American Integrity Insurance Group, Inc. (AII) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects strong financial performance with improved profitability and operational efficiency, as evidenced by the decreased expense ratio and combined ratio. The Q&A session supports this with management's confidence in legislative reforms and favorable reinsurance outlook. Despite some unclear responses, the overall sentiment is positive, particularly with a significant increase in book value per share and net income growth.
Key Financial Performance
Gross premiums written Increased by 49% to $239 million compared to $161 million in the third quarter of '24. The increase was driven primarily by new and renewal policies written through the voluntary market and strategic participation in the Citizens takeout program.
Gross premiums earned Increased by 34% to $222 million compared to $165 million in the third quarter of '24. This was driven by new and renewal policies written through the voluntary market and strategic participation in the Citizens takeout program.
Net premiums earned Increased by 28% to $52 million compared to $40 million in the third quarter of '24. The increase was driven by new and renewal policies written through the voluntary market and strategic participation in the Citizens takeout program.
Ceded premiums earned Increased by 36% to $170 million compared to $125 million in the third quarter of last year. This increase was due to the increase in gross premiums earned and the placement of the '25-'26 catastrophe excess of loss reinsurance program.
Net investment income Increased 84% to $6.9 million compared to $3.8 million in the third quarter of '24. This was driven by an increase in invested assets, primarily due to the IPO proceeds and the growth in in-force premiums.
Losses and loss adjustment expenses Increased 19% to $30 million compared to $25 million in the third quarter of '24. This was driven primarily by an increase in gross premiums earned, offset by the lack of catastrophe losses.
Underlying loss and loss adjustment expense ratio 50% for the third quarter of '25 compared to 36% in the third quarter of '24. This reflects normal quarterly variability and remains within underwriting expectations.
Policy acquisition expenses Decreased 20% to $6.2 million compared to $7.8 million in the third quarter of '24. This was driven by slightly lower acquisition costs associated with Citizens takeouts and increased ceding commissions.
Expense ratio Decreased by 10 percentage points to 25% for the third quarter of '25 from 35% in the third quarter of '24. This reflects enduring scale benefits and stronger ceding commissions.
Combined ratio 79% for the third quarter of '25 compared to 94% for the third quarter of '24. This demonstrates improved profitability and operational efficiency.
Net income available to common shareholders $13 million for the third quarter of '25. This reflects the company's ability to translate growth into profitability.
Adjusted net income $14 million for the third quarter of '25. This reflects sustained margin improvement through structural gains.
Book value per share $16.14 at September 30, '25, up 28.2% from $12.58 at year-end '24. This reflects the company's ability to grow equity and deliver shareholder value.
Operating Highlights
Commercial Residential Product Launch: Launched in October 2025, designed for Florida's condominium, townhome, and residential homeowners associations. First writings expected in Q4 2025, including participation in the November 2025 Citizens takeout.
Tri-County Florida Expansion: Growth initiative in the Tri-County region of Florida is gaining momentum with 26,493 policies in force, representing 6.5% of the book. Potential market share is 26% of the state's households.
Middle-Aged Homes Market: Reassessed and re-entered the middle-aged homes market post-legislative reforms. Currently, 32,202 HO3 policies in force, representing 7.9% of the portfolio. Estimated 25% of statewide housing stock meets criteria.
New State Expansion: Continued growth in Georgia and South Carolina through homebuilder agent relationships. Policies in North Carolina to begin in December 2025.
Policy Growth: Wrote 25,985 new policies in Q3 2025, bringing year-to-date total to over 78,000, a 25% increase over the same period in 2024. Total policies in force increased 49% year-over-year to 406,000.
Retention Levels: Retention levels reached 82.8% in Q3 2025, contributing to a 19% increase in voluntary policies in force over the past year.
Non-Cat Loss Ratio: Non-cat losses are favorable, with $0.17 paid out per dollar of gross premium earned, aligning with 2025 expectations.
Underwriting Focus: Maintained stringent underwriting standards while expanding into new markets and segments, ensuring adequate risk-adjusted returns.
Reinsurance Strategy: Purchased more reinsurance coverage for 2025-2026 to reflect increased in-force premium and total insured value.
Risk or Challenges
Expansion into Tri-County region of Florida: The company is expanding into the Tri-County region of Florida, which represents a significant market opportunity. However, this expansion carries risks such as potential underwriting challenges, market competition, and the need for disciplined growth to avoid overexposure.
Focus on middle-aged homes: The company is re-entering the middle-aged homes market, which was previously avoided due to underwriting concerns. While legislative reforms have made this market more attractive, there is still a risk of mispricing or underestimating potential losses.
Launch of commercial residential product: The company has launched a new commercial residential product targeting Florida's condominium, townhome, and residential homeowners associations. This new product carries risks related to market acceptance, underwriting accuracy, and scaling responsibly.
Dependence on Florida market: The company remains heavily reliant on the Florida market, which is prone to natural disasters like hurricanes. While this year has been favorable in terms of catastrophe losses, the inherent risk of operating in a disaster-prone region remains significant.
Reinsurance costs and coverage: The company has increased its reinsurance coverage to reflect higher in-force premiums and total insured value. However, reinsurance costs and the availability of adequate coverage could pose challenges, especially in the event of a major catastrophe.
Citizens takeout program: While the Citizens takeout program has contributed to growth, its future role is expected to be modest. This shift could impact the company's growth trajectory if voluntary market growth does not meet expectations.
Guidance & Outlook
Tri-County Region Growth: The company is expanding its growth initiative in the Tri-County region of Florida, with 26,493 policies in force at the end of Q3 2025. This represents 6.5% of the company's book, with potential market share in the area estimated at 26%. The company expects meaningful growth in this region in 2026.
Middle-Aged Homes Market: The company is reorienting its sales efforts to target middle-aged homes, which now represent 7.9% of its portfolio. This segment is seen as a large addressable market with significant growth potential, and the company plans to expand its presence while maintaining disciplined underwriting.
Commercial Residential Product Launch: A new commercial residential product was launched in October 2025, targeting Florida's condominium, townhome, and residential homeowners associations. Initial writings are expected in Q4 2025, with plans for responsible scaling.
Geographic Expansion: The company is expanding its operations into North Carolina starting December 2025, while continuing growth in Georgia and South Carolina. Florida remains the core market.
Voluntary Market Growth: The company wrote 25,985 new policies in the voluntary market in Q3 2025, contributing to a year-to-date total of over 78,000 policies, a 25% increase compared to the same period in 2024. Voluntary growth is expected to be a significant driver moving forward.
Reinsurance and Catastrophe Losses: The company anticipates a favorable year for catastrophe losses, which could positively impact reinsurance costs for 2026. The company has purchased more reinsurance coverage to reflect increased in-force premiums and insured value.
Shareholder Return Plan
The selected topic was not discussed during the call.
Key Q&A
Earnings Word Cloud
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
