American Coastal Insurance (ACIC) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income rose 166% year-over-year to $28.1M ($0.57 per diluted share), driven by higher net premiums earned and investment income, with $27.7M from continuing operations.

• Non-GAAP core income increased 73.6% year-over-year to $26.9M ($0.54 per share), supported by lower ceded earned premiums after reducing the gross CAT quota share from 40% to 20%.

• Gross premiums written remained stable at $93.0M for Q3, while net premiums earned increased 48.2% to $74.5M.

• Book value per share rose 49% to $5.38 at September 30, 2024, from $3.61 at year-end 2023.

• The sale of Interboro Insurance Company is pending, with results now reported as discontinued operations; United Property & Casualty Insurance Company was divested in 2023.

Financial highlights

• Net income for Q3 2024 was $28.1M (vs. $10.6M in Q3 2023); core income reached $26.9M, up $11.4M year-over-year.

• Net premiums earned increased 48.2% year-over-year to $74.5M in Q3 2024.

• Combined ratio improved to 57.7%, down from 62.7% in the prior year period and better than the 65% target.

• Book value per share increased to $5.38, up 49.2% from year-end.

• Cash and investments rose to $630.9M, up 102.3% from year-end.

Outlook and guidance

• Full-year 2024 net income from continuing operations expected between $75.0–$80.0M, down from $85.2M in 2023 due to hurricane losses.

• Q4-24 net income expected between $4.6–$9.6M, reflecting Hurricane Milton's impact.

• Profitability expected in Q4 and for the full year despite hurricane losses, with full reinsurance tower in place for future events.

• Net retention for future hurricanes will drop to $10.3M for the next two named storms.

• Management expects continued focus on commercial residential insurance in Florida following the IIC sale.