National General Holdings Corp. (NASDAQ:NGHC) Q3 2018 Earnings Conference Call Transcript

Oct 31, 2018 • 08:30 am ET


National General Holdings Corp. (NASDAQ:NGHC) Q3 2018 Earnings Conference Call Transcript


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Good morning, ladies and gentlemen, and welcome to the National General Holdings Third Quarter 2018 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation.

It is now my pleasure to turn the floor over to your host, Christine Worley, Director of IR. Ma'am, the floor is yours.

Christine Worley

Thank you. Good morning and welcome to National General Holdings Corp third quarter 2018 earnings conference call. As the operator stated, my name is Christine Worley and I am the Director of IR at National General. With me this morning are Barry Karfunkel, CEO, and Mike Weiner, CFO.

(Forward-Looking Cautionary Statements)

Our management will refer to financial measures that are not derived from generally accepted accounting principles or GAAP. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures and related information is provided in the press release for our third quarter 2018 earnings, which is available in the IR section of our website at

It is now my pleasure to turn the call over to our CEO, Mr. Barry Karfunkel.

Barry Karfunkel

Thank you. Good morning, and thank you for joining our third quarter earnings conference call. I'm extremely pleased with another quarter of robust earnings despite elevated cat activity. This quarter continues to demonstrate the value creation that we've been able to achieve by leveraging our platform to integrate our past acquisitions and unify them in a way that shares each business' unique capabilities across the entire enterprise.

Turning to some of the specific lines of business. Our auto line continues to perform well. The results this quarter are a reflection of the risk selection and pricing segmentation that our RAD 5.0 product provides us. We have begun to roll out RAD 6.0, which we expect to further benefit our product with more sophisticated segmentation. Looking forward, we expect future growth within the auto line to come from continued growth within our current states as well as recent expansion states entered into as a result of the Direct General and Nationwide acquisitions and continued list from investment in our direct-to-consumer channel.

Within our homeowners line of business, this quarter continued to experience solid growth with our high net worth book benefiting from a recent state expansion. In California, where our large loss activity has been increasing, we are implementing stricter underwriting guidelines to ensure that new business meets our profitability targets. We remain excited about future rollout of our new homeowners product, which should be one of the more segmented and sophisticated products in the industry.

Turning to A&H. I'm extremely pleased with the performance of all lines of business in this segment. Our niche small group stop loss line continues to perform extremely well with strong top line results that offer savings to our targeted customers as a result of our differentiated pricing and underwriting approach. We anticipate strong growth from our individual products including short-term medical this coming open