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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
SAFE HARBOR
This document contains forward-looking statements and management may make additional forward looking statements in
response to your questions. Forward-looking statements include statements regarding the intent, belief or current
expectations of the Company and its management about the Company’s business, financial condition and results of
operations, among other factors. In some cases you can identify these statements by forward-looking words such as
“may,” “might,” “will,” “will likely result,” “should,” “anticipates,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “potential,”
“continue,” “believes” and similar expressions, although some forward-looking statements are expressed differently. These
forward-looking statements are based on the Company’s current expectations and assumptions that are subject to risks
and uncertainties that may cause its actual results, performance, or achievements to differ materially from any expected
future results, performance, or achievements expressed or implied by such forward-looking statements. All statements
other than statements of historical fact are statements that could be deemed forward-looking statements. These risks and
uncertainties include, but are not limited to the level of demand for the Company’s coverage and the incidence of
catastrophic events related to its coverage; the Company’s ability to grow and remain profitable in the competitive
insurance industry; its ability to access additional capital; its ability to attract and retain qualified personnel; changes in
general economic, business and industry conditions; and legal, regulatory, and tax developments.
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A homeowners’ insurance company in states where we believe there is a significant potential for generating high
returns on equity with controlled risk
Ticker (NASDAQ: PIH)
Stock Price $7.55 (as of 3/27/2015)
Shares Outstanding 6.36 million
Market Cap $48.0 million (as of 3/27/2015)
Sector / Industry Insurance
AT A GLANCE
1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Gordon G. PrattChairman
Douglas RaucyPresident and CEO
John Hill, CPAChief Financial Officer
Dean StroudVP of Underwriting
Bob GantleyVP and COO
• Over 20 years of executive insurance industry experience• Current or past director, investor, executive, or advisor to over two dozen
insurance enterprises• Chase Manhattan Bank, Conning & Company, Hales Group, Willis Group, Fund
Management Group
• President and CEO of Maison Insurance Co.• Founder of three homeowners’ insurance companies• Former head of Allstate’s national catastrophe team, over 20 years experience as an
Allstate employee in various positions
• CFO of Maison Insurance Co., previously CFO of three P/C insurance companies• Over 15 years experience in the Florida homeowners’ market• 10 years of experience at a “Big Four” accounting firm
• VP of underwriting for Maison Insurance Co.• Former President of Audubon Insurance Co. (AIG subsidiary)• Over 40 years of homeowner’ underwriting experience
• Over 35 years of experience in the industry, particularly in claims and underwriting• President of ClaimCor, a claim and underwriting technical solutions company
MANAGEMENT BACKGROUNDOVER 100 YEARS OF COMBINED HOMEOWNERS’ INSURANCE EXPERIENCE IN COASTAL STATES
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Creating a homeowners’ insurance company in states where we believe there is a significant potential for generating high returns on equity with controlled risk
Market Criteria Includes:
Target states with high property premiums in U.S.
Seek favorable legislative environment
Areas where industry giants (State Farm, Allstate, Farmers) are looking to decrease coastalrisk exposure
Locations where management has experience in writing and managing wind-risk andindependent and captive agent contacts
Ability to grow to scale quickly in part due to an existing state-run depopulation program– State-run insurer provides property insurance to marketplace and looks to shrink over time by
allowing private insurers to “take out” policies and assume that risk
TARGETING THE CORRECT MARKETS
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Integrated Insurance Company Targeting High Potential Markets
Management Team with Experience Establishing and Managing Coastal Business
Favorable Reinsurance Market
Plan for Expansion into Coastal States
COMPELLING INVESTMENT OPPORTUNITY
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Announced Dec 1, 2014
500,000 shares of common stock over 12 month period
Repurchases will be made from time to timein open market transactions, privately-negotiated transactions, block purchases, orotherwise in accordance with Federalsecurities laws at the discretion of theCompany’s management.
STOCK REPURCHASE PROGRAM
“While investing in the expansion of our
business operations remains our first priority,
the Board’s consent to initiate the program is
a sign of the importance we place in the
Company’s ability to create long-term
profitable growth.”
-CEO Doug Raucy
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
PIH is a holding company that owns an admitted propertyand casualty insurance company based in Louisiana, doingbusiness as Maison Insurance Company, a managing generalagency (MGA) doing business in Louisiana, Maison ManagersInc., and a claims handling company ClaimCor, LLC
Maison Insurance Company provides full coverage to personalresidential dwellings on a multi-peril form to single familystructures including manufactured housing units.Additionally it provides reduced coverage and wind/hailonly coverage
Company is currently writing in Louisiana, seeking entryinto other coastal markets
ClaimCor, LLC is a claims and underwriting technicalsolutions company, acquired in December 2014. Based in St.Petersburg, Florida, the Company provides turnkey,customized, client centric claim and underwriting technicalsolutions to its business partners
WHAT IS 1347 PIHCorporate structure:
1347 Property Insurance
Holdings, Inc
MaisonInsurance Company
MaisonManagers, Inc
ClaimCor, LLC(Dec 2014)
POLICY COUNT TOTAL ASSETS
21,400 at 12/31/14 $74.2 million
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Among the highest overall property insurance rates in the country
Low loss costs and attritional (non-catastrophe) loss ratios
Wind/hail-only policies are limited to providing coverage for these types of weather
Favorable regulatory environment
Significant opportunity to rapidly expand independent agent distribution network through ChiefUnderwriting Officer’s 40 years of experience in Louisiana homeowner market
Population 4.6 million
Total Number of Households Approximately 1.7 million
HomeownersDirect Premiums Written $2.6 Billion*
3-year CAGR for Direct Premiums Written (2011-2013) 3.45%
Top Three in Market Share State Farm / Allstate LA Citizens
* Source: U.S. Census, SNL Financial (Louisiana Homeowners Lines of Business) December 31, 2013 Personal Property – Homeowner Multi-peril, fire, allied lines
LOUISIANA MARKET
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Louisiana Citizens Property Insurance Company(Citizens)
Citizens currently writes homeowners insurance for approximately 7% of Louisiana propertiesas an insurer of last resort
The state of Louisiana implemented an insurance “take-out” program to reduce the number ofproperties insured by Citizens
Under this take-out program, state-approved insurance companies, such as Maison, have theopportunity to assume insurance policies written by Citizens
Occurs annually, on December 1
Take-out company assumes risk / collects unearned premium immediately
LOUISIANA CITIZENSHOW IT WORKS
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Since its founding, the Company has established a network of agents throughout Louisiana
Focus on service and quality claims handling
Company has seen steady organic policy growth since entering independent agency market
Policies written through independent agents are all-peril, including the wind/hail
New Orleans, LA Baton Rouge, LA
Lafayette, LA Lake Charles, LA
Other Policy Acquisition Opportunities
Renewal rights transactions to gain access to niche markets
Establish partnerships as entry to geographies and property segments
Independent Agency Locations
EFFECTIVE DISTRIBUTIONINCREASING THE POLICY BASE
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Homeowners’
45%
Wind/Hail only34%
Manufactured Home19%
Dwelling Fire2%
Homeowners’: owner occupied dwellings, obtained through network of independent agents
Wind / Hail Only: protects insured from perils resulting only from wind and / or hail events, obtained through
Louisiana Citizens depopulations
Manufactured Home: began writing policies through a partnership with American Modern Insurance Group
Dwelling Fire: non-owner occupied dwellings
Policy Breakdown as of December 31, 2014
DIVERSE BOOK OF POLICIES
Type of Policy Policy Count% of Total
Policies in Force
Homeowners’ 9,617 45.0%
Wind/Hail only 7,260 33.9%
Manufactured Home 4,093 19.1%
Dwelling Fire 426 2.0%
Total 21,396 100.0%
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Underwriting discipline to select quality risks for
wind/hail-only and full coverage policies
Develop products tailored for the market
Utilize technology to adequately assess insurance to value
Physically inspect every insured risk written organically throughindependent agents
Manage catastrophe risks through reinsurance, periodic modeling of in-force exposures and individual policy characteristics, e.g., roofengineering
Address classes of risks and rate adequacy with annual rate filings
Responsive, highly efficient, and experienced claims operation
As a result of the acquisition of ClaimCor, PIH will begin to realizeefficiencies and a direct cost savings from internalizing claims servicesduring 2015
DISCIPLINED UNDERWRITING PRACTICES
9.3%
24.8%21.3% 21.4%
0%
10%
20%
30%
40%
50%
Q1 Q2 Q3 Q4
Net Loss Ratio
2014
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Reinsurance brokers predict increased reinsurance capacity and lower prices − “At July 1, we saw continued significant decreases in U.S. property catastrophe program
pricing.” –David Flandor, Global Head of Business Intelligence at Guy Carpenter
− “Capital available for reinsurance coverage hit a record $575 billion at the end of the third quarter, placing pressure on prices, according to broker Aon Benfield.” –Bloomberg News
Factors Influencing Global Supply of Reinsurance
+ Record levels of reinsurer capital
+ Increased investor interest in catastrophe bonds and similar collateralized facilities
- Continued low market valuations of reinsurers’ shares
= High reinsurance market supply
FAVORABLE REINSURANCE MARKET
The largest cost in homeowners’ insurance is reinsurance
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
Company has created a reinsurance program focused on preserving capital
Expects to utilize traditional reinsurance and the insurance-linked securities market to minimizereinsurance costs with 1-in-100 year event coverage and reinstatements
$1,000,000 xs $2,000,000Company Retention
Catastrophe Occurrence$27,000,000 xs $3,000,000
RPP Cover
$92,000,000
$3,000,000
$30,000,000
Top & Aggregate*$20,000,000 xs $72,000,000
1st Event 2nd Event
Top & Aggregate$19,000,000 xs $0
3rd and Subsequent
Events
Catastrophe Occurrence$25,000,000 xs $30,000,000
RPP Cover
Catastrophe Occurrence$17,000,000 xs $55,000,000
RPP Cover$55,000,000
$72,000,000
Company Retention
Catastrophe Occurrence$27,000,000 xs $3,000,000
Catastrophe Occurrence$25,000,000 xs $30,000,000
Catastrophe Occurrence$17,000,000 xs $55,000,000
Top & Aggregate$19,000,000 xs $72,000,000
2014 Property Catastrophe Reinsurance Structure6/1/2014 – 5/31/2015
REINSURANCE STRUCTURE
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
CURRENT PREMIUM GROWTH
$0.4 $2.8
$8.0
$16.0
$5.7
$14.6
$23.1
$32.7
$0M
$5M
$10M
$15M
$20M
$25M
$30M
$35M
Q1 Q2 Q3 Q4
Cumulative Direct Premiums Written
2013 2014
$0.9 $1.6
$2.4
$5.0 $4.1
$8.9
$13.3
$18.5
$0M
$2M
$4M
$6M
$8M
$10M
$12M
$14M
$16M
$18M
$20M
Q1 Q2 Q3 Q4
Cumulative Net Premiums Earned
2013 2014
2014 highlighted by $32.7 million in direct premiums written (104% year-over-year increase)
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
HawaiiTexas Florida
EXPANSION INTO NEW MARKETS
PIH intends, either organically or through acquisition, to expand into other coastal states that fit their selection criteria and when timing is appropriate
Possible first-ever depopulation from Texas Windstorm Insurance Association (TWIA) in 2015
Large market opportunity
Potential partnership opportunities
Company would seek homeowners and “wind-only” policies and other underserved markets
Favorable legislative environment
Large market opportunity
Florida Citizens monthly depopulations
Company would seek homeowners and “wind-only” policies and other underserved markets
Company would seek homeowners and “wind-only” policies and other underserved markets
Last hurricane to hit Hawaii was Inikiin 1992, hit only one island, Kauai
Potential partnership opportunities
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
State Aggregate Premium in Targeted Markets % of Targeted Market
Florida (personal property) $12,937 50.4%
Texas (commercial multi-peril) $9,745 38.0%
Louisiana (personal property) $2,461 9.6%
Hawaii (personal property) $531 2.1%
Total $25,674 100.0%
Source: SNL Financial
MARKET OPPORTUNITIES
PIH’s goal is to capture between 2% and 3% of the
Louisiana market in its first three years of operation(approximately $61.5 M)
The following represents the approximate aggregate industry premiums for targeted markets in the states that PIH anticipates writing (in millions):
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
2014 2013
( in thousands ) 4th
Quarter3rd
Quarter2nd
Quarter1st
Quarter2014Year
4th
Quarter 3rd
Quarter2nd
Quarter1st
Quarter2013 Year
Total Revenues $ 5,427 $ 4,536 $ 4,829 $ 4,173 $ 18,965 $ 2,562 $ 1,060 $ 533 $ 936 $ 5,091
Total Expenses 4,111 3,484 3,775 1,866 13,236 1,531 979 1,319 2,406 6,235
Income (loss) before income tax 1,316 1,052 1,054 2,307 5,729 1,031 81 (786) (1,470) (1,144 )
Income tax expense (benefit) 621 420 438 604 2,083 342 29 (263) (504) (396
Net Income (Loss) $ 695 $ 632 $ 616 $ 1,703 $ 3,646 $ 689 $ 52 $ (523) $ (966) $ (748 )
* This use of cash was driven primarily by the purchase of fixed income securities.
QUARTERLY P & L DATA
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
(figures in millions, except per share data)
Company Ticker Price@ 3 / 27 / 2015 Market Cap
Price/Book Value
(LTM)
P/E(LTM)
Universal Insurance Holdings Inc. UVE $24.53 $819.9 4.13 x 11.79 x
HCI Group, Inc. HCI $43.11 $463.9 2.43 8.04
United Insurance Holdings Corp. UIHC $22.07 $458.0 2.27 10.77
Federated National Holding Company FNHC $28.70 $406.3 2.08 9.60
Heritage Insurance Holdings, Inc. HRTG $21.27 $631.7 2.52 11.69
MEAN 2.69 x 10.38 x
1347 Property Insurance Holdings, Inc. PIH $7.55 $48.0 0.99 10.69Source: Bloomberg and Wall Street Research Note: LTM = Latest Twelve Months
PEER COMPARISON
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0M 200M 400M 600M 800M 1,000M
Price / Book
MarketCap
PIH
FNHCUIHC
HCI
HRTG
UVE
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1347 PROPERTY INSURANCE HOLDINGS NASDAQ: PIH
A homeowners’ insurance company focused on market geographies withaddressable needs
Dedicated management team with experience launching and rapidly expandingcoastal insurance companies Remaining focused on the markets we know
Clean balance sheet with no legacy issues
IPO and follow-on capital raises placed company in strong financial position tosafely expand
Opportunities for growth through partnerships with agency organizations andexpansion into other states
INVESTMENTS CONSIDERATIONS
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For Additional Information
At The Company
Doug RaucyChief Executive [email protected]
Investor Relations
The Equity Group
Forrest HuntAssociate
CONTACT US