ICC Holdings Reports Strong Third Quarter and Nine Months Results, Driven by Core Business Improvements and Favorable Market Conditions
ROCK ISLAND, Ill., Nov. 4, 2024 /PRNewswire/ — ICC Holdings, Inc. (ICCH), the parent company of Illinois Casualty Company, a regional, multi-line property and casualty insurance company specializing in the food and beverage industry, announced today its unaudited results for the three and nine months ended September 30, 2024.
Third Quarter and Nine Months Ended September 30, 2024 – Financial Results
The company reported robust financial performance for both the third quarter and the first nine months of 2024, reflecting positive trends in its core insurance operations and a favorable investment environment. Here are some key highlights:
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Net Earnings Growth:
Net earnings for the third quarter of 2024 totaled $2,052,000, or $0.69 per share, a significant improvement compared to a net loss of $769,000, or $0.26 per share, in the same period last year. For the nine months ended September 30, 2024, the company reported net earnings of $3,560,000, or $1.20 per share, up from $1,396,000, or $0.47 per share, in the corresponding period of 2023.*
Book Value Per Share Increase:
Book value per share climbed to $23.29 at September 30, 2024, from $21.35 at December 31, 2023. This increase was driven by improvements in the company’s core insurance operations and the strengthening investment markets.*
Direct Premiums Written Surge:
Direct premiums written increased by $3,167,000, or 12.9%, to $27,662,000 for the third quarter of 2024, compared to $24,495,000 in the same period in 2023. For the nine months ended September 30, 2024, direct premiums written rose by $7,888,000, or 11.4%, to $76,788,000, compared to $68,900,000 for the same period in 2023. This growth was attributed to rate increases and an increase in policies in force.*
Net Premiums Earned Growth:
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 in the same period last year. Net premiums earned also increased by $6,803,000, or 12.3%, to $62,332,000 for the nine months ended September 30, 2024, compared to $55,529,000 for the same period in 2023. This growth is attributed to the rate increases and increase in policies in force.*
Improved Investment Income:
Net investment income rose by $215,000, or 16.0%, to $1,557,000 for the third quarter of 2024, 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. This increase reflects continued reinvestment of net proceeds at higher rates and overall market improvements.*
Reversal of Unrealized Losses:
Net unrealized gains and losses on equity securities increased by $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 also 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. This reflects the overall gains in the equity markets in 2024.*
Losses and Settlement Expenses:
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 primarily driven by an uptick in Businessowner’s Liability claims. For the nine months ended September 30, 2024, losses and settlement expenses increased by $4,335,000, or 11.8%, to $41,034,000, from $36,699,000 for the same period in 2023. This increase was driven by an increase in Liquor Liability claims.*
Policy Acquisition Costs and Operating Expenses:
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. For the nine months ended September 30, 2024, these costs increased by $2,223,000, or 10.7%, to $23,047,000, from $20,824,000 for the same period in 2023. The increase was primarily due to higher legal and consulting fees associated with the proxy contest and pending merger, as well as higher agency commissions stemming from increased written premiums.Third Quarter Ended September 30, 2024 – Financial Ratios
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Losses and Settlement Expense Ratio:
The company’s losses and settlement expense ratio (defined as losses and settlement expenses divided by net premiums earned) was 65.1% for the third quarter and 65.8% for the nine months ended September 30, 2024, compared to 69.9% and 66.1% for the same periods in 2023. The improvement in this ratio indicates that the company is effectively managing its claims and controlling expenses.*
Expense Ratio:
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% for the third quarter and 37.0% for the nine months ended September 30, 2024, compared to 36.5% and 37.5% for the same periods in 2023. This improvement reflects operational efficiencies implemented by the company.*
GAAP Combined Ratio:
The company’s GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 98.7% for the third quarter and 102.8% for the nine months ended September 30, 2024, compared to 106.4% and 103.6% for the same periods in 2023. The decline in this ratio signifies a positive trend in overall profitability for the company.Management Commentary
Arron Sutherland, President and Chief Executive Officer of ICC Holdings, Inc., commented on the company’s strong performance: “We are pleased to report 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 expedite claim resolution. Underwriting expenses are down despite the $1.0 million 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 considerably 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 year market fluctuations.” Sutherland added. “The merger has been progressing as anticipated. The vote on the merger is planned for late November. We still expect a Q4 2024 closing.”
About ICC Holdings, Inc.
ICC Holdings, Inc. is a vertically integrated company committed to facilitating the growth, expansion, and diversification of its subsidiaries to maximize value for 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 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
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ICC Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings and Comprehensive Earnings
[Table of Consolidated Statements of Earnings and Comprehensive Earnings]
Contact Info:
Arron K. Sutherland, President and CEO
Illinois Casualty Company
(309) 732-0105
arron@ilcasco.com
225 20th Street, Rock Island, IL 61201
