AMERICAN COASTAL INSURANCE Corp

Previous wording

Our Company’s revenue is generated primarily from writing insurance in Florida. Our target market in such areas consists of states where the perceived threat of natural catastrophe has caused large national insurance carriers to reduce their concentration of policies. We believe an opportunity exists for ACIC to write profitable business in such areas.

Current wording

Our Company’s revenue is generated primarily from writing insurance in Florida. In 2026, we began expanding our products and geographical footprint. Our target market consists of states where the perceived threat of natural catastrophe has caused large national insurance carriers to reduce their concentration of policies. We believe an opportunity exists for ACIC to write profitable business in such areas.

Previous wording

Our policies in-force increased by 1.2% from 4,402 policies in-force at June 30, 2025 to 4,453 policies in-force at June 30, 2026.

Current wording

Our policies in-force increased by 6.6% from 4,343 direct policies in-force at September 30, 2025 to 4,628 direct policies in-force at September 30, 2026. These values exclude the policies associated with our assumed excess & surplus lines premium.

Previous wording

When we prepare our consolidated financial statements and accompanying notes in conformity with GAAP, we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgments that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. During the six months ended June 30, 2026, we reassessed our critical accounting policies and estimates as disclosed in Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements and our Annual Report on Form 10-K for the year ended December 31, 2025. We have made no changes or additions with regard to those policies and estimates.

Current wording

When we prepare our consolidated financial statements and accompanying notes in conformity with GAAP, we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgments that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. During the nine months ended September 30, 2026, we reassessed our critical accounting policies and estimates as disclosed in Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements and our Annual Report on Form 10-K for the year ended December 31, 2025. We have made no changes or additions with regard to those policies and estimates.

Previous wording

We must comply with applicable state insurance regulations that prescribe the type, quality and concentrations of investments our insurance subsidiary can make; therefore, our current investment policy limits investment in non-investment-grade fixed maturities and limits total investment amounts in preferred stock, common stock and mortgage notes receivable. We do not invest in derivative securities, however, we do hold warrants as a result of our surplus note investment. Please see Note 4 for more information.

Current wording

We must comply with applicable state insurance regulations that prescribe the type, quality and concentrations of investments our insurance subsidiaries can make; therefore, our current investment policy limits investment in non-investment-grade fixed maturities and limits total investment amounts in preferred stock, common stock and mortgage notes receivable. We do not invest in derivative securities, however, we hold warrants as a result of our surplus note investment. Please see Note 4 for more information.

Previous wording

As of June 30, 2026, we engaged one outside asset management company and retain one internal asset manager, which have authority and discretion to buy and sell securities for us, manage our investments subject to (i) the guidelines established by our Board of Directors and (ii) the direction of management. Prior to August 2025, we engaged two outside asset management companies and prior to April 2026 we engaged no internal asset manager. The Investment Committee of our Board of Directors reviews and approves our investment policy on a regular basis.

Current wording

As of September 30, 2026, we engage one outside asset management company and retain one internal asset manager, which have authority and discretion to buy and sell securities for us, manage our investments subject to (i) the guidelines established by our Board of Directors and (ii) the direction of management. Prior to August 2025, we engaged two outside asset management companies and prior to April 2026 we engaged no internal asset manager. The Investment Committee of our Board of Directors reviews and approves our investment policy on a regular basis.

Previous wording

Our cash, cash equivalents, restricted cash and investment portfolio totaled $650,022,000 at June 30, 2026, compared to $647,744,000 at December 31, 2025.

Current wording

Our cash, cash equivalents, restricted cash and investment portfolio totaled $707,890,000 at September 30, 2026, compared to $647,744,000 at December 31, 2025.

Previous wording

We classify all of our fixed-maturity investments as available-for-sale. Our investments at June 30, 2026 and December 31, 2025 consisted mainly of U.S. government and agency securities, securities of investment-grade corporate issuers, mortgage-backed securities, and states, municipalities and political subdivisions. Our equity holdings as of June 30, 2026 and December 31, 2025 consisted of mutual funds and common stock. At June 30, 2026, approximately 81.7% of our fixed maturities were U.S. Treasuries or corporate bonds rated "A" or better, and 18.3% were corporate bonds rated "BBB" or "BB".

Current wording

We classify all of our fixed-maturity investments as available-for-sale. Our investments at September 30, 2026 and December 31, 2025 consisted mainly of U.S. government and agency securities, securities of investment-grade corporate issuers, mortgage-backed securities, and states, municipalities and political subdivisions. Our equity holdings as of September 30, 2026 and December 31, 2025 consisted of ETFs, mutual funds and common stock. At September 30, 2026, approximately 80.5% of our fixed maturities were U.S. Treasuries or corporate bonds rated "A" or better, and 19.5% were corporate bonds rated "BBB" or "BB".

Previous wording

AmCoastal’s core catastrophe reinsurance program provides occurrence-based coverage up to an exhaustion point of approximately $1,680,000,000 for a first occurrence and $1,918,000,000 in the aggregate. Under this program, the Company's GAAP retention on a first event is $49,000,000 ($26,500,000 retained by AmCoastal under statutory accounting principles (STAT retained), $22,500,000 retained separately by the Company's captive)). The Company has purchased second and third event retrocession coverage, decreasing its second event GAAP retention to $25,000,000 ($13,300,000 STAT retained by AmCoastal, $11,700,000 retained separately by the Company's captive) and third event GAAP retention to $2,000,000, based on three $100,000,000 loss events. AmCoastal’s program provides sufficient coverage for approximately a 1-in-286-year return period, indicating that the probability of a single occurrence exceeding protection purchased is roughly 0.4% when using the catastrophe model AIR 13 (using the long-term catalog with demand surge and 10% loss adjustment expense included) and based on estimated total insured value at September 30, 2026 of $78 billion. AmCoastal’s program also provides sufficient coverage for a 1-in-100-year event followed by a 1-in-50-year event in the same treaty year, the probability of which is less than 0.1%. While we believe these catastrophe models are useful tools and their outputs provide reasonable proxies for the probability of exhausting our reinsurance protections, they are imperfect, and actual results may differ materially from those expected.

Current wording

AmCoastal’s core catastrophe reinsurance program provides occurrence-based coverage up to an exhaustion point of approximately $1,680,000,000 for a first occurrence and $1,918,000,000 in the aggregate. Under this program, the Company's GAAP retention on a first event is $23,500,000. The Company's second event GAAP retention is $25,000,000 and third event GAAP retention is $2,000,000, based on three $100,000,000 loss events. AmCoastal’s program provides sufficient coverage for approximately a 1-in-286-year return period, indicating that the probability of a single occurrence exceeding protection purchased is roughly 0.4% when using the catastrophe model AIR 13 (using the long-term catalog with demand surge and 10% loss adjustment expense included) and based on estimated total insured value at September 30, 2026 of $78 billion. AmCoastal’s program also provides sufficient coverage for a 1-in-100-year event followed by a 1-in-50-year event in the same treaty year, the probability of which is less than 0.1%. While we believe these catastrophe models are useful tools and their outputs provide reasonable proxies for the probability of exhausting our reinsurance protections, they are imperfect, and actual results may differ materially from those expected.

Previous wording

The table below outlines our external quota share agreements in effect for the six months ended June 30, 2026 and 2025.

Current wording

The table below outlines our external quota share agreements in effect for the nine months ended September 30, 2026 and 2025.

Previous wording

Reinsurance costs as a percentage of gross earned premium during the three and six months ended June 30, 2026 and 2025 were as follows:

Current wording

Reinsurance costs as a percentage of gross earned premium during the three and nine months ended September 30, 2026 and 2025 were as follows:

Previous wording

Unpaid losses and LAE totaled $118,920,000 and $165,701,000 as of June 30, 2026 and December 31, 2025, respectively.

Current wording

Unpaid losses and LAE totaled $95,223,000 and $165,701,000 as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

ACIC net income for the three months ended June 30, 2026 decreased $4,546,000, or 17.2%, to net income of $21,896,000 for the second quarter of 2026 from $26,442,000 for the same period in 2025. All of this net income is attributable to continuing operations for the three months ended June 30, 2026. Quarter-over-quarter revenues decreased, driven by a decrease in net premiums earned. In addition, expenses increased quarter-over-quarter, driven by an increase in loss and loss adjustment expenses and general and administrative expenses, partially offset by decreased policy acquisition costs. In addition, other income attributable to the Company's intellectual property transaction came to its conclusion, resulting in a decrease in other income during the quarter.

Current wording

ACIC net income for the three months ended September 30, 2026 decreased $13,086,000, or 40.3%, to net income of $19,397,000 for the third quarter of 2026 from $32,483,000 for the same period in 2025. Quarter-over-quarter revenues decreased, driven by a decrease in net premiums earned. This was offset by decreased expenses quarter-over-quarter, driven by a decrease in loss and loss adjustment expenses and general and administrative expenses. In addition, other income attributable to the Company's intellectual property transaction came to its conclusion, resulting in a decrease in other income during the quarter.

Previous wording

Our gross written premiums decreased $12,042,000, or 5.3%, to $216,304,000 for the second quarter ended June 30, 2026 from $228,346,000 for the same period in 2025. Gross premium earned decreased $26,730,000, or 16.2%, to $138,730,000 for the second quarter ended June 30, 2026 from $165,460,000 for the same period in 2025. These changes are attributed to a 24% decrease in our net pricing year-over-year as the market continued to soften. Ceded premiums earned decreased $17,985,000, or 20.7%, to $69,032,000 for the second quarter ended June 30, 2026 from $87,017,000 for the same period in 2025. The breakdown of the quarter-over-quarter change in these premiums and new and renewal policies are shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above.

Current wording

Our gross written premiums increased $2,299,000, or 3.2%, to $74,111,000 for the third quarter ended September 30, 2026 from $71,812,000 for the same period in 2025. Gross premium earned decreased $24,283,000, or 14.9%, to $138,474,000 for the third quarter ended September 30, 2026 from $162,757,000 for the same period in 2025. The decrease in gross premiums earned was driven in part by a 25.6% year-over-year decrease in our net pricing as the market continued to soften. Ceded premiums earned decreased $8,917,000, or 10.9%, to $73,022,000 for the third quarter ended September 30, 2026 from $81,939,000 for the same period in 2025, following the softening market conditions. The breakdown of the quarter-over-quarter change in these premiums and direct new and renewal policies is shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above.

Previous wording

Expenses for the three months ended June 30, 2026 increased $3,852,000, or 7.7%, to $54,146,000 from $50,294,000 for the same period in 2025. The increase in expenses was primarily due to an increase in losses and loss adjustment expenses and general and administrative expenses. This was offset in part by a decrease in policy acquisition costs. The details of these changes can be seen below.

Current wording

Expenses for the three months ended September 30, 2026 decreased $4,029,000, or 8.3%, to $44,661,000 from $48,690,000 for the same period in 2025. The decrease in expenses was primarily due to a decrease in losses and loss adjustment expenses and general and administrative expenses. The details of these changes can be seen below.

Previous wording

Loss and LAE increased by $3,293,000, or 21.2%, to $18,833,000 for the second quarter of 2026 from $15,540,000 for the second quarter of 2025. Loss and LAE expense as a percentage of net earned premiums increased 7.2 points to 27.0% for the second quarter of 2026, compared to 19.8% for the second quarter of 2025. Excluding catastrophe losses and prior year reserve development, our gross underlying loss and LAE ratio for the second quarter of 2026 was 10.8%, an increase of 0.6 points, from 10.2% for the second quarter of 2025.

Current wording

Loss and LAE decreased by $1,244,000, or 13.5%, to $7,967,000 for the third quarter of 2026 from $9,211,000 for the third quarter of 2025. Loss and LAE expense as a percentage of net earned premiums increased 0.8 points to 12.2% for the third quarter of 2026, compared to 11.4% for the third quarter of 2025. Excluding catastrophe losses and prior year reserve development, our gross underlying loss and LAE ratio for the third quarter of 2026 was 7.5%, an increase of 1.4 points, from 6.1% for the third quarter of 2025.

Previous wording

Policy acquisition costs decreased by $1,554,000, or 6.4%, to $22,703,000 for the second quarter of 2026 from $24,257,000 for the second quarter of 2025, due to a decrease in external management fees of $5,105,000, primarily as the product of the decrease in gross premiums shown above. This was partially offset by a decrease in reinsurance ceding commission income of $2,277,000, driven by a decrease in our quota share cession rate from 20% to 15%, effective June 1, 2025. This was further offset by legacy unearned agent commission collections during the second quarter of 2025, which drove an increase in agent commission expense of $1,536,000 in the second quarter of 2026.

Current wording

Policy acquisition costs decreased by $607,000, or 2.4%, to $24,832,000 for the third quarter of 2026 from $25,439,000 for the third quarter of 2025, due to a decrease in external management fees and commissions of $2,454,000, primarily as the product of the decrease in gross premiums earned shown above. This was partially offset by a decrease in reinsurance ceding commission income of $2,010,000, also as a result of this change in premiums earned.

Previous wording

General and administrative expenses increased by $2,488,000, or 32.0%, to $10,266,000 for the second quarter of 2026 from $7,778,000 for the second quarter of 2025, driven by increased salary related expenses of $3,168,000, primarily due to a non-recurring employee retention tax credit refund of $2,939,000 that was received during the second quarter of 2025. This change was partially offset by a decrease in amortization of $944,000. This decrease in amortization corresponds with the decrease seen in other income. The full details of our general and administrative expenses can be seen in Note 12, above.

Current wording

General and administrative expenses decreased by $1,803,000, or 15.9%, to $9,518,000 for the third quarter of 2026 from $11,321,000 for the third quarter of 2025, largely driven by a decrease in software amortization of $871,000. This decrease in amortization corresponds with the decrease seen in other income. In addition, external spending for audit, actuarial and legal services decreased $975,000 quarter-over-quarter. The full details of our general and administrative expenses can be seen in Note 12, above.

Previous wording

RESULTS OF OPERATIONS - COMPARISON OF THE SIX MONTH PERIODS ENDED JUNE 30, 2026 AND 2025

Current wording

RESULTS OF OPERATIONS - COMPARISON OF THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2026 AND 2025

Previous wording

ACIC net income for the six months ended June 30, 2026 decreased $6,640,000, or 13.9%, to $41,150,000 from $47,790,000 for the same period in 2025. All of this income is attributable to continuing operations for the six months ended June 30, 2026. Year-over-year revenues decreased, driven by a decrease in net premiums earned. In addition, expenses increased year-over-year, driven by an increase in loss and loss adjustment expenses and general and administrative expenses, partially offset by decreased policy acquisition costs.

Current wording

ACIC net income for the nine months ended September 30, 2026 decreased $19,726,000, or 24.6%, to $60,547,000 from $80,273,000 for the same period in 2025. Year-over-year revenues decreased, driven by a decrease in net premiums earned. This was offset by a decrease in expenses year-over-year, driven by a decrease in policy acquisition costs, partially offset by increased general and administrative expenses and increased loss and loss adjustment expenses.

Previous wording

Our gross written premiums decreased $60,499,000, or 14.2%, to $365,699,000 for the six months ended June 30, 2026 from $426,198,000 for the same period in 2025. Gross premium earned decreased $47,697,000, or 14.6%, to $279,864,000 for the six months ended June 30, 2026 from $327,561,000 for the same period in 2025. These changes are attributed to a 24% decrease in our net pricing year-over-year as the market continued to soften. Ceded premiums earned decreased $36,291,000, or 20.1%, to $144,555,000 for the six months ended June 30, 2026 from $180,846,000 for the same period in 2025. The breakdown of the year-over-year change in these premiums and new and renewal policies are shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above.

Current wording

Our gross written premiums decreased $58,200,000, or 11.7%, to $439,810,000 for the nine months ended September 30, 2026 from $498,010,000 for the same period in 2025. Gross premium earned decreased $71,980,000, or 14.7%, to $418,338,000 for the nine months ended September 30, 2026 from $490,318,000 for the same period in 2025. These changes are attributed to a 25.6% decrease in our net pricing year-over-year as the market continued to soften. Ceded premiums earned decreased $45,208,000, or 17.2%, to $217,577,000 for the nine months ended September 30, 2026 from $262,785,000 for the same period in 2025, following the softening market conditions. The breakdown of the year-over-year change in these premiums and direct new and renewal policies is shown in the tables below. More detail regarding our ceded premiums can be seen in our analysis of financial condition above.

Previous wording

Expenses for the six months ended June 30, 2026 increased $2,457,000, or 2.5%, to $99,829,000 from $97,372,000 for the same period in 2025. The increase in expenses was primarily due to an increase in loss and loss adjustment expenses and general and administrative expenses. This was partially offset by decreased policy acquisition costs year-over-year. The details of these changes can be seen below.

Current wording

Expenses for the nine months ended September 30, 2026 decreased $1,572,000, or 1.1%, to $144,490,000 from $146,062,000 for the same period in 2025. The decrease in expenses was primarily due to a decrease in policy acquisition costs. This was partially offset by an increase in loss and loss adjustment expenses and general and administrative expenses year-over-year. The details of these changes can be seen below.

Previous wording

Loss and LAE increased $2,147,000, or 8.0%, to $29,076,000 for the six months ended June 30, 2026 from $26,929,000 for the same period in 2025. Loss and LAE expense as a percentage of net earned premiums increased 3.1 points to 21.5% for the six months ended June 30, 2026, compared to 18.4% for the same period in 2025. Excluding catastrophe losses and prior year reserve development, our underlying loss and LAE as a percentage of gross earned premiums for the six months ended June 30, 2026 would have been 9.6%, an increase of 0.3 points, from 9.3% during the six months ended June 30, 2025.

Current wording

Loss and LAE increased $903,000, or 2.5%, to $37,043,000 for the nine months ended September 30, 2026 from $36,140,000 for the same period in 2025. Loss and LAE expense as a percentage of net earned premiums increased 2.6 points to 18.5% for the nine months ended September 30, 2026, compared to 15.9% for the same period in 2025. Excluding catastrophe losses and prior year reserve development, our underlying loss and LAE as a percentage of gross earned premiums for the nine months ended September 30, 2026 would have been 8.9%, an increase of 0.7 points, from 8.2% during the nine months ended September 30, 2025.

Previous wording

Policy acquisition costs decreased $2,627,000, or 5.5%, to $45,096,000 for the six months ended June 30, 2026 from $47,723,000 for the same period in 2025. The primary driver of the decrease was a decrease in external management fees of $8,258,000 as a result of the decrease in gross premiums shown above. This was partially offset by a decrease in ceding commission income of $4,637,000 as the result of the Company's decrease in quota share reinsurance coverage from 20% to 15%, effective June 1, 2025. This was further offset by legacy unearned agent commission collections during the first six months of 2025, which drove an increase in agent commission expense of $1,749,000 in the first six months of 2026.

Current wording

Policy acquisition costs decreased $3,234,000, or 4.4%, to $69,928,000 for the nine months ended September 30, 2026 from $73,162,000 for the same period in 2025. The primary driver of the decrease was a decrease in external management fees and commissions of $8,963,000 as a result of the decrease in gross premiums earned shown above. This was partially offset by a decrease in ceding commission income of $6,648,000 as the result of the Company's decrease in quota share reinsurance coverage from 20% to 15%, effective June 1, 2025. This was further offset by legacy unearned agent commission collections during the first nine months of 2025, which were $1,700,000 higher than in 2026.

Previous wording

General and administrative expenses increased $3,685,000, or 21.3%, to $20,969,000 for the six months ended June 30, 2026 from $17,284,000 for the same period in 2025, driven by increased salary-related expenses, primarily due to a non-recurring employee retention tax credit refunds of $4,469,000 that were received during 2025. Overall, employee compensation increased $5,557,000, inclusive of this refund. This was partially offset by a decrease in amortization of $1,796,000, as assets related to our intellectual property transaction were fully amortized when the transaction came to its conclusion in January 2026. This decrease in amortization corresponds with the decrease seen in other income year-over-year. The full details of our general and administrative expenses can be seen in Note 12, above.

Current wording

General and administrative expenses increased $1,882,000, or 6.6%, to $30,487,000 for the nine months ended September 30, 2026 from $28,605,000 for the same period in 2025, driven by increased salary-related expenses, primarily due to a $4,469,000 in non-recurring employee retention tax credit refunds received during 2025. Overall, employee compensation increased $5,747,000, inclusive of this refund. This was partially offset by a decrease in amortization of $2,667,000, as assets related to our intellectual property transaction were fully amortized when the transaction came to its conclusion in January 2026. This decrease in amortization corresponds with the decrease seen in other income year-over-year. In addition, external spending for audit, actuarial and legal services decreased $1,135,000 year-over-year. The full details of our general and administrative expenses can be seen in Note 12, above.

Previous wording

As a holding company, we do not conduct any business operations of our own and, as a result, we rely on cash dividends or intercompany loans from our management subsidiary to pay our general and administrative expenses. Insurance regulatory authorities heavily regulate our insurance subsidiary, including restricting any dividends paid by our insurance subsidiary and requiring approval of any management fees our insurance subsidiary pays to our management subsidiary for services rendered; however, nothing restricts our non-insurance company subsidiaries from paying us dividends other than state corporate laws regarding solvency. Our management subsidiary pays us dividends primarily using cash from the collection of management fees from our insurance subsidiary, pursuant to the management agreements in effect between those entities. In accordance with state laws, our insurance subsidiary may pay dividends or make distributions out of that part of its statutory surplus derived from its net operating profit and its net realized capital gains. The Risk-Based Capital (RBC) guidelines published by the National Association of Insurance Commissioners may further restrict our insurance subsidiary's ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause their respective surplus as regards policyholders to fall below minimum RBC guidelines. See Note 8 in our Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Current wording

As a holding company, we do not conduct any business operations of our own and, as a result, we rely on cash dividends or intercompany loans from our management subsidiary to pay our general and administrative expenses. Insurance regulatory authorities heavily regulate our insurance subsidiaries, including restricting any dividends paid by our insurance subsidiaries and requiring approval of any management fees our insurance subsidiaries pay to our management subsidiary for services rendered; however, nothing restricts our non-insurance company subsidiaries from paying us dividends other than state corporate laws regarding solvency. Our management subsidiary pays us dividends primarily using cash from the collection of management fees from our insurance subsidiaries, pursuant to the management agreements in effect between those entities. In accordance with state laws, our insurance subsidiaries may pay dividends or make distributions out of that part of its statutory surplus derived from its net operating profit and its net realized capital gains. The Risk-Based Capital (RBC) guidelines published by the National Association of Insurance Commissioners may further restrict our insurance subsidiaries' ability to pay dividends or make distributions if the amount of the intended dividend or distribution would cause their respective surplus as regards policyholders to fall below minimum RBC guidelines. See Note 8 in our Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Previous wording

The Company made no capital contributions to its subsidiaries during the six months ended June 30, 2026. The Company made a capital contribution of $8,269,000 to its reinsurance subsidiary, Shoreline Re, during the six months ended June 30, 2025.

Current wording

The Company made no capital contributions to its subsidiaries during the nine months ended September 30, 2026, however the Company contributed $15,000,000 to its insurance subsidiary, ACES Specialty Insurance Company, on October 1, 2026. The Company made a capital contribution of $8,269,000 to its reinsurance subsidiary, Shoreline Re, during the nine months ended September 30, 2025.

Previous wording

During the six months ended June 30, 2026, the Company received a dividend of $87,000,000 from AmCoastal. During the six months ended June 30, 2025, the Company received a dividend of $23,000,000 from AmCoastal.

Current wording

During the nine months ended September 30, 2026, the Company received a dividend of $87,000,000 from AmCoastal. During the nine months ended September 30, 2025, the Company received a dividend of $23,000,000 from AmCoastal.

Previous wording

Cash Flows for the Six Months Ended June 30, 2026 and 2025 (in thousands)

Current wording

Cash Flows for the Nine Months Ended September 30, 2026 and 2025 (in thousands)

Previous wording

During the six months ended June 30, 2026, we experienced cash inflows of $52,760,000 compared to $154,392,000 during the six months ended June 30, 2025. This change was driven by a reduction in premiums collected that was more than the reduction in net paid losses during the six months ended June 30, 2026 as compared to June 30, 2025. The change in reinsurance recoverable decreased $83,061,000 and the change in ceded unearned premiums decreased $21,255,000, partially offset by a decrease in the change in unpaid loss and loss adjustment expenses of $56,172,000 and decrease in the change in unearned premiums of $16,137,000. The change in unpaid loss and loss adjustment expenses and the corresponding reinsurance recoverable balance is attributed to the continued settlement of catastrophe claims in 2026.

Current wording

During the nine months ended September 30, 2026, we experienced cash inflows of $117,319,000 compared to $118,777,000 during the nine months ended September 30, 2025. This change was driven by a reduction in premiums collected that was more than the reduction in net paid losses during the nine months ended September 30, 2026 as compared to September 30, 2025. The change in reinsurance recoverable decreased $60,796,000 and the change in ceded unearned premiums decreased $37,176,000, largely offset by an increase in of $63,014,000 in the change in unpaid loss and loss adjustment expenses and an increase of $10,443,000 in the change in unearned premiums. The change in unpaid loss and loss adjustment expenses and the corresponding reinsurance recoverable balance is attributed to the continued settlement of catastrophe claims in 2026.

Previous wording

The principal cash inflows from our investing activities come from repayments of principal, proceeds from maturities and sales of investments. We closely monitor and manage these risks through our comprehensive investment risk management process. The principal cash outflows relate to sales of investments. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market disruption. During the six months ended June 30, 2026, net sales of investments totaled $28,021,000 compared to $25,357,000 during the six months ended June 30, 2025.

Current wording

The principal cash inflows from our investing activities come from repayments of principal, proceeds from maturities and sales of investments. We closely monitor and manage these risks through our comprehensive investment risk management process. The principal cash outflows relate to sales of investments. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market disruption. During the nine months ended September 30, 2026, net sales and maturities of investments totaled $38,888,000 compared to $12,896,000 during the nine months ended September 30, 2025.

Previous wording

The principal cash outflows from our financing activities come from payments of dividends, repayments of debt, and repurchases of common stock. The primary liquidity concern with respect to these cash flows is market disruption in the cost and availability of credit. We believe our current capital resources, together with cash provided from our operations, are sufficient to meet currently anticipated working capital requirements. During the six months ended June 30, 2026, cash used in financing activities totaled $56,041,000, compared to $774,000 provided by financing activities for the six months ended June 30, 2025, driven by the payment of dividends and treasury stock repurchases.

Current wording

The principal cash outflows from our financing activities come from payments of dividends, repayments of debt, and repurchases of common stock. The primary liquidity concern with respect to these cash flows is market disruption in the cost and availability of credit. We believe our current capital resources, together with cash provided from our operations, are sufficient to meet currently anticipated working capital requirements. During the nine months ended September 30, 2026, cash used in financing activities totaled $57,567,000, compared to $774,000 provided by financing activities for the nine months ended September 30, 2025, driven by the payment of dividends and treasury stock repurchases.