On the Road With the Toll Booth of Small Comm'l Insurance

Research evidence excerpt

On the Road With the Toll Booth of Small Comm'l Insurance

Accelerant - Block Summary Model

Income Statement 2026E 2027E 2028E

Direct Comm. Inc. pre-consol 689 823 985

Total Revenues 1,114 1,311 1,529 Valuation

Adjusted Net Income 165 197 231 Our $17 target price is based on a sum-of-the-parts on ARX's

2027 results. We segment EBITDA into capital-light and non- Adjusted EPS $0.76 $0.94 $1.11

capital light portions, based on the proportion of Exchange

Source: BMO Capital Markets, Company Reports Written Premium that we estimate will be direct third party

in 2027 (57%). We apply an ~13.0x EV/EBITDA on the capital-

light portion, and a 10.5x P/E multiple on the non-capital

light portion.

Upside Scenario $26.00

In our upside scenario, Accelerant continues to generate

strong growth on the platform, with an accelerating share

of growth going to third-party balance sheets. The platform

continues to attract MGAs, enabling a data flywheel that

leads to continued improvements in underwriting.

Downside Scenario $11.00

In our downside scenario, Accelerant's loss ratio increases

by 5+ points, causing the platform to become less attractive

to reinsurers and insurers alike.

in USD

-16% +30% +100%

Downside Current Target Upside

Scenario Price Price Scenario

11.00 13.03 17.00 26.00

Key Catalysts

Catalysts include upside to growth and margins on earnings

prints, announcements regarding new sources, or improved

terms on capacity on the platform, and potentially

synergistic M&A.

Company Description

Accelerant is a novel risk exchange that brings together

capital-light underwriters with insurance company balance

sheets. Accelerant provides underwriters with tools and

data insights to maximize underwriting performance. In

order to facilitate more underwriting, Accelerant provides