ACIC - Earnings call transcript Q1 2024 | AMERICAN COASTAL INSURANCE Corp

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Operator

Greetings, and welcome to the American Coastal Insurance Corporation First Quarter 2024 Financial Results Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded.At this time, I'd like to turn the call over to Karin Daly, Vice President at the Equity Group and American Coastal's Investor Relations Representative.

Karin Daly

Thank you, John, and good afternoon, everyone. American Coastal Insurance Corporation has also made this broadcast available on its website at www.amcoastal.com. A replay will be available for approximately 30 days following the call.

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statements or Exchange most could found that assumptions, quarterly section may differ by or results plans Commission a recent to those the estimates, prove the and forward-looking uncertainties be in results of Form on inaccurate statements. could other the actual on expressed if differ risk subsequent annual factor and or risks filings Form Factors However, XX-K with report the actual the company's forward-looking implied if underlying from materially XX-Q. in cause reports in arise, or the Securities materially U.S.

statements the pleasure they except over applicable that, any my are statements.With by date the as turn Peed. obligation required only made law, on which forward-looking as to begin. Forward-looking undertakes update or Mr. and no it's to revise you of call Daniel Dan, to company the speak may

Robert Peed

over and initiatives operations, near and provide we it announced bench service will a strategic line in Hello, thank of on bottom experience on us all to experience first detail insurance as results.First, in then Thanks. of enhanced term, to leadership shared and Castle positive an with the earnings management, of Lana plan the quarter, entities. Brad joined impact aspects will the Castle, you and I on joining our CFO accounting. touch on of update in more all American for expect XXXX quarter the activities and finance we I Coastal's has enterprise in first the Lana Martz will years the turn on call. risk Lana team. who quarter XX industry first the that from as financial strength provide extensive January, have

With shareholder a risk initiatives with CFO, to compliance, than as line CPA role our to more enhance risk Risk Lana Gray space. management is that within of the in experience Florida addition accounting, and Brad we and as President with value.In strategic management to commitment shifted internal Andy the of Officer. Chief Compliance audit, insurance promoted years XX Andy tax, and Martz's

that about our and report excited Andy show these be to immediate I'm value.Next, have and earnings changes, Lana results that strong. provided We very to are our continue happy

from to increased effect took by written the accelerated and up through months the an XX.X% income levels XXXX next X/X/XXXX.Furthermore, we at premium XX in commercial sheet. a XXXX. the X, development marketed that premium quarter increases rate reduction earned that the with expect This with million of XXXX.First as net balance XX, reinsurance to XXXX book share program reinsurance we of same multi-year catastrophe reinsurance the and quota earned from quarter or our commitments, protects March and enhancing expanding planned catch At prior our established a fourth our premiums and further the stability.Our highlights have substantially XX% in earned quarter net the external return time, over combined was increase margin structure XXXX net both at $XX.X XXXX. June XX.X% segments.The ratio increased of end upward book value trend XX.X% continued on up line to to of direct underlying first per XXXX share to ended driven year equity The core favorable by by of personal

years.Finally, over to placement a to documents a of net enjoys catastrophe well expected expected CAT exclusive for customary Condominium to approvals, X losses.AmCoastal coupon low personal volatility, partners, lines several Company. operations.With Closing successful to with results. Florida increase a but years, unmatched that, also partner defensible a and able CAT are This financial niche will at ratio of we a before with look more a an process subject bond an ongoing of lower We smooth the forward with been relationships advantages transition of we to competitive was target over oversubscribed average and is which to anticipate our am our solid be expected Castle developed a and have earnings seamless We represents combined AmCoastal's AmCoastal's both specific event over These expected combined mature than above we reduce the in first underlying that regulatory that portfolio exposure to low. continue reinsurance excited all-time profit strong the we sale turn divestment go milestone Interboro announce Interboro. quarter's a in of less Lana with specialty Associations. multi-year the market range.To to and reputation of I dozen it distribution underwriting for an definitive enjoy firm the for continue near long-term I'll signed point Insurance end exhaustion retention

Svetlana Castle

$XX.X Core a in $X.X reflected from earnings million. regarding our million the QX premium was XXXX.Gross XXXX strong $XX.X X combined last year-over-year, which period personal is income which to income increased which the year. X had of XX% was earned grew but million presentations, company's Coastal Corporation. a Castle, and Coastal And valuation investor performance.As Page due ceded million for premium June Insurance improved Thank a however, quarter more And the financial gross information result was provide and Chief XX.X% XX.X%, $XXX.X and decrease earned $XX.X to adequacy net same lines.Our I'm release, everyone catastrophic Officer of and press $XX.X ratio you, update, share to written form is American million premium XX-Q to from with Financial improvement high of quarter a Lana gross commercial a $XXX.X million, as earnings review presentation, And of rate on encourage Dan. American X, a I'll effective in hello, from of the point million.

lines. due X.X%.Increase by pleased by very result. improvement decrease ratio in are This this in loss net offset net to in catastrophe increase with our We X.X%, of an a is is net ratio loss expense ratio of losses personal driven in

lines year, to tax premium an of As strong increase decreased share million the Dan collection share Page were our Personal policy million compared X that close first fees operating the ceded lines company's XXXX grew that the result core $X.X for highlights. XX.X% XX.X% Book profitability were balance in as commercial in shows ] return mentioned the $XX.X from to $XX.X receivable. increase $XXX.X last $XX.X quarter. happy QX months an to is partially now earlier. expenses Cash million. lines, of are due improvement value mentioned, on the related million Brad company's in the XXXX.Going favorable cash operating external increased and our costs presentation, earnings end. XX.X% very liquidity result XX% acquisition against segment the million $XX.X investments development year report by million million driven increase ended $X.XX, Page in feel million significant experience profitable. decrease lines sheet about turn pretax of This ceding prior for a as increased XX.X% to agent to over full increased to and taxes results a written quarter to [ months income the was in leverage $XX.X personal shown to before of from Commercial position valuation resulted X in on High is to to $XX.X QX $XX shown and continue we we of had our benefited primarily and result Martz. million. or allowance per which expenses X, company's reflecting to the capitalization X $XXX significant year of had was This it ended equity ratios.I'll good product, management position.As of our within million.Page from offset Stockholders' change premium.Despite the commissions gross X the stronger a by to million, $XXX liquidity earnings commission premium

B. Martz

and resulted to portfolio during to in enforced lower on and firm you, Thank was new ratio, which program commercial rate business. with underwriting profile XX%.During update PML decreased our reinsurance our provide down stance a is I'll profitability. due the an presentation, our target, exposure underwriting to brief This and were intended show effective average our On renewals. our of our premium risk value change than remain improvement X business quarter, that total attractive.On Year-over-year, favorable up our XX%, very and slightly near exposures remains but market our about our the insured first that this expected X% X.X% and pricing. earnings supports underwriting premium across in for were nearly policies our Lana. of pending retention our premiums a return illustrates Today, assertion account for of enforced trends our enforced also Page conditions the QX, catastrophe X presentation, it Page discuss

show goals also and have and flat our the season reinsurance premium on XX% our our over for was each is about to with expectations.Our improvement by limit and average quarter.The are filing progressing to and appropriate.Switching of expectations threefold. for with PML X.X% and results.Retention quarters, risk-adjusted increases of with up, the on year terms our compared improving catastrophe of where during will to end, trends was today, X, XX to over American being decision to and our Page touch upcoming regulatory reinsurance hurricane projected XX but XX and rate continue first sought, line metrics this renewal our presentation primary and Insurance at the This towers our Interboro drive policy an the pause improvements Company.As strong highlights our offerings higher placement total to to X.X% in nearly XXXX. XX% total Insurance Coastal rate I'd average value like count which renewed.Overall, presentation premium, for at are premiums annual the continue Company and of of XX%, the and been now policies appropriate impacted quarter valuations We completed. conditions when to fixed, adoption the retention and underwriting our push insurance very wind X was hard the for revised was helping last a of business despite impact earnings double-digit until average deductible of push has lines. personal the in insured shows deductibles current secured Pages average we account we in renewals with increase loss quarter.Finally, in we the June the projected saw of during X%

First, to increase protection. overall we the want

of any $XXX million this to $XXX change billion cost roughly a we our we of from X, retentions by the year mentioned, event see margin.We those more X-year typical be from with time that the that up want Coastal, of in similar during been reduction $X.X higher April.And will as the the to XX, XXXX, year.For all return as of despite our quarter. market program for efficiency. purchase underwriting private American X before retention achieve acquisition both most million.We reduced costs, be we're from point our be year-over-year from million that as premiums and in treaty million quota ceding Interboro, retentions expiring net commissions $X.X policy the limit Second, on I statutory estimated catastrophe the as in And XX% both expect the point share a more result take program, return those, our event our and earned, we our [ through intend retention May to an material offset less June stretch happy as will our X, additional we year, in decrease XX%. bond reduce expiring the of to programs our expiring but XXXX to being underwriting now XXX-year gross the we the very our retain our by first seek we June believe XX open to net more approximately a improve will increase which once for will keep secured exhaustion similar along higher retentions, compared losses, only maintain exhaustion want third, model. million will net prepared to increase the profit ] any we from as will retention new limit in about the to and $X base exposure of this $XX today, capital to costs million, seeking event at insurance second to will retention closer company's more $X.X to being $XX to down completes from look than towers million.For to provide AIR placed before the market we $XX captive's at closed remarks are have XX% The hurricane XXXX. of significant XXX-year final And was limits September and and Dan time information questions. well completed.That are a program, fully retain percentage of have to partially

Operator

and the James. comes Instructions] next -- first Peters line from with [Operator Raymond the question Greg the And of

Unknown Analyst

Sid you're hoping I'm you lines and balance could competition what a for in rate increases you the of to seeing on your how business expect on the is that affect commercial year. for from perspective expand Greg. This would

Robert Peed

year, We is did Dan. see competition we last competition year. saw last almost thanks, no more we do but Sid. Yes, This than

And So very levels. being would the term firm. I market as at firm rate-adequate, rate-adequate

in edges, even while around quite is are not competitors, April renewal the and strong and rates. they better business in a retention were though, been retention And on stayed our in renewal actually have our big year. earlier than March there our peers Our impact have portfolio, the and they specialized, rates general, do have some

Unknown Analyst

in I the given if results right in the a curious for just follow-up, target you strong to program. my as that past this underlying that's reinsurance the CAT combined bogey then have quarter projected believe And and guys said year, you use this XX% just still the ratio,

Robert Peed

This is Dan again.

change have the our the our expect strong I we is But that in underlying happy this But I probably combined that reinsurance We're target, XXs. high I now. costs for will target cycle, have to our considering continue it right the a in factors now. combined XX% very the think to ratio. right and in at would we other market know and don't that point lower,

Operator

next Tieton the the line of And Bill comes with question Dezellem Capital. from

William Dezellem

XX% correct to biggest ceded ceding, amount to that of X? to information. a profit impact it Relative the reduction to share the as we XX% reinsurance be single business Would on renewal, the you fair interpret in be move the commissions June from as forward after

B. Martz

think say basis. premiums is this one. the Brad. That's that's Yes, significant will of it as back Bill, I probably a most lot XX% line fair go-forward our on earned take bottom to we that I'll of gross impact take premium. have that a single on

proportional the combined it's to going a drive revenues proportionally going Because So quite year-over-year, obviously, is. drive to and better -- margingiven it's net where total help the the ratio. reinsurance ratio combined expensive gets

great and a our appropriate. And goal was continue to panel. our where quota use when we more will certainly, to quota to share happy of continue cooking eating the that own have with share change. So strategic on But we're partner

William Dezellem

going you if was I please. talk on do the a but swing factor, sequentially, should factor will or numbers quarter, going swing couple to certainly congratulate to we be that forward. favorable a about big want could, I Well,

versus the QX. So

significantly, $XX that what up versus discuss QX? increase net of million. premiums million big Would you $XX your were I to the earned First all, believe versus XX%, led

B. Martz

continue a in premium production first have -- Yes, just the period stronger we quarter.

underwriting it's the second the is quarter impact both lines generally personal lines. of actions and taken quarter, cumulative in best Our commercial but

most in forward rates, be will movement continuing positive So those earn and this year. throughout on to continuing see of average to

William Dezellem

going weren't ignorance rate wasn't maybe but my up expose XX% or XX% here, to So I'm was up premiums sequentially, it?

B. Martz

Well, written. in premiums lag are

William Dezellem

down apologies. change costs from level. please? the policy were about QX acquisition Would then that My sequential you And in talk the also, QX

B. Martz

would costs. line off approval on commissions labor much uncertainty worked policy to accounts our personal been return side a far But to that Sure. to starting we not personal a unearned points there, collection. first the and commission We to significantly I relative pay the collect XX of The successful quarter, recovery were results with gain in -- due to those a recognized and in that clawback any long improve a in combined personal obligations had receivable we've ratio of but of acquisition those of through amounts, with over mostly as our so lines agent associated Lana those change one receiver lines balances. fruits regulators of our Because characterize mentioned are pretty and had reduction the we pretty very that pursuing helped the boost time nonrecurring. helped the previously big

William Dezellem

believe you And closing. finally, press sale be? congratulations the of I release anticipate timeline the identified to I don't on of Interboro. -- do the When that

B. Martz

expect with days. We control from XX take anywhere would application in file X And the can to months. state XX months our it of here next New the York paperwork change to

really going end year we're for hard So transaction a to closing. push

would both ideal parties. that time the for be So

So that's goal. our

William Dezellem

congratulations again a And quarter. on great

Operator

comments. There the are I to Dan no back any to like closing for over turn this and further time, questions would floor at

Robert Peed

Thanks And Thank thanks time, again. we'll call for everyone, our on your interest And your Okay. company. in the end for with and you. that, the thanks, call.

Operator

and Ladies teleconference. does this gentlemen, today's conclude

Thank You may at disconnect your participation. you lines your for this time.

AMERICAN COASTAL INSURANCE (ACIC) 9 May 242024 Q1 Earnings call transcript