Finance

ICC Holdings, Inc. Reports 2024 Third Quarter and Nine Months Results



ROCK ISLAND, Ill., Nov. 4, 2024 /PRNewswire/ — ICC Holdings, Inc. (NASDAQ: ICCH) (the Company), parent company of Illinois Casualty Company, a regional, multi-line property and casualty insurance company focusing exclusively on the food and beverage industry, today reported unaudited results for the three and nine months ended September 30, 2024.

THIRD  QUARTER AND NINE  MONTHS ENDED SEPTEMBER 30, 2024   FINANCIAL RESULTS

Net earnings totaled $2,052,000, or $0.69 per share, for the third quarter of 2024, compared to a net loss of $769,000, or $0.26 per share, for the third quarter of 2023. For the nine months ended September 30, 2024, the Company reported net earnings of $3,560,000, or $1.20 per share, compared to net earnings of $1,396,000, or $0.47 per share, for the same period in 2023. Book value per share increased to $23.29 at September 30, 2024, from $21.35 at December 31, 2023. These changes for the nine months ended September 30, 2024, were driven by improvements to our core insurance business and the improving investment markets.

Direct premiums written increased by $3,167,000, or 12.9%, to $27,662,000 for the third quarter of 2024, from $24,495,000 for the same period in 2023. For the nine months ended September 30, 2024, direct premiums written increased by $7,888,000, or 11.4%, to $76,788,000 compared to $68,900,000 for the same period in 2023. Net premiums earned increased by $2,477,000, or 12.9%, to $21,711,000 for the three months ended September 30, 2024, from $19,234,000 for the same period in 2023. Net premiums earned increased by $6,803,000, or 12.3%, to $62,332,000 for the nine months ended September 30, 2024, from $55,529,000 for the same period in 2023. The growth for both periods is due to rate increases and an increase in policies in force.

For the third quarter of 2024, the Company ceded to reinsurers $3,479,000 of earned premiums, compared to $2,878,000 of earned premiums for the third quarter of 2023. For the nine months ended September 30, 2024, the Company ceded earned premiums of $10,515,000, compared to $8,066,000 for the same period in 2023. The drivers of this increase include additional direct written premium in the current year plus the addition of a ceding allowance on our first property and casualty reinsurance contracts.

Net investment income increased by $215,000, or 16.0%, to $1,557,000 for the third quarter of 2024, as compared to $1,342,000 for the same period in 2023. For the nine months ended September 30, 2024, net investment income increased by $739,000, or 19.5%, to $4,537,000 from $3,798,000 for the same period in 2023. The increase is the result of continued re-investing of net proceeds at rates far greater than we are disposing of them and market improvements.

Net unrealized gains and losses on equity securities increased $1,676,000 year over year to $614,000 in gains for the third quarter of 2024, compared to losses of $1,062,000 for the same period in 2023. Net unrealized gains on equity securities increased year over year to $2,134,000 in gains as of September 30, 2024, compared to gains of $279,000 as of September 30, 2023. These increases reflect the overall gains in the equity markets in 2024.  

Losses and settlement expenses increased  by $708,000,  or 5.3%, to $14,144,000  for the third quarter of 2024, from $13,436,000  for the same period in 2023. This increase was driven by increased Businessowner’s Liability claims. Losses and settlement expenses increased by $4,335,000, or 11.8%, to $41,034,000 for the nine months ended September 30, 2024, from $36,699,000 for the same period in 2023. This increase was driven by increased Liquor Liability claims.  

Policy acquisition costs and other operating expenses increased by $273,000, or 3.9%, to $7,302,000 for the third quarter of 2024, from $7,029,000 for the same period in 2023. Policy acquisition costs and other operating expenses increased by $2,223,000, or 10.7%, to $23,047,000 for the nine months ended September 30, 2024, from $20,824,000 for the same period in 2023. This increase was due to increases in legal and consulting fees, as well as agency commissions. Legal and consulting expenses are up $1,000,000 due to the past proxy contest and the pending merger. Commissions increased as expected as a direct result of higher written premiums.  

Total assets increased by $21,910,000, or 10.4%, from $211,017,000 on December 31, 2023, to $232,927,000 on September 30, 2024. The investment portfolio, which consists of fixed income securities, common stocks, preferred stocks, property held for investment, and other invested assets, increased by $11,149,000, or 7.9%, from $140,853,000 on December 31, 2023, to $152,002,000 on September 30, 2024. This increase was due mainly to our increased investment holdings.  

Total equity increased by $6,099,000, or 9.1%, from $67,004,000 as of December 31, 2023, to $73,103,000 as of September 30, 2024. The main drivers of this increase were our net earnings and unrealized gains on our fixed income portfolio.

THIRD  QUARTER ENDED SEPTEMBER 30, 2024  “ FINANCIAL RATIOS

The Company’s losses and settlement expense ratio (defined as losses and settlement expenses divided by net premiums earned) was 65.1% and 65.8% for the third quarter and nine months ended September 30, 2024, compared with 69.9% and 66.1% for the same periods in 2023.

The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 33.6% and 37.0% for the third quarter and nine months ended September 30, 2024, compared to 36.5% and 37.5% for the same periods in 2023.

The Company’s GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 98.7% and 102.8% for the third quarter and nine months ended September 30, 2024, compared to 106.4% and 103.6% for the same periods in 2023.

MANAGEMENT COMMENTARY

“We have seen year-over-year improvement in both our losses and settlement expense ratio and underwriting expense ratio.   Losses and settlement expenses are down due to our continued rate strengthening,  tighter risk selection, and the introduction  of Charlee.ai to improve efficiency and hasten claim resolution.   Underwriting expenses are down despite the $1.0M spent on the merger and successful proxy contest as a result of operational efficiencies.   As a result, our combined ratio is lower than last year.

“Investment conditions improved greatly in Q3 leading to more positive investment results in net income and earnings per share. We are seeing marked reversals in our unrealized losses from prior years market fluctuations.  

“The merger has been moving forward  as anticipated. The vote on the merger is planned for late November. We still expect  a Q4  2024  closing,” stated Arron Sutherland, President and Chief Executive Officer.

ABOUT ICC HOLDINGS, INC.

ICC Holdings, Inc. is a vertically integrated company created to facilitate the growth, expansion, and diversification of its subsidiaries to maximize value to its stakeholders. The group of companies consolidated under ICC Holdings, Inc. engages in diverse, yet complementary business activities, including property and casualty insurance, real estate, and information technology.

The Company’s common shares trade on the NASDAQ Capital Market under the ticker symbol “ICCH”. For more information about ICC Holdings, visit http://ir.iccholdingsinc.com.

FORWARD-LOOKING STATEMENTS

This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, or the Reform Act, which may include, but are not limited to, statements regarding the Company’s plans, objectives, expectations, and intentions and other statements contained in this press release that are not historical facts, including statements identified by words such as “believe,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “will,” and similar expressions. All statements addressing operating performance, events, or developments that the Company expects or anticipates will occur in the future, including statements relating to revenue and profit growth; future responses to and effects of the COVID-19 pandemic, including their effects on claims activity and the business operations of the Company and of our current and potential customers; new theories of liability; judicial, legislative, regulatory, and other governmental developments, including, but not limited to, liability related to business interruption claims related to COVID-19; litigation tactics and developments; product and segment expansion; regulatory approval in connection with expansion; downturns and volatility in global economies and equity and credit markets, including as a result of inflation and supply chain disruptions and continued labor shortages; interest rates and changes in rates could adversely affect the Company’s business and profitability; and market share, as well as statements expressing optimism or pessimism about future operating results, are forward-looking statements within the meaning of the Reform Act. The forward-looking statements are based on management’s current views and assumptions regarding future events and operating performance, and are inherently subject to significant business, economic, and competitive uncertainties and contingencies and changes in circumstances, many of which are beyond the Company’s control. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.  

Although the Company does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Company cannot guarantee their accuracy. The foregoing factors, among others, could cause actual results to differ materially from those described in these forward-looking statements. For a list of other factors which could affect the Company’s results, see the Company’s filings with the Securities and Exchange Commission, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including “Forward-Looking Information,” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. No undue reliance should be placed on any forward-looking statements.

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of

September 30,

December 31,

2024

2023

(Unaudited)

Assets:

Investments and cash:

Fixed maturity securities (amortized cost of $120,448,405 at 9/30/2024 and $119,336,041
at 12/31/2023)

$

114,743,833

$

110,955,697

Common stocks at fair value

14,470,556

12,191,621

Preferred stocks at fair value

2,924,056

2,896,296

Other invested assets, net of allowances for credit losses of $310,000 at 9/30/2024 and
$39,000 at 12/31/2023

13,958,375

8,898,409

Property held for investment, at cost, net of accumulated depreciation of $719,900 at
9/30/2024 and $682,402 at 12/31/2023

5,904,718

5,910,864

Cash and cash equivalents

11,011,618

1,478,135

Total investments and cash

163,013,156

142,331,022

Accrued investment income

1,042,274

915,156

Premiums and reinsurance balances receivable, net of allowances for credit losses of
$130,000 at 9/30/2024 and $143,000 at 12/31/2023

38,062,859

37,220,433

Ceded unearned premiums

774,949

755,099

Reinsurance balances recoverable on unpaid losses and settlement expenses, net of
allowances for credit losses of $80,000 at 9/30/2024 and $82,000 at 12/31/2023

12,519,808

12,736,579

Federal income taxes

2,544,027

2,775,366

Deferred policy acquisition costs, net

9,178,039

8,552,459

Property and equipment, at cost, net of accumulated depreciation of $7,381,278 at
9/30/2024 and $6,990,076 at 12/31/2023

3,271,851

3,325,322

Other assets, net of allowances for credit losses of $2,000 at 9/30/2024 and $5,000 at
12/31/2023

2,520,452

2,405,577

Total assets

$

232,927,415

$

211,017,013

Liabilities:

Unpaid losses and settlement expenses

$

83,582,487

$

71,919,585

Unearned premiums

51,295,631

47,259,637

Reinsurance balances payable

1,020,657

1,132,301

Corporate debt

15,000,000

15,000,000

Accrued expenses

7,696,366

7,442,617

Other liabilities

1,228,786

1,259,324

Total liabilities

159,823,927

144,013,464

Equity:

Common stock1

35,000

35,000

Treasury stock, at cost2

(5,727,278)

(5,710,324)

Additional paid-in capital

33,597,942

33,330,846

Accumulated other comprehensive (loss), net of tax

(4,506,518)

(6,621,336)

Retained earnings

51,403,889

47,844,368

Less: Unearned Employee Stock Ownership Plan shares at cost3

(1,699,547)

(1,875,005)

Total equity

73,103,488

67,003,549

Total liabilities and equity

$

232,927,415

$

211,017,013

1  Par value $0.01; authorized: 2023   10,000,000 shares and 2022   10,000,000 shares; issued: 2023   3,500,000 shares and 2022   3,500,000 shares; outstanding: 2023  “  3,138,580 and 2022  “  3,138,976  shares
2 2023  “  361,420  shares and 2022  “  361,024  shares
3 2023  “  175,844  shares and 2022  “  187,498  shares

 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)

For the Three-Months Ended

September 30,

2024

2023

Net premiums earned

$

21,711,407

$

19,233,517

Net investment income

1,556,776

1,342,258

Net realized investment gains

437,258

199,928

Net unrealized gains (losses) on investments

613,594

(1,062,332)

Other income

56,380

51,000

Consolidated revenues

24,375,415

19,764,371

Losses and settlement expenses

14,144,203

13,436,464

Policy acquisition costs and other operating expenses

7,301,724

7,029,218

Interest expense on debt

46,409

46,409

General corporate expenses

264,275

220,092

Total expenses

21,756,611

20,732,183

Earnings (loss) before income taxes

2,618,804

(967,812)

Total income tax expense (benefit)

566,613

(198,850)

Net earnings (loss)

$

2,052,191

$

(768,962)

Other comprehensive earnings (loss), net of tax

3,234,962

(3,025,254)

Comprehensive earnings (loss)

$

5,287,153

$

(3,794,216)

Earnings per share:

Basic:

Basic net earnings (loss) per share

$

0.69

$

(0.26)

Diluted:

Diluted net earnings (loss) per share

$

0.69

$

(0.26)

Weighted average number of common shares outstanding:

Basic

2,964,743

2,945,199

Diluted

2,986,401

2,968,808

 

For the Nine-Months Ended

September 30,

2024

2023

Net premiums earned

$

62,331,966

$

55,528,867

Net investment income

4,536,992

3,798,432

Net realized investment gains

584,925

268,375

Net unrealized gains on investments

2,134,454

279,100

Other income

46,283

160,714

Consolidated revenues

69,634,620

60,035,488

Losses and settlement expenses

41,034,199

36,698,631

Policy acquisition costs and other operating expenses

23,046,544

20,823,605

Interest expense on debt

138,218

137,713

General corporate expenses

870,968

616,304

Total expenses

65,089,929

58,276,253

Earnings before income taxes

4,544,691

1,759,235

Total income tax expense

985,170

363,164

Net earnings

$

3,559,521

$

1,396,071

Other comprehensive earnings (loss), net of tax

2,114,818

(2,193,230)

Comprehensive earnings (loss)

$

5,674,339

$

(797,159)

Earnings per share:

Basic:

Basic net earnings per share

$

1.20

$

0.47

Diluted:

Diluted net earnings per share

$

1.20

$

0.47

Weighted average number of common shares outstanding:

Basic

2,954,852

2,945,686

Diluted

2,976,510

2,969,295

 

Contact Info: Arron K. Sutherland, President and CEO

Illinois Casualty Company

(309) 732-0105

arrons@ilcasco.com

225 20th  Street, Rock Island, IL 61201

 





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