EFH.TO - EGI Financial

[Packer16]

Given that we have alot of Canadian insurance investors on this board, what do you think of EGI?  It appears that their underwriting is slipping as their redundancies have turned into deficiencies in 2009.  In addition, it appears they have a sizable equity portfolio and are selling at a discount to book.  Does anyone have insight into thier undewriting or investment record.  TIA.

 

Packer

[doc75]

Given that we have alot of Canadian insurance investors on this board, what do you think of EGI?  It appears that their underwriting is slipping as their redundancies have turned into deficiencies in 2009.  In addition, it appears they have a sizable equity portfolio and are selling at a discount to book.  Does anyone have insight into thier undewriting or investment record.  TIA.

 

Packer

 

I was just looking into them yesterday and am also curious to hear other thoughts.  I know little about evaluating insurance and figure that small, relatively uncomplicated companies such as these are as good a place as any to learn.

 

It looks like the Ontario niche auto market has been a pretty difficult place to be of late.  Westaim (Jevco) had a pretty decent last quarter, but I think they struggled in that market as well.  They claim that new Ontario legislation will help going forward, but I haven't dug into the details.

 

 

 

 

[woodstove]

EGI Financial (EFH) looks to me like a company that hit a rough patch, but culture is sound and they are likely to do ok, and look more appealing in future vs rather pessimistic market take nowadays (trading at 2/3 of book value).  What pushed me over the threshold into buying more shares of EGI was when I got my recent auto insurance renewal (not from EGI) and saw how much rates have gone up!

[NormR]

Tim McElvaine holds a fair amount (~6% of NAV).

 

EGI – The shares trade at a significant discount to hard book. It is in a

tough industry (non-standard auto insurance) but ably run by Doug

McIntyre. EGI recently repaid all of its bank debt and received approvals

for pricing increase.

[StubbleJumper]

Given that we have alot of Canadian insurance investors on this board, what do you think of EGI?  It appears that their underwriting is slipping as their redundancies have turned into deficiencies in 2009.  In addition, it appears they have a sizable equity portfolio and are selling at a discount to book.  Does anyone have insight into thier undewriting or investment record.  TIA.

 

Packer

 

 

Why is it better than ELF.to which also trades at roughly two-thirds of book, and actually has ok underwriting?

[woodstove]

StubbleJumper asked ...

"Why is it better than ELF.to which also trades at roughly two-thirds of book, and actually has ok underwriting?"

 

That's a good question.  Actually, I ended up selling ELF to buy EFH.  Though I sold ELF a couple of weeks ago, when the price went up for reasons I didn't understand, and only recently decided to increase EFH holding -- so the two are in a sense distinct decisions, though the ELF capital (+ a bit more) ended up being reallocated to EFH.

 

With ELF, the recent rise seemed to me to be the action of an enthusiast building a holding regardless of price, ie without much patience.  Of course it could be the company itself becoming aggressive about buyback, but I doubt that.  Maybe some newsletter recommendation?  It just had the feel of an easy rise that could just as easily fall back, so why not take the money off table and wait?  ELF is not core for me.

 

With EFH, the recent decline seemed to me either a significant exit, eg some bad news I had not learned of, or perhaps some accumulator pushing the price down to justify a block transaction at a lower price?  Re-examining the company's Sedar filings, I could not see anything to make me concerned.  I decided that my moderate EFH holding was too tentative, and upgraded EFH to "core".  It seemed to me that there are some possibilities for EFH to have good news on horizon - management transition might work out well (very probable, in my arms-length take on their culture, knowing nothing about the particular personalities); the rate rise in Ontario (3/4th of business) might be a nice surprise for Q4/10 (a bit) and Q1/11 (full quarter); the bad news from GTA claims and/or US venture might finally have worked thru; whatever.  I felt it was unlikely that EFH would be priced in the market at significantly less than 2/3rd of book value, given that much of that book was Cdn dollar govt bonds. Further there looked to be good chances of book increasing over next few years, eg due to reserve releases since the company tends to include a more-than-probable excess in reserves and that amounts to (in my naive view) a hidden value to be released someday into book.  So that probable future increase in book value and already trading at 2/3rd of book, might provide some margin of safety on the downside.  Still another motivator was a brokerage report that advised wait-and-see before commiting to EFH; such opinions will likely turn someday.  And finally, it was nice to see an increase in McElvaine position.

 

Incidentally, thanks for that link to McElvaine website.  I've not seen that ABBA acronym before; like it a lot, and printed copies to give to a couple of friends.

 

ps.  Edited to fix ELF/EFH symbols mixed up.  Hope I got them straight now!

[doc75]

Unaudited Q4 results are out.  It looks like the steady underwriting improvement over the past few quarters has continued, with a 95% combined ratio for Q4.  Still trading for less than 2/3 book.

 

Here are the Q4 highlights:

 

• Total comprehensive income of $5.4 million compared to a loss of $(5.1) in the fourth quarter of

2009

• Net income of $3.3 million from a loss of $(2.3) million in the fourth quarter of 2009

• Net income per fully diluted share of $0.26 compared to a loss of $(0.19) in the fourth quarter of

2009

• A 16% increase in net earned premiums over the fourth quarter of 2009

• Investment income  of $3.7 million – excluding realized gains, investment income was $3.3

million versus $2.7 million in the fourth quarter of 2009

• A 10% increase in book value  from  the end of the fourth quarter of 2009  – book value at

December 31, 2010, is $146 million, or $12.14 per share

• An 8% increase in the total fair value of the investment portfolio (including premium finance

receivables) to $398 million during the quarter

 

“We are  pleased to report our third consecutive profitable quarter,” said Steve Dobronyi, Chief

Executive Officer of EGI.  “Our underwriting results continue to improve and, in the fourth quarter,

we reached our profitability target by recording a combined ratio of 95%.  These results are evidence

that the  remedial actions taken over the past six to twelve months to restore the profitability of the

business are having the desired effect.”

“Both our Personal Lines and Niche  Products divisions recorded an underwriting profit for the

quarter,” continued Mr. Dobronyi.  “This is our fourth consecutive quarter of improved underwriting

performance and we’re pleased to be ahead of where we expected to be at this point in time.  The

increase in earned premiums demonstrates that our company continues to grow but at a controlled

and more manageable rate.”

“Our balance sheet remains strong and our regulated entities are well capitalized,” added Mr.

Dobronyi.  “We have a high quality investment portfolio, no goodwill and no debt.  These attributes

all contribute to our A.M. Best issuer credit rating of bb+”.

“Going forward, our priorities are clear,” Mr. Dobronyi concluded.  “The Ontario automobile market

remains in disrepair, which provides opportunities for specialty insurers such as EGI.  We will protect

our core non-standard automobile business through  optimum service to our producers and the

sophisticated selection of risk.  We will diversify by product through the growth of our Niche Products division  and by geography  through  our start-up U.S. operation and  expansion into  underserved

segments of the Canadian market.  We expect 2011 to provide a number of compelling opportunities

for enhanced growth and profitability and we have the right team in place to capitalize on them as

they arise.”

[KFRCanuk]

Good Q1

http://www.egi.ca/documents/2012-05-10Q1Results.pdf

 

May 10, 2012 ‐ EGI Financial Holdings Inc. (“EGI” or “the Company”) (TSX: EFH), which operates in

the property and casualty insurance industry in Canada, the United States and Europe, today reported a net

income of $3.8 million, or $0.33 per basic and diluted share, for the first quarter ended March 31, 2012, a

25% increase over the first quarter of 2011.

First Quarter Highlights

 A 42% increase in written premiums over Q1 2011, and a 5% increase in net earned premiums

 Investment income of $6.0 million, compared to $4.4 million in the first quarter of 2011

 An increase in book value per share to $13.14, as at March 31, 2012, from $12.85, as at the end of 2011

 Net operating income of $1.7 million, or $0.14 per share, compared to $2.2 million, or $0.18 per share, in

Q1 2011

 A combined operating ratio of 96% in Canada, and a combined ratio of 102% for the entire Company

 Significant growth in written premiums in the start‐up U.S. division

 The Company’s new International division commenced writing premiums

 On March 30, the Company received approval from the TSX to commence a normal course issuer bid to

repurchase and cancel up to 0.7 million common shares (approximately 10% of the public float as of

March 23)

“We are pleased to report a strong start to 2012 and a continuation of the progress we made in 2010 and

2011,” said Steve Dobronyi, Chief Executive Officer of EGI. “In the first quarter, we produced a 41% increase

in underwriting profit in our Canadian operations, which accounts for more than 90% of our business.”

“We were especially satisfied with the strong growth in profitability in our Niche Products division due to

improved claims performance, a reflection of our renewed focus on underwriting discipline in these

programs,” continued Mr. Dobronyi. “Our core Personal Lines division also recorded healthy underwriting

profits while operating in a challenging, though improving, market for non‐standard automobile insurance.”

“Our start‐up U.S. division was negatively impacted by storms in Texas, but we recognize the seasonality of

such losses and are pleased with the continued quarter‐over‐quarter increase in premiums written by the

division. We anticipate improvements in the division’s operating performance as it grows its business,” Mr.

Dobronyi added. “We’re also happy to report our International division began writing premiums in the first

quarter in Europe, business that is similar in nature to that written by our Niche Products division in Canada.

“Our focus in 2012 is to ensure our Canadian business provides consistent underwriting profits and a stable

platform, and to diversify our business by growing our U.S. and International divisions into significant

contributors to our overall results.”

[KFRCanuk]

 

Looking forward to Q4 results:

 

TORONTO, Jan. 28, 2013 /CNW/ - EGI Financial Holdings Inc. (TSX: EFH) today announced that it intends to release its fourth quarter financial results after market close on Monday, February 25, 2013.

[phil_Buffett]

http://www.egi.ca/documents/2014-05-08Q1PressRelease.pdf

 

anyone still in this?

 

iam Holding still. book value is growing. and collect in the mean time a dividend

[phil_Buffett]

Book value at $14,99

Stock at $12,6

 

Anyone still in this company?