10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period EndedJune 30, 2016

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to

Commission file number 001-37536

Conifer Holdings, Inc.

(Exact name of registrant as specified in its charter)

Michigan	27-1298795
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
550 West Merrill Street, Suite 200
Birmingham, Michigan	48009
(Address of principal executive offices)	(Zip code)

(248) 559-0840

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ (Do not check if a smaller reporting company) Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s common stock, no par value, as of August 9, 2016, was 7,577,829.

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Form 10-Q

INDEX

	Page No.
Part I — Financial Information
Item 1 — Financial Statements
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Operations (Unaudited)	4
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	5
Consolidated Statements of Changes in Redeemable Preferred Stock and Shareholders’ Equity (Unaudited)	6
Consolidated Statements of Cash Flows (Unaudited)	7
Notes to Consolidated Financial Statements (Unaudited)	8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3 — Quantitative and Qualitative Disclosures about Market Risk	36
Item 4 — Controls and Procedures	37
Part II — Other Information
Item 1 — Legal Proceedings	38
Item 1A — Risk Factors	38
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6 — Exhibits	39
Signatures	40

2

PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(dollars in thousands)

	June 30, 2016			December 31, 2015
	(Unaudited)
Assets
Investment securities:
Fixed maturity securities, at fair value (amortized cost of $110,819 and $107,213, respectively)	$	112,469		$	107,093
Equity securities, at fair value (cost of $3,321 and $3,341, respectively)	4,443			4,240
Short-term investments, at fair value	16,304			6,391
Total investments	133,216			117,724
Cash	14,166			12,703
Premiums and agents' balances receivable, net	21,950			18,010
Receivable from affiliate	2,236			1,792
Reinsurance recoverables on unpaid losses	5,890			5,405
Reinsurance recoverables on paid losses	2,209			1,639
Ceded unearned premiums	1,848			3,483
Deferred policy acquisition costs	13,182			12,102
Other assets	5,365			5,069
Total assets	$	200,062		$	177,927
Liabilities and Shareholders' Equity
Liabilities:
Unpaid losses and loss adjustment expenses	$	41,832		$	35,422
Unearned premiums	54,230			47,916
Reinsurance premiums payable	445			1,069
Senior debt	14,750			12,750
Accounts payable and accrued expenses	12,056			2,758
Other liabilities	748			750
Total liabilities	124,061			100,665
Commitments and contingencies	—			—
Shareholders' equity:
Common stock, no par value (100,000,000 shares authorized; 7,577,829 and 7,644,492 issued and outstanding, respectively)	80,069			80,111
Accumulated deficit	(5,572		)	(3,031		)
Accumulated other comprehensive income	1,504			182
Total shareholders' equity	76,001			77,262
Total liabilities and shareholders' equity	$	200,062		$	177,927

The accompanying notes are an integral part of the Consolidated Financial Statements.

3

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)

(dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenue
Premiums
Gross earned premiums	$	25,258		$	22,187		$	48,804		$	43,161
Ceded earned premiums	(3,583		)	(7,072		)	(7,020		)	(13,553		)
Net earned premiums	21,675			15,115			41,784			29,608
Net investment income	528			469			1,065			955
Net realized investment gains	541			87			533			232
Other income	283			480			528			969
Total revenue	23,027			16,151			43,910			31,764
Expenses
Losses and loss adjustment expenses, net	13,541			8,976			26,240			17,546
Policy acquisition costs	6,014			2,639			12,017			5,234
Operating expenses	4,536			3,619			8,675			7,311
Interest expense	143			239			300			483
Total expenses	24,234			15,473			47,232			30,574
Income (loss) before equity earnings of affiliates and income taxes	(1,207		)	678			(3,322		)	1,190
Equity earnings of affiliates, net of tax	71			—			158			—
Income tax (benefit) expense	(623		)	48			(623		)	48
Net income (loss)	(513		)	630			(2,541		)	1,142
Less net income attributable to noncontrolling interest	—			51			—			100
Net income (loss) attributable to Conifer	$	(513	)	$	579		$	(2,541	)	$	1,042
Net income (loss) allocable to common shareholders	$	(513	)	$	366		$	(2,541	)	$	616
Earnings (loss) per common share,basic and diluted	$	(0.07	)	$	0.09		$	(0.33	)	$	0.15
Weighted average common shares outstanding,basic and diluted	7,594,862			4,050,042			7,616,821			4,045,482

The accompanying notes are an integral part of the Consolidated Financial Statements.

4

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(dollars in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Net income (loss)	$	(513	)	$	630		$	(2,541	)	$	1,142
Other comprehensive income (loss), net of tax:
Unrealized investment gains:
Unrealized investment gains (losses) during the period	277			(977		)	1,736			(274		)
Income tax expense (benefit)	585			—			585			—
Unrealized investment gains, net of tax	(308		)	(977		)	1,151			(274		)
Less: reclassification adjustments to:
Net realized investment gains included in net income (loss)	(174		)	208			(257		)	425
Income tax expense (benefit)	(86		)	—			(86		)	—
Total reclassifications included in net income (loss), net of tax	(88		)	208			(171		)	425
Other comprehensive income (loss)	(220		)	(1,185		)	1,322			(699		)
Total comprehensive income (loss)	(733		)	(555		)	(1,219		)	443
Less comprehensive (loss) income attributable to noncontrolling interest	—			51			—			100
Comprehensive income (loss) attributable to Conifer	$	(733	)	$	(606	)	$	(1,219	)	$	343

The accompanying notes are an integral part of the Consolidated Financial Statements.

5

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Redeemable Preferred Stock and Shareholders' Equity (Unaudited)

(dollars in thousands)

	Redeemable Preferred Stock					Preferred Stock					No Par, Common Stock					Retained Earnings			Accumulated Other			Total Conifer Holdings
	Shares		Amount			Shares		Amount			Shares		Amount			(Accumulated deficit)			Comprehensive Income (Loss)			Shareholders' Equity			Noncontrolling Interest			Total Equity
Balances at December 31, 2014	60,600		$	6,119		—		$	—		3,995,013		$	46,119		$	(3,095	)	$	1,158		$	44,182		$	(23	)	$	44,159
Net income	—		—			—		—			—		—			1,042			—			1,042			100			1,142
Issuance of common stock (Pre IPO)*	—		—			—		—			55,029		750			—			—			750			—			750
Paid-in-kind dividends	—		61			—		62			—		(123		)	—			—			(61		)	—			(61		)
Cash dividends paid on preferred stock	—		—			—		—			—		(303		)	—			—			(303		)	—			(303		)
Reclassification of redeemablepreferred stock to permanent equity	(60,600	)	(6,180		)	60,600		6,180			—		—			—			—			6,180			—			6,180
Other comprehensive loss	—		—			—		—			—		—			—			(699		)	(699		)	—			(699		)
Balances at June 30, 2015	—		$	—		60,600		$	6,242		4,050,042		$	46,443		$	(2,053	)	$	459		$	51,091		$	77		$	51,168
Net loss	—		—			—		—			—		—			(978		)	—			(978		)	(181		)	(1,159		)
Paid-in-kind dividends	—		—			—		33			—		(33		)	—			—			—			—			—
Cash dividends paid on preferred stock	—		—			—		—			—		(81		)	—			—			(81		)	—			(81		)
Issuance of common stock (IPO)*	—		—			—		—			3,300,000		32,224			—			—			32,224			—			32,224
IPO Expenses*	—		—			—		—			—		(1,837		)	—			—			(1,837		)	—			(1,837		)
Repurchase of preferred stock	—		—			(60,600	)	(6,275		)	—		—			—			—			(6,275		)	—			(6,275		)
Issuance of common stock to formerpreferred stockholders	—		—			—		—			294,450		3,092			—			—			3,092			—			3,092
Vesting of RSU**	—		—			—		—			—		303			—			—			303			—			303
Deconsolidation of affiliate	—		—			—		—			—		—			—			—			—			104			104
Other comprehensive loss	—		—			—		—			—		—			—			(277		)	(277		)	—			(277		)
Balances at December 31, 2015	—		$	—		—		$	—		7,644,492		$	80,111		$	(3,031	)	$	182		$	77,262		$	—		$	77,262
Net loss	—		—			—		—			—		—			(2,541		)	—			(2,541		)	—			(2,541		)
Repurchase of common stock	—		—			—		—			(66,663	)	(451		)	—			—			(451		)	—			(451		)
Vesting of RSU**	—		—			—		—			—		409			—			—			409			—			409
Other comprehensive income	—		—			—		—			—		—			—			1,322			1,322			—			1,322
Balances at June 30, 2016	—		$	—		—		$	—		7,577,829		$	80,069		$	(5,572	)	$	1,504		$	76,001		$	—		$	76,001

* "IPO" - initial public offering

** "RSU" - restricted stock units

The accompanying notes are an integral part of the Consolidated Financial Statements.

6

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Six Months Ended June 30,
	2016			2015
Cash Flows from Operating Activities
Net income (loss)	$	(2,541	)	$	1,142
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment, and intangibles	197			208
Amortization of bond premium and discount, net	290			279
Gains on investments	(533		)	(232		)
Incentive awards expenses - vesting of RSU	409			—
Equity earnings of affiliate	(158		)	—
Changes in operating assets and liabilities:
(Increase) decrease in:
Premiums and agents' balances receivable	(4,384		)	(956		)
Reinsurance recoverables	(1,055		)	(1,132		)
Ceded unearned premiums	1,635			(1,103		)
Deferred policy acquisition costs	(1,080		)	(1,980		)
Other assets	(868		)	(189		)
Increase (decrease) in:
Unpaid losses and loss adjustment expenses	6,410			825
Unearned premiums	6,314			1,103
Reinsurance premiums payable	(624		)	(4,370		)
Accounts payable and accrued expenses	1,235			1,862
Other liabilities	(3		)	(312		)
Net cash provided by (used in) operating activities	5,244			(4,855		)
Cash Flows From Investing Activities
Purchase of investments:
Fixed maturity securities	(27,375		)	(19,059		)
Equity securities	(754		)	(759		)
Short-term investments	(55,197		)	(44,191		)
Proceeds from maturities and redemptions of investments:
Fixed maturity securities	11,335			1,203
Proceeds from sales of investments:
Fixed maturity securities	20,677			3,206
Equity securities	838			717
Short-term investments	45,284			54,703
Purchases of property and equipment	(138		)	(91		)
Net cash used in investing activities	(5,330		)	(4,271		)
Cash Flows From Financing Activities
Proceeds received from issuance of shares of common stock	—			750
Repurchase of common stock	(451		)	—
Borrowings under debt arrangements	3,000			900
Repayment of borrowings under debt arrangements	(1,000		)	(1,000		)
Dividends paid to preferred shareholders	—			(152		)
Payout of contingent consideration	—			(113		)
Payment of offering costs	—			(1,149		)
Net cash provided by (used in) financing activities	1,549			(764		)
Net increase (decrease) in cash	1,463			(9,890		)
Cash at beginning of period	12,703			18,488
Cash at end of period	$	14,166		$	8,598
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	219		$	439
Net income taxes paid	45			—
Dividends declared but not paid at end of the period	—			151
Paid-in-kind interest	—			123
Payable for securities - non cash item	8,063			—

7

The accompanying notes are an integral part of the Consolidated Financial Statements.

8

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

1.Summary of Significant Accounting Policies

Basis of Presentation

 The consolidated financial statements include accounts, after elimination of intercompany accounts and transactions, of Conifer Holdings, Inc. (the “Company” or “Conifer”), its wholly owned subsidiaries Conifer Insurance Company ("CIC"), White Pine Insurance Company ("WPIC"), Red Cedar Insurance Company ("RCIC"), American Colonial Insurance Company ("ACIC"), American Colonial Insurance Services ("ACIS") and Sycamore Insurance Agency, Inc ("SIA"). CIC, WPIC, RCIC and ACIC are collectively referred to as the "Insurance Company Subsidiaries." On a stand-alone basis Conifer Holdings, Inc. is referred to as the "Parent Company."

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), which differ from statutory accounting practices prescribed or permitted for insurance companies by regulatory authorities. The Company has applied the applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting and therefore the consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments, consisting of items of a normal recurring nature, necessary for a fair presentation of the consolidated interim financial statements, have been included. The results of operations for the six months ended June 30, 2016, are not necessarily indicative of the results expected for the year ended December 31, 2016.

These consolidated financial statements and the notes thereto should be read in conjunction with the Company's audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 15, 2016 ("2015 Audited Financial Statements").

Business

The Company is engaged in the sale of property and casualty insurance products and has organized its principal operations into two types of insurance businesses: commercial lines and personal lines. The Company underwrites a variety of specialty insurance products, including property, general liability, commercial multi-peril, liquor liability, automobile, and homeowners and dwelling policies. The Company markets and sells its insurance products through a network of independent agents, including managing general agents, whereby policies are written in all 50 states in the United States. The Company’s corporate headquarters is located in Birmingham, Michigan with additional office facilities in Florida, Texas, Pennsylvania and Tennessee.

 The Company discontinued offering nonstandard personal automobile policies in the first half of 2015. The Company will continue to pay claims and perform other administrative services until existing policies expire and all claims are paid (a process referred to as “run-off”). The run-off is expected to be substantially complete by the end of 2016.

Initial Public Offering

In August 2015, the Company completed its initial public offering (“IPO”) whereby it issued and sold 3,300,000 shares of common stock, which included 100,000 shares issued and sold to the Company’s Chief Executive Officer, at a public offering price of $10.50 per share. Refer to Note 8 ~ Shareholders’ Equity for further details.

Stock Split

 On July 22, 2015, the board of directors approved a stock split in the form of a stock dividend of 10.2 shares for each share of common stock which was effectuated immediately prior to the effectiveness of the IPO. Accordingly, all common share and per share amounts for all periods presented in these unaudited consolidated financial statements and notes thereto, were adjusted retroactively to reflect the stock split.

Principles of Consolidation

Prior to September 30, 2015, the consolidated financial statements included the accounts of Conifer Holdings, Inc. and its wholly owned subsidiaries, as well as a 50%-owned affiliate (the “Affiliate”) which the Company controlled due to its majority representation on the entity’s board of directors. Noncontrolling interest in a consolidated subsidiary in the consolidated balance sheets represents the noncontrolling shareholder’s proportionate share of the entity’s equity. Consolidated net income or loss is allocated to the Company and noncontrolling interest in proportion to their percentage ownership interests. As of September 30, 2015, the Company no longer controlled the Affiliate but retained significant influence. As a result the entity

9

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

was deconsolidated from the consolidated financial statements and recognized as an investment in an affiliate utilizing the equity method of accounting. All intercompany transactions and accounts were eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While management believes the amounts included in the consolidated financial statements reflect management's best estimates and assumptions, actual results may differ from these estimates.

Recently Issued Accounting Guidance

In May 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-09, Disclosures about Short-Duration Contracts (Topic 944), which enhances disclosure requirements for insurance entities with short-duration insurance contracts. The enhanced disclosures under the new guidance will be provided by the Company for the year ended December 31, 2016, as required.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update modify the requirements related to the measurement of certain financial instruments in the statement of financial condition and results of operation. For equity investments (other than investments accounted for using the equity method), entities must measure such instruments at fair value with changes in fair value recognized in net income. Reporting entities may continue to elect to measure equity investments which do not have a readily determinable fair value at cost with adjustments for impairment and observable changes in price. In addition, for a liability (other than a derivative liability) that an entity measures at fair value, any change in fair value related to the instrument-specific credit risk, that is the entity’s own-credit, should be presented separately in other comprehensive income and not as a component of net income. The amendments are effective for the Company on January 1, 2018, with early adoption permitted solely for the instrument-instrument specific credit risk for liabilities measured at fair value. The amendments must be applied on a modified retrospective basis with a cumulative effect adjustment as of the beginning of the fiscal year of initial adoption. Management is currently evaluating the impact of the guidance.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which addresses the financial reporting of leasing transactions. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the consolidated statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the consolidated statement of operations and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the consolidated statement of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. We have not yet completed the analysis of how adopting this guidance will affect our financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which amends the current methodology and timing for recognizing credit losses. This amendment will replace the current GAAP "incurred loss" methodology for credit losses with a methodology based on expected credit losses. The new guidance will also require expanded consideration of a broader range of reasonable and increased supportable information for the credit loss estimates. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted for years beginning after December 15, 2018. We have not yet completed the analysis of how adopting this guidance will affect our financial statements.

2.Investments

The cost or amortized cost, gross unrealized gain or loss, and estimated fair value of the investments in securities classified as available-for-sale at June 30, 2016 and December 31, 2015 were as follows (dollars in thousands):

10

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

	June 30, 2016
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Fixed Maturity Securities:
U.S. Government obligations	$	5,737	$	80	$	—		$	5,817
State and local government	10,917		551		(1		)	11,467
Corporate debt	34,574		479		(59		)	34,994
Commercial mortgage-backed and other asset-backed	59,591		614		(14		)	60,191
Total fixed maturity securities available for sale	110,819		1,724		(74		)	112,469
Equity Securities:
Common stocks - Public Utilities	220		64		(2		)	282
Common stocks - Banks, Trusts and Insurance Companies	458		151		(3		)	606
Common stocks - Industrial, miscellaneous and all other	2,643		942		(30		)	3,555
Total equity securities available for sale	3,321		1,157		(35		)	4,443
Total securities available for sale	$	114,140	$	2,881	$	(109	)	$	116,912

	December 31, 2015
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Fixed Maturity Securities:
U.S. Government obligations	$	5,474	$	47	$	(13	)	$	5,508
State and local government	14,391		398		(6		)	14,783
Corporate debt	39,183		84		(483		)	38,784
Commercial mortgage-backed and other asset-backed	48,165		164		(311		)	48,018
Total fixed maturity securities available for sale	107,213		693		(813		)	107,093
Equity Securities:
Common stocks - Public Utilities	122		20		(1		)	141
Common stocks - Banks, Trusts and Insurance Companies	503		150		(7		)	646
Common stocks - Industrial, miscellaneous and all other	2,716		836		(99		)	3,453
Total equity securities available for sale	3,341		1,006		(107		)	4,240
Total securities available for sale	$	110,554	$	1,699	$	(920	)	$	111,333

The following table summarizes the aggregate fair value and gross unrealized losses, by security type, of the available-for-sale securities in unrealized loss positions. The table segregates the holdings based on the length of time that individual securities have been in a continuous unrealized loss position, as follows (dollars in thousands): 

11

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

	June 30, 2016
	Less than 12 months						Greater than 12 months						Total
	# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Valueof Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses
Fixed Maturity Securities:
U.S. Government obligations	—	$	—	$	—		—	$	—	$	—		—	$	—	$	—
State and local government	1	118		(1		)	—	—		—			1	118		(1		)
Corporate debt	7	3,104		(17		)	15	5,127		(42		)	22	8,231		(59		)
Commercial mortgage and asset-backed	14	8,779		(11		)	5	1,324		(3		)	19	10,103		(14		)
Total fixed maturity securities available for sale	22	12,001		(29		)	20	6,451		(45		)	42	18,452		(74		)
Equity Securities:
Common stock	47	457		(22		)	4	133		(13		)	51	590		(35		)
Total equity securities available for sale	47	457		(22		)	4	133		(13		)	51	590		(35		)
Total securities	69	$	12,458	$	(51	)	24	$	6,584	$	(58	)	93	$	19,042	$	(109	)

	December 31, 2015
	Less than 12 months						Greater than 12 months						Total
	# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Valueof Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses
Fixed Maturity Securities:
U.S. Government obligations	7	$	2,580	$	(7	)	2	$	679	$	(6	)	9	$	3,259	$	(13	)
State and local government	8	2,688		(6		)	—	—		—			8	2,688		(6		)
Corporate debt	80	21,760		(438		)	12	3,618		(45		)	92	25,378		(483		)
Commercial mortgage and asset-backed	67	32,539		(258		)	5	2,175		(53		)	72	34,714		(311		)
Total fixed maturity securities available for sale	162	59,567		(709		)	19	6,472		(104		)	181	66,039		(813		)
Equity Securities:
Common stock	86	782		(72		)	3	79		(35		)	89	861		(107		)
Total equity securities available for sale	86	782		(72		)	3	79		(35		)	89	861		(107		)
Total securities	248	$	60,349	$	(781	)	22	$	6,551	$	(139	)	270	$	66,900	$	(920	)

12

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

 The Company analyzed its investment portfolio in accordance with its other-than-temporary impairment ("OTTI") review procedures and determined the Company did not need to record a credit related OTTI loss, nor recognize a non-credit related OTTI loss in other comprehensive income for the three and six months ended June 30, 2016 and 2015.

 The Company’s sources of net investment income are as follows (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Fixed maturity securities	$	570		$	532		$	1,156		$	1,063
Equity securities	25			22			51			45
Cash and short-term investments	5			2			7			4
Total investment income	600			556			1,214			1,112
Investment expenses	(72		)	(87		)	(149		)	(157		)
Net investment income	$	528		$	469		$	1,065		$	955

The following table summarizes the gross realized gains and losses from sales or maturities of available-for-sale fixed maturity and equity securities (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Fixed maturity securities:
Gross realized gains	$	502		$	—		$	518		$	68
Gross realized losses	(16		)	(1		)	(22		)	(4		)
Total fixed maturity securities	486			(1		)	496			64
Equity securities:
Gross realized gains	94			104			150			203
Gross realized losses	(39		)	(16		)	(113		)	(35		)
Total equity securities	55			88			37			168
Total realized gains (losses)	$	541		$	87		$	533		$	232

 Proceeds from the sales of debt and equity securities available for sale were $21.5 million and $3.9 million for the six months ended June 30, 2016 and 2015, respectively.

 The table below summarizes the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at June 30, 2016. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties (dollars in thousands):

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	7,779	$	7,784
Due after one year through five years	30,636		31,052
Due after five years through ten years	6,529		6,941
Due after ten years	6,284		6,501
Securities with contractual maturities	51,228		52,278
Commercial mortgage and asset backed	59,591		60,191
Total Fixed maturity securities	$	110,819	$	112,469

 At June 30, 2016 and December 31, 2015, the insurance companies had an aggregate of $9.0 million and $8.9 million, respectively, on deposit in trust accounts to meet the deposit requirements of various state insurance departments. There are

13

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

withdrawal and other restrictions on these deposits, including the type of investments that may be held, however, the Company may generally invest in high-grade bonds and short-term investments and earn interest on the funds. 

3.Fair Value Measurements

 The Company’s financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in these consolidated financial statements . Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principally most advantageous market for the asset or liability in an orderly transaction between market participants. In determining fair value, the Company applies the market approach, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities. The inputs to valuation techniques used to measure fair value are prioritized into a three-level hierarchy. The hierarchy gives the highest priority to quoted prices from sources independent of the reporting entity (“observable inputs”) and the lowest priority to prices determined by the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). The fair value hierarchy is as follows:

Level 1—Valuations that are based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Valuations that are based on observable inputs (other than Level 1 prices) such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3—Unobservable inputs that are supported by little or no market activity. The unobservable inputs represent the Company’s best assumption of how market participants would price the assets or liabilities.

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis, classified by the valuation hierarchy as of June 30, 2016 and December 31, 2015 (dollars in thousands):

	June 30, 2016
	Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed Maturity Securities:
U.S. Government obligations	$	5,817	$	—	$	5,817	$	—
State and local government	11,467		—		11,467		—
Corporate debt	34,994		—		34,994		—
Commercial mortgage-backed and other asset-backed	60,191		—		60,191		—
Total fixed maturity securities	112,469		—		112,469		—
Equity Securities, common stock	4,443		4,443		—		—
Short-term investments	16,304		16,304		—		—
Total assets measured at fair value	$	133,216	$	20,747	$	112,469	$	—
Liabilities:
Senior debt*	$	14,750	$	—	$	14,750	$	—
Total Liabilities measured at fair value	$	14,750	$	—	$	14,750	$	—

 * Carried at cost or amortized cost on the consolidated balance sheet

14

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

	December 31, 2015
	Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed Maturity Securities:
U.S. Government obligations	$	5,508	$	—	$	5,508	$	—
State and local government	14,783		—		14,783		—
Corporate debt	38,784		—		38,784		—
Commercial mortgage-backed and other asset-backed	48,018		—		48,018		—
Total fixed maturity securities	107,093		—		107,093		—
Equity Securities, common stock	4,240		4,240		—		—
Short-term investments	6,391		6,391		—		—
Total assets measured at fair value	$	117,724	$	10,631	$	107,093	$	—
Liabilities:
Senior debt*	$	12,750	$	—	$	12,750	$	—
Total Liabilities measured at fair value	$	12,750	$	—	$	12,750	$	—

 * Carried at cost or amortized cost on the consolidated balance sheet

Level 1 investments consist of equity securities traded in an active exchange market. The Company uses unadjusted quoted prices for identical instruments to measure fair value. Level 1 also includes money market funds and other interest-bearing deposits at banks, which are reported as short-term investments. The fair value measurements that were based on Level 1 inputs comprise 15.6% of the fair value of the total investment portfolio as of June 30, 2016.

Level 2 investments include fixed maturity securities, which consist of U.S. government agency securities, state and local municipal bonds (including those held as restricted securities), corporate debt securities, mortgage-backed and asset-backed securities. The fair value of securities included in the Level 2 category were based on the market values obtained from a third party pricing service that were evaluated using pricing models that vary by asset class and incorporate available trade, bid and other observable market information. The third party pricing service monitors market indicators, as well as industry and economic events. The fair value measurements that were based on Level 2 inputs comprise 84.4% of the fair value of the total investment portfolio as of June 30, 2016.

 The Company obtains pricing for each security from independent pricing services, investment managers or consultants to assist in determining fair value for its Level 2 investments. To validate that these quoted prices are reasonable estimates of fair value, the Company performs various quantitative and qualitative procedures, such as (i) evaluation of the underlying methodologies, (ii) analysis of recent sales activity, (iii) analytical review of our fair values against current market prices and (iv) comparison of the pricing services’ fair value to other pricing services’ fair value for the same investment. No markets for the investments were determined to be inactive at period-ends. Based on these procedures, the Company did not adjust the prices or quotes provided from independent pricing services, investment managers or consultants.

The Level 2 financial instruments also include our senior debt. The fair value of borrowings under the senior debt, consisting of the revolving credit facility and term loans, approximates its carrying amount because interest is based on a short-term, variable, market-based rate.

 The Company’s policy on recognizing transfers between hierarchy levels is applied at the end of each reporting period. There were no transfers between Levels 1, 2 and 3 for the six months ended June 30, 2016 and 2015, respectively.

4. Deferred Policy Acquisition Costs

The Company defers costs incurred which are incremental and directly related to the successful acquisition of new or renewal insurance business, net of corresponding amounts of ceded reinsurance commissions. Net deferred policy acquisition costs are amortized and charged to expense in proportion to premium earned over the estimated policy term. The Company

15

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

anticipates that its deferred policy acquisition costs will be fully recoverable and there were no premium deficiencies for the three and six months ended June 30, 2016 and 2015. The activity in deferred policy acquisition costs, net of reinsurance transactions, is as follows (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Balance at beginning of period	$	12,221		$	6,120		$	12,102		$	5,679
Deferred policy acquisition costs	6,975			4,178			13,097			7,214
Amortization of policy acquisition costs	(6,014		)	(2,639		)	(12,017		)	(5,234		)
Net change	961			1,539			1,080			1,980
Balance at end of period	$	13,182		$	7,659		$	13,182		$	7,659

5.Unpaid Losses and Loss Adjustment Expenses

The Company establishes reserves for unpaid losses and loss adjustment expenses ("LAE") which represent the estimated ultimate cost of all losses incurred that were both reported and unreported (i.e., incurred but not yet reported losses; or “IBNR”) and LAE incurred that remain unpaid at the balance sheet date. The Company’s reserving process takes into account known facts and interpretations of circumstances and factors including the Company’s experience with similar cases, actual claims paid, historical trends involving claim payment patterns and pending levels of unpaid claims, loss management programs, product mix and contractual terms, changes in law and regulation, judicial decisions, and economic conditions. In the normal course of business, the Company may also supplement its claims processes by utilizing third party adjusters, appraisers, engineers, inspectors, and other professionals and information sources to assess and settle catastrophe and non-catastrophe related claims. The effects of inflation are implicitly considered in the reserving process.

Reserves are estimates of unpaid portions of losses that have occurred, including IBNR losses; therefore the establishment of appropriate reserves is an inherently uncertain and complex process. The ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates. The highest degree of uncertainty is associated with reserves for losses incurred in the current reporting period as it contains the greatest proportion of losses that have not been reported or settled. The Company regularly updates its reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in reserve estimates, which may be material, are reported in the results of operations in the period such changes are determined to be needed and recorded.

Management believes that the reserve for losses and LAE, net of reinsurance recoverables, is appropriately established in the aggregate and adequate to cover the ultimate net cost of reported and unreported claims arising from losses which had occurred by the date of the consolidated financial statements based on available facts and in accordance with applicable laws and regulations.

The table below provides the changes in the reserves for losses and LAE, net of reinsurance recoverables, for the periods indicated as follows (dollars in thousands):

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CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Gross reserves - beginning of period	$	38,488	$	32,987	$	35,422	$	31,531
Less: reinsurance recoverables on unpaid losses	5,015		4,590		5,405		3,224
Net reserves - beginning of period	33,473		28,397		30,017		28,307
Add: incurred losses and LAE, net of reinsurance:
Current period	12,034		8,805		23,146		17,340
Prior period	1,507		171		3,094		206
Total net incurred losses and LAE	13,541		8,976		26,240		17,546
Deduct: loss and LAE payments, net of reinsurance:
Current period	5,793		5,029		7,792		6,794
Prior period	5,279		5,009		12,523		11,724
Total net loss and LAE payments	11,072		10,038		20,315		18,518
Net reserves - end of period	35,942		27,335		35,942		27,335
Plus: reinsurance recoverables on unpaid losses	5,890		5,022		5,890		5,022
Gross reserves - end of period	$	41,832	$	32,357	$	41,832	$	32,357

The Company’s incurred losses during the three and six months ended June 30, 2016 include prior-year adverse reserve development of $1.5 million and $3.1 million, respectively. In the second quarter of 2016, there was $695,000 and $613,000 of adverse development in the Florida homeowners and commercial automobile lines, respectively. For the six months ended June 30, 2016, there was adverse development of $1.5 million from the Florida homeowners line and $1.5 million from the commercial automobile line.

The Company’s incurred losses during the three and six months ended June 30, 2015, reflect prior-year adverse reserve development of $171,000 and $206,000, respectively. In the second quarter of 2015, there was $340,000 and $262,000 of adverse development in the commercial and personal automobile lines, respectively. This adverse development was partially offset by favorable reserve development in other lines, including $270,000 and $95,000 of favorable reserve development in the commercial multi-peril and other liability lines, respectively. For the six months ended June 30, 2015, there was a similar result, with the adverse development being generated by the commercial and personal automobile lines of $535,000 and $331,000, respectively. This adverse development was partially offset by favorable development in other lines, including $274,000, $136,000 and $248,000 in the commercial multi-peril, other liability and workers' compensation lines, respectively. 

6.Reinsurance

In the normal course of business, the Company seeks to minimize the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk in various areas of exposure with reinsurers. The Company participates in reinsurance agreements in order to limit its loss exposure including protecting against catastrophe losses. The Company primarily ceded all specific risks in excess of $500,000 in both 2016 and 2015. Reinsurance does not discharge the direct insurer from liability to its policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors the concentration of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. To date, the Company has not experienced any significant difficulties in collecting reinsurance recoverables.

The Company assumes written premiums under a few fronting arrangements, most of which are net of other reinsurance arrangements. The fronting arrangements are with unaffiliated insurers who write on behalf of the Company in markets that require a higher A.M. Best rating than the Company’s rating, or where the policies are written in a state where the Company is not licensed or for other strategic reasons. Assumed premiums is comprised entirely of these arrangements other than where there are premiums assumed from Citizens Property and Casualty Corporation (“Citizens”).

The following table presents the effects of such reinsurance and assumption transactions on premiums, and losses and LAE (dollars in thousands):

17

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Written premiums:
Direct	$	22,533		$	21,510		$	44,133		$	42,629
Assumed	7,192			1,549			10,985			1,634
Ceded	(3,549		)	(7,117		)	(6,892		)	(14,655		)
Net written premiums	$	26,176		$	15,942		$	48,226		$	29,608
Earned premiums:
Direct	$	22,574		$	20,050		$	44,815		$	39,351
Assumed	2,684			2,137			3,989			3,810
Ceded	(3,583		)	(7,072		)	(7,020		)	(13,553		)
Net earned premiums	$	21,675		$	15,115		$	41,784		$	29,608
Losses and LAE:
Direct	$	13,905		$	10,622		$	27,844		$	20,544
Assumed	1,447			281			2,356			805
Ceded	(1,811		)	(1,927		)	(3,960		)	(3,803		)
Net Losses and LAE	$	13,541		$	8,976		$	26,240		$	17,546

7.Senior Debt

The Company's senior debt facility ("Credit Facility") is comprised of three notes: a $17.5 million revolving line of credit ("Revolver") which was scheduled to expire on August 1, 2016 ; a $5.0 millionfive-year term note ("Term Note") which commenced in October 2013; and a $7.5 millionfive-year term note which commenced in September 2014 ("2014 Term Note"). Management is in the process of renewing the Revolver and on July 21, 2016, the expiration date was extended until October 1, 2016. A summary of the outstanding senior debt is as follows (dollars in thousands):

	June 30, 2016		December 31, 2015
Revolver	$	6,500	$	3,500
Term Note	2,250		2,750
2014 Term Note	6,000		6,500
Total	$	14,750	$	12,750

The undrawn portion of the Revolver was $11.0 million as of June 30, 2016, and was available to finance working capital, fund other general corporate purposes and provide surplus contributions to the Company's Insurance Company Subsidiaries to support premium growth or strategic acquisitions.

The Credit Facility contains various restrictive covenants that relate to the Company’s shareholders’ equity, premiums-to-capital and surplus ratios, fixed-charge coverage ratio, risk-based capital ratios, and A.M. Best ratings of its Insurance Company Subsidiaries. At June 30, 2016, the Company was in compliance with all of its Credit Facility financial covenants.

8.Shareholders’ Equity

On February 25, 2016, the Company's Board of Directors authorized a stock repurchase program, under which the Company may repurchase up to $2.1 million of its outstanding common stock over a one-year period. Under this program, management is authorized to repurchase shares at prevailing market prices through open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended. The actual timing, number and value of shares repurchased under the program will be determined by management in its discretion and will depend on a number of factors, including the market price of the Company’s stock, general market conditions, and other factors. Repurchases may be made from time to time, without prior notice. The Company may suspend or discontinue the program at any time. As of June 30, 2016, the Company had repurchased and retired 66,663 shares of stock valued at approximately $451,000.

18

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

9. Other Comprehensive Income (Loss)

 The following table presents changes in accumulated other comprehensive income (loss) for unrealized gains and losses on available-for-sale securities (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Balance at beginning of period	$	1,724		$	1,644		$	182		$	1,158
Other comprehensive income before reclassifications	(308		)	(977		)	1,151			(274		)
Less: amounts reclassified from accumulated other comprehensive income (loss)	(88		)	208			(171		)	425
Net current period other comprehensive income (loss)	(220		)	(1,185		)	1,322			(699		)
Balance at end of period	$	1,504		$	459		$	1,504		$	459

10.EarningsPer Share

 Basic and diluted earnings (loss) per share are computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding during the period. The dividends on preferred stock and other gains are deducted from the net income to arrive at net income allocable to common shareholders. In the period of a net loss, the dividends on preferred stock are added to the net loss to arrive at net loss allocable to common shareholders. The following table presents the calculation of basic and diluted earnings (loss) per common share, as follows (dollars in thousands, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
Net income (loss) attributable to Conifer	$	(513	)	$	579	$	(2,541	)	$	1,042
Preferred stock dividends	—			151		—			303
Paid-in-kind dividends	—			62		—			123
Net income (loss) allocable to common shareholders	$	(513	)	$	366	$	(2,541	)	$	616
Weighted average common shares, basic and diluted*	7,594,862			4,050,042		7,616,821			4,045,482
Earnings (loss) per share allocable to common, basic and diluted	$	(0.07	)	$	0.09	$	(0.33	)	$	0.15

* The nonvested shares of the restricted stock units were anti-dilutive as of June 30, 2016. Therefore, the basic and diluted weighted average common shares are equal for the three and six months ended June 30, 2016.

11.Stock-based Compensation

In 2015, the Company issued 390,352 restricted stock units (“RSU”) to executive officers and other employees to be settled in shares of common stock. The total RSUs were valued at $4.1 million on the date of grant. The Company recorded $204,000 and $409,000 of compensation expense related to the RSUs for the three and six months ended June 30, 2016, respectively. The total compensation cost related to the non-vested portion of the restricted stock units which has not been recognized as of June 30, 2016 was $3.4 million.

12.Commitments and Contingencies

Legal proceedings

The Company and its subsidiaries are subject at times to various claims, lawsuits and proceedings relating principally to alleged errors or omissions in the placement of insurance, claims administration, and other business transactions arising in the

19

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

ordinary course of business. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Most of the claims, lawsuits and proceedings arising in the ordinary course of business are covered by the insurance policy at issue. On the basis of current information, the Company does not believe that there is a reasonable possibility that any material loss exceeding amounts already accrued, if any, will result from any of the claims, lawsuits and proceedings to which the Company is subject, either individually, or in the aggregate.

13.Segment Information

The Company is engaged in the sale of property and casualty insurance products and has organized its principal operations into two types of insurance businesses: commercial lines and personal lines. Within these two insurance businesses, the Company offers various insurance products. Such insurance businesses are engaged in underwriting and marketing insurance coverages, and administering claims processing for such policies.

The Company defines its operating segments as components of the business where separate financial information is available and used by the chief operating decision maker in deciding how to allocate resources to its segments and in assessing its performance. In assessing performance of its operating segments, the Company’s chief operating decision maker, the Chief Executive Officer, reviews a number of financial measures including gross written premiums, net earned premiums, losses and LAE, net of reinsurance recoveries. The primary measure used for making decisions about resources to be allocated to an operating segment and assessing performance is segment underwriting gain or loss which is defined as segment revenues, consisting of net earned premiums and other income, less segment expenses, consisting of losses and LAE, policy acquisition costs and other underwriting and operating expenses of the operating segments. Other underwriting and operating expenses primarily include compensation and related benefits for underwriting personnel, licensing of policy issuance and claims systems, rent and utilities. The Company markets, distributes and sells its insurance products through its own insurance agencies and a network of independent agents. All of the Company’s insurance activities are conducted in the United States with a concentration of activity in Florida, Michigan, Pennsylvania and Texas. For the six months ended June 30, 2016 and 2015, gross written premiums attributable to these four states were 70% and 69%, respectively, of the Company’s total gross written premiums.

 In addition to the reportable segments, the Company maintains a Corporate and Other category to reconcile segment results to the consolidated totals. The Corporate and Other category includes: (i) corporate operating expenses such as salaries and related benefits of the Company’s executive management team and finance and information technology personnel, and other corporate headquarters expenses, (ii) interest expense on the Company’s senior debt obligations; (iii) depreciation and amortization on property and equipment, and (iv) all investment income activity. All investment income activity is reported within net investment income and net realized investment gains on the consolidated statements of operations. The Company’s assets on the consolidated balance sheet are not allocated to the reportable segments.

The Company redefined its operating segments during the quarter ended June 30, 2016 and recast the segment information for the three and six months ended June 30, 2016 in a manner consistent with the new operational management structure. The segment information for the three and six months ended June 30, 2015, has also been recast to be consistent with the new format.

20

CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following tables present information by reportable segment (dollars in thousands):

Three Months Ended June 30, 2016	Commercial Lines		Personal Lines			Corporate & Other			Total
Gross written premiums	$	22,821	$	6,904		$	—		$	29,725
Net written premiums	$	20,548	$	5,628		$	—		$	26,176
Net earned premiums	$	16,484	$	5,191		$	—		$	21,675
Other income	83		187			13			283
Segment revenue	16,567		5,378			13			21,958
Losses and loss adjustment expenses, net	9,344		4,197			—			13,541
Policy acquisition costs	4,366		1,648			—			6,014
Operating expenses	1,610		766			2,160			4,536
Segment expenses	15,320		6,611			2,160			24,091
Segment underwritinggain (loss)	$	1,247	$	(1,233	)	$	(2,147	)	$	(2,133	)
Investment income						528			528
Net realized investment gains (losses)						541			541
Interest expense						(143		)	(143		)
Income (loss) before equity earnings of affiliates and income taxes						$	(1,221	)	$	(1,207	)

Three Months Ended June 30, 2015	Commercial Lines		Personal Lines		Corporate & Other			Total
Gross written premiums	$	18,326	$	4,733	$	—		$	23,059
Net written premiums	$	12,524	$	3,418	$	—		$	15,942
Net earned premiums	$	10,670	$	4,445	$	—		$	15,115
Other income	325		108		47			480
Segment revenue	10,995		4,553		47			15,595
Losses and loss adjustment expenses, net	5,477		3,499		—			8,976
Policy acquisition costs	1,917		722		—			2,639
Operating expenses	1,211		210		2,198			3,619
Segment expenses	8,605		4,431		2,198			15,234
Segment underwritinggain (loss)	$	2,390	$	122	$	(2,151	)	$	361
Investment income					469			469
Net realized investment gains (losses)					87			87
Interest expense					(239		)	(239		)
Income (loss) before equity earnings of affiliates and income taxes					$	(1,834	)	$	678

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CONIFER HOLDINGS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2016	Commercial Lines		Personal Lines			Corporate & Other			Total
Gross written premiums	$	41,965	$	13,153		$	—		$	55,118
Net written premiums	$	37,536	$	10,690		$	—		$	48,226
Net earned premiums	$	31,763	$	10,021		$	—		$	41,784
Other income	182		318			28			528
Segment revenue	31,945		10,339			28			42,312
Losses and loss adjustment expenses, net	17,980		8,260			—			26,240
Policy acquisition costs	8,752		3,265			—			12,017
Operating expenses	3,344		1,435			3,896			8,675
Segment expenses	30,076		12,960			3,896			46,932
Segment underwritinggain (loss)	$	1,869	$	(2,621	)	$	(3,868	)	$	(4,620	)
Investment income						1,065			1,065
Net realized investment gains (losses)						533			533
Interest expense						(300		)	(300		)
Income (loss) before equity earnings of affiliates and income taxes						$	(2,570	)	$	(3,322	)

Six Months Ended June 30, 2015	Commercial Lines		Personal Lines		Corporate & Other			Total
Gross written premiums	$	34,068	$	10,195	$	—		$	44,263
Net written premiums	$	22,378	$	7,230	$	—		$	29,608
Net earned premiums	$	20,158	$	9,450	$	—		$	29,608
Other income	674		236		59			969
Segment revenue	20,832		9,686		59			30,577
Losses and loss adjustment expenses, net	10,794		6,752		—			17,546
Policy acquisition costs	3,655		1,579		—			5,234
Operating expenses	2,683		623		4,005			7,311
Segment expenses	17,132		8,954		4,005			30,091
Segment underwritinggain (loss)	$	3,700	$	732	$	(3,946	)	$	486
Investment income					955			955
Net realized investment gains (losses)					232			232
Interest expense					(483		)	(483		)
Income (loss) before equity earnings of affiliates and income taxes					$	(3,242	)	$	1,190

The Company discontinued offering non-standard personal automobile policies in the first half of 2015, but will continue to pay claims and perform other administrative services as needed until the run-off of the claims on such policies is complete. No premiums were written or earned in the non-standard personal automobile line in 2016. The decision to stop writing non-standard personal automobile policies was the result of the Company’s change in strategic positioning and its desire to increase its personal homeowners product line and pursue existing commercial line opportunities.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the Periods ended June 30, 2016 and 2015

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements (Unaudited), related notes and other financial information appearing elsewhere in this Quarterly Report on Form10-Q and the audited consolidated financial statements and related notes included in our annual form 10-K, filed on March 15, 2016 with theU.S.Securities and Exchange Commission(“SEC”).

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q, which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, as Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “seek” and similar terms and phrases, or the negative thereof, may be used to identify forward-looking statements.

The forward-looking statements contained in this report are based on management’s good-faith belief and reasonable judgment based on current information. The forward-looking statements are qualified by important factors, risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including those described in our form 10-K (“Item 1A Risk Factors”) filed with the SEC on March 15, 2016and subsequent reports filed with or furnished to theSEC. Any forward-looking statement made by us in this report speaks only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws or regulations.

BusinessOverview

We are an insurance holding company that markets and services our product offerings through specialty commercial and specialty personal insurance business lines. Our growth has been significant since our founding in 2009. Currently, we are authorized to write insurance as an excess and surplus lines carrier in 47 states, we are licensed to write insurance as an admitted carrier in 35 states (including Washington, D.C.) and we offer our insurance products in all 50 states.

Our revenues are primarily derived from premiums earned from our insurance operations. We also generate other revenues through investment income and other income which mainly consists of installment fees and policy issuance fees generally related to the policies we write and commission income from Sycamore Insurance Agency, Inc's ("SIA") 50% owned insurance agency in South Carolina (the "Affiliate"). The Affiliate places small commercial risks mainly for alarm and security guard markets.

Our expenses consist primarily of losses and loss adjustment expenses, agents’ commissions, and other underwriting and administrative expenses. We organize our operations in two insurance businesses: commercial insurance lines and personal insurance lines.

Through our commercial insurance lines, we offer coverage for both commercial property and commercial liability. Within these two main lines we offer coverage for property, commercial multi-peril as part of commercial property and general liability and liquor liability as a part of our commercial liability. We also offer coverage for commercial automobiles and workers’ compensation. Our insurance policies are sold to targeted small and mid-sized businesses on a single or multiple-coverage basis.

Through our personal insurance lines, we offer nonstandard homeowners insurance and dwelling fire insurance products ("low-value dwelling") to individuals in four states. Our low-value dwelling insurance line is comprised of dwelling insurance tailored for owners of lower valued homes, which is currently offered in Illinois, Indiana, Texas and Louisiana. Our wind-exposed homeowners line includes homeowners coverage exposed to hurricanes and other significant wind perils to underserved homeowners in Florida, Hawaii, and Texas.

Critical Accounting Policies and Estimates

 In certain circumstances, we are required to make estimates and assumptions that affect amounts reported in our consolidated financial statements and related footnotes. We evaluate these estimates and assumptions periodically on an on-going basis based on a variety of factors. There can be no assurance, however, that actual results will not be materially different

23

than our estimates and assumptions, and that reported results of operation will not be affected by accounting adjustments needed to reflect changes in these estimates and assumptions. During the six months ended June 30, 2016, there were no material changes to our critical accounting policies and estimates, which are disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K filed with the SEC on March 15, 2016.

Executive Overview

The Company reported a net loss of $513,000 and $2.5 million for the three and six months ended June 30, 2016, compared to net income of $630,000 and $1.1 million for the same periods in 2015, respectively.

Net loss allocable to common shareholders was $513,000, or $0.07 per share, for the three months ended June 30, 2016, compared to net income of $366,000, or $0.09 per share, for the same periods in 2015.Net loss allocable to common shareholders was $2.5 million, or $0.33 per share, for the six months ended June 30, 2016, compared to net income of $616,000, or $0.15 per share, for the same periods in 2015.

Operating loss allocable to common shareholders was $1.1 million, or $0.14 per share, and $3.1 million, or $0.40, for the three and six months ended June 30, 2016, respectively. This compares to operating income allocable to common shareholders of $279,000, or $0.07 per share, and $384,000, or $0.09 per share, for the same periods in 2015, respectively.

Our combined ratio was 109.7% and 110.9% for the three and six months ended June 30, 2016, compared to 97.7% and 98.4% for the same periods in 2015, respectively.

The loss for the six months ended June 30, 2016 was largely attributable to management's decision to strengthen reserves in our commercial automobile and Florida homeowners businesses. In addition, the increase in expenses was due to the hiring of new underwriting personnel in commercial and personal lines, and other incremental hiring and infrastructure investments necessary to support the Company’s growth and public company status.

Our premium results for the six months ended June 30, 2016, reflect the continued expansion of our commercial lines and repositioning of our personal lines. Our commercial lines gross written premiums organically grew by 23.2% in the six months ended June 30, 2016, as compared to the same period in 2015. In addition, our personal lines gross written premiums grew 29.0% for the six months ended June 30, 2016, compared to the same period in 2015. The increase in the gross written premiums for the first half of the year was generated from the Company's expansion in the hospitality, security services, low-value dwelling and wind-exposed homeowners lines of business.

Results of OperationsFor The Three Months Ended June 30, 2016 and 2015

The following table summarizes our operating results for the periods indicated (dollars in thousands):

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Summary of Operating Results
	Three Months Ended June 30,
	2016			2015			$ Change			% Change
Gross written premiums	$	29,725		$	23,059		$	6,666		28.9	%
Net written premiums	$	26,176		$	15,942		$	10,234		64.2	%
Net earned premiums	$	21,675		$	15,115		$	6,560		43.4	%
Other income	283			480			(197		)	(41.0	)%
Losses and loss adjustment expenses, net	13,541			8,976			4,565			50.9	%
Policy acquisition costs	6,014			2,639			3,375			127.9	%
Operating expenses	4,536			3,619			917			25.3	%
Underwriting gain (loss)	(2,133		)	361			(2,494		)	*
Net investment income	528			469			59			12.6	%
Net realized investment gains (losses)	541			87			454			521.8	%
Interest expense	143			239			(96		)	(40.2	)%
Income (loss) before equity earnings in affiliate and income taxes	(1,207		)	678			(1,885		)	*
Equity earnings (losses) of affiliates, net of tax	71			—			71			*
Income tax expense (benefit)	(623		)	48			(671		)	*
Net income (loss)	$	(513	)	$	630		$	(1,143	)	*
Underwriting Ratios:
Loss ratio (1)	61.7		%	57.6		%
Expense ratio (2)	48.0		%	40.1		%
Combined ratio (3)	109.7		%	97.7		%

(1) The loss ratio is the ratio, expressed as a percentage, of net losses and loss adjustment expenses to net earned premiums and other income.

(2) The expense ratio is the ratio, expressed as a percentage, of policy acquisition costs and operating expenses to net earned premiums and other income.

(3) The combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.

*Percentage change is not meaningful

Premiums

Earned premiums are earned ratably over the term of the policy, whereas written premiums are reflected on the effective date of the policy. All commercial lines and homeowners products have annual policies, under which premiums are earned evenly over one year. The resulting net earned premiums are impacted by the gross and ceded written premiums, earned ratably over time. 

Our premiums are presented below for the three months ended June 30, 2016 and 2015 (dollars in thousands): 

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Summary of Premium Revenue
	Three Months Ended June 30,
	2016		2015		$ Change		% Change
Gross written premiums
Commercial lines	$	22,821	$	18,326	$	4,495	24.5	%
Personal lines	6,904		4,733		2,171		45.9	%
Total	$	29,725	$	23,059	$	6,666	28.9	%
Net written premiums
Commercial lines	$	20,548	$	12,524	$	8,024	64.1	%
Personal lines	5,628		3,418		2,210		64.7	%
Total	$	26,176	$	15,942	$	10,234	64.2	%
Net Earned premiums
Commercial lines	$	16,484	$	10,670	$	5,814	54.5	%
Personal lines	5,191		4,445		746		16.8	%
Total	$	21,675	$	15,115	$	6,560	43.4	%

Gross written premiums increased $6.7 million, or 28.9%, to $29.7 million for the three months ended June 30, 2016, as compared to $23.1 million for the same period in 2015. The increase was driven by continued growth in both our commercial and personal lines business which reflects the execution of our growth initiatives in the niche commercial insurance markets and our strategic change in the mix of business of our personal lines.

 Commercial lines gross written premiums increased $4.5 million, or 24.5%, to $22.8 million in the second quarter of 2016, as compared to $18.3 million for the second quarter of 2015. This increase was primarily driven by the commercial multi-peril and workers' compensation business which grew 49.4% and 60.8%, respectively, compared to the same period in 2015.

 Personal lines gross written premiums increased $2.2 million, or 45.9%, to $6.9 million in the second quarter of 2016, as compared to $4.7 million for the same period in 2015. The increase was driven by our low-value dwelling and wind-exposed homeowners business which grew 69.3% and 48.1%, respectively, compared to the same period in 2015.

 Net written premiums increased $10.2 million, or 64.2%, to $26.2 million for the three months ended June 30, 2016, as compared to $15.9 million for the same period in 2015. This increase was driven by the growth in the gross written premiums as well as the termination of a quota share reinsurance agreement which occurred on August 1, 2015. The quota share arrangement was terminated as management determined the Company no longer needed the leverage support of this reinsurance arrangement due to the added capital raised from the initial public offering (“IPO”). Excluding the 2015 impact of the quota share reinsurance, the net written premiums for the three months ended June 30, 2016 increased $6.1 million, or 30.5%, compared to the same period in 2015.

Other income

Other income consists primarily of fees charged to policyholders by the Company for services outside of the premium charge, such as installment billings and policy issuance costs. Commission income is also received by the Company’s insurance agencies for writing policies for third party insurance companies. Other income for the three months ended June 30, 2016 decreased $197,000, or 41.0%, to $283,000 as compared to $480,000 for the same period in 2015. The decrease was due to the deconsolidation of the Affiliate which occurred on September 30, 2015.

Losses and Loss Adjustment Expenses

The tables below detail our losses and loss adjustment expenses (“LAE”) and loss ratios for the three months ended June 30, 2016 and 2015 (dollars in thousands). 

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Three Months Ended June 30, 2016	Commercial Lines			Personal Lines			Total
Accident year net losses and LAE	$	8,562		$	3,473		$	12,035
Net (favorable) adverse development	782			724			1,506
Calendar year net loss and LAE	$	9,344		$	4,197		$	13,541
Accident year loss ratio	51.7		%	64.5		%	54.8		%
Net (favorable) adverse development	4.7		%	13.5		%	6.9		%
Calendar year loss ratio	56.4		%	78.0		%	61.7		%

Three Months Ended June 30, 2015	Commercial Lines			Personal Lines			Total
Accident year net losses and LAE	$	5,543		$	3,262		$	8,805
Net (favorable) adverse development	(66		)	237			171
Calendar year net loss and LAE	$	5,477		$	3,499		$	8,976
Accident year loss ratio	50.4		%	71.6		%	56.5		%
Net (favorable) adverse development	(0.6		)%	5.3		%	1.1		%
Calendar year loss ratio	49.8		%	76.9		%	57.6		%

Net losses and LAE increased by $4.6 million, or 50.9%, for the three months ended June 30, 2016, as compared to the same period in 2015. The calendar year loss ratios were 61.7% and 57.6% for the three months ended June 30, 2016 and 2015, respectively. The 4.1 percentage point increase in our loss ratio was primarily attributable to the reserve strengthening in our Florida homeowners and commercial automobile lines of business.  

Overall reserve development on prior accident years in the second quarter of 2016 was $1.5 million of adverse development, or 6.9 percentage points on the loss ratio. In the second quarter of 2016, there was $695,000 and $613,000 adverse reserve development in the Florida homeowners and commercial automobile lines of business, respectively.

Total reserve development on prior accident years in the second quarter of 2015 was slightly adverse by $171,000, or 1.1 percentage points.  

Expense Ratio

Our expense ratio is calculated by dividing the sum of policy acquisition costs and other underwriting and operating expenses by the sum of net earned premiums and other income. We use the expense ratio to evaluate the operating efficiency of our consolidated operations and each segment. Costs that cannot be readily identifiable as a direct cost of a segment or product line remain in Corporate and Other for segment reporting purposes. 

The table below provides the expense ratio by major component. 

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	Three Months Ended June 30,
	2016		2015
Commercial Lines
Policy acquisition costs	26.4	%	17.4	%
Operating expenses	9.7	%	11.0	%
Total	36.1	%	28.4	%
Personal Lines
Policy acquisition costs	30.6	%	15.9	%
Operating expenses	14.2	%	4.6	%
Total	44.8	%	20.5	%
Corporate and Other
Operating expenses	9.8	%	14.1	%
Total	9.8	%	14.1	%
Consolidated
Policy acquisition costs	27.4	%	16.9	%
Operating expenses	20.6	%	23.2	%
Total	48.0	%	40.1	%

 Our expense ratio increased 7.9 percentage points in the three months ended June 30, 2016, as compared to the same period in 2015. The increase in expenses was mainly due to the hiring of new underwriting managers in commercial and personal lines, the impact of the 2015 termination of the 25% quota share reinsurance arrangement, and other incremental hiring and infrastructure investments necessary to support the Company’s growth and public company status.

Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes, underwriting reports and underwriter compensation costs. The Company offsets direct commissions with ceded commissions from reinsurers. For the three months ended June 30, 2016 and 2015, the percentage of policy acquisition costs to net earned premiums and other income was approximately 27.4% and 16.9%, respectively. The increase in the policy acquisition cost ratio was primarily driven by the termination of the 25% quota share reinsurance arrangement in which we received a 37% ceding commission on the ceded premiums. The ceding commission reduced commission expense included in policy acquisition costs for the second quarter of 2015. Because the ceding commission did not exist in 2016 the acquisitions cost ratio was higher.

Operating expenses consist primarily of employee compensation, information technology and occupancy costs, such as rent and utilities. Operating expenses as a percent of net earned premiums and other income was 20.6% and 23.2% for the three months ended June 30, 2016 and 2015, respectively. The most significant change driving the reduction in the operating expense ratio was the elimination of the quota share arrangement, which lowered net earned premium in the second quarter of 2015 and generated a higher operating expense ratio for the second quarter of 2015. In addition, growth on a more fixed operating expense structure has helped to reduce the operating expense ratio, and is expected to continue to decline in the near term.

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Underwriting Results

We measure the performance of our consolidated results, in part, based on our underwriting gain or loss. The following table provides the underwriting gain or loss for the three months ended June 30, 2016 and 2015 (dollars in thousands):

Underwriting Gain (Loss)
	Three Months Ended June 30,
	2016			2015			$ Change			% Change
Commercial Lines	$	1,247		$	2,390		$	(1,143	)	(47.8	)%
Personal Lines	(1,233		)	122			(1,355		)	*
Corporate and Other	(2,147		)	(2,151		)	4			(0.2	)%
Total	$	(2,133	)	$	361		$	(2,494	)	*

* Percentage change is not meaningful

The Company redefined its operating segments during the quarter ended June 30, 2016 and recast the segment information for the three months ended June 30, 2016 in a manner consistent with the new operational management structure. The segment information for the three months ended June 30, 2015, has also been recast to be consistent with the new format.

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Results of OperationsFor The Six Months Ended June 30, 2016 and 2015

The following table summarizes our operating results for the periods indicated (dollars in thousands):

Summary of Operating Results
	Six Months Ended June 30,
	2016			2015			$ Change			% Change
Gross written premiums	$	55,118		$	44,263		$	10,855		24.5	%
Net written premiums	$	48,226		$	29,608		$	18,618		62.9	%
Net earned premiums	$	41,784		$	29,608		$	12,176		41.1	%
Other income	528			969			(441		)	(45.5	)%
Losses and loss adjustment expenses, net	26,240			17,546			8,694			49.5	%
Policy acquisition costs	12,017			5,234			6,783			129.6	%
Operating expenses	8,675			7,311			1,364			18.7	%
Underwriting gain (loss)	(4,620		)	486			(5,106		)	*
Net investment income	1,065			955			110			11.5	%
Net realized investment gains (losses)	533			232			301			129.7	%
Interest expense	300			483			(183		)	(37.9	)%
Income (loss) before equity earnings in affiliate and income taxes	(3,322		)	1,190			(4,512		)	*
Equity earnings (losses) of affiliates, net of tax	158			—			158			*
Income tax expense (benefit)	(623		)	48			(671		)	*
Net income (loss)	$	(2,541	)	$	1,142		$	(3,683	)	*
Underwriting Ratios:
Loss ratio (1)	62.0		%	57.4		%
Expense ratio (2)	48.9		%	41.0		%
Combined ratio (3)	110.9		%	98.4		%

(1) The loss ratio is the ratio, expressed as a percentage, of net losses and loss adjustment expenses to net earned premiums and other income.

(2) The expense ratio is the ratio, expressed as a percentage, of policy acquisition costs and operating expenses to net earned premiums and other income.

(3) The combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.

*Percentage change is not meaningful

Premiums

Earned premiums are earned ratably over the term of the policy, whereas written premiums are reflected on the effective date of the policy. All commercial lines and homeowners products have annual policies, under which premiums are earned evenly over one year. The resulting net earned premiums are impacted by the gross and ceded written premiums, earned ratably over time. 

Our premiums are presented below for the six months ended June 30, 2016 and 2015 (dollars in thousands): 

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Summary of Premium Revenue
	Six Months Ended June 30,
	2016		2015		$ Change		% Change
Gross written premiums
Commercial lines	$	41,965	$	34,068	$	7,897	23.2	%
Personal lines	13,153		10,195		2,958		29.0	%
Total	$	55,118	$	44,263	$	10,855	24.5	%
Net written premiums
Commercial lines	$	37,536	$	22,378	$	15,158	67.7	%
Personal lines	10,690		7,230		3,460		47.9	%
Total	$	48,226	$	29,608	$	18,618	62.9	%
Net Earned premiums
Commercial lines	$	31,763	$	20,158	$	11,605	57.6	%
Personal lines	10,021		9,450		571		6.0	%
Total	$	41,784	$	29,608	$	12,176	41.1	%

Gross written premiums increased $10.9 million, or 24.5%, to $55.1 million for the six months ended June 30, 2016, as compared to $44.3 million for the same period in 2015. The increase was driven by continued growth in both our commercial and personal lines business which reflects the execution of our growth initiatives in the niche commercial insurance markets and our strategic change in the mix of business of our personal lines.

 Commercial lines gross written premiums increased $7.9 million, or 23.2%, to $42.0 million for the six months ended June 30, 2016, as compared to $34.1 million for the same period in 2015. This increase was primarily driven by the commercial multi-peril and workers' compensation business which grew 38.0% and 21.8%, respectively, compared to the same period in 2015.

 Personal lines gross written premiums increased $3.0 million, or 29.0%, to $13.2 million for the six months ended June 30, 2016, as compared to $10.2 million for the same period in 2015. The increase was driven by our low-value dwelling and wind-exposed homeowners business which grew 56.9% and 38.1%, respectively, compared to the same period in 2015. The growth in these lines was partially offset by a reduction in gross written premiums in the personal automobile business which is in run-off.

 Net written premiums increased $18.6 million, or 62.9%, to $48.2 million for the six months ended June 30, 2016, as compared to $29.6 million for the same period in 2015. This increase was driven by the growth in the gross written premiums as well as the termination of a quota share reinsurance agreement which occurred on August 1, 2015. The quota share arrangement was terminated as management determined the Company no longer needed the leverage support of this reinsurance arrangement due to the added capital raised from the IPO. Excluding the 2015 impact of the quota share reinsurance agreement the net written premiums for the six months ended June 30, 2016 increased $9.7 million, or 25.1%, compared to the same period in 2015. This result is consistent with the 24.5% increase in gross written premiums.

Other income

Other income consists primarily of fees charged to policyholders by the Company for services outside of the premium charge, such as installment billings and policy issuance costs. Commission income is also received by the Company’s insurance agencies for writing policies for third party insurance companies. Other income for the six months ended June 30, 2016 decreased $441,000, or 45.5%, to $528,000 as compared to $969,000 for the same period in 2015. The decrease was due to the deconsolidation of the Affiliate which occurred on September 30, 2015.

Losses and Loss Adjustment Expenses

The tables below detail our losses and LAE and loss ratios for the six months ended June 30, 2016 and 2015 (dollars in thousands). 

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Six months ended June 30, 2016	Commercial Lines			Personal Lines			Total
Accident year net losses and LAE	$	16,841		$	6,305		$	23,146
Net (favorable) adverse development	1,139			1,955			3,094
Calendar year net loss and LAE	$	17,980		$	8,260		$	26,240
Accident year loss ratio	52.7		%	61.0		%	54.7		%
Net (favorable) adverse development	3.6		%	18.9		%	7.3		%
Calendar year loss ratio	56.3		%	79.9		%	62.0		%

Six months ended June 30, 2015	Commercial Lines			Personal Lines			Total
Accident year net losses and LAE	$	10,917		$	6,423		$	17,340
Net (favorable) adverse development	(123		)	329			206
Calendar year net loss and LAE	$	10,794		$	6,752		$	17,546
Accident year loss ratio	52.4		%	66.3		%	56.7		%
Net (favorable) adverse development	(0.6		)%	3.4		%	0.7		%
Calendar year loss ratio	51.8		%	69.7		%	57.4		%

Net losses and LAE increased by $8.7 million, or 49.5%, for the six months ended June 30, 2016, as compared to the same period in 2015. The calendar year loss ratios were 62.0% and 57.4% for the six months ended June 30, 2016 and 2015, respectively. The 4.6 percentage point increase in our loss ratio was primarily attributable to the reserve strengthening in our Florida homeowners and commercial automobile lines of business.  

Overall reserve development on prior accident years for the six months ended June 30, 2016 was $3.1 million of adverse development, or 7.3 percentage points on the loss ratio. In the first half of 2016, both the Florida homeowners and commercial automobile lines of business each had $1.5 million of adverse reserve development. 

Total reserve development on prior accident years in the first half of 2015 was slightly adverse by $206,000, or 0.7 percentage points.  

Expense Ratio

Our expense ratio is calculated by dividing the sum of policy acquisition costs and other underwriting and operating expenses by the sum of net earned premiums and other income. We use the expense ratio to evaluate the operating efficiency of our consolidated operations and each segment. Costs that cannot be readily identifiable as a direct cost of a segment or product line remain in Corporate and Other for segment reporting purposes. 

The table below provides the expense ratio by major component. 

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	Six Months Ended June 30,
	2016		2015
Commercial Lines
Policy acquisition costs	27.4	%	17.5	%
Operating expenses	10.5	%	12.9	%
Total	37.9	%	30.4	%
Personal Lines
Policy acquisition costs	31.6	%	16.3	%
Operating expenses	13.9	%	6.4	%
Total	45.5	%	22.7	%
Corporate and Other
Operating expenses	9.2	%	13.1	%
Total	9.2	%	13.1	%
Consolidated
Policy acquisition costs	28.4	%	17.1	%
Operating expenses	20.5	%	23.9	%
Total	48.9	%	41.0	%

 Our expense ratio increased 7.9 percentage points in the six months ended June 30, 2016, as compared to the same period in 2015. The increase in expenses was mainly due to the hiring of new underwriting managers in commercial and personal lines, the impact of the 2015 termination of the 25% quota share reinsurance arrangement, and other incremental hiring and infrastructure investments necessary to support the Company’s growth and public company status.

Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes, underwriting reports and underwriter compensation costs. The Company offsets direct commissions with ceded commissions from reinsurers. For the six months ended June 30, 2016 and 2015, the percentage of policy acquisition costs to net earned premiums and other income was approximately 28.4% and 17.1%, respectively. The increase in the policy acquisition cost ratio was primarily driven by the termination of the 25% quota share reinsurance arrangement in which we received a 37% ceding commission on the ceded premiums. The ceding commission reduced commission expense included in policy acquisition costs for the first half of 2015. Because the ceding commission did not exist in 2016 the acquisition costs ratio was higher for the first half of 2016.

Operating expenses consist primarily of employee compensation, information technology and occupancy costs, such as rent and utilities. Operating expenses as a percent of net earned premiums and other income was 20.5% and 23.9% for the six months ended June 30, 2016 and 2015, respectively. The most significant change driving the reduction in the operating expense ratio was the elimination of the quota share arrangement, which lowered net earned premium in the first half of 2015 and generated a higher operating expense ratio for the first half of 2015. In addition, growth on a more fixed operating expense structure has helped to reduce the operating expense ratio, and is expected to continue to decline in the near term.

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Underwriting Results

We measure the performance of our consolidated results, in part, based on our underwriting gain or loss. The following table provides the underwriting gain or loss for the six months ended June 30, 2016 and 2015 (dollars in thousands):

Underwriting Gain (Loss)
	Six Months Ended June 30,
	2016			2015			$ Change			% Change
Commercial Lines	$	1,869		$	3,700		$	(1,831	)	(49.5	)%
Personal Lines	(2,621		)	732			(3,353		)	*
Corporate and Other	(3,868		)	(3,946		)	78			(2.0	)%
Total	$	(4,620	)	$	486		$	(5,106	)	*

* Percentage change is not meaningful

The Company redefined its operating segments during the quarter ended June 30, 2016 and recast the segment information for the six months ended June 30, 2016 in a manner consistent with the new operational management structure. The segment information for the six months ended June 30, 2015, has also been recast to be consistent with the new format.

Investment Income

Net investment income increased by $110,000, or 11.5%, to $1.1 million for the six months ended June 30, 2016, as compared to $955,000 for the same period in 2015. This increase was the result of growth of the investment portfolio and a change in the mix of investments. Average invested assets through the second quarter of 2016 were $125.5 million as compared to $107.0 million in 2015, an increase of $18.5 million, or 17.3%. As of June 30, 2016, the average invested asset balance was comprised of 87.5% of fixed maturity securities, 3.5% of equity securities and 9.0% of short term investments, compared to the June 30, 2015 mix of 85.4% of fixed maturity securities, 3.9% of equity securities and 10.7% of short term investments.

The portfolio’s average quality was AA at June 30, 2016 and December 31, 2015. The portfolio produced a tax equivalent book yield of 2.12% and 2.19% for the six months ended June 30, 2016 and 2015, respectively. The average duration of the fixed maturity portfolio was 3.1 years at both June 30, 2016 and December 31, 2015.

Interest Expense

Interest expense was $300,000 and $483,000 for the six months ended June 30, 2016 and 2015, respectively. Interest expense decreased primarily due to the additional outstanding borrowings under the Revolver which existed until the completion of the Company’s IPO. The outstanding borrowings under the Revolver were repaid from the proceeds received from the Company’s IPO, in August 2015.

Income Tax Expense

For the six months ended June 30, 2016, the Company had $623,000 of income tax benefit which is largely the result of the tax impact of changes in the valuation allowance on its deferred taxes related to changes in unrealized gains. For the six months ended June 30, 2015, the tax expenses of $48,000 was largely the result of taxes associated with a non-controlling interest. No taxes were otherwise projected for the Company for the year due to the existence of the valuation allowance.

Liquidity and Capital Resources

Sources and Uses of Funds

At June 30, 2016, we had $30.5 million in cash and short-term investments. Our principal sources of funds, excluding capital raises, are insurance premiums, investment income, proceeds from maturity and sale of invested assets and installment fees. These funds are primarily used to pay claims, commissions, employee compensation, taxes and other operating expenses, and service debt. 

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We believe that our existing cash, short-term investments and investment securities balances and the $11.0 million available under our revolving credit line will be adequate to meet our capital and liquidity needs and the needs of our subsidiaries on a short-term and long-term basis. 

We conduct our business operations primarily through our Insurance Company Subsidiaries. Our ability to service debt, and pay administrative expenses is primarily reliant upon our intercompany service fees paid by the Insurance Company Subsidiaries to the holding company for management, administrative, and information technology services provided to the Insurance Company Subsidiaries by the holding company. Secondarily, the holding company may receive dividends from the Insurance Company Subsidiaries; however, this is not the primary means in which the holding company supports its funding as state insurance laws restrict the ability of our Insurance Company Subsidiaries to declare dividends to the holding company. Generally, the limitations are based on the greater of statutory net income for the preceding year or 10% of statutory surplus at the end of the preceding year. There were no dividends paid from our Insurance Company Subsidiaries during the six months ended June 30, 2016. 

Cash Flows

Operating Activities. Cash provided by operating activities for the six months ended June 30, 2016, was $5.2 million as compared to $4.9 million used by operating activities for the same period in 2015. The increase in cash provided by operations was attributable to the overall growth of the business.  

Investing Activities. Cash used in investing activities for the six months ended June 30, 2016, was $5.3 million as compared to $4.3 million for the same period in 2015. The fluctuation in the funds used in routine investing activities correlates with the growth in the Company’s business. We continue to invest in additional securities as premiums are collected faster than claims are paid out. 

Financing Activities. Cash provided by financing activities for the six months ended June 30, 2016, was $1.5 million as compared to $764,000 used in financing activities for the same period in 2015. The increase in cash provided by financing activites is due to funding from the Company's line of credit.

Outstanding Debt

We are party to a $30.0 million senior credit facility with Comerica Bank which currently is comprised of three notes: a $5.0 million five-year term note ("Term Note") which commenced in October 2013; a $7.5 million five-year term note which commenced in September 2014 ("2014 Term Note"); and a $17.5 million revolving line of credit ("Revolver") which was scheduled to expire on August 1, 2016. Management is in the process of renewing the Revolver and on July 21, 2016 the expiration date was extended until October 1, 2016. Our total outstanding senior debt at June 30, 2016, was $14.8 million. Our minimum principal and interest payments on our senior debt for the remaining six months of 2016 is estimated to be $7.6 million, $5.6 million for 2017-2018, and $2.0 million for 2019-2020. Refer to Note 7 ~ Senior Debt of the Notes to the consolidated financial statements, for additional information regarding our outstanding debt.

Non-GAAP Financial Measures

Statutory Capital and Surplus

Statutory capital and surplus is a non-GAAP (accounting principles generally accepted in the United States -“GAAP”) measure. The Company’s insurance subsidiaries’ aggregate statutory capital and surplus was $69.0 million and $71.2 million at June 30, 2016 and December 31, 2015, respectively.

Operating Income and Operating Income Per Share

Operating income and operating income per share are non-GAAP measures that represent net income allocable to common shareholders excluding net realized investment and other gains, net of tax. The most directly comparable financial GAAP measures to operating income and operating income per share are net income and net income per share, respectively. Operating income and operating income per share are intended as supplemental information and are not meant to replace net income or net income per share. Operating income and operating income per share should be read in conjunction with the GAAP financial results. Our definition of operating income may be different from that used by other companies. The following is a reconciliation of net income to operating income (dollars in thousands), as well as net income per share to operating income per

35

share:

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
Net income (loss) allocable to common shareholders	$	(513	)	$	366	$	(2,541	)	$	616
Net realized gains (losses), net of tax	541			87		533			232
Operating income (loss) allocable to common shareholders	$	(1,054	)	$	279	$	(3,074	)	$	384
Weighted average common shares basic and diluted	7,594,862			4,050,042		7,616,821			4,045,482
Diluted income (loss) per common share:
Net income (loss) per share	(0.07		)	0.09		(0.33		)	0.15
Net realized gains, net of tax, per share	0.07			0.02		0.07			0.06
Operating income (loss) per share	(0.14		)	0.07		(0.40		)	0.09

We use operating income and operating income per share to assess our performance and to evaluate the results of our overall business. We believe these measures provide investors with valuable information relating to our ongoing performance that may be obscured by the net effect of realized gains and losses as a result of our market risk sensitive instruments, which primarily relate to fixed income securities that are available for sale and not held for trading purposes. Realized gains and losses may vary significantly between periods and are generally driven by external economic developments, such as capital market conditions. Accordingly, operating income excludes the effect of items that tend to be highly variable from period to period and highlights the results from our ongoing business operations and the underlying loss or profitability of our business. We believe that it is useful for investors to evaluate operating income and operating income per share, along with net income and net income per share, when reviewing and evaluating our performance.

Recently Issued Accounting Pronouncements

 Refer to Note 1 ~ Summary of Significant Accounting Policies – Recently Issued Accounting Guidance of the Notes to the Consolidated Financial Statements for detailed information regarding recently issued accounting pronouncements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, as well as, other relevant market rates or price changes. The volatility and liquidity in the markets in which the underlying assets are traded directly influence market risk. The following is a discussion of our primary market risk exposures and how those exposures are currently managed as of June 30, 2016. Our market risk sensitive instruments are primarily related to our fixed-income securities.

Interest Rate Risk

At June 30, 2016, the fair value of our investment portfolio, excluding cash and cash equivalents, was $133.2 million. Our investment portfolio consists principally of investment-grade, fixed-income securities, all of which are classified as available-for-sale. Accordingly, the primary market risk exposure to our debt securities is interest rate risk. In general, the fair market value of a portfolio of fixed-income securities increases or decreases inversely with changes in market interest rates, while net investment income realized from future investments in fixed-income securities increases or decreases along with interest rates. We attempt to mitigate interest rate risks by investing in securities with varied maturity dates and by managing the duration of our investment portfolio to a defined range of three to four years. The effective duration of our portfolio as of June 30, 2016 and December 31, 2015, was approximately 3.1 years.

The table below illustrates the sensitivity of the fair value of our fixed-income investments, classified as fixed maturity securities and short-term investments, to selected hypothetical changes in interest rates as of June 30, 2016. The selected scenarios are not predictions of future events, but rather illustrate the effect that events may have on the fair value of the fixed-income portfolio and shareholders’ equity (dollars in thousands). 

			Estimated			Hypothetical Percentage Increase (Decrease) in
Hypothetical Change in Interest Rates	Estimated		Change in					Shareholders'
As of June 30, 2016	Fair Value		Fair Value			Fair Value		Equity
200 basis point increase	$	121,304	$	(7,469	)	(5.8	)%	(9.3	)%
100 basis point increase	125,039		(3,734		)	(2.9	)%	(4.7	)%
No change	128,773		—			—	%	—	%
100 basis point decrease	131,348		2,575			2.0	%	3.2	%
200 basis point decrease	131,864		3,091			2.4	%	3.9	%

Credit Risk

 An additional exposure to our fixed-income securities portfolio is credit risk. We manage our credit risk by investing only in investment-grade securities. In addition, we comply with applicable statutory requirements which limit the portion of our total investment portfolio that we can invest in any one security.

 We are subject to credit risks with respect to our reinsurers. Although a reinsurer is liable for losses to the extent of the coverage which it assumes, our reinsurance contracts do not discharge our insurance companies from primary liability to each policyholder for the full amount of the applicable policy, and consequently our insurance companies remain obligated to pay claims in accordance with the terms of the policies regardless of whether a reinsurer fulfills or defaults on its obligations under the related reinsurance agreement. To mitigate our credit risk to reinsurance companies, we attempt to select financially strong reinsurers with an A.M. Best rating of “A−” or better and continue to evaluate their financial condition throughout the duration of our agreements.

At June 30, 2016, the net amount due to the Company from reinsurers, including prepaid reinsurance, was $9.9 million. We believe all amounts recorded as due from reinsurers are recoverable. 

Effects of Inflation

We do not believe that inflation has a material effect on our results of operations, except for the effect that inflation may have on interest rates and claims costs. We consider the effects of inflation in pricing and estimating reserves for unpaid losses and LAE. The actual effects of inflation on our results are not known until claims are ultimately settled. In addition to general price inflation, we are exposed to a long-term upward trend in the cost of judicial awards for damages.

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ITEM 4.  CONTROLS AND PROCEDURES

 A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Disclosure Controls and Procedures

 The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that required information is recorded, processed, summarized and reported within the required timeframe as specified in the SEC’s rules and forms of the SEC. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 Our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures at June 30, 2016. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of June 30, 2016. 

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PARTII - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The information required by this item is included under Note 12 ~ Commitments and Contingencies of the Notes to the Consolidated Financial Statements of the Company’s Form 10-Q for the six months ended June 30, 2016, which is hereby incorporated by reference.

ITEM 1A.  RISK FACTORS

There were no material changes to the risk factors disclosed in our Annual Report on Form 10-K (“Item 1A Risk Factors”) filed with the SEC on March 15, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The proceeds from our IPO have been fully deployed in compliance with the purposes as described in our final prospectus filed with the SEC on August 13, 2015 pursuant to Rule 424(b)(4).

On February 25, 2016, the Company's Board of Directors authorized a stock repurchase program, under which the Company may repurchase up to $2.1 million of its outstanding common stock over a one-year period. Under this program, management is authorized to repurchase shares at prevailing market prices through open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended. The actual timing, number and value of shares repurchased under the program will be determined by management in its discretion and will depend on a number of factors, including the market price of the Company’s stock, general market conditions, and other factors. Repurchases may be made from time to time, without prior notice. The Company may suspend or discontinue the program at any time.

Issuer purchase of Equity Securities
Period of purchases	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced plan or program	Maximum dollars yet to be used for stock purchases (in thousands)
February 25, 2016 to February 29, 2016	—	—		—	$	2,100
March 1, 2016 to March 31, 2016	33,833	$	6.79	33,833	1,869
April 1, 2016 to April 30, 2016	—	$	—	33,833	1,869
May 1, 2016 to May 31, 2016	32,830	$	6.65	66,663	1,649
June 1, 2016 to June 30, 2016	—	$	—	66,663	1,649
Total for the Six Months Ended June 30, 2016	66,663	$	6.72

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ITEM 6.  EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Period Ending	Exhibit / Appendix Number	Filing Date
31.1	Section 302 Certification — CEO
31.2	Section 302 Certification — CFO
32.1*	Section 906 Certification — CEO
32.2*	Section 906 Certification — CFO
101.INS	XBRL Instance Document
101.SCH	SBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CONIFER HOLDINGS, INC.
By:	/s/ Harold J. Meloche
	Harold J. Meloche
	Chief Financial Officer,
	Principal Financial Officer,
	Principal Accounting Officer

Dated: August 11, 2016

41

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER’S 302 CERTIFICATION

I, James G. Petcoff, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Conifer Holdings, Inc. for the quarterly period ended June 30, 2016;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Intentionally omitted.

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2016

/s/ James G. Petcoff

James G. Petcoff

Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER’S 302 CERTIFICATION

I, Harold J. Meloche, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Conifer Holdings, Inc. for the quarterly period ended June 30, 2016;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Intentionally omitted.

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2016

/s/ Harold J. Meloche

Harold J. Meloche

Chief Financial Officer

(principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Conifer Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James J. Petcoff, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 11, 2016 

/s/James J. Petcoff

James J. Petcoff

Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Conifer Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Harold J. Meloche, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 11, 2016 

/s/ Harold J. Meloche

Harold J. Meloche

Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 09, 2016
Document And Entity Information
Entity Registrant Name	Conifer Holdings, Inc.
Entity Central Index Key	0001502292
Trading Symbol	cnfr
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		7,577,829
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Investment securities:
Fixed maturity securities, at fair value (amortized cost of $110,819 and $107,213, respectively)	$ 112,469	$ 107,093
Equity securities, at fair value (cost of $3,321 and $3,341, respectively)	4,443	4,240
Short-term investments, at fair value	16,304	6,391
Total investments	133,216	117,724
Cash	14,166	12,703
Premiums and agents' balances receivable, net	21,950	18,010
Receivable from affiliate	2,236	1,792
Reinsurance recoverables on unpaid losses	5,890	5,405
Reinsurance recoverables on paid losses	2,209	1,639
Ceded unearned premiums	1,848	3,483
Deferred policy acquisition costs	13,182	12,102
Other assets	5,365	5,069
Total assets	200,062	177,927
Liabilities:
Unpaid losses and loss adjustment expenses	41,832	35,422
Unearned premiums	54,230	47,916
Reinsurance premiums payable	445	1,069
Senior debt	14,750	12,750
Accounts payable and accrued expenses	12,056	2,758
Other liabilities	748	750
Total liabilities	124,061	100,665
Commitments and contingencies	0	0
Shareholders' equity:
Common stock, no par value (100,000,000 shares authorized; 7,577,829 and 7,644,492 issued and outstanding, respectively)	80,069	80,111
Accumulated deficit	(5,572)	(3,031)
Accumulated other comprehensive income	1,504	182
Total shareholders' equity	76,001	77,262
Total liabilities and shareholders' equity	$ 200,062	$ 177,927

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Fixed maturity securities, amortized cost	$ 110,819	$ 107,213
Equity securities, amortized cost	$ 3,321	$ 3,341
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	7,577,829	7,644,492
Common stock, shares outstanding (in shares)	7,577,829	7,644,492

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Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Premiums
Gross earned premiums	$ 25,258	$ 22,187	$ 48,804	$ 43,161
Ceded earned premiums	(3,583)	(7,072)	(7,020)	(13,553)
Net earned premiums	21,675	15,115	41,784	29,608
Net investment income	528	469	1,065	955
Net realized investment gains	541	87	533	232
Other income	283	480	528	969
Total revenue	23,027	16,151	43,910	31,764
Expenses
Losses and loss adjustment expenses, net	13,541	8,976	26,240	17,546
Policy acquisition costs	6,014	2,639	12,017	5,234
Operating expenses	4,536	3,619	8,675	7,311
Interest expense	143	239	300	483
Total expenses	24,234	15,473	47,232	30,574
Income (loss) before equity earnings of affiliates and income taxes	(1,207)	678	(3,322)	1,190
Equity earnings of affiliates, net of tax	71	0	158	0
Income tax (benefit) expense	(623)	48	(623)	48
Net income (loss)	(513)	630	(2,541)	1,142
Less net income attributable to noncontrolling interest	0	51	0	100
Net income (loss) attributable to Conifer	(513)	579	(2,541)	1,042
Net income (loss) allocable to common shareholders	$ (513)	$ 366	$ (2,541)	$ 616
Earnings (loss) per per common share, basic and diluted (in dollars per share)	$ (0.07)	$ 0.09	$ (0.33)	$ 0.15
Weighted average common shares outstanding, basic and diluted	7,594,862	4,050,042	7,616,821	4,045,482

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (513)	$ 630	$ (2,541)	$ 1,142
Unrealized investment gains:
Unrealized investment gains (losses) during the period	277	(977)	1,736	(274)
Income tax expense (benefit)	585	0	585	0
Unrealized investment gains, net of tax	(308)	(977)	1,151	(274)
Less: reclassification adjustments to:
Net realized investment gains included in net income (loss)	(174)	208	(257)	425
Income tax expense (benefit)	(86)	0	(86)	0
Total reclassifications included in net income (loss), net of tax	(88)	208	(171)	425
Other comprehensive income (loss)	(220)	(1,185)	1,322	(699)
Total comprehensive income (loss)	(733)	(555)	(1,219)	443
Less comprehensive (loss) income attributable to noncontrolling interest	0	51	0	100
Comprehensive income (loss) attributable to Conifer	$ (733)	$ (606)	$ (1,219)	$ 343

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Consolidated Statements of Changes in Redeemable Preferred Stock and Shareholders' Equity (Unaudited) - USD ($) $ in Thousands		Total	Preferred Stock	No Par, Common Stock	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive Income (Loss)	Total Conifer Holdings Shareholders' Equity	Noncontrolling Interest	Former Preferred Stockholders	Former Preferred Stockholders No Par, Common Stock	Former Preferred Stockholders Total Conifer Holdings Shareholders' Equity	IPO	[1]	IPO No Par, Common Stock	[1]	IPO Total Conifer Holdings Shareholders' Equity	[1]	Redeemable Preferred Stock
Balance at beginning of period (in shares) at Dec. 31, 2014			0	3,995,013
Balance at beginning of period at Dec. 31, 2014		$ 44,159	$ 0	$ 46,119	$ (3,095)	$ 1,158	$ 44,182	$ (23)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		1,142			1,042		1,042	100
Issuance of stock (in shares)	[1]			55,029
Issuance of stock	[1]	750		$ 750			750
Paid-in-kind dividends		(61)	$ 62	(123)			(61)
Cash dividends paid on preferred stock		(303)		$ (303)			(303)
Reclassification of redeemable preferred stock to permanent equity (in shares)			60,600															(60,600)
Reclassification of redeemable preferred stock to permanent equity		6,180	$ 6,180				6,180											$ (6,180)
Other comprehensive loss		(699)				(699)	(699)
Balance at end of period (in shares) at Jun. 30, 2015			60,600	4,050,042
Balance at end of period at Jun. 30, 2015		51,168	$ 6,242	$ 46,443	(2,053)	459	51,091	77
Redeemable Preferred Stock, Beginning Balance (in shares) at Dec. 31, 2014																		60,600
Redeemable Preferred Stock, Beginning Balance at Dec. 31, 2014																		$ 6,119
Increase (Decrease) in Temporary Equity [Roll Forward]
Redeemable Preferred Stock, Paid-in-kind dividends																		$ 61
Redeemable Preferred Stock, Ending Balance (in shares) at Jun. 30, 2015																		0
Redeemable Preferred Stock, Ending Balance at Jun. 30, 2015																		$ 0
Balance at beginning of period at Mar. 31, 2015						1,644
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		630
Cash dividends paid on preferred stock		(151)
Other comprehensive loss		(1,185)
Balance at end of period (in shares) at Jun. 30, 2015			60,600	4,050,042
Balance at end of period at Jun. 30, 2015		51,168	$ 6,242	$ 46,443	(2,053)	459	51,091	77
Redeemable Preferred Stock, Ending Balance (in shares) at Jun. 30, 2015																		0
Redeemable Preferred Stock, Ending Balance at Jun. 30, 2015																		$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(1,159)			(978)		(978)	(181)
Issuance of stock (in shares)										294,450				3,300,000
Issuance of stock									$ 3,092	$ 3,092	$ 3,092	$ 32,224		$ 32,224		$ 32,224
Paid-in-kind dividends		0	$ 33	(33)
Cash dividends paid on preferred stock		(81)		(81)			(81)
IPO expenses	[1]	(1,837)		(1,837)			(1,837)
Repurchase of preferred stock (in shares)			(60,600)
Repurchase of preferred stock		(6,275)	$ (6,275)				(6,275)
Vesting of RSU	[2]	303		$ 303			303
Deconsolidation of affiliate		104						104
Other comprehensive loss		(277)				(277)	(277)
Balance at end of period (in shares) at Dec. 31, 2015			0	7,644,492
Balance at end of period at Dec. 31, 2015		77,262	$ 0	$ 80,111	(3,031)	182	77,262	0
Redeemable Preferred Stock, Ending Balance (in shares) at Dec. 31, 2015																		0
Redeemable Preferred Stock, Ending Balance at Dec. 31, 2015																		$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(2,541)			(2,541)		(2,541)
Cash dividends paid on preferred stock		0
Repurchase of preferred stock (in shares)				(66,663)
Repurchase of preferred stock				$ (451)
Repurchase of common stock (in shares)				(66,663)
Repurchase of common stock		(451)		$ (451)			(451)
Vesting of RSU	[2]	409		$ 409			409
Other comprehensive loss		1,322				1,322	1,322
Balance at end of period (in shares) at Jun. 30, 2016			0	7,577,829
Balance at end of period at Jun. 30, 2016		76,001	$ 0	$ 80,069	(5,572)	1,504	76,001	0
Redeemable Preferred Stock, Ending Balance (in shares) at Jun. 30, 2016																		0
Redeemable Preferred Stock, Ending Balance at Jun. 30, 2016																		$ 0
Balance at beginning of period at Mar. 31, 2016						1,724
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(513)
Cash dividends paid on preferred stock		0
Other comprehensive loss		(220)
Balance at end of period (in shares) at Jun. 30, 2016			0	7,577,829
Balance at end of period at Jun. 30, 2016		$ 76,001	$ 0	$ 80,069	$ (5,572)	$ 1,504	$ 76,001	$ 0
Redeemable Preferred Stock, Ending Balance (in shares) at Jun. 30, 2016																		0
Redeemable Preferred Stock, Ending Balance at Jun. 30, 2016																		$ 0

[1] "IPO" - initial public offering

[2] "RSU" - restricted stock units

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Cash Flows from Operating Activities
Net income (loss)	$ (513)	$ 630	$ (2,541)	$ (1,159)	$ 1,142
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment, and intangibles			197		208
Amortization of bond premium and discount, net			290		279
Gains on investments			(533)		(232)
Incentive awards expenses - vesting of RSU			409		0
Equity earnings of affiliate	(71)	0	(158)		0
(Increase) decrease in:
Premiums and agents' balances receivable			(4,384)		(956)
Reinsurance recoverables			(1,055)		(1,132)
Ceded unearned premiums			1,635		(1,103)
Deferred policy acquisition costs			(1,080)		(1,980)
Other assets			(868)		(189)
Increase (decrease) in:
Unpaid losses and loss adjustment expenses			6,410		825
Unearned premiums			6,314		1,103
Reinsurance premiums payable			(624)		(4,370)
Accounts payable and accrued expenses			1,235		1,862
Other liabilities			(3)		(312)
Net cash provided by (used in) operating activities			5,244		(4,855)
Purchase of investments:
Fixed maturity securities			(27,375)		(19,059)
Equity securities			(754)		(759)
Short-term investments			(55,197)		(44,191)
Proceeds from maturities and redemptions of investments:
Fixed maturity securities			11,335		1,203
Proceeds from sales of investments:
Fixed maturity securities			20,677		3,206
Equity securities			838		717
Short-term investments			45,284		54,703
Purchases of property and equipment			(138)		(91)
Net cash used in investing activities			(5,330)		(4,271)
Cash Flows From Financing Activities
Proceeds received from issuance of shares of common stock			0		750
Repurchase of common stock			(451)		0
Borrowings under debt arrangements			3,000		900
Repayment of borrowings under debt arrangements			(1,000)		(1,000)
Dividends paid to preferred shareholders			0		(152)
Payout of contingent consideration			0		(113)
Payment of offering costs			0		(1,149)
Net cash provided by (used in) financing activities			1,549		(764)
Net increase (decrease) in cash			1,463		(9,890)
Cash at beginning of period			12,703	8,598	18,488
Cash at end of period	14,166	8,598	14,166	$ 12,703	8,598
Supplemental Disclosure of Cash Flow Information:
Interest paid			219		439
Net income taxes paid			45		0
Dividends declared but not paid at end of the period	0	151	0		151
Paid-in-kind interest			0		123
Payable for securities - non cash item	$ 8,063	$ 0	$ 8,063		$ 0

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

 The consolidated financial statements include accounts, after elimination of intercompany accounts and transactions, of Conifer Holdings, Inc. (the “Company” or “Conifer”), its wholly owned subsidiaries Conifer Insurance Company ("CIC"), White Pine Insurance Company ("WPIC"), Red Cedar Insurance Company ("RCIC"), American Colonial Insurance Company ("ACIC"), American Colonial Insurance Services ("ACIS") and Sycamore Insurance Agency, Inc ("SIA"). CIC, WPIC, RCIC and ACIC are collectively referred to as the "Insurance Company Subsidiaries." On a stand-alone basis Conifer Holdings, Inc. is referred to as the "Parent Company."

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), which differ from statutory accounting practices prescribed or permitted for insurance companies by regulatory authorities. The Company has applied the applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting and therefore the consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments, consisting of items of a normal recurring nature, necessary for a fair presentation of the consolidated interim financial statements, have been included. The results of operations for the six months ended June 30, 2016, are not necessarily indicative of the results expected for the year ended December 31, 2016.

These consolidated financial statements and the notes thereto should be read in conjunction with the Company's audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 15, 2016 ("2015 Audited Financial Statements").

Business

The Company is engaged in the sale of property and casualty insurance products and has organized its principal operations into two types of insurance businesses: commercial lines and personal lines. The Company underwrites a variety of specialty insurance products, including property, general liability, commercial multi-peril, liquor liability, automobile, and homeowners and dwelling policies. The Company markets and sells its insurance products through a network of independent agents, including managing general agents, whereby policies are written in all 50 states in the United States. The Company’s corporate headquarters is located in Birmingham, Michigan with additional office facilities in Florida, Texas, Pennsylvania and Tennessee.

 The Company discontinued offering nonstandard personal automobile policies in the first half of 2015. The Company will continue to pay claims and perform other administrative services until existing policies expire and all claims are paid (a process referred to as “run-off”). The run-off is expected to be substantially complete by the end of 2016.

Initial Public Offering

In August 2015, the Company completed its initial public offering (“IPO”) whereby it issued and sold 3,300,000 shares of common stock, which included 100,000 shares issued and sold to the Company’s Chief Executive Officer, at a public offering price of $10.50 per share. Refer to Note 8 ~ Shareholders’ Equity for further details.

Stock Split

 On July 22, 2015, the board of directors approved a stock split in the form of a stock dividend of 10.2 shares for each share of common stock which was effectuated immediately prior to the effectiveness of the IPO. Accordingly, all common share and per share amounts for all periods presented in these unaudited consolidated financial statements and notes thereto, were adjusted retroactively to reflect the stock split.

Principles of Consolidation

Prior to September 30, 2015, the consolidated financial statements included the accounts of Conifer Holdings, Inc. and its wholly owned subsidiaries, as well as a 50%-owned affiliate (the “Affiliate”) which the Company controlled due to its majority representation on the entity’s board of directors. Noncontrolling interest in a consolidated subsidiary in the consolidated balance sheets represents the noncontrolling shareholder’s proportionate share of the entity’s equity. Consolidated net income or loss is allocated to the Company and noncontrolling interest in proportion to their percentage ownership interests. As of September 30, 2015, the Company no longer controlled the Affiliate but retained significant influence. As a result the entity

was deconsolidated from the consolidated financial statements and recognized as an investment in an affiliate utilizing the equity method of accounting. All intercompany transactions and accounts were eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While management believes the amounts included in the consolidated financial statements reflect management's best estimates and assumptions, actual results may differ from these estimates.

Recently Issued Accounting Guidance

In May 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-09, Disclosures about Short-Duration Contracts (Topic 944), which enhances disclosure requirements for insurance entities with short-duration insurance contracts. The enhanced disclosures under the new guidance will be provided by the Company for the year ended December 31, 2016, as required.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update modify the requirements related to the measurement of certain financial instruments in the statement of financial condition and results of operation. For equity investments (other than investments accounted for using the equity method), entities must measure such instruments at fair value with changes in fair value recognized in net income. Reporting entities may continue to elect to measure equity investments which do not have a readily determinable fair value at cost with adjustments for impairment and observable changes in price. In addition, for a liability (other than a derivative liability) that an entity measures at fair value, any change in fair value related to the instrument-specific credit risk, that is the entity’s own-credit, should be presented separately in other comprehensive income and not as a component of net income. The amendments are effective for the Company on January 1, 2018, with early adoption permitted solely for the instrument-instrument specific credit risk for liabilities measured at fair value. The amendments must be applied on a modified retrospective basis with a cumulative effect adjustment as of the beginning of the fiscal year of initial adoption. Management is currently evaluating the impact of the guidance.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which addresses the financial reporting of leasing transactions. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the consolidated statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the consolidated statement of operations and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the consolidated statement of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. We have not yet completed the analysis of how adopting this guidance will affect our financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which amends the current methodology and timing for recognizing credit losses. This amendment will replace the current GAAP "incurred loss" methodology for credit losses with a methodology based on expected credit losses. The new guidance will also require expanded consideration of a broader range of reasonable and increased supportable information for the credit loss estimates. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted for years beginning after December 15, 2018. We have not yet completed the analysis of how adopting this guidance will affect our financial statements.

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Investments

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The cost or amortized cost, gross unrealized gain or loss, and estimated fair value of the investments in securities classified as available-for-sale at June 30, 2016 and December 31, 2015 were as follows (dollars in thousands):

	June 30, 2016
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Fixed Maturity Securities:
U.S. Government obligations	$	5,737	$	80	$	—		$	5,817
State and local government	10,917		551		(1		)	11,467
Corporate debt	34,574		479		(59		)	34,994
Commercial mortgage-backed and other asset-backed	59,591		614		(14		)	60,191
Total fixed maturity securities available for sale	110,819		1,724		(74		)	112,469
Equity Securities:
Common stocks - Public Utilities	220		64		(2		)	282
Common stocks - Banks, Trusts and Insurance Companies	458		151		(3		)	606
Common stocks - Industrial, miscellaneous and all other	2,643		942		(30		)	3,555
Total equity securities available for sale	3,321		1,157		(35		)	4,443
Total securities available for sale	$	114,140	$	2,881	$	(109	)	$	116,912

	December 31, 2015
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Fixed Maturity Securities:
U.S. Government obligations	$	5,474	$	47	$	(13	)	$	5,508
State and local government	14,391		398		(6		)	14,783
Corporate debt	39,183		84		(483		)	38,784
Commercial mortgage-backed and other asset-backed	48,165		164		(311		)	48,018
Total fixed maturity securities available for sale	107,213		693		(813		)	107,093
Equity Securities:
Common stocks - Public Utilities	122		20		(1		)	141
Common stocks - Banks, Trusts and Insurance Companies	503		150		(7		)	646
Common stocks - Industrial, miscellaneous and all other	2,716		836		(99		)	3,453
Total equity securities available for sale	3,341		1,006		(107		)	4,240
Total securities available for sale	$	110,554	$	1,699	$	(920	)	$	111,333

The following table summarizes the aggregate fair value and gross unrealized losses, by security type, of the available-for-sale securities in unrealized loss positions. The table segregates the holdings based on the length of time that individual securities have been in a continuous unrealized loss position, as follows (dollars in thousands): 

	June 30, 2016
	Less than 12 months						Greater than 12 months						Total
	# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Valueof Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses
Fixed Maturity Securities:
U.S. Government obligations	—	$	—	$	—		—	$	—	$	—		—	$	—	$	—
State and local government	1	118		(1		)	—	—		—			1	118		(1		)
Corporate debt	7	3,104		(17		)	15	5,127		(42		)	22	8,231		(59		)
Commercial mortgage and asset-backed	14	8,779		(11		)	5	1,324		(3		)	19	10,103		(14		)
Total fixed maturity securities available for sale	22	12,001		(29		)	20	6,451		(45		)	42	18,452		(74		)
Equity Securities:
Common stock	47	457		(22		)	4	133		(13		)	51	590		(35		)
Total equity securities available for sale	47	457		(22		)	4	133		(13		)	51	590		(35		)
Total securities	69	$	12,458	$	(51	)	24	$	6,584	$	(58	)	93	$	19,042	$	(109	)

	December 31, 2015
	Less than 12 months						Greater than 12 months						Total
	# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Valueof Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses
Fixed Maturity Securities:
U.S. Government obligations	7	$	2,580	$	(7	)	2	$	679	$	(6	)	9	$	3,259	$	(13	)
State and local government	8	2,688		(6		)	—	—		—			8	2,688		(6		)
Corporate debt	80	21,760		(438		)	12	3,618		(45		)	92	25,378		(483		)
Commercial mortgage and asset-backed	67	32,539		(258		)	5	2,175		(53		)	72	34,714		(311		)
Total fixed maturity securities available for sale	162	59,567		(709		)	19	6,472		(104		)	181	66,039		(813		)
Equity Securities:
Common stock	86	782		(72		)	3	79		(35		)	89	861		(107		)
Total equity securities available for sale	86	782		(72		)	3	79		(35		)	89	861		(107		)
Total securities	248	$	60,349	$	(781	)	22	$	6,551	$	(139	)	270	$	66,900	$	(920	)

 The Company analyzed its investment portfolio in accordance with its other-than-temporary impairment ("OTTI") review procedures and determined the Company did not need to record a credit related OTTI loss, nor recognize a non-credit related OTTI loss in other comprehensive income for the three and six months ended June 30, 2016 and 2015.

 The Company’s sources of net investment income are as follows (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Fixed maturity securities	$	570		$	532		$	1,156		$	1,063
Equity securities	25			22			51			45
Cash and short-term investments	5			2			7			4
Total investment income	600			556			1,214			1,112
Investment expenses	(72		)	(87		)	(149		)	(157		)
Net investment income	$	528		$	469		$	1,065		$	955

The following table summarizes the gross realized gains and losses from sales or maturities of available-for-sale fixed maturity and equity securities (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Fixed maturity securities:
Gross realized gains	$	502		$	—		$	518		$	68
Gross realized losses	(16		)	(1		)	(22		)	(4		)
Total fixed maturity securities	486			(1		)	496			64
Equity securities:
Gross realized gains	94			104			150			203
Gross realized losses	(39		)	(16		)	(113		)	(35		)
Total equity securities	55			88			37			168
Total realized gains (losses)	$	541		$	87		$	533		$	232

 Proceeds from the sales of debt and equity securities available for sale were $21.5 million and $3.9 million for the six months ended June 30, 2016 and 2015, respectively.

 The table below summarizes the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at June 30, 2016. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties (dollars in thousands):

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	7,779	$	7,784
Due after one year through five years	30,636		31,052
Due after five years through ten years	6,529		6,941
Due after ten years	6,284		6,501
Securities with contractual maturities	51,228		52,278
Commercial mortgage and asset backed	59,591		60,191
Total Fixed maturity securities	$	110,819	$	112,469

 At June 30, 2016 and December 31, 2015, the insurance companies had an aggregate of $9.0 million and $8.9 million, respectively, on deposit in trust accounts to meet the deposit requirements of various state insurance departments. There are withdrawal and other restrictions on these deposits, including the type of investments that may be held, however, the Company may generally invest in high-grade bonds and short-term investments and earn interest on the funds.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

 The Company’s financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in these consolidated financial statements . Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principally most advantageous market for the asset or liability in an orderly transaction between market participants. In determining fair value, the Company applies the market approach, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities. The inputs to valuation techniques used to measure fair value are prioritized into a three-level hierarchy. The hierarchy gives the highest priority to quoted prices from sources independent of the reporting entity (“observable inputs”) and the lowest priority to prices determined by the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). The fair value hierarchy is as follows:

Level 1—Valuations that are based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Valuations that are based on observable inputs (other than Level 1 prices) such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3—Unobservable inputs that are supported by little or no market activity. The unobservable inputs represent the Company’s best assumption of how market participants would price the assets or liabilities.

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis, classified by the valuation hierarchy as of June 30, 2016 and December 31, 2015 (dollars in thousands):

	June 30, 2016
	Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed Maturity Securities:
U.S. Government obligations	$	5,817	$	—	$	5,817	$	—
State and local government	11,467		—		11,467		—
Corporate debt	34,994		—		34,994		—
Commercial mortgage-backed and other asset-backed	60,191		—		60,191		—
Total fixed maturity securities	112,469		—		112,469		—
Equity Securities, common stock	4,443		4,443		—		—
Short-term investments	16,304		16,304		—		—
Total assets measured at fair value	$	133,216	$	20,747	$	112,469	$	—
Liabilities:
Senior debt*	$	14,750	$	—	$	14,750	$	—
Total Liabilities measured at fair value	$	14,750	$	—	$	14,750	$	—

 * Carried at cost or amortized cost on the consolidated balance sheet

	December 31, 2015
	Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed Maturity Securities:
U.S. Government obligations	$	5,508	$	—	$	5,508	$	—
State and local government	14,783		—		14,783		—
Corporate debt	38,784		—		38,784		—
Commercial mortgage-backed and other asset-backed	48,018		—		48,018		—
Total fixed maturity securities	107,093		—		107,093		—
Equity Securities, common stock	4,240		4,240		—		—
Short-term investments	6,391		6,391		—		—
Total assets measured at fair value	$	117,724	$	10,631	$	107,093	$	—
Liabilities:
Senior debt*	$	12,750	$	—	$	12,750	$	—
Total Liabilities measured at fair value	$	12,750	$	—	$	12,750	$	—

 * Carried at cost or amortized cost on the consolidated balance sheet

Level 1 investments consist of equity securities traded in an active exchange market. The Company uses unadjusted quoted prices for identical instruments to measure fair value. Level 1 also includes money market funds and other interest-bearing deposits at banks, which are reported as short-term investments. The fair value measurements that were based on Level 1 inputs comprise 15.6% of the fair value of the total investment portfolio as of June 30, 2016.

Level 2 investments include fixed maturity securities, which consist of U.S. government agency securities, state and local municipal bonds (including those held as restricted securities), corporate debt securities, mortgage-backed and asset-backed securities. The fair value of securities included in the Level 2 category were based on the market values obtained from a third party pricing service that were evaluated using pricing models that vary by asset class and incorporate available trade, bid and other observable market information. The third party pricing service monitors market indicators, as well as industry and economic events. The fair value measurements that were based on Level 2 inputs comprise 84.4% of the fair value of the total investment portfolio as of June 30, 2016.

 The Company obtains pricing for each security from independent pricing services, investment managers or consultants to assist in determining fair value for its Level 2 investments. To validate that these quoted prices are reasonable estimates of fair value, the Company performs various quantitative and qualitative procedures, such as (i) evaluation of the underlying methodologies, (ii) analysis of recent sales activity, (iii) analytical review of our fair values against current market prices and (iv) comparison of the pricing services’ fair value to other pricing services’ fair value for the same investment. No markets for the investments were determined to be inactive at period-ends. Based on these procedures, the Company did not adjust the prices or quotes provided from independent pricing services, investment managers or consultants.

The Level 2 financial instruments also include our senior debt. The fair value of borrowings under the senior debt, consisting of the revolving credit facility and term loans, approximates its carrying amount because interest is based on a short-term, variable, market-based rate.

 The Company’s policy on recognizing transfers between hierarchy levels is applied at the end of each reporting period. There were no transfers between Levels 1, 2 and 3 for the six months ended June 30, 2016 and 2015, respectively.

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Deferred Policy Acquisition Costs

6 Months Ended

Jun. 30, 2016

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Policy Acquisition Costs

Deferred Policy Acquisition Costs

The Company defers costs incurred which are incremental and directly related to the successful acquisition of new or renewal insurance business, net of corresponding amounts of ceded reinsurance commissions. Net deferred policy acquisition costs are amortized and charged to expense in proportion to premium earned over the estimated policy term. The Company anticipates that its deferred policy acquisition costs will be fully recoverable and there were no premium deficiencies for the three and six months ended June 30, 2016 and 2015. The activity in deferred policy acquisition costs, net of reinsurance transactions, is as follows (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Balance at beginning of period	$	12,221		$	6,120		$	12,102		$	5,679
Deferred policy acquisition costs	6,975			4,178			13,097			7,214
Amortization of policy acquisition costs	(6,014		)	(2,639		)	(12,017		)	(5,234		)
Net change	961			1,539			1,080			1,980
Balance at end of period	$	13,182		$	7,659		$	13,182		$	7,659

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Unpaid Losses and Loss Adjustment Expenses

6 Months Ended

Jun. 30, 2016

Insurance Loss Reserves [Abstract]

Unpaid Losses and Loss Adjustment Expenses

Unpaid Losses and Loss Adjustment Expenses

The Company establishes reserves for unpaid losses and loss adjustment expenses ("LAE") which represent the estimated ultimate cost of all losses incurred that were both reported and unreported (i.e., incurred but not yet reported losses; or “IBNR”) and LAE incurred that remain unpaid at the balance sheet date. The Company’s reserving process takes into account known facts and interpretations of circumstances and factors including the Company’s experience with similar cases, actual claims paid, historical trends involving claim payment patterns and pending levels of unpaid claims, loss management programs, product mix and contractual terms, changes in law and regulation, judicial decisions, and economic conditions. In the normal course of business, the Company may also supplement its claims processes by utilizing third party adjusters, appraisers, engineers, inspectors, and other professionals and information sources to assess and settle catastrophe and non-catastrophe related claims. The effects of inflation are implicitly considered in the reserving process.

Reserves are estimates of unpaid portions of losses that have occurred, including IBNR losses; therefore the establishment of appropriate reserves is an inherently uncertain and complex process. The ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates. The highest degree of uncertainty is associated with reserves for losses incurred in the current reporting period as it contains the greatest proportion of losses that have not been reported or settled. The Company regularly updates its reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in reserve estimates, which may be material, are reported in the results of operations in the period such changes are determined to be needed and recorded.

Management believes that the reserve for losses and LAE, net of reinsurance recoverables, is appropriately established in the aggregate and adequate to cover the ultimate net cost of reported and unreported claims arising from losses which had occurred by the date of the consolidated financial statements based on available facts and in accordance with applicable laws and regulations.

The table below provides the changes in the reserves for losses and LAE, net of reinsurance recoverables, for the periods indicated as follows (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Gross reserves - beginning of period	$	38,488	$	32,987	$	35,422	$	31,531
Less: reinsurance recoverables on unpaid losses	5,015		4,590		5,405		3,224
Net reserves - beginning of period	33,473		28,397		30,017		28,307
Add: incurred losses and LAE, net of reinsurance:
Current period	12,034		8,805		23,146		17,340
Prior period	1,507		171		3,094		206
Total net incurred losses and LAE	13,541		8,976		26,240		17,546
Deduct: loss and LAE payments, net of reinsurance:
Current period	5,793		5,029		7,792		6,794
Prior period	5,279		5,009		12,523		11,724
Total net loss and LAE payments	11,072		10,038		20,315		18,518
Net reserves - end of period	35,942		27,335		35,942		27,335
Plus: reinsurance recoverables on unpaid losses	5,890		5,022		5,890		5,022
Gross reserves - end of period	$	41,832	$	32,357	$	41,832	$	32,357

The Company’s incurred losses during the three and six months ended June 30, 2016 include prior-year adverse reserve development of $1.5 million and $3.1 million, respectively. In the second quarter of 2016, there was $695,000 and $613,000 of adverse development in the Florida homeowners and commercial automobile lines, respectively. For the six months ended June 30, 2016, there was adverse development of $1.5 million from the Florida homeowners line and $1.5 million from the commercial automobile line.

The Company’s incurred losses during the three and six months ended June 30, 2015, reflect prior-year adverse reserve development of $171,000 and $206,000, respectively. In the second quarter of 2015, there was $340,000 and $262,000 of adverse development in the commercial and personal automobile lines, respectively. This adverse development was partially offset by favorable reserve development in other lines, including $270,000 and $95,000 of favorable reserve development in the commercial multi-peril and other liability lines, respectively. For the six months ended June 30, 2015, there was a similar result, with the adverse development being generated by the commercial and personal automobile lines of $535,000 and $331,000, respectively. This adverse development was partially offset by favorable development in other lines, including $274,000, $136,000 and $248,000 in the commercial multi-peril, other liability and workers' compensation lines, respectively.

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Reinsurance

6 Months Ended

Jun. 30, 2016

Reinsurance Disclosures [Abstract]

Reinsurance

Reinsurance

In the normal course of business, the Company seeks to minimize the loss that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk in various areas of exposure with reinsurers. The Company participates in reinsurance agreements in order to limit its loss exposure including protecting against catastrophe losses. The Company primarily ceded all specific risks in excess of $500,000 in both 2016 and 2015. Reinsurance does not discharge the direct insurer from liability to its policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors the concentration of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. To date, the Company has not experienced any significant difficulties in collecting reinsurance recoverables.

The Company assumes written premiums under a few fronting arrangements, most of which are net of other reinsurance arrangements. The fronting arrangements are with unaffiliated insurers who write on behalf of the Company in markets that require a higher A.M. Best rating than the Company’s rating, or where the policies are written in a state where the Company is not licensed or for other strategic reasons. Assumed premiums is comprised entirely of these arrangements other than where there are premiums assumed from Citizens Property and Casualty Corporation (“Citizens”).

The following table presents the effects of such reinsurance and assumption transactions on premiums, and losses and LAE (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Written premiums:
Direct	$	22,533		$	21,510		$	44,133		$	42,629
Assumed	7,192			1,549			10,985			1,634
Ceded	(3,549		)	(7,117		)	(6,892		)	(14,655		)
Net written premiums	$	26,176		$	15,942		$	48,226		$	29,608
Earned premiums:
Direct	$	22,574		$	20,050		$	44,815		$	39,351
Assumed	2,684			2,137			3,989			3,810
Ceded	(3,583		)	(7,072		)	(7,020		)	(13,553		)
Net earned premiums	$	21,675		$	15,115		$	41,784		$	29,608
Losses and LAE:
Direct	$	13,905		$	10,622		$	27,844		$	20,544
Assumed	1,447			281			2,356			805
Ceded	(1,811		)	(1,927		)	(3,960		)	(3,803		)
Net Losses and LAE	$	13,541		$	8,976		$	26,240		$	17,546

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Senior Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Senior Debt

Senior Debt

The Company's senior debt facility ("Credit Facility") is comprised of three notes: a $17.5 million revolving line of credit ("Revolver") which was scheduled to expire on August 1, 2016 ; a $5.0 millionfive-year term note ("Term Note") which commenced in October 2013; and a $7.5 millionfive-year term note which commenced in September 2014 ("2014 Term Note"). Management is in the process of renewing the Revolver and on July 21, 2016, the expiration date was extended until October 1, 2016. A summary of the outstanding senior debt is as follows (dollars in thousands):

	June 30, 2016		December 31, 2015
Revolver	$	6,500	$	3,500
Term Note	2,250		2,750
2014 Term Note	6,000		6,500
Total	$	14,750	$	12,750

The undrawn portion of the Revolver was $11.0 million as of June 30, 2016, and was available to finance working capital, fund other general corporate purposes and provide surplus contributions to the Company's Insurance Company Subsidiaries to support premium growth or strategic acquisitions.

The Credit Facility contains various restrictive covenants that relate to the Company’s shareholders’ equity, premiums-to-capital and surplus ratios, fixed-charge coverage ratio, risk-based capital ratios, and A.M. Best ratings of its Insurance Company Subsidiaries. At June 30, 2016, the Company was in compliance with all of its Credit Facility financial covenants.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

On February 25, 2016, the Company's Board of Directors authorized a stock repurchase program, under which the Company may repurchase up to $2.1 million of its outstanding common stock over a one-year period. Under this program, management is authorized to repurchase shares at prevailing market prices through open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended. The actual timing, number and value of shares repurchased under the program will be determined by management in its discretion and will depend on a number of factors, including the market price of the Company’s stock, general market conditions, and other factors. Repurchases may be made from time to time, without prior notice. The Company may suspend or discontinue the program at any time. As of June 30, 2016, the Company had repurchased and retired 66,663 shares of stock valued at approximately $451,000.

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Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

 The following table presents changes in accumulated other comprehensive income (loss) for unrealized gains and losses on available-for-sale securities (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Balance at beginning of period	$	1,724		$	1,644		$	182		$	1,158
Other comprehensive income before reclassifications	(308		)	(977		)	1,151			(274		)
Less: amounts reclassified from accumulated other comprehensive income (loss)	(88		)	208			(171		)	425
Net current period other comprehensive income (loss)	(220		)	(1,185		)	1,322			(699		)
Balance at end of period	$	1,504		$	459		$	1,504		$	459

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Earnings Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

EarningsPer Share

 Basic and diluted earnings (loss) per share are computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding during the period. The dividends on preferred stock and other gains are deducted from the net income to arrive at net income allocable to common shareholders. In the period of a net loss, the dividends on preferred stock are added to the net loss to arrive at net loss allocable to common shareholders. The following table presents the calculation of basic and diluted earnings (loss) per common share, as follows (dollars in thousands, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
Net income (loss) attributable to Conifer	$	(513	)	$	579	$	(2,541	)	$	1,042
Preferred stock dividends	—			151		—			303
Paid-in-kind dividends	—			62		—			123
Net income (loss) allocable to common shareholders	$	(513	)	$	366	$	(2,541	)	$	616
Weighted average common shares, basic and diluted*	7,594,862			4,050,042		7,616,821			4,045,482
Earnings (loss) per share allocable to common, basic and diluted	$	(0.07	)	$	0.09	$	(0.33	)	$	0.15

* The nonvested shares of the restricted stock units were anti-dilutive as of June 30, 2016. Therefore, the basic and diluted weighted average common shares are equal for the three and six months ended June 30, 2016.

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Stock-based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

Stock-based Compensation

In 2015, the Company issued 390,352 restricted stock units (“RSU”) to executive officers and other employees to be settled in shares of common stock. The total RSUs were valued at $4.1 million on the date of grant. The Company recorded $204,000 and $409,000 of compensation expense related to the RSUs for the three and six months ended June 30, 2016, respectively. The total compensation cost related to the non-vested portion of the restricted stock units which has not been recognized as of June 30, 2016 was $3.4 million.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal proceedings

The Company and its subsidiaries are subject at times to various claims, lawsuits and proceedings relating principally to alleged errors or omissions in the placement of insurance, claims administration, and other business transactions arising in the ordinary course of business. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Most of the claims, lawsuits and proceedings arising in the ordinary course of business are covered by the insurance policy at issue. On the basis of current information, the Company does not believe that there is a reasonable possibility that any material loss exceeding amounts already accrued, if any, will result from any of the claims, lawsuits and proceedings to which the Company is subject, either individually, or in the aggregate.

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Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company is engaged in the sale of property and casualty insurance products and has organized its principal operations into two types of insurance businesses: commercial lines and personal lines. Within these two insurance businesses, the Company offers various insurance products. Such insurance businesses are engaged in underwriting and marketing insurance coverages, and administering claims processing for such policies.

The Company defines its operating segments as components of the business where separate financial information is available and used by the chief operating decision maker in deciding how to allocate resources to its segments and in assessing its performance. In assessing performance of its operating segments, the Company’s chief operating decision maker, the Chief Executive Officer, reviews a number of financial measures including gross written premiums, net earned premiums, losses and LAE, net of reinsurance recoveries. The primary measure used for making decisions about resources to be allocated to an operating segment and assessing performance is segment underwriting gain or loss which is defined as segment revenues, consisting of net earned premiums and other income, less segment expenses, consisting of losses and LAE, policy acquisition costs and other underwriting and operating expenses of the operating segments. Other underwriting and operating expenses primarily include compensation and related benefits for underwriting personnel, licensing of policy issuance and claims systems, rent and utilities. The Company markets, distributes and sells its insurance products through its own insurance agencies and a network of independent agents. All of the Company’s insurance activities are conducted in the United States with a concentration of activity in Florida, Michigan, Pennsylvania and Texas. For the six months ended June 30, 2016 and 2015, gross written premiums attributable to these four states were 70% and 69%, respectively, of the Company’s total gross written premiums.

 In addition to the reportable segments, the Company maintains a Corporate and Other category to reconcile segment results to the consolidated totals. The Corporate and Other category includes: (i) corporate operating expenses such as salaries and related benefits of the Company’s executive management team and finance and information technology personnel, and other corporate headquarters expenses, (ii) interest expense on the Company’s senior debt obligations; (iii) depreciation and amortization on property and equipment, and (iv) all investment income activity. All investment income activity is reported within net investment income and net realized investment gains on the consolidated statements of operations. The Company’s assets on the consolidated balance sheet are not allocated to the reportable segments.

The Company redefined its operating segments during the quarter ended June 30, 2016 and recast the segment information for the three and six months ended June 30, 2016 in a manner consistent with the new operational management structure. The segment information for the three and six months ended June 30, 2015, has also been recast to be consistent with the new format.

The following tables present information by reportable segment (dollars in thousands):

Three Months Ended June 30, 2016	Commercial Lines		Personal Lines			Corporate & Other			Total
Gross written premiums	$	22,821	$	6,904		$	—		$	29,725
Net written premiums	$	20,548	$	5,628		$	—		$	26,176
Net earned premiums	$	16,484	$	5,191		$	—		$	21,675
Other income	83		187			13			283
Segment revenue	16,567		5,378			13			21,958
Losses and loss adjustment expenses, net	9,344		4,197			—			13,541
Policy acquisition costs	4,366		1,648			—			6,014
Operating expenses	1,610		766			2,160			4,536
Segment expenses	15,320		6,611			2,160			24,091
Segment underwritinggain (loss)	$	1,247	$	(1,233	)	$	(2,147	)	$	(2,133	)
Investment income						528			528
Net realized investment gains (losses)						541			541
Interest expense						(143		)	(143		)
Income (loss) before equity earnings of affiliates and income taxes						$	(1,221	)	$	(1,207	)

Three Months Ended June 30, 2015	Commercial Lines		Personal Lines		Corporate & Other			Total
Gross written premiums	$	18,326	$	4,733	$	—		$	23,059
Net written premiums	$	12,524	$	3,418	$	—		$	15,942
Net earned premiums	$	10,670	$	4,445	$	—		$	15,115
Other income	325		108		47			480
Segment revenue	10,995		4,553		47			15,595
Losses and loss adjustment expenses, net	5,477		3,499		—			8,976
Policy acquisition costs	1,917		722		—			2,639
Operating expenses	1,211		210		2,198			3,619
Segment expenses	8,605		4,431		2,198			15,234
Segment underwritinggain (loss)	$	2,390	$	122	$	(2,151	)	$	361
Investment income					469			469
Net realized investment gains (losses)					87			87
Interest expense					(239		)	(239		)
Income (loss) before equity earnings of affiliates and income taxes					$	(1,834	)	$	678

Six Months Ended June 30, 2016	Commercial Lines		Personal Lines			Corporate & Other			Total
Gross written premiums	$	41,965	$	13,153		$	—		$	55,118
Net written premiums	$	37,536	$	10,690		$	—		$	48,226
Net earned premiums	$	31,763	$	10,021		$	—		$	41,784
Other income	182		318			28			528
Segment revenue	31,945		10,339			28			42,312
Losses and loss adjustment expenses, net	17,980		8,260			—			26,240
Policy acquisition costs	8,752		3,265			—			12,017
Operating expenses	3,344		1,435			3,896			8,675
Segment expenses	30,076		12,960			3,896			46,932
Segment underwritinggain (loss)	$	1,869	$	(2,621	)	$	(3,868	)	$	(4,620	)
Investment income						1,065			1,065
Net realized investment gains (losses)						533			533
Interest expense						(300		)	(300		)
Income (loss) before equity earnings of affiliates and income taxes						$	(2,570	)	$	(3,322	)

Six Months Ended June 30, 2015	Commercial Lines		Personal Lines		Corporate & Other			Total
Gross written premiums	$	34,068	$	10,195	$	—		$	44,263
Net written premiums	$	22,378	$	7,230	$	—		$	29,608
Net earned premiums	$	20,158	$	9,450	$	—		$	29,608
Other income	674		236		59			969
Segment revenue	20,832		9,686		59			30,577
Losses and loss adjustment expenses, net	10,794		6,752		—			17,546
Policy acquisition costs	3,655		1,579		—			5,234
Operating expenses	2,683		623		4,005			7,311
Segment expenses	17,132		8,954		4,005			30,091
Segment underwritinggain (loss)	$	3,700	$	732	$	(3,946	)	$	486
Investment income					955			955
Net realized investment gains (losses)					232			232
Interest expense					(483		)	(483		)
Income (loss) before equity earnings of affiliates and income taxes					$	(3,242	)	$	1,190

The Company discontinued offering non-standard personal automobile policies in the first half of 2015, but will continue to pay claims and perform other administrative services as needed until the run-off of the claims on such policies is complete. No premiums were written or earned in the non-standard personal automobile line in 2016. The decision to stop writing non-standard personal automobile policies was the result of the Company’s change in strategic positioning and its desire to increase its personal homeowners product line and pursue existing commercial line opportunities.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

 The consolidated financial statements include accounts, after elimination of intercompany accounts and transactions, of Conifer Holdings, Inc. (the “Company” or “Conifer”), its wholly owned subsidiaries Conifer Insurance Company ("CIC"), White Pine Insurance Company ("WPIC"), Red Cedar Insurance Company ("RCIC"), American Colonial Insurance Company ("ACIC"), American Colonial Insurance Services ("ACIS") and Sycamore Insurance Agency, Inc ("SIA"). CIC, WPIC, RCIC and ACIC are collectively referred to as the "Insurance Company Subsidiaries." On a stand-alone basis Conifer Holdings, Inc. is referred to as the "Parent Company."

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), which differ from statutory accounting practices prescribed or permitted for insurance companies by regulatory authorities. The Company has applied the applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting and therefore the consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments, consisting of items of a normal recurring nature, necessary for a fair presentation of the consolidated interim financial statements, have been included. The results of operations for the six months ended June 30, 2016, are not necessarily indicative of the results expected for the year ended December 31, 2016.

These consolidated financial statements and the notes thereto should be read in conjunction with the Company's audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 15, 2016 ("2015 Audited Financial Statements").

Principles of Consolidation

Principles of Consolidation

Prior to September 30, 2015, the consolidated financial statements included the accounts of Conifer Holdings, Inc. and its wholly owned subsidiaries, as well as a 50%-owned affiliate (the “Affiliate”) which the Company controlled due to its majority representation on the entity’s board of directors. Noncontrolling interest in a consolidated subsidiary in the consolidated balance sheets represents the noncontrolling shareholder’s proportionate share of the entity’s equity. Consolidated net income or loss is allocated to the Company and noncontrolling interest in proportion to their percentage ownership interests. As of September 30, 2015, the Company no longer controlled the Affiliate but retained significant influence. As a result the entity

was deconsolidated from the consolidated financial statements and recognized as an investment in an affiliate utilizing the equity method of accounting. All intercompany transactions and accounts were eliminated.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While management believes the amounts included in the consolidated financial statements reflect management's best estimates and assumptions, actual results may differ from these estimates.

Recently Issued Accounting Guidance

Recently Issued Accounting Guidance

In May 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-09, Disclosures about Short-Duration Contracts (Topic 944), which enhances disclosure requirements for insurance entities with short-duration insurance contracts. The enhanced disclosures under the new guidance will be provided by the Company for the year ended December 31, 2016, as required.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update modify the requirements related to the measurement of certain financial instruments in the statement of financial condition and results of operation. For equity investments (other than investments accounted for using the equity method), entities must measure such instruments at fair value with changes in fair value recognized in net income. Reporting entities may continue to elect to measure equity investments which do not have a readily determinable fair value at cost with adjustments for impairment and observable changes in price. In addition, for a liability (other than a derivative liability) that an entity measures at fair value, any change in fair value related to the instrument-specific credit risk, that is the entity’s own-credit, should be presented separately in other comprehensive income and not as a component of net income. The amendments are effective for the Company on January 1, 2018, with early adoption permitted solely for the instrument-instrument specific credit risk for liabilities measured at fair value. The amendments must be applied on a modified retrospective basis with a cumulative effect adjustment as of the beginning of the fiscal year of initial adoption. Management is currently evaluating the impact of the guidance.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which addresses the financial reporting of leasing transactions. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the consolidated statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the consolidated statement of operations and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the consolidated statement of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. We have not yet completed the analysis of how adopting this guidance will affect our financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which amends the current methodology and timing for recognizing credit losses. This amendment will replace the current GAAP "incurred loss" methodology for credit losses with a methodology based on expected credit losses. The new guidance will also require expanded consideration of a broader range of reasonable and increased supportable information for the credit loss estimates. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted for years beginning after December 15, 2018. We have not yet completed the analysis of how adopting this guidance will affect our financial statements.

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Investments (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities

The cost or amortized cost, gross unrealized gain or loss, and estimated fair value of the investments in securities classified as available-for-sale at June 30, 2016 and December 31, 2015 were as follows (dollars in thousands):

	June 30, 2016
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Fixed Maturity Securities:
U.S. Government obligations	$	5,737	$	80	$	—		$	5,817
State and local government	10,917		551		(1		)	11,467
Corporate debt	34,574		479		(59		)	34,994
Commercial mortgage-backed and other asset-backed	59,591		614		(14		)	60,191
Total fixed maturity securities available for sale	110,819		1,724		(74		)	112,469
Equity Securities:
Common stocks - Public Utilities	220		64		(2		)	282
Common stocks - Banks, Trusts and Insurance Companies	458		151		(3		)	606
Common stocks - Industrial, miscellaneous and all other	2,643		942		(30		)	3,555
Total equity securities available for sale	3,321		1,157		(35		)	4,443
Total securities available for sale	$	114,140	$	2,881	$	(109	)	$	116,912

	December 31, 2015
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Fixed Maturity Securities:
U.S. Government obligations	$	5,474	$	47	$	(13	)	$	5,508
State and local government	14,391		398		(6		)	14,783
Corporate debt	39,183		84		(483		)	38,784
Commercial mortgage-backed and other asset-backed	48,165		164		(311		)	48,018
Total fixed maturity securities available for sale	107,213		693		(813		)	107,093
Equity Securities:
Common stocks - Public Utilities	122		20		(1		)	141
Common stocks - Banks, Trusts and Insurance Companies	503		150		(7		)	646
Common stocks - Industrial, miscellaneous and all other	2,716		836		(99		)	3,453
Total equity securities available for sale	3,341		1,006		(107		)	4,240
Total securities available for sale	$	110,554	$	1,699	$	(920	)	$	111,333

Schedule of Unrealized Loss Positions

The following table summarizes the aggregate fair value and gross unrealized losses, by security type, of the available-for-sale securities in unrealized loss positions. The table segregates the holdings based on the length of time that individual securities have been in a continuous unrealized loss position, as follows (dollars in thousands): 

	June 30, 2016
	Less than 12 months						Greater than 12 months						Total
	# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Valueof Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses
Fixed Maturity Securities:
U.S. Government obligations	—	$	—	$	—		—	$	—	$	—		—	$	—	$	—
State and local government	1	118		(1		)	—	—		—			1	118		(1		)
Corporate debt	7	3,104		(17		)	15	5,127		(42		)	22	8,231		(59		)
Commercial mortgage and asset-backed	14	8,779		(11		)	5	1,324		(3		)	19	10,103		(14		)
Total fixed maturity securities available for sale	22	12,001		(29		)	20	6,451		(45		)	42	18,452		(74		)
Equity Securities:
Common stock	47	457		(22		)	4	133		(13		)	51	590		(35		)
Total equity securities available for sale	47	457		(22		)	4	133		(13		)	51	590		(35		)
Total securities	69	$	12,458	$	(51	)	24	$	6,584	$	(58	)	93	$	19,042	$	(109	)

	December 31, 2015
	Less than 12 months						Greater than 12 months						Total
	# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Valueof Investments with Unrealized Losses		Gross Un realized Losses			# of Issues	Fair Value of Investments with Unrealized Losses		Gross Un realized Losses
Fixed Maturity Securities:
U.S. Government obligations	7	$	2,580	$	(7	)	2	$	679	$	(6	)	9	$	3,259	$	(13	)
State and local government	8	2,688		(6		)	—	—		—			8	2,688		(6		)
Corporate debt	80	21,760		(438		)	12	3,618		(45		)	92	25,378		(483		)
Commercial mortgage and asset-backed	67	32,539		(258		)	5	2,175		(53		)	72	34,714		(311		)
Total fixed maturity securities available for sale	162	59,567		(709		)	19	6,472		(104		)	181	66,039		(813		)
Equity Securities:
Common stock	86	782		(72		)	3	79		(35		)	89	861		(107		)
Total equity securities available for sale	86	782		(72		)	3	79		(35		)	89	861		(107		)
Total securities	248	$	60,349	$	(781	)	22	$	6,551	$	(139	)	270	$	66,900	$	(920	)

Schedule of Investment Income

The Company’s sources of net investment income are as follows (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Fixed maturity securities	$	570		$	532		$	1,156		$	1,063
Equity securities	25			22			51			45
Cash and short-term investments	5			2			7			4
Total investment income	600			556			1,214			1,112
Investment expenses	(72		)	(87		)	(149		)	(157		)
Net investment income	$	528		$	469		$	1,065		$	955

Schedule of Gross Realized Gains and Losses on Securities

The following table summarizes the gross realized gains and losses from sales or maturities of available-for-sale fixed maturity and equity securities (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Fixed maturity securities:
Gross realized gains	$	502		$	—		$	518		$	68
Gross realized losses	(16		)	(1		)	(22		)	(4		)
Total fixed maturity securities	486			(1		)	496			64
Equity securities:
Gross realized gains	94			104			150			203
Gross realized losses	(39		)	(16		)	(113		)	(35		)
Total equity securities	55			88			37			168
Total realized gains (losses)	$	541		$	87		$	533		$	232

Summary of Amortized Cost and Fair Value of Securities

The table below summarizes the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at June 30, 2016. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties (dollars in thousands):

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	7,779	$	7,784
Due after one year through five years	30,636		31,052
Due after five years through ten years	6,529		6,941
Due after ten years	6,284		6,501
Securities with contractual maturities	51,228		52,278
Commercial mortgage and asset backed	59,591		60,191
Total Fixed maturity securities	$	110,819	$	112,469

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis, classified by the valuation hierarchy as of June 30, 2016 and December 31, 2015 (dollars in thousands):

	June 30, 2016
	Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed Maturity Securities:
U.S. Government obligations	$	5,817	$	—	$	5,817	$	—
State and local government	11,467		—		11,467		—
Corporate debt	34,994		—		34,994		—
Commercial mortgage-backed and other asset-backed	60,191		—		60,191		—
Total fixed maturity securities	112,469		—		112,469		—
Equity Securities, common stock	4,443		4,443		—		—
Short-term investments	16,304		16,304		—		—
Total assets measured at fair value	$	133,216	$	20,747	$	112,469	$	—
Liabilities:
Senior debt*	$	14,750	$	—	$	14,750	$	—
Total Liabilities measured at fair value	$	14,750	$	—	$	14,750	$	—

 * Carried at cost or amortized cost on the consolidated balance sheet

	December 31, 2015
	Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed Maturity Securities:
U.S. Government obligations	$	5,508	$	—	$	5,508	$	—
State and local government	14,783		—		14,783		—
Corporate debt	38,784		—		38,784		—
Commercial mortgage-backed and other asset-backed	48,018		—		48,018		—
Total fixed maturity securities	107,093		—		107,093		—
Equity Securities, common stock	4,240		4,240		—		—
Short-term investments	6,391		6,391		—		—
Total assets measured at fair value	$	117,724	$	10,631	$	107,093	$	—
Liabilities:
Senior debt*	$	12,750	$	—	$	12,750	$	—
Total Liabilities measured at fair value	$	12,750	$	—	$	12,750	$	—

 * Carried at cost or amortized cost on the consolidated balance sheet

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Deferred Policy Acquisition Costs (Tables)

6 Months Ended

Jun. 30, 2016

Deferred Policy Acquisition Costs Disclosures [Abstract]

Summary of Deferred Policy Acquisition Costs

The activity in deferred policy acquisition costs, net of reinsurance transactions, is as follows (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Balance at beginning of period	$	12,221		$	6,120		$	12,102		$	5,679
Deferred policy acquisition costs	6,975			4,178			13,097			7,214
Amortization of policy acquisition costs	(6,014		)	(2,639		)	(12,017		)	(5,234		)
Net change	961			1,539			1,080			1,980
Balance at end of period	$	13,182		$	7,659		$	13,182		$	7,659

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Unpaid Losses and Loss Adjustment Expenses (Tables)

6 Months Ended

Jun. 30, 2016

Insurance Loss Reserves [Abstract]

Schedule of the Changes in the Reserves for Losses and Loss Adjustment Expense

The table below provides the changes in the reserves for losses and LAE, net of reinsurance recoverables, for the periods indicated as follows (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Gross reserves - beginning of period	$	38,488	$	32,987	$	35,422	$	31,531
Less: reinsurance recoverables on unpaid losses	5,015		4,590		5,405		3,224
Net reserves - beginning of period	33,473		28,397		30,017		28,307
Add: incurred losses and LAE, net of reinsurance:
Current period	12,034		8,805		23,146		17,340
Prior period	1,507		171		3,094		206
Total net incurred losses and LAE	13,541		8,976		26,240		17,546
Deduct: loss and LAE payments, net of reinsurance:
Current period	5,793		5,029		7,792		6,794
Prior period	5,279		5,009		12,523		11,724
Total net loss and LAE payments	11,072		10,038		20,315		18,518
Net reserves - end of period	35,942		27,335		35,942		27,335
Plus: reinsurance recoverables on unpaid losses	5,890		5,022		5,890		5,022
Gross reserves - end of period	$	41,832	$	32,357	$	41,832	$	32,357

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Reinsurance (Tables)

6 Months Ended

Jun. 30, 2016

Reinsurance Disclosures [Abstract]

Summary of the Effects of Reinsurance

The following table presents the effects of such reinsurance and assumption transactions on premiums, and losses and LAE (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Written premiums:
Direct	$	22,533		$	21,510		$	44,133		$	42,629
Assumed	7,192			1,549			10,985			1,634
Ceded	(3,549		)	(7,117		)	(6,892		)	(14,655		)
Net written premiums	$	26,176		$	15,942		$	48,226		$	29,608
Earned premiums:
Direct	$	22,574		$	20,050		$	44,815		$	39,351
Assumed	2,684			2,137			3,989			3,810
Ceded	(3,583		)	(7,072		)	(7,020		)	(13,553		)
Net earned premiums	$	21,675		$	15,115		$	41,784		$	29,608
Losses and LAE:
Direct	$	13,905		$	10,622		$	27,844		$	20,544
Assumed	1,447			281			2,356			805
Ceded	(1,811		)	(1,927		)	(3,960		)	(3,803		)
Net Losses and LAE	$	13,541		$	8,976		$	26,240		$	17,546

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Senior Debt (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of Outstanding Senior Debt

A summary of the outstanding senior debt is as follows (dollars in thousands):

	June 30, 2016		December 31, 2015
Revolver	$	6,500	$	3,500
Term Note	2,250		2,750
2014 Term Note	6,000		6,500
Total	$	14,750	$	12,750

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Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income (loss) for unrealized gains and losses on available-for-sale securities (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Balance at beginning of period	$	1,724		$	1,644		$	182		$	1,158
Other comprehensive income before reclassifications	(308		)	(977		)	1,151			(274		)
Less: amounts reclassified from accumulated other comprehensive income (loss)	(88		)	208			(171		)	425
Net current period other comprehensive income (loss)	(220		)	(1,185		)	1,322			(699		)
Balance at end of period	$	1,504		$	459		$	1,504		$	459

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The following table presents the calculation of basic and diluted earnings (loss) per common share, as follows (dollars in thousands, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
Net income (loss) attributable to Conifer	$	(513	)	$	579	$	(2,541	)	$	1,042
Preferred stock dividends	—			151		—			303
Paid-in-kind dividends	—			62		—			123
Net income (loss) allocable to common shareholders	$	(513	)	$	366	$	(2,541	)	$	616
Weighted average common shares, basic and diluted*	7,594,862			4,050,042		7,616,821			4,045,482
Earnings (loss) per share allocable to common, basic and diluted	$	(0.07	)	$	0.09	$	(0.33	)	$	0.15

* The nonvested shares of the restricted stock units were anti-dilutive as of June 30, 2016. Therefore, the basic and diluted weighted average common shares are equal for the three and six months ended June 30, 2016.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

The following tables present information by reportable segment (dollars in thousands):

Three Months Ended June 30, 2016	Commercial Lines		Personal Lines			Corporate & Other			Total
Gross written premiums	$	22,821	$	6,904		$	—		$	29,725
Net written premiums	$	20,548	$	5,628		$	—		$	26,176
Net earned premiums	$	16,484	$	5,191		$	—		$	21,675
Other income	83		187			13			283
Segment revenue	16,567		5,378			13			21,958
Losses and loss adjustment expenses, net	9,344		4,197			—			13,541
Policy acquisition costs	4,366		1,648			—			6,014
Operating expenses	1,610		766			2,160			4,536
Segment expenses	15,320		6,611			2,160			24,091
Segment underwritinggain (loss)	$	1,247	$	(1,233	)	$	(2,147	)	$	(2,133	)
Investment income						528			528
Net realized investment gains (losses)						541			541
Interest expense						(143		)	(143		)
Income (loss) before equity earnings of affiliates and income taxes						$	(1,221	)	$	(1,207	)

Three Months Ended June 30, 2015	Commercial Lines		Personal Lines		Corporate & Other			Total
Gross written premiums	$	18,326	$	4,733	$	—		$	23,059
Net written premiums	$	12,524	$	3,418	$	—		$	15,942
Net earned premiums	$	10,670	$	4,445	$	—		$	15,115
Other income	325		108		47			480
Segment revenue	10,995		4,553		47			15,595
Losses and loss adjustment expenses, net	5,477		3,499		—			8,976
Policy acquisition costs	1,917		722		—			2,639
Operating expenses	1,211		210		2,198			3,619
Segment expenses	8,605		4,431		2,198			15,234
Segment underwritinggain (loss)	$	2,390	$	122	$	(2,151	)	$	361
Investment income					469			469
Net realized investment gains (losses)					87			87
Interest expense					(239		)	(239		)
Income (loss) before equity earnings of affiliates and income taxes					$	(1,834	)	$	678

Six Months Ended June 30, 2016	Commercial Lines		Personal Lines			Corporate & Other			Total
Gross written premiums	$	41,965	$	13,153		$	—		$	55,118
Net written premiums	$	37,536	$	10,690		$	—		$	48,226
Net earned premiums	$	31,763	$	10,021		$	—		$	41,784
Other income	182		318			28			528
Segment revenue	31,945		10,339			28			42,312
Losses and loss adjustment expenses, net	17,980		8,260			—			26,240
Policy acquisition costs	8,752		3,265			—			12,017
Operating expenses	3,344		1,435			3,896			8,675
Segment expenses	30,076		12,960			3,896			46,932
Segment underwritinggain (loss)	$	1,869	$	(2,621	)	$	(3,868	)	$	(4,620	)
Investment income						1,065			1,065
Net realized investment gains (losses)						533			533
Interest expense						(300		)	(300		)
Income (loss) before equity earnings of affiliates and income taxes						$	(2,570	)	$	(3,322	)

Six Months Ended June 30, 2015	Commercial Lines		Personal Lines		Corporate & Other			Total
Gross written premiums	$	34,068	$	10,195	$	—		$	44,263
Net written premiums	$	22,378	$	7,230	$	—		$	29,608
Net earned premiums	$	20,158	$	9,450	$	—		$	29,608
Other income	674		236		59			969
Segment revenue	20,832		9,686		59			30,577
Losses and loss adjustment expenses, net	10,794		6,752		—			17,546
Policy acquisition costs	3,655		1,579		—			5,234
Operating expenses	2,683		623		4,005			7,311
Segment expenses	17,132		8,954		4,005			30,091
Segment underwritinggain (loss)	$	3,700	$	732	$	(3,946	)	$	486
Investment income					955			955
Net realized investment gains (losses)					232			232
Interest expense					(483		)	(483		)
Income (loss) before equity earnings of affiliates and income taxes					$	(3,242	)	$	1,190

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Summary of Significant Accounting Policies - Narrative (Details)		1 Months Ended	6 Months Ended
	Jul. 22, 2015	Aug. 31, 2015 $ / shares shares	Jun. 30, 2016 state business	Sep. 29, 2015
Class of Stock [Line Items]
Number of operating segments | business			2
Number of states in which entity operates | state			50
Stock split conversion ratio	10.2
Ownership percentage				50.00%
IPO
Class of Stock [Line Items]
Stock issued during period (shares)		3,300,000
Price per share (in dollars per share) | $ / shares		$ 10.50
IPO | Chief Executive Officer
Class of Stock [Line Items]
Stock issued during period (shares)		100,000

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Investments - Narrative (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Proceeds from sale of available for sale securities	$ 21.5	$ 3.9
Deposits held in trust accounts	$ 9.0		$ 8.9

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Investments - Available-for-sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fixed maturity securities, amortized cost	$ 110,819	$ 107,213
Fixed maturity securities, gross unrealized gain	1,724	693
Fixed maturity securities, gross unrealized loss	(74)	(813)
Fixed maturity securities, Estimated Fair Value	112,469	107,093
Equity securities, amortized cost	3,321	3,341
Equity securities, gross unrealized gain	1,157	1,006
Equity securities, gross unrealized loss	(35)	(107)
Equity securities, Estimated Fair Value	4,443	4,240
Securities, cost or amortized cost	114,140	110,554
Securities, gross unrealized gain	2,881	1,699
Securities, gross unrealized loss	(109)	(920)
Securities, Estimated Fair Value	116,912	111,333
U.S. Government obligations
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fixed maturity securities, amortized cost	5,737	5,474
Fixed maturity securities, gross unrealized gain	80	47
Fixed maturity securities, gross unrealized loss	0	(13)
Fixed maturity securities, Estimated Fair Value	5,817	5,508
State and local government
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fixed maturity securities, amortized cost	10,917	14,391
Fixed maturity securities, gross unrealized gain	551	398
Fixed maturity securities, gross unrealized loss	(1)	(6)
Fixed maturity securities, Estimated Fair Value	11,467	14,783
Corporate debt
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fixed maturity securities, amortized cost	34,574	39,183
Fixed maturity securities, gross unrealized gain	479	84
Fixed maturity securities, gross unrealized loss	(59)	(483)
Fixed maturity securities, Estimated Fair Value	34,994	38,784
Commercial mortgage-backed and other asset-backed
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Fixed maturity securities, amortized cost	59,591	48,165
Fixed maturity securities, gross unrealized gain	614	164
Fixed maturity securities, gross unrealized loss	(14)	(311)
Fixed maturity securities, Estimated Fair Value	60,191	48,018
Common stocks - Public Utilities
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Equity securities, amortized cost	220	122
Equity securities, gross unrealized gain	64	20
Equity securities, gross unrealized loss	(2)	(1)
Equity securities, Estimated Fair Value	282	141
Common stocks - Banks, Trusts and Insurance Companies
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Equity securities, amortized cost	458	503
Equity securities, gross unrealized gain	151	150
Equity securities, gross unrealized loss	(3)	(7)
Equity securities, Estimated Fair Value	606	646
Common stocks - Industrial, miscellaneous and all other
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Equity securities, amortized cost	2,643	2,716
Equity securities, gross unrealized gain	942	836
Equity securities, gross unrealized loss	(30)	(99)
Equity securities, Estimated Fair Value	$ 3,555	$ 3,453

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Investments - Available-for-sale Securities in Unrealized Loss Positions (Details) $ in Thousands	Jun. 30, 2016 USD ($) security	Dec. 31, 2015 USD ($) security
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Less than 12 months, number of issues | security	69	248
Greater than 12 months, number of issues | security	24	22
Number of Issues | security	93	270
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 12,458	$ 60,349
Greater than 12 months, fair value	6,584	6,551
Fair Value	19,042	66,900
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract]
Less than 12 months, unrealized losses	(51)	(781)
Greater than 12 months, unrealized losses	(58)	(139)
Unrealized losses	$ (109)	$ (920)
Total fixed maturity securities available for sale
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Less than 12 months, number of issues | security	22	162
Greater than 12 months, number of issues | security	20	19
Number of Issues | security	42	181
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 12,001	$ 59,567
Greater than 12 months, fair value	6,451	6,472
Fair Value	18,452	66,039
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract]
Less than 12 months, unrealized losses	(29)	(709)
Greater than 12 months, unrealized losses	(45)	(104)
Unrealized losses	$ (74)	$ (813)
U.S. Government obligations
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Less than 12 months, number of issues | security	0	7
Greater than 12 months, number of issues | security	0	2
Number of Issues | security	0	9
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 0	$ 2,580
Greater than 12 months, fair value	0	679
Fair Value	0	3,259
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract]
Less than 12 months, unrealized losses	0	(7)
Greater than 12 months, unrealized losses	0	(6)
Unrealized losses	$ 0	$ (13)
State and local government
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Less than 12 months, number of issues | security	1	8
Greater than 12 months, number of issues | security	0	0
Number of Issues | security	1	8
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 118	$ 2,688
Greater than 12 months, fair value	0	0
Fair Value	118	2,688
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract]
Less than 12 months, unrealized losses	(1)	(6)
Greater than 12 months, unrealized losses	0	0
Unrealized losses	$ (1)	$ (6)
Corporate debt
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Less than 12 months, number of issues | security	7	80
Greater than 12 months, number of issues | security	15	12
Number of Issues | security	22	92
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 3,104	$ 21,760
Greater than 12 months, fair value	5,127	3,618
Fair Value	8,231	25,378
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract]
Less than 12 months, unrealized losses	(17)	(438)
Greater than 12 months, unrealized losses	(42)	(45)
Unrealized losses	$ (59)	$ (483)
Commercial mortgage-backed and other asset-backed
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Less than 12 months, number of issues | security	14	67
Greater than 12 months, number of issues | security	5	5
Number of Issues | security	19	72
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 8,779	$ 32,539
Greater than 12 months, fair value	1,324	2,175
Fair Value	10,103	34,714
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract]
Less than 12 months, unrealized losses	(11)	(258)
Greater than 12 months, unrealized losses	(3)	(53)
Unrealized losses	$ (14)	$ (311)
Common stock
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Less than 12 months, number of issues | security	47	86
Greater than 12 months, number of issues | security	4	3
Number of Issues | security	51	89
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 457	$ 782
Greater than 12 months, fair value	133	79
Fair Value	590	861
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract]
Less than 12 months, unrealized losses	(22)	(72)
Greater than 12 months, unrealized losses	(13)	(35)
Unrealized losses	$ (35)	$ (107)

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Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net Investment Income [Line Items]
Investment income	$ 600	$ 556	$ 1,214	$ 1,112
Investment expenses	(72)	(87)	(149)	(157)
Net investment income	528	469	1,065	955
Fixed maturity securities
Net Investment Income [Line Items]
Investment income	570	532	1,156	1,063
Equity securities
Net Investment Income [Line Items]
Investment income	25	22	51	45
Cash and short-term investments
Net Investment Income [Line Items]
Investment income	$ 5	$ 2	$ 7	$ 4

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Investments - Gross Realized Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Schedule of Available-for-sale Securities [Line Items]
Net realized investment gains	$ 541	$ 87	$ 533	$ 232
Fixed maturity securities
Schedule of Available-for-sale Securities [Line Items]
Gross realized gains	502	0	518	68
Gross realized losses	(16)	(1)	(22)	(4)
Net realized investment gains	486	(1)	496	64
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Gross realized gains	94	104	150	203
Gross realized losses	(39)	(16)	(113)	(35)
Net realized investment gains	$ 55	$ 88	$ 37	$ 168

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Investments - Available-for-sale Fixed Maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Amortized Cost
Due in one year or less, amortized cost	$ 7,779
Due after one year through five years, amortized cost	30,636
Due after five years through ten years, amortized cost	6,529
Due after ten years, amortized cost	6,284
Securities with contractual maturities, amortized cost	51,228
Commercial mortgage and asset-backed, amortized cost	59,591
Fixed maturity securities, amortized cost	110,819	$ 107,213
Estimated Fair Value
Due in one year or less, fair value	7,784
Due after one year through five years, fair value	31,052
Due after five years through ten years, fair value	6,941
Due after ten years, fair value	6,501
Securities with contractual maturities, fair value	52,278
Commercial mortgage and asset-backed, fair value	60,191
Fixed maturity securities	$ 112,469	$ 107,093

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Fair Value Measurements - Narrative (Details)	Jun. 30, 2016
Level 1
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Investment portfolio percentage	15.60%
Level 2
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Investment portfolio percentage	84.40%

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Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	$ 112,469	$ 107,093
Equity securities	4,443	4,240
Short-term investments	16,304	6,391
Total assets measured at fair value	133,216	117,724
Total liabilities measured at fair value	14,750	12,750
Senior debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior debt	14,750	12,750
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments	16,304	6,391
Total assets measured at fair value	20,747	10,631
Total liabilities measured at fair value		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Senior debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior debt		0
Significant Other Observable Inputs (Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total assets measured at fair value	112,469	107,093
Total liabilities measured at fair value	14,750	12,750
Significant Other Observable Inputs (Level 2) | Senior debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior debt	14,750	12,750
Significant Unobservable Inputs (Level 3)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities measured at fair value		0
Significant Unobservable Inputs (Level 3) | Senior debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior debt		0
U.S. Government obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	5,817	5,508
U.S. Government obligations | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities
U.S. Government obligations | Significant Other Observable Inputs (Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	5,817	5,508
State and local government
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	11,467	14,783
State and local government | Significant Other Observable Inputs (Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	11,467	14,783
Corporate debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	34,994	38,784
Corporate debt | Significant Other Observable Inputs (Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	34,994	38,784
Commercial mortgage-backed and other asset-backed
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	60,191	48,018
Commercial mortgage-backed and other asset-backed | Significant Other Observable Inputs (Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	60,191	48,018
Fixed maturity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	112,469	107,093
Fixed maturity securities | Significant Other Observable Inputs (Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities	112,469	107,093
Common stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity securities	4,443	4,240
Common stock | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity securities	$ 4,443	$ 4,240

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Deferred Policy Acquisition Costs - Activity in Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Balance at beginning of period	$ 12,221	$ 6,120	$ 12,102	$ 5,679
Deferred policy acquisition costs	6,975	4,178	13,097	7,214
Amortization of policy acquisition costs	(6,014)	(2,639)	(12,017)	(5,234)
Net change	961	1,539	1,080	1,980
Balance at end of period	$ 13,182	$ 7,659	$ 13,182	$ 7,659

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Unpaid Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior-year adverse (favorable) reserve development	$ 1,507	$ 171	$ 3,094	$ 206
Florida homeowners line
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior-year adverse (favorable) reserve development	695		1,500
Commercial automobile line
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior-year adverse (favorable) reserve development	$ 613	340	$ 1,500	535
Personal automobile line
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior-year adverse (favorable) reserve development		262		331
Commercial multi-peril line
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior-year adverse (favorable) reserve development		(270)		(274)
Other liability line
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior-year adverse (favorable) reserve development		$ (95)		(136)
Workers’ compensation line
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior-year adverse (favorable) reserve development				$ (248)

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Unpaid Losses and Loss Adjustment Expenses - Changes in the Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Gross reserves - beginning of period	$ 38,488	$ 32,987	$ 35,422	$ 31,531
Less: reinsurance recoverables on unpaid losses	5,015	4,590	5,405	3,224
Net reserves - beginning of period	33,473	28,397	30,017	28,307
Add: incurred losses and LAE, net of reinsurance:
Current period	12,034	8,805	23,146	17,340
Prior period	1,507	171	3,094	206
Total net incurred losses and LAE	13,541	8,976	26,240	17,546
Deduct: loss and LAE payments, net of reinsurance:
Current period	5,793	5,029	7,792	6,794
Prior period	5,279	5,009	12,523	11,724
Total net loss and LAE payments	11,072	10,038	20,315	18,518
Net reserves - end of period	35,942	27,335	35,942	27,335
Plus: reinsurance recoverables on unpaid losses	5,890	5,022	5,890	5,022
Gross reserves - end of period	$ 41,832	$ 32,357	$ 41,832	$ 32,357

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Reinsurance - Narrative (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Maximum
Effects of Reinsurance [Line Items]
Amount retained (excess of)	$ 500,000	$ 500,000

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Reinsurance - Effects of Reinsurance and Assumption Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Written premiums:
Direct	$ 22,533	$ 21,510	$ 44,133	$ 42,629
Assumed	7,192	1,549	10,985	1,634
Ceded	(3,549)	(7,117)	(6,892)	(14,655)
Net written premiums	26,176	15,942	48,226	29,608
Earned premiums:
Direct	22,574	20,050	44,815	39,351
Assumed	2,684	2,137	3,989	3,810
Ceded	(3,583)	(7,072)	(7,020)	(13,553)
Net earned premiums	21,675	15,115	41,784	29,608
Losses and LAE:
Direct	13,905	10,622	27,844	20,544
Assumed	1,447	281	2,356	805
Ceded	(1,811)	(1,927)	(3,960)	(3,803)
Total net incurred losses and LAE	$ 13,541	$ 8,976	$ 26,240	$ 17,546

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Senior Debt - Narrative (Details)	6 Months Ended
	Jun. 30, 2016 USD ($) debt_instrument
Revolver
Debt Instrument [Line Items]
Remaining borrowing capacity	$ 11,000,000
Secured Debt
Debt Instrument [Line Items]
Number of debt instruments | debt_instrument	3
Secured Debt | Revolver
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 17,500,000.0
Term Note | Secured Debt
Debt Instrument [Line Items]
Face amount of debt instrument	$ 5,000,000.0
Term of debt instrument	5 years
2014 Term Note | Secured Debt
Debt Instrument [Line Items]
Face amount of debt instrument	$ 7,500,000.0
Term of debt instrument	5 years

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Senior Debt - Outstanding Senior Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Debt	$ 14,750	$ 12,750
Revolver
Debt Instrument [Line Items]
Debt	6,500	3,500
Term Note
Debt Instrument [Line Items]
Debt	2,250	2,750
2014 Term Note
Debt Instrument [Line Items]
Debt	$ 6,000	$ 6,500

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Shareholders' Equity - Narrative (Details) - USD ($)		6 Months Ended
	Feb. 25, 2016	Jun. 30, 2016	Dec. 31, 2015
Equity, Class of Treasury Stock [Line Items]
Stock repurchased and retired during period, value			$ 6,275,000
Stock Repurchase Program, February 2016
Equity, Class of Treasury Stock [Line Items]
Authorized amount of stock repurchase program	$ 2,100,000.0
Stock repurchase program, period	1 year
Common stock
Equity, Class of Treasury Stock [Line Items]
Stock repurchased and retired during period, shares		66,663
Stock repurchased and retired during period, value		$ 451,000

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Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period			$ 77,262	$ 51,168	$ 44,159
Other comprehensive income before reclassifications	$ (308)	$ (977)	1,151		(274)
Less: amounts reclassified from accumulated other comprehensive income (loss)	(88)	208	(171)		425
Other comprehensive income (loss)	(220)	(1,185)	1,322	(277)	(699)
Balance at end of period	76,001	51,168	76,001	77,262	51,168
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	1,724	1,644	182	459	1,158
Other comprehensive income (loss)			1,322	(277)	(699)
Balance at end of period	$ 1,504	$ 459	$ 1,504	$ 182	$ 459

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Earnings Per Share - Basic and Diluted Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Earnings Per Share [Abstract]
Net income (loss) attributable to Conifer	$ (513)	$ 579	$ (2,541)		$ 1,042
Preferred stock dividends	0	151	0	$ 81	303
Paid-in-kind dividends	0	62	0		123
Net income (loss) allocable to common shareholders	$ (513)	$ 366	$ (2,541)		$ 616
Weighted average common shares outstanding, basic and diluted	7,594,862	4,050,042	7,616,821		4,045,482
Earnings (loss) per share allocable to common, basic and diluted (in dollars per share)	$ (0.07)	$ 0.09	$ (0.33)		$ 0.15

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Stock-based Compensation - Narrative (Details) - 2015 Omnibus Incentive Plan - Restricted Stock Units (RSUs) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period			390,352
Stock granted, value			$ 4,100
Share-based compensation expense	$ 204	$ 409
Share-based compensation expense not yet recognized	$ 3,400	$ 3,400

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Segment Information - Narrative (Details) - business	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Number of reportable segments	2
Gross Written Premiums | Geographic Concentration Risk | Florida, Michigan, Pennsylvania and Texas
Segment Reporting Information [Line Items]
Concentration risk	70.00%	69.00%

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Segment Information - Information by Reportable Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Gross written premiums	$ 29,725	$ 23,059	$ 55,118	$ 44,263
Net written premiums	26,176	15,942	48,226	29,608
Net earned premiums	21,675	15,115	41,784	29,608
Other income	283	480	528	969
Segment revenue	21,958	15,595	42,312	30,577
Losses and loss adjustment expenses, net	13,541	8,976	26,240	17,546
Policy acquisition costs	6,014	2,639	12,017	5,234
Operating expenses	4,536	3,619	8,675	7,311
Total expenses	24,091	15,234	46,932	30,091
Segment underwriting gain (loss)	(2,133)	361	(4,620)	486
Net investment income	528	469	1,065	955
Net realized investment gains	541	87	533	232
Interest expense	(143)	(239)	(300)	(483)
Income (loss) before equity earnings of affiliates and income taxes	(1,207)	678	(3,322)	1,190
Operating Segments | Commercial Lines
Segment Reporting Information [Line Items]
Gross written premiums	22,821	18,326	41,965	34,068
Net written premiums	20,548	12,524	37,536	22,378
Net earned premiums	16,484	10,670	31,763	20,158
Other income	83	325	182	674
Segment revenue	16,567	10,995	31,945	20,832
Losses and loss adjustment expenses, net	9,344	5,477	17,980	10,794
Policy acquisition costs	4,366	1,917	8,752	3,655
Operating expenses	1,610	1,211	3,344	2,683
Total expenses	15,320	8,605	30,076	17,132
Segment underwriting gain (loss)	1,247	2,390	1,869	3,700
Operating Segments | Personal Lines
Segment Reporting Information [Line Items]
Gross written premiums	6,904	4,733	13,153	10,195
Net written premiums	5,628	3,418	10,690	7,230
Net earned premiums	5,191	4,445	10,021	9,450
Other income	187	108	318	236
Segment revenue	5,378	4,553	10,339	9,686
Losses and loss adjustment expenses, net	4,197	3,499	8,260	6,752
Policy acquisition costs	1,648	722	3,265	1,579
Operating expenses	766	210	1,435	623
Total expenses	6,611	4,431	12,960	8,954
Segment underwriting gain (loss)	(1,233)	122	(2,621)	732
Corporate & Other
Segment Reporting Information [Line Items]
Gross written premiums	0	0	0	0
Net written premiums	0	0	0	0
Net earned premiums	0	0	0	0
Other income	13	47	28	59
Segment revenue	13	47	28	59
Losses and loss adjustment expenses, net	0	0	0	0
Policy acquisition costs	0	0	0	0
Operating expenses	2,160	2,198	3,896	4,005
Total expenses	2,160	2,198	3,896	4,005
Segment underwriting gain (loss)	(2,147)	(2,151)	(3,868)	(3,946)
Net investment income	528	469	1,065	955
Net realized investment gains	541	87	533	232
Interest expense	(143)	(239)	(300)	(483)
Income (loss) before equity earnings of affiliates and income taxes	$ (1,221)	$ (1,834)	$ (2,570)	$ (3,242)