American Integrity (NYSE: AII) grows premiums but Q1 2026 profit declines
American Integrity Insurance Group reported solid premium growth but lower profitability for the three months ended March 31, 2026. Net premiums earned rose to $82.2 million from $65.4 million, driven by higher gross premiums and reduced quota share ceding. However, net income declined to $19.9 million from $38.1 million as losses, acquisition costs and general and administrative expenses all increased.
The loss ratio increased to 37.3% from 30.9%, while the expense ratio jumped to 37.6% from 12.0%, pushing the combined ratio up to 75.0% from 42.9%. Policy counts grew 14.1% year over year to 437,308 and in-force premium reached $974.8 million, supported by voluntary growth and Citizens take-outs. The company remained well-capitalized, with shareholders’ equity of $335.5 million and cash, cash equivalents and restricted cash of $226.4 million, after paying a special cash dividend of $20.0 million.
Positive
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Negative
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Insights
Premium and policy growth are strong, but margins compressed sharply.
American Integrity grew net premiums earned 25.7% to $82.2 million and expanded policies in-force 14.1% to 437,308. Growth was supported by Florida-focused personal lines, Citizens take-outs, and a lower quota share cession, which left more premium on balance sheet.
Profitability weakened as the loss ratio climbed to 37.3% and the expense ratio to 37.6%, more than doubling total expenses. Policy acquisition costs and general and administrative expenses rose notably, partly reflecting lower ceding commissions and public-company and stock-based compensation costs.
Despite net income dropping to $19.9 million, the combined ratio of 75.0% still indicates underwriting profitability. Capital and liquidity remain solid with $335.5 million of equity and $226.4 million in cash and restricted cash as of March 31, 2026. Subsequent filings may provide more detail on how expense levels evolve across the 2026 catastrophe season.
Key Figures
Net premiums earned: $82.2 million
Net income: $19.9 million
Combined ratio: 75.0%
+5 more
8 metrics
Net premiums earned
$82.2 million
Three months ended March 31, 2026 vs $65.4M in 2025
Net income
$19.9 million
Three months ended March 31, 2026 vs $38.1M in 2025
Combined ratio
75.0%
Three months ended March 31, 2026 vs 42.9% in 2025
Policies in-force
437,308 policies
As of March 31, 2026 vs 383,332 a year earlier
In-force premium
$974.8 million
As of March 31, 2026 across all products
Shareholders’ equity
$335.5 million
As of March 31, 2026 balance sheet
Special cash dividend
$20.0 million ($1.02/share)
Declared February 24, 2026 and paid March 30, 2026
Ceded premiums earned
$148.6 million
Three months ended March 31, 2026
Key Terms
combined ratio, quota share reinsurance, Citizens take-outs, ceded premiums earned, +2 more
6 terms
combined ratio financial
"Combined ratio (3) | 75.0% | 42.9%"
The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.
quota share reinsurance financial
"the reduction of our quota share; competition; future regulatory"
A quota share reinsurance agreement is a contract where an insurance company hands a fixed percentage of every policy it sells to another insurer, sharing both premiums and claims in that set proportion. Investors should care because it smooths an insurer’s profits and limits losses—like splitting every slice of a cake with a partner—affecting revenue stability, capital needs, and the company's risk exposure.
Citizens take-outs financial
"we assumed 584 policies from Citizens Property Insurance Corporation"
ceded premiums earned financial
"Ceded premiums earned | ( 148,564 ) | ( 144,754 )"
Ceded premiums earned are the portion of an insurer’s policy payments that it has transferred to reinsurers and that has been recognized as earned over a reporting period. They matter to investors because they lower the insurer’s retained revenue and shift risk to another party—like hiring a subcontractor to take on part of a project—so changes in ceded premiums earned affect reported profit, capital requirements, and how much risk the company keeps on its balance sheet.
loss ratio financial
"Loss ratio (1) | 37.3% | 30.9%"
Loss ratio is the percentage of an insurer’s collected premiums that is paid out to cover claims and related costs, showing how much of customer payments are used to settle losses. Investors treat it like a fuel-efficiency gauge for an insurance business—lower loss ratios suggest pricing and risk selection leave more room for profit, while consistently high ratios signal weak pricing, rising claims, or not enough money set aside, which can hurt returns.
restricted stock units financial
"performance-based restricted stock units (“PSUs”) granted for the unaudited"
Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.
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FAQ
How did American Integrity Insurance Group (AII) perform in Q1 2026?
American Integrity generated net income of $19.9 million in Q1 2026, down from $38.1 million a year earlier. Net premiums earned rose to $82.2 million, but higher losses and operating expenses significantly reduced overall profitability compared with the prior-year quarter.
What were American Integrity’s key underwriting ratios for Q1 2026?
In Q1 2026, American Integrity reported a loss ratio of 37.3%, an expense ratio of 37.6%, and a combined ratio of 75.0%. These compare with 30.9%, 12.0%, and 42.9% respectively in Q1 2025, indicating notably higher losses and expenses relative to earned premiums.
How fast did American Integrity’s premiums and policies grow year over year?
Gross premiums earned grew 9.8% to $230.8 million and net premiums earned increased 25.7% to $82.2 million in Q1 2026. Policies in-force rose 14.1% to 437,308, reflecting growth in the voluntary market and additional Citizens take-out business compared with March 31, 2025.
What was American Integrity’s financial position as of March 31, 2026?
As of March 31, 2026, American Integrity reported total assets of $1.18 billion, total liabilities of $839.6 million and shareholders’ equity of $335.5 million. Cash, cash equivalents and restricted cash totaled $226.4 million, supporting ongoing underwriting, reinsurance and seasonal catastrophe needs.
How did reinsurance affect American Integrity’s Q1 2026 results?
In Q1 2026, ceded premiums earned were $148.6 million versus $144.8 million in Q1 2025, meaning 64.4% of gross premiums were ceded. The company also recorded $11.3 million of ceded losses and $25.8 million of ceded policy acquisition expenses, illustrating the scale of its reinsurance program.
Did American Integrity pay any dividends in early 2026?
Yes. On February 24, 2026, the board declared a special cash dividend of $20.0 million, or $1.02 per common share, which was paid on March 30, 2026 to stockholders of record as of March 16, 2026. This distribution reduced retained earnings during the quarter.
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 March 31, 2026
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
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
(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 |
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).
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 | ☐ |
☒ | 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 May 14, 2026, there were 19,590,817 shares of common stock, par value of $0.001 per share, outstanding.
i
American Integrity Insurance Group, Inc.
Table of Contents
PART I | ||
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 March 31, 2026 (Unaudited) and December 31, 2025 | 1 | |
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2026 and March 31, 2025 | 2 | |
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2026 and March 31, 2025 | 3 | |
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and March 31, 2025 | 4 | |
Notes to the Unaudited Condensed Consolidated Financial Statements | 6 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 43 |
Item 4. | Controls and Procedures | 43 |
PART II – OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 45 |
Item 1A. | Risk Factors | 45 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 45 |
Item 3. | Defaults Upon Senior Securities | 45 |
Item 4. | Mine Safety Disclosures | 45 |
Item 5. | Other Information | 45 |
Item 6. | Exhibits | 46 |
Signatures | 47 | |
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,” “American Integrity,” “we,” “our” or “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” as defined in Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). 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
portfolios. 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;
•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;
iv
•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 from 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 and Part I, Item 1A
“Risk Factors” in our most recent Annual Report on Form 10-K.
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)
March 31, 2026 | December 31, 2025 | ||
(unaudited) | |||
Assets | |||
Fixed maturities, available-for-sale, at fair value (amortized cost of $ $ | $ | $ | |
Short-term investments (amortized cost of $ | |||
Total investments | |||
Cash and cash equivalents | |||
Restricted cash | |||
Premiums receivable, net | |||
Accrued investment income | |||
Prepaid reinsurance premiums | |||
Reinsurance recoverable, net | |||
Net reinsurance commission receivable | |||
Property and equipment, net | |||
Right-of-use assets – operating leases | |||
Deferred income tax asset, net | |||
Other assets | |||
Total assets | $ | $ | |
Liabilities and shareholders’ equity | |||
Liabilities: | |||
Unpaid losses and loss adjustment expenses | $ | $ | |
Income tax payable | |||
Unearned premiums | |||
Reinsurance payable | |||
Advance premiums | |||
Long-term debt | |||
Lease liabilities – operating leases | |||
Deferred policy acquisition costs, net of unearned ceding commissions | |||
Other liabilities and accrued expenses | |||
Total liabilities | $ | $ | |
Shareholders’ equity:(1) | |||
Common stock, $ issued and outstanding at March 31, 2026 and outstanding at December 31, 2025 | $ | $ | |
Additional paid-in capital | |||
Accumulated other comprehensive income, net of taxes | |||
Retained earnings | |||
Total shareholders’ equity | $ | $ | |
Total liabilities and shareholders’ equity | $ | $ |
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 14 — “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 March 31, | |||
2026 | 2025 | ||
Revenues: | |||
Gross premiums written | $ | $ | |
Change in gross unearned premiums | ( | ||
Gross premiums earned | |||
Ceded premiums earned | ( | ( | |
Net premiums earned | |||
Policy fees | |||
Net investment income | |||
Net realized gains on investments | |||
Other income | |||
Total revenues | |||
Expenses: | |||
Losses and loss adjustment expenses, net | |||
Policy acquisition expenses | |||
General and administrative expenses | |||
Total expenses | |||
Income before income taxes | |||
Income tax expense | |||
Net income | $ | $ | |
Other comprehensive income (loss): | |||
Unrealized holding gains (losses) on available-for-sale securities, net of taxes | ( | ||
Reclassification adjustment for net realized gains (losses), net of taxes | ( | ( | |
Total other comprehensive income (loss) | ( | ||
Comprehensive income | $ | $ | |
Earnings per share:(1) | |||
Basic earnings per share | $ | $ | |
Diluted earnings per share | $ | $ | |
Weighted average shares outstanding – Basic | |||
Weighted average shares outstanding – Diluted | |||
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 14 — “Earnings Per Share.”
3
American Integrity Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
Three Months Ended March 31, 2026
(In thousands, except share amounts)
Common Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||
Balance at December 31, 2025 | $ | $ | $ | $ | $ | ||||||
Common stock dividends ($ share) | — | — | — | ( | — | ( | |||||
Total other comprehensive income (loss) | — | — | — | — | ( | ( | |||||
Net income | — | — | — | — | |||||||
Vesting of restricted stock awards | — | — | — | ||||||||
Stock-based compensation on restricted stock units | — | — | — | — | |||||||
Balance at March 31, 2026 | $ | $ | $ | $ | $ |
Common Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||
Balance at December 31, 2024 | $ | $ | $ | $( | $ | ||||||
Distributions to members – tax advances and profit distributions ($ | — | — | — | ( | — | ( | |||||
Total other comprehensive income | — | — | — | — | |||||||
Net income | — | — | — | — | |||||||
Balance at March 31, 2025 | $ | $ | $ | $ | $ |
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 11 — “Shareholders’ Equity.”
4
American Integrity Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
For the Three Months Ended March 31, | |||
2026 | 2025 | ||
Cash flows provided by (used in) operating activities | |||
Net income | $ | $ | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Stock-based compensation expense | |||
Amortization and depreciation | |||
Deferred income taxes | ( | ||
Net realized (gains) | ( | ( | |
Changes in operating assets and liabilities: | |||
Premiums receivable | ( | ||
Accrued investment income | |||
Prepaid reinsurance premiums | |||
Reinsurance recoverable | ( | ||
Net reinsurance commission receivable | |||
Other assets | |||
Unpaid losses and loss adjustment expense | ( | ( | |
Unearned premiums | ( | ||
Reinsurance payable | ( | ( | |
Advance premiums | |||
Income taxes payable (recoverable) | |||
Operating lease payments | ( | ||
Deferred policy acquisition costs, net unearned ceding commissions | ( | ( | |
Other liabilities and accrued expenses | ( | ( | |
Net cash provided by operating activities | |||
Cash flows provided by (used in) investing activities | |||
Purchases of property and equipment | ( | ( | |
Proceeds from sales and maturities of fixed maturity securities | |||
Purchases of fixed maturity securities | ( | ( | |
Proceeds from sales and maturities of short-term investments | |||
Purchases of short-term investments | ( | ||
Net cash provided by (used in) investing activities | ( | ||
Cash flows provided by (used in) financing activities | |||
Cash dividends paid | ( | ||
Cash distributions to members(1) | ( | ||
Repayment of long-term debt | ( | ( | |
Net cash used in financing activities | ( | ( | |
Net increase in cash, cash equivalents and restricted cash | ( | ||
Cash, cash equivalents and restricted cash at beginning of year | |||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |
(1)The distributions were made to members prior to the IPO. See Note 1 — “Nature of Operations and Basis of Presentation” and
Note 11 — “Shareholders’ Equity.”
5
American Integrity Insurance Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
For the Three Months Ended March 31, | |||
2026 | 2025 | ||
Supplemental disclosures of cash flow information | |||
Interest paid | $ | $ | |
Income taxes paid | $ | $ | |
The following table is a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s
condensed consolidated balance sheets:
March 31, 2026 | December 31, 2025 | ||
Cash and cash equivalents | $ | $ | |
Restricted cash | |||
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows | $ | $ |
See accompanying notes to unaudited condensed consolidated financial statements.
6
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(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, Inc.) (“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, Georgia, North Carolina, and South
Carolina.
Basis of Presentation and Principles of Consolidation
with accounting principles generally accepted in the United States of America (“GAAP”) and the Securities and
Exchange Commission (“SEC”). References to the Accounting Standard Codification (“ASC”) and the Accounting
Standard Updates (“ASU”) included hereinafter refer to the Accounting Standards Codification and Updates issued
by the Financial Accounting Standards Board (“FASB”) as the source of the authoritative GAAP. 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.
owned subsidiaries, as well as variable interest entities (“VIE”) in which the Company is determined to be the
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.
7
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
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
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 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
“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.
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 consolidated financial
statements of the Company for the year ended December 31, 2025. The Company has included the Restricted Stock
policy, which is a newly updated policy to reflect the performance-based restricted stock units (“PSUs”) granted for
the unaudited condensed consolidated financial statements of the Company for the three months ended March 31,
2026.
The PSUs are subject to performance-based vesting conditions and are accounted for as equity under ASC Topic
718, Compensation—Stock Compensation. PSUs are valued based on the fair value of the underlying award, which
is the closing price of the Common Stock on the date of the grant. The Company recognizes the compensation cost
for PSUs on a straight-line basis over the awards’ three-year vesting period as general and administrative expenses
within the Company’s consolidated statements of operations and comprehensive income. The PSUs were granted
assuming expected maximum achievement of the applicable performance conditions. Accordingly, compensation
8
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
cost is subject to decreases based on the Company’s actual performance relative to the established metrics for each
In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures, which amended the guidance in ASC 280, Segment Reporting, to require a public entity to
disclose significant segment expenses and other segment items on an annual and interim basis and to provide in
interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required
annually. Public entities with a single reportable segment are required to provide the new disclosures and all the
disclosures required under ASC 280. The guidance is applied retrospectively to all periods presented in financial
statements, unless it is impracticable. The guidance applies to all public entities and is effective for fiscal years
beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.
The Company adopted ASU 2023-07 for its 2024 year-end. The adoption of the ASU did not have a material impact
on the consolidated financial statements.
In December 2023, the FASB issued 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 permits either prospective or retrospective application.
For public business entities, the new requirements will be effective for annual periods beginning after December 15,
2024. The Company adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31,
2025. The adoption did not have a material impact on the Company’s consolidated financial condition or results of
operations, but resulted in additional income tax disclosures in the consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software
(Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use 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
periods beginning after December 15, 2027, and interim periods within those annual periods. The Company adopted
ASU 2025-06 on January 1, 2026 using the prospective method. The adoption of the ASU did not have a material
impact on the condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
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
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 consolidated financial
statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope
Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.
The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle
requiring entities to disclose events since the end of the last annual reporting period that have a material impact on
the entity. ASU 2025-11 is effective for annual reporting periods beginning after December 15, 2027 and interim
periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of
9
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
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 consolidated financial statements with
intercompany balances and transactions eliminated in consolidation.
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”).
March 31, 2026 | December 31, 2025 | ||
Restricted cash and cash equivalents | $ | $ | |
Total | $ | $ |
4. Investments
Available-for-Sale Securities
March 31, 2026 | |||||||||
Amortized Cost | Allowance for Credit Loss | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||
U.S. Treasury and U.S. government agencies | $ | $ | $ | $( | $ | ||||
Corporate debt securities | ( | ||||||||
Asset-backed securities | ( | ||||||||
Total fixed maturity securities | ( | ||||||||
Short-term investments | ( | ||||||||
Total available-for-sale investments | $ | $ | $ | $( | $ | ||||
10
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
December 31, 2025 | |||||||||
Amortized Cost | Allowance for Credit Loss | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||
U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | $ | ||||
Corporate debt securities | ( | ||||||||
Asset-backed securities | ( | ||||||||
Total fixed maturity securities | ( | ||||||||
Short-term investments | ( | ||||||||
Total available-for-sale investments | $ | $ | $ | $( | $ | ||||
by time period in an unrealized loss position is as follows:
March 31, 2026 | |||||||||||
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 | $ | $ | $ | $( | $ | $( | |||||
Corporate debt securities | ( | ( | |||||||||
Asset-backed securities | ( | ( | ( | ||||||||
Short-term investments | ( | ( | |||||||||
Total | $ | $( | $ | $( | $ | $( | |||||
December 31, 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 | ||||||
Corporate debt securities | $ | $( | $ | $( | $ | $( | |||||
Asset-backed securities | ( | ( | ( | ||||||||
Short-term investments | ( | ( | |||||||||
Total | $ | $( | $ | $( | $ | $( | |||||
As of March 31, 2026 and December 31, 2025, there were 77 and 17 available-for-sale fixed-maturity securities,
respectively, in an unrealized loss position.
11
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
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 | $ | $ | |
Due after one year through five years | |||
Due after five years through 10 years | |||
Due after 10 years | |||
Other securities, which provide for periodic payments: | |||
Asset-backed securities | |||
Total | $ | $ |
Three Months Ended March 31, | |||
2026 | 2025 | ||
Fixed maturities, available-for-sale | $ | $ | |
Short-term investments | |||
Cash and cash equivalents | |||
Gross investment income | |||
Investment expenses | ( | ( | |
Net investment income | $ | $ | |
Proceeds from sales or maturities of fixed maturity available-for-sale securities for the three months ended
March 31, 2026 were $20,534 , with $82 and $24 of gross realized gains and losses, respectively. Proceeds from
sales of fixed maturity available-for-sale securities for the three months ended March 31, 2025 were $59,870 , with
$111 and $93 of gross realized gains and losses, respectively. Proceeds from sales or maturities of short-term
securities for the three months ended March 31, 2026 were $22,659 , with $0 and $5 of gross realized gains and
losses, respectively. There were no proceeds from sales or maturities of short-term securities for the three months
ended March 31, 2025.
The Company did not record any activity pertaining to the allowance for credit losses as of March 31, 2026 or
December 31, 2025.
12
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
5. Fair Value Measurements
basis:
March 31, 2026 | |||||||
Total | Level 1 | Level 2 | Level 3 | ||||
U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | |||
Corporate debt securities | |||||||
Asset-backed securities | |||||||
Short-term investments | |||||||
Total | $ | $ | $ | $ | |||
December 31, 2025 | |||||||
Total | Level 1 | Level 2 | Level 3 | ||||
U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | |||
Corporate debt securities | |||||||
Asset-backed securities | |||||||
Short-term investments | |||||||
Total | $ | $ | $ | $ | |||
The Company had no assets carried at fair value in the Level 3 category as of March 31, 2026 and December 31,
2025.
The Company classifies U.S. Treasury bonds and government agencies within Level 1 of the fair value hierarchy
because they are valued based on quoted market prices in active markets. Corporate debt securities, short-term
investments, 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 months ended March 31, 2026, the Company had no event or circumstance change that would
cause an instrument to be transferred between levels.
not carried at fair value as of the date presented:
March 31, 2026 | December 31, 2025 | ||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||
Long-term debt: | |||||||
Surplus note | $ | $ | $ | $ | |||
The Company’s long-term debt represents a surplus note. Fair value was determined by management based on the
expected cash flows discounted using the interest rate specified in the surplus note agreement with the Florida State
Board of Administration (“FSBA”). The interest rate is not obtained from an external market source but is defined
within the agreement as a rate equivalent to the 10-year Constant Maturity Treasury Rate, adjusted quarterly in
accordance with the terms of the agreement. The Company’s use of funds from the surplus note is limited by the
terms of the agreement. The Company has concluded that the contractual interest rate quoted by the FSBA to be
13
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
6. Property and Equipment
March 31, 2026 | December 31, 2025 | ||
Furniture | $ | $ | |
Leasehold improvements | |||
Computer equipment | |||
Vehicle fleet | |||
Internally developed software | |||
Total, at cost | |||
Accumulated depreciation and amortization | ( | ( | |
Property and equipment, net | $ | $ |
Depreciation and amortization expense related to property and equipment was $595 and $196 for the three months
ended March 31, 2026 and 2025, respectively.
7. Deferred Policy Acquisition Costs, Net of Ceding Commissions
March 31, 2026 and 2025.
For the three months ended March 31, 2026 and 2025, the Company allocated earned ceding commission income of
$12,932 and $14,814 to policy acquisition costs, respectively, and $12,916 and $23,879 to general and
administrative expenses, respectively.
Three Months Ended March 31, 2026 | |||||
DPAC, excluding unearned ceding commission | Unearned ceding commission | Total | |||
DPAC, beginning of period | $ | $( | $( | ||
Policy acquisition costs deferred during the period: | |||||
Producer commissions | — | ||||
Premium taxes | — | ||||
Other acquisition costs | — | ||||
Ceding commissions | — | ( | ( | ||
Total policy acquisition costs | ( | ||||
Amortization | ( | ( | |||
DPAC, end of period | $ | $( | $( | ||
14
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
Three Months Ended March 31, 2025 | |||||
DPAC, excluding unearned ceding commission | Unearned ceding commission | Total | |||
DPAC, beginning of period | $ | $( | $( | ||
Policy acquisition costs deferred during the period: | |||||
Producer commissions | — | ||||
Premium taxes | — | ||||
Other acquisition costs | — | ||||
Ceding commissions | — | ( | ( | ||
Total policy acquisition costs | ( | ( | |||
Amortization | ( | ||||
DPAC, end of period | $ | $( | $( | ||
8.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.
Three Months Ended March 31, | |||
2026 | 2025 | ||
Unpaid Loss and LAE beginning of period | $ | $ | |
Less: Reinsurance recoverables on unpaid losses and LAE | |||
Net unpaid loss and LAE at beginning of period | |||
Add: Losses and LAE, net of reinsurance, incurred related to: | |||
Current period | |||
Prior period | |||
Total net losses and LAE incurred | |||
Less: Losses and LAE paid, net of reinsurance, related to: | |||
Current period | |||
Prior period | |||
Total net paid losses and LAE | |||
Unpaid loss and LAE, net of reinsurance at end of period | |||
Add: Reinsurance recoverables on unpaid losses and LAE | |||
Unpaid loss and LAE at end of period | $ | $ | |
During the three months ended March 31, 2026, the liability for unpaid losses and LAE, net of reinsurance,
increased by $9,943 from $74,255 as of December 31, 2025 to $84,198 as of March 31, 2026. The increase was
primarily as a result of an increase in reserves related to non-catastrophe storms of $5,755 , with an additional
increase in reserves for Citizens, a Florida state-supported insurer, assumed business of $4,106 .
Prior period development includes changes in estimated losses and LAE for all events occurring in prior periods
including hurricanes and other weather events. In 2026, the Company’s net loss and LAE incurred for the three
months ended March 31, 2026 reflected no prior year development. These adjustments are generally the result of
15
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
ongoing analysis of recent loss development trends. Original estimates are decreased or increased as additional
information becomes known regarding individual claims.
9. 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 (“FHCF”), a
state-mandated catastrophe fund for Florida policies only. All 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.
Effective December 31, 2025 to December 31, 2026, the Company entered into quota share agreements that
generally provide coverage for 25 % of all losses net of other reinsurance coverages, the aggregate of which shall not
exceed 116.6 % of net ceded premiums earned. The reinsurers’ net liability on catastrophe losses shall not exceed
the agreements, the maximum amount allowed by the reinsurers for other inuring reinsurance coverages is limited to
commission of 68.25 % to 69.00 %, depending on the reinsurer, that adjusts based on loss experience.
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. See Note 8 – “Liability for Unpaid Losses and Loss Adjustment Expenses” for recoveries due from
reinsurers relating to paid and unpaid losses and LAE under these treaties.
Effect of Reinsurance
Three Months Ended March 31, | |||||||
2026 | 2025 | ||||||
Written | Earned | Written | Earned | ||||
Direct premiums | $ | $ | $ | $ | |||
Assumed Premiums | |||||||
Gross Premiums | |||||||
Ceded premiums | ( | ( | ( | ( | |||
Net premiums | $ | $ | $ | $ | |||
16
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
comprehensive income for the three months ended March 31, 2026 and 2025 by the following amounts:
Three Months Ended March 31, | |||
2026 | 2025 | ||
Ceded premiums earned | $( | $( | |
Ceded losses and loss adjustment expenses incurred | |||
Ceded policy acquisition expenses | |||
For the three months ended March 31, 2026 and 2025, recoveries received under reinsurance contracts were $5,619
and $36,285 , respectively.
10. 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 March 31, 2026 and December 31, 2025, AIIC reported statutory capital and surplus of $200,664 and
$193,080 , respectively. For the three months ended March 31, 2026 and 2025, AIIC reported statutory net income of
$5,957 and $17,886 , respectively. Statutory-basis surplus differs from shareholders’ equity reported in accordance
with GAAP primarily due to the impact of the Company’s IPO proceeds, and because policy acquisition costs are
expensed when incurred, certain assets that are not admitted assets are eliminated from the consolidated balance
sheets, 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
March 31, 2026 and December 31, 2025, AIIC exceeded the minimum statutory surplus requirement, which was
$20,066 and $19,308 , 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 three months ended March 31, 2026, 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 March 31, 2026 and December 31, 2025, based on calculations using the appropriate
NAIC RBC formula, AIIC reported total adjusted capital in excess of the requirements.
17
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
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 sheets.
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
March 31, 2026, AIIC had a ratio of gross and net premiums written to surplus of 1.0 to 1 and 0.8 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
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 $48,826 and $38,398 as of March 31, 2026 and
December 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, the actual amount of statutory
capital and surplus was $48,826 and $38,398 , 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.
11. 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.
Initial Public Offering
The Company’s amended and restated certificate of incorporation authorizes 100,000,000 shares of Common Stock,
of which 19,581,343 10,000,000 shares of preferred
stock, $0.001 par value per share, of which no
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 consolidated
balance sheets. 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 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 10 – “Regulatory Requirements and Restrictions” for
the restrictions on dividends from AIIC and Note 3 – “Variable Interest Entity” for restrictions on dividends from
Catstyle.
18
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
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 amended and restated company agreement. Tax distributions totaled $4.9 million during
the three months ended March 31, 2025.
Additionally, according to AIIG’s company agreement and prior to the IPO, AIIG’s Board of Directors was
permitted to, in its discretion, declare distributions to AIIG’s members in proportion to such members’ respective
percentage ownership interests. The Company made $10.0 million of discretionary distributions to members during
the three months ended March 31, 2025.
Special Cash Dividend
On February 24, 2026, the Company’s Board of Directors declared a $20.0 million special cash dividend of $1.02
per common share. The dividends were paid on March 30, 2026 to stockholders of record as of March 16, 2026.
12. Stock-Based Compensation
The Company adopted the American Integrity Insurance Group, Inc. 2025 Long-Term Incentive Plan (the “Plan”)
effective May 7, 2025. The maximum number of shares of Common Stock that may be issued pursuant to awards
under the Plan is 2,175,758 shares of Common Stock.
At March 31, 2026, there were 1,898,810 shares of Common Stock available for future issuance under the Plan.
Restricted Stock Awards
During 2025 and the first quarter of 2026, the Company issued shares of restricted stock (“RSAs”) to its non-
employee members of the Board of Directors pursuant to 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 Plan. Under the Non-Employee Director Compensation Policy, an initial grant of
March 31, 2026 and December 31, 2025, respectively. The RSAs awarded under the Non-Employee Director
Compensation Policy vest immediately on their respective grant date.
Number of RSAs | Weighted Average Grant Date Fair Value | ||
Granted and unvested at December 31, 2025 | $ | ||
Granted | |||
Vested | ( | ||
Nonvested at March 31, 2026 | $ |
During the three months ended March 31, 2026, the Company recognized $45 of share-based compensation expense
related to the RSAs granted to the non-employee members of the Board of Directors within general and
administrative expenses in the consolidated statements of operations and comprehensive income.
Restricted Stock Units
On December 4, 2025, the Compensation Committee of the Board of Directors approved the grant of 46,876 time-
based restricted stock units (“RSUs”) pursuant to the Company’s form of RSU agreement (the “RSU Agreement”)
under the Plan. The RSUs were granted to certain executive officers with a grant-date fair value of $20.62 per share,
which was determined using the closing price of our Common Stock reported on the New York Stock Exchange on
the grant date. One-third of these RSUs vest annually on the Plan’s adoption anniversary date over a three-year term,
19
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
commencing on May 7, 2026. The vesting of the shares granted pursuant to the RSU Agreement is contingent upon
the employee’s continuous employment with the Company through each vesting period.
On March 2, 2026, the Compensation Committee of the Board of Directors approved the grant of 44,137 time-based
RSUs pursuant to the RSU Agreement under the Plan. These RSUs were granted to certain executive officers based
on a grant-date fair value of $21.16 per share, which was determined using the closing price of our Common Stock
reported on the New York Stock Exchange on the grant date. One-third of these RSUs vest annually over a three-
employee’s continuous employment with the Company through each vesting period.
On March 2, 2026, the Compensation Committee of the Board of Directors approved the grant of 176,557 PSUs
pursuant to the Company’s form of PSU Agreement under the Plan. These PSUs were granted to certain executive
officers based on a grant-date fair value of $21.16 per share, which was determined using the closing price of our
Common Stock reported on the New York Stock Exchange on the grant date. These PSUs are subject to a three-year
performance period, commencing on January 1, 2026 and ending on December 31, 2028. Performance is measured
annually, and following the conclusion of each performance year, the Compensation Committee of the Board of
Directors will certify the Company’s achievement of the applicable performance metrics and determine the number
of PSUs earned for that year.
Notwithstanding the annual performance measurement, the PSUs do not vest until the completion of the full three-
year performance period, and participants must remain employed through the end of the performance period to
receive any shares underlying the awards. Shares earned based on the annual performance assessments are therefore
subject to continued employment through December 31, 2028 and will vest following the end of the performance
period, but no later than March 15, 2029.
These PSUs were granted assuming expected maximum achievement of the applicable performance conditions and
are subject to decreases based on the Company’s actual performance relative to the established metrics for each
performance year.
Number of RSUs and PSUs | Weighted Average Grant Date Fair Value | ||
Granted and unvested RSUs and PSUs at December 31, 2025 | $ | ||
Granted - RSUs | |||
Granted - PSUs | |||
Vested | |||
Forfeited | |||
Granted and unvested RSUs and PSUs at March 31, 2026 | $ |
The Company recognizes the compensation cost for the RSUs and PSUs on a straight-line basis over the awards’
vesting period.
The Company recognized compensation costs associated with the RSUs and PSUs of $221 for the three months
ended March 31, 2026. The Company did not grant RSUs or PSUs under the Plan prior to December 4, 2025, and
therefore no compensation cost related to RSUs or PSUs was recognized for the three months ended March 31,
2025.
20
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
13. Segment Reporting
Operating segments are defined as components of a company that engage in activities from which it may earn
revenues and incur expenses for which separate operational financial information is available and is regularly
evaluated by the chief operating decision maker (“CODM”). For the purpose of allocating the Company’s resources
and assessing its operating performance, the Company identified the CODM to be the Chief Executive Officer.
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. The first characteristic of an operating segment is that it
engages in business activities from which it may recognize revenues and incur expenses. The second characteristic is
that its operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to
the segment and assess its performance. The third characteristic is that its discrete financial information is available.
The Company considered each of these factors in determining that the consolidated entity is the single operating
segment. As there is only one operating segment, the Company did not assess any aggregation or materiality and
concluded that the Company will report a single reportable segment. As there is a single reportable segment, the
CODM uses information that is presented in the consolidated financial statements to evaluate the performance of the
single segment, including net income as the measure of profit or loss. The CODM uses net income to monitor
budgeted versus actual results, which assists in the evaluation of segment performance and what resources are
needed. The CODM also uses net income to assess the Company’s performance in comparison with competitors. No
single customer represents more than 10% of the Company’s revenue.
14. 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.
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 RSUs and PSUs have a contractual right to participate in undistributed earnings with Common Stock. The
Company applies the two-class method to allocate income between common shareholders and RSU and PSU
holders.
earnings per share calculations. For the three months ended March 31, 2025, there were no potentially dilutive
instruments outstanding.
For the three months ended March 31, 2026, diluted earnings per share reflects the impact of RSUs and PSUs using
the treasury stock method. As of March 31, 2026, approximately 273 shares were considered dilutive, primarily
related to RSUs and PSUs. The impact of these dilutive shares was immaterial and did not change diluted earnings
per share when rounded.
21
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
Three Months Ended March 31, | |||
2026 | 2025 | ||
Numerator: | |||
Net income attributable to common shareholders | $ | $ | |
Income allocated to participating securities | |||
Income available for common shareholders | $ | $ | |
Denominator: | |||
Shares outstanding | |||
Weighted average common shares outstanding - basic | |||
Weighted average common shares outstanding - diluted(1) | |||
Earnings available to common shareholders per share | |||
Basic | $ | $ | |
Diluted | $ | $ | |
(1)17,503 anti-dilutive shares were excluded from the diluted EPS computation for the three months ended March 31, 2026 in
accordance with ASC 260.
15. 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 consolidated statements of operations and comprehensive income.
component of other comprehensive income (loss) for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, | |||||||||||
2026 | 2025 | ||||||||||
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 | $( | $ | $( | $ | $( | $ | |||||
Reclassification adjustment for (gains) losses realized in net income | ( | ( | ( | ( | |||||||
Other comprehensive income (loss) | $( | $ | $( | $ | $( | $ | |||||
16. Income Taxes
The Company was incorporated as a Delaware corporation on January 15, 2025 and is subject to U.S. federal and
state corporate income tax. From January 1, 2025 through May 7, 2025, the Company and its non-insurance
subsidiaries were included in a single partnership return and were not subject to entity-level U.S. income tax. The
Company’s insurance subsidiary, AIIC, was subject to U.S. federal and state corporate income tax and filed on a
22
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
stand-alone basis. Effective May 7, 2025, the Company and its non-insurance corporate subsidiaries became subject
to U.S. federal and state income tax. Beginning in 2026, the Company will file a consolidated federal corporate
income tax return with its eligible subsidiaries. Taxes will be settled among the subsidiaries in accordance with the
Company’s tax sharing agreement.
In accordance with ASC 740, each interim period is considered integral to the annual period and tax expense is
generally determined using an estimate of the annual effective income tax rate (“AETR”). The Company records
income tax expense each quarter using the estimated AETR to provide for income taxes on a current year-to-date
basis, adjusted for discrete items that are noted in the relevant period. During the three months ended March 31,
2026, there were no discrete items identified. During the three months ended March 31, 2025, the non-taxable
entities represented a reduction to the overall effective tax rate of 11.7 %.
The provision for income taxes for the three months ended March 31, 2026 and 2025 was $7.3 million and
$4.8 million, respectively, based on pretax income of $27.3 million and $42.9 million, respectively. The effective
tax rate was 26.9 % and 11.2 % for the three months ended March 31, 2026 and 2025, respectively. The tax provision
for the three months ended March 31, 2026 differs from tax expense in the same period in 2025 primarily due to
non-taxable entities’ pretax income adjustment of $24 million, which resulted in the recognition of discrete tax
benefits of $5 million during the three months ended March 31, 2025.
The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months
ended March 31, 2026 was primarily due to state income taxes and non-deductible compensation related to
employee stock awards granted and fully vested during the quarter.
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 consolidated balance sheets. Multi-year contract commitments for future years are
recorded at the beginning of the coverage period. As of March 31, 2026 and December 31, 2025, there were no
multi-year reinsurance contract obligations.
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 consolidated financial statements. The Company contests liability and/or the
amount of damages as appropriate in each pending matter.
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 $2,059 and $1,690 ,
23
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
respectively, in other liability and accrued expenses as of March 31, 2026 and December 31, 2025, which represents
the policy surcharge amounts collected, but unremitted to FIGA as of that date.
18. Leases
On February 20, 2025, the Company entered into a new 152 -month lease agreement for approximately 75,000
square feet of office space in Tampa, Florida. Access to the leased premises commenced on March 31, 2026 and was
made available for use by the Company. Accordingly, the right-of-use asset and lease liability have been recognized
as of March 31, 2026. Total future contractual lease payments under this agreement are expected to approximate
$45.7 million over the lease term. The terms of the new lease agreement include an eight-month rent abatement
period upon commencement. As a result, lease payments in 2026 are lower than subsequent years.
Operating lease cost was $370 and $543 for the three months ended March 31, 2026 and 2025, respectively, and is
included in other operating expenses on the condensed consolidated statements of operations and comprehensive
income. Short-term and variable lease costs were immaterial for the three months ended March 31, 2026 and 2025.
2026 and December 31, 2025:
March 31, 2026 | December 31, 2025 | ||
Operating leases: | |||
Right-of-use assets | $ | $ | |
Lease liability | $ | $ | |
Weighted-average remaining lease term: | |||
Operating leases | |||
Weighted-average discount rate: | |||
Operating leases |
March 31, 2026 and 2025:
Three Months Ended March 31, | |||
2026 | 2025 | ||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | $ | |
Operating Leases | ||
2026 remaining | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total lease payments | ||
Less: imputed interest | ( | |
Present value of lease liabilities | $ |
24
American Integrity Insurance Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except share and per share data, unless otherwise stated)
19. Subsequent Events
The Company performed an evaluation of subsequent events through the date the financial statements were issued,
and determined there were no recognized or unrecognized subsequent events that would require an adjustment or
additional disclosure in the financial statements as of March 31, 2026.
25
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides a detailed analysis of our financial condition, results of operations, liquidity, and capital
resources. The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly
Report on Form 10-Q, as well as our audited consolidated financial statements and related notes included in our Annual
Report on Form 10-K for the year ended December 31, 2025. This analysis includes forward-looking statements, which are
subject to various risks and uncertainties. Actual results may differ from projections due to factors beyond our control, as
detailed under Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and under Part I, Item 1A “Risk
Factors” in our Annual Report on Form 10-K. References to the “Company,” “American Integrity,” “we,” “us” or “our”
refer to American Integrity Insurance Group, Inc.
Overview
We are a profitable and growing insurance group headquartered in Tampa, Florida. Through our insurance carrier
subsidiary, American Integrity Insurance Company (“AIIC”), we provide personal residential property insurance for single-
family homeowners and condominium owners, as well as coverage for vacant dwellings and investment properties,
predominantly in Florida. Florida represented 93.0% of our policies in-force as of March 31, 2026. As of March 31, 2026,
70.7% of our in-force premium was in the insurance market in which we underwrite and sell policies to policyholders
where we choose to offer coverage without the assistance of residual market mechanisms (the “Voluntary Market”).
Moreover, 94.4% of our Voluntary Market in-force premium was in our core Florida market and 5.6% was in South
Carolina, Georgia, and North Carolina, where we have strategically expanded to support and enhance our relationships
with our builder agency network.
We strive to generate consistent underwriting profits, exclusive of investment income or gains and losses from the sale of
invested assets. Our goal is to achieve profitability across economic and insurance cycles by maintaining a conservative
financial position, increasing premiums written and risk exposure when we believe market conditions are favorable, and
reducing risk exposure during periods when we believe market conditions are unfavorable and earning profits is more
challenging. AIIC, our statutory insurance carrier, maintains a Financial Stability Rating of “A” (Exceptional) by
Demotech, and a financial strength rating of “BBB+” with a stable outlook from the Kroll Bond Rating Agency, LLC.
Additionally, the Company maintains a BB+ issuer rating, with a stable outlook, from the Kroll Bond Rating Agency, LLC.
We generate revenue primarily from insurance premiums earned, net of reinsurance ceded. We also generate revenue from
policy fees, installment income fees, income generated through the investment of our assets, and realized gains or losses on
the sale of our invested assets. Our financial results are highly seasonal due to the occurrence of hurricanes and tropical
storms typically between June 1st and November 30th of each year in Florida and the other states in which we operate. Our
reinsurance purchasing, including our catastrophe excess of loss reinsurance coverages, which commence on June 1st
annually, also materially influences our financial results and are impacted by changes in reinsurance rates or alterations in
terms and conditions, including in attachment or loss retention levels.
Key Factors Affecting Our Results of Operations and Comparability Between Periods
Florida Trends. Prior to the legislative reforms passed in December 2022, the legal and regulatory environment in Florida
posed significant challenges for property and casualty insurers, particularly due to excessive litigation and aggressive
claims practices relating to issues such as assignment of benefits abuse, extended statute of limitations, and attorney fee
multipliers, which led to disproportionately high litigation rates in Florida relative to other geographies. These factors
increased claims costs and reinsurance expenses, impacting the profitability of insurers operating in Florida. Recent
legislative changes, however, have improved operating conditions in the Florida insurance market, including a reduction in
claims litigation activity since the reforms were enacted in December 2022. We believe these legislative reforms provide
greater opportunities for us to profitably underwrite residential property insurance in Florida.
Citizens “Take-out” Program. In the first quarter of 2026, we assumed 584 policies from Citizens Property Insurance
Corporation (“Citizens”), representing $1.2 million in assumed unearned premiums. These policies we assume carry no
upfront acquisition costs and are covered by our current treaty year reinsurance program which may impact comparability
between periods depending on the number of policies and unearned premiums assumed.
In late 2025, we began selectively participating in commercial policy take-outs from Citizens. During the first quarter of
2026, 42 of the 584 total assumed policies were commercial take-outs, representing $0.6 million of the $1.2 million in
26
assumed unearned premiums. These policies are subject to the same underwriting and profitability standards as our
residential assumptions and are intended to complement our existing portfolio.
While we expect there will continue to be opportunities to assume policies from Citizens, we believe the number of policies
available that meet our underwriting and profitability standards has declined and may continue to decline over time.
Changing Climate Conditions. Over the past two decades, the increasing frequency and severity of severe weather events
have highlighted the unpredictable nature of climate trends. Climate change has the potential to influence the occurrence
and intensity of natural disasters, including convective storms, hurricanes, tornadoes, hailstorms, severe winter storms, and
flooding, among others. This unpredictability creates challenges in assessing future risks and exposures.
We continuously monitor climate data and collaborate with climate change and catastrophe modeling experts to refine our
risk assessment models, enhancing our preparedness for evolving climate-related challenges.
Seasonality of our Business. Our business is seasonal as hurricanes and other named storms typically occur in the
geographies where we operate between June 1st and November 30th of each year. This may result in significant variability
in our losses and loss adjustment expenses (“LAE”) depending on the number, location and strength of hurricanes and
other named storms during these months as compared to other months. In addition, because our catastrophe reinsurance
program renews on June 1st each year, the ceded premiums written recorded in the second quarter are typically
substantially higher than any other quarter during a fiscal year. In some instances, this will cause our reported net
premiums written to be negative (or substantially lower than other quarters) in the second quarter of each year.
Inflation. We may be adversely affected during periods of high inflation, primarily because of increased labor and material
costs, which could cause claims and claim expenses to increase. This has been evident since the COVID-19 pandemic in
early 2020. In addition, periods of high inflation can lead to periods of high interest rates, which may impact the
performance of our investment portfolios. The impact of inflation on our results cannot be known with any certainty;
however, we revise our reserves for unpaid losses as additional information becomes available, and reflect adjustments to
our reserves, if any, in our earnings in the periods in which we determine the adjustments are necessary. We monitor
inflation trends and factor them into the pricing of our new business and renewal policies.
Cost and Availability of Reinsurance. We purchase excess of loss and quota share reinsurance as part of our capital
management strategy and in an effort to reduce volatility of earnings and protect our balance sheet from the impact of
potential catastrophe events. Our ability to implement an effective reinsurance strategy is dependent, in part, on the cost
and availability of reinsurance coverage. We ceded 64.4% and 68.9% of our gross premiums earned in the three months
ended March 31, 2026 and March 31, 2025, respectively.
Quota share. Effective January 1, 2026, we reduced the percentage of our ceding commission on our quota share
reinsurance treaty from 40% to 25%, which impacted the comparability of our results between periods. A lower ceding
commission increases the amount of premiums we retain on policies we write, and the reduction in the ceding commission
on our quota share reinsurance treaty also reduces the amount reimbursed by reinsurers pursuant to the treaty, which
increases policy acquisition expenses and general and administrative expenses.
Initial Public Offering and Corporate Contribution
On May 9, 2025, we completed our initial public offering (the “IPO”) of an aggregate of 6,875,000 shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), at a price to the public of $16.00 per share,
6,250,000 of which shares were sold by the Company and 625,000 of which shares were sold by certain selling
stockholders. The gross proceeds to us from the IPO were $100 million, and gross proceeds to the selling stockholders
from the IPO were $10 million, before deducting underwriting discounts and commissions and estimated offering
expenses. On May 13, 2025, the underwriters completed the exercise of their option to purchase an additional 1,031,250
shares of Common Stock from the selling stockholders resulting in an additional $16.5 million in gross proceeds to the
selling stockholders, before deducting underwriting discounts and commissions. We did not receive any gross proceeds
from the sales of shares of Common Stock by the selling stockholders. In connection with our IPO, we effected a net
issuance of 417,470 shares of restricted stock to certain of our employees and consultants (the “Restricted Stock Grant”)
after giving effect to the withholding of approximately 234,587 shares of Common Stock to satisfy the estimated tax
withholding and remittance obligations (the “Restricted Stock Grant Net Settlement”). We incurred a one-time share-based
compensation expense of $10.4 million in connection with the Restricted Stock Grant and paid $3.8 million in connection
with the Restricted Stock Grant Net Settlement. The compensation expense for these awards was recognized in the second
27
quarter of 2025. Immediately prior to the IPO, the owners of the equity interests of American Integrity Insurance Group,
LLC (“AIIG”) contributed all of their equity interests to the Company in exchange for an aggregate of 12,904,495 shares of
Common Stock.
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The following table summarizes our results of operations for the three months ended March 31, 2026 and three months
ended March 31, 2025:
Three Months Ended March 31, | |||||||
($ in thousands) | 2026 | 2025 | Change | % Change | |||
Gross premiums written | $220,004 | $212,150 | $7,854 | 3.7% | |||
Change in gross unearned premiums | 10,768 | (1,994) | 12,762 | (640.0)% | |||
Gross premiums earned | 230,772 | 210,156 | 20,616 | 9.8% | |||
Ceded premiums earned | (148,564) | (144,754) | (3,810) | 2.6% | |||
Net premiums earned | 82,208 | 65,402 | 16,806 | 25.7% | |||
Policy fees | 2,745 | 2,204 | 541 | 24.5% | |||
Net investment income | 5,652 | 4,103 | 1,549 | 37.8% | |||
Net realized gains (losses) on investments | 53 | 16 | 37 | 231.3% | |||
Other income | 273 | 161 | 112 | 69.6% | |||
Total Revenues | 90,931 | 71,886 | 19,045 | 26.5% | |||
Losses and loss adjustment expenses | 31,725 | 20,862 | 10,863 | 52.1% | |||
Policy acquisition expenses | 15,985 | 3,107 | 12,878 | 414.5% | |||
General and administrative expenses | 15,966 | 5,008 | 10,958 | 218.8% | |||
Total Expenses | 63,676 | 28,977 | 34,699 | 119.7% | |||
Income before taxes | 27,255 | 42,909 | (15,654) | (36.5)% | |||
Income tax expense | 7,345 | 4,813 | 2,532 | 52.6% | |||
Net Income | $19,910 | $38,096 | $(18,186) | (47.7)% | |||
Loss ratio(1) | 37.3% | 30.9% | |||||
Expense ratio(2) | 37.6% | 12.0% | |||||
Combined ratio(3) | 75.0% | 42.9% | |||||
Return on equity(4) | 23.7% | 87.5% | |||||
Ceded catastrophe excess of loss premiums ratio(5) | 46.6% | 41.4% | |||||
Net underlying loss and loss adjustment expense ratio(6) | 37.3% | 30.0% | |||||
Gross underlying loss and loss adjustment expense ratio(7) | 19.1% | 16.2% | |||||
(1)Loss ratio is a key business metric and is the ratio of losses and LAE to net premiums earned plus policy fees. Management uses
this operating metric to analyze our loss trends and believes it is useful for investors to evaluate this component separately from our
other operating expenses.
(2)Expense ratio is a key business metric and is the ratio of policy acquisition expenses and general and administrative expenses to net
premiums earned plus policy fees. Management uses this metric to analyze our expense trends and believes it is useful for investors
to evaluate these components separately from our loss and LAE.
(3)Combined ratio is a key business metric, defined as the sum of the loss ratio and the expense ratio. Management uses this operating
metric to analyze our total expense trends and believes it is a key indicator for investors when evaluating the overall profitability of
our business.
(4)Return on equity is a key business metric, defined as net income divided by the average beginning and ending shareholders’ equity
during the applicable period. This metric is annualized for interim periods by multiplying by the applicable ratio in order to present
return on equity consistently.
(5)Ceded catastrophe excess of loss premiums ratio is a key business metric and a non-GAAP measure defined as ceded catastrophe
excess of loss premiums earned divided by gross premiums earned. We view this ratio as meaningful to our business as it provides a
28
view into the cost of our catastrophe reinsurance program. The most directly comparable GAAP financial measure is the ratio of
ceded premiums earned to gross premiums earned. The ceded catastrophe excess of loss premiums ratio should not be considered a
substitute for ceded premiums earned and does not reflect the overall profitability of our business.
(6)Net underlying loss and loss adjustment expense ratio is a key business metric and a non-GAAP measure defined as the ratio of loss
and LAE, net, less current year net catastrophe losses and net prior year reserve development divided by net premiums earned plus
policy fees. We view this ratio as meaningful to our business as it allows us to analyze our loss trends before the impact of
catastrophe losses and prior year reserve development. The most directly comparable GAAP measure is the loss ratio. The net
underlying loss and LAE ratio should not be considered a substitute for the loss ratio and does not reflect the overall profitability of
our business.
(7)Gross underlying loss and loss adjustment expense ratio is a key business metric and a non-GAAP measure defined as the ratio of
net underlying loss and LAE plus ceded non-catastrophe losses divided by total gross earned premiums and policy fees. We view
this ratio as meaningful to our business as it allows us to analyze our loss trends before the impact of reinsurance and to evaluate the
cost of non-catastrophe losses for every dollar of gross premium earned. The most directly comparable GAAP measure is the loss
ratio. The gross underlying loss and LAE ratio should not be considered a substitute for the loss ratio and does not reflect the overall
profitability of our business.
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. Our geographic diversification strategy, including expansion into states such as South Carolina, Georgia,
and North Carolina, has generally resulted in lower average premiums compared to Florida due to our view on the
appropriate amount to charge for the risk we underwrite.
The following table shows our policies in-force and in-force premium by product as of March 31, 2026 and March 31,
2025:
As of March 31, | |||||||
2026 | 2025 | ||||||
($ in thousands) | Policies in-force | In-force premium | Policies in-force | In-force premium | |||
HO-3 | 289,250 | $642,351 | 243,943 | $590,921 | |||
HO-4 | 4,009 | 1,067 | 3,773 | 1,064 | |||
HO-5 | 8,229 | 10,684 | 1,815 | 1,903 | |||
HO-6 | 15,442 | 27,270 | 14,639 | 27,256 | |||
MH | 5,606 | 18,873 | 6,768 | 22,950 | |||
DP-1 (Including vacant) | 26,659 | 62,583 | 27,894 | 66,867 | |||
DP-3 | 76,119 | 189,972 | 74,142 | 193,425 | |||
Commercial | 234 | 15,528 | — | — | |||
Watercraft | 3,676 | 5,214 | 3,367 | 4,072 | |||
Golf Cart | 8,084 | 1,264 | 6,916 | 1,053 | |||
Umbrella | — | — | 75 | 28 | |||
Total | 437,308 | $974,806 | 383,332 | $909,539 | |||
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The following table shows our policies in-force and in-force premiums by county as of March 31, 2026 and March 31,
2025:
As of March 31, | |||||||
($ in thousands) | 2026 | 2025 | |||||
County | Policies in-force | In-force premium | Policies in-force | In-force premium | |||
POLK | 28,528 | $49,208 | 24,484 | $45,436 | |||
ORANGE | 26,772 | 58,788 | 24,601 | 56,588 | |||
LEE | 25,851 | 66,386 | 26,487 | 74,914 | |||
DUVAL | 23,722 | 37,987 | 21,812 | 38,315 | |||
HILLSBOROUGH | 21,542 | 50,462 | 20,370 | 50,440 | |||
OSCEOLA | 21,068 | 41,422 | 18,146 | 38,335 | |||
PASCO | 20,789 | 43,220 | 18,210 | 38,407 | |||
PALM BEACH | 19,412 | 75,386 | 19,355 | 79,869 | |||
MARION | 17,667 | 24,188 | 15,547 | 24,249 | |||
BREVARD | 14,972 | 37,143 | 13,588 | 34,184 | |||
VOLUSIA | 14,113 | 28,974 | 12,980 | 28,202 | |||
OTHERS | 202,872 | 461,642 | 167,752 | 400,600 | |||
Total | 437,308 | $974,806 | 383,332 | $909,539 | |||
Policies in-force were 437,308 as of March 31, 2026, an increase of 14.1% compared to policies in-force of 383,332 as of
March 31, 2025. The increase in our policies in-force was primarily due to new policies written through the Voluntary
Market and the 2025 Citizens take-outs.
During the three months ended March 31, 2026, we wrote 29,867 policies in the Voluntary Market, which was an increase
of 5,313 compared to 24,554 new policies written in the Voluntary Market during the three months ended March 31, 2025.
We experienced policy retention rates of 83.6% during the first quarter of 2026, up from 78.1% during the first quarter of
2025.
The following table shows our policies in-force and in-force premium by source:
($ in thousands) | Policies In-Force | In-Force Premium | |
As of March 31, 2026 | |||
Voluntary Market | 344,961 | $689,221 | |
Citizens Legacy Take-Outs(1) | 5,367 | 21,829 | |
Citizens Take-Outs(2)(3)(4) | 77,160 | 221,266 | |
FY 2025 Citizens Take-Outs(4)(6) | 9,243 | 40,080 | |
FY 2026 Citizens Take-Outs(5)(6) | 577 | 2,410 | |
Total | 437,308 | $974,806 |
(1)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.
(2)Reflects policies assumed from Citizens in 2024 and 2025 that have since renewed directly with the Company.
(3)There were 68,844 policies assumed from Citizens during 2024; and 56,450 policies, or 82.0%, were still in-force as of
March 31, 2026.
(4)There were 33,861 policies assumed from Citizens during 2025; and 29,953 policies, or 88.5%, were still in-force as of
March 31, 2026.
(5)There were 584 policies assumed from Citizens during the three months ended March 31, 2026; and 577 policies, or
98.8%, were still in-force as of March 31, 2026.
(6)Reflects policies assumed from Citizens during the stated calendar year that have less than a year remaining under
their current Citizens policy and will be offered a renewal policy with the Company upon expiration.
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Revenues
Gross premiums written increased by $7.8 million, or 3.7%, to $220.0 million for the three months ended March 31, 2026,
compared to $212.2 million for the three months ended March 31, 2025. The increase was primarily driven by growth in
our Voluntary Market writings, reflecting higher new and renewal business.
Gross premiums earned increased to $230.8 million for the three months ended March 31, 2026, from $210.2 million for
the three months ended March 31, 2025. The $20.6 million, or 9.8%, increase was due largely to our increase in gross
premiums written related to the growth in the Voluntary Market.
Ceded premiums earned increased $3.8 million, or 2.6%, to $148.6 million for the three months ended March 31, 2026,
from $144.8 million for the three months ended March 31, 2025. The increase in ceded premiums earned was due to
growth in our gross premiums earned, and the windfall from the Citizens take-out resulting in lower ceded catastrophe
excess of loss premiums earned for the three months ended March 31, 2025, offset by lower ceded premiums reflecting the
reduction in our non-catastrophe quota share reinsurance arrangement.
Net premiums earned grew by $16.8 million, or 25.7%, reaching $82.2 million for the three months ended March 31, 2026,
up from $65.4 million for the three months ended March 31, 2025. This increase was due largely to the increase in gross
premiums earned outpacing the increase in ceded premiums earned.
Policy fees increased $0.5 million, or 24.5%, to $2.7 million for the three months ended March 31, 2026 from $2.2 million
for the three months ended March 31, 2025. The increase in policies written during the three months ended March 31, 2026
contributed to the increase in policy fees.
Net investment income increased $1.6 million, or 37.8%, to $5.7 million for the three months ended March 31, 2026 from
$4.1 million for the three months ended March 31, 2025. The increase in net investment income was due to an increase in
invested assets driven by the increased in-force premiums and the proceeds from our IPO.
Sales of available-for-sale debt securities resulted in net realized investment gains of $53,135 for the three months ended
March 31, 2026 and net realized investment gains of $15,518 for the three months ended March 31, 2025.
Other income was $0.3 million for the three months ended March 31, 2026, in line with $0.2 million for the three months
ended March 31, 2025.
Expenses
Losses and LAE increased $10.8 million, or 52.1%, to $31.7 million for the three months ended March 31, 2026 from
$20.9 million for the three months ended March 31, 2025. The increase in losses and LAE was primarily driven by higher
net premiums earned.
Policy acquisition expenses increased $12.9 million, or 414.5%, to $16.0 million for the three months ended March 31,
2026 from $3.1 million for the three months ended March 31, 2025. The increase was primarily driven by the increase in
policies written during the three months ended March 31, 2026, the windfall from Citizens take-outs during the three
months ended March 31, 2025, and less ceding commission due to the reduction in our non-catastrophe quota share
reinsurance arrangement from 40% to 25% on January 1, 2026.
General and administrative expenses increased $11.0 million, or 218.8%, to $16.0 million for the three months ended
March 31, 2026 from $5.0 million for the three months ended March 31, 2025. The increase was primarily driven by lower
ceding commissions associated with a reduction in our non-catastrophe quota share reinsurance arrangement from 40% to
25% on January 1, 2026.
Income tax expense was $7.3 million and $4.8 million for the three months ended March 31, 2026 and 2025, respectively.
Our effective tax rate for the three months ended March 31, 2026 and 2025 was 26.9% and 11.2%, respectively. The
increase in the effective tax rate was primarily due to the absence of discrete tax benefits recognized in the prior year
period, as the 2025 period included a $24 million pretax income adjustment related to non-taxable entities that resulted in
$5.0 million of discrete tax benefits. For the three months ended March 31, 2026, our effective tax rate differed from the
U.S. federal statutory rate of 21% primarily due to state income taxes.
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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 increased by 6.4 percentage points for the three months ended March 31,
2026, to 37.3%, compared to 30.9% for the three months ended March 31, 2025. The increase in the loss ratio reflects the
impact of the Citizens take-out windfall on net premiums earned for the three months ended March 31, 2025.
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 increased by 25.6 percentage points to 37.6% for the three months ended March 31,
2026 compared to 12.0% for the three months ended March 31, 2025, driven by the increase in policies written during the
three months ended March 31, 2026, the Citizens take-out windfall for the three months ended March 31, 2025, and less
ceding commission due to the reduction in our non-catastrophe quota share reinsurance arrangement from 40% to 25% on
January 1, 2026.
Combined ratio
Combined ratio is the sum of the loss ratio and the expense ratio. We utilize combined ratio to assess our underwriting
performance. A combined ratio below 100% indicates an underwriting profit, while a combined ratio exceeding 100%
indicates an underwriting loss. Our combined ratio increased to 75.0% for the three months ended March 31, 2026 from
42.9% for the three months ended March 31, 2025 due to the increases in our expense ratio and loss ratio.
Return on equity
Return on equity is defined as net income, divided by the average beginning and ending shareholders’ equity during the
applicable period. This metric is annualized for interim periods by multiplying by the applicable ratio in order to present
return on equity consistently. Our return on equity decreased to 23.7% for the three months ended March 31, 2026 from
87.5% for the three months ended March 31, 2025. The decrease in our return on equity was due to less windfall from
Citizens take-outs for the three months ended March 31, 2026 versus the three months ended March 31, 2025.
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.
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We monitor the following key business metrics and non-GAAP financial measures that assist us in evaluating our business,
measuring our performance, identifying trends and making strategic decisions. As such, we have presented the following
non-GAAP measure, their most directly comparable GAAP measure, and key business metrics:
Non-GAAP Measure | Comparable GAAP Measure | |
Underwriting income (loss) | Income before taxes | |
Adjusted net income | Net income | |
Adjusted earnings per share | Earnings per share | |
Adjusted return on equity | Return on equity | |
Net underlying loss and loss adjustment expense ratio | Losses and loss adjustment expense ratio | |
Gross underlying loss and loss adjustment expense ratio | Losses and loss adjustment expense ratio | |
Ceded catastrophe excess of loss premiums ratio | Ceded premiums earned to gross premiums earned |
Underwriting income (loss)
Underwriting income (loss) is a non-GAAP financial measure defined as income (loss) before income taxes, excluding net
investment income, net realized gains and losses on investments, interest expense, and other income. 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 decreased by $17.4 million, or 44.9%, to $21.3 million from $38.6 million for the three months
ended March 31, 2025. The decrease was primarily driven by lower contributions from the Citizens take-out program,
partially offset by growth in the Voluntary Market reflecting higher earned premiums from new and renewal policies.
Underwriting income for the three months ended March 31, 2026 and 2025 reconciles to income before taxes as follows:
Three Months Ended March 31, | |||
($ in thousands) | 2026 | 2025 | |
Income before taxes | $27,255 | $42,909 | |
Less: | |||
Net investment income | 5,652 | 4,103 | |
Net realized gains on investments | 53 | 16 | |
Other income | 273 | 161 | |
Underwriting income | $21,277 | $38,629 | |
Adjusted net income and Adjusted earnings per share
Adjusted net income is a non-GAAP financial measure defined as net income excluding net realized gains or losses on
investments, stock compensation expense incurred in connection with our IPO, and certain non-recurring or non-cash
expenses, including those incurred in connection with our IPO, net of tax. We use adjusted net income as an internal
performance measure in the management of our operations because we believe it gives us and users of our financial
information useful insight into our results of operations and our underlying business performance excluding the impact of
realized gains and losses on the sale of securities, which we do not view as core to the underlying trends in our business.
Adjusted net income should not be viewed as a substitute for net income calculated in accordance with GAAP, and other
companies may define adjusted net income differently.
For the three months ended March 31, 2026, adjusted net income decreased by $18.0 million, or 47.1%, to $20.1 million
from $38.1 million for the three months ended March 31, 2025. The decrease was primarily driven by lower contributions
from the Citizens take-out program, partially offset by growth in the Voluntary Market.
Adjusted earnings per share is a non-GAAP measure, which is calculated as adjusted net income available to common
shareholders divided by weighted average diluted common shares outstanding. Management believes this metric is
33
meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by
excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not
indicative of operating trends.
Adjusted net income and adjusted earnings per share for the three months ended March 31, 2026 and 2025 reconcile to net
income and earnings per share, respectively, as follows:
Three Months Ended March 31, | |||
($ in thousands) | 2026 | 2025 | |
Net Income | $19,910 | $38,096 | |
Add: | |||
One-time non-recurring expenses(1) | 329 | — | |
Less: | |||
Net realized gains on Investments | 53 | 16 | |
Tax effect(2) | 58 | (4) | |
Adjusted net income | $20,128 | $38,084 | |
Adjusted income allocated to participating securities | — | 2,190 | |
Numerator: | |||
Adjusted net income available for common shareholders | $20,128 | $35,894 | |
Denominator: | |||
Weighted average common shares outstanding: | |||
Basic | 19,579,035 | 12,904,495 | |
Diluted | 19,579,308 | 12,904,495 | |
Earnings per share: | |||
Basic | $1.02 | $2.78 | |
Diluted | $1.02 | $2.78 | |
Adjusted earnings per share: | |||
Basic | $1.03 | $2.78 | |
Diluted | $1.03 | $2.78 | |
(1)Material non-recurring items that we do not expect to continue in the future and believe are not reflective of our ongoing operations
and our performance.
(2)We included the tax impact of all adjustments to adjusted net income using the U.S. federal statutory corporate tax rate of 21%.
While the Company’s actual effective tax rates for the three months ended March 31, 2026 and 2025 were 26.9% and 11.2%,
respectively, the use of the statutory rate provides a consistent and simplified approach for comparability. This approach is applied
uniformly, including to items that may be partially or fully nondeductible for tax purposes. The tax effect row is presented exclusive
of the change in tax status impact.
Adjusted return on equity
Adjusted return on equity is a non-GAAP financial measure defined as adjusted net income divided by the average of
beginning and ending shareholders’ equity during the applicable period and is annualized for periods of less than one year.
We use adjusted return on equity as an internal performance measure in the management of our operations because we
believe it gives us and users of our financial information useful insight into our underlying business performance. Adjusted
return on equity should not be viewed as a substitute for any metrics calculated in accordance with GAAP, and other
companies may define adjusted return on equity differently.
Adjusted return on equity decreased by 63.5 percentage points to 23.9% for the three months ended March 31, 2026 from
87.4% for the three months ended March 31, 2025. The decrease in adjusted return on equity was primarily due to less
windfall from Citizens take-outs for the three months ended March 31, 2026 compared to three months ended March 31,
2025.
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Adjusted return on equity for the three months ended March 31, 2026 and 2025 reconciles to return on equity as follows:
Three Months Ended March 31, | |||
($ in thousands) | 2026 | 2025 | |
Net income | $19,910 | $38,096 | |
Average beginning and ending shareholders’ equity(1) | 336,253 | 174,226 | |
Return on equity | 23.7% | 87.5% | |
Adjusted net income (after tax)(2)(3) | $20,128 | $38,084 | |
Average shareholders’ equity | 336,253 | 174,226 | |
Adjusted return on equity(2)(3) | 23.9% | 87.4% | |
(1)Average beginning and ending shareholders’ equity represents the average of shareholders' equity at the beginning and end of the
period presented.
(2)Adjusted return on equity is the adjusted net income (after tax) divided by the average beginning and ending shareholders’ equity.
(3)We included the tax impact of all adjustments to adjusted net income using the US federal statutory corporate tax rate of 21%.
While the Company’s actual effective tax rates for the three months ended March 31, 2026 and 2025 were 26.9% and 11.2%
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.
Net underlying loss and loss adjustment expense ratio
Net underlying loss and loss adjustment expense ratio is a non-GAAP measure. We calculate the net 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 net 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 net 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 no net prior year reserve development for the three months ended March 31, 2026 and unfavorable net
prior year development of $0.6 million for the three months ended March 31, 2025. We experienced no catastrophe losses
for the three months ended March 31, 2026 and for the three months ended March 31, 2025.
The net underlying loss and loss adjustment expense ratio increased to 37.3% for the three months ended March 31, 2026
from 30.0% for the three months ended March 31, 2025, primarily driven by less windfall from Citizens take-out net
earned premiums for the three months ended March 31, 2026 compared to March 31, 2025 and higher net losses reflecting
increased retention due to the reduction in our non-catastrophe quota share reinsurance arrangement, partially offset by
growth in net premiums earned.
35
The following table summarizes the loss and LAE ratios and net underlying loss and LAE ratios for the three months ended
March 31, 2026 and 2025:
Three Months Ended March 31, | |||
($ in thousands) | 2026 | 2025 | |
Total Net Premiums Earned | $82,208 | $65,402 | |
Plus: Policy Fees | 2,745 | 2,204 | |
Total Net Premiums Earned Plus Policy Fees | 84,953 | 67,606 | |
Losses and Loss Adjustment Expenses, Net | $31,725 | $20,862 | |
Loss and Loss Adjustment Expense Ratio (% Net Premiums Earned Plus Policy Fees) | 37.3% | 30.9% | |
Less: | |||
Current Year Net Catastrophe Losses | — | — | |
Prior Year Net Reserve Development | — | 579 | |
Underlying Loss and Loss Adjustment Expenses, Net | $31,725 | $20,283 | |
Net Underlying Loss and Loss Adjustment Expense Ratio (% Net Premiums Earned Plus Policy Fees) | 37.3% | 30.0% | |
Gross underlying loss and loss adjustment expense ratio
Gross underlying loss and loss adjustment expense ratio is a non-GAAP measure. We calculate the gross underlying loss
and LAE ratio by adding net underlying loss and LAE and ceded non-catastrophe losses and dividing that amount by the
sum of total gross earned premium and policy fees. We use the gross underlying loss and LAE ratio to analyze our loss
trends before the impact of reinsurance.
We believe it is useful for investors to evaluate the cost of non-catastrophe losses for every dollar of gross premium earned.
The most comparable GAAP measure is the net loss and LAE ratio. The gross underlying loss and LAE ratio should not be
considered a substitute for net loss and LAE ratio and does not reflect the overall profitability of our business.
The following tables summarize the gross underlying loss and LAE ratios for the three months ended March 31, 2026, and
2025:
Three Months Ended March 31, | |||
($ in thousands) | 2026 | 2025 | |
Total Gross Premiums Earned | $230,772 | $210,156 | |
Plus: Policy Fees | 2,745 | 2,204 | |
Total Gross Premiums Earned Plus Policy Fees | 233,517 | 212,360 | |
Losses and Loss Adjustment Expenses, Net | 31,725 | 20,862 | |
Less: | |||
Current Year Net Catastrophe Losses | — | — | |
Prior Year Net Reserve Development | — | 579 | |
Underlying Loss and Loss Adjustment Expenses, Net | $31,725 | $20,283 | |
Add: | |||
Ceded Non-Catastrophe Loss and Loss Adjustment Expense | 12,762 | 14,020 | |
Gross Underlying Loss and Loss Adjustment Expenses | $44,487 | $34,303 | |
Loss and Loss Adjustment Expense Ratio (% Net Premiums Earned Plus Policy Fees) | 37.3% | 30.9% | |
Gross Underlying Loss and Loss Adjustment Expense Ratio (% Gross Premiums Earned Plus Policy Fees) | 19.1% | 16.2% | |
Ceded catastrophe excess of loss premiums ratio
Ceded catastrophe excess of loss premiums ratio is a non-GAAP measure and, expressed as percentage, is defined as ceded
catastrophe excess of loss premiums earned divided by gross premiums earned. We believe it is useful for investors to
36
evaluate ceded catastrophe excess of loss premiums ratio as it provides a proxy for our cost of catastrophe reinsurance. The
most directly comparable GAAP measure is the ratio of ceded premiums earned to gross premiums earned. The ceded
catastrophe excess of loss premiums ratio should not be considered a substitute for ceded premiums earned and does not
reflect the overall profitability of our business.
Ceded catastrophe excess of loss premiums ratio increased 5.2 percentage points, to 46.6% for the three months ended
March 31, 2026 from 41.4% for the three months ended March 31, 2025. This increase was primarily driven by the three
month period end March 31, 2025 having lower ceded premiums earned relative to gross premiums earned due to the
windfall from Citizens take-outs compared to the three months ended March 31, 2026 where this benefit was less
pronounced.
The calculation of our ceded excess of loss premiums ratio for the three months ended March 31, 2026 and 2025 is shown
in the table below:
Three Months Ended March 31, | |||
($ in thousands) | 2026 | 2025 | |
Gross Premiums Earned | $230,772 | $210,156 | |
Total Ceded Premiums Earned | (148,564) | (144,754) | |
Less: NCQSR and other ancillary reinsurance treaties | (40,952) | (57,731) | |
Ceded Catastrophe Excess of Loss Premiums Earned | $(107,612) | $(87,023) | |
Ceded Catastrophe Excess of Loss Premiums Ratio | 46.6% | 41.4% | |
Liquidity and Capital Resources
Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet the short-term and long-term cash
requirements of its business operations. Funds generated from operations have been sufficient to meet our current and long-
term liquidity requirements.
The liquidity of the Company, comprised of cash, cash equivalents and our liquid fixed income portfolios, fluctuates from
time to time. As of March 31, 2026, our liquidity totaled $575.6 million. A portion of that liquidity is not held at AIIC. The
total cash and cash equivalents not held at the insurance subsidiary was $136.5 million as of March 31, 2026. Our liquidity
framework is designed to support operational flexibility, ensuring we can fund claims obligations, capital expenditures, and
growth initiatives without reliance on external financing. In the event of a large loss event, we may utilize proceeds from
our investment portfolios as a source of liquidity to service claims.
On May 9, 2025, we consummated our IPO and received net proceeds of $82 million, after (i) deducting underwriting
discounts and commissions totaling $7.0 million as well as $4.2 million of other expenses related to the offering, (ii) using
approximately $3.8 million of the proceeds from the offering to satisfy the Restricted Stock Grant Net Settlement and (iii)
using $3.0 million of the proceeds of the offering to terminate the management services agreement by and between James
Sowell Company, L.P. and AIIG.
We maintain a disciplined capital management approach, balancing organic growth investments with stockholder return
considerations. Our capital resources include:
•Operating cash flow, which remains the primary source of funding for day-to-day operations and claim payments.
•Reinsurance arrangements, which provide financial resilience against catastrophe loss events.
•Potential strategic financing, including debt instruments or equity offerings, which may be considered to
accelerate expansion opportunities.
Future capital requirements will be driven by business growth, regulatory capital needs, and evolving market conditions.
Our goal is to optimize capital efficiency while maintaining a strong financial foundation for long-term success.
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
37
paid by AIIC to American Integrity MGA, LLC (“AIMGA”) for general agency, inspections, agent commissions, general
operating expenses and claims adjusting services.
Future capital allocation decisions, including dividend distributions and share repurchases, will be determined by our Board
of Directors based on profitability trends, regulatory considerations, and long-term stockholder value objectives. We did
not declare or pay any dividends during 2025. On February 24, 2026, our Board of Directors declared a special cash
dividend of $1.02 per share of Common Stock payable on March 30, 2026 to stockholders of record at the close of business
on March 16, 2026. The aggregate amount of the payment made in connection with this special cash dividend was
approximately $20.0 million, and we paid such dividend using cash on hand.
While we currently intend to retain any future earnings for use in the operation of our business and have no plans to declare
or pay any additional cash dividends in the foreseeable future, our Board of Directors may, from time to time, reassess
whether to declare dividends in the future.
As discussed in Note 10 – “Regulatory Requirements and Restrictions” in the notes to our consolidated financial
statements, there are limitations on the dividends a subsidiary may pay to its immediate parent company.
The maximum amount of dividends that can be paid by Florida insurance companies without prior approval of the Florida
Office of Insurance Regulation is subject to restrictions as referenced below and in Note 10 – “Regulatory Requirements
and Restrictions” in the notes to our consolidated financial statements. Dividends from AIIC can only be paid from
accumulated unassigned funds derived from net operating profits and net realized capital gains. Subject to such
accumulated unassigned funds, the maximum dividend that may be paid by AIIC to the Company without prior approval is
further limited to the lesser of statutory net income from operations of the preceding calendar year or statutory unassigned
surplus as of the preceding year end. As of March 31, 2026, AIIC has not declared dividends.
Liquidity for AIIC is primarily required to cover payments for reinsurance premiums, claims payments including potential
payments of catastrophe losses (offset by recovery of any reimbursement amounts under our reinsurance agreements), fees
paid to affiliates for managing general agency services, claims adjusting services, premium and income taxes, regulatory
assessments, general operating expenses, and interest and principal payments on debt obligations. Principal sources of
liquidity for AIIC consist of the revenue generated from the collection of written premiums and the collection of
reinsurance recoverable.
Principal sources of liquidity for the Company include fees paid by our insurance subsidiary, AIIC, and dividends paid by
other subsidiaries generated from, among other things, income earned on policy fees and fees paid by AIIC to AIMGA for
general agency, inspections, agent commissions, general operating expenses and claims adjusting services.
Cash flows
Our most significant source of cash is from premiums received from our policyholders, which, for most policies, we
receive at the beginning of the coverage period, although some policyholders elect to pay in installments over the duration
of the policy. Our most significant cash outflow is for the cost of our reinsurance agreements in the form of ceded
premiums and for claims that arise when a policyholder incurs an insured loss. Because the payment of claims occurs after
the receipt of the premium, sometimes years later, we invest the cash in various investment securities that earn interest and
dividends. We also use cash to pay commissions to distribution partners, as well as to pay for ongoing operating expenses
such as salaries, professional services and taxes. As described under “Reinsurance” below, we use reinsurance to manage
the risk that we take on our policies. We cede, or pay out, part of the premiums we receive to our reinsurers and collect
cash back when losses subject to our reinsurance coverage are paid.
The timing of our cash flows from operating activities can vary among periods due to the timing by which payments are
made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can
be significant, so their timing can influence cash flows from operating activities in any given period. Management believes
that cash receipts from premiums, proceeds from investment sales and redemptions and investment income are sufficient to
cover cash outflows for the foreseeable future.
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Our cash flows for the three months ended March 31, 2026 and 2025 were:
Three Months Ended March 31, | |||
($ in thousands) | 2026 | 2025 | |
Cash and cash equivalents (net) provided by: Operating activities | $6,792 | $68,085 | |
Cash and cash equivalents (net) provided by (used in): Investing activities | (4,486) | 8,343 | |
Cash and cash equivalents (net) used in: Financing activities | (20,074) | (14,978) | |
Net increase in cash and cash equivalents | $(17,768) | $61,450 | |
Cash provided by operating activities was $6.8 million for the three months ended March 31, 2026 compared to $68.1
million provided by operating activities for the three months ended March 31, 2025. The decrease in cash provided by
operating activities resulted from higher cash outflows related to reinsurance activity and loss payments associated with
increased gross premiums earned.
Cash used in investing activities was $(4.5) million for the three months ended March 31, 2026 compared to $8.3 million
provided by investing activities for the three months ended March 31, 2025. The increase in net cash used in investing
activities was primarily attributable to the purchases of fixed income securities and short-term investments in excess of
proceeds from sales and maturities of fixed maturity securities and short-term investments during the period.
Net cash used in financing activities was $(20.1) million for the three months ended March 31, 2026 compared to $(15.0)
million used in financing activities for the three months ended March 31, 2025. The increase in net cash used in financing
activities was primarily attributable to the special cash dividend paid to stockholders during the period.
Capitalization
Capital resources provide protection for policyholders, furnish the financial strength to support the business of
underwriting insurance risks and facilitate continued business growth. The following table provides our shareholders’
equity, total long-term debt, total capital resources, debt-to-total capital ratio and debt-to-equity ratio as of March 31, 2026,
and December 31, 2025.
($ in thousands) | March 31, 2026 | December 31, 2025 | |
Shareholders’ equity | $335,483 | $337,022 | |
Long-term debt | 515 | 618 | |
Total capital resources | 335,998 | 337,640 | |
Debt-to-total capital ratio | 0.2% | 0.2% | |
Debt-to-equity ratio | 0.2% | 0.2% |
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 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 consolidated financial statements. Our current critical accounting policies and estimates are:
Liability for unpaid losses and loss adjustment expenses
We set aside reserves, net of estimated subrogation, to provide for the estimated costs of paying losses and LAE under
insurance policies we issued. Liability for unpaid losses and LAE represent management’s best estimate of the ultimate
cost of settling all outstanding claims, including claims that have been incurred, but not yet reported (“IBNR”) as of a
financial statement date. With the assistance of an independent, actuarial firm, we use statistical analysis to establish
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liabilities for unpaid losses and LAE. We do not discount the liability for unpaid losses and LAE for financial statement
purposes. In establishing the liability for unpaid losses and LAE, actuarial judgment is relied upon in order to make
appropriate assumptions to estimate a best estimate of ultimate losses. Those estimates are based on our historical
information, industry information and estimates of trends that may affect the ultimate frequency of incurred but not
reported claims and changes in ultimate claims severity.
We regularly review our reserve estimates and adjust them as necessary as experience develops or as new information
becomes known to us. Such adjustments are included in current operations. During the loss settlement period, if we have
indications that claims frequency or severity exceeds our initial expectations, we generally increase our reserves for losses
and LAE. Conversely, when claims frequency and severity trends are more favorable than initially anticipated, we
generally reduce our reserves for losses and LAE once we have sufficient data to confirm the validity of the favorable
trends. Even after such adjustments, the ultimate liability may exceed or be less than the revised estimates. Accordingly,
the ultimate settlement of losses and the related LAE may vary significantly from the estimate included in our consolidated
financial statements.
Reserving for reported claims relies on a detailed assessment of individual risks, understanding the specifics of each claim,
and considering the insurance policy terms related to the particular type of loss. Reserving for unreported claims and LAE
involves utilizing historical data per line of insurance adjusted to present circumstances. Typically, the reserving process
implicitly considers inflation by analyzing costs, trends, and reviewing historical reserving outcomes across several years.
The process of estimating the reserves for losses and LAE requires a high degree of judgment and is subject to several
variables. Reserve estimates for our ultimate liability are derived using several different actuarial estimation methods,
depending on the type of loss:
•Loss development method: The loss development method uses actual loss data and the historical development
profiles on older underwriting years to project more recent, less developed years to their ultimate position.
•Frequency/severity methods: These methods are similar to the paid and case incurred loss development methods
except that estimates of ultimate claim counts (a measure of claim frequency) and ultimate average severity are
derived separately and then multiplied together to provide an estimate of ultimate loss.
•Incremental cost per closed claim method: This method is similar to the frequency/severity method except that
paid severities are selected for each incremental development period, and then are trending using selected short-
term and long-term trend factors.
•Bornhuetter-Ferguson method: The Bornhuetter-Ferguson method uses as a starting point an assumed initial
expected loss ratio and blends in the loss ratio, which is implied by the claims experience to date using benchmark
loss development patterns on paid claims data or reported claims data.
•IBNR-to-case outstanding method: This method requires the estimation of consistent paid and reported (case)
incurred loss development patterns and age-to-ultimate factors. These patterns imply a specific expected
relationship between IBNR, including both development or known claims (bulk reserve) and losses on a true late
reported claims, and reported case incurred losses.
•DCC development methods: When DCC data is evaluated separately from losses, historical paid and case incurred
DCC data may be arranged in a triangular format and projected to ultimate using the same technique as used for
losses (i.e., loss development methods). In addition, projections using triangles of ratios of paid DCC-to-paid loss
and ratios of paid DCC-to-case incurred losses can be made; those triangles can be constructed using ratios of
incremental (e.g. annual) amounts, or ratios of cumulative amounts. Indications that result from projecting these
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.
40
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 March 31, 2026, we
recorded $10.1 million in case reserves and an additional $254.7 million for IBNR reserves, totaling $264.9 million in
reserves, with an added $275.3 million attributable to reinsurance claims payable.
For further detail, see Note 8 – “Liability for Unpaid Losses and Loss Adjustment Expenses” in our notes to the
consolidated financial statements.
Reinsurance
We follow industry standards by reinsuring a portion of our risks. Reinsurance involves transferring, or “ceding,” a share of
the risk exposure from the policies we write to another insurer, known as a reinsurer. If our reinsurers are unable to fulfill
their obligations under our reinsurance agreements, we remain accountable for the entire insured loss.
In cases where losses fall within our reinsurance coverage, we document recoverable amounts from our reinsurers for paid
losses and an estimation of recoverable amounts on unpaid losses. The reinsurance recoverables on unpaid losses are
estimated in a manner consistent with the Company’s estimate of unpaid losses and LAE associated with the insured
business, thus fluctuating with changes to our estimates of unpaid losses. The estimation of recoverable amounts from
reinsurers on unpaid losses may change in the future, and if there is a change, it could adversely affect the amounts stated
in our consolidated financial statements.
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 acquisition costs 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.
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Accordingly, the Company develops estimates of ceding commissions based on an evaluation of historical experience and
available information, with subsequent adjustment for true-ups recorded prospectively.
Investments
The Company currently classifies all of its investments in debt securities and short-term investments as available-for-sale
and reports them at fair value. Short-term investments consist of investments in interest-bearing assets with original
maturities of 12 months or less. The Company records subsequent changes in value through the date of disposition as
unrealized holding gains and losses, net of taxes, and includes them as a component of accumulated other comprehensive
income until reclassified to earnings upon sale. Realized gains and losses on the sale of investments are determined using
the specific-identification method and included in earnings. The Company amortizes any premium or discount on fixed
maturities over the remaining maturity period of the related securities using the effective interest method and reports the
amortization in net investment income. The Company recognizes dividends and interest income when earned. We have a
financial stability rating of A, “Exceptional” from Demotech, an independent financial firm specializing in evaluating the
financial stability of regional and specialty insurers, and whose rating is accepted by major mortgage companies. We do not
have a rating from A.M. Best.
Fair Value
In our disclosure of the fair value of our investments, we utilize a hierarchy based on the quality of inputs used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to
transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value.
The three levels of the fair value hierarchy are described below:
•Level 1 – Valuations based on quoted prices in active markets for identical assets and liabilities;
•Level 2 – Valuations based on observable inputs that do not meet the criteria for Level 1, including quoted prices
in inactive markets and quoted prices in active markets for similar, but not identical instruments; and
•Level 3 – Valuations based on unobservable inputs, which are based upon the best available information when
external market data is limited or unavailable.
We estimate the fair value of our investments using the closing prices on the last business day of the reporting period,
obtained from active markets using independent pricing sources. 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 March 31, 2026 and December 31, 2025. Changes in
interest rates subsequent to March 31, 2026 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
portfolios, offset by our ability to earn higher rates of return on funds reinvested. Conversely, a decline in interest rates
would increase the net unrealized holding gains of our investment portfolios, offset by lower rates of return on funds
reinvested. Unrealized gains and losses on our fixed maturity securities are included in accumulated other comprehensive
income as a separate component of total shareholders’ equity.
Impairment
Quarterly, the Company performs an assessment of all investments to determine if any are impaired as the result of a credit
loss. An investment is impaired when the fair value of the investment declines to an amount less than the cost or amortized
cost of that investment. For each fixed-income security in an unrealized loss position, if the intent is to sell the security or if
it is more likely than not that the Company will be required to sell the security before recovering the cost or amortized cost
basis for reasons such as liquidity needs, contractual or regulatory requirements, the security’s entire decline in fair value is
recorded in earnings. If the intent is not to sell the security or it is not more likely than not that the Company will be
42
required to sell the security, the Company will evaluate whether any impairment is attributable to credit-related factors.
Such evaluation includes consideration of factors such as:
•Failure of the issuer of the security to make scheduled interest or principal payment;
•Downgrades in the security’s credit rating since acquisition by three or more notches;
•Adverse conditions specifically related to the security, an industry, or geographic area;
•Changes in the financial condition of the issuer of the security; and
•The payment structure of the security and the likelihood of the issuer being able to make payments that increase in
the future.
Upon determination of a credit-related impairment, an allowance for credit losses will be recognized and is measured as the
amount by which the security’s amortized cost basis exceeds the entity’s best estimate of the present value of cash flows
expected to be collected. The allowance is limited to the difference between the amortized cost basis and the security’s fair
value. Subsequent recovery of any previously recorded impairment will be recognized through reversal of the allowance
for credit losses.
Deferred income taxes
We account for taxes under the asset and liability method, under which we record deferred income taxes as assets or
liabilities on our balance sheet to reflect the net tax effect of the temporary differences between the carrying amount of
assets and liabilities for financial reporting purposes and their respective tax bases. We recognize deferred tax assets and
liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax
rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences.
Should a change in tax rates occur, we recognize the effect on deferred tax assets and liabilities in operations in the period
that includes the enactment date. Realization of our deferred income tax assets depends upon our generation of sufficient
future taxable income.
We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would
more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold,
the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood
of being realized upon ultimate settlement with the relevant taxing authority. The amount of income tax expense or benefit
recorded in future periods will depend on the jurisdictions in which we operate and the tax laws and regulations in effect.
The Company is subject to payment of U.S. federal and state income taxes as a corporation.
Recent Accounting Pronouncements
We currently qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the
JOBS Act. Accordingly, we are provided the option to adopt new or revised accounting guidance either (i) within the same
periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private
companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not be required to
adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other
public companies.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which we have total
annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the
date of the completion of our IPO; (iii) the date on which we have issued more than $1 billion in nonconvertible debt
during the previous three years; and (iv) the date on which we are deemed to be a large accelerated filer under the rules of
the SEC.
See Note 2 – “Significant Accounting Policies” in our notes to the consolidated financial statements.
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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.
As of March 31, 2026, and December 31, 2025, 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 our fixed income portfolio at AIIC was 2.09 years and 1.31 years at March 31,
2026 and 2025, respectively, and 2.09 years at December 31, 2025. As of March 31, 2026, the estimated weighted-average
credit quality rating of the fixed income portfolio was AA-.
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
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 portfolios 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.
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 March 31, 2026, our disclosure controls and procedures were effective.
44
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
45
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which we are a party or of which any of our property is the subject.
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
There were no material changes to the risk factors disclosed in Part I, Item 1A “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2025. For more information concerning our risk factors, please see Part I,
Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
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 March 31, 2026 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 has 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.
Issuer Purchases of Equity Securities
There were no repurchases of our Common Stock during the three months ended March 31, 2026.
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
as defined in Item 408(a) of Regulation S-K (the “Ritchie 10b5-1 Plan”) that is intended to satisfy the affirmative defense
conditions of Exchange Act Rule 10b5-1(c). The Ritchie 10b5-1 Plan provides for the sale of up to 775,000 shares of
Common Stock pursuant to one or more limit orders from June 11, 2026 until December 10, 2027 , subject to earlier
termination in accordance with the terms of the Ritchie 10b5-1 Plan and applicable laws, rules and regulations.
46
Item 408(a) of Regulation S-K), during the quarter ended March 31, 2026.
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 SEC 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 SEC 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 SEC on June 10, 2025). | |
10.1+ | Employment Agreement, dated April 6, 2026, by and between the Company and Brian Foley (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2026). | |
10.2 | General Release and Consulting Agreement, dated April 6, 2026, by and between the Company and Ben Lurie (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2026). | |
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.
47
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: May 14, 2026 | By: | /s/ Robert Ritchie |
Robert Ritchie | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: May 14, 2026 | By: | /s/ Brian Foley |
Brian Foley | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Date: May 14, 2026 | By: | /s/ Steve Biggs |
Steve Biggs | ||
Chief Accounting Officer | ||
(Principal Accounting Officer) | ||