American Coastal Insurance (ACIC) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income rose 166% year-over-year to $28.1M ($0.57 per diluted share), driven by higher net premiums earned and investment income, with $27.7M from continuing operations.

• Non-GAAP core income increased 73.6% year-over-year to $26.9M ($0.54 per share), supported by a reduction in the gross CAT quota share from 40% to 20%.

• Book value per share rose 49.2% year-to-date to $5.38, and stockholders' equity increased to $259.6M.

• The company completed its first takeout from Citizens, expanding the condo book and launching a new apartment program, while the sale of Interboro Insurance Company (IIC) is pending.

• Active Atlantic hurricane season, including Hurricanes Debby, Helene, and Milton, impacted operations and resulted in claims and losses.

Financial highlights

• Net income for Q3 2024 was $28.1M, up from $10.6M in Q3 2023; core income was $26.9M, and core earnings per share of $0.54 exceeded analyst estimates.

• Net premiums earned increased 48.2% year-over-year to $74.5M; gross premium earned was $160.2M.

• Combined ratio improved to 57.7%, down from 62.7% in the prior year and better than the 65% target.

• Cash and investments rose to $630.9M, up 102.3% from year-end; book value per share increased to $5.38.

• Net investment income more than doubled to $6.1M in Q3 2024 from $2.1M in Q3 2023.

Outlook and guidance

• Full-year 2024 net income from continuing operations expected between $75.0–$80.0M, down from $85.2M in 2023 due to hurricane losses.

• Q4 2024 net income expected between $4.6–$9.6M, reflecting Hurricane Milton's impact; profitability expected in Q4 despite hurricane losses.

• Net premiums earned for FY24 guided to $270.0–$280.0M, up from $262.1M in 2023.

• Net retention for future hurricanes reduced to $10.3M per event, with full reinsurance tower reinstated.

• Management to focus on commercial residential insurance in Florida following the IIC sale.