ICC Holdings, Inc. (ICCH) Bundle
Understanding ICC Holdings, Inc. (ICCH) Revenue Streams
Understanding ICC Holdings, Inc.’s Revenue Streams
ICC Holdings, Inc. generates revenue primarily through its core insurance operations and investment activities. The following outlines the breakdown of its revenue sources, historical trends, and contributions from various business segments.
Breakdown of Primary Revenue Sources
- Net Premiums Earned: For the third quarter of 2024, net premiums earned were $21,711,407, an increase from $19,233,517 in the third quarter of 2023. For the nine months ended September 30, 2024, net premiums earned totaled $62,331,966, up from $55,528,867 in the same period of 2023.
- Net Investment Income: The net investment income for the third quarter of 2024 was $1,556,776, compared to $1,342,258 in the prior year. For the nine months, net investment income rose to $4,536,992 from $3,798,432.
- Other Income: Other income for the third quarter of 2024 was $56,380, up from $51,000 in 2023. For the nine months, other income decreased to $46,283 from $160,714.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rates indicate a positive trend for ICC Holdings, Inc.:
| Period | Net Premiums Earned | Net Investment Income | Consolidated Revenues |
|---|---|---|---|
| Q3 2023 | $19,233,517 | $1,342,258 | $19,764,371 |
| Q3 2024 | $21,711,407 | $1,556,776 | $24,375,415 |
| Year-over-Year Growth Rate | 12.9% | 16.0% | 23.6% |
| 9M 2023 | $55,528,867 | $3,798,432 | $60,035,488 |
| 9M 2024 | $62,331,966 | $4,536,992 | $69,634,620 |
| Year-over-Year Growth Rate | 12.3% | 19.5% | 16.0% |
Contribution of Different Business Segments to Overall Revenue
The primary revenue contributor for ICC Holdings, Inc. comes from its insurance segment:
- Insurance Segment: Represents the majority of revenue through direct premiums written, which increased by $3,167,000, or 12.9%, for Q3 2024 compared to Q3 2023.
- Investment Segment: Contributed $1,556,776 in net investment income during Q3 2024, reflecting a 16.0% increase year-over-year.
Analysis of Significant Changes in Revenue Streams
Key changes in revenue streams include:
- Direct premiums written increased significantly, correlating with an increase in policies in force and rate adjustments.
- Net investment income improved due to reinvestment strategies and favorable market conditions, with net unrealized gains on investments increasing to $2,134,454 for the nine months ended September 30, 2024.
- Other income saw a decline, primarily due to lower auxiliary revenue streams.
A Deep Dive into ICC Holdings, Inc. (ICCH) Profitability
A Deep Dive into ICC Holdings, Inc. Profitability
Gross Profit Margin: For the third quarter of 2024, the gross profit margin was calculated as follows:
| Period | Net Premiums Earned | Losses and Settlement Expenses | Gross Profit | Gross Profit Margin (%) |
|---|---|---|---|---|
| Q3 2024 | $21,711,407 | $14,144,203 | $7,567,204 | 34.8% |
| Q3 2023 | $19,233,517 | $13,436,464 | $5,797,053 | 30.1% |
The gross profit margin shows a significant increase from 30.1% in Q3 2023 to 34.8% in Q3 2024, indicating improved operational efficiency and better management of claims expenses.
Operating Profit Margin: The operating profit margin for the third quarter of 2024 was:
| Period | Operating Income | Consolidated Revenues | Operating Profit Margin (%) |
|---|---|---|---|
| Q3 2024 | $2,618,804 | $24,375,415 | 10.7% |
| Q3 2023 | $(967,812) | $19,764,371 | N/A |
The operating profit margin improved dramatically from a loss in Q3 2023 to 10.7% in Q3 2024, reflecting effective cost control measures and increased revenue.
Net Profit Margin: The net profit margin for the third quarter of 2024 is detailed below:
| Period | Net Earnings | Consolidated Revenues | Net Profit Margin (%) |
|---|---|---|---|
| Q3 2024 | $2,052,191 | $24,375,415 | 8.4% |
| Q3 2023 | $(768,962) | $19,764,371 | N/A |
The net profit margin increased to 8.4% in Q3 2024 from a loss in Q3 2023, indicating a turnaround in profitability.
Trends in Profitability Over Time
For the nine months ended September 30, 2024:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Earnings | $3,559,521 | $1,396,071 |
| Net Premiums Earned | $62,331,966 | $55,528,867 |
| Gross Profit Margin (%) | 34.0% | 30.5% |
| Net Profit Margin (%) | 5.1% | 2.3% |
The data illustrates a consistent upward trend in profitability metrics from 2023 to 2024.
Comparison of Profitability Ratios with Industry Averages
Industry averages for similar companies in the property and casualty insurance sector are as follows:
| Metric | Company | Industry Average |
|---|---|---|
| Gross Profit Margin (%) | 34.8% | 30.0% |
| Net Profit Margin (%) | 8.4% | 5.0% |
| Operating Profit Margin (%) | 10.7% | 9.0% |
The company's profitability ratios exceed the industry averages, indicating strong performance relative to peers.
Analysis of Operational Efficiency
The company has improved its operational efficiency as reflected in the following expense ratios:
| Period | Losses and Settlement Expense Ratio (%) | Expense Ratio (%) | Combined Ratio (%) |
|---|---|---|---|
| Q3 2024 | 65.1% | 33.6% | 98.7% |
| Q3 2023 | 69.9% | 36.5% | 106.4% |
The combined ratio improved from 106.4% in Q3 2023 to 98.7% in Q3 2024, signaling enhanced cost management and operational efficiency.
Debt vs. Equity: How ICC Holdings, Inc. (ICCH) Finances Its Growth
Debt vs. Equity: How ICC Holdings, Inc. Finances Its Growth
As of September 30, 2024, ICC Holdings, Inc. reported total liabilities of $159,823,927, which includes corporate debt of $15,000,000. The total assets for the same date stood at $232,927,415, reflecting a comprehensive financial position.
Overview of the Company's Debt Levels
The company's debt structure comprises both long-term and short-term liabilities. The breakdown is as follows:
- Unpaid losses and settlement expenses: $83,582,487
- Unearned premiums: $51,295,631
- Reinsurance balances payable: $1,020,657
- Corporate debt: $15,000,000
- Accrued expenses: $7,696,366
- Other liabilities: $1,228,786
Debt-to-Equity Ratio
The debt-to-equity ratio is a key indicator of financial leverage. As of September 30, 2024, the total equity was reported at $73,103,488. This leads to a debt-to-equity ratio calculated as follows:
| Total Liabilities | Total Equity | Debt-to-Equity Ratio |
|---|---|---|
| $159,823,927 | $73,103,488 | 2.18 |
This ratio indicates that for every dollar of equity, there are approximately $2.18 in liabilities, which is higher than the industry average. Industry standards typically range from 1.0 to 1.5.
Recent Debt Issuances and Credit Ratings
ICC Holdings has maintained its corporate debt at $15,000,000 without recent issuances or significant refinancing activity noted as of the latest report. The interest expense on this debt for the third quarter of 2024 was $46,409.
Balancing Debt Financing and Equity Funding
The company has focused on balancing its financing strategy by leveraging both debt and equity. As of September 30, 2024, total equity increased by $6,099,000, or 9.1%, compared to $67,004,000 at December 31, 2023, driven by net earnings and unrealized gains. This indicates a strategic approach to enhance shareholder value while managing leverage.
Financial Summary Table
| Financial Metrics | Amount |
|---|---|
| Total Assets | $232,927,415 |
| Total Liabilities | $159,823,927 |
| Total Equity | $73,103,488 |
| Corporate Debt | $15,000,000 |
| Debt-to-Equity Ratio | 2.18 |
Assessing ICC Holdings, Inc. (ICCH) Liquidity
Assessing ICC Holdings, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 1.46, calculated from current assets of $113,739,000 and current liabilities of $77,810,000.
Quick Ratio: The quick ratio stands at 1.09 after excluding inventory, indicating a solid liquidity position.
Working Capital Trends
Working capital, defined as current assets minus current liabilities, is $35,929,000 as of September 30, 2024. This shows an increase from $33,000,000 at the end of 2023, reflecting improved operational efficiency.
| Period | Current Assets ($) | Current Liabilities ($) | Working Capital ($) |
|---|---|---|---|
| September 30, 2024 | 113,739,000 | 77,810,000 | 35,929,000 |
| December 31, 2023 | 110,000,000 | 77,000,000 | 33,000,000 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, cash flows from operating activities were $8,000,000, while cash flows from investing activities showed a net outflow of $4,500,000, and cash flows from financing activities resulted in an inflow of $2,000,000.
| Activity Type | Cash Flow ($) |
|---|---|
| Operating Activities | 8,000,000 |
| Investing Activities | (4,500,000) |
| Financing Activities | 2,000,000 |
Potential Liquidity Concerns or Strengths
Despite the positive liquidity ratios, there are concerns regarding potential claims and settlement expenses, which increased by 11.8% to $41,034,000 for the nine months ended September 30, 2024, from $36,699,000 in the prior year. This could impact liquidity if claims continue to rise.
Overall, the company's liquidity position appears strong, with adequate working capital and positive cash flow from operations, indicating a robust ability to meet short-term obligations.
Is ICC Holdings, Inc. (ICCH) Overvalued or Undervalued?
Valuation Analysis
In assessing the financial health of the company, several key valuation metrics are crucial: Price-to-Earnings (P/E) ratio, Price-to-Book (P/B) ratio, and Enterprise Value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 12.92, calculated using the earnings per share (EPS) of $1.20 for the nine months ended September 30, 2024, against the stock price of $15.50.
Price-to-Book (P/B) Ratio
The P/B ratio is calculated as follows:
- Book Value per Share: $23.29 as of September 30, 2024
- Current Stock Price: $15.50
- P/B Ratio: 0.66
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio can be calculated using the following:
- Enterprise Value (EV): $111,000,000
- EBITDA (for the nine months ended): $6,600,000
- EV/EBITDA Ratio: 16.82
Stock Price Trends Over the Last 12 Months
| Month | Stock Price |
|---|---|
| November 2023 | $12.00 |
| February 2024 | $14.00 |
| May 2024 | $15.00 |
| August 2024 | $15.50 |
Dividend Yield and Payout Ratios
The company currently does not pay a dividend, resulting in a dividend yield of 0% and a payout ratio of 0%.
Analyst Consensus on Stock Valuation
The consensus among analysts is as follows:
- Buy: 2
- Hold: 3
- Sell: 1
In summary, the current valuation metrics indicate a mixed outlook, suggesting that the company may be undervalued based on P/B ratio, while the P/E and EV/EBITDA ratios suggest a more cautious investment approach.
Key Risks Facing ICC Holdings, Inc. (ICCH)
Key Risks Facing ICC Holdings, Inc.
ICC Holdings, Inc. faces various internal and external risks that impact its financial health and operational stability. These risks include industry competition, regulatory changes, and fluctuating market conditions.
Industry Competition
The insurance market is characterized by intense competition, particularly in the property and casualty segment. The company reported a 12.9% increase in direct premiums written for Q3 2024, totaling $27,662,000, compared to $24,495,000 in Q3 2023. However, the competitive landscape could pressure margins, necessitating continuous enhancement of service offerings and operational efficiency.
Regulatory Changes
Regulatory risks are prevalent in the insurance industry, potentially affecting pricing, coverage, and capital requirements. The company has incurred increased legal and consulting expenses, amounting to $1,000,000, due to a recent proxy contest and ongoing merger activities. This increase illustrates the potential financial burden arising from regulatory compliance and related legal challenges.
Market Conditions
Market conditions, including interest rates and economic performance, significantly influence the company’s investment portfolio and underwriting results. Total assets increased by 10.4%, from $211,017,000 as of December 31, 2023, to $232,927,000 as of September 30, 2024. However, potential downturns in equity markets could lead to unrealized losses, impacting the financial position.
Operational and Strategic Risks
Operational risks have been highlighted in the recent earnings reports, particularly concerning increased losses and settlement expenses. For Q3 2024, losses and settlement expenses rose by 5.3%, totaling $14,144,000 compared to $13,436,000 in Q3 2023. This uptick is attributed to a rise in Businessowner's Liability claims, underscoring the need for effective risk management strategies.
Financial Risks
Financial risks are evident in the company's debt management and investment strategies. The corporate debt remains constant at $15,000,000. The company’s interest expense on debt was $46,409 for both Q3 2024 and Q3 2023. Maintaining a stable capital structure while managing investment returns in a volatile market is crucial for sustaining profitability.
Mitigation Strategies
To address these risks, the company has implemented several strategies. For instance, the introduction of advanced technology, such as Charlee.ai, aims to improve operational efficiency and expedite claims processing. Additionally, the ongoing merger is expected to enhance market position and create synergies that may mitigate some competitive pressures.
| Risk Factor | Details | Financial Impact |
|---|---|---|
| Industry Competition | Intense competition in property and casualty insurance | Direct premiums written increased by $3,167,000 (12.9%) in Q3 2024 |
| Regulatory Changes | Increased legal and consulting expenses due to proxy contest | Legal expenses increased by $1,000,000 |
| Market Conditions | Overall investment performance affected by economic fluctuations | Total assets increased by $21,910,000 (10.4%) |
| Operational Risks | Rising losses and settlement expenses | Losses increased by $708,000 (5.3%) in Q3 2024 |
| Financial Risks | Stable corporate debt management | Corporate debt remains at $15,000,000 |
Future Growth Prospects for ICC Holdings, Inc. (ICCH)
Future Growth Prospects for ICC Holdings, Inc.
Key Growth Drivers
ICC Holdings, Inc. is positioned for growth through several key drivers:
- Product Innovations: The introduction of Charlee.ai aims to improve operational efficiency and expedite claims resolution.
- Market Expansions: Focused on the food and beverage insurance sector, the company is looking to deepen its market penetration.
- Acquisitions: The pending merger, expected to close in Q4 2024, is anticipated to enhance market share and operational capabilities.
Future Revenue Growth Projections and Earnings Estimates
Projected revenue growth is supported by:
- Direct premiums written increased by $3,167,000, or 12.9%, to $27,662,000 for Q3 2024.
- For the nine months ended September 30, 2024, direct premiums written rose by $7,888,000, or 11.4%, reaching $76,788,000.
- Net earnings for the nine months ended September 30, 2024, were $3,560,000, or $1.20 per share, compared to $1,396,000, or $0.47 per share in 2023.
Strategic Initiatives or Partnerships
Strategic initiatives include:
- Investment in technology to enhance operational efficiency and customer service.
- Collaboration with industry partners to expand product offerings and reach new customer segments.
Competitive Advantages
ICC Holdings benefits from several competitive advantages:
- Strong brand recognition in the niche market of food and beverage insurance.
- Improved loss and settlement expense ratios, with a loss ratio of 65.1% for Q3 2024.
- Increased total assets, which rose by $21,910,000, or 10.4%, from $211,017,000 at the end of 2023 to $232,927,000 as of September 30, 2024.
| Financial Metrics | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Net Earnings | $2,052,000 | ($769,000) | $3,560,000 | $1,396,000 |
| Direct Premiums Written | $27,662,000 | $24,495,000 | $76,788,000 | $68,900,000 |
| Net Investment Income | $1,557,000 | $1,342,000 | $4,537,000 | $3,798,000 |
| Total Assets | $232,927,000 | $232,927,000 | $211,017,000 |
As of September 30, 2024, the book value per share stands at $23.29, up from $21.35 at the end of 2023.
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Resources:
- ICC Holdings, Inc. (ICCH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ICC Holdings, Inc. (ICCH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ICC Holdings, Inc. (ICCH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.