Conifer Holdings Reports 2024 Fourth Quarter and Year End Financial Results

Rhea-AI Summary

Conifer Holdings (CNFR) reported significant changes in 2024, marked by the sale of its insurance agency operations in August for a $61 million gain. The company posted net income of $23.5 million for the full year 2024, despite a Q4 net loss of $25.4 million.

Total Gross Written Premium declined 50% year-over-year, with Q4 premiums dropping 43.9% to $13.7 million. This decline reflects the company's strategic shift away from commercial lines following the agency sale. However, Personal Lines business showed strong growth, increasing 10.6% in Q4 and 23.4% for the full year, now representing 77% of total gross written premium.

The company's net investment income grew 5.8% to $5.8 million for 2024. Book value per share stood at $1.76 as of December 31, 2024. The company focuses primarily on homeowner's insurance in Texas and the Midwest markets.

Positive

• Sale of insurance agency operations generated $61 million gain
• Personal Lines business grew 23.4% for full year 2024
• Net income of $23.5 million for full year 2024
• Net investment income increased 5.8% to $5.8 million
• Personal Lines combined ratio improved significantly in 2024

Negative

• Q4 net loss of $25.4 million ($2.08 per share)
• Total Gross Written Premium declined 50% year-over-year
• Commercial Lines loss ratio increased significantly in Q4
• Q4 adjusted operating loss of $25.8 million
• $21,000 loss from change in fair value of equity investments in Q4

Insights

Financial Restructuring Analyst

Conifer's Q4 and 2024 results tell the story of a company in strategic transition. While reporting $23.5 million in full-year net income, this figure is misleading without context - it's primarily driven by a $61 million one-time gain from selling their insurance agency operations in August. The Q4 results paint a more concerning picture with a substantial $25.4 million net loss ($2.08 per share).

The company's strategic pivot away from commercial lines is dramatically reducing their premium volume - total gross written premiums decreased 43.9% in Q4 and nearly 50% for the full year. Commercial lines production plummeted 79% in Q4, now representing just 23% of total written premiums.

The bright spot is their personal lines business, particularly homeowners insurance in Texas and the Midwest, which grew 10.6% in Q4 and 23.4% for the full year. This segment was profitable in Q4 and showed an improved combined ratio for 2024.

With a book value of $1.76 per share (compared to the current $0.65 share price), CNFR trades at a significant discount to book value - typical of insurers facing underwriting challenges. The extensive reserve strengthening in commercial lines suggests potential ongoing liability concerns despite the strategic exit.

This transition year involved debt reduction and organizational streamlining, but investors should closely monitor whether the personal lines focus can generate sustainable profitability going forward after stripping away the one-time gain effect.

Insurance Industry Specialist

Conifer's results highlight a classic insurance company restructuring strategy - divesting underperforming segments while doubling down on profitable niches. The $61 million agency sale provided crucial capital to strengthen reserves and reduce debt, addressing two fundamental insurance company weaknesses.

The 79% drop in commercial lines production represents an intentional portfolio pruning rather than market failure. More telling is the commercial lines loss ratio deterioration, indicating that management is aggressively recognizing potential future claims through reserve strengthening - a painful but necessary step toward financial stability.

The company's strategic focus on low-value dwelling insurance in Texas and the Midwest shows promise with 10.6% Q4 growth. This specialty personal lines segment typically faces less competition from major carriers and allows for geographic concentration of underwriting expertise, potentially creating sustainable competitive advantages.

Despite "storm activity" mentioned for the full year, the improved personal lines combined ratio demonstrates pricing adequacy and underwriting discipline in their continuing business. The 5.8% increase in net investment income to $5.8 million provides a stable revenue foundation.

The $25.4 million Q4 loss appears to be a "kitchen sink" quarter where management recognized remaining commercial lines liabilities. This increases confidence that 2025 results will more accurately reflect the performance of their continuing personal lines business without legacy issues distorting the financial picture.

TROY, Mich., March 28, 2025 (GLOBE NEWSWIRE) -- Conifer Holdings, Inc. (Nasdaq: CNFR) (“Conifer” or the “Company”) today announced results for the fourth quarter and year ended December 31, 2024.  

Year End 2024 Financial Highlights

• Net income allocable to common shareholders of $23.5 million
• $61 Million gain on sale of insurance agency operations in August 2024
• Continuing Personal Lines business profitable for the fourth quarter of 2024
• Book value per share of $1.76 as of December 31, 2024

Management Comments

Brian Roney, CEO of Conifer, commented, “2024 was indeed a transitional year for Conifer Holdings as we successfully sold our insurance agency operations, paid down considerable debt, further strengthened reserves, streamlined our organization overall, and focused our production efforts on select personal lines going forward.”

Reduction of Commercial Lines Business

For the full year 2024, total Gross Written Premium was down almost 50% from the prior year, and Net Earned premium was down 27.5% for the same period. As a result of the sale of Conifer’s insurance agency operations, completed in August 2024, we anticipated and planned for this significant decline in Commercial Lines revenue. We expect Commercial Lines business to represent a diminishing percentage of total gross written premium going forward.

Future premiums are expected to consist primarily of Personal Lines business, notably our homeowner’s insurance portfolio in Texas and the Midwest. As detailed in the Personal Lines results overview below, gross written premium for those lines of business for the fourth quarter of 2024 increased 10.6% from the prior year period and increased 23.4% for the full year 2024 over the prior year.

Additional information regarding the disposal of Conifer’s agency business and its impact on future Company operations can be found in the Company’s 2024 Annual Report to be filed March 28, 2025 on Form 10-K.

2024 Fourth Quarter and Full Year Financial Results Overview

	At and for the Three Months Ended December 31,											At and for the Year Ended December 31,
	2024				2023				% Change			2024				2023				% Change
	(dollars in thousands, except share and per share amounts)
Gross written premiums	$	13,683			$	24,398			-43.9	%		$	72,053			$	143,834			-49.9	%
Net written premiums		9,526				15,329			-37.9	%			49,338				68,688			-28.2	%
Net earned premiums		12,708				14,821			-14.3	%			60,862				83,935			-27.5	%
Net investment income		1,352				1,411			-4.2	%			5,763				5,447			5.8	%
Net realized investment gains (losses)		-				(20	)		**				(125	)			(20	)		**
Change in fair value of equity investments		(21	)			13			261.5	%			(203	)			608			-133.4	%
Net income (loss) allocable to common shareholders		(25,382	)			(19,479	)		-30.3	%			23,530				(25,923	)		**
Net income (loss) allocable to common shareholders	$	(2.08	)		$	(1.59	)		-30.3	%		$	1.93			$	(2.12	)
per share, diluted
Adjusted operating income (loss)*		(25,821	)			(19,411	)		-33.0	%			(34,558	)			(27,867	)		-24.0	%
Adjusted operating income (loss) per share, diluted*	$	(2.11	)		$	(1.59	)		-32.7	%		$	(2.83	)		$	(2.28	)		-24.1	%
Book value per common share outstanding	$	1.76			$	0.24						$	1.76			$	0.24
Weighted average shares outstanding, basic and diluted		12,222,881				12,222,881							12,222,881				12,220,551
Underwriting ratios:
Loss ratio (1)		254.6	%			191.1	%						120.2	%			97.8	%
Expense ratio (2)		38.3	%			40.6	%						35.8	%			37.1	%
Combined ratio (3)		292.9	%			231.7	%						156.0	%			134.9	%
* The "Definitions of Non-GAAP Measures" section of this release defines and reconciles data that are not based on generally accepted accounting principles.
** Percentage is not meaningful
(1) The loss ratio is the ratio, expressed as a percentage, of net losses and loss adjustment expenses to net earned premiums and other income from underwriting operations.
(2) The expense ratio is the ratio, expressed as a percentage, of policy acquisition costs and other underwriting expenses to net earned premiums and other income from underwriting operations.
(3) The combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.

2024 Fourth Quarter Gross Written Premium

Gross written premiums decreased 43.9% in the fourth quarter of 2024 to $13.7 million, compared to $24.4 million in the prior year period. This decrease reflects the Company’s operational shift away from commercial lines insurance business given the sale of our agency group earlier in the year.

Commercial Lines Financial and Operational Review

	Three Months Ended December 31,											Year Ended December 31,
	2024				2023				% Change			2024				2023				% Change
	(dollars in thousands)
Gross written premiums	$	3,124			$	14,850			-79.0	%		$	26,686			$	107,078			-75.1	%
Net written premiums		488				7,009			93.0	%			14,541				36,580			-60.2	%
Net earned premiums		4,254				7,296			-41.7	%			28,160				59,221			-52.4	%
Underwriting ratios:
Loss ratio		650.8	%			316.7	%						184.8	%			105.7	%
Expense ratio		33.8	%			38.4	%						29.8	%			35.5	%
Combined ratio		684.6	%			355.1	%						214.6	%			141.2	%
Contribution to combined ratio from net
(favorable) adverse prior year development		550.9	%			205.5	%						118.5	%			32.3	%
Accident year combined ratio (1)		133.7	%			149.6	%						96.1	%			108.9	%
(1) The accident year combined ratio is the sum of the loss ratio and the expense ratio, less changes in net ultimate loss estimates from prior accident year loss reserves. The accident year combined ratio provides management with an assessment of the specific policy year's profitability and assists management in their evaluation of product pricing levels and quality of business written.

The Company’s commercial lines production was down 79% for the fourth quarter of 2024 and represented roughly 23% of total gross written premium in quarter. Commercial Lines net earned premium was down 41.7% for the same period. The Commercial Lines loss ratio for the quarter increased significantly as the Company’s management focused on additional commercial lines reserve strengthening overall.

Personal Lines Financial and Operational Review

	Three Months Ended December 31,											Year Ended December 31,
	2024				2023				% Change			2024				2023				% Change
	(dollars in thousands)
Gross written premiums	$	10,559			$	9,548			10.6	%		$	45,367			$	36,756			23.4	%
Net written premiums		9,038				8,320			8.6	%			34,797				32,108			8.4	%
Net earned premiums		8,454				7,525			12.3	%			32,702				24,714			32.3	%
Underwriting ratios:
Loss ratio		55.2	%			69.0	%						64.6	%			78.9	%
Expense ratio		40.6	%			42.7	%						41.1	%			40.7	%
Combined ratio		95.8	%			111.7	%						105.7	%			119.6	%
Contribution to combined ratio from net
(favorable) adverse prior year development		0.9	%			-2.6	%						0.8	%			-5.6	%
Accident year combined ratio		94.9	%			114.3	%						104.9	%			125.2	%

Personal Lines premium represented 77% of total gross written premium for the fourth quarter of 2024. Personal Lines production increased 10.6% from the prior year period to $10.6 million for the quarter, led by growth in the Company’s low-value dwelling line of business in Texas and the Midwest.

Despite storm activity in the full year, the combined ratio for personal lines business improved significantly in 2024 compared to the same period in 2023.

Combined Ratio Analysis

	Three Months Ended December 31,							Year Ended December 31,
	2024			2023				2024			2023
Underwriting ratios:
Loss ratio	254.6	%		191.1	%			120.2	%		97.8	%
Expense ratio	38.3	%		40.6	%			35.8	%		37.1	%
Combined ratio	292.9	%		231.7	%			156.0	%		134.9	%
Contribution to combined ratio from net (favorable)
adverse prior year development	185.0	%		100.0	%			55.3	%		21.2	%
Accident year combined ratio	107.9	%		131.7	%			100.7	%		113.7	%

Net Investment Income
Net investment income increased 5.8% to $5.8 million for the year ending December 31, 2024, compared to $5.4 million in the prior year period.

Change in Fair Value of Equity Securities
During the quarter, the Company reported a loss of $21,000 from the change in fair value of equity investments, compared to a $13,000 gain in the prior year period.

Net Income (Loss) allocable to common shareholders
The Company reported a net loss allocable to common shareholders of $25.4 million, or $2.08 per share, for the fourth quarter of 2024. For the full year 2024, the Company reported net income allocable to common shareholders of $23.5 million, or $1.93 per share.

Adjusted Operating Income (Loss)

In the fourth quarter of 2024, the Company reported an adjusted operating loss of $25.8 million, or $2.11 per share. See Definitions of Non-GAAP Measures.

About Conifer Holdings
Conifer Holdings, Inc. is a Michigan-based property and casualty holding company. Through its subsidiaries, Conifer offers specialty insurance coverage for both commercial and personal lines, marketing through independent agents. The Company is traded on the Nasdaq Capital Market under the symbol CNFR. Additional information is available on the Company's website at www.ir.cnfrh.com.

Forward-Looking Statement

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance, and include Conifer’s expectations regarding future revenue, premiums, earnings, its capital position, expansion, and business strategies. The forward-looking statements contained in this press release are based on management’s good-faith belief and reasonable judgment based on current information. The forward-looking statements are qualified by important factors, risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including those described in our Form 10-K (“Item 1A Risk Factors”) filed with the SEC on March 28, 2025 and subsequent reports filed with or furnished to the SEC. Any forward-looking statement made by us in this press release speaks only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws or regulations.

Definitions of Non-GAAP Measures
Conifer prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners' (NAIC) Accounting Practices and Procedures Manual, and therefore is not reconciled to GAAP data.

We believe that investors’ understanding of Conifer’s performance is enhanced by our disclosure of adjusted operating income. Our method for calculating this measure may differ from that used by other companies and therefore comparability may be limited. We define adjusted operating income (loss), a non-GAAP measure, as net income (loss) excluding: 1) net realized investment gains and losses, 2) change in fair value of equity securities 3) other gains and 4) net income from discontinued operations. We use adjusted operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance.

Reconciliations of adjusted operating income (loss) and adjusted operating income (loss) per share:

		Three Months Ended December 31,								Year Ended December 31,
		2024				2023				2024				2023
		(dollar in thousands, except share and per share amounts)
Net income (loss)		$	(25,382	)		$	(19,460	)		$	24,347			$	(25,904	)
Less:
Net realized investment gains (losses)			-				(20	)			(125	)			(20	)
Change in fair value of equity securities			(21	)			13				(203	)			608
Other gains			646				-				646				-
Net income from discontinued operations			(186	)			(42	)			58,587				1,375
Impact of income tax expense (benefit) from adjustments *			-				-				-				-
Adjusted operating income (loss)		$	(25,821	)		$	(19,411	)		$	(34,558	)		$	(27,867	)
Weighted average common shares, diluted			12,222,881				12,222,881				12,222,881				12,220,551
Diluted income (loss) per common share:
Net income (loss)		$	(2.08	)		$	(1.59	)		$	1.99			$	(2.12	)
Less:
Net realized investment gains (losses)			-				-				(0.01	)			-
Change in fair value of equity securities			-				-				(0.02	)			0.05
Other gains			0.05				-				0.06				-
Net income from discontinued operations			(0.02	)			-				4.79				0.11
Impact of income tax expense (benefit) from adjustments *			-				-				-				-
Adjusted operating income (loss), per share		$	(2.11	)		$	(1.59	)		$	(2.83	)		$	(2.28	)

* The Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2024 and December 31, 2023, respectively. As a result, there were no taxable impacts to adjusted operating income from the adjustments to net income (loss) in the table above after taking into account the use of NOLs and the change in the valuation allowance.

Conifer Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
	December 31				December 31,
	2024				2023
Assets
Investment securities:
Debt securities, at fair value (amortized cost of $117,827 and	$	105,665			$	122,113
$135,370, respectively)
Equity securities, at fair value (cost of $1,836 and $2,385, respectively)		1,603				2,354
Short-term investments, at fair value		21,151				20,838
Total investments		128,419				145,305
Cash and cash equivalents		27,654				10,663
Premiums and agents' balances receivable, net		9,901				29,364
Receivable from Affiliate		-				1,047
Reinsurance recoverables on unpaid losses		84,490				70,807
Reinsurance recoverables on paid losses		6,919				12,619
Prepaid reinsurance premiums		6,088				28,908
Deferred policy acquisition costs		6,380				6,405
Receivable from contingent considerations		8,070				-
Other assets		3,735				7,036
Assets from discontinued operations		-				3,452
Total assets	$	281,656			$	315,606
Liabilities and Shareholders' Equity
Liabilities:
Unpaid losses and loss adjustment expenses	$	189,285			$	174,612
Unearned premiums		30,590				65,150
Reinsurance premiums payable		1				246
Debt		11,932				25,061
Funds held under reinsurance agreements		25,829				24,550
Premiums payable to other insureds		-				13,986
Liabilities from discontinued operations		-				4,083
Accounts payable and accrued expenses		2,494				5,029
Total liabilities		260,131				312,717
Commitments and contingencies		-				-
Shareholders' equity:
Series A Preferred stock, no par value (10,000,000 shares authorized; 0 and 1,000
issued and outstanding, respectively)		-				6,000
Common stock, no par value (100,000,000 shares authorized; 12,222,881
issued and outstanding, respectively)		98,178				98,100
Accumulated deficit		(63,153	)			(86,683	)
Accumulated other comprehensive income (loss)		(13,500	)			(14,528	)
Total shareholders' equity		21,525				2,889
Total liabilities and shareholders' equity	$	281,656			$	315,606

Conifer Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(dollars in thousands, except share and per share data)
	Three Months Ended								Year Ended
	December 31,								December 31,
	2024				2023				2024				2023
Revenue and Other Income
Premiums
Gross earned premiums	$	19,721			$	38,115			$	106,612			$	146,572
Ceded earned premiums		(7,013	)			(23,294	)			(45,750	)			(62,637	)
Net earned premiums		12,708				14,821				60,862				83,935
Net investment income		1,352				1,411				5,763				5,447
Net realized investment gains (losses)		-				(20	)			(125	)			(20	)
Change in fair value of equity securities		(21	)			13				(203	)			608
Other gains		646				-				646				-
Other income		41				144				328				552
Total revenue and other income		14,726				16,369				67,271				90,522
Expenses
Losses and loss adjustment expenses, net		32,349				28,470				73,302				82,413
Policy acquisition costs		3,535				2,392				13,335				15,797
Operating expenses		3,165				3,969				11,831				16,738
Interest expense		862				845				4,883				3,206
Total expenses		39,911				35,676				103,351				118,154
Income (loss) from continuing operations before income taxes		(25,185	)			(19,307	)			(36,080	)			(27,632	)
Income tax expense (benefit)		11				111				(1,840	)			(353	)
Net income (loss) from continuing operations	$	(25,196	)		$	(19,418	)		$	(34,240	)		$	(27,279	)
Net income (loss) from discontinued operations		(186	)			(42	)			58,587				1,375
Net income (loss)		(25,382	)			(19,460	)			24,347				(25,904	)
Series A Preferred Stock Dividends and Redemption premium		-				19				817				19
Net income (loss) allocable to common shareholders		(25,382	)			(19,479	)			23,530				(25,923	)
Earnings (loss) per common share, basic and diluted
Net income (loss) from continuing operations	$	(2.06	)		$	(1.59	)		$	(2.87	)		$	(2.23	)
Net income (loss) from discontinued operations	$	(0.02	)		$	(0.00	)		$	4.79			$	0.11
Net income (loss) allocable to common shareholders	$	(2.08	)		$	(1.59	)		$	1.93			$	(2.12	)
Weighted average common shares outstanding,
basic and diluted		12,222,881				12,222,881				12,222,881				12,220,551

For Further Information:
Jessica Gulis, 248.559.0840
ir@cnfrh.com

FAQ

What was the impact of CNFR's insurance agency sale in 2024?

The sale generated a $61 million gain and led to a significant reduction in Commercial Lines business, with total Gross Written Premium declining 50% year-over-year.

How did CNFR's Personal Lines business perform in Q4 2024?

Personal Lines grew 10.6% to $10.6 million, representing 77% of total gross written premium, driven by growth in low-value dwelling business in Texas and Midwest.

What was CNFR's net income for full year 2024?

CNFR reported net income of $23.5 million ($1.93 per share) for full year 2024, despite a Q4 net loss of $25.4 million.

How much did CNFR's investment income grow in 2024?

Net investment income increased 5.8% to $5.8 million compared to $5.4 million in the prior year.