American Coastal Insurance Corporation Q3 FY2025 earnings call

• American Coastal delivered exceptional results in the third quarter with over $42 million of earnings before income taxes, best quarter to date. Total revenues grew over 10%, net income grew 16% year-over-year.
• Intentionally slowed premiums written in third quarter to limit exposure growth through hurricane season and hit modeled expected average annual loss target.
• Reverted to normal operations on October 1, expect rebound in premiums written in fourth quarter and positive momentum into 2026.
• Wholly owned MGA, Skyway Underwriters, introduced new commercial residential property insurance program targeting assisted and independent living facility market in Florida, leveraging distribution relationships and underwriting expertise.

American Coastal continued to deliver exceptional results in the third quarter with over $42 million of earnings before income taxes, representing the best quarter to date. Total revenues grew over 10%. Net income grew 16% year-over-year. Net income was $32.5 million, core income was $30.5 million, an increase of $3.6 million year-over-year due to a $6.4 million increase in net premiums earned. Operating costs increased by $5.6 million, partially offsetting the net premiums earned increase. Combined ratio was 56.9%, a decrease of 0.8 points from 2024. Non-GAAP underlying combined ratio was 57.8%. Cash and investments grew 28.5% since year-end to $695 million. Stockholders' equity increased 38.9% since year-end to $327.2 million. Book value per share is $6.71, a 37.2% increase from year-end 2024. The wholly owned MGA, Skyway Underwriters, introduced a new commercial residential property insurance program targeting the assisted and independent living facility market in Florida.

• Expect rebound in premiums written during fourth quarter with positive momentum likely continuing into 2026.
• On October 1, reverted to normal operations.
• Will host Investor Day in first half of 2026 to update strategic initiatives and full year guidance for 2026.

• Commercial property market softening poses headwinds.
• Uncertainties from current softening cycle in the insurance market.
• Risks related to reinsurance arrangements and their impact on pricing and profitability (factors may be found in company's SEC filings).

Q: Can you break up the part of the decrease in gross premium written in the third quarter related to suspending writing new business versus pricing being down?

A: We didn't suspend new business per se, but had more stringent underwriting controls to meet reinsurance targets related to expected average annual loss. Could have continued to grow if not for the need to meet targets, and expect rebound in fourth quarter.

Q: Give a sense of how the 1/1 renewal discussions are going and early read on wind contract in June?

A: Had productive conversations with reinsurance panel in October, conversations not centered on price, related to front end rate trends, and support from reinsurance partners.

Q: What's the addressable market for the assisted living business and how it might factor into your growth for next year?

A: Initial market research suggests about $100 million addressable market, first year expected to capture 10%, impact on next year results will be limited, will update guidance at Investor Day in first half of 2026