Financial Data and Key Metrics Changes - The accident year combined ratio improved to 90.4%, resulting in an underwriting profit of $10.2 million, compared to 93.5% last year [7] - Net income for Q3 2025 was $12.5 million, consistent with last year's results, while underlying operating income increased by 19% [8][13] - Book value per share rose from $48.35 to $48.88, with a return to shareholders of 1.8% for the quarter [13] Business Line Data and Key Metrics Changes - Gross written premiums increased by 9% to $108.4 million, with a 13% growth excluding terminated products [15] - The wholesale commercial business grew by 10% to $67.9 million, driven by a 4% average rate increase [15] - Assumed reinsurance gross premiums grew 58% to $15.6 million due to new treaties added [17] Market Data and Key Metrics Changes - The investment income for Q3 2025 was $17.9 million, a 9% increase from the previous year [13] - The total investment return was $14.5 million for Q3 2025, with an annualized return of 4% [17] Company Strategy and Development Direction - The company is focusing on achieving substantial scale in its agency and insurance services segment through organic growth, new product launches, and strategic acquisitions [11] - A new legal and organizational structure was launched, and the company plans to have all existing products on a new system architecture by 2026 [10][11] - The company has rebranded its group to Catalyx and acquired IATA, an AI-enabled digital distribution marketplace [11] Management's Comments on Operating Environment and Future Outlook - Management noted that while the market remains favorable, competition is increasing, particularly as new products are introduced [10][26] - The outlook for 2025 is positive, with expectations of at least double-digit premium growth [18][30] - Corporate expenses are expected to remain higher due to investments in new business opportunities [14] Other Important Information - The board has decided to move the stock listing to NASDAQ, which is seen as more appropriate for the company's new chapter [12] - Discretionary capital was reported at $273 million, up from $260 million [31] Q&A Session Summary Question: Explanation of investment losses - The $4 million loss was a fair value decline on equities, not realized through sale, and is considered short-term [21] Question: Restructuring of investment portfolio - The company has deployed $200 million into corporates and mortgage-backed securities, with only 4% of the portfolio currently in short-term investments [23] Question: Increase in competition - Competition is increasing in small commercial and collectibles sectors, but the company is still achieving expected pricing levels [26] Question: Future premium growth expectations - Management remains optimistic about achieving at least double-digit premium growth [30] Question: Discretionary capital update - Discretionary capital is currently $273 million, an increase from the previous figure [31] Question: Thoughts on implementing a buyback program - The board has decided to focus on growth opportunities rather than stock buybacks in the short term [33]

Financial Data and Key Metrics Changes - Net income increased to $43.2 million in 2024 from $25.4 million in 2023, with a per-share value increase from $47.53 to $49.98 [24] - Investment income rose by 13% to $62.4 million compared to the previous year [25] - The consolidated accident year combined ratio improved to 95.4% in 2024 from 97.3% in 2023 [29] Business Line Data and Key Metrics Changes - Penn America segment's gross premiums increased by 12% in 2024, driven by a 17% growth in Insurtech and 12% growth in wholesale commercial [10] - Underwriting income for Penn America rose to $22.1 million in 2024 from $18.5 million in 2023, with an accident year combined ratio of 94.4% [30] - The assumed reinsurance business grew significantly, with gross written premiums increasing to $25.4 million from $13.9 million in 2023 [40] Market Data and Key Metrics Changes - Total gross premiums decreased to $389.8 million in 2024 from $416.4 million in 2023, primarily due to runoff from non-core segments [35] - The California wildfire losses amounted to $15 million, with the company reassessing its exposure and modeling for future risks [14][62] Company Strategy and Development Direction - The company is focusing on enhancing underwriting capabilities and expanding product offerings through strategic hires and technology investments [20][88] - A multi-year technology transformation is underway, with over 75% of the transition to the cloud completed [17] - The company aims for revenue growth of 10% from Penn America in 2025, alongside improvements in non-catastrophe accident year loss ratios [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term metrics for revenue growth and underwriting profits, despite challenges in the regulatory environment for rate increases in California [8][72] - The company is optimistic about the future, with plans to continue investing in growth and improving underwriting results [22][90] Other Important Information - The expense ratio for Penn America was reported at 38.1%, with a goal to reduce it to 37% or lower [16] - Discretionary capital increased to $255 million at the end of 2024, providing flexibility for future investments [42] Q&A Session Summary Question: Regarding the California fires, was it an underwriting issue or rate increase challenges? - Management indicated that they have been seeking rate increases but faced regulatory challenges, resulting in a sizable loss from a limited number of properties [46] Question: Can you provide more details on the reinsurance segment's growth? - The reinsurance segment has grown to 16 treaties with expectations for continued growth in 2025 and 2026 [49] Question: Is there potential for reducing the expense ratio without compromising underwriting quality? - Management acknowledged room for improvement in the expense ratio and indicated that they do not currently plan any special dividends [80] Question: What is the total exposure in California? - The total exposure in California is about six basis points of the total market, all on the direct book [58] Question: What kind of rate increases are expected in California following the wildfire? - Management anticipates needing at least a 50% rate increase for affected business, but regulatory challenges may complicate this [72]