President and Chief Executive Officer - Bennett Bradford Martz Chief Financial Officer - Svetlana Castle Vice President, Finance and Investor Relations - Alexander Baty Operator: Hello, everyone. Thank you for joining us, and welcome to the American Coastal Insurance Corporation Q2 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Bennett Bradford Martz, President and CEO. On behalf of the company, I'd like to note that statements made during this call that are not historical facts are forward-looking statements.
For more information regarding these statements, please note the language on Slide 2 of our earnings presentation. During the second quarter of 2026, American Coastal continued to maintain its market leadership position in Florida commercial-residential property insurance, but also experienced continued downward rate pressure, causing gross premiums written to decrease roughly 5% compared to the same period a year ago. Some minor non-hurricane catastrophe losses incurred of approximately $3.1 million also impacted comparability with the prior year, given the lack of any such losses in 2025.
Despite top and bottom line compression year-over-year, our underlying combined ratio of 68.7% was very respectable, as was the 26.6% return on equity in the current quarter. During the open window -- trading window, that is, in the second quarter, the company repurchased nearly 1.4 million shares of its common stock, bringing the year-to-date total shares repurchased to just over 1.8 million. And I'm happy to announce that the Board of Directors has increased our authority to buy back up to roughly $30.6 million worth of our common stock in the future.
Our earnings presentation was revamped this quarter with the intent to improve the messaging around what makes ACIC special. I strongly encourage anyone looking to learn more about our company to read that document each period along with our other filings. As disclosed on Page 9 of our earnings presentation, we recently seized an opportunity to reduce our first event hurricane retention from $49 million to only $23.5 million before income tax, effective August 1.
The outlook for hurricanes making landfall in Florida this year, along with continued softening of reinsurance pricing, allowed us to mitigate downside risk from potential hurricanes this year. This change is further evidence that ACIC is continuously monitoring the market and always on the lookout for opportunities to improve our risk-adjusted performance. For the sake of clarity, our reinsurance strategy is to buy more protection when pricing is cost-effective and retain more risk on our balance sheet when it's not.
Our second and third event retentions remain unchanged at $25 million and $2 million, respectively. Thus, we are confident to state that American Coastal should remain profitable this year, even with 3 full retentions. Lowering American Coastal's potential risk from hurricanes improves the overall quality and reliability of our earnings and cash flows.
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