American Coastal Insurance Corporation Reports Financial Results for its Second Quarter Ended June 30, 2024
American Coastal Insurance (ACIC) reported its Q2 2024 financial results. Net income reached $19.1 million ($0.39 per diluted share), up 7.2% from Q2 2023. However, net premiums earned dropped by 18.8% to $63.4 million, and total revenue decreased 6.6% to $68.7 million. The company signed a Stock Purchase Agreement with Forza Insurance Holdings, selling its subsidiary Interboro Insurance Company, reflected as discontinued operations.
Gross premiums written fell by 3.1% to $229.4 million. Operating expenses decreased by $7.1 million, driven by lower policy acquisition costs and operating expenses, but general and administrative expenses rose by $3.5 million. The combined ratio was 64.9%, up 1.8 points from Q2 2023. The book value per share increased 28.3% to $4.63 from December 31, 2023.
Notably, cash and investment holdings surged to $572.6 million from $311.9 million at year-end 2023, supported by positive cash flows from operations.
American Coastal Insurance (ACIC) ha riportato i suoi risultati finanziari per il Q2 2024. Il reddito netto ha raggiunto $19,1 milioni ($0,39 per azione diluita), in aumento del 7,2% rispetto al Q2 2023. Tuttavia, i premi netti guadagnati sono diminuiti del 18,8% a $63,4 milioni, e il fatturato totale è sceso 6,6% a $68,7 milioni. L'azienda ha firmato un Accordo di Acquisto di Azioni con Forza Insurance Holdings, vendendo la sua controllata Interboro Insurance Company, riflessa come operazioni discontinue.
I premi lordi scritti sono calati del 3,1% a $229,4 milioni. Le spese operative sono diminuite di $7,1 milioni, grazie a costi di acquisizione delle polizze e spese operative più basse, ma le spese generali e amministrative sono aumentate di $3,5 milioni. Il rapporto combinato era del 64,9%, in aumento di 1,8 punti rispetto al Q2 2023. Il valore di libro per azione è aumentato del 28,3% a $4,63 rispetto al 31 dicembre 2023.
È degno di nota che le disponibilità liquide e gli investimenti sono aumentati a $572,6 milioni da $311,9 milioni a fine 2023, sostenuti da flussi di cassa operativi positivi.
American Coastal Insurance (ACIC) informó sus resultados financieros del Q2 2024. La ganancia neta alcanzó $19.1 millones ($0.39 por acción diluida), lo que representa un aumento del 7.2% en comparación con el Q2 2023. Sin embargo, las primas netas devengadas cayeron un 18.8% a $63.4 millones, y los ingresos totales disminuyeron un 6.6% a $68.7 millones. La compañía firmó un Acuerdo de Compra de Acciones con Forza Insurance Holdings, vendiendo su subsidiaria Interboro Insurance Company, que se refleja como operaciones discontinuadas.
Las primas brutas suscritas cayeron un 3.1% a $229.4 millones. Los gastos operativos disminuyeron en $7.1 millones, impulsados por menores costos de adquisición de pólizas y gastos operativos, aunque los gastos generales y administrativos aumentaron $3.5 millones. El índice combinado fue del 64.9%, un aumento de 1.8 puntos en comparación con el Q2 2023. El valor contable por acción aumentó un 28.3% a $4.63 desde el 31 de diciembre de 2023.
Es notable que los efectivo e inversiones se dispararon a $572.6 millones desde $311.9 millones a finales de 2023, respaldados por flujos de caja positivos de las operaciones.
어메리칸 코스탈 인슈어런스 (ACIC)가 2024년 2분기 재무 결과를 발표했습니다. 순익은 1910만 달러 ($0.39 희석 주당 수익)로, 2023년 2분기 대비 7.2% 증가했습니다. 그러나 순보험료는 18.8% 감소하여 6340만 달러에 달했고, 총 수익은 6.6% 줄어 6870만 달러를 기록했습니다. 이 회사는 Forza Insurance Holdings와 함께 주식 매매 계약을 체결하고 자회사인 Interboro Insurance Company를 매각했으며 이는 중단된 사업으로 반영되었습니다.
총 보험료는 3.1% 감소하여 2억 2940만 달러가 되었습니다. 운영 비용은 정책 인수 비용과 운영 비용의 감소로 710만 달러 줄어들었지만, 일반 관리 비용은 350만 달러 증가했습니다. 종합 비율은 64.9%로, 2023년 2분기 대비 1.8 포인트 증가했습니다. 주당 장부가치는 2023년 12월 31일 대비 28.3% 증가하여 4.63달러에 이르렀습니다.
특히, 현금 및 투자 보유액은 2023년 연말 3억 1190만 달러에서 5억 7260만 달러로 급증했으며, 이는 운영에서 긍정적인 현금 흐름 덕분입니다.
American Coastal Insurance (ACIC) a rapporté ses résultats financiers du T2 2024. Le revenu net a atteint 19,1 millions de dollars (0,39 $ par action diluée), en hausse de 7,2 % par rapport au T2 2023. Cependant, les primes nettes perçues ont chuté de 18,8 % à 63,4 millions de dollars, et les revenus totaux ont diminué de 6,6 % à 68,7 millions de dollars. La société a signé un Accord d'Achat d'Actions avec Forza Insurance Holdings, vendant sa filiale Interboro Insurance Company, qui est refletée comme des opérations abandonnées.
Les primes brutes souscrites ont diminué de 3,1 % à 229,4 millions de dollars. Les charges d'exploitation ont diminué de 7,1 millions de dollars, en raison de coûts d’acquisition de polices et de charges d’exploitation plus faibles, mais les charges générales et administratives ont augmenté de 3,5 millions de dollars. Le taux combiné était de 64,9 %, en hausse de 1,8 point par rapport au T2 2023. La valeur comptable par action a augmenté de 28,3 % pour atteindre 4,63 $ depuis le 31 décembre 2023.
Il est à noter que les liquidités et les investissements ont bondi à 572,6 millions de dollars, contre 311,9 millions de dollars à la fin de 2023, soutenus par des flux de trésorerie d'exploitation positifs.
American Coastal Insurance (ACIC) hat ihre Finanzergebnisse für das Q2 2024 berichtet. Der Nettogewinn betrug 19,1 Millionen Dollar (0,39 $ pro verwässerter Aktie), was einem Anstieg von 7,2 % im Vergleich zum Q2 2023 entspricht. Allerdings fielen die verdienten Nettoprämien um 18,8 % auf 63,4 Millionen Dollar, und die Gesamteinnahmen verringerten sich um 6,6 % auf 68,7 Millionen Dollar. Das Unternehmen unterzeichnete einen Aktienkaufvertrag mit Forza Insurance Holdings und verkaufte seine Tochtergesellschaft Interboro Insurance Company, was als aufgegebene Geschäftsbereiche verbucht wurde.
Die brutto ausgegebenen Prämien sanken um 3,1 % auf 229,4 Millionen Dollar. Die Betriebskosten sanken um 7,1 Millionen Dollar, was durch niedrigere Kosten für den Policenerwerb und Betriebsausgaben bedingt war, während die allgemeinen und administrativen Ausgaben um 3,5 Millionen Dollar stiegen. Die Kombinationsquote betrug 64,9 %, was einem Anstieg um 1,8 Punkte im Vergleich zu Q2 2023 entspricht. Der Buchwert pro Aktie stieg um 28,3 % auf 4,63 Dollar seit dem 31. Dezember 2023.
Bemerkenswert ist, dass sich der Bargeld- und Anlagebestand auf 572,6 Millionen Dollar von 311,9 Millionen Dollar zum Jahresende 2023 erhöht hat, unterstützt durch positive Cashflows aus den operativen Tätigkeiten.
- Net income increased by 7.2% to $19.1 million.
- Gross premiums earned rose by 3.7% to $155.5 million.
- Operating expenses decreased by $7.1 million.
- Book value per share grew by 28.3% to $4.63.
- Cash and investment holdings surged to $572.6 million.
- Net premiums earned fell by 18.8% to $63.4 million.
- Total revenue declined by 6.6% to $68.7 million.
- Combined ratio increased by 1.8 points to 64.9%.
- Income from continuing operations dropped by 10.2%.
- General and administrative expenses increased by $3.5 million.
Insights
This earnings report shows mixed results for American Coastal Insurance in Q2 2024. While consolidated net income increased
Positively, the company improved its book value per share by 28.3% to
Overall, while profitability remains decent, the declining premium growth and rising combined ratio warrant close monitoring in coming quarters. The planned sale of Interboro Insurance Company should allow greater focus on the core commercial property business.
American Coastal's Q2 results reflect the challenging property insurance market in Florida. The
The increased use of quota share reinsurance is a prudent risk management strategy, helping to limit catastrophe exposure. This is important given Florida's hurricane risks. The higher ceding ratio of
The planned divestiture of Interboro Insurance aligns with the strategy to focus on commercial property. This specialization could be advantageous but also increases concentration risk in one market segment. The strong book value growth and solid capital position provide a buffer against potential market volatility.
American Coastal's Q2 performance indicates a cautious approach in a volatile market. The slight decline in premiums written suggests the company is prioritizing profitability over growth, which is prudent given the challenging Florida insurance landscape.
The increase in book value per share to
The company's focus on commercial property, especially condominiums and HOAs, provides a niche market position. This specialization could be a competitive advantage but also exposes the company to sector-specific risks. The planned sale of Interboro Insurance should streamline operations and potentially improve overall efficiency.
Investors should watch for the impact of reinsurance costs and catastrophe losses in future quarters, as these factors significantly influence the company's performance in the hurricane-prone Florida market.
Company to Host Quarterly Conference Call at 5:00 P.M. ET on August 7, 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., Aug. 07, 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 second quarter ended June 30, 2024. On May 9, 2024, the Company entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC ("Forza") in which ACIC will sell and Forza will acquire
| ($ in thousands, except for per share data) | Three Months Ended | Six Months Ended | ||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||
| Gross premiums written | $ | 229,449 | $ | 236,822 | (3.1)% | $ | 414,050 | $ | 413,463 | 0.1 | % | |||||||||||
| Gross premiums earned | $ | 155,450 | $ | 149,837 | 3.7 | % | $ | 315,720 | $ | 287,812 | 9.7 | % | ||||||||||
| Net premiums earned | $ | 63,381 | $ | 78,014 | (18.8)% | $ | 126,012 | $ | 162,655 | (22.5)% | ||||||||||||
| Total revenue | $ | 68,656 | $ | 73,542 | (6.6)% | $ | 135,254 | $ | 160,617 | (15.8)% | ||||||||||||
| Income from continuing operations, net of tax | $ | 19,073 | $ | 21,244 | (10.2)% | $ | 42,782 | $ | 52,809 | (19.0)% | ||||||||||||
| Income (loss) from discontinued operations, net of tax | $ | (19 | ) | $ | (3,465 | ) | 99.5 | % | $ | (129 | ) | $ | 232,250 | NM | ||||||||
| Consolidated net income | $ | 19,054 | $ | 17,779 | 7.2 | % | $ | 42,653 | $ | 285,059 | (85.0)% | |||||||||||
| Net income available to ACIC stockholders per diluted share | ||||||||||||||||||||||
| Continuing Operations | $ | 0.39 | $ | 0.49 | (20.4)% | $ | 0.87 | $ | 1.21 | (28.1)% | ||||||||||||
| Discontinued Operations | $ | — | $ | (0.08 | ) | 100.0 | % | — | 5.31 | (100.0)% | ||||||||||||
| Total | $ | 0.39 | $ | 0.41 | (4.9)% | $ | 0.87 | $ | 6.52 | (86.7)% | ||||||||||||
| Reconciliation of net income to core income: | ||||||||||||||||||||||
| Plus: Non-cash amortization of intangible assets and goodwill impairment | $ | 609 | $ | 811 | (24.9)% | $ | 1,421 | $ | 1,623 | (12.4)% | ||||||||||||
| Less: Income (loss) from discontinued operations, net of tax | $ | (19 | ) | $ | (3,465 | ) | 99.5 | % | $ | (129 | ) | $ | 232,250 | NM | ||||||||
| Less: Net realized losses on investment portfolio | $ | (121 | ) | $ | (6,708 | ) | 98.2 | % | $ | (121 | ) | $ | (6,791 | ) | 98.2 | % | ||||||
| Less: Unrealized gains (losses) on equity securities | $ | 49 | $ | 141 | (65.2)% | $ | (1 | ) | $ | 615 | NM | |||||||||||
| Less: Net tax impact (1) | $ | 143 | $ | 1,549 | (90.8)% | $ | 324 | $ | 1,638 | (80.2)% | ||||||||||||
| Core income (2) | $ | 19,611 | $ | 27,073 | (27.6)% | $ | 44,001 | $ | 58,970 | (25.4)% | ||||||||||||
| Core income per diluted share (2) | $ | 0.40 | $ | 0.62 | (35.5)% | $ | 0.90 | $ | 1.35 | (33.3)% | ||||||||||||
| Book value per share | $ | 4.63 | $ | 2.59 | 78.8 | % | ||||||||||||||||
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: “During the second quarter of 2024, we recorded yet another profitable period for American Coastal. We also successfully placed our core catastrophe reinsurance program, increasing the exhaustion point of the program from the prior year period and meeting our goal of limiting American Coastal’s retention to less than one quarter’s pre-tax earnings. Moreover, we executed on the final phase of our multi-year strategy to phase out our personal lines operations by signing definitive agreements for the sale of Interboro Insurance Company. We remain focused on delivering long-term shareholder value over time and will continue to explore further opportunities to expand our product offering to meet the needs of the market.”
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 | Six Months Ended | ||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Income from continuing operations, net of tax | $ | 19,073 | $ | 21,244 | $ | 42,782 | $ | 52,809 | ||||||||
| Return on equity based on GAAP income from continuing operations, net of tax (1) | 45.6 | % | 228.9 | % | 51.1 | % | 284.5 | % | ||||||||
| Income (loss) from discontinued operations, net of tax | $ | (19 | ) | $ | (3,465 | ) | $ | (129 | ) | $ | 232,250 | |||||
| Return on equity based on GAAP income (loss) from discontinued operations, net of tax (1) | — | % | (37.3)% | (0.2)% | NM | |||||||||||
| Consolidated net income attributable to ACIC | $ | 19,054 | $ | 17,779 | $ | 42,653 | $ | 285,059 | ||||||||
| Return on equity based on GAAP net income (1) | 45.6 | % | 191.6 | % | 51.0 | % | NM | |||||||||
| Core income | $ | 19,611 | $ | 27,073 | $ | 44,001 | $ | 58,970 | ||||||||
| Core return on equity (1)(2) | 46.9 | % | 291.7 | % | 52.6 | % | 317.7 | % | ||||||||
(1) Return on equity for the three and six months ended June 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 IIC, captured within discontinued operations, are shown below.
| ($ in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
| Consolidated | ||||||||||||||||
| Loss ratio, net (1) | 24.1 | % | 20.8 | % | 3.3 pts | 22.0 | % | 18.4 | % | 3.6 pts | ||||||
| Expense ratio, net (2) | 40.8 | % | 42.3 | % | (1.5) pts | 37.1 | % | 42.2 | % | (5.1) pts | ||||||
| Combined ratio (CR) (3) | 64.9 | % | 63.1 | % | 1.8 pts | 59.1 | % | 60.6 | % | (1.5) pts | ||||||
| Effect of current year catastrophe losses on CR | — | % | 7.9 | % | (7.9) pts | 0.2 | % | 5.0 | % | (4.8) pts | ||||||
| Effect of prior year favorable development on CR | (1.5)% | (6.8)% | 5.3 pts | (0.8)% | (5.0)% | 4.2 pts | ||||||||||
| Underlying combined ratio (4) | 66.4 | % | 62.0 | % | 4.4 pts | 59.7 | % | 60.6 | % | (0.9) pts | ||||||
| IIC | ||||||||||||||||
| Loss ratio, net (1) | 91.4 | % | 90.6 | % | 0.8 pts | 74.3 | % | 91.6 | % | (17.3) pts | ||||||
| Expense ratio, net (2) | 37.4 | % | 46.9 | % | (9.5) pts | 45.7 | % | 60.4 | % | (14.7) pts | ||||||
| Combined ratio (CR) (3) | 128.8 | % | 137.5 | % | (8.7) pts | 120.0 | % | 152.0 | % | (32.0) pts | ||||||
| Effect of current year catastrophe losses on CR | 2.5 | % | 6.6 | % | (4.1) pts | 5.6 | % | 10.9 | % | (5.3) pts | ||||||
| Effect of prior year favorable development on CR | (1.7)% | 3.6 | % | (5.3) pts | (3.9)% | (2.7)% | (1.2) pts | |||||||||
| Underlying combined ratio (4) | 128.0 | % | 127.3 | % | 0.7 pts | 118.3 | % | 143.8 | % | (25.5) 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 | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||
| Loss and LAE | $ | 15,277 | $ | 16,245 | $ | (968 | ) | $ | 27,751 | $ | 30,146 | $ | (2,395 | ) | ||||||||||
| % of Gross earned premiums | 9.8 | % | 10.8 | % | (1.0) pts | 8.8 | % | 10.5 | % | (1.7) pts | ||||||||||||||
| % of Net earned premiums | 24.1 | % | 20.8 | % | 3.3 pts | 22.0 | % | 18.4 | % | 3.6 pts | ||||||||||||||
| Less: | ||||||||||||||||||||||||
| Current year catastrophe losses | $ | (8 | ) | $ | 6,201 | $ | (6,209 | ) | $ | 203 | $ | 8,298 | $ | (8,095 | ) | |||||||||
| Prior year reserve favorable development | (968 | ) | (5,334 | ) | 4,366 | (1,022 | ) | (8,107 | ) | 7,085 | ||||||||||||||
| Underlying loss and LAE (1) | $ | 16,253 | $ | 15,378 | $ | 875 | $ | 28,570 | $ | 29,955 | $ | (1,385 | ) | |||||||||||
| % of Gross earned premiums | 10.5 | % | 10.3 | % | 0.2 pts | 9.0 | % | 10.4 | % | (1.4) pts | ||||||||||||||
| % of Net earned premiums | 25.6 | % | 19.7 | % | 5.9 pts | 22.7 | % | 18.4 | % | 4.3 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 | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||
| Policy acquisition costs | $ | 13,939 | $ | 23,526 | $ | (9,587 | ) | $ | 23,534 | $ | 48,692 | $ | (25,158 | ) | ||||||||||
| Operating and underwriting | 2,040 | 3,046 | (1,006 | ) | 4,377 | 4,881 | (504 | ) | ||||||||||||||||
| General and administrative | 9,898 | 6,414 | 3,484 | 18,813 | 15,025 | 3,788 | ||||||||||||||||||
| Total Operating Expenses | $ | 25,877 | $ | 32,986 | $ | (7,109 | ) | $ | 46,724 | $ | 68,598 | $ | (21,874 | ) | ||||||||||
| % of Gross earned premiums | 16.6 | % | 22.0 | % | (5.4) pts | 14.8 | % | 23.8 | % | (9.0) pts | ||||||||||||||
| % of Net earned premiums | 40.8 | % | 42.3 | % | (1.5) pts | 37.1 | % | 42.2 | % | (5.1) pts | ||||||||||||||
Quarterly Financial Results
Net income for the second quarter of 2024 was
The Company's total gross written premium decreased by
| ($ in thousands) | Three Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | Change $ | Change % | ||||||||||||
| Direct Written and Assumed Premium by State | |||||||||||||||
| Florida | $ | 229,449 | $ | 236,766 | $ | (7,317 | ) | (3.1)% | |||||||
| New York | — | — | — | — | |||||||||||
| Total direct written premium by state | 229,449 | 236,766 | (7,317 | ) | (3.1 | ) | |||||||||
| Assumed premium | — | 56 | (56 | ) | (100.0 | ) | |||||||||
| Total gross written premium by state | $ | 229,449 | $ | 236,822 | $ | (7,373 | ) | (3.1)% | |||||||
| Gross Written Premium by Line of Business | |||||||||||||||
| Commercial property | $ | 229,449 | $ | 236,822 | $ | (7,373 | ) | (3.1)% | |||||||
| Personal property | — | — | — | — | |||||||||||
| Total gross written premium by line of business | $ | 229,449 | $ | 236,822 | $ | (7,373 | ) | (3.1)% | |||||||
Loss and LAE decreased by
Policy acquisition costs decreased by
Operating and underwriting expenses decreased by
General and administrative expenses increased by
IIC Results Highlights
Net losses attributable to IIC totaled
Reinsurance Costs as a Percentage of Gross Earned Premium
Reinsurance costs as a percentage of gross earned premium in the second quarter of 2024 and 2023 were as follows:
| 2024 | 2023 | ||
| Non-at-Risk | (0.2)% | (0.4)% | |
| Quota Share | (26.4)% | (15.2)% | |
| All Other | (32.7)% | (32.3)% | |
| Total Ceding Ratio | (59.3)% | (47.9)% | |
Ceded premiums earned related to the Company's catastrophe excess of loss contracts remained relatively flat. The Company's utilization of quota share reinsurance coverage resulted in less excess of loss coverage needed for the 2023-2024 catastrophe year. The cost associated with this reduction in necessary coverage was offset by rate increases on catastrophe excess of loss coverage for the 2023-2024 catastrophe year. The utilization of quota share reinsurance coverage, as described below, increased the Company's ceding ratio overall.
Reinsurance costs as a percentage of gross earned premium in the second quarter of 2024 and 2023 for IIC, captured within discontinued operations, were as follows:
| IIC | |||||
| 2024 | 2023 | ||||
| Non-at-Risk | (2.6)% | (2.9)% | |||
| Quota Share | — | % | — | % | |
| All Other | (23.8)% | (35.4)% | |||
| Total Ceding Ratio | (26.4)% | (38.3)% | |||
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) | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| Book Value per Share | ||||||||
| Numerator: | ||||||||
| Common stockholders' equity | $ | 223,073 | $ | 168,765 | ||||
| Denominator: | ||||||||
| Total Shares Outstanding | 48,132,370 | 46,777,006 | ||||||
| Book Value Per Common Share | $ | 4.63 | $ | 3.61 | ||||
| Book Value per Share, Excluding the Impact of Accumulated Other Comprehensive Income (AOCI) | ||||||||
| Numerator: | ||||||||
| Common stockholders' equity | $ | 223,073 | $ | 168,765 | ||||
| Less: Accumulated other comprehensive loss | (19,149 | ) | (17,137 | ) | ||||
| Stockholders' Equity, excluding AOCI | $ | 242,222 | $ | 185,902 | ||||
| Denominator: | ||||||||
| Total Shares Outstanding | 48,132,370 | 46,777,006 | ||||||
| Underlying Book Value Per Common Share (1) | $ | 5.03 | $ | 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: | August 7, 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=1678464&tp_key=7e632cd730 |
| 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. |
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 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 | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| REVENUE: | ||||||||||||||||
| Gross premiums written | $ | 229,449 | $ | 236,822 | $ | 414,050 | $ | 413,463 | ||||||||
| Change in gross unearned premiums | (73,999 | ) | (86,985 | ) | (98,330 | ) | (125,651 | ) | ||||||||
| Gross premiums earned | 155,450 | 149,837 | 315,720 | 287,812 | ||||||||||||
| Ceded premiums earned | (92,069 | ) | (71,823 | ) | (189,708 | ) | (125,157 | ) | ||||||||
| Net premiums earned | 63,381 | 78,014 | 126,012 | 162,655 | ||||||||||||
| Net investment income | 5,347 | 2,095 | 9,364 | 4,138 | ||||||||||||
| Net realized investment losses | (121 | ) | (6,708 | ) | (121 | ) | (6,791 | ) | ||||||||
| Net unrealized gains (losses) on equity securities | 49 | 141 | (1 | ) | 615 | |||||||||||
| Total revenues | $ | 68,656 | $ | 73,542 | $ | 135,254 | $ | 160,617 | ||||||||
| EXPENSES: | ||||||||||||||||
| Losses and loss adjustment expenses | 15,277 | 16,245 | 27,751 | 30,146 | ||||||||||||
| Policy acquisition costs | 13,939 | 23,526 | 23,534 | 48,692 | ||||||||||||
| Operating expenses | 2,040 | 3,046 | 4,377 | 4,881 | ||||||||||||
| General and administrative expenses | 9,898 | 6,414 | 18,813 | 15,025 | ||||||||||||
| Interest expense | 3,426 | 2,719 | 6,145 | 5,438 | ||||||||||||
| Total expenses | 44,580 | 51,950 | 80,620 | 104,182 | ||||||||||||
| Income before other income | 24,076 | 21,592 | 54,634 | 56,435 | ||||||||||||
| Other income | 811 | 806 | 1,621 | 1,394 | ||||||||||||
| Income before income taxes | 24,887 | 22,398 | 56,255 | 57,829 | ||||||||||||
| Provision for income taxes | 5,814 | 1,154 | 13,473 | 5,020 | ||||||||||||
| Income from continuing operations, net of tax | $ | 19,073 | $ | 21,244 | $ | 42,782 | $ | 52,809 | ||||||||
| Income (loss) from discontinued operations, net of tax | (19 | ) | (3,465 | ) | (129 | ) | 232,250 | |||||||||
| Net income | $ | 19,054 | $ | 17,779 | $ | 42,653 | $ | 285,059 | ||||||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||
| Change in net unrealized gains (losses) on investments | 73 | (2,168 | ) | (125 | ) | 2,063 | ||||||||||
| Reclassification adjustment for net realized investment losses | 121 | 6,725 | 121 | 6,808 | ||||||||||||
| Income tax benefit related to items of other comprehensive income (loss) | — | — | — | — | ||||||||||||
| Total comprehensive income | $ | 19,248 | $ | 22,336 | $ | 42,649 | $ | 293,930 | ||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 47,821,115 | 43,229,416 | 47,572,236 | 43,178,758 | ||||||||||||
| Diluted | 49,398,463 | 43,805,217 | 49,162,233 | 43,690,435 | ||||||||||||
| Earnings available to ACIC common stockholders per share | ||||||||||||||||
| Basic | ||||||||||||||||
| Continuing operations | $ | 0.40 | $ | 0.49 | $ | 0.90 | $ | 1.22 | ||||||||
| Discontinued operations | — | (0.08 | ) | — | 5.37 | |||||||||||
| Total | $ | 0.40 | $ | 0.41 | $ | 0.90 | $ | 6.59 | ||||||||
| Diluted | ||||||||||||||||
| Continuing operations | $ | 0.39 | $ | 0.49 | $ | 0.87 | $ | 1.21 | ||||||||
| Discontinued operations | — | (0.08 | ) | — | 5.31 | |||||||||||
| Total | $ | 0.39 | $ | 0.41 | $ | 0.87 | $ | 6.52 | ||||||||
| Dividends declared per share | $ | — | $ | — | $ | — | $ | — | ||||||||
| Consolidated Balance Sheets | ||||||||
| In thousands, except share amounts | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Investments, at fair value: | ||||||||
| Fixed maturities, available-for-sale | $ | 264,446 | $ | 138,387 | ||||
| Equity securities | 15,429 | — | ||||||
| Other investments | 31,116 | 16,487 | ||||||
| Total investments | $ | 310,991 | $ | 154,874 | ||||
| Cash and cash equivalents | 229,431 | 138,930 | ||||||
| Restricted cash | 32,158 | 18,070 | ||||||
| Accrued investment income | 4,722 | 1,767 | ||||||
| Property and equipment, net | 9,096 | 3,658 | ||||||
| Premiums receivable, net | 52,873 | 45,924 | ||||||
| Reinsurance recoverable on paid and unpaid losses | 206,436 | 340,820 | ||||||
| Ceded unearned premiums | 260,852 | 155,301 | ||||||
| Goodwill | 59,476 | 59,476 | ||||||
| Deferred policy acquisition costs | 51,423 | 21,149 | ||||||
| Intangible assets, net | 7,127 | 8,548 | ||||||
| Other assets | 12,995 | 36,718 | ||||||
| Assets held for sale | 73,705 | 77,143 | ||||||
| Total Assets | $ | 1,311,285 | $ | 1,062,378 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Unpaid losses and loss adjustment expenses | $ | 211,433 | $ | 347,738 | ||||
| Unearned premiums | 374,487 | 276,157 | ||||||
| Reinsurance payable on premiums | 226,508 | — | ||||||
| Payments outstanding | 580 | 706 | ||||||
| Accounts payable and accrued expenses | 75,530 | 74,783 | ||||||
| Operating lease liability | 67 | 739 | ||||||
| Other liabilities | 713 | 672 | ||||||
| Notes payable, net | 148,854 | 148,688 | ||||||
| Liabilities held for sale | 50,040 | 44,130 | ||||||
| Total Liabilities | $ | 1,088,212 | $ | 893,613 | ||||
| Commitments and contingencies | ||||||||
| Stockholders' Equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 5 | 5 | ||||||
| Additional paid-in capital | 436,383 | 423,717 | ||||||
| Treasury shares, at cost; 212,083 shares | (431 | ) | (431 | ) | ||||
| Accumulated other comprehensive loss | (19,149 | ) | (17,137 | ) | ||||
| Retained earnings (deficit) | (193,735 | ) | (237,389 | ) | ||||
| Total Stockholders' Equity | $ | 223,073 | $ | 168,765 | ||||
| Total Liabilities and Stockholders' Equity | $ | 1,311,285 | $ | 1,062,378 | ||||
FAQ
What were ACIC's Q2 2024 net income results?
How much did ACIC's net premiums earned decrease in Q2 2024?
What is the combined ratio for ACIC in Q2 2024?
What is the book value per share for ACIC as of June 30, 2024?
What was the total revenue for ACIC in Q2 2024?
What were ACIC's cash and investment holdings as of June 30, 2024?
How did ACIC's operating expenses change in Q2 2024?
