Summary of Accelerant Q3 2025 Earnings Call

1Key Financial Results and Metrics

Exchange Written Premium: $1.04 billion, a 17% year-over-year increase (29% growth when adjusted for two atypical members).

Member Count: Increased to 265, with 17 new members added in the quarter.

Net Revenue Retention: 135%, indicating strong member growth and retention.

Gross Loss Ratio: 50%, reflecting stable performance across the portfolio.

Net Retention: 7% for the quarter.

Third-Party Direct Written Premium: $336 million, representing 32% of exchange written premium, up from 27% in the previous quarter.

Revenue: $267 million, a 74% increase year-over-year.

Adjusted EBITDA: $105 million, over 300% growth year-over-year, with an adjusted EBITDA margin of 39%.

Adjusted Net Income: $80 million, equating to $0.38 per share.

2Strategic Updates and Business Highlights

Accelerant is focusing on expanding its network of third-party insurers, with a goal of having two-thirds of its portfolio written by third-party companies in the medium term (3-5 years).

The company has onboarded new risk exchange insurers, including a Lloyd's facility, enhancing its underwriting capabilities and market presence.

Accelerant is leveraging its data capabilities to refine risk models, which has contributed to its strong gross loss ratios and overall profitability.

The company aims to maintain a high Net Promoter Score (NPS) and continues to attract top managing general agents (MGAs).

3Forward Guidance and Outlook

Q4 2025 Guidance: Expected exchange written premium of $1.06 billion to $1.1 billion, with third-party direct written premium projected at $415 million to $430 million.

Full Year 2026 Guidance: Anticipates at least $5 billion in exchange written premium and $2.1 billion in third-party direct written premium.

Adjusted EBITDA for 2026 is projected at $269 million.

4Bad News, Challenges, or Points of Concern

The company is experiencing delays in member transitions, impacting the expected growth of third-party direct written premium.

The transition to third-party insurers may lead to a moderation in gross written premium growth over time.

The potential for fluctuations in net retention and the impact of moving business from owned insurance companies to third-party insurers could affect revenue recognition.

The company has incurred significant IPO-related expenses, which are non-cash and non-dilutive but still represent a substantial figure impacting net income.

5Notable Q&A Insights

Management clarified that while the transition to third-party insurers will moderate growth on the Accelerant side, it is a strategic move to enhance capital efficiency.

There was discussion about the nature of member departures, which are rare and typically due to performance issues rather than market conditions.

The gross loss ratio remains strong, attributed to the small size of policies and effective risk management, with expectations to maintain low 50s in the future.

The company is optimistic about its pipeline, reporting over $3 billion in annualized premium, indicating strong future growth potential. Overall, Accelerant reported a robust quarter with significant growth metrics, strategic advancements in partnerships, and a positive outlook, despite some challenges related to member transitions and expense management.