David Webb is the Senior Vice President, Corporate Development & Strategy for Hallmark Financial Services, Inc. and has been with the company since 2018. Prior to that, Mr. Webb worked for State National Companies, which was acquired by Markel Corporation in 2017, as SVP of Reinsurance and Program Underwriting.
Between 2005 and 2009, he held capital markets roles for a life reinsurance company and later advised on a consulting basis. In this 2,069 word interview, Mr. Webb goes into detail on what makes his insurance company a great investment:
“…The company has been in the process of a strategic transformation over the past four years. Back around 2014, the company was primarily known as a regional auto writer, with nearly two-thirds of its premium coming from auto-related products.
Today, this business accounts for less than half.
In addition, in 2014, the company wrote about 55% of its premiums in Texas and Louisiana, and today, that amount is about one-third of our premiums. That profile change is primarily a result of the growth in our new specialty product lines.”
Beyond making money on writing insurance, the company makes money on managing its balance sheet:
“We also have a 23% allocation to bank loans. What we like about these securities is that they are fully secured by the borrower, but the rating only gets partial credit from the collateralization, and yet it has a coupon rate more closely linked to their unsecured rating.
You get a little extra return, from our view, for the risk.”
Hallmark Financial also creates returns from its operational expertise:
“We had a good 2018, and it’s good to highlight a couple of points here. Operating earnings for the full year were roughly $1.01 per share, which was a great improvement from the prior year, in which we had a loss of about $0.60 per share…Another way to look at operating earnings in this context, for 2018, operating earnings returned 8.9% on beginning tangible book value.”
Get the complete story by reading this entire 2,069 word interview, exclusively in the Wall Street Transcript.