KBRA Upgrades Ratings for American Coastal Insurance Company and American Coastal Insurance Corp.
21 Jul 2026 | New York
KBRA upgrades the insurance financial strength rating (IFSR) of American Coastal Insurance Company (AmCoastal) to A from A-. Consistent with the upgrade of AmCoastal’s IFSR, KBRA upgrades the issuer rating to BBB from BBB- for American Coastal Insurance Corp (ACIC) and upgrades the debt rating to BBB from BBB- for ACIC’s $150 million 10-year 6.25% senior unsecured notes due 2027. The Outlook for all ratings has been changed to Stable from Positive.
The upgrades reflect the company's sustained strengthening of its financial profile, supported by materially improved capitalization, consistently strong underwriting performance, disciplined catastrophe risk management, and successful execution of its strategic plan. Internally generated earnings increased policyholder surplus to approximately $317 million at year-end 2025 from $77 million at year-end 2022, while the statutory RBC ratio improved to 1757%, providing strong capital adequacy to support future growth and absorb catastrophe losses.
The upgrade also reflects AmCoastal's demonstrated ability to consistently generate strong underwriting results despite its exclusive focus on Florida commercial residential property insurance. The company has maintained disciplined underwriting, conservative catastrophe risk management, and robust reinsurance protection while prioritizing profitability over premium growth, producing exceptionally strong combined ratios in recent years. Although the company remains concentrated in a catastrophe-exposed market, KBRA believes these risks are appropriately mitigated by its strong capitalization, conservative net retentions, comprehensive enterprise risk management framework, and strategic initiatives aimed at gradually diversifying the business.
The IFSR of AmCoastal reflects its strong risk-based capitalization, disciplined underwriting producing consistent profitability, comprehensive catastrophe risk management, favorable market position, experienced management team and conservative investment portfolio and strong liquidity. AmCoastal has been profitable every year since 2007 inclusive of major hurricane losses, except for 2019-2021 when it was part of a pooling arrangement with ACIC's former personal lines subsidiaries; the company divested these entities in the first quarter of 2023. AmCoastal is the leading provider of commercial residential property insurance in Florida.
These strengths are balanced by the company's significant geographic concentration, exposure to catastrophe event risk and heavy reliance on reinsurance. As a single state writer with high catastrophe exposure, the availability and affordability of adequate reinsurance is critical to the company’s ability to manage exposure within its capital resources.
Factors that could positively impact the ratings include continued improvement in financial leverage, controlled geographic expansion into other states outside of Florida, or a favorable change in risk profile.
Factors that could negatively impact the ratings include deterioration in risk adjusted capitalization and/or underwriting leverage, an inability to obtain reinsurance on acceptable terms and pricing, causing an increase in loss exposure, a reduction in the company’s ability to underwrite policies or a drag on earnings, a material decline in the credit quality of the reinsurance panel and/or inability to collect on reinsurance causing a material adverse effect on operating results and overall financial condition, an unfavorable change in risk profile, or a sustained deterioration in financial leverage.
To access ratings and relevant documents, click here.
Click here to view the report.