ACIC - Earnings call transcript Q2 2024 | AMERICAN COASTAL INSURANCE Corp

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Operator

Greetings, and welcome to the American Coastal Insurance Corporation's Second Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Karin Daly, Investor Relations with The Equity Group. Please go ahead, Karin.

Karin Daly

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

website. you the Investors in company's of find section earnings the Additionally, copies presentation latest can release and of the

Martz; and these Speaking facts statements. and assumptions behalf today reasonable are the like during forward-looking statements I'd statements The on note company, President, estimates, are the will Bennett call of Chief Officer, that are Svetlana be based Financial plans. Castle. On that made believes to company Bradford not historical

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

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

B. Martz

Two on future stand due more our this of X key turn XXXX. then and earnings these market of you, on some presentation out quarter Thank I'll underwriting Castle, an quarter. some second over impact forward-looking remainder Karin, and CFO, our periods. current results. Page hello. also their Lana review update of for for provide highlights commercial residential to accomplishments to and Today detail and I'll guidance our our the of it

Company. The comparability Accordingly, discontinued easier for profitable year. forward now second the is the part historically Insurance the into continuing business, not reflect the the given presented divest the and as caused with is to which analysis results entry our definitive is the from volatility X, operations only renewal our and making operations of core agreements Interboro going future. associated sale its June and results lines personal pending of our be and operations, to First formal effective XXXX, lines commercial Interboro reinsurance of catastrophe quarter noise

Before the with I to diversified reinsurance our partners thank X our to X reinsurers whom reinsurance grateful we our of panel but All discussing this incumbent we for on very us, are impact and and core reinsurers support renewal, catastrophe of our their to our lines by their want adding have panel. renewed year. proud first new

coverage third Page high-severity along event structure, of against protect against regarding to protect announcement strengthen we our current potential $XXX to on to of The our further presentation. top more million by shown of a the and of renewal, an the added our with recap opportunity June highlights, also is an tower Following seized series adding events. X additional on program program our earnings of event our completing limit XX moderate a successfully a

private core coverages impact earnings will are the positive that. offset than the the the to more of on from additional the cost, we added share plus and ACIC's layer XX%, reinsurance a the both to in While quota replacement expecting Thus, XX% of have growth. program enhanced market, FORA reduction catastrophe revenue

impact to operations, X premiums catastrophe it earnings noted it's presentation excluding year-over-year from year. net on introduce I operations losses income the net between be full this. this appropriate for income XX% XXXX of summarizes of a without reinsurance our of half and regarding by fair the for growth felt million $XX forward-looking in net Potential between material year, significant comparison. prior hurricane XX% was some second losses the and earned. Slide in million period, from and But changes outlook This year-over-year. a earnings $XX implies our and Given estimating operations could any the discontinued continuing to continuing have catastrophes, guidance

estimates first potential If within reinsurance such stress-test down third our after are that to earnings please hurricane assuming second $XX.X a losses, drops our is the after for retention event $XX.X and for program. note tax for you event, tax, events million million a contained and

on risk earnings full provides The seeing for year that estimate additional of XXXX XX% increased softening, in we're be competition. The second presentation margin. combined having between line the underlying to showing in last residential revenue what Lana, and and bottom the like commercial growth million bullet commercial for XX some they the is XX% Page still XX but I'd net we our is it's it material of will a presentation $XXX Florida premiums between and not the XXXX, and ratio in rates marketplace. on year. Pages is of thing participate our lower our turning over October achievable impact the earned, before a our is As expected XX% through million takeout. $XXX implying believe despite our for the highlight, portfolio to signs XX, Citizens half of XX this market color to last of residential indicating We outlook earnings on very plans the

we policies Office assumption that hundred our underwriting that date. received have Regulation identified participate the Insurance current few of and on criteria, a from have approval to We Florida fit

to we're it a the likely but Lana. fraction now participate will via the supplement to about identified, of opportunity We policies we've get and turn growth only process. I'll our excited over this

Svetlana Castle

hello. Thank financial I'm investor review release, and the encourage regarding but you, the company's press Coastal Form provide and our information for and earnings update, I'll American XX-Q and everyone performance. Lana Insurance of Corporation, to Officer presentation more Financial Castle, Chief Brad,

$X.X had gross of catastrophe million X from share, decrease XXXX. income the a of of year-over-year a was quarter which Page the as effective is million. of strong earned XX% which on $XX.X X, presentation, ceded earnings quota income was Coastal reflected with million, premiums June net result As American a a Core $XX.X higher

million. to $XXX.X grew Page that X shows premium million of presentation gross the $X.X earned

on was target, Our XX.X% but same ratio period is the last XX.X%, X.X points year. in combined from increased which

to development reserve good continue feel We our favorable and about position. very experience prior year

of of yield. year-end. on As stronger year-over-year. Page by detail cash Stockholders' equity XX.X% million. million, by anticipation company's highlights. in administrative XX.X% Page improvement are acquisition X shown to increased High the $XX.X to portfolio fixed This due and X decreased Cash investment liquidity the in additional strong a of commission earlier. in cash and primarily the and by earnings of with $X.X XX% This on was position, a driven costs policy the cash significant strong increase XX.X% NAIC reflecting increased securities shows results. balance expenses our liquidity significant in increase $X.X ceding partially the our Book operating the in tax of presentation, higher $XXX second offset result underwriting invested increase share Level in in XX% driven ceded $X.XX, of X mentioned million, X our income before and as expenses. million provides or presentation decrease $XXX Despite decrease quota $XXX securities. is million. Level of quarter, million the XX.X% capitalization change general million were portfolio. X we In sheet share from value $X.X grew to investments in to premium, per an ratios. Page was resulted leverage

closing investment responsive Brad remarks. strategy it turn portfolio to Martz tolerance. I to for is our Our high-quality risk conditions within maintain over market to now will

B. Martz

through by conclude I'll today, take and Lana. questions. done insurance successfully company very just thrive cycle you, Thank to well the happy any remains saying we now completes since prepared parts XXXX. That all of positioned as are our we've the to remarks

Operator

coming first Our is from from Instructions] Peters James. question Gregory [Operator Raymond

Charles Peters

first and was there's you talk on going seeing the because And a could PML question, XX, just to the pretty what on focus the on focused for just initiatives there. looks XXX-year maybe being down in us and favorable. X%, TIV about we're first insurance-to-value some going still I on under assume down then that it remain X%, conditions up. to Slide So the count just XX, Slide you with underlying I'm Slide like spend minute policy I make under statement XX.

B. Martz

that total dotted Greg. noted the in some on We've we're in to Slide XX, is value year-over-year periods. take very good. we focused I'll bottom, continue But that that is holding future Brad. remains past It slide. small On return with is just demonstrate want This would to strong. with in that. the insured gap premium increases TIV profile the line Certainly. expect to Yes. decreases premium the that versus slight blue narrowing risk Thanks, top, what on we at relative line to some the

down being value continued insured total being the that's policy as just underwriting. down, far As and count

of terms We've are held conditions market while attempt and and take on We pricing, disciplined. advantage conditions. others softening being line the to

So opportunity curbing since in we've to able exposure, -- reduce premiums work overall we've zones metric especially changes to the taken we've exposure. changes been of force are some year-end, our those grow through to and since in while peak

prudent do limit we've growth. especially very positioned reinsurance into now X/X, we of like exposure add well our like going the additional to renewal. felt bought we some So catastrophe year And place, the thing feel that with got was in new that program to that a subsequent in we half first the we're to

is that on of So in we anticipation wind reason business because some season. XX, of -- did the the is we October part of which assuming obviously still the want

we're growth the on there So is horizon, selective. very being still but

Charles Peters

you guess program. I mentioned Okay. the reinsurance

about cat reinsurance question pivot talk let's to where my XX follow-up 'XX-'XX for program. the the So you Slide

is net then say exposure So maximum the $XX you is retention first million. reinstatement event $XX this million,

don't if will whole But the go the $XX something million reinstatement be less be if than I you the would net whole that. through go tower. through you the tower, assume

due. it's that I if of that portion plus $XX.X think be going when whatever happens event correct your interpretation? reinstatement to is retention, So about the Is curses million an

B. Martz

with That's reinstatement correct. the the difference key exposure a pretax one, is that's And number. that,

look then tax So reinstatement to treaty at are two, apples-to-apples. And the amortized term for premiums you'd over of remaining the after that probably period. want the

September event an cost to amortized loss X, that the XXXX, in on full immediately. X be whereas reinstatement XX, if is happened from September May would So recognized

Charles Peters

coverage a of for retentions, if we you in would Or billion? second had you costs, reinstatement the a $X.XXX that third layer the full is event, have amount event event the in coverage event? going and third have the happens there full you X up the when year, this third tower Florida to different So second versus these events have

B. Martz

it They're the different third first And depends really what event. the event amounts of on second event. coverage and in happens the with

event, super is available. it question -- of that the we to remaining first that think would we complicated, I as to of answer estimate the but the quickly are loss get to first event. and depends as what after and So the market say our guidance try possible it trying the reinsurance And real obviously, on a way gets size about

Charles Peters

figured I complex. was it Okay.

soon Just -- say on you final, offer not. you But any have probably sure through, But too a that, material yet wait just you really or not to want couple guys Debby to comment do you way it's more for do weeks? if or anything. yet to came can

B. Martz

not Yes. event, wind rain I can comment that it event. was a mostly a

residential Our the fared to similar in portfolio events. commercial has past resiliently

We roof leak have deductible. claim small, It's this at claim, very time. X under

everyone elsewhere, the was Florida, of of lot -- So of we and for the not a even was I'm now. event. that There in West obviously, Florida, right rain, by on Coast impacted water feel outside of lot a --

would all. The take be we We the worry But close -- nothing. don't is about. is never But for wind cover at to a covered. unfortunately, have that's us, expect not lightly flood. that fortunately don't or we to peril So to damage that flooding,

Charles Peters

enough. All slide thanks guidance, for too. the Well, right. Fair the on

helpful. Congratulations on think quarter. I that's the

B. Martz

welcome. You're you. Thank

Operator

conclude the session. webcast. our And and does and Instructions] We've ladies end gentlemen, [Operator of reached teleconference that question-and-answer today's

You your We have time, line a at wonderful may your and thank participation this today. you for day. disconnect

AMERICAN COASTAL INSURANCE (ACIC) 7 Aug 242024 Q2 Earnings call transcript