Name: ATLANTIC AMERICAN CORP Q1 2025 Earnings Call
Start: 2025-05-13T00:00:00.000Z

Executive Summary

Q1 2025 swung to profitability: net income $0.80M and $0.03 EPS versus a net loss of $(2.00)M and $(0.10) EPS in Q1 2024, driven by 5.3% premium revenue growth and favorable life & health loss experience .
Operating income (non-GAAP) improved to $0.27M from $(2.39)M YoY; net revenue rose to $50.13M from $46.997M, while property & casualty (P&C) losses remained elevated and management pointed to recent rate actions to support forward results .
Sequentially vs Q4 2024, revenue and EPS ticked up (revenue $50.13M vs $49.04M; EPS $0.03 vs $0.02), with life & health loss ratio improving YoY and P&C loss ratio remaining high; book value per share rose to $4.80 from $4.61 .
No formal quantitative guidance was provided; management emphasized momentum in life & health and anticipated benefits from P&C rate adjustments. AM Best affirmed group subsidiary ratings and parent ICR with stable outlook, supporting capital strength and liquidity narratives .

What Went Well and What Went Wrong

Returned to profitability: “improved profitability and solid growth in insurance premiums” with net income $0.8M and operating income $0.3M for Q1 2025 .
Life & health segment improvement: premium revenue rose to $28.58M (from $26.67M) and incurred losses fell to $17.32M (from $19.11M), supporting margin recovery .
Capital metrics strengthened: shareholders’ equity increased to $102.39M and book value per share to $4.80; total cash & investments rose to $268.42M .

P&C losses elevated: incurred losses of $14.60M vs $12.81M YoY and a high segment loss ratio, with management noting challenges in auto liability .
Investment income softer: net investment income edged down to $2.44M vs $2.56M YoY, modestly offset by $0.77M unrealized equity gains .
Ongoing control and macro risks: forward-looking disclosures highlight a material weakness in internal control over financial reporting and broader macro/industry risks, including reinsurance availability and auto market inflationary pressures .

Metric	Q1 2024	Q4 2024	Q1 2025
Insurance premiums, net ($USD Millions)	$44.552	$45.404	$46.913
Total revenue ($USD Millions)	$46.997	$49.043	$50.125
Net income ($USD Millions)	$(1.998)	$0.412	$0.802
Diluted EPS ($USD)	$(0.10)	$0.02	$0.03
Operating income (non-GAAP) ($USD Millions)	$(2.392)	$(0.749)	$0.268
Net income margin (%)	(4.25%)	0.84%	1.60%

Segment breakdown

Segment Metric	Q1 2024	Q4 2024	Q1 2025
Life & Health premiums ($USD Millions)	$26.674	$29.351	$28.582
Life & Health incurred losses ($USD Millions)	$19.112	$16.597	$17.316
Life & Health loss ratio (%)	71.7%	56.5%	60.6%
P&C premiums ($USD Millions)	$17.878	$16.053	$18.331
P&C incurred losses ($USD Millions)	$12.813	$14.742	$14.597
P&C loss ratio (%)	71.7%	91.8%	79.7%

KPIs and balance sheet

KPI	Dec 31, 2024	Mar 31, 2025
Total cash & investments ($USD Millions)	$265.696	$268.424
Total assets ($USD Millions)	$393.428	$388.436
Insurance reserves & policyholder funds ($USD Millions)	$225.106	$220.520
Debt ($USD Millions)	$37.761	$37.760
Shareholders’ equity ($USD Millions)	$99.613	$102.385
Book value per share ($)	$4.61	$4.80
Statutory capital & surplus – Life & Health ($USD Millions)	$32.443	$33.468
Statutory capital & surplus – P&C ($USD Millions)	$47.670	$47.614

Metric	Period	Previous Guidance	Current Guidance	Change
Formal quantitative guidance	2025	Not provided	Not provided	Maintained (no guidance)
P&C rate actions	2025+	N/A	“recent rate adjustments” expected to benefit results	Raised rates (qualitative)
Dividend per share	2025 annual	$0.02 (annual) declared; payable 4/23/25 to holders of record 4/9/25	$0.02	Maintained (annual declaration)

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Life & Health performance	Unfavorable underwriting in group life & Medicare supplement; premium flat-to-down nine months	Favorable loss experience drove quarterly profitability; strong Medicare supplement sales in AEP	Favorable loss experience; premium +5.3% YoY; momentum robust	Improving since Q4; sustained into Q1
P&C auto liability	Elevated frequency/severity in auto liability; inflationary market	Elevated P&C losses; management taking rate actions	Elevated losses persist; expects rate adjustments to help	Stabilizing actions underway, losses still high
Capital and ratings	—	Equity $99.6M; BVPS $4.61	Equity $102.4M; BVPS $4.80; AM Best affirmed ratings with stable outlook	Strengthening capital; ratings stable
Internal controls	Material weakness noted in filings	Risk factor reiterated	Risk factor reiterated	Ongoing remediation focus
Outlook commentary	Cautiously optimistic; strategy execution emphasized	Optimistic path forward; rate actions planned	Confident in remainder of 2025; opportunities ahead	Confidence building

“We are pleased to report strong quarterly results, highlighted by improved profitability and solid growth in insurance premiums. New business momentum within our life and health segments remains robust... we expect recent rate adjustments to begin positively impacting results in the coming periods.” — Hilton H. Howell, Jr., Chairman, President & CEO .
Management defines operating income (loss) to isolate core operations excluding tax, realized gains/losses, and unrealized equity marks; reconciliation provided in financial data .
Forward-looking disclosures emphasize macro, reinsurance, underwriting, cybersecurity, and internal control risks, providing context for volatility drivers .

No earnings call transcript was available for Q1 2025; the company’s press release served as the primary source, and no Q&A themes were disclosed .

Wall Street consensus estimates (EPS, revenue, target price) via S&P Global were unavailable for Q1 2025 for AAME; the company appears undercovered by sell-side, so no beat/miss analysis versus consensus can be provided (Values retrieved from S&P Global).*

The pivot to profitability and positive non-GAAP operating income signals underlying improvement, led by life & health underwriting and premium growth .
P&C remains the swing factor; elevated auto losses keep segment ratios high, but rate increases are in place and should begin to flow through over coming periods—monitor loss ratio trajectory and pricing adequacy .
Capital position improved: equity and BVPS higher; AM Best’s affirmation with stable outlook supports balance sheet strength and liquidity narratives .
Lack of formal guidance and limited sell-side coverage can increase volatility on reported results; position sizing should consider potential swings in segment loss ratios and investment mark-to-market .
Near-term trading: catalysts include continued life & health momentum, evidence of P&C rate adequacy, and any progress updates on internal control remediation; watch for quarterly loss ratio trends and premium growth prints .
Medium-term thesis: execution on pricing and underwriting discipline in P&C, diversification within life & health beyond Medicare supplement, and stability in investment income underpin sustainable profitability .
Dividend policy remains shareholder-friendly with a $0.02 annual dividend declared; assess payout sustainability against underwriting variability and capital needs .