Ategrity Specialty Q3 earnings fall to $0.29 a share
Nine-month revenue and net income attributable to stockholders were higher year over year, while third-quarter diluted earnings per share was lower.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Ategrity Specialty Insurance Company Holdings reported third-quarter and nine-month 2026 financial results.
For the three months ended September 30, total revenue was $125.6 million versus $116.1 million in 2025, while net income attributable to stockholders was $14.6 million versus $22.7 million; diluted earnings per share were $0.29 versus $0.45. Net earned premiums were $127.1 million versus $93.7 million, and net realized and unrealized investment results were a $17.2 million loss versus a $9.2 million gain.
For the nine months, total revenue was $403.0 million versus $301.0 million, net income attributable to stockholders was $73.5 million versus $48.7 million, and operating cash flow was $154.7 million versus $91.9 million. As of September 30, 2026, fixed-maturity securities in an unrealized-loss position had a fair value of $671.5 million and gross unrealized losses of $23.8 million; the company reported no impairment losses and said it did not intend to sell these securities, nor was it more likely than not it would be required to sell them, before recovery of amortized cost. Under a share repurchase program authorizing up to $50.0 million, the company repurchased 142,686 shares for $2.8 million at an average price of $19.87; $47.2 million remained available as of September 30, 2026, and no shares were repurchased in the third quarter.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month revenue: $403.0 million vs. $301.0 million.
- Moderate pointNine-month net income attributable to stockholders: $73.5 million vs. $48.7 million.
Negative
- Moderate pointThird-quarter net income attributable to stockholders: $14.6 million vs. $22.7 million.
Filing Explained
At September 30, 1,454,752 warrants and 4,389,002 options were outstanding, not issued shares; any added shares depend on exercise.
At September 30, 2026, 1,454,752 warrants remained outstanding and unexercised; they give holders the right to buy common shares, so exercise would increase the share count and reduce existing holders’ percentage ownership.
The warrants were exercisable from
Separately, 4,389,002 non-qualified options were outstanding at September 30, 2026, at a weighted-average exercise price of
Key Figures
Total revenue: $125.6 million
Net income attributable to stockholders: $14.6 million
Diluted earnings per share: $0.29
+5 more
8 metrics
Total revenue
$125.6 million
Three months ended September 30, 2026; $116.1 million in 2025
Net income attributable to stockholders
$14.6 million
Three months ended September 30, 2026; $22.7 million in 2025
Diluted earnings per share
$0.29
Three months ended September 30, 2026; $0.45 in 2025
Total revenue
$403.0 million
Nine months ended September 30, 2026; $301.0 million in 2025
Net income attributable to stockholders
$73.5 million
Nine months ended September 30, 2026; $48.7 million in 2025
Net cash provided by operating activities
$154.7 million
Nine months ended September 30, 2026; $91.9 million in 2025
Net realized and unrealized gains (losses) on investments
$17.2 million loss
Three months ended September 30, 2026; $9.2 million gain in 2025
Shares repurchased
142,686 shares
Nine months ended September 30, 2026
Key Terms
net earned premiums, gross written premium, variable interest entity, high watermark provisions, +1 more
5 terms
variable interest entity financial
"the Utility Limited Partnership is a VIE"
A variable interest entity (VIE) is a company structure where one party controls another company’s operations and economic outcomes through contracts or special arrangements instead of owning a majority of its voting shares. For investors, VIEs matter because the controlling party’s financial results, debts and risks can appear in the controller’s reports even though ownership looks separate, so understanding VIEs helps assess true exposure, governance limits and transparency—like spotting a puppet controlled by strings rather than direct ownership.
high watermark provisions financial
"subject to high watermark provisions"
treasury stock method financial
"under the treasury stock method for diluted EPS"
A bookkeeping technique used to estimate how many additional shares would exist if all outstanding stock options, warrants and convertible securities were exercised, assuming the company uses the cash received to buy back shares at the current market price. Investors use it to calculate diluted earnings per share and to gauge potential ownership and profit dilution—like figuring out how a pie would be divided if more people claimed slices and some money was used to buy slices back.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ASIC's third-quarter revenue and earnings?
For the three months ended September 30, 2026, ASIC reported $125.6 million in total revenue and $14.6 million in net income attributable to stockholders. In the same 2025 period, total revenue was $116.1 million and net income attributable to stockholders was $22.7 million; diluted earnings per share were $0.29 and $0.45, respectively.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 10-Q
_________________________________________
(Mark One)
For the quarterly period ended September 30, 2026
OR
For the transition period from ____________ to ____________
Commission file number 001-42695
(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, including 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. x Yes o 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). x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company o Emerging growth company x
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
As of November 4, 2026, the registrant had 47,831,484 shares of common stock outstanding.
ATEGRITY SPECIALTY INSURANCE COMPANY HOLDINGS
TABLE OF CONTENTS
| Page | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | 4 | ||||||
Condensed Consolidated Balance Sheets at September 30, 2026 (Unaudited) and December 31, 2025 | 4 | |||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 | 5 | |||||||
Condensed Consolidated Statements of Changes in Stockholders’ Equity and Non-Controlling Interest (Unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 | 6 | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2026 and 2025 | 8 | |||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 9 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 36 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 54 | ||||||
Item 4. | Controls and Procedures | 55 | ||||||
PART II. OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 56 | ||||||
Item 1A. | Risk Factors | 56 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 56 | ||||||
Item 3. | Defaults Upon Senior Securities | 56 | ||||||
Item 4. | Mine Safety Disclosures | 56 | ||||||
Item 5. | Other Information | 56 | ||||||
Item 6. | Exhibits | 57 | ||||||
Signatures | 59 | |||||||
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Forward-looking statements
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies and other future conditions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. You can identify forward-looking statements herein by the use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” “believes,” “will,” “should,” “would,” “may,” and “could” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among others, statements relating to our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs, loss reserves, reinsurance, our investment portfolio, share repurchases, taxes, and other similar matters. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks, and changes in circumstances that are difficult to predict.
Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements included in this Quarterly Report as a result of various factors, including, among others:
•the intense competition for business in our industry;
•the inability to obtain reinsurance coverage at reasonable prices and on terms that adequately protect us;
•the possibility that our loss reserves may be inadequate to cover our actual losses, which could have an adverse effect on our financial condition, results of operations, and cash flows;
•the inherent uncertainty of models resulting in actual losses that are materially different than our estimates;
•a decline in the financial strength rating assigned to Ategrity Specialty Insurance Company (“Ategrity Specialty”) or to Ategrity Specialty Insurance Limited (“Ategrity Limited”) adversely affecting the amount of business we write;
•our reliance on a select group of brokers;
•unexpected changes in the interpretation of our coverage or provisions;
•adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity resulting in the sale of fewer policies than expected, or an increase in frequency or severity of claims and premium defaults, or both, affecting our growth and profitability;
•the performance of our investment portfolio adversely affecting our financial results;
•the potential loss of one or more key executives or an inability to attract and retain qualified personnel adversely affecting our results of operations;
•the failure of any of the loss limitations or exclusions we employ, or change in other claims or coverage issues, having a material adverse effect on our financial condition or results of operations;
•extensive regulation adversely affecting our ability to achieve our business objectives or the failure to comply with these regulations adversely affecting our financial condition and results of operations;
•the effects of litigation having an adverse effect on our business;
•the inability to manage our growth effectively;
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•the ability to pay dividends and other distributions and service our debt obligations being dependent on our ability to obtain cash dividends or other permitted payments from Ategrity Specialty;
•being forced to sell investments to meet our liquidity requirements;
•our underwriters and other associates taking excessive risks;
•the possibility that severe weather conditions and other catastrophes may result in an increase in the number and amount of claims filed against us;
•the ability of Zimmer Financial Services Group LLC (“ZFSG”) and its affiliates to exert significant influence over us and our corporate decisions;
•the failure to maintain effective internal controls in accordance with the Sarbanes-Oxley Act; and
•other risks and uncertainties discussed in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (our “2025 Form 10-K”) and elsewhere herein.
Accordingly, you should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect.
Forward-looking statements speak only as of the date they are made. Except as expressly required under federal securities laws and the rules and regulations of the SEC, we do not have any obligation, and do not undertake, to update any forward-looking statement, whether as a result of new information, future events, or otherwise. You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.
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Table of Contents
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Ategrity Specialty Insurance Company Holdings and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
See accompanying Notes to the Condensed Consolidated Financial Statements.
| September 30, 2026 | December 31, 2025 | ||||||||||
(in thousands, except share and par value data) | |||||||||||
| Assets: | |||||||||||
Fixed-maturity securities available-for-sale, at fair value (amortized cost: $ | $ | $ | |||||||||
Utility & Infrastructure Investments, at fair value (cost of $ | |||||||||||
| Short-term investments | |||||||||||
| Loans to affiliates | |||||||||||
| Other invested assets | |||||||||||
| Total invested assets | |||||||||||
| Cash and cash equivalents | |||||||||||
| Investment income due and accrued | |||||||||||
Premiums receivable, net of allowance for credit losses of $ | |||||||||||
| Deferred policy acquisition costs, net of ceding commissions | |||||||||||
| Prepaid reinsurance premiums | |||||||||||
| Income tax receivable | |||||||||||
| Deferred income tax asset, net | |||||||||||
Reinsurance recoverable, net of allowance for credit losses of $ | |||||||||||
| Ceded unearned premiums | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities, stockholders' equity and non-controlling interest: | |||||||||||
| Liabilities: | |||||||||||
| Reserves for unpaid losses and loss adjustment expenses | |||||||||||
| Unearned premiums | |||||||||||
| Payable to reinsurers | |||||||||||
| Accounts payable and accrued expenses | |||||||||||
| Funds held under reinsurance treaties | |||||||||||
| Income tax payable | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Stockholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
Treasury stock, at cost ( | ( | ||||||||||
| Total stockholders' equity | |||||||||||
| Non-controlling interest - General Partner | |||||||||||
| Total stockholders' equity and non-controlling interest | |||||||||||
| Total liabilities, stockholders' equity and non-controlling interest | $ | $ | |||||||||
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Gross written premiums | $ | $ | $ | $ | |||||||||||||||||||
| Ceded written premiums | ( | ( | ( | ( | |||||||||||||||||||
| Net written premiums | |||||||||||||||||||||||
| Change in unearned premiums | ( | ( | ( | ( | |||||||||||||||||||
| Net earned premiums | |||||||||||||||||||||||
| Fee income | |||||||||||||||||||||||
| Net investment income | |||||||||||||||||||||||
| Net realized and unrealized gains (losses) on investments | ( | ||||||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Losses and loss adjustment expenses | |||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income (loss) attributable to non-controlling interest - General Partner | ( | ||||||||||||||||||||||
| Net income attributable to stockholders | |||||||||||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Unrealized gains (losses), net of taxes | ( | ( | |||||||||||||||||||||
| Total comprehensive income (loss) attributable to stockholders | $ | ( | $ | $ | $ | ||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity and Non-Controlling Interest (Unaudited)
| Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Accumulated Other Compre- hensive Income (Loss) | Treasury Stock, at Cost | Total Stock- holders' Equity | Non-Controlling Interest | Total Stockholders' Equity and Non-Controlling Interest | ||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except share data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock acquired - share repurchase program | ( | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock reissued related to share-based compensation | — | ( | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity
and Non-Controlling Interest, Continued (Unaudited)
| Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Accumulated Other Compre- hensive Income (Loss) | Treasury Stock, at Cost | Total Stock- holders' Equity | Non-Controlling Interest | Total Stockholders' Equity and Non-Controlling Interest | |||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of taxes | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from issuance of common stock in initial public offering (IPO), net | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pre-IPO issuances of common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under share-based compensation plan | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of taxes | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| INVESTING ACTIVITIES | |||||||||||
| Purchase of fixed-maturity securities, available-for-sale | ( | ( | |||||||||
| Proceeds from sale of fixed-maturity securities, available-for-sale | |||||||||||
| Proceeds from maturities and redemptions of fixed-maturity securities, available-for-sale | |||||||||||
| Purchases of Utility & Infrastructure Investments | ( | ( | |||||||||
| Proceeds from redemptions of Utility & Infrastructure Investments | |||||||||||
| Change in short-term investments, net | ( | ||||||||||
| Loans to affiliates | ( | ||||||||||
| Purchase of other invested assets | ( | ||||||||||
| Proceeds from redemption of other invested assets | |||||||||||
| Change in due to/from broker | ( | ||||||||||
Purchase of property and equipment | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Proceeds from issuance of common shares, net | |||||||||||
| Payments of initial public offering costs | ( | ||||||||||
| Capital contributions | |||||||||||
| Payments for share repurchases | ( | ||||||||||
| Treasury stock acquired - share repurchase program | ( | ||||||||||
| Capital distribution | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, at beginning of period | |||||||||||
| Cash and cash equivalents, at end of period | $ | $ | |||||||||
| Supplementary cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid (received) for taxes | $ | $ | |||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Organization
Ategrity Specialty Insurance Company Holdings (the “Company”), formerly Ategrity Specialty Holdings LLC, converted from a Delaware limited liability company to a Nevada corporation (the “Corporate Conversion”) concurrent with its initial public offering (“IPO”) on June 11, 2025. The Company, which formed in 2017 and commenced operations in 2018, is an insurance holding company and conducts its operations principally through its wholly owned subsidiaries providing excess and surplus lines insurance and reinsurance products. The Company is majority owned by Zimmer Financial Services Group LLC (“ZFSG”), a financial services holding company with operations in the insurance and asset management industries. The following are the Company’s operating subsidiaries:
•Ategrity Specialty Insurance Company (“Ategrity Specialty”), which is registered in Delaware and organized for the purpose of writing excess and surplus lines insurance on a non-admitted basis in the United States.
•Ategrity Specialty Insurance Limited (“Ategrity Limited”) was incorporated under the laws of Bermuda (owned through Ategrity Specialty Holdings Limited, an intermediate holding company domiciled in Bermuda) for the sole purpose of providing quota-share reinsurance to Ategrity Specialty.
2. Summary of Significant Accounting Policies
Basis of Presentation
Principles of Consolidation
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
Reclassifications and Statement of Cash Flows Presentation
Certain prior period amounts have been reclassified to conform to the current period’s presentation. Beginning in the first quarter of 2026, the Company refined the presentation of certain investment-related cash flows within investing activities in the condensed consolidated statements of cash flows. Prior period amounts have been reclassified to conform to the current-period presentation. The reclassification had no impact on net cash provided by operating activities, net cash used in investing activities, net cash provided by financing activities, net change in cash and cash equivalents, net income, total assets, total liabilities or total stockholders’ equity.
Reverse Stock Split and Corporate Conversion
On June 10, 2025, in connection with its initial public offering, the Company completed its corporate conversion from a Delaware limited liability company to a Nevada corporation and effected a 1-for-10.66 reverse stock split of its outstanding member units. The Corporate Conversion was accounted for as a recapitalization. All common share and per-share amounts presented for prior periods have been retroactively adjusted to reflect the Corporate Conversion and Reverse Stock Split.
Estimates and Assumptions
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Management makes estimates and assumptions that include, but are not limited to, reserves for unpaid losses and loss adjustment expenses, fair value of financial assets and liabilities, allowance for credit losses, and income taxes.
Recent Accounting Pronouncements
The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Company has elected 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.
Accounting Standard Updates Recently Adopted
The Company has not adopted any new accounting standards during the three and nine months ended September 30, 2026.
Accounting Standard Updates Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. The guidance is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the effect of the guidance on its consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40). The standard eliminates the previous stage-based model for capitalization, introduces a “probable-to-complete” threshold that defers capitalization if significant development uncertainty exists, and aligns disclosure requirements with those for software developed for external use, as described in
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
ASC 360-10, Property, Plant and Equipment. The ASU also supersedes ASC 350-50, Website Development Costs, unifying all internally developed technology, whether labeled “software” or “website”, under a single framework. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those years, with early adoption permitted. The Company is currently assessing the potential impact of the guidance on its consolidated financial statements and disclosures.
3. Consolidated Variable Interest Entity
The Company is party to the Amended and Restated Limited Partnership Agreement of the Utility Limited Partnership, which formed on March 19, 2018 under the laws of the State of Delaware and commenced operations on April 1, 2018. The Utility Limited Partnership operates as a feeder fund that invests substantially all of its assets in the Absolute Return Utility & Infrastructure Fund, an exempted company incorporated in the Cayman Islands.
Zimmer Partners, LP (the “Investment Manager”), a Delaware limited partnership and a related party, is the investment manager of the Absolute Return Utility & Infrastructure Fund and the Utility Limited Partnership. The Investment Manager is registered with the United States Securities and Exchange Commission as a registered investment advisor under the Investment Advisers Act of 1940.
ZP Utility Insurance GP, LLC, a Delaware limited liability company and a related party, is the general partner of the Utility Limited Partnership (the “Utility General Partner”) and is responsible for the investment decisions of the Utility Limited Partnership. The Utility General Partner owned less than 2 % and 1 % of the Utility Limited Partnership as of September 30, 2026 and December 31, 2025, respectively.
The Company performed an assessment of all relevant facts and circumstances and determined that the Utility Limited Partnership is a VIE as the equity holders as a group lack the characteristics of a controlling financial interest and that substantially all of the activities of the VIE are conducted on behalf of the Company. As a result, the Company concluded that it is the primary beneficiary of the Utility Limited Partnership.
The Company consolidates the Utility Limited Partnership as its primary beneficiary, meeting both the “power” and “benefits” criteria associated with VIE accounting guidance. Non-controlling interests in the condensed consolidated statement of operations and comprehensive income for the three and nine months ended September 30, 2026 and 2025 represent the ownership interests in the consolidated VIE held by Utility General Partner. The assets of the consolidated VIE may only be used to settle obligations of the same VIE. In addition, there is no recourse to the Company for the consolidated VIE’s liabilities.
On March 31, 2025, the Company redeemed $97.2 million from the Utility Limited Partnership.
During the nine months ended September 30, 2026, the Company, through Ategrity Limited, made additional investments in the Utility Limited Partnership totaling $20.0 million, consisting of $10.0
The carrying amounts of the assets and liabilities of the Utility Limited Partnership consolidated VIE included in the Company’s condensed consolidated balance sheets are as follows:
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Assets | |||||||||||
| Cash | $ | $ | |||||||||
| Investments in the Absolute Return Utility & Infrastructure Fund, at fair value | |||||||||||
Investment in affiliated fund, at fair value (cost of $ | |||||||||||
| Due from the Absolute Return Utility & Infrastructure Fund | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and partners' capital | |||||||||||
| Liabilities: | |||||||||||
| Withdrawals payable | |||||||||||
| Accrued expenses and other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Partners' capital: | |||||||||||
| Limited partners | |||||||||||
| General partner | |||||||||||
| Total partners' capital: | |||||||||||
| Total liabilities and partners' capital | $ | $ | |||||||||
4. Investments
Fixed-Maturity Securities, Available-for-Sale
The Company considers all fixed-maturity securities to be available-for-sale and reports them at fair value with the net unrealized gains or losses reported (after-tax) as a component of accumulated other comprehensive income. The proceeds from sales of securities were $89.3 million and $251.2 million for the three and nine months ended September 30, 2026, and $33.4 million and $323.6 million for the three and nine months ended September 30, 2025, respectively. Gross gains of $0.6 million and $2.0 million, and gross losses of $0.5 million and $0.9 million were realized on sales of available-for-sale securities during the three and nine months ended September 30, 2026, respectively. Gross gains of $0.1 million and $6.5 million, and gross losses of $0.2
The Company’s fixed-maturity securities, available-for-sale as of September 30, 2026 and December 31, 2025, are summarized as follows:
| Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | ||||||||||||||||||||
| September 30, 2026 | (in thousands) | ||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | $ | $ | $ | ( | $ | ||||||||||||||||||
| Corporate | ( | ||||||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | $ | $ | $ | ( | $ | ||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | ||||||||||||||||||||
| December 31, 2025 | (in thousands) | ||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government | $ | $ | $ | $ | |||||||||||||||||||
| Corporate | ( | ||||||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | $ | $ | $ | ( | $ | ||||||||||||||||||
Contractual Maturities of Available-for-Sale Fixed-Maturity Securities
The amortized cost and fair value of fixed-maturity securities, available-for-sale as of September 30, 2026, categorized by contractual maturity, are summarized as follows:
| Amortized Cost | Fair Value | ||||||||||
| September 30, 2026 | (in thousands) | ||||||||||
| Due in one year or less | $ | $ | |||||||||
| Due after one year through five years | |||||||||||
| Due after five years through ten years | |||||||||||
| Due after ten years | |||||||||||
| Total fixed-maturity securities, available-for-sale | $ | $ | |||||||||
Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
Fixed-Maturity Securities, Available-for-Sale, in a Loss Position
The following table shows the Company’s gross unrealized losses and fair value for available-for-sale securities aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
| Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Gross Unrealized (Losses) | Fair Value | Gross Unrealized (Losses) | Fair Value | Gross Unrealized (Losses) | ||||||||||||||||||||||||||||||
| September 30, 2026 | (in thousands) | ||||||||||||||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations guaranteed by the U.S. government | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Corporate | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Gross Unrealized (Losses) | Fair Value | Gross Unrealized (Losses) | Fair Value | Gross Unrealized (Losses) | ||||||||||||||||||||||||||||||
| December 31, 2025 | (in thousands) | ||||||||||||||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||||||||||||||
| Corporate | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
As of September 30, 2026, the Company held securities of eighty-three issuers that were in an unrealized loss position with a total fair value of $671.5 million, and gross unrealized losses of $23.8 million. None of the fixed-maturity securities with unrealized losses has ever missed, or been delinquent on, a scheduled principal or interest payment date.
Impairment of Available-for-Sale Securities
The Company performs a periodic assessment of its available-for-sale portfolio to determine if there is a decline in the fair value below the amortized cost basis and if the decline is due to credit-related factors or noncredit-related factors (i.e., changes in market-based interest rates). The Company considers several factors in completing its review of potential credit losses, including the extent to which a security’s fair value has been below cost and the financial condition of the issuer. In addition to specific issuer information, the Company also evaluates the current market and interest rate environment. Generally, a change in a security’s value caused by a change in the market or interest rate environment does not constitute a credit loss.
During the three and nine months ended September 30, 2026, the Company did not recognize any impairment losses or write off any accrued interest receivable related to its available-for-sale fixed-maturity securities.
For all available-for-sale securities in an unrealized loss position as of September 30, 2026, the Company does not intend to sell, and it is not “more likely than not” that the Company will be required to sell these securities before recovery of their amortized cost basis.
Net Investment Income
The major categories of the Company’s net investment income for the three and nine months ended September 30, 2026 and 2025, are summarized as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
Fixed-maturity securities, available-for-sale | $ | $ | $ | $ | |||||||||||||||||||
| Utility & Infrastructure Investments | |||||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| Loans to affiliates | |||||||||||||||||||||||
| Cash equivalents | |||||||||||||||||||||||
| Equity Securities | |||||||||||||||||||||||
| Gross investment income | |||||||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
Management fees (1) | ( | ( | ( | ( | |||||||||||||||||||
Other expenses (1) | ( | ( | ( | ( | |||||||||||||||||||
| Net investment income | $ | $ | $ | $ | |||||||||||||||||||
(1)Amounts related to investment activity.
Net Realized and Unrealized Gains (Losses)
The following table summarizes the Company’s change in net unrealized gains (losses) on available-for-sale fixed-maturity securities for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||
Change in net unrealized gains (losses) | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Total | $ | ( | $ | $ | ( | $ | |||||||||||||||||
The following table presents realized and unrealized gains (losses) on investments for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Gross realized gains: | |||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale | $ | $ | $ | $ | |||||||||||||||||||
| Utility & Infrastructure Investments | |||||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| Equity Securities | |||||||||||||||||||||||
| Securities sold, not yet purchased | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
| Gross realized (losses): | |||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale | ( | ( | ( | ( | |||||||||||||||||||
| Utility & Infrastructure Investments | ( | ( | ( | ( | |||||||||||||||||||
| Short-term investments | ( | ( | ( | ||||||||||||||||||||
| Total | ( | ( | ( | ( | |||||||||||||||||||
| Net unrealized gains (losses) on investments: | |||||||||||||||||||||||
| Utility & Infrastructure Investments | ( | ( | ( | ( | |||||||||||||||||||
| Equity securities | ( | ||||||||||||||||||||||
| Total | ( | ( | ( | ( | |||||||||||||||||||
| Net realized and unrealized gains (losses) | $ | ( | $ | $ | $ | ||||||||||||||||||
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
Utility & Infrastructure Investments
The assets recognized in the Company’s condensed consolidated balance sheets related to the Company’s variable interests in non-consolidated VIEs as of September 30, 2026 and December 31, 2025, are summarized as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Cost | Net Unrealized Gains (Losses) | Fair Value | Cost | Net Unrealized Gains (Losses) | Fair Value | ||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Absolute Return Utility & Infrastructure Fund | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| MidCap Limited Partnership | |||||||||||||||||||||||||||||||||||
| Total Utility & Infrastructure Investments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Absolute Return Utility & Infrastructure Fund
The Company measures its investment in the Absolute Return Utility & Infrastructure Fund at fair value using NAV as a practical expedient. This amount represents the Company’s maximum exposure to loss related to the unconsolidated VIE. The Absolute Return Utility & Infrastructure Fund is the master within a “master-feeder” fund structure whereby its current shareholders, Utility Limited Partnership and two other feeder funds (collectively, the “Feeder Funds”), invest substantially all their capital in the Absolute Return Utility & Infrastructure Fund.
The Absolute Return Utility & Infrastructure Fund’s investment objective is to employ an energy and infrastructure-focused long/short strategy which seeks to deliver absolute returns in all market conditions with minimal correlation to energy sector indices and broader market indices. The Absolute Return Utility & Infrastructure Fund invests primarily in the equities of electric and gas utilities, integrated utilities, water utilities, telecommunication companies, independent power producers and pipelines, exploration and production companies, oilfield service companies and more broadly in energy and infrastructure-related industries (such as chemicals, materials, transportation infrastructure and real estate equities). The Absolute Return Utility & Infrastructure Fund’s portfolio is generally managed to be balanced.
The Company performed an assessment of all relevant facts and circumstances and determined that the Absolute Return Utility & Infrastructure Fund is a VIE. The Company concluded that it is not the primary beneficiary of the VIE because the investment manager controls the significant activities of the Absolute Return Utility & Infrastructure Fund.
The Absolute Return Utility & Infrastructure Fund measures its investments, which consist primarily of equities, and its derivative activities, which relate to swap contracts, foreign currency forward contracts and option contracts, at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As the majority of the Absolute Return Utility & Infrastructure Fund’s investments are exchange-traded securities, such securities are reported at fair value.
The following table summarizes certain investments of the Absolute Return Utility & Infrastructure Fund where the Utility Limited Partnership’s proportionate share of the fair value of the classes of investment represents more than 10% of the Company’s stockholders’ equity as of September 30, 2026 and December 31, 2025:
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Investment in securities | Cost (1) | Fair Value (1) | Percentage of Stockholders' Equity | |||||||||||||||||
| September 30, 2026 | (in thousands) | |||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Total common stock | $ | $ | % | |||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Total common stock | $ | ( | $ | ( | ( | % | ||||||||||||||
(1)Values represent the Company’s proportionate share of the Absolute Return Utility & Infrastructure Fund’s total holdings.
| Investment in securities | Cost (1) | Fair Value (1) | Percentage of Stockholders' Equity | |||||||||||||||||
| December 31, 2025 | (in thousands) | |||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Total common stock | $ | $ | % | |||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Total common stock | $ | ( | $ | ( | ( | % | ||||||||||||||
(1)Values represent the Company’s proportionate share of the Absolute Return Utility & Infrastructure Fund’s total holdings.
There were no investments of the Absolute Return Utility & Infrastructure Fund where the Utility Limited Partnership’s proportionate share of the fair value of certain investments represents more than 5% of the Company’s stockholders’ equity as of September 30, 2026 and December 31, 2025.
Effective April 1, 2018, under the Investment Management Agreement, dated April 1, 2018, between the Utility Limited Partnership and the Investment Manager, the Investment Manager is paid a quarterly fixed fee computed at an annual rate of 2.0 % (i.e., 0.5 % per quarter) of the balance of each limited partner’s capital account (the “Fixed Fee”). The Fixed Fee was $1.1 million and $3.0 million for the three and nine months ended September 30, 2026 and $0.8
Under the terms of the revised Utility Limited Partnership Agreement of ZP Utility Insurance Fund, L.P., the Utility General Partner is entitled to an incentive allocation equal to 20 % of the Utility Limited Partnership’s net profits, subject to high watermark provisions, and adjusted for withdrawals (the “Incentive Allocation”). The Incentive Allocation is credited as of the end of the fiscal year to the Capital Account of the Utility General Partner. The Incentive Allocation was a reversal of $3.5 million for the three months ended September 30, 2026 and an allocation of $1.9 million for the nine months ended September 30, 2026, and an allocation of $0.9
The Utility Limited Partnership has a quarterly liquidity option, subject to specific conditions, which are as follows:
•to the extent it is required to pay insurance claims
•to the extent it is required to pay for reasonable operating expenses
•in the event the Company receives a notification from A.M. Best, or
•to the extent the Company is required to diversify its assets pursuant to a law, order or regulation.
The Utility General Partner may withdraw all or a portion of its capital account at any time.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
MidCap Limited Partnership
On January 1, 2025, the Company entered into the Amended and Restated Limited Partnership Agreement with the MidCap Limited Partnership with an initial investment of $10 million. The MidCap Limited Partnership operates as a feeder fund in a “master-feeder” structure, in which the MidCap Limited Partnership invests substantially all of its assets in the ZP Master MidCap Fund, Ltd. (“MidCap Fund”).
ZP MidCap GP, LLC (the “MidCap General Partner”), an affiliate of ZFSG, is the general partner of the MidCap Limited Partnership and is responsible for the investment decisions of the MidCap Limited Partnership, including the appointment of the investment manager of the MidCap Limited Partnership. The Investment Manager is also the investment manager of the MidCap Fund and the MidCap Limited Partnership.
The Company performed an assessment of all relevant facts and circumstances and determined that the MidCap Limited Partnership is a VIE. The Company concluded that it is not the primary beneficiary of the VIE because the investment manager controls the significant activities of the MidCap Fund and MidCap Limited Partnership.
The Company measures its investment in the MidCap Limited Partnership at fair value using the reported net asset value (“NAV”) as a practical expedient in accordance with ASC 820, Fair Value Measurement. The carrying amount of the investment represents the Company’s maximum exposure to loss related to the unconsolidated VIE.
Loans to Affiliates
The Company entered into technology transactions (the “Technology Transactions”) effective January 1, 2023, with ZFSG and Zimmer Technology Group, LLC (“ZTG”), a wholly owned subsidiary of ZFSG, governing the sale, licensing and services related to certain technology assets developed and owned by the Company. As part of the Technology Transactions, ZTG acquired the assets for a purchase price of $13.5 million paid in the form of a promissory note (the “Promissory Note”) issued by ZFSG bearing interest at 7.42 % per annum with a maturity date of December 31, 2029. The Company received a principal repayment of $0 and $1.0 million during the three months ended September 30, 2026 and 2025, respectively. The unpaid principal balance was $12.5
In connection with the Company’s redemption on March 31, 2025 from its investment in the Utility Limited Partnership, effective April 1, 2025, the Company executed: (a) a Loan Agreement with a principal amount of $94.0 million, with Zimmer Insurance Services, LLC (“ZIS”), a wholly owned subsidiary of ZFSG (the “ZIS Loan”), as the borrower; and (b) a Guarantee and Pledge Agreement with ZFSG. The ZIS Loan provides for a fixed interest rate of 5.5 %, payable annually in cash and matures on April 30, 2032. The Company carries the ZIS Loan at its unpaid principal balance.
See Note 21, Related Party Transactions, for interest income and accrued interest receivable related to these investments.
Insurance – Statutory Deposits
The Company had invested assets with a carrying value of $0.1
5. Fair Value Measurements
Three levels of inputs are used to measure fair value of financial instruments: (1) Level 1: quoted price (unadjusted) in active markets for identical assets, (2) Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or
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Notes to Condensed Consolidated Financial Statements (Unaudited)
liability, either directly or indirectly, for substantially the full term of the instrument and (3) Level 3: inputs to the valuation methodology are unobservable for the asset or liability.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.
To measure fair value, the Company obtains prices for its investment securities from independent pricing services and other observable market inputs through third-party service providers. When quoted market prices for identical securities in active markets are not available, the Company uses observable inputs such as quoted prices of similar securities and evaluated pricing. The values for all fixed-maturity securities (consisting of U.S. Treasury securities and corporate securities) and equity securities generally incorporate significant Level 2 inputs using the market approach and income approach valuation techniques. The Company did not have any instruments classified within Level 3 measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025. There have been no changes in the Company’s use of valuation techniques since commencement of operations.
The Company reviews fair value prices obtained through third-party service providers for reasonableness and monitors changes in unrealized gains and losses. The Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the independent pricing services, and controls are in place to validate that prices provided represent fair values. The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy and obtaining and reviewing internal control reports for relevant third-party service providers involved in the pricing process.
Financial instruments measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025, are summarized below by level within the fair value hierarchy.
| Fair Value Measurements Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| September 30, 2026 | (in thousands) | ||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||
| U.S. Treasury securities and obligations guaranteed by the U.S. Government | $ | $ | $ | $ | |||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Fair Value Measurements Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| December 31, 2025 | (in thousands) | ||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Fixed-maturity securities, available-for-sale: | |||||||||||||||||||||||
| U.S. Treasury securities and obligations guaranteed by the U.S. Government | $ | $ | $ | $ | |||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Total fixed-maturity securities, available-for-sale | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
The fair values of cash and cash equivalents and short-term investments approximate their carrying values due to their short-term maturities. Investments measured using net asset value (“NAV”) as a practical expedient are not classified within the fair value hierarchy and are described in Note 4, Investments – Utility & Infrastructure Investments.
There were no transfers into or out of Level 3 during the three and nine months ended September 30, 2026 and 2025.
The Company did not have any material assets or liabilities measured at fair value on a nonrecurring basis as of September 30, 2026 and December 31, 2025.
6. Premiums Receivable, Net
Premiums receivable are carried at face value, net of any allowance for credit losses. The allowance for credit losses represents an estimate of amounts considered uncollectible based on the Company’s assessment of the collectability of receivables. The estimate considers historical collection data, current economic conditions and expectations of future conditions that could affect ultimate collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
The following table presents the rollforward of the allowance for credit losses for premiums receivable for the three and nine months ended September 30, 2026 and 2025.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Current period change for estimated uncollectible premiums | |||||||||||||||||||||||
| Net write-offs | ( | ( | ( | ( | |||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
7. Deferred Policy Acquisition Costs
The following table presents the amounts of policy acquisition costs deferred and amortized for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Policy acquisition costs deferred: | |||||||||||||||||||||||
| Direct commissions | |||||||||||||||||||||||
| Ceded commissions | ( | ( | ( | ( | |||||||||||||||||||
| Underwriting and other insurance expenses | |||||||||||||||||||||||
| Amortization of policy acquisition costs | ( | ( | ( | ( | |||||||||||||||||||
| Net change | |||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Amortization of policy acquisition costs is included in underwriting, acquisition and insurance expenses in the accompanying condensed consolidated statements of operations and comprehensive income.
8. Underwriting, Acquisition and Insurance Expenses
Underwriting, acquisition and insurance expenses for the three and nine months ended September 30, 2026 and 2025, include the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Policy acquisition costs | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Total underwriting, acquisition and insurance expenses | $ | $ | $ | $ | |||||||||||||||||||
9. Property and Equipment, Net
Property and equipment net, which is included in other assets in the condensed consolidated balance sheets, was $8.8 million and $6.7 million as of September 30, 2026 and December 31, 2025, respectively.
During the three and nine months ended September 30, 2026, the Company capitalized approximately $1.2 million and $2.9 million of costs related to software, respectively. Depreciation expense on property and equipment was $333 thousand and $903 thousand for the three and nine months ended September 30, 2026, respectively, and $110 thousand and $407 thousand for the three and nine months ended September 30, 2025, respectively. No
10. Leases
The Company’s leases consist of one operating lease on its office space in Scottsdale, Arizona that expires in 2028 and is subject to a renewal option at market rates prevailing at the time of renewal. The Company became a sublessor of the same office space when it entered into a sublease agreement effective July 1, 2022 with ZFSG. The base rent under the sublease is equal to that which the Company pays under the head lease and the lease terms are coterminous. The Company remains the primary obligor under the head lease.
The Company applies the portion of the straight-line sublease income that is equal to its head lease expense as a contra expense to head lease expense in underwriting, acquisition and insurance expenses and records the remainder in other income.
The following tables summarize the details and balances associated with the Company’s operating lease balances and lease cost, including sublease income:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Lease Balances: | |||||||||||
| $ | $ | ||||||||||
| ( | ( | ||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Lease Cost: | |||||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Sublease income | ( | ( | ( | ( | |||||||||||||||||||
| Net lease (income) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| Weighted-average remaining lease term — operating leases | |||||||||||
| Weighted-average discount rate — operating leases | % | % | |||||||||
Cash paid for amounts included in the measurement of operating lease liabilities was $573 thousand and $559 thousand for the nine months ended September 30, 2026 and 2025, respectively. These amounts represent gross cash payments under the head lease and are not reduced by cash receipts under the related sublease. Because the base rent under the sublease is equal to the base rent payable by the Company under the head lease and the lease terms are coterminous, cash receipts under the sublease are expected to offset cash payments under the head lease.
Future minimum lease payments under the operating lease as of September 30, 2026 are expected to be as follows:
| Future Minimum Lease Payments | September 30, 2026 | |||||||
| (in thousands) | ||||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less: imputed interest | ( | |||||||
| Present value of lease liabilities | $ | |||||||
11. Reserves for Unpaid Losses and Loss Adjustment Expenses
The following table reconciles the beginning and ending reserve balances for unpaid losses and loss adjustment expenses, net of reinsurance, to the gross amounts reported in the condensed consolidated balance sheets:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Balance, beginning of period | |||||||||||
| Reserves for unpaid losses and loss adjustment expenses | $ | $ | |||||||||
| Reinsurance recoverable on unpaid losses and loss adjustment expenses | ( | ( | |||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Reserves for unpaid losses and loss adjustment expenses, net of reinsurance | |||||||||||
| Current Activity | |||||||||||
| Incurred losses and loss adjustment expenses, net of reinsurance: | |||||||||||
| Current year | |||||||||||
| Prior year | ( | ||||||||||
| Total net losses and loss adjustment expenses incurred | |||||||||||
| Payments: | |||||||||||
| Current year | ( | ( | |||||||||
| Prior year | ( | ( | |||||||||
| Total payments | ( | ( | |||||||||
| Balance, end of period | |||||||||||
| Reserves for unpaid losses and loss adjustment expenses, net of reinsurance | |||||||||||
| Reinsurance recoverable on unpaid losses and loss adjustment expenses | |||||||||||
| Reserves for unpaid losses and loss adjustment expenses, gross of reinsurance | $ | $ | |||||||||
12. Reinsurance
Written premiums, earned premiums and losses and loss adjustment expenses incurred are presented on a gross, ceded, and net basis for the three and nine months ended September 30, 2026 and 2025 in the table below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Written premiums: | |||||||||||||||||||||||
| Direct | $ | $ | $ | $ | |||||||||||||||||||
| Ceded | ( | ( | ( | ( | |||||||||||||||||||
| Net written | $ | $ | $ | $ | |||||||||||||||||||
| Earned premiums: | |||||||||||||||||||||||
| Direct | $ | $ | $ | $ | |||||||||||||||||||
| Ceded | ( | ( | ( | ( | |||||||||||||||||||
| Net earned | $ | $ | $ | $ | |||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Losses and loss adjustment expenses: | |||||||||||||||||||||||
| Direct | $ | $ | $ | $ | |||||||||||||||||||
| Ceded | ( | ( | ( | ( | |||||||||||||||||||
| Net losses and loss adjustment expenses | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2026 and December 31, 2025, the Company had reinsurance recoverables on unpaid losses of $168.9 million and $139.4 million, respectively, and reinsurance recoverables on paid losses of $18.9 million and $11.0 million, respectively. As of September 30, 2026 and December 31, 2025, prepaid reinsurance premiums totaled $0.1 million and $2.9 million, respectively.
13. Commitments and Contingent Liabilities
14. Employee Benefits
The Company is party to multi-employer savings plans (the “Savings Plans”) which qualify under Section 401(k) of the U.S. Internal Revenue Code. Participants may contribute certain percentages of their pre-tax salary to the Savings Plans subject to statutory limitations. The Company matches 100 % of employees’ contributions to the Savings Plans, up to a maximum contribution of 5 % of the participant’s earnings, subject to certain statutory limitations. For the three and nine months ended September 30, 2026, the expense associated with the Savings Plans totaled $0.3 million and $1.0 million, respectively, and $0.3 million and $0.8 million for the three and nine months ended September 30, 2025, respectively.
The Company’s employees participate in a self-insured healthcare plan sponsored by ZIS. ZIS provides insurance to the Company’s employees pursuant to such plan and certain other employee benefits. For the three and nine months ended September 30, 2026, the Company recognized expense of $0.8 million and $2.3 million, respectively, related to employee benefits provided by ZIS, including $0.7 million and $2.0 million, respectively, related to the employer portion of healthcare plan insurance premiums for the benefit of its employees. For the three and nine months ended September 30, 2025, the Company recognized expense of $0.6 million and $1.7 million, respectively, related to employee benefits provided by ZIS, including $0.5 million and $1.5 million, respectively, related to the employer portion of healthcare plan insurance premiums for the benefit of its employees.
15. Stockholders' Equity
Common Stock
As of September 30, 2026, the Company had 48,066,674 shares of common stock issued, and 47,926,928 outstanding. No shares of preferred stock were issued or outstanding as of September 30, 2026. No dividends on common stock were declared or paid during the three and nine months ended September 30, 2026.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Treasury Stock
On February 12, 2026, the Company’s Board of Directors approved a Share Repurchase Program authorizing the repurchase of up to $50.0 million of the Company’s outstanding common stock. During the nine months ended September 30, 2026, the Company repurchased 142,686 shares of its common stock for an aggregate purchase price of $2.8 million, including commissions and excluding the Stock Repurchase Excise Tax (the “Excise Tax”), all of which were purchased during the three months ended June 30, 2026. The average purchase price per share repurchased, including commissions and excluding the Excise Tax, was $19.87 . The Company did no t repurchase any shares during the three months ended September 30, 2026.
The Company recorded an estimated Excise Tax of $28 thousand related to its 2026 share repurchase activity under IRC Section 4501, Repurchase of Corporate Stock. The estimated Excise Tax reflects the applicable statutory netting of qualifying stock issuances, including the 2,940 Treasury Shares reissued upon settlement of the Director restricted stock units, as further described in Note 16, Share-based Compensation. The Excise Tax was recorded as an additional cost of Treasury Stock within stockholders’ equity, with an offsetting accrued liability. Including the estimated Excise Tax, Treasury Stock acquired under the share repurchase program was $2.9 million, as reflected in the condensed consolidated statements of changes in stockholders’ equity and non-controlling interest.
As of September 30, 2026, $47.2 million remained available for future repurchases under the program.
Repurchased shares are held as Treasury Shares and are reported in the condensed consolidated balance sheets as Treasury Stock, at cost, as a reduction of stockholders’ equity. The Treasury Shares may subsequently be reissued for general corporate purposes, including the settlement of employee and director equity awards. During the nine months ended September 30, 2026, the Company reissued 2,940 Treasury Shares, all during the three months ended June 30, 2026, upon the vesting and settlement of restricted stock units granted to three members of its Board of Directors. The reissuance reduced Treasury Stock and increased outstanding shares by 2,940 shares. No gain or loss was recognized in connection with the reissuance.
Other Capital Transactions
In January 2025, the Company issued 2,010,442 additional common shares to ZFSG, in exchange for U.S. Treasury bills of $20.0 million.
During the three months ended June 30, 2025, ZFSG made a cash contribution of $2.7 million and received 257,088 shares in connection with the repurchase of 257,088 shares from certain shareholders for an aggregate purchase price of $2.7 million. The net effect of this transaction was zero on the condensed consolidated statement of changes in stockholders’ equity and non-controlling interest.
Warrants
The Company has outstanding warrants to purchase shares of its common stock (the “Warrants”), which are classified within stockholders’ equity. As of September 30, 2026, the Warrants remained outstanding and unexercised. The Warrants became exercisable on October 21, 2024 and have a contractual term of ten years from issuance.
The Warrants consist of the following tranches:
•Tranche 1: 1,079,605 warrants with an exercise price of $31.99 per share
•Tranche 2: 375,147 warrants with an exercise price of $21.32 per share
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Notes to Condensed Consolidated Financial Statements (Unaudited)
In aggregate, the Warrants represent the right to purchase 1,454,752 shares of common stock, subject to customary anti-dilution adjustments. The Warrants may be exercised for cash or on a cashless basis, at the option of the holder. The Company determined that the Warrants are freestanding instruments indexed to its own common stock and meet the criteria for equity classification. Accordingly, the Warrants are recorded within additional paid-in capital and are not remeasured subsequent to issuance.
Pursuant to a waiver executed on August 5, 2025, effective July 1, 2025 (the “Waiver”), the Warrants are not participating securities during the period ending December 31, 2027 (the “Waiver Period”) and are considered under the treasury stock method for diluted earnings per share when dilutive.
16. Share-Based Compensation
Equity Incentive Plans
The Company’s Equity Incentive Plan (the “2019 Equity Plan”) provided for restricted units, non-qualified incentive options and other unit-based awards for directors, officers and other employees. On June 10, 2025, the Company established the 2025 Incentive Award Plan (the “2025 Equity Plan”), under which various equity-based awards may be granted to directors, officers and other employees. No additional awards may be granted under the 2019 Equity Plan after the effectiveness of the 2025 Equity Plan; however, outstanding awards granted under the 2019 Equity Plan remain subject to their existing terms.
Total share-based compensation expense recognized was $216 thousand and $657 thousand for the three and nine months ended September 30, 2026, respectively, and $268 thousand and $788 thousand for the three and nine months ended September 30, 2025, respectively. The related tax benefit recognized was $45 thousand and $138 thousand for the three and nine months ended September 30, 2026, respectively, and $56 thousand and $166 thousand for the three and nine months ended September 30, 2025, respectively.
Non-Qualified Stock Options (“NQSOs”)
NQSOs generally have contractual terms of to ten years , and vest over - or five-year service periods. Certain awards include performance conditions in addition to service conditions, including awards that vested upon completion of the Company’s IPO.
For awards subject only to service conditions, compensation cost is recognized on a straight-line basis over the requisite service period. For awards subject to both service and performance conditions, compensation cost is recognized using a graded vesting attribution method when achievement of the performance condition is considered probable.
The following table summarizes NQSO activity for the nine months ended September 30, 2026:
| Number of Options | Weighted-Average Exercise Price | ||||||||||
| Outstanding as of January 1, 2026 | $ | ||||||||||
| Granted | $ | ||||||||||
| Exercised | |||||||||||
| Expired | |||||||||||
| Forfeited | ( | $ | |||||||||
| Outstanding as of September 30, 2026 | $ | ||||||||||
The following table summarizes NQSOs outstanding and exercisable as of September 30, 2026:
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Options | Weighted‑Average Exercise Price | Weighted‑Average Remaining Term (years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||||||
| Outstanding | $ | $ | ||||||||||||||||||
| Exercisable | $ | $ | ||||||||||||||||||
The aggregate intrinsic value represents the total pre‑tax intrinsic value (the excess of the closing stock price over the exercise price) of in‑the‑money options as of September 30, 2026.
As of September 30, 2026, unrecognized compensation expense related to unvested NQSOs was $3.1 million and is expected to be recognized over a weighted-average period of 4.4 years.
Restricted Stock Units (“RSUs”)
RSUs represent the right to receive shares of the Company’s common stock upon vesting. Holders of unvested RSUs do not have voting rights and are not entitled to dividends prior to vesting. Accordingly, unvested RSUs are not considered participating securities for purposes of calculating earnings per share.
Outstanding RSUs generally vest over a three-year service period. Compensation expense is recognized on a straight-line basis over the applicable requisite service period.
Upon vesting of RSUs, the Company may settle awards using treasury shares. During the nine months ended September 30, 2026, 2,940 shares of treasury stock were reissued in connection with the settlement of vested RSUs.
The following table summarizes RSU activity for the nine months ended September 30, 2026:
| Nine Months Ended September 30, 2026 | |||||||||||
| Shares | Weighted Average Grant-Date Fair Value | ||||||||||
| Non-vested | |||||||||||
| Beginning of period | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | $ | |||||||||
| Forfeited | |||||||||||
| End of period | $ | ||||||||||
The total fair value of RSUs vested during the three and nine months ended September 30, 2026 was $0 and $50 thousand, respectively. As of September 30, 2026, unrecognized compensation expense related to unvested RSUs was $85 thousand and is expected to be recognized over the remaining vesting period.
17. Segment Reporting
The Company operates as one
The following table presents the Company’s operating results as evaluated by the CODM.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Net earned premiums | $ | $ | $ | $ | |||||||||||||||||||
| Fee income | |||||||||||||||||||||||
| Net investment income | |||||||||||||||||||||||
| Net realized and unrealized gains (losses) on investments | ( | ||||||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Losses and loss adjustment expenses | |||||||||||||||||||||||
| Policy acquisition costs | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income (loss) attributable to non-controlling interest - General Partner | ( | ||||||||||||||||||||||
| Segment net income | $ | $ | $ | $ | |||||||||||||||||||
| Reconciliation of profit or loss: | |||||||||||||||||||||||
| Adjustments and reconciling items | |||||||||||||||||||||||
| Consolidated net income attributable to stockholders | $ | $ | $ | $ | |||||||||||||||||||
The table below presents gross written premium (“GWP”) by product group for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Product Group | Amount | % of GWP | Amount | % of GWP | Amount | % of GWP | Amount | % of GWP | ||||||||||||||||||||||||||||||||||||||||||
| Casualty | $ | $ | $ | % | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Property | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Written Premium | $ | $ | $ | % | $ | |||||||||||||||||||||||||||||||||||||||||||||
All long-term assets of the Company are based in the United States and similarly, all of the Company’s revenues are derived from customers based in the United States.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
18. Earnings Per Share
The following table presents the calculation of basic and diluted EPS for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except for share and per share data) | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income attributable to stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Income allocable to participating securities | |||||||||||||||||||||||
| Net income available to stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares outstanding - basic, including participating securities | |||||||||||||||||||||||
| Weighted-average participating securities | ( | ||||||||||||||||||||||
| Weighted-average shares outstanding - basic | |||||||||||||||||||||||
| Dilutive effect of share-based compensation and warrants | |||||||||||||||||||||||
| Weighted-average shares outstanding - diluted | |||||||||||||||||||||||
| Earnings per share - basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share - diluted | $ | $ | $ | $ | |||||||||||||||||||
Common share and per-share data for prior periods have been retroactively adjusted to reflect the June 2025 reverse stock split and corporate conversion. Basic net earnings per share is computed by dividing net income available to stockholders by the weighted-average number of common shares outstanding during the period. Diluted net earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
Unvested share-based payment awards, including restricted stock units and stock options, do not have nonforfeitable rights to dividends or dividend equivalents and therefore are not considered participating securities under ASC 260, Earnings Per Share. Such awards are included in diluted earnings per share using the treasury stock method when dilutive and when applicable vesting or performance conditions have been satisfied as of the reporting date.
Effective July 1, 2025, pursuant to the Waiver described in Note 15, Stockholders’ Equity, the Company no longer allocates earnings to the Warrants under the two-class method during the Waiver Period and instead considers the Warrants under the treasury stock method for diluted EPS when dilutive.
For the three and nine months ended September 30, 2026, 407 thousand and 606 thousand NQSOs, respectively, were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive. For both the three and nine months ended September 30, 2025, 563
For the three months ended September 30, 2026, the Tranche 2 Warrants (375,147 warrants with an exercise price of $21.32 per share) were included in the calculation of diluted EPS under the treasury stock method because the average market price of the Company’s common stock for the period exceeded their exercise price. The Tranche 1 Warrants (1,079,605 warrants with an exercise price of $31.99 per share) were excluded because
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Notes to Condensed Consolidated Financial Statements (Unaudited)
their effect was anti-dilutive. For the nine months ended September 30, 2026, the incremental shares attributable to the Tranche 2 Warrants reflect the average of the incremental shares included in each quarterly computation; the Tranche 2 Warrants were anti-dilutive in the first and second quarters of 2026, and the Tranche 1 Warrants were anti-dilutive for the nine-month period.
For the three months ended September 30, 2025, the Warrants were anti-dilutive and were excluded from the calculation of diluted EPS. For the nine months ended September 30, 2025, the Warrants were participating securities during the first and second quarters of 2025; earnings were allocated to the Warrants under the two-class method through June 30, 2025, and the Warrants were not included in the diluted EPS denominator.
19. Other Comprehensive Income
The following table summarizes the components of other comprehensive income for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Unrealized gains (losses) arising during the period, pre-tax | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
| Unrealized (losses) gains arising during the period, net of taxes | ( | ( | |||||||||||||||||||||
| Other comprehensive (losses) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
20. Income Taxes
The Company uses the estimated annual effective tax rate method for calculating its tax provision in interim periods, which represents the Company's best estimate of the effective tax rate expected for the full year.
The Company’s effective tax rates were 24.4 % and 20.6 % for the three months ended September 30, 2026 and 2025, respectively, and 20.9 % and 20.8 % for the nine months ended September 30, 2026 and 2025, respectively. The effective tax rates differed from the federal statutory rate of 21.0 % primarily due to income attributable to the non-controlling interest and non-deductible expenses.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. Among other provisions, the OBBBA modifies the timing of deductions for depreciation and certain other capitalized costs for tax purposes. The Company evaluated the provisions of the OBBBA and determined that, while the changes will affect the timing of certain tax deductions, the overall impact of the legislation is not material to the Company’s condensed consolidated financial statements.
Tax Allocation Agreement
The Company is included in ZFSG’s consolidated Federal income tax return and in various combined state income tax returns. The Company entered into a Tax Allocation Agreement with ZFSG (the “Tax Agreement”) which governs the allocation of consolidated tax liability among the parties to the agreement, the reimbursement of ZFSG for payments of such liabilities, the compensation of affiliated companies of ZFSG for the use of its tax attributes and the allocation of refunds or subsequent adjustments to tax liabilities. Under the Tax Agreement, the Company paid to ZFSG $7.3 million and $29.3 million in the three and nine months ended September 30, 2026, respectively, and $6.0 million and $22.9 million in the three and nine months ended
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025, respectively, of which $7.9 million was paid-in-kind via a transfer of the Company’s interest in the Absolute Return Utility & Infrastructure Fund during the three months ended March 31, 2025. As of September 30, 2026, $4.1 million was receivable from ZFSG under the Tax Agreement and was included in income tax receivable in the condensed consolidated balance sheets. As of December 31, 2025, $8.1 million was due to ZFSG under the Tax Agreement and was included in income tax payable in the condensed consolidated balance sheets.
21. Related Party Transactions
Technology Transactions
As part of the Technology Transactions as further described in Note 4, Investments, the Company obtained a license to continue using the technology assets in its operations at a cost of $0.8 million per annum, with the ability to non-renew the license at the end of each one-year period. The Company also agreed to provide services relating to the assets to ZTG with the actual internal and external costs incurred by the Company in performing the services to be paid by ZTG.
The following amounts were recorded in the three months ended September 30, 2026 and 2025, respectively, related to the Technology Transactions: (a) $0.2 million and $0.2 million, respectively, of interest income on the Promissory Note, which is included in net investment income; (b) $0.2 million and $0.2 million, respectively, of licensing fee expense, which is included in underwriting, acquisition and insurance expenses; (c) $0.2 million and $0.6 million, respectively, of service charges billed to ZTG, which are included in underwriting, acquisition and insurance expenses as an offset; and (d) a principal repayment of $1.0 million of the Promissory Note received from ZFSG on September 26, 2025.
The following amounts were recorded in the nine months ended September 30, 2026 and 2025, respectively, related to the Technology Transactions: (a) $0.7 million and $0.7 million, respectively, of interest income on the Promissory Note, which is included in net investment income; (b) $0.6 million and $0.6 million, respectively, of licensing fee expense, which is included in underwriting, acquisition and insurance expenses; (c) $1.4 million and $2.3 million, respectively, of service charges billed to ZTG, which are included in underwriting, acquisition and insurance expenses as an offset; and (d) a principal repayment of $1.0 million of the Promissory Note received from ZFSG on September 26, 2025.
As of September 30, 2026 and December 31, 2025, the receivable from ZTG was $0.3 million and $0.6 million, respectively, and the payable to ZTG was $0.2 million and $0.2 million, respectively, included in other assets and accounts payable and accrued expenses, respectively, in the condensed consolidated balance sheets.
AtegrityOne Transaction
The Company entered into a transaction with ZTG, effective April 1, 2025, to acquire software developed by ZTG for the Company, for the purchase price of $3.2 million, which was paid following a redemption on March 31, 2025, of the Company’s interests from the Utility Limited Partnership in such amount. The Company recorded the acquired software in other assets in the condensed consolidated balance sheets.
Affiliate Service Agreements and Sublease
The Company entered into a Management & Cost Sharing Agreement effective September 30, 2023 with ZIS, pursuant to which, among other things, ZIS may provide certain Services (as defined therein) to the Company and its affiliates. Commencing October 1, 2024, ZIS began providing employee benefit administration services to the Company that were previously provided to the Company by a third-party vendor. As of September 30, 2026 and December 31, 2025, $0.4 million and $0.7 million, respectively, was due to ZIS under this agreement,
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
included in accounts payable and accrued expenses in the condensed consolidated balance sheets. The Company’s expense related to such services provided by ZIS was $0.8 million and $2.3 million for the three and nine months ended September 30, 2026, respectively, and $0.6 million and $1.7 million for the three and nine months ended September 30, 2025, respectively, included in underwriting, acquisition and insurance expenses in the condensed consolidated statements of operations.
On June 10, 2025, the Company entered into a Shared Services Agreement with ZFSG (the “Shared Services Agreement”), pursuant to which ZFSG provides the Company with certain services, such as, human resources, tax, legal and corporate secretary, transaction advisory, information technology and investor relations. The Company pays ZFSG a fee for such services on a cost-plus basis and reimburses ZFSG at cost for its allocable share of out-of-pocket expenses incurred in performing the services. The Shared Services Agreement also permits the Company to make use of ZFSG’s office space and facilities at 9 West 57th Street, New York, New York. The term of the Shared Services Agreement is for a period of five years , with automatic renewals for two-year periods thereafter. The Company’s expense related to the Shared Services Agreement was $165 thousand and $471 thousand, respectively, for the three and nine months ended September 30, 2026, and $75
As described in Note 10, Leases, the Company subleases office space to ZFSG under a sublease agreement effective July 1, 2022. The base rent under the sublease is equal to the base rent payable by the Company under the related head lease, and the sublease and head lease are coterminous.
Ategrity Specialty Insurance Company Holdings IMA
The Company entered into an Amended & Restated Investment Management Agreement, dated October 1, 2024 (as amended, the “ASH IMA”) with the Investment Manager, pursuant to which the Company appointed the Investment Manager to manage a portfolio of assets and granted the Investment Manager the full and exclusive authority and discretion to effect investment transactions through the portfolio, subject to the Investment Guidelines set forth therein.
Ategrity Limited IMAs
Ategrity Limited entered into an Amended & Restated Investment Management Agreement, dated October 1, 2024 and an Investment Management Agreement, dated December 1, 2024 (as amended, the “Ategrity Limited IMAs”) with the Investment Manager, pursuant to which Ategrity Limited appointed the Investment Manager to manage portfolios of assets and granted the Investment Manager the full and exclusive authority and discretion to effect investment transactions through the portfolios, subject to the Investment Guidelines set forth in each Ategrity Limited IMA.
The Company recorded fees under the Ategrity Limited IMAs and the ASH IMA of $95 thousand and $273 thousand for the three and nine months ended September 30, 2026, respectively, and $76 thousand and $187 thousand for the three and nine months ended September 30, 2025, respectively. The fees were included as an offset to net investment income in the condensed consolidated statements of operations. As of September 30, 2026 and December 31, 2025, $95 thousand and $87 thousand, respectively, was due to the Investment Manager under these agreements, and was included in accounts payable and accrued expenses in the condensed consolidated balance sheets.
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Table of Contents
Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
MidCap Limited Partnership Agreement
On January 1, 2025, the Company entered into the Amended and Restated Limited Partnership Agreement with the MidCap Limited Partnership with an initial investment of $10 million, as further described in Note 4, Investments.
Utility Limited Partnership
As described in Note 3, Consolidated Variable Interest Entity, on March 31, 2025, the Company redeemed $97.2 million from the Utility Limited Partnership. During the nine months ended September 30, 2026, the Company, through Ategrity Limited, made additional investments in the Utility Limited Partnership totaling $20.0 million, consisting of $10.0
Loans to Affiliates
As described in Note 4, Investments, the Company has related party loans receivable from affiliates consisting of the Promissory Note issued by ZFSG and the ZIS Loan. The Company recorded interest income related to these investments of $1.5 million and $4.6 million for the three and nine months ended September 30, 2026, respectively, and $1.5 million and $3.3 million for the three and nine months ended September 30, 2025, respectively, included in net investment income in the condensed consolidated statements of operations, of which $1.3 million and $3.9 million for the three and nine months ended September 30, 2026, respectively, related to the ZIS Loan. As of September 30, 2026 and December 31, 2025, accrued interest receivable on the ZIS Loan was $2.6 million and $2.9 million, respectively, and on the Promissory Note was $0.2 million and $0.2 million, respectively.
Advisory Fee
On March 31, 2025, ZFSG paid the Company an advisory fee equal to $940 thousand relating to certain advisory services provided to ZFSG by the Company that the Company recorded in other income in the condensed consolidated statements of operations for the three months ended March 31, 2025. No similar advisory fee was recorded during the three and nine months ended September 30, 2026.
Fee Waiver for Utility Limited Partnership
The Investment Manager waived Fixed Fees of $2.6 million due under the Investment Management Agreement during the six months ended June 30, 2025. No
Tax Allocation Agreement
The Company is party to the Tax Agreement with ZFSG, which governs the allocation of consolidated federal and state income tax liabilities and related settlements among members of the consolidated group. Refer to Note 20, Income Taxes, for additional information regarding amounts paid or received under this agreement and balances receivable from or due to ZFSG as of September 30, 2026 and December 31, 2025.
Capital Transactions
Capital transactions with ZFSG during the three and nine months ended September 30, 2025 are described in Note 15, Stockholders’ Equity.
In addition, during the three and nine months ended September 30, 2025, the Company’s parent, ZFSG, purchased an aggregate of 0 and 84,408 shares of the Company’s common stock from certain shareholders of the Company.
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
Stockholders’ Agreement
Following the pricing of the IPO, the Company entered into a stockholders’ agreement with ZFSG (the “Stockholders’ Agreement”). Pursuant to such Stockholders’ Agreement, ZFSG has the right, among other rights, to designate a specified number of directors to be nominated for election to the Company’s Board of Directors, based on ZFSG and its affiliates’ ownership percentages, calculated using the total shares of the Company’s common stock outstanding at such time.
Employee Agreements
On May 16, 2025, ZFSG entered into a consulting agreement with the Company’s CEO, under which the CEO agreed to provide consulting services to a subsidiary of ZFSG for matters unrelated to the Company. Pursuant to the consulting agreement, ZFSG paid the CEO a $0.7 million consulting fee in May 2025 and an additional $0.3 million consulting fee pursuant to such agreement was paid in June 2026. The terms of the consulting agreement did not affect the CEO’s compensation as the Company’s CEO and any fees paid for consulting services were separate from his standard compensation.
On June 30, 2025, ZFSG entered into a letter agreement with the Company’s CEO appointing him as a Board observer for ZFSG (“ZFSG Board Letter”) and ZIS entered into a letter agreement with the Company’s CEO appointing him as a director for ZIS (“ZIS Board Letter”). Under each of the ZFSG Board Letter and ZIS Board Letter, the Company’s CEO will receive a fee of $0.1 million per annum which will be pro-rated for any partial year of service beginning in 2027. ZIS and ZFSG may terminate their respective agreements at any time without notice. On July 25, 2025, ZFSG made a payment of $0.1 million to the Company’s CEO under the ZFSG Board Letter and ZIS made a payment of $0.1 million to the Company’s CEO under the ZIS Board Letter.
The Company’s CEO was an employee of the Investment Manager until the IPO. During 2025, the Investment Manager paid the Company’s CEO $0.4 million in salary for services provided to the Investment Manager and made a $0.7 million severance payment following the termination of his employment agreement with the Investment Manager. During the first quarter of 2026, the Investment Manager paid the Company’s CEO a pro-rated annual performance bonus for 2025 of $0.9 million in accordance with the terms of his employment agreement with the Investment Manager. The Company was not a party to the employment agreement and did not fund or reimburse any amounts paid by the Investment Manager under the agreement.
Following the pricing of the IPO, the Company entered into a stockholders’ agreement with ZFSG (the “Stockholders’ Agreement”). Pursuant to such Stockholders’ Agreement, ZFSG has the right, among other rights, to designate a specified number of directors to be nominated for election to the Company’s Board of Directors, based on ZFSG and its affiliates’ ownership percentages, calculated using the total shares of the Company’s common stock outstanding at such time.
Affiliate Balances
The amounts due from and due to affiliates summarized in the table below are included in other assets and accounts payable and accrued expenses, respectively, in the condensed consolidated balance sheets. They
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Ategrity Specialty Insurance Company Holdings and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
primarily relate to technology services, employee benefit administration services, shared services and investment management arrangements described above.
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
Due from affiliates | $ | $ | |||||||||
Due to affiliates | $ | $ | |||||||||
22. Subsequent Events
The Company has evaluated subsequent events through the date these condensed consolidated financial statements were issued. Other than the events described below, no subsequent events have occurred that would require recognition or disclosure in these condensed consolidated financial statements.
On October 1, 2026, the Company, through Ategrity Limited, made an additional $10.0 million subscription in the Utility Limited Partnership, a consolidated variable interest entity of the Company, as described in Note 3, Consolidated Variable Interest Entity.
On November 1, 2026, Ategrity Limited withdrew its entire capital account of approximately $193.1 million from the Utility Limited Partnership and invested the same amount as a limited partner in ZP Utility Fund, L.P. (“ZP Utility Fund”). The withdrawal amount was based on Ategrity Limited’s capital account at net asset value as of October 31, 2026. Like the Utility Limited Partnership, ZP Utility Fund invests substantially all of its assets in the Absolute Return Utility & Infrastructure Fund. Its general partner and investment manager are controlled by ZFSG (see Note 21, Related Party Transactions).
From October 1, 2026 through November 4, 2026, the Company repurchased 95,444 shares of its common stock under its share repurchase program for an aggregate purchase price of $2.3 million, including commissions. As of November 4, 2026, approximately $44.9 million remained available under the $50.0 million share repurchase program authorized by the Board of Directors on February 12, 2026.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the “Risk Factors” as well as set forth in other parts of this Quarterly Report on Form 10-Q.
Overview
Ategrity Specialty Insurance Company Holdings is a specialty property and casualty insurance holding company dedicated exclusively to the excess and surplus (“E&S”) market for small to medium-sized businesses (“SMBs”) across the United States. Our underwriting operations are conducted through Ategrity Specialty Insurance Company, a Delaware-domiciled E&S insurer.
We underwrite small and medium-sized commercial risks across selected industry verticals, including Retail, Real Estate, Hospitality, and Construction. The SMB segment of the E&S market is characterized by a high volume of smaller-premium policies, where distribution partners expect speed, clarity, and consistency in the underwriting process. Our operating model uses a technology-driven method to standardize, simplify, and automate these transactions, which we call productionized underwriting. This method incorporates micro-segmentation, centralized underwriting governance, and automated workflows to promote consistent, disciplined execution across a high volume of E&S transactions.
We operate our business in a single segment and as one reportable segment for purposes of assessing performance, making operating decisions and allocating resources.
Components of results of operations
Gross written premiums
Gross written premiums are the amount received or to be received for insurance policies written or assumed by us during a specific period of time without reduction for policy acquisition costs, reinsurance costs, or other deductions. The volume of our gross written premiums in any given period is generally influenced by:
•New business submissions;
•Binding of new business submissions into policies;
•Renewals of existing policies; and
•Average size and premium rate of new and existing policies.
Ceded written premiums
Certain premiums and losses are ceded to other insurance and reinsurance companies under various excess of loss and quota-share reinsurance contracts. Ceded written premiums are the amount of gross written premiums ceded to reinsurers. We enter into reinsurance contracts to limit our exposure to potential large losses as well as to provide additional capacity for growth. Ceded written premiums are earned over the reinsurance contract period in proportion to the period of risk covered. The volume of our ceded written premiums is impacted by the level of our gross written premiums and any decision we make to increase or decrease retention levels.
Net earned premiums
Net earned premiums represent the earned portion of our net written premiums. Written premiums are earned on a pro rata basis over the terms of the policies, which are generally 12 months. The portion of premiums written applicable to the terms of the policies that have already elapsed is recorded as earned premiums.
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Fee income
Fee income includes policy fees charged to insureds and is recognized in earnings when the related premiums are written. These policy fees may be assessed as either a flat amount or a variable charge, depending on the specific policy type. The total amount of policy fee income is primarily impacted by the volume of our written policies.
Losses and loss adjustment expenses
Losses and loss adjustment expenses are a function of the amount and type of insurance contracts we write and the loss experience associated with the underlying coverage. In general, our losses and loss adjustment expenses are affected by:
•frequency of claims associated with the particular types of insurance contracts that we write;
•trends in the average size of losses incurred on a particular type of business;
•mix of business written by us;
•reinsurance agreements we have in place at the time of loss;
•changes in the legal or regulatory environment related to the business we write;
•trends in legal defense costs;
•inflation in building material costs;
•wage inflation; and
•inflation in medical costs.
Losses and loss adjustment expenses are based on actual paid losses and an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods. Losses and loss adjustment expenses may be paid out over a period of years.
Underwriting, acquisition, and insurance expenses
Underwriting, acquisition, and insurance expenses include policy acquisition costs and operating expenses. Policy acquisition costs are principally comprised of the commissions we pay our brokers, net of ceding commissions we receive on business ceded under certain reinsurance contracts. Policy acquisition costs also include deferred underwriting expenses that are directly related to the successful acquisition of those policies. Operating expenses represent general and administrative expenses related to our insurance business, including employee compensation, software and technology costs, travel, marketing, and professional fees.
Net investment income
We earn investment income on our portfolio of cash and invested assets. Our cash and invested assets are primarily comprised of fixed income securities, the Utility & Infrastructure Investments, loans to affiliates, and cash and cash equivalents. Net investment income related to the Utility & Infrastructure Investments includes our proportionate share of the rebate, dividend, interest and other income, net of investment expenses, and investment management fees for the funds underlying the Utility & Infrastructure Investments. The principal factors that influence net investment income are the size of our investment portfolio and the yield on that portfolio as measured by amortized cost (which excludes changes in fair market value, such as from changes in interest rates) and investment management and other related expenses. The size of our investment portfolio is mainly a function of our invested equity capital along with premiums we receive from our insureds less payments on policyholder claims.
Net realized and unrealized gains (losses) on investments
Net realized and unrealized gains (losses) on investments include realized gains and losses which are a function of the difference between the amount received by us on the sale of a security and the security’s cost or
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amortized cost, as applicable, as well as the change in unrealized gains (losses) on equity securities and unrealized appreciation (depreciation) on securities sold not yet purchased. Net realized and unrealized gains (losses) on investments also includes appreciation on securities, derivative contracts, and foreign currency transactions allocated from the funds underlying the Utility & Infrastructure Investments. Such allocation represents our proportionate share of the Utility & Infrastructure Investments’ net realized gains (losses) of the funds underlying the Utility & Infrastructure Investments which are a function of the difference between the amount received on the sale of a security and the security’s amortized cost as well as change in unrealized appreciation (depreciation) on securities, derivative contracts, and foreign currency transactions.
Interest expense
Interest expense in 2025 primarily consisted of fees related to our letters of credit issued for the benefit of Ategrity Specialty on behalf of Ategrity Limited, which were terminated in September and October 2025. Interest expense in 2026 has not been significant.
Income tax expense (benefit)
Currently our income tax expense (benefit) consists mainly of federal income taxes imposed on our operations. Our effective tax rates are dependent upon the components of pretax earnings and the related tax effects. The amount of income tax expense (benefit) recorded in future periods will depend on the jurisdictions in which we operate and the tax laws and regulations in effect.
Key metrics
We discuss certain key metrics, described below, which provide useful information about our business and the operational factors underlying our financial performance.
Underwriting income is a non-GAAP financial measure. We define underwriting income as income before income taxes excluding the impact of net investment income, net realized and unrealized gains (losses) on investments, other income, interest expense, and other expenses (which include expenses relating to corporate activities and expenses recorded by us in connection with the Company’s initial public offering (the “IPO”). For a reconciliation of underwriting income to the most directly comparable GAAP financial measure, information about why we consider underwriting income useful and a discussion of the material risks and limitations of underwriting income, see “Reconciliation of non-GAAP financial measures”.
Adjusted net income attributable to stockholders is a non-GAAP financial measure. We define adjusted net income attributable to stockholders as net income attributable to stockholders, excluding certain non-operating expenses, which include expenses recorded by us in connection with the Company’s IPO. For a reconciliation of adjusted net income attributable to stockholders to the most directly comparable GAAP financial measure, information about why we consider adjusted net income attributable to stockholders useful and a discussion of the material risks and limitations of adjusted net income attributable to stockholders, see “Reconciliation of non-GAAP financial measures”.
Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses to net earned premiums.
Expense ratio, expressed as a percentage, is the ratio of underwriting, acquisition, and insurance expenses less fee income to net earned premiums.
Combined ratio is the sum of loss ratio and expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.
Return on stockholders’ equity is net income attributable to stockholders expressed as a percentage of average beginning and ending stockholders’ equity during the period.
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Adjusted return on stockholders’ equity is a non-GAAP financial measure. We define adjusted return on stockholders’ equity as adjusted net income attributable to stockholders, expressed as a percentage of average beginning and ending stockholders’ equity during the period. For a reconciliation of adjusted return on stockholders’ equity to the most directly comparable GAAP financial measure, information about why we consider adjusted return on stockholders’ equity useful and a discussion of the material risks and limitations of adjusted return on stockholders’ equity, see “Reconciliation of non-GAAP financial measures”.
Adjusted diluted earnings per share is a non-GAAP financial measure. We define adjusted diluted earnings per share as adjusted net income attributable to stockholders divided by weighted average common shares outstanding - diluted for the period. For a reconciliation of adjusted diluted earnings per share to the most directly comparable GAAP financial measure, information about why we consider adjusted diluted earnings per share useful and a discussion of the material risks and limitations of adjusted diluted earnings per share, see “Reconciliation of non-GAAP financial measures”.
Results of operations
Three months ended September 30, 2026, compared to three months ended September 30, 2025
The following table sets forth a summary of our consolidated results of operations for the periods indicated.
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands, except percentages and per share data) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Gross written premiums | $ | 165,021 | $ | 143,858 | $ | 21,163 | 14.7 | % | ||||||||||||||||||
| Ceded written premiums | (29,781) | (36,348) | 6,567 | (18.1) | % | |||||||||||||||||||||
| Net written premiums | $ | 135,240 | $ | 107,510 | $ | 27,730 | 25.8 | % | ||||||||||||||||||
Net earned premiums | 127,139 | 93,710 | 33,429 | 35.7 | % | |||||||||||||||||||||
| Fee income | 2,630 | 2,225 | 405 | 18.2 | % | |||||||||||||||||||||
| Losses and loss adjustment expenses | 73,061 | 56,199 | 16,862 | 30.0 | % | |||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 37,204 | 29,116 | 8,088 | 27.8 | % | |||||||||||||||||||||
Underwriting income (1) | 19,504 | 10,620 | 8,884 | 83.7 | % | |||||||||||||||||||||
| Net investment income | 13,051 | 10,961 | 2,090 | 19.1 | % | |||||||||||||||||||||
| Net realized and unrealized gains (losses) on investments | (17,249) | 9,179 | (26,428) | (287.9) | % | |||||||||||||||||||||
| Interest expense | 3 | 392 | (389) | (99.2) | % | |||||||||||||||||||||
| Other income | 24 | 25 | (1) | (4.0) | % | |||||||||||||||||||||
| Other expenses | 718 | 659 | 59 | 9.0 | % | |||||||||||||||||||||
| Income before income taxes | 14,609 | 29,734 | (15,125) | (50.9) | % | |||||||||||||||||||||
| Income tax expense | 3,566 | 6,118 | (2,552) | (41.7) | % | |||||||||||||||||||||
| Net income | $ | 11,043 | $ | 23,616 | $ | (12,573) | (53.2) | % | ||||||||||||||||||
| Less: Net income (loss) attributable to non-controlling interest - General Partner | (3,534) | 952 | (4,486) | (471.2) | % | |||||||||||||||||||||
| Net income attributable to stockholders | $ | 14,577 | $ | 22,664 | $ | (8,087) | (35.7) | % | ||||||||||||||||||
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| Three Months Ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands, except percentages and per share data) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Key Metrics | ||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||
Adjusted net income attributable to stockholders (1) | 14,665 | 22,828 | ||||||||||||||||||||||||
| Loss ratio | 57.5 | % | 60.0 | % | ||||||||||||||||||||||
| Expense ratio | 27.2 | % | 28.7 | % | ||||||||||||||||||||||
| Combined ratio | 84.7 | % | 88.7 | % | ||||||||||||||||||||||
Return on stockholders' equity (2) | 8.8 | % | 15.8 | % | ||||||||||||||||||||||
Adjusted return on stockholders' equity (1) (2) | 8.9 | % | 15.9 | % | ||||||||||||||||||||||
| Diluted earnings per share | $ | 0.29 | $ | 0.45 | ||||||||||||||||||||||
Adjusted diluted earnings per share(1) | $ | 0.29 | $ | 0.46 | ||||||||||||||||||||||
(1) Each of these metrics is a non-GAAP financial measure. See “Reconciliation of non-GAAP financial measures” for a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP measure.
(2) For the three months ended September 30, 2026 and 2025, net income attributable to stockholders and adjusted net income attributable to stockholders are annualized to arrive at return on stockholders’ equity and adjusted return on stockholders’ equity.
NM = Percentage not meaningful.
Premiums
The following table presents gross written premiums by product for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands, except percentages) | 2026 | % of Total | 2025 | % of Total | ||||||||||||||||||||||
| Casualty | $ | 108,791 | 65.9 | % | $ | 98,863 | 68.7 | % | ||||||||||||||||||
| Property | 56,230 | 34.1 | % | 44,995 | 31.3 | % | ||||||||||||||||||||
| Gross written premiums | $ | 165,021 | 100.0 | % | $ | 143,858 | 100.0 | % | ||||||||||||||||||
Our gross written premiums were $165.0 million for the three months ended September 30, 2026 compared to $143.9 million for the three months ended September 30, 2025, an increase of approximately $21.2 million, or 14.7%. The increase in both our casualty and property lines was primarily driven by the continued execution of our growth initiatives and increased engagement across our expanding distribution network.
Net written premiums were $135.2 million for the three months ended September 30, 2026, compared to $107.5 million for the three months ended September 30, 2025, an increase of approximately $27.7 million, or 25.8%. The increase was primarily attributable to higher gross written premiums as well as a decrease in ceded written premiums as a percentage of gross written premiums, reflecting the reduction in quota share reinsurance within our casualty lines.
Net earned premiums were $127.1 million for the three months ended September 30, 2026, compared to $93.7 million for the three months ended September 30, 2025, an increase of approximately $33.4 million, or 35.7%. The increase was primarily due to growth in net written premiums.
Fee income
Fee income was $2.6 million for the three months ended September 30, 2026 compared to $2.2 million for the three months ended September 30, 2025, an increase of approximately $0.4 million. The increase was driven by the implementation of market-standard policy-related fees that occurred over the course of 2025.
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Loss Ratio
Our loss ratio was 57.5% for the three months ended September 30, 2026 compared to 60.0% for the three months ended September 30, 2025. The loss ratio for the three months ended September 30, 2026 benefited from strong performance in our property portfolio. The loss ratio decreased compared to the three months ended September 30, 2025, reflecting favorable underwriting performance across both property and casualty lines of business.
During the three months ended September 30, 2026, prior accident years developed favorably by $2.0 million, primarily due to lower than expected loss emergence. For the three months ended September 30, 2025, there was no development on our net incurred losses for prior periods.
Our losses paid in the three months ended September 30, 2026 and 2025 were $40.0 million and $33.2 million, respectively.
Expense ratio
The following table summarizes the components of the expense ratio for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| ($ in thousands, except percentages) | Expenses | % of Net Earned Premiums | Expenses | % of Net Earned Premiums | ||||||||||||||||||||||
| Policy acquisition costs | $ | 21,896 | 17.2 | % | $ | 16,741 | 17.9 | % | ||||||||||||||||||
Operating expenses, net of fee income (1) | 12,678 | 10.0 | % | 10,150 | 10.8 | % | ||||||||||||||||||||
Underwriting, acquisition and insurance expenses, net of fee income | $ | 34,574 | 27.2 | % | $ | 26,891 | 28.7 | % | ||||||||||||||||||
(1) Net of fee income of $2.6 million and $2.2 million for the three months ended September 30, 2026 and 2025, respectively.
Our expense ratio was 27.2% for the three months ended September 30, 2026 compared to 28.7% for the three months ended September 30, 2025. The improvement was driven by a lower policy acquisition ratio and operating expense ratio.
The decrease in policy acquisition costs as a percentage of net earned premiums was primarily attributable to a favorable shift in our business mix.
The decrease in operating expenses as a percentage of net earned premiums was primarily due to operating expense leverage.
Investing Results
The following tables summarize net investment income and net realized and unrealized gains on investments for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Investment income | ||||||||||||||||||||||||||
| Fixed-maturity securities | $ | 9,924 | $ | 6,599 | $ | 3,325 | 50.4 | % | ||||||||||||||||||
| Short-term investments | 1,650 | 2,361 | (711) | (30.1) | % | |||||||||||||||||||||
| Cash equivalents | 373 | 433 | (60) | (13.9) | % | |||||||||||||||||||||
| Loans to affiliates | 1,524 | 1,537 | (13) | (0.8) | % | |||||||||||||||||||||
| Total fixed income | 13,471 | 10,930 | 2,541 | 23.2 | % | |||||||||||||||||||||
| Equity securities | 55 | — | 55 | NM | ||||||||||||||||||||||
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| Three Months Ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Utility & Infrastructure Investments | (335) | 64 | (399) | NM | ||||||||||||||||||||||
| Other expenses | (140) | (33) | (107) | 324.2 | % | |||||||||||||||||||||
| Net investment income (loss) | $ | 13,051 | $ | 10,961 | $ | 2,090 | 19.1 | % | ||||||||||||||||||
| Net realized and unrealized gains (losses) on investments | $ | (17,249) | $ | 9,179 | $ | (26,428) | (287.9) | % | ||||||||||||||||||
NM = Percentage not meaningful.
Net investment income was $13.1 million for the three months ended September 30, 2026, compared to $11.0 million for the three months ended September 30, 2025, an increase of $2.1 million, or 19.1%. This increase was mainly driven by additional investments in fixed-maturity securities. Included in net investment income is a net loss of $0.3 million and net income of $0.1 million attributable to Utility & Infrastructure Investments, net of investment management fees, for the three months ended September 30, 2026 and 2025, respectively.
Net realized and unrealized loss on investments was $17.2 million for the three months ended September 30, 2026, compared to a net realized and unrealized gain of $9.2 million for the three months ended September 30, 2025, a decrease of $26.4 million. This decrease was primarily driven by realized and unrealized losses on the Utility & Infrastructure investments in the current period, reflecting a normalization of returns following strong performance in the first half of 2026, compared to net realized and unrealized gains in the prior-year period.
During the three months ended September 30, 2025, the Company recognized an impairment loss of $38 thousand on certain fixed-maturity securities classified as available-for-sale. The impairment reflected the Company’s decision to sell the securities prior to recovery of their amortized cost basis, which required recognition of the full unrealized loss in earnings. The loss was recorded in net realized and unrealized gains (losses) within the condensed consolidated statements of operations. During the three months ended September 30, 2026, the Company recognized no impairment loss on fixed-maturity securities classified as available-for-sale.
Interest expense
Interest expense was $3 thousand for the three months ended September 30, 2026 compared to $392 thousand for the three months ended September 30, 2025, a decrease of approximately $389 thousand, or 99.2%, driven by the termination of our letters of credit in 2025.
Income tax expense (benefit)
Income tax expense was $3.6 million for the three months ended September 30, 2026 compared to $6.1 million for the three months ended September 30, 2025, a decrease of approximately $2.6 million. Our effective tax rate was 24.4% for the three months ended September 30, 2026 compared to 20.6% for the three months ended September 30, 2025. The increase in our effective tax rate was primarily related to changes in the income attributable to the non-controlling interest and non-deductible expenses.
Results of operations
Nine months ended September 30, 2026, compared to nine months ended September 30, 2025
The following table sets forth a summary of our consolidated results of operations for the periods indicated.
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
($ in thousands, except percentages and per share data) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Gross written premiums | $ | 514,710 | $ | 427,503 | $ | 87,207 | 20.4 | % | ||||||||||||||||||
| Ceded written premiums | (107,326) | (112,851) | 5,525 | (4.9) | % | |||||||||||||||||||||
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| Nine Months Ended September 30, | ||||||||||||||||||||||||||
($ in thousands, except percentages and per share data) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Net written premiums | $ | 407,384 | $ | 314,652 | $ | 92,732 | 29.5 | % | ||||||||||||||||||
Net earned premiums | 346,125 | 258,939 | 87,186 | 33.7 | % | |||||||||||||||||||||
| Fee income | 8,285 | 4,309 | 3,976 | 92.3 | % | |||||||||||||||||||||
| Losses and loss adjustment expenses | 201,445 | 153,472 | 47,973 | 31.3 | % | |||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 104,149 | 82,431 | 21,718 | 26.3 | % | |||||||||||||||||||||
Underwriting income (1) | 48,816 | 27,345 | 21,471 | 78.5 | % | |||||||||||||||||||||
| Net investment income | 37,755 | 30,747 | 7,008 | 22.8 | % | |||||||||||||||||||||
| Net realized and unrealized gains (losses) on investments | 10,807 | 5,990 | 4,817 | 80.4 | % | |||||||||||||||||||||
| Interest expense | 11 | 1,286 | (1,275) | (99.1) | % | |||||||||||||||||||||
| Other income | 72 | 1,017 | (945) | (92.9) | % | |||||||||||||||||||||
| Other expenses | 2,162 | 1,059 | 1,103 | 104.2 | % | |||||||||||||||||||||
| Income before income taxes | 95,277 | 62,754 | 32,523 | 51.8 | % | |||||||||||||||||||||
| Income tax expense | 19,886 | 13,071 | 6,815 | 52.1 | % | |||||||||||||||||||||
| Net income | $ | 75,391 | $ | 49,683 | $ | 25,708 | 51.7 | % | ||||||||||||||||||
| Less: Net income (loss) attributable to non-controlling interest - General Partner | 1,897 | 936 | 961 | 102.7 | % | |||||||||||||||||||||
| Net income attributable to stockholders | $ | 73,494 | $ | 48,747 | $ | 24,747 | 50.8 | % | ||||||||||||||||||
| Key Metrics | ||||||||||||||||||||||||||
Adjusted net income attributable to stockholders (1) | 73,812 | 49,228 | ||||||||||||||||||||||||
| Loss ratio | 58.2 | % | 59.3 | % | ||||||||||||||||||||||
| Expense ratio | 27.7 | % | 30.2 | % | ||||||||||||||||||||||
Combined ratio (2) | 85.9 | % | 89.4 | % | ||||||||||||||||||||||
Return on stockholders' equity (3) | 15.4 | % | 13.2 | % | ||||||||||||||||||||||
Adjusted return on stockholders' equity (1) (3) | 15.5 | % | 13.3 | % | ||||||||||||||||||||||
| Diluted earnings per share | $ | 1.47 | $ | 1.06 | ||||||||||||||||||||||
Adjusted diluted earnings per share(1) | $ | 1.48 | $ | 1.09 | ||||||||||||||||||||||
(1)Each of these metrics is a non-GAAP financial measure. See “Reconciliation of non-GAAP financial measures” for a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP measure.
(2)Ratios are calculated using unrounded figures. The sum of components may differ slightly from totals shown due to rounding.
(3) For the nine months ended September 30, 2026 and 2025, net income attributable to stockholders and adjusted net income attributable to stockholders are annualized to arrive at return on stockholders’ equity and adjusted return on stockholders’ equity.
Premiums
The following table presents gross written premiums by product for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands, except percentages) | 2026 | % of Total | 2025 | % of Total | ||||||||||||||||||||||
| Casualty | $ | 346,868 | 67.4 | % | $ | 288,026 | 67.4% | |||||||||||||||||||
| Property | 167,842 | 32.6 | % | 139,477 | 32.6% | |||||||||||||||||||||
| Gross written premiums | $ | 514,710 | 100.0 | % | $ | 427,503 | 100.0% | |||||||||||||||||||
Gross written premiums were $514.7 million for the nine months ended September 30, 2026 compared to $427.5 million for the nine months ended September 30, 2025, an increase of approximately $87.2 million, or
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20.4%. The increase in both our casualty and property lines was primarily driven by the continued execution of our growth initiatives and increased engagement across our expanding distribution network.
Net written premiums were $407.4 million for the nine months ended September 30, 2026, compared to $314.7 million for the nine months ended September 30, 2025, an increase of approximately $92.7 million, or 29.5%. The increase was primarily attributable to higher gross written premiums as well as a decrease in ceded written premiums as a percentage of gross written premiums, reflecting the reduction in quota share reinsurance within our casualty lines.
Net earned premiums were $346.1 million for the nine months ended September 30, 2026, compared to $258.9 million for the nine months ended September 30, 2025, an increase of approximately $87.2 million, or 33.7%. The increase was primarily due to growth in net written premiums.
Fee income
Fee income was $8.3 million for the nine months ended September 30, 2026 compared to $4.3 million for the nine months ended September 30, 2025, an increase of approximately $4.0 million. The increase was driven by the implementation of market-standard policy-related fees over the course of 2025.
Loss Ratio
Our loss ratio was 58.2% for the nine months ended September 30, 2026 compared to 59.3% for the nine months ended September 30, 2025. The decrease in the loss ratio was primarily driven by strong performance in our property portfolio.
During the nine months ended September 30, 2026, prior accident years developed favorably by $3.5 million primarily due to lower than expected loss emergence. For the nine months ended September 30, 2025, there was no development on our net incurred losses for prior periods.
Our losses paid in the nine months ended September 30, 2026 and 2025 were $113.7 million and $99.2 million, respectively.
Expense ratio
The following table summarizes the components of the expense ratio for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| ($ in thousands, except percentages) | Expenses | % of Net Earned Premiums | Expenses | % of Net Earned Premiums | ||||||||||||||||||||||
| Policy acquisition costs | $ | 60,809 | 17.6 | % | $ | 47,562 | 18.4 | % | ||||||||||||||||||
Operating expenses, net of fee income (1) | 35,055 | 10.1 | % | 30,561 | 11.8 | % | ||||||||||||||||||||
| Underwriting, acquisition and insurance expenses, net of fee income | $ | 95,864 | 27.7 | % | $ | 78,123 | 30.2 | % | ||||||||||||||||||
(1) Net of fee income of $8.3 million and $4.3 million for the nine months ended September 30, 2026 and 2025, respectively.
Our expense ratio was 27.7% for the nine months ended September 30, 2026 compared to 30.2% for the nine months ended September 30, 2025. The improvement was driven by a lower policy acquisition ratio and operating expense ratio.
The decrease in policy acquisition costs as a percentage of net earned premiums was primarily attributable to a favorable shift in our business mix.
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The decrease in operating expenses as a percentage of net earned premiums was primarily driven by the continued scaling of our business, where net earned premiums grew at a higher rate than our operating expenses, and by the benefit of an increase in our fee income.
Investing Results
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Investment income | ||||||||||||||||||||||||||
| Fixed-maturity securities | $ | 27,125 | $ | 19,324 | $ | 7,801 | 40.4 | % | ||||||||||||||||||
| Short-term investments | 5,216 | 4,085 | 1,131 | 27.7 | % | |||||||||||||||||||||
| Cash equivalents | 1,079 | 1,344 | (265) | (19.7) | % | |||||||||||||||||||||
| Loans to affiliates | 4,578 | 3,330 | 1,248 | 37.5 | % | |||||||||||||||||||||
| Total fixed income | 37,998 | 28,083 | 9,915 | 35.3 | % | |||||||||||||||||||||
| Equity securities | 55 | — | 55 | NM | ||||||||||||||||||||||
| Utility & Infrastructure Investments | 117 | 2,995 | (2,878) | (96.1) | % | |||||||||||||||||||||
| Other expenses | (415) | (331) | (84) | 25.4 | % | |||||||||||||||||||||
| Net investment income | $ | 37,755 | $ | 30,747 | $ | 7,008 | 22.8 | % | ||||||||||||||||||
| Net realized and unrealized gains (losses) on investments | $ | 10,807 | $ | 5,990 | $ | 4,817 | 80.4 | % | ||||||||||||||||||
NM = Percentage not meaningful.
Net investment income was $37.8 million for the nine months ended September 30, 2026, compared to $30.7 million for the nine months ended September 30, 2025, an increase of $7.0 million, or 22.8%. This increase was driven by additional investments in fixed-maturity securities and short-term investments, including the investment of the proceeds from our IPO, as well as income from loans to affiliates. Included in net investment income were $0.1 million and $3.0 million attributable to Utility & Infrastructure Investments, net of investment management fees for the nine months ended September 30, 2026 and 2025, respectively.
Net realized and unrealized gains on investments were $10.8 million for the nine months ended September 30, 2026, compared to net realized and unrealized gains of $6.0 million for the nine months ended September 30, 2025, an increase of $4.8 million. This change was primarily driven by higher net realized and unrealized gains related to the Utility & Infrastructure Investments, partially offset by lower gains on sales of fixed-maturity securities compared to the prior year period.
Interest expense
Interest expense was $11 thousand for the nine months ended September 30, 2026 compared to $1.3 million for the nine months ended September 30, 2025, a decrease of $1.3 million, or 99.1%, primarily driven by the termination of our letter of credit agreements in September and October 2025.
Income tax expense (benefit)
Income tax expense was $19.9 million for the nine months ended September 30, 2026 compared to $13.1 million for the nine months ended September 30, 2025, an increase of approximately $6.8 million. Our effective tax rate was 20.9% for the nine months ended September 30, 2026 compared to 20.8% for the nine months ended September 30, 2025. Our effective tax rate was relatively consistent between periods and differed from the 21.0% federal statutory rate primarily due to income attributable to the non-controlling interest and non-deductible expenses.
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Reconciliation of non-GAAP financial measures
We report our financial results in accordance with GAAP. However, we believe that certain non-GAAP financial measures provide investors in our common stock with additional useful information in evaluating our performance. Management believes that excluding certain items that are not indicative of core performance assists in evaluating our ability to generate earnings and to more readily compare these metrics between past and future periods. These non-GAAP financial measures may be different than similarly titled measures used by other companies.
These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are limitations related to the use of these non-GAAP financial measures as compared to the most directly comparable GAAP financial measures.
Underwriting income
We define underwriting income as income before income taxes excluding the impact of net investment income, net realized and unrealized gains (losses) on investments, other income, interest expense, and other expenses (which include expenses related to corporate activities and expenses recorded by us in connection with the Company’s IPO). Underwriting income is a measure of the pre-tax profitability of our underwriting operations and allows us to evaluate our underwriting performance without regard to net investment income among other things. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting income should not be viewed as a substitute for income before income taxes calculated in accordance with GAAP and other companies may define underwriting income differently.
Underwriting income for the three and nine months ended September 30, 2026 and 2025 reconciles to income before income taxes as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Income before income taxes | $ | 14,609 | $ | 29,734 | $ | 95,277 | $ | 62,754 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Net investment (income) loss | (13,051) | (10,961) | (37,755) | (30,747) | ||||||||||||||||||||||
| Net realized and unrealized (gains) losses on investments | 17,249 | (9,179) | (10,807) | (5,990) | ||||||||||||||||||||||
| Other income | (24) | (25) | (72) | (1,017) | ||||||||||||||||||||||
| Add: | ||||||||||||||||||||||||||
| Interest expense | 3 | 392 | 11 | 1,286 | ||||||||||||||||||||||
| Other expenses | 718 | 659 | 2,162 | 1,059 | ||||||||||||||||||||||
| Underwriting income | $ | 19,504 | $ | 10,620 | $ | 48,816 | $ | 27,345 | ||||||||||||||||||
Adjusted net income attributable to stockholders
We define adjusted net income attributable to stockholders as net income attributable to stockholders excluding certain other non-operating expenses, which include expenses recorded by us in connection with the Company’s IPO. Adjusted net income attributable to stockholders excludes the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We use adjusted net income attributable to stockholders as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net income attributable to stockholders
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should not be viewed as a substitute for net income attributable to stockholders calculated in accordance with GAAP, and other companies may define adjusted net income differently.
Adjusted net income attributable to stockholders for the three and nine months ended September 30, 2026 and 2025 reconciles to net income attributable to stockholders as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net income attributable to stockholders | $ | 14,577 | $ | 22,664 | $ | 73,494 | $ | 48,747 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
Other non-operating expenses (1) | 111 | 207 | 402 | 608 | ||||||||||||||||||||||
| Tax impact | (23) | (43) | (84) | (127) | ||||||||||||||||||||||
| Adjusted net income attributable to stockholders | $ | 14,665 | $ | 22,828 | $ | 73,812 | $ | 49,228 | ||||||||||||||||||
(1)In the three and nine months ended September 30, 2026 and 2025, other non-operating expenses include share-based compensation expenses recorded by us related to our IPO.
Adjusted return on stockholders’ equity
We define adjusted return on stockholders’ equity as adjusted net income attributable to stockholders, expressed as a percentage of average beginning and ending stockholders’ equity during the period. We use adjusted return on stockholders’ equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted return on stockholders’ equity should not be viewed as a substitute for return on stockholders’ equity calculated in accordance with GAAP, and other companies may define adjusted return on stockholders’ equity and adjusted net income differently.
Adjusted return on stockholders’ equity for the three and nine months ended September 30, 2026 and 2025 reconciles to return on stockholders’ equity as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| ($ in thousands, except percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Numerator: Adjusted net income attributable to stockholders, annualized (1) | $ | 58,660 | $ | 91,312 | $ | 98,416 | $ | 65,637 | ||||||||||||||||||
| Denominator: Average stockholders’ equity | 661,021 | 574,125 | 635,978 | 493,434 | ||||||||||||||||||||||
| Adjusted return on stockholders' equity | 8.9 | % | 15.9 | % | 15.5 | % | 13.3 | % | ||||||||||||||||||
(1) For the three and nine months ended September 30, 2026 and 2025, net income and adjusted net income are annualized to arrive at return on stockholders’ equity and adjusted return on stockholders’ equity.
Adjusted diluted earnings per share
We define adjusted diluted earnings per share as adjusted net income attributable to stockholders divided by weighted average common shares outstanding - diluted for the period. We use adjusted diluted earnings per share as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted diluted earnings per share should not be viewed as a substitute for diluted earnings per share calculated in accordance with GAAP, and other companies may define adjusted diluted earnings per share differently.
Adjusted diluted earnings per share for the three and nine months ended September 30, 2026 and 2025 reconciles to diluted earnings per share as follows:
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| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| ($ in thousands, except share and per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Numerator: Adjusted net income attributable to stockholders | $ | 14,665 | $ | 22,828 | $ | 73,812 | $ | 49,228 | ||||||||||||||||||
| Denominator: Weighted-average shares outstanding - diluted | 50,246,439 | 49,972,530 | 49,974,188 | 45,046,434 | ||||||||||||||||||||||
| Adjusted diluted earnings per share | $ | 0.29 | $ | 0.46 | $ | 1.48 | $ | 1.09 | ||||||||||||||||||
Liquidity and capital resources
Sources and uses of funds
We are organized as a holding company, and conduct our operations primarily through our insurance subsidiaries, Ategrity Specialty and Ategrity Limited. We depend on distributions from our insurance subsidiaries and other sources of liquidity.
We may receive cash through (1) loans from banks, (2) issuance of equity or debt securities, (3) corporate service fees from Ategrity Specialty, (4) payments from our subsidiaries pursuant to the Tax Agreement and other transactions, and (5) dividends from our insurance subsidiaries, subject to regulatory approval. We may use these sources to support premium growth, reduce reliance on reinsurance, pay dividends and taxes, fund operating expenses and meet other holding company obligations.
On a consolidated basis, our primary source of cash is premiums received from our insureds, and our primary uses of cash are payments of losses and loss adjustment expenses and operating expenses. The timing and amount of claim payments can vary significantly depending on claim severity, frequency and catastrophic events. As a result, liquidity management is an important consideration in our business, particularly at our insurance subsidiaries, where claims are paid. Our material cash requirements include payments of insurance claims and loss adjustment expenses, operating expenses, reinsurance premiums, and taxes payable under the Tax Agreement.
Management believes that the Company has sufficient liquidity available at our holding company and subsidiaries to meet our operating cash needs and obligations for the next twelve months.
Share repurchase program
On February 12, 2026, our Board of Directors authorized a share repurchase program under which the Company may repurchase up to $50 million worth of its outstanding common stock. The timing and amount of repurchases, if any, will depend on market conditions, capital requirements, and other factors. The authorization does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time. During the three months ended June 30, 2026, the Company repurchased 142,686 shares of common stock under its share repurchase program for $2.8 million. The average cost per share repurchased was $19.87. The Company made no repurchases during the three months ended September 30, 2026. The cost of treasury stock acquired pursuant to common share repurchases includes the 1% excise tax imposed on common share repurchase activity, net of common share issuances, under the Inflation Reduction Act of 2022. Subsequent to September 30, 2026 through November 4, 2026, the Company repurchased 95,444 shares of its common stock under its share repurchase program for an aggregate purchase price of $2.3 million, including commissions. As of November 4, 2026, the Company had approximately $44.9 million of capacity remaining under its share repurchase program.
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Cash flows
Our most significant source of cash is from premiums received from our insureds, which, for most policies, we receive at the beginning of the coverage period. Our most significant cash outflow is for claims that arise when a policyholder incurs an insured loss. Because the payment of claims occurs after the receipt of the premium, often years later, we invest the cash in various investment securities that earn interest and dividends. We also use cash to pay commissions to brokers, as well as to pay for ongoing operating expenses such as employee compensation and benefits, technology costs, taxes, and professional services. We use reinsurance to manage the risk that we take on our policies. We cede, or pay out, part of the premiums we receive to our reinsurers and collect cash back when losses subject to our reinsurance coverage are paid.
The timing of our cash flows from operating activities can vary among periods due to the timing by which payments are made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can be significant, so their timing can influence cash flows from operating activities in any given period. Management believes that cash receipts from premiums, proceeds from investment sales and redemptions, and investment income are sufficient to cover cash outflows in the foreseeable future.
The following table sets forth a summary of our cash flows for the periods indicated:
| Nine Months Ended September 30, | ||||||||||||||
| ($ in thousands) | 2026 | 2025 | ||||||||||||
| Net cash provided by operating activities | $ | 154,676 | $ | 91,863 | ||||||||||
| Net cash used in investing activities | (165,871) | (215,527) | ||||||||||||
| Net cash provided by (used in) financing activities | (4,912) | 131,410 | ||||||||||||
| Net change in cash and cash equivalents | $ | (16,107) | $ | 7,746 | ||||||||||
Operating activities
Our net cash provided by operating activities was approximately $154.7 million for the nine months ended September 30, 2026, compared to $91.9 million for the nine months ended September 30, 2025. The increase was primarily driven by growth of our business and the timing of premium receipts, claim payments, reinsurance recoveries and operating payables.
Investing activities
Net cash used in investing activities was approximately $165.9 million for the nine months ended September 30, 2026, compared to $215.5 million for the nine months ended September 30, 2025. In both periods, cash used in investing activities reflected the continued deployment of cash generated from operating activities into investments. Cash used in investing activities during the nine months ended September 30, 2025 also reflected the investment of proceeds from our initial public offering.
Financing activities
Net cash used in financing activities was approximately $4.9 million for the nine months ended September 30, 2026, which consisted of $2.8 million of share repurchases and the payment of a $2.1 million capital distribution to ZP Utility Insurance GP, LLC (the “Utility General Partner”), the general partner of ZP Utility Insurance Fund, L.P. (the “Utility Limited Partnership”). The distribution was accrued as a withdrawal payable as of December 31, 2025 and accordingly is not reflected as a reduction of non-controlling interest during the nine months ended September 30, 2026. Net cash provided by financing activities of $131.4 million for the nine months ended September 30, 2025 primarily consisted of net proceeds from our IPO as well as a capital contribution from ZFSG, partially offset by the payment of capital distribution to the Utility General Partner.
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Reinsurance
We enter into reinsurance contracts to limit our exposure to potential large losses and to provide additional capacity for growth. Our reinsurance is primarily contracted under quota-share reinsurance treaties and excess of loss treaties. In quota-share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission. In excess of loss reinsurance, the reinsurer agrees to assume all or a portion of the ceding company’s losses, in excess of a specified amount. In excess of loss reinsurance, the premium payable to the reinsurer is negotiated by the parties based on their assessment of the amount of risk being ceded to the reinsurer because the reinsurer does not share proportionately in the ceding company’s losses.
For the nine months ended September 30, 2026, property insurance represented 32.6% of our gross written premiums. When we write property insurance, we buy reinsurance to significantly mitigate our risk to large losses. We use sophisticated computer models to analyze the risk of severe losses from weather-related events and earthquakes. We measure exposure to these catastrophe losses in terms of Probable Maximum Loss (“PML”), which is an estimate of what level of loss we would expect to experience in a windstorm or earthquake event occurring once in every 100 or 250 years. We manage this PML by purchasing catastrophe reinsurance coverage. As of September 30, 2026, we maintained catastrophe reinsurance coverage of $38 million per event in excess of our $12 million per event retention. Our property catastrophe reinsurance includes a reinstatement provision which requires us to pay reinstatement premiums after a loss has occurred in order to preserve coverage. Including the reinstatement provision, the maximum aggregate loss recovery limit is $76 million and is in addition to the coverage provided by our other property reinsurance.
Reinsurance contracts do not relieve us from our obligations to policyholders. Failure of the reinsurer to honor its obligation could result in losses to us, and therefore, we evaluate the need for an allowance for expected credit losses based on historical analysis of credit losses for highly rated companies in the insurance industry. The Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk arising from its exposure to individual reinsurers.
As of September 30, 2026, Ategrity Specialty has only contracted with reinsurers with A.M. Best financial strength ratings of “A-” (Excellent) or better. Reinsurers who do not meet the Company’s rating criteria are required to post collateral. As of September 30, 2026, we recorded no allowance for credit losses related to our reinsurance balances.
Ratings
Ategrity Specialty and Ategrity Limited both have a financial strength rating of “A-” (Excellent) from A.M. Best. A.M. Best assigns 16 ratings to insurance companies, which currently range from “A++” (Superior) to “F” (In Liquidation). “A-” (Excellent) is the fourth highest rating issued by A.M. Best. The “A-” (Excellent) rating is assigned to insurers that have, in A.M. Best’s opinion, an excellent ability to meet their ongoing obligations to policyholders. This rating is intended to provide an independent opinion of an insurer’s ability to meet its obligation to policyholders and is not an evaluation directed at investors.
The financial strength ratings assigned by A.M. Best have an impact on the ability of the insurance companies to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that the insurance companies receive. The “A-” (Excellent) rating obtained by Ategrity Specialty is consistent with our business plan and allows us to actively pursue relationships with the agents and brokers identified in our marketing plan.
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Contractual obligations and commitments
As of September 30, 2026, there has been no material change to our contractual obligations and commitments from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Financial condition
Stockholders’ equity
As of September 30, 2026, total stockholders’ equity was $657.6 million compared to $614.3 million total stockholders’ equity as of December 31, 2025. The $43.3 million increase in total stockholders’ equity over the prior year end balance was primarily driven by net profits generated during the period which were partially offset by a reduction in unrealized gains in fixed-maturity securities and common stock repurchases under the Company's share repurchase program.
Investment portfolio
Our cash and invested assets consist of fixed-maturity securities, cash and cash equivalents, short-term investments, loans to affiliates, and the Utility & Infrastructure Investments.
The table below presents our cash and invested assets as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| ($ in thousands, except percentages) | Fair value | % of total | Fair value | % of total | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 13,614 | 1.1 | % | $ | 29,721 | 2.7 | % | ||||||||||||||||||
| Fixed-maturity securities | 695,290 | 56.0 | % | 558,428 | 50.5 | % | ||||||||||||||||||||
| Short-term investments | 207,542 | 16.7 | % | 220,241 | 19.9 | % | ||||||||||||||||||||
| Utility & Infrastructure Investments | 219,468 | 17.6 | % | 189,859 | 17.3 | % | ||||||||||||||||||||
| Loans to affiliates | 106,500 | 8.6 | % | 106,500 | 9.6 | % | ||||||||||||||||||||
| Other invested assets | 153 | NM | 280 | NM | ||||||||||||||||||||||
| Total cash and invested assets | $ | 1,242,567 | 100.0% | $ | 1,105,029 | 100.0% | ||||||||||||||||||||
NM = Percentage not meaningful.
As of September 30, 2026 and December 31, 2025, $13.6 million and $29.7 million, respectively, represented the cash and cash equivalents portion of our total cash and invested assets of $1.2 billion and $1.1 billion, respectively.
As of September 30, 2026 and December 31, 2025, $695.3 million and $558.4 million, respectively, of our total cash and invested assets was comprised of fixed-maturity securities that are classified as available-for-sale and carried at fair value with unrealized gains and losses on these securities, net of any deferred taxes, reported as a separate component of accumulated other comprehensive income. Also included in our investment portfolio as of September 30, 2026 and December 31, 2025, were $207.5 million and $220.2 million of short-term investments. Our fixed-maturity and short-term securities had a weighted average duration of 3.6 years and 3.8 years as of September 30, 2026 and December 31, 2025, respectively, and an average rating of “A-” as of both September 30, 2026 and December 31, 2025. Our fixed-maturity and short-term securities portfolio had a book yield of 5.4% as of September 30, 2026 and 5.2% as of December 31, 2025.
As of September 30, 2026, the amortized cost and fair value of our fixed-maturity securities and short-term investments were as follows:
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| September 30, 2026 | ||||||||||||||||||||
| ($ in thousands, except percentages) | Amortized Cost | Estimated Fair Value | % of Total Fair Value | |||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||
| U.S. Treasury securities and obligations guaranteed by the U.S. government | $ | 106,506 | $ | 105,927 | 11.7 | % | ||||||||||||||
| Corporate | 612,424 | 589,363 | 65.3 | % | ||||||||||||||||
| Total fixed-maturity securities | 718,930 | 695,290 | 77.0 | % | ||||||||||||||||
| Short-term investments | 207,542 | 207,542 | 23.0 | % | ||||||||||||||||
| Total | $ | 926,472 | $ | 902,832 | 100.0 | % | ||||||||||||||
As of December 31, 2025, the amortized cost and fair value of our fixed-maturity securities and short-term investments were as follows:
| December 31, 2025 | ||||||||||||||||||||
| ($ in thousands, except percentages) | Amortized Cost | Estimated Fair Value | % of Total Fair Value | |||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||
| U.S. Treasury securities and obligations guaranteed by the U.S. government | $ | 2,073 | $ | 2,117 | 0.3 | % | ||||||||||||||
| Corporate | 544,682 | 556,311 | 71.4 | % | ||||||||||||||||
| Total fixed-maturity securities | 546,755 | 558,428 | 71.7 | % | ||||||||||||||||
| Short-term investments | 220,241 | 220,241 | 28.3 | % | ||||||||||||||||
| Total | $ | 766,996 | $ | 778,669 | 100.0 | % | ||||||||||||||
The amortized cost and fair value of our available-for-sale investments in fixed-maturity securities summarized by contractual maturity as of September 30, 2026, were as follows:
| September 30, 2026 | ||||||||||||||||||||
| ($ in thousands, except percentages) | Amortized Cost | Estimated Fair Value | % of Total Fair Value | |||||||||||||||||
| One year or less | $ | 65,038 | $ | 64,825 | 9.3 | % | ||||||||||||||
| After one year through five years | 150,192 | 148,475 | 21.4 | % | ||||||||||||||||
| After five years through ten years | 292,949 | 280,470 | 40.3 | % | ||||||||||||||||
| After ten years | 210,751 | 201,520 | 29.0 | % | ||||||||||||||||
| Total | $ | 718,930 | $ | 695,290 | 100.0 | % | ||||||||||||||
Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
As of September 30, 2026 and December 31, 2025, $208.4 million and $178.9 million, respectively, represented the investments in ZP Master Utility Fund, Ltd. (the “Absolute Return Utility & Infrastructure Fund”) with fair values measured using our interest in the unadjusted net asset value (“NAV”) as reported by Zimmer Partners, LP (the “Investment Manager”) as of September 30, 2026. The Utility Limited Partnership operates as a feeder fund in a “master-feeder” structure, in which the Utility Limited Partnership invests substantially all of its assets in the Absolute Return Utility & Infrastructure Fund. As of September 30, 2026 and December 31, 2025, we invested 16.8% and 16.2%, respectively, of our total cash and invested assets in the Absolute Return Utility & Infrastructure Fund through the Utility Limited Partnership.
The Absolute Return Utility & Infrastructure Fund’s investment objective is to employ an energy and infrastructure-focused long/short strategy which seeks to deliver absolute returns in all market conditions with minimal correlation to energy sector indices and broader market indices. The Absolute Return Utility &
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Infrastructure Fund invests primarily in the equities of electric and gas utilities, integrated utilities, water utilities, telecommunication companies, independent power producers and pipelines, exploration and production companies, oilfield service companies, and more broadly in energy and infrastructure-related industries (such as chemicals, materials, transportation infrastructure, and real estate equities).
The Absolute Return Utility & Infrastructure Fund invests in equity securities and related instruments and derivatives, and fixed income, comprising 98.7% and 1.3%, and 95.8% and 4.2% of gross investments, respectively, as of September 30, 2026 and December 31, 2025. The following table summarizes the sectors of the Absolute Return Utility & Infrastructure Fund’s gross assets as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| % of total | % of total | |||||||||||||
| Utilities | 63.7 | % | 64.3 | % | ||||||||||
| Pipelines | 24.9 | % | 26.9 | % | ||||||||||
| Real Estate | 9.1 | % | 6.1 | % | ||||||||||
| Other Sectors | 2.3 | % | 2.7 | % | ||||||||||
| Total | 100.0 | % | 100.0 | % | ||||||||||
Off-balance sheet arrangements
As of September 30, 2026, there has been no material change to our off-balance sheet arrangements from the disclosure included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Off-balance sheet arrangements” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical accounting policies and estimates
We identified accounting policies and estimates that involve a high degree of judgment and complexity which we believe are the most critical to understanding and evaluating our financial condition and results of our operations. We use significant judgment concerning future results and developments in applying these critical accounting policies and estimates and in preparing our condensed consolidated financial statements. These judgments and estimates affect our reported amounts of assets, liabilities, revenues and expenses, and the disclosure of our material contingent assets and liabilities. The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. We evaluate our estimates regularly using information that we believe to be relevant.
There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Accounting pronouncements
See Note 2 to our condensed consolidated financial statements for further discussion regarding our recent accounting pronouncements.
Regulatory Developments
There were no material regulatory developments during the three months ended September 30, 2026.
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Emerging growth company
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may remain an emerging growth company for up to five years following the IPO. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.
Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business. 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, equity prices, foreign currency exchange rates, and commodity prices. The primary components of market risk affecting us are credit risk, interest rate risk, and equity price risk.
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. Our risk management strategy and investment policy is to primarily invest in debt instruments of high credit quality issuers and to limit the amount of credit exposure with respect to particular ratings categories and any one issuer. As of both September 30, 2026 and December 31, 2025, our fixed-maturity and short-term securities portfolio had an average rating of “A-”, with approximately 37% and 32%, respectively, of securities in that portfolio rated “A” or better by at least one nationally recognized rating organization. Our policy is to invest predominantly in investment grade securities, while making strategic, risk-adjusted allocations to targeted investment opportunities across the credit spectrum. We monitor the financial condition of all of the issuers of fixed-maturity securities in our portfolio. The credit profile of our fixed-maturity and short-term securities portfolio was comprised of 21.7% AAA, 13.0% AA, 1.8% A, 48.4% BBB, 11.5% BB and 3.6% below BB or unrated securities as of September 30, 2026 and 28.3% AAA, 0.3% AA, 3.4% A, 56.2% BBB, 8.0% BB and 3.8% below BB or unrated securities as of December 31, 2025.
We are exposed to credit losses from reinsurers being unable to meet their obligations. We evaluate the financial condition of potential reinsurers and reinsure our business with highly rated reinsurers with a rating of “A-” (Excellent) or better from A.M. Best. Reinsurers who do not meet the Company’s rating criteria are required to post collateral. We have not experienced any credit losses from reinsurance recoverables and did not record an allowance for uncollectible reinsurance recoverables as of September 30, 2026 and December 31, 2025.
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Interest rate risk
Interest rate risk is the risk that we will incur economic losses due to adverse changes in interest rates. Our interest rate risk is associated primarily with our fixed-maturity securities, which are carried at fair value, and our short-term investments, which are carried at amortized cost that approximates fair value. These investments totaled $902.8 million and $778.7 million as of September 30, 2026 and December 31, 2025, respectively. When market interest rates rise, the fair value of these investments decreases, and when interest rates fall, their fair value increases. Because our fixed-maturity securities are classified as available-for-sale, unrealized changes in their fair value are recorded, net of tax, in accumulated other comprehensive income (loss) within stockholders’ equity, and do not ordinarily have an immediate effect on net income. We manage interest rate risk by managing the duration of our investment portfolio in relation to the duration of our loss reserves.
As of September 30, 2026 and December 31, 2025, the weighted average duration of these investments was approximately 3.6 years and 3.8 years, respectively. A hypothetical immediate 100 basis point increase in interest rates would have decreased their fair value by approximately $32.0 million, or 3.5%, as of September 30, 2026. This analysis assumes a parallel shift in the yield curve and does not reflect actions we might take in response; actual results may differ. These balances include short-term investments of $207.5 million and $220.2 million as of September 30, 2026 and December 31, 2025, respectively, consisting primarily of U.S. Treasury bills, whose short maturities limit their sensitivity to changes in interest rates.
Equity risk
Our Utility & Infrastructure Investments have equity risk due to the equity strategy, and therefore, we have indirect equity risk through our Utility & Infrastructure Investments. Equity risk represents the potential economic losses due to adverse changes in equity security prices.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2026, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the Company’s disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are subject to routine legal proceedings in the normal course of operating our insurance business. We are not currently involved in any legal proceedings which reasonably could be expected to have a material adverse effect on our business, results of operations, or financial condition.
Item 1A. Risk Factors
There have been no material changes in our risk factors in the three months ended September 30, 2026 from those set forth in the section entitled “Risk Factors,” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The Company did not repurchase any shares of its common stock during the three months ended September 30, 2026. As of September 30, 2026, approximately $47.2 million remained available for repurchases under the Company’s share repurchase program.
The Company’s Board of Directors has authorized a share repurchase program under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in privately negotiated transactions or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels appropriate for the Company’s business operations, changes in levels of written premiums, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws and other factors. The cost of treasury stock acquired pursuant to common share repurchases includes broker commissions and the applicable 1% federal excise tax imposed on common share repurchase activity, net of qualifying common share issuances, as part of the Inflation Reduction Act of 2022.
For additional information regarding the Company’s share repurchases, see “Part I—Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
Disclosure in lieu of reporting on a Current Report on Form 8-K.
Entry into Material Definitive Agreement
Effective November 1, 2026, Ategrity Limited, a subsidiary of the Company, subscribed for limited partnership interests in, and became a limited partner of ZP Utility Fund, L.P. (the “New Feeder Fund”), and became party to the Fourth Amended and Restated Limited Partnership Agreement of the New Feeder Fund, dated as of October 1, 2018, in connection with the optimization of its investment in the Absolute Return Utility &
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Infrastructure Fund (the “Master Fund”). Pursuant to this transaction, Ategrity Limited will move its existing investment in the Master Fund from the Utility Limited Partnership to the New Feeder Fund.
The New Feeder Fund, like the Utility Limited Partnership, operates as a feeder fund in a “master-feeder” structure, investing substantially all of its assets in the Master Fund. The New Feeder Fund includes other unaffiliated limited partners, and following the move of Ategrity Limited’s investment, the Company and its subsidiaries are expected to own approximately 29.1% of the New Feeder. The terms of Ategrity Limited’s investment in the New Feeder Fund’s Limited Partnership Agreement are substantially similar to those of the Amended and Restated Limited Partnership Agreement of the Utility Limited Partnership, which was previously filed as Exhibit 10.12 to the Company’s Registration Statement on Form S-1/A (File No. 333-286059), filed with the SEC on March 24, 2025. Accordingly, the transition will not change the underlying Master Fund in which the Company and its subsidiaries invest.
ZP Utility GP, LLC serves as general partner of the New Feeder Fund, and the Investment Manager serves as its investment manager. Both entities are affiliated with ZFSG, the Company’s controlling stockholder.
Material changes to the procedures by which security holders may recommend nominees to the board of directors.
None.
Insider trading arrangements and policies.
During the three months ended September 30, 2026, no director or “officer” (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted terminated
Item 6. Exhibits
| Incorporated by Reference | ||||||||||||||||||||
| Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | ||||||||||||||
| 3.1 | Articles of Incorporation of Ategrity Specialty Insurance Company Holdings | S-8 | 333-287969 | 3.1 | 6/12/2025 | |||||||||||||||
| 3.2 | Bylaws of Ategrity Specialty Insurance Company Holdings | S-8 | 333-287967 | 3.2 | 6/12/2025 | |||||||||||||||
10.1§ | Employment offer letter, dated July 9, 2026, between Ategrity Specialty Insurance Company Holdings and Neil Adler. | * | ||||||||||||||||||
| 10.2§ | Third Amended and Restated Employment Agreement, dated September 4, 2026, between Ategrity Specialty Insurance Company Holdings and Chris Schenk. | 8-K | 001-42695 | 10.1 | 9/4/2026 | |||||||||||||||
| 10.3§ | Separation Agreement and Release, dated October 20, 2026, between Ategrity Specialty Insurance Company Holdings and Neelam Patel. | 8-K | 001-42695 | 10.1 | 10/21/2026 | |||||||||||||||
10.4 | Fourth Amended and Restated Limited Partnership Agreement of ZP Utility Fund, L.P., dated as of October 1, 2018, by and among ZP Utility GP, LLC, as general partner, and the limited partners party thereto, including Ategrity Specialty Insurance Limited, as a limited partner. | * | ||||||||||||||||||
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| Incorporated by Reference | ||||||||||||||||||||
| Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | ||||||||||||||
| 31.1 | Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | ||||||||||||||||||
| 31.2 | Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | ||||||||||||||||||
32.1 † | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ** | ||||||||||||||||||
32.2 † | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ** | ||||||||||||||||||
| 101.INS *** | Inline XBRL Instance 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 (embedded within the Inline XBRL document). | |||||||||||||||||||
*Filed herewith.
**Furnished herewith.
***The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
†This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
§ Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| Ategrity Specialty Insurance Company Holdings | ||||||||
| Date: November 5, 2026 | By: | /s/ Justin Cohen | ||||||
| Justin Cohen | ||||||||
Chief Executive Officer & Director | ||||||||
| (Principal Executive Officer) | ||||||||
| Date: November 5, 2026 | By: | /s/ Neil Adler | ||||||
| Neil Adler | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
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