Earnings Presentation Q4 2024

Company Overview

ACIC is a specialty underwriter of catastrophe exposed property insurance.

¹ IIC 's results are classified as discontinued operations.

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Executive Summary

• Q4-24Results
• • Non-GAAPCore Income of $6.0m ($0.12) decreased $12.0m (-66.7%) from $18.0m ($0.39) y/y on higher incurred losses resulting from Hurricane Milton and higher policy acquisition costs due to lower ceding commission income, offset by lower ceded earned premiums resulting from the step down of the 40% gross CAT quota share effective 6.1.2023 to 20% effective 6.1.2024.
  • Net premiums earned grew $24.4m (+49.7%)to $73.5m y/y.
  • Our combined ratio of 91.9% was impacted by Hurricane Milton, which drove 27.8 points of this ratio. Our Non-GAAP underlying combined ratio (which excludes current catastrophe losses and PY development) was 65.9%. FY24 ended with a combined ratio of 67.5%.
  • Current year net catastrophe losses in the quarter were $20.4m before tax (Hurricane Milton) and we had $1.3m of favorable prior year reserve development.
  • Stockholders' equity attributable to ACIC,decreased $23.9 million from September 30, 2024, to $235.7m or $4.89 per share and $5.21 per share excluding unrealized losses in accumulated other comprehensive income. This was driven by the $0.50 special dividend declared during the fourth quarter.
• Other Highlights
• • We successfully launched our new apartment product, having bound 19 policies with $2.3m of premium as of February 25, 2025.
  • Successful placement of an additional Catastrophe Bond effective December 20, 2024, which was oversubscribed and provides an additional $200 million in cascading coverage up to a third event.
  • In addition to the renewal of our January 1, 2025, AOP CAT and February 1, 2025, Excess Per Risk programs at a lower risk-adjusted cost, we placed a new catastrophe aggregate excess of loss agreement (CAT AGG), providing $40m of aggregate limit excess of $40m from all catastrophe perils for the full year ending December 31, 2025 to reduce potential earnings volatility from increased frequency.

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4Q-24 Financial Scorecard

Results remain in line with Raymond James' estimates for the quarter.

*Analyst Est. adjusted for special dividend

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4Q-24 Summary of Key Results

A profitable Q4 and our FY24 combined ratio ended near our 65% target, despite the impact of Hurricane Milton

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4Q-24 Operating Overview

Despite a full catastrophe retention from Hurricane Milton, the Company remained profitable in Q4

The impact of the quota share step down from 40% to 20% effective June 1, 2024, had a significant impact on ceded premiums earned and operating expense (policy acquisition costs) y/y.

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Balance Sheet Highlights

Strong underwriting results have improved our financial strength and allowed us to pay a $0.50 special dividend, despite an active hurricane season.

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2025 Full Year Guidance

Our 2025 guidance remains unchanged from our initial December 4, 2024, estimate.

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Investment Portfolio Overview

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Average Account Rate Trends & Wind Deductible

While rates trend lower, consistent with reinsurance trends, deductibles and terms remain largely unchanged.

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