Asked about the underwriting profit outlook, management reiterated a target of $1.5 billion , noting the past two years have run higher but emphasizing conservatism and the company’s ability to absorb catastrophe losses as its premium base has expanded.The company recorded $752 million of favorable reserve development in 2025, a benefit of 2.9 points on the combined ratio, marking the 19th consecutive year of favorable reserve development. Clarke said runoff operations strengthened reserves by $298 million ...

(Note: All dollar amounts in this news release are expressed in U.S. dollars except as otherwise noted. The financial results are derived from unaudited consolidated financial statements prepared using the recognition and measurement requirements of International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). This news release contains certain non-GAAP and other financial measures, including underwriting profit (loss), adjusted operatin ...

Summary of American Coastal Insurance Conference Call Company Overview - **Company**: American Coastal Insurance Corporation (Ticker: ACIC) - **Industry**: Specialty insurance focused on commercial residential property insurance in Florida - **Market Position**: Holds the number one market share, insuring approximately 4,300 out of 17,000 condominium associations in Florida [2][3] Core Business Strategy - **Focus Shift**: Transitioned from personal loans and homeowners insurance to commercial residential insurance, with plans to expand outside Florida [3][4] - **Underwriting Profitability**: Achieved consistent underwriting profit since inception in 2007, even during adverse conditions [4][5] - **Risk Characteristics**: Targets low-rise, garden-style commercial residential buildings with an average total insured value of about $16 million, focusing on properties valued between $5 million and $60 million [5][12] Financial Performance - **2025 Financials**: As of September 2025, gross premium earned was nearly $500 million, with net premium earned at $228 million, reflecting a 15% growth [20][21] - **Return on Equity**: Core return on equity stands at 37.9% [21] - **Stockholders' Equity**: Reported at $1.2 million with total cash and cash equivalents increasing to $270 million from $137 million at the end of 2024 [21][22] Reinsurance Strategy - **Risk Transfer**: Utilizes extensive reinsurance to mitigate volatility, with a main catastrophe reinsurance program covering named hurricanes and tropical storms [16][17] - **Retention Levels**: Retains $30 million on the first event and $19 million on the second event, with total coverage of $1.3 billion [16] - **New Programs**: Introduced an aggregate CAT reinsurance program in 2025, providing additional protection against high-severity, high-frequency catastrophe events [17] Growth Opportunities - **New Product Launches**: Launched new underwriting programs for apartments and assisted living facilities through their own Managing General Agency (MGA) named Skyway [19][20] - **Market Expansion**: Plans to leverage underwriting capabilities to enter new products and geographies, enhancing growth potential [29][30] Capital Allocation and Shareholder Value - **Dividends and Buybacks**: Plans to focus on special dividends, increasing from $0.50 to $0.75 per share for 2024, with potential buybacks contingent on stock price performance [23][24] - **Long-term Leverage Goals**: Aims to maintain a leverage ratio of less than 25% [23] Market Conditions and Outlook - **Insurance Cycle**: Acknowledges the current softening cycle in the insurance market but remains optimistic about underwriting profitability through careful risk selection [14][30] - **Earnings Volatility Management**: Emphasizes the importance of reducing earnings volatility through strategic reinsurance rather than maximizing average earnings [25][26] Key Takeaways - **Strong Financial Position**: The company has a robust capital base and liquidity, allowing for growth without immediate debt financing [22] - **Focus on Underwriting Profit**: Prioritizes underwriting profit over aggressive growth, ensuring sustainable long-term performance [30][31] - **Strategic Partnerships**: Maintains a beneficial partnership with AmRisc for underwriting, while also developing internal capabilities through Skyway [10][11]

Financial Data and Key Metrics Changes - Consolidated operating income for 2025 was $1,100,000,000 compared to $410,000,000 in the same period last year, driven by changes in unrealized gains on the equity portfolio [19] - Overall recurring investment income from interest and dividends reached $467,000,000 for 2025 compared to $441,000,000 a year ago [14] - The Markel Insurance combined ratio was 96.9% versus 93.8% in the same quarter one year ago [30] Business Line Data and Key Metrics Changes - Markel Ventures revenues grew to $2,700,000,000 year to date compared to $2,600,000,000, with operating income increasing to $310,000,000 from $281,000,000 [15] - Underwriting gross written premiums were down 2% for the quarter but up 1% year to date, with a 26% decline from Global Reinsurance [28] - Programs and Solutions gross written premiums were up 8% in the second quarter year over year, driven by growth in Personal Lines [29] Market Data and Key Metrics Changes - The dollar weakened against the euro and British pound, resulting in a net loss from foreign currency of $192,000,000 [25] - The price of each Markel Group share closed at $19.97 on June 30, 2025, compared to $15.76 a year ago [16] Company Strategy and Development Direction - The company is focusing on simplifying its insurance operations and enhancing financial reporting to align with its strategy [5][10] - A decision was made to sell renewal rights for the global reinsurance business and put it into runoff, allowing the company to focus on core lines of business [9][36] - The organizational structure of U.S. Wholesale and Specialty operations was simplified, consolidating under new leadership to improve accountability and performance [10][44] Management Comments on Operating Environment and Future Outlook - Management acknowledged challenges in certain product lines but expressed confidence in the ongoing business's strong performance, particularly in the International division [42] - The company expects the impact of underwriting actions to reduce in the second half of the year, improving overall attritional loss ratios [30][37] - Management emphasized the importance of maintaining a conservative approach to reserves, believing they are more likely redundant than deficient [13][37] Other Important Information - The company reported six points of overall favorable reserve development for Markel Insurance in the first half of the year, continuing a 20-year trend of favorable reserve development [13] - The company has federated over 70% of corporate and shared service personnel into business units to enhance efficiency and accountability [49][50] Q&A Session Summary Question: Can you share the capital that might be freed up by the reinsurance going into runoff? - Management indicated that capital relief will occur over time as premium volume reduces and reserves run down, but the reserves will still sit on the books initially [58][60] Question: How much of the Programs and Solutions business is written by MGAs? - Approximately a third of the segment's business comes from delegated underwriting programs, with a mix of larger and smaller programs contributing to the total [70] Question: Any comments on the workers' comp line and emerging signs of medical inflation pressure? - The workers' comp line has seen gradual takedowns and has performed well, but medical inflation is a watch area [78][80] Question: Can you elaborate on the adverse development in the risk managed D and O book? - Management noted that claims severity and frequency exceeded expectations, prompting strong reserving actions to address the issue [90][94]

Core Insights - Fairfax Financial Holdings Limited reported net earnings of $945.7 million in Q1 2025, an increase from $776.5 million in Q1 2024, driven by higher net gains on investments despite a decrease in adjusted operating income to $685.5 million from $977.1 million [1][2][12] - The book value per basic share rose to $1,080.38 as of March 31, 2025, reflecting a 3.5% increase from $1,059.60 at the end of 2024, adjusted for dividends [1][18] Financial Performance - The property and casualty insurance and reinsurance operations generated adjusted operating income of $685.5 million, with a consolidated combined ratio of 98.5% and an underwriting profit of $96.9 million despite catastrophe losses of $781.3 million from California wildfires [2][8][12] - Gross premiums written increased by 5.0% to $8,474.0 million, while net premiums written grew by 8.4% to $6,843.1 million, indicating strong business growth [5][22] Investment Gains - Net gains on investments totaled $1,056.1 million, primarily from common stocks ($779.5 million) and bonds ($388.4 million), reflecting favorable market conditions [3][10][12] - The fixed income portfolio remains conservatively positioned, with 70% in U.S. treasuries and government bonds, and 20% in high-quality corporate bonds [10] Cash and Liquidity - The company ended the quarter with approximately $2.1 billion in cash and marketable securities, alongside $1.7 billion in investments in associates and consolidated non-insurance companies [4][12] Segment Performance - The insurance service result for property and casualty insurance and reinsurance operations was $609.1 million, down from $1,037.5 million in 2024, primarily due to increased catastrophe losses [7][12] - The company recorded a net favorable prior year reserve development benefit of $219.1 million, compared to $29.9 million in 2024 [12][19] Shareholder Returns - The company paid a dividend of $15.00 per common share in Q1 2025, consistent with the previous year [18][20] - The total debt to total capital ratio, excluding non-insurance companies, increased to 25.3% from 24.8% at the end of 2024, reflecting short-term borrowings and preferred share redemptions [16][35]

Financial Data and Key Metrics Changes - American Coastal Insurance Corporation reported a net income of $4.9 million for Q4 2024, with core income decreasing by $12 million year-over-year to $6 million due to a 20.53% tax retention from Hurricane Milton [18][19] - Gross premium earned increased by $3.6 million to $162.7 million, while the combined ratio was 91.9%, with Hurricane Milton contributing 27.8% to this ratio [19][20] - The full-year 2024 pre-tax income was approximately $102 million, up nearly 6% year-over-year, despite incurring $23 million more in net catastrophe losses [14][15] Business Line Data and Key Metrics Changes - The company successfully launched a new apartment program in Florida, writing 19 new apartment risks totaling approximately $2.3 million in premium [8] - New business growth and better-than-expected renewal account retention contributed to a sequential quarter-over-quarter increase in policy count [10] - The company aims for a modest target of about $20 million in premium from the apartment book for 2025, with potential for growth in subsequent years [35] Market Data and Key Metrics Changes - Rates are continuing to decrease due to favorable trends in loss and reinsurance costs, with average account renewal pricing down between 5% and 10% year-over-year [30] - The company has received hundreds of high-quality submissions from distribution partners, indicating a strong market interest [9] Company Strategy and Development Direction - American Coastal is focused on maintaining underwriting profit as the primary objective for all new business, emphasizing the importance of risk selection [9][56] - The company has enhanced its reinsurance protections, including a new three-year catastrophe bond upsized from $100 million to $200 million, which includes a cascading feature for multiple hurricane events [11][12] - The strategic goal is to achieve a combined ratio of 65 before catastrophe losses, maintaining profitability despite pricing changes [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the successful absorption of Hurricane Milton's losses within a single quarter's profit [7][15] - The company projects a net income range of $70 million to $90 million for 2025, supported by strong liquidity and capitalization [23] - Management noted that while the California fires may impact the global reinsurance market, they do not expect significant effects on American Coastal [60][62] Other Important Information - Stockholders' equity increased by 39.6% to $235.7 million, reflecting strong underwriting results and a $24 million dividend paid to shareholders [22] - The company received regulatory approval to complete the sale of Interboro, which will add approximately $22 million in cash to the holding company [24] Q&A Session Summary Question: Can you provide an update on pricing and how it is evolving? - Management indicated that pricing is changing due to expectations of future loss and reinsurance costs, with a positive outlook for the Florida marketplace [28][30] Question: What is the aspirational target for the apartment book? - The company aims for a target of $20 million in premium for the apartment book in 2025, with potential for growth in the following years [35] Question: What changes are expected in the reinsurance structure for the upcoming renewal? - Management is actively working on the reinsurance structure and aims to keep a modest retention that can be absorbed within a typical quarter's earnings [37][40] Question: What implications do the recent California fires have for American Coastal? - Management believes the impact will be minimal, although it may affect capacity in the global reinsurance market [60][62] Question: Can you elaborate on the new coverage that has become available? - The new CAT bond provides superior coverage with a cascading feature for multiple events, offering more protection than in previous years [65]