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, generating $26.5 million in cash proceeds; IIC results now classified as discontinued operations.

• Policies in force grew to 4,239 as of March 31, 2025, with premiums in force totaling $661 million.

• Focus remains on newer, well-maintained, low-rise condos inland, with healthy underwriting margins and competitive rates.

Financial highlights

• Gross premiums written rose 7.2% to $197.9 million; net premiums earned increased 9% to $68.3 million year-over-year.

• Net income from continuing operations was $19.7 million, down from $23.7 million; consolidated net income was $21.3 million, down 9.5% year-over-year.

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

• Operating expenses rose, mainly from a 144.8% increase in policy acquisition costs, partially offset by a 15.9% decrease in G&A expenses.

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

Outlook and guidance

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

• Significant progress on catastrophe reinsurance program renewal, with increased occurrence and aggregate limits and a risk-adjusted cost decrease of approximately 12%.

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