American Coastal Insurance Corporation Reports Financial Results for Its Third Quarter Ended September 30, 2024
American Coastal Insurance (ACIC) reported strong Q3 2024 financial results with net income of $28.1 million ($0.57 per diluted share), up 166.1% from $10.6 million in Q3 2023. Total revenue increased 56.4% to $82.1 million. The company maintained strong underwriting performance with a combined ratio of 57.7%, improving from 62.7% year-over-year. Gross premiums written remained relatively stable at $93 million. Book value per share increased 49% to $5.38 from $3.61 at year-end 2023. The company reduced its quota share reinsurance coverage from 40% to 20% effective June 1, 2024.
American Coastal Insurance (ACIC) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un utile netto di 28,1 milioni di dollari (0,57 dollari per azione diluita), in crescita del 166,1% rispetto ai 10,6 milioni di dollari del terzo trimestre del 2023. Il fatturato totale è aumentato del 56,4% a 82,1 milioni di dollari. L'azienda ha mantenuto una forte performance di sottoscrizione con un rapporto combinato del 57,7%, in miglioramento rispetto al 62,7% dell'anno precedente. I premi lordi scritti sono rimasti relativamente stabili a 93 milioni di dollari. Il valore contabile per azione è aumentato del 49% a 5,38 dollari rispetto ai 3,61 dollari di fine 2023. L'azienda ha ridotto la propria copertura di riassicurazione in quota dal 40% al 20% a partire dal 1° giugno 2024.
American Coastal Insurance (ACIC) reportó resultados financieros sólidos para el tercer trimestre de 2024, con un ingreso neto de 28,1 millones de dólares (0,57 dólares por acción diluida), un aumento del 166,1% desde los 10,6 millones de dólares en el tercer trimestre de 2023. Los ingresos totales aumentaron un 56,4% a 82,1 millones de dólares. La compañía mantuvo un sólido desempeño de suscripción con una proporción combinada del 57,7%, mejorando desde el 62,7% del año anterior. Las primas brutas escritas se mantuvieron relativamente estables en 93 millones de dólares. El valor contable por acción aumentó un 49% a 5,38 dólares desde 3,61 dólares a finales de 2023. La compañía redujo su cobertura de reaseguro de cuota del 40% al 20% a partir del 1 de junio de 2024.
American Coastal Insurance (ACIC)는 2024년 3분기 강력한 재무 실적을 보고하며, 순이익이 2,810만 달러(희석 주당 0.57 달러)로 2023년 3분기 1,060만 달러에서 166.1% 증가했다고 발표했습니다. 총 수익은 56.4% 증가하여 8,210만 달러에 이릅니다. 이 회사는 57.7%의 결합 비율로 강력한 인수 성과를 유지하여 전년 대비 62.7%에서 개선되었습니다. 총 작성된 보험료는 9,300만 달러로 상대적으로 안정세를 유지했습니다. 주당 장부 가치는 3.61 달러에서 5.38 달러로 49% 증가했습니다. 이 회사는 2024년 6월 1일부터 40%에서 20%로 재보험 쿼터 공유를 줄였습니다.
American Coastal Insurance (ACIC) a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec un bénéfice net de 28,1 millions de dollars (0,57 dollar par action diluée), en hausse de 166,1 % par rapport à 10,6 millions de dollars au troisième trimestre 2023. Le chiffre d'affaires total a augmenté de 56,4 % pour atteindre 82,1 millions de dollars. La société a maintenu une forte performance de souscription avec un ratio combiné de 57,7 %, s'améliorant par rapport à 62,7 % d'une année sur l'autre. Les primes brutes souscrites sont restées relativement stables à 93 millions de dollars. La valeur comptable par action a augmenté de 49 % pour atteindre 5,38 dollars, contre 3,61 dollars à la fin 2023. L'entreprise a réduit sa couverture de réassurance sur quote-part de 40 % à 20 %, à compter du 1er juin 2024.
American Coastal Insurance (ACIC) berichtete über starke Finanzergebnisse für das 3. Quartal 2024 mit einem Nettogewinn von 28,1 Millionen Dollar (0,57 Dollar pro verwässerter Aktie), was einem Anstieg von 166,1 % gegenüber 10,6 Millionen Dollar im 3. Quartal 2023 entspricht. Der Gesamterlös stieg um 56,4 % auf 82,1 Millionen Dollar. Das Unternehmen hielt eine starke Underwriting-Performance mit einer kombinierten Quote von 57,7 % aufrecht, was eine Verbesserung gegenüber 62,7 % im Jahresvergleich darstellt. Die geschriebenen Bruttobeiträge blieben mit 93 Millionen Dollar relativ stabil. Der Buchwert pro Aktie stieg um 49 % auf 5,38 Dollar von 3,61 Dollar zum Jahresende 2023. Das Unternehmen reduzierte seine Quotenanteils-Rückversicherung von 40 % auf 20 %, wirksam ab dem 1. Juni 2024.
- Net income increased 166.1% to $28.1 million in Q3 2024
- Revenue grew 56.4% to $82.1 million
- Combined ratio improved to 57.7% from 62.7%
- Book value per share increased 49% to $5.38
- Core income rose 73.6% to $26.9 million
- Gross premiums written declined 1% to $93 million
- Net premiums earned from continuing operations decreased 5.8% for the nine months period
- Core income per diluted share decreased 15.3% for the nine-month period
Insights
American Coastal Insurance reported strong Q3 2024 results with
- Revenue increased
56.4% to$82.1 million - Combined ratio improved to
57.7% from62.7% - Book value per share grew to
$5.38 , up93.5% YoY
The improved performance stems from reduced reinsurance costs (quota share decreased from
The results demonstrate excellent underwriting performance with the underlying combined ratio improving to
Company to Host Quarterly Conference Call at 5:00 P.M. ET on November 6, 2024 and Announces their 2024 Virtual Investor Day at 11:00 A.M. ET on December 4, 2024
The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.
ST. PETERSBURG, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or the "Company"), a property and casualty insurance holding company, today reported its financial results for the third quarter ended September 30, 2024.
| ($ in thousands, except for per share data) | Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
| Gross premiums written | $ | 93,016 | $ | 93,986 | (1.0)% | $ | 507,066 | $ | 507,449 | (0.1)% | ||||||
| Gross premiums earned | $ | 160,178 | $ | 157,777 | $ | 475,898 | $ | 445,589 | ||||||||
| Net premiums earned | $ | 74,486 | $ | 50,264 | $ | 200,498 | $ | 212,919 | (5.8)% | |||||||
| Total revenue | $ | 82,136 | $ | 52,532 | $ | 217,390 | $ | 213,149 | ||||||||
| Income from continuing operations, net of tax | $ | 27,669 | $ | 15,015 | $ | 70,451 | $ | 67,824 | ||||||||
| Income (loss) from discontinued operations, net of tax | $ | 450 | $ | (4,447) | $ | 321 | $ | 227,803 | NM | |||||||
| Consolidated net income | $ | 28,119 | $ | 10,568 | $ | 70,772 | $ | 295,627 | (76.1)% | |||||||
| Net income available to ACIC stockholders per diluted share | ||||||||||||||||
| Continuing Operations | $ | 0.56 | $ | 0.34 | $ | 1.43 | $ | 1.54 | (7.1)% | |||||||
| Discontinued Operations | $ | 0.01 | $ | (0.10) | 0.01 | 5.19 | (99.8)% | |||||||||
| Total | $ | 0.57 | $ | 0.24 | $ | 1.44 | $ | 6.73 | (78.6)% | |||||||
| Reconciliation of net income to core income: | ||||||||||||||||
| Plus: Non-cash amortization of intangible assets and goodwill impairment | $ | 610 | $ | 812 | (24.9)% | $ | 2,031 | $ | 2,436 | (16.6)% | ||||||
| Less: Income (loss) from discontinued operations, net of tax | $ | 450 | $ | (4,447) | $ | 321 | $ | 227,803 | NM | |||||||
| Less: Net realized gains (losses) on investment portfolio | $ | (3) | $ | 4 | NM | $ | (124) | $ | (6,787) | |||||||
| Less: Unrealized gains on equity securities | $ | 1,543 | $ | 177 | NM | $ | 1,542 | $ | 792 | NM | ||||||
| Less: Net tax impact (1) | $ | (195) | $ | 133 | NM | $ | 129 | $ | 1,771 | (92.7)% | ||||||
| Core income (2) | $ | 26,934 | $ | 15,513 | $ | 70,935 | $ | 74,484 | (4.8)% | |||||||
| Core income per diluted share (2) | $ | 0.54 | $ | 0.35 | $ | 1.44 | $ | 1.70 | (15.3)% | |||||||
| Book value per share | $ | 5.38 | $ | 2.78 | ||||||||||||
| NM = Not Meaningful | ||||||||||||||||
| (1) In order to reconcile net income to the core income measures, the Company included the tax impact of all adjustments using the | ||||||||||||||||
| (2) Core income and core income per diluted share, both of which are measures that are not based on GAAP, are reconciled above to net income and net income per diluted share, respectively, the most directly comparable GAAP measures. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below. | ||||||||||||||||
Comments from Chief Executive Officer, Dan Peed:
“Foremost, American Coastal is committed to helping and responding to those who were impacted by Hurricanes Debby, Helene and Milton. Having so many associates impacted by the storms, we understand the requirement for, and expectation of, exceptional customer service. Two of American Coastal’s core values are collaboration and resiliency, and I am proud that our associates embody these values in the wake of devastating storms that impacted so many.
Our performance this quarter reflects these core values and the strength of our underwriting discipline and the focus on protecting American Coastal from outsized exposure. We continue reporting increased returns on equity and combined ratios lower than
Return on Equity and Core Return on Equity
The calculations of the Company's return on equity and core return on equity are shown below.
| ($ in thousands) | Three Months Ended | Nine Months Ended | ||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Income from continuing operations, net of tax | $ | 27,669 | $ | 15,015 | $ | 70,451 | $ | 67,824 | ||||
| Return on equity based on GAAP income from continuing operations, net of tax(1) | ||||||||||||
| Income (loss) from discontinued operations, net of tax | $ | 450 | $ | (4,447) | $ | 321 | $ | 227,803 | ||||
| Return on equity based on GAAP income (loss) from discontinued operations, net of tax(1) | (52.7)% | NM | ||||||||||
| Consolidated net income | $ | 28,119 | $ | 10,568 | $ | 70,772 | $ | 295,627 | ||||
| Return on equity based on GAAP net income (1) | NM | |||||||||||
| Core income | $ | 26,934 | $ | 15,513 | $ | 70,935 | $ | 74,484 | ||||
| Core return on equity (1)(2) | ||||||||||||
| (1) Return on equity for the three and nine months ended September 30, 2024 and 2023 is calculated on an annualized basis by dividing the net income or core income for the period by the average stockholders' equity for the trailing twelve months. | ||||||||||||
| (2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income, which is reconciled on the first page of this press release to net income, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below. | ||||||||||||
Combined Ratio and Underlying Ratio
The calculations of the Company's combined ratio and underlying combined ratio on a consolidated basis and attributable to Interboro Insurance Company ("IIC"), now captured within discontinued operations, are shown below.
| ($ in thousands) | Three Months Ended | Nine Months Ended | ||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||
| Consolidated | ||||||||||||
| Loss ratio, net (1) | (3.7) pts | 0.9 pts | ||||||||||
| Expense ratio, net (2) | (1.3) pts | (3.5) pts | ||||||||||
| Combined ratio (CR) (3) | (5.0) pts | (2.6) pts | ||||||||||
| Effect of current year catastrophe losses on CR | (3.1) pts | (3.6) pts | ||||||||||
| Effect of prior year favorable development on CR | (1.8)% | (6.2)% | 4.4 pts | (1.2)% | (5.2)% | 4.0 pts | ||||||
| Underlying combined ratio (4) | 52.9% | 59.2% | (6.3) pts | 57.2% | 60.2% | (3.0) pts | ||||||
| IIC | ||||||||||||
| Loss ratio, net (1) | (7.6) pts | (12.7) pts | ||||||||||
| Expense ratio, net (2) | (15.3) pts | (14.4) pts | ||||||||||
| Combined ratio (CR) (3) | (22.9) pts | (27.1) pts | ||||||||||
| Effect of current year catastrophe losses on CR | (12.5) pts | (8.2) pts | ||||||||||
| Effect of prior year favorable development on CR | (6.0)% | (4.4)% | (1.6) pts | (4.7)% | (3.4)% | (1.3) pts | ||||||
| Underlying combined ratio (4) | 100.6% | 109.4% | (8.8) pts | 112.0% | 129.6% | (17.6) pts | ||||||
| (1) Loss ratio, net is calculated as losses and loss adjustment expenses ("LAE"), net of losses ceded to reinsurers, relative to net premiums earned. | ||||||||||||
| (2) Expense ratio, net is calculated as the sum of all operating expenses, less interest expense relative to net premiums earned. | ||||||||||||
| (3) Combined ratio is the sum of the loss ratio, net and expense ratio, net. | ||||||||||||
| (4) Underlying combined ratio, a measure that is not based on GAAP, is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below. | ||||||||||||
Combined Ratio Analysis
The calculations of the Company's loss ratios and underlying loss ratios are shown below.
| ($ in thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||
| Loss and LAE | $ | 11,774 | $ | 9,822 | $ | 1,952 | $ | 39,525 | $ | 39,968 | $ | (443) | ||||||
| % of Gross earned premiums | 1.2 pts | (0.7) pts | ||||||||||||||||
| % of Net earned premiums | (3.7) pts | 0.9 pts | ||||||||||||||||
| Less: | ||||||||||||||||||
| Current year catastrophe losses | $ | 4,953 | $ | 4,891 | $ | 62 | $ | 5,156 | $ | 13,189 | $ | (8,033) | ||||||
| Prior year reserve favorable development | (1,357) | (3,105) | 1,748 | (2,379) | (11,212) | 8,833 | ||||||||||||
| Underlying loss and LAE (1) | $ | 8,178 | $ | 8,036 | $ | 142 | $ | 36,748 | $ | 37,991 | $ | (1,243) | ||||||
| % of Gross earned premiums | — pts | (0.8) pts | ||||||||||||||||
| % of Net earned premiums | (5.0) pts | 0.5 pts | ||||||||||||||||
| (1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below. | ||||||||||||||||||
The calculations of the Company's expense ratios are shown below.
| ($ in thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||
| Policy acquisition costs | $ | 20,942 | $ | 13,606 | $ | 7,336 | $ | 44,476 | $ | 62,298 | $ | (17,822) | ||||||
| Operating and underwriting | 2,115 | 2,081 | 34 | 6,492 | 6,962 | (470) | ||||||||||||
| General and administrative | 8,174 | 6,011 | 2,163 | 26,987 | 21,036 | 5,951 | ||||||||||||
| Total Operating Expenses | $ | 31,231 | $ | 21,698 | $ | 9,533 | $ | 77,955 | $ | 90,296 | $ | (12,341) | ||||||
| % of Gross earned premiums | 5.7 pts | (3.9) pts | ||||||||||||||||
| % of Net earned premiums | (1.3) pts | (3.5) pts | ||||||||||||||||
Quarterly Financial Results
Net income for the third quarter of 2024 was
The Company's total gross written premium remained relatively flat, decreasing by
| ($ in thousands) | Three Months Ended September 30, | ||||||||||
| 2024 | 2023 | Change $ | Change % | ||||||||
| Direct Written and Assumed Premium by State | |||||||||||
| Florida | $ | 93,016 | $ | 93,965 | $ | (949) | (1.0)% | ||||
| New York | — | — | — | — | |||||||
| Total direct written premium by state | 93,016 | 93,965 | (949) | (1.0) | |||||||
| Assumed premium | — | 21 | (21) | (100.0) | |||||||
| Total gross written premium by state | $ | 93,016 | $ | 93,986 | $ | (970) | (1.0)% | ||||
| Gross Written Premium by Line of Business | |||||||||||
| Commercial property | $ | 93,016 | $ | 93,986 | $ | (970) | (1.0)% | ||||
| Personal property | — | — | — | — | |||||||
| Total gross written premium by line of business | $ | 93,016 | $ | 93,986 | $ | (970) | (1.0)% | ||||
Loss and LAE increased by
Policy acquisition costs increased by
Operating and underwriting expenses remained unchanged at
General and administrative expenses increased by
IIC Results Highlights
Net income attributable to IIC totaled
Reinsurance Costs as a Percentage of Gross Earned Premium
Reinsurance costs as a percentage of gross earned premium in the third quarter of 2024 and 2023 were as follows:
| 2024 | 2023 | |||
| Non-at-Risk | (0.5)% | (0.2)% | ||
| Quota Share | (16.2)% | (31.5)% | ||
| All Other | (36.8)% | (36.4)% | ||
| Total Ceding Ratio | (53.5)% | (68.1)% |
Ceded premiums earned related to the Company's catastrophe excess of loss contracts remained relatively flat quarter-over-quarter. The Company's utilization of quota share reinsurance coverage resulted in less excess of loss coverage needed for the 2023-2024 catastrophe year; however, the cost savings associated with this reduction in necessary coverage were offset by rate increases on catastrophe excess of loss coverage for the same period. This utilization of quota share reinsurance coverage increased the Company's ceding ratio overall during 2023. Effective June 1, 2024, the Company decreased its quota share reinsurance coverage from
Reinsurance costs as a percentage of gross earned premium in the third quarter of 2024 and 2023 for IIC, captured within discontinued operations, were as follows:
| IIC | ||||
| 2024 | 2023 | |||
| Non-at-Risk | (2.5)% | (2.8)% | ||
| Quota Share | —% | —% | ||
| All Other | (21.9)% | (27.9)% | ||
| Total Ceding Ratio | (24.4)% | (30.7)% | ||
Investment Portfolio Highlights
The Company's cash, restricted cash and investment holdings increased from
Book Value Analysis
Book value per common share increased
| ($ in thousands, except for share and per share data) | ||||||
| September 30, 2024 | December 31, 2023 | |||||
| Book Value per Share | ||||||
| Numerator: | ||||||
| Common stockholders' equity | $ | 259,582 | $ | 168,765 | ||
| Denominator: | ||||||
| Total Shares Outstanding | 48,204,962 | 46,777,006 | ||||
| Book Value Per Common Share | $ | 5.38 | $ | 3.61 | ||
| Book Value per Share, Excluding the Impact of AOCI | ||||||
| Numerator: | ||||||
| Common stockholders' equity | $ | 259,582 | $ | 168,765 | ||
| Less: Accumulated other comprehensive loss | (11,617) | (17,137) | ||||
| Stockholders' Equity, excluding AOCI | $ | 271,199 | $ | 185,902 | ||
| Denominator: | ||||||
| Total Shares Outstanding | 48,204,962 | 46,777,006 | ||||
| Underlying Book Value Per Common Share (1) | $ | 5.63 | $ | 3.97 | ||
| (1) Underlying book value per common share is a non-GAAP financial measure and is reconciled above to book value per common share, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures"section below. | ||||||
Conference Call Details
Date and Time: November 6, 2024 - 5:00 P.M. ET
Participant Dial-In: (United States): 877-445-9755 / (International): 201-493-6744
Webcast: To listen to the live webcast, please go to https://investors.amcoastal.com and click on the conference call link at the top of the page or go to: https://event.webcasts.com/starthere.jsp?ei=1692077&tp_key=987914f3a40. An archive of the webcast will be available for a limited period of time thereafter.
Presentation: The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.
Virtual Investor Day
American Coastal Insurance Corporation will host its 2024 Investor Day on Wednesday, December 4, 2024 from 11:00 A.M. ET. This will be a virtual video event that investors can access live from American Coastal's investor relations website at https://investors.amcoastal.com. The event will feature presentations from the senior leadership team and will highlight operational developments and strategic initiatives across the business.
Investors are encourage to pre-submit questions for the Q&A portion of the event by emailing the Company's investor relations representative, Karin Daly, Vice President, The Equity Group, at kdaly@equityny.com. There will also be an opportunity to ask live questions via chat during the webcast. A replay of the webcast will be available shortly after the event concludes.
About American Coastal Insurance Corporation
American Coastal Insurance Corporation (amcoastal.com) is the holding company of the insurance carrier, American Coastal Insurance Company, which was founded in 2007 for the purpose of insuring Condominium and Homeowner Association properties, and apartments in the state of Florida. American Coastal Insurance Company has an exclusive partnership for distribution of Condominium Association properties in the state of Florida with AmRisc Group (amriscgroup.com), one of the largest Managing General Agents in the country specializing in hurricane-exposed properties. American Coastal Insurance Company has earned a Financial Stability Rating of “A”, "Exceptional" from Demotech, and maintains an “A-” insurance financial strength rating with a Stable outlook by Kroll. ACIC maintains a ‘BB+’ issuer rating with a Stable outlook by Kroll.
| Contact Information: |
| Alexander Baty |
| Vice President, Finance & Investor Relations, American Coastal Insurance Corp. |
| investorrelations@amcoastal.com |
| (727) 425-8076 |
| Karin Daly |
| Investor Relations, Vice President, The Equity Group |
| kdaly@equityny.com |
| (212) 836-9623 |
Definitions of Non-GAAP Measures
The Company believes that investors' understanding of ACIC's performance is enhanced by the Company's disclosure of the following non-GAAP measures. The Company's methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.
Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure that is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on the Company's investment portfolio, net of tax, and unrealized gains (losses) on the Company's equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and, therefore, the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of the Company's operations. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net income (loss) and does not reflect the overall profitability of the Company's business.
Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income (loss) for the period by the average stockholders’ equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). Core income (loss) is an after-tax non-GAAP measure that is calculated by excluding from net income (loss) the effect of income (loss) from discontinued operations, net of tax, non-cash amortization of intangible assets, including goodwill, unrealized gains or losses on the Company's equity security investments and net realized gains or losses on the Company's investment portfolio. In the opinion of the Company’s management, core income (loss), core income (loss) per share and core return on equity are meaningful indicators to investors of the Company's underwriting and operating results, since the excluded items are not necessarily indicative of operating trends. Internally, the Company’s management uses core income (loss), core income (loss) per share and core return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis. The most directly comparable GAAP measure is return on equity. The core return on equity measure should not be considered a substitute for return on equity and does not reflect the overall profitability of the Company's business.
Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. The Company believes that this ratio is useful to investors, and it is used by management to highlight the trends in the Company's business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause the Company's loss trends to vary significantly between periods as a result of their frequency of occurrence and severity and can have a significant impact on the combined ratio. Prior year development is caused by unexpected loss development on historical reserves. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered as a substitute for the combined ratio and does not reflect the overall profitability of the Company's business.
Net loss and LAE excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE) is a non-GAAP measure that is computed by subtracting the effect of current year catastrophe losses and prior year reserve development from net loss and LAE. The Company uses underlying loss and LAE figures to analyze the Company's loss trends that may be impacted by current year catastrophe losses and prior year development on the Company's reserves. As discussed previously, these two items can have a significant impact on the Company's loss trends in a given period. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net loss and LAE. The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of the Company's business.
Book value per common share, excluding the impact of accumulated other comprehensive loss (underlying book value per common share), is a non-GAAP measure that is computed by dividing common stockholders' equity after excluding accumulated other comprehensive income (loss), by total common shares outstanding plus dilutive potential common shares outstanding. The Company uses the trend in book value per common share, excluding the impact of accumulated other comprehensive income (loss), in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes this non-GAAP measure is useful to investors because it eliminates the effect of interest rates that can fluctuate significantly from period to period and are generally driven by economic and financial factors that are not influenced by management. Book value per common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of accumulated other comprehensive income (loss), should not be considered a substitute for book value per common share and does not reflect the recorded net worth of the Company's business.
Discontinued Operations
On May 9, 2024, the Company entered into the Sale Agreement with Forza Insurance Holdings, LLC ("Forza") in which ACIC will sell and Forza will acquire
Forward-Looking Statements
Statements made in this press release, or on the conference call identified above, and otherwise, that are not historical facts are “forward-looking statements”. The Company believes these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions, or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those expressed in, or implied by, the forward-looking statements. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words such as “may,” “will,” “expect,” "endeavor," "project," “believe,” "plan," “anticipate,” “intend,” “could,” “would,” “estimate” or “continue” or the negative variations thereof or comparable terminology. Factors that could cause actual results to differ materially may be found in the Company's filings with the U.S. Securities and Exchange Commission, in the “Risk Factors” section in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements.
| Consolidated Statements of Comprehensive Income | ||||||||||||
| In thousands, except share and per share amounts | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| REVENUE: | ||||||||||||
| Gross premiums written | $ | 93,016 | $ | 93,986 | $ | 507,066 | $ | 507,449 | ||||
| Change in gross unearned premiums | 67,162 | 63,791 | (31,168) | (61,860) | ||||||||
| Gross premiums earned | 160,178 | 157,777 | 475,898 | 445,589 | ||||||||
| Ceded premiums earned | (85,692) | (107,513) | (275,400) | (232,670) | ||||||||
| Net premiums earned | 74,486 | 50,264 | 200,498 | 212,919 | ||||||||
| Net investment income | 6,110 | 2,087 | 15,474 | 6,225 | ||||||||
| Net realized investment gains (losses) | (3) | 4 | (124) | (6,787) | ||||||||
| Net unrealized gains on equity securities | 1,543 | 177 | 1,542 | 792 | ||||||||
| Total revenues | $ | 82,136 | $ | 52,532 | $ | 217,390 | $ | 213,149 | ||||
| EXPENSES: | ||||||||||||
| Losses and loss adjustment expenses | 11,774 | 9,822 | 39,525 | 39,968 | ||||||||
| Policy acquisition costs | 20,942 | 13,606 | 44,476 | 62,298 | ||||||||
| Operating expenses | 2,115 | 2,081 | 6,492 | 6,962 | ||||||||
| General and administrative expenses | 8,174 | 6,011 | 26,987 | 21,036 | ||||||||
| Interest expense | 3,067 | 2,718 | 9,212 | 8,156 | ||||||||
| Total expenses | 46,072 | 34,238 | 126,692 | 138,420 | ||||||||
| Income before other income | 36,064 | 18,294 | 90,698 | 74,729 | ||||||||
| Other income (loss) | 453 | (237) | 2,074 | 1,157 | ||||||||
| Income before income taxes | 36,517 | 18,057 | 92,772 | 75,886 | ||||||||
| Provision for income taxes | 8,848 | 3,042 | 22,321 | 8,062 | ||||||||
| Income from continuing operations, net of tax | $ | 27,669 | $ | 15,015 | $ | 70,451 | $ | 67,824 | ||||
| Income (loss) from discontinued operations, net of tax | 450 | (4,447) | 321 | 227,803 | ||||||||
| Net income | $ | 28,119 | $ | 10,568 | $ | 70,772 | $ | 295,627 | ||||
| OTHER COMPREHENSIVE INCOME: | ||||||||||||
| Change in net unrealized gains (losses) on investments | 7,529 | (2,761) | 7,404 | (698) | ||||||||
| Reclassification adjustment for net realized investment losses (gains) | 3 | (2) | 124 | 6,806 | ||||||||
| Income tax benefit related to items of other comprehensive income (loss) | — | — | — | — | ||||||||
| Total comprehensive income | $ | 35,651 | $ | 7,805 | $ | 78,300 | $ | 301,735 | ||||
| Weighted average shares outstanding | ||||||||||||
| Basic | 48,066,358 | 43,301,388 | 47,742,744 | 43,220,084 | ||||||||
| Diluted | 49,521,246 | 44,142,693 | 49,255,071 | 43,888,665 | ||||||||
| Earnings available to ACIC common stockholders per share | ||||||||||||
| Basic | ||||||||||||
| Continuing operations | $ | 0.58 | $ | 0.34 | $ | 1.48 | $ | 1.57 | ||||
| Discontinued operations | 0.01 | (0.10) | 0.01 | 5.27 | ||||||||
| Total | $ | 0.59 | $ | 0.24 | $ | 1.49 | $ | 6.84 | ||||
| Diluted | ||||||||||||
| Continuing operations | $ | 0.56 | $ | 0.34 | $ | 1.43 | $ | 1.54 | ||||
| Discontinued operations | 0.01 | (0.10) | 0.01 | 5.19 | ||||||||
| Total | $ | 0.57 | $ | 0.24 | $ | 1.44 | $ | 6.73 | ||||
| Dividends declared per share | $ | — | $ | — | $ | — | $ | — | ||||
| Consolidated Balance Sheets | ||||||
| In thousands, except share amounts | ||||||
| September 30, 2024 | December 31, 2023 | |||||
| ASSETS | ||||||
| Investments, at fair value: | ||||||
| Fixed maturities, available-for-sale | $ | 278,373 | $ | 138,387 | ||
| Equity securities | 25,950 | — | ||||
| Other investments | 26,392 | 16,487 | ||||
| Total investments | $ | 330,715 | $ | 154,874 | ||
| Cash and cash equivalents | 183,147 | 138,930 | ||||
| Restricted cash | 57,251 | 18,070 | ||||
| Accrued investment income | 3,359 | 1,767 | ||||
| Property and equipment, net | 7,300 | 3,658 | ||||
| Premiums receivable, net | 18,630 | 45,924 | ||||
| Reinsurance recoverable on paid and unpaid losses | 147,065 | 340,820 | ||||
| Ceded unearned premiums | 199,426 | 155,301 | ||||
| Goodwill | 59,476 | 59,476 | ||||
| Deferred policy acquisition costs | 43,166 | 21,149 | ||||
| Intangible assets, net | 6,518 | 8,548 | ||||
| Other assets | 13,284 | 36,718 | ||||
| Assets held for sale | 74,537 | 77,143 | ||||
| Total Assets | $ | 1,143,874 | $ | 1,062,378 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Liabilities: | ||||||
| Unpaid losses and loss adjustment expenses | $ | 173,322 | $ | 347,738 | ||
| Unearned premiums | 307,325 | 276,157 | ||||
| Reinsurance payable on premiums | 122,597 | — | ||||
| Payments outstanding | 4,479 | 706 | ||||
| Accounts payable and accrued expenses | 75,525 | 74,783 | ||||
| Operating lease liability | 23 | 739 | ||||
| Other liabilities | 2,960 | 672 | ||||
| Notes payable, net | 148,937 | 148,688 | ||||
| Liabilities held for sale | 49,124 | 44,130 | ||||
| Total Liabilities | $ | 884,292 | $ | 893,613 | ||
| Commitments and contingencies | ||||||
| Stockholders' Equity: | ||||||
| Preferred stock, | — | — | ||||
| Common stock, | 5 | 5 | ||||
| Additional paid-in capital | 437,241 | 423,717 | ||||
| Treasury shares, at cost; 212,083 shares | (431) | (431) | ||||
| Accumulated other comprehensive loss | (11,617) | (17,137) | ||||
| Retained earnings (deficit) | (165,616) | (237,389) | ||||
| Total Stockholders' Equity | $ | 259,582 | $ | 168,765 | ||
| Total Liabilities and Stockholders' Equity | $ | 1,143,874 | $ | 1,062,378 | ||
FAQ
What was ACIC's net income for Q3 2024?
What was ACIC's combined ratio in Q3 2024?
How did ACIC's book value per share change in Q3 2024?
What changes did ACIC make to its quota share reinsurance coverage?
