AMERICAN COASTAL INSURANCE Corp 8-K

What Happened

• American Coastal Insurance Corporation (ACIC), through its insurance subsidiary American Coastal Insurance Company (AmCoastal), filed an 8-K reporting renewal of its Core catastrophe reinsurance (Core CAT) program effective June 1, 2026. ACIC purchased approximately $1.918 billion of occurrence-based aggregate limit for 2026/27, up $241.5 million (14.4%) from the $1.676 billion purchased for 2025/26.
• The program includes $200 million of new multi‑year catastrophe bond capacity placed in two $100 million tranches, a 15.0% multi‑year external quota share with an unaffiliated A+ reinsurer, an estimated first-event limit of $1.68 billion, and first-event retention of up to $49 million (AmCoastal retains $26.5 million; an affiliated captive retains $22.5 million). ACIC elected 90% coverage under the Florida Hurricane Catastrophe Fund (FHCF) for the FHCF reimbursement contract effective June 1, 2026.

Key Details

• Total 2026/27 occurrence-based aggregate limit: ~$1.918 billion (14.4% increase vs. 2025/26).
• Catastrophe bonds: $200 million new capacity in two $100M tranches (one below/alongside FHCF layer; one at the top). Combined cascading limit in multi-event scenarios: $435 million.
• Retentions: first-event retention up to $49M (15.4% of 12/31/2025 stockholders’ equity); second-event retention up to $25M (7.9% of 12/31/2025 stockholders’ equity).
• Cost and reinstatement exposure: provisional cost of excess-of-loss reinsurance (excluding the 15% quota share) ≈ $179.5M vs. $201.85M in 2025/26; maximum reinstatement/additional premium exposure $0.9M (down $4.9M, or 84%, from prior year).

Why It Matters

• The expanded $1.918B program and added catastrophe bond capacity increase ACIC’s protection against large single and multiple catastrophe events, which can reduce the risk of large losses hitting the company’s reported capital.
• Lower provisional reinsurance cost (excluding quota share) and sharply reduced reinstatement exposure can help stabilize near-term underwriting results and capital volatility following a major event.
• Higher retentions (first- and second-event increases) mean ACIC will retain more losses up front before reinsurance responds—important for investors assessing potential capital impact after storms.