Hello. I'm Brad Martz, President and CEO of American Coastal Insurance Corporation. Here with me is our CFO, Lana Castle, who will also be presenting, and we welcome you to our Flash Strategic Update. This presentation is intended to share some exciting developments at ACIC that are anticipated to create shareholder value by driving revenue and earnings growth over time. Accordingly, statements made in this presentation contain forward-looking statements, as defined herein, and we recommend caution accordingly. Please review our annual report on Form 10-K, including the risk factors, as well as other public filings for more information regarding American Coastal. You may already be familiar with American Coastal, but for those of you who are new to our story, American Coastal was founded by our Chairman, Dan Peed, in 2007 to underwrite commercial residential property insurance in Florida. That includes habitational risks such as condominiums and apartments.
We insure the building shell or envelope. That includes the roof, the doors, windows, and common areas, as well as garages, carports, rec centers, and other structures. We do not cover flood liability or contents of individual units or flood risk, as those are typically covered in separate flood and homeowners policies. ACIC is the market leader for condominium associations in Florida, with a number one market share that includes roughly 4,300 of the approximate 17,000 condominium associations eligible for our product, representing most of the $637 million of premium in-force at the end of the third quarter. Our Florida condo book is underwritten in partnership with the AmRisc Group, the leading commercial property managing general agency in the United States. The relationship with AmRisc has been very successful, with American Coastal achieving an underwriting profit in every year of its existence.
Eighteen years of consecutive profitability in Florida, the peak exposure zone in the world for hurricane risk, is no accident. And clearly, it differentiates American Coastal as a leading specialty insurer of catastrophe-exposed property insurance. This brings us to our first major update, which is an expansion of the partnership with AmRisc. In addition to the admitted market condominium business, AmRisc produces exclusively for ACIC in Florida. AmRisc also underwrites a large portfolio of catastrophe-exposed commercial property insurance on an excess and surplus lines basis, also referred to as E&S or not admitted, in partnership with several other P&C carriers throughout the country. I'm excited to announce that ACIC is thrilled to provide additional capacity to AmRisc, with a 6% participation in their nationwide E&S portfolio. We believe this is mutually beneficial, as the additional capacity helps support AmRisc's long-term growth strategy.
Their stellar underwriting track record in the E&S space over the past 25 years provides American Coastal tremendous comfort that we can earn a superior return on capital with virtually no execution risk or risk of adverse selection. Here we've included an example illustration of how ACIC's participation is expected to support AmRisc's $1 billion-plus E&S portfolio and produce approximately $75 million of gross written premium for ACIC in 2026, assuming a March 1st start date. Since American Coastal doesn't currently have an AM Best rating, we're utilizing a fronting carrier and a reinsurance partner to effectively pass through our 6% share of the premiums and losses from AmRisc via a net quota share reinsurance agreement. Once all the agreements are finalized, ACIC plans to file an 8-K with more details on this arrangement, including who the counterparties are.
The initial term of the net quota share is two years, but we do expect this to be a long-term commitment of capital to AmRisc, assuming mutually beneficial participation arrangements can be renewed in future periods beyond the initial term. Consistent with ACIC's strategy of retaining a small portion of the overall risk exposure to mitigate potential volatility from catastrophe events, there will be a new catastrophe reinsurance program placed that is specific to covering our 6% share of AmRisc's E&S portfolio's risk exposure. This slide provides an illustration showing that ACIC's retention will likely be limited to no more than $10.8 million, with an all-perils excess loss program being placed up to the 250-year probable maximum loss, with all losses beyond the open market reinsurance program being retained by the fronting carrier.
The coverage will be placed one at 100 and include reinstatement premium protection to effectively eliminate potential reinstatement costs if any losses are ceded to this program. Because this is a net quota share, our reinsurance partner in this transaction, who is a multibillion-dollar global entity, will be placing all the open market reinsurance coverage on our behalf, which obviously provides us tremendous confidence it will be placed properly and cost-effectively. The E&S market has historically been dwarfed by the admitted market for all lines of business, but that is changing in property insurance. This chart shows how the commercial property insurance market has shifted from admitted to E&S over the past few years during the hard market and helps demonstrate why we believe E&S capabilities are critical for long-term growth and underwriting profitability at American Coastal.
Our strategy will not change in Florida because of the Florida Hurricane Catastrophe Fund, also known as the FHCF or the CAT Fund. The FHCF is only available to carriers writing habitational property insurance on an admitted basis in Florida. Because there is a significant cost advantage provided by the CAT Fund, and we can price our business like an E&S carrier, it does make sense to continue writing as much of the condominiums, apartments, and assisted living centers as possible in the Florida admitted market via American Coastal Insurance Company. However, not all desired risks will fit our admitted market strategy. For instance, the Florida Hurricane Catastrophe Fund is specific to Florida only. So for all other states outside of Florida, as well as commercial property risks that don't qualify for the CAT Fund and/or require an AM Best-rated carrier, the E&S market is our preferred pathway forward.
That leads to our second major update, which is the formation of a new wholly owned and controlled E&S carrier called ACES Specialty Insurance Company. ACES is short for American Coastal E&S, so it's easy to remember. ACES has an application pending approval in Arizona, so timing for regulatory approval is uncertain, but we do anticipate our new E&S company should be operational this year. ACES is planning to launch with $30 million of policyholder surplus, which we believe will be sufficient for us to achieve our premium objectives in the short term. ACES will likely begin operations by assuming risk as a collateralized reinsurer until it is properly positioned to be a direct underwriter of new business.
To be a viable direct underwriter of new business, ACES will first need to obtain regulatory approval in the various states where the company plans to operate and also achieve a financial rating of at least A- from AM Best. This will take some time and additional capital, but we are excited to get started and expect to immediately earn a return on the initial capitalization contributed to ACES via multiple reinsurance opportunities. Next, this page summarizes our preliminary view of the E&S market opportunities by product for both ACES and our wholly owned specialty MGA Skyway Underwriters, who will produce and administer direct business on behalf of ACES. Our initial focus will be underwriting the five classes of commercial property shown here in Florida, Texas, and South Carolina.
We have underwriting experience in all of these classes and states, with the exception of the non-habitational commercial property, which is expected to be relatively small for us. We are open to expansion in other CAT-exposed geographies where we would expect to have some sort of sustainable competitive advantage underwriting these classes of business. For example, California is a perfect spot in a marketplace that is experiencing some dislocation and represents significant opportunity for us, but it will take us some more time to find the right approach to a state like that. This slide updates our underwriting strategy to incorporate our thinking on excess and surplus lines. In short, as I mentioned before, our strategy will not change much as we seek to replicate the success we've had in Florida as closely as possible.
Distribution will continue to utilize the national wholesale partners that produce the vast majority of our profitable in-force portfolio today. There is differentiation here shown between the admitted balance sheet of American Coastal Insurance Company versus ACES and what the unaffiliated partnership with AmRisc is producing compared to our wholly owned internal MGA Skyway Underwriters. Before turning it over to our CFO, I want to touch on the market cycle quickly. As you can see from this chart, pricing is coming down, but so are losses and reinsurance costs. That's why we still see opportunity for acceptable returns and remain in a risk-on mindset.
We obviously intend to be very careful and very selective through the softening part of the cycle where rates are coming down and terms and conditions are weakening, but being a consistent provider of capacity to our brokers and customers has served ACIC well since our inception. With that, I'd like to reintroduce you to Lana Castle.
Thank you, Brad, and hello, everybody. I will start by covering our updates to the reinsurance program. Our company has a robust reinsurance program and strong long-term relationships with an extensive panel of highly rated reinsurers. In addition to our core catastrophe reinsurance program, we purchase all other perils and aggregate catastrophe reinsurance programs, both successfully renewed on January 1st.
All other perils catastrophe reinsurance provides protection from catastrophe loss events other than named windstorms, such as hailstorms, tornadoes, and other severe convective storm events, up to $106 million on the first and second events, with retention of approximately $10 million on the first and second events. Additionally, we purchase aggregate catastrophe reinsurance. This program was added in 2025 and renewed for 2026. It provides protection from aggregate catastrophe losses in excess of $40 million during the coverage year. This reinsurance covers all perils, and the current limit is $20 million. We will now cover our 2026 guidance. ACIC has two major goals. First, to remain profitable every quarter with a full catastrophe retention loss, and second, to remain profitable for the full year even with three full catastrophe retentions.
Our earnings before income tax guidance is $85 million-$100 million, and our total revenue guidance is $335 million-$365 million. We will now move on to slide 15, which shows trends in liquidity and book value. ACIC has experienced steady growth in liquidity and book value over the last 24 months. ACIC paid special cash dividends of $0.50 per share on January 10th, 2025, and $0.75 per share on January 9th, 2026. Next, I'd like to cover our capital allocation philosophy. In the long term, we plan to target less than 25% debt-to-capital ratio. When management believes ACIC stock is significantly undervalued, we might participate in stock buybacks. The board of directors previously authorized repurchasing up to $25 million of ACIC stock, but we haven't had any buybacks to date. We have previously covered our 2026 and 2025 dividends.
As a catastrophe-exposed underwriter, we believe the special dividends approach provides the company with a stronger capital position than a regular quarterly dividend. Lastly, I'd like to summarize our investment thesis outlined on slide 17. ACIC has remained profitable every year since its inception in 2007, including years with high-frequency and high-severity catastrophe losses. This is accomplished through deep underwriting expertise and an exclusive partnership with the leading commercial property MGA in the U.S. Additionally, as mentioned in our insurance section, our risk transfer strategy is designed to help reduce potential volatility of earnings and ensure continuity over time. Looking forward, in addition to our established channel, growth will be accomplished through dedicated, wholly owned E&S property and casualty paper and internal MGA Skyway Underwriters. This concludes our presentation, and we thank you all for your interest and attention.