American Coastal Insurance Corporation (ACIC) saw its stock surge by 5.22% on November 6, 2024, after reporting impressive financial results for the third quarter ended September 30, 2024. The company's strong performance was driven by robust revenue growth, improved underwriting profitability, and effective cost management.
ACIC reported net income from continuing operations of $27.7 million, an 84.3% increase compared to the same period last year. This significant growth was fueled by a 56.4% surge in total revenue, which reached $82.1 million in Q3 2024, up from $52.5 million in Q3 2023. The company's gross premiums earned grew by 1.5% year-over-year, while net premiums earned saw a remarkable 48.2% increase, reflecting the company's strong underwriting business growth.
The company's underwriting performance also improved substantially, as evidenced by the combined ratio dropping from 62.7% in Q3 2023 to 57.7% in Q3 2024. This favorable trend was driven by lower current year catastrophe losses and higher net favorable reserve development. Additionally, ACIC benefited from a decrease in reinsurance costs as a percentage of gross earned premiums, which contributed to the overall profitability improvement.
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