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Management attributed the significant growth in 2025 net income to a multi-year ‘deliberate and disciplined’ restructuring of the business base, moving away from dependence on market cycles towards real underwritten profitability.
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Performance was driven by achieving price parity in 90% of operating geographies, allowing the company to reopen previously suspended markets for new business.
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The company successfully reversed $31.8 million in net pretax losses from the California wildfires, which management cites as a significant revenue strength of the company.
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Strategic capital allocation has been shifted towards products and regions with the strongest returns, with tough choices to exit low-cost policies and aligned professional distribution networks.
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Operational improvements include deep integration of data-driven analytics and AI to accelerate risk selection and improve claims capabilities while maintaining regulatory compliance.
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Management touted the benefits of Florida’s tort reform, noting that the decline in litigation has reduced the industry’s loss expectations for recent hurricanes like Milton, benefiting both the company and its reinsurers.
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Revenue growth is expected to accelerate through 2026 as the company ramps up new business efforts, supported by a 60% increase in new business premium generation in Q4 2025.
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The company plans to enter the Texas market on an E&S basis in 2026, focusing on Tier I and Tier II geographies for geographic diversification.
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Management expressed optimism for improved reinsurance rates in 2026 due to increased capacity in the traditional and ILS markets and a favorable lack of recent catastrophe losses.
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The combined ratio is expected to remain favorable for the next several years, although management anticipates that it will eventually “flatten” as prices stabilize and market competition normalizes.
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Investment income is expected to continue to move upward as the company lengthens the yield curve and benefits from increased cash flows.
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Underlying book value per share increased 72.5% year over year to $16.39, driven by strong net income and a reduction in unrealized losses on fixed income securities.
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A new $25 million share buyback plan is in place through 2026, with management indicating they may seek more board authority if shares become undervalued.
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The company reduced its net quota share program at NBIC, which will result in higher net income, but higher policy acquisition costs due to lower ceding commissions.
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Statutory surplus increased to $392.6 million from $106.9 million, which management said provides sufficient capacity to support expected organic growth in 2026.
