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Reinsurance
 12 Months Ended
Dec. 31, 2024
Reinsurance Disclosures [Abstract]  
Reinsurance REINSURANCE
Our catastrophe reinsurance programs are designed primarily by utilizing third-party catastrophe modeling software and consulting with third-party reinsurance experts to project our exposure to catastrophe events. We evaluate modeled expected losses developed by the catastrophe modeling software using our risk portfolio data to estimate probable maximum losses ("PML") across multiple return periods and the average annual loss. The Company monitors and manages its catastrophe risk using this model output along with other internal and external data sources, such as our historical loss experience and industry loss experience, to develop our view of catastrophe risk.

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.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.

This reinsurance protection is an essential part of our catastrophe risk management strategy. It is intended to provide our stockholders with an acceptable return on the risks assumed by our insurance entities, 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. 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. Additionally, we face the risk that actual losses incurred from one or more catastrophic events may be above the modeled expected loss, resulting in losses exceeding our reinsurance coverage, which may result in a decline in surplus, and as a result, we may not be able to fulfill our obligations to policyholders, or we may not be able to maintain compliance with various regulatory financial requirements. 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. 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). 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 also provides sufficient coverage for a 1-in-100-year event followed by a 1-in-50-year event in the same treaty year, the probability of which is less than 0.1%. While we believe these catastrophe models are reliable 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.

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%.

IIC’s core catastrophe reinsurance program, which is reported under discontinued operations, provides coverage up to an exhaustion point of approximately $82,500,000 in the aggregate, with a retention of $2,500,000 per occurrence. Based on IIC’s PML, the program provides sufficient coverage for two 1-in-130-year events in the same season, indicating the probability of a single occurrence exceeding protection purchased is no more than 0.1%.

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
additional expense of approximately $6,300,000 for the year ended December 31, 2023, and a reduction in expense of approximately $6,300,000 and $15,700,000 during the three and six months ended June 30, 2024, respectively.

Where we think prudent, particularly where premium rates are high relative to the risk, we retain risk whereby AmCoastal purchases reinsurance from Shoreline Re, our captive reinsurance entity. 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.

The table below outlines the participation of Shoreline Re for each program, including premium received and capital at risk.

TreatyEffective DatesPremium 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 Agreement02/01/2024 - 02/01/2025$1,867,000$633,000
Quota Share Agreement06/01/2024 - 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.
(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.

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.

ReinsurerCompanies in ScopeEffective DatesCession RateStates in Scope
External third-partyAmCoastal06/01/2024 - 06/01/2026
20% (1)(2)
Florida
External third-partyAmCoastal06/01/2023 - 06/01/2024
40% (1)
Florida
External third-partyUPC, FSIC & AmCoastal06/01/2022 - 06/01/2023
10% (1)
Florida, Louisiana, Texas
TypTapUPC06/01/2022 - 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. 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.


Reinsurance recoverable at the balance sheet dates consists of the following:
 December 31,
 20242023
Reinsurance recoverable on unpaid losses and LAE$249,276 $271,736 
Reinsurance recoverable on paid losses and LAE14,143 69,084 
Reinsurance recoverable(1)
$263,419 $340,820 
(1) Our reinsurance recoverable balance is net of our allowance for expected credit losses. More information related to this allowance can be found in Note 14.
The following table depicts written premiums, earned premiums and losses, showing the effects that our reinsurance transactions have on these components of our Consolidated Statements of Comprehensive Income (Loss):
 Year ended December 31,
 202420232022
Premium written:
Direct$642,727 $635,593 $507,716 
Assumed5,078 116 20,444 
Ceded(370,210)(413,462)(229,352)
Net premium written$277,595 $222,247 $298,808 
Change in unearned premiums:
Direct$(5,730)$(41,227)$(44,646)
Assumed(3,467)10,201 (9,326)
Ceded5,592 70,839 (21,907)
Net decrease (increase)$(3,605)$39,813 $(75,879)
Premiums earned:
Direct$636,997 $594,366 $463,070 
Assumed1,611 10,317 11,118 
Ceded(364,618)(342,623)(251,259)
Net premiums earned$273,990 $262,060 $222,929 
Losses and LAE incurred:
Direct$231,537 $120,114 $746,186 
Assumed(4,077)3,767 16,887 
Ceded(158,141)(77,203)(666,964)
Net losses and LAE incurred$69,319 $46,678 $96,109 

Ceded losses incurred increased by $80,938,000 during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily as a result of the changes to our reinsurance contracts as described above, and Hurricane Milton, which made landfall in Florida as a Category Three hurricane.

The following table highlights the effects that our reinsurance transactions have on unpaid losses and loss adjustment expenses and unearned premiums in our Consolidated Balance Sheets:

 December 31,
 202420232022
Unpaid losses and LAE:
Direct$315,412 $332,396 $818,166 
Assumed6,675 15,342 (1,677)
  Gross unpaid losses and LAE322,087 347,738 816,489 
Ceded(249,276)(271,736)(731,666)
Net unpaid losses and LAE$72,811 $76,002 $84,823 
Unearned premiums:
Direct$281,887 $276,157 $234,930 
Assumed3,467 — 10,201 
  Gross unearned premiums285,354 276,157 245,131 
Ceded(160,893)(155,301)(84,461)
Net unearned premiums$124,461 $120,856 $160,670