[10-Q] American Integrity Insurance Group, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

American Integrity Insurance Group, Inc. (AII) reported stronger third‑quarter results. For the three months ended September 30, 2025, total revenues were $62.0 million and net income was $13.2 million, or $0.67 per share. Net premiums earned were $52.0 million as gross premiums written rose to $239.1 million. Net investment income more than doubled to $6.9 million, supporting earnings alongside lower policy acquisition expenses.

For the nine months, net income reached $78.8 million with basic and diluted EPS of $4.66. The balance sheet expanded, with total assets of $1.43 billion and shareholders’ equity of $315.9 million. The company completed its IPO in May, issuing 6,250,000 shares and receiving $93.0 million in net proceeds, and ended the period with 19,576,804 shares outstanding as of November 13, 2025.

AII implemented a 2025–2026 catastrophe reinsurance program providing $1.93 billion of third‑party coverage for a single event and $2.59 billion across all occurrences, with $35.0 million net retention on the first two events. The program includes $565.0 million in catastrophe bonds and a 90% FHCF election. Expected ceded catastrophe premiums are approximately $433.3 million for the treaty year.

Insights

P&C insurance analyst

Solid Q3 earnings, strengthened capital, and expanded cat protection.

AII delivered Q3 net income of $13.2M on total revenues of $62.0M, helped by net investment income of $6.9M and net premiums earned of $52.0M. Nine‑month EPS of $4.66 reflects improved underwriting and investment returns, while shareholders’ equity rose to $315.9M.

Risk transfer remains central. The 2025–2026 catastrophe reinsurance program lists third‑party coverage of $1.93B per event and $2.59B across occurrences, with $35.0M retention for the first two events. The structure includes a 90% FHCF layer and $565.0M in cat bonds.

The IPO added $93.0M in net proceeds, bolstering liquidity as reinsurance costs are expected at approximately $433.3M for the treaty year. Actual impact will depend on event activity and earned/ceded premium dynamics disclosed for the period ended September 30, 2025.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-42634

American Integrity Insurance Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 33-2925846 (I.R.S. Employer Identification No.)

5426 Bay Center Drive, Suite 600 Tampa, Florida (Address of principal executive offices) 33609 (Zip Code)

(813) 880-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	AII	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act

of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject

to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule

405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to

submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and

“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with

any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.            ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of November 13, 2025, there were 19,576,804 shares of common stock, par value of $0.001 per share, outstanding.

i

American Integrity Insurance Group, Inc.

Table of Contents

Explanatory Note		ii
Special Note Regarding Forward-Looking Statements		iii
	PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024	1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2025 and September 30, 2024	2
	Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2025 and September 30, 2024	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and September 30, 2024	5
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	49
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	78
Item 3.	Defaults Upon Senior Securities	78
Item 4.	Mine Safety Disclosures	78
Item 5.	Other Information	78
Item 6.	Exhibits	79
Signatures		80

ii

EXPLANATORY NOTE

This Quarterly Report on Form 10-Q covers a period that includes a portion of time prior to the completion of our

initial public offering (the “IPO”) on May 9, 2025. In connection with the completion of the IPO, American Integrity

Insurance Group, Inc. (the “Company,” “we,” “our” and “us”) effected a corporate contribution in which the owners

of the equity interests of American Integrity Insurance Group, LLC (“AIIG”) contributed all of their equity interests

in AIIG to the Company in exchange for an aggregate of 12,904,495 shares of the Company’s common stock, par

value $0.001 per share (the “Common Stock”). Except as otherwise noted herein, our unaudited condensed

consolidated financial statements included in this Quarterly Report on Form 10-Q are those of the Company and its

consolidated operations.

iii

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of

historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. Forward-

looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements

regarding: our outlook; our business strategy; writing new business and retaining existing policies; new insurance

products; availability of reinsurance coverage; expectations on future growth; future Citizens Property Insurance

Corporation (“Citizens”) take-out opportunities; anticipated future operating results and operating expenses, cash

flows, capital resources and liquidity; reserves for losses and loss adjustment expenses; geographic expansion;

reduction of our quota share; competition; future regulatory, judicial and legislative changes; forecasts of future

revenues and appropriately planning our expenses; and our plans regarding our capital expenditures and investment

portfolio. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,”

“contemplates,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,”

“projects,” “should,” “targets,” “will,” “would” or the negative of these terms or other similar expressions.

Forward-looking statements are neither historical facts nor assurances of future performance, and are based only on

our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies,

projections, anticipated events and trends, the economy and other future conditions. Because forward-looking

statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are

difficult to predict and many of which are outside of our control. Therefore, you should not rely on any of these

forward-looking statements. Important factors that could cause our actual results and financial condition to differ

materially from those indicated in the forward-looking statements include, among others, the following:

•the potential that we may face significant losses due to being a property and casualty insurer and our

exposure to catastrophic events and severe weather conditions, which can be unpredictable;

•our loss reserves are estimates and may be inadequate to cover our actual liability for losses, and actual

claims incurred have exceeded, and in the future may exceed, reserves established for claims;

•the dependence of our financial results on the regulatory, legal, economic and weather conditions in Florida

due to the fact that we conduct substantially all of our business in Florida;

•changing climate conditions may increase the severity and frequency of catastrophic events and severe

weather conditions;

•the severity and frequency of catastrophe events of which are unpredictable;

•dependence upon the effectiveness of exclusions and other loss limitation methods in the insurance policies

we assume or write;

•reliance upon third-party distribution partners, including independent insurance agents, homebuilder-

affiliated agents and national insurance carriers;

•our ability to pursue Citizens’ take-out opportunities;

•cyclical changes in the insurance industry;

•our ability to obtain reinsurance coverage at commercially reasonable rates, or at all;

•credit risk of our reinsurers who may suffer a downgrade;

•the inherent uncertainty of models and our reliance on such models as a tool to evaluate risk, and the

dependence of our results upon our ability to accurately price the risks we underwrite;

iv

•the possibility that our information technology systems may fail or be disrupted;

•our ability to expand our business and the possible need to acquire additional capital in the future to fund

such expansion;

•the ability of our claims department, or the third-party claims adjusters whom we may engage, to

effectively manage or remediate claims as well as unanticipated increases in the severity or frequency of

claims;

•the possibility that actual renewals of our existing policies will not meet expectations;

•increased competition and market conditions, including changes in our financial stability and credit ratings;

•the extensive regulatory environment in which we operate that requires approval of rate increases, can

mandate rate decreases, and that can dictate underwriting practices and mandate participation in loss

sharing arrangements, and other potential further restrictive regulation we may face;

•mandatory assessments or competition for government entities may create short-term liabilities or affect our

ability to underwrite more policies; and

•other risks identified in Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q. 

New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the

impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual

results to differ materially from those contained in any forward-looking statements we may make. In light of these

risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q

may not occur and actual results could differ materially and adversely from those anticipated or implied in the

forward-looking statements.

1

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

American Integrity Insurance Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

	September 30, 2025		December 31, 2024
	(unaudited)
Assets
Fixed maturities, available-for-sale, at fair value (amortized cost of $327,571 and $214,505, respectively)	$329,883		$214,045
Short-term investments (amortized cost of $27,098 and $0, respectively)	27,098		—
Total investments	356,981		214,045
Cash and cash equivalents	144,784		173,220
Restricted cash	39,540		6,052
Premiums receivable, net	54,172		51,594
Accrued investment income	3,183		2,174
Prepaid reinsurance premiums	444,042		268,254
Reinsurance recoverable, net	371,882		462,097
Property and equipment, net	6,255		1,843
Right-of-use assets – operating leases	992		2,498
Deferred income tax asset, net	6,655		—
Other assets	5,194		16,368
Total assets	$1,433,680		$1,198,145
Liabilities and shareholders’ equity
Liabilities:
Unpaid losses and loss adjustment expenses	$363,445		$475,708
Income tax payable	1,304		11,873
Unearned premiums	504,281		421,881
Reinsurance payable	177,568		56,348
Advance premiums	20,812		6,561
Deferred income tax liability, net	—		1,122
Long-term debt	721		1,029
Lease liabilities – operating leases	1,028		2,612
Deferred policy acquisition costs, net of unearned ceding commissions	22,897		31,931
Other liabilities and accrued expenses	25,744		26,688
Total liabilities	1,117,800		1,035,753
Shareholders’ equity:(1)
Common stock, $0.001 par value, 100,000,000 shares authorized, 19,576,804 shares issued and outstanding at September 30, 2025 and 12,904,495 shares issued and outstanding at December 31, 2024	20		13
Additional paid-in capital	105,821		10,274
Accumulated other comprehensive loss, net of taxes	1,729		(327)
Retained earnings	208,310		152,432
Total shareholders’ equity	315,880		162,392
Total liabilities and shareholders’ equity	$1,433,680		$1,198,145

See accompanying notes to unaudited condensed consolidated financial statements.

(1)Both the number of shares outstanding and their par value have been retrospectively recast for all prior periods presented to

reflect the par value of the outstanding stock of American Integrity Insurance Group, Inc. as a result of the Corporate

Contribution. See Note 1 — “Nature of Operations and Basis of Presentation” and Note 13 — “Earnings Per Share.”

2

American Integrity Insurance Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(In thousands, except share and per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenues:
Gross premiums written	$239,100		$160,977		$738,245		$530,061
Change in gross unearned premiums	(17,151)		4,384		(82,401)		(47,686)
Gross premiums earned	221,949		165,361		655,844		482,375
Ceded premiums earned	(169,950)		(124,897)		(472,275)		(362,109)
Net premiums earned	51,999		40,464		183,569		120,266
Policy fees	2,805		1,928		7,976		5,656
Net investment income	6,906		3,757		15,788		10,419
Net realized gains on investments	41		18		542		103
Other income	275		376		536		791
Total revenues	62,026		46,543		208,411		137,235
Expenses:
Losses and loss adjustment expenses, net	29,652		25,017		71,702		58,024
Policy acquisition expenses	6,254		7,790		15,642		19,695
General and administrative expenses	7,347		7,185		35,287		19,224
Total expenses	43,253		39,992		122,631		96,943
Income before income taxes	18,773		6,551		85,780		40,292
Income tax expense	5,610		2,038		7,027		8,948
Net income	13,163		4,513		78,753		31,344
Other comprehensive income:
Unrealized holding gains on available-for-sale securities, net of taxes	774		1,043		2,463		1,230
Reclassification adjustment for net realized gains, net of taxes	(32)		(14)		(407)		(81)
Total other comprehensive income	742		1,029		2,056		1,149
Comprehensive income	$13,905		$5,542		$80,809		$32,493
Earnings per share:(1)
Basic and diluted earnings per share	$0.67		$0.33		$4.66		$2.32
Weighted average shares outstanding – Basic and diluted	19,572,595		12,904,495		16,446,038		12,904,495

See accompanying notes to unaudited condensed consolidated financial statements.

(1)Both the number of shares outstanding and their par value have been retrospectively recast for all prior periods presented to

reflect the par value of the outstanding stock of American Integrity Insurance Group, Inc. as a result of the Corporate

Contribution. See Note 1 — “Nature of Operations and Basis of Presentation” and Note 13 — “Earnings Per Share.”

3

American Integrity Insurance Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

Three Months Ended September 30, 2025

(In thousands, except share amounts)

	Common Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance as of June 30, 2025	19,571,965		$20		$105,720		$195,147		$987		$301,874
Total other comprehensive income	—		—		—		—		742		742
Net income	—		—		—		13,163		—		13,163
Vesting of restricted stock awards	4,839		—		101		—		—		101
Balance as of September 30, 2025	19,576,804		$20		$105,821		$208,310		$1,729		$315,880

	Common Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance as of June 30, 2024	12,904,495		$13		$10,274		$139,521		$(915)		$148,893
Total other comprehensive income	—		—		—		—		1,029		1,029
Net income	—		—		—		4,513		—		4,513
Balance as of September 30, 2024	12,904,495		$13		$10,274		$144,034		$114		$154,435

See accompanying notes to unaudited condensed consolidated financial statements.

4

American Integrity Insurance Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

Nine Months Ended September 30, 2025

(In thousands, except share amounts)

	Common Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance as of December 31, 2024	12,904,495		$13		$10,274		$152,432		$(327)		$162,392
Distributions to members – tax advances and profit distributions ($1.17 per share)(1)	—		—		—		(22,875)		—		(22,875)
Total other comprehensive income	—		—		—		—		2,056		2,056
Net income	—		—		—		78,753		—		78,753
Vesting of restricted stock awards	656,896		1		10,533		—		—		10,534
Tax withholding on vesting of restricted stock awards	(234,587)		—		(3,753)		—		—		(3,753)
Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions and other offering costs	6,250,000		6		88,767		—		—		88,773
Balance as of September 30, 2025	19,576,804		$20		$105,821		$208,310		$1,729		$315,880

	Common Shares		Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance as of December 31, 2023	12,904,495		$13		$10,274		$124,714		$(1,035)		$133,966
Distributions to members – tax advances and profit distributions ($0.93 per share)(1)	—		—		—		(12,024)		—		(12,024)
Total other comprehensive income	—		—		—		—		1,149		1,149
Net income	—		—		—		31,344		—		31,344
Balance as of September 30, 2024	12,904,495		$13		$10,274		$144,034		$114		$154,435

See accompanying notes to unaudited condensed consolidated financial statements.

(1)The distributions were made to members prior to the IPO. See Note 1 — “Nature of Operations and Basis of Presentation”

and Note 10 —  “Shareholders’ Equity.”

5

American Integrity Insurance Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2025		2024
Cash flows provided by (used in) operating activities
Net income	$78,753		$31,344
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	10,533		—
Amortization and depreciation	1,545		2,117
Deferred income taxes	(7,777)		(1,191)
Net realized (gains)	(542)		(103)
Changes in operating assets and liabilities:
Premiums receivable	(2,578)		(163)
Accrued investment income	(1,009)		(27)
Prepaid reinsurance premiums	(175,788)		(117,951)
Reinsurance recoverable	90,215		(9,234)
Other assets	11,174		(8,546)
Unpaid losses and loss adjustment expense	(112,263)		38,355
Unearned premiums	82,400		45,502
Reinsurance payable	121,220		700
Advance premiums	14,251		(1,426)
Income taxes payable (recoverable)	(10,569)		9,522
Operating lease payments	(1,584)		(1,553)
Deferred policy acquisition costs, net unearned ceding commissions	(9,034)		13,669
Other liabilities and accrued expenses	(944)		(4,807)
Net cash provided by (used in) operating activities	88,003		(3,792)
Cash flows provided by (used in) investing activities
Purchases of property and equipment	(5,036)		(1,214)
Proceeds from sales and maturities of fixed maturity securities	109,475		68,890
Purchases of fixed maturity securities	(222,264)		(46,105)
Proceeds from sales and maturities of short-term investments	—		1,943
Purchases of short-term investments	(26,963)		—
Net cash from provided by (used in) investing activities	(144,788)		23,514
Cash flows provided by (used in) financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions	93,000		—
Payments on tax withheld on vesting of restricted stock awards	(3,753)		—
Cash distributions to members(1)	(22,875)		(12,024)
Repayment of long-term debt	(308)		(309)
Payments of initial public offering costs	(4,227)		—
Net cash from provided by (used in) financing activities	61,837		(12,333)
Net increase in cash, cash equivalents and restricted cash	5,052		7,389
Cash, cash equivalents and restricted cash at beginning of year	179,272		62,168
Cash, cash equivalents and restricted cash at end of period	$184,324		$69,557

(1)The distributions were made to members prior to the IPO. See Note 1 — “Nature of Operations and Basis of Presentation” and

Note 10 —  “Shareholders’ Equity.”

6

American Integrity Insurance Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2025		2024
Supplemental disclosures of cash flow information
Interest paid	$19		$55
Income taxes paid	$26,275		$1,000

See accompanying notes to unaudited condensed consolidated financial statements.

The following table is a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s

condensed consolidated balance sheets:

	September 30, 2025		December 31, 2024
Cash and cash equivalents	$144,784		$173,220
Restricted cash	39,540		6,052
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows	$184,324		$179,272

See accompanying notes to unaudited condensed consolidated financial statements.

7

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

1.Nature of Operations and Basis of Presentation

Organization and Description of the Company

American Integrity Insurance Group, Inc., a Delaware corporation (the “Company”), was formed on January 15,

2025. American Integrity Insurance Group, LLC, a Texas limited liability company (“AIIG”), was formed in 2006.

On May 7, 2025, the holders of all of the outstanding equity of AIIG, contributed all of their equity interests in AIIG

to the Company (the “Corporate Contribution”), in exchange for 12,904,495 shares of the Company’s common

stock, par value $0.001 per share (the “Common Stock”), immediately prior to the Company’s initial public offering

(the “IPO”). This is further described in the “Initial Public Offering and Corporate Contribution” section below.

The operations of AIIG represent the predecessor to the Company prior to the IPO, and the consolidated and

combined entities of the Company are described in more detail below. Information for any periods prior to May 7,

2025 relates to AIIG and its subsidiaries.

The Company and its wholly-owned subsidiaries are engaged in the property and casualty insurance business. The

Company’s subsidiaries include American Integrity Insurance Company (f/k/a American Integrity Insurance

Company of Florida) (“AIIC”), a property and casualty insurance company domiciled in the state of Florida; AIIG;

American Integrity MGA, LLC (“AIMGA”), a Texas limited liability company operating as a managing general

agency and functioning as a manager for the insurance subsidiary’s business; American Integrity Claims Services,

LLC (“AICS”), a Texas limited liability company operating as a third-party administrator and providing insurance

claims processing services; Pinnacle Insurance Consultants, LLC (“PIC”), a Nevada limited liability company

operating as a licensed insurance agency in the state of Florida; and Pinnacle Analytics, LLC (“PA”), a Texas

limited liability company performing limited reinsurance brokerage functions for the insurance subsidiary’s

business. During 2023, the Company entered into an agreement with Artex SAC Limited (“Artex”), a Bermuda

Licensed Segregated Accounts Company, to establish Catstyle Segregated Account (“Catstyle”). Catstyle is a

segregated account controlled by the Company formed for the purpose of conducting reinsurance business.

The Company’s property and casualty insurance is currently offered in Florida, South Carolina, and Georgia.

Basis of Presentation and Principles of Consolidation

The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance

with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial

information, and the Securities and Exchange Commission (“SEC”) rules for interim financial reporting.

Accordingly, these condensed consolidated financial statements do not include all the information and footnotes

required for complete financial statements and should be read in conjunction with the audited condensed

consolidated financial statements of AIIG and the accompanying notes thereto for the year ended December 31,

2024. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a

fair presentation have been included in these condensed consolidated financial statements. The results for interim

periods do not necessarily indicate the results that may be expected for any interim period or for the full year.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-

owned subsidiaries, as well as variable interest entities (“VIE”) in which the Company is determined to be the

primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Certain information and disclosures normally included in annual condensed consolidated financial statements

presented in accordance with GAAP have been omitted pursuant to rules and regulations of the SEC. Accordingly,

investors should read these unaudited condensed consolidated financial statements and related notes in conjunction

with AIIG’s audited condensed consolidated financial statements and related notes included in our prospectus, dated

May 7, 2025 filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on May 8,

2025 in connection with the Company’s IPO.

8

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

The condensed consolidated financial statements for prior periods give effect to the Corporate Contribution

discussed below, including the exchange of all 122,900 units of AIIG for an aggregate of 12,904,495 shares of

Common Stock of the Company, which is equivalent to an overall exchange ratio of one-for-105. All share and

earnings per share amounts presented herein have been retroactively adjusted to give effect to the Corporate

Contribution as if they occurred prior to all prior periods presented.

Initial Public Offering and Corporate Contribution

Immediately prior to the IPO, the owners of the equity interests of AIIG contributed all of their equity interests to

the Company in exchange for an aggregate of 12,904,495 shares of Common Stock in the Corporate Contribution.

On May 9, 2025, the Company completed its IPO of an aggregate of 6,875,000 shares of the Company’s 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 the Company 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 of $7 million. Pending their further use, the proceeds were invested in

investment grade instruments. 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. The Company did not receive any gross proceeds from the sales of shares of Common Stock by the

selling stockholders.

In connection with the IPO, the Company issued a net amount of 417,470 shares of restricted stock to certain

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”). The Company incurred a one-time share-based compensation expense of

$10.4 million in connection with the Restricted Stock Grant, which was expensed in general and administrative

expenses on the condensed consolidated Statements of operations and comprehensive income. The Company also

paid $3.8 million for tax withheld on vesting of restricted stock in connection with the Restricted Stock Grant Net

Settlement. The compensation expense for these awards was recognized in the second quarter of 2025.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to

make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed

consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. As

a result, actual results could differ from those estimates. Management evaluates estimates on an ongoing basis when

updated information related to such estimates becomes available. The most significant areas that require

management judgment are the estimate of unpaid losses and loss adjustment expenses, evaluation of reinsurance

recoverable, evaluation of ceding commission, and valuation of investments.

2.Significant Accounting Policies

Changes to Significant Accounting Policies

There have been no changes to significant accounting policies as reported in the audited condensed consolidated

financial statements of AIIG for the year ended December 31, 2024. The Company has included the Earnings per

Share policy, which is a newly updated policy to reflect the Corporate Contribution for the unaudited condensed

consolidated financial statements of the Company for the nine months ended September 30, 2025. The Company has

also included the fair value of financial instruments policy, which establishes the fair value hierarchy.

9

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

Deferred Transaction Costs

Deferred transaction costs consist of direct incremental legal, accounting, and consulting fees relating to the

Company’s IPO. The deferred transaction costs were offset against the IPO proceeds upon the completion of the

offering in accordance with ASC 340-10-S99-1. A total of $4,227 of transaction costs were offset against the IPO

proceeds and reported as a reduction to additional paid in capital (APIC) during the nine months ended

September 30, 2025. As of September 30, 2025 and December 31, 2024, there were no deferred transaction costs

capitalized in other assets in the condensed consolidated balance sheets.

Restricted Stock

The restricted stock awards are subject to a service condition and are accounted for as equity under ASC 718. The

restricted stock awards are valued based on the fair value of the underlying award, which is the closing price of the

Company’s Common Stock on the date of grant. The Company recognizes the compensation cost for the restricted

stock awards on a straight-line basis over the awards’ vesting period as general and administrative expenses within

the Company’s condensed consolidated statements of operations and comprehensive income. All shares issued to

date have vested immediately. The Company recognizes any award forfeitures when they occur.

In connection with the restricted stock awards, the Company satisfies employee tax withholding obligations related

to the vesting of restricted stock by withholding a portion of the shares otherwise issuable to employees. The shares

withheld are immediately retired and are not held as treasury stock. As a result, both the number of shares issued and

outstanding are reduced by the number of shares withheld and retired. The cash paid to tax authorities for these

withheld shares is classified as a financing activity in the condensed consolidated statement of cash flows.

Earnings per Share

Basic net income per share is computed by dividing net income available to common shareholders by the weighted-

average common shares outstanding during the period. Diluted earnings per share is computed by dividing the

Company’s net income available to shareholders, by the weighted average number of shares outstanding during the

period plus the impact of all potentially dilutive shares, such as preferred shares, unvested shares and options. The

dilutive impact of share options and unvested shares is determined by applying the treasury stock method and the

dilutive impact of any preferred shares is determined by applying the “if converted” method. The Company did not

have any dilutive instruments for the period, and therefore, diluted earnings per share is equal to basic earnings per

share. There are no unvested shares issued or outstanding.

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants as of the measurement date (an exit price). ASC 820, “Fair Value Measurements and

Disclosures” (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the level of observability of

inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors,

including the type of investment, characteristics specific to the investment, market conditions and other factors. 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).

10

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

The three levels of the hierarchy are as follows:

Level 1:		Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used.
Level 2:		Pricing inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3:		Pricing inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. The inputs used in determination of fair value require significant judgment and estimation.

When fair value inputs fall within different levels of the fair value hierarchy, the level in the fair value hierarchy

within which the asset or liability is categorized in its entirety is determined based on the lowest level input that is

significant to the asset or liability. Assessing the significance of a particular input to the valuation of an asset or

liability in its entirety requires judgment and considers factors specific to the asset or liability. The categorization of

an asset or liability within the hierarchy is based upon the pricing transparency of the asset or liability and does not

necessarily correspond to the perceived risk of that asset or liability.

Cash and cash equivalents, and restricted cash approximate fair value and are therefore excluded from the leveling

table seen in Note 5 – “Fair Value Measurements.” The cost basis is determined to approximate fair value due to the

short-term duration of the financial instruments.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

(“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which amended the

guidance in ASC 740 to enhance the transparency and decision-usefulness of income tax disclosures, particularly in

the rate reconciliation table and disclosures about income taxes paid. The guidance applies to all entities subject to

income taxes and will be applied prospectively with the option to apply it retrospectively for each period presented.

For public business entities, the new requirements will be effective for annual periods beginning after December 15,

2024. Management is currently evaluating the impact and does not expect that this update will have a material

impact on its consolidated financial condition or results of operations, but the ASU will require additional

disclosures in the annual condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income –

Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires disaggregated disclosure of income

statement expenses, such as employee compensation and depreciation, for public business entities. The ASU does

not change the expense captions an entity presents on the face of the income statement; rather, it requires

disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the

condensed consolidated financial statements. The ASU also requires disclosure of a qualitative description of the

amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03

is effective for all public business entities for fiscal years beginning after December 15, 2026 and interim periods

within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will adopt the

guidance on December 31, 2027, and is currently assessing the impact of this ASU on the condensed consolidated

financial statements and related disclosures.

In October 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software

(Subtopic 350-40): Accounting for and Disclosure of Internally Developed Software, which provides updated

guidance on the recognition, measurement, and disclosure of costs incurred in connection with internally developed

software. The new standard is intended to align accounting practices for software that is developed in-house with

recent advancements in technology and current industry practices.  ASU 2025-06 is effective for annual reporting

11

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is

permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements

and related disclosures.

3.Variable Interest Entity

As part of the 2023-2024 catastrophe excess of loss reinsurance placement, which incepted on June 1, 2023, AIIC

entered into a reinsurance agreement with Catstyle, a segregated account controlled by the Company. Catstyle

provides reinsurance coverage for layer one of the Company’s catastrophe reinsurance program effective June 1,

2023 through May 31, 2024, June 1, 2024 through May 31, 2025, and June 1, 2025 through May 31, 2026. Catstyle

reinsurance eliminates in consolidation.

To establish the Catstyle, AIIG entered into a master preference shareholder agreement with Artex whereby AIIG

purchased 1,000 non-voting redeemable preference shares, par value of $1.00, to become the sole shareholder of

Catstyle. AIIG also contributed additional surplus in order to fully capitalize Catstyle.

The Company was determined to be the primary beneficiary of Catstyle, a silo that is a VIE within Artex, as AIIG

has the power to direct the activities that significantly affect the economic performance as well as the obligation to

absorb losses and the right to receive benefits that could potentially be significant of Catstyle. Thus, AIIG has

consolidated the assets, liabilities and operations of Catstyle in its condensed consolidated financial statements with

intercompany balances and transactions eliminated in consolidation.

The following table presents, on a consolidated basis, the balance sheet classification and exposure of restricted cash

and investments held in the segregated account, which are used to settle reinsurance obligations of the VIE as of the

dates presented. Restricted cash and investments held in the segregated account are required to be held in a trust

account solely for the benefit of the Company and can be used to settle activity under the reinsurance agreement.

Any restricted cash or investments held in the segregated account not actively being used to settle activity under the

reinsurance agreement can be paid to the Company by dividend based upon underwriting results of the segregated

account or by expiration or termination of the reinsurance agreement. Catstyle cannot declare or pay dividends

without necessary approvals from the Bermuda Monetary Authority (the “Authority”).

	September 30, 2025		December 31, 2024
Restricted Cash	$38,991		$5,516
Fixed maturity securities	—		12,669
Total	$38,991		$18,185

12

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

4.          Investments

Available-for-Sale Securities

The amortized cost and estimated fair value of available-for-sale securities are as follows:

	September 30, 2025
	Amortized Cost		Allowance for Credit Loss		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury and U.S. government agencies	$33,017		$—		$46		$(13)		$33,050
Corporate debt securities	210,935		—		1,720		(140)		212,515
Asset-backed securities	83,619		—		701		(2)		84,318
Total fixed maturity securities	327,571		—		2,467		(155)		329,883
Short-term investments	27,098		—		1		(1)		27,098
Total available-for-sale investments	$354,669		$—		$2,468		$(156)		$356,981

	December 31, 2024
	Amortized Cost		Allowance for Credit Loss		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury and U.S. government agencies	$75,532		$—		$—		$(298)		$75,234
Corporate debt securities	109,174		—		164		(548)		108,790
Asset-backed securities	29,799		—		262		(40)		30,021
Total fixed maturity securities	214,505		—		426		(886)		214,045
Total available-for-sale investments	$214,505		$—		$426		$(886)		$214,045

A summary of the aggregate estimated fair values of available-for-sale securities with unrealized losses segregated

by time period in an unrealized loss position is as follows:

	September 30, 2025
	Less than 12 months				12 months or greater				Total
	Estimated Fair Value		Unrealized losses		Estimated Fair Value		Unrealized losses		Estimated Fair Value		Unrealized losses
U.S. Treasury and U.S. government agencies	$16,720		$(7)		$16,330		$(6)		$33,050		$(13)
Corporate debt securities	172,690		(29)		39,825		(111)		212,515		(140)
Asset-backed securities	73,815		—		10,503		(2)		84,318		(2)
Short-term investments	27,098		(1)		—		—		27,098		(1)
Total	$290,323		$(37)		$66,658		$(119)		$356,981		$(156)

	December 31, 2024
	Less than 12 months				12 months or greater				Total
	Estimated Fair Value		Unrealized losses		Estimated Fair Value		Unrealized losses		Estimated Fair Value		Unrealized losses
U.S. Treasury and U.S. government agencies	$21,209		$(145)		$41,355		$(153)		$62,564		$(298)
Corporate debt securities	60,993		(198)		47,797		(350)		108,790		(548)
Asset-backed securities	13,869		(11)		16,152		(29)		30,021		(40)
Total	$96,071		$(354)		$105,304		$(532)		$201,375		$(886)

13

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

As of September 30, 2025 and December 31, 2024, there were 23 and 65 available-for-sale fixed-maturity securities,

respectively, in an unrealized loss position.

A summary of the amortized cost and estimated fair value of available-for-sale securities at September 30, 2025, by

contractual maturity is as follows. The expected maturities may differ from the contractual maturities because

certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Estimated Fair Value
Years to maturity
Government and corporate securities:
Due in one year or less	$74,798		$74,889
Due after one year through five years	194,444		195,953
Due after five years through 10 years	1,808		1,821
Due after 10 years	–		–
Other securities, which provide for periodic payments:
Asset-backed securities	83,619		84,318
Total	$354,669		$356,981

The following table presents components of the Company’s net investment income for the three and nine month

period ended September 30, 2025:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Fixed maturities, available-for-sale	$3,548		$1,730		$7,818		$5,595
Short-term investments	172		—		172		—
Cash and cash equivalents	3,336		2,149		8,297		5,103
Gross investment income	7,056		3,879		16,287		10,698
Investment expenses	(150)		$(122)		(499)		(279)
Net investment income	$6,906		$3,757		$15,788		$10,419

Proceeds from sales or maturities of fixed maturity available-for-sale securities for the three months ended

September 30, 2025 were $5,989 with $44 and $3 of gross realized gains and losses, respectively. For the three

months ended September 30, 2024, proceeds from sales of fixed maturity available-for-sale securities totaled

$16,750, with $23 and $5 of gross realized gains and losses, respectively. Proceeds from sales or maturities of fixed

maturity available-for-sale securities for the nine months ended September 30, 2025 were $109,475 with $655 and

$113 of gross realized gains and losses, respectively. For the nine months ended September 30, 2024, proceeds from

sales of fixed maturity available-for-sale securities totaled $68,890, with $112 and $9 of gross realized gains and

losses, respectively. There were no sales or maturities of short-term securities for the periods above.

The Company did not record any activity pertaining to the allowance for credit losses as of September 30, 2025 or

December 31, 2024.

14

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

5.Fair Value Measurements

The tables below presents information about the Company’s financial assets measured at fair value on a recurring

basis:

	September 30, 2025
	Total		Level 1		Level 2		Level 3
U.S. Treasury and U.S. government agencies	$33,050		$33,050		$—		$—
Corporate debt securities	212,515		24,385		188,130		—
Asset-backed securities	84,318		—		84,318		—
Short-term investments	27,098				27,098		—
Total	$356,981		$57,435		$299,546		$—

	December 31, 2024
	Total		Level 1		Level 2		Level 3
U.S. Treasury and U.S. government agencies	$75,234		$75,234		$—		$—
Corporate debt securities	108,790		28,222		80,568		—
Asset-backed securities	30,021		—		30,021		—
Total	$214,045		$103,456		$110,589		$—

The Company had no assets carried at fair value in the Level 3 category as of September 30, 2025 and December 31,

2024.

The Company classifies U.S. Treasury bonds and government agencies, short-term investments, and some corporate

debt securities within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in

active markets. Corporate debt securities and asset-backed securities categorized as Level 2 were valued using a

market approach. Valuations were based upon quoted prices for similar assets in active markets, quoted prices for

identical or similar assets in inactive markets, or valuations based on models where the significant inputs are

observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated

by observable market data.

During the three and nine months ended September 30, 2025, the Company had no event or circumstance change

that would cause an instrument to be transferred between levels.

The following table summarizes the carrying value and estimated fair value of the Company’s financial instruments

not carried at fair value as of the date presented:

	September 30, 2025				December 31, 2024
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Long-term debt:
Surplus note	$721		$595		$1,029		$885

The Company’s long-term debt represents a surplus note and fair value was determined by management from the

expected cash flows discounted using the interest rate quoted by the holder. The Florida State Board of

Administration (“FSBA”) is the holder of the surplus note, and the quoted interest rate is equivalent to the 10-year

Constant Maturity Treasury Rate, adjusted quarterly. The Company’s use of funds from the surplus note is limited

by the terms of the agreement, therefore, the Company has determined the interest rate quoted by the FSBA to be

appropriate for purposes of establishing the fair value of the surplus note (Level 3).

15

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

6.Deferred Policy Acquisition Costs, Net of Ceding Commissions

The tables below show the activity regarding deferred policy acquisition costs (“DPAC”) for the three and nine

months ended September 30, 2025 and 2024.

	Three Months Ended September 30, 2025
	DPAC, excluding unearned ceding commission		Unearned ceding commission		Total
DPAC, beginning of period	$56,598		$(83,464)		$(26,866)
Policy acquisition costs deferred during the period:
Producer commissions	25,399		—		25,399
Premium taxes	4,112		—		4,112
Other acquisition costs	2,964		—		2,964
Ceding commissions	—		(45,082)		(45,082)
Total policy acquisition costs	32,475		(45,082)		(12,607)
Amortization	(26,161)		42,737		16,576
DPAC, end of period	$62,912		$(85,809)		$(22,897)

	Three Months Ended September 30, 2024
	DPAC, excluding unearned ceding commission		Unearned ceding commission		Total
DPAC, beginning of period	$45,838		$(59,282)		$(13,444)
Policy acquisition costs deferred during the period:
Producer commissions	17,835		—		17,835
Premium taxes	1,652		—		1,652
Other acquisition costs	2,406		—		2,406
Ceding commissions	—		(27,113)		(27,113)
Total policy acquisition costs	21,893		(27,113)		(5,220)
Amortization	(21,594)		26,589		4,995
DPAC, end of period	$46,137		$(59,806)		$(13,669)

	Nine Months Ended September 30, 2025
	DPAC, excluding unearned ceding commission		Unearned ceding commission		Total
DPAC, beginning of period	$38,803		$(70,734)		$(31,931)
Policy acquisition costs deferred during the period:
Producer commissions	72,603		—		72,603
Premium taxes	11,808		—		11,808
Other acquisition costs	8,128		—		8,128
Ceding commissions	—		(135,596)		(135,596)
Total policy acquisition costs	92,539		(135,596)		(43,057)
Amortization	(68,430)		120,521		52,091
DPAC, end of period	$62,912		$(85,809)		$(22,897)

16

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

	Nine Months Ended September 30, 2024
	DPAC, excluding unearned ceding commission		Unearned ceding commission		Total
DPAC, beginning of period	$43,080		$(48,216)		$(5,136)
Policy acquisition costs deferred during the period:
Producer commissions	56,686		—		56,686
Premium taxes	5,429		—		5,429
Other acquisition costs	6,291		—		6,291
Ceding commissions	—		(89,233)		(89,233)
Total policy acquisition costs	68,406		(89,233)		(20,827)
Amortization	(65,349)		77,643		12,294
DPAC, end of period	$46,137		$(59,806)		$(13,669)

7.Liability for Unpaid Losses and Loss Adjustment Expenses

The liability for unpaid losses and loss adjustment expenses (“LAE”) includes an amount determined from loss

reports and individual cases and an amount, based on past experience, for losses incurred but not yet reported.

The following table provides a reconciliation of changes in the liability for unpaid losses and LAE:

	Nine Months Ended September 30,
	2025		2024
Unpaid Loss and LAE beginning of period	$475,708		$279,392
Less: Reinsurance recoverables on unpaid losses and LAE	415,086		214,718
Net unpaid loss and LAE at beginning of period	60,622		64,674
Add: Losses and LAE, net of reinsurance, incurred related to:
Current period	70,507		64,786
Prior period	1,195		(6,762)
Total net losses and LAE incurred	71,702		58,024
Less: Losses and LAE paid, net of reinsurance, related to:
Current period	29,801		31,271
Prior period	32,232		31,125
Total net paid losses and LAE	62,033		62,396
Unpaid loss and LAE, net of reinsurance at end of period	70,291		60,302
Add: Reinsurance recoverables on unpaid losses and LAE	293,154		257,445
Unpaid loss and LAE at end of period	$363,445		$317,747

During the nine months ended September 30, 2025, the liability for unpaid losses and loss adjustment expenses, net

of reinsurance, increased by $9,669 from $60,622 as of December 31, 2024 to $70,291 as of September 30, 2025.

The increase was primarily as a result of an increase in reserves for Citizens Property Insurance Corporation

(“Citizens”), a Florida state-supported insurer, assumed business of $12,252, partially offset by a decrease in

reserves related to non-catastrophe storms.

17

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

Prior period development includes changes in estimated losses and LAE for all events occurring in prior periods

including hurricanes and other weather events. In 2025, the Company’s net loss and LAE incurred for the nine

months ended September 30, 2025 reflected a unfavorable development of $1,195, which was a result of re-

estimation of unpaid losses and LAE. These adjustments are generally the result of ongoing analysis of recent loss

development trends. Original estimates are decreased or increased as additional information becomes known

regarding individual claims.

8.Reinsurance

In order to limit the Company’s potential exposure to individual risks and catastrophic events, the Company

purchases reinsurance from third-party reinsurers as well as the Florida Hurricane Catastrophe Fund (the “FHCF”), a

state-mandated catastrophe fund for Florida policies only. Most of the Company’s reinsurance partners were rated

“A-” or higher by A.M. Best Company, Inc. (“A.M. Best”) or “BBB” or higher by Standard & Poor’s Financial

Services LLC (“S&P”) or were fully collateralized.

In 2024, the Company also began participating in a “take-out program” through which the Company assumes

insurance policies held by Citizens. The take-out program is a legislatively mandated program designed to reduce

the state’s risk exposure by encouraging private companies to assume policies from Citizens.

The Company remains contingently liable in the event the reinsuring companies do not meet their obligations under

these reinsurance contracts. Given the quality of the reinsuring companies, management believes this possibility to

be remote.

2025 – 2026 Reinsurance Program

Catastrophe Excess of Loss Reinsurance

Effective June 1, 2025, the Company entered into catastrophe excess of loss reinsurance agreements covering its

insurance subsidiary, AIIC. The catastrophe reinsurance program is indemnity-based and includes a combination of

coverage from traditional reinsurers, the FHCF, Insurance Linked Securities (“ILS”) investors through Integrity Re

III Ltd., and the Company’s segregated cell captive reinsurer.

The 2025–2026 reinsurance program provides third-party reinsurance coverage of $1.93 billion for a single

catastrophic event, with total third-party coverage of $2.59 billion across all occurrences, representing a 45%

increase over the prior year’s treaty limit. The Company’s net retention for the first and second events is $35.0

million, consisting of $10.0 million retained by AIIC and $25.0 million retained by the Company’s segregated cell

captive reinsurer. The retention for third and fourth catastrophic events decreases to $15.8 million and $10.0 million,

respectively, and is retained solely by AIIC.

The FHCF covers Florida-admitted risks only, and the Company elected to participate at 90% for the 2025 hurricane

season, consistent with the prior year.

Integrity Re III Ltd., a Bermuda-based special purpose insurer and unrelated party issued new catastrophe bonds

totaling $565.0 million as part of the program, marking the eighth and largest ILS transaction sponsored by the

Company.

All reinsurers participating in the program are either rated “A-” or higher by A.M. Best or are fully collateralized, to

mitigate counterparty credit risk. The entire program is structured without parametric covers and is fully indemnity-

based.

Total net consolidated catastrophe reinsurance premiums ceded to third parties are expected to be approximately

$433.3 million for the 2025–2026 treaty year, a 28% increase compared to the prior year.

18

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

Effect of Reinsurance

The effects of reinsurance on premiums written and earned are as follows:

	Three Months Ended September 30,
	2025				2024
	Written		Earned		Written		Earned
Direct premiums	$237,542		$196,294		$160,999		$165,001
Assumed Premiums	1,558		25,655		(22)		360
Gross Premiums	239,100		221,949		160,977		165,361
Ceded premiums	(55,414)		(169,950)		(37,452)		(124,897)
Net premiums	$183,686		$51,999		$123,525		$40,464

 

	Nine Months Ended September 30,
	2025				2024
	Written		Earned		Written		Earned
Direct premiums	$689,208		$542,579		$529,032		$481,849
Assumed Premiums	49,037		113,265		1,029		526
Gross Premiums	738,245		655,844		530,061		482,375
Ceded premiums	(664,084)		(472,275)		(503,180)		(362,109)
Net premiums	$74,161		$183,569		$26,881		$120,266

The Company’s reinsurance arrangements affected certain items in the condensed consolidated statement of

operations and comprehensive income for the three and nine months ended September 30, 2025 and 2024 by the

following amounts:

	Three Months Ended September 30,
	2025		2024
Ceded premiums earned	$(169,950)		$(124,897)
Ceded losses and loss adjustment expenses incurred	14,897		105,803
Ceded policy acquisition expenses	42,737		11,678

For the three months ended September 30, 2025 and 2024, recoveries received under reinsurance contracts were

$35,588 and $57,882, respectively.

	Nine Months Ended September 30,
	2025		2024
Ceded premiums earned	$(472,275)		$(362,109)
Ceded losses and loss adjustment expenses incurred	11,698		308,080
Ceded policy acquisition expenses	120,521		62,202

For the nine months ended September 30, 2025 and 2024, recoveries received under reinsurance contracts were

$101,914 and $298,846, respectively.

19

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

9.Regulatory Requirements and Restrictions

State laws and regulations, as well as national regulatory agency requirements, govern the operations of all insurers.

The various laws and regulations require that insurers maintain minimum amounts of statutory surplus and risk-

based capital (“RBC”); restrict insurers’ ability to pay dividends; restrict the allowable investment types and

investment mixes and subject the Company’s insurers to assessments.

The Company’s insurance subsidiary is subject to regulations and standards of the Florida Office of Insurance

Regulation (“FLOIR”). It is also subject to regulations and standards of regulatory authorities in other states where

they are licensed, although as a Florida-domiciled insurer, its principal regulatory authority is the FLOIR.

The Company’s insurance subsidiary, AIIC, prepares its statutory-basis financial statements in accordance with

statutory accounting practices prescribed or permitted by FLOIR. The commissioner of the FLOIR has the right to

permit other practices that may deviate from prescribed practices. AIIC does not obtain and follow any permitted

practice. As of September 30, 2025 and December 31, 2024, AIIC reported statutory capital and surplus of $179,861

and $149,586, respectively. For the nine months ended September 30, 2025 and September 30, 2024, AIIC reported

statutory net income of $33,021 and $3,007, respectively. Statutory-basis surplus differs from shareholders’ equity

reported in accordance with GAAP primarily because policy acquisition costs are expensed when incurred, certain

assets that are not admitted assets are eliminated from the consolidated balance sheet and surplus notes are reported

as surplus rather than liabilities. In addition, the recognition of deferred tax assets is based on different recoverability

assumptions.

The Florida statutes require a residential property insurance company to maintain statutory surplus as to

policyholders of at least $1,500 or 10% of the insurer’s total liabilities, whichever is greater. Accordingly, as of

September 30, 2025 and December 31, 2024, AIIC exceeded the minimum statutory surplus requirement, which was

$17,986 and $14,959, respectively.

Under Florida law, without regulatory approval, AIIC may pay dividends if they do not exceed the greater of: (i) the

lesser of 10% of surplus or net income, not including realized capital gains, plus a two-year carry forward; (ii) 10%

of surplus, with dividends payable limited to unassigned funds minus 25% of unrealized capital gains; or (iii) the

lesser of 10% of surplus or net investment income plus a three-year carry forward with dividends payable limited to

unassigned funds minus 25% of unrealized capital gains. AIIC did not pay any dividends during the nine months

ended September 30, 2025, and it can still pay dividends without regulatory approval.

AIIC is also required annually to comply with the National Association of Insurance Commissioners (“NAIC”) RBC

requirements. RBC requirements prescribe a method of measuring the amount of capital appropriate for an insurance

company to support its overall business operations in light of its size and risk profile. NAIC RBC requirements are

used by regulators to determine appropriate regulatory actions relating to insurers who show signs of a weak or

deteriorating condition. As of September 30, 2025 and December 31, 2024, based on calculations using the

appropriate NAIC RBC formula, AIIC total adjusted capital in excess of the requirements.

AIIC has maintained a cash deposit with the Insurance Commissioner of the State of Florida and other states in

which AIIC is authorized to write business in order to meet regulatory requirements and such cash deposit is

included in restricted cash on the condensed consolidated balance sheet.

In addition, Florida property and casualty insurance companies are required to adhere to prescribed premium-to-

capital surplus ratios. Florida state law requires that the ratio of 90% of premiums written divided by surplus as to

policyholders does not exceed 10 to 1 for gross premiums written or 4 to 1 for net premiums written. As of

September 30, 2025, AIIC had a ratio of gross and net premiums written to surplus of 3.7 to 1 and 0.2 to 1,

respectively, which met the requirements. 

The Company also has the Catstyle reinsurance segregated account, where the Company can withdraw from cash

held in the segregated account, but must provide written notice to the trustee in the form of a withdrawal notice in

order to access the funds. However, consent of the grantor is not required to access the funds, and the funds’ use is

20

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

not restricted within the terms of the trust agreement. Catstyle is regulated by the Authority and is required to meet

and maintain certain minimum levels of solvency and liquidity. Catstyle’s statutory capital and surplus necessary to

satisfy the regulatory requirements in the aggregate was $26,141 and $9,610 as of September 30, 2025 and

December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, the actual amount of statutory

capital and surplus was $26,141 and 9,610, respectively. The liabilities of Catstyle are fully collateralized and

accordingly capital and surplus are available to be paid out in dividends and subject to approval in accordance with

regulations of the Authority.

10.Shareholders’ Equity

Immediately prior to the IPO, the owners of the equity interests of AIIG contributed all of their equity interests to

the Company in exchange for an aggregate of 12,904,495 shares of Common Stock.

Public Offering

The Company's amended and restated certificate of incorporation authorizes 100,000,000 shares of Common Stock,

of which 19,576,804 shares were issued and outstanding as of September 30, 2025, and 10,000,000 shares of

preferred stock, $0.001 par value per share, of which no shares were issued and outstanding as of September 30,

2025.

The Company issued 6,250,000 shares of Common Stock to the public, at a price of $16.00 per share in its IPO. The

Company received net proceeds of $93 million after deducting underwriting discounts and commissions and paid

$4.2 million in offering expenses that reduced the proceeds received in additional paid-in capital in the Condensed

consolidated balance sheet. In addition, in connection with the IPO, the Company used $3.8 million of the proceeds

from the offering to satisfy the Restricted Stock Grant Net Settlement and $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,

but these costs were expensed in general and administrative expenses on the condensed consolidated statements of

operations and comprehensive income.

Distributions

The Company is a legal entity separate and distinct from its subsidiaries. As a holding company, the primary sources

of cash needed to meet its obligations are distributions, dividends, and other permitted payments from its

subsidiaries and consolidated VIEs. While there are no restrictions on distributions from AIMGA, AICS, PA, and

PIC, dividends from AIIC and Catstyle are restricted. See Note 9 – “Regulatory Requirements and Restrictions” for

the restrictions on dividends from AIIC and Note 3 – “Variable Interest Entity” for restrictions on dividends from

Catstyle.

Prior to the IPO, taxable income was allocated to the members of AIIG in accordance with the United States Internal

Revenue Code and AIIG’s LLC Operating Agreement. There were no distributions to members characterized as tax

distributions, declared or paid during the three months ended September 30, 2025 and 2024, respectively. Tax

distributions totaled $12.9 million and $8.0 million during the nine months ended September 30, 2025 and 2024,

respectively.

Additionally, according to AIIG’s LLC Operating Agreement and prior to the IPO, AIIG’s Board of Directors may

have, at its discretion, declared distributions to the members proportionally in accordance with their respective

percentage ownership interests. The Company made $10.0 million and $4.0 million of discretionary distributions to

members during the nine months ended September 30, 2025 and 2024, respectively. There were no discretionary

distributions to members during the third quarter of 2025 and 2024.

21

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

11.        Stock-Based Compensation

Restricted Stock

On May 7, 2025, in connection with the IPO, the Company issued 652,057 shares of restricted stock to certain

employees and consultants, which vested immediately upon issuance. In connection with the issuance, 234,587

shares were withheld to satisfy the estimated tax withholding and remittance obligations. The shares withheld were

immediately retired and not held as treasury stock, thus, as a result, both the number of shares issued and

outstanding were reduced by the number of shares withheld and retired.

In addition, during the third quarter of 2025, the Company  issued  restricted stock to its non-employee members of

the Board of Directors in connection with the American Integrity Insurance Group, Inc. 2025 Non-Employee

Director Compensation Policy (the “Non-Employee Director Compensation Policy”) approved on September 9,

2025, under the American Integrity Insurance Group, Inc. 2025 Long-Term Incentive Plan. Under the Non-

Employee Director Compensation Policy, an initial grant of 2,658 shares of restricted stock was awarded on

September 9, 2025, followed by a quarterly grant of 2,181 shares on September 30, 2025. The shares awarded under

this policy vest immediately on their respective grant date.

A summary of all restricted stock activity for the period May 7, 2025 to September 30, 2025 is as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value
Outstanding, May 7, 2025	—		$—
Granted	656,896		$16.04
Shares withheld for tax remittance (retired)	(234,587)		16.00
Vested	(422,309)		16.05
Nonvested at September 30, 2025	—		$—

The Company incurred a one-time share-based compensation expense of $10,433 in connection with the Restricted

Stock Grant and paid $3,753 in connection with the Restricted Stock Grant Net Settlement related to the IPO. In

addition, during the third quarter of 2025, the Company recognized $101 of share-based compensation expense

related to the restricted stock awards granted to the non-employee members of the Board of Directors within general

and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

12.Segment Reporting

The Company concluded that it has only one reportable operating segment. This conclusion is based on the three

characteristics of an operating segment within ASC 280. As there is a single reportable segment, the chief operating

decision maker uses information that is presented in the condensed consolidated financial statements to evaluate the

performance of the single segment, including net income as the measure of profit or loss. The measure of segment

assets is reported on the balance sheet as total consolidated assets.

13.Earnings Per Share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-

average number of common shares outstanding during the period.

For the purposes of determining the basic and diluted weighted-average number of common shares outstanding

during the periods presented that are prior to the IPO, the Company retrospectively reflected the Corporate

Contribution in connection with the IPO. As such, the basic and diluted weighted-average number of common shares

outstanding for those periods reflect the exchange of AIIG’s membership units into shares of Common Stock on the

date of the IPO, assuming that all shares of Common Stock issued in conjunction with the IPO was issued and

outstanding as of the beginning of the earliest period presented.

22

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

The Company historically had a Profit Participation Plan (“PPP”) that was terminated upon the IPO. For the

comparative historical period presented, it was determined in accordance with ASC 260, Earnings Per Share, (“ASC

260”), that the participants of the PPP were able to participate in undistributed earnings with Common Stock based

on a predetermined formula on a nonforfeitable basis, thus representing a participating security. The Company

applies the two-class method to allocate income between the common shareholders and the PPP participants.

The following table presents the net income and the weighted average number of shares outstanding used in the

earnings per share calculations. There were no potentially dilutive instruments for the three and nine months ended

September 30, 2025 and 2024.

	Three Months Ended September 30,
	2025		2024
Numerator:
Net income attributable to common shareholders	$13,163		$4,513
Income allocated to participating securities	—		194
Income available for common shareholders	13,163		4,319
Denominator:
Shares outstanding	19,576,804		12,904,495
Weighted average common shares outstanding - basic and diluted	19,572,595		12,904,495
Earnings available to common shareholders per share
Basic	$0.67		$0.33
Diluted	$0.67		$0.33

	Nine Months Ended September 30,
	2025		2024
Numerator:
Net income attributable to common shareholders	$78,753		$31,344
Income allocated to participating securities	2,190		1,350
Income available for common shareholders	76,563		29,994
Denominator:
Shares outstanding	19,576,804		12,904,495
Weighted average common shares outstanding - basic and diluted	16,446,038		12,904,495
Earnings available to common shareholders per share
Basic	$4.66		$2.32
Diluted	$4.66		$2.32

14.Other Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in unrealized gains and losses on fixed maturities classified as

available-for-sale. Reclassification adjustments for realized (gains) losses are reflected in net realized gains (losses)

on investments on the condensed consolidated statement of operations and comprehensive income.

23

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

The following tables are summaries of other comprehensive income (loss) and disclose the tax impact of each

component of other comprehensive income (loss) for the three and nine months ended September 30, 2025 and

2024:

	Three Months Ended September 30, 2025						Three Months Ended September 30, 2024
	Pre-Tax		Income Tax Benefit (Expense)		Net-of-Tax Amount		Pre-Tax		Income Tax Benefit (Expense)		Net-of-Tax Amount
Net changes to available-for-sale securities:
Unrealized holding gains (losses) arising during period	$1,034		$(260)		$774		$1,396		$(353)		$1,043
Reclassification adjustment for (gains) losses realized in net income	(42)		10		(32)		(19)		5		(14)
Other comprehensive income (loss)	$992		$(250)		$742		$1,377		$(348)		$1,029

	Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024
	Pre-Tax		Income Tax Benefit (Expense)		Net-of-Tax Amount		Pre-Tax		Income Tax Benefit (Expense)		Net-of-Tax Amount
Net changes to available-for-sale securities:
Unrealized holding gains (losses) arising during period	$3,314		$(851)		$2,463		$1,638		$(408)		$1,230
Reclassification adjustment for (gains) losses realized in net income	(542)		135		(407)		(107)		26		(81)
Other comprehensive income (loss)	$2,772		$(716)		$2,056		$1,531		$(382)		$1,149

15.Income Taxes

Prior to the IPO, AIIG and its non-insurance subsidiaries, were included in a single partnership return for United

States federal and state income tax purposes and were not subject to United States income tax, for the period January

1, 2025 through May 7, 2025, where the holders of all of the outstanding equity interests in AIIG contributed all of

their equity interests in AIIG to the Company. As of May 7, 2025, the Company and its non-insurance subsidiaries

are organized as a corporation and are subject to United States federal and state income tax. AIIC remains organized

as a corporation and is a taxable entity and will continue to file a stand-alone corporate income tax return for federal

and state income tax purposes. The Company’s tax sharing agreement requires settlement of taxes between the

subsidiaries in accordance to the terms of the agreement.

During the nine months ended September 30, 2025 and 2024, the Company recorded approximately $7,027 and

$8,948, respectively, of income tax expense, which resulted in effective tax rates of 8.2% and 22.2%, respectively.

The Company has evaluated the circumstances for the nine months ended September 30, 2025 and 2024,

respectively, and determined that it is unable to make a reliable estimate of its ordinary income or related tax

expense for the fiscal year. Therefore, the Company has calculated the income tax expense for the nine months

ended September 30, 2025 and 2024, respectively, based on the discrete effective tax rate. The Company’s estimated

effective tax rate differs from the statutory federal tax rate due to state and income taxes, as well as certain

nondeductible and tax-exempt items.

24

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the nine months

ended September 30, 2025 was primarily due to state income taxes, non-deductible compensation related to

employee stock awards granted and fully vested during the quarter, and a change in tax status related to the

conversion of a non-taxable entity into a corporation. The effective tax rate also reflects the unfavorable impact of

certain other nondeductible expenses.

The change in tax status created deferred tax assets of approximately $9.7 million, which were recognized as a one-

time gain for the nine months ended September 30, 2025, and results in an effective tax rate of (11.3)% for the

period.

A valuation allowance must be established for deferred tax assets when it is more likely than not that the deferred

tax assets will not be realized based on available evidence both positive and negative, including recent operating

results, available tax planning strategies, and projected future taxable income. As of December 31, 2024,

management concluded, based on the evaluation of the positive and negative evidence, that it is more likely than not

that the deferred tax assets will be realized and therefore no valuation allowance on the Company’s deferred tax

assets is required. The Company evaluates the realizability of its deferred tax assets each quarter, and as of

September 30, 2025, based on all of the available evidence, management concluded that it was more likely than not

that the deferred tax assets will be realized.

On July 4, 2025, the “One Big Beautiful Bill” (H.R. 1) was enacted into law. This legislation included broad

changes to individuals, businesses, and international income tax provisions, but did not address the taxation of

property and casualty insurance companies, under Subchapter L of the Internal Revenue Code. The Company

evaluated the legislation and it did not have a material impact on current or deferred income taxes. As such, no

adjustment was made to the condensed consolidated financial statements as of September 30, 2025.

16.Related Party Transactions

AIIG was a party to a management and financial advisory services agreement with a company owned by one of its

members. The fees for financial advisory services were negotiated in good faith by both parties on a case-by-case

basis. For financial oversight and monitoring services, AIIG paid a fixed monthly fee under the terms of the

agreement. During the nine months ended September 30, 2025 and 2024, the Company incurred fees under the

agreement of $411 and $793, respectively, which is recorded within general and administrative expenses. During the

second quarter of 2025, the management and financial advisory services agreement was terminated in conjunction

with the IPO for a payment of $3,000. This has been included in general and administrative expenses on the

condensed consolidated statements of operations and comprehensive income. There were no amounts payable at

September 30, 2025 or December 31, 2024, related to the agreement.

17.        Commitments and Contingencies

Obligations under Multi-Year Reinsurance Contracts

The Company purchases reinsurance coverage to protect its capital and to limit its losses when certain major events

occur. The Company’s reinsurance commitments generally run from June 1 of the current year to May 31 of the

following year. From time to time, certain of the Company’s reinsurance agreements may be for periods longer than

one year. Amounts payable for coverage during the current June 1 to May 31 contract period are recorded as

reinsurance payable in the condensed consolidated balance sheets. Multi-year contract commitments for future years

are recorded at the beginning of the coverage period. As of September 30, 2025 and December 31, 2024, there were

no multi-year reinsurance contract obligations.

25

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

Litigation

Lawsuits and other legal proceedings are filed against the Company from time to time. Many of these legal

proceedings involve claims under insurance policies that the Company underwrites. The Company is also involved

in various other legal proceedings and litigation unrelated to claims under the Company’s contracts, which arise in

the ordinary course of business. The Company accrues amounts resulting from claim-related legal proceedings in

unpaid losses and loss adjustment expenses during the period it determines an unfavorable outcome becomes

probable and amounts can be estimated. Management believes that the resolution of these legal actions will not have

a material impact on the Company’s condensed consolidated financial statements. The Company contests liability

and/or the amount of damages as appropriate in each pending matter.

Leases

On February 20, 2025, the Company entered into a 152-month lease agreement for approximately 75,000 square feet

of new office space, where the Company will gain access to office suites in phases beginning in the first half of

2026. The asset has not been made available for use by the Company, and once made available for use, the

Company will record the corresponding right-of-use asset and lease liability. The Company will begin paying rent

on the leased space in December 2026 and future minimum lease commitments amount to $45,724 over the lease

term.

Florida Insurance Guaranty Association

In April 2023, the Florida Insurance Guaranty Association (“FIGA”) issued an order for the collection of a 1.0%

FIGA assessment policy surcharge for policies effective October 1, 2023 through September 30, 2024. The order

directed member insurance companies to collect policy surcharge amounts in advance and to remit those surcharge

amounts to FIGA on a quarterly basis. The Company recorded an accrued liability totaling $2,254 and $1,195,

respectively, in other liability and accrued expenses as of September 30, 2025 and December 31, 2024, which

represents the policy surcharge amounts collected, but unremitted to FIGA as of that date.

18.        Leases

Operating lease cost was $549 and $539 for the three months ended September 30, 2025 and 2024, respectively, and

$1,641 and $1,620 for the nine months ended September 30, 2025 and 2024, respectively, and is included in other

operating expenses on the condensed consolidated statement of operations and comprehensive income. Short-term

and variable lease cost was immaterial for the nine months ended September 30, 2025 and 2024.

The following table provides supplemental balance sheet information about the Company’s leases as of

September 30, 2025 and December 31, 2024:

	September 30, 2025		December 31, 2024
Operating leases:
Right-of-use assets	$992		$2,498
Lease liability	$1,028		$2,612
Weighted-average remaining lease term:
Operating leases	0.51 years		1.18 years
Weighted-average discount rate:
Operating leases	3.07%		2.75%

26

American Integrity Insurance Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except share and per share data, unless otherwise stated)

Supplemental disclosure of cash flow information related to leases was as follows for the three and nine months

ended September 30, 2025 and 2024:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$573		$546		$1,705		$1,635

The estimated future minimum payments of operating leases as of September 30, 2025 are as follows:

	Operating Leases
2025 remaining	$574
2026	447
2027	12
2028	—
2029	—
Thereafter	—
Total lease payments	1,033
Less: imputed interest	(5)
Present value of lease liabilities	$1,028

19.Subsequent Events

On October 21, 2025, the Company's insurance subsidiary, AIIC, assumed approximately 478 policies from

Citizens, representing approximately $1,330 in gross written premiums.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date

that the condensed consolidated financial statements were issued. Based upon this review, the Company did not

identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated

financial statements.

27

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. Investors should read this section alongside our unaudited condensed consolidated financial

statements and related notes included in this Quarterly Report on Form 10-Q, as well as our audited condensed

consolidated financial statements and related notes included in our prospectus, dated May 7, 2025 filed with the

Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on May

8, 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.” References to the “Company,” “American Integrity,” “we,” “us” or “our” refer to American

Integrity Insurance Group, Inc. 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 Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Special Note Regarding

Forward-Looking Statements.”

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 96.8% of our direct premiums written for the nine

months ended September 30, 2025 and 94.5% of our policies in-force as of September 30, 2025. As of September

30, 2025, more than 70% 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, 97.1% of our Voluntary Market in-force premium in our core Florida market

and 2.9% was in Georgia and South 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,

28

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 the first quarter of 2025 we assumed 16,632 policies from Citizens, representing $31.2 million in

assumed unearned premiums. In the second quarter of 2025, we assumed 7,372 policies from Citizens, representing

$17.8 million in assumed unearned premiums. In the third quarter of 2025, we assumed 1,891 policies from Citizens,

representing $3.4 million in assumed unearned premiums. These policies we assume carry no upfront acquisition

costs and are covered by our current treaty year reinsurance program.

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

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

believe recent regulatory changes, improvements in the data that is made available on Citizens policies and rate

increases implemented by Citizens making pricing more comparable to what we charge in the Voluntary Market

have made the opportunity to assume policies from Citizens more attractive.

Take-out opportunities, however, are subject to a number of market, timing and execution risks, and future take-out

opportunities may or may not materialize.

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 portfolio. 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

29

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 72.0% and 75.1% of our gross premiums earned in the nine months ended September 30,

2025 and September 30, 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 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.

30

Results of Operations

The following table summarizes our results of operations for the three and nine months ended September 30, 2025

and 2024 (dollar amounts in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Gross premiums written	$239,100		$160,977		$738,245		$530,061
Change in gross unearned premiums	(17,151)		4,384		(82,401)		(47,686)
Gross premiums earned	221,949		165,361		655,844		482,375
Ceded premiums earned	(169,950)		(124,897)		(472,275)		(362,109)
Net premiums earned	51,999		40,464		183,569		120,266
Policy fees	2,805		1,928		7,976		5,656
Net investment income	6,906		3,757		15,788		10,419
Net realized gains (losses) on investments	41		18		542		103
Other income	275		376		536		791
Total Revenues	62,026		46,543		208,411		137,235
Losses and loss adjustment expenses	29,652		25,017		71,702		58,024
Policy acquisition expenses	6,254		7,790		15,642		19,695
General and administrative expenses	7,347		7,185		35,287		19,224
Total Expenses	43,253		39,992		122,631		96,943
Income before taxes	18,773		6,551		85,780		40,292
Income tax expense	5,610		2,038		7,027		8,948
Net Income	$13,163		$4,513		$78,753		$31,344
Loss ratio	54.1%		59.0%		37.4%		46.1%
Expense ratio	24.8%		35.3%		26.6%		30.9%
Combined ratio	78.9%		94.3%		64.0%		77.0%
Annualized return on equity	17.0%		11.9%		43.9%		29.0%
Ceded catastrophe excess of loss premiums ratio(1)	48.0%		46.8%		43.9%		46.5%
Underlying loss and loss adjustment expense ratio(1)	49.9%		36.4%		36.8%		37.1%

(1)These ratios and operating metrics presented above are considered non-GAAP financial measures. These measures are key

performance indicators used by management to evaluate operating results and trends that may not be apparent from GAAP

measures alone. For a reconciliation to the most directly comparable GAAP financial measure and additional discussion of

these metrics, see “Management’s Discussion and Analysis of Results of Operations - Key Business Metrics and Non-

GAAP Financial Measures.”

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 and Georgia, 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.

31

The following table shows our policies in-force and in-force premiums by product as of September 30, 2025 and

September 30, 2024:

	As of September 30,
	2025				2024
($ in thousands)	Policies in-force		In-force premium		Policies in-force		In-force premium
HO-3	263,539		$597,371		173,175		$448,515
HO-4	3,868		1,047		3,636		1,082
HO-5	4,992		6,118		298		342
HO-6	15,302		27,954		8,957		19,204
MHO	6,027		20,347		7,482		25,833
DP-1 (Including vacant)	26,692		62,209		27,315		69,260
DP-3	74,582		189,575		43,040		130,441
Watercraft	3,740		4,664		2,871		3,455
Golf Cart	7,352		1,119		6,016		914
Umbrella	—		—		432		167
Total	406,094		$910,404		273,222		$699,213

The following table shows our policies in-force and in-force premiums by county as of September 30, 2025 and

September 30, 2024:

	As of September 30,
($ in thousands)	2025				2024
County	Policies in-force		In-force premium		Policies in-force		In-force premium
POLK	26,366		$46,423		20,018		$41,042
LEE	25,899		68,421		22,384		72,572
ORANGE	25,280		56,307		17,532		44,986
DUVAL	22,440		36,870		17,341		34,403
HILLSBOROUGH	20,795		49,155		16,275		44,577
PASCO	19,470		38,983		15,688		36,821
OSCEOLA	19,428		40,430		10,307		23,823
PALM BEACH	18,673		72,003		2,354		12,411
MARION	16,497		23,577		13,238		24,038
BREVARD	13,900		34,061		7,960		22,901
VOLUSIA	13,159		27,260		11,100		27,020
OTHERS	184,187		416,914		119,025		314,619
Total	406,094		$910,404		273,222		$699,213

Policies in-force were 406,094 as of September 30, 2025, an increase of 48.6% compared to policies in-force of

273,222 as of September 30, 2024, and an increase of 14.0% 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.

During the three months ended September 30, 2025, we wrote 25,985 policies in the Voluntary Market, which was

in-line with the number of policies we wrote in the Voluntary Market during the three months ended September 30,

2024. We experienced policy retention rates of 82.8% during the third quarter of 2025, up from 72.1% during the

third quarter of 2024.

32

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

($ in thousands)	Policies In-Force		In-Force Premium
As of March 31, 2025
Voluntary Market	293,577		$652,888
Citizens Legacy Take-Outs	7,106		28,661
Citizens Take-Outs	13,256		35,364
FY 2024 Citizens Take-Outs	52,875		144,998
FY 2025 Citizens Take-Outs	16,518		47,628
Total	383,332		$909,539
As of June 30, 2025
Voluntary Market	305,873		648,177
Citizens Legacy Take-Outs	6,742		26,899
Citizens Take-Outs	35,441		98,253
FY 2024 Citizens Take-Outs	27,490		75,439
FY 2025 Citizens Take-Outs	23,592		72,484
Total	399,138		$921,252
As of September 30, 2025
Voluntary Market(1)	315,217		$644,628
Citizens Legacy Take-Outs(2)	6,285		24,850
Citizens Take-Outs(3)	58,766		163,561
FY 2024 Citizens Take-Outs(4)(5)	1,115		2,718
FY 2025 Citizens Take-Outs(4)(6)	24,711		74,647
Total	406,094		$910,404

(1)During the three months ended September 30, 2025, we wrote 25,985 policies in the Voluntary Market, which was in-line

with the number of policies we wrote in the Voluntary Market during the three months ended September 30, 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)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.

(5)There were 68,844 policies assumed from Citizens during 2024; and 59,950 or 87.1%, were still in-force as of September

30, 2025.

(6)There have been 25,895 policies assumed from Citizens during 2025; and 24,711 policies, or 95.4%, were still in-force as of

September 30, 2025.

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

Revenues

For the three months ended September 30, 2025, gross premiums written increased by $78.1 million, or 48.5%, to

$239.1 million, compared to $161.0 million for the three months ended September 30, 2024. This increase was due

largely to new and renewal policies written through the Voluntary Market and from our strategic participation in the

Citizens take-out program.

Gross premiums earned increased to $221.9 million for the three months ended September 30, 2025 from $165.4

million for the three months ended September 30, 2024. The $56.5 million, or 34.2%, increase was due largely to

new and renewal gross premiums written from the Voluntary Market and those related to the Citizens take-outs.

Ceded premiums earned increased $45.1 million, or 36.1%, to $170.0 million for the three months ended September

30, 2025 from $124.9 million for the three months ended September 30, 2024. The increase in ceded premiums

earned was due to growth in our gross premiums earned and the placement of our 2025-2026 catastrophe excess-of-

33

loss reinsurance program effective June 1, 2025. The Company purchased more reinsurance coverage compared to

prior years, reflecting an increase in in-force premiums and total insured value (TIV).

Net premiums earned grew by $11.5 million, or 28.5%, reaching $52.0 million for the three months ended

September 30, 2025, up from $40.5 million for the three months ended September 30, 2024. This increase was due

largely to the increase in gross premiums earned driven largely by strength in the Voluntary Market and our

participation in the Citizens take-out program.

Policy fees increased $0.9 million, or 45.5%, to $2.8 million for the three months ended September 30, 2025 from

$1.9 million for the three months ended September 30, 2024. The increase in policies written during the three

months ended September 30, 2025 contributed to the increase in policy fees.

Net investment income increased $3.1 million, or 83.8%, to $6.9 million for the three months ended September 30,

2025 from $3.8 million for the three months ended September 30, 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.

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

realized investment gains of $40,736 for the three months ended September 30, 2025 and net realized investment

gains of $18,175 for the three months ended September 30, 2024.

Other income decreased by $0.1 million, or 26.7%, to $0.3 million for the three months ended September 30, 2025

from $0.4 million for the three months ended September 30, 2024.

Expenses

Losses and LAE increased $4.7 million, or 18.5%, to $29.7 million for the three months ended September 30, 2025

from $25.0 million for the three months ended September 30, 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 decreased $1.5 million, or 19.7%, to $6.3 million for the three months ended September

30, 2025 from $7.8 million for the three months ended September 30, 2024. The decrease was primarily due to an

increase in non-catastrophe ceded commission allocation.

General and administrative expenses were largely flat year-over-year, at $7.3 million for the three months ended

September 30, 2025, as compared to $7.2 million for the three months ended September 30, 2024. The Company

had increased salaries and consulting fees incurred to support the public company operations and ongoing growth,

largely offset by an increase in net premiums earned.

Income tax expense was $5.6 million and $2.0 million for the three months ended September 30, 2025 and 2024,

respectively. Our effective tax rate for the three months September 30, 2025 and 2024 was 29.9% and 31.1%,

respectively.

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 improved by 4.9 percentage point for the three months

ended September 30, 2025, to 54.1%, compared to 59.0% for the three months ended September 30, 2024. The

decrease was primarily due to the absence of significant storm activity in Florida during the three months ended

September 30, 2025, compared to the prior-year period which included losses from Hurricane Debby and Hurricane

Helene.

34

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 improved by 10.5 percentage points to 24.8% for the three months ended

September 30, 2025 compared to 35.3% for the three months ended September 30, 2024, driven by an increase in

net premiums earned partially offset by higher salaries and consulting fees incurred to support the public company

operations and ongoing growth.

Combined ratio

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

underwriting performance. Our combined ratio improved by 15.4 percentage points to 78.9% for the three months

ended September 30, 2025 from 94.3% for the three months ended September 30, 2024. This improvement was

primarily driven by an increase in net premiums earned, which contributed to reducing both the expense and loss

ratios. The improvement also reflects the absence of significant storm activity in Florida during the current period

compared to the prior year.

Annualized return on equity

Annualized return on equity is defined as net income, annualized, divided by the average beginning and ending

shareholders’ equity during the applicable period. Our annualized return on equity increased to 17.0% for the three

months ended September 30, 2025 from 11.9% for the three months ended September 30, 2024. The increase in our

annualized return on equity was due to an increase in net income during the period, partially offset by an increase in

shareholders' equity as a result of retained earnings.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Revenues

For the nine months ended September 30, 2025, gross premiums written increased by $208.1 million, or 39.3%, to

$738.2 million, compared to $530.1 million for the nine months ended September 30, 2024. This increase was due

largely to an increase in assumed 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 increased to $655.8 million for the nine months ended September 30, 2025 from $482.4

million for the nine months ended September 30, 2024. The $173.4 million, or 36.0%, increase was due largely to

our increase in gross premiums written related to the Citizens take-outs.

Ceded premiums earned increased $110.2 million, or 30.4%, to $472.3 million for the nine months ended September

30, 2025 from $362.1 million for the nine months ended September 30, 2024. The increase in ceded premiums

earned was due to growth in our gross premiums earned.

Net premiums earned grew by $63.3 million, or 52.6%, reaching $183.6 million for the nine months ended

September 30, 2025, up from $120.3 million for the nine months ended September 30, 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 increased $2.3 million, or 41.0%, to $8.0 million for the nine months ended September 30, 2025 from

$5.7 million for the nine months ended September 30, 2024. The increase in policies written during the nine months

ended September 30, 2025 contributed to the increase in policy fees.

35

Net investment income increased $5.4 million, or 51.5%, to $15.8 million for the nine months ended September 30,

2025 from $10.4 million for the nine months ended September 30, 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.

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

realized investment gains of $0.5 million for the nine months ended September 30, 2025 and net realized investment

gains of $0.1 million for the nine months ended September 30, 2024.

Other income decreased by $0.3 million, or 32.3%, to $0.5 million for the nine months ended September 30, 2025

from $0.8 million for the nine months ended September 30, 2024.

Expenses

Losses and LAE increased $13.7 million, or 23.6%, to $71.7 million for the nine months ended September 30, 2025

from $58.0 million for the nine months ended September 30, 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 decreased $4.1 million, or 20.6%, to $15.6 million for the nine months ended September

30, 2025 from $19.7 million for the nine months ended September 30, 2024. The decrease was primarily driven by

lower acquisition costs associated with Citizens take-outs.

General and administrative expenses increased $16.1 million, or 83.6%, to $35.3 million for the nine months ended

September 30, 2025 from $19.2 million for the nine months ended September 30, 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 expense was $7.0 million and $8.9 million for the nine months ended September 30, 2025 and 2024,

respectively. Our effective tax rate for the nine months September 30, 2025 and 2024 was 8.2% and 22.2%,

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 condensed 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 the second quarter of 2025

resulting in a lower effective tax rate for the nine months ended September 30, 2025.

Key Business Metrics and Ratios

Loss ratio

Our loss ratio decreased by 8.7 percentage points for the nine months ended September 30, 2025, to 37.4%,

compared to 46.1% for the nine months ended September 30, 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

Our expense ratio decreased by 4.3 percentage points to 26.6% for the nine months ended September 30, 2025

compared to 30.9% for the nine months ended September 30, 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

36

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

Our combined ratio improved to 64.0% for the nine months ended September 30, 2025 from 77.0% for the nine

months ended September 30, 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 earned premiums, and the absence of significant storm activity in Florida during the

current period.

Annualized return on equity

Our annualized return on equity increased to 43.9% for the nine months ended September 30, 2025 from 29.0% for

the nine months ended September 30, 2024. The increase in our annualized 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.

Key Business Metrics and 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
Annualized adjusted return on equity		Annualized return on equity
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

37

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 (loss) increased $9.2 million, or 381.2%, to $11.6 million for the three months ended

September 30, 2025 from $2.4 million for the three months ended September 30, 2024. For the nine months ended

September 30, 2025, underwriting income increased by $39.9 million, or 137.8%, to $68.9 million from $29.0

million for the nine months ended September 30, 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 during the periods.

Underwriting income for the three and nine months ended September 30, 2025 and 2024 reconciles to income before

taxes as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Income before taxes	$18,773		$6,551		$85,780		$40,292
Less:
Net investment income	6,906		3,757		15,788		10,419
Net realized losses on investments	41		18		542		103
Other income	275		376		536		791
Underwriting income	$11,551		$2,400		$68,914		$28,979

Adjusted net income (loss) and Adjusted Earnings Per Share

Adjusted net income (loss) 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.

Adjusted net income (loss) increased $9.5 million, or 210.9%, to $14.0 million for the three months ended

September 30, 2025 from $4.5 million for the three months ended September 30, 2024. The increase was due largely

to the financial benefits of our recent participation in the Citizens take-out program and premiums from new policies

written through the Voluntary Market, as well as improved underwriting performance due in part to the absence of

significant storm activity in Florida during the current period. For the nine months ended September 30, 2025,

adjusted net income (loss) increased by $52.1 million, or 166.7%, to $83.4 million from $31.3 million for the nine

months ended September 30, 2024. The increase was due largely to the financial benefits of our recent participation

in the Citizens take-out program and higher net earned premiums, 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

38

periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors

and are not indicative of operating trends.

Adjusted net income (loss) and adjusted earnings per share for the three and nine months ended September 30, 2025

and 2024 reconciles to net income and earnings per share, respectively, as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Net Income	$13,163		$4,513		$78,753		$31,344
Add:
Stock compensation(1)	—		—		10,433		—
Termination of MSA(2)	—		—		3,000		—
One-time bonus(2)	—		—		1,387		—
One-time IPO expenses(2)	—		—		1,654		—
Post IPO transition expenses(2)	1,084		—		1,084		—
Less:
Net realized gains on Investments	41		18		542		103
Change in tax status(3)	—		—		9,722		—
Tax effect(4)	219		(4)		2,683		(22)
Adjusted net income	$13,987		$4,499		$83,364		$31,263
Adjusted income allocated to participating securities	—		194		2,190		1,350
Numerator:
Adjusted net income available for common shareholders	13,987		4,305		81,174		29,913
Denominator:
Weighted average common shares outstanding - basic and diluted	19,573		12,904		16,446		12,904
Adjusted earnings per share:
Basic	0.71		0.33		4.94		2.32
Diluted	0.71		0.33		4.94		2.32

(1)Stock-based compensation expense recognized of $10,433 for the nine months ended September 30, 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 nine months ended September 30, 2025 and 2024 were 8.2%

and 22.2% 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.

Annualized adjusted return on equity

Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income for the

period on an annualized basis divided by the average of beginning and ending shareholders’ equity during the

applicable period. We use annualized 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

39

into our underlying business performance. Annualized adjusted return on equity should not be viewed as a substitute

for any metrics calculated in accordance with GAAP, and other companies may define annualized adjusted return on

equity differently.

Annualized adjusted return on equity increased by 6.2 percentage points, to 18.1% for the three months ended

September 30, 2025 from 11.9% for the three months ended September 30, 2024. The increase in annualized

adjusted return on equity over the prior period 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.

Annualized adjusted return on equity increased by 17.6 percentage points, to 46.5% for the nine months ended

September 30, 2025 from 28.9% for the nine months ended September 30, 2024. The increase in annualized adjusted

return on equity over the prior period end balance 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.

Annualized adjusted return on equity for the three and nine months ended September 30, 2025 and 2024 reconciles

to annualized return on equity as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Net income	$13,163		$4,513		$78,753		$31,344
Average beginning and ending share holders’ equity(1)	308,876		151,664		239,136		144,201
Annualized return on equity(2)	17.0%		11.9%		43.9%		29.0%
Adjusted net income (loss) (after tax)(3)(4)	$13,987		$4,499		$83,364		$31,263
Average shareholders’ equity	308,876		151,664		239,136		144,201
Annualized adjusted return on equity(3)(4)	18.1%		11.9%		46.5%		28.9%

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

respective period presented (quarter-to-date or year-to-date).

(2)Annualized return on equity is net income divided by average beginning and ending shareholders’ equity, multiplied by four

for the three months ended and four-thirds for the nine months ended.

(3)Annualized adjusted return on equity is the adjusted net income (loss) (after tax) divided by the average beginning and

ending shareholders’ equity, multiplied by four for the three months ended and four-thirds for the nine months ended.

(4)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 nine months ended September 30, 2025 and 2024 were 8.2%

and 22.2% 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 unfavorable net prior year reserve development of $2.3 million for the three months ended

September 30, 2025 and favorable net prior year reserve development $0.4 million for the three months ended

September 30, 2024. We experienced no catastrophe losses for the three months ended September, 30, 2025. For the

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three months ended September 30, 2024 we experienced $10.0 million of catastrophe losses related to losses

retained on Hurricane Helene and Property Claims Services (“PCS”) coded storm activity.

The underlying loss and loss adjustment expense ratio increased to 49.9% for the three months ended September 30,

2025 from 36.4% for the three months ended September 30, 2024, due to a greater share of our losses being ceded

under our quota share reinsurance arrangement in periods with greater catastrophe losses as compared to periods

with lower or no catastrophe losses, which had the effect of reducing underlying losses in the prior period, as well as

the impact of modest rate decreases during 2025 and the onboarding of Citizens policies that have a slightly higher

expected loss ratio.

We experienced unfavorable net prior year reserve development of $1.2 million for the nine months ended

September 30, 2025 and favorable net prior year development $6.8 million for the nine months ended September 30,

2024. We experienced no catastrophe losses for the nine months ended September, 30, 2025. For the nine months

ended September 30, 2024 we experienced $18.1 million of catastrophe losses related to PCS 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 decreased to 36.8% for the nine months ended September 30,

2025 from 37.1% for the nine months ended September 30, 2024, primarily due to the lack of catastrophe losses in

2025 combined with the increase in net earned premium resulting from our participation in the Citizens take-out

program and voluntary policy and premium growth.

The following table summarizes loss ratios and underlying loss and LAE ratios for the three months and nine months

ended September 30, 2025 and 2024:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Total Net Premiums Earned	$51,999		$40,464		$183,569		$120,266
Plus: Policy Fees	2,805		1,928		7,976		5,656
Total Net Premiums Earned Plus Policy Fees	54,804		42,392		191,545		125,922
Net Losses and Loss Adjustment Expenses, Net	$29,652		$25,017		$71,702		$58,024
Loss and Loss Adjustment Expense Ratio (% Net Premiums Earned Plus Policy Fees)	54.1%		59.0%		37.4%		46.1%
Less:
Current Year Net Catastrophe Losses	—		10,012		—		18,107
Prior Year Net Reserve Development	2,312		(405)		1,195		(6,762)
Underlying Loss and Loss Adjustment Expenses, Net	$27,340		$15,410		$70,507		$46,679
Underlying Loss and Loss Adjustment Expense Ratio (% Net Premiums Earned Plus Policy Fees)	49.9%		36.4%		36.8%		37.1%

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.

41

Ceded catastrophe excess of loss premiums ratio increased 1.2 percentage points, to 48.0% for the three months

ended September 30, 2025 from 46.8% for the three months ended September 30, 2024. This increase was primarily

due to higher reinsurance costs recognized under the June 1, 2025 renewal and the timing of earned premiums.

Ceded catastrophe excess of loss premiums ratio decreased 2.6 percentage points, to 43.9% for the nine months

ended September 30, 2025 from 46.5% for the nine months ended September 30, 2024. This decrease was primarily

due to a disproportionate increase in gross earned premium related to our recent participation in the Citizens take-out

program and 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 three and nine months ended September 30, 2025

and 2024 is shown in the table below:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Gross Premiums Earned	$221,949		$165,361		$655,844		$482,375
Total Ceded Premiums Earned	(169,950)		(124,897)		(472,275)		(362,109)
Less: NCQSR and other ancillary reinsurance treaties	(63,447)		(47,511)		(184,390)		(137,906)
Ceded Catastrophe Excess of Loss Premiums Earned	$(106,503)		$(77,386)		$(287,885)		$(224,203)
Ceded Catastrophe Excess of Loss Premiums Ratio	48.0%		46.8%		43.9%		46.5%

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 portfolio, fluctuates

from time to time. As of September 30, 2025, our liquidity totaled $541.3 million. A portion of that liquidity is not

held at AIIC. The total cash and cash equivalents not held at the insurance subsidiary was $141.9 million as of

September 30, 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 portfolio 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.

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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.

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.

As discussed in Note 9 – “Regulatory Requirements and Restrictions” in the notes to our unaudited condensed

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 9 – “Regulatory

Requirements and Restrictions” in the notes to our unaudited condensed 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

September 30, 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.

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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.

Our cash flows for the nine months ended September 30, 2025 and 2024 were:

	Nine Months Ended September 30,
($ in thousands)	2025		2024
Cash and cash equivalents (net) provided by (used in): Operating activities	$88,003		$(3,792)
Cash and cash equivalents (net) provided by (used in): Investing activities	(144,788)		23,514
Cash and cash equivalents (net) provided by (used in): Financing activities	61,837		(12,333)
Net increase (decrease) in cash and cash equivalents	$5,052		$7,389

Cash provided by operating activities was $88.0 million for the nine months ended September 30, 2025 compared to

$(3.8) million used in operating activities for the nine months ended September 30, 2024. The increase in cash

provided by operating activities resulted from our strategic expansion through our Citizen’s take-out program.

Cash used in investing activities was $(144.8) million for the nine months ended September 30, 2025 compared to

$23.5 million provided by investing activities for the nine months ended September 30, 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 $61.8 million for the nine months ended September 30, 2025

compared to $(12.3) million used in financing activities for the nine months ended September 30, 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 September 30, 2025, and December 31, 2024.

($ in thousands)	September 30, 2025		December 31, 2024
Shareholders’ equity	$315,880		$162,392
Long-term debt	$721		$1,029
Total capital resources	$316,601		$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 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

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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 decisions could lead to substantial alterations in the reported outcomes. For a detailed

discussion of our accounting policies, see our notes to the unaudited condensed consolidated financial statements.

Our current critical accounting 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 condensed 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.

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•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 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 September 30,

2025, we recorded $13.1 million in case reserves and an additional $350.4 million for IBNR reserves, totaling

$363.4 million in reserves, with an added $371.9 million attributable to reinsurance claims payable.

For further detail, see Note 7 – “Liability for Unpaid Losses and Loss Adjustment Expense” in our notes to the

unaudited condensed consolidated financial statements.

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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 condensed consolidated financial statements.

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

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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 September 30,

2025 and December 31, 2024. Changes in interest rates subsequent to September 30, 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 factors beyond our control. A rise in interest rates would decrease the net unrealized

holding gains of our investment portfolio, 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 portfolio,

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

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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 condensed 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 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 unaudited condensed consolidated financial

statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial instrument

as the result of changes in interest rates, duration, equity prices, foreign currency exchange rates, and commodity

prices. The primary components of market risk affecting us are interest rate risk, duration risk and credit risk. We do

not have significant exposure to equity risk, foreign currency exchange rate risk or commodity risk.

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As of September 30, 2025, and December 31, 2024, our investment portfolios contained fixed-maturity securities.

These securities are not intended for trading or speculative purposes. Our primary aim is to maximize after-tax

investment income while ensuring sufficient liquidity to fulfill policyholder obligations. Additionally, we strive to

minimize market risk, which encompasses potential economic losses resulting from adverse fluctuations in

securities’ prices.

In developing our investment strategies, we consider various factors such as credit ratings, investment

concentrations, regulatory requirements, expected interest rate fluctuations, durations, and prevailing market

conditions. Our investment portfolios are managed by Goldman Sachs Asset Management, overseen by our Board of

Directors and an investment committee appointed by AIIC’s Board of Directors.

Our investment portfolios are predominantly exposed to interest rate risk, duration risk and credit risk. We classify

these fixed-maturity securities as available-for-sale. Any unrealized gains or losses, adjusted for deferred income

taxes, are reported as part of other comprehensive income within our shareholders’ equity. Consequently, significant

temporary changes in their fair value could potentially affect the carrying value of our shareholders’ equity.

The effective weighted average duration of the portfolio was 2.19 years and 0.68 years at September 30, 2025 and

2024, respectively. As of September 30, 2025, the estimated weighted-average credit quality rating of the fixed

maturity securities portfolio was A+. We have not experienced a material impact when compared to the tabular

presentations of our interest rate and market risk sensitive instruments in our prospectus, dated May 7, 2025 filed

with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), on May

8, 2025 for the year ended December 31, 2024.

Interest Rate Risk

Interest rate risk is the risk that we will incur economic losses due to adverse changes in interest rates. When market

interest rates rise, the fair value of our fixed maturity securities decreases. Conversely, as interest rates fall, the fair

value of our fixed maturity securities increases. Credit risk is the potential loss resulting from adverse changes in an

issuer’s ability to repay its debt obligations. Credit risk can expose us to potential losses arising principally from

adverse changes in the financial condition of the issuers of our fixed maturity securities. We mitigate the risk by

primarily investing in fixed-maturity securities that are rated “BBB” (S&P) or higher and diversifying our

investment portfolio to avoid concentrations in any single issuer or business sector.

Credit Risk

Credit risk is the potential loss resulting from adverse changes in an issuer’s ability to repay its debt obligations. We

have exposure to credit risk as a holder of fixed maturity investments. Credit risk can expose us to potential losses

arising principally from adverse changes in the financial condition of the issuers of our fixed maturity securities. We

mitigate the risk by primarily investing in fixed-maturity securities that are rated “BBB” (S&P) or higher and

diversifying our investment portfolio to avoid concentrations in any single issuer or business sector. Pursuant to our

investment policy, only $1.0 million may be invested in below investment grade bonds.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in the Exchange Act, Rule 13a-15(e)) that are designed

to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized

and reported within the time periods specified in the SEC’s rules and forms, and that such information is

accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer,

as appropriate, to allow timely decisions regarding required disclosures.

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As required by Exchange Act Rule 13a-15(b) or Rule 15d-15(b), as of the end of the period covered by this

Quarterly Report, under the supervision and with the participation of our Chief Executive Officer and Chief

Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures. Based on this

evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, our

disclosure controls and procedures were not effective due to the material weakness in our internal control over

financial reporting described below.

Material Weakness in Internal Control Over Financial Reporting

As previously disclosed in our registration statement on Form S-1, we identified a material weakness in our internal

control over financial reporting. The material weakness relates to the aggregate effect of multiple deficiencies in

internal controls, which affected the control activities component of the Company’s internal control framework,

including with respect to controls that address claims payments in the Company’s policy administrative system,

reconciliation of claim payments used by the Company’s actuaries to estimate reserves, reconciliation of premium

receivable balances and reserve for credit losses, reconciliation of investments held by consolidated variable interest

entities, and the reconciliation of ceding commission. The Company did not maintain sufficiently detailed and

precise documentation in support of the design and operation of controls, which is pervasive throughout the

Company’s internal control environment.

Remediation Efforts

The Company is committed to remediating this material weakness as quickly as possible and will continue to

monitor the effectiveness of these remediation measures. The Company is in the early stages of implementing a plan

to remediate the material weaknesses identified. The current plan includes the below:

•Hiring additional experienced accounting, financial reporting and internal control personnel and changing roles and

responsibilities of our personnel since we have recently transitioned to being a public company and are required to

comply with Section 404 of the Sarbanes Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

•Implementing company-wide internal control training to deepen our employees’ understanding of their role

in relation to our overall control environment and establish clear expectations for control documentation.

•Engaging external service providers to assist management as we enhance written policies and procedures to

establish specific actions expected of control owners, such that sufficient documentation is maintained to

demonstrate control activities are performed consistently throughout the organization and with an

appropriate level of precision to meet objectives and mitigate risks to acceptable levels.

•Reviewing and enhancing the design of controls to evaluate accounting policies and establish processes and

controls to review management’s estimate of credit losses due to the cancellation of insurance policies.

The material weakness cannot be considered remediated until the enhanced controls have operated for a sufficient

period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during our most recent quarter that has

materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are subject to routine legal proceedings in the ordinary course of business. We believe that the

ultimate resolution of these matters will not have a material adverse effect on our business, financial condition,

results of operations or cash flows.

Item 1A. Risk Factors

Summary of Risk Factors

Our business is subject to a number of risks and uncertainties that you should understand before making an

investment decision. These include:

•As a property and casualty insurer, we may face significant losses, and exposure to catastrophic events and

severe weather conditions may cause our financial results to significantly vary from period to period.

•Our loss reserves are estimates and may be inadequate to cover our actual liability for losses, which could

adversely affect our business.

•Because we conduct substantially all of our business in Florida, our financial results depend on the

regulatory, legal, economic and weather conditions in Florida.

•Changing climate conditions may increase the severity and frequency of catastrophic events and severe

weather conditions, which may adversely affect our business.

•Actual claims incurred have exceeded, and in the future may exceed, reserves established for claims,

adversely affecting our operating results and financial condition.

•Lack of effectiveness of exclusions and other loss limitation methods in the insurance policies we assume

or write could have a material adverse effect on our financial condition or results of operations.

•Because we rely on third-party distribution partners, including independent insurance agents, homebuilder-

affiliated agents and national insurance carriers who restrict the amount of business they write in Florida,

the loss of these relationships and the business they control or our inability to attract distribution partners

could have an adverse impact on our business.

•Although we believe that recent legislative reforms have driven a stabilization of rates, our results may

fluctuate based on cyclical changes in the insurance industry.

•We may pursue opportunities to participate in Citizens’ take-out programs and directly assume policies

issued by Citizens to policyholders who were otherwise unable to obtain private insurance. Take-out

opportunities are subject to a number of timing and execution risks, and we may fail to participate in

Citizens’ take-out programs on terms that are ultimately profitable to us, or at all.

•Reinsurance coverage may not be available to us in the future at commercially reasonable rates, or at all.

•Reinsurance subjects us to the credit risk of our reinsurers who may suffer a downgrade, and we risk not

being able to collect reinsurance amounts in a timely manner, or at all, due to us under our contracts with

reinsurers, which could materially harm our business and financial condition.

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•The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial

condition or results of operations.

•The inherent uncertainty of models and our reliance on such models as a tool to evaluate risk may have an

adverse effect on our financial results.

•Our success depends on our ability to accurately price the risks we underwrite, which is subject to

uncertainty.

•Our information technology systems may fail or be disrupted, which could adversely affect our business.

•If we are unable to expand our business because our capital must be used to pay greater than anticipated

claims, our financial results may suffer, and we may require additional capital in the future which may not

be available or may be available only on unfavorable terms.

•Unanticipated increases in the severity or frequency of claims could adversely affect our business or

financial condition.

•If actual renewals of our existing policies do not meet expectations, our future premiums and results of

operations could be materially adversely affected.

•The failure of our claims department, or the third-party claims adjusters whom we may engage, to

effectively manage or remediate claims could adversely affect our business, financial results or capital

requirements.

•Increased competition and market conditions, including changes in our financial stability and credit ratings,

could affect the growth of our business and negatively affect our financial results.

•We are subject to extensive regulation, and potential further restrictive regulation may increase our

operating costs and limit our growth and profitability.

•The effects of emerging claim and coverage issues in Florida on our business are uncertain.

•Mandatory assessments or competition for government entities may create short-term liabilities or affect

our ability to underwrite more policies.

•We face financial exposure to unpredictable weather patterns and catastrophic storms and resulting

regulation from the FLOIR.

•The Florida Hurricane Catastrophe Fund may not have enough resources to pay us for the coverage we

purchased.

•A regulatory environment that requires approval of rate increases, can mandate rate decreases, and that can

dictate underwriting practices and mandate participation in loss sharing arrangements may adversely affect

our results of operations and financial condition.

•We are not contractually obligated to pay regular cash dividends on our Common Stock. As a result, you

may not receive any return on investment unless you sell your Common Stock for a price greater than that

which you paid for it.

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Risks Related to Our Business

As a property and casualty insurer, we may face significant losses, and exposure to catastrophic events and severe

weather conditions may cause our financial results to significantly vary from period to period.

Because of the exposure of our property and casualty business to catastrophic events, our operating results or

financial condition have varied, and may in the future vary, significantly from one period to the next, and our

historical results of operations may not be indicative of future results of operations. Property damage resulting from

catastrophes is the greatest risk of loss we face in the ordinary course of our business. Artificial or natural disasters,

including but not limited to hurricanes, convective storms, tornadoes, tropical storms, sinkholes, windstorms,

hailstorms and other severe weather events may cause catastrophes. The frequency and severity of property

insurance claims typically increase when catastrophic events and severe weather conditions occur. Catastrophes are

inherently unpredictable and difficult to project. As a result, we have in the past and may in the future, suffer

financial loss due to unpredictable numbers of claims as catastrophes occur.

The loss estimates developed by the models we use are dependent upon assumptions or scenarios incorporated by a

third-party developer and by us. When these assumptions or scenarios do not reflect the characteristics of

catastrophic events that affect areas covered by our policies or the resulting economic conditions, then we become

exposed to losses not covered by our reinsurance program, which could adversely affect our financial condition,

business or results of operations. Although we use widely recognized and commercially available models to estimate

our exposure to loss from hurricanes and certain other catastrophes, other models exist that might produce a wider or

narrower range of loss estimates, or loss estimates from perils considered less significant to our insured risks. These

models are constantly changing, and we may utilize different models than we have historically. Despite our

catastrophe management programs, we retain material exposure to catastrophic events. Additionally, the models

themselves produce a range of results and associated probabilities of occurrence from which we can assess risks of

exposure to catastrophic loss. Extreme catastrophe scenarios exist within the modeling results that may also have a

material adverse effect on our results of operations during any reporting period due to increases in our losses.

Catastrophes may reduce or otherwise impact liquidity, which could have a negative impact on our business.

Catastrophes have eroded and in the future may erode our statutory surplus or ability to obtain adequate reinsurance

which could negatively affect our ability to write new or renewal business. Catastrophic claim severity is impacted

by the effects of inflation and increases in insured value and factors such as the overall claims, legal and litigation

environments in affected areas, in addition to the geographic concentration of insured property.

Our loss reserves are estimates and may be inadequate to cover our actual liability for losses, which could

adversely affect our business.

We maintain reserves to cover our estimated ultimate liabilities for losses and LAE, also referred to as loss reserves.

Our loss reserves are based primarily on our historical data and statistical projections of what we believe the

resolution and administration of claims will cost based on facts and circumstances then known to us.

Our claims experience and our experience with the risks related to certain claims are inherently limited. We use

company historical data to the extent it is available and rely on industry historical data, which may not be indicative

of future periods. As a result, our projections and our estimates may be inaccurate, which in turn may cause our

actual losses to exceed our loss reserves. If our actual losses exceed our loss reserves, our financial results, our

ability to expand our business and our ability to compete in the property and casualty insurance industry may be

negatively affected.

Because of the inherent uncertainties in the reserving process, we cannot be certain that our reserves will be

adequate to cover our actual losses and LAE. If our reserves for unpaid losses and LAE are less than actual losses

and LAE, we will be required to increase our reserves with a corresponding reduction in our net income in the

period in which the deficiency is identified. Future losses and LAE that exceed our reserves could substantially harm

our results of operations or financial condition.

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Because we conduct substantially all of our business in Florida, our financial results depend on the regulatory,

legal, economic and weather conditions in Florida.

Though we are licensed to transact insurance business in other states, we write substantially all of our policies in

Florida. Because of our concentration in Florida, we are exposed to hurricanes, windstorms and other catastrophes

affecting Florida. We have incurred and may in the future incur higher catastrophe losses in Florida or elsewhere

than those we experienced in prior years; those estimated by catastrophe models we use; the average expected level

used in pricing; and our current reinsurance coverage limits. We are also subject to claims arising from non-

catastrophic weather events such as rain, hail and high winds.

Additionally, in Florida, despite the recent decrease in the frequency of claims due in part to recent legislative

reforms, the severity of costs associated with both catastrophe claims and non-catastrophe claims has continued to

increase. The nature and level of future catastrophes, the incidence and severity of weather conditions in any future

period, and the impact of catastrophes on behaviors related to non-catastrophe claims cannot be predicted and could

materially and adversely impact our operations.

Therefore, prevailing regulatory, consumer behavior, legal, economic, political, demographic, competitive, weather

and other conditions in Florida affect our revenues and profitability. The Florida legislature changes laws related to

property insurance frequently and has done so more often in recent years. While some of these law changes have

been designed to reduce abuses in the Florida market and reinvigorate admitted market interest in expanding

writings, other law changes have imposed new or increased requirements on insurers that might prove to be

detrimental to our business. In addition, extended implementation periods, ensuing regulatory rule making timelines

and periods of uncertainty as opponents of the changes challenge them in court often follow changes to Florida’s

insurance laws. Resulting delays in the effectiveness of new laws, even when intended to be beneficial for the

insurance industry, may limit or delay the laws’ impact on our business.

Adverse changes in these conditions in Florida have a more pronounced effect on us than they would on other

insurance companies that are more geographically diversified throughout the United States. A single catastrophic

event, or a series of such events, specifically affecting Florida, particularly in the more densely populated areas of

the state, have had and could have an adverse impact on our business, financial condition or results of operations.

This is particularly true in certain Florida counties where we write a large amount of policies such that a catastrophic

event or series of catastrophic events in these counties could have a significant impact on our business, financial

condition or results of operations. Our concentration in Florida subjects us to increased exposure to certain

catastrophic events and destructive weather patterns such as hurricanes, tropical storms and tornadoes and to the

ensuing claims-related behaviors that have characterized the Florida market in recent years.

While we operate substantially all of our business in Florida, we have expanded our business into other geographical

markets, and there is no guarantee that such expansion will be successful or that the underwriting and profitability

criteria we utilize in Florida will successfully translate to other states. In addition, we are and will continue to be

subject to regulatory, legal, economic and weather conditions in the states where we will write policies, which are

often different than the conditions we face in Florida. As a result, we may not be able to adjust to changing

conditions in other states in which we write policies due to our focus and expertise in Florida, and as a result, our

results of operations may be materially affected.

Changing climate conditions may increase the severity and frequency of catastrophic events and severe weather

conditions, which may adversely affect our business.

Longer-term weather trends may be changing, and new types of catastrophe losses may be developing due to climate

change, a phenomenon that has been associated with greenhouse gases and extreme weather events linked to rising

temperatures, including effects on global weather patterns, sea, land and air temperature, sea levels, rain, and snow.

To the extent the frequency or severity of weather events is exacerbated due to climate change, we may experience

increases in catastrophe losses in both coastal and non-coastal areas. This may increase our claims-related and/or

insurance costs or may negatively affect our ability to provide insurance to our policyholders. In addition, increased

catastrophic events could result in increased credit exposure to the reinsurers that we work with. Our actual losses

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from catastrophic events might exceed levels that the third parties’ reinsurance programs protect or might be larger

than anticipated if one or more of our reinsurers fail to meet their obligations. Climate change may affect the

occurrence of certain natural events, such as increasing the frequency or severity of convection storms, wind,

tornado, hailstorm and thunderstorm events due to increased convection in the atmosphere. There could also be more

frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes due to

higher sea surface temperatures. As a result, incurred losses from such events and the demand, price and availability

of reinsurance coverages for homeowners insurance may be affected. This may cause an increase in claims-related

and/or reinsurance costs or may negatively affect our ability to provide homeowners insurance to our policyholders

in the future.

In addition, we cannot predict how legal, regulatory and societal responses to concerns around climate change may

impact our business. The inherent uncertainties associated with studying, understanding and modeling changing

climate conditions, available analyses and models in this area typically relate to potential meteorological or sea level

impacts and generally are not intended to analyze or predict impacts on insured losses.

Actual claims incurred have exceeded, and in the future may exceed, reserves established for claims, adversely

affecting our operating results and financial condition.

We maintain loss reserves to cover our estimated ultimate liability for unpaid losses and LAE for reported and

unreported claims as of the end of each accounting period. The reserve for losses and LAE is reported net of

receivables for subrogation. Recorded claim reserves in the property and casualty business are based on our best

estimates of what the ultimate settlement and administration of claims will cost, both reported and incurred but not

reported. These estimates, which generally involve actuarial projections, are based on management’s assessment of

known facts and circumstances, including our experience with similar cases, actual claims paid, historical trends

involving claim payment patterns, pending levels of unpaid claims and contractual terms. External factors are also

considered, which include but are not limited to changes in the law, court decisions, changes to regulatory

requirements, economic conditions including inflation as experienced in recent years, and consumer behavior

(including as a result of any foreign or domestic tariffs, taxes or levies instituted in connection with ongoing global

trade negotiations). Many of these factors are not quantifiable and are subject to change over time. The current

Florida homeowners’ insurance market is adversely impacted by changes in claimant behaviors resulting in losses

and LAE exceeding historical trends, amounts experienced in other states, and amounts we previously estimated.

The increases in losses and LAE are attributable to the active solicitation of claims activity by policyholder

representatives, high levels of represented claims compared to historical patterns or patterns seen in other states, and

a proliferation of inflated claims filed by policyholder representatives and vendors.

Additionally, there sometimes is a significant reporting lag between the occurrence of an event and the time it is

reported to us. The inherent uncertainties of estimating reserves are greater for certain types of liabilities,

particularly those in which the various considerations affecting the type of claim are subject to change and in which

long periods of time elapse before a definitive determination of liability is made. We continually refine reserve

estimates as experience develops and as subsequent claims are reported and settled. Adjustments to reserves are

reflected in the financial statement results of the periods in which such estimates are changed. Inflationary pressures,

rising energy prices, supply chain issues and other macroeconomic conditions (including as a result of any foreign or

domestic tariffs, taxes or levies instituted in connection with ongoing global trade negotiations) have caused

increases in the cost of building materials and labor, which in turn have caused the cost to replace damaged or

destroyed property to increase. We model expected costs (including expected inflation) associated with any policy

we write in order to help determine the amount of premiums needed for the policy to yield our targeted profit.

Inflation and other macroeconomic factors have increased our costs more than we anticipated and may continue to

do so in the future. Because our policies generally carry a term of one year, replacement costs have, at times in the

past, exceeded our estimates (including as a result of inflation), causing our targeted profit to be eroded or

eliminated. This has resulted in our paid losses exceeding prior reserve estimates and in increases in our current

estimates of unpaid losses and LAE. Because setting reserves is inherently uncertain and claims conditions change

over time, the ultimate cost of losses has varied and, in the future, may vary materially from recorded reserves, and

such variance may continue to adversely affect our operating results and financial condition. The full extent of the

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ongoing disruptions and claims behaviors in the markets in which we operate, and the extent to which legislative

efforts aimed at mitigating these concerns will be successful, are unknown and still unfolding.

Subrogation is a significant component of our total net reserves for losses and LAE. There has been a significant

increase in our efforts to pursue subrogation against third parties responsible for property damage losses to our

policyholders. More recently, changes in Florida’s claims environment and legal climate have reduced the

effectiveness of our efforts to properly apportion losses through subrogation. Responsible parties are increasingly

using delays and defensive tactics to avoid subrogation and increase costs of subrogation, which in turn decreases

the effectiveness of subrogation. Our ability to recover recorded amounts remains subject to significant uncertainty,

including risks inherent in litigation, collectability of the recorded amounts and potential law changes or judicial

decisions that can hinder or reduce the effectiveness of subrogation.

Lack of effectiveness of exclusions and other loss limitation methods in the insurance policies we assume or write

could have a material adverse effect on our financial condition or results of operations.

Provisions of our policies, such as limitations or exclusions from coverage, which are designed to limit our risks,

may not be enforceable in the manner we intend. In addition, the policies we issue contain conditions requiring the

prompt reporting of claims to us and our right to decline coverage in the event of a violation of that condition. While

our insurance product exclusions and limitations reduce the loss exposure to us and help eliminate known exposures

to certain risks, it is possible that a court or regulatory authority could nullify or void an exclusion or limitation, or

legislation could be enacted that modifies or bars the use of such endorsements and limitations in a way that would

adversely affect our loss experience, which could have a material adverse effect on our financial condition or results

of operations.

Because we rely on third-party distribution partners, including independent insurance agents, homebuilder-

affiliated agents and national insurance carriers who restrict the amount of business they write in Florida, the

loss of these relationships and the business they control or our inability to attract distribution partners could have

an adverse impact on our business.

Our business depends in part on the marketing efforts of third-party distribution partners, including independent

insurance agents, homebuilder-affiliated agents and national insurance carriers who restrict the amount of business

they write in Florida and our ability to offer products and services that meet the requirements of our third-party

distribution partners and their customers’ requirements. We write insurance policies in the Voluntary Market

through various channels, including through a network of independent agents, which represents our largest

distribution channel, as measured by gross premiums written for the nine months ended September 30, 2025. Many

of our competitors also distribute through these same partners as these agents have the ability to write or re-write

business with other carriers. As a result, we must compete with other insurers for our partners’ business. Our

competitors may offer a greater variety of insurance products, lower premiums for insurance coverage or higher

commissions to their third-party distribution partners. If our products, pricing and commissions do not remain

competitive, we may find it more difficult to attract business from our partners to sell our products. We cannot

provide assurance that we will retain our current distribution relationships, or be able to establish new distribution

relationships, with independent agents. We also rely on other third parties such as third-party claims adjusters as part

of our claims management process and utilize third-party reinsurers to help cover losses. The inability to maintain

these relationships with these third-party providers could have a material impact on our business and results of

operations.

Although we believe that recent legislative reforms have driven a stabilization of rates, our results may fluctuate

based on cyclical changes in the insurance industry.

The insurance industry historically has been cyclical, characterized by periods of intense price competition due to

excessive underwriting capacity and periods of shortages of capacity that permitted an increase in pricing and, thus,

more favorable underwriting profits. As premium levels increase, there may be new entrants to the market, which

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could lead to a decrease in policies written by us. Any of these factors could lead to a reduction in revenue in future

periods, less favorable policy terms and fewer opportunities to underwrite insurance risks, which could have a

material adverse effect on our results of operations and cash flows. In addition to these considerations, changes in

the frequency and severity of losses suffered by policyholders and insurers may affect the cycles of the insurance

business significantly.  

We believe the legislative reforms in 2022 have driven a stabilization of rates within the insurance industry,

however, we cannot predict whether market conditions will continue to improve, remain constant or deteriorate, and

the characterization of the insurance market as a whole is subject to varying interpretations and opinions that

fluctuate regularly. Negative market conditions may impair our ability to write insurance at rates that we consider

appropriate relative to the risk assumed. If we cannot write insurance at appropriate rates, our business could be

materially and adversely affected.

We may pursue opportunities to participate in Citizens’ take-out programs and directly assume policies issued by

Citizens to policyholders who were otherwise unable to obtain private insurance. Take-out opportunities are

subject to a number of timing and execution risks, and we may fail to participate in Citizens’ take-out programs

on terms that are ultimately profitable to us, or at all.

Citizens acts as Florida’s state-owned insurer of last resort, and is one of the largest homeowners insurers in Florida

as measured by premiums in-force. From time to time, Citizens will transfer certain of its existing policies to private

companies in order to reduce the State of Florida’s risk exposure. We participated in four take-out opportunities in

2024 assuming 68,844 policies, and have assumed 25,895 policies during the nine months ended September 30,

2025. As of September 30, 2025, 22.4% of our policies in-force were assumed from Citizens representing 29.2% of

our premiums in-force. Prior to 2024, we had not pursued a take-out opportunity since 2014 and therefore have less

recent experience in executing on these opportunities than certain of our peers. Although each policy we pursue

from Citizens is run through our standard underwriting procedures, the amount of data made available to us by

Citizens may be less or different from what is available to us in the Voluntary Market. The lack of availability of this

information may pose a material risk to our underwriting profitability with respect to any take-outs we pursue.

Additionally, there can be no guarantee that Citizens will timely offer sizeable take-out opportunities to the private

insurance market that would meet our underwriting and profitability criteria or continue the depopulation program at

all. While Citizens does replenish its policies after conducting take-outs, there is no guarantee that such

replenishments will meet our underwriting and profitability criteria or provide attractive take-out opportunities for us

in the future, and our financial condition may suffer as a result. In addition, there may be a negative perception

regarding our depopulations from Citizens or the desirability of the policies we assume, which could adversely

affect the price of our Common Stock.

Further, the market for attractive take-out opportunities is highly competitive and is subject to a bidding process. If

competing private insurers offer a lower premium than us for the same policy, Citizens is required to allocate that

policy to the insurer who offers the lowest premium. In the past, certain of our peers have been able to offer lower

premiums than us when pursuing the same take-out opportunities. Other carriers may also choose to re-enter or

expand their business in Florida in light of potential attractive take-out opportunities and generally improving

market conditions on the back of the legislative reforms in 2022. Additionally, following the term of each policy

assumed from Citizens, the policyholder has the opportunity to renew their policy similar to our underwriting

process in the Voluntary Market. There is no guarantee that we will be able to renew these assumed policies, and a

lack of renewals could harm our financial condition.

Reinsurance coverage may not be available to us in the future at commercially reasonable rates, or at all.

Reinsurance is a method of transferring part of an insurance company’s liability under an insurance policy to another

insurance company, or reinsurer. We use reinsurance arrangements to limit and manage the amount of risk we retain,

to stabilize our underwriting results and to increase our underwriting capacity. The cost of such reinsurance is

subject to prevailing market conditions beyond our control, such as the amount of capital in the reinsurance market

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and the occurrence of natural and human-made catastrophes. We cannot be assured that reinsurance will remain

continuously available to us in sufficient amounts or at prices acceptable to us. As a result, we may determine to

increase the amount of risk we retain or look for other alternatives to reinsurance, which could in turn have a

material adverse effect on our financial position, results of operations and cash flows.

Reinsurance subjects us to the credit risk of our reinsurers who may suffer a downgrade, and we risk not being

able to collect reinsurance amounts in a timely manner, or at all, due to us under our contracts with reinsurers,

which could materially harm our business and financial condition.

Reinsurance does not legally discharge us from our primary liability for the full amount of the risk we insure,

although it may make the reinsurer liable to us in the event of a claim. In addition, our reinsurers may not pay the

claims we incur on a timely basis, or they may not pay some or all of these claims. Our inability to collect a material

recovery from a reinsurer or to collect such recovery in a timely fashion could have a material adverse effect on our

operating results, financial condition and liquidity.

In addition, we are subject to credit risk with respect to our reinsurers as third-party rating agencies assess and rate

the claims-paying ability of reinsurers based upon criteria established by the rating agencies. We address this credit

risk by selecting reinsurers that have an A.M. Best Financial Strength Rating of “A-” (Excellent) or better at the time

we enter into the agreement or for which we hold collateral equal to 100% of the reinsurance recoverable.

Downgrades to the credit ratings of our reinsurance counterparties may result in the reduction of rating agency

capital credit provided by those reinsurance contracts, which could limit our ability to write new policies or renew

existing policies. If one or more of our reinsurers were to suffer a credit downgrade, our financial condition may

suffer, and we may be forced to consider various options to lessen the risk of asset impairment, including

commutation, novation and letters of credit. The collectability of reinsurance recoverables is subject to uncertainty

arising from many factors, including our reinsurers’ (i) financial capacity, (ii) willingness to make payments under

the terms of a reinsurance treaty or contract and (iii) whether insured losses meet the qualifying conditions and are

recoverable under our reinsurance contracts for covered events or are excluded.

The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial

condition or results of operations.

We utilize a number of strategies to mitigate our risk exposure including:

•employing proper underwriting processes;

•carefully evaluating the terms and conditions of our policies;

•selective underwriting with respect to certain geographic areas we consider high-risk due to the potential of

catastrophe events or litigation; and

•ceding insurance risk to reinsurance companies.

However, there are inherent limitations in these strategies. We are unable to assure that an event or series of events

will not result in loss levels that could have a material adverse effect on our financial condition or results of

operations.

The inherent uncertainty of models and our reliance on such models as a tool to evaluate risk may have an

adverse effect on our financial results.

We use models developed by third-party vendors in assessing our exposure to catastrophe losses, and these models

assume various conditions and probability scenarios, most of which are not known to us or are not within our

control. These models may not accurately predict future losses or accurately measure losses incurred. In addition,

these models are constantly changing, and we may utilize different models than we have historically. Competing

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models may differ in assessing risk and often utilize different underlying assumptions. The accuracy of models in

estimating insured losses from prior storms has varied considerably by catastrophe when compared to actual results

from those catastrophes. If these models understate the exposures we assume, we may not properly assess the risk

and we may make poor decisions relating to pricing, underwriting and selecting the related amount of reinsurance

we purchase. This uncertainty may materially impact our financial results.

Our success depends on our ability to accurately price the risks we underwrite, which is subject to uncertainty.

The results of our operations and our financial condition depend on our ability to underwrite and accurately set

premium rates for a variety of risks. Rate adequacy is necessary to generate sufficient premiums to pay losses, LAE,

underwriting expenses and to earn a profit. To price our products accurately, we must collect and properly analyze a

substantial amount of data; develop, test and apply appropriate rating formulas; closely monitor and timely

recognize changes in trends; and project both severity and frequency of losses with reasonable accuracy. Our ability

to undertake these efforts successfully, and thus, price our products accurately, is subject to several risks and

uncertainties, some of which are outside of our control, including:

•the availability of sufficient reliable data;

•the uncertainties that inherently characterize estimates and assumptions;

•our selection and application of appropriate rating and pricing techniques;

•changes in legal standards, claim settlement practices, and restoration costs; and

•legislatively imposed consumer initiatives.

In addition, we could underprice risks, which could negatively affect our financial results. We could also overprice

risks, which could reduce our retention, sales volume and competitiveness. The foregoing factors could materially

and adversely affect our business and results of operations.

Our information technology systems may fail or be disrupted, which could adversely affect our business.

Our insurance business is highly dependent upon the successful and uninterrupted functioning of our computer and

data processing systems. We rely on these systems to perform underwriting and other modeling functions necessary

for writing policies and handling our policy administration process. The failure or disruption of these systems could

interrupt our operations and result in a material adverse effect on our business. The increasing prevalence and

severity of cyber-related threats and incidents may further increase the risk of disruption of our information

technology systems. The increasing prevalence and severity of cyber-related threats and incidents may further

increase the risk of disruption of our information technology systems.

The growth of our insurance business is dependent upon the successful development and implementation of

advanced computer and data processing systems as well as the development and deployment of new information

technologies to streamline our operations, including policy underwriting, production, administration and claim

processing. The failure of these systems to function as planned could adversely affect our future business volume or

results of operations. Additionally, our computer and data processing systems could become obsolete or could cease

to provide a competitive advantage in policy underwriting, production, administration and claim processing, which

could negatively affect our results of operations.

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If we are unable to expand our business because our capital must be used to pay greater than anticipated claims,

our financial results may suffer, and we may require additional capital in the future, which may not be available

or may be available only on unfavorable terms.

Our future growth and future capital requirements will depend on the number of insurance policies we write, the

kinds of insurance products we offer and the geographic markets in which we do business versus the business risks

we choose to assume. Growth initiatives require capital. Our existing sources of funds include potential sales of

Common Stock, incurring debt and our earnings from operations and investments. Unexpected catastrophic events in

our coverage areas, such as hurricanes, may result in greater claims losses than anticipated, which could require us

to limit or halt our growth while we redeploy our capital to pay these unanticipated claims unless we are able to raise

additional capital.

To the extent that our present capital is insufficient to meet future operating requirements or to cover losses, we may

need to raise additional funds through financing or curtail our growth. Based on our current operating plan, we

believe that our current capital together with our anticipated retained income will support our operations. However,

we cannot provide any assurance that our current capital will support our current operating plan or future growth,

since many factors will affect the amount and timing of our capital needs, including profitability of our business, the

availability and cost of reinsurance, market disruptions and other unforeseeable developments. If we require

additional capital, it is possible that equity or debt financing may not be available on acceptable terms or at all. In the

case of equity financings, dilution to our stockholders could result, and in any case such securities may have rights,

preferences and privileges that are senior to those of existing stockholders. If we cannot obtain adequate capital on

favorable terms or at all, our business, financial condition or results of operations could be materially adversely

affected.

Unanticipated increases in the severity or frequency of claims could adversely affect our business or financial

condition.

Changes in the severity or frequency of claims affect our profitability. Although we aim to provide adequate and

appropriate coverage under each of our policies, policyholders could purchase policies that prove to be inadequate or

inappropriate. If such policyholders bring a claim or claims alleging that we failed in our responsibilities to provide

them with the type or amount of coverage that they sought to purchase, we could be found liable for amounts

significantly in excess of the policy limit, resulting in an adverse effect on our business, results of operations or

financial condition.

Changes in homeowners’ claim severity can be and have been driven by inflation in the construction industry, in

building materials and in home furnishings, as well as by other economic and environmental factors, including

increased demand for services and supplies in areas affected by catastrophes, supply chain disruptions, labor

shortages, and prevailing attitudes towards insurers and the claims process, including increases in the number of

litigated claims or claims involving representation as well as continuing efforts by policyholder representatives to

seek larger settlements on pre-reform claims in recognition that the elimination of the statutory right to attorneys’

fees and other law changes will apply to future claims. However, changes in the level of the severity of claims are

not limited to the effects of inflation and demand surge in these various sectors of the economy or to Florida’s

disproportionately high incidence of represented claims. Increases in claim severity can also arise from unexpected

events that are inherently difficult to predict. In addition, significant long-term increases in claim frequency also

have an adverse effect on our operating results or financial condition. Further, the level of claim frequency we

experience varies from period to period, and from region to region. Claim frequency can be influenced by natural

conditions such as the number and types of severe weather events affecting areas where we write policies as well as

by factors such as the prevalence of solicited and represented claims, including efforts by policyholder

representatives to encourage claims activity related to policy periods predating law changes. Although we pursue

various loss management initiatives in order to mitigate future increases in claim severity and frequency, there can

be no assurances that these initiatives will successfully identify or reduce the effect of future increases in claim

severity and frequency.

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If actual renewals of our existing policies do not meet expectations, our future premiums and results of

operations could be materially adversely affected.

We generally write our insurance policies for a one-year term, and we make assumptions about the renewal of our

prior year’s contracts, including for purposes of determining the amount of reinsurance we purchase. If actual

renewals do not meet expectations or if we choose not to write on a renewal basis because of pricing conditions, our

premiums written in future years and our future operations could be materially adversely affected, and we have in

the past and may in the future purchase reinsurance beyond what we believe is the most appropriate level.

The failure of our claims department, or the third-party claims adjusters whom we may engage, to effectively

manage or remediate claims could adversely affect our business, financial results or capital requirements.

We rely on our claims department and outsourced third-party claims adjusters and resources to facilitate and oversee

the claims adjustment process for our policyholders. Many factors could affect the ability of our claims department

to effectively manage claims by our policyholders, including:

•the accuracy of our adjusters or third-party claims adjusters as they make their assessments and submit their

estimates of damages;

•the training, background and experience of our claims representatives and third-party claims adjusters;

•the ability of our claims department and third-party claims adjusters to ensure consistent claims handling;

•the ability of our claims department to translate the information provided by third-party adjusters into

acceptable claims resolutions; and

•the ability of our claims department and third-party adjusters to maintain and update their claims handling

procedures and systems as they evolve over time based on claims and geographical trends in claims

reporting.

Any failure to effectively manage the claims adjustment process (including failure to manage our third-party

adjusters), including failure to pay claims accurately, could lead to litigation, undermine our reputation in the

marketplace, impair our corporate image and negatively affect our financial results. Further, the home insurance

industry is regularly subject to negative publicity, including as a result of governmental investigations, adverse

media coverage and political debate concerning industry regulation. Negative publicity may adversely affect our

stock price, damage our reputation, and expose us to unexpected or unwarranted regulatory scrutiny.

Increased competition and market conditions, including changes in our financial stability and credit ratings,

could affect the growth of our business and negatively affect our financial results.

The Florida residential insurance marketplace is currently dominated by single-state or regional insurance

companies, with the larger national insurance carriers maintaining a smaller overall market share. Our lines of

insurance are written by both these smaller insurers and the large national carriers, in addition to other markets such

as Citizens, which are highly competitive. Many of these large national insurance companies have greater name

recognition, established insurance agency networks and stronger financial resources to compete should they decide

to recommit to Florida and begin writing new policies. Some of the regional or single-state carriers could merge to

form a company larger than ours and be in a position to compete against us in a larger fashion by paying higher

commissions or other tactics. New insurance companies are being formed in Florida and will bring more

competition into the market. In addition, insurance agents are knowledgeable about insurance company strength, and

some have a bias towards placing policyholders with better rated companies. 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. Large national carriers

may have a rating from a more recognized rating firm named A.M. Best, which we do not have. We could receive a

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downgrade from Demotech, which could result in the loss of business and an adverse impact on our results and

operations. Additionally, a credit rating downgrade could also result in a significant reduction in the number of

policies that we may be able to sell to our policyholders who may be sensitive to fluctuations in such ratings.

In addition, industry developments could further increase competition in our industry. These developments could

include:

•an influx of new capital in the marketplace as existing companies attempt to expand their businesses and

new companies attempt to enter the insurance business as a result of better premium pricing and/or policy

terms;

•an increase in programs in which state-sponsored entities provide property insurance in catastrophe-prone

areas;

•changes in state regulatory climates; and

•the passage of federal proposals for an optional federal charter that would allow some competing insurers to

operate under regulations different or less stringent than those applicable to us.

These developments and others could make the property and casualty insurance marketplace more competitive by

increasing the supply of insurance available. If competition limits our ability to write new business at adequate rates,

our future results of operations could be adversely affected.

We rely on qualified and highly-skilled personnel, and if we are unable to attract, retain or motivate key

personnel, our business may be seriously harmed.

Our performance depends on the talents and efforts of highly-skilled and experienced individuals. Our operations are

dependent on the efforts of our senior executive officers. The loss of their leadership, industry knowledge and

experience could negatively impact our operations. However, we have management succession plans to lessen any

such negative impact. Our future success depends on our continuing ability to identify, hire, develop, motivate and

retain highly skilled and experienced personnel, and if we are unable to hire and train a sufficient number of

qualified employees for any reason, we may not be able to maintain or implement our current initiatives or grow, or

our business may contract and we may lose market share. Our competitors or other insurance or technology

businesses may seek to hire our employees. We cannot assure that we will provide adequate incentives to attract,

retain and motivate employees in the future. If we do not succeed in attracting, retaining and motivating highly

qualified personnel, our business may be seriously harmed.

Our business could be materially adversely affected by geopolitical conditions, pandemics and macroeconomic

conditions.

Geopolitical conditions such as changes in domestic or foreign policy, wars, conflicts, including those in Ukraine

and in the Middle East, and other global events have and may bring increased uncertainty. In addition, rising

inflation, changes in global trade policies and tariffs, high interest rates, supply chain issues, labor shortages,

volatility in capital markets and other economic risk have and may continue to increase economic uncertainty.

Inflation and interest rates directly impact the buying and selling of residences, which impacts our insurance policies

as well as the rates we may offer on our insurance policies. Any one or combination of these conditions may

materially impact our business, results of operations or financial condition.

Pandemics and other outbreaks of disease have had and can have significant and wide-spread impacts. As seen with

the COVID-19 pandemic, outbreaks of disease can cause governments, public institutions and other organizations to

impose or recommend, and businesses and individuals to implement, restrictions on various activities or take other

actions to combat the disease’s spread, such as warnings, restrictions and bans on travel, transportation or in-person

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gatherings; and local or regional closures or lockdowns. Outbreaks of disease, and actions taken in response to the

outbreak, could materially negatively impact our workforce, business, operations and financial results, both directly

and indirectly.

If we fail to comply with our obligations under license or technology agreements with third parties, or if we

cannot license rights to use technology or data on reasonable terms, we could be required to pay damages, lose

license rights that are critical to our business or be unable to commercialize new products and services in the

future.

We license certain intellectual property, technology and data from third parties that are important to our business

and, in the future, we may enter into additional agreements that provide us with licenses to valuable intellectual

property, technology or data. If we fail to comply with any of our obligations under our license or technology

agreements with third parties, we may be required to pay damages and the licensor may have the right to terminate

the license. Termination by the licensor (or other applicable counterparty) may cause us to lose valuable rights, and

could disrupt our operations and harm our reputation. Our business may suffer if any current or future licenses or

other grants of rights to us terminate, if the licensors (or other applicable counterparties) fail to abide by the terms of

the license or other applicable agreement, if the licensors fail to enforce the licensed intellectual property against

infringing third parties or if the licensed intellectual property rights are found to be invalid or unenforceable.

In the future, we may identify additional third-party intellectual property, technology and data that we need,

including to develop and offer new products and services. However, such licenses may not be available on

acceptable terms or at all. Further, third parties from whom we currently license intellectual property, technology

and data could refuse to renew our agreements upon their expiration or could impose additional terms and fees that

we otherwise would not deem acceptable requiring us to obtain the intellectual property or technology from another

third party, if any is available, or to pay increased licensing fees or be subject to additional restrictions on our use of

such third-party intellectual property or technology. Defense of any lawsuit or failure to obtain any of these licenses

on favorable terms could prevent us from commercializing products or services, which could have a material

adverse effect on our competitive position, business, financial condition and results of operations.

Cybersecurity attacks or other breaches of our systems could have an adverse impact on our business and

reputation.

Our business and operations rely on the secure and efficient processing, storage and transmission of customer and

Company data, including policyholders’ nonpublic personal information, financial information and proprietary

business information, on our computer systems and networks. Unauthorized access to personally identifiable

information, even if not financial information, could damage all affected parties. Breaches can involve attacks

intended to obtain unauthorized access to nonpublic personal information, destroy data, disrupt or degrade service,

sabotage systems or cause other damage, including through the introduction of computer viruses or malware,

cyberattacks and other means. Breaches can also involve human error, such as employees falling victim to phishing

schemes or computer coding errors that may leave data exposed.

Our computer systems may be vulnerable to unauthorized access and hackers, computer viruses and other scenarios

in which our data may be exposed or compromised. Cyberattacks can originate from a variety of sources, including

third parties who are affiliated with foreign governments or employees acting negligently or in a manner adverse to

our interests. Third parties may seek to gain access to our systems either directly or using equipment or security

passwords belonging to employees, policyholders, third-party service providers or other users of our systems. Our

systems also may inadvertently expose, through a computer programming error or otherwise, confidential

information as well as that of our policyholders and third parties with whom we interact. In addition, any significant

data security breach of our independent agents or third-party vendors could harm our business and reputation.

Our computer systems have been, and likely will continue to be, subject to cyber hacking activities, computer

viruses, other malicious codes or other computer-related penetrations. This is especially the case with employees

who work remotely. We commit significant resources to administrative and technical controls to prevent cyber

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incidents and protect our information technology, but our preventative actions to reduce the risk of cyber threats may

be insufficient to prevent physical and electronic break-ins and other cyberattacks or security breaches, including

those due to human vulnerabilities. Any such event could damage our computers or systems; compromise our

confidential information as well as that of our policyholders and third parties with whom we interact; significantly

impede or interrupt business operations, including denial of service on our website; and could result in violations of

applicable privacy and other laws, financial loss to us or to our policyholders, loss of confidence in our security

measures, customer dissatisfaction, significant litigation exposure and reputational harm, all of which could have a

material adverse effect on us. We expend significant additional resources to modify our protective measures and to

investigate and remediate vulnerabilities, exposures, or information security events. Due to the complexity and

interconnectedness of our systems, the process of enhancing our protective measures can itself create a risk of

systems disruptions and security issues.

The increase in the use of cloud technologies and in consumer preference for online transactions can heighten

cybersecurity and other operational risks. Certain aspects of the security of such technologies are unpredictable or

beyond our control, and this lack of transparency may inhibit our ability to discover a failure by cloud service

providers to safeguard their systems and prevent cyberattacks that could disrupt our operations and result in

misappropriation, corruption or loss of confidential and other information. In addition, there is a risk that encryption

and other protective measures, despite their sophistication, may be defeated, particularly to the extent that new

computing technologies vastly increase the speed and computing power available.

Although we have no plans to do so, we are not restricted from incurring indebtedness and may do so in the

future.

Subject to market conditions and availability, we are not restricted from incurring indebtedness and may do so in the

future. We are permitted to enter into credit facilities (including term loans and revolving facilities) and to conduct

public and private debt issuances. The amount of debt we may incur may vary depending on our available

investment opportunities, our available capital and our ability to obtain and access financing arrangements with

lenders. Our governing documents contain no limit on the amount of debt we may incur, and we may do so at any

time without approval of our stockholders.

Incurring debt could subject us to many risks that, if realized, would materially and adversely affect us, including the

risk that:

•our cash flow from operations may be insufficient to make required payments of principal of and interest

on the debt, or we may fail to comply with covenants contained in our debt instruments;

•debt may increase our vulnerability to adverse economic, market and industry conditions with no assurance

that our investment yields will increase to match our higher financing costs;

•we may be required to dedicate a substantial portion of our cash flow from operations to payments on our

debt, thereby reducing funds available for operations, future business opportunities, distributions to our

stockholders or other purposes; and

•we may not be able to refinance maturing debts.

We have identified material weaknesses in our internal control over financial reporting. If we are unable to

develop and maintain an effective system of internal control over financial reporting, we may not be able to

accurately report our financial results in a timely manner, which may adversely affect investor confidence in us

and materially and adversely affect our business and operating results, and we may face litigation as a result.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting

such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will

not be prevented, or detected and corrected, on a timely basis. In connection with the preparation of the Company’s

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condensed consolidated financial statements as of and for the year ended December 31, 2024, management and our

independent auditors identified material weaknesses in our internal control over financial reporting. The material

weakness related to the following:

•Control Documentation – Management identified a material weakness in the Company’s overall control

environment due to the aggregate effect of multiple deficiencies in internal controls, which affected the

control activities component of the Company’s internal control framework, including with respect to

controls that address claims payments in the Company’s policy administrative system, reconciliation of

claim payments used by the Company’s actuaries to estimate reserves, reconciliation of premium receivable

balances and reserve for credit losses, reconciliation of investments held by consolidated variable interest

entities, and the reconciliation of ceding commission. The Company did not maintain sufficiently detailed

and precise documentation in support of the design and operation of controls, which is pervasive

throughout the Company’s internal control environment.

Effective internal controls are necessary to provide reliable financial reports and prevent fraud. Material weaknesses

could limit the ability to prevent or detect a misstatement of accounts or disclosures that could result in a material

misstatement of annual or interim financial statements.

The Company’s management continues to evaluate steps to remediate the material weaknesses. We continue  to

make progress on our plan to remediate the material weaknesses identified. Remediation efforts include the

following:

•hired additional experienced accounting, financial reporting and internal control personnel and changing

roles and responsibilities of our personnel since we have recently transitioned to being a public company

and are required to comply with Section 404 of the Sarbanes Oxley Act.

•conducting Company-wide internal control training to deepen our employees’ understanding of their role in

relation to our overall control environment and establish clear expectations for control documentation. 

•engaged external service providers to assist management as we enhance written policies and procedures to

establish specific actions expected of control owners, such that sufficient documentation is maintained to

demonstrate control activities are performed consistently throughout the organization and with an

appropriate level of precision to meet objectives and mitigate risks to acceptable levels. The Company has

implemented several new controls and enhancements to existing controls and control documentation during

the third quarter of 2025 with additional enhancements to be implemented through the remainder of the

year.

•reviewed and enhanced the design of controls to evaluate accounting policies and established processes and

controls to review management’s estimate of credit losses due to the cancellation of insurance policies.

The Company is actively monitoring the implementation of the remediation plan and anticipates resolution by the

end of fiscal year 2025.

We cannot assure you that these measures will remediate the material weaknesses described above. The

implementation of these remediation measures is in the early stages and will require validation and testing of the

design and operating effectiveness of our internal controls over a sustained period of financial reporting cycles and,

as a result, the timing of when we will be able to remediate the material weaknesses is uncertain and we may not

remediate these material weaknesses in the near term. If the steps we take do not remediate the material weaknesses

in a timely manner, there could be a reasonable possibility that these control deficiencies or others may result in a

material misstatement of our annual or interim financial statements that would not be prevented or detected on a

timely basis. This, in turn, could jeopardize our ability to comply with our reporting obligations, limit our ability to

access the capital markets and adversely impact our stock price.

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Changes in accounting practices and future pronouncements may materially affect our reported financial results.

Developments in accounting practices may require us to incur considerable additional expenses to comply,

particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply

the new requirements retroactively. The impact of changes in current accounting practices and future

pronouncements cannot be predicted but may affect the calculation of net income, shareholders’ equity and other

relevant financial statement line items.

AIIC is required to comply with statutory accounting principles, or SAP. SAP and various components of SAP are

subject to constant review by the NAIC and its task forces and committees, as well as state insurance departments, in

an effort to address emerging issues and otherwise improve financial reporting. Various proposals are pending

before committees and task forces of the NAIC, some of which, if enacted and adopted on a state level, could have

negative effects on insurance industry participants. The NAIC continuously examines existing laws and regulations.

We cannot predict whether or in what form such reforms will be enacted and, if so, whether the enacted reforms will

positively or negatively affect us.

Risks Related to Our Regulatory Environment

We are subject to extensive regulation, and potential further restrictive regulation may increase our operating

costs and limit our growth and profitability.

Laws and regulations applicable to the insurance industry are complicated and subject to change. Compliance with

these laws and regulations may increase the costs of running our business or slow our ability to respond effectively

and quickly to operational opportunities. Insurance regulators change, are appointed by elected officials who are

subject to re-election and changes in political headwinds and preferences, and the FLOIR could change its

interpretation of one or more existing regulations to the detriment of the Company and its business. In addition, state

legislatures enact new statutes, and can change existing statutes, which could have a material impact on our costs,

operations and profitability. In addition, the Company is admitted in states outside of Florida, and legislatures or

insurance regulators in those states might have differing interpretations or take positions that conflict with Florida

regulators, which could impact our growth, expansion and profitability. The federal government may also seek to

further regulate the insurance industry or establish federal charters. As a highly regulated entity, insurance regulators

have the final say on major issues affecting our business including:

•what rates we may charge;

•what our policy forms must cover or exclude;

•claims practices and business operations;

•how much reinsurance we must purchase;

•participation in guaranty funds;

•various financial tests including ratios of how much premium we may write in relation to our net worth;

•RBC measurements;

•restrictions on insurance company dividends;

•restrictive accounting requirements;

•regular financial and market conduct examinations;

•restrictions on investments;

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•and many other requirements.

The FLOIR and regulators in other jurisdictions where we may become licensed and offer insurance products

conduct periodic examinations of the affairs of insurance companies and require the filing of annual and other

reports relating to financial condition, holding company issues and other matters. These regulatory requirements

may adversely affect or inhibit our ability to achieve some or all of our business objectives. These regulatory

authorities also conduct periodic examinations into insurers’ business practices. These reviews may reveal

deficiencies in our insurance operations or non-compliance with regulatory requirements.

In certain states including Florida, insurance companies are subject to assessments levied by the states where they

conduct their business. While we can recover these assessments from Florida policyholders through policy

surcharges, our payment of the assessments and our recoveries may not offset each other in the same reporting

period in our condensed consolidated financial statements and may cause a material, adverse effect on our cash

flows and results of operations in a particular reporting period.

In addition, regulatory authorities have relatively broad discretion to deny or revoke licenses for various reasons,

including the violation of regulations. In some instances, we follow practices based on our interpretations of

regulations or practices that we believe may be generally followed by the industry. These practices may turn out to

be different from the interpretations of regulatory authorities. If we do not have the requisite licenses and approvals

or do not comply with applicable regulatory requirements, insurance regulatory authorities could preclude or

temporarily suspend us from carrying on some or all of our activities or otherwise penalize us. This could adversely

affect our ability to operate our business.

Finally, changes in the level of regulation of the insurance industry or changes in laws or regulations themselves or

interpretations by regulatory authorities could adversely affect our ability to operate our business, reduce our

profitability and limit our growth.

The regulators powers include suspending our ability to write new business, suspending or revoking our licenses,

forcing us to change our business plans and strategies, and financial fines and penalties. This substantial regulation

could adversely affect our ability to execute portions of our business plans, or, if we were to have our ability to issue

new policies restricted or our license revoked, have a material adverse effect on our results of operations, financial

results, or ability to continue in the business.

The effects of emerging claim and coverage issues in Florida and other states in which we operate on our

business are uncertain.

Despite declining loss frequencies, the severity of losses in the property and casualty insurance industry and multi-

peril personal lines business has increased in recent years, often driven by financial and social inflation. Increased

litigation in Florida regarding Assignment of Benefits (“AOB”) and roof claims is an example of these trends. For

example, in recent years, Florida homeowners have been assigning the benefit of their insurance recovery to third

parties, which has resulted in increases in the size and number of claims and the amount of litigation, interference in

the adjustment of claims, the assertion of bad faith actions and one-way rights to claim attorneys’ fees. One-way fee

shifting allows policyholders to recover attorneys’ fees from their insurer when the policyholder prevails in a

coverage action. The Florida legislature enacted several reform bills in recent years with the intention to limit AOB

and frivolous litigation. Recently, Florida has repealed its one-way fee shifting statute and altered bad faith actions

such that mere negligence alone is insufficient to constitute bad faith, and imposed a good faith requirement on

policyholders. While the frequency of non-catastrophe claims has recently decreased due in part to these reforms,

the severity of such claims has continued to increase. However, there can be no assurance that this new legislation

will reduce the future impact of AOB or litigated claims practices nor is there any assurance that future changes to

these or other standards or statutes may occur. In addition, there can be no assurance that the Florida legislature will

not reverse these reforms or that future legislation will not mitigate or eliminate the effects of these reforms

altogether or impose new burdens on us.

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As we continue to expand into new states, including South Carolina and Georgia, we are and will continue to be

subject to legislation, statutes and standards in jurisdictions that may differ materially from those in Florida. Our

expansion into new states could expose us to varying regulatory environments, which could have an adverse effect

on our results of operations, financial results, or ability to continue our business in new states.

In addition, many legal actions and proceedings have been brought on behalf of classes of complainants, which can

increase the size of judgments. The propensity of policyholders and third-party claimants to litigate and the

willingness of courts to expand causes of loss and the size of awards may render the loss reserves of AIIC

inadequate for current and future losses. In addition, as industry practices and social and other environmental

conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may

adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the

number or size of claims. In some instances, these changes may not become apparent until sometime after we have

issued insurance policies that are affected by the changes. As a result, the full extent of liability under our insurance

policies may not be known at the time such policies are issued or renewed, and our financial position or results of

operations may be adversely affected.

Mandatory assessments or competition for government entities may create short-term liabilities or affect our

ability to underwrite more policies.

All states have guaranty funds that can assess us to pay the claims of insolvent insurers. Florida, where a substantial

portion of our business resides, also has a FHCF, which can assess us if it needs funds to provide reinsurance-like

coverage to us and all residential insurers, and additionally, we can also be assessed to pay for shortfalls at Citizens,

which provides insurance to residential consumers unable to procure insurance from the private market. While we

can recoup or pass through these assessments to our policyholders, in many cases we may not be able to recoup

them within the same annual accounting period creating a short-term drain on our resources. In addition, Citizens is

structured to be an insurer of last resort, but based on varying involvement by the Florida legislature, the Governor

of Florida and others, at times can instead compete against us and offer lower rates, causing us to lose market share

or not underwrite as many new policies as we desire.

We face financial exposure to unpredictable weather patterns and catastrophic storms and resulting regulation

from the FLOIR.

We write insurance policies covering homeowners, renters, condominium owners, and mobile home policyholders

that cover property losses including those caused by hurricanes and other catastrophes. We manage our risk through

strict underwriting, spreading our risk across our service area, and through the purchase of reinsurance. A substantial

portion of our business is located in Florida, which is particularly susceptible to hurricanes. The FLOIR requires that

we manage risk through reinsurance by purchasing up to or exceeding a 1-in-130 year storm, including coverage for

multiple hurricane events in one season. Notwithstanding these requirements and our efforts to plan for and manage

risk, a particularly strong storm, or a series of multiple storms in one hurricane season could exceed our reinsurance

protection and may have a material adverse impact on our results of operations and financial condition.

The Florida Hurricane Catastrophe Fund may not have enough resources to pay us for the coverage we

purchased.

The state-run FHCF charges all insurers premiums for coverage to assume part of the risk of their hurricane related

losses. In addition, the FHCF may issue pre- and post-event bonds to raise capital to meet its commitment to us and

other insurers. In the event of a significantly large storm, or multiple storms, the FHCF may not have the resources

to pay us all of the coverage we purchased from them, including that the capital markets may not be able to support

a large bond issuance by the FHCF. Further, Florida law allows the FHCF to not pay the remaining amount they owe

insurers if they do not have enough resources to cover such claims.

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A regulatory environment that requires approval of rate increases, can mandate rate decreases, and that can

dictate underwriting practices and mandate participation in loss sharing arrangements may adversely affect our

results of operations and financial condition.

From time to time, political events and positions affect the insurance market, including efforts to suppress rates to a

level that may not allow us to reach targeted levels of profitability. For example, if our loss ratio compares favorably

to that of the industry, state regulatory authorities may impose rate rollbacks, require us to pay premium refunds to

policyholders, or challenge or otherwise delay our efforts to raise rates even if the homeowners industry generally is

not experiencing regulatory challenges to rate increases.

In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in

assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require insurers to

offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge. In

these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates,

possibly leading to an unacceptable return on equity. Our results of operations and financial condition could be

adversely affected by any of these factors.

State insurance regulators impose additional reporting requirements regarding enterprise risk on insurance

holding company systems, with which we must comply as an insurance holding company.

In the past decade, various state insurance regulators have increased their focus on risks within an insurer’s holding

company system that may pose enterprise risk to the insurer. In 2012, the NAIC adopted significant amendments to

the Insurance Holding Company Act and related regulations, or the NAIC Amendments. The NAIC Amendments

are designed to respond to perceived gaps in the regulation of insurance holding company systems in the United

States. One of the major changes is a requirement that an insurance holding company system’s ultimate controlling

person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities,

circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to

have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding

company system as a whole. Other changes include the requirement that a controlling person submit prior notice to

its domiciliary insurance regulator of a divestiture of control, detailed minimum requirements for cost sharing and

management agreements between an insurer and its affiliates and expanding of the agreements between an insurer

and its affiliates to be filed with its domiciliary insurance regulator, including states (if any) in which the insurer is

commercially domiciled. The NAIC Amendments must be adopted by the individual state legislatures and insurance

regulators in order to be effective, and many states have already done so.

In 2012, the NAIC also adopted the Risk Management and Own Risk and Solvency Assessment Model Act, or the

ORSA Model Act. The ORSA Model Act, as adopted by the various states, requires an insurance holding company

system’s Chief Risk Officer to submit annually to its lead state insurance regulator an Own-risk and Solvency

Assessment Summary Report (“ORSA”). The ORSA is an internal assessment, tailored to the nature, scale, and

complexity of an insurer or insurance group, conducted by that insurer or insurance group, of the material and

relevant risks associated with the business plan of an insurer or insurance group and the sufficiency of capital

resources to support those risks. Insurers that exceed $500 million in gross premiums written may be subjected to

additional reporting and compliance requirements and costs.

There is also risk that insurance holding company systems may become subject to group capital requirements at the

holding company level. In December 2020, the NAIC adopted additional amendments to the Insurance Holding

Company System Regulatory Act and the Insurance Holding Company System Model Regulation to provide a

framework intended to complement the current holding company analytics framework by providing additional

information to the lead state regulator for use in assessing group risks and capital adequacy. The amendments to the

ORSA Model Act and Insurance Holding Company System Model Regulation adopt a group capital calculation and

liquidity stress test. We cannot predict whether or when these amendments may be adopted by Florida or the impact,

if any, that the new regulatory requirements may have on our business, financial condition or results of operation.

In addition, the NAIC promulgated a Model Audit Rule, which places additional compliance duties and costs on

insurers that exceed $500 million in direct premiums written. This rule includes the establishment of additional

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internal controls, disclosing unremediated material weaknesses and analysis of any limitations of internal control. As

the Company grows and exceeds these premium thresholds, additional costs and duties under these statutes and rules

must be implemented, which can materially affect our results of operations.

Regulations limiting rate changes and requiring us to participate in loss sharing or assessments may decrease

our profitability.

From time to time, public policy preferences and perceptions affect the insurance market, including insurers’ efforts

to effectively maintain rates that allow us to reach targeted levels of rate adequacy and profitability. Despite efforts

to address rate needs and other operational issues analytically, facts and history demonstrate that public

policymakers, when faced with unexpected events and adverse public sentiment, have acted and may in the future

act in ways that impede our ability to maintain a satisfactory correlation between rates and risk. This has included,

and in the future may include, policymakers’ failures to take steps to address the causes of adverse market

conditions. Such acts or failures to act may affect our ability to obtain approval for or implement rate changes that

we believe are necessary to attain rate adequacy along with targeted levels of profitability and returns on equity.

Additionally, because AIIC often must obtain regulatory approval prior to changing rates, delays in the filing,

review or implementation of rate changes can adversely affect our ability to attain rate adequacy. This is especially

the case in hard markets such as the current Florida market, where many insurers are submitting filings for

significant rate increases and thereby affecting the FLOIR’s workload and its ability to timely review filings.

Our ability to afford reinsurance required to reduce our catastrophe risk also depends in part on our ability to adjust

rates for our costs.

Additionally, we are required to participate in guaranty funds for insolvent insurance companies and other statutory

insurance entities. The guaranty funds and other statutory entities periodically levy assessments against all

applicable insurance companies doing business in the state, and the amounts and timing of those assessments are

unpredictable. Although we seek to recoup these assessments from our policyholders, we might not be able to fully

do so and at any point in time or for any period, our operating results and financial condition could be adversely

affected by any of these factors.

The amount of statutory capital and surplus that AIIC has and the amount of statutory capital and surplus it

must hold vary and are sensitive to a number of factors outside of our control, including market conditions and

the regulatory environment and rules.

AIIC is subject to RBC standards and other minimum capital and surplus requirements imposed under applicable

state laws. The RBC standards, based upon the Risk-Based Capital Model Act adopted by the NAIC, require us to

report our results of RBC calculations to the FLOIR and the NAIC. These RBC standards provide for different

levels of regulatory attention depending upon the ratio of an insurance company’s total adjusted capital, as

calculated in accordance with NAIC guidelines, to its authorized control level RBC. Authorized control level RBC is

determined using the NAIC’s RBC formula, which measures the minimum amount of capital that an insurance

company needs to support its overall business operations.

An insurance company with total adjusted capital that (i) is at less than 200% of its authorized control level RBC, or

(ii) falls below 300% of its RBC requirement and also fails a trend test, is deemed to be at a “company action level,”

which would require the insurance company to file a plan that, among other things, contains proposals of corrective

actions the company intends to take that are reasonably expected to result in the elimination of the company action

level event. Additional action level events occur when the insurer’s total adjusted capital falls below 150%, 100%,

and 70% of its authorized control level RBC. The lower the percentage, the more severe the regulatory response,

including, in the event of a mandatory control level event (total adjusted capital falls below 70% of the insurer’s

authorized control level RBC), placing the insurance company into receivership.

In addition, AIIC is required to maintain certain minimum capital and surplus and to limit premiums written to

specified multiples of capital and surplus. AIIC could exceed these ratios if its volume increases faster than

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anticipated or if its surplus declines due to catastrophe or non-catastrophe losses or excessive underwriting and

operational expenses.

Any failure by AIIC to meet the applicable RBC or minimum statutory capital requirements imposed by the laws of

Florida (or other states where we currently or may eventually conduct business) could subject AIIC to further

examination or corrective action imposed by state regulators, including limitations on our writing of additional

business, state supervision or receivership, which could have a material adverse impact on our reputation and

financial condition. Any such failure also could adversely affect our financial strength and stability ratings.

Any changes in existing RBC requirements, minimum statutory capital requirements, or applicable writings ratios

may require us to increase our statutory capital levels, which we may be unable to do, or require us to reduce the

amount of premiums we write, which could adversely affect our business and our operating results.

We incur increased costs and demands upon management as a result of complying with the laws and regulations

affecting public companies, which could adversely affect our operating results.

As a public company, we incur significant legal, accounting and other expenses that we did not previously incur as a

private company, including costs associated with public company reporting and corporate governance requirements.

For example, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the

“Exchange Act”), and are required to comply with the applicable requirements of the Sarbanes-Oxley Act, as well as

rules and regulations implemented by the SEC and the NYSE, including the establishment and maintenance of

effective disclosure controls and procedures and internal control over financial reporting and changes in corporate

governance practices, subject to any applicable phase-in periods or other exemptions.

We expect that continuing to comply with these rules and regulations will substantially increase our legal and

financial compliance costs and make some activities more time-consuming and costly. In addition, our management

team will have to continue to adapt to the requirements of being a public company. In particular, we expect to incur

significant expenses and devote substantial management effort toward ensuring compliance with the requirements of

Section 404 of the Sarbanes-Oxley Act, which will increase to the extent we are no longer an emerging growth

company, as defined by the JOBS Act, and are not a smaller reporting company. We cannot predict or estimate the

amount of additional costs we may incur as a result of being a public company or the timing of such costs, which

could adversely affect our operating results.

We have made, and will continue to make, changes to our internal controls and procedures for financial reporting

and accounting systems to meet our reporting obligations as a public company. However, the measures we take may

not be sufficient to satisfy our obligations as a public company. In addition, these rules and regulations have and will

continue to increase our legal and financial compliance costs and will make some activities more time-consuming

and costly. These additional obligations could have a material adverse effect on our business, financial condition,

results of operations, cash flows and prospects.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are

creating uncertainty for public companies, increasing legal and financial compliance costs and making some

activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in

many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new

guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding

compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We

have and will continue to invest resources to comply with evolving laws, regulations and standards, and this

investment may result in increased general and administrative expenses and a diversion of our management’s time

and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws,

regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities

related to their application and practice, regulatory authorities may initiate legal proceedings against us and there

could be a material adverse effect on our business, financial condition, results of operations, cash flows and

prospects.

72

The increased costs associated with operating as a public company may decrease our net income or result in a net

loss and may require us to reduce costs in other areas of our business or increase the prices of our solution.

Additionally, if these requirements divert management’s attention from other business concerns, they could have an

adverse effect on our business, operating results or financial condition.

Risks Related to Our Investments

We are subject to market risk, which may adversely affect investment income.

Our primary market risk exposures are changes in interest rates, which impact our investment income and returns.

Fluctuations in interest rates could expose us to increased financial risk. Since September 2024, the U.S. Federal

Reserve has reduced the target range for the federal funds rate by an aggregate of 125 basis points. Declines in

market interest rates can have an adverse effect on our investment income to the extent that we invest cash in new

interest-bearing investments that yield less than our portfolio’s average rate of return or purchase longer-term or

riskier assets in order to obtain adequate investment yields resulting in a duration gap when compared to the duration

of liabilities. Conversely, increases in market interest rates also have in the past and can have an adverse effect on

the value of our investment portfolio by decreasing the fair values of the available-for-sale debt securities that

comprise a large portion of our investment. In addition, inflation, such as what we are seeing in the current economic

environment, has adversely impacted our business and financial results and could in the future.

Our overall financial performance depends in part on the returns on our investment portfolio.

The performance of our investment portfolio is independent of the revenue and income generated from our insurance

operations, and there is typically no direct correlation between the financial results of these two activities. Thus, to

the extent that our investment portfolio does not perform well due to the factors discussed above or otherwise, our

results of operations may be materially adversely affected even if our insurance operations perform favorably.

Further, because the returns on our investment portfolio are subject to market volatility, our overall results of

operations could likewise be volatile from period to period even if we do not experience significant financial

variances in our insurance operations.

We have assets held at a financial institution that may exceed the insurance coverage offered by the Federal

Deposit Insurance Corporation (“FDIC”), the loss of which could negatively impact our financial condition.

As a part of our cash management strategy, we maintain deposits in a United States financial institution in an

amount intended to satisfy our immediate liquidity needs. Any amounts in excess of $100,000 are swept on a daily

basis into a money market fund custodied outside of the financial institution and invested in short-term obligations

issued or guaranteed by the United States government. Although balances we hold at the financial institution

fluctuate daily based on a variety of factors, any exposure over the FDIC limit of $250,000 is limited to short

intraday windows. However, in the event of a failure of the financial institution, there is a chance we may be unable

to access such funds and may incur a loss to the extent such balance exceeds the FDIC insurance limit during the

day prior to a sweep, which could have a negative impact on our liquidity and financial condition.

Risks Related to Our Common Stock

The trading price of our Common Stock could be volatile, which could cause the value of your investment to

decline.

Our IPO occurred in May 2025. Therefore, there has only recently been a public market for our Common Stock.

Although we list our Common Stock on the NYSE, an active trading market for our Common Stock may not

develop or be sustained. A public trading market having the desirable characteristics of depth, liquidity and

orderliness depends upon the existence of willing buyers and sellers at any given time, such existence being

dependent upon the individual decisions of buyers and sellers over which neither we nor any market maker has

73

control. The failure of an active and liquid trading market to develop and continue would likely have a material

adverse effect on the value of our Common Stock. An inactive market may also impair our ability to raise capital to

continue to fund operations by issuing additional shares of our Common Stock or other equity or equity-linked

securities and may impair our ability to make acquisitions using any such securities as consideration.The trading

price of our Common Stock may fluctuate substantially in response to numerous factors, many of which are beyond

our control. These fluctuations could cause you to lose all or part of your investment in our Common Stock. Factors

that could cause fluctuations in the trading price of our Common Stock include the following:

•results of operations that vary from the expectations of securities analysts and investors;

•results of operations that vary from those of our competitors;

•changes in expectations as to our future financial performance, including financial estimates and investment

recommendations by securities analysts and investors;

•changes in economic conditions for companies in our industry;

•changes in market valuations of, or earnings and other announcements by, companies in our industry;

•declines in the market prices of stocks generally, particularly those of insurance companies;

•strategic actions by us or our competitors;

•changes in general economic or market conditions or trends in our industry or the economy as a whole and,

in particular, in the insurance environment;

•changes in business or regulatory conditions;

•future sales of our Common Stock or other securities;

•investor perceptions of the investment opportunity associated with our Common Stock relative to other

investment alternatives;

•the public’s response to press releases or other public announcements by us or third parties, including our

filings with the SEC;

•announcements relating to litigation or governmental investigations;

•guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this

guidance;

•the development and sustainability of an active trading market for our stock;

•changes in accounting principles; and

•other events or factors, including those resulting from system failures and disruptions, natural or man-made

disasters, extreme weather events, war, acts of terrorism, an outbreak of highly infectious or contagious

diseases or responses to these events.

Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or

disproportionate to the operating performance of particular companies. These broad market and industry fluctuations

may adversely affect the market price of our Common Stock, regardless of our actual operating performance. In

addition, price volatility may be greater if the public float and trading volume of our Common Stock is low.

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In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we

were involved in securities litigation, it could have a substantial cost and divert resources and the attention of

management from our business regardless of the outcome of such litigation.

As a result of becoming a public company, we are obligated to develop and maintain proper and effective internal

control over financial reporting in order to comply with Section 404 of the Sarbanes-Oxley Act. We may not

complete our analysis of our internal control over financial reporting in a timely manner, or these internal

controls may not be determined to be effective, which may adversely affect investor confidence in us and, as a

result, the value of our Common Stock.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements in accordance with GAAP. We are in the

early stages of the costly and challenging process of compiling the system and processing documentation necessary

to perform the evaluation needed to comply with Section 404 of the Sarbanes-Oxley Act. We may not be able to

complete our evaluation, testing and any required remediation in the time required. If we are unable to assert that our

internal control over financial reporting is effective, we could lose investor confidence in the accuracy and

completeness of our financial reports, which would cause the price of our Common Stock to decline, and we may be

subject to investigation or sanctions by the SEC.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on,

among other things, the effectiveness of our internal control over financial reporting as of the end of the fiscal year

that coincides with the filing of our second annual report on Form 10-K. This assessment will need to include

disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

We are also currently required to disclose changes made in our internal control and procedures on a quarterly basis.

However, our independent registered public accounting firm is not required to report on the effectiveness of our

internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year

following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth

company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a

report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or

operating.

Additionally, the existence of the material weakness in our internal control over financial reporting that we

identified, or any additional material weakness or a significant deficiency, requires management to devote

significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies,

and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely

manner. The existence of our material weakness in our internal control over financial reporting that we identified or

any additional material weakness in our internal control over financial reporting could also result in errors in our

financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting

obligations and cause stockholders to lose confidence in our reported financial information, all of which could

materially and adversely affect our business and stock price. To comply with the requirements of being a public

company, we are undertaking various costly and time-consuming actions, such as implementing new internal

controls and procedures and hiring accounting or internal audit staff, which may adversely affect our business,

financial condition, results of operations, cash flows and prospects.

The JOBS Act allows us to postpone the date by which we must comply with certain laws and regulations

intended to protect investors and to reduce the amount of information we provide in our reports filed with the

SEC. We cannot be certain if this reduced disclosure will make our Common Stock less attractive to investors.

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies.” As defined in the

JOBS Act, a public company whose initial public offering of common equity securities occurs after December 8,

75

2011, and whose annual net sales are less than $1.235 billion will, in general, qualify as an “emerging growth

company” until the earliest of:

•the last day of its fiscal year following the fifth anniversary of the date of its initial public offering of

common equity securities;

•the last day of its fiscal year in which it has annual gross revenue of $1.235 billion or more;

•the date on which it has, during the previous three-year period, issued more than $1 billion in

nonconvertible debt; and

•the date on which it is deemed to be a “large accelerated filer,” which will occur at such time as we (i) have

an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or

more as of the last business day of its most recently completed second fiscal quarter, (ii) have been required

to file annual and quarterly reports under the Exchange Act, for a period of at least 12 months, and (iii)

have filed at least one annual report pursuant to the Exchange Act.

We are an emerging growth company and may remain an “emerging growth company” until as late as the fifth

anniversary of our IPO. For so long as we are an “emerging growth company,” we will, among other things:

•not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley

Act;

•not be required to hold a nonbinding advisory shareholder vote on executive compensation pursuant to

Section 14A(a) of the Exchange Act;

•not be required to seek shareholder approval of any golden parachute payments not previously approved

pursuant to Section 14A(b) of the Exchange Act;

•be exempt from the requirement of the Public Company Accounting Oversight Board regarding the

communication of critical audit matters in the auditor’s report on the condensed consolidated financial

statements; and

•be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and

proxy statements.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition

period provided in Section 7(a)(2)(B) of the Securities Act of 1933, for complying with new or revised accounting

standards. This permits an emerging growth company to delay the adoption of certain accounting standards until

those standards would otherwise apply to private 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 cannot predict if investors will find our Common Stock less attractive as a result of our decision to take

advantage of some or all of the reduced disclosure requirements above. If some investors find our Common Stock

less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may

be more volatile.

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We are not contractually obligated to pay regular cash dividends on our Common Stock. As a result, you may not

receive any return on investment unless you sell your Common Stock for a price greater than that which you paid

for it.

We are not contractually obligated to pay regular cash dividends on our Common Stock. Any decision to declare and

pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other

things, general and economic conditions, our results of operations and financial condition, our available cash and

current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, and such

other factors that our Board of Directors may deem relevant.

In addition, our ability to pay dividends is, and may be, limited by covenants of any future outstanding indebtedness

we or our subsidiaries incur. Therefore, any return on investment in our Common Stock may be solely dependent

upon the appreciation of the price of our Common Stock on the open market, which may not occur.

Certain provisions of Delaware law and anti-takeover provisions in our organizational documents could delay or

prevent a change of control.

Certain provisions of Delaware law, our amended and restated certificate of incorporation (the “Charter”) and

amended and restated bylaws (the “Bylaws”) may have an anti-takeover effect and may delay, defer, or prevent a

merger, acquisition, tender offer, takeover attempt, or other change of control transaction that a stockholder might

consider in its best interest, including those attempts that might result in a premium over the market price for the

shares held by our shareholders. These provisions provide for, among other things:

•a classified Board of Directors (until the declassification of our Board of Directors is completed by the

annual meeting of stockholders to be held in 2031 (the “Sunset Date”));

•the ability of our Board of Directors to issue one or more series of preferred stock without stockholder

approval;

•our stockholders may not take action by consent without a meeting and may only take action at a meeting

of stockholders;

•vacancies on our Board of Directors are able to be filled only by our Board of Directors and not by

stockholders;

•advance notice procedures apply for shareholders to nominate candidates for election as directors or to

bring matters before an annual meeting of stockholders;

•shareholders are unable to call a special meeting of stockholders;

•no cumulative voting in the election of directors;

•until the full declassification of our Board of Directors by the Sunset Date, directors may be removed only

for cause and only upon the affirmative vote of holders of at least a majority of the voting power of our

outstanding shares of capital stock entitled to vote thereon; and

•that certain provisions of the Charter may be amended only by the affirmative vote of holder of at least 66

2/3% of the voting power of our then-outstanding capital stock entitled to vote thereon.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s

offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in

their ability to obtain a premium for their shares.

77

In addition, we have opted out of Section 203 of the General Corporation Law of the State of Delaware, as amended

(the “DGCL”), but our Charter provides that engaging in any of a broad range of business combinations with any

“interested” shareholder (generally defined as any shareholder with 15% or more of our outstanding voting stock

and any entity or person affiliated with or controlling or controlled by such shareholder) for a period of three years

following the time on which the shareholder became an “interested” shareholder is prohibited (except with respect to

Sowell Investment Holdings Co., LLC and any of its respective affiliates and any of their respective direct or

indirect transferees of our Common Stock).

Our Charter designates the Court of Chancery of the State of Delaware as the exclusive forum for certain

litigation that may be initiated by our stockholders and the federal district courts of the United States as the

exclusive forum for litigation arising under the Securities Act, which could limit our stockholders’ ability to

obtain a favorable judicial forum for disputes with us.

Pursuant to our Charter, unless we consent in writing to the selection of an alternative forum, the Court of Chancery

of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the United States District Court for

the District of Delaware) is, to the fullest extent permitted by law, the sole and exclusive forum for (i) a derivative

action, suit or proceeding brought on behalf of our Company, (ii) an action, suit or proceeding asserting a claim of

breach of a fiduciary duty owed by any current or former director, officer or other employee or shareholder of the

Company to the Company or to the Company’s stockholders, (iii) an action, suit or proceeding arising pursuant to

any provision of the DGCL or our Charter or our Bylaws or as to which the DGCL confers jurisdiction to the Court

of Chancery of the State of Delaware, or (iv) an action, suit or proceeding asserting a claim against our Company

governed by the internal affairs doctrine. This provision does not apply to any action or proceeding asserting a claim

under the Securities Act or the Exchange Act for which the federal courts have exclusive jurisdiction or any other

claim for which the federal courts have exclusive jurisdiction. Furthermore, our Charter provides that, unless we

consent in writing to the selection of an alternative forum, the federal district courts of the United States are the sole

and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act,

Exchange Act or any other claim for which federal courts of the United States have exclusive jurisdiction, against us

or any director, officer, employee or agent of ours. However, Section 22 of the Securities Act creates concurrent

jurisdiction for federal and state courts over all suits brought to enforce a duty or liability created by the Securities

Act or the rules and regulations thereunder; accordingly, we cannot be certain that a court would enforce such

provision. Our Charter provides that any person or entity purchasing or otherwise acquiring any interest in shares of

our capital stock is deemed to have notice of and consented to the provisions of our Charter described above;

however, investors cannot waive compliance with the federal securities laws and the rules and regulations

thereunder. The forum selection provisions in our Charter may have the effect of discouraging lawsuits against us or

our directors and officers and may limit our stockholders’ ability to obtain a favorable judicial forum for disputes

with us. If the enforceability of our forum selection provision were to be challenged, we may incur additional costs

associated with resolving such a challenge. While we currently have no basis to expect any such challenge would be

successful, if a court were to find our forum selection provision to be inapplicable or unenforceable, we may incur

additional costs associated with having to litigate in other jurisdictions, which could have an adverse effect on our

business, financial condition and results of operations and result in a diversion of the time and resources of our

employees, management and Board of Directors.

If securities or industry analysts do not publish research or reports about our business, if they publish

unfavorable research or reports, or adversely change their recommendations regarding our Common Stock or if

our results of operations do not meet their expectations, our stock price and trading volume could decline.

The trading market for our Common Stock is influenced by the research and reports that industry or securities

analysts publish about us or our business. We do not have any control over these analysts. As a newly public

company, we may be slow to attract research coverage. In the event we obtain securities or industry analyst

coverage, if any of the analysts who cover us provide inaccurate or unfavorable research, issue an adverse opinion

regarding our stock price or if our results of operations do not meet their expectations, our stock price could decline.

Moreover, if one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could

lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

78

We may issue shares of preferred stock in the future, which could make it difficult for another company to

acquire us or could otherwise adversely affect holders of our Common Stock, which could depress the price of

our Common Stock.

Our Charter authorizes us to issue one or more series of preferred stock. Our Board of Directors has the authority to

determine the preferences, limitations and relative rights of the shares of preferred stock and to fix the number of

shares constituting any series and the designation of such series, without any further vote or action by our

stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the

rights of our Common Stock. The potential issuance of preferred stock may delay or prevent a change in control of

us, discouraging bids for our Common Stock at a premium to the market price, and materially adversely affect the

market price and the voting and other rights of the holders of our Common Stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

There were no sales of unregistered securities during the quarter ended September 30, 2025 that were not previously

reported on a Current Report on Form 8-K.

Use of Proceeds

On May 9, 2025, we completed our IPO, and all shares of Common Stock sold were registered pursuant to a

registration statement on Form S-1 (File No. 333-286524), as amended, declared effective by the SEC on May 7,

2025. We 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 tax withholding and remittance obligations related to the net settlement of

shares of restricted stock issued in connection with the IPO 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.

Pending their further use, the net proceeds from our IPO have been invested in investment grade instruments, and

there have been no material change in the expected use of the net proceeds from our IPO as described in our

prospectus dated May 7, 2025 filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as

amended, on May 8, 2025.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

This item is not applicable.

Item 5. Other Information

Rule 10b5-1 Trading Arrangements

During the quarter ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) of the Exchange

Act) of the Company adopted, modified, or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1

trading arrangement” (in each case, as defined in Item 408(a) of Regulation S-K). 

79

Item 6. Exhibits

The following exhibits are incorporated herein by reference or are filed with this Quarterly Report on Form 10-Q, in

each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K): 

Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation of American Integrity Insurance Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 9, 2025).
3.2		Amended and Restated Bylaws of American Integrity Insurance Group, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 9, 2025).
4.1		Registration Rights Agreement, dated May 7, 2025, by and among the Company, Sowell Investments Holding Co., LLC and Robert Ritchie (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on June 10, 2025).
31.1*		Certification of Principal Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document,
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Filed herewith.

**The certifications attached as Exhibit 32.1 are not deemed “filed” with the SEC and are not to be incorporated by reference

into any filing of American Integrity Insurance Group, Inc. under the Securities Act of 1933, as amended, or the Securities

Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q,

irrespective of any general incorporation language contained in such filing.

+Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K.

American Integrity Insurance Group, Inc. agrees to furnish a copy of all omitted exhibits and schedules to the Securities and

Exchange Commission upon request.

80

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be

signed on its behalf by the undersigned thereunto duly authorized.

	AMERICAN INTEGRITY INSURANCE GROUP, INC.
Date:  November 13, 2025	By:	/s/ Robert Ritchie
		Robert Ritchie
		Chief Executive Officer
		(Principal Executive Officer)
Date:  November 13, 2025	By:	/s/ Ben Lurie
		Ben Lurie
		Chief Financial Officer
		(Principal Financial Officer)