American Coastal Insurance, formerly known as United Insurance Holdings, released its financial results for Q3 2023, reporting a combined ratio of 68.7% for Q3’23 as compared to a ratio of 139.3% for Q3’22.
American Coastal Insurance, a property and casualty insurance holding company, reported a net income attributable to the Company of $10.6 million, compared to a net loss of $70.9 million for the third quarter of 2022.
The drivers of net income from continuing operations during the third quarter of 2023 included increased gross premiums earned partially offset by increased ceded premiums earned driven by our 2023 quota share agreements, a decrease in our loss and LAE incurred, driven by decreased catastrophe losses, and decreased policy acquisition costs and administrative costs.
The Company’s total gross written premium increased by $0.7 million, or 0.7%, to $103.9 million for the third quarter of 2023, from $103.2 million for the third quarter of 2022. The reason for this increase is driven primarily by an increase in our commercial premiums written, offset by decreased personal lines premiums written.
Net premiums earned by the company were $55.8 million in Q3 2023 as compared to $70.2 million in Q3 2022.
The company’s operating and underwriting expenses decreased by $324 thousand, or 10.4%, to $2.8 million for the third quarter of 2023, from $3.1 million for the third quarter of 2022, primarily due to decreased investments in technology quarter-over-quarter.
The company’s loss and LAE decreased by $39.0 million, or 73.9%, to $13.8 million for the third quarter of 2023, from $52.8 million for the third quarter of 2022. Loss and LAE expense as a percentage of net earned premiums decreased 50.4 points to 24.7% for the third quarter of 2023, compared to 75.1% for the third quarter of 2022.
Excluding catastrophe losses and reserve development, the Company’s gross underlying loss and LAE ratio for the third quarter of 2023 would have been 6.8%, a decrease of 6.9 points from 13.7% during the third quarter of 2022.
Dan Peed, Chief Executive Officer (CEO), commented: “We are pleased to again deliver value to our shareholders. Our book value per share at September 30th increased to $2.78, and our continuing operations reported a core return on equity of 170.3%, with $14.4 million in third quarter earnings.”
“American Coastal continues to outperform its peers and expectations. Although our personal lines segment experienced a pre-tax loss of $5.5 million, this is a significant improvement quarter-over-quarter, and we continue to take pricing and underwriting actions that improve the outlook of the personal lines segment.”
“Consolidated net income for the third quarter was $10.6 million, including a loss on discontinued operations of $3.8 million, which shows the strength of American Coastal’s earnings power. Our focus on expense reduction and the quality of our book of business has delivered results,” Peed added.
