AMERICAN COASTAL INSURANCE (ACIC) 10 Aug 232023 Q2 Earnings call transcript

Hello, and welcome to the American Coastal Insurance Corporation Second Quarter 2023 Financial Results Conference Call and Webcast. [Operator Instructions].

As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Karin Daly, Vice President, Investor Relations with The Equity Group. Please go ahead, Karin.

good and Kevin, you, afternoon, everyone. Thank Insurance on its Coastal Corporation has available broadcast this made website also American at www.amcoastal.com. A for call. replay approximately XX days available will following be the

and of Additionally, find of the presentation website. in latest the you company's the copies earnings can section Investors release

Daniel Bennett will R. Martz. Chairman Executive be and President today the Board and Speaking Chief Chief and of Officer Peed; Financial Officer,

statements. company, during historical plans. of the estimates, I'd company forward-looking this facts that behalf note reasonable made like statements On statements these not call are are on are The believes to based and assumptions

Form However, differ by our to or risks Securities U.S. Factors statements Exchange or results the forward-looking the in may recent could reports found that most with annual these expressed differ underlying and other prove actual section arise, materially the those company's the results could the statements. filings Factors on if on forward-looking estimates, Form actual assumptions Commission, XX-K uncertainties Risk in materially subsequent cause XX-Q. if implied in inaccurate or or quarterly and from plans be in report

company as the by statements and only made, which applicable update except revise obligation no Forward-looking they statements. speak law, are on date to of as the or undertakes forward-looking required any

turn With call that, Peed. over my may pleasure begin. the Dan, it's to to you Mr. Daniel

for planning Chairman Brad second who and us operations. for lines our financial our the earnings to it on thanks the continuing activities on Hello, will joining operations of year-to-date Insurance the turn expand of the of CEO continuing quarter specifically and Martz, results Peed, on to then I'll touching our numbers, Thanks, American including Corporation. over segment. commercial I'm overview the operating Karin. results Dan and second quarter and Coastal call. I'm

transition changed will gross Coastal Company August with Insurance written we ticker, of that this track Corporation trading through We've Insurance The has Holding business quarter immediately the XX-year from XX% of the specialty over the we Insurance premium now as we ACIC. premium. comprises effective XX% future Insurance XX, consistent and product commercial In Corporation. performance company a transition Coastal better American announced company to holding specialty a And begin We direction segment the our new in underwritten of to predominantly the second gross name American reflects completed XX of have Florida. earned to lines commercial our record of United Coastal this Company. July a insurance and commercial light business, financial believe American

the to numbers. Back

Given applicable the extreme and the operations, operations accounting in most year-to-date variances from numbers consider to lines the by I results continuing discontinued for the commercial be quarterly segment. introduced

segment, focus the I'm lines through Brad to and going on lines the going includes is Interboro. such, continuing to commercial mostly from As continuing operations, personal operations which results highlight then our

expectations. respectively. both The segment income the For lines was quarter XX.X% ratio $XX.X $XX.X in and line The the in second down quarter was ratio year-over-year, XX.X% points from the year. and and down net XX.X% year-to-date, combined last the from second in XX% XX.X% commercial XX.X% and about in The X year-to-date, second net the and the XX.X% quarter ratio expense in quarter XX.X% second with the lines loss net segment, commercial year-to-date. XX.X% million pretax million year-to-date, in was was

second X.X% quarter which to year favorable lines from second be and and XX.X% portfolio. produced underlying in in spring. the year-over-year, XX.X% the by the Now down the X.X% despite the in second profitability the cat combined in very line ratio the was loss active commercial in year-to-date, improvement year-to-date. and X.X% demonstrating lines XX.X% cat development with season segment. year-to-date, underlying ratio XX.X% X.X% continued at addressing commercial is Prior expectations quarter The The and quarter the this was

To down as the maximum down while insured year-over-year XX% is basis. value highlight lines gross the XX.X% In exposure AIR both return commercial written the the contrast, year-to-date. was period modeled total probable using and a metrics is underwriting loss up the XX% on second at on XX.X%, portfolio, quarter few a the XXX-year premium in

up X%. an quoted Valuation from is and Submissions average business were to ratio X.X%, up hit XX%. decreased renewal for of the XX%

the of the prove of system assignment subsequently, their to to benefits litigate, continue the loss half one-way issues over Florida to we be as changes elimination of the the The other will report, fees as forward, some Looking insurance will intent attorney legislative effective costs reduce notification pre-suit rates. to years. in last time the well dozen and work of changes made excessive through mitigation an of reduced to believe way litigation and

negative some these it However, of for the in sentiments Florida term, the will near way appear take to But to work their system. reinsurers' through time have changes exposure. mitigated surrounding some does the the it

Florida cat market hard. will some get time investors reinsurers exposures that residential the Florida the remains and conclusion, In It offers. with challenges for to and take comfortable

for creates and terms. it American least expect share #X market the the Florida. an admitted While in market at intermediate market creates having hard for the also challenges, residential I commercial Coastal the for near to remain excellent exposure opportunity hard

turn I'll to over Martz. that, it With Brad

review everyone XX-Q American is Coastal more CFO of our This information pleased Corporation. and Brad the Martz, for and results financial regarding review Forms hello. release, and to press Dan, to company's performance. President I'm but investor and you, presentation XX-K our Thank Insurance the encourage

investment about the Pages XX, a a discontinued share to operations. year, of $X.XX of $X.XX included our and summary current of or $X.X our the year-over-year XXX% income quarter for of from or by recast in X a underwriting $XX.X income operations million last by reduced losses tax $XX.X versus which or million which million million grew investor period $X.X segment, continuing was in million partially June a year, last or or commercial which share period. favorably strong presentation a a performance $X.XX share net $X.XX provide compared core same share Net driven $X.X share of X of in lines the XXXX, $X.XX ending

Our combined X XX% year, the our policies or over ratio versus fueled in risk lines in to and million year-over-year the personal points the intentional by second reduction last exposure overall accomplishments The against successful for premiums XX.X% premiums despite $XX with segment. severity retention last were reinsurance in at the against and our quarter the catastrophe the increase over lowest a written Interboro the protection quarter improved most we've programs $XX the decade written placement Coastal reduced just second of during million. had new more American hurricane and Florida and significant for

earned investor and income nonrecurring Page XX.X% or the of increased well these an our XXX% year net provides catastrophe revenue breakdown losses the losses. amounts, highlight items, for helping ceded premiums presentation and recast year-to-date results X as investment a continuing grew quarter, second our to decreased Despite gross in of premiums the which against overcome $XX.X million, year-over-year to as from growing quarter year-over-year. $XX.X operations from more million of increase XXXX

with $X breaks expense from million interest Page pretax to down X of personal a commercial company. investor million holding million of and from our by lines, profit loss our $XX.X a results at the by reduced primarily $X.X lines loss presentation related segment

lines with quarter. we continuing should of now affiliate, of to from also from operations Page million $X.X United quarter, impact certain current discontinued our segment, reconcile of part our investor the net impact derived or presentation year-to-date that discontinued as P&C, to moving and net the Accordingly, our nonrecurring the During included be this summarizes immaterial personal determined operations The former last to of book income X revenue operations. was no reported change help results. with value roughly impact expenses

$X.XX bond an portfolio total share, or on including of equity or indicating declined highlights increasing increase of provides $X.XX invested to $XXX.X from balance the share, of share million and Page prior to our million XX, about investor of assets X $XXX approximately stockholders' nearly value of June our a assets $X.XX Unrealized with presentation per over quarter. XX% book $X.XX. billion. $XX.X an sheet as million totaled Cash underlying a losses

Reinsurance our will this will impact risk-based has capital a the net of capital and portion quota premium role increase short our of on higher XXXX, June risk, our in the in X, improve term. management our ratio the reduce plays share reinsurance company's from XX% to year a critical strategy, ceding in expected help the in but also away which turn profit underwriting XX%

position our will commercial long capital us However, more statutory improving lines retain term. and over write business profitable allow the to

with is Fund of aggregate occurrence limit, And not combined XX the the the and limit. of structure is X quota investor the Florida Coastal Hurricane scale limit market XXXX, reinsurance occurrence programs enduring remaining to and interact our final billion cost and open to for how Pages Interboro. The layers about million altogether, tower, American that Coastal XXXX shows or of here, the $XXX XX% base on limit. X and the which $X.X Page Catastrophe XX% and with the XX% represents $XXX prepaid. it American market private share billion show for FORA presentation when private drawn of roughly graph perfectly effects million reinstatable, programs of Of $X.X X catastrophe of

group program. fully the reinsurer of program, Layer The on did effect Thus, event of the Florida could from captive $XX take not consolidated a Coastal's but increasing of Coastal if to layer also captive the it small $XX.X retention have to utilized a Interboro's X% exhausts American on company first its program. million American our X participation, participate million the

our take prepared now are completes questions. remarks, to happy That and we any

the this closing [Operator any to management turn comments. at time, Instructions]. floor there are If questions no back further I'll or for over

our to company. for specialty in call would is our again. transition commercial and Okay. like your then as your I associates Thanks. on Dan. this their for interest this And investors, our employees time and thanks diligent we for company efforts thank underwriter. to a Thanks This

Thank teleconference and today's does conclude you. webcast. That

this you your wonderful line have a You may thank for time, We and participation at your today. day. disconnect