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American Coastal Insurance Corp. (NASDAQ:ACIC), a Delaware-incorporated insurance holding company with a market capitalization of $523 million and an "GREAT" Financial Health Score according to InvestingPro, disclosed the renewal of its core catastrophe reinsurance program effective June 1, 2025. The company has demonstrated strong performance with a 23.92% revenue growth over the last twelve months. The renewal, conducted through its subsidiary American Coastal Insurance Company (AmCoastal), sees the firm increasing its occurrence-based limit by 3.9% to approximately $1.676 billion for the 2025/26 period, up from $1.614 billion in the previous year.
The enhanced reinsurance program aims to cover windstorms in Florida, named or numbered by the National Hurricane Center, among other perils. ACIC’s first event limit has grown to an estimated $1.33 billion, a 5.4% increase from the previous year. The coverage is designed to protect against a 1-in-201-year event and exceeds the protection for a 1-in-100-year event followed by a 1-in-50-year event within the same season.
The company’s first event retention, the portion of loss ACIC retains, has increased to $29.75 million, which is 12.6% of the stockholders’ equity as of December 31, 2024. This marks a rise from the $20.5 million retention in the prior year. The second event retention is set at up to $18.5 million, up from $13 million in the 2024/25 program. With a P/E ratio of 7.19 and Return on Equity of 31%, InvestingPro analysis suggests the company maintains strong financial metrics despite increased risk retention.
Additionally, the Florida Hurricane Catastrophe Fund (FHCF) Reimbursement Contract for ACIC has been set at 90% coverage, providing approximately $534.1 million of Florida-only coverage. The firm also placed an external quota share with an unaffiliated reinsurer rated A+ by AM Best, covering all catastrophe perils and attritional losses.
The total cost for ACIC’s 2025/26 catastrophe excess of loss reinsurance programs, excluding reinstatement premium, is approximately $201.85 million. This represents a risk-adjusted rate decrease of 12.2% from the previous year’s program. Furthermore, the maximum exposure for reinstatement/additional premium, assuming all layers are exhausted from a first event, is $5.9 million, a significant decrease from the previous year.
This information is based on a press release statement filed with the Securities and Exchange Commission. For deeper insights into ACIC’s financial health, valuation metrics, and expert analysis, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which provides detailed analysis of this and 1,400+ other US stocks.
In other recent news, American Coastal Insurance Corporation reported its financial results for the first quarter of 2025, showcasing a net income of $21.3 million and a 9% increase in net premium earned, reaching $68.3 million. The company also highlighted a 6% growth in policies in force since the year-end. Additionally, American Coastal Insurance has launched a new insurance initiative targeting apartment buildings in Central and Northeast Florida. The company plans to renew its catastrophe reinsurance program with increased protection and decreased rates, effective June 1, 2025. In another development, Raymond (NSE:RYMD) James adjusted its financial outlook for Atlas Crest Investment Corp, reducing the price target from $16.00 to $15.00 while maintaining an Outperform rating. Analyst Greg Peters noted the valuation reflects a multiple of 10.4 times the estimated operating earnings per share for 2026. American Coastal Insurance also held its 2025 Annual Meeting of Stockholders, where key proposals, including the election of directors and the ratification of Deloitte & Touche as the accounting firm, were approved. These developments reflect the company’s strategic focus on growth and innovation while navigating market challenges.
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