American Coastal Insurance Corporation

Hello, and welcome to the American Coastal Insurance Corporation's 2023 Fourth Quarter and Full Year Earnings Conference Call and Webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Karen Daly, Vice President of the Equity Group and American Coastal's Investor Relations Representative. Please go ahead, Karen.

Thank you, Kevin, and good afternoon, everyone. American Coastal Insurance Corporation has also made this broadcast available on its website at www.amcoastal.com. A replay will be available for approximately 30 days following the call. Additionally, you can find copies of the latest earnings release and presentations in the investor section of the company's website. Speaking today will be Chairman of the Board and Chief Executive Officer R. Daniel Pede and President Bennett Bradford Marks. On behalf of the company, I'd like to note that statements made during this call that are not historical facts are forward-looking statements. The company believes these statements are based on reasonable estimates, assumptions, and plans. If these estimates, assumptions, or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those expressed in or implied by the forward-looking statements. Factors that could cause actual results to differ materially may be found in the company's filings with the U.S. Securities and Exchange Commission in the risk factors section of their most recent annual report on Form 10-K. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable law, the company undertakes no obligation to update or revise any forward-looking statement. With that, it's my pleasure to turn the call over to Mr. Daniel Pede. Dan, you may begin.

Thanks, Karen. Hello, and thank you for joining us on our fourth quarter earnings call. I'm Dan Pede, Chairman and CEO of American Coastal Insurance Corporation. I will provide an overview of results from the fourth quarter and year to date, and then turn it over to Brad Martz, who will expand on the financial results. Our core income for the fourth quarter is $17.7 million, which annualized is a 100.6% core return on equity. The core income at December 31st is $89.5 million. which is over a 100 million improvement year over year. Net income is primarily attributable to our commercial wine segment. The consolidated net loss ratio is 21.2% for the fourth quarter, 23 versus 54.3% in the same period in 2022. Consolidated net loss ratio year to date is 22.3%. The consolidated net expense ratio continues to trend downwards, 45.4% in the fourth quarter and 43.7% year to date, down from 50.2% and 56.2% respectively last year. The net combined ratio is 66.6% in the fourth quarter and 66.0% year to date, down from 104.5% and 106.2% year over year respectively. Personal lines underperformed in the fourth quarter and year-to-date, but the impact is smoothed by the commercial line segment continuing to outperform year-over-year. Pre-tax earnings attributable to the commercial line segment totaled $27.9 million for the fourth quarter of 2023 compared to $3.7 million for the fourth quarter of 2022. The commercial lines underlying combined ratio improved 17.5 points to 50.9% in the fourth quarter 2023 from 68.4% in the fourth quarter 2022. The same improvement holds true year-to-date with commercial lines underlying combined ratio improving 13.2 points year-over-year to 53.6% year-to-date for 2023. Earnings also improved as management implemented and achieved its plan for expense reduction in 2023. Policy acquisition, underwriting, and general and administrative expenses were all reduced, positively impacting the bottom line. AmCoastal's 2023 results position commercial lines in a solid position going into 2024 and creates opportunities unique to AmCoastal. the largest commercial residential lines rider in Florida behind only citizens, to continue its conservative reinsurance approach, protect its balance sheet, and identify opportunities to expand our products to meet the needs of Florida policyholders and create shareholder value. Moving on to personal lines, this segment experienced a pre-tax loss of $5.2 million in the fourth quarter of 2023. but that compares favorably to a pre-tax loss of 10.6 million in the fourth quarter of 2022. We continue confirmatory due diligence with the potential buyer of Interboro and expect to sign definitive documents shortly. The sale of Interboro will unlock capital and generate liquidity to explore diversification opportunities for our business. In all, net income attributable to the company for the year ended December 31st, 2023 was $309.9 million, or $7.11 per diluted share. Our at-the-market offering raised approximately $38 million to date, which, as we have stated, creates capacity for expanding specialty underwriting, especially during these hard market conditions. As a result of the strong performance of our commercial segment and the improvement in our personal line segment, Period over period, our book value per common share increased 29.8% from $2.78 at September 30, 2023, to $3.61 at December 31, 2023. While competition in the commercial line space is increasing, AmCoastal continues to be a commercial residential leader in Florida because of its well-established reputation, extensive distribution network, and underwriting expertise. I expect this unmatched competitive advantage will continue to drive results and deliver value to shareholders. With that, I'll turn it over to Brad Martz.