A year after a leadership overhaul prompted by state regulators, Florida-based American Coastal Insurance has earned a modest credit upgrade from Kroll Bond Rating Agency (KBRA), leading to reduced borrowing costs for the company.
“We’re pleased to have restored our investment-grade rating and received a positive outlook,” said President and CEO Brad Martz in a statement released Monday. “This change will immediately lower our annual interest expense by $1.5 million and supports our long-term plan for responsible growth.”
KBRA announced that it has raised the issuer and debt ratings of American Coastal’s holding company from “BB+” to “BBB-.” The firm’s financial strength rating remains at “A-,” while the outlook across all ratings has been revised from stable to positive.
The agency cited its confidence that American Coastal will maintain strong financial performance, robust risk-adjusted capitalization, a well-structured reinsurance program with reliable counterparties, and a high-quality investment portfolio.
Founded in 2007 and based in St. Petersburg, American Coastal had approximately 4,000 active policies in Florida as of the first quarter of 2025, primarily covering condominium associations and other types of commercial residential properties.
The company became the last operational arm of United Property & Casualty Insurance after UPC was declared insolvent in 2023. In mid-2024, the Florida Office of Insurance Regulation (OIR) began enforcing a 2002 regulation that bars executives from failed insurers from taking leadership roles at active insurance carriers for a period of two years.
Twelve individuals at American Coastal, more than at any other insurer in the state, received warning letters from OIR. The result: multiple leadership changes, including the reassignment of then-CEO Dan Peed to board chairman. Although Martz was also among those flagged by regulators, he remained as president. The company also trimmed its board from 10 members to five.
In its Q1 2025 financial report, American Coastal reported net earnings of $21.3 million — a 9.5% decrease from the same quarter in 2024. Direct premiums written totaled $646 million, up $10 million year over year, according to OIR records.
KBRA noted that American Coastal has posted positive annual earnings every year since its founding, with the exception of 2020. The ratings agency also acknowledged the recent sale of its New York-based subsidiary, Interboro Insurance Co., for $25.7 million.
Despite the positive ratings news, AmCoastal’s stock ended the day slightly down at $10.66, well below its high of $14.30 reached in December 2024, according to Yahoo!Finance.