PRHI

• Shift towards a commission-based revenue model through wholly-owned managing general agency Conifer Insurance Services.
• Accelerated transfer of cannabis premiums to capacity partner Palomar.
• Commercial lines production decreased significantly compared to prior year due to ramping up other capacity providers.
• Expense ratio improved to 32% in Q2, down 580 basis points from same period last year and below near-term target of 35%.
• Net investment income was $1.5 million in Q2, up 11% from prior year period.
• Investments conservatively managed with vast majority in fixed income securities.

• Expect profitability to be achieved more quickly with the commission-based MGA model on commercial lines and improved weather results in personal lines.
• Considering other asset sales as a source of liquidity if additional liquidity is needed.

In the second quarter, overall gross written premium decreased 58% to $19 million. The breakdown of total gross written premium was 36% commercial lines and 64% personal lines. Commercial lines combined ratio was 105% and accident year combined ratio was 81%. Personal lines were significantly impacted by spring storms in Oklahoma, with the run-off process expected to be largely completed by year-end.

Q: Long-standing shareholder asks about when profitability is expected and sources of liquidity if not achieved.

A: Nicholas J. Petcoff states the commission-based model on commercial lines with A-rated paper and improved personal lines weather results will lead to profitability. Harold Meloche mentions expense reductions over years and considering other asset sales for liquidity