Ategrity Specialty Q4 2025 Earnings Report

Ategrity Specialty EPS Results

• Actual EPS: $0.51
• Consensus EPS: $0.35
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: N/A

Ategrity Specialty Revenue Results

• Actual Revenue: $123.34 million
• Expected Revenue: $111.45 million
• Beat/Miss: Beat by +$11.89 million
• YoY Revenue Growth: N/A

Ategrity Specialty Announcement Details

• Quarter: Q4 2025
• Date: 2/19/2026
• Time: After Market Closes
• Conference Call Date: Thursday, February 19, 2026
• Conference Call Time: 5:00PM ET

Ategrity Specialty (NYSE:ASIC) is a specialty insurance company that provides customized property and casualty coverage for complex, unusual or difficult-to-place risks. The company operates primarily in the excess and surplus lines market, where insurance products are tailored for businesses and exposures that may not fit standard policies.

Its offerings include specialty commercial insurance solutions across areas such as property, casualty, professional liability and other complex risks. Ategrity distributes its products through wholesale insurance brokers and works with brokers and policyholders to structure coverage for specialized industries and situations.

The company serves customers primarily in the United States. Ategrity Specialty was established to focus on underwriting specialty risks and building a flexible platform for brokers seeking customized insurance solutions.

Ategrity Specialty Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Ategrity delivered a record quarter with gross written premiums up 30% YoY, net earned premiums +34%, adjusted net income of $25.4M, and a record 84.9% combined ratio.
• Positive Sentiment: Underwriting discipline and scale drove operating leverage—submissions rose ~90% YoY, net written premiums increased 44%, and the expense ratio improved 6.1 points to 27.8%.
• Neutral Sentiment: Management says an AI roadmap (operationalized in back office) is being embedded into underwriting workflows in 2026 and is expected to lower expenses, but deployment remains phased and subject to testing and execution risk.
• Positive Sentiment: The company announced a $50 million share repurchase program, which management cites as a use of excess capital after recent earnings and book value gains.
• Neutral Sentiment: Outlook calls for Q1 growth ~20 percentage points above the E&S market and a combined ratio just below 90%, with casualty targeted at 60–70% of mix (67% this quarter), which are forward-looking targets that depend on continued market conditions and execution.

Presentation

[Operator]

Good afternoon, everyone, and thank you for joining us today for Ategrity's fourth quarter fiscal year 2025 earnings results conference call. Speaking today are Justin Cohen, Chief Executive Officer, Chris Schenk, President and Chief Underwriting Officer, and Neelam Patel, Chief Financial Officer. After Justin, Chris, and Neelam have made their formal remarks, we will open the call to questions. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

[Operator]

If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you.

[Operator]

Before we begin, I would like to mention that certain matters discussed in today's conference call are forward-looking statements relating to future events, management's plans and objectives for the business, and the future financial performance of the company that are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are referred to in our press release issued today, our final prospectus, and other filings filed with the SEC.

[Operator]

We do not undertake any obligation to update the forward-looking statements made today. Finally, the speakers may refer to certain adjusted or non-GAAP financial measures on this call. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is also available in our press release issued today, a copy of which may be obtained by visiting the investor relations website at investors.ategrity.com. And with that, I will now turn the call over to Justin.

[Justin Cohen, CEO at Ategrity]

Good evening and thank you all for joining Ategrity's fourth quarter earnings call. This is Justin Cohen, and I'm joined here today by Chris Schenk, our President and Chief Underwriting Officer, and Neelam Patel, our CFO. Ategrity once again delivered record results in fourth quarter, demonstrating strength on both the top and bottom line. Gross written premiums grew 30% year over year, exceeding our guidance of outperforming E&S industry growth by 20 percentage points. Our 84.9% combined ratio in the quarter is a new record for the company.

[Justin Cohen, CEO at Ategrity]

We continue to profitably grow our market share in the small and mid-sized E&S space because of three key factors. First, in our core specialty verticals, we have identified market gaps and built targeted products around them, producing structural growth while maintaining strict technical discipline. Second, we have grown our distribution network of nearly 600 partners.

[Justin Cohen, CEO at Ategrity]

Through tight alignment of product and execution, we have driven strong submission volume, including nearly 90% year-over-year growth this quarter. Third, we have engineered our workflows and automation to deliver speed with precision, responding quickly to brokers while maintaining rigorous standards at scale. Together, these factors have driven both growth and margin expansion in a moderating E&S market.

[Justin Cohen, CEO at Ategrity]

Turning to additional dynamics from the quarter. In property, we grew 18% year-over-year, with strong sequential acceleration in stark contrast to the overall property market, which contracted as a whole. By focusing on small and medium-sized attritional risks where we have an underwriting advantage, we position ourselves away from the more cyclical, large account, catastrophe-exposed market. Our 84.9% combined ratio reflects favorable loss experience, business mix, and operating leverage.

[Justin Cohen, CEO at Ategrity]

Net earned premiums grew 25 percentage points faster than operating expenses net of fees, driving a 6.1 percentage point improvement in our overall expense ratio, even as we continue to invest in growth initiatives and technology. On technology, in recent weeks, the capital markets have focused on the risks of AI to the specialty insurance industry. At Ategrity, over two years ago, we developed a clear roadmap for integrating AI and made critical investments in that direction. Those investments have now been operationalized, and we will provide some additional context later in the call.

[Justin Cohen, CEO at Ategrity]

Finally, stepping back to broader E&S market dynamics. While industry growth has decelerated, it is less the case in our small and mid-sized segment. Competitive intensity increased marginally again this quarter, but we continue to stand out through our business model and execution, driving growth in our market share. With that, I will turn it over to Neelam to discuss the financial results.

[Neelam Patel, CFO at Ategrity]

Thanks, Justin. We delivered another strong quarter with adjusted net income of $25.4 million, up from $22.7 million in the same quarter last year, driven by top-line growth, improving margins, and continued strength in our investment income. Our gross written premiums were up 30% in the quarter, and the growth was broad-based. Casualty premiums grew 38% and property premiums grew 18%. Net written premiums increased 44%, which reflects higher retention year over year.

[Neelam Patel, CFO at Ategrity]

Net earned premiums were up 34%, which is less than net written premium growth because of the natural lagged recognition of our growth trajectory. Net earned premium growth accelerated sequentially due to our expanded premium base and the impact of the reduction in our quota share reinsurance in 2025.

[Neelam Patel, CFO at Ategrity]

Our fee income was $2.3 million, compared to $0.4 million a year ago, reflecting standard policy fees implemented in 2025. Our underwriting income for the quarter was $15.5 million, up 160% year-over-year.... That translates into a combined ratio of 84.9%, compared to 92.3% last year, due to reductions in both our loss and expense ratios.

[Neelam Patel, CFO at Ategrity]

The loss ratio came in at 57.1%, down 1.2 points year-over-year, driven by strong underlying results in our property business. We again had no prior year development. Catastrophe losses were 3.2% of net earned premium, down from 3.7% last year, due to very few catastrophe events in the fourth quarter.

[Neelam Patel, CFO at Ategrity]

On expenses, the overall expense ratio improved 6.1 points to 27.8%. Operating expense was 10.5% of net earned premiums, down 2.4 points year-over-year, and lower than second quarter and third quarter of 2025. That improvement was driven by earned premiums growing faster than operating expenses, along with the benefit of higher fee income. Policy acquisition costs as a percent of net earned premiums declined to 17.3% from 21%. The improvement was primarily mix-driven, as growth has been concentrated in lines of business carrying lower acquisition costs and higher ceding commissions.

[Neelam Patel, CFO at Ategrity]

Moving on to investment results. Net investment income was $11.6 million, up from $6.3 million last year, reflecting a larger investment portfolio. Realized and unrealized gains were $6.7 million, supported by strong results in our utility and infrastructure portfolio.

[Neelam Patel, CFO at Ategrity]

Our effective tax rate was 20.2%, bringing net income to $25.3 million. Adjusted net income was $25.4 million, or $0.51 per diluted share. Turning to the balance sheet, cash and investments increased by $45 million from the third quarter to $1.1 billion, reflecting strong operating cash flow. Book value increased by $26 million, driven by retained earnings. Our book value per share ended the quarter at $12.78, up 21% since the IPO. Overall, the quarter reflects strong growth, underwriting discipline, and operating leverage. With that, I'll turn it over to Chris to discuss underwriting and operating performance.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Thanks, Neelam. With 30% growth and an 84.9% combined ratio, this was another record quarter for Ategrity. Core operating metrics, including retention, hit ratios, submissions, and rate change, were in line with or above our plan. Our cost of product indicators, including frequency and severity signals, continued to track favorably. These results reflect the strength of our productionized underwriting model, which is built on vertical specialization, deep expertise, and structured underwriting. I want to highlight three drivers behind our results.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

First, we have capitalized on growth opportunities that have been overlooked by peers. These are differentiated pathways for growth that we can uniquely identify because we specialize in specific verticals and microsegments. Approximately half of our growth this quarter came from strategic initiatives like Project Heartland, retail trade, and our multifamily developer product.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

In property, we exited 2025 with premium growth and renewal rate increases. We grew 18% while many peers contracted. This growth came from states that are often overlooked, like North Dakota, Ohio, and Nebraska. In property, we also achieved full-year rate change in the high single digits. Turning to casualty, there we grew 38% and achieved low teen full-year rate increases. Our management and professional liability lines were strong contributor, with premium more than tripling despite broader softening conditions.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Second, we achieved greater wallet share with our partners. Notably, our 2023 and 2024 distribution cohorts delivered over 100% same-store growth. These partners had strong renewals and increased new business placement with Ategrity. Meanwhile, our 2025 cohort added 25% more new partners to our distribution network, and we are seeing strong early signs of engagement.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Our submissions increased roughly 90% year over year. We achieved premium growth by quoting more business from a larger opportunity set while maintaining pricing discipline. Third, our underwriting platform is driving speed and operating leverage. We are delivering fast, predictable, and market-ready quotes without diluting technical rigor. In our brokerage channel, policy count increased 3.5x along record high transaction volumes. Our underwriting efficiency more than doubled. We produced record high quotes while reducing turnaround times.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Process standardization and tech automation allowed us to absorb that growth while driving operating leverage. This contributed to a 2.4-point reduction in our operating expense ratio year over year. Looking ahead to 2026, we are executing on initiatives for the next wave of growth. This includes intensifying our regional strategies. In Florida, we launched a brokerage package product supported by a dedicated underwriting team.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

It is one of the few products of its kind in the market. In New England, we are stepping up to fill a market gap with a playbook for older buildings and dense mixed-use exposures. In the Midwest, we are doubling down on Project Heartland with a comprehensive branded product. These growth pathways are unique and should allow us to continue to outpace the market. Finally, I want to build on Justin's earlier comments on AI. We have been executing on a distinct roadmap for over two years now.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

AI has already been deployed in our back office, improving risk qualification, data preparation, and parameter optimization. In 2026, we are now embedding AI capabilities directly into underwriting workflows with solutions that were built by our in-house innovation lab.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Our underwriting model is perfect for implementing AI because it is structured and built on technical pricing with clear risk selection criteria. The way we select risk and deviate from technical rates is very prescriptive, and as such, we can integrate AI with disciplined guardrails and extract real economic value. We see this as a step change for the company.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Much of the heavy lifting has been done, but we are taking a responsible approach, and we'll be testing and ramping deployment over the course of this year. We expect this to drive our expense ratio lower once it is fully deployed this year. With that, I'll turn it back to Justin for closing comments.

[Justin Cohen, CEO at Ategrity]

Thanks, Chris. This was a strong quarter by any measure. We grew top line, expanded margins, and continued to deepen distribution relationships, all while maintaining underwriting discipline in a moderating market.

[Justin Cohen, CEO at Ategrity]

Our performance reflects a purpose-built model that is being executed with rigor. With that context, let me turn to our outlook. Our guidance for first quarter 2026, consistent with last quarter's guidance, is for a growth rate that is 20 percentage points above E&S market growth, reflecting more market share gains in the strength of our approach. Further, we are anticipating a combined ratio just below 90%. One last item to cover.

[Justin Cohen, CEO at Ategrity]

Today, we filed an 8-K announcing a share repurchase program, and we are happy to address any questions on that in the Q&A. With that, we thank you for your time listening. And Operator, can you please open it up for questions?

[Operator]

I sure can, and at this time, I would like to remind everyone in order to ask a question, again, star one on your telephone keypad. Once again, star one. In the interest of time, we ask that you please limit your questions to one primary question and one follow-up. Thanks in advance, and we will pause just a moment to compile the Q&A roster. All right. Looks like our first question today comes from the line of Christian Getzoff with Wells Fargo. Christian, please go ahead.

[Christian Getzoff, Senior Equity Analyst at Wells Fargo]

Hi, good afternoon. Thank you for taking my question. My first question is, can you parse out the rate environment you're seeing, particularly in casualty and property, separately relative to loss trends? And is it safe to assume, just given the current rate environment, we should see your mix continue to shift towards casualty in 2026?

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Chris? Yeah, so I'll start with casualty. The rating environment there is still strong in our verticals. There's a good deal of demand. We're seeing that come through in the submission flow, and we're holding firm on pricing. Our technical rates are on a prospective basis. So we have achieved rates above trend, and we don't see that slowing down in the short term. However, given market dynamics and given where we're competing, you know, we have left the flexibility to protect our renewals if there's a shift in the market on all of our lines. So if there's any slowdown in rates, that would be from that source.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

On property, we are playing in a very differentiated playing field in the Midwest. We're not seeing a lot of competition going after the type of business we're winning, so we are able to get the rates that we require for that. We have priced in for tariffs and other factors that are affecting severity, so we are rate adequate on property also. And we have achieved rates above trend.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

And on mix, to your question on mix, we've said in the past that 60% to 70% casualty is the target range for where we expect to be on casualty. We were at 67% this quarter, and we will continue to be within the range, and we shouldn't expect us to deviate from there. So around where we are is a strong expectation for mix.

[Christian Getzoff, Senior Equity Analyst at Wells Fargo]

Got it. Thank you. And then on Project Heartland, I guess, how can you guys quantify how much runway there is in expanding distribution and any quantification of how much this initiative has added to premium growth in the year?

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Yeah. So, there's two parts to Project Heartland. It is, there's an appointment component, adding more partners, and we are nearing the end of that phase. It's more about getting more wallet share from partners. So, we, we're just at the beginning of that phase. That is a... you know, we feel like the, the, the investments we have made in our... in the Midwest, along... not just in distribution, but in terms of developing products and really making a unique play for in our verticals, is really what's allowing us to stand out. So, we see a huge runway for growth.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

As I mentioned in the comments, we are launching a heartland product that will allow us to stand out in the market. It's really a marketing tactic, but it's also, you know, a way for our coverage and our offering to be instantly recognized. That's going to be the next phase of our efforts there. It does present to us, you know, much more, a longer runway for growth.

[Operator]

All right. Thank you so much for the question. Our next question comes from the line of Pablo Singzon with JPMorgan. Pablo, please go ahead.

[Pablo Singzon, Executive Director at JPMorgan]

Hi, good evening. So, so many, many other insurance companies, some of them quite large with well-established platforms, have shown a strong interest in small commercial E&S and have publicly disclosed growth metrics that are quite impressive. The question is: do you see any evidence of them showing up in the markets where you compete in?

[Justin Cohen, CEO at Ategrity]

You're asking, have there been new players coming in?

[Pablo Singzon, Executive Director at JPMorgan]

Right. And I'm thinking specifically, without naming names, like large companies that, you know, that have an intense interest in small commercial units.

[Justin Cohen, CEO at Ategrity]

We have not experienced any pressure from that and have not seen that. You saw some of our metrics as they emerged from this quarter, and I think it demonstrates that we are gaining traction ourselves, and we have not experienced that type of competition.

[Pablo Singzon, Executive Director at JPMorgan]

Okay. And then second question, just on the guidance. Last I checked, I think E&S market was running high single digits, so your 20% plus guidance is just a high 20s growth rate for first quarter, Justin? Is what it, kind of...

[Justin Cohen, CEO at Ategrity]

Yeah, we've been very deliberate about shifting our guidance to a growth rate above the market. That's cause we don't forecast the market. That's not how we spend our efforts, and we don't think that would be productive for us to describe our guesses on that. But I think if you think about, you know, where we-- based on what we've heard and seen in the market, we think that maybe mid to high single digits would be appropriate place to benchmark that.

[Operator]

All right. Thank you so much, Pablo. Our next question comes from the line of Andrew Kligerman with TD Securities. Andrew, please go ahead.

[Andrew Kligerman, Managing Director at TD Securities]

Hey, good evening, and good to talk to you. 84.9, you mentioned that it was your record combined ratio, and I'm wondering, you've put up some pretty good numbers for the last few years. Could you... and you had no prior year development as well, I think Neelam said on the call. Could you talk a little bit about your reserving methodology, how much, if any, conservatism you're putting in those numbers? You know, are there, you know... Maybe talk a little bit about that.

[Justin Cohen, CEO at Ategrity]

Yep, Andrew, thanks. Our reserves are in a very strong position overall, both in property and casualty. You heard Chris mention in the prepared remarks that the early indicators for the recent years are coming in very strong, and so we're, we're, we are highly confident in our reserves there. And then in addition, we really had a low, a low quarter of losses in frequency and severity in property. But we have booked losses, we have booked reserves, in anticipation of maybe late reporting. So, we think that both property and casualty are in strong position.

[Andrew Kligerman, Managing Director at TD Securities]

That's very helpful. I want to talk a little bit. I'm on the road, so I did not see the 8-K. It's great to hear about a buyback authorization. Could you talk about the amount and the want to administer it, to really utilize it? And then just in general, could you size up redeployable capital? I know you have de minimis leverage. Do you have the capital on balance sheet to meet this really robust growth of 30% a quarter?

[Justin Cohen, CEO at Ategrity]

Yeah. So, Andrew, the size of it is $50 million. The rationale is that we're a company that increases book value per share since the IPO of about 21%. We trade at nine times consensus forward, and we've generated excess capital in just the quarters that we've been talking about, in the last three quarters that we've been reporting to you. So, we believe we're supposed to buy the stock here. I will say, we are committed to increasing the float over time. It'll just be at a different price.

[Justin Cohen, CEO at Ategrity]

So, in terms of excess capital, if you look back to the amounts that we have generated in just the past three quarters, that's actually a fairly sizable number, and it positions us well for deploying the capital in a buyback as well as continuing to grow. So, the Ategrity capital outlook and the growth trajectory with respect to deploying capital has not changed.

[Operator]

All right. Thanks so much for the question, Andrew. Our next question comes from the line of Matthew Heimermann with Citi. Matt, please go ahead.

[Matthew Heimermann, Managing Director at Citi]

Hey, good evening, everyone. A couple questions. One would be just with the, with the AI in the back office already implemented, I'd be curious with respect to the, the claims organization, if that has been helping at all, UE, excuse me, LAE cost, whether allocated or unallocated?

[Justin Cohen, CEO at Ategrity]

With respect to AI, we have seen the opportunity set first and foremost for us on the underwriting side, so we have not deployed it in a meaningful way yet in the claim side, if you're referring to that. Did you have a follow-up there?

[Matthew Heimermann, Managing Director at Citi]

Yeah. So, what-- well, let's-- I have two follow-ups to that. One would be just on the, on the w- what are, do you think, the use cases for your company on the claims side? And I'd be curious about that. And just, I-- part of that's just, maybe my own confusion around, what's more back office versus front of the house function. So maybe you could actually roll through what you consider to be in back office, just so we can maybe level set with, with that as well.

[Justin Cohen, CEO at Ategrity]

Just on claims, one of the things that's clear is there is a processing component to incoming claims and so deploying it there as we do on our intake process in submissions, that is, that will ultimately be an easy win. But we're not, we're not on this call going to describe how we're going to be deploying claims in AI. If you want to talk a little bit about it?

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

Yeah. On, just on what's back office in the context of, my comments, we consider that to be everything that happens before an account gets to an underwriter's desk. So, intake to data prep to pre-qualification. So, we have been using AI for pre-qualification. That allows us to screen out accounts that are not in appetite. The next phase is, with risk assessment once the account is on the underwriter's desk. So there, there's a spectrum of, of utilization.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

It could range from everything from full automation for simple accounts to partial automation of the risk assessment. So, this is, individual account level, underwriting, where we, assess for specific criteria. Because our model is structured, we are able to, identify use cases that, are very, value-added, in multiple ways.

[Chris Schenk, President and Chief Underwriting Officer at Ategrity]

One, in making a clearer assessment, a more quantitative assessment. Two, in driving a better-quality decision if it's not a purely quantitative automated assessment. If it goes to the underwriter's judgment, so guiding that judgment, is the second sort of use case there.

[Operator]

All right. Thank you so much for the question, Matt. And that does conclude our Q&A session for today. So, I will now turn the call back over to Justin for closing remarks. Justin?

[Justin Cohen, CEO at Ategrity]

Well, we thank you all very much for listening and for those questions, and we look forward to seeing you in the weeks and months ahead. Thank you very much.

Participants

Analysts

• Andrew Kligerman, Managing Director at TD Securities
• Chris Schenk, President and Chief Underwriting Officer at Ategrity
• Christian Getzoff, Senior Equity Analyst at Wells Fargo
• Justin Cohen, CEO at Ategrity
• Matthew Heimermann, Managing Director at Citi
• Neelam Patel, CFO at Ategrity
• Pablo Singzon, Executive Director at JPMorgan