KBRA Upgrades AmCoastal Debt Ratings, Reducing Interest Expenses

One year after American Coastal Insurance went through a regulator-forced shakeup in leadership, the Florida-based carrier’s holding company has received a slight upgrade in its debt rating from KBRA, producing a savings on interest expenses.

“We are proud to have regained investment-grade status and positive outlooks,” President and CEO Brad Martz said in a statement Monday. “This will immediately reduce the company’s annual interest expense by $1.5 million and supports our strategy to grow the business responsibly.”

KBRA, the Kroll Bond Rating Agency, announced Monday that it has upgraded AmCoastal’s issuer rating and debt rating from “BB+” to “BBB-.” The insurer’s financial strength rating remains at “A-” and the outlook for all ratings has been improved, from stable to positive, KBRA said in a statement.

The upgrades reflect KBRA’s expectation that St. Petersburg-based American Coastal will continue to report favorable operating results and maintain its strong risk-adjusted capitalization, robust reinsurance programs with strong counterparties, and high credit quality investment portfolio, the company noted.

AmCoastal, founded in 2007, had about 4,000 policies in force in Florida as of Q1 this year, mostly in condominium association and other commercial residential coverage.

The company was the remaining subsidiary left standing after United Property & Casualty Insurance was deemed insolvent in 2023. In July 2024, the Florida Office of Insurance Regulation, began seeking to enforce a 2002 “no-fly list” law that forbids officers and directors of insolvent insurers from leading other carriers for at least two years. The office warned 12 people at AmCoastal – more than any other Florida carrier – that they would need to justify their positions or move on.

Several officers were removed or reassigned after that, including former CEO Dan Peed, who moved into the chairman’s role. Martz received one of the OIR letters but remained in the president’s office. The number of board members was reduced from 10 to five.

In its first quarter earnings report this year, the publicly traded AmCoastal showed a net income of $21.3 million, down 9.5% from the same period in 2024. It also reported $646 million in total direct premium written, a $10 million increase from the year before, according to OIR information.

The company has been profitable every year, except for 2020, KBRA pointed out. KBRA also noted the completion of American Coastal’s sale of its subsidiary, Interboro Insurance Co., in New York, for $25.7 million.

Despite the financial rating news, AmCoastal’s share price closed slightly down Monday at $10.66, well below its December 2024 high of $14.30, according to Yahoo!Finance.