How Are Claims Handled?
Text Size: A   A   A

News Releases

<< Back
07/31/20

National General Holdings Corp. Reports Second Quarter 2020 Results

NEW YORK, July 31, 2020 (GLOBE NEWSWIRE) -- National General Holdings Corp. (Nasdaq: NGHC) reported second quarter 2020 net income of $157.6 million or $1.37 per diluted share, compared to net income of $69.0 million or $0.60 per diluted share in the second quarter of 2019. Second quarter 2020 operating earnings (non-GAAP)(1) were $157.6 million or $1.36 per diluted share compared to $78.1 million or $0.67 per diluted share in the second quarter of 2019.

Second Quarter 2020 Highlights versus Second Quarter 2019*

  • Gross written premium grew by $50.4 million to $1,243.2 million compared to the prior year’s quarter due to our P&C segment growth of 3.2%, driven by the acquisition of National Farmers Union Property and Casualty Company (“Farmers Union Insurance”) in the third quarter of 2019, and organic growth, largely offset by the premium refund provided due to lower miles driven as a result of the COVID-19 pandemic; and our A&H domestic segment growth of 20.2%, excluding our previously sold A&H international business.

  • The overall combined ratio(11,12) was 80.5% compared to 90.9% in the prior year’s quarter, excluding non-cash amortization of intangible assets. The P&C segment reported an improved combined ratio to 83.6% from 92.6% in the prior year’s quarter driven by our continued strong underwriting and recent declines in miles driven. The P&C combined ratio includes prior year unfavorable loss development of $8.6 million compared to $10.4 million unfavorable loss development in the prior year’s quarter, and $35.3 million of catastrophe losses related to weather-related events compared to $18.4 million of catastrophe losses in the prior year’s quarter. The A&H segment reported a decrease in the combined ratio to 65.0% from 82.6% in the prior year’s quarter, driven by strong operating results in our small group self-funded and individual products, absence of our international business which was sold in the fourth quarter of 2019, and growth in service and fee income of 51.3%. The A&H combined ratio includes $11.4 million of favorable loss development compared to $8.1 million of favorable loss development in the prior year’s quarter.

  • Stockholders’ equity was $3.0 billion and fully diluted book value per share was $22.02 at June 30, 2020, growth of 13.0% and 15.5%, respectively, from December 31, 2019. Excluding accumulated other comprehensive income, fully diluted book value per share was $20.40 at June 30, 2020, growth of 10.7%, from December 31, 2019. Our trailing twelve-month operating return on average equity (ROE)(13) was 18.1% as of June 30, 2020.

  • Second quarter of 2020 operating earnings (non-GAAP)(1) excludes the following, net of tax: $0.1 million loss on equity method investments, $4.4 million or $0.04 per share of net gain on investments and $4.2 million or $0.04 per share of non-cash amortization of intangible assets.

  • Repurchased 459,083 shares during the second quarter of 2020 as part of our share repurchase program.

  • Agreement announced on July 7, 2020 to be acquired by Allstate for expected total consideration of $34.50 per share cash (consisting of $32.00 in cash and an up to $2.50 per share closing dividend), subject to shareholder and regulatory approval and other customary closing conditions.

Barry Karfunkel, National General’s CEO, stated: “Our well diversified platform continues to perform well. With our recently announced agreement to be acquired by Allstate, we look forward to contributing to the greater Allstate. I want to personally thank each and every one of the National General team members for their outstanding and continued work during these unprecedented times and for their continuing contribution to the success of the pending acquisition.”

*NOTE: Unless specified otherwise, discussion of our second quarter 2020 and 2019 results do not include financial results from the Reciprocal Exchanges, which are presented within our consolidated financial results within this release but are not included in net income available to NGHC common stockholders.


Overview of Second Quarter 2020 as Compared to Second Quarter 2019

  • Property & Casualty - Gross written premium grew by 3.2% to $1,053.5 million, net written premium increased by 0.4% to $789.4 million, and net earned premium increased by 2.9% to $842.0 million. P&C gross written premium growth was driven by $47.7 million of added premiums from the acquisition of Farmers Union Insurance, and organic growth, largely offset by the premium refund provided due to lower miles driven as a result of the COVID-19 pandemic. Service and fee income was $112.0 million compared to $113.1 million in the prior year’s quarter. Excluding non-cash amortization of intangible assets, the combined ratio(11,12) was 83.6% with a loss and LAE ratio of 59.8% and an expense ratio(10,12) of 23.8%, versus a prior year combined ratio of 92.6% with a loss and LAE ratio of 72.6% and an expense ratio of 20.0%. The loss and LAE ratio was impacted by pre-tax catastrophe losses of approximately $35.3 million primarily related to weather-related events in the second quarter of 2020, compared to $18.4 million of losses in the second quarter of 2019. Unfavorable loss development was $8.6 million in the second quarter of 2020 primarily driven by small business auto, compared to unfavorable loss development of $10.4 million in the second quarter of 2019.
     
  • Accident & Health - Gross written premium grew by $18.0 million compared to the prior year’s quarter due to growth in both our small group self-funded and individual products. Excluding our A&H international business, our A&H domestic segment grew by 20.2% to $189.7 million. Service and fee income grew 51.3% to $80.1 million compared to $52.9 million in the prior year’s quarter. Excluding non-cash amortization of intangible assets, the combined ratio(11,12) was 65.0% with a loss and LAE ratio of 39.5% and an expense ratio(10,12) of 25.5%, versus a prior year combined ratio of 82.6% with a loss and LAE ratio of 52.0% and an expense ratio of 30.6%. The loss and LAE ratio reflects strong performance in both small group self-funded and individual products. Favorable loss development was $11.4 million in the second quarter of 2020, compared to favorable loss development of $8.1 million in the second quarter of 2019.
     
  • Reciprocal Exchanges - Results for the Reciprocal Exchanges are not included in net income available to NGHC common stockholders. Gross written premium was $98.4 million, net written premium was $57.3 million, and net earned premium was $54.8 million. Reciprocal Exchanges combined ratio(11,12) excluding non-cash amortization of intangible assets was 83.1% with a loss and LAE ratio of 54.8% and an expense ratio(10,12) of 28.3%.

Second quarter of 2020 net investment income decreased to $30.5 million, compared to $35.9 million in the second quarter of 2019. Total investments and cash and cash equivalents (including restricted cash) were $5.2 billion as of June 30, 2020. Accumulated other comprehensive income increased to a $186.9 million gain at June 30, 2020, from a $74.5 million gain at December 31, 2019, primarily due to market improvement.

Interest expense was $11.8 million, down from $12.9 million in the prior year’s quarter. Debt was $682.3 million at June 30, 2020, compared to $686.0 million at December 31, 2019.

The second quarter of 2020 provision for income taxes was $49.0 million and the effective tax rate for the quarter was 22.7% compared with income taxes of $22.3 million and an effective rate of 22.2% in the second quarter of 2019.

Stockholders’ equity was $2,995.1 million at June 30, 2020, growth of 13.0% from $2,649.5 million at December 31, 2019. Fully diluted book value per share was $22.02 at June 30, 2020, growth of 15.5% from $19.06 at December 31, 2019. Excluding accumulated other comprehensive income, fully diluted book value per share was $20.40 at June 30, 2020, growth of 10.7%, from December 31, 2019. Our trailing twelve-month operating return on average equity (ROE)(13) was 18.1% as of June 30, 2020.

Year-to-Date P&C Segment Notable Large Losses
Year   Quarter   Event   P&C Notable Large Losses and LAE
($ millions)
  P&C Loss and LAE Ratio Points*   EPS Impact After Tax
2020   Q2   Weather-related Events   $35.3   4.2%   $0.24
2020   Q1   Weather-related Events   $8.1   0.9%   $0.06
                     
2019   Q2   Weather-related Events   $18.4   2.2%   $0.13
2019   Q1   Winter Weather   $12.1   1.6%   $0.08

* Loss and LAE ratio points related to P&C net earned premium in quarter the loss event was recorded.

Additional item -

Homeowners Quota Share - Effective July 1, 2020, we cede 20.0% of net liability and receive a 37.0% ceding commission on in-force, new and renewal business, under our homeowners quota share reinsurance agreement.

About National General Holdings Corp.

National General Holdings Corp. (NASDAQ: NGHC), headquartered in New York City, is a specialty personal lines insurance holding company. National General traces its roots to 1939, has a financial strength rating of A- (excellent) from A.M. Best, and provides personal and commercial automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health and other niche insurance products.


IMPORTANT INFORMATION FOR INVESTORS

Additional Information and Where to Find It

This communication may be deemed solicitation material in respect of the proposed acquisition of National General Holdings Corp. (the “Company”) by The Allstate Corporation. In connection with the merger, the Company plans to file with the Securities and Exchange Commission and furnish its stockholders a proxy statement. Additionally, the Company will file other relevant materials with the Securities and Exchange Commission in connection with the proposed transaction.

The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission’s web site at www.sec.gov. In addition, stockholders also may obtain free copies of the proxy statement, when available, from the Company by contacting National General Holdings Corp. Investor Relations at 59 Maiden Lane, 38th Floor New York, New York 10038, telephone number (212) 380-9462 or InvestorRelations@ngic.com.

INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE MERGER.

Participants in the Solicitation

The Company and its directors, executive officers and other members of management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of the Company’s stockholders in connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of certain of the Company’s executive officers and directors in the solicitation by reading the Company’s proxy statement for its 2020 annual meeting of stockholders and the proxy statement and other relevant materials which may be filed with the Securities and Exchange Commission in connection with the merger when and if they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the merger when and if it becomes available. Additional information regarding the Company’s executive officers and directors in the solicitation is available by reading the Company’s proxy statement for its 2020 annual meeting of stockholders.


Forward Looking Statements

This news release contains “forward-looking statements” that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “plan,” “expect,” “project,” “intend,” “estimate,” “anticipate” and “believe” or their variations or similar terminology. There can be no assurance that actual developments will be those anticipated by us. Actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to, plans and expectations related to our proposed merger with The Allstate Corporation (“Allstate”), including anticipated timing for closing of the merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with Allstate, the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger, the possibility that competing offers will be made, non-receipt of expected payments from insureds or reinsurers, changes in interest rates, a downgrade in the financial strength ratings of our insurance subsidiaries, the potential effect of changes in LIBOR reporting practices, the effects of pandemics or other widespread health problems such as the ongoing COVID-19 pandemic on our business, including our investment portfolio, and the national and global economy generally, the effect of the performance of financial markets on our investment portfolio, our ability to accurately underwrite and price our products and to maintain and establish accurate loss reserves, estimates of the fair value of investments, development of claims and the effect on loss reserves, large loss activity including hurricanes and wildfires, the cost and availability of reinsurance coverage, the effects of emerging claim and coverage issues, the effect of unpredictable catastrophic losses, changes in the demand for our products, our degree of success in integrating acquired businesses, the effect of general economic conditions, state and federal legislation, the effects of tax reform, regulations and regulatory investigations into industry practices, risks associated with conducting business outside the United States, developments relating to existing agreements, disruptions to our business relationships with third party vendors or agencies, breaches in data security or other disruptions involving our technology, heightened competition, changes in pricing environments, and changes in asset valuations. The forward-looking statements contained in this news release are made only as of the date of this release. The Company undertakes no obligation to publicly update any forward-looking statement except as may be required by law. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected, is contained in the Company’s filings with the Securities and Exchange Commission.


Income Statement - Second Quarter
$ in thousands
(Unaudited)

    Three Months Ended June 30,
    2020     2019  
    NGHC   Reciprocal Exchanges   Consolidated     NGHC   Reciprocal Exchanges   Consolidated  
Revenues:                            
Gross written premium   $ 1,243,165     $ 98,436     $ 1,341,601       $ 1,192,762     $ 121,146     $ 1,313,908    
Net written premium   957,640     57,268     1,014,908       939,178     56,220     995,398    
Net earned premium   1,010,782     54,785     1,065,567       984,021     46,630     1,030,651    
                             
Ceding commission income   35,530     11,110     46,640       43,346     16,846     60,192    
Service and fee income   192,023     2,336     180,592   (A)   166,049     1,516     148,908   (G)
Net investment income   30,523     2,012     31,175   (B)   35,949     2,124     35,131   (H)
Net gain (loss) on investments   5,511     (353 )   5,158       (5,274 )   44     (5,230 )  
Total revenues   $ 1,274,369     $ 69,890     $ 1,329,132   (C)   $ 1,224,091     $ 67,160     $ 1,269,652   (I)
                             
Expenses:                            
Loss and loss adjustment expense   $ 570,439     $ 30,007     $ 600,446       $ 680,246     $ 35,289     $ 715,535    
Acquisition costs and other underwriting expenses   219,278     10,100     229,378       185,951     8,175     194,126    
General and administrative expenses   257,318     18,858     262,409   (D)   244,827     21,597     247,767   (J)
Interest expense   11,779     1,360     11,779   (E)   12,925     2,942     12,925   (K)
Total expenses   $ 1,058,814     $ 60,325     $ 1,104,012   (F)   $ 1,123,949     $ 68,003     $ 1,170,353   (L)
                             
Income (loss) before provision (benefit) for income taxes   $ 215,555     $ 9,565     $ 225,120       $ 100,142     $ (843 )   $ 99,299    
Provision (benefit) for income taxes   48,981     1,526     50,507       22,266     (25 )   22,241    
Net income (loss) before non-controlling interest and dividends on preferred shares   166,574     8,039     174,613       77,876     (818 )   77,058    
Less: net income (loss) attributable to noncontrolling interest       8,039     8,039           (818 )   (818 )  
Net income before dividends on preferred shares   166,574         166,574       77,876         77,876    
Less: dividends on preferred shares   8,925         8,925       8,925         8,925    
Net income available to common stockholders   $ 157,649     $     $ 157,649       $ 68,951     $     $ 68,951    

NOTES: Consolidated column includes eliminations as follows: (A) $(13,767), (B) $(1,360), (C) $(15,127), (D) $(13,767), (E) $(1,360), (F) $(15,127), (G) $(18,657), (H) $(2,942), (I) $(21,599), (J) $(18,657), (K) $(2,942) and (L) $(21,599).


Income Statement - Year To Date
$ in thousands
(Unaudited)

    Six Months Ended June 30,
    2020     2019  
    NGHC   Reciprocal Exchanges   Consolidated     NGHC   Reciprocal Exchanges   Consolidated  
Revenues:                            
Gross written premium   $ 2,627,866     $ 190,289     $ 2,818,155       $ 2,596,971     $ 226,715     $ 2,823,686    
Net written premium   2,111,948     112,563     2,224,511       2,054,887     105,175     2,160,062    
Net earned premium   2,028,390     112,383     2,140,773       1,902,520     92,288     1,994,808    
                             
Ceding commission income   72,121     24,824     96,945       94,346     35,380     129,726    
Service and fee income   383,180     3,493     360,033   (A)   346,437     2,886     314,415   (G)
Net investment income   60,270     4,195     61,418   (B)   70,232     4,294     68,576   (H)
Net gain (loss) on investments   (557 )   (1,146 )   (1,703 )     (4,508 )   (700 )   (5,208 )  
Total revenues   $ 2,543,404     $ 143,749     $ 2,657,466   (C)   $ 2,409,027     $ 134,148     $ 2,502,317   (I)
                             
Expenses:                            
Loss and loss adjustment expense   $ 1,220,070     $ 72,374     $ 1,292,444       $ 1,290,030     $ 77,314     $ 1,367,344    
Acquisition costs and other underwriting expenses   437,023     20,597     457,620       389,284     16,760     406,044    
General and administrative expenses   518,197     38,421     529,978   (D)   487,660     43,109     495,861   (J)
Interest expense   23,559     3,047     23,559   (E)   25,924     5,950     25,924   (K)
Total expenses   $ 2,198,849     $ 134,439     $ 2,303,601   (F)   $ 2,192,898     $ 143,133     $ 2,295,173   (L)
                             
Income (loss) before provision (benefit) for income taxes   $ 344,555     $ 9,310     $ 353,865       $ 216,129     $ (8,985 )   $ 207,144    
Provision (benefit) for income taxes   77,222     1,457     78,679       46,495     (1,748 )   44,747    
Net income (loss) before non-controlling interest and dividends on preferred shares   267,333     7,853     275,186       169,634     (7,237 )   162,397    
Less: net income (loss) attributable to noncontrolling interest       7,853     7,853           (7,237 )   (7,237 )  
Net income before dividends on preferred shares   267,333         267,333       169,634         169,634    
Less: dividends on preferred shares   16,800         16,800       16,800         16,800    
Net income available to common stockholders   $ 250,533     $     $ 250,533       $ 152,834     $     $ 152,834    

NOTES: Consolidated column includes eliminations as follows: (A) $(26,640), (B) $(3,047), (C) $(29,687), (D) $(26,640), (E) $(3,047), (F) $(29,687) (G) $(34,908), (H) $(5,950), (I) $(40,858), (J) $(34,908), (K) $(5,950) and (L) $(40,858).


Earnings and Per Share Data
$ in thousands, except shares and per share data
(Unaudited)

  Three Months Ended June 30,   Six Months Ended June 30,
  2020   2019   2020   2019
Net income available to common stockholders $ 157,649     $ 68,951     $ 250,533     $ 152,834  
Basic net income per common share $ 1.39     $ 0.61     $ 2.21     $ 1.35  
Diluted net income per common share $ 1.37     $ 0.60     $ 2.17     $ 1.33  
               
Operating earnings attributable to NGHC (non-GAAP)(1) $ 157,643     $ 78,140     $ 263,402     $ 167,856  
Basic operating earnings per common share (non-GAAP)(1) $ 1.39     $ 0.69     $ 2.32     $ 1.48  
Diluted operating earnings per common share (non-GAAP)(1) $ 1.36     $ 0.67     $ 2.27     $ 1.45  
               
Dividends declared per common share $ 0.05     $ 0.04     $ 0.10     $ 0.08  
               
Weighted average number of basic shares outstanding 113,542,628     113,178,552     113,549,952     113,097,084  
Weighted average number of diluted shares outstanding 115,720,069     116,050,267     115,898,110     116,062,721  
Shares outstanding, end of period 113,397,545     113,215,632          
Fully diluted shares outstanding, end of period 115,574,986     116,087,347          
Book value per share $ 22.44     $ 17.92          
Fully diluted book value per share $ 22.02     $ 17.48          


Reconciliation of Net Income to Operating Earnings (Non-GAAP)(1)(13)
$ in thousands, except per share data
(Unaudited)

  Three Months Ended June 30,   Six Months Ended June 30,
  2020   2019   2020   2019
Net income available to common stockholders $ 157,649      $ 68,951      $ 250,533      $ 152,834   
Add (subtract):              
Equity in (earnings) losses of equity method investments 160     (731 )   3,888     203  
Net (gain) loss on investments (5,511 )   5,274     557     4,508  
Non-cash amortization of intangible assets 5,343     7,089     11,845     14,305  
Income tax expense (benefit) 2     (2,443 )   (3,421 )   (3,994 )
Operating earnings attributable to NGHC (non-GAAP)(1) $ 157,643     $ 78,140     $ 263,402     $ 167,856  
               
Operating earnings per common share (non-GAAP)(1):              
Basic operating earnings per common share (non-GAAP)(1) $ 1.39     $ 0.69     $ 2.32     $ 1.48  
Diluted operating earnings per common share (non-GAAP)(1) $ 1.36     $ 0.67     $ 2.27     $ 1.45  
                               


Balance Sheet
$ in thousands
(Unaudited)

    June 30, 2020     December 31, 2019  
ASSETS   NGHC   Reciprocal Exchanges   Consolidated     NGHC   Reciprocal Exchanges   Consolidated  
Total investments (2)   $ 4,853,180     $ 340,103     $ 5,085,750   (A)   $ 4,632,960     $ 329,494     $ 4,854,998   (H)
Cash and cash equivalents, including restricted cash   334,771     237     335,008       163,480     983     164,463    
Premiums and other receivables, net   1,438,085     49,649     1,487,734       1,373,089     55,859     1,428,948    
Reinsurance balances   1,614,713     196,005     1,810,718       1,745,036     225,019     1,970,055    
Intangible assets, net   347,686     3,135     350,821       362,598     3,225     365,823    
Goodwill   179,328         179,328       179,328         179,328    
Other (3)   776,916     29,364     768,484   (B)   798,675     29,070     792,919   (I)
Total assets   $ 9,544,679     $ 618,493     $ 10,017,843   (C)   $ 9,255,166     $ 643,650     $ 9,756,534   (J)
LIABILITIES AND STOCKHOLDERS’ EQUITY                            
Liabilities:                            
Unpaid loss and loss adjustment expense reserves   $ 2,626,314     $ 200,270     $ 2,826,584       $ 2,680,628     $ 205,786     $ 2,886,414    
Unearned premiums and other revenue   2,102,044     226,403     2,328,447       2,059,688     252,553     2,312,241    
Reinsurance payable   437,989     23,907     461,896       527,155     35,689     562,844    
Accounts payable and accrued expenses   320,176     45,549     327,929   (D)   306,869     43,323     315,366   (K)
Debt   682,266     107,533     682,266   (E)   686,006     107,456     686,006   (L)
Other   380,766     30,279     411,045       345,366     30,803     376,169    
Total liabilities   $ 6,549,555     $ 633,941     $ 7,038,167   (F)   $ 6,605,712     $ 675,610     $ 7,139,040   (M)
Stockholders’ equity:                            
Preferred stock (4)   $ 450,000     $     $ 450,000       $ 450,000     $     $ 450,000    
Common stock (5)   1,139         1,139       1,134         1,134    
Treasury stock, at cost (6)   (8,482 )       (8,482 )                
Additional paid-in capital   1,069,152         1,069,152       1,065,634         1,065,634    
Accumulated other comprehensive income   186,864         186,864       74,548         74,548    
Retained earnings   1,296,451         1,296,451       1,058,138         1,058,138    
Total National General Holdings Corp. stockholders’ equity   2,995,124         2,995,124       2,649,454         2,649,454    
Noncontrolling interest       (15,448 )   (15,448 )         (31,960 )   (31,960 )  
Total stockholders’ equity   $ 2,995,124     $ (15,448 )   $ 2,979,676       $ 2,649,454     $ (31,960 )   $ 2,617,494    
Total liabilities and stockholders’ equity   $ 9,544,679     $ 618,493     $ 10,017,843   (G)   $ 9,255,166     $ 643,650     $ 9,756,534   (N)

NOTES: Consolidated column includes eliminations as follows: (A) $(107,533), (B) $(37,796), (C) $(145,329), (D) $(37,796), (E) $(107,533), (F) $(145,329), (G) $(145,329) (H) $(107,456), (I) $(34,826), (J) $(142,282), (K) $(34,826), (L) $(107,456), (M) $(142,282) and (N) $(142,282).


Segment Information - Second Quarter
$ in thousands
(Unaudited)

    Three Months Ended June 30,
    2020     2019
    P&C   A&H   NGHC     Reciprocal
Exchanges
    P&C   A&H   NGHC     Reciprocal Exchanges
Gross written premium   $ 1,053,508     $ 189,657     $ 1,243,165       $ 98,436       $ 1,021,090     $ 171,672     $ 1,192,762       $ 121,146  
Net written premium   789,428     168,212     957,640       57,268       786,471     152,707     939,178     56,220  
Net earned premium   841,985     168,797     1,010,782       54,785       817,972     166,049     984,021       46,630  
                                       
Ceding commission income   35,059     471     35,530       11,110       39,418     3,928     43,346       16,846  
Service and fee income   111,955     80,068     192,023       2,336       113,112     52,937     166,049       1,516  
Total underwriting revenues   $ 988,999     $ 249,336     $ 1,238,335       $ 68,231       $ 970,502     $ 222,914     $ 1,193,416       $ 64,992  
                                       
Loss and loss adjustment expense (A)   503,784     66,655     570,439       30,007       593,922     86,324     680,246       35,289  
Acquisition costs and other underwriting expenses   152,384     66,894     219,278       10,100       137,950     48,001     185,951       8,175  
General and administrative expenses   199,327     57,991     257,318       18,858       183,535     61,292     244,827       21,597  
Total underwriting expenses   $ 855,495     $ 191,540     $ 1,047,035       $ 58,965       $ 915,407     $ 195,617     $ 1,111,024       $ 65,061  
                                       
Underwriting income (loss)   133,504     57,796     191,300       9,266       55,095     27,297     82,392       (69 )
Non-cash amortization of intangible assets   4,041     1,302     5,343       30       5,412     1,677     7,089       12  
Underwriting income (loss) before amortization and impairment   $ 137,545     $ 59,098     $ 196,643       $ 9,296       $ 60,507     $ 28,974     $ 89,481       $ (57 )
                                       
Underwriting ratios                                      
Loss and loss adjustment expense ratio (7)   59.8 %   39.5 %   56.4 %     54.8 %     72.6 %   52.0 %   69.1 %     75.7 %
Operating expense ratio (Non-GAAP) (8)   24.3 %   26.3 %   24.6 %     28.3 %     20.7 %   31.6 %   22.5 %     24.5 %
Combined ratio (Non-GAAP) (9)   84.1 %   65.8 %   81.0 %     83.1 %     93.3 %   83.6 %   91.6 %     100.2 %
                                       
Underwriting ratios (before amortization and impairment)                                      
Loss and loss adjustment expense ratio (7)   59.8 %   39.5 %   56.4 %     54.8 %     72.6 %   52.0 %   69.1 %     75.7 %
Operating expense ratio (Non-GAAP) (10)   23.8 %   25.5 %   24.1 %     28.3 %     20.0 %   30.6 %   21.8 %     24.4 %
Combined ratio before amortization and impairment (Non-GAAP) (11)   83.6 %   65.0 %   80.5 %     83.1 %     92.6 %   82.6 %   90.9 %     100.1 %

(A) Loss and loss adjustment expenses for the three months ended June 30, 2020 included $8,584 of unfavorable loss development on prior accident year loss and loss adjustment expense reserves in the P&C segment, and $11,430 of favorable loss development in the A&H segment, versus $10,396 of unfavorable loss development in the P&C segment, and $8,135 of favorable loss development in the A&H segment for the three months ended June 30, 2019.


Segment Information - Year To Date
$ in thousands
(Unaudited)

    Six Months Ended June 30,
    2020     2019
    P&C   A&H   NGHC     Reciprocal
Exchanges
    P&C   A&H   NGHC     Reciprocal Exchanges
Gross written premium   $ 2,251,184     $ 376,682     $ 2,627,866       $ 190,289       $ 2,166,755     $ 430,216     $ 2,596,971       $ 226,715  
Net written premium   1,775,520     336,428     2,111,948       112,563       1,701,999     352,888     2,054,887     105,175  
Net earned premium   1,694,887     333,503     2,028,390       112,383       1,574,891     327,629     1,902,520       92,288  
                                       
Ceding commission income   71,090     1,031     72,121       24,824       87,827     6,519     94,346       35,380  
Service and fee income   222,588     160,592     383,180       3,493       232,488     113,949     346,437       2,886  
Total underwriting revenues   $ 1,988,565     $ 495,126     $ 2,483,691       $ 140,700       $ 1,895,206     $ 448,097     $ 2,343,303       $ 130,554  
                                       
Loss and loss adjustment expense (A)   1,071,814     148,256     1,220,070       72,374       1,118,957     171,073     1,290,030       77,314  
Acquisition costs and other underwriting expenses   301,658     135,365     437,023       20,597       283,435     105,849     389,284       16,760  
General and administrative expenses   400,454     117,743     518,197       38,421       367,730     119,930     487,660       43,109  
Total underwriting expenses   $ 1,773,926     $ 401,364     $ 2,175,290       $ 131,392       $ 1,770,122     $ 396,852     $ 2,166,974       $ 137,183  
                                       
Underwriting income (loss)   214,639     93,762     308,401       9,308       125,084     51,245     176,329       (6,629 )
Non-cash amortization of intangible assets   9,228     2,617     11,845       60       10,897     3,408     14,305       23  
Underwriting income (loss) before amortization and impairment   $ 223,867     $ 96,379     $ 320,246       $ 9,368       $ 135,981     $ 54,653     $ 190,634       $ (6,606 )
                                       
Underwriting ratios                                      
Loss and loss adjustment expense ratio (7)   63.2 %   44.5 %   60.1 %     64.4 %     71.0 %   52.2 %   67.8 %     83.8 %
Operating expense ratio (Non-GAAP) (8)   24.1 %   27.4 %   24.6 %     27.3 %     21.0 %   32.1 %   22.9 %     23.4 %
Combined ratio (Non-GAAP) (9)   87.3 %   71.9 %   84.7 %     91.7 %     92.0 %   84.3 %   90.7 %     107.2 %
                                       
Underwriting ratios (before amortization and impairment)                                      
Loss and loss adjustment expense ratio (7)   63.2 %   44.5 %   60.1 %     64.4 %     71.0 %   52.2 %   67.8 %     83.8 %
Operating expense ratio (Non-GAAP) (10)   23.6 %   26.6 %   24.1 %     27.3 %     20.3 %   31.1 %   22.2 %     23.4 %
Combined ratio before amortization and impairment (Non-GAAP) (11)   86.8 %   71.1 %   84.2 %     91.7 %     91.3 %   83.3 %   90.0 %     107.2 %

(A) Loss and loss adjustment expenses for the six months ended June 30, 2020 included $13,055 of unfavorable loss development on prior accident year loss and loss adjustment expense reserves in the P&C segment, and $16,238 of favorable loss development in the A&H segment, versus $4,882 of unfavorable loss development in the P&C segment, and $18,987 of favorable loss development in the A&H segment for the six months ended June 30, 2019.


Reconciliation of Operating Expense Ratio (Non-GAAP)(8,10,12)
$ in thousands
(Unaudited)

    Three Months Ended June 30,
    2020     2019
    P&C   A&H   NGHC     Reciprocal Exchanges     P&C   A&H   NGHC     Reciprocal Exchanges
Total underwriting expenses   $ 855,495     $ 191,540     $ 1,047,035       $ 58,965       $ 915,407     $ 195,617     $ 1,111,024       $ 65,061  
Less: Loss and loss adjustment expense   503,784     66,655     570,439       30,007       593,922     86,324     680,246       35,289  
Less: Ceding commission income   35,059     471     35,530       11,110       39,418     3,928     43,346       16,846  
Less: Service and fee income   111,955     80,068     192,023       2,336       113,112     52,937     166,049       1,516  
Operating expense (Non-GAAP) (8)   204,697     44,346     249,043       15,512       168,955     52,428     221,383       11,410  
Net earned premium   $ 841,985     $ 168,797     $ 1,010,782       $ 54,785       $ 817,972     $ 166,049     $ 984,021       $ 46,630  
Operating expense ratio (Non-GAAP) (8)   24.3 %   26.3 %   24.6 %     28.3 %     20.7 %   31.6 %   22.5 %     24.5 %
                                       
Total underwriting expenses   $ 855,495     $ 191,540     $ 1,047,035       $ 58,965       $ 915,407     $ 195,617     $ 1,111,024       $ 65,061  
Less: Loss and loss adjustment expense   503,784     66,655     570,439       30,007       593,922     86,324     680,246       35,289  
Less: Ceding commission income   35,059     471     35,530       11,110       39,418     3,928     43,346       16,846  
Less: Service and fee income   111,955     80,068     192,023       2,336       113,112     52,937     166,049       1,516  
Less: Non-cash amortization of intangible assets   4,041     1,302     5,343       30       5,412     1,677     7,089       12  
Operating expense before amortization and impairment (Non-GAAP) (10)   200,656     43,044     243,700       15,482       163,543     50,751     214,294       11,398  
Net earned premium   $ 841,985     $ 168,797     $ 1,010,782       $ 54,785       $ 817,972     $ 166,049     $ 984,021       $ 46,630  
Operating expense ratio before amortization and impairment (Non-GAAP) (10)   23.8 %   25.5 %   24.1 %     28.3 %     20.0 %   30.6 %   21.8 %     24.4 %
                                                       
 


Reconciliation of Operating Expense Ratio (Non-GAAP)(8,10,12)
$ in thousands
(Unaudited)

    Six Months Ended June 30,
    2020     2019
    P&C   A&H   NGHC     Reciprocal Exchanges     P&C   A&H   NGHC     Reciprocal Exchanges
Total underwriting expenses   $ 1,773,926     $ 401,364     $ 2,175,290       $ 131,392       $ 1,770,122     $ 396,852     $ 2,166,974       $ 137,183  
Less: Loss and loss adjustment expense   1,071,814     148,256     1,220,070       72,374       1,118,957     171,073     1,290,030       77,314  
Less: Ceding commission income   71,090     1,031     72,121       24,824       87,827     6,519     94,346       35,380  
Less: Service and fee income   222,588     160,592     383,180       3,493       232,488     113,949     346,437       2,886  
Operating expense (Non-GAAP) (8)   408,434     91,485     499,919       30,701       330,850     105,311     436,161       21,603  
Net earned premium   $ 1,694,887     $ 333,503     $ 2,028,390       $ 112,383       $ 1,574,891     $ 327,629     $ 1,902,520       $ 92,288  
Operating expense ratio (Non-GAAP) (8)   24.1 %   27.4 %   24.6 %     27.3 %     21.0 %   32.1 %   22.9 %     23.4 %
                                       
Total underwriting expenses   $ 1,773,926     $ 401,364     $ 2,175,290       $ 131,392       $ 1,770,122     $ 396,852     $ 2,166,974       $ 137,183  
Less: Loss and loss adjustment expense   1,071,814     148,256     1,220,070       72,374       1,118,957     171,073     1,290,030       77,314  
Less: Ceding commission income   71,090     1,031     72,121       24,824       87,827     6,519     94,346       35,380  
Less: Service and fee income   222,588     160,592     383,180       3,493       232,488     113,949     346,437       2,886  
Less: Non-cash amortization of intangible assets   9,228     2,617     11,845       60       10,897     3,408     14,305       23  
Operating expense before amortization and impairment (Non-GAAP) (10)   399,206     88,868     488,074       30,641       319,953     101,903     421,856       21,580  
Net earned premium   $ 1,694,887     $ 333,503     $ 2,028,390       $ 112,383       $ 1,574,891     $ 327,629     $ 1,902,520       $ 92,288  
Operating expense ratio before amortization and impairment (Non-GAAP) (10)   23.6 %   26.6 %   24.1 %     27.3 %     20.3 %   31.1 %   22.2 %     23.4 %
                                                       
 


Premiums by Product Line
$ in thousands
(Unaudited)

  Three Months Ended June 30,
  Gross Written Premium     Net Written Premium     Net Earned Premium
  2020   2019   Change     2020   2019   Change     2020   2019   Change
Property & Casualty                                      
Personal Auto $ 612,927     $ 611,312     0.3 %     $ 533,242     $ 511,952     4.2 %     $ 561,548     $ 542,834     3.4 %
Homeowners 205,211     190,037     8.0 %     84,257     108,404     (22.3 )%     99,368     102,008     (2.6 )%
RV/Packaged 57,801     61,314     (5.7 )%     55,882     58,167     (3.9 )%     46,956     49,411     (5.0 )%
Small Business Auto 60,717     83,829     (27.6 )%     46,429     65,420     (29.0 )%     53,733     60,059     (10.5 )%
Lender-placed insurance 103,922     58,859     76.6 %     64,674     37,214     73.8 %     71,102     60,278     18.0 %
Other 12,930     15,739     (17.8 )%     4,944     5,314     (7.0 )%     9,278     3,382     174.3 %
Total Premium $ 1,053,508     $ 1,021,090     3.2 %     $ 789,428     $ 786,471     0.4 %     $ 841,985     $ 817,972     2.9 %
                                       
Accident & Health                                      
Group 89,467     75,036     19.2 %     69,217     57,960     19.4 %     69,232     57,949     19.5 %
Individual 100,190     82,799     21.0 %     98,995     82,652     19.8 %     99,565     83,916     18.6 %
Total Premium Domestic $ 189,657     $ 157,835     20.2 %     $ 168,212     $ 140,612     19.6 %     $ 168,797     $ 141,865     19.0 %
International     13,837     (100.0 )%         12,095     (100.0 )%         24,184     (100.0 )%
                                       
Total National General $ 1,243,165     $ 1,192,762     4.2 %     $ 957,640     $ 939,178     2.0 %     $ 1,010,782     $ 984,021     2.7 %
Total National General (A) $ 1,243,165     $ 1,178,925     5.4 %     $ 957,640     $ 927,083     3.3 %     $ 1,010,782     $ 959,837     5.3 %
                                       
Reciprocal Exchanges                                      
Personal Auto $ 37,382     $ 43,984     (15.0 )%     $ 34,281     $ 18,661     83.7 %     $ 31,714     $ 16,093     97.1 %
Homeowners 60,160     76,140     (21.0 )%     22,667     37,211     (39.1 )%     22,741     30,225     (24.8 )%
Other 894     1,022     (12.5 )%     320     348     (8.0 )%     330     312     5.8 %
Total Premium $ 98,436     $ 121,146     (18.7 )%     $ 57,268     $ 56,220     1.9 %     $ 54,785     $ 46,630     17.5 %
                                       
Consolidated Total $ 1,341,601     $ 1,313,908     2.1 %     $ 1,014,908     $ 995,398     2.0 %     $ 1,065,567     $ 1,030,651     3.4 %

(A) Excludes A&H international product line which was sold in the fourth quarter of 2019.


Premiums by Product Line
$ in thousands
(Unaudited)

  Six Months Ended June 30,
  Gross Written Premium     Net Written Premium     Net Earned Premium
  2020   2019   Change     2020   2019   Change     2020   2019   Change
Property & Casualty                                      
Personal Auto $ 1,407,424     $ 1,377,993     2.1 %     $ 1,235,549     $ 1,170,872     5.5 %     $ 1,141,050     $ 1,053,388     8.3 %
Homeowners 370,464     342,079     8.3 %     172,800     193,649     (10.8 )%     190,851     186,066     2.6 %
RV/Packaged 110,929     113,165     (2.0 )%     107,860     109,764     (1.7 )%     96,248     99,716     (3.5 )%
Small Business Auto 133,469     169,707     (21.4 )%     105,028     139,606     (24.8 )%     113,158     127,692     (11.4 )%
Lender-placed insurance 199,366     134,797     47.9 %     142,143     79,284     79.3 %     140,769     101,996     38.0 %
Other 29,532     29,014     1.8 %     12,140     8,824     37.6 %     12,811     6,033     112.3 %
Total Premium $ 2,251,184     $ 2,166,755     3.9 %     $ 1,775,520     $ 1,701,999     4.3 %     $ 1,694,887     $ 1,574,891     7.6 %
                                       
Accident & Health                                      
Group 177,005     139,974     26.5 %     138,688     111,910     23.9 %     138,702     111,912     23.9 %
Individual 199,677     166,991     19.6 %     197,740     166,775     18.6 %     194,801     166,151     17.2 %
Total Premium Domestic $ 376,682     $ 306,965     22.7 %     $ 336,428     $ 278,685     20.7 %     $ 333,503     $ 278,063     19.9 %
International     123,251     (100.0 )%         74,203     (100.0 )%         49,566     (100.0 )%
                                       
Total National General $ 2,627,866     $ 2,596,971     1.2 %     $ 2,111,948     $ 2,054,887     2.8 %     $ 2,028,390     $ 1,902,520     6.6 %
Total National General (A) $ 2,627,866     $ 2,473,720     6.2 %     $ 2,111,948     $ 1,980,684     6.6 %     $ 2,028,390     $ 1,852,954     9.5 %
                                       
Reciprocal Exchanges                                      
Personal Auto $ 69,191     $ 80,846     (14.4 )%     $ 63,355     $ 34,306     84.7 %     $ 64,637     $ 31,954     102.3 %
Homeowners 119,396     143,940     (17.1 )%     48,592     70,227     (30.8 )%     47,074     59,716     (21.2 )%
Other 1,702     1,929     (11.8 )%     616     642     (4.0 )%     672     618     8.7 %
Total Premium $ 190,289     $ 226,715     (16.1 )%     $ 112,563     $ 105,175     7.0 %     $ 112,383     $ 92,288     21.8 %
                                       
Consolidated Total $ 2,818,155     $ 2,823,686     (0.2 )%     $ 2,224,511     $ 2,160,062     3.0 %     $ 2,140,773     $ 1,994,808     7.3 %

(A) Excludes A&H international product line which was sold in the fourth quarter of 2019.


Fee Income
$ in thousands
(Unaudited)

  Three Months Ended June 30,   Six Months Ended June 30,
  2020   2019   Change   2020   2019   Change
Property & Casualty                      
Service and Fee Income $ 111,955     $ 113,112     (1.0 )%   $ 222,588     $ 232,488     (4.3 )%
Ceding Commission Income 35,059     39,418     (11.1 )%   71,090     87,827     (19.1 )%
Property & Casualty $ 147,014     $ 152,530     (3.6 )%   $ 293,678     $ 320,315     (8.3 )%
                       
Accident & Health                      
Service and Fee Income                      
Group $ 43,241     $ 32,862     31.6 %   $ 83,723     $ 63,236     32.4 %
Individual 2,265     1,242     82.4 %   4,482     3,378     32.7 %
Medicare Sales 11,078     5,159     114.7 %   22,790     12,260     85.9 %
Third Party Fee 23,484     13,674     71.7 %   49,597     35,075     41.4 %
Total Service and Fee Income 80,068     52,937     51.3 %   160,592     113,949     40.9 %
Ceding Commission Income 471     3,928     (88.0 )%   1,031     6,519     (84.2 )%
Accident and Health $ 80,539     $ 56,865     41.6 %   $ 161,623     $ 120,468     34.2 %
                       
Total National General $ 227,553     $ 209,395     8.7 %   $ 455,301     $ 440,783     3.3 %
                       
Reciprocal Exchanges                      
Service and Fee Income $ 2,336     $ 1,516     54.1 %   $ 3,493     $ 2,886     21.0 %
Ceding Commission Income 11,110     16,846     (34.0 )%   24,824     35,380     (29.8 )%
Reciprocal Exchanges $ 13,446     $ 18,362     (26.8 )%   $ 28,317     $ 38,266     (26.0 )%
                       
Consolidated Total (A) $ 227,232     $ 209,100     8.7 %   $ 456,978     $ 444,141     2.9 %

NOTES: (A) Consolidated Total includes eliminations between National General and the Reciprocal Exchanges in Service and Fee Income of $(13,767) and $(18,657) in the three months ended June 30, 2020 and 2019, respectively, and $(26,640) and $(34,908) in the six months ended June 30, 2020 and 2019, respectively.


Additional Disclosures

(1) References to operating earnings and basic and diluted operating earnings per share (“EPS”) are non-GAAP financial measures defined by the Company as net income/loss and basic and diluted earnings per share excluding after-tax net gain or loss on investments (including credit loss on investments in debt securities and foreign exchange gain or loss), earnings or losses of equity method investments (related parties), deferred tax asset impairment, non-cash impairment of goodwill and non-cash amortization of intangible assets, and any significant non-recurring or infrequent items that may not be indicative of ongoing operations. The Company believes operating earnings and basic and diluted operating EPS are relevant measures of the Company’s profitability because operating earnings and basic and diluted operating EPS contain the components of net income upon which the Company’s management has the most influence and excludes factors outside management’s direct control and non-recurring items. Other companies may calculate these measures differently, and therefore, their measures may not be comparable to those used by National General. Please see the Non-GAAP Financial Measures table within this release for the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure.

(2) Total investments includes $235,458 and $238,841 from related parties at June 30, 2020 and December 31, 2019, respectively.

(3) Other includes $2,405 and $2,391 from related parties at June 30, 2020 and December 31, 2019, respectively.

(4) Preferred stock: $0.01 par value - authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - June 30, 2020; authorized 10,000,000 shares, issued and outstanding 2,565,120 shares - December 31, 2019.

(5) Common stock: $0.01 par value - authorized 150,000,000 shares, issued 113,856,628 and outstanding 113,397,545 shares - June 30, 2020; authorized 150,000,000 shares, issued and outstanding 113,368,811 shares - December 31, 2019.

(6) Treasury stock, at cost: 459,083 shares - June 30, 2020.

(7) Loss and loss adjustment expense ratio (loss ratio) is calculated by dividing loss and loss adjustment expense by net earned premium.

(8) Operating expense ratio is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by dividing operating expense by net earned premium. Operating expense consists of the sum of acquisition and other underwriting costs and general and administrative expenses less ceding commission income and service and fee income. The ratio is used as an indicator of the Company’s efficiency in acquiring and servicing its business.

(9) Combined ratio is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by adding the loss and loss adjustment expense ratio(7) and the operating expense ratio (non-GAAP)(8) together. The ratio is used as an indicator of the Company’s underwriting discipline, efficiency in acquiring and servicing its business, and overall underwriting profit. Management uses operating expense ratio (non-GAAP) and combined ratio (non-GAAP) to evaluate financial performance against historical results and establish targets. A combined ratio under 100% generally indicates an underwriting profit, while over 100% an underwriting loss.

(10) Operating expense ratio before amortization and impairment is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by dividing the operating expense before amortization and impairment by net earned premium. Operating expense before amortization and impairment consists of the sum of acquisition and other underwriting costs and general and administrative expenses less ceding commission income, service and fee income, non-cash amortization of intangible assets and non-cash impairment of goodwill. The ratio is used as an indicator of the Company’s efficiency in acquiring and servicing its business. Management believes that this measure provides a more useful comparison to the operating expense ratio of other insurance companies involved in fewer acquisitions.

(11) Combined ratio before amortization and impairment is a non-GAAP financial measure defined by the Company, which is commonly used in the insurance industry. The Company calculates the ratio by adding the loss and loss adjustment expense ratio(7) and the operating expense ratio before amortization and impairment (non-GAAP)(10) together. The ratio is used as an indicator of the Company’s underwriting discipline, efficiency in acquiring and servicing its business, and overall underwriting profit. Management believes that this measure of underwriting profitability provides a more useful comparison to the combined ratio of other insurance companies involved in fewer acquisitions. A combined ratio under 100% generally indicates an underwriting profit, while over 100% an underwriting loss.

(12) Combined ratio (non-GAAP), operating expense ratio (non-GAAP), combined ratio before amortization and impairment (non-GAAP) and operating expense ratio before amortization and impairment (non-GAAP) are considered non-GAAP financial measures under applicable SEC rules. Other companies may calculate these ratios differently, and therefore, their measures may not be comparable to those used by National General. Please see the Non-GAAP Financial Measures table within this release for the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure.

(13) Trailing twelve month operating return on average equity is the ratio of the previous twelve months operating earnings (non-GAAP) to average shareholders’ equity for the same twelve-month period. Average shareholders’ equity is the sum of the shareholders’ equity excluding preferred stock at the beginning and end of the period divided by two. In the opinion of the Company’s management this ratio is an important indicator of how well management creates value for its shareholders through its operating activities and capital management. Other companies may calculate these measures differently, and therefore, their measures may not be comparable to those used by National General. Please see the Non-GAAP Financial Measures table within this release for the reconciliation of net income to operating earnings, which is the Non-GAAP component of the operating return on average equity.

(14) Combined ratio excluding losses from various weather-related events, is calculated by taking the combined ratio as defined in Note 11, and adjusting it to exclude the total net losses of $35.3 million and $18.4 million from these events for the three months ended June 30, 2020 and 2019, respectively. The Company believes this measure enhances investors’ understanding of our results by eliminating what we believe are volatile and unusual events.

Year       Combined Ratio (11)   Impact of Weather-related Events   Combined Ratio Excluding Weather-related Events (14)
2020   P&C Segment   83.6%   4.2%   79.4%
                 
2020   Overall NGHC   80.5%   3.5%   77.0%
                 
                 
2019   P&C Segment   92.6%   2.2%   90.4%
                 
2019   Overall NGHC   90.9%   1.2%   89.7%

(15) Our products in the P&C segment include personal auto, homeowners, RV/Packaged, small business auto, lender-placed insurance and other products. The personal auto product includes policies for standard, preferred and nonstandard automobile insurance. The homeowners product includes multiple-peril policies and personal umbrella coverage to the homeowner. The RV/Packaged product offers policies that include RV automatic personal effects coverage, optional replacement cost coverage, RV storage coverage and full-time liability coverage. The small business auto product offers policies that include liability and physical damage coverage for light-to-medium duty commercial vehicles. The lender-placed insurance product offers fire, home and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles. Our products and revenue in the A&H segment include group, individual and third party fees. The group product includes revenue from our small group self-funded product. The individual product line includes revenue from our supplemental products including short-term medical, accident/AD&D, hospital indemnity, cancer/critical illness, dental and term life insurance. Medicare fees include commission and general agent fees for selling Medicare policies issued by third-party insurance companies as well as revenue from our Medicare Supplement product. Third party fees include commission and general agent fees for selling policies issued by third-party insurance companies, fees generated through selling our technology products to third parties.

Investor Contact

Clifford Gallant
SVP of Capital Strategy and Investor Relations
Phone: 212-380-9462
Email: Clifford.Gallant@NGIC.COM


National General Holdings Corp. logo

Source: National General Holdings Corp