American Coastal Insurance Corp (ACIC) 2024 Q3 法說會逐字稿

Greetings and welcome to American Coastal's third quarter, 2024 earnings conference call. at this time, all participants are in a listen-only mode, a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Karin Daly, Vice President, the Equity Group and American Coastal's IR Representative. Please go ahead.

歡迎參加 American Coastal 2024 年第三季財報電話會議。此時，所有參與者都處於僅聽模式，正式演示之後將進行問答環節。如果有人在會議期間需要接線員協助，請按下電話鍵盤上的星號零。提醒一下，本次會議正在錄製中。現在我想將會議轉交給東道主卡琳·達利 (Karin Daly)，她是股票集團副總裁兼美國海岸投資者關係代表。請繼續。

Thank you, Brock and good afternoon, everyone. American Coastal Insurance Corporation has also made this broadcast available on its website at www.amcoastal.com. a replay will be available for approximately 30 days following the call. additionally, you can find copies of the latest earnings release and presentation in the investors section of the company's website. speaking today will be Chairman of the board and Chief Executive Officer R Daniel Peed, President Bennett Bradford Martz and Chief Financial Officer Svetlana Castle. On behalf of the company I'd like to note that statements made during this call 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. Factors that could cause actual results to different materially may be found in the company's filings with the US Securities and Exchange Commission in the risk factor section of their 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 statement with that. It's my pleasure to turn the call over to Mr Daniel PD. You may begin.

謝謝布洛克，大家下午好。美國海岸保險公司也在其網站 www.amcoastal.com 上發布了該廣播。通話後約 30 天內可重播。此外，您可以在公司網站的投資者部分找到最新收益發布和簡報的副本。今天發表演說的包括董事會主席兼執行長 R Daniel Peed、總裁 Bennett Bradford Martz 和財務長 Svetlana Castle。我謹代表本公司指出，本次電話會議所做的非歷史事實的陳述均為前瞻性陳述。公司相信這些陳述是基於合理的估計、假設和計劃。然而，如果前瞻性陳述所依據的估計假設或計劃被證明不準確，或者出現其他風險或不確定性，則實際結果可能與前瞻性陳述中明示或暗示的結果有重大差異。可能導致實際結果出現重大差異的因素可以在該公司向美國證券交易委員會提交的文件中的最新 10-K 表格年度報告和 10-Q 表格前瞻性季度報告的風險因素部分中找到。代表其作出之日的情況，適用法律要求的情況除外。該公司不承擔更新或修改任何前瞻性聲明的義務。我很高興將電話轉給丹尼爾·PD 先生。你可以開始了。

Thank you, Karin. The third quarter of 2024 saw the emergence of the active Atlantic hurricane season that was predicted starting with hurricanes Debbie and Helene. Then just after the third quarter ended, hurricane milton made landfall in central Florida, impacting millions of Floridians including and coastal staff in preparation for hurricane milton. American coastal activated its business continuity plan and I'm pleased to report that our operations continued seamlessly, meaning there were no disruptions to policyholders and we were prepared to immediately respond to claims significant clean up and restoration efforts continue. And American coastal is proud to have supported relief efforts through monetary donations and paid time off for employees who volunteered. As we previously announced, we estimate that we will retain approximately 3.8 million in after tax losses stemming from Debby and Helene and 16.2 million in after tax losses retained in Milton in the fourth quarter. This compares favorably against our peers and enables a strong underwriting profit in the third quarter. Furthermore, American coastal has an exceptional and steady underlying combined ratio along with the significantly increased total revenue of 82.1 million in the third quarter. This stems from favorable reinsurance pricing as well as the reduction of the quota share from 40% to 20%. We expect a new noncost margin run rate as measured by the underlying combined ratio as well as the strong revenue growth to continue in future quarters. Finally, I'm pleased to announce that American coastal successfully participated in its first ever takeout from citizens. The takeout added policies to our condo book and signaled the launch of a new apartment program. We are excited for the future and pleased that you are here to learn more about American coastal. With that, I will turn the call over to Bennett Martz, President of ACIC.

謝謝你，卡琳。2024 年第三季將出現活躍的大西洋颶風季節，預計將從颶風黛比和海倫開始。第三季結束後不久，颶風米爾頓在佛羅裡達州中部登陸，影響了數百萬佛羅裡達人，包括為颶風米爾頓做準備的沿海工作人員。美國海岸啟動了其業務連續性計劃，我很高興地報告說，我們的營運繼續無縫進行，這意味著保單持有人沒有受到任何干擾，我們準備立即回應重大清理和恢復工作仍在繼續的索賠。美國沿海公司很自豪能夠透過捐款支持救災工作，並為志願員工提供帶薪休假。正如我們之前宣布的，我們預計第四季度我們將保留 Debby 和 Helene 產生的約 380 萬美元的稅後損失，以及 Milton 保留的 1,620 萬美元的稅後損失。這與我們的同行相比具有優勢，並在第三季度實現了強勁的承保利潤。此外，美國海岸擁有出色且穩定的基礎綜合成本率，第三季總收入大幅成長至8,210萬美元。這源自於有利的再保險定價以及配額份額從 40% 減少至 20%。我們預計，以基本綜合成本率衡量的新的非成本利潤率以及強勁的收入成長將在未來幾季繼續。最後，我很高興地宣布，美國海岸成功參加了首次公民外賣活動。此次外送在我們的公寓預訂中添加了政策，並標誌著新公寓計劃的啟動。我們對未來感到興奮，並很高興您來到這裡了解更多有關美國海岸的資訊。接下來，我將把電話轉給 ACIC 主席貝內特·馬茨 (Bennett Martz)。

Thanks Dan and hello today, I will provide additional color on the recent hurricane losses and also review our forward-looking guidance for the remainder of 2024. Then I will turn it over to our CFO pages 3 and 4 of our earnings presentation. Highlight additional details on the name windstorms that Dan mentioned made landfall in Florida. So far this year, hurricane Debby was a cap one storm in August with minimal wind damage to date. We've only received 15 claims and a gross loss of a million dollars with a net impact of about $600,000 after tax in the third quarter, hurricane Helene was a much stronger category four storm in September, but late made landfall in the big bend region resulting in very minor wind damage to our risk portfolio. Helene also caused extensive flood damage on the west coast of Florida but flood is not a covered peril by our Hurricane policies today we received 26 claims for Helene and estimated our gross loss at 5 million, which translates to a net loss of about 3.2 million after tax like Debby Helene was within our retention and not considered an event for our core catastrophe, excess of loss reinsurance program. hurricane Milton on the other hand, was a category three storm in October that caused significant wind damage to our portfolio, given its landfall in Sarasota County. As of today we have received 154 claims and expect about 200 in total and have estimated the ultimate gross loss to be between 150 to 200 million. Milton appears to be trending towards the bottom of that range. It may even be below our guidance, but we will certainly exceed our 20.5 million retention making it our first event ceded to the core catastrophe access to loss reinsurance program this year net of reinsurance and income tax benefit. Milton will result in a $16.2 million net loss in the fourth quarter. Lastly, the company will also incur roughly $13 million of additional seated premiums earned between October 2024 and May of 2025 to reinstate the limit used by Milton. This means that we have nearly our full reinsurance tower in place for any future events. So ACIC is very well protected against potential subsequent events such as Rafael and if any additional hurricanes impact Florida this year, our net retention would drop to 10.3 million net of reinsurance and income tax benefit for the next two named windstorms. Should they occur? Page 8 of our earnings presentation updates, the guidance provided previously to include the actual results for the third quarter as well as the impact of hurricane milton on the fourth quarter of 2024. while I'm pleased to say we expect to remain profitable in the fourth quarter and post a strong result for the full year considering the increased level of hurricane activity impacting Florida. Comparison to the prior periods is obviously impacted by the fact that American coastal did not incur any hurricane losses or reinstatement premium costs in 2023. With that, I would now like to turn it over to Lana.

謝謝丹，今天大家好，我將提供有關最近颶風損失的更多信息，並回顧我們對 2024 年剩餘時間的前瞻性指導。然後我會將其轉交給我們的財務長收益報告的第 3 頁和第 4 頁。突出顯示丹提到的在佛羅裡達州登陸的風暴名稱的更多詳細資訊。今年到目前為止，黛比颶風是八月的一場風暴，迄今為止風力造成的損失很小。我們僅收到 15 份索賠，總損失為 100 萬美元，第三季稅後淨影響約為 60 萬美元，颶風海倫是 9 月份強度大得多的四級風暴，但較晚在大彎曲地區登陸導致我們的創投組合受到非常輕微的風害。海倫(Helene) 也在佛羅裡達州西海岸造成了廣泛的洪水破壞，但洪水並不屬於我們的颶風保單涵蓋的危險範圍。為500 萬美元，這意味著在颶風過後的淨損失約為320 萬美元。 。另一方面，米爾頓颶風是 10 月的三級風暴，由於它在薩拉索塔縣登陸，對我們的投資組合造成了嚴重的風力破壞。截至今天，我們已收到 154 起索賠，預計總數約為 200 起，預計最終總損失將在 150 至 2 億之間。米爾頓似乎正趨向於該範圍的底部。它甚至可能低於我們的指導，但我們肯定會超過我們的 2050 萬保留金，使其成為今年我們首次將核心巨災獲得損失再保險計劃（扣除再保險和所得稅福利）。Milton 將導致第四季淨虧損 1,620 萬美元。最後，該公司還將承擔 2024 年 10 月至 2025 年 5 月期間賺取的約 1,300 萬美元的額外保費，以恢復 Milton 使用的限額。這意味著我們幾乎已經為未來的任何事件準備好了完整的再保險塔。因此，ACIC 得到了很好的保護，免受拉斐爾等潛在後續事件的影響，如果今年有任何額外的颶風影響佛羅裡達州，我們的淨保留額將降至1030 萬淨保留再保險和接下來兩次指定風暴的所得稅福利。它們應該發生嗎？我們的財報更新第 8 頁，先前提供的指引包括第三季的實際結果以及颶風米爾頓對 2024 年第四季的影響。到影響佛羅裡達州的颶風活動水準增加，第四季度並公佈了全年的強勁業績。與前期相比，明顯受到 2023 年美國沿海沒有遭受任何颶風損失或恢復保費成本這一事實的影響。有了這個，我現在想把它交給拉娜。

Thank you, Bennett and hello, I will provide a financial update but encourage everyone to review the company's press release earnings and investor presentations and form 10-Q. For more information regarding our performance, it reflected on page 5 of the earnings presentation. American coastal had a strong quarter with a net income of 28.1 million foreign income was 26.9 million, which is an increase of 11.4 million year over year. as a result of lower seeded earned premiums from the step down of our gross catastrophe quarter share from 40% to 20% effective June 1st 2024. Page 6 of the presentation shows that gross premium earned grew 2.4 million to 160.2 million. our combined ratio was 57.7% which is below our 65% target and a decrease of five points from 62.7% in the same period. Last year, we feel our reserve position is strong as shown on page 6 of our presentation, operating expenses increased 9.5 million. This was primarily driven by 7.3 million or 53.7% increase in policy acquisition costs due to a decrease in seeding commission income because of the quarter share step down mentioned earlier. General and administrative expenses also contributed to this increase increase in 2.2 million or 36.7%. these increased costs were in line with expectations and were more than offset by the decrease in the previously mentioned seated premiums earned. the result is an increase in earnings before tax of 18.4 million year over year. This is a direct result of our executed initiative to retain more of our underwriting profit. page 9 shows balance sheet highlights cash and investments grew 83.1% to 571.1 million. reflecting the company's strong liquidity position, stockholders equity increased 53.8% to 259.6 million. driven by strong underwriting results. Book value per share is 538 a 49.2% increase from year end, high liquidity and stronger capitalization resulted in significant improvement to our leverage ratios. the company is in a strong position to meet policyholder obligations from the recent catastrophe losses. I will now turn it over to Bennett Martz for closing remarks.

謝謝貝內特，你好，我將提供財務更新，但鼓勵大家查看公司的新聞稿收益和投資者演示以及 10-Q 表格。有關我們業績的更多信息，請參閱收益報告的第 5 頁。美國沿海季度表現強勁，淨利為2,810萬美元，國外營收為2,690萬美元，較去年同期成長1,140萬美元。自 2024 年 6 月 1 日起，我們的災難季度總份額從 40% 降至 20%，導致種子賺取保費下降。簡報第 6 頁顯示，毛保費收入成長了 240 萬，達到 1.602 億。我們的綜合成本率為 57.7%，低於我們 65% 的目標，比同期的 62.7% 下降了 5 個百分點。去年，我們認為我們的儲備狀況強勁，如我們的簡報第 6 頁所示，營運費用增加了 950 萬美元。這主要是由於前面提到的季度份額下降導致種子佣金收入減少，導致保單獲取成本增加 730 萬美元或 53.7%。一般及行政費用也促成了這一增長，增幅為220萬，即36.7%。這些增加的成本符合預期，並且被前面提到的就座保費的減少所抵銷。結果是稅前利潤比去年同期增加了 1840 萬美元。這是我們執行保留更多承保利潤計劃的直接結果。第 9 頁顯示資產負債表重點顯示現金和投資成長 83.1% 至 5.711 億。股東權益成長 53.8%，達到 2.596 億美元，反映出公司強勁的流動性狀況。受到強勁承保業績的推動。每股帳面價值為538，較年底成長49.2%，高流動性和更強的資本實力使我們的槓桿率顯著改善。該公司有能力履行近期災難損失造成的保單持有人義務。現在我將把它交給貝內特·馬茨 (Bennett Martz) 作結束語。

Thanks Svetlana. We appreciate your interest in ACIC and look forward to sharing more information with you at our upcoming virtual investor day at 11 a.m. on December the fourth that completes our prepared remarks today and we are now happy to take any questions.

謝謝斯維特蘭娜。我們感謝您對ACIC 的興趣，並期待在12 月4 日上午11 點即將舉行的虛擬投資者日上與您分享更多信息，這完成了我們今天準備好的發言，現在我們很樂意回答任何問題。

At this time. We will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. a confirmation tone will indicate your line is in the question queue. You may press star two. If you would like to remove your question from the queue for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please. While we pull for questions as a reminder, if you would like to ask a question, please press star, then one on your touchtone phone, there appears to be no questions at this time. I would like to turn the call back to Daniel Peed for closing remarks.

此時。我們將舉行問答環節。如果您想提問，請按電話鍵盤上的星號一。確認音將表示您的線路已在問題佇列中。您可以按星二號。如果您想從使用揚聲器裝置的參與者群組中刪除您的問題，可能需要在按星號鍵之前拿起聽筒。請稍等一下。雖然我們提醒您提問，但如果您想提問，請按星號，然後按按鍵式電話上的一個，目前似乎沒有問題。我想將電話轉回給丹尼爾·皮德（Daniel Peed），讓其致閉幕詞。

Hey, thanks. and thanks to all of you for your time and your interest in American coastal.

嘿，謝謝。感謝大家的寶貴時間以及對美國沿海的興趣。

We are excited for our future opportunities and looking forward to our continuing profitable growth with that.

我們對未來的機會感到興奮，並期待我們的持續獲利成長。

Thanks again.

再次感謝。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。