American Integrity Insurance Group, Inc. Q4 FY2025 earnings call

• In May 2025, completed IPO raising $100 million, strengthening balance sheet. • 2025 achievements: gross premiums earned up nearly 30% to $885M, adjusted net income $103M, combined ratio 63.7%, adjusted return on equity 42.1%, customer count up 19%. • Voluntary growth: voluntary customer count up 16% to 327,000 policies. • Florida position: sixth-largest writer by policy count. • Growth initiatives: reentered Tri-County region, renewed focus on middle-aged homes, launched commercial residential product, expanded to North Carolina. • Reduced non-cat quota share from 40% to 25% with improved pricing. • Fourth quarter 2025: voluntary market wrote 87,000 new and renewal policies, up 17% y-o-y; Tri-County region had 29,226 policies in force at year-end 2025; middle-aged homes market reoriented sales efforts; commercial residential product launched in Oct 2025; out-of-state policies in force doubled to 26,732; non-cat loss and LAE ratio 17.1% in fourth quarter 2025. • Fourth quarter 2025 financials: net income available to common shareholders $20.9M, or $1.07 per diluted share; adjusted net income $21.8M, or $1.11 per diluted share; return on equity 25.6% vs 21.2% in prior year; adjusted return on equity 26.7% vs 21.2% in prior year.

In 2025, gross premiums earned grew nearly 30% to $885 million. Adjusted net income available to common shareholders was $103 million, or $5.97 per diluted share, vs $37.9 million, or $2.94 per diluted share, in prior year. Combined ratio was a record 63.7%, up from 80.9% in 2024. Adjusted return on equity was 42.1%, up from 26.8% in 2024. Customer count increased 19% to nearly 422,000. Voluntary customer count increased 16% to 327,000 policies. In Florida, which represents 97% of in-force premium, ended year as sixth-largest writer by policy count. Fourth quarter 2025: gross premiums written decreased to $206.4 million from $237.6 million in prior year; gross premiums earned increased to $229.1 million from $199.8 million; ceded premiums earned increased to $169.8 million from $138.1 million; net premiums earned decreased to $59.4 million from $61.8 million; net investment income increased to $5.9 million from $3.8 million; losses and loss adjustment expenses decreased to $26.3 million from $32.8 million; policy acquisition expenses decreased to $5.8 million from $11.8 million; general and administrative costs decreased to $6.7 million from $11.7 million; combined ratio was 62.8% vs 88.7% in prior year.

• Expect non-cat loss ratio to increase modestly as they write more policies in Tri-County and for homes with middle-aged roofs. • With reduced non-cat quota share, expect additional revenue and reduced cost of quota share by approx 50% in 2026, positively impacting net income. • Reinsurance renewal expectations: risk-adjusted rate decreases for 2026 renewals estimated at 10%-20% depending on region. • Intend to place reinsurance cover for 2026 renewal cycle with third and fourth event cover for storm season, retentions consistent with prior treaty year.

• Risks and uncertainties associated with forward-looking statements, including actual results differing from expectations. • Catastrophe loss risk, although 2025 was catastrophe loss-free, future catastrophes could impact results. • Competition in the insurance market, which could affect new business and renewal business opportunities. • Changes in reinsurance pricing and availability, which could impact the company's cost structure and profitability. • Regulatory changes in the insurance industry, which could affect the company's operations and financial performance.

Q: Charles Peters with Raymond James asked about the competitive environment across different cohorts.

A: Robert Ritchie said there are 7 new capital groups, with only one very large one, others are niche players. American Integrity is in a leadership position in distribution channels, dominates new builder segment, does business with most national carriers except State Farm, has relationships with mortgage companies, etc., and is writing record new business on their terms.

Q: Charles Peters asked about the change in quota share and its impact on expense ratio.

A: Benjamin Lurie said quota share program gives ceding commissions that net against general and admin and policy acquisition expenses; underlying expenses stay constant, but net increase in those line items is offset by decrease in ceded premiums, resulting in slightly higher expenses but significantly higher net revenues and profitability.

Q: Jon Paul Newsome with Piper Sandler asked about capital management and prioritization.

A: Benjamin Lurie said IPO was for growth opportunities, remaining IPO proceeds to fund growth initiatives, and special dividend was due to windfall earnings from no cat storms and 20-year history of returning excess capital; secondary in last quarter was to get stock in hands of new public shareholders for liquidity.

Q: Jon Paul Newsome asked about trade-off between special dividend and buybacks.

A: Benjamin Lurie said secondary was to get stock in hands of new investors for liquidity, and they want to continue executing on business plan to make stock attractive.

Q: Thomas Mcjoynt-Griffith with KBW asked about average premium per policy trajectory.

A: Jon Ritchie said mix of business like middle-aged homes and Tri-County will elevate average premium, 5% average rate decrease in portfolio for 2025 annual rate filings, commercial policies will take time to grow but early success seen, and inflation factor on renewal book partially offsets rate decrease.

Q: Thomas Mcjoynt-Griffith asked about reinsurance renewal decisions.

A: Jon Ritchie said reinsurance market is advantageous, capacity abundant, pricing down, retentions consistent with prior year, intent to have third and fourth event cover for 2026 storm season.

Q: Charles Peters asked about retention for first, second, third, and fourth events.

A: Jon Ritchie said first-event retention consistent with prior year, options on second event, finalizing third and fourth event cover, retention important to keep low. Also, Jon Ritchie talked about non-cat loss ratio and its expected increase as they write in Tri-County and middle-aged homes.

Q: Charles Peters asked about managing risk aggregation and concentration.

A: Jon Ritchie said growth initiatives in Tri-County and middle-aged homes complement the portfolio geographically, offsetting concentration risk concerns.