American Integrity Insurance Group, Inc. (AII)

CIK: 0002007587. SIC: 6331 Fire, Marine & Casualty Insurance. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Finance, Insurance, And Real Estate > Insurance Carriers > SIC 6331 Fire, Marine & Casualty Insurance

SEC company page: https://www.sec.gov/edgar/browse/?CIK=2007587. Latest filing source: 0002007587-26-000016.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0002007587.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0002007587.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0002007587-26-000063.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-14. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides a detailed analysis of our financial condition, results of operations, liquidity, and capital

resources. The following discussion and analysis of our financial condition and results of operations should be read in

conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly

Report on Form 10-Q, as well as our audited consolidated financial statements and related notes included in our Annual

Report on Form 10-K for the year ended December 31, 2025. This analysis includes forward-looking statements, which are

subject to various risks and uncertainties. Actual results may differ from projections due to factors beyond our control, as

detailed under Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and under Part I, Item 1A “Risk

Factors” in our Annual Report on Form 10-K. References to the “Company,” “American Integrity,” “we,” “us” or “our”

refer to American Integrity Insurance Group, Inc.

Overview

We are a profitable and growing insurance group headquartered in Tampa, Florida. Through our insurance carrier

subsidiary, American Integrity Insurance Company (“AIIC”), we provide personal residential property insurance for single-

family homeowners and condominium owners, as well as coverage for vacant dwellings and investment properties,

predominantly in Florida. Florida represented 93.0% of our policies in-force as of March 31, 2026. As of March 31, 2026,

70.7% of our in-force premium was in the insurance market in which we underwrite and sell policies to policyholders

where we choose to offer coverage without the assistance of residual market mechanisms (the “Voluntary Market”).

Moreover, 94.4% of our Voluntary Market in-force premium was in our core Florida market and 5.6% was in South

Carolina, Georgia, and North Carolina, where we have strategically expanded to support and enhance our relationships

with our builder agency network.

We strive to generate consistent underwriting profits, exclusive of investment income or gains and losses from the sale of

invested assets. Our goal is to achieve profitability across economic and insurance cycles by maintaining a conservative

financial position, increasing premiums written and risk exposure when we believe market conditions are favorable, and

reducing risk exposure during periods when we believe market conditions are unfavorable and earning profits is more

challenging. AIIC, our statutory insurance carrier, maintains a Financial Stability Rating of “A” (Exceptional) by

Demotech, and a financial strength rating of “BBB+” with a stable outlook from the Kroll Bond Rating Agency, LLC.

Additionally, the Company maintains a BB+ issuer rating, with a stable outlook, from the Kroll Bond Rating Agency, LLC.

We generate revenue primarily from insurance premiums earned, net of reinsurance ceded. We also generate revenue from

policy fees, installment income fees, income generated through the investment of our assets, and realized gains or losses on

the sale of our invested assets. Our financial results are highly seasonal due to the occurrence of hurricanes and tropical

storms typically between June 1st and November 30th of each year in Florida and the other states in which we operate. Our

reinsurance purchasing, including our catastrophe excess of loss reinsurance coverages, which commence on June 1st

annually, also materially influences our financial results and are impacted by changes in reinsurance rates or alterations in

terms and conditions, including in attachment or loss retention levels.

Key Factors Affecting Our Results of Operations and Comparability Between Periods

Florida Trends. Prior to the legislative reforms passed in December 2022, the legal and regulatory environment in Florida

posed significant challenges for property and casualty insurers, particularly due to excessive litigation and aggressive

claims practices relating to issues such as assignment of benefits abuse, extended statute of limitations, and attorney fee

multipliers, which led to disproportionately high litigation rates in Florida relative to other geographies. These factors

increased claims costs and reinsurance expenses, impacting the profitability of insurers operating in Florida. Recent

legislative changes, however, have improved operating conditions in the Florida insurance market, including a reduction in

claims litigation activity since the reforms were enacted in December 2022. We believe these legislative reforms provide

greater opportunities for us to profitably underwrite residential property insurance in Florida.

Citizens “Take-out” Program. In the first quarter of 2026, we assumed 584 policies from Citizens Property Insurance

Corporation (“Citizens”), representing $1.2 million in assumed unearned premiums. These policies we assume carry no

upfront acquisition costs and are covered by our current treaty year reinsurance program which may impact comparability

between periods depending on the number of policies and unearned premiums assumed.

In late 2025, we began selectively participating in commercial policy take-outs from Citizens. During the first quarter of

2026, 42 of the 584 total assumed policies were commercial take-outs, representing $0.6 million of the $1.2 million in

26

assumed unearned premiums. These policies are subject to the same underwriting and profitability standards as our

residential assumptions and are intended to complement our existing portfolio.

While we expect there will continue to be opportunities to assume policies from Citizens, we believe the number of policies

available that meet our underwriting and profitability standards has declined and may continue to decline over time.

Changing Climate Conditions. Over the past two decades, the increasing frequency and severity of severe weather events

have highlighted the unpredictable nature of climate trends. Climate change has the potential to influence the occurrence

and intensity of natural disasters, including convective storms, hurricanes, tornadoes, hailstorms, severe winter storms, and

flooding, among others. This unpredictability creates challenges in assessing future risks and exposures.

We continuously monitor climate data and collaborate with climate change and catastrophe modeling experts to refine our

risk assessment models, enhancing our preparedness for evolving climate-related challenges.

Seasonality of our Business. Our business is seasonal as hurricanes and other named storms typically occur in the

geographies where we operate between June 1st and November 30th of each year. This may result in significant variability

in our losses and loss adjustment expenses (“LAE”) depending on the number, location and strength of hurricanes and

other named storms during these months as compared to other months. In addition, because our catastrophe reinsurance

program renews on June 1st each year, the ceded premiums written recorded in the second quarter are typically

substantially higher than any other quarter during a fiscal year. In some instances, this will cause our reported net

premiums written to be negative (or substantially lower than other quarters) in the second quarter of each year.

Inflation. We may be adversely affected during periods of high inflation, primarily because of increased labor and material

costs, which could cause claims and claim expenses to increase. This has been evident since the COVID-19 pandemic in

early 2020. In addition, periods of high inflation can lead to periods of high interest rates, which may impact the

performance of our investment portfolios. The impact of inflation on our results cannot be known with any certainty;

however, we revise our reserves for unpaid losses as additional information becomes available, and reflect adjustments to

our reserves, if any, in our earnings in the periods in which we determine the adjustments are necessary. We monitor

inflation trends and factor them into the pricing of our new business and renewal policies.

Cost and Availability of Reinsurance. We purchase excess of loss and quota share reinsurance as part of our capital

management strategy and in an effort to reduce volatility of earnings and protect our balance sheet from the impact of

potential catastrophe events. Our ability to implement an effective reinsurance strategy is dependent, in part, on the cost

and availability of reinsurance coverage. We ceded 64.4% and 68.9% of our gross premiums earned in the three months

ended March 31, 2026 and March 31, 2025, respectively.

Quota share. Effective January 1, 2026, we reduced the percentage of our ceding commission on our quota share

reinsurance treaty from 40% to 25%, which impacted the comparability of our results between periods. A lower ceding

commission increases the amount of premiums we retain on policies we write, and the reduction in the ceding commission

on our quota share reinsurance treaty also reduces the amount reimbursed by reinsurers pursuant to the treaty, which

increases policy acquisition expenses and general and administrative expenses.

Initial Public Offering and Corporate Contribution

On May 9, 2025, we completed our initial public offering (the “IPO”) of an aggregate of 6,875,000 shares of the

Company’s common stock, par value $0.001 per share (the “Common Stock”), at a price to the public of $16.00 per share,

6,250,000 of which shares were sold by the Company and 625,000 of which shares were sold by certain selling

stockholders. The gross proceeds to us from the IPO were $100 million, and gross proceeds to the selling stockholders

from the IPO were $10 million, before deducting underwriting discounts and commissions and estimated offering

expenses. On May 13, 2025, the underwriters completed the exercise of their option to purchase an additional 1,031,250

shares of Common Stock from the selling stockholders resulting in an additional $16.5 million in gross proceeds to the

selling stockholders, before deducting underwriting discounts and commissions. We did not receive any gross proceeds

from the sales of shares of Common Stock by the selling stockholders. In connection with our IPO, we effected a net

issuance of 417,470 shares of restricted stock to certain of our employees and consultants (the “Restricted Stock Grant”)

after giving effect to the withholding of approximately 234,587 shares of Common Stock to satisfy the estimated tax

withholding and remittance obligations (the “Restricted Stock Grant Net Settlement”). We incurred a one-time share-based

compensation expense of $10.4 million in connection with the Restricted Stock Grant and paid $3.8 million in connection

with the Restricted Stock Grant Net Settlement. The compensation expense for these awards was recognized in the second

27

quarter of 2025. Immediately prior to the IPO, the owners of the equity interests of American Integrity Insurance Group,

LLC (“AIIG”) contributed all of their equity interests to the Company in exchange for an aggregate of 12,904,495 shares of

Common Stock.

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and three months

ended March 31, 2025:

Three Months Ended March 31,

($ in thousands)

2026

2025

Change

% Change

Gross premiums written

$220,004

$212,150

$7,854

3.7%

Change in gross unearned premiums

10,768

(1,994)

12,762

(640.0)%

Gross premiums earned

230,772

210,156

20,616

9.8%

Ceded premiums earned

(148,564)

(144,754)

(3,810)

2.6%

Net premiums earned

82,208

65,402

16,806

25.7%

Policy fees

2,745

2,204

541

24.5%

Net investment income

5,652

4,103

1,549

37.8%

Net realized gains (losses)

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-02-27. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides a detailed analysis of our financial condition, results of operations, liquidity, and capital

resources. The following discussion and analysis of our financial condition and results of operations should be read in

conjunction with the audited consolidated financial statements and related notes included elsewhere in this Annual Report

on Form 10-K. In addition, this analysis includes forward-looking statements, which are subject to various risks and

uncertainties. Actual results may differ from projections due to factors beyond our control, as detailed under Part I, Item

1A “Risk Factors.” Our actual results could differ materially from those discussed in the forward-looking statements.

Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Annual

Report on Form 10-K, particularly in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

References to the “Company,” “American Integrity,” “we,” “us” or “our” refer to American Integrity Insurance Group,

Inc. and its consolidated subsidiaries.

Overview

We are a profitable and growing insurance group headquartered in Tampa, Florida. Through our insurance carrier

subsidiary, American Integrity Insurance Company (“AIIC”), we provide personal residential property insurance for single-

family homeowners and condominium owners, as well as coverage for vacant dwellings and investment properties,

predominantly in Florida. Florida represented over 96.3% of our direct premiums written and 93.7% of our policies in-

force as of December 31, 2025. As of December 31, 2025, 69.1% of our in-force premium is in the insurance market in

which we underwrite and sell policies to policyholders where we may freely choose or reject without the assistance of

residual market mechanisms (the “Voluntary Market”). Moreover, 95.0% of our Voluntary Market in-force premium was

in our core Florida market and 5.0% was in South Carolina, Georgia, and North Carolina, where we have strategically

expanded to support and enhance our relationships with our builder agency network.

We strive to generate consistent adjusted underwriting profits, exclusive of investment income or gains and losses from the

sale of invested assets. Our goal is to achieve long-term profitability across economic and insurance cycles by maintaining

a conservative financial position, increasing premiums written and risk exposure when we believe market conditions are

favorable, and reducing risk exposure during periods when we believe market conditions are unfavorable and earning

profits is more challenging. AIIC, our statutory insurance carrier, maintains a Financial Stability Rating of

“A” (Exceptional) by Demotech, and a financial strength rating of “BBB+” with a stable outlook from the Kroll Bond

Rating Agency, LLC. Additionally, the Company maintains a BB+ rating, with stable outlook, from the Kroll Bond Rating

Agency, LLC.

We generate revenue primarily from insurance premiums earned, net of reinsurance ceded. We also generate revenue from

policy fees, installment income fees, income generated through the investment of our assets, and realized gains or losses on

the sale of our invested assets. Our financial results are highly seasonal due to the occurrence of hurricanes and tropical

storms typically between June 1st and November 30th of each year in Florida and the other states in which we operate. Our

reinsurance purchasing, including our catastrophe excess of loss reinsurance coverages, which commence on June 1st

annually, also materially influences our financial results and are impacted by changes in reinsurance rates or alterations in

terms and conditions, including in attachment or loss retention levels.

Key Factors Affecting Our Results of Operations and Comparability Between Periods

Florida Trends. Prior to the legislative reforms passed in December 2022, the legal and regulatory environment in Florida

posed significant challenges for property and casualty insurers, particularly due to excessive litigation and aggressive

claims practices relating to issues such as assignment of benefits abuse, extended statute of limitations, and attorney fee

multipliers led to disproportionately high litigation rates in Florida relative to other geographies. These factors increased

claims costs and reinsurance expenses, impacting the profitability of insurers operating in Florida. Recent legislative

changes, however, have improved operating conditions in the Florida insurance market, including a reduction in claims

litigation activity since the reforms were enacted in December 2022. We believe these legislative reforms provide greater

opportunities for us to profitably underwrite residential property insurance in Florida.

Citizens “Take-out” Program. In late 2024, we strategically expanded our policy base, assuming 68,844 policies,

representing $112.4 million in assumed unearned premiums from Citizens Property Insurance Corporation (“Citizens”). In

2025, we assumed 33,867 policies from Citizens, representing $73.2 million in assumed unearned premiums. These

policies we assume carry no upfront acquisition costs and are covered by our current treaty year reinsurance program.

55

In late 2025, we began selectively participating in commercial policy take-outs from Citizens. These take-outs represented

149 policies out of the 33,867 total assumed policies and represent $5.9 million of the $73.2 million in assumed unearned

premiums. These policies are subject to the same underwriting and profitability standards as our residential assumptions

and are intended to complement our existing portfolio.

Over the past decade, market conditions did not support take-outs from Citizens that aligned with our underwriting and

profitability standards, and prior to 2024 our last assumption of policies from Citizens was in 2014. However, we believe

recent regulatory changes, improvements in the data made available on Citizens policies, and rate increases implemented

by Citizens that have made pricing more comparable to the Voluntary Market have increased the attractiveness of assuming

policies from Citizens. While we expect there will continue to be opportunities to assume policies from Citizens, we

believe the number of policies available that meet our underwriting and profitability standards has declined and may

continue to decline over time.

Changing Climate Conditions. Over the past two decades, the increasing frequency and severity of severe weather events

have highlighted the unpredictable nature of climate trends. Climate change has the potential to influence the occurrence

and intensity of natural disasters, including convective storms, hurricanes, tornadoes, hailstorms, severe winter storms, and

flooding, among others. This unpredictability creates challenges in assessing future risks and exposures.

We continuously monitor climate data and collaborate with climate change and catastrophe modeling experts to refine our

risk assessment models, enhancing our preparedness for evolving climate-related challenges.

Seasonality of our Business. Our business is seasonal as hurricanes and other named storms typically occur in the

geographies where we operate between June 1st and November 30th of each year. This may result in significant variability

in our losses and loss adjustment expenses (“LAE”) depending on the number, location and strength of hurricanes and

other named storms during these months as compared to other months. In addition, because our catastrophe reinsurance

program renews on June 1st each year, the ceded premiums written recorded in the second quarter are typically

substantially higher than any other quarter during a fiscal year. In some instances, this will cause our reported net

premiums written to be negative (or substantially lower than other quarters) in the second quarter of each year.

Inflation. We may be adversely affected during periods of high inflation, primarily because of increased labor and material

costs, which could cause claims and claim expenses to increase. This has been evident since the COVID-19 pandemic in

early 2020. In addition, periods of high inflation can lead to periods of high interest rates, which may impact the

performance of our investment portfolios. The impact of inflation on our results cannot be known with any certainty;

however, we revise our reserves for unpaid losses as additional information becomes available, and reflect adjustments to

our reserves, if any, in our earnings in the periods in which we determine the adjustments are necessary. We monitor

inflation trends and factor them into the pricing of our new business and renewal policies.

Cost and Availability of Reinsurance. We purchase excess of loss and quota share reinsurance as part of our capital

management strategy and in an effort to reduce volatility of earnings and protect our balance sheet from the impact of

potential catastrophe events. Our ability to implement an effective reinsurance strategy is dependent, in part, on the cost

and availability of reinsurance coverage. In recent years, reinsurance rates have significantly increased and terms and

conditions have tightened (including reductions on what we are able to charge for claims administration), particularly for

catastrophe exposed property lines of business. This can be attributed to a variety of factors, including high inflation and a

rising interest rate environment, social inflation, the frequency and severity of natural catastrophes including large

hurricanes in Florida such as Hurricane Ian and Milton, and reinsurance capacity constraints. We ceded 72.5% and 73.3%

of our gross premiums earned in the years ended December 31, 2025 and December 31, 2024, respectively.

Initial Public Offering and Corporate Contribution

On May 9, 2025, we completed our initial public offering (the “IPO”) of an aggregate of 6,875,000 shares of the

Company’s common stock, par value $0.001 per share (the “Common Stock”), at a price to the public of $16.00 per share,

6,250,000 of which shares were sold by the Company and 625,000 of which shares were sold by certain selling

stockholders. The gross proceeds to us from the IPO were $100 million, and gross proceeds to the selling stockholders

from the IPO were $10 million, before deducting underwriting discounts and commissions and estimated offering

expenses. On May 13, 2025, the underwriters completed the exercise of their option to purchase an additional 1,031,250

additional shares of Common Stock from the selling stockholders resulting in an additional $16.5 million in gross proceeds

to the selling stockholders, before deducting underwriting discounts and commissions. We did not receive any gross

proceeds from the sales of shares of Common Stock by the selling stockholders. In connection with our IPO, we effected a

56

net issuance of 417,470 shares of restricted stock to certain of our employees and consultants (the “Restricted Stock

Grant”) after giving effect to the withholding of approximately 234,587 shares of Common Stock to satisfy the estimated

tax withholding and remittance obligations (the “Restricted Stock Grant Net Settlement”). We incurred a one-time share-

based compensation expense of $10.4 million in connection with the Restricted Stock Grant and paid $3.8 million in

connection with the Restricted Stock Grant Net Settlement. The compensation expense for these awards was recognized in

the second quarter of 2025. Immediately prior to the IPO, the owners of the equity interests of American Integrity

Insurance Group, LLC (“AIIG”) contributed all of their equity interests to the Company in exchange for an aggregate of

12,904,495 shares of Common Stock.

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:

Year Ended December 31

($ in thousands)

2025

2024

Change

% Change

Gross premiums written

$944,634

$767,678

$176,956

23.1%

Change in gross unearned premiums

(59,676)

(85,462)

25,786

(30.2)%

Gross premiums earned

884,958

682,216

202,742

29.7%

Ceded premiums earned

(642,035)

(500,161)

(141,874)

28.4%

Net premiums earned

242,923

182,055

60,868

33.4%

Policy fees

10,397

7,393

3,004

40.6%

Net investment income

21,704

14,180

7,524

53.1%

Net realized gains (losses) on investments

569

119

450

378.2%

Other income

892

607

285

47.0%

Total Revenues

276,485

204,354

72,131

35.3%

Losses and loss adjustment expenses

98,034

90,832

7,202

7.9%

Policy acquisition expenses

21,446

31,532

(10,086)

(32.0)%

General and administrative expenses

41,948

30,951

10,997

35.5%

Total Expenses

161,428

153,315

8,113

5.3%

Income before taxes

115,057

51,039

64,018

125.4%

Income tax expense

15,436

11,297

4,139

36.6%

Net Income

$99,621

$39,742

$59,879

150.7%

Loss ratio(1)

38.7%

47.9%

Expense ratio(2)

25.0%

33.0%

Combined ratio(3)

63.7%

80.9%

Return on equity(4)

39.9%

26.8%

Ceded catastrophe excess of loss premiums ratio(5)

44.5%

44.9%

Underlying loss and loss adjustment expense ratio(6)

39.4%

32.6%

Gross underlying non-catastrophe loss and loss adjustment

expense ratio(7)

17.0%

17.0%

(1)Loss ratio is a key business metric and is the ratio of losses and LAE to net premiums earned plus policy fees. Management uses

this operating metric to analyze our loss trends and believes it is useful for investors to evaluate this component separately from our

other operating expenses.

(2)Expense ratio is a key business metric and is the ratio of policy acquisition expenses and general and administrative expenses to net

premiums earned plus policy fees. Management uses this metric to analyze our expense trends and believes it is useful for investors

to evaluate these components separately from our loss and loss adjustment expenses.

(3)Combined ratio is a key business metric, defined as the sum of the loss ratio and the expense ratio. Management uses this operating

metric to analyze our total expense trends and believes it is a key indicator for investors when evaluating the overall profitability of

our business.

57

(4)Return on equity is a key business metric, defined as net income, annualized, divided by the average beginning and ending

shareholders’ equity during the applicable period. This metric is annualized for interim periods by multiplying by the applicable

ratio in order to present return on equity consistently.

(5)Ceded catastrophe excess of loss premiums ratio is a key business metric and a non-GAAP measure defined as ceded catastrophe

excess of loss premiums earned divided by gross premiums earned. We view this ratio as meaningful to our business as it provides a

view into the cost of our catastrophe reinsurance program. The most directly comparable GAAP financial measure is the ratio of

ceded premiums earned to gross premiums earned. The ceded catastrophe excess of loss premiums ratio measure should not be

considered a substitute for ceded premiums earned and does not reflect the overall profitability of our business.

(6)Underlying loss and loss adjustment expense ratio is a key business metric and a non-GAAP measure defined as the ratio of loss

and LAE, net, less current year net catastrophe losses and net prior year reserve development divided by net premiums earned plus

policy fees. We view this ratio as meaningful to our business as it allows us to analyze our loss trends before the impact of

catastrophe losses and prior year reserve development. The most directly comparable GAAP measure is the loss ratio. The

underlying loss and LAE ratio should not be considered a substitute for the loss ratio and does not reflect the overall profitability of

our business.

(7)Gross underlying non-catastrophe loss and loss adjustment expense ratio is a key business metric and a non-GAAP measure defined

as the ratio of net underlying loss and LAE plus ceded non-catastrophe losses divided by total gross earned premiums and policy

fees. We view this ratio as meaningful to our business as it allows us to analyze our loss trends before the impact of reinsurance and

to evaluate the cost of non-catastrophe losses for every dollar of gross premium earned. Catastrophe reinsurance windfalls from

Citizens take-outs, changes in catastrophe reinsurance pricing, and changes in the structure of our quota share program can have a

significant impact on underlying loss and LAE ratios. The most directly comparable GAAP measure is the loss ratio. The gross

underlying non-catastrophe loss and LAE ratio should not be considered a substitute for the loss ratio and does not reflect the

overall profitability of our business.

Policies In-Force

Policies in-force represents the number of active insurance policies with coverage in effect as of the end of the period

referenced. We utilize the change in the number of policies in-force to assess the trajectories of our operations.

In-force premium represents the annual premium for active insurance policies with coverage in effect as of the end of the

period referenced. Since 2023, we have seen average in-force premiums decline moderately due to lower average rates per

insurance policy as a result of improving litigation trends and regulatory reform. In addition, the new states we are

expanding into, including South Carolina, Georgia and North Carolina, tend to have lower average rates than Florida.

However, through our continued expansion into the Tri-County region of Florida and into insuring middle-aged homes, we

plan to capitalize on higher average premiums.

The following table shows our policies in-force and in-force premiums by product as of December 31, 2025 and

December 31, 2024:

As of December 31,

2025

2024

($ in thousands)

Policies in-force

In-force premium

Policies in-force

In-force premium

HO-3

276,033

$618,471

225,291

$565,025

HO-4

3,936

1,051

3,677

1,077

HO-5

6,720

8,734

967

1,034

HO-6

15,254

27,606

12,793

24,720

MH

5,800

19,582

7,347

24,519

DP-1 (Including vacant)

26,682

62,354

27,599

68,201

DP-3

76,036

192,284

68,986

185,513

RCAP

157

12,462

—

—

Watercraft

3,518

4,887

3,032

4,190

Golf Cart

7,730

1,192

6,416

978

Total

421,866

$948,623

356,108

$875,257

58

The following table shows our policies in-force and in-force premiums by county as of December 31, 2025 and

December 31, 2024:

As of December 31,

($ in thousands)

2025

2024

County

Policies in-force

In-force premium

Policies in-force

In-force premium

POLK

27,335

$47,538

22,997

$44,493

LEE

25,996

67,600

26,380

78,323

ORANGE

25,977

57,361

22,863

54,288

DUVAL

22,845

36,933

20,598

37,832

HILLSBOROUGH

21,134

49,781

19,454

49,700

OSCEOLA

20,201

41,866

16,185

35,140

PASCO

20,104

39,846

17,327

38,173

PALM BEACH

19,093

73,301

16,218

68,680

MARION

17,007

23,660

14,644

24,431

BREVARD

14,655

36,223

12,588

32,407

VOLUSIA

13,478

28,119

12,543

28,469

OTHERS

194,041

446,395

154,311

383,321

Total

421,866

$948,623

356,108

$875,257

Policies in-force were 421,866 as of December 31, 2025, an increase of 18.5% compared to policies in-force of 356,108 as

of December 31, 2024. The increase in our policies in-force was primarily due to new policies written through the

Voluntary Market and 2024-2025 Citizens take-outs.

In 2025, we wrote 104,283 policies in the Voluntary Market, an increase of 17.0% compared to 89,138 new policies

written in the Voluntary Market during 2024. We experienced policy retention rates of 82.8% during 2025, up from 75.2%

during 2024.

The following table shows our policies in-force and in-force premium by source:

($ in thousands)

Policies In-Force

In-Force Premium

As of December 31, 2024

Voluntary Market

280,755

$661,338

Citizens Legacy Take-Outs

7,140

29,599

FY 2024 Citizens Take-Outs

68,213

184,320

Total

356,108

$875,257

As of December 31, 2025

Voluntary Market(1)

326,758

$655,626

Citizens Legacy Take-Outs(2)

6,022

23,810

Citizens Take-Outs(3)(4)(5)

72,326

204,418

FY 2025 Citizens Take-Outs(5)(6)

16,760

64,769

Total

421,866

$948,623

(1)During 2025, we wrote 104,283 new policies in the Voluntary Market, an increase of 17.0% compared to 89,138 new policies

written in the Voluntary Market during 2024.

(2)Reflects policies assumed from Citizens in or prior to 2014 that have since been renewed directly with the Company. The Company

did not conduct any take-outs in the years 2015 through 2023.

(3)Reflects policies assumed from Citizens that have since renewed directly with the Company.

(4)There were 68,844 policies assumed from Citizens during 2024; and 57,717, or 83.8%, were still in-force as of December 31, 2025.

(5)There were 33,867 policies assumed from Citizens during 2025; and 31,119 policies, or 91.9%, were still in-force as of

December 31, 2025.

(6)Reflects policies assumed from Citizens during the stated calendar year that have less than a year remaining under their current

Citizens policy and will be offered a renewal policy with the Company upon expiration.

59

Revenues

Gross premiums written are the amount received or to be received for insurance policies written or assumed by us during a

specific period of time, in each case prior to amounts ceded to reinsurers. We utilize gross premiums written to assess the

growth of our business excluding the effects of ceded reinsurance.

Gross premiums written are generally impacted by:

•renewals of existing policies;

•new business submissions;

•binding of new business submissions into policies;

•bound policies going effective;

•average premium of new and renewing policies;

•premium rates of new and renewing policies; and

•assumption of policies from third-party carriers and/or Florida state-supported insurers, including from the

Citizens “depopulation” programs.

Gross premiums written increased by $176.9 million, or 23.1%, to $944.6 million for the year ended December 31, 2025,

compared to $767.7 million for the year ended December 31, 2024. This increase was due largely to an increase in written

premiums related to our strategic participation in the Citizens take-out program and premium from new and renewal

policies written through the Voluntary Market.

Gross premiums earned represent the earned portion of our gross premiums written, adjusted by the change in gross

unearned premium. Premiums associated with written, and assumed policies are earned ratably over the remaining term of

the policy, respectively, which is typically one year.

Gross premiums earned increased to $885.0 million for the year ended December 31, 2025 from $682.2 million for the year

ended December 31, 2024. The $202.8 million, or 30.2%, increase was due largely to our increase in gross premiums

written related to the Citizens take-outs.

Ceded premiums written represent the gross premiums written that are ceded to reinsurers under our reinsurance treaties.

We enter into reinsurance contracts to limit our exposure to potential large catastrophe losses and severe non-catastrophe

losses, and in the case of our quota share, to provide additional capacity for growth. Ceded premiums written are impacted

by the level of our gross premiums written and decisions we make from time to time to adjust our net retention levels,

quota share terms, facultative reinsurance terms, property per risk terms and catastrophe excess of loss terms and capacity,

as well as the pricing and availability of reinsurance generally.

Ceded premiums earned represent the earned portion of our ceded premiums written, adjusted by the change in ceded

unearned premiums. We recognize the cost of our reinsurance program and ceded premiums earned ratably over the 12-

month term of the arrangements.

Ceded premiums earned increased $141.8 million, or 28.4%, to $642.0 million for the year ended December 31, 2025 from

$500.2 million for the year ended December 31, 2024. The increase in ceded premiums earned was due to growth in our

gross premiums earned.

Net premiums written reflect gross premiums written, less ceded premiums written.

Net premiums earned reflect gross premiums earned, less ceded premiums earned.

Net premiums earned grew by $60.8 million, or 33.4%, reaching $242.9 million for the year ended December 31, 2025, up

from $182.1 million for the year ended December 31, 2024. This increase was due largely to an increase in gross premiums

earned related to our strategic participation in the Citizens take-out program and premium from new and renewal policies

written through the Voluntary Market.

Policy fees represent various upfront policy fees paid by policyholders on new and renewal insurance policies. In

accordance with ASC 606, policy fees are recognized and earned upon collection as they are not subject to refund, and our

service obligation is fulfilled when the policy is issued.

60

Policy fees increased $3.0 million, or 40.6%, to $10.4 million for the year ended December 31, 2025 from $7.4 million for

the year ended December 31, 2024. The increase in policies written during the year ended December 31, 2025 contributed

to the increase in policy fees.

Net investment income includes interest earned from cash, cash equivalents, fixed maturity securities and short-term

investments. Our invested assets primarily consist of cash and fixed-maturity securities. The primary factors affecting net

investment income include the size of our investment portfolios and the yield generated by the underlying securities held in

the portfolios.

Net investment income increased $7.5 million, or 53.1%, to $21.7 million for the year ended December 31, 2025 from

$14.2 million for the year ended December 31, 2024. The increase in net investment income was due to an increase in

invested assets driven by the increased premiums in-force and the proceeds from our IPO.

Net realized gains (losses) on investments reflect the differences between the amount received by us upon the sale of a

security and the amortized cost of the security, as well as allowances for credit losses recognized in earnings, if any.

We continuously seek to optimize our investment portfolios. Sales of available-for-sale debt securities resulted in net

realized investment gains of $0.6 million for the year ended December 31, 2025 and net realized investment gains of $0.1

million for the year ended December 31, 2024.

Other income represents installment fees earned by us when policyholders elect to pay their premium over time as opposed

to in full at inception of the policy and other miscellaneous items.

Other income increased by $0.3 million, or 47.0%, to $0.9 million for the year ended December 31, 2025 from $0.6 million

for the year ended December 31, 2024.

Expenses

Losses and loss adjustment expenses reflect losses and expenses paid to resolve claims, such as fees paid to claims

adjusters, attorneys and investigators, and changes in our reserves for unpaid losses and LAE during the fiscal period, in

each case net of losses and LAE ceded to reinsurers. Losses and LAE include a provision for claims that have occurred but

have not yet been reported to us. These expenses are a function of the amount and type of insurance contracts we write, and

the loss experience associated with the underlying coverage. Additionally, losses and LAE include the financial benefit

from the management of claims, by American Integrity Claims Services, LLC, our in-house third-party administrator that

earns fees for managing certain policies we issue, including claim fees ceded to reinsurers, which is an offset (contra

expense) to LAE. Our losses and LAE are generally affected by:

•the occurrence, frequency and severity of claims associated with the particular types of insurance contracts that we

write;

•the occurrence of large catastrophe weather events in the states where we operate: Florida, Georgia, North

Carolina and South Carolina;

•the reinsurance agreements we have in place at the time of a loss;

•the mix of business written by us;

•changes in the legal or regulatory environment related to the business we write;

•trends in legal defense costs; and

•inflation in the cost of claims including inflation related to labor and building materials.

Losses and LAE increased $7.2 million, or 7.9%, to $98.0 million for the year ended December 31, 2025 from $90.8

million for the year ended December 31, 2024. The increase in losses and LAE was primarily driven by higher gross

premiums earned, partially offset by the absence of significant storm activity in Florida during the current period.

Policy acquisition expenses are costs we incur in connection with the acquisition of an insurance policy including

commissions paid to distribution partners at the time of policy issuance, policy administration fees paid to third-party

administrators at the time of policy issuance, premium taxes, and inspection fees. These policy acquisition expenses are

partially offset by ceding commission we receive from third-party reinsurers participating on our net quota share program

61

in connection with us ceding a portion of our gross premiums written. We recognize policy acquisition expenses and

ceding commissions ratably over the term of the underlying policies. Ceding commissions are reported as a reduction to

policy acquisition costs and general and administrative expenses and allocated to each based upon the proportion these

costs bear to production of new business.

Policy acquisition expenses decreased $10.1 million, or 32.0%, to $21.4 million for the year ended December 31, 2025

from $31.5 million for the year ended December 31, 2024. The decrease was primarily driven by lower acquisition costs

associated with Citizens take-outs and partially offset by higher ceded commissions related to growth in the voluntary

business.

General and administrative expenses consist of expenses of our operations including employee compensation and benefits,

technology costs, facilities costs and professional services fees, including legal, accounting and actuarial fees, as well as

general corporate overhead expenses. As noted above, a certain portion of our ceding commissions are allocated to general

and administrative expenses.

General and administrative expenses increased $10.9 million, or 35.5%, to $41.9 million for the year ended December 31,

2025 from $31.0 million for the year ended December 31, 2024. The increase was primarily driven by one-time stock-

based and cash compensation expenses, the termination payment related to the management services agreement, and other

IPO-related costs, along with higher salaries and consulting fees to support the public company operations and ongoing

growth.

Income tax (benefit) expense relates to federal and state income taxes. The amount of income tax expense or benefit

recorded in future periods will depend on the jurisdictions in which we operate and the tax laws and regulations in effect.

The Company is subject to payment of U.S. federal and state income taxes as a corporation.

Income tax expense was $15.4 million and $11.3 million for the year ended December 31, 2025 and 2024, respectively.

Our effective tax rate for the year ended December 31, 2025 and 2024 was 13.4% and 22.1%, respectively. On May 7,

2025, the Company reorganized its structure through a tax-free transaction, which changed its tax status from a limited

liability company, treated as a partnership for federal income tax purposes, to a corporation subject to United States federal

income tax, under Subchapter C of the Internal Revenue Code. Conversion from a non-taxable entity to a corporation is

considered a change in tax status, and has been reflected in the consolidated financial statements in accordance with the

relevant accounting guidance. The change in tax status created deferred tax assets of approximately $9.7 million as a one-

time gain in 2025 resulting in a lower effective tax rate for the year ended December 31, 2025.

Key Business Metrics and Ratios

Loss ratio

Loss ratio is the ratio of losses and LAE to net premiums earned plus policy fees. We add policy fees to net premiums

earned when calculating our loss and expense ratios to include the total revenue produced by a policy, given they are

earned when a policy is written. Our loss ratio decreased by 9.2 percentage points for the year ended December 31, 2025,

to 38.7%, compared to 47.9% for the year ended December 31, 2024. The decrease in the loss ratio was primarily due to

the increase in net premiums earned driven largely by our recent participation in the Citizens take-out program and the

absence of significant storm activity in Florida during the current period.

Expense ratio

Expense ratio is the ratio of policy acquisition expenses and general and administrative expenses to net premiums earned

plus policy fees. Our expense ratio decreased by 8.0 percentage points to 25.0% for the year ended December 31, 2025

compared to 33.0% for the year ended December 31, 2024 primarily due to higher net premiums earned driven by our

recent participation in the Citizens take-out program and premiums from new and renewal policies written through the

Voluntary Market, partially offset by non-recurring expenses and higher salaries and consulting fees related to the IPO and

ongoing public company operations.

Combined ratio

Combined ratio is the sum of the loss ratio and the expense ratio. We utilize combined ratio to assess our underwriting

performance. A combined ratio below 100% indicates an underwriting profit, while a combined ratio exceeding 100%

indicates an underwriting loss. Our combined ratio improved to 63.7% for the year ended December 31, 2025 from 80.9%

62

for the year ended December 31, 2024. This improvement was due largely to our recent participation in the Citizens take-

out program, which resulted in a financial benefit by reducing our expense ratio and loss ratio and resulted in a

disproportionate increase in net premiums earned, and the absence of significant storm activity in Florida during the current

period.

Return on equity

Return on equity is defined as net income, divided by the average beginning and ending shareholders’ equity during the

applicable period. Our return on equity increased to 39.9% for the year ended December 31, 2025 from 26.8% for the year

ended December 31, 2024. The increase in our return on equity was due to an increase in net income during the period

partially offset by growth in shareholders’ equity as a result of retained earnings and proceeds from our IPO.

Non-GAAP Financial Measures

We utilize certain non-GAAP financial measures to analyze our business and provide useful information about our

financial performance. The non-GAAP financial measures are not recognized terms under GAAP and should not be

considered as alternatives to the corresponding GAAP measures of financial performance, or any other performance

measure derived in accordance with GAAP. Because not all companies use identical calculations, the presentation of the

non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and can differ

significantly from company to company. Our management uses these non-GAAP financial measures, in conjunction with

GAAP financial measures, as an integral part of managing our business and to, among other things: (i) monitor and

evaluate the performance of our business operations and financial performance; (ii) facilitate internal comparisons of the

historical operating performance of our business operations; (iii) facilitate external comparisons of the results of our overall

business to the historical operating performance of other companies that may have different capital structures and debt

levels and different go-to-market models; (iv) review and assess the operating performance of our management team; (v)

analyze and evaluate financial and strategic planning decisions regarding future operating investments; and (vi) plan for

and prepare future annual operating budgets and determine appropriate levels of operating investments.

We monitor the following key business metrics and non-GAAP financial measures that assist us in evaluating our business,

measuring our performance, identifying trends and making strategic decisions. As such, we have presented the following

non-GAAP measure, their most directly comparable GAAP measure, and key business metrics:

Non-GAAP Measure

Comparable GAAP Measure

Underwriting income (loss)

Income before taxes

Adjusted net income

Net income

Adjusted earnings per share

Earnings per share

Adjusted return on equity

Return on equity

Underlying loss and loss adjustment expense ratio

Losses and loss adjustment expense ratio

Gross underlying loss and loss adjustment expense ratio

Losses and loss adjustment expense ratio

Ceded catastrophe excess of loss premiums ratio

Ceded premiums earned to gross premiums earned

Underwriting income (loss)

Underwriting income (loss) is a non-GAAP financial measure defined as income (loss) before income taxes, excluding net

investment income, net realized gains and losses on investments, interest expense, other income and stock-based

compensation expense. We use underwriting income as an internal performance measure in the management of our

operations because we believe it gives us and users of our financial information useful insight into our results of operations

and our underlying business performance and provides insight into the results of how effective our policy underwriting is.

Underwriting income (loss) should not be viewed as a substitute for net income calculated in accordance with GAAP and

other companies may define underwriting income differently.

Underwriting income increased by $55.8 million, or 154.3%, to $91.9 million from $36.1 million for the year ended

December 31, 2024. The increases were due largely to the financial benefits of our participation in the Citizens take-out

program, as well as improved underwriting performance reflecting higher earned premiums from new and renewal policies

written during the period.

63

Underwriting income for the years ended December 31, 2025 and 2024 reconciles to income before taxes as follows:

Year Ended December 31,

($ in thousands)

2025

2024

Income before taxes

$115,057

$51,039

Less:

Net investment income

21,704

14,180

Net realized gains on investments

569

119

Other income

892

607

Underwriting income

$91,892

$36,133

Adjusted net income and Adjusted earnings per share

Adjusted net income is a non-GAAP financial measure defined as net income excluding net realized gains or losses on

investments, stock compensation expense, and certain non-recurring or non-cash expenses, including those incurred in

connection with our IPO, net of tax. We use adjusted net income as an internal performance measure in the management of

our operations because we believe it gives us and users of our financial information useful insight into our results of

operations and our underlying business performance excluding the impact of realized gains and losses on the sale of

securities, which we do not view as core to the underlying trends in our business. Adjusted net income should not be

viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define adjusted net

income differently.

For the year ended December 31, 2025, adjusted net income increased by $65.5 million, or 165.2%, to $105.2 million from

$39.6 million for the year ended December 31, 2024. The increase was due largely to the financial benefits of our recent

participation in the Citizens take-out program and higher net premiums earned, as well as improved underwriting

performance due in part to the absence of significant storm activity in Florida during the current period.

Adjusted earnings per share is a non-GAAP measure, which is calculated as adjusted net income available to common

stockholders divided by weighted average diluted common shares outstanding. Management believes this metric is

meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by

excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not

indicative of operating trends.

64

Adjusted net income and adjusted earnings per share for the year ended December 31, 2025 and 2024 reconciles to net

income and earnings per share, respectively, as follows:

Year Ended December 31,

($ in thousands)

2025

2024

Net Income

$99,621

$39,742

Add:

Stock compensation(1)

10,433

—

Termination of management services

agreement(2)

3,000

—

One-time bonus(2)

1,387

—

One-time IPO expenses(2)

1,654

—

Post IPO transition expenses(2)

2,287

—

Less:

Net realized gains on Investments

569

119

Change in tax status(3)

9,722

—

Tax effect(4)

2,930

(25)

Adjusted net income

$105,161

$39,648

Adjusted income allocated to participating

securities

2,190

1,711

Numerator:

Adjusted net income available for common

shareholders

$102,971

$37,937

Denominator:

Weighted average common shares outstanding:

Basic

17,235,168

12,904,495

Diluted

17,235,376

12,904,495

Adjusted earnings per share:

Basic

$5.97

$2.94

Diluted

$5.97

$2.94

(1)Stock-based compensation expense recognized of $10,433 for the year ended December 31, 2025, and approximately $4,241 was

nondeductible for U.S. federal income tax purposes.

(2)Material non-recurring items that we do not expect to continue in the future and believe are not reflective of our ongoing operations

and our performance.

(3)The change in tax status of the parent company from a non-taxable entity to a taxable corporation resulted in recognition of a

deferred income tax benefit. This adjustment has been removed using the U.S. federal statutory and state blended corporate tax rate

of 25.262% for consistency with the tax asset recorded.

(4)We included the tax impact of all adjustments to adjusted net income using the U.S. federal statutory corporate tax rate of 21%.

While the Company’s actual effective tax rates for the year ended December 31, 2025 and 2024 were 13.4% and 22.1%

respectively, the use of the statutory rate provides a consistent and simplified approach for comparability. This approach is applied

uniformly, including to items that may be partially or fully nondeductible for tax purposes. The tax effect row is presented exclusive

of the change in tax status impact.

Adjusted return on equity

Adjusted return on equity is a non-GAAP financial measure defined as adjusted net income divided by the average of

beginning and ending shareholders’ equity during the applicable period and is annualized for periods of less than one year.

We use adjusted return on equity as an internal performance measure in the management of our operations because we

believe it gives us and users of our financial information useful insight into our underlying business performance. Adjusted

return on equity should not be viewed as a substitute for any metrics calculated in accordance with GAAP, and other

companies may define adjusted return on equity differently.

Adjusted return on equity increased by 15.3 percentage points, to 42.1% for the year ended December 31, 2025 from

26.8% for the year ended December 31, 2024. The increase in adjusted return on equity over the prior period end balance

65

was primarily due to an increase in net income during the period, partially offset by growth in shareholders’ equity as a

result of retained earnings and proceeds from our IPO.

Adjusted return on equity for the years ended December 31, 2025 and 2024 reconciles to return on equity as follows:

Year Ended December 31,

($ in thousands)

2025

2024

Net income

$99,621

$39,742

Average beginning and ending shareholders’

equity(1)

249,707

148,179

Return on equity

39.9%

26.8%

Adjusted net income (after tax)(2)(3)

$105,161

$39,648

Average shareholders’ equity

249,707

148,179

Adjusted return on equity(2)(3)

42.1%

26.8%

(1)Average beginning and ending shareholders’ equity represents the average of shareholders' equity at the beginning and end of the

year presented.

(2)Adjusted return on equity is the adjusted net income (after tax) divided by the average beginning and ending shareholders’ equity.

(3)We included the tax impact of all adjustments to adjusted net income using the US federal statutory corporate tax rate of 21%.

While the Company’s actual effective tax rates for the year ended December 31, 2025 and 2024 were 13.4% and 22.1%

respectively, the use of the statutory rate provides a consistent and simplified approach for comparability. This approach is applied

uniformly, including to items that may be partially or fully nondeductible for tax purposes.

Underlying loss and loss adjustment expense ratio

Underlying loss and loss adjustment expense ratio is a non-GAAP measure. We calculate the underlying loss and loss

adjustment expense ratio by subtracting current year net catastrophe losses and prior year net reserve development from

total net losses and LAE and dividing that amount by the sum of total net premiums earned plus policy fees. We use the

underlying loss and LAE ratio to allow us to analyze our loss trends before the impact of catastrophe losses and prior year

reserve development. These two items can have a significant impact on our loss trends in a given period. We believe it is

useful for investors to evaluate these components both separately and in the aggregate when reviewing our performance.

The most directly comparable GAAP measure is net loss and LAE ratio. The underlying loss and LAE ratio should not be

considered a substitute for net loss and LAE ratio and does not reflect the overall profitability of our business.

We experienced favorable net prior year reserve development of $1.8 million for the year ended December 31, 2025 and

favorable net prior year development $3.2 million for the year ended December 31, 2024. We experienced no catastrophe

losses for the year ended December 31, 2025. For the year ended December 31, 2024, we experienced $32.2 million of

catastrophe losses related to Property Claims Services, coded storm activity during the period primarily due to Hurricane

Helene and a severe convective storm in May 2024.

The underlying loss and loss adjustment expense ratio increased to 39.4% for the year ended December 31, 2025 from

32.6% for the year ended December 31, 2024, primarily due to the lack of catastrophe losses in 2025 combined with the

increase in net premiums earned resulting from our participation in the Citizens take-out program and voluntary policy and

premium growth.

66

The following table summarizes loss ratios and underlying loss and LAE ratios for the years ended December 31, 2025 and

2024:

Year Ended December 31,

($ in thousands)

2025

2024

Total Net Premiums Earned

$242,923

$182,055

Plus: Policy Fees

10,397

7,393

Total Net Premiums Earned Plus Policy Fees

253,320

189,448

Losses and Loss Adjustment Expenses, Net

$98,034

$90,832

Loss and Loss Adjustment Expense Ratio (% Net Premiums

Earned Plus Policy Fees)

38.7%

47.9%

Less:

Current Year Net Catastrophe Losses

—

32,192

Prior Year Net Reserve Development

(1,814)

(3,187)

Underlying Loss and Loss Adjustment Expenses, Net

$99,848

$61,827

Underlying Loss and Loss Adjustment Expense Ratio (% Net

Premiums Earned Plus Policy Fees)

39.4%

32.6%

Gross underlying non-catastrophe loss and loss adjustment expense ratio

Gross underlying non-catastrophe loss and loss adjustment expense ratio is a non-GAAP measure. We calculate the gross

underlying non-catastrophe loss and LAE ratio by adding net underlying loss and LAE and ceded non-catastrophe losses

and dividing that amount by the sum of total gross earned premium and policy fees. We use the gross underlying non-

catastrophe loss and LAE ratio to analyze our loss trends before the impact of reinsurance.

Catastrophe reinsurance windfalls from Citizens takeouts, changes in catastrophe reinsurance pricing, and changes in the

structure of our quota share program can have a significant impact on underlying loss and LAE ratios. We believe it is

useful for investors to evaluate the cost of non-catastrophe losses for every dollar of gross premium earned. The most

comparable GAAP measure is the net loss and LAE ratio. The gross underlying loss and LAE ratio should not be

considered a substitute for net loss and LAE ratio and does not reflect the overall profitability of our business.

The following tables summarize the gross underlying non-catastrophe loss and LAE ratios for year ended December 31,

2025, and 2024:

Year Ended December 31,

($ in thousands)

2025

2024

Total Gross Premiums Earned

$884,958

$682,216

Plus: Policy Fees

10,397

7,393

Total Gross Premiums Earned Plus Policy Fees

895,355

689,609

Losses and Loss Adjustment Expenses, Net

98,034

90,832

Less:

Current Year Net Catastrophe Losses

—

32,192

Prior Year Net Reserve Development

(1,814)

(3,187)

Underlying Loss and Loss Adjustment Expenses, Net

$99,848

$61,827

Add:

Ceded Non-Catastrophe Loss and Loss Adjustment

Expense

52,522

55,381

Gross Underlying Non-Catastrophe Loss and Loss Adjustment

Expenses, Net

$152,370

$117,208

Loss and Loss Adjustment Expense Ratio (% Net Premiums

Earned Plus Policy Fees)

38.7%

47.9%

Gross Underlying Non-Catastrophe Loss and Loss Adjustment

Expense Ratio (% Gross Premiums Earned Plus Policy Fees)

17.0%

17.0%

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Ceded catastrophe excess of loss premiums ratio

Ceded catastrophe excess of loss premiums ratio is a non-GAAP measure and, expressed as percentage, is defined as ceded

catastrophe excess of loss premiums earned divided by gross premiums earned. We believe it is useful for investors to

evaluate ceded catastrophe excess of loss premiums ratio as it provides a proxy for our cost of catastrophe reinsurance. The

most directly comparable GAAP measure is the ratio of ceded premiums earned to gross premiums earned. The ceded

catastrophe excess of loss premiums ratio measure should not be considered a substitute for ceded premiums earned and

does not reflect the overall profitability of our business.

Ceded catastrophe excess of loss premiums ratio decreased 0.4 percentage points, to 44.5% for the year ended December

31, 2025 from 44.9% for the year ended December 31, 2024. This decrease was primarily driven by an increase in gross

premiums earned related to our participation in the Citizens take-out program, which increased at a higher rate than ceded

catastrophe excess of loss premiums, as well as risk-adjusted decreases in reinsurance pricing from the June 1, 2025

catastrophe excess of loss reinsurance renewal.

The calculation of our ceded excess of loss premiums ratio for the year ended December 31, 2025 and 2024 is shown in the

table below:

Year Ended December 31,

($ in thousands)

2025

2024

Gross Premiums Earned

$884,958

$682,216

Total Ceded Premiums Earned

(642,035)

(500,161)

Less: NCQSR and other ancillary reinsurance treaties

(248,103)

(194,022)

Ceded Catastrophe Excess of Loss Premiums Earned

$(393,932)

$(306,139)

Ceded Catastrophe Excess of Loss Premiums Ratio

44.5%

44.9%

Liquidity and Capital Resources

Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet the short-term and long-term cash

requirements of its business operations. Funds generated from operations have been sufficient to meet our current and long-

term liquidity requirements.

The liquidity of the Company, comprised of cash, cash equivalents and our liquid fixed income portfolios, fluctuates from

time to time. As of December 31, 2025, our liquidity totaled $592.7 million. A portion of that liquidity is not held at AIIC.

The total cash and cash equivalents not held at the insurance subsidiary was $143.3 million as of December 31, 2025. Our

liquidity framework is designed to support operational flexibility, ensuring we can fund claims obligations, capital

expenditures, and growth initiatives without reliance on external financing. In the event of a large loss event, we may

utilize proceeds from our investment portfolios as a source of liquidity to service claims.

On May 9, 2025, we consummated our IPO and received net proceeds of $82 million, after (i) deducting underwriting

discounts and commissions totaling $7.0 million as well as $4.2 million of other expenses related to the offering, (ii) using

approximately $3.8 million of the proceeds from the offering to satisfy the Restricted Stock Grant Net Settlement and (iii)

using $3.0 million of the proceeds of the offering to terminate the management services agreement by and between James

Sowell Company, L.P. and AIIG.

We maintain a disciplined capital management approach, balancing organic growth investments with stockholder return

considerations. Our capital resources include:

•Operating cash flow, which remains the primary source of funding for day-to-day operations and claim payments.

•Reinsurance arrangements, which provide financial resilience against catastrophe loss events.

•Potential strategic financing, including debt instruments or equity offerings, which may be considered to

accelerate expansion opportunities.

Future capital requirements will be driven by business growth, regulatory capital needs, and evolving market conditions.

Our goal is to optimize capital efficiency while maintaining a strong financial foundation for long-term success.

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The principal source of liquidity at the Company is from its subsidiaries, including fees paid by the insurance subsidiary,

AIIC, and dividends paid by other subsidiaries generated from, among other things, income earned on policy fees and fees

paid by AIIC to American Integrity MGA, LLC (“AIMGA”) for general agency, inspections, agent commissions, general

operating expenses and claims adjusting services.

Future capital allocation decisions, including dividend distributions and share repurchases, will be determined by our Board

of Directors based on profitability trends, regulatory considerations, and long-term stockholder value objectives. We did

not declare or pay any dividends during 2025. On February 24, 2026, our Board of Directors declared a special cash

dividend of $1.02 per share of Common Stock payable on March 30, 2026 to stockholders of record at the close of business

on March 16, 2026. The aggregate amount of the payment to be made in connection with this special cash dividend will be

approximately $20 million, and we plan to pay such dividend using cash on hand.

While we currently intend to retain any future earnings for use in the operation of our business and have no plans to declare

or pay any additional cash dividends in the foreseeable future (other than the special dividend referenced above), our Board

of Directors may, from time to time, reassess whether to declare dividends in the future.

As discussed in Note 10 – “Regulatory Requirements and Restrictions” in the notes to our consolidated financial

statements, there are limitations on the dividends a subsidiary may pay to its immediate parent company.

The maximum amount of dividends that can be paid by Florida insurance companies without prior approval of the Florida

Office of Insurance Regulation is subject to restrictions as referenced below and in Note 10 – “Regulatory Requirements

and Restrictions” in the notes to our consolidated financial statements. Dividends from AIIC can only be paid from

accumulated unassigned funds derived from net operating profits and net realized capital gains. Subject to such

accumulated unassigned funds, the maximum dividend that may be paid by AIIC to the Company without prior approval is

further limited to the lesser of statutory net income from operations of the preceding calendar year or statutory unassigned

surplus as of the preceding year end. As of December 31, 2025, AIIC has not declared dividends.

Liquidity for AIIC is primarily required to cover payments for reinsurance premiums, claims payments including potential

payments of catastrophe losses (offset by recovery of any reimbursement amounts under our reinsurance agreements), fees

paid to affiliates for managing general agency services, claims adjusting services, premium and income taxes, regulatory

assessments, general operating expenses, and interest and principal payments on debt obligations. Principal sources of

liquidity for AIIC consist of the revenue generated from the collection of written premiums and the collection of

reinsurance recoverable.

Principal sources of liquidity for the Company include fees paid by our insurance subsidiary, AIIC, and dividends paid by

other subsidiaries generated from, among other things, income earned on policy fees and fees paid by AIIC to AIMGA for

general agency, inspections, agent commissions, general operating expenses and claims adjusting services.

Cash flows

Our most significant source of cash is from premiums received from our policyholders, which, for most policies, we

receive at the beginning of the coverage period, although some policyholders elect to pay in installments over the duration

of the policy. Our most significant cash outflow is for the cost of our reinsurance agreements in the form of ceded

premiums and for claims that arise when a policyholder incurs an insured loss. Because the payment of claims occurs after

the receipt of the premium, sometimes years later, we invest the cash in various investment securities that earn interest and

dividends. We also use cash to pay commissions to distribution partners, as well as to pay for ongoing operating expenses

such as salaries, professional services and taxes. As described under “Reinsurance” below, we use reinsurance to manage

the risk that we take on our policies. We cede, or pay out, part of the premiums we receive to our reinsurers and collect

cash back when losses subject to our reinsurance coverage are paid.

The timing of our cash flows from operating activities can vary among periods due to the timing by which payments are

made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can

be significant, so their timing can influence cash flows from operating activities in any given period. Management believes

that cash receipts from premiums, proceeds from investment sales and redemptions and investment income are sufficient to

cover cash outflows for the foreseeable future.

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Our cash flows for the years ended December 31, 2025 and 2024 were:

Year Ended December 31,

($ in thousands)

2025

2024

Cash and cash equivalents (net) provided by: Operating activities

$138,192

$148,909

Cash and cash equivalents (net) used in: Investing activities

(135,079)

(19,369)

Cash and cash equivalents (net) provided by (used in): Financing activities

61,734

(12,436)

Net increase in cash and cash equivalents

$64,847

$117,104

Cash provided by operating activities was $138.2 million for the year ended December 31, 2025 compared to $148.9

million provided by operating activities for the year ended December 31, 2024. The decrease in cash provided by operating

activities resulted from higher cash outflows related to reinsurance activity and loss payments associated with increased

gross premiums earned.

Cash used in investing activities was $(135.1) million for the year ended December 31, 2025 compared to $(19.4) million

used in investing activities for the year ended December 31, 2024. The increase in net cash used in investing activities was

primarily attributable to the purchases of fixed income securities in excess of proceeds from sales and maturities of fixed

maturity securities during the period.

Net cash provided by financing activities was $61.7 million for the year ended December 31, 2025 compared to $(12.4)

million used in financing activities for the year ended December 31, 2024. The increase in net cash provided by financing

activities was primarily attributable to proceeds from the Company’s IPO, slightly offset by an increase in the distribution

made to members to pay federal income tax prior to the IPO and a discretionary distribution that was paid out to members

prior to the IPO.

Capitalization

Capital resources provide protection for policyholders, furnish the financial strength to support the business of

underwriting insurance risks and facilitate continued business growth. The following table provides our shareholders’

equity, total long-term debt, total capital resources, debt-to-total capital ratio and debt-to-equity ratio as of December 31,

2025, and December 31, 2024.

Year Ended December 31,

($ in thousands)

2025

2024

Shareholders’ equity

$337,022

$162,392

Long-term debt

618

1,029

Total capital resources

337,640

163,421

Debt-to-total capital ratio

0.2%

0.6%

Debt-to-equity ratio

0.2%

0.6%

The debt-to-total capital ratio is calculated as total long-term debt divided by total capital resources, whereas the debt-to-

equity ratio is calculated as total long-term debt divided by shareholders’ equity. These ratios help management measure

the amount of financing leverage in place in relation to equity and future leverage capacity.

Critical Accounting Policies and Estimates

In order to align with GAAP, preparing financial statements requires us to forecast future events through estimates and

assumptions. These projections, along with their underlying assumptions, significantly impact the reported values of assets

and liabilities, the disclosure of potential assets and liabilities, and the recorded figures for revenues and expenses. Among

the accounting estimates, the accounting estimates discussed below are those that demand judgment, where different

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decisions could lead to substantial alterations in the reported outcomes. For a detailed discussion of our accounting

policies, see our notes to the consolidated financial statements. Our current critical accounting policies and estimates are:

Liability for unpaid losses and loss adjustment expenses

We set aside reserves, net of estimated subrogation, to provide for the estimated costs of paying losses and LAE under

insurance policies we issued. Liability for unpaid losses and LAE represent management’s best estimate of the ultimate

cost of settling all outstanding claims, including claims that have been incurred, but not yet reported (“IBNR”) as of a

financial statement date. With the assistance of an independent, actuarial firm, we use statistical analysis to establish

liabilities for unpaid losses and LAE. We do not discount the liability for unpaid losses and LAE for financial statement

purposes. In establishing the liability for unpaid losses and LAE, actuarial judgment is relied upon in order to make

appropriate assumptions to estimate a best estimate of ultimate losses. Those estimates are based on our historical

information, industry information and estimates of trends that may affect the ultimate frequency of incurred but not

reported claims and changes in ultimate claims severity.

We regularly review our reserve estimates and adjust them as necessary as experience develops or as new information

becomes known to us. Such adjustments are included in current operations. During the loss settlement period, if we have

indications that claims frequency or severity exceeds our initial expectations, we generally increase our reserves for losses

and LAE. Conversely, when claims frequency and severity trends are more favorable than initially anticipated, we

generally reduce our reserves for losses and LAE once we have sufficient data to confirm the validity of the favorable

trends. Even after such adjustments, the ultimate liability may exceed or be less than the revised estimates. Accordingly,

the ultimate settlement of losses and the related LAE may vary significantly from the estimate included in our consolidated

financial statements.

Reserving for reported claims relies on a detailed assessment of individual risks, understanding the specifics of each claim,

and considering the insurance policy terms related to the particular type of loss. Reserving for unreported claims and LAE

involves utilizing historical data per line of insurance adjusted to present circumstances. Typically, the reserving process

implicitly considers inflation by analyzing costs, trends, and reviewing historical reserving outcomes across several years.

The process of estimating the reserves for losses and LAE requires a high degree of judgment and is subject to several

variables. Reserve estimates for our ultimate liability are derived using several different actuarial estimation methods,

depending on the type of loss:

•Loss development method: The loss development method uses actual loss data and the historical development

profiles on older underwriting years to project more recent, less developed years to their ultimate position.

•Frequency/severity methods: These methods are similar to the paid and case incurred loss development methods

except that estimates of ultimate claim counts (a measure of claim frequency) and ultimate average severity are

derived separately and then multiplied together to provide an estimate of ultimate loss.

•Incremental cost per closed claim method: This method is similar to the frequency/severity method except that

paid severities are selected for each incremental development period, and then are trending using selected short-

term and long-term trend factors.

•Bornhuetter-Ferguson method: The Bornhuetter-Ferguson method uses as a starting point an assumed initial

expected loss ratio and blends in the loss ratio, which is implied by the claims experience to date using benchmark

loss development patterns on paid claims data or reported claims data.

•IBNR-to-case outstanding method: This method requires the estimation of consistent paid and reported (case)

incurred loss development patterns and age-to-ultimate factors. These patterns imply a specific expected

relationship between IBNR, including both development or known claims (bulk reserve) and losses on a true late

reported claims, and reported case incurred losses.

•DCC development methods: When DCC data is evaluated separately from losses, historical paid and case incurred

DCC data may be arranged in a triangular format and projected to ultimate using the same technique as used for

losses (i.e., loss development methods). In addition, projections using triangles of ratios of paid DCC-to-paid loss

and ratios of paid DCC-to-case incurred losses can be made; those triangles can be constructed using ratios of

incremental (e.g. annual) amounts, or ratios of cumulative amounts. Indications that result from projecting these

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ratios must be multiplied by the ultimate loss selections to arrive at ultimate DCC indications. Similarly, triangles

of ratios of paid DCC-to-closed or reported claim counts can be used. The results from projecting these ratios will

require multiplication by ultimate claim count selections to arrive at ultimate DCC indications.

Each actuarial methodology requires the selection and application of various parameters and assumptions. The key

parameters and assumptions include:

1)Loss development factors – These factors are key assumptions in the loss development methods which assume

recent accident years will follow the development patterns of prior accident years.

2)Initial expected loss ratio selections – The initial expected loss ratio selection is the key assumption in the

Bornhuetter-Ferguson methods. The selection was made based on average of development methods loss ratios and

selected loss ratio trend.

3)Claim count decay ratios – The decay ratio is the key assumption in the projection of ultimate claim counts for

catastrophe and non-catastrophe storms.

4)Short-term and long-term projected severity trends – These severity trends are the key assumption in projecting

severities for accident years in their future development periods.

Our reserves are driven by several important factors, including litigation and regulatory trends, legislative activity, climate

change, social and economic patterns and claims inflation assumptions. Our reserve estimates reflect current inflation in

legal claims’ settlements and assume we will not be subject to losses from significant new legal liability theories. Our

reserve estimates assume that there will not be significant changes in the regulatory and legislative environment. The

impact of potential changes in the regulatory or legislative environment is difficult to quantify in the absence of specific,

significant new regulation or legislation. In the event of significant new regulation or legislation, we will attempt to

quantify its impact on our business, but no assurance can be given that our attempt to quantify such inputs will be accurate

or successful.

Our financial status, reported outcomes, and liquidity are susceptible to shifts in critical assumptions determining our loss

reserves. While we do not anticipate changes in claim frequency to significantly impact our reserves, fluctuations in the

severity of claims could influence these reserves.

These amounts fell within the range of total reserves provided by our independent actuary. As of December 31, 2025, we

recorded $10.7 million in case reserves and an additional $255.9 million for IBNR reserves, totaling $266.6 million in

reserves, with an added $269.1 million attributable to reinsurance claims payable.

For further detail, see Note 8 – “Liability for Unpaid Losses and Loss Adjustment Expenses” in our notes to the

consolidated financial statements.

($ in thousands)

Actual

Low Estimate

% Change from

Actual

High Estimate

% Change from

Actual

Loss Reserves

$80,876

$70,994

13.9%

$86,758

7.3%

Reinsurance

We follow industry standards by reinsuring a portion of our risks. Reinsurance involves transferring, or “ceding,” a share of

the risk exposure from the policies we write to another insurer, known as a reinsurer. If our reinsurers are unable to fulfill

their obligations under our reinsurance agreements, we remain accountable for the entire insured loss.

In cases where losses fall within our reinsurance coverage, we document recoverable amounts from our reinsurers for paid

losses and an estimation of recoverable amounts on unpaid losses. The reinsurance recoverables on unpaid losses are

estimated in a manner consistent with the Company’s estimate of unpaid losses and LAE associated with the insured

business, thus fluctuating with changes to our estimates of unpaid losses. The estimation of recoverable amounts from

reinsurers on unpaid losses may change in the future, and if there is a change it could adversely affect the amounts stated in

our consolidated financial statements.

72

We estimate uncollectible amounts receivable from reinsurers based on an assessment of factors including the

creditworthiness of the reinsurers and the adequacy of collateral obtained, where applicable.

Ceding Commission

A sliding scale ceding commission is a type of contingent fee paid in connection with a reinsurance treaty and is based on

the loss experience of the underlying insurance contract. At inception, the commission is estimated, and adjustments are

subsequently made as more information becomes available regarding actual loss experience.

In connection with quota share reinsurance arrangements for non-catastrophe losses, the Company receives ceding

commissions from the reinsurers to reimburse its direct and indirect acquisitions cost as well as other expenses.

The amount of ceding commissions ultimately received by the Company are contingent upon the amount of premium

written and earned and the commission rate is adjusted on a sliding scale based upon loss ratios of the ceded premium.

Accordingly, the Company develops estimates of ceding commissions based on an evaluation of historical experience and

available information, with subsequent adjustment for true-ups recorded prospectively.

Investments

The Company currently classifies all of its investments in debt securities and short-term investments as available-for-sale

and reports them at fair value. Short-term investments consist of investments in interest-bearing assets with original

maturities of 12 months or less. The Company records subsequent changes in value through the date of disposition as

unrealized holding gains and losses, net of taxes, and includes them as a component of accumulated other comprehensive

income until reclassified to earnings upon sale. Realized gains and losses on the sale of investments are determined using

the specific-identification method and included in earnings. The Company amortizes any premium or discount on fixed

maturities over the remaining maturity period of the related securities using the effective interest method and reports the

amortization in net investment income. The Company recognizes dividends and interest income when earned. We have a

financial stability rating of A, “Exceptional” from Demotech, an independent financial firm specializing in evaluating the

financial stability of regional and specialty insurers, and whose rating is accepted by major mortgage companies. We do not

have a rating from A.M. Best.

Fair Value

In our disclosure of the fair value of our investments, we utilize a hierarchy based on the quality of inputs used to measure

fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or

liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to

transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value.

The three levels of the fair value hierarchy are described below:

•Level 1 – Valuations based on quoted prices in active markets for identical assets and liabilities;

•Level 2 – Valuations based on observable inputs that do not meet the criteria for Level 1, including quoted prices

in inactive markets and quoted prices in active markets for similar, but not identical instruments; and

•Level 3 – Valuations based on unobservable inputs, which are based upon the best available information when

external market data is limited or unavailable.

We estimate the fair value of our investments using the closing prices on the last business day of the reporting period,

obtained from active markets using independent pricing source. For securities for which quoted prices in active markets are

unavailable, we use observable inputs such as quoted prices in inactive markets, quoted prices in active markets for similar

instruments, benchmark interest rates, broker quotes and other relevant inputs. Our estimates of fair value reflect the

interest rate environment that existed as of the close of business on December 31, 2025 and December 31, 2024. Changes

in interest rates subsequent to December 31, 2025 may affect the fair value of our investments.

Investment securities are subject to fluctuations in fair value due to changes in issuer-specific circumstances, such as credit

rating, and changes in industry-specific circumstances, such as movements in credit spreads based on the market’s

perception of industry risks. In addition, fixed maturities are subject to fluctuations in fair value due to changes in interest

rates as a result of governmental monetary policies, domestic and international economic and political conditions and other

73

factors beyond our control. A rise in interest rates would decrease the net unrealized holding gains of our investment

portfolios, offset by our ability to earn higher rates of return on funds reinvested. Conversely, a decline in interest rates

would increase the net unrealized holding gains of our investment portfolios, offset by lower rates of return on funds

reinvested. Unrealized gains and losses on our fixed maturity securities are included in accumulated other comprehensive

income as a separate component of total shareholders’ equity.

Impairment

Quarterly, the Company performs an assessment of all investments to determine if any are impaired as the result of a credit

loss. An investment is impaired when the fair value of the investment declines to an amount less than the cost or amortized

cost of that investment. For each fixed-income security in an unrealized loss position, if the intent is to sell the security or if

it is more likely than not that the Company will be required to sell the security before recovering the cost or amortized cost

basis for reasons such as liquidity needs, contractual or regulatory requirements, the security’s entire decline in fair value is

recorded in earnings. If the intent is not to sell the security or it is not more likely than not that the Company will be

required to sell the security, the Company will evaluate whether any impairment is attributable to credit-related factors.

Such evaluation includes consideration of factors such as:

•Failure of the issuer of the security to make scheduled interest or principal payment;

•Downgrades in the security’s credit rating since acquisition by three or more notches;

•Adverse conditions specifically related to the security, an industry, or geographic area;

•Changes in the financial condition of the issuer of the security; and

•The payment structure of the security and the likelihood of the issuer being able to make payments that increase in

the future.

Upon determination of a credit-related impairment, an allowance for credit losses will be recognized and is measured as the

amount by which the security’s amortized cost basis exceeds the entity’s best estimate of the present value of cash flows

expected to be collected. The allowance is limited to the difference between the amortized cost basis and the security’s fair

value. Subsequent recovery of any previously recorded impairment will be recognized through reversal of the allowance

for credit losses.

Deferred income taxes

We account for taxes under the asset and liability method, under which we record deferred income taxes as assets or

liabilities on our balance sheet to reflect the net tax effect of the temporary differences between the carrying amount of

assets and liabilities for financial reporting purposes and their respective tax bases. We recognize deferred tax assets and

liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of

existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax

rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences.

Should a change in tax rates occur, we recognize the effect on deferred tax assets and liabilities in operations in the period

that includes the enactment date. Realization of our deferred income tax assets depends upon our generation of sufficient

future taxable income.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would

more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold,

the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood

of being realized upon ultimate settlement with the relevant taxing authority. The amount of income tax expense or benefit

recorded in future periods will depend on the jurisdictions in which we operate and the tax laws and regulations in effect.

The Company is subject to payment of U.S. federal and state income taxes as a corporation.

Recent Accounting Pronouncements

We currently qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the

JOBS Act. Accordingly, we are provided the option to adopt new or revised accounting guidance either (i) within the same

periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private

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companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not be required to

adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other

public companies.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which we have total

annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the

date of the completion of our IPO; (iii) the date on which we have issued more than $1 billion in nonconvertible debt

during the previous three years; and (iv) the date on which we are deemed to be a large accelerated filer under the rules of

the SEC.

See Note 2 – “Significant Accounting Policies” in our notes to the consolidated financial statements.