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AS

Ategrity Specialty Insurance Co Holdings (ASIC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered profitable growth: total revenue $101.78M, net income attributable to stockholders $17.62M, diluted EPS $0.39; adjusted diluted EPS $0.41 with a combined ratio of 88.9% versus 94.0% in Q2 2024 .
  • Significant estimate beats: EPS beat consensus by ~$0.10 (actual $0.41 vs $0.308; +33%), revenue beat by ~$3.6M (actual $101.78M vs $98.20M) — driven by stronger underwriting and higher net investment income; 5 EPS estimates, 1 revenue estimate *.
  • Gross written premiums rose 32.3% to $167.5M, with casualty +56.7% and property +3.7%; book value per share reached $11.64 at quarter-end .
  • Management reaffirmed 2H 2025 outlook: mid- to high-20s GWP growth and combined ratio in the low-90s, citing “productionized underwriting” and disciplined pricing as competitive advantages .
  • IPO completed in June raised $130.3M gross proceeds (7,666,667 shares), bolstering invested assets and book value; net investment income rose to $11.89M vs $5.73M YoY .

What Went Well and What Went Wrong

What Went Well

  • Strong underwriting performance: combined ratio improved to 88.9% (loss ratio 58.0%, expense ratio 31.0%), reflecting lower catastrophe losses and improved acquisition cost leverage .
  • Distribution and pricing execution: CEO highlighted “productionized underwriting” and technology-enabled processes; President emphasized disciplined deployment, above-technical rates in casualty, and firm property rates amid modest market softening .
  • Investment income and capital strength: net investment income more than doubled to $11.89M; IPO proceeds increased invested assets to $955.266M and book value per share to $11.64 .

What Went Wrong

  • Property growth modest (+3.7%) as management prioritized price over volume, reduced exposure in certain coastal zones, and raised severity assumptions to reflect prospective tariff impacts on building materials and labor .
  • Operating expenses, net of fee income, were 12.4% of net earned premiums — flat to slightly higher YoY due to 2024 investments in personnel, systems, and public company infrastructure .
  • Casualty mix shift extends reserve tail duration; management is comfortable but acknowledged liability tail implications as casualty reaches 60–70% of mix target range .

Financial Results

Summary vs Prior Year and Prior Quarter

MetricQ2 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$74.37 $86.20*$101.78
Net Income Attributable to Stockholders ($USD Millions)$4.94 $8.46*$17.62
Diluted EPS (GAAP, $USD)$0.14 $0.02*$0.39
Adjusted Diluted EPS ($USD)$0.14 N/A$0.41
Loss Ratio (%)60.8% N/A58.0%
Expense Ratio (%)33.2% N/A31.0%
Combined Ratio (%)94.0% N/A88.9%

Values marked with * retrieved from S&P Global.

Actual vs Consensus (Q2 2025)

MetricConsensusActualSurprise
EPS ($USD)$0.308*$0.41 +$0.10 (+33%)
Revenue ($USD Millions)$98.20*$101.78 +$3.58 (+3.6%)
EPS – # of Estimates5*——
Revenue – # of Estimates1*——

Values marked with * retrieved from S&P Global.

Segment Breakdown (Gross Written Premiums)

SegmentQ2 2024 ($M)Q2 2025 ($M)YoY %
Casualty$68.30 $107.02 +56.7%
Property$58.31 $60.48 +3.7%
Total GWP$126.61 $167.50 +32.3%

Key KPIs

KPIQ2 2024Q2 2025
Net Premiums Earned ($M)$72.64 $86.93
Underwriting Income ($M)$4.39 $9.61
Net Investment Income ($M)$5.73 $11.89
Adjusted ROE (%)5.9% 14.5%
Book Value per Share ($)—$11.64

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Written Premium Growth2H 2025Mid- to high-20s (shared during IPO process) Mid- to high-20s Maintained
Combined Ratio2H 2025Low-90s (shared during IPO process) Low-90s Maintained

Management also indicated firm property rates with low-teens increases and prospective pricing actions given mid-single-digit cost impacts from tariffs, but did not provide formal quantified property guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 & Q-1)Current Period (Q2 2025)Trend
Technology/AutomationN/A“Productionized underwriting” leveraging analytics and automation to lower unit costs and enhance underwriting quality Positive progress
Supply Chain/Tariffs/MacroN/ARaised severity assumptions prospectively; mid-single-digit cost increases expected from tariffs; maintained firm pricing Proactive risk/pricing stance
Product PerformanceN/ACasualty strong (+56.7% GWP); property modest (+3.7%) with disciplined footprint and coastal exposure reduction Mixed: casualty strength, property cautious
Regional StrategyN/AProject Heartland accelerating Midwest penetration; >3 dozen partners activated Scaling distribution
Regulatory/LegalN/ANo specific new items; paid-to-incurred ratio dynamics discussed (mix and maturation) Stable; monitoring
R&D/InnovationN/AAdvancing next phase of automation and pre-priced solutions; more to come Building pipeline

Management Commentary

  • CEO: “We executed with focus and discipline… Our productionized underwriting model, which combines technical underwriting with technology-enabled processes, is gaining traction… investments in automation and analytics will accelerate our opportunity to redefine how E&S insurance… is underwritten and delivered.”
  • CFO: “Underwriting income… $9.6M up 119% YoY… combined ratio of 88.9%, down from 94% due to reductions in both our loss and expense ratio… policy acquisition costs… declined to 18.5% from 21.1% thanks to higher ceding commissions and a more favorable business mix.”
  • CUO: “We achieved above-technical rates in casualty, held firm on property rates even as parts of the market began to soften… leveraging segmentation, analytics‑driven pricing, and automation to deliver strong, profitable growth.”

Q&A Highlights

  • Casualty mix shift: Greater casualty exposure extends tail duration; management targets 60–70% casualty share and remains comfortable with reserve posture .
  • Project Heartland: >3 dozen partners activated; early-stage production ramp provides a long runway for growth .
  • Property pricing and tariffs: Low-teens rate increases; mid-single-digit cost pressures from tariffs anticipated; selective coastal exposure reduction to optimize cat reinsurance costs .
  • Paid-to-incurred ratio: Higher YoY relates to maturation of casualty reserves and prior faster property growth; trend expected to transition as property decelerates .
  • Outlook: Reaffirmed mid-/high-20s GWP growth and low-90s combined ratio for 2H 2025, assuming consistent competitive dynamics in SME E&S markets .

Estimates Context

  • EPS beat: Actual adjusted EPS $0.41 vs consensus $0.308; surprise +$0.10 (+33%), driven by underwriting improvements and net investment income more than doubling YoY *.
  • Revenue beat: Actual total revenue $101.78M vs consensus $98.20M; surprise +$3.58M (+3.6%) *.
  • Coverage depth: 5 EPS estimates and 1 revenue estimate for Q2 2025 *.
  • Note on EPS definitions: The press release reports GAAP diluted EPS $0.39 and adjusted diluted EPS $0.41; consensus “Primary EPS” aligns with normalized/adjusted reporting conventions used by S&P Global *.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat and margin expansion: Strong underwriting drove combined ratio to 88.9% and EPS/revenue beats; investment income tailwind amplified the quarter *.
  • Growth composition matters: Casualty-led growth (+56.7%) supports profitability but extends reserve tail; management’s disciplined posture and technical rates mitigate risk .
  • Property prudence: Modest property growth (+3.7%) reflects firm pricing, tariff-aware severity assumptions, and targeted coastal exposure reductions — prioritizing long-term economics over near-term volume .
  • Distribution flywheel: Project Heartland and >3 dozen new partners bolster submission volume and market penetration, supporting mid-/high-20s growth guidance for 2H .
  • Operating leverage: Lower acquisition cost ratio and automation-led efficiencies are improving unit costs and underwriting quality, reinforcing the productionized model’s scalability .
  • Capital strength post-IPO: Added capital expanded invested assets and book value per share ($11.64), enabling growth and investment in platforms/analytics .
  • Watch items: Monitor competitive intensity in SME E&S, casualty tail development, tariff and input cost impacts on property severity, and paid-to-incurred trends through 2H .

Notes:

  • We searched for prior quarters’ earnings materials (Q1 2025, Q4 2024) and did not find separate 8-Ks or transcripts; period comparisons rely on reported YoY data and S&P Global quarterly fundamentals where noted [ListDocuments results above].
  • Where prior-quarter figures are shown with an asterisk, they are sourced from S&P Global and may reflect definitional differences versus the company’s reported totals. Values marked with * retrieved from S&P Global.