American Coastal Insurance Corporation Common Stock 17th Annual Midwest IDEAS Conference

Thank you, and good afternoon, everybody. We will briefly go over results of our company and what we represent. I will cover more of the general information and then pass it over to Alex to cover some of the detailed financials. Just a housekeeping item, some of the information presented here is looking forward statements, and those are subject to change. A little bit about us and our value proposition. What we are, how we like to present ourselves, is a niche specialized underwriter, disciplined with very high returns and with our historical statistics proving that we've been successful through every cycle of insurance since our inception in 2007. We are currently number one admitted commercial residential insurer in Florida. As I mentioned, we've been profitable every year since inception, which includes high severity and high frequency events that hit Florida in the last two years.

Our OE is in mid-20s and 68.6 underlying combined ratio. Our current target is 65%-75%, depending on where we are in the market cycle. Of course, some of that depends on whether we have or don't have catastrophe losses, which does not impact the underlying combined ratio, but it impacts your overall GAAP combined ratio. We are risk-averse when it comes to catastrophe losses. We do get a lot of questions about the volatility on our book, and while absolutely there is some volatility because we cannot predict the weather or how many events we will get in a certain year, we structure our insurance program in such a way that our surplus is always protected and, if anything, catastrophe events are our earnings events versus the capital events.

As of today, we are roughly 50% insider-owned, with a large percentage held by our original founder, Dan Pitt. We think that strongly aligns the value for all of the shareholders with such a heavy presence of insider ownership. As of late last year, we have new growth channels, which is our ACES, American Coastal E&S Company. Currently, it is still in the formation with the state of Arizona. We do expect to get licensing later this year, and we expect to start writing business probably in the second quarter of 2027. This slide just highlights some of our key metrics and the results. Currently, we have about 4,400 policies in force. Despite the softer market that right now a lot of insurers are facing in the state of Florida, we actually have been able to grow our brief count in the last year.

That being said, because of the price decline, overall premium is down compared to the last year. Our retention goal is 85% on account based, and we've been able to successfully hit that 85% for the last few years and inclusive of 2026 in the softening market. $573 million is our current premium in force. As I mentioned in the introduction, the three engines currently are AmCoastal, ACES, and Skyway is what we use as an MGA that's affiliated to write apartments. Our new book of business that just commenced last year. AmRisc is who we use to underwrite our condo book of business, which represents currently the majority of our book. This slide just shows our key metrics, how we view, and how we measure our success. Core EPS for 2025 of $2.08. Revenue was $335. Combined ratio 60.1.

2025 was a stellar year. We were still at the parts of the hardening market in 2026, also. 2025, sorry, did not have any catastrophe events in the state of Florida. Book value per share $6.51. Core return on equity in 2025 was an impressive 35.2%, and underlying combined was 61.5. On the revenue, maybe for those of you that are more generalist versus insurance specialist, that represents a net number. So currently, in order to diversify our risk, about 50% of every dollar we write goes to reinsurers to protect us. The $335 is a number after significant amount of dollars were sent to reinsurers. Underwriting strategy, I think, is what differentiates us from some of our competitors. We target low-rise, usually two to three-story garden-style apartments in the state of Florida, up to $100 million of total insured value.

We honestly don't write a lot in the $100 million bracket. Most of our buildings represent under $35 million of insured value, be a particular construction type. On more than 75% of our book, the way we price our business, it's judgment based, right? We do have filed rates with the state of Florida. But every time total insured value exceeds $5 million, we are able to use a lot of judgment in terms of which price we are able to offer. That price can fluctuate from the filed rates are as high as we want it to be, and also as low as we want to stay competitive to the extent we still feel we're meeting our underwriting targets. American Coastal is currently the MGA leader in their E&S space. We are their only relationship on admitted basis, and those relationships are mutually exclusive.

We are not able to write condominium associations and admitted market through anybody but AmRisc, and AmRisc, on the other hand, is not able to write admitted condo book for anybody but American Coastal. On the reinsurance side, we have a very long-term history with a lot of credible reinsurers. We use highly rated paper as well as some fully collateralized reinsurers. For the past two years, we added more than 10 new reinsurers to the panel. We actually had so much demand this year that we had to turn down some of the reinsurers or reduce capacity to others because our book has been profitable, our history has been very favorable to reinsurers, and as a result, we've been able to continue to expand the reinsurance panel, which is very important when you write business in the state of Florida.

This slide just shows, maybe in a little more technical way, how we manage through the insurance cycle and our hard markets and soft markets, they are part of insurance, right. It does not mean that one is particularly worse than the other. Both are needed to have the market in balance. We have seen softer market than it is today. We still were profitable. Currently, while substantially below where the historical hard market been in the last 2 years, we are still above the lowest point, at least in our history, in terms of the technical pricing and managing risk exposure and being disciplined in underwriting is key. We do have some accounts that we turn down when we do not feel that the price is attractive enough to us. We never compete on the price. If anything, we compete on the quality of risk, on our relationship.

Some of those accounts, we are completely fine if they go to our competitors, but we do ask that question a lot, right. You are in a soft market. There is a lot of competition that sees how profitable you have been. Are you worried about that. We watch it closely, but honestly, we are so big that some of those startups actually good to test the market. Some healthy competition is appreciated, but none of those risks currently are viewed by as by major. This shows our, as I indicated earlier, managing the catastrophe protection and making sure we accurately portray that message and investors understand how we structure our risk appetite. This just shows that for 2026, 2027, kind of 12-year catastrophe calendar period coverage, we have $1.7 billion on the first event named windstorm limit, and on the first event, we have $23.5 million retention.

This number has been decreased from originally almost $50 million, which we placed as of June 1st. However, we saw continued excess capacity on the reinsurance side. As a result, that brought the pricing to very favorable level. While none of us can predict the weather, we felt that the price was attractive enough for us to purchase down the retention from $50 million to $23.5 million. Even with $50 million, we still plan to be profitable on a calendar year basis, but $23.5 million further protects the surplus of the company. Overall, our philosophy has been to be profitable in any given quarter with one event and to be profitable for the year or maybe at break even with three catastrophe events. We currently feel very confident that this is where the company is positioned.

As I mentioned earlier, 25 to 31 was the reinsurance panel expansion from 2025 to 2026/27. Some takeaways, if you want the summary or the snapshot of where we are, again, very strong core cat catastrophe program. That is not the only program we place. In the appendix to this presentation, if you want further detail to additional reinsurance we purchase, you are welcome to study that, and we are always here to answer any additional questions. But for the sake of time, we are just not covering the detail of those reinsurance programs in this particular format. We have multi-year placement, which allows us to have 3-year continuity with some of their portions of our catastrophe tower, and currently it is about $760 million that is placed in multi-year. The reinsurance cost, it has been down, trending down, consistent with where the pricing is overall of the insurance market.

The margins generally stay intact, at least when it comes to your premium versus the reinsurance one. But where obviously some of the insurance company are seeing some deterioration is on expense ratio, because while direct costs are variable, some of the fixed costs are here. During harder market, when you have more premium dollars to collect, naturally that expense ratio will be lower. This is why our combined ratio targets have shifted slightly upwards. This is where we see our growth because we do have a lot of questions. Your condo is a mature book of business. It has been profitable. However, it is still some concentration because it is one product and in one state. So how we see ourselves going forward. For right now, what we have added in March of 2026 is a portion of AmRisc nationwide E&S book.

We are taking a small percentage of it, and it is projected to be at about $70 million on the 12-month basis. If the pricing and the capacity shift slightly, that number can be as high as $100 million, but currently we budget for about $70 million. This was kind of our first step in the E&S, which, in 2027, is expected to start showing significant results. Skyway, as I mentioned, is our internal MGA. During the softer market, we were able to build a policy admin system to have our underwriting done fully in-house. As ACES gets licensed, we will add E&S products to the same platform that we were able to build for our admitted product, and that will be done completely in-house. We currently have a team of eight underwriters. As the book grows, we might add a little bit to that team.