Ategrity Specialty Insurance Company Holdings

Good afternoon everyone and thank you for joining us today for a Tegrity's second quarter fiscal year 2026 earnings results conference call. Speaking today are Justin Cohen, Chief Executive Officer, Chris Schenk, President and Chief Underwriting Officer, and Neel Adler, Chief Financial Officer. After Justin, Chris and Neel have made their formal remarks, we will open the call to questions. All lines have been placed on mute to prevent any background noise. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, 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, are 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-Gap Financial Measures to the Most Directly Comparable Gap 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. I will now turn the call over to Justin.

Good evening, and thank you all for joining Integrity's second quarter earnings call. This is Justin Cohen, and I'm joined today by Chris Schenk, our President and Chief Underwriting Officer, and Neal Adler, our Chief Financial Officer. Etegrity delivered another quarter of record results, including our highest ever quarterly written premiums, underwriting income, and net income. In a quarter in which the E&S industry contracted as a whole, we produced 23.4% growth in gross written premiums alongside an 85.9% combined ratio. with both metrics well ahead of guidance. These results reflect the strength of our productionized underwriting platform and the disciplined execution of our strategy. Growth was broad-based across both casualty and property with more than 20% premium growth in each, driven by expanding distribution relationships, targeted regional strategies, and new products launched over the past year. Importantly, our operating model demonstrated further scale this quarter. The combined ratio improved three points year-over-year, driven primarily by a reduction in our operating expense ratio to 9.5%. As premiums have grown, our centralized underwriting platform has processed higher volumes with expanding profitability. Turning to the market, while competitive pressure continued to intensify across portions of the E&S market, our differentiated positioning contributed to outperformance. We continue to identify attractive market segments in the small and medium-sized space that have less competition and in which we offer unique solutions that are resonating with our growing network of distribution partners. The strengths we've built across the business are increasingly reinforcing one another, and Chris will explain how that played out this quarter later in the call. But first, I would like to turn it over to Neal Adler, our Chief Financial Officer, to review our financial results.

Thank you, Justin. We delivered another strong quarter with adjusted net income of $33.5 million, up from $17.9 million in the same quarter last year, driven by top-line growth, improving margins, and continued strength in investment income. Gross written premiums were up 23.4%, with casualty premiums up 24.7%, and property premiums up 21.3%. Net written premiums increased 30.8%, which reflects higher retention year-over-year while net earned premiums were up 30.9%. Fee income was $3.4 million compared to $1.5 million a year ago with growth coming from standard policy fees introduced over the course of 2025. Our underwriting income for the quarter was $16 million up 66.9% year-over-year. That translated into a combined ratio of 85.9% compared to 88.9% last year. driven primarily by a reduction in our expense ratio. Our loss ratio came in at 58.5%, which was up a half a percentage point year over year, reflecting the continued shift in business towards our brokerage channel and lower catastrophe activity in prior year quarter. Catastrophe losses were 4.3% of net earned premiums up from 4.1% last year. We also had favorable developments this quarter equal to 0.9% of net earned premiums. On expenses, the overall expense ratio improves 3.5 points to 27.5%. Our operating expense ratio declined 2.9 points year-over-year to 9.5% of net earned premiums. The improvement reflected earned premiums growing faster than operating expenses together with higher fee income. Policy acquisition costs as a percentage of net earned premiums also declined in the second quarter to 17.9% from 18.5%. The continued shift in our business mix towards the brokerage channel also reduced policy acquisition costs, resulting in an overall economic benefit to our margins. Moving on to investment results. Net investment income was $12.7 million up from $11.9 million last year, reflecting a larger investment portfolio partially offset by lower short-term interest rates. Realized and unrealized gains were $18.6 million or $14.9 million net of non-controlling interest supported by strong results in our utility and infrastructure portfolio. Our effective tax rate was 20%, bringing net income to stockholders to $33.5 million. Adjusted net income was also $33.5 million, or $0.67 per diluted share. Turning briefly to the balance sheet, cash and investments increased by $62.3 million from the first quarter to $1.2 billion, reflecting strong operating cash flow. Book value increased by $33.4 million since the first quarter, driven by retained earnings and an increase in AOCI offset by the impact of shares purchased in the quarter under our stock repurchase program. Our book value per share ended the quarter at $13.86 per share, up 31% since our IPO. With that, I'll turn it over to Chris to discuss underwriting and operating performance.