Q2 2024 American Coastal Insurance Corp Earnings Call - Q&A

August 7, 2024

Operator: and welcome to the American Coastal Insurance Corporation's second quarter, 2024 earnings conference calling webcast. At this time, we'll have to spend some of this in only mode. A question and an intercession will follow the formal presentation. If anyone would require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Greetings and welcome to the American Coastal Insurance Corporation second quarter 2024 earnings conference call and webcast. At this time all participants are in a listen only mode.

A question answer session will follow the formal presentation.

Operator: If anyone should require operator assistance, please press star zero on your telephone keypad. It's now my pleasure to turn the call over to your host, Karin Daly, Investor Relations with the Equity Group.

Operator: which would require operator assistance, please press star zero on your telephone keypad. As a reminder... this conference is being recorded. It's now my pleasure to turn the call over to your host, Karin Daly, Investor Relations with the Equity Group. Please go ahead.

Speaker Change: And what should require operator assistance. Please press star zero on your telephone keypad.

As a reminder.

This conference is being recorded.

Karin Daly: It's my pleasure to turn the call over to your host, Karin Daly, Investor Relations with the Equity Group. Please go ahead, Karin. Thank you, Kevin, and good afternoon, everyone. American Coastal Insurance Corporation has also made this broadcast available on its website at www.amcoastals.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 investor's section of the company's website.

My pleasure to turn the call over to your host Karen Daily Investor Relations with the equity group. Please.

Speaker Change: Please go ahead Karen.

Karin Daly: Thank you, Kevin, 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 investor section of the company's website. On behalf of the company, I'd like to note that statements made during the call that are not historical facts are forward-looking statements.

Karin Daly: Thank you, Kevin, 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 investor section of the company's website. Speaking today will be President Bennett Bradford Martz and Chief Financial Officer Svetlana Castle. On behalf of the company, I'd like to note that statements made during the call that are not historical facts are forward-looking statements.

Karen: Thank you Kevin and good afternoon, everyone American coastal insurance Corporation has also made this broadcast available on its website at www Dot M coastal dot com.

A replay will be available for approximately 30 days following the call.

Additionally, you can find copies of our latest earnings release and presentation in the investors section of the company's website.

Karin Daly: Speaking today, we'll be President Bennett Preffert-Marts and Chief Financial Officer Svetlana Castle. On behalf of the company, I'd like to note that statements made during the 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 statement. Factors that could cause actual results to differ materially may be found in the company's filings with the U.S.

Speaker Change: Speaking today will be President Senate profit Martz, Chief Financial Officer, but Mana Castle.

Karin Daly: 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 differ materially may be found in the company's filings with the U.S. Securities and Exchange Commission in the risk factors section of the 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 Brad, you may begin.

Speaker Change: On behalf of the company I'd like to note that statements made during the 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.

Speaker Change: Uncertainties arise actual results could differ materially from those expressed in or implied by the forward looking statements.

Speaker Change: 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 and the risk factors section of the most recent annual report on Form 10-K, and subsequent quarterly reports on Form 10-Q.

Karin Daly: Securities and Exchange Commission in the risk factor section of the most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q.

Karin Daly: Forward-looking statements speak only as of the day 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.

Speaker Change: 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 with that it's my pleasure to turn the call over to Mr. Brad Martz, Brad you may begin.

Karin Daly: The company believes these statements are based on reasonable estimates, assumptions, and plans. 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 of the 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 said, it's my pleasure to turn the call over to Mr. Brad Martz. Brad, you may begin.

Bennett Martz: With that, it's my pleasure to turn the call over to Mr. Brad Marts. Brad, you may begin. Thank you, Karen, and hello. Today, I'll provide an underwriting and commercial residential market update and also review some forward-looking guidance for the remainder of 2024.

Bennett Bradford Martz: Thank you, Karin, and hello. Today, I'll provide an underwriting and commercial residential market update and also review some forward-looking guidance for the remainder of 2024. I'll then turn it over to our CFO, Lana Castle, for more detail on our second quarter results. Page 3 of our earnings presentation highlights some of our key accomplishments this quarter. Two of these stand out due to their impact on current and future periods. The first is the Core Catastrophe Reinsurance Renewal, effective June 1, 2024, and the second is the entry into a formal definitive agreement to divest Interboro Insurance Company. The pending sale of Interboro caused its results to be presented as discontinued operations for the quarter and the year.

Brad Martz: Thank you Karen and Hello.

Brad Martz: I'll provide an underwriting in commercial residential market update and also review some forward looking guidance for the remainder of 2024.

Bennett Martz: I'll then turn it over to our CFL on a castle for more detail on our second quarter results. Page three of our earnings presentation highlights some of our key accomplishments this quarter. Two of these stand out due to their impact on current and future periods. First is the core catastrophe re-insurance renewal, effective June 1, 2024, and the second is the entry into formal definitive agreements to divest of Interborough Insurance Company. The pending sale of Interborough caused its results to be presented as discontinued operations for the quarter and the year. Accordingly, our results from continuing operations now only reflect our profitable commercial lines operations, making comparability and analysis easier going forward, given the noise and volatility historically associated with the personal lines business, which is not part of our future.

Brad Martz: I'll then turn it over to our CFO, Lana Castle, for more detail on our second quarter results. Two of these stand out due to their impact on current and future periods. The first is the Core Catastrophe Reinsurance Renewal, effective June 1, 2024, and the second is the entry into a formal definitive agreement to divest Interboro Insurance Company. Accordingly, our results from continuing operations now only reflect our profitable commercial lines operations, making comparability and analysis easier going forward, given the noise and volatility historically associated with the personal lines business, which is not part of our future.

Lana Castle: I'll, then turn it over to our CFO Lana castle for more detail on our second quarter results.

Speaker Change: Page three of our earnings presentation highlights some of our key accomplishments this quarter.

Speaker Change: Two of these stand out due to their impact on current and future periods.

Speaker Change: First is the core catastrophe reinsurance renewal effective June one 2024, and the second is the entry into formal definitive agreements to divest of Interborough insurance company.

Brad Martz: The pending sale of inter burrow caused.

Brad Martz: Its results to be presented as discontinued operations for the quarter and the year.

Bennett Bradford Martz: Accordingly, our results from continuing operations now only reflect our profitable commercial lines operations, making comparability and analysis easier going forward, given the noise and volatility historically associated with the personal lines business, which is not part of our future. Before discussing the impact of our core catastrophe reinsurance renewal, I want to first thank our reinsurance partners, to whom we are very grateful for their support and proud to have on our panel. All but one of our incumbent reinsurers renewed their lines with us, and we diversified our panel by adding eight new reinsurers this year.

Brad Martz: Accordingly, our results from continuing operations now only reflect our profitable commercial lines operation, making comparability and analysis easier going forward, given the noise and volatility historically associated with the personal lines business, which is not part of our future.

Bennett Martz: Before discussing the impact of our core catastrophe re-insurance renewal, I want to first thank our re-insurance partners, to whom we are very grateful for their support and proud to have on our panel. All but one of our incumbent re-insurers renewed their lines with us, and we diversified our panel by adding new re-insurers this year. Following up our announcement regarding successfully completing our June 1st renewal, we seized an opportunity to strengthen our program further by adding an additional $100 million of limit on the top of our tower to protect against the potential high severity event and also added third event coverage to protect against a series of more moderate events.

Brad Martz: Before discussing the impact of our core catastrophe reinsurance renewal, I want to first thank our reinsurance partners, to whom we are very grateful for their support and proud to have on our panel. All but one of our incumbent reinsurers renewed their lines with us, and we diversified our panel by adding eight new reinsurers this year. The current structure, along with a recap of the program highlights, is shown on page 13 of our earnings briefing.

Speaker Change: Before discussing the impact of our core catastrophe reinsurance renewal I want to first.

Speaker Change: Our reinsurance partners to whom we are very grateful for their support and proud to have on our panel.

Speaker Change: All but one of our incumbent reinsurers.

Speaker Change: There lies with us and we diversified our panel by adding eight new reinsurers this year.

Bennett Bradford Martz: Following our announcement regarding successfully completing our June 1st renewal, we seized an opportunity to strengthen our program further by adding an additional $100 million of limit on the top of our tower to protect against a potential high-severity event and also added third event coverage to protect against a series of more moderate events. The current structure, along with a recap of the program highlights, is shown on page 13 of our earnings briefing. While the additional coverage added cost, the replacement of the four-layer in the private market, plus the reduction of the quota share from 40% to 20%, were more than offset by.

Speaker Change: Following our announcement regarding successfully completing our June 1st renewal, we seized an opportunity to strengthen our program further by adding an additional $100 million of limit on the top of our tower to protect against the potential high severity of that and also added third event coverage to protect against the series.

Speaker Change: It is a more moderate events.

Bennett Martz: The current structure, along with the recap of the program highlights, is shown on page 13 of our earnings presentation. While the additional coverage is added cost, the replacement of the four layer in the private market plus the reduction of the core to share from 40% to 20% were more than offset that. Thus, we are expecting ACIC's enhanced core catastrophe re-insurance program to have a positive impact on both revenue and earnings growth.

Speaker Change: The current structure, along with a recap of the program highlights as shown on page 13 of our earnings presentation.

Speaker Change: Yeah.

Speaker Change: While the additional coverages added cost the replacement of the four layer in the private market.

Speaker Change: Plus the reduction of the quota share from 40% to 20%.

Speaker Change: Were more than offset that loss.

Bennett Bradford Martz: Thus, we are expecting ACIC's enhanced core catastrophe reinsurance program to have a positive impact on both revenue and earnings growth. Given the discontinued operations and reinsurance changes noted for this period, I felt it was appropriate to introduce some forward-looking guidance regarding net income from continuing operations and net premiums earned. Slide 7 of our earnings presentation summarizes our outlook by estimating net income from continuing operations, excluding catastrophes, to be between $85 million and $95 million for the full year.

Speaker Change: Thus, we are expecting AC Ics enhanced core catastrophe reinsurance program to have a positive impact on both revenue and earnings growth.

Bennett Martz: Given the discontinued operations and re-insurance changes noted for this period, I felt it was appropriate to introduce some forward-looking guidance regarding net income from continuing operations and net premiums earned. Slide 7 of our earnings presentation summarizes our outlook by estimating net income from continuing operations, excluding catastrophes, to be between 85 million and 95 million for the full year. This implies earnings growth in the second half of 2024 of between 43% and 77% year-over-year. Potential catastrophe losses could have a significant impact on this, but without any material hurricane losses in the prior year, it's a fair year-over-year comparison.

Speaker Change: Given the discontinued operations and reinsurance changes noted for this period I felt it was appropriate to introduce some forward looking guidance regarding net income from continuing operations and net premiums earned.

Speaker Change: Slide seven of our earnings presentation summarizes our outlook by estimating net income from continuing operations, excluding catastrophes to be between $85 million and $95 million for the full year.

Bennett Bradford Martz: This implies earnings growth in the second half of 2024 of between 43% and 77% year-over-year. Potential catastrophe losses could have a significant impact on this, but without any material hurricane losses in the prior year, it's a fair year-over-year comparison.

Speaker Change: This implies earnings growth in the second half of 2024.

Speaker Change: Oh between 43% and 77% year over year.

Brad Martz: Potential catastrophe losses could have a significant impact on this. Pages 10 through 12 of our earnings presentation provide some additional color on our risk portfolio and what we're seeing in the Florida commercial residential marketplace. We have identified a few hundred policies that fit our current underwriting criteria, and we have received approval from the Florida Office of Insurance Regulation to participate.

Speaker Change: Potential catastrophe losses could have a significant impact on this.

Speaker Change: But without any material hurricane losses, and prior year, its a fair year over year comparison.

Bennett Martz: If you stress test our earnings estimates for potential hurricane losses, please note that our retention for a first event is 16.2 million after tax and drops down to 10.3 million after tax for a second and third event, assuming such events are contained within the re-insurance program. As for net premiums earned, we estimate they will be between 285 and 300 million for the full year 2024, and blind revenue growth of between 33% and 46% in the second half of this year.

Bennett Bradford Martz: If you stress test our earnings estimates for potential hurricane losses, please note that our retention for a first event is $16.2 million after tax and drops down to $10.3 million after tax for a second and third event, assuming such events are contained within the reinsurance program. As for net premiums earned, we estimate they will be between $285 and $300 million for the full year 2024, implying revenue growth of between 33% and 46% in the second half of this year.

Speaker Change: If you stress test our earnings estimates for potential Hurricane losses. Please note that our retention for our first of that is $16 2 million after tax and drops down to $10 3 million after tax for a second and third of that.

Speaker Change: Assuming such events are contained within the reinsurance program.

Speaker Change: That's for net premiums earned we estimate they will be between 285 and $300 million for the full year 2020 core implying revenue growth of between 33% and 46% in the second half of this year.

Bennett Martz: Pages 10-12 of our earnings presentation provides some additional color on our risk portfolio and what we're seeing in the Florida commercial residential marketplace. The bottom line is that the market is showing signs of softening, but it's not having a material impact on our expected margin. We still believe that 65% underlying combing ratio is very achievable, despite our outlook for lower rates and increased competition.

Bennett Bradford Martz: Pages 10 through 12 of our earnings presentation provide some additional color on our risk portfolio and what we're seeing in the Florida commercial residential marketplace. The bottom line is that the market is showing signs of softening, but it's not having a material impact on our expected margin. We still believe a 65% underlying combined ratio is very achievable, despite our outlook for lower rates and increased competition. The last thing I'd like to highlight, before turning it over to Lana, is the last bullet on page 10 of the earnings presentation, indicating our plans to participate in the October 27, 2024 Citizens Commercial Residential Takeout. We have identified a few hundred policies that fit our current underwriting criteria, and we have received approval from the Florida Office of We will likely only get a fraction of the policies we've identified, but we're excited about the opportunity to participate and supplement our growth via this process. I'll now turn it over to Lana.

Speaker Change: Pages 10 through 12 of our earnings presentation I'll provide some additional color on our risk portfolio and what we're seeing in the Florida commercial residential marketplace.

Speaker Change: The bottom line is that the market is showing signs of softening, but it's not having a material impact on our expected margin.

Speaker Change: We still believe a 65% underlying combined ratio is very achievable, despite our outlook for lower rates and increased competition.

Bennett Martz: The last thing I'd like to highlight before turning it over to Lana is the last bullet on page 10 of the earnings presentation, indicating our plans to participate in the October 27, 2024, Citizens Commercial Residential takeout. We have identified a few hundred policies that fit our current underwriting criteria, and we have received approval from the Florida Office of Insurance Regulation to participate. on that assumption date. We will likely only get a fraction of the policies we've identified, but we're excited about the opportunity to participate and supplement our growth via this process.

Speaker Change: The last thing I'd like to highlight before turning it over to Lana.

Lana Castle: The last bullet on page 10 of the earnings presentation, indicating our plans to participate in the October 27, 2020 for citizens commercial residential take out.

Lana Castle: We have identified a few other policies that that our current underwriting criteria and we have received approval from the Florida office of insurance regulation to participate.

Lana Castle: On that assumption date.

Lana Castle: We will likely only get a fraction of the policies we've identified.

Lana Castle: But we're excited about the opportunity to participate and supplement our growth via this process.

Svetlana Castle: I'll now turn it over to Lana. I'll invest the presentation and forms MQ for more information regarding our performance. As I've collected on page 5 of the earnings presentation, American Coastal had a strong quarter with a net income of 19.1 million. Core income was 19.6 million, which is a decrease of 7.5 million year-over-year as a result of high-seated entrepreneurs from the 40% growth catastrophe quarter share, which was effective June 1, 2020. Page 6 of the presentation saw that growth premium hand grew 5.6 million to 155 million. Our combined ratio was 64.9%, which is on target, but increased 1.8 points from 63.1% in the same period last year.

Lana Castle: Now I'll turn it over Kalana.

Svetlana Castle: Thank you, Brett, and hello. I'm Lana Castle, Chief Financial Officer of American Coastal Insurance Corporation, and I'll provide the financial updates, but I encourage everyone to review the company's press release, earnings and investor presentations, and Form 10-Q for more information regarding our performance. As reflected on page 5 of the earnings presentation, American Coastal had a strong quarter with a net income of $19.1 million. Core income was $19.6 million, which is a decrease of $7.5 million year-over-year as a result of high-seeded earned premiums from the 40% gross catastrophe quarter share, which was effective June 1, 2023.

Kalana: Thank you, Brett and Hello, and lung Costco, Chief Financial Officer of American Coastal insurer Corporation, and he'll provide the financial update but to encourage everyone to review the company's press release.

Svetlana Castle: Page 6 of the presentation shows that gross premium earned grew $5.6 million to $155.5 million. Our combined ratio was 64.9%, which is on target, but increased 1.8 points from 63.1% in the same period last year. We continue to experience favorable prior year development and feel very good about our reserve position.

Svetlana Castle: As shown on page 6 of our presentation, operating expenses decreased $7.1 million. This was primarily driven by a $9.6 million, or 41%, decrease in policy acquisition costs due to an increase in the Seeding Commission income as a result of the 40% quarterly share mentioned earlier. This was partially offset by increased general and administrative expenses.

Speaker Change: As an investor presentation and Form 10-Q for more information regarding our performance.

Kalana: And then just like the dump Leach why what was the earnings presentation American coastal had a strong quarter with a net income of $19 1 million.

Lana Castle: As reflected on page 5 of the earnings presentation, American Coastal had a strong quarter with a net income of $19.1 million. We continue to experience favorable prior year development and feel very good about our reserve position percent to $573 million, reflecting the company's strong liquidity position, with an increase in cash of $90.5 million. Stockholders' equity increased 32.2% to $223 million driven by strong underwriting results. Book value per share is $4.63, a 28.5% increase from year-end.

Speaker Change: Core income was $19 6 million, which is a decrease of seven 5 million year over year is that the ceded earned premium from the 40% gross catastrophe quarter share, which was effective June 1st.

Speaker Change: When you do when you see.

Speaker Change: Page six of the presentation. So what was the gross premium grew by one 6 million to $155 5 million.

Kalana: Our combined ratio was 64, 9%, which is on target, but increased one eight points from 651% in the same period last year.

Operator: and welcome to the American Coastal Insurance Corporation's second quarter, 2024 Earnings Conference Calling Webcast. At this time, we'll have to spend some of this in only mode. A question and an intercession will follow the formal presentation.

Svetlana Castle: But we continued to experience favorable prior-year development and feel very good about our result position. As shown on page 6 of our presentation, a rate in expansive decrease 7.1 million. This was primarily driven by 19.6 million or 41% decrease in policy acquisition costs, due to an increase in seed income commission income as a result of the 40% quarter share mentioned earlier. This was partially offset by increased general and administrative expenses. Despite the significant change in seeded premium, earnings before tax were 2.5 million higher year-over-year. Page 8 shows balance sheet highlights. Cash and investment grew 83.6% to 5.17 million, reflected in the company's strong liquidity position, with increased in cash of 90.5 million.

Lana Castle: We've continued to experience favorable prior year development and feel very good about all of it is our position.

Lana Castle: As shown on page six of our presentation breaking expenses decreased $7 1 million.

Operator: If anyone would require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker Change: This was primarily driven by a $9 6, million% to 41% decrease in policy acquisition costs due to an increase in ceding Commission income as it is out of the 40% quota share mentioned earlier.

Karin Daly: It's on my pleasure to turn the call over to your host, Karin Daly, Invest relations with the equity group. Please go ahead, Karin. Thank you, Kevin, and good afternoon, everyone. American Coastal Insurance Corporation has also made this broadcast available on its website at www.amcoastals.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 investor's section of the company's website.

Lana Castle: This was partially offset by increased general and administrative expenses.

Svetlana Castle: Despite the significant change in the CEDAW premium, earnings before tax were $2.5 million higher year over year. Page 8 shows balance sheet highlights. The Cash and Investments Group 83.6% to $573 million, reflecting the company's strong liquidity position, with an increase in cash of $90.5 million. Stockholders' equity increased 32.2% to $223 million, driven by strong underwriting results. Book value per share is $4.63, a 28.5% increase from year-end. High liquidity and strong capitalization resulted in a significant improvement to our leverage ratio.

Speaker Change: Despite the significant change and see the female earnings before tax were two 5 million high yeah over here.

Lana Castle: Page eight shows the balance sheet highlights cash.

Speaker Change: Cash and investments totaled $83 six.

Speaker Change: Person to person I'm, just feeling just see me alone.

Lana Castle: The company's strong liquidity position with increase in cash of $90 5 million.

Karin Daly: Speaking today, we'll be President Bennett Preffert-Marts and Chief Financial Officer Svetlana Castle. On behalf of the company, I'd like to note that statements made during the 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 statement.

Svetlana Castle: So-called as equity increased 32.2%, to 223 million, driven by strong underweighting results. Vukua Dipper shares its 463, at 28.5% increased from year-end. High liquidity and strong capitalization resulted in significant employment tall leverage ratios. Page 9 on the presentation provides additional detail on our investment portfolio. 99.4% of the portfolio and IC level 1 and level 2 securities. In the second quarter, we invested 150 million of cash in six securities in anticipation of the decrease in cash yield. Our investment strategy is to maintain high-quality portfolio responses to market conditions within our risk tolerance.

Lana Castle: So of course, there's equity increased 32, 2% to 223 million driven by strong underwriting results.

Karin Daly: 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 factor section of the most recent annual report on Form 10K and subsequent quarterly reports on Form 10Q.

Speaker Change: Well Guadeloupe for sure it's four six defeat.

Lana Castle: Eight 5% increase from year end.

Speaker Change: Highly agreed against Jumbo capitalization resulted in significant control one to our leverage ratios.

Svetlana Castle: Page 9 of the presentation provides additional detail on our investment portfolio. 99.4% of the portfolio is NIC Level 1 and Level 2 securities. In the second quarter, we invested $150 million of cash in fixed securities in anticipation of the decrease in cash yields. Our investment strategy is to maintain high-quality portfolio responses to market conditions within our risk tolerance. I will now turn it over to Brad Martz for closing remarks.

Speaker Change: But you can imagine the presentation provides additional detail on our investment portfolio maintained.

Lana Castle: 99.4% of the portfolio NIC level one and level two securities. Our investment strategy is to maintain high-quality portfolio responses to market conditions within our risk tolerance. I will now turn it over to Brad Martz for closing remarks.

Speaker Change: 99, 4% of the portfolio and I C level, one and level two securities.

Brad Martz: In the second quarter, we invested $150 million of cash in fixed securities in anticipation of increasing cash yield.

Brad Martz: Our investment strategy is someone paying high quality portfolio is pass if the market conditions within all of these clients.

Bennett Martz: I will now turn it over to Brad Marks for closing remarks. Thank you, Ronald. I'll conclude by just saying the company remains very well positioned to thrive, as we've done successfully through all parts of the insurance cycle since 2007.

Brad Martz: Oh No go ahead Mark.

Brad Martz: Marc for closing remarks.

Brad Martz: Thank you Ronald.

Bennett Bradford Martz: I'll conclude by just saying the company remains very well positioned to thrive, as we have done successfully through all parts of the insurance cycle since 2007. That concludes our prepared remarks today, and we are now happy to take any questions.

Brad Martz: Conclude by just saying the company remains very well positioned to thrive as we have done successfully through all parts of the insurance cycles since 2007.

Bennett Martz: That completes our prepared remarks today, and we are now happy to take any questions. Thank you.

Brad Martz: That completes our prepared remarks today and we are now happy to take any questions.

Operator: Thank you, and I'll be conducting a question and answer session. If you'd like to ask the question, can you please press star one on your telephone keypad? A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question is coming from Gregory Peters from Raymond James. Your line is now live.

Operator: Thank you. We're now conducting a question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. You may press star 2 if you'd like to remove your question from the queue. Our first question is coming from Gregory Peters from Raymond James. Your line is now live.

Speaker Change: Thank you will now be conducting a question and answer session, if you'd like to be placing the question queue. Please press star one on your telephone keypad.

Operator: And now we're conducting a question-and-answer session. If you'd like to be placing the question Q, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question Q. You may press star two if you'd like to remove your question from the Q. For participants using Speak recruitment, maybe necessary to pick up your handset before pressing star one. One moment, please. What we pull for questions.

Bennett Martz: I'll then turn it over to our CFL on a castle for more detail on our second quarter results. Page three of our earnings presentation highlight some of our key accomplishments this quarter. Two of these stand out due to their impact on current and future periods. First is the core catastrophe re-insurance renewal, effective June 1, 2024, and the second is the entry into formal definitive agreements to divest of Interborough Insurance Company. The pending sale of Interborough caused its results to be presented as discontinued operations for the quarter and the year.

Operator: A confirmation tone will indicate your line is in the question queue.

Operator: You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing star one.

Speaker Change: One moment, please while we poll for questions.

Gregory Peters: Our first question is coming from Gregory Peters from Raymond James; your line is that live. Good afternoon, everyone. So for the first question, I'm going to focus on the first statement you make in slide 10 and then slide 11. I was focused on the TIV down just under 2%, policy camping down just under 6%, with 100-year PML up. I assume there's some underlying insurance devalued issues going in there, and maybe you could spend a minute and just talk to us about what we're seeing on slide 11 because it looks like conditions still remain pretty favorable.

Operator: First question is coming from Gregory Peters from Raymond James Your line is now live.

Gregory Peters: Hey, good afternoon, everyone.

Gregory Peters: Good afternoon, everyone. So for the first question, I'm going to focus on the first statement you make on slide 10, and then slide 11, with the 100-year PML op. I assume there are some underlying insurance-to-value initiatives going on there, and maybe you could spend a minute and just talk to us about what we're seeing on slide 11, because it looks like...

Gregory Peters: Good afternoon, everyone. For the first question, I'm going to focus on the first statement you make on slide 10, and then on slide 11. I was focused on the TIV being down just under 2%, and the policy count being down just under 6%, with the 100-year PML op. I assume there's some underlying insurance-to-value initiatives going on there, and maybe you could spend a minute and just talk to us about what we're seeing on slide 11, because it looks like... conditions still remain pretty favorable.

Gregory Peters: So for the first question I'm going to focus on.

Speaker Change: First statement you make on slide 10.

Speaker Change: Slide 11.

Speaker Change: I'll just focus on the T V.

Speaker Change: Just under 2% policy count being down just under 6%.

Bennett Martz: Accordingly, our results from continuing operations now only reflect our profitable commercial lines operations, making comparability and analysis easier going forward, giving the noise and volatility historically associated with the personal lines business, which is not part of our future. Before discussing the impact of our core catastrophe re-insurance renewal, I want to first Thank our re-insurance partners to whom we are very grateful for their support and proud to have on our panel. All but one of our incumbent re-insurers renewed their lines with us and we diversified our panel by adding new re-insurers this year.

Speaker Change: With 100 year P M L.

Gregory Peters: I assume there was there's some underlying insurance to value initiatives going in there and maybe maybe you could spend a minute and just talk to us about what we're seeing on slide 11.

Speaker Change: Because it looks like.

Speaker Change: Conditions still remain pretty favorable.

Bennett Martz: Certainly, thanks, Greg. I'll take that. On slide 11, we just want to continue to demonstrate that year-over-year premium relative to TIV is holding strong. We've noted in the past that we would expect some slight increases to the dotted total insured value line at the with some small decreases in the premium line on top, narrowing that gap in future periods, but the risk versus return profile is what we're focused on with that slide, and it remains. Very good. As far as the total insured value being down and policy count being down, that's just continued underwriting. We are being disciplined.

Bennett Bradford Martz: Certainly. Thanks, Greg. This is Brad.

Gregory Peters: Certainly thanks, Greg This is Brad I'll take that.

Speaker Change: On slide 11, we just want to continue to demonstrate that year over year.

Bennett Bradford Martz: I'll take that. Yeah, on slide 11, we just want to continue to demonstrate that year-over-year, you know, the premium relative to TIV is holding strong. You know, we've noted in the past that we would expect some slight increases to the dotted total insured value line at the bottom with some small decreases in the blue premium line on top, narrowing that gap in future periods, but the risk versus return profile is what we're focused on with that slide, and it remains very good, as far as the total insured value being down and the policy count being down. That's just continued underwriting. You know, we are being disciplined.

Speaker Change: Premium relative to Tid is holding strong.

Speaker Change: Noted in the past that we would expect some some slight increases to the dotted.

Bennett Martz: Following up our announcement regarding successfully completing our June 1st renewal, we seized an opportunity to strengthen our program further by adding an additional $100 million of limit on the top of our tower to protect against the potential high severity event and also added third event coverage to protect against a series of more moderate events. The current structure along with the recap of the program highlights is shown on page 13 of our earnings presentation.

Speaker Change: Total insured value line at the bottom with some small decreases and the blue premium line on top narrowing that gap in future periods.

Speaker Change: But the risk versus return profile is what we're focused on with that slide it remains.

Brad Martz: Very good, as far as the total insured value being down and the policy count being down. That's just continued underwriting. You know, we are being disciplined. We've held the line on terms and conditions and pricing while others, you know, attempt to... our catastrophe reinsurance renewal. And now that we've got that new program in place, especially with the additional limit we bought subsequent to 6-1, we feel like we're very well positioned to add some exposure growth.

Speaker Change: Very good.

Brad Martz: As far as the total insured value being down and policy count being down that is.

Brad Martz: Continued underwriting.

Brad Martz: We are being disciplined.

Bennett Martz: We've held the line on terms and conditions and pricing while others attempt to take advantage of softening market conditions. We've taken the opportunity to work through changes in some of our peak zones to reduce overall exposure, especially since those are metric changes since year-end. We've been able to grow premiums in force while curbing exposures, so we felt like that was the prudent thing to do in the first half of the year going into our catastrophe re-insurance renewal. And now that we've got that new program in place, especially with the additional limit we bought subsequent to 6-1.

Bennett Bradford Martz: We've held the line on terms and conditions and pricing while others attempt to... take advantage of softening market conditions. So we've taken the opportunity to work through changes in some of our peak zones to reduce overall exposure, especially since those are metric changes since year-end, and we've been able to grow premiums in force while curbing exposures. So we felt like that was the prudent thing to do in the first half of the year going into our catastrophe reinsurance renewal.

Bennett Martz: While the additional coverage is added cost, the replacement of the four layer in the private market plus the reduction of the core to share from 40% to 20% were more than offset that. Thus, we are expecting ACIC's enhanced core catastrophe re-insurance program to have a positive impact on both revenue and earnings growth.

Brad Martz: Held.

Brad Martz: The line on terms and conditions and pricing while others.

Speaker Change: Temp to.

Brad Martz: So take advantage of softening market conditions, so we've taken the opportunity to.

Brad Martz: Work through changes in some of our peak zones to reduce overall exposure.

Brad Martz: Especially since we did that.

Speaker Change: The metric changes since yearend and we.

Brad Martz: We've been able to grow premiums in force while carbon exposure. So we felt like that was the prudent thing to do in the first half of the year going into.

Brad Martz: Our catastrophe reinsurance renewal and now that we've got that new program in place.

Bennett Bradford Martz: And now that we've got that new program in place, especially with the additional limit we bought subsequent to 6-1, we feel like we're very well positioned to add some exposure growth. So part of the reason we did that is because of the anticipation of assuming some business on October 27th, which is obviously still in the wind season. So there is growth on the horizon, but we're still being very selective.

Brad Martz: Especially with the additional limit we bought subsequent to six one we feel like we're very well positioned to add some exposure growth. So part of the reason we want.

Bennett Martz: We feel like we're very well positioned to have some exposure growth. Part of the reason we did that is because of the anticipation of assuming some business on October 27th, which is obviously still in the wind season.

Brad Martz: So part of the reason we did that was because of the anticipation of assuming some business on October 27th, which is obviously still in the wind season. So there is growth on the horizon, but we're still being very selective.

Brad Martz: We did that is because of the anticipation of assuming some business.

Bennett Martz: Potential catastrophe losses could have a significant impact on this, but without any material hurricane losses in the prior year, it's a fair year-over-year comparison. If you stress test our earnings estimates for potential hurricane losses, please note that our retention for a first event is 16.2 million after tax and drops down to 10.3 million after tax for a second and third event, assuming such events are contained within the re-insurance program. As for net premiums earned, we estimate they will be between 285 and 300 million for the full year 2024, and blind revenue growth of between 33% and 46% in the second half of this year.

Brad Martz: On October 27th which is obviously still on the wind season. So.

Bennett Martz: There is growth on the horizon, but we're still being very selective.

Brad Martz: There is growth on the horizon, but we're still being very selective.

Gregory Peters: Okay, I think you mentioned the reinsurance program, so let's pivot for my follow-up question to slide 13, where you talk about the 2425 CAT reinsurance program. So the first event retention is $16 million. Then you say this net maximum reinstatement exposure is $14 million. I assumed the $14 million would be if you go through the whole tower, but if you don't go through the whole tower, the net reinstatement would be something less than that. So when I think about if an event happens that pierces your retention, it's going to be 16.2 plus whatever portion of reinstatement is due. Is that a correct interpretation?

Gregory Peters: Okay, I guess you mentioned the re-insurance program, so let's pivot for my follow-up question to slide 13, where you talk about the 24-25 Cat Re insurance program. So, the first event retention is $16 million; then you say this net maximum reinstatement exposure is $14 million. I assume the $14 million would be if you use, go through the whole tower, but if you don't go through the whole tower, the net reinstatement would be something less than that. So, when I think about if an event happens, it pierces your retention, it's going to be $16.2 plus whatever portion of reinstatement is due.

Brad Martz: Okay.

Speaker Change: I guess you mentioned the reinsurance program. So let's pivot for my follow up question to the Slide 13, where you talk about 'twenty four 'twenty five cat reinsurance program.

Brad Martz:

Speaker Change: Uh huh.

Speaker Change: The first event retention is 16 million then you say the snack nuts, Max reinstatement exposure is $14 million.

Bennett Bradford Martz: That's correct and the key difference with the reinstatement exposure is that one that's a pre-tax number so you'd want to probably look at that after tax for apples to apples and then two those reinstatement premiums you know are amortized over the remaining term of the treaty period so if an event happened and you know on September 1st that reinstatement costs with the amortized from September 1st to May 31st, 2025, whereas the loss is recognized in full immediately.

Gregory Peters: I assumed the $14 million would be if you go through the whole tower, but if you don't go through the whole tower, the net reinstatement would be something less than that. So when I think about if an event happens that pierces your retention, it's going to be 16.2 plus whatever portion of reinstatement is due. Is that a correct interpretation?

Speaker Change: I assume the $14 million would be if you use go through the whole tower, but.

Gregory Peters: If you don't go through the whole tower, the nuts reinstatement would be something less than that so when I think about if an event happens.

Speaker Change: Curious as your.

Gregory Peters: Retention, it's gonna be 16.2, plus.

Gregory Peters: Whatever portion of reinstatement is too is that a correct interpretation.

Bennett Martz: Is that a correct interpretation? That's correct. And the key difference with the reinstatement exposure is that one that's a three-tax number, so you'd want to probably look at that aftertax for apples to apples. And then two, those reinstatement premiums are amortized over the remaining term of the treaty period. So, if an event happened on September 1st, that reinstatement cost would be amortized from September 1st to May 31st, 2025, whereas the loss is recognized in full immediately. So, when you have these reinstatement costs, you have a second and third event retention. If we had three full events in Florida this year, the third event you would have coverage for the full tower layer going up to the $1.259 billion, or is there a different amount of coverage that happens in the third event versus the second event?

Brad Martz: That's correct and the key difference with the reinstatement exposure is that one, that's a pre-tax number so you'd want to probably look at that after tax for apples to apples and then two, those reinstatement premiums you know are amortized over the remaining term of the treaty period so if an event happened and you know on September 1st that reinstatement costs with the amortized from September 1st to May 31st, 2025, whereas the loss is recognized in full immediately.

Speaker Change: That's correct and the key difference with the reinstatement exposures that one that's a pretax number so you'd want to probably look at that after tax for apples to apples and then to the reinstatement premiums.

Brad Martz: Our are amortized over the remaining term of the treaty period. So.

Bennett Martz: The last thing I'd like to highlight before turning it over to Lana is the last bullet on page 10 of the earnings presentation indicating our plans to participate in the October 27, 2024 Citizens Commercial Residential takeout. We have identified a few hundred policies that fit our current underwriting criteria and we have received approval from the Florida Office of Insurance Regulation to participate, on that assumption date. We will likely only get a fraction of the policies we've identified, but we're excited about the opportunity to participate and supplement our growth via this process.

Brad Martz: It's an event happened in September 1st that reinstatement costs.

Brad Martz: Would be amortize from September one to May 31, 2025, whereas the.

Brad Martz: The loss is recognized in full immediately.

Gregory Peters: So when you have these reinstatement costs... if you have a second and third event retention, like if we had three full events in Florida this year,

Gregory Peters: So when you have these reinstatement costs... if you have a second and third event retention, is, if we had three full events in Florida this year, would the third event have coverage for the full tower layer going up to 1.259 billion, or is there a different amount of coverage that happens in the third event versus the second event?

Brad Martz: So when you have the these reinstatement costs.

Gregory Peters: You have a second and third event Retentions.

Gregory Peters: Is is if we had three full events in Florida this year.

Gregory Peters:

Speaker Change: Third event, you would have coverage for the full tower later going up to the 1.259 billion or is there a different amount of coverage that happens in the third event versus a second event.

Bennett Bradford Martz: There are different amounts of coverage in both the second event and the third event, and it really depends on what happens with the first event. So, I think what we are trying to say gets super complicated, but the real way to answer that question is that it depends on the size of the first event. Obviously, after a first event, we would try and get guidance to the market as quickly as possible about our estimate of that loss and the remaining reinsurance available.

Bennett Martz: There are different amounts of coverage in the second event and the third event. And it really depends on what happens with the first event. So, I think what we are trying to say, it gets super complicated, but the real way to answer that question is it depends on the size of the first event. And obviously, after a first event, we would try and get guidance to the market as quickly as possible about our estimate of that loss and the remaining reinsurance available. Okay, I figured it was complex.

Speaker Change: There are different amount of coverage in the second event and a third of that and it really depends on what happens with the first event. So I think what we are trying to say it gets super complicated, but the real way to answer that question is it depends on the size of the first event.

Gregory Peters: And.

Speaker Change: Obviously after a first then we would.

Ryan: Ryan get guidance.

Speaker Change: To the market as quickly as possible about our estimate of that loss.

Gregory Peters:

Speaker Change: Remaining reinsurance available.

Svetlana Castle: Page 6 of the presentation saw that growth premium hand grew 5.6 million to 155 million. Our combined ratio was 64.9%, which is on target, but increased 1.8 points from 63.1% in the same period last year. But we continued to experience favorable prior-year development and feel very good about our result position. As shown on page 6 of our presentation, a rate in expansive decrease 7.1 million. This was primarily driven by 19.6 million or 41% decrease in policy acquisition costs, due to an increase in seed income commission income as a result of the 40% quarter share mentioned earlier.

Gregory Peters: Okay. I figured it was complex. Just final, just I'm probably way too soon to say anything, but Debbie came through. Not sure if it's really material to you guys yet or not, but do you have any comment you can offer yet on that, or do you want to wait for a couple more weeks?

Gregory Peters: Okay.

Speaker Change: I figured it was complex just final just stopped.

Bennett Martz: Just final, just I'm probably way too soon to say anything, but Debbie came through. Not sure if it's really material to you guys yet or not, but do you have any comment you can offer yet on that, or do you want to wait for a couple more weeks? Yeah, I can comment that it was mostly a rain event, not a wind event, or commercial residential portfolio, you know, it's spared resiliently in the past to similar events. We have one claim at this time. It's very small, roughly claim, under deductible. So, I'm not, you know, obviously we feel for everyone that was impacted by the event.

Speaker Change: Probably way too soon to say anything but.

Gregory Peters: Debbie came through not sure if it's really material to you guys, yet or not but.

Speaker Change: Do you have any comment you can offer yet on that or do you want to wait for a couple more weeks.

Bennett Bradford Martz: Yeah, I can comment that it was mostly a rain event, not a wind event. Our commercial residential portfolio, you know, has fared resiliently in the past against similar events.

Speaker Change: Yeah, I can comment that it was mostly a rain event at a window then our commercial residential portfolio.

Speaker Change: It's fared resilient Lee in the past to similar events a week.

Bennett Bradford Martz: We have one claim at this time. It's a very small roof leak claim, under-deductible. So I'm not... Obviously, we feel for everyone that was impacted by the event. There was a lot of rain, a lot of water on the west coast of Florida and elsewhere, even outside of Florida right now. So, never take that lightly at all.

Speaker Change: Have one claim at this time it is very small ruefully claim.

Speaker Change: Under deductible, so I'm not Iowa.

Svetlana Castle: This was partially offset by increased general and administrative expenses. Despite the significant change in seeded premium, earnings before tax were 2.5 million higher year-over-year. Page 8 shows balance sheet highlights. Cash and investment grew 83.6% to 5.17 million, reflected in the company's strong liquidity position, with increased in cash of 90.5 million. So-called as equity increased 32.2%, to 223 million, driven by strong underweighting results. Vukua Dipper shares its 463, at 28.5% increased from year-end.

Speaker Change: Obviously, we feel for everyone that was impacted by the events.

Bennett Martz: There was a lot of rain, a lot of water on the west coast of Florida, and elsewhere, even outside of Florida right now. So, you know, never take that lightly at all. The flooding, unfortunately, is, or fortunately for us, it's not covered. We don't cover flood, but that's a peril. You know, we don't have to worry about it, but the wind damage we would expect to be close to nothing. Fair enough. All right.

Speaker Change: There was a lot of rain a lot of water and on the West Coast, Florida and elsewhere, even outside of Florida right now so.

Speaker Change: Never take that lightly at all the flooding. Unfortunately is fortunately for us it's not covered we don't cover flood, but that's.

Bennett Bradford Martz: The flooding, unfortunately, or fortunately for us, is not covered. We don't cover flooding. That's a peril that we don't have to worry about. But the wind damage, we would expect to be close to nothing.

Speaker Change: That's apparel.

Gregory Peters:

Speaker Change: We don't have to worry about but the wind damage, we would expect to be close.

Speaker Change: Close to nothing.

Gregory Peters: Fair enough. All right. Well, thanks for the slide on the guidance, too. I think that's helpful. Congratulations on the quarter.

Speaker Change: Fair enough alright, well thanks for the slide on the guidance too I think that's helpful. Congratulations on the quarter.

Brad Martz: Fair enough. All right.

Gregory Peters: Well, thanks for the slide on the guidance, too. I think that's helpful. Congratulations on the quarter. You're welcome. Thank you.

Svetlana Castle: High liquidity and strong capitalization resulted in significant employment tall leverage ratios. Page 9 on the presentation provides additional detail on our investment portfolio. 99.4% of the portfolio and IC level 1 and level 2 securities. In the second quarter, we invested 150 million of cash in six securities in anticipation of the decrease in cash yield. Our investment strategy is to maintain high-quality portfolio responses to market conditions within our risk tolerance.

Gregory Peters: You're welcome. Thank you.

Speaker Change: Youre welcome. Thank you.

Speaker Change: Thank you as a reminder, its star one to be placed in the question Q1 moment, please while I pull for further questions.

Operator: As a reminder, it's star one to be placed in the question queue.

Operator: One moment, please. While ladies and gentlemen, that doesn't include today's teleconferencing webcast, you may just connect the line at this time and have a wonderful day. We thank you for your participation today.

Speaker Change: We reached end of our question and answer session, ladies and gentlemen that does conclude today's teleconference and webcast. You may disconnect. Your line at this time and have a wonderful day.

Speaker Change: Thank you for your participation today.

Bennett Martz: I will now turn it over to Brad Marks for closing remarks. Thank you, Ronald. I'll conclude by just saying the company remains very well positioned to thrive as we've done successfully through all parts of the insurance cycle since 2007.

Operator: That completes our prepared remarks today, and we are now happy to take any questions. Thank you. And now we're conducting a question and answer session. If you'd like to be placing the question Q, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question Q. You may press star two if you'd like to remove your question from the Q. For participants using speak recruitment, maybe necessary to pick up your handset before pressing star one. One moment, please, what we pull for questions.

Gregory Peters: Our first question is coming from Gregory Peters from Raymond James, your line is that live. Good afternoon, everyone. So for the first question, I'm going to focus on the first statement you make in slide 10 and then slide 11. I was focused on the TIV down just under 2% policy camping down just under 6% with 100-year PML up. I assume there's some underlying insurance devalued issues going in there and maybe you could spend a minute and just talk to us about what we're seeing on slide 11 because it looks like conditions still remain pretty favorable.

Gregory Peters: Certainly, thanks, Greg. I'll take that. On slide 11, we just want to continue to demonstrate that year-over-year premium relative to TIV is holding strong. We've noted in the past that we would expect some slight increases to the dotted total insured value line at the with some small decreases in the premium line on top, narrowing that gap in future periods, but the risk versus return profile is what we're focused on with that slide and it remains.

Gregory Peters: Very good. As far as the total insured value being down and policy count being down, that's just continued underwriting. We are being disciplined. We've held the line on terms and conditions and pricing while others attempt to take advantage of softening market conditions. We've taken the opportunity to work through changes in some of our peak zones to reduce overall exposure, especially since those are metric changes since year-end. We've been able to grow premiums in force while curbing exposures, so we felt like that was the prudent thing to do in the first half of the year going into our catastrophe re-insurance renewal, and now that we've got that new program in place, especially with the additional limit, we bought subsequent to 6-1.

Gregory Peters: We feel like we're very well positioned to have some exposure growth. Part of the reason we did that is because of the anticipation of assuming some business on October 27th, which is obviously still in the wind season. There is growth on the horizon, but we're still being very selective.

Bennett Martz: Okay, I guess you mentioned the re-insurance program, so let's pivot for my follow- question to the slide 13, where you talk about the 24-25 Cat Re insurance program. So, the first event retention is $16 million, then you say this net maximum reinstatement exposure is $14 million. I assume the $14 million would be if you use, go through the whole tower, but if you don't go through the whole tower, the net reinstatement would be something less than that.

Bennett Martz: So, when I think about if an event happens, it pierces your retention, it's going to be $16.2 plus whatever portion of reinstatement is due. Is that a correct interpretation? That's correct. And the key difference with the reinstatement exposure is that one that's a three-tax number, so you'd want to probably look at that aftertax for apples to apples. And then two, those reinstatement premiums are amortized over the remaining term of the treaty period.

Bennett Martz: So, if an event happened in September 1st that reinstatement cost would be amortized from September 1st to May 31st, 2025, whereas the loss is recognized in full immediately. So, when you have these reinstatement costs, you have a second and third event retention. If we had three full events in Florida this year, the third event you would have coverage for the full tower layer going up to the $1.259 billion, or is there a different amount of coverage that happens in the third event versus the second event?

Bennett Martz: There are different amounts of coverage in the second event and the third event. And it really depends on what happens with the first event. So, I think what we are trying to say, it gets super complicated, but the real way to answer that question is it depends on the size of the first event. And obviously after a first event, we would try and get guidance to the market as quickly as possible about our estimate of that loss and the remaining reinsurance available. Okay, I figured it was complex.

Bennett Martz: Just final, just I'm probably way too soon to say anything, but Debbie came through, not sure if it's really material to you guys yet or not, but do you have any comment you can offer yet on that, or do you want to wait for a couple more weeks? Yeah, I can comment that it was mostly a rain event, not a wind event, or commercial residential portfolio, you know, it's spared resiliently in the past to similar events.

Bennett Martz: We have one claim at this time. It's very small, roughly claim, under deductible. So, I'm not, you know, obviously we feel for everyone that was impacted by the event. There was a lot of rain, a lot of water on the west coast of Florida, and elsewhere, even outside of Florida right now. So, you know, never take that lightly at all. The flooding unfortunately is, or fortunately for us, it's not covered. We don't cover flood, but that's a peril. You know, we don't have to worry about it, but the wind damage we would expect to be close to nothing.

Gregory Peters: Fair enough. All right. Well, thanks for the slide on the guidance, too. I think that's helpful.

Operator: Congratulations on the quarter. You're welcome. Thank you. As a reminder, it's star one to be placed in the question queue.

Operator: One moment, please, while ladies and gentlemen, that doesn't include today's teleconferencing webcast, you may just connect the line at this time and have a wonderful day.

Operator: We thank you for your participation today.

Q2 2024 American Coastal Insurance Corp Earnings Call - Q&A

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