First Acceptance Stock Price, News & Analysis

First Acceptance Corporation (FACO) is an insurance holding company in the finance and insurance sector, classified within the direct property and casualty insurance carriers industry. According to the company’s public disclosures, First Acceptance focuses on underwriting non-standard personal automobile insurance through insurance companies known as the First Acceptance Insurance Group.

The company states that it is headquartered in Nashville. Its business model centers on writing its own automobile insurance policies and distributing them through independent insurance agents. In multiple press releases, First Acceptance notes that it solely offers its own underwritten insurance policies through independent agents, reflecting a distribution model that emphasizes relationships with third-party agencies rather than operating a retained insurance agency network.

Business model and insurance focus

First Acceptance describes itself as an insurance holding company whose primary activity is the underwriting of non-standard personal automobile insurance. Non-standard auto insurance generally refers to coverage for drivers who may not qualify for standard auto policies, but the company’s releases focus on the fact that it underwrites this type of personal automobile insurance through its insurance subsidiaries operating as the First Acceptance Insurance Group.

The company highlights that its insurance operations generate revenues from written and earned premiums and that its financial results are influenced by factors such as loss and loss adjustment expense (LAE) development, reinsurance arrangements, and investment income. In several quarterly and annual result announcements, First Acceptance discusses loss ratios, expense ratios, and combined ratios for its insurance companies, underscoring the importance of underwriting performance and claims experience to its overall results.

Distribution through independent agents

In its public communications, First Acceptance explains that it transitioned to a total independent agency distribution system. The company indicates that, subsequent to the sale of its insurance agency operations effective December 1, 2023, it has relied on independent agents to distribute its non-standard auto insurance products. The company notes that it solely offers its own underwritten insurance policies through these independent agents, and it refers to this as a complete independent agent model of distribution.

Management commentary in earnings releases emphasizes that written premiums and policies in force have grown under this independent agent model, and that premium growth has occurred across distribution channels that utilize independent agencies. The company also notes contingent commission arrangements with at least one independent agent, which can be affected by prior period loss and LAE development.

Reinsurance and risk management elements

First Acceptance’s public financial updates describe the impact of a reinsurance agreement effective July 1, 2024. The company reports that revenues for various periods in 2024 and 2025 were reduced by ceded premiums earned under this new reinsurance contract. It distinguishes between revenues before ceded reinsurance and revenues after ceded reinsurance to show how the agreement affects its reported top line.

In addition, the company regularly discloses the effect of prior period loss and LAE development on its results. Favorable or unfavorable development can influence both earnings and related commission expenses, including contingent commission adjustments to an independent agent. The company also reports loss ratios, expense ratios, and combined ratios for its insurance companies, providing insight into underwriting performance and operating efficiency.

Investment income and capital position

First Acceptance’s press releases indicate that investment income has become a more significant contributor to net income over time. The company attributes this to increased investable assets and favorable investment market conditions. It also notes that the sale of its insurance agency operations in December 2023 provided statutory capital that supported higher gross premiums written in a subsequent year.

The company’s disclosures reference book value per common share and, in some periods, tangible book value per share as measures of its capital position and shareholder equity. Management commentary links improvements in these measures to profitability, premium growth, investment income, and the proceeds from the sale of the insurance agency operations.

Board of Directors and governance developments

First Acceptance periodically announces changes to its Board of Directors. The company has reported the appointment of several new board members, some of whom serve on the Board’s Audit Committee and Risk Committee. In these announcements, First Acceptance notes the proportion of independent directors on the Board. The backgrounds of the new directors, as described by the company, include experience in non-standard automobile insurance, insurance distribution, and corporate and securities law.

These governance updates provide insight into the company’s oversight structure and the expertise represented on its Board, particularly in areas such as non-standard auto insurance markets, independent agent management, and corporate legal matters.

Financial reporting and performance commentary

First Acceptance regularly issues press releases summarizing its quarterly and annual operating results. These communications report income before income taxes, net income, diluted net income per share, and revenues for the periods discussed. The company also describes trends affecting its results, including:

• Changes in physical damage loss severity, which it has linked to costs for autos and parts and, in one period, to marketplace price increases in anticipation of tariffs on imported vehicles, auto parts, and vehicle components.
• Changes in claim frequency, including references to reductions in claim frequency in certain periods.
• The impact of storm activity and hurricanes on claim losses in some of its market states, with the company noting when such events did not produce significant losses.
• The effect of reinsurance agreements on revenues through ceded premiums earned.

Management commentary in these releases often discusses underwriting standards, pricing actions, claim handling operations, and cost containment efforts as factors influencing profitability and combined ratios. The company also refers to periods of consecutive profitable quarters, based on its reported financial results.

Status and trading venue

In its public news releases, First Acceptance identifies itself as trading on the OTCQX market under the ticker symbol FACO. The company’s communications direct readers to disclosure documents available on the OTC Markets platform for more detailed financial information.

FAQs about First Acceptance Corporation (FACO)

• What does First Acceptance Corporation do?
  First Acceptance Corporation is an insurance holding company that underwrites non-standard personal automobile insurance through insurance companies known as the First Acceptance Insurance Group. The company states that it focuses on offering its own underwritten auto insurance policies.
• How does First Acceptance distribute its insurance products?
  According to the company’s disclosures, First Acceptance distributes its non-standard personal automobile insurance policies through independent agents. Following the sale of its insurance agency operations effective December 1, 2023, the company reports that it solely offers its own underwritten insurance policies through independent agents.
• What type of insurance does First Acceptance focus on?
  The company reports that it underwrites non-standard personal automobile insurance. Its press releases consistently describe its business as centered on this type of auto insurance coverage.
• Where is First Acceptance Corporation headquartered?
  First Acceptance states in its public communications that it is an insurance holding company headquartered in Nashville.
• How does reinsurance affect First Acceptance’s reported revenues?
  The company notes that a reinsurance agreement effective July 1, 2024 results in ceded premiums earned that reduce reported revenues. It distinguishes between revenues before ceded reinsurance and revenues after ceded reinsurance in its financial updates.
• What financial metrics does First Acceptance highlight for its insurance operations?
  In its earnings releases, First Acceptance reports income before income taxes, net income, diluted net income per share, and revenues. For its insurance companies, it also presents loss ratios, expense ratios, and combined ratios, along with the impact of prior period loss and loss adjustment expense development.
• How does First Acceptance describe the role of investment income?
  The company states that investment income has become a more significant component of its net income, supported by increased investable assets and favorable market conditions. It also notes that proceeds from the sale of its insurance agency operations contributed to higher levels of cash and invested assets.
• What governance developments has First Acceptance reported?
  First Acceptance has announced the appointment of several new members to its Board of Directors, some of whom serve on the Board’s Audit Committee and Risk Committee. The company notes the number of directors and the count of independent directors following these appointments.
• On which market does First Acceptance Corporation’s stock trade?
  In its press releases, First Acceptance identifies its common stock as trading on the OTCQX market under the ticker symbol FACO.
• Where can investors find more detailed financial information about First Acceptance?
  The company’s news releases state that quarterly reports and additional disclosure documents for First Acceptance Corporation (FACO) can be found on the OTC Markets disclosure platform.