Orion180 Insurance Group Q3 2026 Earnings Call Transcript

Orion180 Insurance Group (NASDAQ:OIG) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Orion180 Insurance Group reported strong financial performance in Q3 2026, with managed premiums written growing by 60% to $204 million and net income rising 32% to $11 million.

The company completed its initial public offering in September, raising $224 million to pay down debt and strengthen its financial position.

Strategically, the company is expanding its product offerings, including launching the Flex Luxury product, and is focusing on technological advancements with its My180 platform.

Orion180’s underwriting discipline is evident in its industry-leading gross loss ratio of 32.8% and an improved combined ratio of 68.8%, showcasing effective risk management.

The company plans to continue growing in existing and new states, with a focus on maintaining competitive advantages through product differentiation and customer-centric solutions.

Full Transcript

OPERATOR

Greetings and welcome to the Orion180 Insurance Group third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star-zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to Orion180 Insurance Group. You may begin.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thank you, and welcome to our third quarter 2026 earnings call, our first call as a public company. We are excited to be speaking with you today, and I want to thank everyone for joining us and for your interest in Orion180 Insurance Group. Let me start with the quarter. We delivered an excellent third quarter across all of our key metrics. Managed premiums written grew by 60% year over year to $204 million. Managed premiums in force as of September 30, 2026 grew 72% from last year’s period end to $678 million.

Consolidated revenue rose 58% from the prior-year period to $54 million. Net income increased 32% from the prior-year period to $11 million, and consolidated adjusted EBITDA grew 65% year over year to $25 million. In September, we completed our initial public offering, a major milestone in our company’s history. Our CFO, Christoph Birchler, will walk you through the details of our third quarter results in a few minutes. Because this is our first call, for those of you new to the Orion180 Insurance Group story, I’d like to spend a few minutes on who we are, how we win, and where we are going. Orion180 Insurance Group is a founder-led, technology-focused, capital-efficient specialty insurance group with a clear vision to become the premier provider of specialty property insurance solutions. We began operations in April of 2018 with a simple conviction that homeowners insurance could be underwritten better, priced faster, and serviced with far more care by leveraging today’s technology as opposed to utilizing legacy systems that are typically slow to evolve.

When I founded the company over eight years ago, I had a vision of doing things differently. I didn’t focus on finding a problem, but instead on seeing an opportunity. I felt I could build a company not focused on price or profit, but focused on the customer experience and providing value for others throughout the entire value chain for all stakeholders. Utilizing technology as a differentiator and value proposition—seeing technology as an asset, not as an expense—and utilizing it to drive product innovation as well as operational efficiencies.

Focusing on solutions that serve customers, agents, and reinsurance partners as well as the company itself, I built the company on the focus of how something can be done rather than accepting why something can’t be done. We are proud to have built this business organically with no institutional equity funding. In roughly eight years, we have become the second-largest E&S homeowners insurance provider in the United States by direct written premiums, with a presence in 14 states and distribution through a network of approximately 17,000 active independent agents as of September 30, 2026. Our growth has been rapid and consistent while we remained appropriately disciplined with respect to our underwriting. From less than $2 million of managed premium in 2018, we have grown to well over $650 million on a trailing 12-month basis.

We have expanded our footprint from 2 states to 14 and expanded our reinsurance panel from 4 to more than 50 global partners. We’ve achieved this remarkable growth while delivering underwriting performance that materially outperforms the industry. How we structure the company is what sets us apart. We set out to capture as much of the insurance value chain as possible and designed the company to maximize our diversified revenue streams, optimize margins, and be capital efficient. Orion180 Insurance Group has two segments. Our service segment includes our managing general agency (MGA), our in-house claims company, Cyton Claim Solutions, and our technology company, OTX. It is fee-based, high margin, and notably, it generates the majority of our consolidated revenue.

Meanwhile, our underwriting segment includes our two in-house fronting carriers and our Bermuda captive. We earn commissions and fees on every dollar of premium we write while we only retain 15% of the exposure to remain aligned with our partners. The other 85% is ceded to an 11-member panel of third-party, unrelated global reinsurance capacity providers, up from 10 members at the same time last year. We’ve also put in place a robust reinsurance program that covers our full portfolio with an additional 40-plus reinsurance providers, ensuring that we have significant catastrophe protection to effectively minimize the impact of any major event.

As a result, our maximum per loss event claims obligation for our in-house fronting carriers under our current reinsurance program is only $1 million, or less than a half of 1% of our managed premiums in force as of September 30. At the same time, our best-in-class underwriting results have resulted in industry-leading profits for our reinsurance partners over the years. Because the Orion180 Insurance Group of companies includes our own in-house fronting carriers, claims entity, and technology company, we participate in the full economics across the entire value chain as opposed to typical MGAs that only earn commissions and policy fees on the premium produced. This differentiated structure not only monetizes but optimizes the insurance experience. We are confident this model will only become exceedingly more difficult to replicate over time.

We are well positioned for continued long-term growth driven by four key points. First, our differentiated product lineup. Flex, our unique flagship product, was designed to give consumers choice. It gives customers the flexibility to create a policy that fits their individual risk-tolerance preferences. Insureds can choose from numerous base peril combinations along with customizable deductibles and features such as a two-year locked-in rate or copay options.

We price it in real time and bind it in minutes. We believe it is a truly one-of-a-kind customized homeowners offering. Building on Flex, we recently introduced Flex Luxury, a new product designed to meet the differentiating demands of our homeowners with high-value homes. Flex Luxury expands our dwelling coverage limit up to $5 million with total insured value up to $7.5 million. It recently launched in Florida and Texas with plans to expand throughout the current geographical footprint and potential additional states.

Rounding out our Flex lineup, our Dwelling Protection, or DP Landlord, program launched in the spring of this year and is now live in nine states. Beyond our Flex suite, we also offer traditional homeowner policies for catastrophic and non-catastrophic exposed geographies. Rounding out our current offerings, we continue to grow our residential private flood coverage offered in 11 states. Secondly, our unique proprietary My180 technology platform was purpose-built in house from day one. It is a complete end-to-end platform that is central to everything we do. We are constantly innovating and enhancing the platform’s capabilities. This provides us with significant advantages in speed to market, advanced analytics, flexibility to rapidly respond to market demands, and comprehensive insight to the business on a real-time basis. It is a core differentiator and paramount to our success and why 22% of the entire Orion180 Insurance Group team are strictly focused on technology development and delivery for customers.

For customers, My180 means receiving precise pricing, tailored coverage, a self-service portal, and a seamless and pleasurable end-to-end experience. For agents, My180 means quote-to-bind in minutes, real-time coverage adjustments, efficient onboarding, and best-in-class individual analytics to manage their book and performance. For our reinsurance partners, My180 means superior underwriting results, key concentration and loss analytics, and real-time insight to their exposure.

Our third driver of growth is our underwriting discipline. Our average direct loss ratio since inception in 2018 through the end of 2025 was 36% versus roughly 68% for the industry, while delivering significant double-digit growth year after year. We’re able to deliver these industry-leading results through the utilization of our differentiated data analytics, constant monitoring of frequency and severity trends, and our ability to optimize catastrophe exposure management.

When we see an unfavorable pattern emerge, we course-correct in real time. Our portfolio managers are continuously optimizing our rating algorithms and coverages. As an example, in our first 11 months in Texas, we made nine product updates which produced $91 million of new written premium with a 25% loss ratio over that same time period in the state, illustrating our dynamic product management and the power of our platform. Every quote, policy, and claim we add results in a more informed next decision on changes we make, leading to higher retention, better agent platform utilization, stronger outcomes, and constantly strengthening our data advantage.

Finally, our distribution and service. We believe in the independent agent channel. We value our agents, and they choose us because of our ease of doing business, commitment to provide competitive solutions, and commitment to being there through different market cycles. Importantly, we have a highly diversified distribution network of agents with no single agency branch representing more than 6% of our written premiums. We also handle claims in house through our related claims company, Cyton.

Claims Solutions. Owning our claims company allows the group to capture the profits that would have gone to others for their handling of our claims. Furthermore, it assures that the claims experience for our insureds and agents meets our expectations and, as importantly, the policy terms are adhered to in the adjusting of the claim. The results are evident throughout with an average of 22 days to close an open claim, industry-leading loss ratios, and our exceptional customer reviews.

Our emphasis on putting the customer at the center of everything we do is core to our culture and mission. The result is a 4.8 out of 5 star rating on over 5,000 Google reviews. All of this strengthens our relationships with agents and policyholders while capturing the economics inside the group. Our market opportunities are significant and growing. The United States homeowners market is roughly $192 billion and has grown at about 70% from 2020 to 2025. We hold about a 2% share on average in the 14 states where we operate today and less than 1/2 of 1% nationally in the broader homeowners market. In short, there’s ample room to continue our strong growth driven by our product suite, technology, and customer experience. We are well positioned to further expand our market share with a multi-pronged strategy that will continue to increase long-term shareholder value.

First, we are strengthening our market presence in our existing geographical footprint where we expect to continue growing. Leading the way will be the three largest markets we entered in 2025, Texas, Florida, and California, the three most populous states in the country. While strategically exploring to expand to new states, we also recently expanded in Colorado over the summer and it is already contributing to the current strong growth. Second, we continue to expand our product offerings in 2026, building on top of the three states we entered in 2025 and our existing homeowners and flood programs.

We launched the DP Landlord in April and Flex Lux in October. Finally, we expect to expand selectively into adjacent products and markets for future growth opportunities. Underpinning these growth opportunities is the scalability of our business. We will always invest thoughtfully in our growth capabilities and our proprietary technology to reinforce our competitive advantages. This allows us to quickly and confidently enter new markets and introduce new products. We are well positioned to significantly grow our managed premiums and revenue while ultimately optimizing margins over time. This will continue to drive long-term value for our shareholders.

We could not be more excited for the future of Orion180 and with that I’ll turn the call over to Christoph Birchler, our CFO, to take you through the quarter in more detail.

Christoph Birchler (Chief Financial Officer)

Thank you, Ken, and good afternoon, everyone. Let’s get right into our third quarter results. Managed premiums written had another strong quarter of growth at 60% to $204 million compared to $127 million in the prior year period, while new business premiums written also grew 62% to $102 million from $63 million in the prior year period. Managed premiums in force at September 30, 2026 had a significant increase to $678 million, up 72% from $394 million at the same time one year ago.

Policy retention remains strong at 87.6% compared with 89.6% in the prior year period, which is mostly attributable to underwriting actions focused on profitability and retaining desirable risks. On a consolidated basis, total revenues increased to $53.9 million, up 58% year over year from $34.1 million, driven by a 52% increase in net premiums earned and a 70% increase in policy fee income. Consolidated adjusted EBITDA had strong growth of 65% to $25.1 million, and our adjusted EBITDA margin also expanded from 44.7% to 46.6%. Our growth results continue as our net income for the quarter grew to $11.5 million, up 32% from the prior year period.

Net income in the quarter included $2.8 million of non-recurring expenses related to our IPO and loss on debt extinguishment. Turning to our two segments, starting with Services, commission and fee revenue grew 64% year over year to $75.1 million. Within that, policy fee income grew 70% while commission income grew 57%. Services adjusted EBITDA grew 16% from the prior year period to $18.6 million. Our Underwriting segment also had a strong quarter. Net premiums earned expanded to $29.9 million, up 52% from the prior year period. We continue to produce strong underwriting results with a gross loss ratio of only 32.8% compared to 27.3% a year ago, but still comfortably below our 36% average since inception.

Furthermore, our net loss ratio improved from 47.5% in the prior year period to 42.8% and our expense ratio significantly improved from 48.3% in the prior year period to 26%. As a result, our combined ratio decreased 27 points from 95.8% in the prior year period to 68.8%. Underwriting adjusted EBITDA was $11.5 million, an over 425% increase from $2.7 million in the prior year period. We ended the quarter in a strong position with cash and cash equivalents of $166 million and debt of $56 million. In September, we sold 20 million shares of Class A common stock in our initial public offering, generating proceeds net of underwriting expenses of approximately $224 million, which we used to pay down outstanding debt and strengthen our overall financial position. With that, I’ll turn the call back over to Ken.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thanks, Christoph. Before opening up for your questions, let me close with a few thoughts. This was another strong quarter for Orion180 and a milestone one. We continue our best-in-class results with our year-over-year production: managed premiums written growing at 60%, managed premiums in force increasing by 72%, consolidated total revenues rising 58%, adjusted EBITDA expanding 65%, enhancing our margin year over year, and further strengthening our balance sheet through our IPO.

Going forward, while we plan for continued near-term uncertainty in the macro economy and mortgage environment, we expect to continue outperforming in our market. Our business model is built to be flexible and sustainable through every type of market cycle. What excites me most is what lies ahead and the incredible opportunity we have to succeed now and over the long term. We hold less than 1/2 of 1% of the $192 billion and expanding homeowners market.

Our My1E platform is built for scale. We have the discipline to underwrite profitably, a capital-efficient model that turns growth into cash flow, and a team that is constantly innovating. Our vision has always been consistent: to be the premier provider of specialty property insurance solutions. We will get there by doing what we have done over the past eight years: innovating relentlessly, continually investing in our tech to further enhance our competitive advantage, underwriting with discipline, offering the best solutions to our customers, and being the best partner to our agents and reinsurers. By doing that, we know we will continue to drive increased long-term value for all of our shareholders.

I want to thank our customers, employees, agents, reinsurance partners, and new shareholders for their support. We are very excited for the future of Orion180. Operator, we are now ready to take questions.

OPERATOR

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you’d like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

Our first question comes from Matt Carletti with JMP. Please go ahead.

Matt Carletti (Analyst)

Thanks. Good afternoon, Ken. I was hoping maybe you could peel the onion back a little bit on, over the past, like call it, you know, 12 to 18 months, you’ve entered three pretty big states, Texas, Florida, California, and maybe just give us a little color on kind of how those early months and quarters are going versus kind of either your expectations or maybe how some of your other more mature states kind of came out of the gates.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thank you, Matt. Appreciate the question, and thank you for joining us on the call. Looking at the three largest states, California, Texas, and Florida, I think when we look at those states and how we’re performing, they’re doing as we expected them to do. We’re garnering the market share, competing very well, and for us they’re doing what we always anticipated, right? It’s allowing us to capture and participate in the large markets, and from there we expect them to continue driving the growth going forward.

So from our standpoint we’re very pleased with that and it just continues along what we’ve done in the past. It’s the same, a little bit of the same of doing what we’ve done in the past. It’s the same, over repeating the process.

Matt Carletti (Analyst)

Gotcha. And then kind of a follow-on there. You mentioned, you know, recently starting in Colorado. If I look at kind of the other large kind of homeowners E&S states and I guess states with high value homes too, you see places like Illinois, New Jersey on that list. Are those logical places to expect to see you next, or are there reasons why you might not look to go in those markets?

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Another good question. I appreciate it. Colorado is actually trending along the same lines of what we’ve done in all three of the other large states. It’s starting to contribute and pick up and garner the market share, or get the traction that we’ve had in the other states, in the same trajectory. So we are seeing it contribute to the growth already, and we’re going to expect to see it continue to grow along the same lines on the trajectory. As to the other part of the question of additional states, we will do, and we are looking at, the prospect of the expansion to the additional states if it fits our essentially our appetite, and it has to fit across the board. We look at a number of things as we’ve mentioned in the past. We look at the environment, the market opportunity, and will our solutions fit the market needs. So I think we’re going to continually be looking, on a very essentially measured, disciplined way, to see if the market is the right—if it’s the right fit for us in any of those additional states.

Matt Carletti (Analyst)

Great. Thank you very much for the answers. Appreciate it.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thank you.

OPERATOR

Our next question comes from Roland Mayer with RBC Capital Markets. Please go ahead.

Roland Mayer (Analyst)

Hi, good evening, and thank you for taking my questions. I was wondering if you discussed policy in-force growth and how that compared to managed premiums. Is pricing currently a drag on the top line?

Christoph Birchler (Chief Financial Officer)

I’m sorry, could you repeat the question one more time? Sorry.

Roland Mayer (Analyst)

Yeah, I was wondering if you discussed policies in-force growth and how that compared to managed premiums. Just trying to get a sense on if pricing is a drag on the top line.

Christoph Birchler (Chief Financial Officer)

Yeah, very good—good, good question. Our policy growth has been pretty close in line. We’re not seeing a lot of drag on the premium side. We had roughly, at the end of the quarter, about 280,000 policies in force. So there’s a little bit of pricing pressure, but we’re not seeing a significant amount impacting it through the third quarter.

Roland Mayer (Analyst)

Thank you. And then I guess as my follow-up, you ended the quarter with a healthy net cash position and a little bit of debt outstanding. Is it your intention to fully reduce that remaining $56 million of debt?

Christoph Birchler (Chief Financial Officer)

We are going to continue to monitor our cash needs going forward, but our intent is, with excess cash, we will look to continue to pay down the debt.

Roland Mayer (Analyst)

Thank you. And then if I could sneak in one more, any expected losses from Hurricane Isaias?

Christoph Birchler (Chief Financial Officer)

Great question. It was a non-material impact at all, a non-event for us.

Roland Mayer (Analyst)

Thank you. Congrats on the quarter.

Christoph Birchler (Chief Financial Officer)

Thank you.

OPERATOR

Our next question comes from Brian Meredith with UBS. Please go ahead.

Leandro (Analyst)

Hi, good afternoon everyone. Ken, Chris, this is Leandro. On behalf of Brian, congrats on the quarter. And I have a follow-up question on the hurricane and the relationship of the services side. Should we expect any claims activity to generate incremental revenues on that segment?

Ken Gregg (Founder, Chairman and Chief Executive Officer)

I would say no. We have not had any size of number of claims from the hurricane.

Leandro (Analyst)

Sounds good. And my second question here, it’s on the E&S segment and admitted market capacity. We have heard from other market participants that additional admitted capacity is entering the homeowners insurance and some businesses potentially moving from the E&S back into the admitted market. Are you seeing this dynamic across your business or has it impacted at all your business?

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Great question about the competition. And we have seen entrants enter the market, either new or essentially returning. However, I think when you look at—and it’s actually evident through our retention ratio—we’re highly confident with our position, and it’s actually proof. What you’re seeing is the proof that we compete on an admitted-like basis. From a standpoint that we have roughly 88% policy retention on this, and we’re putting up admitted-like retention ratios.

We’re built to compete. We’re not shy of it. And I think the results of the third quarter show that we’re able to compete, and it’s not really having an impact. I think what you’re seeing goes back to early conversations when we were going through the process and explaining to people that we operate in an E&S environment, but we offer and we compete on an admitted basis. We offer admitted-like product, and we compete against the entire admitted spectrum. So for us it’s not having an impact, and in fact, our results show that we’re competing very well.

Leandro (Analyst)

Very clear. Thank you, Ken, and congrats again.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thank you.

OPERATOR

Our next question comes from Gregory Peters with Raymond James. Please go ahead.

Gregory Peters (Analyst)

Hey, good afternoon. You know, you’re posting really substantial rates of growth, and the other carriers, the publicly traded ones, most of them are reporting growth, but not as robust as yours. Ken, you talked about underwriting discipline. Maybe you could spend a second and walk us through how your rates of growth reflect the underwriting discipline relative to what we’re seeing with other companies in the marketplace.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thank you, Greg. I appreciate you joining the call and I appreciate the question. What I would say is the underwriting discipline is actually more evident in the results in the loss ratio, not so much on the growth side. The growth is showing that it’s the full value package that we offer, right? It’s not price-driven we compete on. We are out there putting together a total package. When we go to our agent partners, we compete across the board, not just on price.

In fact, price is the last thing we want to try to compete on. Don’t get me wrong, I understand we need to be competitively priced, which we are, but it’s about the full experience all the way through with us. So we’re always being selective to make sure we have the right, essentially, recipe between the pricing, coverages and so forth that fits what is our risk appetite. That drives the loss ratios with their appropriate growth. And we’re having success. And that’s why I think you’re seeing that we’re able to put together that appropriate mix that meets the needs and desires of the customer at the right risk exposure for us at the right price point that drives the sales.

So I think we’ve spent eight years building this distribution, these relationships, and that’s what’s driving why we’re able to continually do what we do. It’s a process, it’s a repeatable process, and I’d say it’s also what is our moat.

Gregory Peters (Analyst)

That answer makes sense. Thanks. I guess my follow-up question is if we can just pivot to the underwriting segment. Substantial improvement in the combined ratio. Maybe you could just spend a second and talk to us about some of the drivers and if they’re durable, you know, going forward.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Yeah, I appreciate that. I’m going to go ahead and let Christoph kind of talk to that, and if need be, if you want, I can add color afterwards.

Christoph Birchler (Chief Financial Officer)

Yeah. Hey Greg. I would say, you know, driven by the gross loss ratio, right? As the geographic profile of the portfolio has shifted, you’re seeing the results of the seasonality impact of increased storms through the third quarter. These shifts are, you know, naturally within our expectations. And also, additionally, we are seeing significant reinsurance terms improvements. That is not a factor that counts in here.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Yeah, I think on that side of it, you’re seeing that combined ratio—as there’s more earned premium going through the book. Of course, you’ve seen the improved economics in the reinsurance expense and the structure of the reinsurance—that’s helped driving the ultimate underwriting and improved combined ratio.

Gregory Peters (Analyst)

Perfect. Thanks for the answers. Congratulations on the quarter.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thank you, Greg. Appreciate it.

OPERATOR

Once again, if you would like to ask a question, please press Star one on your telephone keypad. Our next question comes from Cave Montezeri with Deutsche Bank. Please go ahead.

Cave Montezeri (Analyst)

I just want to follow up on the combined ratio question And maybe focus more on the acquisition ratio improvement. Wondering if you can unpack that a bit more.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

The acquisition—I’m sorry, the last piece came across muffled. I’m sorry.

Cave Montezeri (Analyst)

Oh, the policy acquisition ratio.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

And your underwriting segment. First off, do you want to talk about that? We’ll follow up on that. Let us take that question away.

Cave Montezeri (Analyst)

Sure. Sorry, my headset just dropped off, so I don’t know if you heard my question. The follow-up is I was wondering if you can unpack both in earned premium in the underwriting—like both on the growth side and from a net premium earned as well. So gross premium earned and net.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Yeah. You’re saying how much has the earned premium actually changed?

Cave Montezeri (Analyst)

Yeah, I’m just wondering like what drove the improvement,

Ken Gregg (Founder, Chairman and Chief Executive Officer)

The combined ratio improvement, you’re saying?

Cave Montezeri (Analyst)

No, sorry, not a different question. Now the gross earned premium—like what drove the growth in earned premium?

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Oh, it’s the higher held book. As the book matures and becomes more held, even with the significant growth, we’re still having more earned flow-through than what’s being added on the new.

Cave Montezeri (Analyst)

Okay. And sorry, I don’t even know if my first question went through, because like I said, my phone died. So I’m going to ask a different question, which is just from a brand recognition point of view, given the recent IPO—and I know you’ve got the F1 sponsorship that you’ve renewed, and recently we saw your name on some, like, college basketball tournament—just wondering where you are in terms of brand awareness.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Oh, so you’re looking at the brand awareness, the marketing that we do to build the brand awareness. I think first—

Cave Montezeri (Analyst)

Marketing, and the IPO as well probably helps as well.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Yes, absolutely. I think that was part of the entire—one of the things that we looked at when I was going down the path of the IPO was to help the agents as well as the consumers to recognize and essentially give additional validity to us when they’re presenting us to the insureds. We won’t hide behind the fact that, overall, we don’t have the same household name as some of the legacy large companies that have been out there for 100-plus years. So we’re building that brand as you see, as you mentioned, through F1, the relationship—being associated to the premier racing series in the world, right? Again, being positioned as a premier provider. We’re associating ourselves with premier-type series and events, like the basketball—we associated with the number one team in the country. Again, it’s a premier type of experience, all those things. And the IPO absolutely gives additional credibility to us with our partners, insureds and agents as well, to understand you have a strong company that’s a publicly traded company and also goes through the scrutiny of the SEC.

Cave Montezeri (Analyst)

Makes sense. Thank you. And sorry about the technical issues earlier.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

No, thank you. I appreciate it. Sorry I didn’t quite clearly understand on the first side. Thank you, Cave.

OPERATOR

Our next question comes from Randy Binner with Texas Capital. Please go ahead.

Randy Binner (Analyst)

All right, thank you. Yeah, just a few cleanup questions here. I guess on just like following the pricing question—I think you kind of replied that you’re not seeing, I think it was Roland that asked, that you’re not seeing a lot of pricing pressure across the book. But can we kind of dig into states, you know—like is pricing versus loss costs a lot better in the new states like California and Colorado versus your legacy states? Just kind of be curious where the best rate versus loss opportunity is in the states you’re looking at,

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Actually, I think—good question, Randy. I appreciate it. Again, thank you for joining us on the call and appreciate, you know, your question. It’s actually pretty steady. You’re going to see this run on a traditional basis already. And for example, in the Midwest you’re going to see pricing have more of an impact on the loss ratio. It’s a different type of exposure in the Midwest, for example, than on the coastal Southeast. You look at our legacy states—for example, South Carolina is a perfect example—still performing extremely strong.

And there is, you know, again, increased competition. But we compete more than just on price. I don’t want to say, and I don’t want anybody to walk away from here misunderstanding, that we’re seeing price competition but we’re not having a drastic impact on us is what I’m saying, right? There is price pressure out there, but we compete on other than just price alone. So we’re not having a significant impact at least through the third quarter. And that’s where we continue to find ways to compete and differentiate the product to get away from just the pricing.

When you look at, for example, the Flex product in itself, it’s specifically designed so that you are not competing there just on price. It allows the customer to pick and choose their policy and design it to fit their personal needs, and the price will come out to be where it is. So it’s not a real get-into-a-commodities approach of pricing in apples-to-apples type of side-by-side comparison because you’re not—you’re comparing two different types of policies at that point that are totally structured to where they are.

You look at inside the Flex product—we added some additional, essentially, optional coverages. For example, the ability to have a two-year rate lock—that’s not an easy comparable product feature that other products have—having essentially a no-loss reward that they get, return of premiums if they have no loss over periods of time, that feature inside the Flex product. So Flex allows enough differentiation that you don’t get into a competitive environment that you’re competing like-to-like.

You’re competing on product and different services before you go just pure price. So that’s why what you’re seeing from us—and this is what we are built on as a company right from day one—we have built to compete on innovation and differentiating on value, bringing value to the equation versus just having a like-like product and competing on price. Which I think what you see in the current environment—historically you find companies that do enter and enter new markets or reenter. That’s what they typically do, come in and try to buy market share.

And that’s not something we do. We try to compete in different ways. And I think you’re seeing we’re fairly successful at it, which I think is directly—you can see it directly through the results that we have.

Randy Binner (Analyst)

That’s great. And then I just have a couple others. So on Flex Luxury I think you mentioned that it goes up to seven and a half million dollar home values. And so if I got that right, that’s, that’s a bit, I think that’s a bigger house than you’ve insured in the past. Correct me if I’m wrong, but is that, I think that’s all. Is that all E&S? Is there different considerations that you have to evaluate when getting into kind of larger homes like that?

Ken Gregg (Founder, Chairman and Chief Executive Officer)

No. Great question. No, you are correct, by the way. The value is $7.5 million total insured value. The home value itself is $5 million. But that’s still significantly higher than what we have in our current portfolio. Max limit on our current portfolio, and it is strictly E&S. That’s, again, where our focus and growth is, to continue staying in the E&S environment. And it’s, again, not about risk selection but more about having the availability of the tools and the ability to leverage our insight and data and technology advantage to stay competitive in the environment in a more dynamic fashion.

Speed to market with changes to stay competitive with the market demands. That’s why we stay in the space. The Flex Lux product is a natural fit for us. It’s just an extension of what we currently do.

Randy Binner (Analyst)

Got it. Okay, that’s helpful. And then just one other modeling question. The yield, the investment yield, is actually pretty darn good this quarter. Is there anything unusual? There is that. Can we model that kind of yield on a quarterly basis, or did you. Were there some good guys in there?

Christoph Birchler (Chief Financial Officer)

Hey, Randy, can you repeat that question?

Randy Binner (Analyst)

Oh, no, I apologize. Sorry. I’m reading you guys well. But I am asking if, for net investment income, the yield captured in the quarter was better than I modeled. And so my question is, is that a good yield model going forward, or was there any unusual good items in the quarter for the investment yield?

Christoph Birchler (Chief Financial Officer)

No, there wasn’t anything specific to mention here. Our investment yield, right, stays pretty consistent with our expectations. Naturally, net investment return is growing as we’re just building more business and retaining more cash. But we can talk about modeling offline.

Randy Binner (Analyst)

All right, I’ll leave it there. Thanks so much.

Christoph Birchler (Chief Financial Officer)

Thank you, Randy.

OPERATOR

We have reached the end of our question and answer session. I would now like to turn the floor back over to Ken Gregg for closing comments.

Ken Gregg (Founder, Chairman and Chief Executive Officer)

Thank you. I’d like to thank everyone for participating in this call. It’s our first earnings call as a publicly traded company. We’re very excited about our future. Again, in closing, I’d like to first off thank all of our customers, our agents, our reinsurance partners, and our new shareholders for trusting us and being part of their, you know, part of their life. And, you know, for that, we’re extremely excited about the future of Orion180 and what we have going forward. So I want to thank everyone for their participation and hope everyone has a great night.

OPERATOR

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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