Core Viewpoint - American Coastal Insurance Corporation reported significant improvements in financial performance for the fourth quarter and full year ended December 31, 2023, with a notable increase in net income and gross premiums written compared to the previous year [1][14][24]. Financial Performance Summary - For Q4 2023, gross premiums written increased by 13.4% to $135.2 million from $119.1 million in Q4 2022 [2][15]. - Total revenues for Q4 2023 were $58.2 million, down 22.1% from $74.7 million in Q4 2022, primarily due to a decrease in net premiums earned [2]. - The company reported a consolidated net income of $14.3 million for Q4 2023, a significant recovery from a net loss of $296.8 million in Q4 2022 [14][24]. - For the full year 2023, net income attributable to the company was $309.9 million, compared to a net loss of $469.9 million in 2022 [24][26]. Premiums and Underwriting - Gross premiums earned for the year increased by 17.1% to $670.0 million in 2023 from $572.3 million in 2022 [2][26]. - The company’s personal lines segment reported a pre-tax loss of $5.2 million in Q4 2023, an improvement from a loss of $10.6 million in Q4 2022 [4][22]. - The commercial lines segment achieved pre-tax earnings of $27.9 million in Q4 2023, up from $3.7 million in Q4 2022, driven by decreased loss and LAE incurred [20]. Expense Management - Policy acquisition costs decreased by 40.2% to $15.2 million in Q4 2023 from $25.4 million in Q4 2022, attributed to increased reinsurance ceding commission income [18]. - General and administrative expenses fell by 20.8% to $8.0 million in Q4 2023, down from $10.1 million in Q4 2022, due to reduced amortization costs [19]. - Operating and underwriting expenses decreased by 35.1% to $2.0 million in Q4 2023 from $3.1 million in Q4 2022 [18]. Return on Equity - The company reported a core return on equity of 100.6% for Q4 2023, a significant increase from 13.4% in Q4 2022 [5][30]. - The return on equity based on GAAP income from continuing operations was 97.0% for Q4 2023, compared to 2.7% in Q4 2022 [5]. Book Value and Investment Portfolio - Book value per share increased by 185.8% to $3.61 at December 31, 2023, from $(4.21) at December 31, 2022 [40]. - The company's cash and investment holdings rose from $340.9 million at December 31, 2022, to $369.0 million at December 31, 2023 [38][39].

Premiums and Revenues - Gross premiums written increased by 13.4% to $135.2 million in Q4 2023, and by 17.1% to $670.0 million for the full year[2]. - Net premiums earned decreased by 27.7% to $55.6 million in Q4 2023, but increased by 4.7% to $281.9 million for the full year[2]. - Total revenues for Q4 2023 were $58.2 million, down 22.1% year-over-year, while full-year revenues increased by 6.2% to $286.5 million[2]. - Total gross written premium increased by $16.0 million, or 13.4%, to $135.2 million in Q4 2023 from $119.1 million in Q4 2022, driven by personal lines and a focus on specialty commercial lines[17]. - Total gross written premium increased by $97.7 million, or 17.1%, to $670.0 million for the year ended December 31, 2023, compared to $572.3 million for the year ended December 31, 2022[26]. Income and Earnings - Consolidated net income attributable to ACIC was $14.3 million in Q4 2023, a significant recovery from a loss of $296.8 million in Q4 2022[2]. - Core earnings for Q4 2023 were $17.7 million, leading to an annualized core return on equity of 100.6%[4]. - Core income per diluted share for the full year was $2.02, compared to a loss of $0.53 in the previous year[2]. - The company's net income for Q4 2023 was $14.3 million, or $0.31 per diluted share, compared to a net loss of $296.8 million, or $6.89 per diluted share, in Q4 2022[16]. - The company reported a basic earnings per share of $0.32 for total operations, compared to a loss of $6.89 in 2022[54]. Loss Ratios and Combined Ratios - The underlying combined ratio for commercial lines was 50.9%, while the consolidated combined ratio was 67.2%[4]. - The combined ratio (CR) improved to 47.1% in Q4 2023 from 89.5% in Q4 2022, a change of (42.4) points[10]. - The loss ratio, net, decreased to 21.2% in Q4 2023 from 54.3% in Q4 2022, a reduction of (33.1) points[10]. - The underlying combined ratio was 50.9% in Q4 2023, compared to 68.4% in Q4 2022, a decrease of (17.5) points[10]. - Catastrophe losses on the combined ratio were (0.8)% in Q4 2023, compared to 25.0% in Q4 2022, a change of (25.8) points[10]. Expenses and Costs - Total expenses decreased significantly to $39,699, down 52% from $82,635 in 2022[54]. - Policy acquisition costs decreased to $15.2 million in Q4 2023 from $25.4 million in Q4 2022, a reduction of $10.2 million[14]. - Policy acquisition costs decreased by $12.0 million, or 12.6%, to $83.3 million for the year ended December 31, 2023, from $95.3 million for the year ended December 31, 2022[29]. - General and administrative expenses decreased by $12.8 million, or 30.3%, to $29.5 million for the year ended December 31, 2023, from $42.3 million for the year ended December 31, 2022[30]. Assets and Equity - Book value per share increased to $3.61, reflecting a 185.7% improvement year-over-year[2]. - Book value per common share increased 185.8% from $(4.21) at December 31, 2022, to $3.61 at December 31, 2023[38]. - Common stockholders' equity attributable to ACIC was $168,765 thousand at December 31, 2023, compared to $(182,039) thousand at December 31, 2022[39]. - The Company's cash and investment holdings increased from $340.9 million at December 31, 2022, to $369.0 million at December 31, 2023[37]. - Stockholders' equity improved to $168,765 from a deficit of $182,039 in 2022, reflecting a positive shift in financial health[56]. Discontinued Operations - Income from discontinued operations improved significantly, with a net income of $227.7 million for the full year compared to a loss of $429.9 million in the previous year[2]. - The company recognized losses from discontinued operations of $2.8 million related to the deconsolidation of United Property & Casualty Insurance Company[16]. - The Company recorded a gain on disposal of its former subsidiary UPC totaling $238.4 million, contributing to income from discontinued operations for the year[25]. Other Notable Information - The company has an exclusive partnership for distribution of Condominium Association properties in Florida with AmRisc Group[42]. - The company earned a Financial Stability Rating of 'A, Exceptional' from Demotech[42]. - The conference call is scheduled for February 29, 2024, at 5:00 P.M. ET[41]. - The company emphasizes the importance of non-GAAP measures for understanding performance, including core income and underlying combined ratio[44][46][47].

Group 1 - American Coastal Insurance Corporation (ACIC) will release its financial results for Q4 and full year 2023 on February 29, 2024, after market close [1] - A quarterly conference call will be held at 5:00 p.m. ET on the same day, including live remarks and a Q&A session [1] - Interested participants should dial in 10 minutes prior to the start of the conference call [1] Group 2 - American Coastal Insurance Corporation is the holding company for American Coastal Insurance Company, which was established in 2007 to insure condominium and homeowner association properties in Florida [2] - The company has an exclusive partnership with AmRisc Group for the distribution of condominium association properties in Florida [2] - American Coastal Insurance Company has received a Financial Stability Rating of 'A, Exceptional' from Demotech [2]

Core Viewpoint - American Coastal Insurance Corporation has announced significant changes to its executive leadership team, aiming to enhance operations and shareholder value through new appointments and promotions [1][2]. Leadership Changes - Svetlana Castle has been appointed as the new Chief Financial Officer, effective January 22, 2024, bringing 15 years of insurance industry experience and various academic qualifications [2][3]. - B. Bradford Martz will transition from CFO to focus on his role as President, emphasizing strategic initiatives and investor relations [3]. - J. Andy Gray has been promoted to Chief Compliance and Risk Officer, a newly created position, to enhance accountability and oversight in compliance and risk management [4][5]. Company Background - American Coastal Insurance Corporation is a property and casualty insurance holding company, founded in 2007, specializing in insuring condominium and homeowner association properties in Florida [6]. - The company has a partnership with AmRisc Group for the distribution of condominium association properties and has received a Financial Stability Rating of 'A, Exceptional' from Demotech [6].

Earnings Presentation 3rd Quarter 2023 Company Overview ACIC is a specialty underwriter of catastrophe exposed property insurance. American Coastal Insurance Corp. (Nasdaq: ACIC) is the insurance ACIC as of September 30, 2023 holding company for two P&C carriers: American Coastal Total Assets: $1.15 billion Insurance Company (AmCoastal) and Interboro Insurance Company (IIC) along with other operating affiliates. Total Equity: $120.6 million AmCoastal has the #1 market share of commercial residential Annuali ...

Financial Performance - Gross premiums written for Q3 2023 were $103.872 million, a slight increase from $103.153 million in Q3 2022[195]. - Gross premiums earned for the nine months ended September 30, 2023, were $468.435 million, compared to $390.576 million for the same period in 2022, reflecting a 20% increase[195]. - Net income from continuing operations for Q3 2023 was $14.373 million, a significant recovery from a loss of $27.446 million in Q3 2022[195]. - Core income for the nine months ended September 30, 2023, was $71.767 million, compared to a loss of $27.731 million for the same period in 2022[195]. - Net income attributable to ACIC for the three months ended September 30, 2023, was $10.568 million, compared to a net loss of $70.884 million in the same period of 2022[197]. - Net earnings attributable to ACIC for the nine months ended September 30, 2023 increased by $468,712,000, or 270.8%, to net income of $295,627,000 from a net loss of $173,085,000 for the same period in 2022[261]. Policy and Operations - Policies in-force decreased by 92.3% from 302,296 at September 30, 2022, to 23,162 at September 30, 2023, primarily due to the receivership of the former subsidiary UPC[192]. - The company has ceased writing personal residential business in South Carolina and Texas since May 1, 2022, and has divested ownership of UPC[186]. - The total number of new and renewal policies decreased by 14,710 to 19,274 for the nine months ended September 30, 2023, compared to 33,984 for the same period in 2022[264]. - The total number of new and renewal policies in Florida decreased to 629 from 818 year-over-year, a decline of 189 policies[244]. Revenue and Expenses - Total revenue for the three months ended September 30, 2023, was $58.714 million, down from $72.752 million in the same period of 2022, representing a decrease of about 19.3%[197]. - Total expenses significantly decreased to $41.012 million for the three months ended September 30, 2023, from $100.235 million in the prior year, a reduction of approximately 59.1%[197]. - Expenses decreased by $59,223,000, or 59.1%, to $41,012,000 for the three months ended September 30, 2023, compared to $100,235,000 for the same period in 2022[236]. - Total operating expenses decreased by $14,924,000, or 13.2%, to $97,865,000 for the nine months ended September 30, 2023, from $112,789,000 for the same period in 2022[267]. Loss Ratios and Claims - The loss ratio, net, improved to 24.7% for the three months ended September 30, 2023, compared to 75.1% in the prior year, indicating a significant reduction in loss expenses[197]. - The combined ratio for the three months ended September 30, 2023, was 68.7%, a substantial improvement from 139.3% in the same period of 2022[197]. - The underlying combined ratio, excluding the effects of current year catastrophe losses, was 64.2% for the three months ended September 30, 2023, compared to 91.2% in the prior year[199]. - Net loss and LAE for the third quarter of 2023 was $13,764,000, a decrease of $39,001,000, or 73.9%, from $52,765,000 in the third quarter of 2022[237]. Reinsurance and Catastrophe Losses - A quota share reinsurance agreement was established with TypTap Insurance Company, ceding 100% of UPC's in-force policies in Georgia, North Carolina, and South Carolina[189]. - The company purchased catastrophe excess of loss reinsurance protection up to an exhaustion point of approximately $1,300 million for the 2023 hurricane season, effective June 1, 2023[213]. - The total incurred catastrophe losses for Q3 2023 amounted to $5,847,000, with a combined ratio impact of 10.5%, compared to $35,606,000 and 50.7% in Q3 2022[225]. - The company has approximately $508 million of occurrence limit remaining for Hurricane Ian, with an aggregate limit of approximately $980 million after reinstatement premiums[214]. Investment and Cash Flow - Cash, cash equivalents, restricted cash, and investment portfolio totaled $286.944 million at September 30, 2023, down from $340.905 million at December 31, 2022[208]. - The company reported net investment income of $2.709 million for the three months ended September 30, 2023, an increase from $2.236 million in the same period of 2022[197]. - During the nine months ended September 30, 2023, the company experienced cash outflows of $184,889,000, a significant increase from cash outflows of $27,048,000 during the same period in 2022[297]. - Net sales of investments during the nine months ended September 30, 2023, totaled $263,877,000, compared to $99,702,000 in the same period of 2022[298]. General and Administrative Expenses - General and administrative expenses fell by $9,828,000, or 61.6%, to $6,131,000 for the third quarter of 2023, largely due to a one-time goodwill impairment charge[240]. - General and administrative expenses decreased by $10,724,000, or 33.3%, to $21,507,000 for the nine months ended September 30, 2023, from $32,231,000 for the same period in 2022[269]. Company Outlook and Concerns - The company concluded that substantial doubt about its ability to continue as a going concern has been alleviated as of June 30, 2023[293]. - The company did not have any off-balance sheet arrangements or material changes to its contractual obligations at September 30, 2023[301].

Financial Data and Key Metrics Changes - The commercial lines segment now comprises over 90% of the third quarter gross written premium and 95% of the gross earned premium, with pretax income of $25.9 million in the third quarter and $90.2 million year-to-date [5] - Core income for the quarter was $14.9 million or $0.34 a share, an increase of nearly $33 million compared to a core loss of $18.1 million or $0.42 a share last year [10] - Net income from continuing operations improved to $14.4 million or $0.33 a share, approximately $42 million better than a net loss of $27.5 million or $0.64 a share in the same period last year [10] - The combined ratio for the third quarter improved over 70 points to 68.7% compared to last year [11] Business Line Data and Key Metrics Changes - The net loss ratio for commercial lines was 19.5% in the third quarter and 19.7% year-to-date, in line with expectations [6] - The commercial lines net expense ratio decreased to 33% in the third quarter and 35.6% year-to-date, down from 43% and 44.2% respectively last year [6] - The underlying combined ratio for the commercial segment was 48.9% in the third quarter and 54.3% year-to-date, down from 57.7% and 66.1% year-over-year [7] - Gross written premium for commercial lines increased by 22% through the third quarter and 31% year-to-date [8] Market Data and Key Metrics Changes - The total insured value for the commercial portfolio was down 14%, while the probable maximum loss at the 100-year return period decreased by 23% year-over-year [8] - Florida continues to be a hard market, with benefits from insurance reform leading to reduced litigation [8] Company Strategy and Development Direction - The company is divesting Interboro, its New York domiciled personal lines carrier, to focus on commercial lines [9] - The outlook for Florida's commercial marketplace remains unchanged, with expectations for a hard market in the near and intermediate terms [9] - The company launched an at-the-market common stock offering to raise between $10 million and $20 million to support exposure growth and optimize reinsurance spend [15] Management's Comments on Operating Environment and Future Outlook - Management noted that Hurricane Idalia had a minimal impact, with current loss estimates well below the reinsurance attachment point [6] - The company expects to continue benefiting from the hard market conditions in Florida, which are conducive to outsized returns on capital [15] Other Important Information - Stockholders' equity increased to $120.6 million or $2.78 a share, a 7.3% increase from the prior quarter [14] - Cash and invested assets totaled nearly $287 million, with total assets of approximately $1.15 billion [14] Q&A Session Summary Question: Current quota share agreements and potential for a captive MGA - Management indicated that they have two 20% quota shares and view them as instrumental in the current catastrophe reinsurance program, with plans to reduce these over time [19] - The company has a Class B reinsurer domiciled in Cayman and plans to utilize it more extensively going forward [20] Question: Current book value of Interboro - The current book value of Interboro is approximately $23 million [21] Question: Split between price and volume in the increase of gross written premiums - The volume is down about 13% to 14%, while the rate is up around 30% [25]

Financial Performance - Gross premiums written for Q2 2023 were $243.885 million, up from $207.632 million in Q2 2022, representing an increase of 17.4%[195] - Net premiums earned for Q2 2023 were $83.169 million, compared to $64.532 million in Q2 2022, reflecting a growth of 28.8%[195] - Total revenues for Q2 2023 reached $79.295 million, an increase from $63.910 million in Q2 2022, marking a rise of 24.0%[195] - Earnings from continuing operations for Q2 2023 were $20.352 million, a significant recovery from a loss of $13.311 million in Q2 2022[195] - Core income for Q2 2023 was $26.192 million, compared to a loss of $10.693 million in Q2 2022, indicating a turnaround in financial performance[195] - Net income from continuing operations for Q2 2023 was $20.352 million, a significant recovery from a loss of $13.311 million in Q2 2022[196] - Net earnings attributable to American Coastal Insurance Corporation for Q2 2023 increased by $86,808,000, or 125.8%, to $17,779,000 from a net loss of $69,029,000 in Q2 2022[231] - Net earnings for the six months ended June 30, 2023 increased by $387,260,000, or 378.9%, to $285,059,000 from a net loss of $102,201,000 for the same period in 2022[258] Premiums and Policies - The number of policies in-force decreased by 49.0%, from 46,401 at June 30, 2022, to 23,664 at June 30, 2023, due to the receivership of the former subsidiary UPC[192] - The company is seeking a buyer for Interboro Insurance Company (IIC) to exit the personal lines business, expecting the sale price to match the book value of the entity[193] - Gross written premiums rose by $36,253,000, or 17.5%, to $243,885,000 in Q2 2023 compared to $207,632,000 in Q2 2022, primarily driven by an increase in commercial premiums written[232] - Direct written premium by state for Florida increased by $57,578,000 to $236,766,000 in Q2 2023 from $179,188,000 in Q2 2022[233] - Total new and renewal policies decreased by 6,942, from 12,962 in June 2022 to 6,020 in June 2023[234] - Gross written premiums for the six months ended June 30, 2023 increased by $80,962,000, or 23.1%, to $431,008,000 from $350,046,000 in the same period in 2022[259] Expenses and Losses - Expenses increased by $7,043,000, or 13.5%, to $59,036,000 for the three months ended June 30, 2023, compared to $51,993,000 for the same period in 2022[235] - Loss and LAE increased by $6,883,000, or 49.1%, to $20,915,000 for the second quarter of 2023, with a net earned premium loss ratio of 25.1%, up 3.4 points from 21.7% in 2022[236] - Catastrophe losses incurred in Q2 2023 totaled $6,540,000, impacting the combined ratio by 7.9%, compared to a loss of $(2,113,000) and a combined ratio impact of (3.3)% in Q2 2022[223] - Unpaid losses and loss adjustment expenses (LAE) totaled $534,676,000 as of June 30, 2023, down from $842,958,000 as of December 31, 2022[227] - Loss and LAE for personal lines decreased by $1,168,000, or 20.0%, to $4,670,000 in Q2 2023 from $5,838,000 in Q2 2022[255] - Loss and LAE expenses decreased by $10,858,000, or 60.2%, to $7,181,000 for the six months ended June 30, 2023, compared to $18,039,000 for the same period in 2022[282] Investment and Cash Flow - Cash, cash equivalents, and investment portfolio totaled $241.714 million at June 30, 2023, down from $340.905 million at December 31, 2022[206] - The company reported net investment income of $2.692 million in Q2 2023, up from $1.839 million in Q2 2022, a growth of 46.5%[196] - Cash outflows from operating activities totaled $232,823,000 for the six months ended June 30, 2023, compared to cash inflows of $8,286,000 during the same period in 2022[292] - Net sales of investments amounted to $258,736,000 for the six months ended June 30, 2023, compared to $83,661,000 during the same period in 2022[293] Reinsurance and Ceding Ratios - The company entered into a quota share reinsurance agreement with TypTap Insurance Company, ceding 100% of UPC's in-force policies in Georgia, North Carolina, and South Carolina effective June 1, 2022[189] - The total ceding ratio for the three months ended June 30, 2023, was 47.4%, a decrease from 50.2% in the same period of 2022[216] - For personal lines, the total ceding ratio for the three months ended June 30, 2023, was 25.9%, compared to 19.6% in 2022[218] - Ceded premiums written for the three months ended June 30, 2023, totaled $339,004 million, up from $191,712 million in the same period of 2022[220] Segment Performance - Pretax earnings for the commercial lines segment increased by $6,595,000, or 35.1%, to $25,381,000 for the second quarter of 2023[239] - Gross written premiums for the commercial lines segment increased by $55,755,000, or 30.8%, to $236,822,000 for the second quarter of 2023[240] - Total expenses for the commercial lines segment increased by $12,233,000, or 38.6%, to $43,903,000 for the second quarter of 2023[244] - Pretax earnings for the personal lines operating segment improved by $11,839,000, or 78.5%, resulting in a pre-tax loss of $3,243,000 for the six months ended June 30, 2023, compared to a loss of $15,082,000 in the same period of 2022[276] - Gross written premiums for the personal lines segment decreased by $23,470,000, or 57.2%, to $17,545,000 for the six months ended June 30, 2023, down from $41,015,000 in the same period of 2022[277]

Investor Presentation Second Quarter 2023 Company Overview ACIC is a specialty underwriter of catastrophe exposed property insurance. American Coastal Insurance Corp. (Nasdaq: ACIC - effective ACIC as of June 30, 2023 8.15.2023) is the insurance holding company for two P&C Total Assets: $1.44 billion carriers: American Coastal Insurance Company (AmCoastal) and Interboro Insurance Company (IIC) along with other Total Equity: $106.5 million operating affiliates. Annualized Revenue: $339.2 million AmCoastal ha ...

Financial Data and Key Metrics Changes - The core income for Q2 2023 was $28.4 million or $0.65 per share, a 236% increase year-over-year from $8.5 million or $0.20 per share [12] - Net income from continuing operations was $22.6 million or $0.52 per share, compared to $5.8 million or $0.14 per share in the same period last year, driven by strong underwriting performance [12] - The combined ratio improved over 9 points to 67.7% compared to the previous year, fueled by a $36 million or 17% increase in premiums written year-over-year [13] Business Line Data and Key Metrics Changes - The commercial lines segment accounted for over 97% of the second quarter gross written premium and 92% of the gross earned premium [7] - Pretax income from the commercial lines segment was $25.4 million in Q2 and $64.3 million year-to-date, with a net loss ratio of 22.0% in Q2 [8] - The net combined ratio in the commercial lines segment was 59.4% in Q2, down from 61.5% year-over-year [8] Market Data and Key Metrics Changes - The total insured value exposure in the commercial lines portfolio decreased by 12.8%, while the probable maximum loss at the 100-year return period decreased by 21% year-over-year [9] - Gross written premium increased by 31% in Q2 and 33.8% year-to-date [9] Company Strategy and Development Direction - The company has transitioned to a commercial specialty insurance business and changed its name to American Coastal Insurance Corporation, effective August 15, 2023 [7] - The company expects the hard market in Florida to create opportunities, as it holds the 1 market share for admitted commercial residential exposure in the state [11] Management's Comments on Operating Environment and Future Outlook - Management believes legislative changes in Florida will mitigate excessive litigation issues and reduce loss costs and insurance rates over time [10] - The Florida residential cat market remains hard, and it will take time for reinsurers and investors to become comfortable with the exposures [11] Other Important Information - Stockholders' equity increased to $106.5 million or $2.45 per share, a 27% increase from the prior quarter [16] - Cash and invested assets totaled nearly $242 million, with total assets exceeding $1.44 billion [16] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded with management thanking employees and investors for their support [22][20]