Ategrity Specialty (NYSE:ASIC) reported record fourth-quarter fiscal 2025 results, driven by strong premium growth, improved underwriting profitability, and higher investment income. On the company’s earnings call, CEO Justin Cohen said the quarter reflected strength “on both the top and bottom line,” supported by growth in core specialty verticals, an expanding distribution network, and increased workflow automation designed to improve speed and underwriting precision.
Premium growth and record combined ratio
Management said gross written premiums increased 30% year over year in the quarter. Cohen noted that performance exceeded the company’s guidance to outperform E&S industry growth by 20 percentage points. He also highlighted that fourth-quarter combined ratio of 84.9% was “a new record for the company.”
- Gross written premiums: up 30% year over year
- Casualty premiums: up 38%
- Property premiums: up 18%
- Net written premiums: up 44% (reflecting higher retention)
- Net earned premiums: up 34%
Patel said net earned premium growth accelerated sequentially due to a larger premium base and the impact of a reduction in quota share reinsurance in 2025. Fee income increased to $2.3 million from $0.4 million a year ago, reflecting standard policy fees implemented in 2025.
Underwriting results: loss ratio improvement and expense leverage
Patel reported underwriting income of $15.5 million, up 160% year over year, translating to the 84.9% combined ratio versus 92.3% a year ago. The improvement reflected reductions in both the loss ratio and the expense ratio.
The loss ratio was 57.1%, down 1.2 points year over year, driven by “strong underlying results” in the property business, Patel said. The company again reported no prior year development. Catastrophe losses were 3.2% of net earned premium, down from 3.7% last year, which Patel attributed to very few catastrophe events in the fourth quarter.
On expenses, the expense ratio improved 6.1 points to 27.8%. Patel said operating expense fell to 10.5% of net earned premiums, down 2.4 points year over year and lower than the second and third quarters of 2025, driven by earned premiums growing faster than operating expenses and aided by higher fee income. Policy acquisition costs declined to 17.3% from 21%, with Patel attributing the improvement primarily to mix, as growth concentrated in lines with lower acquisition costs and higher ceding commissions.
Property and casualty trends, distribution growth, and Project Heartland
President and Chief Underwriting Officer Chris Schenk said operating metrics such as retention, hit ratios, submissions, and rate change were in line with or above plan, while “frequency and severity signals” tracked favorably.
Schenk highlighted three drivers of performance: growth opportunities “overlooked by peers,” increased wallet share with distribution partners, and improved speed and operating leverage from the underwriting platform.
He said approximately half of the quarter’s growth came from strategic initiatives including Project Heartland, retail trade, and a multifamily developer product. In property, Ategrity grew 18% while “many peers contracted,” with growth coming from states “often overlooked,” including North Dakota, Ohio, and Nebraska. Schenk added that property achieved full-year rate change in the high single digits.
In casualty, he said premiums grew 38% and the company achieved low teen full-year rate increases. Management and professional liability was described as a strong contributor, with premium more than tripling “despite broader softening conditions.”
On distribution, Schenk said the company’s network includes nearly 600 partners. The 2023 and 2024 distribution cohorts delivered over 100% same-store growth, and the 2025 cohort added 25% more new partners. Submissions increased roughly 90% year over year, which Schenk said allowed Ategrity to quote more business while maintaining pricing discipline.
During Q&A, Schenk said Project Heartland includes an appointment component that is “nearing the end of that phase,” with the next focus on gaining greater wallet share from partners. He also referenced launching a “Heartland product” intended to increase market recognition of Ategrity’s offering.
Investment income and balance sheet metrics
Patel said net investment income rose to $11.6 million from $6.3 million a year ago, reflecting a larger investment portfolio. Realized and unrealized gains were $6.7 million, supported by results in the company’s utility and infrastructure portfolio. The effective tax rate was 20.2%, resulting in net income of $25.3 million. Adjusted net income was $25.4 million, or $0.51 per diluted share.
On the balance sheet, cash and investments increased by $45 million from the third quarter to $1.1 billion, which Patel attributed to strong operating cash flow. Book value increased by $26 million due to retained earnings, and book value per share ended the quarter at $12.78, up 21% since the IPO.
AI initiatives, 2026 outlook, and new buyback authorization
Cohen and Schenk both addressed the company’s investments in artificial intelligence. Cohen said Ategrity developed a roadmap for integrating AI more than two years ago and has since “operationalized” those investments. Schenk said AI has already been deployed in the back office to improve risk qualification, data preparation, and parameter optimization, with plans in 2026 to embed AI directly into underwriting workflows through tools built by the company’s in-house innovation lab. Schenk said the company will test and ramp deployment over the course of the year and expects AI to help drive the expense ratio lower “once it is fully deployed this year.”
In response to a question on claims, management said it has not deployed AI in a meaningful way in claims yet, describing the primary opportunity set as underwriting. They added that “back office” refers to processes before an account reaches an underwriter’s desk, including intake, data preparation, and pre-qualification.
For guidance, Cohen said first-quarter 2026 expectations remain consistent with prior guidance: a growth rate 20 percentage points above E&S market growth and a combined ratio just below 90%. In Q&A, Cohen said the company has shifted guidance to a growth rate above the market because it does not forecast the market, though he referenced mid- to high-single-digit E&S market growth as a reasonable benchmark for context.
The company also filed an 8-K announcing a share repurchase program. In Q&A, Cohen said the authorization is $50 million. He cited book value per share growth since the IPO, the stock’s valuation relative to consensus forward earnings, and the company’s capital generation as rationale for the program, while also stating the company remains committed to increasing float over time “at a different price.”
About Ategrity Specialty (NYSE:ASIC)
We are a profitable and growing specialty insurance company dedicated to providing excess and surplus (“E&S”) products to small to medium-sized businesses (“SMBs”) across the United States. We have built a proprietary underwriting platform that combines sophisticated data analytics with automated and streamlined processes to efficiently serve our clients and deliver long-term value to our stockholders. The SMB market is characterized by large volumes of small-sized policies, and we believe our competitive edge lies in our ability to offer consistent, high-speed, and low-touch interactions that our distribution partners value.
