Ategrity Specialty Insurance Company Holdings

Good afternoon everyone and thank you for joining us today for a Tegrity's third quarter fiscal year 2026 earnings results conference call. Speaking today are Justin Cohen, Chief Executive Officer, Chris Schenk, President and Chief Underwriting Officer, and Neil Adler, Chief Financial Officer. After Justin, Chris, and Neil 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. 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. I will now turn the call over to Justin Cohen.

Good evening. and thank you all for joining Ategrity's third quarter earnings call. This is Justin Cohen and I'm joined today by Chris Schenk, our President and Chief Underwriting Officer and Neil Adler, our Chief Financial Officer. Ategrity delivered an exceptional underwriting quarter, achieving our lowest ever combined ratio of 84.7% and underwriting income growth of 83.7% year over year. These results demonstrate the strength of our underwriting strategy and the compounding benefits of our productionized platform. Our rigorous technical underwriting and centralized operating model are driving lower loss and expense ratios, while our differentiated products and solutions are generating strong business momentum and market share gains. Submissions grew 30% in the quarter, reflecting exceptional demand for our offerings that give our distribution partners a competitive edge. Gross written premiums grew approximately 15% year over year, substantially outpacing a relatively flat E&S market. While we expected to outperform the market by even more this quarter, we made two deliberate choices to prioritize long-term growth and profitability. First, we implemented meaningful rate increases on new casualty business to reflect the cost of expanded coverage and strengthen underwriting margins. Second, we rolled out our next generation underwriting technology, temporarily reducing productivity in exchange for substantially greater underwriting throughput and efficiency going forward. Chris will discuss these decisions and our new growth initiatives in greater detail later in the call. We enter the fourth quarter with four new specialty products, an expanded underwriting team and distribution network, and a more powerful underwriting system. Together, these capabilities expand our capacity to serve growing demand, capture additional market share, and profitably compound growth. With that, I'll turn it over to Neil Adler to review our financial results.

Thank you, Justin. We produced adjusted net income of $14.7 million compared to $22.8 million a year ago. Underwriting income grew 83.7% and net investment income increased 19.1% with those gains offset by realized and unrealized investment losses. Gross rent and premiums were up 14.7% with property premiums up 25% and casualty premiums up 10%. Net rent and premiums increased 25.8%, which reflects higher retention year over year, while net earned premiums were up 35.7%. Fee income was $2.6 million compared to $2.2 million a year ago, with growth coming from standard policy fees introduced over the course of 2025. Our underwriting income for the quarter was $19.5 million, producing a combined ratio of 84.7% compared to 88.7% last year, driven primarily by a reduction in both our loss and expense ratios. Our loss ratio came in at 57.5%, which was down 2.5 points year-over-year, reflecting favorable underwriting performance across both property and casualty, including 1.6 points of favorable development. Catastrophe losses were 4.2% of net earned premiums, up from 4% last year. On expenses, the overall expense ratio improved 1.5 points to 27.2%. Our operating expense ratio declined 0.8 points year-over-year to 10% 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 third quarter to 17.2% from 17.9%. The continued shift in our business mix towards the brokerage channel reduced policy acquisition costs and benefited underwriting margins. Moving on to investment results. Net investment income was $13.1 million, up from $11 million last year, reflecting a larger investment portfolio and higher interest rates. Realized and unrealized losses were $17.2 million or $13.7 million net of non-controlling interest, primarily reflecting a normalization of the substantial gains recorded earlier this year in our utility and infrastructure investments, which had been running well ahead of long-term street expectations of 5.5% annually. As of the end of the third quarter, year-to-date returns remained above that annual expectation. Our effective tax rate was 24%, bringing net income to stockholders to $14.6 million. Adjusted net income was $14.7 million, or $0.29 per diluted share. Turning briefly to the balance sheet, cash and investments increased by $33.5 million from the second quarter to $1.24 billion, reflecting strong operating cash flow. Book value decreased by $6.7 million from the second quarter as an increase in retained earnings was offset by a decline in AOCI due to the material move in U.S. Treasury yields in the third quarter. We did not repurchase any shares during the quarter. Our book value per share ended the quarter at $13.72, up 30% since our IPO. With that, I'll turn it over to Chris to discuss underwriting and operating performance.