Conifer Holdings Reports 49.9% Drop in Gross Written Premiums and $34.2 Million Net Loss for Fiscal Year 2024

Conifer Holdings, Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with gross written premiums dropping to $72.1 million, a decrease of 49.9% from $143.8 million in 2023. The company's commercial lines premiums fell sharply by 75.1% to $26.7 million, while personal lines premiums increased by 23.4% to $45.4 million, primarily due to growth in low-value dwelling insurance in Texas. The company recorded a net loss from continuing operations of $34.2 million, or $2.87 per share, compared to a net loss of $27.3 million, or $2.23 per share, in the previous year.

The decline in revenue was attributed to the cessation of nearly all commercial lines underwriting due to inadequate statutory capital and surplus in its insurance subsidiaries. In a strategic shift, Conifer sold its managing general agency, Conifer Insurance Services (CIS), on August 30, 2024, to generate liquidity and support its insurance subsidiaries. This sale, along with the sale of its 50% interest in Sycamore Specialty Underwriters, significantly impacted the company's revenue structure, as it transitioned from an underwriting-based model to a reliance on commission revenue, which is now non-existent following the sale of CIS.

Operationally, the company has undergone substantial changes, including a reduction in employee headcount from 77 to 9, following the sale of CIS. The company now relies heavily on third-party vendors for underwriting, claims, and information technology services. The concentration of risk has increased, as the company’s homeowners business is now solely dependent on one agency, Sycamore Specialty Underwriters, over which it has no control. This shift has raised concerns about the sustainability of its revenue streams and the ability to maintain its market presence.

In terms of financial health, Conifer's insurance subsidiaries faced capital constraints, necessitating a $16 million capital contribution to remain compliant with regulatory requirements. The company also reported a downgrade in financial strength ratings from both A.M. Best and Kroll, which could hinder its ability to attract new business. The outlook remains uncertain, with management indicating that while they expect to meet obligations in the near term, the long-term viability of the business will depend on successfully navigating these challenges and potentially restructuring operations to regain profitability.

Looking ahead, Conifer Holdings plans to focus on its homeowners insurance business in the Midwest and Texas, although it anticipates minimal growth in commercial lines. The company has raised $7.5 million through the issuance of Series B Preferred Stock and is eligible for contingent payments from the CIS sale, which could provide additional liquidity. However, the overall financial outlook remains cautious, with management acknowledging the need for ongoing capital support and the potential for further operational adjustments in response to market conditions.