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What changed in AMERICAN COASTAL INSURANCE Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AMERICAN COASTAL INSURANCE Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+302 added−341 removedSource: 10-K (2026-03-09) vs 10-K (2025-03-10)

Top changes in AMERICAN COASTAL INSURANCE Corp's 2025 10-K

302 paragraphs added · 341 removed · 256 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+9 added−22 removed29 unchanged
Biggest changeKroll maintains a letter-scale financial strength rating system for insurance companies ranging from AAA (extremely strong operations and no risk) to R (operating under regulatory supervision). The financial strength or stability ratings of our insurance company subsidiaries as of December 31, 2024 are listed below.
Biggest changeWe are rated by Demotech and Kroll Bond Rating Agency (Kroll). Demotech maintains a letter-scale financial stability rating system ranging from A’’ (A double prime) to L (licensed by insurance regulatory authorities). Kroll maintains a letter-scale financial strength rating system for insurance companies ranging from AAA (extremely strong operations and no risk) to R (operating under regulatory supervision).
Working under these principles, our Human Resources Department is tasked with recruiting and hiring, onboarding, performance management, and managing employee-related matters. We believe in transparency at all levels at ACIC.
Working under these principles, our Human Resources Department is tasked with recruiting, hiring, onboarding, performance management, and managing employee-related matters. We believe in transparency at all levels at ACIC.
To ensure we are successful in this, we provide our employees with the following: • Competitive salaries and bonuses; • Tuition reimbursement; • Paid parental leave; and • Robust employee benefit packages that include: ◦ Health care; ◦ Vision; ◦ Dental; ◦ Retirement program; ◦ Paid time off; and ◦ Employee assistance program that provides emotional support, legal services and financial services.
To ensure we are successful in this, we provide our employees with the following: • Competitive salaries and bonuses; • Tuition reimbursement; • Paid parental leave; and • Robust employee benefit packages that include: o Health care; o Vision; o Dental; o Retirement program; o Paid time off; and o Employee assistance program that provides emotional support, legal services and financial services.
In addition to this, the leaders in each department assist our executive officers in maintaining our culture and implementing our core values at all levels of the organization. Total Rewards We believe that our future success largely depends upon our ability to attract and retain highly skilled employees.
In addition, the leaders in each department assist our executive officers in maintaining our culture and implementing our core values at all levels of the organization. Total Rewards We believe that our future success largely depends upon our ability to attract and retain highly skilled employees.
Limitations on Dividends by Insurance Subsidiaries As a holding company with no significant business operations of our own, we rely on payments from our insurance subsidiaries as one of the principal sources of cash to pay dividends and meet our obligations.
Limitations on Dividends by Insurance Subsidiaries As a holding company with no significant business operations of our own, we rely on payments from our insurance subsidiary as one of the principal sources of cash to pay dividends and meet our obligations.
Our primary competitors range from large national property and casualty insurance companies that write most classes of business using traditional products and pricing to small and mid-size regional insurance companies that provide specialty coverages. We compete primarily on the basis of policy features, the strength of our distribution network and the quality of our services to our agents and policyholders.
Our primary competitors range from large national property and casualty insurance companies that write most classes of business using traditional products and pricing to small and mid-size regional insurance companies that provide specialty coverages. We compete primarily on the basis of policy features, the strength of our distribution network and the quality of our services to our partners and policyholders.
We seek to optimize our portfolio by managing our probable maximum loss (PML), total insured value (TIV) and average annual loss. As part of this optimization process, we use the output from third-party modeling software to analyze our risk exposures, including wind exposures, by zip code or street address.
We seek to optimize our portfolio by managing our probable maximum loss (PML), total insured value (TIV) and average annual loss (AAL). As a part of this optimization process, we use the output from third-party modeling software to analyze our risk exposures, including wind exposures, by zip code or street address.
One factor is the financial strength or stability ratings assigned to our insurance subsidiaries by independent rating agencies. A downgrade in these ratings could negatively impact our position in the market. Another factor is that we must attract and retain key employees and highly skilled people in order to be successful in the market.
One factor is the financial strength or stability ratings assigned to our insurance subsidiary by independent rating agencies. A downgrade in these ratings could negatively impact our position in the market. Another factor is that we must attract and retain key employees and highly skilled people in order to be successful in the market.
The Company uses pricing algorithms, judgement-based rating and consent to rate methodologies that consider historical attritional loss costs for the rating territory in which the risk resides, as well as modeled expected losses for catastrophes and projected reinsurance costs based on the specific geographic and structural characteristics of the property.
The Company uses pricing algorithms, judgment-based rating and consent to rate methodologies that consider historical attritional loss costs for the rating territory in which the risk resides, as well as modeled expected losses for catastrophes and projected reinsurance costs based on the specific geographic and structural characteristics of the property.
(2) Our management team is comprised of employees in supervisory roles at the manager and director level or above. We believe that inclusion and diversity starts at the top. In 2021, we appointed a female leader within our organization to serve as our General Counsel.
(2) Our management team is comprised of employees in supervisory roles at the manager and director level or above. We believe that inclusion and diversity start at the top. In 2021, we appointed a female leader within our organization to serve as our General Counsel.
ACIC continuously monitors our environmental footprint and will continue to make steps to reduce this footprint where possible. Previously, we made an aspirational commitment to achieve net-zero carbon emissions in our operations and through our value chain by no later than 2030.
ACIC continuously monitors our environmental footprint and will continue to take steps to reduce this footprint where possible. Previously, we made an aspirational commitment to achieve net-zero carbon emissions in our operations and through our value chain by no later than 2030.
On a monthly basis, an all-employee meeting is held where our executive officers recognize employees for their continued success, discuss new and ongoing company initiatives, and address any concerns our employees may have.
On a monthly basis, an all-employee meeting is held where our executive officers and senior management recognize employees for their continued success, discuss new and ongoing company initiatives, and address any concerns our employees may have.
As a result, we have taken the following steps to improve our environmental footprint and reduce our contribution to climate change: • Reducing waste: paperless policy document delivery option and investment in paperless technologies; • Eco-friendly disposal of retired equipment and electronics; • Installed filtered water dispensers throughout our offices to promote re-usable bottles over disposables; • Utilization of recycling bins throughout our offices; • Maintenance of a hybrid and remote work environment to both enhance productivity and curb the impact of daily commuting; and • Use of energy-efficient LED lighting, motion-activated lighting, and programmable thermostats to reduce energy use.
As a result, we have taken the following steps to improve our environmental footprint and reduce our contribution to climate change: • Reducing waste: paperless policy document delivery option and investment in paperless technologies; • Eco-friendly disposal of retired equipment and electronics; • Installed filtered water dispensers throughout our offices to promote re-usable bottles over disposables; • Utilization of recycling bins throughout our offices; 9 AMERICAN COASTAL INSURANCE CORPORATION • Maintenance of a hybrid and remote work environment to both enhance productivity and curb the impact of daily commuting; and • Use of energy-efficient LED lighting, motion-activated lighting, and programmable thermostats to reduce energy use.
Statutory RBC requirements may further restrict our insurance subsidiaries’ ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause statutory surplus to fall below minimum RBC requirements.
Statutory RBC requirements may further restrict our insurance subsidiary's ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause statutory surplus to fall below minimum RBC requirements.
Eight of our directors, or 88.9%, are considered to be independent. Our Board of Directors has several committees, including an Audit Committee, a Compensation and Benefits Committee, a Nominating and Corporate Governance Committee, and an Investment Committee.
Eight of our directors, or 88.9%, are considered to be independent. Our Board of Directors has several committees, including an Audit Committee, a Compensation and Benefits Committee, a Nominating and Corporate Governance Committee, Risk Management Committee, and an Investment Committee.
Collectively, we refer to the holding company and all our subsidiaries, including non-insurance subsidiaries, as “American Coastal Insurance Corporation,” which is the preferred brand identification for our Company. Our Company’s primary source of revenue is generated from writing insurance in Florida.
Collectively, we refer to the holding company and all our subsidiaries, including non-insurance subsidiaries, as “American Coastal Insurance Corporation,” which is the preferred brand identification for our Company. Our Company’s revenue is generated from writing insurance in Florida.
Subsidiary RBC Ratio AmCoastal 1,470 % IIC 461 % Underwriting and Marketing Restrictions During the past several years, various regulatory and legislative bodies have adopted or proposed new laws or regulations to address the cyclical nature of the insurance industry, catastrophic events and insurance capacity and pricing.
Subsidiary RBC Ratio AmCoastal 1,757 % Underwriting and Marketing Restrictions During the past several years, various regulatory and legislative bodies have adopted or proposed new laws or regulations to address the cyclical nature of the insurance industry, catastrophic events and insurance capacity and pricing.
Any purchaser of 5% or more of the outstanding shares of our common stock could be presumed to have acquired control of us unless the insurance regulatory authority, upon application, determines otherwise. 11 AMERICAN COASTAL INSURANCE CORPORATION Insurance holding company regulations also govern the amount any affiliate of the holding company may charge our insurance affiliates for services (i.e., management fees and commissions).
Any purchaser of 5% or more of the outstanding shares of our common stock could be presumed to have acquired control of us unless the insurance regulatory authority, upon application, determines otherwise. Insurance holding company regulations also govern the amount any affiliate of the holding company may charge our insurance affiliate for services (i.e., management fees and commissions).
As a part of our retention efforts, we also invest in ongoing development for all employees, and attempt to fill vacant senior or leadership roles through internal promotion when possible. Voluntary attrition was 5.9% for the year ended December 31, 2024. CORPORATE INFORMATION American Coastal Insurance Corporation was incorporated in Delaware in 2007.
As a part of our retention efforts, we also invest in ongoing development for all employees, and attempt to fill vacant senior or leadership roles through internal promotion when possible. Voluntary attrition was 3.0% for the year ended December 31, 2025. CORPORATE INFORMATION American Coastal Insurance Corporation was incorporated in Delaware in 2007.
There is intense competition in our industry which could lead to higher-than-expected employee turnover or difficulty attracting new employees. Finally, technological advancements and innovation in the insurance industry provide opportunities for a competitive advantage. Advancements and innovation are being used in all aspects of the industry 9 AMERICAN COASTAL INSURANCE CORPORATION including digital-based distribution methods, underwriting and claims handling.
There is intense competition in our industry which could lead to higher-than-expected employee turnover or difficulty attracting new employees. Finally, technological advancements and innovation in the insurance industry, including the use of artificial intelligence, provide opportunities for a competitive advantage. Advancements and innovation are being used in all aspects of the industry including digital-based distribution methods, underwriting and claims handling.
Our climate risk analysis and strategy remain under development and subject to evolution over time. As such, as of December 31, 2024, we cannot provide a timeline for achieving a net-zero carbon emission commitment. 12 AMERICAN COASTAL INSURANCE CORPORATION Social Responsibility We understand that research shows diverse teams perform better, innovate more and are more effective at managing risks.
Our climate risk analysis and strategy remain under development and subject to evolution over time. As such, as of December 31, 2025, we cannot provide a timeline for achieving a net-zero carbon emission commitment. Social Responsibility We understand that research shows diverse teams perform better, innovate more and are more effective at managing risks.
While we continue to evaluate data and guidance as it becomes clearer, we believe further analysis and strategy is necessary than we initially believed. As a result, we may need to change or recalibrate our goals in line with improved data and as climate science, regulatory requirements and market practices regarding standards, methodologies and measurements evolve.
While we continue to evaluate data and guidance as it becomes clearer, we believe further analysis is necessary and achieving net-zero will take longer than we initially believed. As a result, we may need to change or recalibrate our goals in line with improved data and as climate science, regulatory requirements and market practices regarding standards, methodologies and measurements evolve.
With three of the seven members of our executive leadership team as of December 31, 2024, comprised of underrepresented groups, we believe this is strong evidence of our commitment to our ESG goals. 13 AMERICAN COASTAL INSURANCE CORPORATION Oversight and Management We recognize the diversity of our policyholders, team, and geographic markets, and believe in creating an inclusive environment that represents a variety of backgrounds.
With three of the seven members of our executive leadership team as of December 31, 2025 comprised of underrepresented groups, we believe this is strong evidence of our commitment to our ESG goals. Oversight and Management We recognize the diversity of our policyholders, team, and geographic markets, and believe in creating an inclusive environment that represents a variety of backgrounds.
The Company also seeks to have risks maintain an appropriate insurance to value through annual re-underwriting and inspection of each property to ensure it meets or exceeds our underwriting guidelines with verified data quality and integrity regarding the key risk characteristics of our covered properties.
The Company also seeks to have risks maintain an appropriate insurance to value through re-underwriting and inspections of each property every three years to ensure it meets or exceeds our underwriting guidelines with verified data quality and integrity regarding the key risk characteristics of our covered properties.
Most states, including Florida and New York, have enacted the NAIC guidelines as statutory requirements, and insurers having less statutory surplus than required will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. 10 AMERICAN COASTAL INSURANCE CORPORATION The level of required RBC is calculated and reported annually.
Most states, including Florida, have enacted the NAIC guidelines as statutory requirements, and insurers having less statutory surplus than required will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. The level of required RBC is calculated and reported annually.
In addition, in January 2024, we appointed a new female leader from outside of our organization to serve as our Chief Financial Officer.
In addition, in January 2024, we appointed a new female leader from outside of our organization to serve as our Chief Financial Officer. Furthermore, AmCoastal appointed two female directors in 2024.
You may also access this information at the SEC’s website (www.sec.gov). This site contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. 14 AMERICAN COASTAL INSURANCE CORPORATION
You may also access this information at the SEC’s website (www.sec.gov). This site contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
On July 10, 2023, we changed our corporate name from United Insurance Holdings Corp. to American Coastal Insurance Corporation. We conduct our business principally through our two wholly owned insurance subsidiaries: American Coastal Insurance Company (AmCoastal); and Interboro Insurance Company (IIC).
On July 10, 2023, we changed our corporate name from United Insurance Holdings Corp. to American Coastal Insurance Corporation. We conduct our business principally through our wholly owned insurance subsidiary, American Coastal Insurance Company (AmCoastal).
The Company allocates a portion of relevant expenses to AmCoastal for statutory accounting purposes at cost. AmRisc, a managing general underwriter, handles the underwriting, claims processing and premium collection for our AmCoastal commercial business written in Florida. In return, AmRisc is reimbursed through monthly management fees. The Company does not utilize a managing general agent structure in New York.
The Company allocates a portion of relevant expenses to AmCoastal for statutory accounting purposes at cost. AmRisc, a managing general underwriter, handles the underwriting, claims processing and premium collection for our AmCoastal condominium business written in Florida. In return, AmRisc is reimbursed through monthly management fees.
We continue to leverage the technology that we have and have made substantial investments into new technology in an effort to gain an advantage over our competitors. REGULATION We are subject to extensive regulation in the jurisdictions in which our insurance company subsidiaries are domiciled and licensed to transact business, primarily at the state level.
We continue to leverage the technology that we have and to make substantial investments into new technology in an effort to gain an advantage over our competitors. REGULATION We are subject to extensive regulation in the jurisdiction in which our insurance company subsidiary is domiciled and licensed to transact business, primarily at the state level. AmCoastal is domiciled in Florida.
HUMAN CAPITAL MANAGEMENT Diversity and Employment Statistics As of December 31, 2024, we had 65 full-time employees, of which 15 worked in our Claims Department, and 5 worked in our Sales and Underwriting Department, respectively. These employees have regular direct contact with our vendors, agencies, or customers.
HUMAN CAPITAL MANAGEMENT Diversity and Employment Statistics As of December 31, 2025, we had 68 employees, of which 11 worked in our Claims Department, and 10 worked in our Sales and Underwriting Department, respectively. These employees have regular direct contact with our vendors, agencies, or customers.
In addition, during 2022 we wrote personal residential business in six other states, however on February 27, 2023, our former insurance subsidiary, United Property & Casualty Insurance Company (UPC) was placed into receivership with the Florida Department of Financial Services (the "DFS"), which divested our ownership of UPC.
In 2023, our former insurance subsidiary that wrote personal residential business in six states, United Property & Casualty Insurance Company (UPC) was placed into receivership with the Florida Department of Financial Services (the "DFS"), which divested our ownership of UPC.
Our insurance subsidiaries provide audited statutory financial statements to the various insurance regulatory authorities.
Our insurance subsidiary provides audited statutory financial statements to the various insurance regulatory authorities.
The events leading to receivership and results of this subsidiary for periods prior to receivership, now included within discontinued operations, can be seen in Note 4 of the Notes to Consolidated Financial Statements below.
The results of this subsidiary for periods prior to receivership, now included within discontinued operations, can be seen in Note 4 of the Notes to Consolidated Financial Statements below. Discussion of 2023 and 2024 related to UPC can be found in our 2023 and 2024 Forms 10-K.
In addition to our social responsibility as an employer within the community, ACIC also seeks to support our community through various initiatives intended to give back and promote goodwill.
In addition to our social responsibility as an employer within the community, ACIC also seeks to support our community through various initiatives intended to give back and promote goodwill. Over the past several years we have provided support to numerous non-for-profit organizations.
Effective June 1, 2022, we merged JIC into AmCoastal, with AmCoastal being the surviving entity. On May 9, 2024, the Company entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC ("Forza") in which ACIC will sell and Forza will acquire 100% of the issued and outstanding stock of IIC.
On May 9, 2024, we entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC (Forza) in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of IIC.
The state laws of Florida and New York permit an insurer to pay dividends or make distributions out of that part of statutory surplus derived from net operating profit and net realized capital gains or adjusted net investment income.
Our insurance affiliate is regulated as a property and casualty insurance company and its ability to pay dividends is restricted by Florida law. The state laws of Florida permit an insurer to pay dividends or make distributions out of that part of statutory surplus derived from net operating profit and net realized capital gains or adjusted net investment income.
AmCoastal is domiciled in Florida and IIC is domiciled in New York. In general, these regulations are designed to protect the interests of insurance policyholders.
In general, these regulations are designed to protect the interests of insurance policyholders.
We have historically grown our business through strong organic growth, complemented by strategic acquisitions and partnerships, including our acquisitions of AmCo Holding Company, LLC (AmCo) and its subsidiaries, including AmCoastal, in April 2017, and IIC in April 2016, and our strategic partnership with a subsidiary of Tokio Marine Kiln Group Limited (Tokio Marine), which formed Journey Insurance Company (JIC) in August 2018.
We have historically grown our business through strong organic growth, complemented by strategic acquisitions and partnerships, including our acquisitions of AmCo Holding Company, LLC (AmCo) and its subsidiaries, including AmCoastal, in April 2017.
Not-At-Risk Offerings On our equipment breakdown, identity theft and cybersecurity policies we earn a commission while retaining no risk of loss, since all such risk is ceded to other private companies (other risks). Previously, we offered flood policies that were ceded to the federal government via the National Flood Insurance Program (NFIP).
Not-At-Risk Offerings On our equipment breakdown, identity theft, and flood policies we earn a commission while retaining no risk of loss, since all such risk is ceded to other private companies (other risks). Underwriting We price our products at levels that we project will generate an acceptable underwriting profit.
The table below outlines each of our subsidiaries’ RBC ratios, all of which were in excess of minimum requirements, as of December 31, 2024.
The table below outlines our subsidiary's RBC ratio, which was in excess of minimum requirements, as of December 31, 2025.
We are listed on the Nasdaq stock exchange under ticker symbol “ACIC.” Segments We conduct our operations under one reportable operating segment. Our chief operating decision maker is our President, who makes decisions to allocate resources and assesses performance.
We are listed on the Nasdaq stock exchange under ticker symbol “ACIC.” Segments We conduct our operations under one reportable operating segment.
We measure our underwriting profitability by the combined ratio, which is a sum of the ratios of losses, loss adjustment expenses, and underwriting expenses to either gross or net earned premiums. A combined ratio under 100% indicates an underwriting profit.
We also utilize AI technology to assist with the intake process and the underwriting evaluation process (including both guidelines and building characteristics). We measure our underwriting profitability by the combined ratio, which is a sum of the ratios of losses, loss adjustment expenses, and underwriting expenses to either gross or net earned premiums.
The Company’s continuous portfolio optimization process strives to balance our risk appetite and underwriting profit opportunities with our available capital and reinsurance capacity to achieve consistent and sustainable underwriting profitability for the Company and its reinsurers over time.
The Company’s continuous portfolio optimization process strives to balance our risk appetite and underwriting profit opportunities with our available capital and reinsurance capacity to achieve consistent and sustainable underwriting profitability for the Company and its reinsurers over time. 5 AMERICAN COASTAL INSURANCE CORPORATION We desire to have the right combination of price, underwriting rules, deductibles and coverages to earn a return on capital that exceeds our cost of capital throughout the insurance market cycle.
Our plan is to focus primarily on low-rise commercial property insurance in Florida, through our exclusive managing general agency agreement and long-term partnership with AmRisc.
Subsidiary Demotech Rating Kroll Rating AmCoastal A A- ACIC BBB- Our Strategy Our vision is to be a top-quartile underwriter of catastrophe-exposed property insurance . Our plan is to focus primarily on low-rise commercial property insurance in Florida. We write our condominium product through our exclusive managing general agency agreement and long-term partnership with AmRisc.
We are not party to any collective bargaining agreements and we have not experienced any work stoppages or strikes as a result of labor disputes. The following table shows the diversity in our workforce population at December 31, 2024 and how this diversity has changed from December 31, 2023.
We are not party to any collective bargaining agreements and we have not experienced any work stoppages or strikes as a result of labor disputes.
In 2023, the FLOIR notified the Company of a statutory financial examination of AmCoastal as of December 31, 2023, which commenced in 2024, is scheduled to conclude prior to June 30, 2025, and has had no significant findings to date.
In 2023, the FLOIR notified the Company of a statutory financial examination of AmCoastal as of December 31, 2023, which commenced in 2024 and concluded prior to December 31, 2025, with no findings. In 2025, the FLOIR notified the Company of a targeted market conduct examination related to AmCoastal's Hurricane Ian claims handling operations.
Personal residential products are offered in New York. We include coverage to policyholders for loss or damage to dwellings, detached structures or equipment caused by covered causes of loss such as fire, wind, hail, water, theft and vandalism.
PRODUCTS AND DISTRIBUTION Commercial Residential Products We provide commercial multi-peril property insurance for residential condominium associations, apartments and assisted living facilities in Florida. We include coverage to policyholders for loss or damage to buildings, inventory or equipment caused by covered causes of loss such as fire, wind, hail, water, theft and vandalism.
AmRisc is an unaffiliated third party and represents 100% of our commercial lines revenue based on our exclusive agreement in Florida. As of December 31, 2024, we marketed and distributed our personal lines policies to consumers through approximately 400 independent agencies.
Distribution Channels Our condominium policies are marketed and distributed by AmRisc through a network of independent agencies managed by AmRisc that specialize in commercial residential insurance. AmRisc is an unaffiliated third party and represents 100% of our condominium revenue based on our exclusive agreement in Florida.
For more information regarding our products and distribution, as well as the agreements in place with managing general agents and underwriters, please refer to Part 1 Item 1. “ Products and Distribution” as well as Part 1 Item 1. “Insurance Holding Company Regulation”.
Our chief operating decision maker is our President and CEO, who makes decisions to allocate resources and assesses performance. 11 AMERICAN COASTAL INSURANCE CORPORATION For more information regarding our products and distribution, as well as the agreements in place with managing general agents and underwriters, please refer to Part 1 Item 1.
Gender (1) Change from December 31, 2023 Race (1) Change from December 31, 2023 Executive Officers 28.6% 8.6 points 28.6% (11.4) points Management Team (2) 38.7% (6.0) points 6.5% (8.4) points All Other Employees 48.1% 6.0 points 22.2% 6.4 points (1) Information regarding gender and race is based on information provided by employees.
The following table shows the diversity in our workforce population at December 31, 2025 and how this diversity has changed from December 31, 2024. 10 AMERICAN COASTAL INSURANCE CORPORATION Gender (1) Change from December 31, 2024 Race (1) Change from December 31, 2024 Executive Officers 28.6% 0.0 points 28.6% 0.0 points Management Team (2) 44.6% 5.7 points 13.9% 7.4 points All Other Employees 44.0% 7.9 points 12.0% (10.2) points (1) Information regarding gender and race is based on information provided by employees.
Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of this report for further details on our combined ratio. Distribution Channels Our commercial lines policies are marketed and distributed to condominium associations by AmRisc through a network of independent agencies managed by AmRisc that specialize in commercial residential insurance.
A combined ratio under 100% indicates an underwriting profit. Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of this report for further details on our combined ratio.
Insurance Holding Company Regulation As a holding company of insurance subsidiaries, we are subject to laws governing insurance holding companies in Florida and New York.
For additional information regarding those restrictions, see Part II, Item 5 and Part I, Item 1A of this report. 8 AMERICAN COASTAL INSURANCE CORPORATION Insurance Holding Company Regulation As a holding company of an insurance subsidiary, we are subject to laws governing insurance holding companies in Florida.
Given IIC is our last remaining personal lines entity and represents the final step in our strategic shift to becoming a specialty commercial underwriter, IIC results of operations and assets and liabilities are captured within discontinued operations and can be seen in Note 4 of the Notes to Consolidated Financial Statements below.
As a result, IIC results of operations and assets and liabilities are captured within discontinued operations and can be seen in Note 4 of the Notes to Consolidated Financial Statements below. Financial strength or stability ratings are important to insurance companies in establishing their competitive position and may impact an insurance company’s ability to write policies.
With these ratings, we expect our property insurance policies will be acceptable to the secondary mortgage marketplace and mortgage lenders. Subsidiary Demotech Rating Kroll Rating AmCoastal A A- IIC A BBB+ ACIC BB+ 5 AMERICAN COASTAL INSURANCE CORPORATION Our Strategy Our vision is to be a top-quartile underwriter of catastrophe-exposed property insurance .
The financial strength or stability ratings of our insurance company subsidiary as of December 31, 2025 are listed below. With these ratings, we expect our property insurance policies will be acceptable to the secondary mortgage marketplace and mortgage lenders.
On February 13, 2025, Forza’s application to acquire IIC was approved by the NYDFS. The Company and Forza have agreed to close on April 1, 2025.
Forza’s application to acquire IIC was approved by the New York Department of Financial Services ("NYDFS") on February 13, 2025, and the sale closed on April 1, 2025. The Company received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impacts.
Removed
During 2022, we also wrote commercial residential insurance in South Carolina and Texas, however, effective May 1, 2022, we no longer write in these states.
Added
The Company also previously wrote insurance outside of Florida through Interboro Insurance Company (IIC); however, on April 1, 2025, the Company completed the sale of IIC. The details of this transaction are described below.
Removed
The aggregate purchase price for the shares will be equal to IIC's GAAP shareholder’s equity on the closing date. Closing is subject to customary closing conditions, including New York Department of Financial Services ("NYDFS") approval of Forza's application for acquisition of control, and NYDFS approval of a new rate and form filing.
Added
The Company also recognized a $1,348,000 loss, net of tax impacts, on IIC's fixed maturity portfolio, which was included in accumulated other comprehensive loss on the Company's Consolidated Balance Sheets prior to the sale.
Removed
Financial strength or stability ratings are important to insurance companies in establishing their competitive position and may impact an insurance company’s ability to write policies. We are rated by Demotech and Kroll Bond Rating Agency (Kroll). Demotech maintains a letter-scale financial stability rating system ranging from A’’ (A double prime) to L (licensed by insurance regulatory authorities).
Added
In addition, in 2025 we began writing our apartment and assisted living products through our affiliated managing general agency Skyway Underwriters.
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We desire to have the right combination of price, underwriting rules, deductibles and coverages to earn a return on capital that exceeds our cost of capital throughout the insurance market cycle.
Added
Our apartment and assisted living facility policies are marketed and distributed by Skyway Underwriters through multiple wholesaler partners that specialize in commercial residential insurance. These wholesalers represented 100% of our apartment and assisted living facility revenue. The Company believes wholesale partners build relationships in their communities that can lead to profitable business and policyholder satisfaction.
Removed
With UPC in receivership, the Company’s personal lines business is limited to IIC in New York and activities supporting the run-off and liquidation of UPC. As a result of the definitive agreements to sell IIC and our desire to focus on commercial lines, we expect AmCoastal to be our only operating insurance subsidiary following the sale of IIC.
Added
We believe we have built significant credibility and loyalty with the wholesale communities in Florida through (i) our frequent in-depth communications on our products and (ii) our expectations and goals for our relationships with each wholesaler. Typically, our wholesale partners represent several insurance companies for commercial product lines. We depend on these partners to produce new business for us.
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PRODUCTS AND DISTRIBUTION In July 2020, we implemented a strategy to de-risk the Company by reducing premiums and exposure from our personal lines portfolio that was offset with growth in our commercial lines portfolio. Upon closing of the sale of IIC, we will have completed our exit of the personal lines market.
Added
We compensate our wholesale partners primarily with fixed-rate commissions that we believe are consistent with those generally prevailing in the market. 100% of our premiums and policies are concentrated in the state of Florida. COMPETITION 6 AMERICAN COASTAL INSURANCE CORPORATION The property and casualty insurance market in the United States is highly competitive and rapidly changing.
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The graphs below show our product mix distribution based on gross written premium, including our premiums attributable to IIC, but excluding UPC, which is no longer a subsidiary of the Company. 6 AMERICAN COASTAL INSURANCE CORPORATION Personal Residential Products Policies we issue under our homeowners’ program provide structure, content and liability coverage for standard single-family homeowners, renters and condominium unit owners through our subsidiary, IIC.
Added
This concluded prior to 7 AMERICAN COASTAL INSURANCE CORPORATION December 31, 2025, and the Company agreed to enter into a Consent Order wherein the Company was fined $400,000 related to the findings of the examination.
Removed
In 2024, personal residential property policies (by which we mean both standard homeowners’, dwelling fire, renters’ and condo owners’ policies) produced written premium of $39,704,000 and accounted for 5.8% of our total gross written premium. Loss and loss adjustment expenses related to our personal residential products tend to be higher during periods of severe or inclement weather.
Added
Skyway Underwriters, our managing general agency, handles the underwriting and premiums collection for our AmCoastal apartment and assisted living business written in Florida. In return, Skyway Underwriters is reimbursed through monthly management fees.
Removed
Commercial Residential Products We provide commercial multi-peril property insurance for residential condominium associations and apartments in Florida. In 2020, we began writing commercial policies in Texas and South Carolina. Effective May 31, 2022, we no longer write commercial policies in Texas and South Carolina.
Added
“ Products and Distribution” as well as Part 1 Item 1. “Insurance Holding Company Regulation”.
Removed
We include coverage to policyholders for loss or damage to buildings, inventory or equipment caused by covered causes of loss such as fire, wind, hail, water, theft and vandalism. In 2024, commercial policies produced written premium of $647,805,000 and accounted for 94.2% of our total gross written premium.
Removed
However, on June 9, 2022, we entered into a renewal rights agreement with Wright National Flood Insurance Company to sell our entire NFIP Write Your Own flood insurance business and are no longer offering flood policies. Underwriting We price our products at levels that we project will generate an acceptable underwriting profit.
Removed
The Company has focused on the independent agency distribution channel since its inception, and we believe independent agents and agencies build relationships in their communities that can lead to profitable business and policyholder satisfaction.
Removed
We believe we have built significant credibility and loyalty with the independent agent communities in the states in which we 7 AMERICAN COASTAL INSURANCE CORPORATION operate through (i) our extensive training for full-service insurance agencies that distribute our products and (ii) periodic business reviews using established benchmarks and goals for premium volume and profitability.
Removed
Typically, a full-service agency is small to medium in size and represents several insurance companies for both personal and commercial product lines. We depend on our independent agents to produce new business for us. We compensate our independent agents primarily with fixed-rate commissions that we believe are consistent with those generally prevailing in the market.
Removed
GEOGRAPHIC MARKETS The table below shows the geographic distribution of our policies in-force as of December 31, 2024, 2023 and 2022, including our policies in-force attributable to IIC, but excluding UPC, which is no longer a subsidiary of the Company. The graphs below exclude states with policies that are less than 0.2% of our total policies in-force.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

81 edited+8 added−11 removed120 unchanged
Biggest changeMany of these agents are independent insurance agents that own their customer relationships, and our agency contracts with them limit our ability to directly solicit business from our existing policyholders. Independent agents commonly represent other insurance companies, including our competitors, and we do not control their activities. As a result, we must compete with other insurers for independent agents’ business.
Biggest changeThese wholesalers and their brokers own the customer relationships and are not under our direct control. Our contracts restrict us from directly soliciting their policyholders, and most brokers also represent competing insurers. As a result, we must continually compete for their attention and business. Competitors may offer broader product options, lower premiums or higher broker commissions.
These include an event leading to power outages, loss of facility access, a major internet failure, pandemic or a failure of one or more of our information technology, telecommunications or other systems.
These include an event leading to power outages, loss of facility access, a major internet failure, a pandemic or a failure of one or more of our information technology, telecommunications or other systems.
Our Senior Notes due 2027 (Senior Notes) place certain restrictions on the Company’s financial operations. Because we are a holding company, our assets consist primarily of the securities of our subsidiaries. The negative pledge provisions in the Senior Notes limit our ability to pledge securities of our subsidiaries and restrict dispositions of the capital stock of our subsidiaries.
Our Senior Notes due 2027 (the "Senior Notes") place certain restrictions on the Company’s financial operations. Because we are a holding company, our assets consist primarily of the securities of our subsidiaries. The negative pledge provisions in the Senior Notes limit our ability to pledge securities of our subsidiaries and restrict dispositions of the capital stock of our subsidiaries.
While our product exclusions and conditions may reduce the loss exposure to us and may eliminate known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void policy exclusions and conditions, or legislation could be enacted modifying or barring the use of these exclusions and limitations.
While our product exclusions and conditions may reduce the loss exposure to us and may eliminate known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void policy exclusions and conditions, or that legislation could be enacted modifying or barring the use of these exclusions and limitations.
Trends in the insurance industry regarding claims and coverage issues, such as increased litigation and the willingness of courts to expand covered causes of loss, and juries awarding large damage awards, may contribute to increased litigation costs and increase our loss exposure under the policies that we underwrite.
Trends in the insurance industry regarding claims and coverage issues, such as increased litigation, the willingness of courts to expand covered causes of loss and juries awarding large damage awards, may contribute to increased litigation costs and increase our loss exposure under the policies that we underwrite.
In connection with an acquisition, merger, disposition or other strategic transaction, we could incur debt, amortization expenses related to intangible assets, large and immediate write-offs, assume liabilities or issue stock that would dilute our current stockholders’ percentage of ownership. As a result, there is a risk of transaction-related litigation.
In connection with an acquisition, merger or other strategic transaction, we could incur debt, amortization expenses related to intangible assets, large and immediate write-offs, assume liabilities or issue stock that would dilute our current stockholders’ percentage of ownership. As a result, there is a risk of transaction-related litigation.
The principal assets are the stock of its subsidiaries and the holding company’s directly held investment portfolio. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 16 in our Notes to Consolidated Financial Statements. The limitations are based on statutory income and surplus.
The principal assets are the stock of its subsidiaries and the holding company’s directly held investment portfolio. State insurance regulatory authorities limit the payment of dividends by our insurance subsidiary, as described in Note 16 in our Notes to Consolidated Financial Statements. The limitations are based on statutory income and surplus.
As part of its registration, each insurance company must identify material agreements, relationships and transactions with affiliates, including loans, investments, asset transfers, transactions outside of the ordinary course of business, certain management, service, and cost sharing agreements, reinsurance transactions, dividends, and other financial and non-financial components of an insurer’s business.
As part of its registration, the insurance company must identify material agreements, relationships and transactions with affiliates, including loans, investments, asset transfers, transactions outside of the ordinary course of business, certain management, service, and cost sharing agreements, reinsurance transactions, dividends, and other financial and non-financial components of an insurer’s business.
Furthermore, in recent years the SEC has maintained a focus on cybersecurity. In August 2023, the SEC adopted new cybersecurity disclosure rules, aimed at enhancing and standardizing disclosures made by public companies regarding cybersecurity risk management, strategy, governance and incident reporting.
Furthermore, in recent years the SEC maintained a focus on cybersecurity. In August 2023, the SEC adopted new cybersecurity disclosure rules, aimed at enhancing and standardizing disclosures made by public companies regarding cybersecurity risk management, strategy, governance and incident reporting.
Because our information technology and telecommunications systems interface with and often depend on third-party systems, we could experience service denials if demand for such service exceeds capacity or a third-party system fails or experiences an interruption.
Because our information technology and telecommunications systems interface with and often depend on third-party systems, we could experience service denials if demand for such service exceeds capacity or a third-party system fails or experiences interruption.
High ratings help maintain public confidence in a company’s products, facilitate the marketing of its products and enhance the company’s competitive position. Rating agencies review their ratings periodically, and our current ratings may not be maintained in the future.
High ratings help maintain public confidence in company’s products, facilitate the marketing of its products and enhance the company’s competitive position. Rating agencies review their ratings periodically, and our current ratings may not be maintained in the future.
If we are subpoenaed for information by government agencies and authorities, potential outcomes could include law enforcement proceedings or settlements resulting in fines, penalties and/or changes in business practices that could cause a material adverse effect on our results of operations. In addition, these investigations may result in changes to laws and regulations affecting the industry.
If we are subpoenaed for information by government agencies and authorities, potential outcomes could include law enforcement proceedings or settlements resulting in fines, penalties and/or changes in business practices that could have a material adverse effect on our results of operations. In addition, these investigations may result in changes to laws and regulations affecting the industry.
We cannot predict with certainty when such a period may occur or how long any given hard or soft market will last. Downturns in the property and casualty market may cause a material adverse effect on our results of operations and our financial condition. Losses from legal actions may materially affect our operating results, cash flows and financial condition.
We cannot predict with certainty when such a period may occur or how long any given hard or soft market will last. Downturns in the property and casualty market may have a material adverse effect on our results of operations and our financial condition. Losses from legal actions may materially affect our operating results, cash flows and financial condition.
The frequency and severity of weather conditions are inherently unpredictable, but the frequency and severity of property claims generally increase when severe weather conditions occur. We write a majority of our policies in Florida, a state that has experienced significant hurricanes in recent years, which some weather analysts believe is consistent with a period of sustained greater hurricane activity.
The frequency and severity of weather conditions are inherently unpredictable, but the frequency and severity of property claims generally increase when severe weather conditions occur. We write all of our policies in Florida, a state that has experienced significant hurricanes in recent years, which some weather analysts believe is consistent with a period of sustained greater hurricane activity.
AmCo and AmCoastal are also subject to restrictive covenant agreements that contain non-competition, non-solicitation, confidentiality and other restrictive covenants that prohibit AmCo and AmCoastal from engaging in certain activities, including activities customarily performed by managing general agents and activities relating to segments of the commercial property insurance market for coastally exposed risks in the United States.
AmCo and AmCoastal are also subject to restrictive covenant agreements that contain non-competition, non-solicitation, confidentiality and other restrictive covenants that prohibit AmCo and AmCoastal from engaging in certain activities, including activities customarily performed by managing general agents and activities relating to segments of the commercial property insurance market for coastally exposed risks in the United States. Transactions by Mr.
Additionally, our failure to comply with certain provisions of applicable insurance laws and regulations could result in significant fines or penalties being levied against us and may cause a material adverse effect on our results of operations or financial condition.
Additionally, our failure to comply with certain provisions of applicable insurance laws and regulations could result in significant fines or penalties being levied against us and may have a material adverse effect on our results of operations or financial condition.
Dividend payments on our common stock in the future are uncertain, and our ability to pay dividends may be constrained by our holding company structure. We have paid dividends on our common stock in the past, but currently do not pay an ordinary quarterly dividend.
Dividend payments on our common stock in the future are uncertain, and our ability to pay dividends may be constrained by our holding company structure. We have paid both ordinary quarterly dividends and special dividends on our common stock in the past, but currently do not pay an ordinary quarterly dividend.
We may have difficulty controlling our market share due to an increase in reinsurance costs, inflation which increases actual losses and loss adjustment expenses, and losses from the high frequency and severity of catastrophe events in recent years.
We may have difficulty controlling our market share due to an increase in reinsurance costs, inflation which increases actual losses and loss adjustment expenses, and losses from the high frequency and severity of catastrophe events.
We rely on internal claims personnel and unaffiliated third party claim administration vendors to evaluate and pay claims made under our policies in an accurate and timely manner. Commercial residential policies often cover several structures and result in complex claims.
We rely on internal claims personnel and an unaffiliated third-party claim administration vendor to evaluate and pay claims made under our policies in an accurate and timely manner. Commercial residential policies often cover several structures and result in complex claims.
Historically, the financial performance of the property and casualty insurance and reinsurance industry has been cyclical, characterized by periods of severe price competition and excess underwriting capacity, or “soft” markets, followed by periods of high premium rates and shortages of underwriting capacity, or “hard” markets.
Historically, the financial performance of the property and casualty insurance and reinsurance industries has been cyclical, characterized by periods of severe price competition and excess underwriting capacity, or “soft” markets, followed by periods of high premium rates and shortages of underwriting capacity, or “hard” markets.
Our ability to process policies and adjust claims in a timely manner could be impaired by an unplanned shutdown or failure of one or more systems or facilities due to man-made or natural disruption.
Our ability to process policies and adjust claims in a timely manner could be impaired by an unplanned shutdown or failure of one or more systems or facilities due to man-made or natural disruptions.
Deterioration in statutory surplus or earnings, from developments such as catastrophe losses, or changes in market conditions or interest rates, could adversely affect holding company liquidity by impacting the amount of dividends from our subsidiaries or the utilization of invested assets at the holding company to increase statutory surplus or for other corporate purposes.
Deterioration in statutory surplus or earnings, from developments such as catastrophe losses, or changes in market conditions or interest rates, could adversely affect holding company liquidity by impacting the amount of dividends from our insurance subsidiary or the utilization of invested assets at the holding company to increase statutory surplus or for other corporate purposes.
Limits on the ability of the subsidiaries to pay dividends could adversely affect holding company liquidity, including our ability to pay dividends to stockholders and service our debt in the timeframe expected. Management views enterprise economic capital as a combination of statutory surplus and invested assets at the parent holding company level.
Limits on the ability of the insurance subsidiary to pay dividends could adversely affect holding company liquidity, including our ability to pay dividends to stockholders and service our debt in the timeframe expected. Management views enterprise economic capital as a combination of statutory surplus and invested assets at the parent holding company level.
Therefore, investors who purchase our common stock may only realize a return on their investment if the value of our common stock appreciates. The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations. The Company is a holding company with no significant operations.
Therefore, investors who purchase our common stock may only realize a return on their investment if the value of our common stock appreciates. The ability of our insurance subsidiary to pay dividends may affect our liquidity and ability to meet our obligations. The Company is a holding company with no significant operations.
The potential impact on our business as a result of the Dodd-Frank Act and the FIO’s current and future recommendations remains unclear; however, the implementation of any federal insurance regulations that constrain our business opportunities or reduce investment flexibility could negatively impact our business. 21 AMERICAN COASTAL INSURANCE CORPORATION In recent years, the state insurance regulatory framework has come under increased federal scrutiny.
The potential impact on our business as a result of the Dodd-Frank Act and the FIO’s current and future recommendations remains unclear; however, the implementation of any federal insurance regulations that constrain our business opportunities or reduce investment flexibility could negatively impact our business. In recent years, the state insurance regulatory framework has come under increased federal scrutiny.
In addition, we may face individual and class action lawsuits by insured and other parties for alleged violations of certain of these laws or regulations.
In addition, we may face individual and class action lawsuits by insureds and other parties for alleged violations of certain of these laws or regulations.
Since the majority of our investments are held by our insurance subsidiaries, significant decreases in the fair value of these investments will produce significant declines in the statutory surplus of our insurance business.
Since the majority of our investments are held by our insurance subsidiary, significant decreases in the fair value of these investments will produce significant declines in the statutory surplus of our insurance business.
The declaration and payment of dividends are at the discretion of our Board of Directors and will be dependent upon our profits, financial requirements and other factors, including legal and regulatory restrictions on the payment of dividends from our subsidiaries (as we are a holding company and do not have any significant operations or assets other than our ownership of the shares of our operating subsidiaries), capital adequacy, liquidity, general business conditions and such other factors as our 25 AMERICAN COASTAL INSURANCE CORPORATION Board of Directors deems relevant.
The declaration and payment of dividends are at the discretion of our Board of Directors and will be dependent upon our profits, financial requirements and other factors, including legal and regulatory restrictions on the payment of dividends from our subsidiaries (as we are a holding company and do not have any significant operations or assets other than our ownership of the shares of our operating subsidiaries), capital adequacy, liquidity, general business conditions and such other factors as our Board of Directors deems relevant.
These material adverse effects could include, but are not limited to: • reducing demand for new sales of insurance products; • requiring us to modify our existing products or services, introduce new products or services or reduce prices for our products and services, in order to remain competitive; • adversely affecting our relationships with our independent agents; • materially increasing the number or amount of policy cancellations and non-renewals by policyholders; • requiring us to post additional collateral under certain covenants of our financing transactions; • limiting financial flexibility and access to capital markets; • adversely affecting our ability to obtain reinsurance at reasonable prices or at all; and • increasing the interest rates on our outstanding Senior Notes.
These material adverse effects could include, but are not limited to: • reducing demand for new sales of insurance products; • requiring us to modify our existing products or services, introduce new products or services or reduce prices for our products and services in order to remain competitive; 22 AMERICAN COASTAL INSURANCE CORPORATION • adversely affecting our relationships with our wholesalers; • materially increasing the number or amount of policy cancellations and non-renewals by policyholders; • requiring us to post additional collateral under certain covenants of our financing transactions; • limiting financial flexibility and access to capital markets; • adversely affecting our ability to obtain reinsurance at reasonable prices or at all; and • increasing the interest rates on our outstanding Senior Notes.
As of December 31, 2024, we had registered up to 100 million shares of our securities (including both our preferred and common stock) authorized to issue from time to time in one or more offerings. Additional equity financing or other share issuances by us could adversely affect the market price of our common stock.
As of December 31, 2025, we had registered up to 101 million shares of our securities (including both our preferred and common stock) authorized to issue from time to time in one or more offerings. Additional equity financing or other share issuances by us could adversely affect the market price of our common stock.
A reinsurer’s insolvency, inability to make payments, or dispute of its obligations under the terms of a reinsurance contract could have a material adverse effect on our business, results of operations, financial condition and cash flow. 22 AMERICAN COASTAL INSURANCE CORPORATION Our efforts to manage these risks through underwriting guidelines, collateral requirements, financial strength ratings and other oversight mechanisms may not be successful.
A reinsurer’s insolvency, inability to make payments, or dispute of its obligations under the terms of a reinsurance contract could have a material adverse effect on our business, results of operations, financial condition and cash flow. Our efforts to manage these risks through underwriting guidelines, collateral requirements, financial strength ratings and other oversight mechanisms may not be successful.
We strive to maintain all required licenses and approvals. However, we may not fully comply with the wide variety of applicable laws and regulations. The relevant authority's interpretation of the laws and regulations also may change from time to time. Regulatory authorities have relatively broad discretion to impose fines, and grant, renew or revoke licenses and approvals.
However, we may not fully comply with the wide variety of applicable laws and regulations. The relevant authority's interpretation of the laws and regulations also may change from time to time. Regulatory authorities have relatively broad discretion to impose fines, and grant, renew or revoke licenses and approvals.
Our ability to comply with these laws and regulations, and to obtain necessary regulatory action in a timely manner is, and will continue to be, critical to our success. Currently, the federal government’s role in regulating or dictating the policies of insurance companies is limited.
Our ability to comply with these laws and regulations, and to obtain necessary regulatory action in a timely manner is, and will continue to be, critical to our success. 18 AMERICAN COASTAL INSURANCE CORPORATION Currently, the federal government’s role in regulating or dictating the policies of insurance companies is limited.
While third party administrator(s) may underwrite on behalf of AmCoastal, we are responsible for setting the criteria under which our vendor(s) operate. We must collect and properly analyze a substantial amount of data, closely monitor and timely recognize changes in trends and models and project both severity and frequency of losses with reasonable accuracy.
While third-party administrators may underwrite on behalf of AmCoastal, we are responsible for setting the criteria under which our vendors operate. We must collect and properly analyze a substantial amount of data, closely monitor and timely recognize changes in trends and models and project both severity and frequency of losses with reasonable accuracy.
This level of complexity, along with factors such as the accuracy of adjusters as they make their assessment and submit their estimates of damage, the training, background and experience of our claims representatives, and the ability of our claims personnel to maintain and update our claims processing procedures as laws change and the litigation landscape change, could affect our ability to evaluate and pay claims in an accurate and timely manner.
This level of complexity, along with factors such as (i) the accuracy of adjusters as they make their assessments and submit their estimates of damage, (ii) the training, background and experience of our claims representatives, and (iii) the ability of our claims personnel to maintain and update our claims processing procedures as laws and the litigation landscape change, could affect our ability to evaluate and pay claims in an accurate and timely manner.
Catastrophes may also reduce liquidity and could impair our ability to maintain existing capital, or raise capital on acceptable terms or at all. In addition to catastrophes, the accumulation of losses from several smaller weather-related events in any reporting period may have a similar impact to our results of operations and financial condition.
Catastrophes may also reduce liquidity and could impair our ability to maintain existing capital, or raise capital on acceptable terms or 12 AMERICAN COASTAL INSURANCE CORPORATION at all. In addition to catastrophes, the accumulation of losses from several smaller weather-related events in any reporting period may have a similar impact to our results of operations and financial condition.
Moreover, in the event of a data breach involving any of our third-party vendors, our customers’, claimants’ or employees’ personally identifiable information could also be put at risk. The failure of the third-party vendor to adhere to service level standards, or perform their duties in accordance with applicable law, could impact our financial position.
Moreover, in the event of a data breach involving any of our third-party vendors, our customers’, 15 AMERICAN COASTAL INSURANCE CORPORATION claimants’ or employees’ personally identifiable information could also be put at risk. The failure of the third-party vendor to adhere to service level standards, or perform their duties in accordance with applicable law, could impact our financial position.
The propensity of policyholders and third-party claimants to litigate and the willingness of courts to expand causes of loss and the 24 AMERICAN COASTAL INSURANCE CORPORATION size of awards may result in increased costs associated with litigation, render our loss reserves inadequate and may be material to our operating results and cash flows for a particular quarter or annual period and to our financial condition.
The propensity of policyholders and third-party claimants to litigate and the willingness of courts to expand causes of loss and the size of awards may result in increased costs associated with litigation, render our loss reserves inadequate and be material to our operating results and cash flows for a particular quarter or annual period and to our financial condition.
Any failure to pay claims accurately and timely could lead to litigation, undermine our reputation in the marketplace, negatively impact our corporate image and negatively affect our financial results. Our investments are subject to market risks that may result in reduced returns or losses.
Any failure to pay claims accurately and timely could lead to litigation, undermine our reputation in the marketplace, negatively impact our corporate image and negatively affect our financial results. 20 AMERICAN COASTAL INSURANCE CORPORATION Our investments are subject to market risks that may result in reduced returns or losses.
From time to time, states pass legislation, and regulators take action, that has the effect of limiting the ability of insurers to manage risk, such as legislation prohibiting insurers from reducing 20 AMERICAN COASTAL INSURANCE CORPORATION exposures or withdrawing from catastrophe-prone areas, or mandating that insurers participate in residual markets.
From time to time, states pass legislation, and regulators take action, that has the effect of limiting the ability of insurers to manage risk, such as legislation prohibiting insurers from reducing exposures or withdrawing from catastrophe-prone areas, or mandating that insurers participate in residual markets.
In addition, application of statistical and actuarial methods in estimating our loss reserves may require the adjustment of overall reserves upward or downward from time to time. Future loss experience substantially in excess of our loss reserves could substantially harm our results of operations and financial condition.
In addition, application of statistical and actuarial methods in estimating our loss reserves may 13 AMERICAN COASTAL INSURANCE CORPORATION require the adjustment of overall reserves upward or downward from time to time. Future loss experience substantially in excess of our loss reserves could substantially harm our results of operations and financial condition.
While we may have the ability to recover these assessments from policyholders through policy surcharges in some states in which we operate, our payment of the assessments and our recoveries may not offset each other in the same reporting period in our financial statements and may cause a material adverse effect on our results of operations in a particular reporting period.
While we may have the ability to recover these assessments from policyholders through policy surcharges in Florida, our payment of the assessments and our recoveries may not offset each other in the same reporting period in our financial statements and may have a material adverse effect on our results of operations in a particular reporting period.
As a result, we may face certain operating, financial, legal, regulatory, compliance and other risks relating to these entities, including, but not limited to, risks related to the financial strength of other investors; the willingness of other investors to provide adequate funding for the entity; differing goals, 19 AMERICAN COASTAL INSURANCE CORPORATION strategies, priorities or objectives between us and other investors; our inability to unilaterally implement actions, policies or procedures with respect to the entity that we believe are favorable; legal and regulatory compliance risks relating to actions of the entity or other investors; and the risk that we will be unable to resolve disputes with other investors.
As a result, we may face certain operating, financial, legal, regulatory, compliance and other risks relating to these entities, including, but not limited to, risks related to the financial strength of other investors; the willingness of other investors to provide adequate funding for the entity; differing goals, strategies, priorities or objectives between us and other investors; our inability to unilaterally implement actions, policies or procedures with respect to the entity that we believe are favorable; legal and regulatory compliance risks relating to actions of the entity or other investors; and our inability to resolve disputes with other investors.
These developments could include: • an influx of new capital in the marketplace as existing companies attempt to expand their businesses and new companies attempt to enter the insurance business as a result of better market conditions, more competitive premium pricing and/or more favorable policy terms; • an increase in programs in which state-sponsored entities provide property insurance in catastrophe-prone areas; • changes in state regulatory climates; and • the passage of federal proposals for an optional federal charter that would allow some competing insurers to operate under regulations different or less stringent than those applicable to us.
These developments could include: • an influx of new capital in the marketplace as existing companies attempt to expand their businesses and new companies attempt to enter the insurance business as a result of better market conditions, more competitive premium pricing and/or more favorable policy terms; • an increase in programs in which state-sponsored entities provide commercial property insurance in catastrophe-prone areas; • changes in state regulatory climates; and • the passage of federal proposals for an optional federal charter that would allow some competing insurers to operate under regulations different or less stringent than those applicable to us. 17 AMERICAN COASTAL INSURANCE CORPORATION These developments and others could make the property and casualty insurance marketplace more competitive by increasing the supply of insurance available.
Our senior executive officers play an integral role in the development and management of our business given their skills, knowledge of our business, years of industry experience and the potential difficulty of promptly finding qualified replacement 18 AMERICAN COASTAL INSURANCE CORPORATION employees.
Our senior executive officers play an integral role in the development and management of our business given their skills, knowledge of our business, years of industry experience and the potential difficulty of promptly finding qualified replacement employees.
If we were unable to find a replacement managing general agent, our revenues could decrease, which could have a material adverse effect on our business, financial condition and results of operations.
If we were unable to find one or more replacement managing general agents, our revenues could decrease, which could have a material adverse effect on our business, financial condition and results of operations.
For example, a trend of more frequent and severe weather-related catastrophes may lead rating agencies to substantially increase their capital requirements. We cannot guarantee that our insurance subsidiaries, IIC and AmCoastal will maintain their current A (Exceptional) or higher ratings by Demotech.
For example, a trend of more frequent and severe weather-related catastrophes may lead rating agencies to substantially increase their capital requirements. We cannot guarantee that our insurance subsidiary, AmCoastal, will maintain its current A (Exceptional) or higher rating by Demotech. Further, we cannot guarantee that AmCoastal will maintain its A- rating by Kroll.
In addition, competitive pressures generally require the subsidiaries to maintain insurance financial strength ratings. These restrictions and other regulatory requirements affect the ability of the subsidiaries to make dividend payments.
In addition, competitive pressures generally require the subsidiary to maintain an insurance financial strength rating. These restrictions and other regulatory requirements affect the ability of the insurance subsidiary to make dividend payments.
Daniel Peed and his affiliates allows him to exert significant control over us, and the Company and R. Daniel Peed are subject to certain restrictive covenants that may restrict our ability to pursue certain opportunities. R.
The substantial ownership of our common stock by R. Daniel Peed and his affiliates allows him to exert significant control over us, and the Company and R. Daniel Peed are subject to certain restrictive covenants that may restrict our ability to pursue certain opportunities. R.
Our results of operations and financial conditions could be materially and adversely impacted if any of these components of our underwriting process do not operate in their intended manner. We may fail to pay claims accurately and timely, which could adversely affect our results of operations and financial condition.
Our results of operations and financial conditions could be materially and adversely impacted if any component of our underwriting process does not operate in its intended manner. We may fail to pay claims accurately and timely, which could adversely affect our results of operations and financial condition.
Some states impose restrictions or require prior regulatory approval of specific corporate actions, which may adversely affect our ability to operate, innovate, obtain necessary rate adjustments in a timely manner or grow our business profitably.
Florida imposes restrictions or requires prior regulatory approval of specific corporate actions, which may adversely affect our ability to operate, innovate, obtain necessary rate adjustments in a timely manner or grow our business profitably.
Such shares may also be resold into the public markets in accordance with an exemption from 26 AMERICAN COASTAL INSURANCE CORPORATION registration under the Securities Act, including Rule 144, subject to the volume limitations, manner of sale requirements and notice requirements thereof. Sales of our common stock by Mr.
Such shares may also be resold into the public markets in accordance with an exemption from registration under the Securities Act, including Rule 144, subject to the volume limitations, manner of sale requirements and notice requirements thereof. Sales of our common stock by Mr. Peed and his affiliates could have the effect of lowering our stock price.
Although we may have the ability to collect this assessment from our policyholders, the timing of collection may have a material adverse effect on our results of operations. 16 AMERICAN COASTAL INSURANCE CORPORATION Our insurance subsidiaries are subject to assessments levied by various governmental and quasi-governmental entities in the states in which we operate.
Although we may have the ability to collect this assessment from our policyholders, the timing of collection may have a material adverse effect on our results of operations. Our insurance subsidiary is subject to assessments levied by various governmental and quasi-governmental entities in Florida.
Therefore, the prevailing regulatory, legal, economic, political, demographic, competitive, weather and other conditions in Florida will likely have a more significant impact on our revenues and profitability compared to such conditions in other jurisdictions in which we operate.
Therefore, the prevailing regulatory, legal, economic, political, demographic, competitive, weather and other conditions in Florida will have a significant impact on our revenues and profitability.
Despite our continual evaluation of potential attackers’ techniques and tactics and our efforts in monitoring, training, planning and prevention, our information technology systems are vulnerable to computer viruses, natural disasters, unauthorized access, cyber-attacks, system failures, human error and negligence, and similar disruptions. There is no assurance that our security measures will provide fully effective protection from such disruptions.
Despite our ongoing evaluation of potential attackers’ techniques and tactics and our efforts in monitoring, training, planning and prevention, there is no assurance that our security measures will provide fully effective protection from information technology disruptions, such as those caused by cyber-attacks, system failures, human error, unauthorized access, natural disasters or malicious software.
Peed is able to exert substantial control over us. Moreover, Mr. Peed’s interests may conflict with the interests of other holders of our common stock and he may take actions affecting us with which other stockholders may disagree. Mr.
Peed’s interests may conflict with the interests of other holders of our common stock, and he may take actions affecting us with which other stockholders may disagree. Mr.
Additionally, the Board of Directors and executive officers control greater than 50% of the common stock of the Company.
Additionally, the Board of Directors and executive officers control approximately 49% of the common stock of the Company.
Moreover, our private equity limited partnership interests are subject to transfer restrictions and may be illiquid. General economic conditions, stock market conditions, geopolitical events and many other factors beyond our control can adversely affect the fair value of our equity securities or other investments and could adversely affect our realization of net investment income.
General economic conditions, stock market conditions, geopolitical events and many other factors beyond our control can adversely affect the fair value of our equity securities or other investments and could adversely affect our realization of net investment income.
Because we conduct a significant portion of our business in Florida, our financial results substantially depend on, and could be adversely affected by, the regulatory, legal, economic, political, demographic, competitive and weather conditions present in that state.
Because we conduct all of our business in Florida, our financial results substantially depend on, and could be adversely affected by, the regulatory, legal, economic, political, demographic, competitive and weather conditions present in that state. As of December 31, 2025, all of our policies in-force were written in Florida and all of our TIV was in Florida.
Any downgrade or withdrawal of these ratings could impact the acceptability of our products to mortgage lenders that require homeowners to buy insurance, reduce our ability to retain and attract policyholders and agents and damage our ability to compete, which may cause a material adverse effect on our results of operations and financial condition.
Any downgrade or withdrawal of these ratings could (i) impact the acceptability of our products to condominium associations that are required to buy insurance, or to commercial mortgage lenders that require apartment and assisted living facility owners to buy insurance, (ii) reduce our ability to retain and attract policyholders and wholesalers and (iii) damage our ability to compete, which may have a material adverse effect on our results of operations and financial condition.
Any of these alternatives may cause a material adverse effect on our results of operations and our financial condition. Our inability to collect from our reinsurers on our reinsurance claims could have a material adverse effect on our business, results of operation, financial condition and cash flow. We use reinsurance as a tool to manage risks associated with our business.
Any of these alternatives may have a material adverse effect on our results of operations and our financial condition. 19 AMERICAN COASTAL INSURANCE CORPORATION Our inability to collect from our reinsurers on our reinsurance claims could have a material adverse effect on our business, results of operation, financial condition and cash flow.
We are also subject to a certain level of risk regarding the actual condition of the businesses that we acquire or merge with. Until we actually assume operating control of such businesses and their assets and operations, we may not be able to ascertain the actual value or understand the potential liabilities of the acquired entities and their operations.
Until we actually assume operating control of such businesses and their assets and operations, we may not be able to ascertain the actual value or understand the potential liabilities of the acquired or merged entities and their operations.
The principal competitive factors in our industry are price, service, coverage options, underwriting guidelines, commission structure and financial condition. We compete with other property and casualty insurers that underwrite property and casualty insurance in the same geographic areas in which we operate and some of those insurers have greater financial resources and have a longer operating history than we do.
We compete with other property and casualty insurers that underwrite commercial property and casualty insurance in the same geographic areas in which we operate and some of those insurers have greater financial resources and have a longer operating history than we do.
As a result, we may not be able to complete acquisitions, mergers or other strategic transactions or integrate the operations, products or personnel gained through any such acquisition, merger or other strategic transaction without a material adverse effect on our business, financial condition and results of operations. We may engage in future dispositions or wind-downs of certain business.
As a result, we may not be able to complete acquisitions, mergers or other strategic transactions or integrate the operations, products or personnel gained through any such acquisition, merger or other strategic transaction without a material adverse effect on our business, financial condition and results of operations. 16 AMERICAN COASTAL INSURANCE CORPORATION We face risks associated with investments in which we share ownership or management with third parties.
Federal and/or state tax legislation could be enacted that would lessen or eliminate some or all of the tax advantages we currently benefit from, including those governing received deductions and tax credits, which could adversely affect the value of our investment portfolio.
Federal and/or state tax legislation could be enacted that would lessen or eliminate some or all of the tax advantages we currently benefit from, including those governing received deductions and tax credits, which could adversely affect the value of our investment portfolio. 21 AMERICAN COASTAL INSURANCE CORPORATION The property and casualty insurance and reinsurance industries are historically cyclical and the pricing and terms for our products may decline, which would adversely affect our profitability.
Management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2023; however, these weaknesses were remediated as of December 31, 2024 as described in more detail in Part II, Item 9A of this report.
Management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2023; however, this weakness was remediated as of December 31, 2024 as described in more detail in Part II, Item 9A of our 2024 Annual Report on Form 10-K, filed with the SEC on March 10, 2025.
From time to time, we have experienced threats to our data and information technology systems, including malware and computer virus attacks, attempts of unauthorized access, system failures and disruptions.
From time to time, we experience threats to our data and information technology systems, including system failures, service disruptions and attempts to gain unauthorized access.
Third parties to whom we outsource certain functions are also subject to the risks outlined above, any one of which may result in our incurring substantial costs and other negative consequences, including a material adverse effect on our business, financial condition and results of operations. 17 AMERICAN COASTAL INSURANCE CORPORATION In addition, we may transmit, receive and store personally identifiable, confidential and proprietary information by any number of standard data transmission methods or other electronic means.
Third parties to whom we outsource certain functions are also subject to the risks outlined above, any one of which may result in our incurring substantial costs and other negative consequences, including a material adverse effect on our business, financial condition and results of operations.
Such impediments could have a material adverse effect on our financial condition and results of operations due to the concentration of AmCoastal’s business with AmRisc. We market our homeowners’ insurance product to a broad range of prospective policyholders through approximately 400 independent agencies as of December 31, 2024.
Such impediments could have a material adverse effect on our financial condition and results of operations due to the concentration of AmCoastal’s business with AmRisc. As of December 31, 2025, we market our apartment and assisted living insurance products through a network of multiple independent wholesalers.
However, we remain primarily liable as the direct insurer on all risks for which we obtain reinsurance. Our reinsurance agreements do not eliminate our obligation to pay claims to insureds. As a result, we are subject to counterparty risk with respect to our ability to recover amounts due from reinsurers.
We use reinsurance as a tool to manage risks associated with our business. However, we remain primarily liable as the direct insurer on all risks for which we obtain reinsurance. Our reinsurance agreements do not eliminate our obligation to pay claims to insureds.
Because techniques used to obtain unauthorized access or to sabotage systems evolve rapidly, we may be unable to anticipate these techniques or to implement comprehensive counter measures.
Because modern technology platforms and the malicious techniques used to obtain unauthorized access or to sabotage systems 14 AMERICAN COASTAL INSURANCE CORPORATION evolve rapidly, we may be unable to anticipate some techniques or to implement comprehensive counter measures.
Peed and his affiliates could have the effect of lowering our stock price. The perceived risk associated with the possible sale of a large number of shares by these stockholders could cause some of our other stockholders to sell their stock, thus causing the price of our stock to decline.
The perceived risk associated with the possible sale of a large number of shares by these stockholders could cause some of our other stockholders to sell their stock, thus causing the price of our stock to decline. In addition, actual or anticipated downward pressure on our stock price due to actual or anticipated sales of stock by Mr.
Provisions in our charter documents may make it harder for others to obtain control of us even though some stockholders might consider such a development to be favorable. Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws contain provisions that may discourage unsolicited takeover proposals our stockholders may consider to be in their best interests.
Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws contain provisions that may discourage unsolicited takeover proposals our stockholders may consider to be in their best interests.
We may experience credit or default losses in our portfolio, including as a result of the failure of the procedures we have implemented to monitor the credit risk of our invested assets, which could adversely affect our results of operations and financial condition. 23 AMERICAN COASTAL INSURANCE CORPORATION We may decide to invest an additional portion of our assets in equity securities, private equity limited partnership interests or other investments, which are generally subject to greater volatility than fixed maturity investments.
We may experience credit or default losses in our portfolio, including as a result of the failure of the procedures we have implemented to monitor the credit risk of our invested assets, which could adversely affect our results of operations and financial condition.
Peed beneficially owned approximately 29% of our issued and outstanding common stock as of December 31, 2024. The Company has granted Mr.
Peed and his affiliates involving our common stock may have an adverse effect on the price of our common stock. As noted above, Mr. Peed beneficially owned approximately 28% of our issued and outstanding common stock as of December 31, 2025. The Company has granted Mr.
Daniel Peed, our Executive Chairman of the Board of Directors, beneficially owned approximately 29% of our issued and outstanding common stock at December 31, 2024. Mr. Peed also has a proxy from another member of RDX Holding, LLC, the former parent company of AmCo, who beneficially owns approximately 7% of our issued and outstanding common stock. As a result, Mr.
Peed also has a proxy from another member of RDX Holding, LLC, the former 23 AMERICAN COASTAL INSURANCE CORPORATION parent company of AmCo, who beneficially owns approximately 6% of our issued and outstanding common stock. As a result, Mr. Peed is able to exert substantial control over us. Moreover, Mr.
Furthermore, changes in such conditions in Florida could make doing business in Florida less attractive for us, which could have a more pronounced effect on us than it would on other insurance companies that are more geographically diversified. 15 AMERICAN COASTAL INSURANCE CORPORATION In addition, due to Florida’s climate, we are subject to increased exposure to certain catastrophic events such as hurricanes, tropical storms and tornadoes, as well as an increased risk of losses from such events.
Furthermore, changes in such conditions in Florida could make doing business in Florida less attractive for us, which could have a more pronounced effect on us than it would on other insurance companies that are more geographically diversified.
These developments and others could make the property and casualty insurance marketplace more competitive by increasing the supply of insurance available. If competition limits our ability to write new business at adequate rates, or reduces our policy retention rates, our future results of operations would be adversely affected.
If competition limits our ability to write new business at adequate rates or reduces our policy retention rates, our future results of operations would be adversely affected. Changes in state regulation may adversely affect our results of operation and financial condition.
We are subject to comprehensive regulation and supervision by state insurance departments in New York and Florida, the states in which our insurance subsidiaries are domiciled, as well as all states in which they are licensed.
We are subject to comprehensive regulation and supervision by the Office of Insurance Regulation in Florida, the state in which our insurance subsidiary is domiciled and licensed. Florida regulations are unique and complex and subject to change. We strive to maintain all required licenses and approvals.
In addition, actual or anticipated downward pressure on our stock price due to actual or anticipated sales of stock by Mr. Peed and his affiliates could cause other institutions or individuals to engage in short sales of our common stock, which may further cause the price of our stock to decline.
Peed and his affiliates could cause other institutions or individuals to engage in short sales of our common stock, which may further cause the price of our stock to decline. Provisions in our charter documents may make it harder for others to obtain control of us even though some stockholders might consider such a development to be favorable.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis includes the periodic review and update of IT security policies, employee security awareness training programs complemented by simulated phish testing, and the implementation of firewalls, intrusion prevention and detection systems, anti-malware functionality, and access and identity management controls. 27 AMERICAN COASTAL INSURANCE CORPORATION As one of our processes, we have implemented cybersecurity incident response plans, including the Security Incident Response Plan and IT Disaster Recovery Plan, that set forth specific frameworks for responding to and managing potential and actual cybersecurity incidents, provide guidance on the roles of, and interactions with, various departments within ACIC and define certain processes and procedures for cybersecurity incident response and management.
Biggest changeRisk Assessment, Risk Management and Incident Management We employ people, processes and technologies to proactively address cybersecurity risks. This includes the periodic review and update of IT security policies, employee security awareness training programs complemented by simulated phish testing, and the implementation of firewalls, intrusion prevention and detection systems, anti-malware sensors, and access and identity management controls.
In 2024, third-party consultants were engaged to perform security penetration tests and to facilitate a table top exercise to test the Company’s cyber incident response plan. We continue to make investments to enhance our ability to identify and detect cybersecurity risks within our environment and protect the Company from those identified risks.
In 2025, third-party consultants were engaged to perform security penetration tests and to facilitate a table top exercise to test the Company’s cyber incident response plan. We continue to make investments to enhance our ability to identify and detect cybersecurity risks within our environment and protect the Company from those identified risks.
Board of Directors Oversight The Board of Directors and Audit Committee are responsible for overseeing our annual enterprise risk assessment, reviewing the guidelines and policies for assessing and managing the Company’s exposure to risks, including cybersecurity risks, and the steps management has taken to monitor and control such exposures.
Board of Directors Oversight The Board of Directors and Audit Committee are responsible for overseeing our annual enterprise risk assessment, reviewing the guidelines and policies for assessing and managing the Company’s exposure to risks, including cybersecurity risks, and the steps 25 AMERICAN COASTAL INSURANCE CORPORATION management has taken to monitor and control such exposures.
Item 1C. Cybersecurity Risk Management and Strategy Our cybersecurity program is led by our Chief Information Security Officer (CISO) and overseen by the Audit Committee and the Board of Directors. Our cybersecurity program prioritizes threat mitigation, while focusing on maintaining the integrity and resilience of our systems.
Item 1C. Cybersecurity Risk Management and Strategy Our cybersecurity program is led by our Chief Information Security Officer (CISO) and overseen by the Audit Committee and the Board of Directors. Our cybersecurity program prioritizes threat mitigation, while focusing on maintaining the integrity and resilience 24 AMERICAN COASTAL INSURANCE CORPORATION of our systems.
In addition to evaluating the Company’s cybersecurity risks, the Board of Directors has oversight of management’s cybersecurity function and is responsible for reviewing and approving the Company’s cybersecurity program, as well as reviewing the quality and effectiveness of the Company’s technology security. 28 AMERICAN COASTAL INSURANCE CORPORATION
In addition to evaluating the Company’s cybersecurity risks, the Board of Directors has oversight of management’s cybersecurity function and is responsible for reviewing and approving the Company’s cybersecurity program, as well as reviewing the quality and effectiveness of the Company’s technology security.
Under the cybersecurity incident response plans and their protocols, incidents are responded to by multidisciplinary teams and are further escalated to the attention of senior management and our Board of Directors when applicable. The Company reviews and updates these cybersecurity incident response plans annually. The Company’s risk assessment considers cybersecurity threats associated with the use of third-party service providers.
We review and update our cybersecurity incident response plans every year to ensure their effectiveness. The Company’s risk assessment considers cybersecurity threats associated with the use of third-party service providers.
Removed
Risk Assessment, Risk Management and Incident Management We employ processes and technologies to proactively address cybersecurity risks.
Added
We have established cybersecurity incident response plans, such as the Cybersecurity Incident Response Plan and the IT Disaster Recovery Plan, which outline frameworks for addressing and managing potential cybersecurity incidents. These plans provide direction on departmental responsibilities and collaboration within ACIC, as well as define processes and protocols for incident response and management.
Removed
Our cybersecurity incident response plans and procedures also establish escalation protocols in connection with a potential cybersecurity incident. These protocols vary depending upon the specific factors involved, including the materiality of an incident, the related harms and risks associated therewith, any undertakings required to mitigate and remediate any such incident and any corresponding legal or regulatory actions.
Added
The Cybersecurity Incident Response Plan specifies escalation procedures aligned to factors like the severity of the incident, associated risks and harms, necessary mitigation and remediation steps and any relevant legal or regulatory obligations. Multidisciplinary teams handle incident responses and escalate matters to senior management and the Board of Directors when needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Claim alleges that former officers and directors of UPC were involved in wrongful acts that resulted in UPC’s insolvency and demands immediate tender of our director and officer’s policy limit of $40 million where we have a retention of $1.5 million. The former directors and officers of UPC deny the allegations.
Biggest changeThe Claim demands immediate tender of the Company's director and officer’s policy limit of $40,000,000 where the Company has a retention of $1,500,000. The former directors and officers of UPC deny the allegations. Although no litigation has arisen from the Claim, litigation is anticipated.
On October 20, 2023, we received notice that the DFS filed a notice of claim and demand for tender of insurance policy limits under our director and officer insurance to carriers participating in our director and officer’s insurance program (the “Claim”).
On October 20, 2023, the Company received notice that the Florida Department of Financial Services ("DFS") filed a notice of claim and demand for tender of policy limits under the Company's director and officer insurance policy (the “Claim”). The Claim alleges that former officers and directors of UPC were involved in wrongful acts that resulted in UPC's insolvency.
Although no litigation has arisen from the Claim, litigation is anticipated. We anticipate that directors and officers will be successful in their defense; however, due to our indemnification obligation, we accrued the policy retention amount of $1.5 million in 2023.
The directors and officers plan to vigorously defend against the Claim; however, due to the Company's indemnification obligation, during 2023, the Company accrued the policy retention amount of $1,500,000.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSee Note 16 to our Notes to Consolidated Financial Statements for further discussion of restrictions on future payments of dividends by our insurance affiliates. 31 AMERICAN COASTAL INSURANCE CORPORATION RECENT SALES OF UNREGISTERED SECURITIES During 2024, we did not have any unregistered sales of our equity securities.
Biggest changeAs of December 31, 2025, we were in compliance with these requirements. See Note 16 to our Notes to Consolidated Financial Statements for further discussion of restrictions on future payments of dividends by our insurance affiliates.
The insurer’s entire net operating profits and realized net capital gains derived during the immediately preceding calendar year, and: 30 AMERICAN COASTAL INSURANCE CORPORATION i. The insurer will have surplus as to policyholders equal to or exceeding 115% of the minimum required statutory surplus as to policyholders after the dividend or distribution is made, and ii.
The insurer’s entire net operating profits and realized net capital gains derived during the immediately preceding calendar year, and: i. The insurer will have surplus as to policyholders equal to or exceeding 115% of the minimum required statutory surplus as to policyholders after the dividend or distribution is made, and 27 AMERICAN COASTAL INSURANCE CORPORATION ii.
The number of record holders does not include stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. DIVIDENDS During December 2024, we declared a special cash dividend of $0.50 per share of common stock, which we paid on January 10, 2025, to shareholders of record on January 2, 2025.
The number of record holders does not include stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. DIVIDENDS In December 2025, we declared a special cash dividend of $0.75 per share of common stock, which we paid on January 9, 2026 to shareholders of record on January 2, 2026.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION Our common stock trades on the Nasdaq Capital Market (Nasdaq) under the symbol “ACIC”. HOLDERS OF COMMON EQUITY As of March 3, 2025, we had 7,171 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION Our common stock trades on the Nasdaq Capital Market (Nasdaq) under the symbol “ACIC”. HOLDERS OF COMMON EQUITY As of February 27, 2026, we had 7,669 holders of record of our common stock.
REPURCHASES OF EQUITY SECURITIES During 2024, we did not repurchase any of our equity securities. 32 AMERICAN COASTAL INSURANCE CORPORATION
REPURCHASES OF EQUITY SECURITIES During 2025, we did not repurchase any of our equity securities.
During December 2024, we received a $14,300,000 dividend from our insurance subsidiary, AmCoastal. During November 2022, we received a $26,000,000 dividend from our insurance subsidiary, AmCoastal.
During the year ended December 31, 2025, the Company received a dividend of $23,000,000 from our insurance subsidiary, AmCoastal. During the year ended December 2024, we received a $14,300,000 dividend from our insurance subsidiary, AmCoastal.
Removed
As of December 31, 2024, we were in compliance with these requirements.
Added
In December 2024, we declared a special cash dividend of $0.50 per share of common stock, which we paid on January 10, 2025, to shareholders of record on January 2, 2025.
Removed
Under the insurance regulations of New York, a New York-domiciled insurer such as IIC may not declare or distribute any dividend to shareholders which, together with all dividends declared or distributed by it during the next preceding twelve months, exceeds: 1. the lesser of: a. 10% of the insurer’s surplus to policyholders as shown on its latest statement on file with the Superintendent, or b. 100% of “adjusted net investment income” during that period.
Added
PERFORMANCE GRAPH Set forth below is a line graph comparing the dollar change in the cumulative total stockholder return on our common stock from December 31, 2020 through December 31, 2025, as compared to the cumulative total return of the Russell 2000 Index and the Nasdaq Insurance Index.
Removed
New York law defines “adjusted net investment income” to mean net investment income for the twelve months immediately preceding the declaration or distribution of the current dividend increased by the excess, if any, of net investment income over dividends declared or distributed during the period commencing 36 months prior to the declaration or distribution of the current dividend and ending 12 months prior thereto.
Added
The cumulative total stockholder return is a concept used to compare the performance of a company’s stock over time and is the ratio of the stock price change plus the cumulative amount of dividends over the specified time period (assuming dividend reinvestment) to the stock price at the beginning of the time period.
Removed
In addition, in connection with the filed plan of withdrawal in New York for our former insurance subsidiary, UPC, our subsidiary, IIC, agreed not to pay ordinary dividends until January 1, 2025, without the prior approval of the NYDFS.
Added
The chart depicts the value on each December 31 from 2020 through 2025 of a $100 investment made on December 31, 2020 with all dividends reinvested.
Added
The foregoing performance graph and data shall not be deemed “filed” as part of this Form 10-K for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and should not be deemed incorporated by reference into any other filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference into such filing. 28 AMERICAN COASTAL INSURANCE CORPORATION RECENT SALES OF UNREGISTERED SECURITIES During 2025, we did not have any unregistered sales of our equity securities.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeTo evaluate our financial condition, we consider our liquidity, financialstrength, ratings, book value per share and return on equity. 34 AMERICAN COASTAL INSURANCE CORPORATION Consolidated Net Income (Loss) Year Ended December 31, 2024 2023 2022 REVENUE: Gross premiums written $ 647,805 $ 635,709 $ 528,160 Change in gross unearned premiums (9,197) (31,026) (53,972) Gross premiums earned 638,608 604,683 474,188 Ceded premiums earned (364,618) (342,623) (251,259) Net premiums earned 273,990 262,060 222,929 Net investment income 20,795 8,300 6,043 Net realized losses (124) (6,789) (6,512) Net unrealized gains (losses) on equity securities 1,996 814 (1,968) Other revenue — 15 1,181 Total revenues 296,657 264,400 221,673 EXPENSES: Losses and loss adjustment expenses 69,319 46,678 96,109 Policy acquisition costs 70,990 75,436 80,996 General and administrative expenses 44,756 37,559 43,746 Interest expense 11,996 10,875 9,483 Total expenses 197,061 170,548 230,334 Income (loss) before other income 99,596 93,852 (8,661) Other income 2,063 2,228 10,342 Income before income taxes 101,659 96,080 1,681 Provision for income taxes 25,340 10,876 26,233 Income (loss) from continuing operations, net of tax $ 76,319 $ 85,204 $ (24,552) Income (loss) from discontinued operations, net of tax (601) 224,707 (445,414) Net income (loss) $ 75,718 $ 309,911 $ (469,966) Less: Net loss attributable to noncontrolling interests — — (111) Net income (loss) attributable to ACIC $ 75,718 $ 309,911 $ (469,855) Net income (loss) per diluted share $ 1.54 $ 6.98 $ (10.91) Book value per share $ 4.89 $ 3.61 $ (4.21) Return on equity based on GAAP net income (loss) 33.5 % 439.5 % (307.4) % Loss ratio, net (1) 25.3 % 17.8 % 43.1 % Expense ratio (2)(5) 42.2 % 43.1 % 56.0 % Combined ratio (3)(5) 67.5 % 60.9 % 99.1 % Effect of current year catastrophe losses on combined ratio 9.3 % 4.9 % 23.5 % Effect of prior year development on combined ratio (1.4) % (4.9) % (3.6) % Underlying combined ratio (4)(5) 59.6 % 60.9 % 79.2 % (1) Loss ratio, net is calculated as losses and LAE net of losses ceded to reinsurers, relative to net premiums earned.
Biggest changeConsolidated Net Income (Loss) Year Ended December 31, 2025 2024 2023 REVENUE: Gross premiums written $ 612,522 $ 647,805 $ 635,709 Change in gross unearned premiums 35,738 (9,197 ) (31,026 ) Gross premiums earned 648,260 638,608 604,683 Ceded premiums earned (341,408 ) (364,618 ) (342,623 ) Net premiums earned 306,852 273,990 262,060 Net investment income 22,206 20,795 8,300 Net realized investment gains (losses) 1,382 (124 ) (6,789 ) Net unrealized gains on equity securities 4,999 1,996 814 Other revenue — — 15 Total revenue 335,439 296,657 264,400 EXPENSES: Losses and loss adjustment expenses 46,040 69,319 46,678 Policy acquisition costs 97,844 70,990 75,436 General and administrative expenses 40,463 44,756 37,559 Interest expense 10,815 11,996 10,875 Total expenses 195,162 197,061 170,548 Income before other income 140,277 99,596 93,852 Other income 2,457 2,063 2,228 Income before income taxes 142,734 101,659 96,080 Provision for income taxes 35,939 25,340 10,876 Net income from continuing operations, net of tax $ 106,795 $ 76,319 $ 85,204 Income (loss) from discontinued operations, net of tax 42 (601 ) 224,707 Net income $ 106,837 $ 75,718 $ 309,911 Earnings available to ACIC common stockholders per diluted share $ 2.15 $ 1.54 $ 6.98 Book value per share $ 6.51 $ 4.89 $ 3.61 Return on equity based on GAAP net income 36.2 % 33.5 % 439.5 % Loss ratio, net (1) 15.0 % 25.3 % 17.8 % Expense ratio (2) 45.1 % 42.2 % 43.1 % Combined ratio (3) 60.1 % 67.5 % 60.9 % Effect of current year catastrophe losses on combined ratio 0.5 % 9.3 % 4.9 % Effect of prior year development on combined ratio (1.9 )% (1.4 )% (4.9 )% Underlying combined ratio (4) 61.5 % 59.6 % 60.9 % (1) Loss ratio, net, is calculated as losses and LAE net of losses ceded to reinsurers, relative to net premiums earned.
On and after that date, we may redeem the Senior Notes at par. On December 8, 2022, the Kroll Bond Rating Agency, LLC announced a downgrade of our issuer and debt ratings from BBB- to BB+. As a result, pursuant to our agreement, the interest rate of our Senior Notes increased from 6.25% to 7.25% effective on June 15, 2023.
On and after that date, we may redeem the Senior Notes at par. On December 8, 2022, the Kroll Bond Rating Agency, LLC announced a downgrade of our issuer and debt ratings from BBB- to BB+. As a result, pursuant to our agreement, the interest rate of our Senior Notes increased from 6.25% to 7.25% effective June 15, 2023.
As discussed in Note 11 in our Notes to Consolidated Financial Statements, we determine our ultimate losses by using multiple actuarial methods to determine an actuarial estimate within a relevant range of indications that we calculate using generally accepted actuarial techniques.
As discussed in Note 11 in our Notes to Consolidated Financial Statements, we estimate our ultimate losses by using multiple actuarial methods to determine an actuarial estimate within a relevant range of indications that we calculate using generally accepted actuarial techniques.
See “ Forward-Looking Statements .” OVERVIEW American Coastal Insurance Corporation is a holding company primarily engaged in commercial and personal property and casualty insurance business with investments in the United States. On July 10, 2023, we changed our corporate name from United Insurance Holdings Corp. to American Coastal Insurance Corporation.
See “ Forward-Looking Statements .” OVERVIEW American Coastal Insurance Corporation is a holding company primarily engaged in commercial property and casualty insurance business with investments in the United States. On July 10, 2023, we changed our corporate name from United Insurance Holdings Corp. to American Coastal Insurance Corporation.
Insurance regulatory authorities heavily regulate our insurance subsidiaries, including restricting any dividends paid by our insurance subsidiaries and requiring approval of any management fees our insurance subsidiaries pay to our management subsidiaries for services rendered; however, nothing restricts our non-insurance company subsidiaries from paying us dividends other than state corporate laws regarding solvency.
Insurance regulatory authorities heavily regulate our insurance subsidiary, including restricting any dividends paid by our insurance subsidiary and requiring approval of any management fees our insurance subsidiary pay to our management subsidiaries for services rendered; however, nothing restricts our non-insurance company subsidiary from paying us dividends other than state corporate laws regarding solvency.
The risk-based capital (RBC) guidelines published by the National Association of Insurance Commissioners (NAIC) may further restrict our insurance subsidiaries’ ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause their respective surplus as it regards policyholders to fall below minimum RBC guidelines.
The risk-based capital (RBC) guidelines published by the National Association of Insurance Commissioners (NAIC) may further restrict our insurance subsidiary’s ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause their respective surplus as it regards policyholders to fall below minimum RBC guidelines.
As of December 31, 2024, 4,373,000 shares had been sold under the Agreement resulting in commissions paid of approximately $1,181,000 and net proceeds of approximately $38,190,000. The Agreement will terminate upon the issuance and sale of all Shares subject to the Agreement, or the Agreement may be suspended or discontinued at any time.
As of December 31, 2025, 4,373,000 shares had been sold under the Agreement resulting in commissions paid of approximately $1,181,000 and net proceeds of approximately $38,190,000. The Agreement will terminate upon the issuance and sale of all Shares subject to the Agreement, or the Agreement may be suspended or discontinued at any time.
Our investments as of December 31, 2024 and 2023 consisted mainly of U.S. government and agency securities, securities of investment-grade corporate issuers, mortgage-backed securities, and states, municipalities and political subdivisions. Our equity holdings as of December 31, 2024 consisted of mutual funds and common stock. We held no equities as of December 31, 2023.
Our investments as of December 31, 2025 and 2024 consisted mainly of U.S. government and agency securities, securities of investment-grade corporate issuers, mortgage-backed securities, and states, municipalities and political subdivisions. Our equity holdings as of December 31, 2025 consisted of mutual funds and common stock. We held no equities as of December 31, 2024.
While we believe these catastrophe models are very good tools and their output provides reasonable proxies for the probability of exhausting our reinsurance protections, they are imperfect, so actual results could vary materially from those expected.
While we believe these catastrophe models are very good tools and their output provides reasonable proxies for the probability of exhausting our reinsurance protections, they are imperfect, so actual results could vary dramatically from those expected.
In the event one or more of our reinsurers fail to fulfill their obligation, the surplus of our statutory entities may decline, and we may not be able to fulfill our obligation to policyholders, or we may not be able to maintain compliance with various regulatory financial requirements.
In the event one or more of our reinsurers fail to fulfill their obligation, the surplus of our statutory entity may decline, and we may not be able to fulfill our obligation to policyholders, or we may not be able to maintain compliance with various regulatory financial requirements.
In accordance with state laws, our insurance subsidiaries may pay dividends or make distributions out of that part of their statutory surplus derived from their net operating profit and their net realized capital gains.
In accordance with state laws, our insurance subsidiary may pay dividends or make distributions out of that part of their statutory surplus derived from their net operating profit and their net realized capital gains.
We have also added a new note to our consolidated financial statements, Note 3 , Disaggregation of Relevant Expense Captions, to provide the users of our financial statements with enhanced insight into this expense line. The following discussion highlights significant factors influencing the consolidated financial position and results of operations of ACIC.
We have also added a new note to our consolidated financial statements, Note 3 , Disaggregation of Relevant Expense Captions, to provide the users of our financial statements with enhanced insight into this expense line. 30 AMERICAN COASTAL INSURANCE CORPORATION The following discussion highlights significant factors influencing the consolidated financial position and results of operations of ACIC.
Shown net of losses ceded to reinsurers. Incurred loss and LAE and number of events includes the development on storms during the year in which it occurred. 44 AMERICAN COASTAL INSURANCE CORPORATION See Note 10 in our Notes to Consolidated Financial Statements for additional information regarding our reinsurance program.
Shown net of losses ceded to reinsurers. Incurred loss and LAE and number of events includes the development on storms during the year in which it occurred. See Note 10 in our Notes to Consolidated Financial Statements for additional information regarding our reinsurance program.
Since the process of estimating loss reserves requires significant judgment due to a number of variables, such as fluctuations in inflation, judicial decisions, legislative changes and changes in claims handling procedures, our ultimate liability will likely differ from these estimates.
Since the process of estimating loss reserves requires significant judgment due to a number of variables, such as fluctuations in inflation, judicial decisions, legislative changes and changes in claims handling procedures, our ultimate liability will likely differ from 38 AMERICAN COASTAL INSURANCE CORPORATION these estimates.
These reserves represent management’s best estimate of the amount we will ultimately pay for losses, and we base the amount upon the application of various actuarial reserve estimation techniques as well as other material facts and circumstances known at the balance sheet date.
These reserves represent management’s best estimate of the amount we will ultimately pay for losses, and we base the 41 AMERICAN COASTAL INSURANCE CORPORATION amount upon the application of various actuarial reserve estimation techniques as well as other material facts and circumstances known at the balance sheet date.
Historical Reserve Development ($ in thousands, except ratios) 2021 2022 2023 2024 Prior year reserve favorable development $ (4,198) $ (7,982) $ (12,694) $ (3,704) Development as a % of earnings before interest and taxes (184.4) % (71.5) % (11.9) % (3.3) % Consolidated net loss and LAE ratio (LR) 31.1 % 43.1 % 17.8 % 25.3 % Prior year reserve favorable development on LR (2.4) % (3.6) % (4.9) % (1.4) % Current year catastrophe losses on LR 5.4 % 23.5 % 4.9 % 9.3 % Underlying net loss and LAE ratio (1) 28.1 % 23.2 % 17.8 % 17.4 % (1) Underlying net loss and LAE Ratio is a non-GAAP measure and is reconciled above to the Consolidated net loss and LAE Ratio, the most directly comparable GAAP measure.
($ in thousands, except ratios) Historical Reserve Development 2021 2022 2023 2024 2025 Prior year reserve favorable development $ (4,198 ) $ (7,982 ) $ (12,694 ) $ (3,704 ) $ (5,827 ) Development as a % of earnings before interest and taxes (184.4 )% (71.5 )% (11.9 )% (3.3 )% (3.8 )% Consolidated net loss and LAE ratio (LR) 31.1 % 43.1 % 17.8 % 25.3 % 15.0 % Prior year reserve favorable development on LR (2.4 )% (3.6 )% (4.9 )% (1.4 )% (1.9 )% Current year catastrophe losses on LR 5.4 % 23.5 % 4.9 % 9.3 % 0.5 % Underlying net loss and LAE ratio (1) 28.1 % 23.2 % 17.8 % 17.4 % 16.4 % 34 AMERICAN COASTAL INSURANCE CORPORATION (1) Underlying net loss and LAE Ratio is a non-GAAP measure and is reconciled above to the Consolidated net loss and LAE Ratio, the most directly comparable GAAP measure.
Our catastrophe reinsurance coverage consists of three separate placements: 1. AmCoastal’s core catastrophe reinsurance program in effect June 1 through May 31, annually, which includes excess of loss and quota share treaties providing coverage for catastrophe losses from named or numbered windstorms; 2.
Our catastrophe reinsurance coverage consists of three separate placements: 1. AmCoastal’s core catastrophe reinsurance program, including catastrophe bonds (effective April 2024 and December 2024), in effect June 1 through May 31, annually, which includes excess of loss and quota share treaties providing coverage for catastrophe losses from named or numbered windstorms; 2.
The details of our programs and the likelihood of a catastrophic event exceeding these three coverages are outlined below. AmCoastal’s core catastrophe reinsurance program provides occurrence-based coverage up to an exhaustion point of approximately $1,260,000,000 for a first occurrence and $1,610,000,000 in the aggregate.
The details of our programs and the likelihood of a catastrophic event exceeding these two coverages are outlined below. AmCoastal’s core catastrophe reinsurance program provides occurrence-based coverage up to an exhaustion point of approximately $1,330,000,000 for a first occurrence and $1,676,000,000 in the aggregate.
(2) This treaty provides or provided coverage for all catastrophe perils and attritional losses incurred. For all catastrophe perils, the quota share agreement provides or provided ground-up protection, effectively reducing our retention for catastrophe losses. (3) Net premiums earned based on estimated subject premiums at 06/01/2024.
(2) This treaty provides or provided coverage for all catastrophe perils and attritional losses incurred. For all catastrophe perils, the quota share agreement provides or provided ground-up protection, effectively reducing our retention for catastrophe losses. (3) Net premiums earned based on estimated subject premiums at June 1, 2025.
Number of Events Incurred Loss and Loss adjustment expense (LAE) (1) Combined Ratio Impact December 31, 2024 Current period catastrophe losses incurred Named and numbered storms 4 $ 25,320 9.2 % All other catastrophe loss events 7 241 0.1 % Total 11 $ 25,561 9.3 % December 31, 2023 Current period catastrophe losses incurred Named and numbered storms 1 $ 600 0.2 % All other catastrophe loss events 10 12,183 4.7 % Total 11 $ 12,783 4.9 % December 31, 2022 Current period catastrophe losses incurred Named and numbered storms 2 $ 52,076 23.4 % All other catastrophe loss events 7 212 0.1 % Total 9 $ 52,288 23.5 % (1) Incurred loss and LAE is equal to losses and LAE paid plus the change in case and incurred but not reported reserves.
Number of Events Incurred Loss and LAE (1) Combined Ratio Impact December 31, 2025 Current period catastrophe losses incurred Named and numbered storms — $ — — % All other catastrophe loss events 4 1,485 0.5 % Total 4 $ 1,485 0.5 % December 31, 2024 Current period catastrophe losses incurred Named and numbered storms 4 $ 25,320 9.2 % All other catastrophe loss events 7 241 0.1 % Total 11 $ 25,561 9.3 % December 31, 2023 Current period catastrophe losses incurred Named and numbered storms 1 $ 600 0.2 % All other catastrophe loss events 10 12,183 4.7 % Total 11 $ 12,783 4.9 % (1) Incurred loss and LAE is equal to losses and LAE paid plus the change in case and incurred but not reported reserves.
We must comply with applicable state insurance regulations that prescribe the type, quality and concentrations of investments our insurance subsidiaries can make; therefore, our current investment policy limits investment in non-investment-grade fixed maturities and limits total investment amounts in preferred stock, common stock and mortgage notes receivable. We do not invest in derivative securities.
We must comply with applicable state insurance regulations that prescribe the type, quality and concentrations of investments our insurance subsidiary can make; therefore, our current investment policy limits investment in non-investment-grade fixed maturities and limits total investment amounts in preferred stock, common stock and mortgage notes receivable.
Treaty Effective Dates Premium Collected / Cession Rate Capital at Risk (1) All Other Perils Catastrophe Excess of Loss Agreement 01/01/2024 - 01/01/2025 — $4,500,000 Excess Per Risk Agreement 02/01/2024 - 02/01/2025 $1,867,000 $633,000 Quota Share Agreement 06/01/2024 - 06/01/2026 30% (2) $4,200,000 (3) (1) Capital at risk is calculated by taking the aggregate losses Shoreline Re is subject to under the contract, less net premiums earned under the contract.
Treaty Effective Dates Premium Collected / Cession Rate Capital at Risk (1) Quota Share Agreement 06/01/2025 - 05/31/2026 45% (2) $ 33,346,000 (3) All Other Perils Catastrophe 01/01/2025 - Excess of Loss Agreement 12/31/2025 $ 1,296,000 2,304,000 All Other Perils Catastrophe 01/01/2024 - Excess of Loss Agreement 12/31/2024 — 4,500,000 (4) Excess Per Risk Agreement 02/01/2024 - 01/31/2025 1,867,000 633,000 Quota Share Agreement (5) 06/01/2024 - 05/31/2026 30% (2) $ 4,200,000 (6) (1) Capital at risk is calculated by taking the aggregate losses Shoreline Re is subject to under the contract, less net premiums earned under the contract.
Our management subsidiaries pay us dividends primarily using cash from the collection of management fees from our insurance subsidiaries, pursuant to the management agreements in effect between those entities.
Our management subsidiary pays us dividends primarily using cash from the collection of management fees from our insurance subsidiary, pursuant to the management agreements in effect between those entities.
In addition, during 2022, we wrote personal residential business in six other states; however on February 27, 2023, our former insurance subsidiary, United Property & Casualty Insurance Company (UPC) was placed into receivership with the Florida Department of Financial Services (the "DFS"), which divested our ownership of UPC.
On February 27, 2023, our former insurance subsidiary that wrote personal residential business in six states, United Property & Casualty Insurance Company (UPC) was placed into receivership with the Florida Department of Financial Services (the "DFS"), which divested our ownership of UPC.
During the years ended December 31, 2024, 2023 and 2022, five, two, and two named storms, respectively, made landfall in our geographic footprint, resulting in retained pre-tax catastrophe losses of $25,442,000, $729,000, and $57,906,000, respectively, excluding our former subsidiary, UPC.
During the years ended December 31, 2024 and 2023, five and two named storms, respectively, made landfall in our geographic footprint, resulting in retained pre-tax catastrophe losses of $25,442,000 and $729,000 respectively.
AmCoastal’s all other perils catastrophe excess of loss agreement in effect January 1 through December 31, annually, which provides protection from catastrophe loss events other than named or numbered windstorms and earthquakes; and 3. IIC’s core catastrophe reinsurance program in effect June 1 through May 31, annually, which provides protection from all catastrophe losses.
AmCoastal’s all other perils catastrophe excess of loss agreement in effect January 1 through December 31, annually, which provides protection from catastrophe loss events other than named or numbered windstorms and earthquakes; and 3.
Excluding catastrophe losses and reserve development, our gross underlying loss and LAE ratio for the year ended December 31, 2024 would have been 7.4%, a decrease of 0.3 points from 7.7% during the year ended December 31, 2023.
Excluding catastrophe losses and reserve development, our gross underlying loss and LAE ratio for the year ended December 31, 2025 would have been 7.8%, an increase of 0.4 points from 7.4% during the year ended December 31, 2024.
Most of the corporate bonds we hold reflected a similar diversification. At December 31, 2024, approximately 87.8% of our fixed maturities were U.S. Treasuries, or corporate bonds rated “A” or better, and 12.2% were corporate bonds rated “BBB” or “BB”. 40 AMERICAN COASTAL INSURANCE CORPORATION Reinsurance We follow the industry practice of reinsuring a portion of our risks.
Most of the corporate bonds we hold reflected a similar diversification. At December 31, 35 AMERICAN COASTAL INSURANCE CORPORATION 2025, approximately 82.6% of our fixed maturities were U.S. Treasuries or corporate bonds rated “A” or better, and 17.4% were corporate bonds rated “BBB” or “BB”. Reinsurance We follow the industry practice of reinsuring a portion of our risks.
During the periods presented, we conducted our business principally through two wholly owned insurance subsidiaries: American Coastal Insurance Company (AmCoastal) and Interboro Insurance Company (IIC). Collectively, we refer to the holding company and all our subsidiaries, including non-insurance subsidiaries, as “ACIC,” which is the preferred brand identification for our Company.
During the periods presented, we conducted our business principally through our wholly owned insurance subsidiary, American Coastal Insurance Company (AmCoastal). Collectively, we refer to the holding company and all our subsidiaries, including non-insurance subsidiaries, as “ACIC,” which is the preferred brand identification for our Company. Our Company’s revenue is generated from writing insurance in Florida.
Our Company’s primary source of revenue is generated from writing insurance in Florida and New York. Our target market in such areas consists of states where the perceived threat of natural catastrophe has caused large national insurance carriers to reduce their concentration of policies. We believe an opportunity exists for ACIC to write profitable business in such areas.
Our target market in such areas consists of states where the perceived threat of natural catastrophe has caused large national insurance carriers to reduce their concentration of policies. We believe an opportunity exists for ACIC to write profitable business in such areas.
Additional information regarding non-GAAP financial measures presented in this Form 10-K can be found in “Definitions of Non-GAAP Measures ”, below.
Additional information regarding non-GAAP financial measures presented in this Form 10-K can be found in the “ Definitions of Non-GAAP Measures ” section, above.
Loss and LAE expense as a percentage of net earned premiums increased 7.5 points to 25.3% for the year ended December 31, 2024, compared to 17.8% for the year ended December 31, 2023. In addition, during the year ended December 31, 2024, prior year reserve favorable development was lower on both catastrophe and non-catastrophe losses.
Loss and LAE expense as a percentage of net earned premiums decreased 10.3 points to 15.0% for the year ended December 31, 2025, compared to 25.3% for the year ended December 31, 2024. In addition, during the year ended December 31, 2025, prior year reserve favorable development was higher on both catastrophe and non-catastrophe losses and catastrophe losses were lower.
Many of these policies, estimates and related judgments are common in the insurance industry. It is reasonably likely that changes in these estimates could occur from time to time and result in a material impact on our consolidated financial statements.
In making these determinations, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance industry. It is reasonably likely that changes in these estimates could occur from time to time and result in a material impact on our consolidated financial statements.
The Agent is not required to sell any specific amount of Shares but has agreed to act as the Company’s sales agent for a commission equal to 3.0% of the gross proceeds from the sales of the Shares.
Sales of the Shares under the Agreement will be made in sales deemed to be “at the market offerings”. The Agent is not required to sell any specific amount of Shares but has agreed to act as the Company’s sales agent for a commission equal to 3.0% of the gross proceeds from the sales of the Shares.
The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of our business. 36 AMERICAN COASTAL INSURANCE CORPORATION RESULTS OF OPERATIONS Consolidated Results Net income attributable to ACIC for the year ended December 31, 2024 decreased by $234,193,000 to $75,718,000, compared to net income of $309,911,000 for the year ended December 31, 2023.
The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of our business. 32 AMERICAN COASTAL INSURANCE CORPORATION RESULTS OF OPERATIONS Consolidated Results Net income for the year ended December 31, 2025 increased by $31,119,000 to $106,837,000, compared to net income of $75,718,000 for the year ended December 31, 2024.
Reinsurance costs as a percentage of gross earned premium during the years ended December 31, 2024 and 2023 were as follows: 2024 2023 Non-at-Risk (0.3) % (0.3) % Quota Share (22.5) (21.7) All Other (34.3) (34.6) Total Ceding Ratio (57.1) % (56.6) % 42 AMERICAN COASTAL INSURANCE CORPORATION Reinsurance costs as a percentage of gross earned premium for IIC, which is now captured within discontinued operations, during the years ended December 31, 2024 and 2023 were as follows: IIC 2024 2023 Non-at-Risk (2.5) % (2.9) % Quota Share — — All Other (25.1) (33.7) Total Ceding Ratio (27.6) % (36.6) % We amortize our ceded unearned premiums over the annual agreement period, and we record that amortization in ceded premiums earned on our Consolidated Statements of Comprehensive Income (Loss).
Reinsurance costs as a percentage of gross earned premium during the years ended December 31, 2025 and 2024 were as follows: 2025 2024 Non-at-Risk (0.3 )% (0.3 )% Quota Share (14.2 )% (22.5 )% All Other (38.1 )% (34.3 )% Total Ceding Ratio (52.6 )% (57.1 )% 37 AMERICAN COASTAL INSURANCE CORPORATION We amortize our ceded unearned premiums over the annual agreement period, and we record that amortization in ceded premiums earned on our Consolidated Statements of Comprehensive Income (Loss).
Reinsurer Companies in Scope Effective Dates Cession Rate States in Scope External third-party AmCoastal 06/01/2024 - 06/01/2026 20% (1)(2) Florida External third-party AmCoastal 06/01/2023 - 06/01/2024 40% (1) Florida External third-party UPC, FSIC & AmCoastal 06/01/2022 - 06/01/2023 10% (1) Florida, Louisiana, Texas TypTap UPC 06/01/2022 - 06/01/2023 100% (3) Georgia, North Carolina, South Carolina (1) This treaty provides or provided coverage for all catastrophe perils and attritional losses incurred.
Reinsurer Companies in Scope Effective Dates Cession Rate States in Scope External third-party AmCoastal 06/01/2024 - 05/31/2026 20% (1)(2) Florida External third-party AmCoastal 06/01/2023 - 05/31/2024 40% (1) Florida (1) This treaty provides or provided coverage for all catastrophe perils and attritional losses incurred.
AmCoastal’s program provides sufficient coverage for approximately a 1-in-206-year return period, indicating that the probability of a single occurrence exceeding protection purchased is roughly 0.5%, estimated by equally blending the AIR and RMS catastrophe models using long-term catalogs including demand surge.
AmCoastal’s program provides sufficient coverage for approximately a 1-in-203-year return period, indicating that the probability of a single occurrence exceeding protection purchased is roughly 0.5% estimated by blending the AIR 10, AIR 11.5, RMS 22 and RMS 23 catastrophe models using long-term catalogs including demand surge and based on total insured value at September 30, 2025 of $69 billion.
See Note 16 in our Notes to Consolidated Financial Statements and Part II, Item 5 for additional information. During the year ended December 31, 2024, the Company made capital contributions of $1,265,000 to its reinsurance subsidiary, Shoreline Re. We may make future contributions of capital to our insurance subsidiaries as circumstances require.
See Note 16 in our Notes to Consolidated Financial Statements and Part II, Item 5 for additional information. During the year ended December 31, 2025, the Company made capital contributions of $8,269,000 to its reinsurance subsidiary, Shoreline Re.
Discussion regarding our results of operations and financial condition for 2023 as compared to 2022 is included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 and the Revised Items of our Form 10-K for the year ended December 31, 2023, filed as Exhibit 99.1 to Form 8-K on October 4, 2024.
The following discussion provides an analysis of our results of operations and financial condition for 2025 as compared to 2024. Discussion regarding our results of operations and financial condition for 2024 as compared to 2023 is included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.
($ in thousands) Year ended December 31, 2024 2023 Change Net loss and LAE $ 69,319 $ 46,678 $ 22,641 % of Gross earned premiums 10.9 % 7.7 % 3.2 pts % of Net earned premiums 25.3 % 17.8 % 7.5 pts Less: Current year catastrophe losses $ 25,561 $ 12,783 $ 12,778 Prior year reserve favorable development (3,704) (12,694) 8,990 Underlying loss and LAE (1) $ 47,462 $ 46,589 $ 873 % of Gross earned premiums 7.4 % 7.7 % (0.3) pts % of Net earned premiums 17.3 % 17.8 % (0.5) pts (1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to net loss and LAE, the most directly comparable GAAP measure.
Year Ended December 31, 2025 2024 Change Net loss and LAE $ 46,040 $ 69,319 $ (23,279 ) % of Gross earned premiums 7.1 % 10.9 % (3.8 ) pts % of Net earned premiums 15.0 % 25.3 % (10.3 ) pts Less: Current year catastrophe losses $ 1,485 $ 25,561 $ (24,076 ) Prior year reserve favorable development (5,827 ) (3,704 ) (2,123 ) Underlying loss and LAE (1) $ 50,382 $ 47,462 $ 2,920 % of Gross earned premiums 7.8 % 7.4 % 0.4 pts % of Net earned premiums 16.4 % 17.3 % (0.9 ) pts (1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to net loss and LAE, the most directly comparable GAAP measure.
As of December 31, 2024, our total obligation related to these claim payments was $322,087,000, of which we estimate $124,642,000 to be short-term in nature (due in less than twelve months), based upon our cumulative claims paid over the last 23 years.
As of December 31, 2025, our total obligation related to these claim payments was $165,701,000, of which we estimate $83,995,000 to be short-term in nature (due in less than twelve months), based upon our cumulative claims paid historically.
We use quoted prices from active markets and an independent third-party valuation service to assist us in determining fair value.
We use quoted prices from active markets and an independent third-party valuation service to assist us in determining fair value. We obtain only one single quote or price for each financial instrument.
Goodwill is not amortized but is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test. We test goodwill for impairment by performing a quantitative assessment.
Measurement of Goodwill and Related Impairment Goodwill is the excess of cost over the estimated fair value of net assets acquired. Goodwill is not amortized but is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test.
On May 9, 2024, the Company entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC ("Forza") in which ACIC will sell and Forza will acquire 100% of the issued and outstanding stock of IIC. The aggregate purchase price for the shares will be equal to IIC's GAAP shareholder’s equity on the closing date.
On May 9, 2024, we entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC (Forza) in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of IIC.
This was done in an effort to align more closely with our peer group for comparability. Accordingly, we have recast our Consolidated Statements of Comprehensive Income for the years ended December 31, 2023 and 2022 to align with this format.
For the years ended December 31, 2025 and 2024, we have consolidated our Operating and Underwriting Expenses and General and Administrative Expenses lines within our Consolidated Statements of Comprehensive Income into the General and Administrative Expenses line. This was done in an effort to align more closely with our peer group for comparability.
Policy acquisition costs decreased by $4,446,000, or 5.9%, to $70,990,000 for the year ended December 31, 2024, from $75,436,000 for the year ended December 31, 2023. The primary driver of the decrease was an increase in ceding commission income of $6,959,000, driven by the changes in the terms of our quota share reinsurance agreement described above.
Policy acquisition costs increased by $26,854,000, or 37.8%, to $97,844,000 for the year ended December 31, 2025, from $70,990,000 for the year ended December 31, 2024. The primary driver of the increase was a decrease in ceding commission income of $17,161,000, driven by the changes in the terms of our quota share reinsurance agreement described above.
The following table summarizes our investments, by type: December 31, 2024 December 31, 2023 Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total U.S. government and agency securities $ 154,660 28.7 % $ 26,002 8.3 % Corporate securities 61,535 11.3 % 48,026 15.5 % Mortgage-backed securities 30,462 5.6 % 34,622 11.1 % States, municipalities and political subdivisions 17,197 3.2 % 16,964 5.4 % Asset-backed securities 11,436 2.1 % 9,485 3.0 % Public utilities 5,284 1.0 % 3,288 1.1 % Foreign governments 427 0.1 % — — % Total fixed maturities 281,001 52.0 % 138,387 44.4 % Mutual fund 31,818 5.9 % — — % Other common stocks 4,976 0.9 % — — % Total equity securities 36,794 6.8 % — — % Other investments 23,623 4.4 % 16,487 5.3 % Total investments 341,418 63.2 % 154,874 49.7 % Cash and cash equivalents 137,036 25.3 % 138,930 44.5 % Restricted cash 62,357 11.5 % 18,070 5.8 % Total cash, cash equivalents, restricted cash and investments $ 540,811 100.0 % $ 311,874 100.0 % We classify all of our investments as available-for-sale.
The following table summarizes our investments, by type: December 31, 2025 December 31, 2024 Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total U.S. government and agency securities $ 92,118 14.2 % $ 154,660 28.7 % Corporate securities 80,745 12.5 61,535 11.3 Mortgage-backed securities 30,711 4.7 30,462 5.6 States, municipalities and political subdivisions 27,078 4.2 17,197 3.2 Asset-backed securities 12,657 2.0 11,436 2.1 Public utilities 9,246 1.4 5,284 1.0 Foreign government 597 0.1 427 0.1 Total fixed maturities 253,152 39.1 % 281,001 52.0 % Mutual funds 56,637 8.7 31,818 5.9 Other common stocks 5,048 0.8 4,976 0.9 Total equity securities 61,685 9.5 % 36,794 6.8 % Other investments 40,053 6.2 23,623 4.4 Total investments 354,890 54.8 % 341,418 63.2 % Cash and cash equivalents 198,762 30.7 137,036 25.3 Restricted cash 94,092 14.5 62,357 11.5 Total cash, cash equivalents, restricted cash and investments $ 647,744 100.0 % $ 540,811 100.0 % We classify all of our investments as available-for-sale.
Additional information regarding non-GAAP financial measures presented in this Form 10-K can be found in the “ Definitions of Non-GAAP Measures ” section, above. 39 AMERICAN COASTAL INSURANCE CORPORATION ANALYSIS OF FINANCIAL CONDITION The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our accompanying consolidated financial statements and related notes in Part II, Item 8 in this Form 10-K.
ANALYSIS OF FINANCIAL CONDITION The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our accompanying consolidated financial statements and related notes in Part II, Item 8 in this Form 10-K.
We obtain only one single quote or price for each financial instrument. 49 AMERICAN COASTAL INSURANCE CORPORATION As discussed in Note 5 in our Notes to Consolidated Financial Statements, we value our investments at fair value using quoted prices from active markets, to the extent available.
As discussed in Note 5 in our Notes to Consolidated Financial Statements, we value our investments at fair value using quoted prices from active markets, to the extent available.
While we believe that historical performance of loss payment patterns is a reasonable source for projecting future claim payments, there is inherent uncertainty in these estimated projected settlements, and as a result these estimates will differ, perhaps significantly, from actual future payments. 47 AMERICAN COASTAL INSURANCE CORPORATION In addition to our unpaid loss and LAE, as of December 31, 2024, we have outstanding debt obligations related to our notes payable totaling $150,000,000.
While we believe that historical performance of loss payment patterns is a reasonable source for projecting future claim payments, there is inherent uncertainty in these estimated projected settlements, and as a result these estimates will differ, perhaps significantly, from actual future payments.
For more information regarding these outstanding notes, please see Note 12 in our Notes to Consolidated Financial Statements. In connection with entering into contracts with our outside vendors, we have minimum obligations due to our vendors over the life of the contracts. Our main vendor obligations are related to underwriting tools, claims and policy administration systems.
Our short-term obligation related to these notes payable total $10,875,000 in estimated interest payments and no principal payments. For more information regarding these outstanding notes, please see Note 12 in our Notes to Consolidated Financial Statements. In connection with entering into contracts with our outside vendors, we have minimum obligations due to our vendors over the life of the contracts.
Effective December 15, 2023, we agreed to commute a private reinsurer’s share of core catastrophe reinsurance coverage and replace this gap in coverage with new coverage provided by one of our other private reinsurers.
Effective December 15, 2023, we agreed to commute a private reinsurer’s share of core catastrophe reinsurance coverage and replace this gap in coverage with new coverage provided by one of our other private reinsurers. This transaction resulted in a reduction in expense of approximately $6,300,000 and $15,700,000 during the three and six months ended June 30, 2024, respectively.
Goodwill is impaired when it is determined that the carrying value of a reporting segment is in excess of the fair value of that reporting segment. The valuation methodologies utilized are subject to key judgments and assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments.
We test goodwill for impairment by performing a quantitative assessment. Goodwill is impaired when it is determined that the carrying value of a reporting segment is in excess of the fair value of that reporting segment. The valuation methodologies utilized are subject to key judgments and assumptions that are sensitive to change.
The principal cash outflows from our operating activities are the result of claims and related costs, reinsurance premiums, policy acquisition costs and salaries and employee benefits. A primary liquidity concern with respect to these cash flows is the risk of large magnitude catastrophe events.
The principal cash outflows from our operating activities are the result of claims and related costs, reinsurance premiums, policy acquisition costs and salaries and employee benefits.
Net investment income increased by $12,495,000, or 150.5%, to $20,795,000 for the year ended December 31, 2024, from $8,300,000 for 2023, driven by increased interest income due to a substantial increase in holdings and higher interest rates year-over-year.
Net investment income increased by $1,411,000, or 6.8%, to $22,206,000 for the year ended December 31, 2025, from $20,795,000 for 2024, driven by increased interest income due to a substantial increase in holdings and higher overall yield on our 2025 portfolio than our 2024 portfolio..
In monitoring our investments, we use credit quality, investment income, cash flows, realized gains and losses, unrealized gains and losses, asset diversification and portfolio duration.
In monitoring our investments, we use credit quality, investment income, cash flows, realized gains and losses, unrealized gains and losses, asset diversification and portfolio duration. To evaluate our financial condition, we consider our liquidity, financial strength, ratings, book value per share and return on equity.
For all catastrophe perils, the quota share agreement provides or provided ground-up protection, effectively reducing our retention for catastrophe losses. (2) The cession rate of this treaty is reduced from 20% to 15% effective 06/01/2025 - 06/01/2026. (3) This treaty provided coverage on our in-force, new and renewal policies until these states were transitioned to HCPCI and TypTap upon renewal.
For all catastrophe perils, the quota share agreement provides or provided ground-up protection, effectively reducing our retention for catastrophe losses. (2) The cession rate of this treaty was reduced from 20% to 15% effective June 1, 2025 to May 31 , 2026.
Given IIC is our last remaining personal lines entity and represents the final step in our strategic shift to becoming a specialty commercial underwriter, IIC results of operations and assets and liabilities are captured within discontinued operations and can be seen in Note 4 of the Notes to Consolidated Financial Statements below.
As a result, IIC results of operations and assets and liabilities are captured within discontinued operations and can be seen in Note 4 of the Notes to Consolidated Financial Statements below.
AmCoastal’s all other perils catastrophe excess of loss agreement provides protection from catastrophe loss events other than named windstorms and earthquakes up to $172,000,000 in the aggregate. This agreement provides sufficient coverage for a 1-in-450-year return period, indicating that the probability of a single occurrence exceeding protection purchased is no more than 0.2%.
This agreement provides sufficient coverage for approximately a 1-in-450-year return period, indicating that the probability of a single occurrence exceeding protection purchased is no more than 0.2%. In addition to the programs described above, AmCoastal purchased a new catastrophe aggregate excess of loss coverage (the “CAT Agg” agreement) to mitigate our catastrophe frequency risk.
Shoreline Re participates on AmCoastal's all other perils catastrophe excess of loss agreement and AmCoastal's excess per risk agreement. In addition, Shoreline Re participates in a 30% quota share agreement with AmCoastal, which provides coverage for all catastrophe perils as well as attritional losses incurred.
In addition, Shoreline Re participates in a 45% quota share agreement with AmCoastal, which provides coverage for all catastrophe perils as well as attritional losses incurred. The table below outlines the participation of Shoreline Re for each program, including premium received and capital at risk.
We closely monitor and manage these risks through our comprehensive investment risk management process. The principal cash outflows relate to purchases of investments. Additional cash outflows relate to the purchase of fixed assets. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market disruption.
Investing Activities The principal cash inflows from our investing activities come from repayments of principal, proceeds from maturities and sales of investments. We closely monitor and manage these risks through our comprehensive investment risk management process. The principal cash outflows relate to purchases of investments. Additional cash outflows relate to the purchase of fixed assets.
The increase in expenses was primarily due to an increase in loss and LAE as a result of Hurricane Milton making landfall in 2024, which caused a large increase in catastrophe losses due to the $20,500,000 retention incurred from the storm. The calculations of our combined loss ratios and underlying loss ratios are shown below.
Expenses Expenses for the year ended December 31, 2025 decreased $1,899,000, or 1.0%, to $195,162,000, from $197,061,000 for 2024. The decrease in expenses was primarily due to a decrease in loss and LAE as a result of Hurricane Milton making landfall in 2024, which caused a large increase in catastrophe losses due to the $20,500,000 retention incurred from the storm.
The increase is primarily driven by a $12,334,000 increase in ceded premiums earned from our quota share agreements. This increase is attributed to the change in AmCoastal’s quota share reinsurance coverage during 2024.
The increase is primarily driven by a $51,621,000 decrease in ceded premiums earned from our quota share agreements. This decrease is attributed to the change in AmCoastal’s quota share reinsurance coverage during 2024 and 2025. We had quota share coverage in place at 40% for the first half of 2024, decreasing to 20% effective June 1, 2024.
Two outside asset management companies, which have authority and discretion to buy and sell securities for us, manage our investments subject to (i) the guidelines established by our Board of Directors and (ii) the direction of management. The Investment Committee of our Board of Directors reviews and approves our investment policy on a regular basis.
As of December 31, 2025, one outside asset management company, which has authority and discretion to buy and sell securities for us, manages our investments subject to (i) the guidelines established by our Board of Directors and (ii) the direction of management. Prior to August 2025, we engaged two outside asset management companies.
($ in thousands) Year ended December 31, 2024 2023 Change Policy acquisition costs $ 70,990 $ 75,436 $ (4,446) General and administrative 44,756 37,559 7,197 Total Operating Expenses $ 115,746 $ 112,995 $ 2,751 % of Gross earned premiums 18.1 % 18.7 % (0.6) pts % of Net earned premiums 42.2 % 43.1 % (0.9) pts Loss and LAE increased by $22,641,000, or 48.5%, to $69,319,000 for the year ended December 31, 2024, from $46,678,000 for the year ended December 31, 2023.
Year Ended December 31, 2025 2024 Change Policy acquisition costs $ 97,844 $ 70,990 $ 26,854 General and administrative 40,463 44,756 (4,293 ) Total operating expenses $ 138,307 $ 115,746 $ 22,561 % of Gross earned premiums 21.3 % 18.1 % 3.2 pts % of Net earned premiums 45.1 % 42.2 % 2.9 pts Loss and LAE decreased by $23,279,000, or 33.6%, to $46,040,000 for the year ended December 31, 2025, from $69,319,000 for the year ended December 31, 2024.
The table below summarizes the amounts of our ceded premiums written under the various types of agreements, as well as the amortization of ceded unearned premiums: Year Ended December 31, 2024 2023 2022 Quota Share $ (102,886) $ (201,315) $ (53,010) Excess-of-loss (265,015) (210,975) (174,073) Equipment, identity theft, and cybersecurity (2,310) (1,172) (2,269) Ceded premiums written $ (370,211) $ (413,462) $ (229,352) Change in ceded unearned premiums 5,593 70,839 (21,907) Ceded premiums earned $ (364,618) $ (342,623) $ (251,259) The breakdown of our ceded premiums written under the various types of agreements, as well as the amortization of ceded unearned premiums for IIC, which is now captured in discontinued operations, can be seen in the tables below.
The table below summarizes the amounts of our ceded premiums written under the various types of agreements, as well as the amortization of ceded unearned premiums: Year Ended December 31, 2025 2024 2023 Quota Share $ (77,381 ) $ (102,886 ) $ (201,315 ) Excess-of-loss (210,570 ) (265,015 ) (210,975 ) Equipment, identity theft, and cyber security (2,261 ) (2,310 ) (1,172 ) Ceded premiums written (290,212 ) (370,211 ) (413,462 ) Change in ceded unearned premiums (51,196 ) 5,593 70,839 Ceded premiums earned $ (341,408 ) $ (364,618 ) $ (342,623 ) Current year catastrophe losses, which are disaggregated between named and numbered storms and all other catastrophe loss events, are shown in the following table.
For more information regarding the results of our discontinued operations, see Note 4 in our Notes to Consolidated Financial Statements. In addition, on May 9, 2024, the Company entered into a Sale Agreement with Forza in which ACIC will sell and Forza will acquire 100% of the issued and outstanding stock of IIC.
In addition, On May 9, 2024, we entered into a Stock Purchase Agreement (the "Sale Agreement") with Forza Insurance Holdings, LLC (Forza) in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of IIC.
In September 2023, the Company entered into an equity distribution agreement (the “Agreement”) with Raymond James & Associates, Inc., as agent (the “Agent”), of up to 8,000,000 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”). Sales of the Shares under the Agreement will be made in sales deemed to be “at the market offerings”.
During the years ended December 31, 2025 and 2024, the Company received dividends of $23,000,000 and $14,300,000, respectively from our insurance subsidiary, AmCoastal. 39 AMERICAN COASTAL INSURANCE CORPORATION In September 2023, the Company entered into an equity distribution agreement (the “Agreement”) with Raymond James & Associates, Inc., as agent (the “Agent”), of up to 8,000,000 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”).
This is exclusive of interest costs, which we estimate will total $43,500,000 over the life of the debt, based on the current fixed interest rates of these notes. Our short-term obligation related to these notes payable total $10,875,000 in estimated interest payments and no principal payments.
In addition to our unpaid loss and LAE, as of December 31, 2025, we have outstanding debt obligations related to our notes payable totaling $150,000,000. This is exclusive of interest costs, which we estimate will total $21,750,000 over the life of the debt, based on the current fixed interest rates of these notes.
Net realized investment losses and net unrealized gains (losses) on equity securities increased by $7,847,000, or 131.3%, to a net gain of $1,872,000 for the year ended December 31, 2024, from a net loss of $5,975,000 for the year ended December 31, 2023, driven by decreased investment sales in 2024 resulting in decreased realized losses of $6,665,000 on our investment portfolio.
Net realized investment losses and net unrealized gains (losses) on equity securities increased by $4,509,000, or 240.9%, to a net gain of $6,381,000 for the year ended December 31, 2025, from a net gain of $1,872,000 for the year ended December 31, 2024, driven by increased unrealized gains on our equity securities as market conditions were favorable and our holdings increased 40.4% year-over-year.
Although reinsurance agreements contractually obligate our reinsurers to reimburse us for the agreed-upon portion of our gross paid losses, they do not discharge our primary liability.
It is intended to provide our stockholders with an acceptable return on the risks assumed by our insurance entity, and to reduce the variability of earnings, while providing surplus protection. Although reinsurance agreements contractually obligate our reinsurers to reimburse us for the agreed-upon portion of our gross paid losses, they do not discharge our primary liability.
RECENT ACCOUNTING STANDARDS Please refer to Note 2(v) in our Notes to Consolidated Financial Statements for a discussion of recent accounting standards that may affect us. APPLICATION OF CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements.
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements. The most critical estimates include those used in determining: • reserves for unpaid losses, • fair value of investments, and • goodwill.
The table below outlines our quota share agreements in effect for the years ended December 31, 2024 and 2023. The impacts of these quota share agreements on the financial statements of our former subsidiary, UPC, are included in discontinued operations in 2023 and 2022.
The table below outlines our quota share agreements in effect for the years ended December 31, 2025 and 2024.
In addition, we saw an increase in the use of third parties for audit, tax, and legal services, totaling $1,065,000 and $620,000, respectively. 38 AMERICAN COASTAL INSURANCE CORPORATION We experienced favorable reserve development in the current year and its historical impact on our net loss and net underlying loss ratios is outlined in the following table.
We experienced favorable reserve development in the current year and its historical impact on our net loss and net underlying loss ratios is outlined in the following table.
Under this program, our GAAP retention on a first event is $20,500,000 ($10,000,000 retained by AmCoastal under statutory accounting principles (STAT retained), $10,500,000 retained separately by our captive). We have purchased second and third event retrocession coverage, reducing our second and third event GAAP retentions to $13,000,000 ($10,000,000 STAT retained by AmCoastal, $3,000,000 retained separately by our captive).
Under this program, the Company's GAAP retention on a first event is $29,750,000 ($14,000,000 retained by AmCoastal under statutory accounting principles (STAT retained), $15,750,000 (retained separately by the Company's captive)).
We have historically grown our business through strong organic growth, complemented by strategic acquisitions and partnerships, including our acquisitions of AmCo Holding Company, LLC (AmCo) and its subsidiaries, including AmCoastal, in April 2017, and IIC in April 2016, and our strategic partnership with a subsidiary of Tokio Marine Kiln Group Limited (Tokio Marine), which formed Journey Insurance Company (JIC) in August 2018.
We have historically grown our business through strong organic growth, complemented by strategic acquisitions and partnerships, including our acquisitions of AmCo Holding Company, LLC (AmCo) and its subsidiaries, including AmCoastal, in April 2017. Our policies in-force increased by 5.20% from 4,099 policies in-force at December 31, 2024, to 4,311 policies in-force at December 31, 2025.
Our cash and investment portfolios totaled $540,811,000 at December 31, 2024, compared to $311,874,000 at December 31, 2023.
The Investment Committee of our Board of Directors reviews and approves our investment policy on a regular basis. Our cash and investment portfolios totaled $647,744,000 at December 31, 2025, compared to $540,811,000 at December 31, 2024.
During the year ended December 31, 2023, we made no capital contributions to our subsidiaries. During the year ended December 31, 2022, we contributed $81,000,000 and $11,200,000 to our former insurance subsidiaries, UPC and FSIC, respectively. The contribution made to FSIC was made prior to the merging of FSIC into UPC.
During the year ended December 31, 2023, we made no capital contributions to our subsidiaries.
The details of these changes can be seen below. The calculations of our loss ratios and underlying loss ratios are shown below.
This was offset by an 33 AMERICAN COASTAL INSURANCE CORPORATION increase in policy acquisition costs, the details of which can be seen below. The calculations of our combined loss ratios and underlying loss ratios are shown below.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table illustrates the composition of our equity portfolio at December 31, 2024: % of Total Stocks by Sector Fair Value Fair Value 2024 Funds $ 31,818 86.5 % Financial 4,976 13.5 Total $ 36,794 100.0 % 52 AMERICAN COASTAL INSURANCE CORPORATION
Biggest changeDuring 2025, we increased our equity portfolio from 10.8% of our total investments (excluding cash, restricted cash and cash equivalents) at December 31, 2024 to 17.4% of our total investments (excluding cash, restricted cash and cash equivalents) at December 31, 2025. 44 AMERICAN COASTAL INSURANCE CORPORATION The following table illustrates the composition of our equity portfolio at December 31, 2025 and 2024: % of Total Stocks by Sector Fair Value Fair Value 2025 Funds $ 56,637 91.8 % Financial 5,048 8.2 Total $ 61,685 100.0 % 2024 Funds $ 31,818 86.5 % Financial 4,976 13.5 Total $ 36,794 100.0 % 45 AMERICAN COASTAL INSURANCE CORPORATION
Based on our analysis, both a 200 and 300-basis point decrease or increase in interest rates from the December 31, 2024, rates would have a material impact on our results of operations and cash flows in the event divesting of these holdings was necessary.
Based on our analysis, both a 200 and 300-basis point decrease or increase in interest rates from the December 31, 2025 rates would have a material impact on our results of operations and cash flows in the event divesting of these holdings was necessary.
However, we do not anticipate the need to sell securities in an unrealized loss position as of December 31, 2024. 51 AMERICAN COASTAL INSURANCE CORPORATION CREDIT RISK Credit risk can expose us to potential losses arising principally from adverse changes in the financial condition of the issuer of our fixed-maturity securities.
However, we do not anticipate the need to sell securities in an unrealized loss position as of December 31, 2025. 43 AMERICAN COASTAL INSURANCE CORPORATION CREDIT RISK Credit risk can expose us to potential losses arising principally from adverse changes in the financial condition of the issuer of our fixed-maturity securities.
For more information regarding our credit loss allowance, please refer to Note 14 . EQUITY PRICE RISK Our equity investment portfolio at December 31, 2024 consisted of common stocks and non-redeemable preferred stocks. We may incur potential losses due to adverse changes in equity security prices. We manage this risk primarily through industry and issuer diversification and asset allocation techniques.
For more information regarding our credit loss allowance, please refer to Note 14 . EQUITY PRICE RISK Our equity investment portfolio at December 31, 2025 consisted of common stocks. We may incur potential losses due to adverse changes in equity security prices. We manage this risk primarily through industry and issuer diversification and asset allocation techniques.
We do not hold any securities that are classified as held to maturity and we do not hold any securities for trading or speculation. We do not utilize any swaps, options, futures or forward contracts to hedge or enhance our investment portfolio.
We do not hold any securities that are classified as held to maturity and we do not hold any securities for trading or speculation. We do not utilize 42 AMERICAN COASTAL INSURANCE CORPORATION any swaps, options, futures or forward contracts to hedge or enhance our investment portfolio.
The following table illustrates the impact of hypothetical changes in interest rates on the fair value of our fixed-income securities at December 31, 2024 and 2023: Hypothetical Change in Interest Rates Estimated Fair Value Change in Estimated Fair Value Percentage Increase (Decrease) in Estimated Fair Value 2024 300 basis point increase $ 262,720 $ (18,281) (6.5) % 200 basis point increase 268,811 (12,190) (4.3) 100 basis point increase 274,904 (6,097) (2.2) Fair value 281,001 — — 100 basis point decrease 287,101 6,100 2.2 200 basis point decrease 293,204 12,203 4.3 300 basis point decrease 299,310 18,309 6.5 % 2023 300 basis point increase $ 123,323 $ (15,064) (10.9) % 200 basis point increase 128,341 (10,046) (7.3) 100 basis point increase 133,362 (5,025) (3.6) Fair value 138,387 — — 100 basis point decrease 143,416 5,029 3.6 200 basis point decrease 148,447 10,060 7.3 300 basis point decrease 153,482 15,095 10.9 % Our calculations of the potential effects of hypothetical interest rate changes are based on several assumptions, including maintenance of the existing composition of fixed-income investments, and should not be considered indicative of future results.
The following table illustrates the impact of hypothetical changes in interest rates on the fair value of our fixed-income securities at December 31, 2025 and 2024: Hypothetical Change in Interest Rates Estimated Fair Value Change in Estimated Fair Value Percentage Increase (Decrease) in Estimated Fair Value 2025 300 basis point increase $ 234,734 $ (18,418 ) (7.3 )% 200 basis point increase 240,578 (12,574 ) (5.0 ) 100 basis point increase 246,718 (6,434 ) (2.5 ) Fair value 253,152 — — 100 basis point decrease 259,882 6,730 2.7 200 basis point decrease 266,907 13,755 5.4 300 basis point decrease 274,212 21,060 8.3 % 2024 300 basis point increase $ 262,720 $ (18,281 ) (6.5 )% 200 basis point increase 268,811 (12,190 ) (4.3 ) 100 basis point increase 274,904 (6,097 ) (2.2 ) Fair value 281,001 — — 100 basis point decrease 287,101 6,100 2.2 200 basis point decrease 293,204 12,203 4.3 300 basis point decrease 299,310 18,309 6.5 % Our calculations of the potential effects of hypothetical interest rate changes are based on several assumptions, including maintenance of the existing composition of fixed-income investments, and should not be considered indicative of future results.
The following table presents the composition of our fixed-income security portfolio by rating at December 31, 2024 and 2023: Comparable Rating Amortized Cost % of Total Amortized Cost Fair Value % of Total Fair Value 2024 AAA $ 42,367 14.3 % $ 37,180 13.2 % AA+, AA, AA- 180,971 61.3 178,417 63.5 A+, A, A- 37,495 12.7 34,199 12.2 BBB+, BBB, BBB- 34,714 11.7 31,205 11.1 Total $ 295,547 100.0 % $ 281,001 100.0 % 2023 AAA $ 36,452 23.4 % $ 31,482 22.7 % AA+, AA, AA- 50,997 32.8 47,689 34.5 A+, A, A- 42,692 27.4 37,094 26.8 BBB+, BBB, BBB- 25,545 16.4 22,122 16.0 Total $ 155,686 100.0 % $ 138,387 100.0 % In addition, we are exposed to credit risk through our reinsurance program.
The following table presents the composition of our fixed-income security portfolio by rating at December 31, 2025 and 2024: Comparable Rating Amortized Cost % of Total Amortized Cost Fair Value % of Total Fair Value 2025 AAA $ 46,181 17.7 % $ 42,962 17.0 % AA+, AA, AA- 123,935 47.3 122,620 48.4 A+, A, A- 45,484 17.4 43,461 17.2 BBB+, BBB, BBB- 44,603 17.1 43,045 17.0 BB+, BB, BB- 1,300 0.5 1,064 0.4 Total $ 261,503 100.0 % $ 253,152 100.0 % 2024 AAA $ 42,367 14.3 % $ 37,180 13.2 % AA+, AA, AA- 180,971 61.3 178,417 63.5 A+, A, A- 37,495 12.7 34,199 12.2 BBB+, BBB, BBB- 34,714 11.7 31,205 11.1 Total $ 295,547 100.0 % $ 281,001 100.0 % In addition, we are exposed to credit risk through our reinsurance program.
Removed
During 2024, we re-entered the equities market. Equities represent 10.8% of our total investments (excluding cash, restricted cash and cash equivalents) at December 31, 2024. We held no equity investments at December 31, 2023.

Other ACIC 10-K year-over-year comparisons