National General Holdings Corp. (Nasdaq:NGHC) reported record first
quarter 2019 net income of $83.9 million or $0.72 per diluted
share, compared to net income of $60.3 million or $0.55 per
diluted share in the first quarter of 2018. First quarter 2019
operating earnings (non-GAAP)(1) was $89.7 million or $0.77
per diluted share compared to $67.6 million or $0.62 per
diluted share in the first quarter of 2018.
First Quarter 2019 Highlights Versus
First Quarter 2018*
- Gross written premium grew $67.2 million or 5.0% to
$1,404.2 million, driven by continued organic growth in our P&C
segment of 3.8% and in our A&H segment of 10.6%.
- In the first quarter, our homeowners’ product experienced
organic growth of 7.6%. Our personal auto product experienced
organic growth of 5.7%, driven by a mixture of PIF increase and an
increase in our overall average premium due to rate increase and
business mix changes.
- The overall combined ratio(9,13) was 89.0% compared to 90.7% in
the prior year’s quarter, excluding non-cash amortization of
intangible assets. The P&C segment reported a decrease in
combined ratio to 90.1% from 90.9% in the prior year’s quarter,
primarily driven by lower current accident year losses, lower
weather-related losses, partially offset by lower favorable loss
development. The A&H segment reported a combined ratio of 84.2%
compared to 90.0% in the prior year’s quarter with the decrease
driven by strong operating results in our small group self-funded
and individual products and higher favorable loss development.
- Service and fee income grew 16.6% to $180.4 million, driven by
organic growth in both our Accident & Health and Property &
Casualty segments.
- Shareholders’ equity was $2.35 billion and fully diluted book
value per share was $16.38 at March 31, 2019, growth of 6.0% and
7.4%, respectively, from December 31, 2018. Our trailing twelve
month operating return on average equity (ROE)(14) was 14.7% as of
March 31, 2019.
- First quarter 2019 operating earnings (non-GAAP)(1) exclude
primarily $5.7 million or $0.05 per share of non-cash
amortization of intangible assets, net of tax.
Barry Karfunkel, National General’s CEO, stated: “I’m pleased to
report that our first quarter 2019 results were a record for the
company and continue to highlight the earnings capabilities of the
platform that we have built. Our diversified approach to niche
areas in personal lines insurance continues to pay dividends, with
strength in both our Property and Casualty and Accident and Health
segments.”
*NOTE: Unless specified otherwise, discussion
of our first quarter 2019 and 2018 results do not include financial
results from the Reciprocal Exchanges, which are presented within
our consolidated financial results within this release but are not
included in net income available to NGHC common stockholders.
Overview of First Quarter 2019 as
Compared to First Quarter 2018 by Segment
- Property & Casualty - Gross written
premium grew by 3.8% to $1,145.7 million, net written premium
increased by 9.9% to $915.5 million, and net earned premium
increased by 7.3% to $756.9 million. P&C gross written
premium growth was primarily driven by organic growth of 7.6% from
our homeowners’ product and 5.7% from our personal auto product.
Service and fee income grew 8.9% to $119.4 million. Excluding
non-cash amortization of intangible assets, the combined
ratio(9,13) was 90.1% with a loss ratio of 69.4% and an expense
ratio(9,12) of 20.7%, versus a prior year combined ratio of 90.9%
with a loss ratio of 70.6% and an expense ratio of 20.3%. The
combined ratio decrease was primarily driven by lower current
accident year losses, lower weather-related losses, partially
offset by lower favorable loss development. The loss ratio was
impacted by pre-tax catastrophe losses of approximately
$12.1 million primarily related to winter weather in the first
quarter 2019, compared to $14.2 million of losses in the first
quarter 2018. Favorable loss development was $5.5 million in
the first quarter 2019, compared to $15.2 million in the first
quarter 2018.
- Accident & Health - Gross written premium
grew by 10.6% to $258.5 million, net written premium decreased
by 10.4% to $200.2 million, and net earned premium grew by
5.0% to $161.6 million. The A&H gross written premium
increase was driven by the continued growth across the entire book
and the decrease in net written premium reflects a quota share
agreement in our European book. Service and fee income was
$61.0 million compared to $45.2 million in the prior
year’s quarter, primarily driven by group benefit administration
fees and third party distribution fees. Excluding non-cash
amortization of intangible assets, the combined ratio(9,13) was
84.2% with a loss ratio of 52.5% and an expense ratio(9,12) of
31.7%, versus a prior year combined ratio of 90.0% with a loss
ratio of 59.3% and an expense ratio of 30.7%. The loss ratio
reflects continued strong performance in both small group
self-funded and individual products and higher favorable loss
development. Favorable loss development was $10.9 million in
the first quarter 2019, compared to $3.4 million in the first
quarter 2018.
- Reciprocal Exchanges - Results for the
Reciprocal Exchanges are not included in net income available to
NGHC common stockholders. Gross written premium was
$105.6 million, net written premium was $49.0 million,
and net earned premium was $45.7 million. Reciprocal Exchanges
combined ratio(9,13) excluding non-cash amortization of intangible
assets was 114.3% with a loss ratio of 92.0% and an expense
ratio(9,12) of 22.3%.
First quarter 2019 investment income grew to $34.3 million,
compared to $25.0 million in the first quarter of 2018, with
the growth primarily driven by an increase in our investment
portfolio and improvement in the book yield. Total investments and
cash and cash equivalents (including restricted cash) were
$4.4 billion as of March 31, 2019. Accumulated other
comprehensive income (loss) increased to a $0.6 million gain
at March 31, 2019 from a $52.1 million loss at December 31,
2018, primarily due to the impact of lower interest rates which
positively impacted bond valuations.
Interest expense was $13.0 million, up from
$11.2 million in the prior year’s quarter. Debt was
$710.2 million at March 31, 2019, up from $705.8 million
at December 31, 2018.
The first quarter of 2019 provision for income taxes was
$24.2 million and the effective tax rate for the quarter was
20.9% compared with income taxes of $18.6 million and an
effective rate of 21.4% in the first quarter of 2018.
Shareholders’ equity was $2,353.2 million at March 31, 2019,
growth of 6.0% from $2,220.8 million at December 31, 2018. Fully
diluted book value per share was $16.38 at March 31, 2019, growth
of 7.4% from $15.25 at December 31, 2018. Our trailing twelve month
operating return on average equity (ROE)(14) was 14.7% as of March
31, 2019.
Year-to-Date P&C Segment Notable Large
Losses |
Year |
|
Quarter |
Event |
|
P&C
Notable Large Losses and LAE($
millions) |
|
P&C
Loss Ratio Points* |
|
EPS Impact
After Tax |
2019 |
|
Q1 |
Winter Weather |
|
$12.1 |
|
1.6% |
|
$0.08 |
|
|
|
|
|
|
|
|
|
|
2018 |
|
Q1 |
Winter Weather |
|
$14.2 |
|
2.0% |
|
$0.10 |
* Loss ratio points related to P&C net earned premium in
quarter the loss event was recorded.
Conference Call
On Tuesday, May 7, 2019 at 9:00 AM ET, Chief Executive
Officer Barry Karfunkel and Chief Financial Officer Mike Weiner
will review results and discuss business conditions via a
conference call that may be accessed as follows:
Toll-Free U.S. Dial-in: International
Dial-in:Conference Entry Code: Webcast
Registration: |
800-346-7359973-528-0008180811http://ir.nationalgeneral.com/events-and-presentations |
|
|
A replay of the conference call will be accessible from 2:00 PM
ET on Tuesday, May 7, 2019 to 11:59 PM ET on Tuesday,
May 21, 2019 by dialing either 800-332-6854 (toll-free) within
the U.S. or 973-528-0005 outside the U.S. and entering passcode
180811. In addition, a replay of the webcast can also be retrieved
at http://ir.nationalgeneral.com/events-and-presentations.
About National General Holdings Corp.
National General Holdings Corp., headquartered in New York City,
is a specialty personal lines insurance holding company. National
General traces its roots to 1939, has a financial strength rating
of A- (excellent) from A.M. Best, and provides personal and
commercial automobile, homeowners, umbrella, recreational vehicle,
motorcycle, lender-placed, supplemental health and other niche
insurance products.
Forward Looking Statements
This news release contains “forward-looking statements” that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements are based on the Company’s current expectations and
beliefs concerning future developments and their potential effects
on the Company. Forward-looking statements can generally be
identified by the use of forward-looking terminology, such as
“may,” “will,” “plan,” “expect,” “project,” “intend,” “estimate,”
“anticipate” and “believe” or their variations or similar
terminology. There can be no assurance that actual developments
will be those anticipated by the Company. Actual results may differ
materially from those expressed or implied in these statements as a
result of significant risks and uncertainties, including, but not
limited to, non-receipt of expected payments from insureds or
reinsurers, changes in interest rates, a downgrade in the financial
strength ratings of our insurance subsidiaries, the effect of the
performance of financial markets on our investment portfolio, our
ability to accurately underwrite and price our products and to
maintain and establish accurate loss reserves, estimates of the
fair value of investments, development of claims and the effect on
loss reserves, large loss activity including hurricanes and
wildfires, the cost and availability of reinsurance coverage, the
effects of emerging claim and coverage issues, the effect of
unpredictable catastrophic losses, changes in the demand for our
products, our degree of success in integrating acquired businesses,
the effect of general economic conditions, state and federal
legislation, the effects of tax reform, regulations and regulatory
investigations into industry practices, risks associated with
conducting business outside the United States, developments
relating to existing agreements, disruptions to our business
relationships with third party vendors or agencies, breaches in
data security or other disruptions involving our technology,
heightened competition, changes in pricing environments, and
changes in asset valuations. The forward-looking statements
contained in this news release are made only as of the date of this
release. The Company undertakes no obligation to publicly update
any forward-looking statement except as may be required by law.
Additional information about these risks and uncertainties, as well
as others that may cause actual results to differ materially from
those projected is contained in the Company’s filings with the
Securities and Exchange Commission.
Income Statement - First
Quarter$ in thousands(Unaudited)
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
2018 |
|
|
|
NGHC |
|
Reciprocal Exchanges |
|
Consolidated |
|
|
NGHC |
|
Reciprocal Exchanges |
|
Consolidated |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written
premium |
|
$ |
1,404,209 |
|
|
$ |
105,569 |
|
|
$ |
1,509,778 |
|
|
|
$ |
1,337,042 |
|
|
$ |
97,689 |
|
|
$ |
1,433,130 |
|
(G) |
Net
written premium |
|
1,115,709 |
|
|
48,955 |
|
|
1,164,664 |
|
|
|
1,056,065 |
|
|
50,578 |
|
|
1,106,643 |
|
|
Net
earned premium |
|
918,499 |
|
|
45,658 |
|
|
964,157 |
|
|
|
859,483 |
|
|
46,055 |
|
|
905,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceding
commission income |
|
51,000 |
|
|
18,534 |
|
|
69,534 |
|
|
|
32,958 |
|
|
11,510 |
|
|
44,468 |
|
|
Service
and fee income |
|
180,388 |
|
|
1,370 |
|
|
165,507 |
|
(A) |
|
154,760 |
|
|
2,446 |
|
|
142,122 |
|
(H) |
Net
investment income |
|
34,283 |
|
|
2,170 |
|
|
33,445 |
|
(B) |
|
25,019 |
|
|
2,144 |
|
|
25,011 |
|
(I) |
Net gain
(loss) on investments |
|
766 |
|
|
(744 |
) |
|
22 |
|
|
|
249 |
|
|
(131 |
) |
|
118 |
|
|
Total revenues |
|
$ |
1,184,936 |
|
|
$ |
66,988 |
|
|
$ |
1,232,665 |
|
(C) |
|
$ |
1,072,469 |
|
|
$ |
62,024 |
|
|
$ |
1,117,257 |
|
(J) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and
loss adjustment expense |
|
$ |
609,784 |
|
|
$ |
42,025 |
|
|
$ |
651,809 |
|
|
|
$ |
589,635 |
|
|
$ |
44,531 |
|
|
$ |
634,166 |
|
|
Acquisition costs and other underwriting expenses |
|
203,333 |
|
|
8,585 |
|
|
211,918 |
|
|
|
157,608 |
|
|
11,102 |
|
|
168,710 |
|
|
General
and administrative expenses |
|
242,833 |
|
|
21,512 |
|
|
248,094 |
|
(D) |
|
227,293 |
|
|
18,796 |
|
|
231,005 |
|
(K) |
Interest
expense |
|
12,999 |
|
|
3,008 |
|
|
12,999 |
|
(E) |
|
11,154 |
|
|
2,152 |
|
|
11,154 |
|
(L) |
Total expenses |
|
$ |
1,068,949 |
|
|
$ |
75,130 |
|
|
$ |
1,124,820 |
|
(F) |
|
$ |
985,690 |
|
|
$ |
76,581 |
|
|
$ |
1,045,035 |
|
(M) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
provision (benefit) for income taxes |
|
$ |
115,987 |
|
|
$ |
(8,142 |
) |
|
$ |
107,845 |
|
|
|
$ |
86,779 |
|
|
$ |
(14,557 |
) |
|
$ |
72,222 |
|
|
Provision
(benefit) for income taxes |
|
24,229 |
|
|
(1,723 |
) |
|
22,506 |
|
|
|
18,571 |
|
|
(2,369 |
) |
|
16,202 |
|
|
Net income (loss)
before non-controlling interest and dividends on preferred
shares |
|
91,758 |
|
|
(6,419 |
) |
|
85,339 |
|
|
|
68,208 |
|
|
(12,188 |
) |
|
56,020 |
|
|
Less: net
income (loss) attributable to non-controlling interest |
|
— |
|
|
(6,419 |
) |
|
(6,419 |
) |
|
|
— |
|
|
(12,188 |
) |
|
(12,188 |
) |
|
Net income before
dividends on preferred shares |
|
91,758 |
|
|
— |
|
|
91,758 |
|
|
|
68,208 |
|
|
— |
|
|
68,208 |
|
|
Less:
dividends on preferred shares |
|
7,875 |
|
|
— |
|
|
7,875 |
|
|
|
7,875 |
|
|
— |
|
|
7,875 |
|
|
Net income available to common stockholders |
|
$ |
83,883 |
|
|
$ |
— |
|
|
$ |
83,883 |
|
|
|
$ |
60,333 |
|
|
$ |
— |
|
|
$ |
60,333 |
|
|
NOTES: Consolidated column
includes eliminations as follows: (A) $(16,251), (B) $(3,008), (C)
$(19,259), (D) $(16,251), (E) $(3,008), (F) $(19,259), || (G)
$(1,601), (H) $(15,084), (I) $(2,152), (J) $(17,236), (K)
$(15,084), (L) $(2,152) and (M) $(17,236).
Earnings and Per Share Data$ in
thousands, except shares and per share data(Unaudited)
|
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
Net income available to
common stockholders |
|
$ |
83,883 |
|
|
$ |
60,333 |
|
Basic net
income per common share |
|
$ |
0.74 |
|
|
$ |
0.57 |
|
Diluted
net income per common share |
|
$ |
0.72 |
|
|
$ |
0.55 |
|
|
|
|
|
|
Operating earnings
attributable to NGHC (non-GAAP)(1) |
|
$ |
89,716 |
|
|
$ |
67,623 |
|
Basic
operating earnings per common share (non-GAAP)(1) |
|
$ |
0.79 |
|
|
$ |
0.63 |
|
Diluted
operating earnings per common share (non-GAAP)(1) |
|
$ |
0.77 |
|
|
$ |
0.62 |
|
|
|
|
|
|
Dividends declared per
common share |
|
$ |
0.04 |
|
|
$ |
0.04 |
|
|
|
|
|
|
Weighted average number
of basic shares outstanding |
|
113,014,711 |
|
|
106,758,641 |
|
Weighted average number
of diluted shares outstanding |
|
116,075,226 |
|
|
108,950,984 |
|
Shares outstanding, end
of period |
|
113,137,346 |
|
|
106,887,566 |
|
Fully diluted shares
outstanding, end of period |
|
116,197,861 |
|
|
109,079,909 |
|
Book value per
share |
|
$ |
16.82 |
|
|
$ |
14.38 |
|
Fully diluted book
value per share |
|
$ |
16.38 |
|
|
$ |
14.09 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Operating
Earnings (Non-GAAP)$ in thousands, except per share
data(Unaudited)
|
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
Net income
available to common stockholders |
|
$ |
83,883 |
|
|
$ |
60,333 |
|
Add (subtract): |
|
|
|
|
Net
(gain) on investments |
|
(766 |
) |
|
(249 |
) |
Equity in
(earnings) losses of equity method investments |
|
934 |
|
|
1,469 |
|
Non-cash
amortization of intangible assets |
|
7,216 |
|
|
6,920 |
|
Income
tax expense (benefit) |
|
(1,551 |
) |
|
(850 |
) |
Operating earnings attributable to NGHC
(non-GAAP)(1) |
|
$ |
89,716 |
|
|
$ |
67,623 |
|
|
|
|
|
|
Operating
earnings per common share (non-GAAP): |
|
|
|
|
Basic
operating earnings per common share (non-GAAP) |
|
$ |
0.79 |
|
|
$ |
0.63 |
|
Diluted
operating earnings per common share (non-GAAP) |
|
$ |
0.77 |
|
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet$ in
thousands(Unaudited)
|
|
March 31, 2019 |
|
|
December 31, 2018 |
|
ASSETS |
|
NGHC |
|
Reciprocal Exchanges |
|
Consolidated |
|
|
NGHC |
|
Reciprocal Exchanges |
|
Consolidated |
|
Total investments
(2) |
|
$ |
4,130,083 |
|
|
$ |
318,914 |
|
|
$ |
4,341,655 |
|
(A) |
|
$ |
4,013,699 |
|
|
$ |
314,411 |
|
|
$ |
4,226,806 |
|
(H) |
Cash and cash
equivalents, including restricted cash |
|
219,979 |
|
|
293 |
|
|
220,272 |
|
|
|
233,383 |
|
|
200 |
|
|
233,583 |
|
|
Premiums and other
receivables, net |
|
1,547,958 |
|
|
60,293 |
|
|
1,608,251 |
|
(B) |
|
1,338,485 |
|
|
61,327 |
|
|
1,399,812 |
|
|
Reinsurance balances
(3) |
|
1,873,657 |
|
|
252,932 |
|
|
2,126,589 |
|
|
|
2,023,911 |
|
|
253,501 |
|
|
2,277,412 |
|
|
Intangible assets,
net |
|
369,452 |
|
|
3,360 |
|
|
372,812 |
|
|
|
376,532 |
|
|
3,405 |
|
|
379,937 |
|
|
Goodwill |
|
180,183 |
|
|
— |
|
|
180,183 |
|
|
|
180,183 |
|
|
— |
|
|
180,183 |
|
|
Other (4) |
|
780,960 |
|
|
29,215 |
|
|
781,805 |
|
(B) |
|
739,068 |
|
|
27,879 |
|
|
741,547 |
|
(I) |
Total assets |
|
$ |
9,102,272 |
|
|
$ |
665,007 |
|
|
$ |
9,631,567 |
|
(C) |
|
$ |
8,905,261 |
|
|
$ |
660,723 |
|
|
$ |
9,439,280 |
|
(J) |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid loss and loss
adjustment expense reserves |
|
$ |
2,674,301 |
|
|
$ |
196,022 |
|
|
$ |
2,870,323 |
|
|
|
$ |
2,778,689 |
|
|
$ |
178,470 |
|
|
$ |
2,957,159 |
|
|
Unearned premiums and
other revenue |
|
2,181,579 |
|
|
258,701 |
|
|
2,440,280 |
|
|
|
2,014,965 |
|
|
265,763 |
|
|
2,280,728 |
|
|
Reinsurance
payable |
|
493,280 |
|
|
31,579 |
|
|
524,859 |
|
|
|
615,872 |
|
|
40,393 |
|
|
656,265 |
|
|
Accounts payable and
accrued expenses (5) |
|
356,107 |
|
|
34,530 |
|
|
362,267 |
|
(D) |
|
390,338 |
|
|
33,120 |
|
|
398,058 |
|
(K) |
Debt |
|
710,196 |
|
|
107,342 |
|
|
710,196 |
|
(E) |
|
705,795 |
|
|
101,304 |
|
|
705,795 |
|
(L) |
Other |
|
333,621 |
|
|
58,539 |
|
|
392,160 |
|
|
|
178,764 |
|
|
61,640 |
|
|
240,404 |
|
|
Total liabilities |
|
$ |
6,749,084 |
|
|
$ |
686,713 |
|
|
$ |
7,300,085 |
|
(F) |
|
$ |
6,684,423 |
|
|
$ |
680,690 |
|
|
$ |
7,238,409 |
|
(M) |
Stockholders’
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock (6) |
|
$ |
1,131 |
|
|
$ |
— |
|
|
$ |
1,131 |
|
|
|
$ |
1,129 |
|
|
$ |
— |
|
|
$ |
1,129 |
|
|
Preferred stock
(7) |
|
450,000 |
|
|
— |
|
|
450,000 |
|
|
|
450,000 |
|
|
— |
|
|
450,000 |
|
|
Additional paid-in
capital |
|
1,058,061 |
|
|
— |
|
|
1,058,061 |
|
|
|
1,057,783 |
|
|
— |
|
|
1,057,783 |
|
|
Accumulated other
comprehensive income (loss) |
|
581 |
|
|
— |
|
|
581 |
|
|
|
(52,130 |
) |
|
— |
|
|
(52,130 |
) |
|
Retained earnings |
|
843,415 |
|
|
— |
|
|
843,415 |
|
|
|
764,056 |
|
|
— |
|
|
764,056 |
|
|
Total National General Holdings Corp. stockholders’
equity |
|
2,353,188 |
|
|
— |
|
|
2,353,188 |
|
|
|
2,220,838 |
|
|
— |
|
|
2,220,838 |
|
|
Non-controlling
interest |
|
— |
|
|
(21,706 |
) |
|
(21,706 |
) |
|
|
— |
|
|
(19,967 |
) |
|
(19,967 |
) |
|
Total stockholders’ equity |
|
$ |
2,353,188 |
|
|
$ |
(21,706 |
) |
|
$ |
2,331,482 |
|
|
|
$ |
2,220,838 |
|
|
$ |
(19,967 |
) |
|
$ |
2,200,871 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
9,102,272 |
|
|
$ |
665,007 |
|
|
$ |
9,631,567 |
|
(G) |
|
$ |
8,905,261 |
|
|
$ |
660,723 |
|
|
$ |
9,439,280 |
|
(N) |
NOTES: Consolidated column
includes eliminations as follows: (A) $(107,342), (B) $(28,370),
(C) $(135,712), (D) $(28,370), (E) $(107,342), (F) $(135,712), (G)
$(135,712), || (H) $(101,304), (I) $(25,400), (J) $(126,704), (K)
$(25,400), (L) $(101,304), (M) $(126,704) and (N) $(126,704).
Segment Information - First
Quarter$ in thousands(Unaudited)
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
2018 |
|
|
P&C |
|
A&H |
|
NGHC |
|
|
ReciprocalExchanges |
|
|
P&C |
|
A&H |
|
NGHC |
|
|
Reciprocal Exchanges |
Gross written
premium |
|
$ |
1,145,665 |
|
|
$ |
258,544 |
|
|
$ |
1,404,209 |
|
|
|
$ |
105,569 |
|
|
|
$ |
1,103,266 |
|
|
$ |
233,776 |
|
|
$ |
1,337,042 |
|
|
|
$ |
97,689 |
|
Net written
premium |
|
915,528 |
|
|
200,181 |
|
|
1,115,709 |
|
|
|
48,955 |
|
|
|
832,712 |
|
|
223,353 |
|
|
1,056,065 |
|
|
|
50,578 |
|
Net earned premium |
|
756,919 |
|
|
161,580 |
|
|
918,499 |
|
|
|
45,658 |
|
|
|
705,607 |
|
|
153,876 |
|
|
859,483 |
|
|
|
46,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceding commission
income |
|
48,409 |
|
|
2,591 |
|
|
51,000 |
|
|
|
18,534 |
|
|
|
32,700 |
|
|
258 |
|
|
32,958 |
|
|
|
11,510 |
|
Service
and fee income |
|
119,376 |
|
|
61,012 |
|
|
180,388 |
|
|
|
1,370 |
|
|
|
109,573 |
|
|
45,187 |
|
|
154,760 |
|
|
|
2,446 |
|
Total
underwriting revenues |
|
$ |
924,704 |
|
|
$ |
225,183 |
|
|
$ |
1,149,887 |
|
|
|
$ |
65,562 |
|
|
|
$ |
847,880 |
|
|
$ |
199,321 |
|
|
$ |
1,047,201 |
|
|
|
$ |
60,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense |
|
525,035 |
|
|
84,749 |
|
|
609,784 |
|
|
|
42,025 |
|
|
|
498,357 |
|
|
91,278 |
|
|
589,635 |
|
|
|
44,531 |
|
Acquisition costs and
other underwriting expenses |
|
145,485 |
|
|
57,848 |
|
|
203,333 |
|
|
|
8,585 |
|
|
|
114,000 |
|
|
43,608 |
|
|
157,608 |
|
|
|
11,102 |
|
General
and administrative expenses |
|
184,195 |
|
|
58,638 |
|
|
242,833 |
|
|
|
21,512 |
|
|
|
176,685 |
|
|
50,608 |
|
|
227,293 |
|
|
|
18,796 |
|
Total
underwriting expenses |
|
$ |
854,715 |
|
|
$ |
201,235 |
|
|
$ |
1,055,950 |
|
|
|
$ |
72,122 |
|
|
|
$ |
789,042 |
|
|
$ |
185,494 |
|
|
$ |
974,536 |
|
|
|
$ |
74,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting income
(loss) |
|
69,989 |
|
|
23,948 |
|
|
93,937 |
|
|
|
(6,560 |
) |
|
|
58,838 |
|
|
13,827 |
|
|
72,665 |
|
|
|
(14,418 |
) |
Non-cash
amortization of intangible assets |
|
5,485 |
|
|
1,731 |
|
|
7,216 |
|
|
|
11 |
|
|
|
5,400 |
|
|
1,520 |
|
|
6,920 |
|
|
|
(27 |
) |
Underwriting income
(loss) before amortization and impairment |
|
$ |
75,474 |
|
|
$ |
25,679 |
|
|
$ |
101,153 |
|
|
|
$ |
(6,549 |
) |
|
|
$ |
64,238 |
|
|
$ |
15,347 |
|
|
$ |
79,585 |
|
|
|
$ |
(14,445 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense ratio (8) |
|
69.4 |
% |
|
52.5 |
% |
|
66.4 |
% |
|
|
92.0 |
% |
|
|
70.6 |
% |
|
59.3 |
% |
|
68.6 |
% |
|
|
96.7 |
% |
Operating
expense ratio (Non-GAAP) (9,10) |
|
21.4 |
% |
|
32.7 |
% |
|
23.4 |
% |
|
|
22.3 |
% |
|
|
21.0 |
% |
|
31.7 |
% |
|
22.9 |
% |
|
|
34.6 |
% |
Combined ratio
(Non-GAAP) (9,11) |
|
90.8 |
% |
|
85.2 |
% |
|
89.8 |
% |
|
|
114.3 |
% |
|
|
91.6 |
% |
|
91.0 |
% |
|
91.5 |
% |
|
|
131.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting ratios
(before amortization and impairment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense ratio (8) |
|
69.4 |
% |
|
52.5 |
% |
|
66.4 |
% |
|
|
92.0 |
% |
|
|
70.6 |
% |
|
59.3 |
% |
|
68.6 |
% |
|
|
96.7 |
% |
Operating
expense ratio (Non-GAAP) (9,12) |
|
20.7 |
% |
|
31.7 |
% |
|
22.6 |
% |
|
|
22.3 |
% |
|
|
20.3 |
% |
|
30.7 |
% |
|
22.1 |
% |
|
|
34.7 |
% |
Combined ratio before
amortization and impairment (Non-GAAP) (9,13) |
|
90.1 |
% |
|
84.2 |
% |
|
89.0 |
% |
|
|
114.3 |
% |
|
|
90.9 |
% |
|
90.0 |
% |
|
90.7 |
% |
|
|
131.4 |
% |
NOTE: Loss and loss adjustment
expenses for the three months ended March 31, 2019 included $5,514
of favorable development on prior accident year loss and loss
adjustment expense reserves in the P&C segment, and $10,852 of
favorable development in the A&H segment, versus $15,169 of
favorable development in the P&C segment, and $3,383 of
favorable development in the A&H segment for the three months
ended March 31, 2018.
Reconciliation of Operating Expense Ratio
(Non-GAAP)$ in thousands(Unaudited)
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
2018 |
|
|
P&C |
|
A&H |
|
NGHC |
|
|
Reciprocal Exchanges |
|
|
P&C |
|
A&H |
|
NGHC |
|
|
Reciprocal Exchanges |
Total underwriting
expenses |
|
$ |
854,715 |
|
|
$ |
201,235 |
|
|
$ |
1,055,950 |
|
|
|
$ |
72,122 |
|
|
|
$ |
789,042 |
|
|
$ |
185,494 |
|
|
$ |
974,536 |
|
|
|
$ |
74,429 |
|
Less: Loss and loss
adjustment expense |
|
525,035 |
|
|
84,749 |
|
|
609,784 |
|
|
|
42,025 |
|
|
|
498,357 |
|
|
91,278 |
|
|
589,635 |
|
|
|
44,531 |
|
Less: Ceding commission
income |
|
48,409 |
|
|
2,591 |
|
|
51,000 |
|
|
|
18,534 |
|
|
|
32,700 |
|
|
258 |
|
|
32,958 |
|
|
|
11,510 |
|
Less:
Service and fee income |
|
119,376 |
|
|
61,012 |
|
|
180,388 |
|
|
|
1,370 |
|
|
|
109,573 |
|
|
45,187 |
|
|
154,760 |
|
|
|
2,446 |
|
Operating expense |
|
161,895 |
|
|
52,883 |
|
|
214,778 |
|
|
|
10,193 |
|
|
|
148,412 |
|
|
48,771 |
|
|
197,183 |
|
|
|
15,942 |
|
Net earned premium |
|
$ |
756,919 |
|
|
$ |
161,580 |
|
|
$ |
918,499 |
|
|
|
$ |
45,658 |
|
|
|
$ |
705,607 |
|
|
$ |
153,876 |
|
|
$ |
859,483 |
|
|
|
$ |
46,055 |
|
Operating expense ratio (Non-GAAP) |
|
21.4 |
% |
|
32.7 |
% |
|
23.4 |
% |
|
|
22.3 |
% |
|
|
21.0 |
% |
|
31.7 |
% |
|
22.9 |
% |
|
|
34.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total underwriting
expenses |
|
$ |
854,715 |
|
|
$ |
201,235 |
|
|
$ |
1,055,950 |
|
|
|
$ |
72,122 |
|
|
|
$ |
789,042 |
|
|
$ |
185,494 |
|
|
$ |
974,536 |
|
|
|
$ |
74,429 |
|
Less: Loss and loss
adjustment expense |
|
525,035 |
|
|
84,749 |
|
|
609,784 |
|
|
|
42,025 |
|
|
|
498,357 |
|
|
91,278 |
|
|
589,635 |
|
|
|
44,531 |
|
Less: Ceding commission
income |
|
48,409 |
|
|
2,591 |
|
|
51,000 |
|
|
|
18,534 |
|
|
|
32,700 |
|
|
258 |
|
|
32,958 |
|
|
|
11,510 |
|
Less: Service and fee
income |
|
119,376 |
|
|
61,012 |
|
|
180,388 |
|
|
|
1,370 |
|
|
|
109,573 |
|
|
45,187 |
|
|
154,760 |
|
|
|
2,446 |
|
Less:
Non-cash amortization of intangible assets |
|
5,485 |
|
|
1,731 |
|
|
7,216 |
|
|
|
11 |
|
|
|
5,400 |
|
|
1,520 |
|
|
6,920 |
|
|
|
(27 |
) |
Operating expense
before amortization and impairment |
|
156,410 |
|
|
51,152 |
|
|
207,562 |
|
|
|
10,182 |
|
|
|
143,012 |
|
|
47,251 |
|
|
190,263 |
|
|
|
15,969 |
|
Net earned premium |
|
$ |
756,919 |
|
|
$ |
161,580 |
|
|
$ |
918,499 |
|
|
|
$ |
45,658 |
|
|
|
$ |
705,607 |
|
|
$ |
153,876 |
|
|
$ |
859,483 |
|
|
|
$ |
46,055 |
|
Operating expense ratio before amortization and impairment
(Non-GAAP) |
|
20.7 |
% |
|
31.7 |
% |
|
22.6 |
% |
|
|
22.3 |
% |
|
|
20.3 |
% |
|
30.7 |
% |
|
22.1 |
% |
|
|
34.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums by Product Line$ in
thousands(Unaudited)
|
Three Months Ended March 31, |
|
Gross Written Premium |
|
|
Net Written Premium |
|
|
Net Earned Premium |
|
2019 |
|
2018 |
|
Change |
|
|
2019 |
|
2018 |
|
Change |
|
|
2019 |
|
2018 |
|
Change |
Property &
Casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Auto |
$ |
766,681 |
|
|
$ |
725,212 |
|
|
5.7 |
% |
|
|
$ |
658,920 |
|
|
$ |
553,997 |
|
|
18.9 |
% |
|
|
$ |
510,554 |
|
|
$ |
454,216 |
|
|
12.4 |
% |
Homeowners |
152,042 |
|
|
141,287 |
|
|
7.6 |
% |
|
|
85,245 |
|
|
92,596 |
|
|
(7.9 |
)% |
|
|
84,058 |
|
|
82,195 |
|
|
2.3 |
% |
RV/Packaged |
51,851 |
|
|
49,464 |
|
|
4.8 |
% |
|
|
51,597 |
|
|
49,189 |
|
|
4.9 |
% |
|
|
50,305 |
|
|
45,689 |
|
|
10.1 |
% |
Small
Business Auto |
85,878 |
|
|
86,244 |
|
|
(0.4 |
)% |
|
|
74,186 |
|
|
64,727 |
|
|
14.6 |
% |
|
|
67,633 |
|
|
58,562 |
|
|
15.5 |
% |
Lender-placed insurance |
75,938 |
|
|
84,934 |
|
|
(10.6 |
)% |
|
|
42,070 |
|
|
63,214 |
|
|
(33.4 |
)% |
|
|
41,718 |
|
|
60,469 |
|
|
(31.0 |
)% |
Other |
13,275 |
|
|
16,125 |
|
|
(17.7 |
)% |
|
|
3,510 |
|
|
8,989 |
|
|
(61.0 |
)% |
|
|
2,651 |
|
|
4,476 |
|
|
(40.8 |
)% |
Total Premium |
$ |
1,145,665 |
|
|
$ |
1,103,266 |
|
|
3.8 |
% |
|
|
$ |
915,528 |
|
|
$ |
832,712 |
|
|
9.9 |
% |
|
|
$ |
756,919 |
|
|
$ |
705,607 |
|
|
7.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accident &
Health |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group |
64,938 |
|
|
56,060 |
|
|
15.8 |
% |
|
|
53,950 |
|
|
45,637 |
|
|
18.2 |
% |
|
|
53,963 |
|
|
45,639 |
|
|
18.2 |
% |
Individual |
84,192 |
|
|
75,048 |
|
|
12.2 |
% |
|
|
84,123 |
|
|
75,048 |
|
|
12.1 |
% |
|
|
82,235 |
|
|
73,866 |
|
|
11.3 |
% |
International |
109,414 |
|
|
102,668 |
|
|
6.6 |
% |
|
|
62,108 |
|
|
102,668 |
|
|
(39.5 |
)% |
|
|
25,382 |
|
|
34,371 |
|
|
(26.2 |
)% |
Total Premium |
$ |
258,544 |
|
|
$ |
233,776 |
|
|
10.6 |
% |
|
|
$ |
200,181 |
|
|
$ |
223,353 |
|
|
(10.4 |
)% |
|
|
$ |
161,580 |
|
|
$ |
153,876 |
|
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total National
General |
$ |
1,404,209 |
|
|
$ |
1,337,042 |
|
|
5.0 |
% |
|
|
$ |
1,115,709 |
|
|
$ |
1,056,065 |
|
|
5.6 |
% |
|
|
$ |
918,499 |
|
|
$ |
859,483 |
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reciprocal
Exchanges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Auto |
$ |
36,862 |
|
|
$ |
34,297 |
|
|
7.5 |
% |
|
|
$ |
15,645 |
|
|
$ |
13,495 |
|
|
15.9 |
% |
|
|
$ |
15,861 |
|
|
$ |
12,997 |
|
|
22.0 |
% |
Homeowners |
67,800 |
|
|
62,521 |
|
|
8.4 |
% |
|
|
33,016 |
|
|
36,808 |
|
|
(10.3 |
)% |
|
|
29,491 |
|
|
32,771 |
|
|
(10.0 |
)% |
Other |
907 |
|
|
871 |
|
|
4.1 |
% |
|
|
294 |
|
|
275 |
|
|
6.9 |
% |
|
|
306 |
|
|
287 |
|
|
6.6 |
% |
Total Premium |
$ |
105,569 |
|
|
$ |
97,689 |
|
|
8.1 |
% |
|
|
$ |
48,955 |
|
|
$ |
50,578 |
|
|
(3.2 |
)% |
|
|
$ |
45,658 |
|
|
$ |
46,055 |
|
|
(0.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Total (A) |
$ |
1,509,778 |
|
|
$ |
1,433,130 |
|
|
5.3 |
% |
|
|
$ |
1,164,664 |
|
|
$ |
1,106,643 |
|
|
5.2 |
% |
|
|
$ |
964,157 |
|
|
$ |
905,538 |
|
|
6.5 |
% |
NOTES: (A) Consolidated Total
includes eliminations between National General and the Reciprocal
Exchanges of $(567) in Personal Auto and $(1,034) in Homeowners
Gross Written Premium in 2018, respectively.
Fee Income$ in
thousands(Unaudited)
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
|
Change |
Property &
Casualty |
|
|
|
|
|
Service and Fee
Income |
$ |
119,376 |
|
$ |
109,573 |
|
8.9 |
% |
Ceding Commission
Income |
48,409 |
|
32,700 |
|
48.0 |
% |
Property &
Casualty |
$ |
167,785 |
|
$ |
142,273 |
|
17.9 |
% |
|
|
|
|
|
|
Accident &
Health |
|
|
|
|
|
Service and Fee
Income |
|
|
|
|
|
Group |
$ |
30,374 |
|
$ |
24,814 |
|
22.4 |
% |
Individual |
2,136 |
|
1,297 |
|
64.7 |
% |
Third
Party Fee |
28,502 |
|
19,076 |
|
49.4 |
% |
Total Service and Fee
Income |
61,012 |
|
45,187 |
|
35.0 |
% |
Ceding Commission
Income |
2,591 |
|
258 |
|
904.3 |
% |
Accident and
Health |
$ |
63,603 |
|
$ |
45,445 |
|
40.0 |
% |
|
|
|
|
|
|
Total National
General |
$ |
231,388 |
|
$ |
187,718 |
|
23.3 |
% |
|
|
|
|
|
|
Reciprocal
Exchanges |
|
|
|
|
|
Service and Fee
Income |
$ |
1,370 |
|
$ |
2,446 |
|
(44.0 |
)% |
Ceding Commission
Income |
18,534 |
|
11,510 |
|
61.0 |
% |
Reciprocal
Exchanges |
$ |
19,904 |
|
$ |
13,956 |
|
42.6 |
% |
|
|
|
|
|
|
Consolidated
Total (A) |
$ |
235,041 |
|
$ |
186,590 |
|
26.0 |
% |
NOTES: (A) Consolidated Total
includes eliminations between National General and the Reciprocal
Exchanges of $(16,251) and $(15,084) in Service and Fee Income in
2019 and 2018, respectively.
Additional Disclosures
(1) References to operating earnings and basic and diluted
operating earnings per share (“EPS”) are non-GAAP financial
measures defined by the Company as net income/loss and basic and
diluted earnings per share excluding after-tax net gain or loss on
investments (including foreign exchange gain or loss),
other-than-temporary impairment losses, earnings or losses of
equity method investments (related parties), deferred tax asset
impairment, non-cash impairment of goodwill and non-cash
amortization of intangible assets, and any significant
non-recurring or infrequent items that may not be indicative of
ongoing operations. The Company believes operating earnings and
basic and diluted operating EPS are relevant measures of the
Company’s profitability because operating earnings and basic and
diluted operating EPS contain the components of net income upon
which the Company’s management has the most influence and excludes
factors outside management’s direct control and non-recurring
items. Other companies may calculate these measures differently,
and therefore, their measures may not be comparable to those used
by National General. Please see the Non-GAAP Financial Measures
table within this release for the reconciliation of these non-GAAP
measures to the most directly comparable GAAP measure.
(2) Total investments includes $233,555 and $233,723 in related
parties at March 31, 2019 and December 31, 2018, respectively.
(3) Reinsurance balances includes $6,136 and $7,425 from related
parties at March 31, 2019 and December 31, 2018, respectively.
(4) Other includes $1,188 and $2,362 from related parties at
March 31, 2019 and December 31, 2018, respectively.
(5) Accounts payable and accrued expenses includes $19,196 and
$69,874 to related parties at March 31, 2019 and December 31, 2018,
respectively.
(6) Common stock: $0.01 par value - authorized 150,000,000
shares, issued and outstanding 113,137,346 shares - March 31, 2019;
authorized 150,000,000 shares, issued and outstanding 112,940,595
shares - December 31, 2018.
(7) Preferred stock: $0.01 par value - authorized 10,000,000
shares, issued and outstanding 2,565,120 shares - March 31, 2019;
authorized 10,000,000 shares, issued and outstanding 2,565,120
shares - December 31, 2018.
(8) Loss and loss adjustment expense ratio is calculated by
dividing loss and loss adjustment expense by net earned
premium.
(9) Operating expense ratio and combined ratio are considered
non-GAAP financial measures under applicable SEC rules because a
component of those ratios, operating expense, is calculated by
offsetting acquisition and other underwriting costs and general and
administrative expenses by ceding commission income and service and
fee income. Management uses operating expense ratio (non-GAAP) and
combined ratio (non-GAAP) to evaluate financial performance against
historical results and establish targets on a consolidated basis.
The Company believes this presentation enhances the understanding
of our results by eliminating what we believe are volatile and
unusual events and presenting the ratios with what we believe are
the underlying run rates of the business. Other companies may
calculate these measures differently, and, therefore, their
measures may not be comparable to those used by National General.
Please see the Non-GAAP Financial Measures table within this
release for the reconciliation of these non-GAAP measures to the
most directly comparable GAAP measure.
(10) Operating expense ratio is a non-GAAP measure defined by
the Company, that is commonly used in the insurance industry. The
Company calculates the ratio by dividing operating expense by net
earned premium. Operating expense consists of the sum of
acquisition and other underwriting costs and general and
administrative expenses less ceding commission income and service
and fee income. The ratio is used as an indicator of the Company’s
efficiency in acquiring and servicing its business. Other companies
may calculate these measures differently, and therefore, their
measures may not be comparable to those used by National General.
Please see the Non-GAAP Financial Measures table within this
release for the reconciliation of these non-GAAP measures to the
most directly comparable GAAP measure.
(11) Combined ratio is a non-GAAP measure defined by the
Company, that is commonly used in the insurance industry. The
Company calculates the ratio by adding the loss and loss adjustment
expense ratio and the operating expense ratio (non-GAAP) together.
The ratio is used as an indicator of the Company’s underwriting
discipline, efficiency in acquiring and servicing its business, and
overall underwriting profit. A combined ratio under 100% generally
indicates an underwriting profit, while over 100% an underwriting
loss. Other companies may calculate these measures differently, and
therefore, their measures may not be comparable to those used by
National General.
(12) Operating expense ratio before amortization and impairment
is a non-GAAP measure defined by the Company, that is commonly used
in the insurance industry. The Company calculates the ratio by
dividing the operating expense before amortization and impairment
by net earned premium. Operating expense before amortization and
impairment consists of the sum of acquisition and other
underwriting costs and general and administrative expenses less
ceding commission income and service and fee income less non-cash
amortization of intangible assets and non-cash impairment of
goodwill. The ratio is used as an indicator of the Company’s
efficiency in acquiring and servicing its business. Other companies
may calculate these measures differently, and therefore, their
measures may not be comparable to those used by National General.
Please see the Non-GAAP Financial Measures table within this
release for the reconciliation of these non-GAAP measures to the
most directly comparable GAAP measure.
(13) Combined ratio before amortization and impairment is a
non-GAAP measure defined by the Company, that is commonly used in
the insurance industry. The Company calculates the ratio by adding
the loss and loss adjustment expense ratio and the operating
expense ratio before amortization and impairment (non-GAAP)
together. The ratio is used as an indicator of the Company’s
underwriting discipline, efficiency in acquiring and servicing its
business, and overall underwriting profit. A combined ratio under
100% generally indicates an underwriting profit, while over 100% an
underwriting loss. Other companies may calculate these measures
differently, and therefore, their measures may not be comparable to
those used by National General. Please see the Non-GAAP Financial
Measures table within this release for the reconciliation of these
non-GAAP measures to the most directly comparable GAAP measure.
(14) Trailing twelve month operating return on average equity is
the ratio of the previous twelve months operating earnings
(non-GAAP) to average shareholders’ equity for the periods
presented. Average shareholders’ equity is the sum of the
shareholders’ equity excluding preferred stock at the beginning and
end of the period presented divided by two. In the opinion of the
Company’s management this ratio is an important indicator of how
well management creates value for its shareholders through its
operating activities and capital management. Other companies may
calculate these measures differently, and therefore, their measures
may not be comparable to those used by National General. Please see
the Non-GAAP Financial Measures table within this release for the
reconciliation of net income to operating earnings, which is the
Non-GAAP component of the operating return on average equity.
(15) Combined ratio excluding losses from various
weather-related events, is calculated by taking the combined ratio
as defined in Note 13, and adjusting it to exclude the total net
losses of $12.1 million and $14.2 million from these events
for the three months ended March 31, 2019 and 2018, respectively.
The company believes this measure enhances investors’ understanding
of our results by eliminating what we believe are volatile and
unusual events.
Year |
|
|
|
Combined
Ratio |
|
Impact of
Weather-related Events |
|
Combined
Ratio Excluding Weather-related Events |
2019 |
|
P&C Segment |
|
90.1% |
|
1.6% |
|
88.5% |
|
|
|
|
|
|
|
|
|
2019 |
|
Overall NGHC |
|
89.0% |
|
1.3% |
|
87.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
P&C Segment |
|
90.9% |
|
2.0% |
|
88.9% |
|
|
|
|
|
|
|
|
|
2018 |
|
Overall NGHC |
|
90.7% |
|
1.7% |
|
89.0% |
(16) Our products in the P&C segment include personal auto,
homeowners, RV/Packaged, small business auto, lender-placed
insurance and other products. The personal auto segment includes
policies for standard, preferred and nonstandard automobile
insurance. The homeowners product includes multiple-peril policies
and personal umbrella coverage to the homeowner. The RV/Packaged
product offers policies that include RV automatic personal effects
coverage, optional replacement cost coverage, RV storage coverage
and full-time liability coverage. The small business auto product
offers policies that include liability and physical damage coverage
for light-to-medium duty commercial vehicles. The lender-placed
insurance product offers fire, home and flood products, as well as
collateral protection insurance and guaranteed asset protection
products for automobiles. Our products in the A&H segment
include group, individual and third party fees. The group product
includes revenue from our small group self-funded product. The
individual product line includes revenue from our supplemental
products including short-term medical, accident/AD&D, hospital
indemnity, cancer/critical illness, dental and term life insurance.
Third party fees include commission and general agent fees for
selling policies issued by third-party insurance companies, fees
generated through selling our technology products to third parties
and fees from our International health insurance offerings.
Investor Contact
Christine WorleyDirector of Investor RelationsPhone:
212-380-9462Email: Christine.Worley@NGIC.com
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