[10-Q] Safety Insurance Group Inc Quarterly Earnings Report

Q: What was Safety Insurance Group’s Q2 2025 diluted EPS (SAFT)?

Diluted EPS for Q2 2025 was $1.95 , up from $1.13 in Q2 2024.

Q: How much did net earned premiums grow year over year?

Net earned premiums increased 14.2% to $282.1 million.

Q: How has shareholders’ equity changed since December 31, 2024?

Shareholders’ equity rose from $828.5 m to $873.3 m , a 5.4% increase.

Q: What dividend did SAFT pay during Q2 2025?

The company paid a $0.90 cash dividend per common share.

Q: What is the size and composition of SAFT’s investment portfolio?

Invested assets total $1.58 b , with $1.19 b in fixed maturities and $235 m in equities.

Filing Impact

(Moderate)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

Safety Insurance Group (SAFT) delivered a robust Q2-25. Net earned premiums rose 14.2% YoY to $282.1 m, lifting total revenue 17.3% to $316.3 m. Losses and LAE grew 12.4%, but expense discipline allowed net income to spike 74% to $28.9 m; diluted EPS reached $1.95 versus $1.13.

Year-to-date revenue is up 14.8% to $617.8 m with net income of $50.8 m (+38.5%), driving diluted EPS to $3.43. Operating cash flow swung to a $35.5 m inflow from $4.5 m, reflecting stronger underwriting profitability.

Balance-sheet strength: assets increased to $2.36 b and shareholders’ equity to $873.3 m (+5.4% YTD). Unrealized losses on the AFS bond portfolio narrowed to $50.3 m, improving AOCI by $18.2 m. Invested assets total $1.58 b, 75% in fixed income. The company refinanced $30 m of short-term borrowings into long-term debt, keeping leverage modest at ~7% of capital.

The board kept the quarterly dividend at $0.90 (approx. 3.9% yield) and no repurchases were reported. Management cites minimal credit concerns; allowance for bond credit losses stands at $1.5 m. Overall, the filing signals improving underwriting margins, healthy liquidity and disciplined capital management.

Positive

Q2 2025 EPS surged 72% YoY to $1.95; revenue up 17%.
Operating cash flow improved to +$35.5 m from +$4.5 m.
Shareholders’ equity rose 5.4% YTD; AOCI loss narrowed by $18 m.
$0.90 dividend maintained, reflecting capital strength.

Negative

Losses and LAE increased 12%, highlighting claims inflation pressure.
Unrealized losses on fixed-income portfolio still sizable at $50 m.
New $30 m long-term debt modestly increases leverage.

Insights

TL;DR Premium growth plus investment gains boosted SAFT’s EPS; capital remains solid despite inflationary pressure on claims.

Revenue and EPS beats stem from double-digit premium expansion and higher investment income. The combined ratio (not explicitly disclosed) appears improved given revenue/expense trends, hinting at positive pricing momentum. Equity climbed 5% YTD while AOCI losses shrank, evidencing rate-driven bond recovery. Debt refinancing lengthens maturity without straining leverage. Dividend stability underscores management’s confidence. Risks: rising claims severity and still-large unrealized bond losses. Net impact: modestly positive.

TL;DR Better underwriting cash flow and book-value growth enhance SAFT’s defensive profile for income investors.

Operating cash flow reversal to +$35 m is material, supporting the 3.9% dividend. Book value per share around $58.6 benefits from narrowing AOCI. The 30 m long-term borrowing is small relative to $873 m equity. Investment book tilt to high-grade fixed income (credit allowance only $1.5 m) limits downside, though $50 m unrealized loss warrants monitoring if rates back up. Shares may re-rate on consistent premium growth and stable yields; impact rated positive.

08/08/2025 - 11:14 AM

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

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

For the quarterly period ended June 30, 2025

☐

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

For the transition period from ______to ______

Commission File Number: 000-50070

SAFETY INSURANCE GROUP, INC.

(Exact name of registrant as specified in its charter)


Delaware		13-4181699
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

20 Custom House Street, Boston, Massachusetts 02110

(Address of principal executive offices including zip code)

(617) 951-0600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SAFT	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition 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	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ◻ No ☒

As of August 1, 2025 there were 14,894,173 shares of common stock with a par value of $0.01 per share outstanding.

Table of Contents

SAFETY INSURANCE GROUP, INC.

TABLE OF CONTENTS

		Page No.
Part I. Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statements of Changes in Shareholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Information about Market Risk	42
Item 4.	Controls and Procedures	43
Part II. Other Information
Item 1	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	44
EXHIBIT INDEX		45
SIGNATURE		46

Table of Contents

Safety Insurance Group, Inc. and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands, except share data)


	June 30,		December 31,
	2025		2024
	(Unaudited)
Assets
Investments:
Fixed maturities, available for sale, at fair value (amortized cost: $1,231,378 and $1,181,038, allowance for expected credit losses of $1,453 and $1,198)	$	1,188,337	$	1,115,218
Short-term investments, at fair value (cost: $0 and $19,970)		—		19,975
Equity securities, at fair value (cost: $208,264 and $201,258)		235,352		221,422
Other invested assets		156,419		156,444
Total investments		1,580,108		1,513,059
Cash and cash equivalents		49,409		58,974
Accounts receivable, net of allowance for expected credit losses of $827 and $918		333,014		306,465
Receivable for securities sold		315		568
Accrued investment income		8,682		7,426
Taxes recoverable		1,701		—
Receivable from reinsurers related to paid loss and loss adjustment expenses		32,234		26,386
Receivable from reinsurers related to unpaid loss and loss adjustment expenses		135,626		130,792
Ceded unearned premiums		41,508		41,413
Deferred policy acquisition costs		111,481		105,474
Deferred income taxes		6,452		11,200
Equity and deposits in pools		4,875		3,740
Operating lease right-of-use-assets		13,657		15,733
Goodwill		17,093		17,093
Intangible assets		7,256		7,730
Other assets		20,797		24,037
Total assets	$	2,364,208	$	2,270,090

Liabilities
Losses and loss adjustment expense reserves	$	685,941	$	671,669
Unearned premium reserves		659,464		619,916
Accounts payable and accrued liabilities		69,568		77,276
Payable for securities purchased		17,103		6,949
Payable to reinsurers		15,211		19,074
Taxes payable		—		1,009
Short-term debt		—		30,000
Long-term debt		30,000		—
Operating lease liabilities		13,657		15,733
Total liabilities		1,490,944		1,441,626

Commitments and contingencies (Note 8)

Shareholders’ equity
Common stock: $0.01 par value; 30,000,000 shares authorized; 18,051,129 and 17,995,584 shares issued		181		180
Additional paid-in capital		233,391		230,864
Accumulated other comprehensive loss, net of taxes		(32,854)		(51,047)
Retained earnings		822,839		798,760
Treasury stock, at cost: 3,157,577 shares		(150,293)		(150,293)
Total shareholders’ equity		873,264		828,464
Total liabilities and shareholders’ equity	$	2,364,208	$	2,270,090

The accompanying notes are an integral part of these financial statements.

Table of Contents

Safety Insurance Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024

Net earned premiums	$	282,113	$	246,944	$	554,803	$	482,997
Net investment income		15,724		13,500		30,298		28,731
Earnings from partnership investments		346		2,480		2,458		4,252
Net realized gains on investments		2,131		2,715		6,394		3,207
Change in net unrealized gains on equity securities		7,194		(3,483)		6,923		4,182
Credit loss expense		66		(37)		(255)		(179)
Commission income		2,285		2,027		4,380		3,835
Finance and other service income		6,485		5,637		12,772		10,991
Total revenue		316,344		269,783		617,773		538,016

Losses and loss adjustment expenses		194,232		172,742		384,522		341,141
Underwriting, operating and related expenses		82,796		73,921		163,647		146,188
Other expense		2,047		1,747		4,001		3,584
Interest expense		442		138		546		261
Total expenses		279,517		248,548		552,716		491,174

Income before income taxes		36,827		21,235		65,057		46,842
Income tax expense		7,890		4,599		14,224		10,128
Net income	$	28,937	$	16,636	$	50,833	$	36,714

Earnings per weighted average common share:
Basic	$	1.95	$	1.13	$	3.44	$	2.49
Diluted	$	1.95	$	1.13	$	3.43	$	2.48

Cash dividends paid per common share	$	0.90	$	0.90	$	1.80	$	1.80

Number of shares used in computing earnings per share:
Basic		14,744,968		14,698,770		14,731,843		14,682,937
Diluted		14,782,244		14,722,209		14,763,732		14,709,398

The accompanying notes are an integral part of these financial statements.

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Safety Insurance Group, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollars in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income	$	28,937	$	16,636	$	50,833	$	36,714

Other comprehensive income (loss), net of tax:
Unrealized holding gains (losses) during the period, net of income tax expense (benefit) of $2,020, $247, $6,178 and ($1,096).		7,600		928		23,244		(4,118)
Reclassification adjustment for net realized gains on investments included in net income, net of income tax benefit of ($447), ($570), ($1,343) and ($674).		(1,683)		(2,145)		(5,051)		(2,534)
Other comprehensive income (loss), net of tax:		5,917		(1,217)		18,193		(6,652)

Comprehensive income	$	34,854	$	15,419	$	69,026	$	30,062

The accompanying notes are an integral part of these financial statements.

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Safety Insurance Group, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(Dollars in thousands)


					Accumulated
					Other
			Additional		Comprehensive						Total
	Common		Paid-in		Loss,		Retained		Treasury		Shareholders’
	Stock		Capital		Net of Taxes		Earnings		Stock		Equity
Balance at December 31, 2023	$	179	$	226,380	$	(53,191)	$	781,192	$	(150,293)	$	804,267
Net income, January 1 to March 31, 2024		—		—		—		20,078		—		20,078
Unrealized gains on securities available for sale, net of deferred federal income taxes		—		—		(5,435)		—		—		(5,435)
Restricted share awards issued		—		599		—		—		—		599
Recognition of employee share-based compensation, net of deferred federal income taxes		1		841		—		—		—		842
Dividends paid and accrued		—		—		—		(13,280)		—		(13,280)
Balance at March 31, 2024		180	$	227,820		(58,626)		787,990		(150,293)		807,071
Net income, April 1 to June 30, 2024		—		—		—		16,636		—		16,636
Unrealized gains on securities available for sale, net of deferred federal income taxes		—		—		(1,217)		—		—		(1,217)
Recognition of employee share-based compensation, net of deferred federal income taxes		—		997		—		—		—		997
Dividends paid and accrued		—		—		—		(13,308)		—		(13,308)
Balance at June 30, 2024	$	180	$	228,817	$	(59,843)	$	791,318	$	(150,293)	$	810,179


					Accumulated
					Other
			Additional		Comprehensive						Total
	Common		Paid-in		Loss,		Retained		Treasury		Shareholders’
			Capital		Net of Taxes		Earnings		Stock		Equity
Balance at December 31, 2024	$	180	$	230,864	$	(51,047)	$	798,760	$	(150,293)	$	828,464
Net income, January 1 to March 31, 2025		—		—		—		21,896		—		21,896
Unrealized gains on securities available for sale, net of deferred federal income taxes		—		—		12,276		—		—		12,276
Restricted share awards issued		—		477		—		—		—		477
Recognition of employee share-based compensation, net of deferred federal income taxes		1		923		—		—		—		924
Dividends paid and accrued		—		—		—		(13,370)		—		(13,370)
Balance at March 31, 2025		181		232,264		(38,771)		807,286		(150,293)		850,667
Net income, April 1 to June 30, 2025		—		—		—		28,937		—		28,937
Unrealized losses on securities available for sale, net of deferred federal income taxes		—		—		5,917		—		—		5,917
Recognition of employee share-based compensation, net of deferred federal income taxes		—		1,127		—		—		—		1,127
Dividends paid and accrued		—		—		—		(13,384)		—		(13,384)
Balance at June 30, 2025	$	181	$	233,391	$	(32,854)	$	822,839	$	(150,293)	$	873,264

The accompanying notes are an integral part of these financial statements.

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Safety Insurance Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)


	Six Months Ended June 30,
	2025		2024
Cash flows from operating activities:
Net income	$	50,833	$	36,714
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Investment amortization, net		(321)		33
Fixed asset depreciation, net		3,911		4,613
Stock based compensation		2,528		2,438
Credit for deferred income taxes		(88)		(410)
Net realized gains on investments		(6,394)		(3,207)
Credit loss expense		255		179
Earnings from partnership investments		(2,413)		(2,482)
Change in net unrealized gains on equity securities		(6,923)		(4,182)
Changes in assets and liabilities:
Accounts receivable, net		(26,549)		(55,674)
Accrued investment income		(1,256)		(20)
Receivable from reinsurers		(10,682)		(28,182)
Ceded unearned premiums		(95)		(3,623)
Deferred policy acquisition costs		(6,007)		(8,682)
Taxes payable		(2,710)		(1,610)
Other assets		(932)		13,156
Losses and loss adjustment expense reserves		14,272		18,556
Unearned premium reserves		39,548		58,427
Accounts payable and accrued liabilities		(7,618)		4,326
Payable to reinsurers		(3,863)		(205)
Other liabilities		—		(25,711)
Net cash provided by operating activities		35,496		4,454

Cash flows from investing activities:
Fixed maturities purchased		(117,399)		(71,351)
Proceeds from maturities of short-term investments		20,000		—
Equity securities purchased		(37,209)		(24,294)
Other invested assets purchased		(4,406)		(6,935)
Proceeds from sales and paydowns of fixed maturities		44,818		49,891
Proceeds from maturities, redemptions, and calls of fixed maturities		32,519		28,717
Proceed from sales of equity securities		37,407		53,152
Proceeds from other invested assets redeemed		6,453		4,249
Acquisition, net of cash received		—		(1,000)
Fixed assets purchased		(400)		(3,608)
Net cash (used for) provided by investing activities		(18,217)		28,821

Cash flows from financing activities:
Proceeds from Citizens loan		30,000		—
Proceeds from FHLB loan		—		15,000
Payments on FHLB loan		(30,000)		(15,000)
Dividends paid to shareholders		(26,844)		(26,848)
Net cash used for financing activities		(26,844)		(26,848)

Net increase (decrease) in cash and cash equivalents		(9,565)		6,427
Cash and cash equivalents at beginning of year		58,974		38,152
Cash and cash equivalents at end of period	$	49,409	$	44,579

The accompanying notes are an integral part of these financial statements.

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In this Form 10-Q, Notes to the Unaudited Consolidated Financial Statements, dollar amounts are presented in thousands, except per share data.

1. Basis of Presentation

The consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

The consolidated financial statements include Safety Insurance Group, Inc. and its subsidiaries (the “Company”). The subsidiaries consist of Safety Insurance Company, Safety Indemnity Insurance Company, Safety Property and Casualty Insurance Company, Safety Northeast Insurance Company, Safety Northeast Insurance Agency, Inc. (“SNIA”), and Safety Management Corporation (“SMC”), which is SNIA’s holding company. All intercompany commission transactions, including commission income and other expense, have been eliminated. Eliminated commission income totaled $317 and $562 for the three and six months ended June 30, 2025, respectively. As of June 30, 2025, fiduciary assets held by SNIA were immaterial and less than $170.

The financial information for the three and six months ended June 30, 2025 and 2024 is unaudited; however, in the opinion of the Company, the information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial condition, results of operations, and cash flows for the periods. The financial information as of December 31, 2024 is derived from the audited consolidated financial statements included in the Company’s 2024 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27, 2025.

These unaudited interim consolidated financial statements may not be indicative of financial results for the full year and should be read in conjunction with the audited consolidated financial statements included in the Company’s 2024 Annual Report on Form 10-K filed with the SEC on February 27, 2025.

The Company is a leading provider of property and casualty insurance focused primarily on the Massachusetts market. The Company’s principal product line is automobile insurance. The Company primarily operates through its insurance company subsidiaries, Safety Insurance Company, Safety Indemnity Insurance Company, Safety Property and Casualty Insurance Company, and Safety Northeast Insurance Company (together referred to as the “Insurance Subsidiaries”).

Since 1998, the Company had been a member of the Massachusetts Property Insurance Underwriting Association (“FAIR Plan”). The FAIR Plan was a residual market insurance association in which all companies writing basic property insurance in the Commonwealth of Massachusetts were required to participate, with profits and losses shared among member companies on a written premium basis. On April 1, 2024, the Massachusetts Division of Insurance approved a restructuring of the FAIR Plan (“FAIR Plan Restructuring”), transforming it from a partnership that shares profit and losses with member companies to a stand-alone, risk bearing entity, and distributing the accumulated members’ equity. As a result of the FAIR Plan Restructuring, during the year ended December 31, 2024, the Company recognized an underwriting gain through the release of prior year loss reserves, and established a new invested asset, (“Investment in FAIR Plan Trust”).

2. Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU updated reportable segment disclosures primarily through enhanced disclosures about significant segment expenses. This ASU does not change how a Company identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. This ASU was effective for fiscal years starting January 1, 2024, and for interim periods starting January 1, 2025, and was applied on a retrospective basis. The effect of

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implementing this guidance was not material to the Company’s consolidated financial position, results of operations or cash flows.

The Company has one reportable operating segment, property and casualty insurance operations. Property and casualty insurance operations accounted for substantially all of the Company’s operations. The Company’s business is organized around private passenger automobile insurance in Massachusetts sold exclusively through independent agents and offers other personal and commercial insurance as complementary products. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The Company’s chief operating decision maker (“CODM”) is the chief executive officer. The CODM assesses performance for the property and casualty insurance operations segment and decides how to allocate resources based on consolidated net income, which is reported in the consolidated statements of operations. The significant segment expenses regularly provided and reviewed by the CODM are the consolidated expenses as reported in the consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheets as total assets. The CODM uses consolidated net income in deciding whether to reinvest profits into the property and casualty insurance operations or into other parts of the entity, such as for acquisitions or to pay dividends.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU updated the required income tax disclosures to include disclosure of income taxes paid disaggregated by jurisdiction and greater disaggregation of information in the required rate reconciliation. This ASU is effective for fiscal years starting January 1, 2025, and will be applied on a prospective basis. The Company is evaluating the disclosure impact of this new guidance; however, it will not have an impact on the consolidated financial position, results of operations, or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting of Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disaggregated disclosure of income statement expenses. This ASU does not change how a Company presents expense captions on the face of the income statement; however, it requires disaggregation of certain expense captions into specified categories in disclosures in the footnotes to the financial statements. This ASU is effective for fiscal years starting January 1, 2027, and for interim periods starting January 1, 2028 and will be applied on a prospective basis. The Company is evaluating the disclosure impact of this new guidance; however, it will not have an impact on the consolidated financial position, results of operations, or cash flows.

3. Earnings per Weighted Average Common Share

Basic earnings per weighted average common share (“EPS”) are calculated by dividing net income by the weighted average number of basic common shares outstanding during the period. Diluted earnings per share amounts are based on the weighted average number of common shares including non-vested performance stock grants.

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The following table sets forth the computation of basic and diluted EPS for the periods indicated.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Earnings attributable to common shareholders - basic and diluted:
Net income from continuing operations	$	28,937	$	16,636	$	50,833	$	36,714
Allocation of income for participating shares		(136)		(73)		(229)		(162)
Net income from continuing operations attributed to common shareholders	$	28,801	$	16,563	$	50,604	$	36,552
Earnings per share denominator - basic and diluted
Total weighted average common shares outstanding, including participating shares		14,814,223		14,763,268		14,799,173		14,747,491
Less: weighted average participating shares		(69,255)		(64,498)		(67,330)		(64,554)
Basic earnings per share denominator		14,744,968		14,698,770		14,731,843		14,682,937
Common equivalent shares- non-vested performance stock grants		37,276		23,439		31,889		26,461
Diluted earnings per share denominator		14,782,244		14,722,209		14,763,732		14,709,398

Basic earnings per share	$	1.95	$	1.13	$	3.44	$	2.49
Diluted earnings per share	$	1.95	$	1.13	$	3.43	$	2.48

Undistributed earnings attributable to common shareholders - basic and diluted:
Net income from continuing operations attributable to common shareholders -Basic	$	1.95	$	1.13	$	3.44	$	2.49
Dividends declared		(0.90)		(0.90)		(1.80)		(1.80)
Undistributed earnings	$	1.05	$	0.23	$	1.64	$	0.69

Net income from continuing operations attributable to common shareholders -Diluted	$	1.95	$	1.13	$	3.43	$	2.48
Dividends declared		(0.90)		(0.90)		(1.80)		(1.80)
Undistributed earnings	$	1.05	$	0.23	$	1.63	$	0.68

Diluted EPS excludes non-vested performance stock grants with exercise prices and exercise tax benefits greater than the average market price of the Company’s common stock during the period because their inclusion would be anti-dilutive. There were no anti-dilutive shares related to non-vested stock grants for the three months ended June 30, 2025 and 190 anti-dilutive shares related to non-vested stock grants for the three months ended June 30, 2024. There were no anti-dilutive shares related to non-vested stock grants for the six months ended June 30, 2025 and 2024, respectively.

4. Share-Based Compensation

2018 Long Term Incentive Plan

On March 24, 2022, the Company’s Board of Directors adopted the Amended and Restated Safety Insurance Group, Inc. 2018 Long-Term Incentive Plan (“the Amended 2018 Plan”), which was subsequently approved by our shareholders at the 2022 Annual Meeting of Shareholders. The Amended 2018 Plan increased the share pool limit by adding 350,000 common shares to the previously adopted Safety Insurance Group, Inc., 2018 Long-Term Incentive Plan. The Amended 2018 Plan enables the grant of stock awards, performance shares, cash-based performance units, other stock-based awards, stock options, stock appreciation rights, and stock unit awards, each of which may be granted separately or in tandem with other awards. Eligibility to participate includes officers, directors, employees and other individuals who provide bona fide services to the Company. The Amended 2018 Plan supersedes the Company’s 2002 Management Omnibus Incentive Plan (“the 2002 Incentive Plan”).

The Amended 2018 Plan establishes a pool of 700,000 shares of common stock available for issuance to our employees and other eligible participants. The Board of Directors and the Compensation Committee intend to issue awards under the Amended 2018 Plan in the future.

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The maximum number of shares of common stock between both the Amended 2018 Plan and 2002 Incentive Plan with respect to which awards may be granted is 3,200,000. No further grants will be allowed under the 2002 Incentive Plan. At June 30, 2025, there were 236,326 shares available for future grant.

Accounting and Reporting for Stock-Based Awards

The Company measures and recognizes the cost of employee services received in exchange for an award of equity instruments. Under the provisions of Accounting Standards Codification (“ASC”) 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant).

Restricted Stock

Service-based restricted stock awarded in the form of unvested shares is recorded at the market value of the Company’s common stock on the grant date and amortized ratably as compensation expense over the requisite service period. Service-based restricted stock awards generally vest over a three-year period and vest 30% on the first and second anniversaries of the grant date and 40% on the third anniversary of the grant date, except for non-executive employees’ restricted stock awards granted prior to 2018 which vest ratably over a five-year service period and independent directors’ stock awards which vest immediately. Our independent directors are subject to stock ownership guidelines, which require them to have a value four times their annual cash retainer.

In addition to service-based awards, the Company grants performance-based restricted shares to certain employees. These performance shares cliff vest after a three-year performance period provided certain performance measures are attained. A portion of these awards, which contain a market condition, vest according to the level of total shareholder return achieved by the Company compared to its property-casualty insurance peers over a three-year period. The remainder, which contain a performance condition, vest according to the level of Company’s combined ratio results compared to a target based on its property-casualty insurance peers.

Actual payouts can range from 0% to 200% of target shares awarded depending upon the level of achievement of the respective market and performance conditions during a three calendar-year performance period. Compensation expense for share awards with a performance condition is based on the probable number of awards expected to vest using the performance level most likely to be achieved at the end of the performance period.

Performance-based awards with market conditions are accounted for and measured differently from awards that have a performance or service condition. The effect of a market condition is reflected in the award’s fair value on the grant date. That fair value is recognized as compensation cost over the requisite service period regardless of whether the market-based performance objective has been satisfied.

All of the Company’s restricted stock awards are issued as incentive compensation and are equity classified.

The following table summarizes restricted stock activity under the Amended 2018 Plan during the six months ended June 30, 2025 assuming a target payout for the 2025 performance-based shares.


	Shares	Weighted		Performance-based		Weighted
	Under	Average		Shares Under		Average
	Restriction	Fair Value		Restriction		Fair Value
Outstanding at beginning of year	63,522	$	83.60	73,232		$	83.53
Granted	41,178		79.67	29,105	(1)		79.67
Vested and unrestricted	(35,188)		84.77	(8,541)			84.98
Forfeited	(291)		82.53	(14,447)			84.98
Outstanding at end of period	69,221	$	82.85	79,349		$	83.85

(1)	Includes an update of previously awarded performance-based restricted share awards. The updated shares were calculated based on the attainment of pre-established performance objectives and granted under the Amended 2018 Plan.

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As of June 30, 2025, there was $7,786 of unrecognized compensation expense related to non-vested restricted stock awards that is expected to be recognized over a weighted average period of 1.7 years. The total fair value of the shares that were vested and unrestricted during the six months ended June 30, 2025 and 2024 was $3,709 and $4,300, respectively. For the six months ended June 30, 2025 and 2024, the Company recorded compensation expense related to restricted stock of $1,997 and $1,926, net of income tax benefits of $531 and $512, respectively, within Underwriting, operating and related expenses on the Consolidated Statements of Operations.

5. Investments

The gross unrealized gains and losses on investments in fixed maturity securities, including redeemable preferred stocks that have characteristics of fixed maturities, short-term investments, equity securities, including interests in mutual funds, and other invested assets were as follows for the periods indicated.

As of June 30, 2025

Cost or

Allowance for

Gross Unrealized

Estimated

Amortized

Expected Credit

Fair

Cost

Losses

Gains

Losses (3)

Value

U.S. Treasury securities

2,402

—

(49)

2,369

Obligations of states and political subdivisions

38,497

—

342

(2,024)

36,815

Residential mortgage-backed securities (1)

336,124

—

1,941

(20,181)

317,884

Commercial mortgage-backed securities

149,935

—

361

(7,959)

142,337

Other asset-backed securities

63,489

—

235

(1,305)

62,419

Corporate and other securities

640,931

(1,453)

5,768

(18,733)

626,513

Subtotal, fixed maturity securities

1,231,378

(1,453)

8,663

(50,251)

1,188,337

Equity securities (2)

208,264

—

35,603

(8,515)

235,352

Other invested assets (4)

156,419

—

156,419

Totals

1,596,061

(1,453)

44,266

(58,766)

1,580,108


	As of December 31, 2024

	Cost or		Allowance for		Gross Unrealized				Estimated
	Amortized		Expected Credit						Fair
	Cost		Losses		Gains		Losses (3)		Value
U.S. Treasury securities	$	2,418	$	—	$	2	$	(77)	$	2,343
Obligations of states and political subdivisions		38,581		—		170		(2,585)		36,166
Residential mortgage-backed securities (1)		327,161		—		601		(26,535)		301,227
Commercial mortgage-backed securities		140,124		—		91		(10,840)		129,375
Other asset-backed securities		65,456		—		155		(1,894)		63,717
Corporate and other securities		607,298		(1,198)		2,734		(26,444)		582,390
Subtotal, fixed maturity securities		1,181,038		(1,198)		3,753		(68,375)		1,115,218
Short-term investments		19,970		—		5		—		19,975
Equity securities (2)		201,258		—		29,244		(9,080)		221,422
Other invested assets (4)		156,444		—		—		—		156,444
Totals	$	1,558,710	$	(1,198)	$	33,002	$	(77,455)	$	1,513,059

(1)

Residential mortgage-backed securities consist primarily of obligations of U.S. Government agencies including collateralized mortgage obligations issued, guaranteed and/or insured by the following issuers: Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) and the Federal Home Loan Bank (FHLB).

(2)	Equity securities include common stock, preferred stock, mutual funds and interests in mutual funds held to fund the Company’s executive deferred compensation plan.

(3)	The Company’s investment portfolio includes 795 and 884 securities in an unrealized loss position at June 30, 2025 and December 31, 2024, respectively.

(4)	Other invested assets are generally accounted for under the equity method which approximated fair value.

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The amortized cost and the estimated fair value of fixed maturity securities, by maturity, are shown below for the period indicated. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	As of June 30, 2025
	Amortized		Estimated
	Cost		Fair Value
Due in one year or less	$	39,895	$	38,626
Due after one year through five years		340,327		332,267
Due after five years through ten years		275,732		269,427
Due after ten years through twenty years		24,288		23,764
Due after twenty years		1,588		1,613
Asset-backed securities		549,548		522,640
Totals	$	1,231,378	$	1,188,337

The gross realized gains and losses on sales of investments were as follows for the periods indicated.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Gross realized gains
Fixed maturity securities	$	127	$	76	$	313	$	306
Equity securities		3,426		3,125		8,271		6,262
Gross realized losses
Fixed maturity securities		(147)		(331)		(271)		(694)
Equity securities		(1,275)		(155)		(1,919)		(2,667)
Net realized gains on investments	$	2,131	$	2,715	$	6,394	$	3,207

In the normal course of business, the Company enters into transactions involving various types of financial instruments, including investments in fixed maturities and equity securities. Investment transactions have credit exposure to the extent that a counter party may default on an obligation to the Company. Credit risk is a consequence of carrying, trading and investing in securities. To manage credit risk, the Company focuses on higher quality fixed income securities, reviews the credit strength of all companies in which it invests, limits its exposure in any one investment and monitors the portfolio quality, taking into account credit ratings assigned by recognized statistical rating organizations.

The following tables as of June 30, 2025 and December 31, 2024 present the gross unrealized losses included in the Company’s investment portfolio and the fair value of those securities aggregated by investment category. The tables also present the length of time that they have been in a continuous unrealized loss position.

As of June 30, 2025

Less than 12 Months

12 Months or More

Total

Estimated

Unrealized

Estimated

Unrealized

Estimated

Unrealized

Fair Value

Losses

Fair Value

Losses

Fair Value

Losses

U.S. Treasury securities

—

1,454

Obligations of states and political subdivisions

3,965

19,633

2,000

23,598

2,024

Residential mortgage-backed securities

37,596

946

154,965

19,235

192,561

20,181

Commercial mortgage-backed securities

—

118,604

7,959

118,604

7,959

Other asset-backed securities

17,289

187

19,723

1,118

37,012

1,305

Corporate and other securities

86,072

2,602

266,756

16,131

352,828

18,733

Subtotal, fixed maturity securities

144,922

3,759

581,135

46,492

726,057

50,251

Equity securities

32,379

4,185

21,332

4,330

53,711

8,515

Total temporarily impaired securities

177,301

7,944

602,467

50,822

779,768

58,766

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	As of December 31, 2024
	Less than 12 Months				12 Months or More				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury securities	$	—	$	—	$	1,742	$	77	$	1,742	$	77
Obligations of states and political subdivisions		13,289		315		19,209		2,270		32,498		2,585
Residential mortgage-backed securities		94,528		2,401		162,260		24,134		256,788		26,535
Commercial mortgage-backed securities		3,050		9		121,152		10,831		124,202		10,840
Other asset-backed securities		11,298		278		22,018		1,616		33,316		1,894
Corporate and other securities		129,953		2,342		287,179		24,102		417,132		26,444
Subtotal, fixed maturity securities		252,118		5,345		613,560		63,030		865,678		68,375
Equity securities		49,268		4,030		21,285		5,050		70,553		9,080
Total temporarily impaired securities	$	301,386	$	9,375	$	634,845	$	68,080	$	936,231	$	77,455

Impairments

For fixed maturities that the Company does not intend to sell or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the Company separates the expected credit loss component of the impairment from the amount related to all other factors. The expected credit loss component is recognized as an allowance for expected credit losses. The allowance is adjusted for any additional credit losses and subsequent recoveries, which are booked in income as either credit loss expense or credit loss benefit, respectively. Upon recognizing a credit loss, the cost basis is not adjusted. The impairment related to all other factors (non-credit factors) is reported in other comprehensive income.

For fixed maturities where the Company records a credit loss, a determination is made as to the cause of the impairment and whether the Company expects a recovery in the value. For fixed maturities where the Company expects a recovery in value, the constant effective yield method is utilized, and the investment is amortized to par.

For fixed maturity investments the Company intends to sell or for which it is more likely than not that the Company will be required to sell before an anticipated recovery in value, the full amount of the impairment is included in credit loss expense. The new cost basis of the investment is the previous amortized cost basis less the impairment recognized in credit loss expense. The new cost basis is not adjusted for any subsequent recoveries in fair value.

The Company uses a systematic methodology to evaluate declines in fair values below cost or amortized cost of our investments. Some of the factors considered in assessing impairment of fixed maturities due to credit losses include the extent to which the fair value is less than amortized cost, the financial condition of and the near and long-term prospects of the issuer, whether the debtor is current on its contractually obligated interest and principal payments, changes to the rating of the security by a rating agency, the historical volatility of the fair value of the security and whether it is more like than not that the Company will be required to sell the investment prior to an anticipated recovery in value.

As of June 30, 2025 and December 31, 2024, the Company concluded that $1,453 and $1,198, respectively, of unrealized losses were due to credit factors and were recorded as an allowance for expected credit losses expense. The Company concluded that outside of the securities that were recognized as credit impaired, the unrealized losses recorded on the fixed maturity portfolio at June 30, 2025 and December 31, 2024 resulted from fluctuations in market interest rates and other temporary market conditions as opposed to fundamental changes in the credit quality of the issuers of such securities. Based upon the analysis performed, the Company’s decision to hold these securities, the Company’s current level of liquidity and our history of positive cash flows, management believes it is more likely than not that it will not be required to sell any of its securities before the anticipated recovery in the fair value to its amortized cost basis.

The following table represents a reconciliation of the beginning and ending balances of the allowance for expected credit losses on fixed maturities classified as available for sale.

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	Three Months Ended June 30,				Six Months Ended June 30,
		2025		2024	2025		2024
Beginning of period	$	1,519	$	1,349	$	1,198	$	1,208
Credit losses on securities with no previously recorded credit losses		—		41		303		41
Net increases (decreases) in allowance on previously impaired securities		66		11		84		152
Reduction due to sales		(132)		(14)		(132)		(14)
Writeoffs charged against allowance		—		—		—		—
Recoveries of amounts previously written off		—		—		—		—
Ending balance of period	$	1,453	$	1,387	$	1,453		1,387

The Company holds no subprime mortgage debt securities. All of the Company’s holdings in mortgage-backed securities are either U.S. Government or Agency guaranteed or are rated investment grade by either Moody’s or Standard & Poor’s.

Net Investment Income

The components of net investment income were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Interest on fixed maturity securities	$	14,752	$	11,154	$	27,285	$	24,102
Dividends on equity securities		1,415		1,480		2,944		3,147
Equity in earnings of other invested assets		384		1,650		1,761		3,057
Interest on other assets		80		79		160		161
Total investment income		16,631		14,363		32,150		30,467
Investment expenses		907		863		1,852		1,736
Net investment income	$	15,724	$	13,500	$	30,298	$	28,731

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosure, provides a revised definition of fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value information. Under ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price). ASC 820 establishes a fair value hierarchy that distinguishes between inputs based on market data from independent sources (“observable inputs”) and a reporting entity’s internal assumptions based upon the best information available when external market data is limited or unavailable (“unobservable inputs”). The fair value hierarchy in ASC 820 prioritizes fair value measurements into three levels based on the nature of the inputs as follows:

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

Level 2 — Valuations based on observable inputs that do not meet the criteria for Level 1, including quoted prices in inactive markets and quoted prices in active markets for similar, but not identical instruments; and

Level 3 — Valuations based on unobservable inputs.

Fair values for the Company’s fixed maturity securities are based on prices provided by its custodian bank and its investment managers. Both the Company’s custodian bank and investment managers use a variety of independent, nationally recognized pricing services to determine market valuations. If the pricing service cannot provide fair value determinations, the Company obtains non-binding price quotes from broker-dealers. A minimum of two quoted prices is obtained for the majority of the Company’s available-for-sale fixed maturity securities in its investment portfolio. The Company uses a third-party pricing service as its primary provider of quoted prices from third-party pricing services and broker-dealers. To provide reasonable assurance of the validity of each price or quote, a secondary third-party pricing service or broker-dealer quote is obtained from the Company’s custodian or investment managers. An examination of the pricing data is then performed for each security. If the variance between the primary and secondary price quotes for a security is within an accepted tolerance level, the quoted price obtained from the Company’s primary source is used for the security. If the variance between the primary and secondary price quotes exceeds an accepted tolerance level, the

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Company obtains a quote from an alternative source, if possible, and documents and resolves any differences between the pricing sources. In addition, the Company may request that its investment managers and its traders provide input as to which vendor is providing prices that its traders believe are reflective of fair value for the security. Following this process, the Company may decide to value the security in its financial statements using the secondary or alternative source if it believes that pricing is more reflective of the security’s value than the primary pricing provided by its custodian bank. The Company analyzes market valuations received to verify reasonableness, to understand the key assumptions used and their sources, and to determine an appropriate ASC 820 fair value hierarchy level based upon trading activity and the observability of market inputs. Based on this evaluation and investment class analysis, each price is classified into Level 1, 2 or 3.

Fair values of instruments are based on (i) quoted prices in active markets for identical assets (Level 1), (ii) quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs are observable in active markets (Level 2) or (iii) valuations derived from valuation techniques in which one or more significant inputs are unobservable in the marketplace (Level 3).

The Company’s Level 1 securities consist of equity securities whose values are based on quoted prices in active markets for identical assets. The Company’s Level 2 securities are comprised of available-for-sale fixed maturity securities whose fair value was determined using observable market inputs. The Company’s Level 3 security consists of an investment in the FHLB-Boston related to Safety Insurance Company’s membership stock, which is not redeemable in a short-term time frame. Fair values for securities for which quoted market prices were unavailable were estimated based upon reference to observable inputs such as benchmark interest rates, market comparables, and other relevant inputs. Investments valued using these inputs include U.S. Treasury securities, obligations of states and political subdivisions, corporate and other securities, commercial and residential mortgage-backed securities, and other asset-backed securities. Short-term investments are comprised of U.S. Treasury securities. Inputs into the fair value application that are utilized by asset class include but are not limited to:

●Obligations of states and political subdivisions: overall credit quality, including assessments of market sectors and the level and variability of sources of payment such as general obligation, revenue or lease; credit support such as insurance, state or local economic and political base, prefunded and escrowed to maturity covenants.

●Corporate and other securities: overall credit quality, the establishment of a risk adjusted credit spread over the applicable risk-free yield curve for discounted cash flow valuations; assessments of the level of industry economic sensitivity, company financial policies, indenture restrictive covenants, and/or security and collateral.

●Residential mortgage-backed securities, U.S. agency pass-throughs, collateralized mortgage obligations (“CMOs”), non U.S. agency CMOs: estimates of prepayment speeds based upon historical prepayment rate trends, underlying collateral interest rates, original weighted average maturity, vintage year, borrower credit quality characteristics, interest rate and yield curve forecasts, U.S. government support programs, tax policies, and delinquency/default trends.

●Commercial mortgage-backed securities: overall credit quality, including assessments of the level and variability of credit support and collateral type such as office, retail, or lodging, predictability of cash flows for the deal structure, prevailing economic market conditions.

●Other asset-backed securities: overall credit quality, estimates of prepayment speeds based upon historical trends and characteristics of underlying loans, including assessments of the level and variability of collateral, revenue generating agreements, area licenses agreements, product sourcing agreements and equipment and property leases.

●Federal Home Loan Bank of Boston (“FHLB-Boston”): value is equal to the cost of the member stock purchased, which is expected to be the exit price.

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In order to ensure the fair value determination is representative of an exit price, the Company’s procedures for validating quotes or prices obtained from third parties include, but are not limited to, obtaining a minimum of two price quotes for each fixed maturity security if possible, as discussed above, the periodic testing of sales activity to determine if there are any significant differences between the market price used to value the security as of the balance sheet date and the sales price of the security for sales that occurred around the balance sheet date, and the periodic review of reports provided by its external investment manager regarding those securities with ratings changes and securities placed on its “Watch List.” In addition, valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by the Company’s external investment manager, whose investment professionals are familiar with the securities being priced and the markets in which they trade, to ensure the fair value determination is representative of an exit price.

All unadjusted estimates of fair value for our fixed maturities priced by the pricing services as described above are included in the amounts disclosed in Level 2. With the exception of the FHLB-Boston security, which is categorized as a Level 3 security, the Company’s entire portfolio was priced based upon quoted market prices or other observable inputs as of June 30, 2025. There were no significant changes to the valuation process during the six months ended June 30, 2025. As of June 30, 2025 and December 31, 2024, no quotes or prices obtained were adjusted by management. All broker quotes obtained were non-binding.

At June 30, 2025 and December 31, 2024, investments in fixed maturities classified as available-for-sale had a fair value which equaled carrying value of $1,188,337 and $1,115,218, respectively. The carrying values of cash and cash equivalents and investment income accrued approximated fair value.

The following tables summarize the Company’s total fair value measurements for investments for the periods indicated.

As of June 30, 2025

Total

Level 1 Inputs

Level 2 Inputs

Level 3 Inputs

U.S. Treasury securities

2,369

—

2,369

—

Obligations of states and political subdivisions

36,815

—

36,815

—

Residential mortgage-backed securities

317,884

—

317,884

—

Commercial mortgage-backed securities

142,337

—

142,337

—

Other asset-backed securities

62,419

—

62,419

—

Corporate and other securities

626,513

—

626,513

—

Other invested assets

14,800

—

14,800

—

Equity securities

203,616

202,684

—

932

Total investment securities

1,406,753

202,684

1,203,137

932


	As of December 31, 2024
	Total		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
U.S. Treasury securities	$	2,343	$	—	$	2,343	$	—
Obligations of states and political subdivisions		36,166		—		36,166		—
Residential mortgage-backed securities		301,227		—		301,227		—
Commercial mortgage-backed securities		129,375		—		129,375		—
Other asset-backed securities		63,717		—		63,717		—
Corporate and other securities		582,390		—		582,390		—
Short-term investments		19,975		—		19,975		—
Other invested assets		14,477		—		14,477		—
Equity securities		189,668		187,548		—		2,120
Total investment securities	$	1,339,338	$	187,548	$	1,149,670	$	2,120

As of June 30, 2025 and December 31, 2024, there were approximately $31,736 and $31,754, respectively, in a real estate investment trust (“REIT”). The REIT is excluded from the fair value hierarchy because the fair value is recorded using the net asset value per share practical expedient. The net asset value per share of this REIT is derived from member ownership in the capital venture to which a proportionate share of independently appraised net assets is attributed. The fair value was determined using the trust’s net asset value obtained from its financial statements. The Company is required to submit a request 45 days before a quarter end to dispose of the security.

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There were no transfers between Level 1 and Level 2 during the three and six months ended June 30, 2025 and 2024.

The following table summarizes the changes in the Company’s Level 3 fair value securities for the periods indicated.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	Level 3		Level 3		Level 3		Level 3
	Fair Value		Fair Value		Fair Value		Fair Value
	Securities		Securities		Securities		Securities
Balance at beginning of period	$	884	$	2,086	$	2,120	$	2,086
Net gains and losses included in earnings		—		—		—		—
Net gains included in other comprehensive income		—		—		—		—
Purchases		48		372		48		372
Sales		—		(338)		(1,236)		(338)
Transfers into Level 3		—		—		—		—
Transfers out of Level 3		—		—		—		—
Balance at end of period	$	932	$	2,120	$	932	$	2,120
Amount of total losses included in earnings attributable to the change in unrealized losses related to assets still held at end of period	$	—	$	—	$	—	$	—

Transfers in and out of Level 3 are attributable to changes in the ability to observe significant inputs in determining fair value exit pricing. As noted in the table above, no transfers were made in or out of Level 3 during the three and six months ended June 30, 2025 and 2024. The Company held one Level 3 security at June 30, 2025 and 2024.

As an element of the FAIR Plan Restructuring, in a non-cash transaction, the Company liquidated its net asset position in the FAIR Plan and established an Investment in FAIR Plan Trust. The Company’s Investment in FAIR Plan Trust was adjusted to its current fair value on a quarterly basis based on information from the FAIR Plan, with changes recognized through earnings. As of June 30, 2025 and December 31, 2024, the Company’s Investment in FAIR Plan Trust of $14,800 and $14,477, respectively, was included in other invested assets. The Company recognized $186 and $323, respectively, of income in earnings from partnership investments from its Investment in FAIR Plan Trust during the three and six months ended June 30, 2025. The Company recognized $0 of income in earnings from partnership investments from its Investment in FAIR Plan Trust during the three and six months ended June 30, 2024.

6. Allowance for Expected Credit Losses

The Company’s financial instruments measured at amortized cost include premiums and accounts receivable, and reinsurance recoverables.

Premiums and accounts receivable are reported net of an allowance for expected credit losses. The allowance is based upon the Company’s ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions and other relevant factors. Credit risk is partially mitigated by the Company’s ability to cancel the policy if the policyholder does not pay the premium and the Company writes off premiums receivable balances that are more than 90 days overdue.

The following tables present the balances of premiums receivable, net of the allowance for expected credit losses and changes in the allowance for expected credit losses for the three and six months ended June 30, 2025 and 2024.

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		At and For the				At and For the
		Three Months Ended June 30, 2025				Three Months Ended June 30, 2024
		Accounts Receivable Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses		Accounts Receivable Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses
Balance, beginning of period	$	306,408	$	785	$	269,491	$	824
Current period change for expected credit losses				834				788
Writeoffs of uncollectable accounts receivable				(792)				(673)
Balance, end of period	$	333,014	$	827	$	312,361	$	939


		At and For the				At and For the
		Six Months Ended June 30, 2025				Six Months Ended June 30, 2024
		Accounts Receivable Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses		Accounts Receivable Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses
Balance, beginning of period	$	306,465	$	918	$	256,687	$	1,053
Current period change for expected credit losses				1,675				1,425
Writeoffs of uncollectable accounts receivable				(1,766)				(1,539)
Balance, end of period	$	333,014	$	827	$	312,361	$	939

Reinsurance recoverables include amounts due from reinsurers for both paid and unpaid losses. The Company cedes insurance to Commonwealth Automobile Reinsurers (“CAR”) and to other reinsurers. The Company has a property catastrophe excess of loss agreement and a casualty excess of loss agreement that qualify as reinsurance treaties and are designed to protect against large or unusual loss and loss adjustment expenses (“LAE”) activity. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company reports its reinsurance recoverables net of an allowance for estimated uncollectable reinsurance. A probability-of-default methodology which reflects current and forecasted economic conditions is used to estimate the amount of uncollectible reinsurance due to credit-related factors and the estimate is reported in an allowance for estimated uncollectible reinsurance. Amounts deemed to be uncollectible, including amounts due from known insolvent reinsurers, are written off against the allowance. Changes in the allowance, as well as any subsequent collections of amounts previously written off, are reported as part of losses and loss adjustment expenses.

The majority of the Company’s reinsurance recoverable on paid and unpaid losses is a result of our participation as a servicing carrier in the CAR Commercial Automobile Program, which represented 96% and 93% of the total reinsurance recoverable on paid and unpaid losses at June 30, 2025 and December 31, 2024, respectively. The remaining 4% and 7%, respectively, of amounts due from reinsurers are related to our other excess of loss and quota share contracts. For amounts due under these contracts, the Company utilizes updated A.M. Best credit ratings on a quarterly basis to determine the allowance for expected credit losses. As of June 30, 2025 and December 31, 2024, most of the reinsurers under these programs are rated “A” or better by A.M. Best. Certain of the Company's reinsurance recoverables are collateralized by letters of credit, funds held or trust agreements. The Company’s analysis concludes that there are no expected credit losses at June 30, 2025 or December 31, 2024.

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7. Loss and Loss Adjustment Expense Reserves

The following table sets forth a reconciliation of beginning and ending reserves for losses and LAE, as shown in the Company’s consolidated financial statements for the periods indicated.


	Six Months Ended June 30,
	2025		2024
Reserves for losses and LAE at beginning of year	$	671,669	$	603,081
Less receivable from reinsurers related to unpaid losses and LAE		(130,792)		(112,623)
Net reserves for losses and LAE at beginning of year		540,877		490,458
Incurred losses and LAE, related to:
Current year		407,995		371,516
Prior years		(23,473)		(30,375)
Total incurred losses and LAE		384,522		341,141
Paid losses and LAE related to:
Current year		198,298		183,925
Prior years		176,786		152,784
Total paid losses and LAE		375,084		336,709
Net reserves for losses and LAE at end of period		550,315		494,890
Plus receivable from reinsurers related to unpaid losses and LAE		135,626		126,747
Reserves for losses and LAE at end of period	$	685,941	$	621,637

At the end of each period, the reserves were re-estimated for all prior accident years. The Company’s prior year reserves decreased by $23,473 and $30,375 for the six months ended June 30, 2025 and 2024, respectively, and resulted from re-estimations of prior year’s ultimate loss and LAE liabilities. The decreases in prior years reserves during the six months ended June 30, 2025 and 2024 are primarily composed of reductions in our retained automobile and retained homeowners lines reserves.

The Company’s automobile lines of business reserves decreased for the six months ended June 30, 2025 and 2024, primarily due to fewer incurred but not yet reported claims than previously estimated and better than previously estimated severity on the Company’s established bodily injury and property damage case reserves. Due to the nature of the risks that the Company underwrites and has historically underwritten, management does not believe that it has an exposure to asbestos or environmental pollution liabilities.

8. Commitments and Contingencies

Commitments

As part of the Company’s investment activity, we have committed $170,000 to investments in limited partnerships. The Company has contributed $149,088 to these commitments as of June 30, 2025. As of June 30, 2025, the remaining committed capital that could be called is $32,163, which includes potential recallable capital distributions.

Contingencies

Various claims, generally incidental to the conduct of normal business, are pending or alleged against the Company from time to time. In the opinion of management, based in part on the advice of legal counsel, the ultimate resolution of such claims will not have a material adverse effect on the Company’s consolidated financial statements. However, if estimates of the ultimate resolutions of those proceedings are revised, liabilities related to those proceedings could be adjusted in the near term.

Massachusetts law requires that insurers licensed to do business in Massachusetts participate in the Massachusetts Insurers Insolvency Fund (“Insolvency Fund”). Members of the Insolvency Fund are assessed a proportionate share of the obligations and expenses of the Insolvency Fund in connection with an insolvent insurer. It is anticipated that there will be additional assessments from time to time relating to various insolvencies. Although the timing and amounts of any future assessments are not known, based upon existing knowledge, management’s opinion is that such future assessments are not expected to have a material effect upon the financial position of the Company.

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9. Debt

On August 10, 2023, the Company extended its Revolving Credit Agreement (the “Credit Agreement”) with Citizens Bank, N.A. (“Citizens Bank”) to a maturity date of August 10, 2028. The Credit Agreement provides a $30,000 revolving credit facility with an accordion feature allowing for future expansion of the committed amount up to $50,000. Loans under the credit facility bear interest at the Company’s option at the higher of the Citizens Bank prime rate, the daily SOFR rate plus 1.25% per annum, or 0.5% above the federal funds rate. Interest only is payable prior to maturity.

The Company’s obligations under the credit facility are secured by pledges of its assets and the capital stock of its operating subsidiaries. The credit facility is guaranteed by the Company’s non-insurance company subsidiaries. The credit facility contains covenants including requirements to maintain minimum risk-based capital ratios and statutory surplus of Safety Insurance Company as well as limitations or restrictions on indebtedness, liens, and other matters. As of June 30, 2025, the Company was in compliance with all covenants. In addition, the credit facility includes customary events of default, including a cross-default provision permitting the lenders to accelerate the facility if the Company (i) defaults in any payment obligation under debt having a principal amount in excess of $10,000 or (ii) fails to perform any other covenant permitting acceleration of all such debt.

On March 27, 2025, the Company borrowed $30,000 under the Credit Agreement with Citizens Bank, bearing interest at SOFR plus 1.25%. Interest is payable monthly and the principal is due upon the maturity of the Credit Agreement. Principal may be repaid at any time without penalty. The Company had $30,000 outstanding on its credit facility at June 30, 2025, and no amounts outstanding at December 31, 2024. The credit facility commitment fee included in interest expense was computed at a rate of 0.20% per annum on the $30,000 commitment. Commitment fees were incurred through March 27, 2025, when the Company borrowed under the facility.

Safety Insurance Company is a member of the FHLB-Boston. Membership in the FHLB-Boston allows Safety Insurance Company to borrow money at competitive interest rates provided the loan is collateralized by specific U.S. Government residential mortgage backed securities. At June 30, 2025, Safety Insurance Company has the ability to borrow $241,424 using eligible invested assets that would be used as collateral.

On March 17, 2020, the Company borrowed $30,000 from the FHLB-Boston for a term of five-years, bearing interest at a rate of 1.42%. The interest and principal were paid on the maturity date of March 17, 2025.

On April 8, 2024, the Company borrowed $10,000 from FHLB-Boston for a term of one-week, bearing an interest rate of 5.50%. The interest and principal were paid on the maturity date of April 15, 2024.

On April 15, 2024, the Company borrowed $5,000 from FHLB-Boston for a term of one-week, bearing an interest rate of 5.52%. The interest and principal were paid on the maturity date of April 22, 2024.

The Company estimates the fair value of the FHLB-Boston and the Citizens Bank Credit Agreement loans (the “Loans”) by discounting cash flows using the interest rate stated in the loan agreements, which is an observable input. As such, the Loans are categorized as Level 2 within the fair value hierarchy. The fair value of the outstanding loan with the FHLB-Boston was $0 and $30,088 at June 30, 2025 and December 31, 2024, respectively. At December 31, 2024, this loan was fully collateralized by specific U.S. Government residential mortgage-backed securities with a fair value of $47,341. The fair value of the loan under the Credit Agreement with Citizens Bank was $32,216 and $0 at June 30, 2025 and December 31, 2024, respectively.

Interest expense on the FHLB-Boston borrowing was $0 and $125 for the three months ended June 30, 2025 and 2024, respectively. Interest expense on the FHLB-Boston borrowing was $89 and $233 for the six months ended June 30, 2025 and 2024, respectively. Interest expense on the Credit Agreement with Citizens Bank was $443 and $15 for the three months ended June 30, 2025 and 2024, respectively. Interest expense on the Credit Agreement with Citizens Bank was $457 and $31 for the six months ended June 30, 2025 and 2024, respectively.

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10. Income Taxes

Federal income tax expense for the six months ended June 30, 2025 and 2024 has been computed using estimated effective tax rates. These rates are revised, if necessary, at the end of each successive interim period to reflect the current estimates of the annual effective tax rates.

The Company believes that the positions taken on its income tax returns for open tax years will be sustained upon examination by the Internal Revenue Service. Therefore, the Company has not recorded any liability for uncertain tax positions under ASC 740, Income Taxes.

During the six months ended June 30, 2025, there were no material changes to the amount of the Company’s unrecognized tax benefits or to any assumptions regarding the amount of its ASC 740 liability.

On July 4, 2025, the “One Big Beautiful Bill Act” (H.R.1) (the “Act”) was signed into law. This wide-ranging budget reconciliation legislation introduces significant changes across multiple areas of federal policy, including taxation, and social programs. While the Company continues to evaluate the potential implications of the Act, we do not currently expect it to have a material impact on our financial position or results of operations.

All tax years prior to 2021 are closed. There are no current examinations ongoing.

In the Company’s opinion, adequate tax liabilities have been established for all open years. However, the amount of these tax liabilities could be revised in the near term if estimates of the Company’s ultimate liability are revised.

11. Share Repurchase Program

On February 23, 2022, the Board of Directors approved a share repurchase program of up to $50,000 of the Company’s outstanding common shares. The Board of Directors has cumulatively authorized increases to the existing share repurchase program of up to $200,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require the Company to repurchase any specific number of shares and it may be modified, suspended or terminated at any time without prior notice.

No share purchases were made by the Company under the program during the three and six months ended June 30, 2025 and 2024. As of June 30, 2025 and December 31, 2024, the Company had purchased 3,215,690 shares at a cost of $155,240.

12. Leases

The Company has various non-cancelable, long-term operating leases, the largest of which are for office space including the corporate headquarters, VIP claims centers and law offices. Other operating leases consist of auto leases and various office equipment. The Company has no finance leases. Our leases have remaining lease terms of one year to eight years, some of which include options to extend the leases for up to five years.

In calculating lease liabilities the Company uses its incremental borrowing rate as of the application date based on original lease terms. The components of lease expense were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
		2025		2024		2025		2024
Operating lease cost	$	904	$	1,006	$	1,809	$	2,019

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Other information related to leases was as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2025

2024

2025

2024

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

1,058

1,158

2,117

2,240

Weighted average remaining lease term

Operating leases

3.45 Years

4.36 Years

Weighted average discount rate

Operating leases

2.46%

2.48%

Maturities of lease liabilities were as follows:


	Operating Leases
2025	$	2,100
2026		3,980
2027		3,973
2028		3,906
Total lease payments		13,959
Less imputed interest		(302)
Total	$	13,657

13. Subsequent Events

The Company has evaluated subsequent events for recognition or disclosure in the consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred, other than as disclosed in Note 10, Income Taxes, as related to the Act, that require recognition or disclosure.

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Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our accompanying consolidated financial statements and notes thereto, which appear elsewhere in this document. In this discussion, all dollar amounts are presented in thousands, except share and per share data.

The following discussion contains forward-looking statements. We intend statements which are not historical in nature to be, and are hereby identified as “forward-looking statements” to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, the Company’s senior management may make forward-looking statements orally to analysts, investors, the media and others. This safe harbor requires that we specify important factors that could cause actual results to differ materially from those contained in forward-looking statements made by or on behalf of us. We cannot promise that our expectations in such forward-looking statements will turn out to be correct. Our actual results could be materially different from and worse than our expectations. See “Forward-Looking Statements” below for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.

Executive Summary and Overview

In this discussion, “Safety” refers to Safety Insurance Group, Inc. and “our Company,” “the Company,” “we,” “us” and “our” refer to Safety Insurance Group, Inc. and its consolidated subsidiaries. Our subsidiaries consist of Safety Insurance Company (“Safety Insurance”), Safety Indemnity Insurance Company (“Safety Indemnity”), Safety Property and Casualty Insurance Company (“Safety P&C”), Safety Northeast Insurance Company (“Safety Northeast”), Safety Northeast Insurance Agency, Inc. (“SNIA”), and Safety Management Corporation (“SMC”), which is SNIA’s holding company.

We are a leading provider of private passenger automobile, commercial automobile, homeowners and commercial other-than-auto insurance in Massachusetts. In addition to private passenger automobile insurance (which represented 55.8% of our direct written premiums in 2024), we offer a portfolio of other insurance products, including commercial automobile (15.2% of 2024 direct written premiums), homeowners (24.3% of 2024 direct written premiums) and dwelling fire, umbrella and business owner policies (totaling 4.7% of 2024 direct written premiums). Operating exclusively in Massachusetts, New Hampshire, and Maine through our insurance company subsidiaries, Safety Insurance, Safety Indemnity, Safety P&C and Safety Northeast (together referred to as the “Insurance Subsidiaries”), we have established strong relationships with independent insurance agents, who numbered 828 in 1,079 locations throughout these three states at December 31, 2024. We have used these relationships and our extensive knowledge of the Massachusetts market to become the third largest private passenger automobile carrier and the second largest commercial automobile insurance carrier in Massachusetts, capturing an approximate 9.7% and 12.9% share, respectively, of the Massachusetts private passenger and commercial automobile markets in 2024 according to statistics compiled by the Commonwealth Automobile Reinsurers (“CAR”) based on automobile exposures. We are also the third largest homeowners insurance carrier in Massachusetts with a 6.3% share of the Massachusetts homeowners insurance market.

A.M. Best, which rates insurance companies based on factors of concern to policyholders, currently assigns Safety Insurance an “A (Excellent)” rating. Our “A” rating was reaffirmed by A.M. Best on June 20, 2025.

Our Insurance Subsidiaries began writing insurance in New Hampshire during 2008 and in Maine in 2016. In November 2020, we formed a fourth insurance subsidiary, Safety Northeast, which became licensed to write insurance products in Massachusetts.

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The table below shows the amount of direct written premiums written in each state during the three and six months ended June 30, 2025 and 2024.


	Three Months Ended June 30,				Six Months Ended June 30,
Direct Written Premiums	2025		2024		2025		2024
Massachusetts	$	326,925	$	299,411	$	610,204	$	553,762
New Hampshire		14,731		13,325		27,154		24,084
Maine		4,173		2,775		7,441		5,004
Total	$	345,829	$	315,511	$	644,799	$	582,850

Recent Trends and Events

Direct and Net Written Premiums. For the three months ended June 30, 2025 direct written premium growth and net written premium growth were 9.6% and 8.3%, respectively, compared to the prior period. The increase in premium is driven by new business production and rate increases. For the six months ended June 30, 2025, average written premium per policy increased 9.0%, 7.2% and 10.6% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2024. Additionally, for the six months ended June 30, 2025, the Company achieved policy count growth across all lines of business, including 0.4%, 2.8% and 3.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2024.

Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended June 30, 2025 increased by $21,490, or 12.4%, to $194,232 from $172,742 for the comparable 2024 period. Losses and loss adjustment expenses incurred for the six months ended June 30, 2025 increased by $43,381, or 12.7%, to $384,522 from $341,141 for the comparable 2024 period. The increase in losses and loss adjustment expenses is primarily driven by increased loss severity as compared to the same periods in the prior year. Our losses and loss adjustment expenses ratio for the three months ended June 30, 2025 decreased to 68.8% from 70.0% for the comparable 2024 period. Our losses and loss adjustment expense ratio for the six months ended June 30, 2025 decreased to 69.3% from 70.6% for the comparable 2024 period. The decrease in the ratio is due to growth in earned premiums, slightly offset by increased loss severity.

Non-generally accepted accounting principles (“non-GAAP”) operating income, as defined below, was $21,519 for the three months ended June 30, 2025 and $40,515 for the six months ended June 30, 2025. Non-GAAP operating income was $17,272 for the three months ended June 30, 2024 and $31,018 for the six months ended June 30, 2024. The increase in non-GAAP operating income for the three and six months ended June 30, 2025 was primarily the result of an increase in net earned premiums. Non-GAAP operating income was $1.45 per diluted share for the three months ended June 30, 2025, and $2.74 per diluted share, for the six months ended June 30, 2025, compared to non-GAAP operating income of $1.18 per diluted share for the three months ended June 30, 2024, and $2.09 per diluted share, for the six months ended June 30, 2024.

The following rate changes have been filed and approved by the insurance regulators of Massachusetts, New Hampshire and Maine in 2025 and 2024.


Line of Business	Effective Date	Rate Change
Massachusetts Homeowners	August 1, 2025	4.2%
Massachusetts Private Passenger Automobile	July 1, 2025	5.1%
Massachusetts Commercial Automobile	May 1, 2025	5.2%
Massachusetts Private Passenger Automobile	January 1, 2025	5.3%
New Hampshire Commercial Automobile	November 1, 2024	9.5%
New Hampshire Private Passenger Automobile	October 1, 2024	4.4%
New Hampshire Homeowners	October 1, 2024	7.4%
Maine Private Passenger Automobile	September 1, 2024	4.4%
Massachusetts Homeowners	August 1, 2024	5.9%
Massachusetts Private Passenger Automobile	July 1, 2024	4.8%
Massachusetts Commercial Automobile	May 1, 2024	6.3%
New Hampshire Private Passenger Automobile	April 1, 2024	3.4%
Massachusetts Private Passenger Automobile	January 1, 2024	3.5%

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Insurance Ratios

The property and casualty insurance industry uses the combined ratio as a measure of underwriting profitability. The combined ratio is the sum of the loss ratio (losses and loss adjustment expenses incurred as a percent of net earned premiums) plus the expense ratio (underwriting and other expenses as a percent of net earned premiums, calculated on a Generally Accepted Accounting Principles (“GAAP”) basis). The combined ratio reflects only underwriting results and does not include income from investments or finance and other service income. Underwriting profitability is subject to significant fluctuations due to competition, catastrophic events, weather, economic and social conditions, and other factors.

Our GAAP insurance ratios are outlined in the following table.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
GAAP ratios:
Loss ratio	68.8	%	70.0	%	69.3	%	70.6	%
Expense ratio	29.3		29.9		29.5		30.3
Combined ratio	98.1	%	99.9	%	98.8	%	100.9	%

Share-Based Compensation

On March 24, 2022, the Company’s Board of Directors adopted the Amended and Restated Safety Insurance Group, Inc. 2018 Long-Term Incentive Plan (the “Amended 2018 Plan”), which was subsequently approved by our shareholders at the 2022 Annual Meeting of Shareholders. The Amended 2018 Plan increases the share pool limit by adding 350,000 common shares to the previously adopted Safety Insurance Group, Inc. 2018 Long-Term Incentive Plan. The Amended 2018 Plan enables the grant of stock awards, performance shares, cash-based performance units, other stock-based awards, stock options, stock appreciation rights, and stock unit awards, each of which may be granted separately or in tandem with other awards. Eligibility to participate includes officers, directors, employees and other individuals who provide bona fide services to the Company. The Amended 2018 Plan supersedes the Company’s 2002 Management Omnibus Incentive Plan (“the 2002 Incentive Plan”).

A summary of share based awards granted under the Incentive Plan during the six months ended June 30, 2025 is as follows:


Type of		Number of		Fair
Equity		Awards		Value per
Awarded	Effective Date	Granted		Share (1)	Vesting Terms
RS - Service	February 25, 2025	35,178	$	79.67	3 years, 30%-30%-40%
RS - Performance	February 25, 2025	29,105	$	79.67	3 years, cliff vesting (3)
RS	February 25, 2025	6,000	$	79.67	No vesting period (2)

(1)	The fair value per share of the restricted stock grant is equal to the closing price of our common stock on the grant date.

(2)	Board of Director members must maintain stock ownership equal to at least four times their annual retainer. This requirement must be met within five years of becoming a director.

(3)

The shares represent performance-based restricted shares award. Vesting of these shares is dependent upon the attainment of pre-established performance objectives, and any difference between shares granted and shares earned at the end of the performance period will be reported at the conclusion of the performance period.

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Reinsurance

We reinsure with other insurance companies a portion of our potential liability under the policies we have underwritten, thereby protecting us against an unexpectedly large loss or a catastrophic occurrence that could produce large losses, primarily in our homeowners line of business. We are selective in choosing our reinsurers, seeking only those companies that we consider to be financially stable and adequately capitalized. In an effort to minimize exposure to the insolvency of a reinsurer, we continually evaluate and review the financial condition of our reinsurers. Most of our reinsurers have an A.M. Best rating of “A+” (Superior) or “A” (Excellent).

We maintain reinsurance coverage to help lessen the effect of losses from catastrophic events, maintaining coverage during 2025 that protects us in the event of a “138-year storm” (that is, a storm of a severity expected to occur once in a 138-year period). We use various software products to measure our exposure to catastrophe losses and the probable maximum loss to us for catastrophe losses such as hurricanes.

For 2025, we have purchased three layers of excess catastrophe reinsurance providing $675,000 of coverage for property losses in excess of $75,000 up to a maximum of $750,000. Our reinsurers’ co-participation is 85.0% of $75,000 for the 1st layer, 85.0% of $250,000 for the 2nd layer and 85.0% of $350,000 for the 3rd layer.

We also have casualty excess of loss reinsurance for large casualty losses occurring in our automobile, homeowners, dwelling fire, and business owner lines of business in excess of $2,000 up to a maximum of $10,000. We have property excess of loss reinsurance coverage for large property losses, with coverage in excess of $3,000 up to a maximum of $25,000, for our homeowners, and business owners. In addition, we have liability excess of loss reinsurance for umbrella large losses in excess of $1,000 up to a maximum of $10,000. We also have various reinsurance agreements with Hartford Steam Boiler Inspection and Insurance Company, of which the primary contract is a quota share agreement under which we cede 100% of the premiums and losses for the equipment breakdown coverage under our business owner policies.

We are a participant in CAR, a state-established body that runs the residual market reinsurance programs for commercial automobile insurance in Massachusetts under which premiums, expenses, losses and loss adjustment expenses on ceded business are shared by all insurers writing automobile insurance in Massachusetts.

At June 30, 2025, we had $171,516 recoverable from CAR, which consisted of loss adjustment expense reserves, unearned premiums and reinsurance recoverable.

The Company previously participated in the Massachusetts Property Insurance Underwriting Association (“FAIR Plan”), in which premiums, expenses, losses and loss adjustment expenses on homeowners business that could not be placed in the voluntary market were shared by all insurers writing homeowners business in Massachusetts. On April 1, 2024, the Division approved a restructuring of the FAIR Plan (“FAIR Plan Restructuring”), transforming it from a partnership that shares profit and losses with member companies to a stand-alone, risk bearing entity, and distributing the accumulated members’ equity.

Non-GAAP Measures

Management has included certain non-GAAP financial measures in presenting the Company’s results. Management believes that these non-GAAP measures better explain the Company’s results of operations and allow for a more complete understanding of the underlying trends in the Company’s business. These measures should not be viewed as a substitute for those determined in accordance with GAAP. In addition, our definitions of these items may not be comparable to the definitions used by other companies.

Non-GAAP operating income and non-GAAP operating income per diluted share consist of our GAAP net income adjusted by the net realized gains (losses) on investments, changes in net unrealized gains on equity securities, credit loss benefit (expense) and taxes related thereto. Net income and earnings per diluted share are the GAAP financial measures that are most directly comparable to non-GAAP operating income and non-GAAP operating income per

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diluted share, respectively. A reconciliation of the GAAP financial measures to these non-GAAP measures is included in the financial highlights below.

Results of Operations

Three and Six Months Ended June 30, 2025 Compared to Three and Six Months Ended June 30, 2024

The following table shows certain of our selected financial results.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Direct written premiums	$	345,829	$	315,511	$	644,799	$	582,850
Net written premiums	$	319,475	$	294,935	$	594,255	$	545,230
Net earned premiums	$	282,113	$	246,944	$	554,803	$	482,997
Net investment income		15,724		13,500		30,298		28,731
Earnings from partnership investments		346		2,480		2,458		4,252
Net realized gains on investments		2,131		2,715		6,394		3,207
Change in net unrealized gains on equity securities		7,194		(3,483)		6,923		4,182
Credit loss expense		66		(37)		(255)		(179)
Commission income		2,285		2,027		4,380		3,835
Finance and other service income		6,485		5,637		12,772		10,991
Total revenue		316,344		269,783		617,773		538,016
Losses and loss adjustment expenses		194,232		172,742		384,522		341,141
Underwriting, operating and related expenses		82,796		73,921		163,647		146,188
Other expense		2,047		1,747		4,001		3,584
Interest expense		442		138		546		261
Total expenses		279,517		248,548		552,716		491,174
Income before income taxes		36,827		21,235		65,057		46,842
Income tax expense		7,890		4,599		14,224		10,128
Net income	$	28,937	$	16,636	$	50,833	$	36,714
Earnings per weighted average common share:
Basic	$	1.95	$	1.13	$	3.44	$	2.49
Diluted	$	1.95	$	1.13	$	3.43	$	2.48
Cash dividends paid per common share	$	0.90	$	0.90	$	1.80	$	1.80

Reconciliation of Net Income to Non-GAAP Operating Income

Net income	$	28,937	$	16,636	$	50,833	$	36,714
Exclusions from net income:
Net realized gains on investments		(2,131)		(2,715)		(6,394)		(3,207)
Change in net unrealized gains on equity securities		(7,194)		3,483		(6,923)		(4,182)
Credit loss expense		(66)		37		255		179
Income tax benefit		1,972		(169)		2,743		1,514
Non-GAAP Operating income	$	21,518	$	17,272	$	40,514	$	31,018

Net income per diluted share	$	1.95	$	1.13	$	3.43	$	2.48
Exclusions from net income:
Net realized gains on investments		(0.14)		(0.18)		(0.43)		(0.22)
Change in net unrealized gains on equity securities		(0.49)		0.24		(0.47)		(0.28)
Credit loss expense		-		-		0.02		0.01
Income tax benefit		0.13		(0.01)		0.19		0.10
Non-GAAP Operating income per diluted share	$	1.45	$	1.18	$	2.74	$	2.09

Direct Written Premiums. Direct written premiums for the three months ended June 30, 2025 increased by $30,318, or 9.6%, to $345,829 from $315,511 for the comparable 2024 period. Direct written premiums for the six months ended June 30, 2025 increased by $61,949, or 10.6%, to $644,799 from $582,850 for the comparable 2024 period. The increases in direct written premium and net written premium are a result of rate increases that are now earning into the financial results. For the six months ended June 30, 2025, the Company achieved moderate policy count growth across most lines of business, including 0.4%, 2.8% and 3.9% in Private Passenger Automobile, Commercial

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Automobile and Homeowners lines, respectively, compared to the same period in 2024. Additionally, for the six months ended June 30, 2025, average written premium per policy increased 9.0%, 7.2% and 10.6% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2024.

Net Written Premiums. Net written premiums for the three months ended June 30, 2025 increased by $24,540, or 8.3%, to $319,475 from $294,935 for the comparable 2024 period. Net written premiums for the six months ended June 30, 2025 increased by $49,025, or 9.0%, to $594,255 from $545,230 for the comparable 2024 period. The increases were primarily due to the factors that increased direct written premiums.

Net Earned Premiums. Net earned premiums for the three months ended June 30, 2025 increased by $35,169, or 14.2%, to $282,113 from $246,944 for the comparable 2024 period. Net earned premiums for the six months ended June 30, 2025 increased by $71,806, or 14.9%, to $554,803 from $482,997 for the comparable 2024 period. The increases were primarily due to the factors that increased direct written premiums.

The effect of reinsurance on net written and net earned premiums is presented in the following table.


	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024		2025		2024
Written Premiums
Direct	$	345,829	$	315,511	$	644,799	$	582,850
Assumed		5,675		8,325		12,480		17,763
Ceded		(32,029)		(28,901)		(63,024)		(55,383)
Net written premiums	$	319,475	$	294,935	$	594,255	$	545,230

Earned Premiums
Direct	$	308,901	$	265,908	$	605,720	$	517,792
Assumed		5,286		7,997		12,011		16,965
Ceded		(32,074)		(26,961)		(62,928)		(51,760)
Net earned premiums	$	282,113	$	246,944	$	554,803	$	482,997

Net Investment Income. Net investment income for the three months ended June 30, 2025 increased $2,224, or 16.5%, to $15,724 from $13,500 for the comparable 2024 period. Net investment income for the six months ended June 30, 2025 increased by $1,567, or 5.5%, to $30,298 from $28,731 for the comparable 2024 period. The increase for the three and six months ended June 30, 2025, compared to the same periods in 2024, is primarily due to higher earned interest from our bond portfolio, resulting from additional bond purchases made during 2025. Net effective annualized yield on the investment portfolio was 4.2% for the three months June 30, 2025 compared to 3.9% for the comparable 2024 period. Net effective annualized yield on the investment portfolio was 4.0% for the six months ended June 30, 2025 compared to 3.9% for the comparable 2024 period. The investment portfolio’s duration on fixed maturities was 3.6 years at June 30, 2025 compared to 3.5 years at December 31, 2024.

Earnings from Partnership Investments. Earnings from partnership investments were $346 for the three months ended June 30, 2025 compared to $2,480 for the comparable 2024 period. Earnings from partnership investments were $2,458 for the six months ended June 30, 2025 compared to $4,252 for the comparable 2024 period. Earnings for the three and six months ended June 30, 2025 reflect lower investment appreciation and the impact of timing differences in the receipt of cash proceeds, compared to the same periods in the prior year. Timing and generation of these returns on capital can vary based on the results and transactions of the underlying partnerships.

Net Realized Gains on Investments. Net realized gains on investments were $2,131 for the three months ended June 30, 2025 compared to $2,715 for the comparable 2024 period. Net realized gains on investments was $6,394 for the six months ended June 30, 2025 compared to $3,207 for the comparable 2024 period. The decrease in net realized gains during the three-month period is driven primarily by the sale of equity securities in a loss position, whereas the increase in net realized gains during the six-month period reflects the sale of equity securities in a gain position during the first quarter.

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The gross unrealized gains and losses on investments in fixed maturity securities, including redeemable preferred stocks that have characteristics of fixed maturities, short term investments, equity securities, including interests in mutual funds, and other invested assets were as follows for the periods indicated:

As of June 30, 2025

Cost or

Allowance for

Gross Unrealized

Estimated

Amortized

Expected Credit

Fair

Cost

Losses

Gains

Losses (3)

Value

U.S. Treasury securities

2,402

—

(49)

2,369

Obligations of states and political subdivisions

38,497

—

342

(2,024)

36,815

Residential mortgage-backed securities (1)

336,124

—

1,941

(20,181)

317,884

Commercial mortgage-backed securities

149,935

—

361

(7,959)

142,337

Other asset-backed securities

63,489

—

235

(1,305)

62,419

Corporate and other securities

640,931

(1,453)

5,768

(18,733)

626,513

Subtotal, fixed maturity securities

1,231,378

(1,453)

8,663

(50,251)

1,188,337

Equity securities (2)

208,264

—

35,603

(8,515)

235,352

Other invested assets (4)

156,419

—

156,419

Totals

1,596,061

(1,453)

44,266

(58,766)

1,580,108

(1)Residential mortgage-backed securities consist primarily of obligations of U.S. Government agencies including collateralized mortgage obligations issued, guaranteed and/or insured by the following issuers: Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) and the Federal Home Loan Bank (FHLB).

(2)Equity securities include common stock, preferred stock, mutual funds and interests in mutual funds held to fund the Company’s executive

deferred compensation plan.

(3)Our investment portfolio includes 795 securities in an unrealized loss position at June 30, 2025.

(4)Other invested assets are generally accounted for under the equity method which approximated fair value.

The composition of our fixed income security portfolio by Moody’s rating was as follows:


	As of June 30, 2025
		Estimated
		Fair Value	Percent
U.S. Treasury securities and obligations of U.S. Government agencies	$	317,884	26.8	%
Aaa/Aa		228,562	19.2
A		233,993	19.7
Baa		204,038	17.2
Ba		42,338	3.6
B		82,407	6.9
Caa/Ca		6,059	0.5
Not rated		73,056	6.1
Total	$	1,188,337	100.0	%

Ratings are generally assigned upon the issuance of the securities and are subject to revision on the basis of ongoing evaluations. Ratings in the table are as of the date indicated.

As of June 30, 2025, our portfolio of fixed maturity investments was comprised principally of investment grade corporate fixed maturity securities, U.S. government and agency securities, and asset-backed securities. The portion of our non-investment grade portfolio of fixed maturity investments is primarily comprised of variable rate secured and senior bank loans and high yield bonds.

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The following table illustrates the gross unrealized losses included in our investment portfolio and the fair value of those securities, aggregated by investment category. The table also illustrates the length of time that they have been in a continuous unrealized loss position as of June 30, 2025.

As of June 30, 2025

Less than 12 Months

12 Months or More

Total

Estimated

Unrealized

Estimated

Unrealized

Estimated

Unrealized

Fair Value

Losses

Fair Value

Losses

Fair Value

Losses

U.S. Treasury securities

—

1,454

Obligations of states and political subdivisions

3,965

19,633

2,000

23,598

2,024

Residential mortgage-backed securities

37,596

946

154,965

19,235

192,561

20,181

Commercial mortgage-backed securities

—

118,604

7,959

118,604

7,959

Other asset-backed securities

17,289

187

19,723

1,118

37,012

1,305

Corporate and other securities

86,072

2,602

266,756

16,131

352,828

18,733

Subtotal, fixed maturity securities

144,922

3,759

581,135

46,492

726,057

50,251

Equity securities

32,379

4,185

21,332

4,330

53,711

8,515

Total temporarily impaired securities

177,301

7,944

602,467

50,822

779,768

58,766

Specific qualitative analysis was also performed for securities appearing on our “Watch List,” if any. Qualitative analysis considered such factors as the financial condition and the near term prospects of the issuer, whether the debtor is current on its contractually obligated interest and principal payments, changes to the rating of the security by a rating agency and the historical volatility of the fair value of the security.

For information regarding fair value measurements of our investment portfolio, refer to Item 1—Financial Statements, Note 5, Investments, of this Form 10-Q.

Commission Income: Commission income includes revenues from new and renewal commissions paid by insurance carriers, which we recognize when earned. Commission income was $2,285 and $2,027 for the three months ended June 30, 2025 and 2024, respectively. Commission income was $4,380 and $3,835 for the six months ended June 30, 2025 and 2024, respectively.

Finance and Other Service Income. Finance and other service income includes revenues from premium installment charges, which we recognize when earned, and other miscellaneous income and fees. Finance and other service income for the three months ended June 30, 2025 increased by $848, or 15.0%, to $6,485 from $5,637 for the comparable 2024 period. Finance and other service income for the six months ended June 30, 2025, increased by $1,781, or 16.2%, to $12,772 from $10,991 for the comparable 2024 period. The increase is primarily driven by the increase in policy counts and changes to our fee assessment policies.

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Our GAAP loss ratio for the three months ended June 30, 2025 decreased to 68.8% from 70.0% for the comparable 2024 period. Our GAAP loss ratio for the six months ended June 30, 2025 decreased to 69.3% from 70.6% for the comparable 2024 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended June 30, 2025 was 60.9% compared to 60.6% for the comparable 2024 period. Our GAAP loss ratio excluding loss adjustment expenses for the six months ended June 30, 2025 was 61.1% compared to 61.4% for the comparable 2024 period. Total prior year favorable development included in the pre-tax results for the three months ended June 30, 2025 was $11,235 compared to $19,417 for the comparable 2024 period. Total prior year favorable development included in the pre-tax results for the six months ended June 30, 2025 was $23,473 compared to $30,375 for the comparable 2024 period. The decrease in favorable prior year development in 2025 is primarily attributable to the inclusion of FAIR Plan development in the prior year.

Underwriting, Operating and Related Expenses. Underwriting, operating and related expenses for the three months ended June 30, 2025 increased by $8,875, or 12.0%, to $82,796 from $73,921 for the comparable 2024 period. Underwriting, operating and related expenses for the six months ended June 30, 2025 increased by $17,459, or 11.9%, to $163,647 from $146,188 for the comparable 2024 period. The increase in the three and six months ended June 30, 2025 is driven by an increase in base commissions resulting from the increase in written premiums. Our GAAP expense ratio for the three months ended June 30, 2025 decreased to 29.3% from 29.9% for the comparable 2024 period. Our GAAP expense ratio for the six months ended June 30, 2025 decreased to 29.5% from 30.3% for the comparable 2024 period due to higher earned premium.

Interest Expense. Interest expense was $442 and $138 for the three months ended June 30, 2025 and 2024, respectively. Interest expense was $546 for the six months ended June 30, 2025 compared to $261 for the comparable 2024 period. The credit facility commitment fee included in interest expense was $14 and $31 for the six months ended June 30, 2025 and 2024, respectively. The increase in interest expense during the current quarter is primarily due to the new loan agreement entered into with Citizens Bank on March 27, 2025, which carries an interest rate of SOFR rate plus 1.25%, compared to the repaid FHLB loan that had a fixed rate of 1.42%. Additionally, the Company no longer incurs a credit facility commitment fee as of March 27, 2025, since a loan is currently outstanding under the facility.

Income Tax Expense. Our effective tax rate was 21.4% and 21.7% for the three months ended June 30, 2025 and 2024, respectively. The effective tax rate was 21.9% and 21.6% for the six months ended June 30, 2025 and 2024, respectively. The effective tax rate in 2025 was higher than the statutory rate primarily due to the effects of stock-based compensation and permanent differences regarding executive compensation.

Net Income. Net income for the three months ended June 30, 2025 was $28,937 compared to net income of $16,636 for the comparable 2024 period. Net income for the six months ended June 30, 2025 was $50,833 compared to $36,714 for the comparable 2024 period.

Non-GAAP Operating Income. Non-GAAP operating income, as defined above, was $21,519 for the three months ended June 30, 2025 compared to $17,272 for the comparable 2024 period. Non-GAAP operating income was $40,515 for the six months ended June 30, 2025 compared to $31,018 for the comparable 2024 period.

Liquidity and Capital Resources

As a holding company, Safety’s assets consist primarily of the stock of our direct and indirect subsidiaries. Our principal source of funds to meet our obligations and pay dividends to shareholders, therefore, is dividends and other permitted payments from our subsidiaries, principally Safety Insurance. Safety is the borrower under our credit facility.

Safety Insurance’s sources of funds primarily include premiums received, investment income, and proceeds from sales and redemptions of investments. Safety Insurance’s principal uses of cash are the payment of claims, operating expenses and taxes, the purchase of investments, and the payment of dividends to Safety.

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Net cash provided by operating activities was $35,496 and $4,454 during the six months ended 2025 and 2024, respectively. Our operations typically generate positive cash flows from operations as most premiums are received in advance of the time when claim and benefit payments are required. Positive operating cash flows are expected in the future to meet our liquidity requirements.

Net cash used for investing activities was $18,217 and net cash provided by invested activities was $28,821 during the six months ended June 30, 2025 and 2024, respectively. Fixed maturities, equity securities, and other invested assets purchased were $159,014 for the six months ended June 30, 2025 compared to $102,580 for the comparable prior year period. Proceeds from maturities, redemptions, calls and sales, of securities were $141,197 during the six months ended June 30, 2025 compared to $136,009 for the comparable prior year period.

Net cash used for financing activities was $26,844 and $26,848 during the six months ended June 30, 2025 and 2024, respectively. Net cash used for financing activities during the six months ended June 30, 2025 consisted of dividend payments to shareholders and debt activity.

The Insurance Subsidiaries maintain a high degree of liquidity within their respective investment portfolios in fixed maturity and equity securities. We do not anticipate the need to sell these securities to meet the Insurance Subsidiaries cash requirements. We expect the Insurance Subsidiaries to generate sufficient operating cash to meet all short-term and long-term cash requirements. However, there can be no assurance that unforeseen business needs or other items will not occur causing us to have to sell securities before their values fully recover; thereby causing us to recognize additional impairment charges in that time period.

Credit Facility

For information regarding our Credit Facility, please refer to Item 1—Financial Statements, Note 9, Debt, of this Form 10-Q.

Recent Accounting Pronouncements

For information regarding Recent Accounting Pronouncements, please refer to Item 1—Financial Statements, Note 2, Recent Accounting Pronouncements, of this Form 10-Q.

Regulatory Matters

Our Insurance Subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to their parent without prior approval of the Commissioner of the Division of Insurance of Massachusetts (the “Commissioner”). The Massachusetts statute limits the dividends an insurer may pay in any twelve-month period, without the prior permission of the Commissioner, to the greater of (i) 10% of the insurer’s surplus as of the preceding December 31 or (ii) the insurer’s net income for the twelve-month period ending the preceding December 31, in each case determined in accordance with statutory accounting practices. Our insurance company subsidiaries may not declare an “extraordinary dividend” (defined as any dividend or distribution that, together with other distributions made within the preceding twelve months, exceeds the limits established by Massachusetts statute) until thirty days after the Commissioner has received notice of the intended dividend and has not objected. As historically administered by the Commissioner, this provision requires the Commissioner’s prior approval of an extraordinary dividend. Under Massachusetts law, an insurer may pay cash dividends only from its unassigned funds, also known as earned surplus, and the insurer’s remaining surplus must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs. At December 31, 2024, the statutory surplus of Safety Insurance was $758,789, and its statutory net income for 2024 was $43,387. As a result, a maximum of $75,879 is available in 2025 for such dividends without prior approval of the Commissioner. As a result of this Massachusetts statute, the Insurance Subsidiaries had restricted net assets in the amount of $682,910 at December 31, 2024. During the six months ended June 30, 2025, Safety Insurance paid dividends to Safety of $25,750.

The maximum dividend permitted by law is not indicative of an insurer’s actual ability to pay dividends, which may be constrained by business and regulatory considerations, such as the impact of dividends on surplus, which could

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affect an insurer’s ratings or competitive position, the amount of premiums that can be written and the ability to pay future dividends.

Since the initial public offering of its common stock in November 2002, the Company has paid regular quarterly dividends to shareholders of its common stock. Quarterly dividends paid during 2025 were as follows:


					Total
Declaration	Record	Payment	Dividend per		Dividends Paid
Date	Date	Date	Common Share		and Accrued
February 14, 2025	March 3, 2025	March 14, 2025	$	0.90	$	13,370
May 7, 2025	June 2, 2025	June 13, 2025	$	0.90	$	13,384

On August 6, 2025, our Board approved and declared an increase in the quarterly cash dividend from $0.90 to $0.92 per share which will be paid on September 15, 2025 to shareholders of record on September 2, 2025. We plan to continue to declare and pay quarterly cash dividends, depending on our financial position and the regularity of our cash flows.

On February 23, 2022, the Board of Directors approved a share repurchase program of up to $50,000 of the Company’s outstanding common shares. As of June 30, 2025, the Board of Directors has cumulatively authorized increases to the existing share repurchase program of up to $200,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require us to repurchase any specific number of shares and may be modified, suspended or terminated at any time without prior notice. No share repurchases were made by the Company under the program during the three and six months ended June 30, 2025. As of June 30, 2025 and December 31, 2024, the Company had purchased 3,215,690 shares of common stock at a cost of $155,240.

Management believes that the current level of cash flow from operations provides us with sufficient liquidity to meet our operating needs over the next 12 months. We expect to be able to continue to meet our operating needs after the next 12 months from internally generated funds. Since our ability to meet our obligations in the long term (beyond such twelve-month period) is dependent upon such factors as market changes, insurance regulatory changes and economic conditions, no assurance can be given that the available net cash flow will be sufficient to meet our operating needs. We expect that we would need to borrow or issue capital stock if we needed additional funds, for example, to pay for an acquisition or a significant expansion of our operations. There can be no assurance that sufficient funds for any of the foregoing purposes would be available to us at such time.

Risk-Based Capital Requirements

The NAIC has adopted a formula and model law to implement risk-based capital requirements for most property and casualty insurance companies, which are designed to determine minimum capital requirements and to raise the level of protection that statutory surplus provides for policyholder obligations. Under Massachusetts law, insurers having less total adjusted capital than that required by the risk-based capital calculation will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. The risk-based capital law provides for four levels of regulatory action. The extent of regulatory intervention and action increases as the level of total adjusted capital to risk-based capital falls. As of December 31, 2024, the Insurance Subsidiaries had total capital of $758,789, which is in excess of amounts requiring company or regulatory action at any prescribed risk-based capital action level. Minimum statutory capital and surplus, or company action level risk-based capital, was $236,219 at December 31, 2024.

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Off-Balance Sheet Arrangements

We have no material obligations under a guarantee contract meeting the characteristics identified in Accounting Standards Codification (“ASC”) 460, Guarantees. We have no material retained or contingent interests in assets transferred to an unconsolidated entity. We have no material obligations, including contingent obligations, under contracts that would be accounted for as derivative instruments. We have no obligations, including contingent obligations, arising out of a variable interest in an unconsolidated entity held by, and material to, us, where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with us. We have no direct investments in real estate and no holdings of mortgages secured by commercial real estate. Accordingly, we have no material off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Loss and Loss Adjustment Expense Reserves

Significant periods of time can elapse between the occurrence of an insured loss, the reporting to us of that loss and our final payment of that loss. To recognize liabilities for unpaid losses, we establish reserves as balance sheet liabilities. Our reserves represent estimates of amounts needed to pay reported and estimated losses incurred but not yet reported (“IBNR”) and the expenses of investigating and paying those losses, or loss adjustment expenses. Every quarter, we review our previously established reserves and adjust them, if necessary.

When a claim is reported, claims personnel establish a “case reserve” for the estimated amount of the ultimate payment. The amount of the reserve is primarily based upon an evaluation of the type of claim involved, the circumstances surrounding each claim and the policy provisions relating to the loss. The estimate reflects the informed judgment of such personnel based on general insurance reserving practices and on the experience and knowledge of the claims person. During the loss adjustment period, these estimates are revised as deemed necessary by our claims department based on subsequent developments and periodic reviews of the cases. When a claim is closed with or without a payment, the difference between the case reserve and the settlement amount creates a reserve deficiency if the payment exceeds the case reserve or a reserve redundancy if the payment is less than the case reserve.

In accordance with industry practice, we also maintain reserves for IBNR. IBNR reserves are determined in accordance with commonly accepted actuarial reserving techniques on the basis of our historical information and experience. We review and make adjustments to incurred but not yet reported reserves quarterly. In addition, IBNR reserves can also be expressed as the total loss reserves required less the case reserves on reported claims.

When reviewing reserves, we analyze historical data and estimate the impact of various loss development factors, such as our historical loss experience and that of the industry, trends in claims frequency and severity, our mix of business, our claims processing procedures, legislative enactments, judicial decisions, legal developments in imposition of damages, and changes and trends in general economic conditions, including the effects of inflation. A change in any of these factors from the assumption implicit in our estimate can cause our actual loss experience to be better or worse than our reserves, and the difference can be material. There is no precise method, however, for evaluating the impact of any specific factor on the adequacy of reserves, because the eventual development of reserves is affected by many factors.

In estimating all our loss reserves, we follow the guidance prescribed by ASC 944, Financial Services – Insurance.

Management determines our loss and LAE reserves estimate based upon the analysis of our actuaries. A reasonable estimate is derived by selecting a point estimate within a range of indications as calculated by our actuaries using generally accepted actuarial techniques. The key assumption in most actuarial analysis is that past patterns of frequency and severity will repeat in the future, unless a significant change in the factors described above takes place.

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Our key factors and resulting assumptions are the ultimate frequency and severity of claims, based upon the most recent ten years of claims reported to the Company, and the data CAR reports to us to calculate our share of the residual market, as of the date of the applicable balance sheet. For each accident year and each coverage within a line of business our actuaries calculate the ultimate losses incurred. Our total reserves are the difference between the ultimate losses incurred and the cumulative loss and loss adjustment payments made to date. Our IBNR reserves are calculated as the difference between our total reserves and the outstanding case reserves at the end of the accounting period. To determine ultimate losses, our actuaries calculate a range of indications and select a point estimation using such actuarial techniques as:

●

Paid Loss Indications: This method projects ultimate loss estimates based upon extrapolations of historic paid loss trends. This method tends to be used on short tail lines such as automobile physical damage.

●

Incurred Loss Indications: This method projects ultimate loss estimates based upon extrapolations of historic incurred loss trends. This method tends to be used on long tail lines of business such as automobile liability and homeowner’s liability.

●

Bornhuetter-Ferguson Indications: This method projects ultimate loss estimates based upon extrapolations of an expected amount of IBNR, which is added to current incurred losses or paid losses. This method tends to be used on small, immature, or volatile lines of business, such as our BOP and umbrella lines of business.

●

Bodily Injury Code Indications: This method projects ultimate loss estimates for our private passenger and commercial automobile bodily injury coverage based upon extrapolations of the historic number of accidents and the historic number of bodily injury claims per accident. Projected ultimate bodily injury claims are then segregated into expected claims by type of injury (e.g. soft tissue injury vs. hard tissue injury) based on past experience. An ultimate severity, or average paid loss amounts, is estimated based upon extrapolating historic trends. Projected ultimate loss estimates using this method are the aggregate of estimated losses by injury type.

Such techniques assume that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting our ultimate losses, total reserves, and resulting IBNR reserves. It is possible that the final outcome may fall above or below these amounts as a result of a number of factors, including immature data, sparse data, or significant growth in a line of business. Using these methodologies our actuaries established a range of reasonably possible estimations for net reserves of approximately $510,482 to $579,378 as of June 30, 2025. In general, the low and high values of the ranges represent reasonable minimum and maximum values of the indications based on the techniques described above. Our selected point estimate of net loss and LAE reserves based upon the analysis of our actuaries was $550,315 as of June 30, 2025.

The following table presents the point estimation of the recorded reserves and the range of estimations by line of business for net loss and LAE reserves as of June 30, 2025.


		As of June 30, 2025
Line of Business	Low		Recorded		High
Private passenger automobile	$	253,835	$	270,205	$	279,924
Commercial automobile		102,659		115,251		127,123
Homeowners		96,281		100,905		103,516
All other		57,707		63,954		68,815
Total	$	510,482	$	550,315	$	579,378

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The following table presents our total net reserves and the corresponding case reserves and IBNR reserves for each line of business as of June 30, 2025.


		As of June 30, 2025
Line of Business	Case		IBNR		Total
Private passenger automobile	$	332,785	$	(62,588)	$	270,197
CAR assumed private passenger auto		1		7		8
Commercial automobile		75,713		5,095		80,808
CAR assumed commercial automobile		20,605		13,838		34,443
Homeowners		109,456		(8,551)		100,905
All other		49,306		14,648		63,954
Total net reserves for losses and LAE	$	587,866	$	(37,551)	$	550,315

At June 30, 2025, our total IBNR reserves for our private passenger automobile line of business was comprised of ($107,338) related to estimated ultimate decreases in the case reserves, including anticipated recoveries (i.e. salvage and subrogation), and $44,750 related to our estimation for not yet reported losses.

Our IBNR reserves consist of our estimate of the total loss reserves required less our case reserves. The IBNR reserves for CAR assumed commercial automobile business are 40.2% of our total reserves for CAR assumed commercial automobile business as of June 30, 2025, due to the reporting delays in the information we receive from CAR, as described further in the section on Residual Market Loss and Loss Adjustment Expense Reserves.

The following table presents information by line of business for our total net reserves and the corresponding retained (i.e. direct less ceded) reserves and assumed reserves as of June 30, 2025.


		As of June 30, 2025
Line of Business		Retained		Assumed		Net
Private passenger automobile	$	270,197
CAR assumed private passenger automobile			$	8
Net private passenger automobile					$	270,205
Commercial automobile		80,808
CAR assumed commercial automobile				34,443
Net commercial automobile						115,251
Homeowners		100,905		—		100,905
All other		63,954		—		63,954
Total net reserves for losses and LAE	$	515,864	$	34,451	$	550,315

Residual Market Loss and Loss Adjustment Expense Reserves

We are a participant in CAR and other various residual markets and assume a portion of losses and LAE on business ceded by the industry participants to the residual markets. We were a participant in FAIR Plan until the recent FAIR Plan Restructuring in 2024. We estimate reserves for assumed losses and LAE that have not yet been reported to us by the residual markets. Our estimations are based upon the same factors we use for our own reserves, plus additional factors due to the nature of and the information we receive.

Residual market deficits and gains, consists of premium ceded to the various residual markets less losses and LAE, and is allocated among insurance companies based on a various formulas (the “Participation Ratio”) that takes into consideration a company’s voluntary market share.

Because of the lag in the various residual market estimations, and in order to try to validate to the extent possible the information provided, we must try to estimate the effects of the actions of our competitors in order to establish our Participation Ratio.

Although we rely to a significant extent in setting our reserves on the information the various residual markets provide, we are cautious in our use of that information, because of the delays in receiving data from the various residual markets. As a result, we have to estimate our Participation Ratio and these reserves are subject to significant judgments and estimates.

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Sensitivity Analysis

Establishment of appropriate reserves is an inherently uncertain process. There can be no certainty that currently established reserves based on our key assumptions regarding frequency and severity in our lines of business, or our assumptions regarding our share of the CAR loss will prove adequate in light of subsequent actual experience. To the extent that reserves are inadequate and are strengthened, the amount of such increase is treated as a charge to earnings in the period that the deficiency is recognized. To the extent that reserves are redundant and are released, the amount of the release is a credit to earnings in the period the redundancy is recognized. For the six months ended June 30, 2025, a 1 percentage-point change in the loss and LAE ratio would result in a change in reserves of $5,549. Each 1 percentage-point change in the loss and LAE ratio would have had a $4,384 effect on net income, or $0.30 per diluted share.

Our assumptions consider that past experience, adjusted for the effects of current developments and anticipated trends, are an appropriate basis for establishing our reserves. Our individual key assumptions could each have a reasonable possible range of plus or minus 5 percentage-points for each estimation, although there is no guarantee that our assumptions will not have more than a 5 percentage point variation. The following sensitivity tables present information for each of our primary lines of business on the effect each 1 percentage-point change in each of our key assumptions on unpaid frequency and severity could have on our retained (i.e., direct minus ceded) loss and LAE reserves and net income for the six months ended June 30, 2025. In evaluating the information in the table, it should be noted that a 1 percentage-point change in a single assumption would change estimated reserves by 1 percentage-point. A 1 percentage-point change in both our key assumptions would change estimated reserves within a range of plus or minus 2 percentage-points.

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	-1 Percent		No		+1 Percent
	Change in		Change in		Change in
	Frequency		Frequency		Frequency
Private passenger automobile retained loss and LAE reserves
-1 Percent Change in Severity
Estimated decrease in reserves	$	(5,404)	$	(2,702)	$	—
Estimated increase in net income		4,269		2,135		—
No Change in Severity
Estimated (decrease) increase in reserves		(2,702)		—		2,702
Estimated increase (decrease) in net income		2,135		—		(2,135)
+1 Percent Change in Severity
Estimated increase in reserves		—		2,702		5,404
Estimated decrease in net income		—		(2,135)		(4,269)

Commercial automobile retained loss and LAE reserves
-1 Percent Change in Severity
Estimated decrease in reserves		(1,616)		(808)		—
Estimated increase in net income		1,277		638		—
No Change in Severity
Estimated (decrease) increase in reserves		(808)		—		808
Estimated increase (decrease) in net income		638		—		(638)
+1 Percent Change in Severity
Estimated increase in reserves		—		808		1,616
Estimated decrease in net income		—		(638)		(1,277)

Homeowners retained loss and LAE reserves
-1 Percent Change in Severity
Estimated decrease in reserves		(2,018)		(1,009)		—
Estimated increase in net income		1,594		797		—
No Change in Severity
Estimated (decrease) increase in reserves		(1,009)		—		1,009
Estimated increase (decrease) in net income		797		—		(797)
+1 Percent Change in Severity
Estimated increase in reserves		—		1,009		2,018
Estimated decrease in net income		—		(797)		(1,594)

All other retained loss and LAE reserves
-1 Percent Change in Severity
Estimated decrease in reserves		(1,279)		(640)		—
Estimated increase in net income		1,010		505		—
No Change in Severity
Estimated (decrease) increase in reserves		(640)		—		640
Estimated increase (decrease) in net income		505		—		(505)
+1 Percent Change in Severity
Estimated increase in reserves		—		640		1,279
Estimated decrease in net income		—		(505)		(1,010)

Our estimated share of CAR loss and LAE reserves is based on assumptions about our Participation Ratio, the size of CAR, and the resulting deficit. Our assumptions consider that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for establishing our CAR reserves. Each of our assumptions could have a reasonably possible range of plus or minus 5 percentage-points for each estimation.

The following sensitivity table presents information of the effect each 1 percentage-point change in our assumptions on our share of reserves for CAR and other residual markets could have on our assumed loss and LAE

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reserves and net income for the six months ended June 30, 2025. In evaluating the information in the table, it should be noted that a 1 percentage-point change in our assumptions would change estimated reserves by 1 percentage-point.


	-1 Percent		+1 Percent
	Change in		Change in
	Estimation		Estimation
CAR assumed commercial automobile
Estimated (decrease) increase in reserves	$	(344)	$	344
Estimated increase (decrease) in net income		272		(272)

Reserve Development Summary

The changes we have recorded in our reserves in the past illustrate the uncertainty of estimating reserves. Our prior year reserves decreased by $23,473 and $30,375 during the six months ended June 30, 2025 and 2024, respectively.

The following table presents a comparison of prior year development of our net reserves for losses and LAE for the six months ended June 30, 2025 and 2024. Each accident year represents all claims for an annual accounting period in which loss events occurred, regardless of when the losses are actually reported, booked or paid. Our financial statements reflect the aggregate results of the current and all prior accident years.


	Six Months Ended June 30,
Accident Year	2025		2024
2015 & prior	$	(483)	$	(1,122)
2016		(424)		(560)
2017		(222)		(185)
2018		(232)		(1,146)
2019		(1,179)		(1,834)
2020		(1,628)		(1,765)
2021		(1,978)		(2,460)
2022		(2,516)		(2,697)
2023		(7,256)		(8,885)
2024		(7,555)		—
FAIR Plan		-		(9,721)
All prior years	$	(23,473)	$	(30,375)

The decreases in prior years’ reserves during the six months ended June 30, 2025 and 2024 resulted from re-estimations of prior year ultimate loss and LAE liabilities. The 2025 decrease is composed of reductions of $3,249 in our private passenger automobile reserves, $3,909 in our commercial automobile reserves, $9,266 in our homeowners reserves, and $7,049 in our other lines reserves. The 2024 decrease is primarily composed of reductions of $3,648 in our private passenger automobile reserves, $2,853 in our commercial automobile reserves, $13,565 in our homeowners reserves which includes $9,721 of FAIR Plan Development, and $10,309 in our other lines reserves.

The following table presents information by line of business for prior year development of our net reserves for losses June 30, 2025.

Private Passenger

Commercial

Accident Year

Automobile

Homeowners

All Other

Total

2015 & prior

(283)

(166)

(41)

(483)

2016

(8)

—

(332)

(84)

(424)

2017

(101)

(253)

(222)

2018

289

(44)

(513)

(232)

2019

405

(547)

(89)

(948)

(1,179)

2020

172

(183)

(521)

(1,096)

(1,628)

2021

276

(348)

(379)

(1,527)

(1,978)

2022

491

(527)

(1,563)

(917)

(2,516)

2023

(184)

(806)

(5,624)

(642)

(7,256)

2024

(4,462)

(1,440)

(625)

(1,028)

(7,555)

All prior years

(3,249)

(3,909)

(9,266)

(7,049)

(23,473)

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The improved private passenger and commercial automobile results were primarily due to fewer claims than previously estimated and better than previously estimated severity on our established bodily injury and property damage case reserves. Our retained other than auto and homeowners lines of business prior year reserves decreased, due primarily to fewer claims than previously estimated.

For further information, see “Results of Operations: Losses and Loss Adjustment Expenses.”

Investment Impairments

We use a systematic methodology to evaluate declines in fair values below cost or amortized cost of our investments. Some of the factors considered in assessing impairment of fixed maturities due to credit losses include the extent to which the fair value is less than amortized cost, the financial condition of and the near and long-term prospects of the issuer, whether the debtor is current on its contractually obligated interest and principal payments, changes to the rating of the security by a rating agency, the historical volatility of the fair value of the security and whether it is more likely than not that we will be required to sell the investment prior to an anticipated recovery in value. This methodology ensures that we evaluate available evidence concerning any declines in a disciplined manner.

For fixed maturities that we do not intend to sell or for which it is more likely than not that we would not be required to sell before an anticipated recovery in value, we separate the expected credit loss component of the impairment from the amount related to all other factors. The expected credit loss component is recognized as an allowance for expected credit losses. The allowance is adjusted for any additional credit losses and subsequent recoveries, which are booked in income as either credit loss expense or credit loss benefit, respectively. Upon recognizing a credit loss, the cost basis is not adjusted. The impairment related to all other factors (non-credit factors) is reported in other comprehensive income.

For further information, see “Results of Operations.”

Forward-Looking Statements

Forward-looking statements might include one or more of the following, among others:

●

Projections of revenues, income, earnings per share, capital expenditures, dividends, capital structure or other financial items;

●

Descriptions of plans or objectives of management for future operations, products or services;

●

Forecasts of future economic performance, liquidity, need for funding and income;

●

Legal and regulatory commentary

●

Descriptions of assumptions underlying or relating to any of the foregoing; and

●

Future performance of credit markets.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “aim,” “projects,” or words of similar meaning and expressions that indicate future events and trends, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements.

Forward-looking statements are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. There are a number of factors, many of which are beyond our control, that could cause actual future conditions, events, results or trends to differ significantly and/or materially from historical results or those projected in the forward-looking statements. These factors include but are not limited to:

●

The competitive nature of our industry and the possible adverse effects of such competition;

●

Conditions for business operations and restrictive regulations in Massachusetts;

●

The possibility of losses due to claims resulting from severe weather;

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●

The impact of inflation, changes in tariffs and supply chain delays on loss severity;

●

The possibility that the Commissioner may approve future rule changes that change the operation of the residual market;

●

The possibility that existing insurance-related laws and regulations will become further restrictive in the future;

●

The impact of investment, economic and underwriting market conditions, including interest rates and inflation;

●

Our possible need for and availability of additional financing, and our dependence on strategic relationships, among others; and

●

Other risks and factors identified from time to time in our reports filed with the SEC. Refer to Part I, Item 1A — Risk Factors of our 2024 Annual Report on Form 10-K for the year ended December 31, 2024.

Some other factors, such as market, operational, liquidity, interest rate, equity and other risks, are described elsewhere in this Quarterly Report on Form 10-Q. Factors relating to the regulation and supervision of our Company are also described or incorporated in this report. There are other factors besides those described or incorporated in this report that could cause actual conditions, events or results to differ from those in the forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We do not undertake any obligation to update publicly or revise any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Item 3. Quantitative and Qualitative Information about Market Risk (Dollars in thousands)

Market Risk. Market risk is the risk that we will incur losses due to adverse changes in market rates and prices. We have exposure to market risk through our investment activities and our financing activities. Our primary market risk exposure is to changes in interest rates. We use both fixed and variable rate debt as sources of financing. We have not entered, and do not plan to enter, into any derivative financial instruments for trading or speculative purposes.

Interest Rate Risk. Interest rate risk is the risk that we will incur economic losses due to adverse changes in interest rates. Our exposure to interest rate changes primarily results from our significant holdings of fixed rate investments and from our financing activities. Our fixed maturity investments include U.S. and foreign government bonds, securities issued by government agencies, obligations of state and local governments and governmental authorities, corporate bonds and asset-backed securities, most of which are exposed to changes in prevailing interest rates.

We manage our exposure to risks associated with interest rate fluctuations through active review of our investment portfolio by our management and Board of Directors and consultation with third-party financial advisors. As a general matter, we do not attempt to match the durations of our assets with the durations of our liabilities, and the majority of our liabilities are “short tail.” Our goal is to maximize the total after-tax return on all of our investments. An important strategy that we employ to achieve this goal is to try to hold enough in cash and short-term investments in order to avoid liquidating longer-term investments to pay claims.

Based upon the results of interest rate sensitivity analysis, the following table shows the interest rate risk of our investments in fixed maturities, measured in terms of fair value (which is equal to the carrying value for all our fixed maturity securities).


		-100 Basis				+100 Basis
		Point Change		No Change		Point Change
As of June 30, 2025
Estimated fair value	$	1,237,363	$	1,188,337	$	1,140,494
Estimated increase (decrease) in fair value	$	49,026	$	—	$	(47,843)

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With respect to floating rate debt, we are exposed to the effects of changes in prevailing interest rates. At June 30, 2025, we had $30,000 of debt outstanding under our credit facility. Assuming the full utilization of our current available credit facility, a 2.0% increase in the prevailing interest rate on our variable rate debt would result in interest expense increasing approximately $600 for 2025, assuming that all of such debt is outstanding for the entire year.

In addition, in the current market environment, our investments can also contain liquidity risks.

Equity Risk. Equity risk is the risk that we will incur economic losses due to adverse changes in equity prices. Our exposure to changes in equity prices results from our holdings of common stock and mutual funds held to fund the executive deferred compensation plan. We continuously evaluate market conditions and we expect in the future to purchase additional equity securities. We principally manage equity price risk through industry and issuer diversification and asset allocation techniques.

Item 4. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures [as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)] as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures are adequate and effective and ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and that information required to be disclosed in such reports is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings

Please see “Item 1—Financial Statements, Note 8, Commitments and Contingencies.”

Item 1A. Risk Factors

There have been no subsequent material changes from the risk factors previously disclosed in the Company’s 2024 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (Dollars in thousands)

On February 23, 2022, the Board of Directors approved an additional share repurchase of up to $50,000 of the Company’s outstanding common shares. The Board of Directors has cumulatively authorized increases to the existing share repurchase program of up to $200,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require the Company to repurchase any specific number of shares and it may be modified, suspended or terminated at any time without prior notice. No shares were repurchased during the three and six months ended June 30, 2025.


	Total number	Average		Total number of shares purchased as part of	Maximum number of
	of Shares	price paid		publicly announced	shares that may yet be purchased under the
Period	purchase	per share		plans or programs	plans or programs
April 1-30, 2025	—		—	—		703,971
May 1-31, 2025	—		—	—		703,971
June 1-30, 2025	—		—	—		703,971
Total	—		—	—

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

During the three months ended June 30, 2025, none of the officers (as defined in rule 16a-1(f) of the Securities Exchange Act of 1934) or directors of the Company adopted, terminated or modified any contract, instruction or written plan for the purchase and sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as such term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

The exhibits are contained herein as listed in the Exhibit Index.

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SAFETY INSURANCE GROUP, INC.

EXHIBIT INDEX


Exhibit
Number		Description
11.0		Statement re: Computation of Per Share Earnings (1)

31.1		CEO Certification Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (2)
31.2		CFO Certification Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (2)

32.1		CEO Certification Pursuant to U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (2)

32.2		CFO Certification Pursuant to U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (2)

101.INS		Inline XBRL Instance Document (2)

101.SCH		Inline XBRL Taxonomy Extension Schema (2)

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase (2)

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase (2)

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase (2)

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase (2)

104		The cover page from this Current Report on form 10-Q, formatted in Inline XBRL (2)

(1)	Not included herein as the information is included as part of this Form 10-Q, Item 1 – Financial Statements, Note 3, Earnings per Weighted Average Common Share.

(2)	Included herein.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


August 8, 2025	SAFETY INSURANCE GROUP, INC. (Registrant)



	By:	/s/ CHRISTOPHER T. WHITFORD
		Christopher T. Whitford
		Vice President, Chief Financial Officer, Secretary and Principal Accounting Officer

Source: View Original Filing on SEC EDGAR

FAQ

What was Safety Insurance Group’s Q2 2025 diluted EPS (SAFT)?

Diluted EPS for Q2 2025 was $1.95, up from $1.13 in Q2 2024.

How much did net earned premiums grow year over year?

Net earned premiums increased 14.2% to $282.1 million.

How has shareholders’ equity changed since December 31, 2024?

Shareholders’ equity rose from $828.5 m to $873.3 m, a 5.4% increase.

What dividend did SAFT pay during Q2 2025?

The company paid a $0.90 cash dividend per common share.

What is the size and composition of SAFT’s investment portfolio?

Invested assets total $1.58 b, with $1.19 b in fixed maturities and $235 m in equities.

Did Safety Insurance repurchase any shares in the quarter?

No share repurchases were disclosed in the Q2 2025 10-Q.

What is the current unrealized loss on the bond portfolio?

Unrealized losses on available-for-sale fixed maturities stand at $50.3 million.

[10-Q] Safety Insurance Group Inc Quarterly Earnings Report

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FAQ

What was Safety Insurance Group’s Q2 2025 diluted EPS (SAFT)?

How much did net earned premiums grow year over year?

How has shareholders’ equity changed since December 31, 2024?

What dividend did SAFT pay during Q2 2025?

What is the size and composition of SAFT’s investment portfolio?

Did Safety Insurance repurchase any shares in the quarter?

What is the current unrealized loss on the bond portfolio?

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[10-Q] Safety Insurance Group Inc Quarterly Earnings Report

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Insurance Equity Analyst positive

Portfolio Manager – P&C Specialist positive

FAQ

What was Safety Insurance Group’s Q2 2025 diluted EPS (SAFT)?

How much did net earned premiums grow year over year?

How has shareholders’ equity changed since December 31, 2024?

What dividend did SAFT pay during Q2 2025?

What is the size and composition of SAFT’s investment portfolio?

Did Safety Insurance repurchase any shares in the quarter?

What is the current unrealized loss on the bond portfolio?

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