American Coastal Insurance (ACIC) Q1 2025 earnings summary

Executive summary

• Achieved a combined ratio of 65% and core return on equity over 34% for Q1 2025, with strong account retention and selective new business driving a 9% increase in net premiums earned year-over-year.

• Net income attributable to the company was $21.3 million ($0.43 per diluted share), down from $23.6 million ($0.48 per diluted share) in Q1 2024, due to higher policy acquisition costs offsetting increased revenues.

• Sale of Interboro Insurance Company closed April 1, 2025, with $26.5 million in cash proceeds; discontinued operations contributed $1.6 million net income in Q1 2025.

• Policies in force grew 6% since year-end; premiums in force reached $661 million as of March 31, 2025.

• Revenue growth driven by increased new and renewal policies, offset by higher policy acquisition costs.

Financial highlights

• Gross premiums written rose 7.2% to $197.9 million; net premiums earned increased 9% to $68.3 million compared to Q1 2024.

• Net income for the quarter was $21.3 million; core income was $20.7 million, down 15.3% year-over-year due to higher policy acquisition costs.

• Book value per share increased 26.5% year-over-year to $5.40; tangible book value per share rose to $4.06.

• Cash, cash equivalents, and investments totaled $568.8 million at March 31, 2025, up from $540.8 million at year-end.

• Loss and LAE ratio improved to 16.7% from 19.9%; expense ratio increased to 48.3% from 33.3% year-over-year.

Outlook and guidance

• Management remains focused on disciplined underwriting and sustainable profitability, emphasizing value creation for shareholders.

• Apartment insurance initiative is progressing, with annualized premiums projected at $18–20 million, though growth will be cautious due to market competitiveness.

• No material changes to risk factors or guidance; company continues to monitor market and regulatory developments.

• Projected core CAT program for 6/1/25 expects increased occurrence and aggregate limits year-over-year, with a risk-adjusted cost decrease of approximately 12%.

• Retention for first event set at $29.75 million, up from $20.5 million prior year.