American Coastal’s CoR increases and net income down in Q4’24

American Coastal Insurance, a property and casualty insurance holding company, has released its financial results for the fourth quarter, reporting a combined ratio of 91.9% despite the devastating impact of natural catastrophes.

Compared to Q4 2023, the insurer’s combined ratio increased 32pts from 59.9%.

American Coastal Insurance reported a Q4 net income of $4.9 million, down from $14.3 million in the same period of 2023. This figure includes $5.9 million attributable to continuing operations, a decrease of $11.5 million compared to the $17.4 million reported in Q4 2023.

Q4 revenues saw an increase driven by reduced ceded premiums earned, alongside growth in gross premiums earned and net investment income. However, this was offset by increased expenses, primarily due to higher loss and loss adjustment expenses (LAE) and policy acquisition costs.

Additionally, the company noted that the absence of income from discontinued operations, following the deconsolidation of United Property and Casualty Insurance Company (UPC), contributed to the net income decline.

Gross written premiums for Q4 2024 rose by $12.5 million, or 9.7%, to $140.7 million, compared to $128.3 million in Q4 2023.

For the full year, American Coastal Insurance reported a net income of $75.7 million, a decrease from $309.9 million in 2023. The combined ratio increased to 67.5% from 60.9% in the prior year.

The 2024 net income was influenced by increased gross premiums earned, partially offset by higher ceded premiums. Growth in net investment income also contributed to overall revenue.

This increase in revenue was offset by increased expenses year-over-year, driven by increases in losses and LAE incurred and general and administrative expenses, partially offset by decreased policy acquisition costs.

During 2024, the company experienced a net loss attributable to discontinued operations of $601 thousand, compared to $224.7 million of net income attributable to discontinued operations during 2023, as the deconsolidation of the insurer’s former subsidiary, UPC, is not impacting the company in 2024.

Annual gross written premiums increased by $12.1 million, or 1.9%, to $647.8 million, up from $635.7 million in 2023.

Chief Executive Officer, B. Bradford Martz, commented: “American Coastal, our insurance subsidiary, remains a leader in the Florida commercial residential market. The Company remained profitable in the 2024 fourth quarter with a combined ratio of 91.9%, despite the devastating impact and full catastrophe retention from Hurricane Milton, leading to a 67.5% combined ratio for the full year.

“This underscores the strength of our reinsurance strategy in safeguarding our balance sheet while mitigating the financial impact of catastrophic events.”

She continued: “Furthermore, American Coastal’s written premium increased 9.7% from the prior year fourth quarter and renewal retention remained steady. In December, we announced the launch of our apartment program, and, to date, we have received hundreds of high-quality submissions from our six broker partners, affirming the strong demand for American Coastal’s products.”

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