American Coastal Insurance Corporation

As a reminder, this conference is being recorded. It's now my pleasure to turn it over to your host, Karen Daly with the Equity Group. 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 presentation in the investor section of the company's website. Speaking today will be President and Chief Executive Officer Bennett Bradford-Martz and Chief Financial Officer Svetlana Castle. 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. However, if the 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. and subsequent quarterly reports on Form 10-Q. 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 statements. With that, it's my pleasure to turn the call over to Brad Mard. Brad?

Thank you, Karen. Today, I'm pleased to report American Coastal continued to deliver exceptional results during the first quarter by hitting our target combined ratio of 65% and also producing a core return on equity of over 34%. We successfully grew our policies in force approximately 6% since year end, with premiums in force as of March 31st, 2025, totaling approximately $661 million. New business growth combined with solid renewal account retention of approximately 88% helped increase gross premiums written by over 7% compared to the same period last year. The Florida condominium market has continued to generate media attention this year, focused primarily on declining affordability and resale values. We acknowledge and certainly understand such issues can be challenging, but they are not having a significant impact on our business. The market for older, high-rise, waterfront condos in Florida, where most of the concerns lie, but that is not our target market. Conversely, the underwriting environment for newer, well-maintained, low-rise, garden-style condos further inland in Florida, where American coastal is focused, remains relatively healthy and competitive. This is evidenced by the fact that we are currently open to new business and passing on savings in the form of lower rates to our policyholders without sacrificing margins that allow us to underwrite this risk. Next, I'd like to offer a quick progress update on our core catastrophe reinsurance program renewal, effective June 1st, 2025, page 12 of our earnings presentation. provides an overview of the projected structure. At this point, we are now 100% placed except for a new top layer shown on this page as layer five, which was recently firm ordered to the market and is in the process of being finalized. Assuming we end up placing 100% of that top layer, that would bring our estimated first event limit up approximately 16% from the 1.16 billion last year to approximately 1.35 billion this year. Our aggregate protection from multiple events is also expected to increase pretty significantly, about 32% year-over-year, given the new drop-down features of the two top layers. ACIC is buying significantly more protection this year due to both exposure growth and a more conservative view of hurricane risk. Last year we disclosed our program exhausted at roughly the 208-year return time using an equal blend of AIR version 10 and RMS version 22. And if you use that same model view on our expected renewal this year, the exhaustion point increases to close to the 250-year return time. However, our updated view of risk incorporates the new versions of both AIR and RMS in the return time shown on this page, so that obviously distorts the comparability. Our first event retention is expected to increase from approximately $20.5 million last year to $29.75 million this year, but is similar to last year as a percentage of stockholders' equity. For three full retention events, we expect to retain $52 million, up from $46.5 million last year, but this is down as a percentage of our equity. We are extremely grateful for the broad support we received this year from our reinsurance partners, and the risk-adjusted reinsurance rate decrease estimated at approximately 12% is consistent with the rate decreases we're currently sharing with our policyholders. The risk-adjusted rate decreases did vary by layer between 10 and 22 percent, with the first layer being flat due to Hurricane Milton. Overall, we're very pleased with the 6 renewal progress, and we will have more detail regarding it in an 8 filing within a couple of weeks. I'll now turn it over to our CFO, Lana Castle, for more specifics on our first quarter results.