Ategrity Specialty Insurance Company Holdings

Good afternoon, everyone, and thank you for joining us today for Ategrity's Fourth Quarter Fiscal Year 2025 Earnings Results Conference Call. Speaking today are Justin Cohen, Chief Executive Officer, Chris Schenk, President and Chief Underwriting Officer, and Neelam Patel, Chief Financial Officer. After Justin, Chris, and Neelam have made their formal remarks, we will open the call to questions. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. Before we begin, I would like to mention that certain matters discussed in today's conference call are forward-looking statements relating to future events, management's plans and objectives for the business and the future financial performance of the company. that are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are referred to in our press release issued today, our final prospectus, and other filings filed with the SEC. We do not undertake any obligation to update the forward-looking statements made today. Finally, the speakers may refer to certain adjusted or non-GAAP financial measures on this call. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is also available in our press release issued today, a copy of which may be obtained by visiting the Investor Relations website at investors.integrity.com. And with that, I will now turn the call over to Justin.

Good evening, and thank you all for joining Ategrity's fourth quarter earnings call. This is Justin Cohen, and I'm joined here today by Chris Schenk, our President and Chief Underwriting Officer, and Neelam Patel, our CFO. Ategrity once again delivered record results in Q4, demonstrating strength on both the top and bottom line. Gross written premiums grew 30% year over year, exceeding our guidance of outperforming E&S industry growth by 20 percentage points. Our 84.9% combined ratio in the quarter is a new record for the company. We continue to profitably grow our market share in the small and mid-sized ENS space because of three key factors. First, in our core specialty verticals, we have identified market gaps and built targeted products around them, producing structural growth while maintaining strict technical discipline. Second, we have grown our distribution network of nearly 600 partners. Through tight alignment of product and execution, we have driven strong submission volume, including nearly 90% year-over-year growth this quarter. Third, we have engineered our workflows and automation to deliver speed with precision, responding quickly to brokers while maintaining rigorous standards at scale. Together, these factors have driven both growth and margin expansion in a moderating E&S market. turning to additional dynamics from the quarter. In property, we grew 18% year over year with strong sequential acceleration in stark contrast to the overall property market, which contracted as a whole. By focusing on small and medium sized attritional risks where we have an underwriting advantage, we position ourselves away from the more cyclical, large account, catastrophe exposed market. Our 84.9% combined ratio reflects favorable loss experience business mix, and operating leverage. Net earned premiums grew 25 percentage points faster than operating expenses net of fees, driving a 6.1 percentage point improvement in our overall expense ratio, even as we continue to invest in growth initiatives and technology. On technology, in recent weeks, the capital markets have focused on the risks of AI to the specialty insurance industry. At Ategrity, over two years ago, we developed a clear roadmap for integrating AI and made critical investments in that direction. Those investments have now been operationalized, and we will provide some additional context later in the call. Finally, stepping back to broader E&S market dynamics, while industry growth has decelerated, it is less the case in our small and midsize segment. Competitive intensity increased marginally again this quarter. but we continue to stand out through our business model and execution, driving growth in our market share. With that, I will turn it over to Neelam to discuss the financial results.

Thanks, Justin. We delivered another strong quarter with adjusted net income of $25.4 million, up from $22.7 million in the same quarter last year, driven by top-line growth, improving margins, and continued strength in our investment income. Our gross return premiums were up 30% in the quarter and the growth was broad-based. Casualty premiums grew 38% and property premiums grew 18%. Net return premiums increased 44%, which reflects higher retention year over year. Net earned premiums were up 34%, which is less than net written premium growth because of the natural lagged recognition of our growth trajectory. Net earned premium growth accelerated sequentially due to our expanded premium base and the impact of the reduction in our quarter share reinsurance in 2025. Our fee income was 2.3 million compared to 0.4 million a year ago, reflecting standard policy fees implemented in 2025. Our underwriting income for the quarter was 15.5 million, up 160% year over year. That translates into a combined ratio of 84.9% compared to 92.3% last year due to reductions in both our loss and expense ratios. The loss ratio came in at 57.1%, down 1.2 points year over year, driven by strong underlying results in our property business. We again had no prior year development. Catastrophe losses were 3.2% of net earned premium down from 3.7% last year due to very few catastrophe events in the fourth quarter. On expenses, the overall expense ratio improved 6.1 points to 27.8%. Operating expense was 10.5% of net earned premiums down 2.4 points year over year and lower than Q2 and Q3 of 2025. That improvement was driven by earned premiums growing faster than operating expenses along with the benefit of higher fee income. Policy acquisition costs as a percent of net earned premiums declined to 17.3% from 21%. The improvement was primarily mixed-driven, as growth has been concentrated in lines of business carrying lower acquisition costs and higher seeding commissions. Moving on to investment results. Net investment income was $11.6 million, up from $6.3 million last year, reflecting a larger investment portfolio. Realized and unrealized gains were 6.7 million, supported by strong results in our utility and infrastructure portfolio. Our effective tax rate was 20.2%, bringing net income to 25.3 million. Adjusted net income was 25.4 million, or 51 cents per diluted share. Turning to the balance sheet, cash and investments increased by 45 million from the third quarter to 1.1 billion, reflecting strong operating cash flow. Book value increased by 26 million, driven by retained earnings. Our book value per share ended the quarter at $12.78, up 21% since the IPO. Overall, the quarter reflects strong growth, underwriting discipline, and operating leverage. With that, I'll turn it over to Chris to discuss underwriting and operating performance.