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Genie Energy Provides Update On Consumer Insurance Offerings Strategy, Expands Coverage
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Genie Energy, Ltd. today provided an update on its consumer insurance initiative.
"Earlier his year, the company announced an initiative to expand its consumer products portfolio with insurance offerings, and formed a wholly-owned, 'captive' self-insurance subsidiary to enhance the Company's risk management strategy," Genie said
"To date, we have secured insurance broker licenses in seven key states and begun to offer third-party insurance solutions through our existing sales channels to our customer base," said Genie's CEO, Michael Stein. "We expect the economics of our offerings to strengthen gradually as we build out and bring to market internally-generated consumer offerings in the coming months."
Genie also announced that it has expanded the coverage provided to the company through its captive insurance subsidiary. In the fourth quarter of 2024, Genie expects to pay its subsidiary approximately $40 million in premiums for expanded insurance coverage to address various additional risks.
Genie said that, as required by GAAP, Genie expects to record a non-recurring, non-cash charge of approximately $31 million in the fourth quarter as an insurance loss reserve related to the expanded coverage. This loss reserve will be reflected in Genie's fourth quarter and full year 2024 financial results under GAAP. However, the Company does not expect this charge to impact its reported measure of Adjusted EBITDA, Genie said
The $40 million in premium payments made to the Captive will remain on Genie's consolidated balance sheet within its reported measures of short and long-term restricted cash, and other short and long-term assets. The funds will be available for investment by the Captive as determined by Genie management to support Genie Energy's strategic objectives consistent with regulations and the Captive's position, Genie said
Genie reported cash and cash equivalents, short and long-term restricted cash, and marketable equity securities of $191.7 million as of September 30, 2024.
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December 5, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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