American Coastal Insurance (NASDAQ:ACIC) used a “Flash Strategic Update” led by President and CEO Brad Martz and CFO Lana Castle to outline growth initiatives tied to excess and surplus (E&S) lines, updates to its reinsurance protections, and 2026 financial guidance. Management emphasized that comments included forward-looking statements and pointed investors to the company’s Form 10-K and other filings for risk factors.
Company background and Florida condominium leadership
Martz recapped that American Coastal was founded in 2007 by Chairman Dan Peed to underwrite commercial residential property insurance in Florida, focused on habitational risks such as condominiums and apartments. The company insures building shells or envelopes—such as roofs, doors, windows, and common areas—and also covers related structures like garages and recreation centers. Martz noted the company does not cover flood, liability, or contents of individual units, which are generally handled by separate policies.
Expanded partnership with AmRisc to access nationwide E&S premium
The central strategic announcement was an expansion of American Coastal’s relationship with AmRisc Group, which management described as the leading commercial property managing general agency (MGA) in the United States. Martz said AmRisc produces exclusively for American Coastal in Florida for admitted-market condominium business, and also underwrites a large E&S commercial property portfolio nationwide with other carriers.
American Coastal announced it plans to provide additional capacity to AmRisc via a 6% participation in AmRisc’s nationwide E&S portfolio. Martz said the company viewed this as a way to earn an attractive return on capital with “virtually no execution risk or risk of adverse selection,” pointing to AmRisc’s underwriting track record in E&S over the past 25 years.
Management provided an illustrative example showing how the participation could support AmRisc’s “$1 billion-plus” E&S portfolio and produce about $75 million of gross written premium for American Coastal in 2026, assuming a March 1 start date. Because American Coastal does not currently have an AM Best rating, Martz said the company will use a fronting carrier and a reinsurance partner to pass through its 6% share of premiums and losses via a net quota share reinsurance agreement. Once agreements are finalized, the company plans to file an 8-K with additional details, including counterparties. The initial term is expected to be two years, with management characterizing the arrangement as intended to be long-term if renewals remain mutually beneficial.
Reinsurance structure and catastrophe retention approach
Martz said the company’s overall strategy is to retain a small portion of risk to mitigate catastrophe-driven volatility. For the new AmRisc E&S participation, he said a separate catastrophe reinsurance program is expected to cover American Coastal’s share of the portfolio’s exposure. In an illustration, management indicated retention would likely be limited to no more than $10.8 million, with an all-perils excess loss program placed up to a 250-year probable maximum loss. Losses beyond the open-market reinsurance program would be retained by the fronting carrier, according to the presentation.
Martz added that coverage would be placed “one at 100” and include reinstatement premium protection intended to eliminate potential reinstatement costs if losses are ceded. He also said the reinsurance partner—described as a “multibillion-dollar global entity”—would place the open-market reinsurance coverage on American Coastal’s behalf.
Castle also detailed the company’s broader reinsurance protections. In addition to its core catastrophe program, she said the company purchases:
- All other perils catastrophe reinsurance (events other than named windstorms, such as hail and tornadoes) up to $106 million on the first and second events, with retention of approximately $10 million on the first and second events.
- Aggregate catastrophe reinsurance, added in 2025 and renewed for 2026, providing protection from aggregate catastrophe losses in excess of $40 million during the coverage year, with a current limit of $20 million.
Creating an owned E&S carrier: ACES Specialty Insurance Company
In a second major strategic update, Martz announced the formation of a new wholly owned and controlled E&S carrier, ACES Specialty Insurance Company (short for American Coastal E&S). The company has an application pending approval in Arizona, and management said timing is uncertain, though it anticipates ACES will be operational this year.
ACES is planned to launch with $30 million of policyholder surplus. Management said ACES will likely begin by assuming risk as a collateralized reinsurer and, to become a direct underwriter, will need state approvals in intended operating jurisdictions and an AM Best rating of at least A-, which management said will require time and additional capital.
Management also discussed how ACES and the company’s wholly owned specialty MGA, Skyway Underwriters, are expected to work together to produce and administer direct business on behalf of ACES. The initial underwriting focus is expected to include five classes of commercial property in Florida, Texas, and South Carolina, with management stating it has underwriting experience in those classes and states except for non-habitational commercial property, which it expects to remain relatively small. Martz also cited California as an example of a market with “dislocation” and potential opportunity, while noting it would take time to find the right approach.
2026 guidance, dividends, and capital allocation priorities
Castle provided 2026 guidance and described two profitability goals: remaining profitable every quarter even with a full catastrophe retention loss, and remaining profitable for the full year even with three full catastrophe retentions. The company guided to earnings before income tax of $85 million to $100 million and total revenue of $335 million to $365 million.
She also said the company has seen steady growth in liquidity and book value over the last 24 months, and noted special cash dividends of $0.50 per share paid on January 10, 2025, and $0.75 per share paid on January 9, 2026. On capital allocation, Castle said the long-term target is less than a 25% debt-to-capital ratio. She added that the board previously authorized up to $25 million in share repurchases, though there have been no buybacks to date. As a catastrophe-exposed underwriter, Castle said the company believes special dividends support a stronger capital position than maintaining a regular quarterly dividend.
About American Coastal Insurance (NASDAQ:ACIC)
American Coastal Insurance Company (NASDAQ:ACIC) is a specialized property and casualty insurer focused on coastal residential and commercial lines across the Southeastern United States. Headquartered in St. Petersburg, Florida, the company underwrites policies designed to address windstorm and non-windstorm perils in areas exposed to hurricane risk. Since its founding in 2007, American Coastal has positioned itself to meet the insurance needs of homeowners, condominium associations, and small business owners operating near coastal zones.
Through a diversified portfolio of personal lines products, American Coastal offers homeowners insurance, dwelling fire, mobile home, condominium unitowners and renters policies.
