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FORM 10-K

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(Mark One)

For the fiscal year ended December 31, 2025

Commission file number 001-42634

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(Exact name of registrant as specified in its charter)

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(813) 880-7000

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

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

requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of

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

Yes  ☒    No  ☐

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

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

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

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal

control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that

prepared or issued its audit report.            o

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the

filing reflect the correction of an error to previously issued financial statements.            o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received

by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).            o

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 February 26, 2026, there were 19,579,009 shares of common stock, par value of $0.001 per share, outstanding. As of June 30, 2025, the aggregate

market value of the registrant’s voting stock held by non-affiliates of the registrant was approximately $155.9 million (based on the closing price for

shares of the registrant’s common stock as reported by the New York Stock Exchange on that date).

The information required by Part III of this Annual Report on Form 10-K is incorporated by reference from the Company’s Definitive Proxy Statement on

Schedule 14A relating to our 2026 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days

after the end of the fiscal year to which this Annual Report on Form 10-K relates.

This Annual Report on Form 10-K covers a period that includes a portion of time prior to the completion of our initial

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

Group, Inc. (the “Company,” “American Integrity,” “we,” “our” or “us”) effected a corporate contribution in which the

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

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

$0.001 per share (the “Common Stock”). Except as otherwise noted herein, our consolidated financial statements included

in this Annual Report on Form 10-K are those of the Company and its consolidated operations.

This Annual Report on Form 10-K contains “forward-looking statements” as defined in Section 27A of the Securities Act

of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the

“Exchange Act”). All statements other than statements of historical facts contained in this Annual Report on Form 10-K

may be forward-looking statements. Forward-looking statements contained in this Annual Report on Form 10-K include,

but are not limited to, statements regarding: our outlook; our business strategy; writing new business and retaining existing

policies; new insurance products; availability of reinsurance coverage; expectations on future growth; future Citizens

Property Insurance Corporation (“Citizens”) take-out opportunities; anticipated future operating results and operating

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

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

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

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

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

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

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

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

anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the

future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many

of which are outside of our control. Therefore, you should not rely on any of these forward-looking statements. Important

factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-

looking statements include, among others, the following:

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

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

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

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

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

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

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

conditions;

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

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

assume or write;

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

agents and national insurance carriers;

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

•cyclical changes in the insurance industry;

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

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

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

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

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

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

expansion;

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

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

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

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

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

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

and other potential further restrictive regulation we may face;

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

ability to underwrite more policies; and

•other risks identified in Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K. 

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

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

materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and

assumptions, the future events and trends discussed in this Annual Report on Form 10-K may not occur and actual results

could differ materially and adversely from those anticipated or implied in the forward-looking statements.

predominantly in Florida. Florida represented 93.7% of our policies in-force as of December 31, 2025 and 96.5% of our in-

force premium as of December 31, 2025. We were the sixth largest writer of residential property insurance in Florida based

on policies in-force (fifth excluding Citizens and national carriers) as of December 31, 2025 and wrote the seventh most

residential policies in Florida (third excluding Citizens and national carriers) during the year ended December 31, 2025

according to data compiled by the Florida Office of Insurance Regulation (“FLOIR”), making us a leading specialty

residential property insurer in the state.

We have been a stable, disciplined provider of residential insurance coverage in Florida for more than 20 years. Our

management team founded our company in 2006 to capitalize on dislocation in the Florida residential property insurance

market following the 2004 and 2005 hurricane seasons, in which a number of severe hurricanes resulted in record insured

property losses and caused a number of national insurance companies to retreat from writing residential property insurance

in the state. As of December 31, 2025, our policies in-force were 421,866, and for the year ended December 31, 2025, our

gross premiums written were $944.6 million.

       

Florida has a large and growing population with a growing residential property insurance market. According to the U.S.

Census Bureau, Florida was the third most populous state in the United States, with 23.4 million residents as of July 1,

2025, and recorded the second fastest population growth rate of all states in the United States from 2024 to 2025.

Population growth supports growth in the property insurance market, which creates opportunity for insurance carriers with

specialized expertise to profitably underwrite property insurance in the Florida market. Florida is a complex property

insurance market with a distinct regulatory environment and risk profile due to its geographic location, population centers

concentrated along the coast, and elevated threat of property damage from catastrophic weather events including

hurricanes, requiring a tailored approach to providing insurance coverage. We believe that consistently delivering

underwriting profits in this market requires a high level of focus and specialization. This level of specialization requires

localized knowledge, market-specific expertise, granular and analytical underwriting and claims management, extensive

historical data, effective use of technology, and a deep understanding of Florida’s regulatory environment - all of which we

believe we have developed over our 20-year history writing residential property insurance in Florida. We believe this

expertise is transferable and repeatable in other Southeastern coastal states, including South Carolina, North Carolina and

Georgia. For example, in January 2026, we announced that we began offering our homeowners insurance product to North

Carolina residents, representing a strategic extension of our footprint beyond Florida, Georgia, and South Carolina.

Through active monitoring of local market conditions and prudent risk selection and capital allocation, we seek to be a

stable and reliable insurance market for our policyholders and distribution partners, and to consistently deliver best-in-class

profitability and value creation for our stockholders.

As of December 31, 2025, we had 421,866 policies in-force. For the year ended December 31, 2025 we produced gross

premiums written of $944.6 million, net premiums written of $270.9 million, net income of $99.6 million, and adjusted net

income of $105.2 million. At December 31, 2025, we had total shareholders’ equity of $337.0 million. For a reconciliation

of adjusted net income to the most directly comparable GAAP measure, see “Management’s Discussion and Analysis of

Financial Condition and Results of Operations - Non-GAAP Financial Measures.”

Our history of profitability and prudent exposure management is matched by our commitment to innovation. We have built

a technology-forward platform that we believe augments the expertise of our underwriting and claims teams, enhances our

access to risk and claims data, accelerates and improves our underwriting and claims decision making, and improves our

distribution partner and policyholder interface. Our use of advanced technology solutions covers the insurance process end-

to-end, from risk selection and underwriting to streamlined quoting, policy management and claims handling. Our

technology and data capture are critical to our ability to monitor our underwriting results at a granular level, timely modify

our underwriting criteria and pricing to respond to changing market conditions, and effectively navigate Florida’s

historically volatile property insurance market cycles.

We believe the current Florida residential property insurance market presents substantial attractive opportunities for

carriers with specialized underwriting and claims expertise, established distribution relationships, advanced technology,

and entrepreneurial leadership. Despite historical market-related disruptions and challenges caused by increasing hurricane

catastrophe activity and other severe weather events, a general tort environment related to property insurance that led to

increased litigation, and reduced insurance capacity as a result of multiple large national insurance carrier exits, we believe

the legislative reforms in Florida enacted in late 2022, in addition to Assignment of Benefit (“AOB”) reform, which began

in 2019, are proving effective at combating historically rampant property insurance legal system abuse and claims fraud,

paving the way for a more stable and resilient property insurance market and greater opportunities for us to profitably

underwrite residential property insurance in Florida.

We seek to leverage our experience, proprietary technology, underwriting expertise and robust claims management

capabilities to provide a stable and reliable residential property insurance market for our distribution partners and

policyholders and offer competitive residential property insurance coverages that are appropriately priced for the risk we

are taking. All of our insurance policies are written on an admitted basis, meaning our rates and policy forms have been

approved by the insurance department of each state in which we sell our policies and our policies are backed by state

guaranty funds. Since our founding, we have sought to develop strong relationships with our regulators, which we believe

help us better navigate and adapt to changing market conditions and maintain our targeted profitability levels.

We employ a vertically integrated operating model whereby we control or manage substantially all aspects of insurance

underwriting, actuarial analysis, pricing, distribution, and claims processing and adjudication. While some Florida

residential property insurance companies have built their business in large part by assuming policies written by state-owned

insurers such as Citizens and rely on these assumptions to generate new business, we primarily distribute our products

through the “Voluntary Market,” meaning we directly underwrite and sell residential property insurance coverage to single

family homeowners and condominium owners. We offer our insurance coverages through multiple distribution channels in

the Voluntary Market, including independent insurance agents, new construction home builder agents, and national

insurance carriers that have restricted their writing of residential homeowners insurance policies in Florida and refer

business to us.

In addition to our Voluntary Market business, we also selectively and opportunistically assume policies from Citizens when

we believe there is an opportunity to assume policies that fit our underwriting and profitability criteria. From 2014 through

2023, we did not assume policies from Citizens. The Florida legislative reforms in 2022 removed one-way attorneys’ fees,

tightened bad faith standards and eliminated excessive AOB, which have led to a decrease in the frequency of non-

catastrophe claims in the state. As the legislative reforms impacting the Florida residential property insurance market have

taken hold and created what we believe to be a more favorable operating environment for insurance carriers writing in the

state, coupled with Citizens raising its rates to be more comparable to the Voluntary Market and our pricing requirements,

we have recently capitalized on opportunities to selectively assume policies from Citizens that we believe to be attractive.

While we will continue to primarily be a Voluntary Market underwriter and we believe other carriers may choose to re-

enter or expand their business in Florida in light of potential attractive take-out opportunities and generally improving

market conditions on the back of the legislative reforms in 2022, we believe selectively assuming policies from Citizens in

the current market environment can be an attractive opportunity to augment our growth and profitability. However, while

we expect there will be continued opportunities to assume policies from Citizens in the future, we expect that the number

of policies we assume will decrease in the future, as the number of policies available with Citizens that fit our profitability

criteria has decreased and continues to decrease. As of December 31, 2025, 77.5% of our in-force policies were from the

Voluntary Market and 22.5% were assumed from Citizens.

We utilize proprietary technology, our deep knowledge of the Florida residential property insurance market, our specialized

underwriting expertise and a sophisticated risk management strategy to differentiate ourselves in the market, profitably

underwrite attractive property insurance risks and prudently grow our business. We have thoughtfully constructed our

portfolio of insurance policies with (i) geographically diverse property exposures within Florida to manage our exposure to

catastrophic hurricane and severe weather events impacting particular locations and (ii) risks for which we believe the

pricing and terms adequately reflect the catastrophe and attritional non-catastrophe loss potential and present us with the

opportunity to earn an attractive underwriting profit. As of December 31, 2025, the geographic distribution of our policies

in-force, net in-force premium and total insured values in Florida were as follows:

(1)Consists solely of policies in-force in Florida.

(2)Total Insured Value (TIV) amounts are presented in millions of U.S. dollars.

Our business is supported by a comprehensive exposure and risk management framework - the cornerstone of which is our

robust reinsurance program - that we believe increases the consistency and predictability of our earnings and protects our

capital against hurricane and other severe weather-related events. We purchase excess of loss, quota share, per risk and

facultative reinsurance from highly rated third-party reinsurers. We have strong relationships with third-party reinsurers,

which we believe are a result of our industry experience and reputation for selective and disciplined underwriting. We have

historically purchased reinsurance in-line with, and occasionally in excess of, what regulators and rating agencies require

and in amounts that we believe are conservative in an effort to minimize the volatility of our earnings and protect our

capital.

We closely manage all aspects of our claims adjustment process and strive to adjudicate and settle all non-catastrophe

claims with our in-house claims professionals. In the case of catastrophic events, we supplement our internal claims

handling resources by contracting with six large national claims adjusting firms to assist our adjusters with the increased

volume of claims and ensure timely responses to our policyholders.

We believe our history of profitability operating in the complex, nuanced and historically volatile Florida property

insurance market, as illustrated by our GAAP net income since 2008 as set forth below, is the result of our specialized risk

selection, pricing strategies and claims management capabilities:

We believe that our competitive strengths include:

Since our founding in 2006, we have principally focused on serving the Florida residential property insurance market.

Florida represented 93.7% of our policies in-force as of December 31, 2025 and 96.5% of our in-force premium as of

December 31, 2025. Throughout our 20-year history, we have maintained a consistent market presence with independent

agents and policyholders in Florida, prudently adjusting our underwriting criteria (whether that be based on sub-

geographies, home age, or types of home construction, among other factors) and pricing to consistently generate attractive

underwriting margins and profits across multiple property and casualty insurance (“P&C”) cycles and Florida property

insurance cycles. We were the sixth largest writer of residential property insurance in Florida based on policies in-force

(fifth excluding Citizens and national carriers) as of December 31, 2025 and wrote the seventh most residential policies in

Florida (third excluding Citizens and national carriers) during the year ended December 31, 2025 according to data

compiled by the FLOIR, making us a leading specialty residential property insurer in the state. We believe we have

developed a deep understanding of the risks inherent with underwriting residential property insurance in Florida, cultivated

strong relationships with distribution partners, reinsurance partners and regulators, and accumulated robust, proprietary

underwriting, claims and loss data over our 20-year history to inform our risk selection and pricing.

As market conditions evolve, we use our market knowledge and experience to adjust our underwriting appetite to increase

exposure to risks and market opportunities we believe are most attractive within the Florida market and reduce exposure

where we believe competition is irrational or where we are not receiving appropriate premium for the risk we are assuming.

We believe our established, multi-channel distribution relationships in the Florida market are a differentiator in a market

where a number of our peers principally, or in some cases almost exclusively, have relied on assuming policies from

Citizens to generate new business as opposed to writing business in the Voluntary Market. We believe our distribution

relationships position us to maintain and increase our market share as the residential property market in Florida continues

to grow and as the improved regulatory and litigation environment provides attractive new market opportunities. We also

believe our expertise from operating in Florida is transferable to other Southeastern coastal states.

We believe our underwriting processes and systems support a dynamic underwriting model and exposure management

framework that have allowed us to produce attractive financial results in the complex Florida residential property insurance

market, as evidenced by our long-term track record of profitability and increasing shareholders’ equity through retained

earnings.

We utilize proprietary historical and third-party data to underwrite risks to the rate, terms and conditions that we believe are

appropriate. Our granular, risk-level data down to the census block (the smallest geographic unit used by the U.S. Census

Bureau for tabulation of 100-percent data) allow for fast, accurate rate determinations and real-time quoting, including

catastrophe loss estimates, to quote individual premium rates on high value homes. In addition to this granularity, our

systems and processes support rapid regulatory approval and internal rate implementation during our quarterly rate

adequacy assessments, enabling us to adjust pricing to protect margins. This has been particularly important in recent years

in the face of inflation, the litigation crisis in the Florida property insurance market, and increasing property reinsurance

costs.

We believe our investment in technology sets us apart from our competitors and positions us to identify emerging loss

trends and to quickly and effectively adapt to changing market conditions. As an example, through enhancements to our

data warehouse, we captured and were able to analyze data that identified a “roof crisis” in Central Florida in 2018, in

which “roofing scams” significantly increased as contractors sought to file fraudulent damage claims in order to receive

insurance payouts. We responded quickly to limit our writings and non-renew policies we believed to be at an elevated risk

of loss. By shrinking our business in Central Florida from approximately 60,000 policies in-force at December 31, 2019 to

approximately 35,000 at December 31, 2022, we were able to minimize the negative impact of these losses.

Our proprietary technology platform integrates policy issuance, document management, ratemaking, underwriting, billing

and data collection into a single system. The system is configurable by our internal technology team, which allows for

rapid modifications, and seamlessly integrates APIs from third-party data sources, including BuildFax, LexisNexis, Verisk,

Cape Analytics, etc. We believe that our technology footprint, data fidelity and data capture and analysis capabilities are

critical to our ability to consistently generate attractive risk-adjusted underwriting margins in the market we serve.

We have a robust in-house claims management function that is responsible for all aspects of our claims adjudication

process. All non-catastrophe claims in Florida are handled entirely by our in-house claims team. We believe handling

claims in-house allows us to better coordinate between claims and underwriting departments, collect more granular claims

data, quickly respond to claims, deliver a consistent agent and insured experience, better control loss and loss adjustment

expenses (“LAE”), and implement claims strategies and pursue rate, form, and underwriting actions we believe to be

appropriate. We believe our data-driven approach to claims has allowed us to profitably navigate historical loss trends

unique to the Florida market, such as losses related to sinkholes, AOBs, roof claims and cast-iron pipe claims. In the case

of claims outside of Florida or a catastrophic event in Florida, we supplement internal claims resources by contracting with

six large national claims adjusting firms to assist our adjusters with the increased volume of claims to ensure timely

responses to our policyholders and to manage claim costs.

When we contract with claims adjusting firms, our in-house claims department oversees and manages the work performed

by these firms to ensure claims are being handled to our standards. We believe that our people, systems and organizational

structure around our claims management have been a key contributor to our underwriting performance.

We employ a multi-channel distribution strategy in the Voluntary Market to distribute our insurance policies through

various channels, including independent insurance agents, national insurance carriers, and homebuilder-affiliated insurance

agents. Independent insurance agents represent our largest distribution channel, as measured by gross premiums written

production for the year ended December 31, 2025. We have methodically developed our independent agent distribution

partnerships in an effort to align the interests of our distribution partners with our desire to write profitable business. We

appoint only those independent insurance agents that we believe can consistently produce targeted volumes of quality

business for us, and we seek to maintain excellent relationships with this group of agents by being a consistent market for

Florida homeowners risks that meet our underwriting appetite, presenting clear underwriting criteria and pricing, paying

competitive commissions, ensuring rapid speed to quote, offering consistently high-quality service and expertise, and

maintaining financial stability. We carefully allocate capacity to our independent agents to ensure they benefit from our

franchise value and do not experience a cannibalizing level of competition from other independent agents with an

American Integrity appointment. In return, we expect our agents to work with us to develop business plans and incentive

programs that align with our underwriting goals. This relationship has allowed us to be a reliable, consistent partner to our

agents over time and aligns their incentives with our business objectives. Independent agents have the ability to write

business with other insurance carriers, and we compete for their services with other carriers based on a variety of factors,

including quality of service, responsiveness to policy submissions and claims, tenure and reputation in the market and

financial strength, as well as the products, pricing and commissions that we offer. We believe the strength of our

independent insurance agent relationships are a differentiating factor in the Florida market, where we believe a number of

carriers have relied - in some cases exclusively - on assuming policies from Citizens as their primary source of new

business and have made limited investment in independent agent distribution or other distribution channels. We believe our

distribution relationships position us for more predictable policy and premium growth, stronger policy retention rates, and

superior underwriting results across P&C insurance and Florida property market cycles.

We have developed partnerships with national insurance carriers who restrict their writing of residential homeowners

policies in Florida, including Allstate, American Family, Farmers, Liberty Mutual, The Hartford (AARP), Progressive and

USAA, to offer residential property insurance to their customers who are also seeking Florida residential property

insurance coverage. We recently added partnerships with affiliates of Horace Mann Educators Corporation and South

Carolina Farm Bureau Insurance. We handle all underwriting, pricing and claims management of these policies, and all

policies are offered on our policy forms and are solely adjudicated by us. We believe these relationships provide attractive

new business growth opportunities incremental to our writings through the independent agency channel. The national

carriers benefit from our partnership due to their enhanced ability to service their existing policyholders in need of

homeowners insurance in Florida, creating strong and strategic alignment.

We also have developed strong relationships with retail insurance agents affiliated with homebuilders to increase our

access to the new home construction market, which has seen substantial growth in Florida in recent years. These new

homes are required to comply with the latest building codes and standards, allowing us to generally offer more competitive

risk-adjusted rates while maintaining our targeted profitability in our book of business. We have completed technology

integrations with new construction builder agencies in order to better integrate into their business and serve their needs. We

believe this distribution channel will continue to grow as a result of continued strong population growth within Florida, a

lack of available existing home supply, and the resulting increase in new home building. Many of our homebuilder

partnerships operate in additional Southeastern coastal states, and we look to leverage these relationships as we selectively

expand our geographic footprint.

We purchase third-party reinsurance to help manage our exposure to catastrophic weather events. Our relationships with

our reinsurers, all of whom have a financial strength rating of “A-” or better by A.M. Best or for which we hold collateral

equal to 100% of the reinsurance limit or recoverable, have been developed over time as a result of our extensive

experience and reputation for selective underwriting in the Florida market. Our financial strength, underwriting results and

the long-term relationships between our organization and our reinsurance partners have resulted in consistent reinsurance

capacity across P&C insurance and Florida property insurance cycles. We regularly assess and adjust our reinsurance

structure as we see necessary to optimize the effectiveness of our reinsurance program. We currently utilize quota share,

facultative, property per-risk and excess of loss reinsurance to provide significant levels of balance sheet and earnings

protection, and to support the size of our in-force premium and insured exposure relative to our capital base.

Since our inception, we supported the capital needs of our business and grew our shareholders’ equity to $206.7 million at

our IPO on May 7, 2025 through consistent profitability and the accumulation of retained earnings. During that period, we

achieved this growth without raising outside equity capital beyond our initial capitalization of an aggregate of $10.3 million

in 2006 and 2007, while also paying $75 million in aggregate profit distributions to our equity owners.

As of December 31, 2025, we have grown shareholders’ equity to $337.0 million with a debt to equity ratio on our balance

sheet of less than 1%. Debt to equity ratio is calculated as total long-term debt divided by shareholders’ equity.

We have conservative investment portfolios managed by Goldman Sachs Asset Management, LP that are focused on

highly-rated, short-duration investment grade fixed income securities, a strong reinsurance program and conservatively

booked reserves.

Our strong capitalization is a critical component to our relationships with our policyholders, distribution partners, and

reinsurance partners who value our financial strength and the stability of our balance sheet. We endeavor to maintain and

continue to enhance our strong capital position through the accumulation of retained earnings, our utilization of third-party

reinsurance, and our conservative investment strategy and reserving strategy.

We have a deep and experienced management team with expertise spanning underwriting, claims, technology and

insurance operations that we believe has been integral to our past performance and will help drive our long-term success.

Our management team has remained largely consistent since our founding in 2006, with an average of more than 10 years

with the Company, and has deep expertise in the Florida property insurance market. Our team is led by industry veteran

Robert Ritchie, who has served as Chief Executive Officer since our founding in 2006, along with our Chairman, David

Clark. Jon Ritchie, our President, has been with us since 2009, and Ben Lurie, our Chief Financial Officer, has served in a

variety of different roles, including Director, Vice President and Secretary, with us since 2017. Many of our employees and

members of our senior management team have worked together to build our Company from a start-up to one of the largest

personal residential insurance writers in Florida. Our management team members have a significant equity ownership

interest in our business, aligning their financial interests with stockholders. As of December 31, 2025, management owned

15.8% of the Company’s Common Stock.

We believe that we will be able to continue to successfully leverage our strengths to execute the following business

strategies:

We believe we are well-positioned to take advantage of favorable trends in our existing primary market of Florida to grow

the amount of new premiums we write and generate additional revenue. We believe the significant regulatory reform bills

passed in December 2022 by the Florida legislature are significantly improving the property insurance underwriting

environment in the state, allowing us to pursue additional new business opportunities that in the past did not meet our

underwriting and profitability criteria. We have started - and expect to continue - to judiciously broaden our risk appetite as

a result of these reforms, including underwriting older properties and middle-aged homes where we believe the pricing and

terms adequately reflect the risk we are assuming and broadening our presence in certain counties where we have

significantly limited our writings in the past due to the historical litigation environment. For example, we recently began

writing policies in the Tri-County region of Florida (Miami-Dade, Broward and Palm Beach counties), which accounts for

28% of Florida’s population according to the U.S. Census Bureau and therefore provides a substantial opportunity to grow

our business in Florida. We expect to achieve our growth primarily with our existing distribution partners with whom we

have built strong relationships to access business that we believe is desirable and profitable. We expect to continue to

deepen our penetration of the Florida market by leveraging and growing these strong distribution relationships and

employing sophisticated technology to select and underwrite risks that meet our underwriting and profitability criteria. We

will continue to be thoughtful and opportunistic in our pursuit of market opportunities and growth in Florida, without

compromising on our commitment to, and unwavering focus on, profitability.

We are a disciplined, underwriting-driven company with an unwavering focus on profitability. Despite many years of

costly catastrophe events and periods of elevated attritional losses for the P&C industry as a whole, and particularly the

Florida property insurance market where we principally operate, we have produced a positive return on equity in every year

since our inception except two: 2018 and 2020. We have always sought to effectively manage the P&C insurance cycle and

Florida property cycle since our inception to consistently deliver best-in-class underwriting results and profitability. We

utilize the data we collect and analyze from our operations, combined with our view of the current P&C market and

residential property insurance cycle dynamics, to adjust rates, forms, and various other underwriting criteria to optimize our

new business writings.

We believe we identified and addressed Florida-wide residential insurance litigation trends earlier than many of our

competitors, which has contributed to multiple years of strong underwriting outperformance compared to the broader

Florida residential property insurance industry. While the industry experienced over $6.9 billion in underwriting losses

between 2017 and 2024, and nearly a dozen insurance companies focusing on the Florida residential property market failed

during that time period, we were profitable in every year except two, generated cumulative net income of $121.2 million,

and maintained a strong, stable balance sheet with no decreases in statutory surplus. We believe these results are a

testament to our disciplined approach and primary focus on stability and profitability, with a secondary focus on growth.

In addition to our comprehensive catastrophe reinsurance program, we have historically purchased quota share reinsurance

covering all business we write. Under our current Non-Catastrophe Quota Share Reinsurance (“NCQSR”) arrangements,

which we re-negotiated for the start of 2026, we cede 25% of our gross premiums written, net of premium ceded under our

catastrophe excess of loss reinsurance agreements but prior to other reinsurance agreements. We reduced this percentage

from 40% in the 2025 fiscal year to 25% for the 2026 fiscal year through the re-negotiation of our NCQSR arrangements at

no additional cost to the Company, and this reduction allows us to retain more of the premiums we currently write on a net

basis. Our NCQSR arrangements were established to allow us to increase our gross premiums written at a time when we

believed other forms of capital were less attractive. Over time, the benefit we received from the quota share has diminished

as reinsurance costs have increased industry-wide, non-catastrophe weather losses we have incurred have declined,

magnifying the lost net investment income on premium we cede under the quota share. Any decision to retain more

premium would be based on various factors including P&C market conditions, our capital position, the cost of reinsurance

and interest rates, among others. Under our current quota share reinsurance agreement, we are able to reduce the amount of

business we cede, or eliminate the quota share entirely, at no cost. We believe retaining additional premium we already

underwrite can be an attractive and profitable use of capital given our extensive existing knowledge of this business and its

historical underwriting performance.

We intend to continue to purchase an appropriate level of catastrophe reinsurance as we seek to reduce the volatility of our

earnings and protect our balance sheet from the impact of potential weather-related catastrophe events. Our current

catastrophe reinsurance program is indicative of the type of conservative catastrophe protection that we believe to be

appropriate. Using multiple FLOIR-approved models and as a result of management’s internal practices and the

requirements of rating agencies, we have historically sought to buy to a 1-in-130 year probable maximum loss (“PML”)

level, meaning we buy the amount of reinsurance necessary to protect us in the event of the occurrence of a storm of a

severity expected to occur only once in a 130-year period.

Over our 20-year history, we have developed strong relationships with reinsurers rated “A-” or better by A.M. Best. We

have been rewarded by our reinsurers for our disciplined underwriting and consistent profitability with consistent capacity,

including in reinsurance markets in which it has been challenging for many of our peers to obtain adequate reinsurance

coverage. We view our reinsurers as long-term partners and seek to maintain positive relations with them to ensure we have

adequate reinsurance capacity in future years. Historically, we have prioritized the consistency and sustainability of our

earnings over the long term above maximizing earnings in any particular year when constructing our reinsurance program,

and we intend to maintain this strategy going forward.

Our integrated technology infrastructure and data capture capabilities allow us to efficiently manage various processes

across our platform, improve real-time visibility into market trends, lower costs, and realize operating leverage as we scale.

Our platform is purpose-built to cohesively integrate each of our technology solutions with one another, creating a

proprietary full-stack insurance platform that allows us to balance and integrate the complete insurance process from

underwriting and quoting through claims management and adjudication.

We intend to continue to develop our technology platform and capture additional data that we believe will allow us to

continue to identify, price, and write the risks that meet our underwriting and risk management criteria. This entails

utilizing real-time proprietary and third-party data integrations in both the ratemaking and front-end underwriting process

to make efficient, data-driven underwriting and management decisions. We believe our advanced technology is a

differentiator in the markets where we operate and positions us well for profitable growth.

We intend to continue to execute on our multi-channel distribution strategy partnering with independent insurance agents,

national insurance carriers and homebuilder-affiliated insurance agents. We have built our business and technology with

the critical importance of our distribution partners in mind, and we believe that creating strong alignment with our

distribution partners drives better growth, profitability, and a stronger operating model.

As an insurer committed to the independent agency distribution model, we seek to offer meaningful insurance capacity

within the confines of our underwriting guidelines to a select group of agents. In each market we serve, we seek to align

ourselves with selected agents that provide us a meaningful portion of their overall business.

This allows us to manage these distribution relationships based on key corporate priorities and performance indicators,

including volume of new business writings, loss ratio, and policy retention. We believe that working with our agency

partners to achieve these goals is critical to our growth and continued underwriting success. At the same time, we recognize

that it is important to have a balanced source of distribution. We expect to continue to selectively expand our distribution

relationships to new independent agents, national insurance carriers and homebuilder-affiliated agents.

We believe our strong distribution relationships in the Voluntary Market have provided us access to superior risks and

enable us to produce more sustainable growth across P&C insurance market cycles.

Citizens is one of the largest homeowners insurers in the state of Florida as measured by premium in-force and acts as the

state-owned insurer of last resort. It is incentivized by the state to transfer policies from its books to the private market in

order to reduce systemic risk to the insurance market. See “Business - Citizens Depopulations” for more information. Over

the 10 years leading up to 2024, we did not believe that there were opportunities to assume policies from Citizens, also

referred to as “depopulations” or “take-outs,” that met our underwriting and profitability criteria. The last take-out we

pursued prior to 2024 was in 2014. We believe the combination of Citizens raising its rates, an improved level of

underwriting data disclosed by Citizens on its in-force portfolio, and the legislative reforms passed in 2022 and 2023 have

significantly changed the Citizens depopulation economics based on our experience and understanding of the Florida

market, and created opportunities for us to assume policies that fit our underwriting and profitability criteria. We are

selective when we pursue policy assumptions from Citizens, and each policy we consider assuming from Citizens is run

through our rigorous underwriting and profitability criteria, including assessing the county and location of the underlying

risk, to determine its attractiveness, a process which is similar to our underwriting in the Voluntary Market. While we

measure the attractiveness of “take-out” opportunities based on our long-term profitability expectations of the policies we

assume, take-outs can generate significant near-term earnings because (i) the cost of policy acquisition is lower than in the

Voluntary Market, as we do not pay upfront agent commissions on policies assumed from Citizens, as compared to writing

business in the Voluntary Market where we also have to pay commissions (generally 12%) to our distribution partners

upfront, and (ii) we are not required to purchase reinsurance on the policies we assume until our reinsurance program

renews on the subsequent June 1st. Generally, we are able to price take-out policies above the price we would offer in the

Voluntary Market. Because the policies we assume from Citizens go through our underwriting processes, we expect them

to have a similar risk-return profile to the policies that we write in the Voluntary Market. We participated in four take-out

opportunities in 2024, assuming 68,844 policies and assumed an additional 33,867 policies during the year ended

December 31, 2025, that fit our underwriting and profitability criteria, and we believe provide an attractive opportunity in

light of recent legislative reforms. As of December 31, 2025, 22.5% of our policies in-force were assumed from Citizens

representing 30.9% of our premiums in-force. We will continue to selectively pursue Citizens take-out opportunities if we

feel there is an opportunity to assume policies that align with our underwriting and profit criteria based on the profile of the

underlying risk. While we expect there will be continued opportunities to assume policies from Citizens in the future, we

expect that the number of policies we assume will decrease as the number of policies available with Citizens that fit our

profitability criteria has decreased and continues to decrease.

AIIG was founded in 2006 as an insurance holding company by our Chief Executive Officer, Robert Ritchie, in partnership

with our Chairman, David Clark, to capitalize on the Florida homeowners insurance market dislocation following the 2004

and 2005 hurricane seasons.

Sowell & Co. capitalized us with an aggregate of $10.3 million in equity investments in 2006 and 2007, which remains the

only equity investment that has been made into the business prior to the IPO in May 2025. Sowell & Co. is a family office

founded in 1972 by James E. Sowell to pursue real estate, oil and gas, and private equity investments. The firm invests the

capital of its principals and does not have a drawdown fund structure with a finite life, enabling it to have a longer-term

investment horizon and aligning its interests with those of management. On May 7, 2025, immediately prior to our IPO,

our members’ equity had increased to $206.7 million. Our growth in members’ equity was generated entirely through

retained earnings, representing a compound annual growth rate of approximately 16.8% over 19 years. Additionally, since

our formation in 2006 through our IPO in May 2025, we paid our members $75 million of aggregate profit distributions,

excluding distributions related to flow-through tax liabilities. The compound annual growth rate of our members’ equity

inclusive of cumulative profit distributions was 20.2% over the same 19-year period. As of December 31, 2025, we have

grown shareholders’ equity to $337.0 million while maintaining a debt to equity ratio on our balance sheet of less than 1%.

(1)Pre-IPO

(2)Excludes tax distributions made to members

In March 2007, we commenced operations and were approved to assume up to 165,000 policies from Citizens, of which we

assumed a select portion based on a number of criteria including historical performance and our expectations for future

profitability, geographic spread of risk and prospects for retention. This initial “depopulation” allowed us to gain scale in

the Florida market immediately and in a cost-efficient manner while also providing us time to establish relationships with

distribution partners to write in the Voluntary Market. We have participated in additional depopulations from Citizens in

each of 2007-2010, 2012-2014, and 2024-2025.

In 2008, we began writing business in the Voluntary Market and have since principally focused our efforts in expanding

our volume of policies written through the Voluntary Market. As of December 31, 2025, 77.5% of our policies in-force

were originated by us in the Voluntary Market representing 69.1% of our premiums in-force.

Since our founding in 2006, we have grown profitably to become a leading provider of residential property insurance in the

state of Florida. Throughout our history, we have introduced new products or expanded into additional products relevant to

our market in response to policyholder demand and based on our existing underwriting expertise, which have strengthened

our market presence and relationships with our distribution partners. As an example, in 2010, we began offering insurance

for vacant properties in the wake of the global financial crisis, and we were the first admitted carrier in Florida to do so. In

2014, we began to underwrite high-value homeowners and condominium owner’s policies in Florida. In 2018, we began to

underwrite coverage for small watercraft in Florida. In October 2025, we launched our commercial residential property

program. We assumed 149 commercial wind policies in November 2025 and began writing voluntary commercial policies

in December 2025. Our commercial residential property program is designed to deliver comprehensive and reliable

protection for Florida’s condominium associations, townhome associations and residential homeowners associations. We

may introduce new products and/or expand into additional products in the future.

As a holding company, we wholly own six subsidiaries, which include AIIG, AIIC, which is our admitted insurance

company, and four subsidiaries that provide various services exclusively to AIIC. We established each of these subsidiaries

in conjunction with our formation in 2006. While our statutory capital and all insurance policies reside at AIIC, our core

operations relating to risk selection, underwriting, claims, brokerage and reinsurance are performed by our other

subsidiaries. This structure provides enhanced profit opportunities and capital flexibility for our holding company, which

we believe benefit our stockholders.

Our subsidiaries include the following:

American Integrity Insurance Group, LLC (AIIG) operates as a holding company for our other subsidiaries and was formed

in Texas in 2006.

American Integrity Insurance Company (AIIC) is a corporation that operates as a Florida-domiciled admitted insurance

company with licenses to write business in Florida, Georgia, North Carolina and South Carolina. AIIC is regulated by the

FLOIR. While most of our core operations are performed by our other subsidiaries, our accounting employees are

employed by AIIC.

American Integrity MGA, LLC (AIMGA) operates as a Texas domiciled managing general agency to produce, underwrite,

negotiate, bind and administer policies on an exclusive basis for AIIC. Most of our employees, including our sales,

underwriting, product development and marketing employees, are employed by AIMGA.

American Integrity Claims Services, LLC (AICS) manages all non-catastrophe claims for AIIC and, on an as needed basis,

contracts with third-party claims services providers to manage and oversee catastrophe claims. Our claims employees are

employed by AICS.

Pinnacle Analytics, LLC (Pinnacle) is responsible for performing ongoing reinsurance related analytical and modeling

work for the benefit of AIIC. Using proprietary tools and technology, Pinnacle monitors, updates and assesses data and

information that is available to us in connection with recent events (e.g., storms and other related weather events,

regulatory changes and impacts, etc.) to analyze their potential impact on AIIC’s results of operations, including its various

reinsurance programs.

Pinnacle Insurance Consultants, LLC (PIC) acts as the agent of record of policies that are assumed from Citizens and are

not already affiliated with an independent insurance agent.

Our business is seasonal as hurricanes and other named storms typically occur in the geographies where we operate

between June 1st and November 30th of each year. This may result in significant variability in our losses and LAE

depending on the number, location and strength of hurricanes and other named storms during these months as compared to

other months. In addition, because our catastrophe reinsurance program renews on June 1st each year, the ceded premiums

written recorded in the second quarter are typically substantially higher than any other quarter during a fiscal year. In some

instances, this will cause our reported net premiums written to be negative (or substantially lower than other quarters) in the

second quarter of each year.

We offer a broad set of homeowners and related P&C products that we believe provide us attractive premium growth and

profit opportunities. Our diversified product set provides coverage for homeowners, condominium owners, manufactured

homeowners, landlords and investors principally in Florida, but also in Georgia, North Carolina and South Carolina, and

we insure perils including wind and hail events, water damage, fire and liability.

Our primary product is homeowners insurance where we focus on owner-occupied single family homes, high value homes

and condominium units that fit our target underwriting profitability hurdles. Our dwelling policies insure rental, seasonal,

investment and other non-owner-occupied properties. We are one of the select few carriers in Florida that offers a specific

policy for vacant homes, a policy which we developed in 2010. We also offer coverage for manufactured homes with a

focus on newer model homes that are in gated communities.

The following charts represent our product mix as of December 31, 2025:

MH = Manufactured Home. DP = Dwelling Property. HO = Homeowners. RCAP = Commercial Residential.

Other = Watercraft, Golf Cart and Other(1).

(1)  “Other” includes Umbrella policies, which are no longer written and represent legacy Umbrella policies underwritten by AIIC

We issue these products on 11 distinct policy forms, which are as detailed as follows:

In addition, we provide a variety of endorsements and supplemental products that provide policyholders with value-added

coverage enhancements. We offer optional endorsements on our HO-3 and HO-6 policies that provide higher levels of

standard coverage and optional coverages such as personal injury, animal liability, identity recovery and golf cart physical

damage and liability. We also offer access to flood insurance through a partnership with Wright National Flood Insurance

Company as well as Tokio Marine Highland in connection with our flood endorsement coverage, and home systems and

equipment breakdown protection through a strategic alliance with Hartford Steam Boiler. We receive a fee for marketing

these supplemental products and do not assume underwriting risk.

Our product team assesses our product offering on a quarterly basis to continuously monitor our products’ positioning and

the value proposition of our product portfolio. As an admitted carrier, in the markets where we currently operate, all rate

filings are made public, enabling our product team to closely track competitive trends by our peers across geographies on a

monthly basis. We use this information, in conjunction with actuarial analysis, to adjust our pricing strategy and identify

classes of business we believe are attractive and which we may want to enter. By using sophisticated data capture and

business intelligence, we can implement ratemaking decisions based on various underwriting, behavioral and loyalty

considerations to respond quickly to competitive trends and profitable market opportunities.

On an ongoing basis, we evaluate the development of new products that may provide attractive growth opportunities and

meet our target underwriting profitability hurdles. We seek to introduce new products that complement our existing product

offering, seamlessly integrate into our existing operations and enable our distribution partners to better serve their clients.

For example, we launched our commercial residential property product focused on condominium associations, townhome

associations and residential homeowners associations. We began writing commercial residential business in Florida in

October 2025, and we are leveraging our previous condominium expertise and distribution relationships in order to expand

into this complementary and underserved market.

Our multi-channel approach to marketing and distribution is a cornerstone of our success. By strategically investing in

preferred distribution relationships and leveraging our expertise in Florida’s niche homeowners insurance market, we have

built a differentiated business model that drives growth and profitability.

We distribute our products primarily through the Voluntary Market, which includes partnerships with independent agents,

national and regional insurance companies, homebuilder-affiliated agents, and direct-to-consumer channels.

Additionally, we selectively assume policies from Citizens that fit our underwriting and profitability criteria. Our

diversified distribution strategy mitigates risks, reduces reliance on any single channel, and enables us to reach more

potential policyholders. Of our $948.6 million total premium in-force as of December 31, 2025, $655.6 million in-force

premium comes from the Voluntary Market representing approximately 69.1% of our total premium in-force.

Independent Agents

Independent agents represent our largest source of new policy origination. These agents are carefully selected based on

criteria such as geographic focus, expertise, and alignment with our underwriting priorities. Our internal sales force uses a

data-driven approach to incentivize agents to align their business goals with ours by setting performance targets related to

loss ratio, retention, volume and other key underwriting metrics. We have approximately 1,300 independent agent partners

through which we source business. These agents have been carefully chosen and capacity is selectively offered by

geography, among other criteria, to ensure we do not saturate any particular geographic market with our capacity. Overall,

policies produced by independent agents represented $479.4 million of in-force premium, or approximately 50.5% of our

total in-force premiums as of December 31, 2025. Our largest agency relationship represented approximately 7.3% of our

of in-force premiums. Our growth strategy includes focusing on growing high-potential strategic accounts in Florida, which

represented nearly $205.0 million of in-force premiums as of December 31, 2025.

Homebuilder Affiliated Agents

We have partnered with insurance agencies affiliated with national homebuilders such as D.R. Horton, Homefirst, KB

Home, Lennar, Toll Brothers and Pulte. These partnerships allow us to capture a growing market for new-construction

homes, which are particularly attractive due to their higher safety standards and technologically advanced risk-mitigation

features, such as smart home systems. Our builder-affiliated agencies represented $87.5 million of in-force premium, or

approximately 9.2% of total in-force premiums as of December 31, 2025, which has grown by 705.9% since 2021. We

offer quotes to purchasers of single-family homes within days of purchase contracts, which creates a competitive

advantage. Additionally, we aim to leverage our homebuilder agent relationships to support our growth in South Carolina,

North Carolina and Georgia.

Insurance Companies

We have developed partnerships with national and regional personal lines carriers in the United States, especially those

carriers that limit the amount of homeowners insurance they write in Florida due to elevated risk of losses from hurricanes

and A.M. Best’s negative treatment of catastrophe exposure. We have developed strategic relationships with insurers such

as Allstate, American Family, Farmers, Liberty Mutual, The Hartford (AARP), Progressive and USAA and regional

carriers such as Horace Mann Educators Corporation and South Carolina Farm Bureau Insurance. These partnerships allow

insurers to provide homeowners coverage for their policyholders in Florida on our paper while cross-selling private

passenger auto and other insurance on their paper. Policies generated through insurance company partnerships accounted

for approximately $52.0 million of in-force premiums, representing approximately 5.5% of total in-force premiums as of

December 31, 2025, which has increased by 191.6% since 2021. As we grow, we aim to maintain mutually beneficial

relationships with a focus on long-term profitability; utilize in-house systems, products, and underwriting guidelines to

ensure seamless integration with these partners’ agencies; and enter into new company alliances.

National Agencies

This distribution channel represents agencies that operate at a national level, and include mortgage-related agencies,

national brokers and InsurTech agencies, such as Goosehead Insurance, Rate Insurance, Matic and Blend Insurance. Many

of these national agents focus on building relationships with mortgage companies and brokers to produce a point-of-sale

book of business. Premiums generated through national agencies represented $36.7 million of in-force premiums as of

December 31, 2025, representing approximately 3.9% of total in-force premiums as of December 31, 2025. This channel

has grown by 231.2% since 2021 and has helped support our growth into other Southeastern coastal states. We aim to

invest in partnerships with tech-enabled agencies to lower customer acquisition costs and streamline policy issuance at the

point of sale. The table below shows the diversification of our distribution for the periods indicated with our business that

we write in the Voluntary Market.

Since 2023, we have seen average in-force premiums decline moderately due to lower average rates per insurance policy as

a result of improving litigation trends and regulatory reform. In addition, the new states we are expanding into, including

South Carolina, North Carolina and Georgia, tend to have lower average rates than Florida. However, through our

continued expansion into the Tri-County region of Florida and into insuring middle-aged homes, we plan to capitalize on

higher average premiums.

Citizens Depopulations

We opportunistically review and, from time to time, may assume policies from Citizens through the depopulation process,

although this is not a primary focus of our policy acquisition efforts. We view pursuing depopulations as an opportunistic

strategy to grow our business so long as the policies we assume fit within our underwriting and profitability criteria. Most

recently, we pursued depopulations throughout 2025, as we determined that the policies we could assume through these

depopulations were attractive from a geographic, structural, underwriting and profitability perspective. Some of these

policies assumed in 2025 were assumed after the end of hurricane season, and we view these policies to have had minimal

near-term catastrophe risk, and some of these assumptions occurred after our reinsurance renewal date of June 1st, and

those policies are covered by our existing reinsurance program at no incremental cost, thereby providing an attractive near-

term profitability opportunity in addition to a longer-term opportunity to profitably grow and compound book value and

earnings. Overall, policies assumed from Citizens represented $293.0 million of in-force premiums as of December 31,

2025, representing 22.5% of our policies in-force and 30.9% of our premiums in-force as of December 31, 2025. As the

pricing gap between our policies and Citizens policies continues to narrow in part due to the new regulatory reform passed

at the end of 2022, we expect there to be additional opportunities to assume policies from Citizens. However, we expect

that the number of policies that we will assume in the future will decrease as the number of policies available with Citizens

that fit our profitability criteria decreases.

A disciplined underwriting focus, made possible by proprietary data and bespoke technology systems, is central to our

continued success. We continually optimize our rates, forms and point-of-sale underwriting guidelines based on real-time

market conditions. We rely on data derived from our technology, our internal processes and our experienced management

team to identify trends and modify these underwriting elements accordingly.

We believe we have a differentiated capability to determine rates at a more localized and granular level than many of our

competitors. Our technology system enables us to set rates at the census block level, which we believe provides for highly

accurate rate setting and risk selection. We couple this with other attributes tracked in our technology system, including

structure characteristics, to enhance our underwriting capabilities. We collaborate with our technology team to implement

new rates quickly in response to changing market conditions. Our sophisticated technology system, premier reputation in

the market and longstanding relationships with preferred agencies result in our ability to charge rates above the average in

our market to ensure long-term profitability. We make pricing decisions that align to acceptable levels of rate adequacy

from a regulatory perspective and work effectively with regulators to get necessary filing approvals.

Although we offer policies under an admitted form, we retain the ability to modify forms with the approval of the FLOIR.

We maintain good relations with the FLOIR and believe our track record of making timely, innovative form changes has

been a material contributor to our success. Selected examples include:

Roof Wear and Tear. After the Sebo v. American Home Assurance Company ruling in December 2016 determined that

claims alleging concurrent losses due to covered and excluded perils could be covered if the policy language did not

include language disallowing such claims, we gained approval for a “roof wear and tear” clause that returned our policy

contract to a pre-Sebo standard by specifying that damage from a non-insured cause would not be covered.

Cast Iron Pipes. In 2019, our claims department noticed a significant increase in the number of claims related to cast iron

pipes, which are particularly susceptible to corrosion in Florida due to the state’s high temperatures and humidity. While

low in frequency, these claims have the potential to be significant in severity. Our underwriting team promptly received

approval from the FLOIR to modify our policy contract to eliminate this uncovered exposure.

Roof Actual Cash Value. The historic reforms passed by the Florida legislature in December 2022 did not include a return

from a “replacement cost” to “actual cash value” standard, exposing us to the possibility of additional Sebo-type claims by

requiring us to cover replacement costs regardless of wear and tear occurring over time. Our underwriting team was able to

gain approval for a substantive policy form change which includes language to address this issue.

Binding Arbitration. In early 2022, the FLOIR approved our offering of a policy endorsement that offers policyholders a

discount of up to 20% in exchange for agreeing to a binding arbitration claims dispute resolution process outside of the

court system. The Florida legislature later codified this into law in Senate Bill 2A in December 2022, and it has prevailed

in numerous court challenges. We view this favorably as it benefits our customers with discounts, and settling disputes

outside of a court room with a jury partially insulates us from the uncertainty of potentially disproportionate verdicts

whereby courts award plaintiffs with compensation well in excess of amounts insurers are contractually obligated to pay

customers. Since we first enacted this endorsement, approximately 34.3% of our policyholders have signed up for it as of

Our distribution partners utilize our technology system to quote and bind policies. Our policy administration system

incorporates proprietary rating algorithms, underwriting criteria and filters, and third-party data sources to approve only

those risks that meet the rigorous underwriting standards of the Company. These standards also manage concentration risk

such as the number of residences we insure within the same county, census block, city, and zip code.

Our underwriting department consisted of 23 underwriters and 39 client services and billing specialists as of December 31,

2025. Underwriters are assigned to territories in order to specialize and better recognize geographical trends. Our

underwriting team uses rules-based algorithms to make an underwriting decision on a majority of policies, with only a

limited percentage of policies requiring a decision by an underwriter.

Our policy administration system generates automated quotes, which our underwriters have the authority to manually

modify if our distribution partner believes there to be an error in the quote.

Our underwriting team and field sales professionals work closely together, reviewing the portfolios of our independent

agent partners and communicating with these agents about any mix of business changes that are needed for achieving

profitable growth. We work on agency optimization plans in those cases that involve targeting non-renewals and

adjustments to new business mix. Occasionally, we will terminate an agency relationship based on performance standards.

Additionally, our underwriters, working in conjunction with our actuarial and product teams, constantly evaluate our in-

force renewal portfolio to ensure these risks continue to meet our current underwriting standards from a rate, guideline and

reinsurance perspective. We utilize multiple technology tools to analyze our book of business. Our proprietary data

warehouse feeds data into these platforms, which enables us to enhance our underwriting, predict the frequency and

severity of catastrophe events, and streamline our claims adjudication. We will target system wide non-renewals of

unprofitable business when needed.

We incorporate sophisticated catastrophe modeling into our underwriting process and coordinate with our risk management

and actuarial departments to ensure our book of business is properly diversified. We are fully self-sufficient from a

catastrophe risk analysis perspective and perform these functions in house. Our risk management department regularly

analyzes our in-force portfolio to ensure the spread of risk is optimal and aligns with our current strategy. This team

leverages the software licensed including Touchstone from AIR (Verisk), Risk Modeler from RMS (Moody’s), RiskInsight

from Karen Clark & Company, and Opterrix for weather data along with policy concentration analysis. We also carefully

monitor catastrophe events in real time utilizing live event technology functionality, which aids in predicting both

frequency and severity of catastrophe events to assist with claim adjudication and proper notification to our reinsurance

partners.

Our claims department consisted of 62 employees as of December 31, 2025, who handle all non-catastrophe claims and a

portion of catastrophe claims. The claims department is fully integrated with our actuarial, underwriting and product teams

to ensure effective communication of any meaningful loss trends.

Our technology automatically assigns incoming claims to adjusters based upon skillset of the adjuster and characteristics of

the claim. This allows for the adjudication process to begin sooner and reduces the need to reassign claims in the future.

Settlement authority increases with seniority within the department, and our policy administration platform automatically

adjusts ownership of the claim as reserves thresholds are surpassed. This allows for streamlined service for the

policyholder while retaining control and oversight of the loss facts as severity increases.

Further, our technology allows for automation of letter creation to decrease the potential for human error when drafting

claim correspondence with policyholders. The system allows for the automated input of key claim characteristics,

applicable dates, and most importantly, underlying policy language and terms.

For large-scale loss events, such as hurricanes, we utilize third-party adjusting partners who are carefully selected through

an annual request-for-proposal, or RFP, process. Despite using third-party adjusting partners, these catastrophe claims are

still closely managed by the claims department to ensure consistency and accuracy of our claims handling.

Our litigation department consisted of an additional 29 employees, including eight licensed attorneys, as of December 31,

2025, which has decreased substantially since 2024 as the recent legislative reforms have reduced our frequency of non-

catastrophe claims. These employees and attorneys handle all litigated claims either internally or in conjunction with third-

party panel counsel partners. We seek to reduce our litigation expenses by settling claims for the amount that we believe

we owe. This department also manages all liability claims regardless of litigation status. We are able to manage most

claims in-house and only utilize assistance, at times, from third-party administrators following larger catastrophe storms.

We believe by maintaining in-house litigation and claims management teams, we can achieve synergies that would be

unavailable if these functions were outsourced to third parties.

Subrogation is a component of our total net reserves for losses and LAE. There has been an increase in our efforts to pursue

subrogation against third parties responsible for property damage losses to our policyholders. We have engaged a third

party to pursue additional subrogation recoveries since 2018 and are seeking to improve subrogation recoveries in the

future.

As a data-driven underwriting company, we rely heavily on our robust technology system. We believe that our technology

system differentiates us in the market from our competitors by allowing us to rapidly develop and program rates at a

granular level down to the census block, seamlessly integrate application programming interfaces from third-party data

providers to enable real-time, front-line underwriting, and produce actionable business intelligence for us to identify

emerging trends.

Our policy and claims administration system is Guidewire InsuranceNow, which integrates all of our business units so that

our producers, underwriters, claims adjusters and management can view the business through a consistent lens.

InsuranceNow is an event-driven platform, with a new quote or first notice of loss initiating our underwriting or claims

adjudication processes. We operate under a perpetual license to the service, which we believe is attractive because it is

structured so that our internal IT resources can customize our instance of InsuranceNow and integrate several third-party

data sources into the platform. This optimizes and enhances the system to our unique specifications.

The ease-of-use of InsuranceNow gives us a competitive advantage with our distribution partners when they choose which

carriers to submit business. Our ability to build custom interfaces with our distribution partners, third-party data providers

and other stakeholders enhances the rating and underwriting functions of the platform. Lastly, our system’s ability to

produce reliable and clean data allows for the usage of our proprietary data warehouse to drive our data-driven decision

making.

We strategically purchase reinsurance from third parties, which we believe enhances our business by protecting our capital

from the impact of severe events (including large single event losses and catastrophes), which reduces volatility in our

earnings. When an insurance company purchases reinsurance, it transfers or “cedes” all or a portion of its exposure on

policies it underwrites to another insurer (the “reinsurer”) in exchange for a premium. Ceding of insurance to the reinsurer,

however, does not legally discharge the insurance company from its primary liability of its policies. We remain liable for

the entire insured loss if the reinsurer fails to meet its obligations to us under the reinsurance agreement.

For the June 1, 2025 to May 31, 2026 catastrophe reinsurance year, our net retention is $35 million for a single event

(inclusive of $25 million retained via our segregated cell captive reinsurer), whether a named storm or a severe convective

storm, representing 10.4% of our shareholders’ equity at December 31, 2025. “Net retention” refers to our expected losses

retained in connection with our reinsurance program. We own a segregated cell captive reinsurer as an offshore segregated

cell, and funded it with an original deposit of capital from our holding company in 2023 in the amount of approximately

$1.6 million. For 2025, the segregated cell was funded with approximately $7.5 million of profits from the prior year and

approximately $41.3 million of ceded premiums from our insurance company. We believe the formation of the segregated

cell captive reinsurer was a capital efficient way to offset the rising cost of reinsurance for lower layer coverages, and we

believe our use of traditional reinsurance and the captive offers an optimal balance of risk, reward and cost.

Our reinsurance contracts are predominantly one year in length and renew annually throughout the year, primarily in

January and June. At each annual renewal, we consider several factors that influence any changes to our reinsurance

purchases, including any plans to change the underlying insurance coverage we offer, updated loss activity, the level of our

capital and surplus, changes in our risk appetite and the cost and availability of reinsurance.

We purchase catastrophe excess of loss (“XOL”), quota share reinsurance, per-risk excess of loss reinsurance and

facultative excess of loss reinsurance coverage in order to limit our exposure from losses. Our catastrophe XOL reinsurance

provides coverage for catastrophe events, subject to specified exclusions, in excess of a specified amount. This coverage in

particular significantly limits our net retained losses in a catastrophe event, provides coverage for multiple catastrophe

events and gives us substantial aggregate coverage for a given year. Our quota share reinsurance provides coverage for a

specified percentage of our retained liability of non-catastrophe losses. Our property per risk excess of loss and facultative

excess of loss reinsurance provide coverage for individual property losses in excess of a retained amount on a single loss

occurrence, which we use selectively to supplement limits or to cover risks or perils excluded from other reinsurance

contracts such as fire. Our reinsurance program serves to reduce underwriting volatility and increase our overall

underwriting capacity. We believe our mix of reinsurance coverage optimizes for efficiency, cost, our risk appetite and the

specific factors of the underlying risks we underwrite.

We purchase catastrophe XOL reinsurance coverage to mitigate an aggregation of property losses due to a single event or

series of events. We believe our current reinsurance program provides expansive coverage, and we believe it provides more

coverage compared to the reinsurance coverage purchased by many of our competitors. Despite the current “hard market”

in reinsurance of driving higher reinsurance costs, increased primary retentions, more exclusions and reduced capacity, we

have managed to retain “multi-peril coverage” which we believe is, in large part, due to our market position and tenure,

underwriting track record and reputation for selective underwriting and strong reinsurer relationships. “Multi-peril

coverage,” in contrast with named storm coverage that specifically protects against losses caused by named storms only

(such as hurricanes or tropical storms), provides us more comprehensive protection against a broad range of risks or perils

including, but not limited to, named storms, severe convective storms, earthquake, riots, freezes and firestorms.

To inform our purchase of catastrophe reinsurance, our risk management team uses third-party stochastic models to analyze

the risk of aggregation of losses from catastrophe events. These models provide a quantitative view of our PML, which is

an estimate of the level of loss we would expect to experience once in a given number of years, referred to as the return

period. Based upon our modeling, it would take an event beyond our 1-in-130 year PML of $1.9 billion, based on the AIR

model, to exhaust our approximately $1.9 billion property catastrophe reinsurance coverage, as of June 1, 2025.

The AIR model calculates our losses under multiple scenarios, taking into account potential increases in costs due to the

effects of inflation and increased development density (calculated as if the event had occurred on the date the analysis was

run), prior to the impact of any take-outs through Citizens, including if certain historical catastrophes were to reoccur. The

AIR model is updated on an annual basis. Under our current reinsurance program, because the modeled PML for each of

these historical events is less than approximately $1.9 billion, should an event equivalent to any of these historical events

reoccur our hypothetical net loss per event would be capped at our current net retention of $35 million as of June 1, 2025

(which includes the amount retained via our segregated cell captive) as demonstrated in the following table, which reflects

our gross losses before reinsurance and inclusive of a 20% LAE load, which we believe to be a conservative estimate of

our actual LAE on a large event:

(1)“Modeled PML” represents loss figures generated by the AIR model for historical events for exposure from our policies in-force as

of December 31, 2025 for the ended December 31, 2025.

We believe our current reinsurance program provides coverage well in excess of our theoretical losses from any recorded

historical event or season.

Our current catastrophe XOL reinsurance program, for the June 1, 2025 to May 31, 2026 catastrophe reinsurance year, has

six layers of coverage. For the first catastrophe event in a season, our reinsurance program would provide total coverage up

to approximately $1.9 billion after our total net retention of up to $35 million (inclusive of an initial net retention of $10

million and an additional $25 million retained via our segregated cell captive), and for the second catastrophe event, we

would have coverage up to $1.5 billion after our initial retention of $35 million (inclusive of an initial net retention of $10

million and an additional $25 million retained via a reinstatement from our segregated cell captive). We partner with over

40 traditional reinsurers for this coverage. For the third and subsequent catastrophe events, our reinsurance program would

provide coverage up to $85 million, after our initial retention of $10 million (our segregated cell captive does not retain any

liability for a third or fourth catastrophe event). To mitigate potential volatility in reinsurance market conditions, we have

prepaid reinstatement premiums or purchased reinstatement premium coverage for all layers that include reinstatement

provisions. Reinstatements, where included, provide coverage in the event more than one catastrophe event occurs within

one year.

We purchase XOL reinsurance coverage at a June 1st renewal date. At each reinsurance treaty renewal, we consider several

factors that influence any changes to our reinsurance purchases, including any plans to change the underlying insurance

coverage we offer, updated loss activity, the level of our capital and surplus, changes in our risk appetite and the cost and

availability of reinsurance.

We have two reinsurance contracts that include a no claims bonus feature, whereby we can accrue to our benefit the

amount of 20% of the original deposit premium in the event we have no or minimal losses to that layer. The maximum

benefit we would receive under this contract is $4.0 million, as of June 1, 2025, which would be reflected as lower ceded

premiums on our income statement.

We additionally have reinsurance from the Florida Hurricane Catastrophe Fund (“FHCF”) and a named storm inuring layer

which inure to all six layers of our coverage. Our FHCF coverage is mandated by the state of Florida and includes an

estimated maximum provisional limit of 90% of $485.4 million, or $436.9 million, in excess of our retention and private

reinsurance of $272.7 million. A panel of private reinsurers cover the remaining 10% of the $485.4 million loss and LAE.

The limit and retention of the FHCF coverage will be subject to upward or downward adjustment based on, among other

things, submitted exposures to FHCF by all participants. Our private reinsurance would generally adjust to fill in gaps in

the FHCF coverage, if any. Our named storm inuring layer, which was initially mandated by the state of Florida in our

2022-2023 treaty year reinsurance program and then carried over to the 2023 and 2024 programs on a named storm only

basis, has been removed. For the 2025-2026 treaty year, the previous named storm inuring layer has been converted back to

an all-perils coverage within the traditional reinsurance market and is assumed within our layer three coverage of $143.2

million in excess of $210 million of losses and LAE, providing 20% LAE coverage.

To supplement our reinsurance program, we have placed collateralized catastrophe bonds in the private markets to protect

against named storm events across all states in which we write insurance products, on an indemnity and cascading per-

occurrence basis. Our bonds include investments from prominent catastrophe bond investors which we view as a testament

to our strong underwriting results throughout our history. In February 2025, we successfully placed a multi-tranche $565

million catastrophe bond, the eighth bond issuance we have sponsored since 2017, having varying maturity dates of June

2027 and June 2028. In March 2024, we successfully placed a multi-tranche $305 million catastrophe bond, the seventh

bond issuance we have sponsored since 2017, expiring at the end of May 2026.

Our catastrophe XOL reinsurance is illustrated below:

In addition to the reinsurance purchased by the FHCF, we seek to purchase reinsurance from a high-quality panel of

reinsurers that are rated at least “A-” (Excellent) or better by A.M. Best as of our June 1, 2025 renewal or for which

we hold collateral up to 100% of the reinsurance recoverable. While we only select reinsurers whom we believe to have

acceptable credit and A.M. Best ratings, if our reinsurers are unable to pay the claims for which they are responsible, we

ultimately retain primary liability to our policyholders. Failure of the reinsurer to honor its obligations could result in losses

to us; therefore, we establish allowances for amounts considered uncollectible.

The following table sets forth our most significant reinsurers by amount of reinsurance recoverables and the amount of

reinsurance recoverables pertaining to each such reinsurer as well as A.M. Best rating as of December 31, 2025.

The FHCF is a tax-exempt state trust fund that provides reimbursements to residential property insurance companies for a

portion of their catastrophic hurricane losses in Florida. The FHCF is neither rated nor collateralized and is designed to be

self-supporting (except in extraordinary situations) and funded only with premium revenues paid by residential property

insurance companies, investment income, and in some circumstances, revenue bonds backed by emergency assessments on

most types of P&C premiums. Included in “All others” above are reinsurers that are not rated by A.M. Best but are fully

collateralized.

We have a non-catastrophe quota share reinsurance arrangement with a group of seven major reinsurers, whereby 25% of

our gross premiums written (net of premium ceded to XOL reinsurers) and associated losses for the December 31, 2025 to

December 31, 2026 NCQSR reinsurance year are ceded to these counterparties. The quota share reinsurance provides

capital support for the gross premiums written ceded under the treaties and mitigates the negative income statement impact

of higher than expected attritional losses in a given year by ceding 25% of those unanticipated losses to the reinsurers. This

results in an increase in underwriting capacity as our premium to surplus leverage ratio improves given the ceding of these

anticipated losses to reinsurers.

We receive a ceding commission from our quota share reinsurers. The minimum ceding commission provides a mechanism

for the reinsurers to share in the downside risk of higher-than-expected losses. Additionally, the quota share reinsurance

treaties also provide coverage for a pro-rata share of our net retained losses from a catastrophe event subject to a limit of

approximately 2.5% of subject premium.

We have a flood quota share agreement with two reinsurers. This represents a 100% quota share of our gross liability for

each risk classified as Primary Flood Business. We earn a flat ceding commission of 26% on the gross premiums written

ceded to our reinsurers.

Concurrent with offering high-value homeowners policies, beginning in 2013 we established a property per risk treaty that

provides up to $5 million of reinsurance coverage for non-catastrophe losses from individual policies in excess of $1

million. We then attach facultative reinsurance at a $6 million retention that offers coverage up to $12 million for an

individual property. This treaty also inures to the benefit of the quota share treaties. The treaty provides for three

reinstatements at no additional cost.

We collect premiums from our policyholders and hold a portion of these funds in reserves until claims are paid. We then

invest these reserves, alongside our net equity capital, primarily in investment-grade fixed income securities and cash and

cash equivalents to generate stable and predictable investment returns. The portfolio guidelines governing our investment

criteria are approved by AIIC’s Investment Committee and our Board of Directors, consistent with regulatory guidelines

for the state of Florida, and our investments are managed by a highly-regarded asset management firm.

Our fixed income portfolio at AIIC totaled $288.4 million as of December 31, 2025 with a weighted average effective

duration of 2.09 years and an average credit rating of “AA-” (Standard & Poor’s) as of December 31, 2025.

AIIC’s invested assets consist primarily of investment-grade and government fixed-maturity securities that we believe

provide desired preservation of our capital. These investments, as of December 31, 2025, were as follows:

We take a conservative approach to establishing loss reserves and have historically experienced reserve redundancy

(“excess reserves”). When a claim is reported to us or when an event occurs, we establish loss reserves to cover our

estimated ultimate losses and LAE relating to the investigation and settlement of policy claims. These reserves include

estimates of the cost of the claims reported to us (“case reserves”) and estimates of the cost of claims that have been

incurred but not yet reported (“IBNR”) and are net of estimated related salvage, subrogation recoverables and reinsurance

recoverables. Reserves are estimates involving actuarial projections of the expected ultimate cost to settle and administer

claims at a given time but are not expected to precisely represent the ultimate liability. Estimates are based upon past loss

experience modified for current trends as well as prevailing economic, legal and social conditions. Such estimates will also

be based on facts and circumstances then known but are subject to significant uncertainty based on the outcome of various

factors, such as future events, future trends in claim severity, inflation and changes in the judicial interpretation of policy

provisions relating to the determination of coverage.

Reserve amounts for IBNR claims are determined based on actuarial analysis of our historical loss experience and claims

trends in the overall insurance industry, as well as other factors that could impact the expected frequency and severity of

claims. These other factors include lines of business, claims processing procedures, enacted legislation, judicial decisions

and other legal developments, and general economic conditions, including economic and social inflation.

Upon first notice of loss, we establish an initial case reserve for all claims. Starting in 2024, we increased the amount that

we establish for case reserves from $3,000 to $15,000 per claim for named storms in order to hedge against risk of loss.

The claims adjuster handling the claim may then adjust the case reserve up or down as necessary. Our case reserves for all

other claims remains at $3,000 per claim. Case reserve amounts are revised following further review of the claim based

upon the judgment of the assigned adjuster and following the estimate of damage based upon a physical inspection. As

claims mature, reserve estimates are updated as deemed necessary by our claims department based upon additional

information received regarding the loss, the results of additional on-site reviews and any other information gathered while

reviewing the claim.

We also have a comprehensive reserving program, which utilizes both internal resources and peer review from external

sources. We conduct full internal actuarial reviews each quarter and update actual versus expected reserve development on

the same basis. By utilizing various reserving methodologies and diagnostics including closing timelines and payment

patters, we are able to update the range of potential outcomes for our ultimate claim payouts. Our legal and claims leaders

work closely with our internal and external actuaries as they examine the data to ensure that significant patterns and trends

are incorporated into the analysis. For example, the modification of our case reserving methodology for catastrophes in

2024 was based on this analysis, which also included a review of historical reserving trends and recent inflation trends.

We are involved in claims-related legal actions that arise in the ordinary course of business and accrue estimated amounts

of the related unpaid losses and LAE during the period that we determine an unfavorable outcome becomes probable.

Aside from claims-related and ordinary course litigation, we are not aware of any pending litigation against us that would

have a material adverse effect on our operations.

The Florida homeowners insurance market is characterized by a distinctive competitive landscape, primarily influenced by

the limited presence of national carriers and the significant role of state-backed entities. As of December 31, 2025, national

insurance carriers collectively accounted for approximately 25.4% of the market share based on gross premiums written. In

contrast, Citizens held approximately 4.4% of the market share, positioning it as the largest individual insurer in Florida.

Within our targeted regions in Florida, we face competition from insurers including Tower Hill Insurance Group, Florida

Peninsula Insurance Company, Frontline Insurance Unlimited Company, Southern Oak Insurance Company and

Progressive. We have identified our competitors based upon geographical considerations, competition for independent

agents, key metrics such as policies in-force, and trends in the industry based on information from our internal sales team.

As of December 31, 2025, our insurance entity, AIIC, maintains a Financial Stability Ratio of “A” (Exceptional) by

Demotech, a financial analysis firm that has been rating independent, regional and specialty insurance carriers since 1989,

and a BBB+ financial strength rating, with stable outlook, from the Kroll Bond Rating Agency, LLC. Additionally, the

Company maintains a BB+ rating, with stable outlook, from the Kroll Bond Rating Agency, LLC.

We have applied for various trademark registrations in the United States at both the federal and state levels. We will pursue

additional trademark registrations and other intellectual property protection to the extent we believe it would be beneficial

and cost effective. In addition, we monitor our trademarks and service marks regularly and protect them from unauthorized

use as necessary.

As of December 31, 2025, we had 313 employees, all of whom are full-time employees. We are not a party to any

collective bargaining agreement and have not experienced any work stoppages or strikes as a result of labor disputes. We

consider relations with our employees to be good.

We strive to be a leading employer in both our industry and local community. We cultivate a workplace culture centered

around our six core corporate values: integrity, commitment, teamwork, humility, passion and fun. Through this culture,

we foster a rich diversity of thought, background and perspective, leading to high employee retention and satisfaction. In

addition, we offer and maintain an attractive benefits package designed to support the well-being of our employees,

including, but not limited to, life, medical, dental and vision insurance, a 401(k) plan, paid time off, family leave, COBRA

coverage and employee assistance programs. Our employees are our most valuable asset, and we emphasize their training

and continuous personal and professional development and growth through various initiatives including programs run by

our Director of Training and potential education reimbursements.

We have been recognized as a leading employer in the insurance industry and our local community. We have been named

one of the “Best Places to Work” by Business Insurance from 2013 through 2025. We recently received “America’s Best

Workplaces” and “Best Places to Work in Florida” accolades from Best Companies Group in 2025. We have also been

named a “Top Workplace in Tampa” by the Tampa Bay Times for the past 10 years, and a “Top Workplace in the USA”

for the past six years. These awards are given based on employee feedback and compared against thousands of companies

across the country.

The insurance industry is highly regulated by state insurance regulators. AIIC is subject to the laws and regulations of the

state of Florida and any other state where we may seek to do business. The regulatory structure in Florida and other states

provides for regulation of virtually all aspects of our business and is generally designed to protect the interests of

policyholders, not stockholders. These regulations relate to a variety of matters, both financial and otherwise, including

among other things:

•capital and surplus requirements;

•risk-based capital (“RBC”) requirements;

•dividend limitations;

•investment limitations;

•underwriting limitations;

•writing ratios;

•reserve requirements;

•approval of and restrictions on transactions between insurers and affiliates;

•approval of rates and forms;

•approval of changes in control;

•corporate governance;

•claims practices;

•market conduct;

•approval and sufficiency of reinsurance contracts;

•policyholder service;

•filing of required reports and data call submissions;

•approval of company officers and directors and 10% or more owners; and

•licensing and appointment of agents.

Florida, like many states, has adopted numerous model laws and regulations as promulgated by the National Association of

Insurance Commissioners (“NAIC”). State statutes and administrative rules generally require each insurance company that

is part of a holding company group to register with the department of insurance in its state of domicile and to furnish

information concerning the operations of the companies within the holding company system, which may materially affect

the operations, management or financial condition of the insurers within the group.

As part of its registration and ongoing regulation under the insurance holding company statutes, each insurance company

must identify material agreements, relationships and transactions with affiliates, including without limitation loans,

investments, asset transfers, transactions outside of the ordinary course of business, certain management, service, and cost

sharing agreements, reinsurance transactions, dividends and consolidated tax allocation agreements. Many of these

agreements or transactions require regulatory approval prior to being effectuated.

The Florida legislature is very active in assuring that the Florida Insurance Commissioner has the tools needed to strongly

regulate the industry. The 2023 Florida legislature enacted CS/SB 7052, an act related to insurer accountability. This new

law substantially increased financial penalties applicable to insurers that do not follow the law, increases the cadence of

financial and market conduct examinations, creating detailed standards to determine if an insurer is operating in a

hazardous condition and granting enhanced powers to regulate hazardous insurers, creating new unfair trade practices,

requiring insurers to develop detailed claims manuals, and granting authority to the Florida Insurance Commissioner to

review such manuals, and providing funds for regulators to hire more staff to regulate insurers.

Our failure to comply with applicable insurance laws, regulations or requirements in any state could have a material

adverse effect on our business, our reputation, our operational results and/or our financial condition.

The Company, as the ultimate parent company of AIIC, is subject to certain laws of the State of Florida governing

insurance holding company systems. These laws, among other things, (i) require us to file periodic information with the

FLOIR, including information concerning our capital structure, ownership, financial condition and general business

operations, (ii) regulate certain transactions between us and our affiliates, including the amount of dividends and other

distributions, the terms of surplus notes and amounts that our affiliates can charge the Insurance Entities for services such

as policy administration and claims administration, and (iii) restrict the ability of any one person to acquire certain levels of

our voting securities without prior regulatory approval.

The Florida Insurance Code prohibits any person from acquiring control of the Insurance Entities or their holding

companies unless that person has filed a notification with specified information with the FLOIR and has obtained the

FLOIR’s prior approval. Under the Florida Insurance Code, acquiring 10% or more of the voting securities of an insurance

company or its parent company is presumptively considered an acquisition of control of the insurance company, although

such presumption may be rebutted. Some state insurance laws require prior notification to state insurance regulators of an

acquisition of control of a non-domiciliary insurance company doing business in that state.

Insurance holding company regulations also govern the amount any affiliate of the holding company may charge AIIC for

services (e.g., claims adjustment, administration, management fees and commissions). Further, insurance holding company

regulations may also require prior approval of insurance regulators for amendments to or terminations of certain affiliate

agreements.

Florida statutes require insurers to file Own-risk and Solvency Assessment Summary Report (“ORSA”) summary reports

annually. The ORSA is an internal assessment, tailored to the nature, scale, and complexity of an insurer or insurance

group, conducted by that insurer or insurance group, of the material and relevant risks associated with the business plan of

an insurer or insurance group and the sufficiency of capital resources to support those risks. Insurers that exceed $500

million in gross premiums written may be subjected to additional reporting and compliance requirements and costs.

disclosing unremediated material weaknesses and analysis of any limitations of internal control.

As AIIC grows, additional costs and duties under these statutes and rules must be implemented.

State insurance authorities monitor insurance companies’ solvency and capital requirements using various statutory

requirements and industry ratios. Initially, states require minimum capital levels based on the lines of business written by a

company and set requirements regarding the ongoing amount and composition of capital. Certain state regulators also

require state deposits in their respective states. As a company grows, additional capital measures and standards may be

implemented by a regulator. Regulatory authorities use an RBC model published by the NAIC to monitor and regulate the

capital adequacy and solvency of licensed property and casualty insurance companies. These guidelines measure three

major areas of risk facing property and casualty insurers: (i) underwriting risks, which encompass the risk of adverse loss

developments and inadequate pricing, (ii) declines in asset values arising from credit risk and (iii) other business risks.

Most states, including Florida, have enacted the NAIC guidelines as statutory requirements, and insurers having less

surplus than required by applicable statutes and ratios are subject to varying degrees of regulatory action depending on the

level of capital inadequacy.

Solvency requirements are statutorily prescribed by each state and evaluated primarily according to the requirements of the

domiciliary (home) state of the insurer. Insurers are subject to specific accounting rules known as statutory accounting,

which is a conservative methodology designed to admit only those assets that can be quickly converted to cash to pay

insurance claims. As a result, there are significant limitations on asset classes and whether those assets can be counted on

the company’s balance sheet. Many assets that anchor the balance sheets of non-insurance companies, such as real estate,

goodwill, older receivables, intangible assets, etc., are excluded from an insurance company’s balance sheet.

Insurers are subject to ongoing financial analysis predominantly by their state of domicile but also to a more limited degree

by each state in which they conduct business. This includes the filing of quarterly and annual financial statements in a

prescribed format, compliance with RBC requirements which measure the insurer’s level of capital to determine if it is

adequate in proportion to its risk, the filing of holding company registration statements, and a host of other financial

solvency reporting requirements. Insurers are also subject to regularly scheduled or targeted financial examinations, which

may be conducted by the domiciliary state or any state in which the company is licensed. The results of financial

examinations are disclosed in a final report of examination, which is a public document.

As a holding company with no significant business operations of its own, we rely on dividend payments from our

subsidiaries as our principal source of cash to pay stockholder dividends, support subsidiary operations and development,

and meet our short-and long-term obligations. Dividends paid by our subsidiaries, other than AIIC, are not subject to the

statutory restrictions set forth in the Florida Insurance Code.

State insurance laws govern the payment of dividends by insurance companies. The maximum amount of dividends that

can be paid by Florida insurance companies such as AIIC without prior approval of the commissioner of the FLOIR is

subject to restrictions relating to statutory surplus. The maximum dividend that may be paid by AIIC to its immediate

parent company without prior approval is limited to the lesser of statutory net income from operations of the preceding

calendar year or statutory unassigned surplus as of the preceding year end.

Insurers are also subject to market conduct examination in their home state or in any state in which they do business to

determine compliance with each state’s insurance laws and rules or regulations. These examinations focus on such areas as

claims payment practices, consumer complaints, marketing activities, rate and form issues, governance and other

compliance activities. These examinations may be regularly scheduled or targeted market conduct examinations. The

results of market conduct examinations are also disclosed in a final report, which is a public document.

Most states regulate the content of policy forms to ensure that they comply with applicable statutory provisions and do not

contain unfair or deceptive provisions; Florida and most states require the policy forms to be filed and approved prior to

use. Florida and most states also regulate the rate that an insurer can charge for coverage to determine that the rates are “not

excessive, inadequate or unfairly discriminatory” and require that the rates be approved prior to use.

Data contained in the NAIC’s 2021 Market Conduct Annual Statement (“MCAS”) report reflected that while Florida

accounted for 8% of homeowners insurance claims filed nationwide in 2019, Florida accounted for 76% of homeowners

litigation initiated nationwide. Florida lawmakers convened two special sessions in 2022 to address property insurance

reform, including measures to improve the litigation environment. Senate Bill 2-A (“SB 2A”), which passed in December

of 2022, included a provision which eliminated the right to attorneys’ fees under a residential or commercial property

insurance policy. The latest MCAS report as of 2022 reflected that Florida accounted for 14.9% of homeowners insurance

claims filed nationwide with 70.8% of homeowners litigation nationwide. The inordinate levels of litigation in Florida have

largely been driven by the historic requirement mandating attorneys’ fees be paid by the insurance company if a claimant

litigates and obtains even one dollar more than what the insurance company offered in its claim settlement. Policyholders

that litigate and lose, however, have not historically been bound to pay the insurer any attorneys’ fees, creating a perverse

incentive for individual plaintiffs lawyers to file hundreds, and many times thousands of cases netting small dollar awards

for consumers, but substantial attorneys’ fees for the lawyers. SB 2A eliminated these “one-way attorneys’ fees” bringing

Florida in line with most other states.

The 2023 Florida legislature clarified SB 2A by enacting a provision mandating that the elimination of the one-way

attorneys’ fees apply prospectively on policies that renewed after SB 2A’s effective date, and which also had a claim filed

on the renewed policy. As a result, plaintiffs’ lawyers have filed an unprecedented number of lawsuits on claims occurring

under the pendency of the old one-way attorneys’ fee law, including claims involving losses in Hurricane Ian, which made

landfall as a Category 5 storm in September 2022. Information provided by the Florida Department of Financial Services,

which must be provided service of process in all insurance related litigation, indicates that service of process accepted by

the Florida Department of Financial Services on behalf of insurance companies dropped 33% in 2024 to 24%, compared to

2023. In addition, AIIC experienced a decline in non-hurricane related claims lawsuits between December 2022 and

December 2023 of 70%, as each month during that 12-month period policies renewed and new claims occurring during that

period were subjected to the new law. All policies are now subject to the new law for claims occurring from this point

forward.

From time to time, regulatory and legislative bodies in Florida and in other states have adopted or proposed new laws or

regulations to address the cyclical nature of the insurance industry, catastrophic events and insurance capacity and pricing.

These regulations (i) restrict certain policy non-renewals or cancellations and require advance notice on certain policy non-

renewals and (ii) from a practical standpoint, limit or delay rate changes for a specified period during or after a catastrophe

event. Most states, including Florida, also have insurance laws requiring that rate schedules and other information be filed

for review by the insurance regulatory authority. The insurance regulatory authority may disapprove a rate filing if it finds

that the proposed rates would be inadequate, excessive or unfairly discriminatory. Rates, which are not necessarily uniform

for all insurers, vary by many factors including class of business, hazard covered, risk location, reinsurance cost, incurred

losses and size of risk.

Most states, including Florida, require licensure or insurance regulatory authority approval prior to the marketing of new

insurance products. Typically, licensure review is comprehensive and includes a review of a company’s business plan,

solvency, reinsurance, character and experience of its officers and directors, rates, forms and other financial and non-

financial aspects of the company. The insurance regulatory authorities may prohibit entry into a new market by not

granting a license or by withholding approval for an insurer to write new lines of business.

The Company is subject to comprehensive regulatory oversight and regulations, which include periodic reporting to

regulators and regulatory examinations to assure the Company maintains compliance with statutory requirements, and the

payment of fees, premium taxes and assessments in order to maintain its licenses.

State legislatures may amend the laws regulating and governing the insurance industry with little notice, including laws

governing insurer rates, solvency, market conduct or other laws that could have a material adverse effect on our business,

operational results, or our financial condition.

Federal and state laws and regulations require certain business entities to protect the security and confidentiality of non-

public personal information and to notify policyholders and other individuals about their policies and practices relating to

their collection and disclosure of customer information and their practices relating to protecting the security and

confidentiality of that information. The NAIC issued a model law on cybersecurity, which is leading to adoption of the

same or similar provisions in the states where we do business. In addition, some states have adopted, and others might

adopt, cybersecurity regulations that differ from proposed model acts or from the laws enacted in other states. Federal and

state lawmakers and regulatory bodies may be expected to consider additional or more detailed regulation regarding these

subjects and the privacy and security of non-public personal information.

Our internet address is www.aii.com, and our investor relations website is located at investors.aii.com. Our Annual Reports

on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports can be

found on our investor relations website, free of charge, as soon as reasonably practicable after we electronically file such

material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). Information contained on our website

is not incorporated by reference into this Form 10-K. The SEC maintains a public website, www.sec.gov, which includes

information about and the filings of issuers that file electronically with the SEC.

The risks below are those that we believe are the material risks that we currently face but are not the only risks facing us

and our business. If any of these risks actually occur, our business, financial condition and results of operations could be

materially adversely affected. Below is a summary of our risk factors with a more detailed discussion following.

•As a property and casualty insurer, we may face significant losses, and exposure to catastrophic events and severe

weather conditions may cause our financial results to significantly vary from period to period.

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

adversely affect our business.

•Because we conduct substantially all of our business in Florida, our financial results depend on the regulatory,

legal, economic and weather conditions in Florida.

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

conditions, which may adversely affect our business.

•Actual claims incurred have exceeded, and in the future may exceed, reserves established for claims, adversely

affecting our operating results and financial condition.

•Lack of effectiveness of exclusions and other loss limitation methods in the insurance policies we assume or write

could have a material adverse effect on our financial condition or results of operations.

•Because we rely on third-party distribution partners, including independent insurance agents, homebuilder-

affiliated agents and national insurance carriers who restrict the amount of business they write in the states in

which we operate, especially Florida, the loss of these relationships and the business they control or our inability

to attract distribution partners could have an adverse impact on our business.

•Although we believe that recent legislative reforms have driven a stabilization of rates, our results may fluctuate

based on cyclical changes in the insurance industry.

•We may pursue opportunities to participate in Citizens’ take-out programs and directly assume policies issued by

Citizens to policyholders who were otherwise unable to obtain private insurance. Take-out opportunities are

subject to a number of timing and execution risks, and we may fail to participate in Citizens’ take-out programs on

terms that are ultimately profitable to us, or at all.

•Reinsurance coverage may not be available to us in the future at commercially reasonable rates, or at all.

•Reinsurance subjects us to the credit risk of our reinsurers who may suffer a downgrade, and we risk not being

able to collect reinsurance amounts in a timely manner, or at all, due to us under our contracts with reinsurers,

which could materially harm our business and financial condition.

•The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial

condition or results of operations.

•The inherent uncertainty of models and our reliance on such models as a tool to evaluate risk may have an adverse

effect on our financial results.

•Our success depends on our ability to accurately price the risks we underwrite, which is subject to uncertainty.

•Our information technology systems may fail or be disrupted, which could adversely affect our business.

•If we are unable to expand our business because our capital must be used to pay greater than anticipated claims,

our financial results may suffer, and we may require additional capital in the future which may not be available or

may be available only on unfavorable terms.

•Unanticipated increases in the severity or frequency of claims could adversely affect our business or financial

condition.

•If actual renewals of our existing policies do not meet expectations, our future premiums and results of operations

could be materially adversely affected.

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

manage or remediate claims could adversely affect our business, financial results or capital requirements.

•Increased competition and market conditions, including changes in our financial stability and credit ratings, could

affect the growth of our business and negatively affect our financial results.

•We are subject to extensive regulation, and potential further restrictive regulation may increase our operating costs

and limit our growth and profitability.

•The effects of emerging claim and coverage issues in Florida and other states in which we operate on our business

are uncertain.

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

ability to underwrite more policies.

•We face financial exposure to unpredictable weather patterns and catastrophic storms and resulting regulation

from the FLOIR.

•The Florida Hurricane Catastrophe Fund may not have enough resources to pay us for the coverage we purchased.

•A regulatory environment that requires approval of rate increases, can mandate rate decreases, and that can dictate

underwriting practices and mandate participation in loss sharing arrangements may adversely affect our results of

operations and financial condition.

•We are not contractually obligated to pay regular cash dividends on our Common Stock. As a result, you may not

receive any return on investment unless you sell your Common Stock for a price greater than that which you paid

for it.

Because of the exposure of our property and casualty business to catastrophic events, our operating results or financial

condition have varied, and may in the future vary, significantly from one period to the next, and our historical results of

operations may not be indicative of future results of operations. Property damage resulting from catastrophes is the greatest

risk of loss we face in the ordinary course of our business. Artificial or natural disasters, including but not limited to

hurricanes, convective storms, tornadoes, tropical storms, sinkholes, windstorms, hailstorms and other severe weather

events may cause catastrophes. The frequency and severity of property insurance claims typically increase when

catastrophic events and severe weather conditions occur. Catastrophes are inherently unpredictable and difficult to project.

As a result, we have in the past and may in the future, suffer financial loss due to unpredictable numbers of claims as

catastrophes occur.

The loss estimates developed by the models we use are dependent upon assumptions or scenarios incorporated by a third-

party developer and by us. When these assumptions or scenarios do not reflect the characteristics of catastrophic events that

affect areas covered by our policies or the resulting economic conditions, then we become exposed to losses not covered by

our reinsurance program, which could adversely affect our financial condition, business or results of operations. Although

we use widely recognized and commercially available models to estimate our exposure to loss from hurricanes and certain

other catastrophes, other models exist that might produce a wider or narrower range of loss estimates, or loss estimates

from perils considered less significant to our insured risks. These models are constantly changing, and we may utilize

different models than we have historically. Despite our catastrophe management programs, we retain material exposure to

catastrophic events. Additionally, the models themselves produce a range of results and associated probabilities of

occurrence from which we can assess risks of exposure to catastrophic loss. Extreme catastrophe scenarios exist within the

modeling results that may also have a material adverse effect on our results of operations during any reporting period due

to increases in our losses. Catastrophes may reduce or otherwise impact liquidity, which could have a negative impact on

our business. Catastrophes have eroded and in the future may erode our statutory surplus or ability to obtain adequate

reinsurance, which could negatively affect our ability to write new or renewal business. Catastrophic claim severity is

impacted by the effects of inflation and increases in insured value and factors such as the overall claims, legal and litigation

environments in affected areas, in addition to the geographic concentration of insured property.

We maintain reserves to cover our estimated ultimate liabilities for losses and LAE, also referred to as loss reserves. Our

loss reserves are based primarily on our historical data and statistical projections of what we believe the resolution and

administration of claims will cost based on facts and circumstances then known to us.

Our claims experience and our experience with the risks related to certain claims are inherently limited. We use company

historical data to the extent it is available and rely on industry historical data, which may not be indicative of future

periods. As a result, our projections and our estimates may be inaccurate, which in turn may cause our actual losses to

exceed our loss reserves. If our actual losses exceed our loss reserves, our financial results, our ability to expand our

business and our ability to compete in the property and casualty insurance industry may be negatively affected.

Because of the inherent uncertainties in the reserving process, we cannot be certain that our reserves will be adequate to

cover our actual losses and LAE. If our reserves for unpaid losses and LAE are less than actual losses and LAE, we will be

required to increase our reserves with a corresponding reduction in our net income in the period in which the deficiency is

identified. Future losses and LAE that exceed our reserves could substantially harm our results of operations or financial

condition.

Though we are licensed to transact insurance business in other states, we write substantially all of our policies in Florida.

Because of our concentration in Florida, we are exposed to hurricanes, windstorms and other catastrophes affecting Florida.

We have incurred and may in the future incur higher catastrophe losses in Florida or elsewhere than those we experienced

in prior years; those estimated by catastrophe models we use; the average expected level used in pricing; and our current

reinsurance coverage limits. We are also subject to claims arising from non-catastrophic weather events such as rain, hail

and high winds.

Additionally, in Florida, despite the recent decrease in the frequency of claims due in part to recent legislative reforms, the

severity of costs associated with both catastrophe claims and non-catastrophe claims has continued to increase. The nature

and level of future catastrophes, the incidence and severity of weather conditions in any future period, and the impact of

catastrophes on behaviors related to non-catastrophe claims cannot be predicted and could materially and adversely impact

our operations.

Therefore, prevailing regulatory, consumer behavior, legal, economic, political, demographic, competitive, weather and

other conditions in Florida affect our revenues and profitability. The Florida legislature changes laws related to property

insurance frequently and has done so more often in recent years. While some of these law changes have been designed to

reduce abuses in the Florida market and reinvigorate admitted market interest in expanding writings, other law changes

have imposed new or increased requirements on insurers that might prove to be detrimental to our business. In addition,

extended implementation periods, ensuing regulatory rule making timelines and periods of uncertainty as opponents of the

changes challenge them in court often follow changes to Florida’s insurance laws. Resulting delays in the effectiveness of

new laws, even when intended to be beneficial for the insurance industry, may limit or delay the laws’ impact on our

business.

Adverse changes in these conditions in Florida have a more pronounced effect on us than they would on other insurance

companies that are more geographically diversified throughout the United States. A single catastrophic event, or a series of

such events, specifically affecting Florida, particularly in the more densely populated areas of the state, have had and could

have an adverse impact on our business, financial condition or results of operations. This is particularly true in certain

Florida counties where we write a large amount of policies such that a catastrophic event or series of catastrophic events in

these counties could have a significant impact on our business, financial condition or results of operations. Our

concentration in Florida subjects us to increased exposure to certain catastrophic events and destructive weather patterns

such as hurricanes, tropical storms and tornadoes and to the ensuing claims-related behaviors that have characterized the

Florida market in recent years.

While we operate substantially all of our business in Florida, we have expanded our business into other geographical

markets, and there is no guarantee that such expansion will be successful or that the underwriting and profitability criteria

we utilize in Florida will successfully translate to other states. As we grow our business in South Carolina, North Carolina

and Georgia, our financial results are increasingly impacted by the regulatory, legal, economic and weather conditions of

those states. The regulatory, legal, economic and weather conditions in these other states where we write policies are often

different than the conditions we face in Florida. As a result, we may not be able to adjust to changing conditions in other

states in which we write policies due to our focus and expertise in Florida, and as a result, our results of operations may be

materially affected.

Longer-term weather trends may be changing, and new types of catastrophe losses may be developing due to climate

change, a phenomenon that has been associated with greenhouse gases and extreme weather events linked to rising

temperatures, including effects on global weather patterns, sea, land and air temperature, sea levels, rain, and snow. To the

extent the frequency or severity of weather events is exacerbated due to climate change, we may experience increases in

catastrophe losses in both coastal and non-coastal areas. This may increase our claims-related and/or insurance costs or

may negatively affect our ability to provide insurance to our policyholders. In addition, increased catastrophic events could

result in increased credit exposure to the reinsurers that we work with. Our actual losses from catastrophic events might

exceed levels that the third parties’ reinsurance programs protect or might be larger than anticipated if one or more of our

reinsurers fail to meet their obligations. Climate change may affect the occurrence of certain natural events, such as

increasing the frequency or severity of convection storms, wind, tornado, hailstorm and thunderstorm events due to

increased convection in the atmosphere. There could also be more frequent wildfires in certain geographies, more flooding

and the potential for increased severity of hurricanes due to higher sea surface temperatures. As a result, incurred losses

from such events and the demand, price and availability of reinsurance coverages for homeowners insurance may be

affected. This may cause an increase in claims-related and/or reinsurance costs or may negatively affect our ability to

provide homeowners insurance to our policyholders in the future.

In addition, we cannot predict how legal, regulatory and societal responses to concerns around climate change may impact

our business. The inherent uncertainties associated with studying, understanding and modeling changing climate

conditions, available analyses and models in this area typically relate to potential meteorological or sea level impacts and

generally are not intended to analyze or predict impacts on insured losses.

We maintain loss reserves to cover our estimated ultimate liability for unpaid losses and LAE for reported and unreported

claims as of the end of each accounting period. The reserve for losses and LAE is reported net of receivables for

subrogation. Recorded claim reserves in the property and casualty business are based on our best estimates of what the

ultimate settlement and administration of claims will cost, both reported and incurred but not reported. These estimates,

which generally involve actuarial projections, are based on management’s assessment of known facts and circumstances,

including our experience with similar cases, actual claims paid, historical trends involving claim payment patterns, pending

levels of unpaid claims and contractual terms. External factors are also considered, which include but are not limited to

changes in the law, court decisions, changes to regulatory requirements, economic conditions including inflation as

experienced in recent years, and consumer behavior (including as a result of any foreign or domestic tariffs, taxes or levies

instituted in connection with ongoing global trade negotiations). Many of these factors are not quantifiable and are subject

to change over time. The current Florida homeowners’ insurance market is adversely impacted by changes in claimant

behaviors resulting in losses and LAE exceeding historical trends, amounts experienced in other states, and amounts we

previously estimated. The increases in losses and LAE are attributable to the active solicitation of claims activity by

policyholder representatives, high levels of represented claims compared to historical patterns or patterns seen in other

states, and a proliferation of inflated claims filed by policyholder representatives and vendors.

Additionally, there sometimes is a significant reporting lag between the occurrence of an event and the time it is reported to

us. The inherent uncertainties of estimating reserves are greater for certain types of liabilities, particularly those in which

the various considerations affecting the type of claim are subject to change and in which long periods of time elapse before

a definitive determination of liability is made. We continually refine reserve estimates as experience develops and as

subsequent claims are reported and settled. Adjustments to reserves are reflected in the financial statement results of the

periods in which such estimates are changed. Inflationary pressures, rising energy prices, supply chain issues and other

macroeconomic conditions (including as a result of any foreign or domestic tariffs, taxes or levies instituted in connection

with ongoing global trade negotiations) have caused increases in the cost of building materials and labor, which in turn

have caused the cost to replace damaged or destroyed property to increase. We model expected costs (including expected

inflation) associated with any policy we write in order to help determine the amount of premiums needed for the policy to

yield our targeted profit. Inflation and other macroeconomic factors have increased our costs more than we anticipated and

may continue to do so in the future. Because our policies generally carry a term of one year, replacement costs have, at

times in the past, exceeded our estimates (including as a result of inflation), causing our targeted profit to be eroded or

eliminated. This has resulted in our paid losses exceeding prior reserve estimates and in increases in our current estimates

of unpaid losses and LAE. Because setting reserves is inherently uncertain and claims conditions change over time, the

ultimate cost of losses has varied and, in the future, may vary materially from recorded reserves, and such variance may

continue to adversely affect our operating results and financial condition. The full extent of the ongoing disruptions and

claims behaviors in the markets in which we operate, and the extent to which legislative efforts aimed at mitigating these

concerns will be successful, are unknown and still unfolding.

Subrogation is a significant component of our total net reserves for losses and LAE. There has been a significant increase

in our efforts to pursue subrogation against third parties responsible for property damage losses to our policyholders. More

recently, changes in Florida’s claims environment and legal climate have reduced the effectiveness of our efforts to

properly apportion losses through subrogation. Responsible parties are increasingly using delays and defensive tactics to

avoid subrogation and increase costs of subrogation, which in turn decreases the effectiveness of subrogation. Our ability to

recover recorded amounts remains subject to significant uncertainty, including risks inherent in litigation, collectability of

the recorded amounts and potential law changes or judicial decisions that can hinder or reduce the effectiveness of

subrogation.

Provisions of our policies, such as limitations or exclusions from coverage, which are designed to limit our risks, may not

be enforceable in the manner we intend. In addition, the policies we issue contain conditions requiring the prompt reporting

of claims to us and our right to decline coverage in the event of a violation of that condition. While our insurance product

exclusions and limitations reduce the loss exposure to us and help eliminate known exposures to certain risks, it is possible

that a court or regulatory authority could nullify or void an exclusion or limitation, or legislation could be enacted that

modifies or bars the use of such endorsements and limitations in a way that would adversely affect our loss experience,

which could have a material adverse effect on our financial condition or results of operations.

Our business depends in part on the marketing efforts of third-party distribution partners, including independent insurance

agents, homebuilder-affiliated agents and national insurance carriers who restrict the amount of business they write in the

states in which we operate, especially Florida and our ability to offer products and services that meet the requirements of

our third-party distribution partners and their customers’ requirements. We write insurance policies in the Voluntary

Market through various channels, including through a network of independent agents, which represents our largest

distribution channel, as measured by gross premiums written for the year ended December 31, 2025. Many of our

competitors also distribute through these same partners as these agents have the ability to write or re-write business with

other carriers. As a result, we must compete with other insurers for our partners’ business. Our competitors may offer a

greater variety of insurance products, lower premiums for insurance coverage or higher commissions to their third-party

distribution partners. If our products, pricing and commissions do not remain competitive, we may find it more difficult to

attract business from our partners to sell our products. We cannot provide assurance that we will retain our current

distribution relationships, or be able to establish new distribution relationships, with independent agents. We also rely on

other third parties such as third-party claims adjusters as part of our claims management process and utilize third-party

reinsurers to help cover losses. The inability to maintain these relationships with these third-party providers could have a

material impact on our business and results of operations.

The insurance industry historically has been cyclical, characterized by periods of intense price competition due to excessive

underwriting capacity and periods of shortages of capacity that permitted an increase in pricing and, thus, more favorable

underwriting profits. As premium levels increase, there may be new entrants to the market, which could lead to a decrease

in policies written by us. Any of these factors could lead to a reduction in revenue in future periods, less favorable policy

terms and fewer opportunities to underwrite insurance risks, which could have a material adverse effect on our results of

operations and cash flows. In addition to these considerations, changes in the frequency and severity of losses suffered by

policyholders and insurers may affect the cycles of the insurance business significantly.

We believe the legislative reforms in 2022 have driven a stabilization of rates within the insurance industry, however, we

cannot predict whether market conditions will continue to improve, remain constant or deteriorate, and the characterization

of the insurance market as a whole is subject to varying interpretations and opinions that fluctuate regularly. Negative

market conditions may impair our ability to write insurance at rates that we consider appropriate relative to the risk

assumed. If we cannot write insurance at appropriate rates, our business could be materially and adversely affected.

Citizens acts as Florida’s state-owned insurer of last resort, and is one of the largest homeowners insurers in Florida as

measured by premiums in-force. From time to time, Citizens will transfer certain of its existing policies to private

companies in order to reduce the State of Florida’s risk exposure. We participated in four take-out opportunities in 2024

assuming 68,844 policies, and have assumed 33,867 policies during the year ended December 31, 2025. As of December

31, 2025, 22.5% of our policies in-force were assumed from Citizens representing 30.9% of our premiums in-force. Prior to

2024, we had not pursued a take-out opportunity since 2014 and therefore have less recent experience in executing on these

opportunities than certain of our peers. Although each policy we pursue from Citizens is run through our standard

underwriting procedures, the amount of data made available to us by Citizens may be less or different from what is

available to us in the Voluntary Market. The lack of availability of this information may pose a material risk to our

underwriting profitability with respect to any take-outs we pursue.

Additionally, there can be no guarantee that Citizens will timely offer sizeable take-out opportunities to the private

insurance market that would meet our underwriting and profitability criteria or continue the depopulation program at all.

While Citizens does replenish its policies after conducting take-outs, there is no guarantee that such replenishments will

meet our underwriting and profitability criteria or provide attractive take-out opportunities for us in the future, and our

financial condition may suffer as a result. In addition, there may be a negative perception regarding our depopulations from

Citizens or the desirability of the policies we assume, which could adversely affect the price of our Common Stock.

Further, the market for attractive take-out opportunities is highly competitive and is subject to a bidding process. If

competing private insurers offer a lower premium than us for the same policy, Citizens is required to allocate that policy to

the insurer who offers the lowest premium. In the past, certain of our peers have been able to offer lower premiums than us

when pursuing the same take-out opportunities. Other carriers have chosen, and others may also choose, to re-enter or

expand their business in Florida in light of potential attractive take-out opportunities and generally improving market

conditions on the back of the legislative reforms in 2022. Additionally, following the term of each policy assumed from

Citizens, the policyholder has the opportunity to renew their policy similar to our underwriting process in the Voluntary

Market. There is no guarantee that we will be able to renew these assumed policies, and a lack of renewals could harm our

Reinsurance is a method of transferring part of an insurance company’s liability under an insurance policy to another

insurance company, or reinsurer. We use reinsurance arrangements to limit and manage the amount of risk we retain, to

stabilize our underwriting results and to increase our underwriting capacity. The cost of such reinsurance is subject to

prevailing market conditions beyond our control, such as the amount of capital in the reinsurance market and the

occurrence of natural and human-made catastrophes. We cannot be assured that reinsurance will remain continuously

available to us in sufficient amounts or at prices acceptable to us. As a result, we may determine to increase the amount of

risk we retain or look for other alternatives to reinsurance, which could in turn have a material adverse effect on our

financial position, results of operations and cash flows.

Reinsurance does not legally discharge us from our primary liability for the full amount of the risk we insure, although it

may make the reinsurer liable to us in the event of a claim. In addition, our reinsurers may not pay the claims we incur on a

timely basis, or they may not pay some or all of these claims. Our inability to collect a material recovery from a reinsurer

or to collect such recovery in a timely fashion could have a material adverse effect on our operating results, financial

condition and liquidity.

In addition, we are subject to credit risk with respect to our reinsurers as third-party rating agencies assess and rate the

claims-paying ability of reinsurers based upon criteria established by the rating agencies. We address this credit risk by

selecting reinsurers that have an A.M. Best Financial Strength Rating of “A-” (Excellent) or better at the time we enter into

the agreement or for which we hold collateral equal to 100% of the reinsurance recoverable. Downgrades to the credit

ratings of our reinsurance counterparties may result in the reduction of rating agency capital credit provided by those

reinsurance contracts, which could limit our ability to write new policies or renew existing policies. If one or more of our

reinsurers were to suffer a credit downgrade, our financial condition may suffer, and we may be forced to consider various

options to lessen the risk of asset impairment, including commutation, novation and letters of credit. The collectability of

reinsurance recoverables is subject to uncertainty arising from many factors, including our reinsurers’ (i) financial capacity,

(ii) willingness to make payments under the terms of a reinsurance treaty or contract and (iii) whether insured losses meet

the qualifying conditions and are recoverable under our reinsurance contracts for covered events or are excluded.

We utilize a number of strategies to mitigate our risk exposure including:

•employing proper underwriting processes;

•carefully evaluating the terms and conditions of our policies;

•selective underwriting with respect to certain geographic areas we consider high-risk due to the potential of

catastrophe events or litigation; and

•ceding insurance risk to reinsurance companies.

However, there are inherent limitations in these strategies. We are unable to assure that an event or series of events will not

result in loss levels that could have a material adverse effect on our financial condition or results of operations.

We use models developed by third-party vendors in assessing our exposure to catastrophe losses, and these models assume

various conditions and probability scenarios, most of which are not known to us or are not within our control. These

models may not accurately predict future losses or accurately measure losses incurred. In addition, these models are

constantly changing, and we may utilize different models than we have historically. Competing models may differ in

assessing risk and often utilize different underlying assumptions. The accuracy of models in estimating insured losses from

prior storms has varied considerably by catastrophe when compared to actual results from those catastrophes. If these

models understate the exposures we assume, we may not properly assess the risk and we may make poor decisions relating

to pricing, underwriting and selecting the related amount of reinsurance we purchase. This uncertainty may materially

impact our financial results.

The results of our operations and our financial condition depend on our ability to underwrite and accurately set premium

rates for a variety of risks. Rate adequacy is necessary to generate sufficient premiums to pay losses, LAE, underwriting

expenses and to earn a profit. To price our products accurately, we must collect and properly analyze a substantial amount

of data; develop, test and apply appropriate rating formulas; closely monitor and timely recognize changes in trends; and

project both severity and frequency of losses with reasonable accuracy. Our ability to undertake these efforts successfully,

and thus, price our products accurately, is subject to several risks and uncertainties, some of which are outside of our

control, including:

•the availability of sufficient reliable data;

•the uncertainties that inherently characterize estimates and assumptions;

•our selection and application of appropriate rating and pricing techniques;

•changes in legal standards, claim settlement practices, and restoration costs; and

•legislatively imposed consumer initiatives.

In addition, we could underprice risks, which could negatively affect our financial results. We could also overprice risks,

which could reduce our retention, sales volume and competitiveness. The foregoing factors could materially and adversely

affect our business and results of operations.

Our insurance business is highly dependent upon the successful and uninterrupted functioning of our computer and data

processing systems. We rely on these systems to perform underwriting and other modeling functions necessary for writing

policies and handling our policy administration process. The failure or disruption of these systems could interrupt our

operations and result in a material adverse effect on our business. The increasing prevalence and severity of cyber-related

threats and incidents may further increase the risk of disruption of our information technology systems. The increasing

prevalence and severity of cyber-related threats and incidents may further increase the risk of disruption of our information

technology systems.

The growth of our insurance business is dependent upon the successful development and implementation of advanced

computer and data processing systems as well as the development and deployment of new information technologies to

streamline our operations, including policy underwriting, production, administration and claim processing. The failure of

these systems to function as planned could adversely affect our future business volume or results of operations.

Additionally, our computer and data processing systems could become obsolete or could cease to provide a competitive

advantage in policy underwriting, production, administration and claim processing, which could negatively affect our

results of operations.

Our future growth and future capital requirements will depend on the number of insurance policies we write, the kinds of

insurance products we offer and the geographic markets in which we do business versus the business risks we choose to

assume. Growth initiatives require capital. Our existing sources of funds include potential sales of Common Stock,

incurring debt and our earnings from operations and investments. Unexpected catastrophic events in our coverage areas,

such as hurricanes, may result in greater claims losses than anticipated, which could require us to limit or halt our growth

while we redeploy our capital to pay these unanticipated claims unless we are able to raise additional capital.

To the extent that our present capital is insufficient to meet future operating requirements or to cover losses, we may need

to raise additional funds through financing or curtail our growth. Based on our current operating plan, we believe that our

current capital together with our anticipated retained income will support our operations. However, we cannot provide any

assurance that our current capital will support our current operating plan or future growth, since many factors will affect the

amount and timing of our capital needs, including profitability of our business, the availability and cost of reinsurance,

market disruptions and other unforeseeable developments. If we require additional capital, it is possible that equity or debt

financing may not be available on acceptable terms or at all. In the case of equity financings, dilution to our stockholders

could result, and in any case such securities may have rights, preferences and privileges that are senior to those of existing

stockholders. If we cannot obtain adequate capital on favorable terms or at all, our business, financial condition or results

of operations could be materially adversely affected.

Changes in the severity or frequency of claims affect our profitability. Although we aim to provide adequate and

appropriate coverage under each of our policies, policyholders could purchase policies that prove to be inadequate or

inappropriate. If such policyholders bring a claim or claims alleging that we failed in our responsibilities to provide them

with the type or amount of coverage that they sought to purchase, we could be found liable for amounts significantly in

excess of the policy limit, resulting in an adverse effect on our business, results of operations or financial condition.

Changes in homeowners’ claim severity can be and have been driven by inflation in the construction industry, in building

materials and in home furnishings, as well as by other economic and environmental factors, including increased demand for

services and supplies in areas affected by catastrophes, supply chain disruptions, labor shortages, and prevailing attitudes

towards insurers and the claims process, including increases in the number of litigated claims or claims involving

representation as well as continuing efforts by policyholder representatives to seek larger settlements on pre-reform claims

in recognition that the elimination of the statutory right to attorneys’ fees and other law changes will apply to future claims.

However, changes in the level of the severity of claims are not limited to the effects of inflation and demand surge in these

various sectors of the economy or to Florida’s disproportionately high incidence of represented claims. Increases in claim

severity can also arise from unexpected events that are inherently difficult to predict. In addition, significant long-term

increases in claim frequency also have an adverse effect on our operating results or financial condition. Further, the level of

claim frequency we experience varies from period to period, and from region to region. Claim frequency can be influenced

by natural conditions such as the number and types of severe weather events affecting areas where we write policies as well

as by factors such as the prevalence of solicited and represented claims, including efforts by policyholder representatives to

encourage claims activity related to policy periods predating law changes. Although we pursue various loss management

initiatives in order to mitigate future increases in claim severity and frequency, there can be no assurances that these

initiatives will successfully identify or reduce the effect of future increases in claim severity and frequency.

We generally write our insurance policies for a one-year term, and we make assumptions about the renewal of our prior

year’s contracts, including for purposes of determining the amount of reinsurance we purchase. If actual renewals do not

meet expectations or if we choose not to write on a renewal basis because of pricing conditions, our premiums written in

future years and our future operations could be materially adversely affected, and we have in the past and may in the future

purchase reinsurance beyond what we believe is the most appropriate level.

We rely on our claims department and outsourced third-party claims adjusters and resources to facilitate and oversee the

claims adjustment process for our policyholders. Many factors could affect the ability of our claims department to

effectively manage claims by our policyholders, including:

•the accuracy of our adjusters or third-party claims adjusters as they make their assessments and submit their

estimates of damages;

•the training, background and experience of our claims representatives and third-party claims adjusters;

•the ability of our claims department and third-party claims adjusters to ensure consistent claims handling;

•the ability of our claims department to translate the information provided by third-party adjusters into acceptable

claims resolutions; and

•the ability of our claims department and third-party adjusters to maintain and update their claims handling

procedures and systems as they evolve over time based on claims and geographical trends in claims reporting.

Any failure to effectively manage the claims adjustment process (including failure to manage our third-party adjusters),

including failure to pay claims accurately, could lead to litigation, undermine our reputation in the marketplace, impair our

corporate image and negatively affect our financial results. Further, the home insurance industry is regularly subject to

negative publicity, including as a result of governmental investigations, adverse media coverage and political debate

concerning industry regulation. Negative publicity may adversely affect our stock price, damage our reputation, and expose

us to unexpected or unwarranted regulatory scrutiny.

The Florida residential insurance marketplace is currently dominated by single-state or regional insurance companies, with

the larger national insurance carriers maintaining a smaller overall market share. Our lines of insurance are written by both

smaller insurers and large national carriers, in addition to us participating in Citizens take-outs, all of which are highly

competitive. Many of these large national insurance companies have greater name recognition, established insurance

agency networks and stronger financial resources to compete should they decide to recommit to Florida and begin writing

new policies. Some of the regional or single-state carriers could merge to form a company larger than ours and be in a

position to compete against us in a larger fashion by paying higher commissions to independent agents or other tactics.

New insurance companies are regularly being formed in Florida and will bring more competition into the market. In

addition, insurance agents are knowledgeable about insurance company strength, and some have a bias towards placing

policyholders with better rated companies. As we expand in other states in which we operate, including South Carolina,

North Carolina and Georgia, we will face similar risks due to increased competition and market conditions in those states.

We have a financial stability rating of A, “Exceptional” from Demotech, an independent financial firm specializing in

evaluating the financial stability of regional and specialty insurers, and whose rating is accepted by major mortgage

companies. Large national carriers may have a rating from a more recognized rating firm named A.M. Best, which we do

not have. We could receive a downgrade from Demotech, which could result in the loss of business and an adverse impact

on our results and operations. Additionally, a credit rating downgrade could also result in a significant reduction in the

number of policies that we may be able to sell to our policyholders who may be sensitive to fluctuations in such ratings.

In addition, industry developments could further increase competition in our industry. These developments could include:

•an influx of new capital in the marketplace as existing companies attempt to expand their businesses and new

companies attempt to enter the insurance business as a result of better premium pricing and/or policy terms;

•an increase in programs in which state-sponsored entities provide property insurance in catastrophe-prone areas;

•changes in state regulatory climates; and

•the passage of federal proposals for an optional federal charter that would allow some competing insurers to

operate under regulations different or less stringent than those applicable to us.

These developments and others could make the property and casualty insurance marketplace more competitive by

increasing the supply of insurance available. If competition limits our ability to write new business at adequate rates, our

future results of operations could be adversely affected.

Our performance depends on the talents and efforts of highly-skilled and experienced individuals. Our operations are

dependent on the efforts of our senior executive officers. The loss of their leadership, industry knowledge and experience

could negatively impact our operations. However, we have management succession plans to lessen any such negative

impact. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled

and experienced personnel, and if we are unable to hire and train a sufficient number of qualified employees for any reason,

we may not be able to maintain or implement our current initiatives or grow, or our business may contract and we may lose

market share. Our competitors or other insurance or technology businesses may seek to hire our employees. We cannot

assure that we will provide adequate incentives to attract, retain and motivate employees in the future. If we do not succeed

in attracting, retaining and motivating highly qualified personnel, our business may be seriously harmed.

Geopolitical conditions such as changes in domestic or foreign policy, wars, conflicts, including those in Ukraine and in the

Middle East, and other global events have and may bring increased uncertainty. In addition, rising inflation, changes in

global trade policies and tariffs, high interest rates, supply chain issues, labor shortages, volatility in capital markets and

other economic risk have and may continue to increase economic uncertainty. Inflation and interest rates directly impact

the buying and selling of residences, which impacts our insurance policies as well as the rates we may offer on our

insurance policies. Any one or combination of these conditions may materially impact our business, results of operations or

Pandemics and other outbreaks of disease have had and can have significant and wide-spread impacts. As seen with the

COVID-19 pandemic, outbreaks of disease can cause governments, public institutions and other organizations to impose or

recommend, and businesses and individuals to implement, restrictions on various activities or take other actions to combat

the disease’s spread, such as warnings, restrictions and bans on travel, transportation or in-person gatherings; and local or

regional closures or lockdowns. Outbreaks of disease, and actions taken in response to the outbreak, could materially

negatively impact our workforce, business, operations and financial results, both directly and indirectly.

We license certain intellectual property, technology and data from third parties that are important to our business and, in

the future, we may enter into additional agreements that provide us with licenses to valuable intellectual property,

technology or data. If we fail to comply with any of our obligations under our license or technology agreements with third

parties, we may be required to pay damages and the licensor may have the right to terminate the license. Termination by

the licensor (or other applicable counterparty) may cause us to lose valuable rights, and could disrupt our operations and

harm our reputation. Our business may suffer if any current or future licenses or other grants of rights to us terminate, if the

licensors (or other applicable counterparties) fail to abide by the terms of the license or other applicable agreement, if the

licensors fail to enforce the licensed intellectual property against infringing third parties or if the licensed intellectual

property rights are found to be invalid or unenforceable.

In the future, we may identify additional third-party intellectual property, technology and data that we need, including to

develop and offer new products and services. However, such licenses may not be available on acceptable terms or at all.

Further, third parties from whom we currently license intellectual property, technology and data could refuse to renew our

agreements upon their expiration or could impose additional terms and fees that we otherwise would not deem acceptable

requiring us to obtain the intellectual property or technology from another third party, if any is available, or to pay

increased licensing fees or be subject to additional restrictions on our use of such third-party intellectual property or

technology. Defense of any lawsuit or failure to obtain any of these licenses on favorable terms could prevent us from

commercializing products or services, which could have a material adverse effect on our competitive position, business,

financial condition and results of operations.

Our business and operations rely on the secure and efficient processing, storage and transmission of customer and

Company data, including policyholders’ nonpublic personal information, financial information and proprietary business

information, on our computer systems and networks. Unauthorized access to personally identifiable information, even if

not financial information, could damage all affected parties. Breaches can involve attacks intended to obtain unauthorized

access to nonpublic personal information, destroy data, disrupt or degrade service, sabotage systems or cause other damage,

including through the introduction of computer viruses or malware, cyberattacks and other means. Breaches can also

involve human error, such as employees falling victim to phishing schemes or computer coding errors that may leave data

exposed.

Our computer systems may be vulnerable to unauthorized access and hackers, computer viruses and other scenarios in

which our data may be exposed or compromised. Cyberattacks can originate from a variety of sources, including third

parties who are affiliated with foreign governments or employees acting negligently or in a manner adverse to our interests.

Third parties may seek to gain access to our systems either directly or using equipment or security passwords belonging to

employees, policyholders, third-party service providers or other users of our systems. Our systems also may inadvertently

expose, through a computer programming error or otherwise, confidential information as well as that of our policyholders

and third parties with whom we interact. In addition, any significant data security breach of our independent agents or

third-party vendors could harm our business and reputation.

Our computer systems have been, and likely will continue to be, subject to cyber hacking activities, computer viruses, other

malicious codes or other computer-related penetrations. This is especially the case with employees who work remotely. We

commit significant resources to administrative and technical controls to prevent cyber incidents and protect our information

technology, but our preventative actions to reduce the risk of cyber threats may be insufficient to prevent physical and

electronic break-ins and other cyberattacks or security breaches, including those due to human vulnerabilities. Any such

event could damage our computers or systems; compromise our confidential information as well as that of our

policyholders and third parties with whom we interact; significantly impede or interrupt business operations, including

denial of service on our website; and could result in violations of applicable privacy and other laws, financial loss to us or

to our policyholders, loss of confidence in our security measures, customer dissatisfaction, significant litigation exposure

and reputational harm, all of which could have a material adverse effect on us. We expend significant additional resources

to modify our protective measures and to investigate and remediate vulnerabilities, exposures, or information security

events. Due to the complexity and interconnectedness of our systems, the process of enhancing our protective measures can

itself create a risk of systems disruptions and security issues.

The techniques used to obtain unauthorized access to information, disable or degrade service, or sabotage systems change

frequently, and are increasingly more complex and sophisticated, including due to the use of artificial intelligence. The

increase in the use of cloud technologies and in consumer preference for online transactions can heighten cybersecurity and

other operational risks. Certain aspects of the security of such technologies are unpredictable or beyond our control, and

this lack of transparency may inhibit our ability to discover a failure by cloud service providers to safeguard their systems

and prevent cyberattacks that could disrupt our operations and result in misappropriation, corruption or loss of confidential

and other information. In addition, there is a risk that encryption and other protective measures, despite their sophistication,

may be defeated, particularly to the extent that new computing technologies vastly increase the speed and computing power

available.

Subject to market conditions and availability, we are not restricted from incurring indebtedness and may do so in the future.

We are permitted to enter into credit facilities (including term loans and revolving facilities) and to conduct public and

private debt issuances. The amount of debt we may incur may vary depending on our available investment opportunities,

our available capital and our ability to obtain and access financing arrangements with lenders. Our governing documents

contain no limit on the amount of debt we may incur, and we may do so at any time without approval of our stockholders.

Incurring debt could subject us to many risks that, if realized, would materially and adversely affect us, including the risk

that:

•our cash flow from operations may be insufficient to make required payments of principal of and interest on the

debt, or we may fail to comply with covenants contained in our debt instruments;

•debt may increase our vulnerability to adverse economic, market and industry conditions with no assurance that

our investment yields will increase to match our higher financing costs;

•we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt,

thereby reducing funds available for operations, future business opportunities, distributions to our stockholders or

other purposes; and

•we may not be able to refinance maturing debts.

Although as of December 31, 2025, we have remediated the previously identified material weaknesses in internal control

over financial reporting, we may in the future discover additional material weaknesses in our internal control over financial

reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting

such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be

prevented, or detected and corrected, on a timely basis. Effective internal controls are necessary to provide reliable

financial reports and prevent fraud. Material weaknesses could limit the ability to prevent or detect a misstatement of

accounts or disclosures that could result in a material misstatement. Our internal control over financial reporting will not

prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only

reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in

all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will

not occur or that all control issues and instances of fraud will be detected.

If we identify additional material weaknesses, we may be unable to provide required financial information in a timely and

reliable manner and we may incorrectly report financial information. Likewise, if our financial statements are not filed on a

timely basis, we could be subject to sanctions or investigations by the stock exchange on which our stock is listed, the SEC

or other regulatory authorities. The existence of material weaknesses in internal control over financial reporting could

adversely affect our reputation or investor perceptions of us, which could have a negative effect on the trading price of our

stock.

Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if

we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements

retroactively. The impact of changes in current accounting practices and future pronouncements cannot be predicted but

may affect the calculation of net income, shareholders’ equity and other relevant financial statement line items.

AIIC is required to comply with statutory accounting principles, or SAP. SAP and various components of SAP are subject

to constant review by the NAIC and its task forces and committees, as well as state insurance departments, in an effort to

address emerging issues and otherwise improve financial reporting. Various proposals are pending before committees and

task forces of the NAIC, some of which, if enacted and adopted on a state level, could have negative effects on insurance

industry participants. The NAIC continuously examines existing laws and regulations. We cannot predict whether or in

what form such reforms will be enacted and, if so, whether the enacted reforms will positively or negatively affect us.

Laws and regulations applicable to the insurance industry are complicated and subject to change. Compliance with these

laws and regulations may increase the costs of running our business or slow our ability to respond effectively and quickly

to operational opportunities. Insurance regulators change, are appointed by elected officials who are subject to re-election

and changes in political headwinds and preferences, and the FLOIR could change its interpretation of one or more existing

regulations to the detriment of the Company and its business. In addition, state legislatures enact new statutes, and can

change existing statutes, which could have a material impact on our costs, operations and profitability. In addition, the

Company is admitted in states outside of Florida, and legislatures or insurance regulators in those states might have

differing interpretations or take positions that conflict with Florida regulators, which could impact our growth, expansion

and profitability. The federal government may also seek to further regulate the insurance industry or establish federal

charters. As a highly regulated entity, insurance regulators have the final say on major issues affecting our business

including:

•what rates we may charge;

•what our policy forms must cover or exclude;

•claims practices and business operations;

•how much reinsurance we must purchase;

•participation in guaranty funds;

•various financial tests including ratios of how much premium we may write in relation to our net worth;

•RBC measurements;

•restrictions on insurance company dividends;

•restrictive accounting requirements;

•regular financial and market conduct examinations;

•restrictions on investments; and

•and many other requirements.

The FLOIR and regulators in other jurisdictions where we may become licensed and offer insurance products conduct

periodic examinations of the affairs of insurance companies and require the filing of annual and other reports relating to

financial condition, holding company issues and other matters. These regulatory requirements may adversely affect or

inhibit our ability to achieve some or all of our business objectives. These regulatory authorities also conduct periodic

examinations into insurers’ business practices. These reviews may reveal deficiencies in our insurance operations or non-

compliance with regulatory requirements.

In certain states including Florida, insurance companies are subject to assessments levied by the states where they conduct

their business. While we can recover these assessments from Florida policyholders through policy surcharges, our payment

of the assessments and our recoveries may not offset each other in the same reporting period in our consolidated financial

statements and may cause a material, adverse effect on our cash flows and results of operations in a particular reporting

period.

In addition, regulatory authorities have relatively broad discretion to deny or revoke licenses for various reasons, including

the violation of regulations. In some instances, we follow practices based on our interpretations of regulations or practices

that we believe may be generally followed by the industry. These practices may turn out to be different from the

interpretations of regulatory authorities. If we do not have the requisite licenses and approvals or do not comply with

applicable regulatory requirements, insurance regulatory authorities could preclude or temporarily suspend us from

carrying on some or all of our activities or otherwise penalize us. This could adversely affect our ability to operate our

business.

Finally, changes in the level of regulation of the insurance industry or changes in laws or regulations themselves or

interpretations by regulatory authorities could adversely affect our ability to operate our business, reduce our profitability

and limit our growth.

The regulators powers include suspending our ability to write new business, suspending or revoking our licenses, forcing

us to change our business plans and strategies, and financial fines and penalties. This substantial regulation could adversely

affect our ability to execute portions of our business plans, or, if we were to have our ability to issue new policies restricted

or our license revoked, have a material adverse effect on our results of operations, financial results, or ability to continue in

the business.

Despite declining loss frequencies, the severity of losses in the property and casualty insurance industry and multi-peril

personal lines business has increased in recent years, often driven by financial and social inflation. Increased litigation in

Florida regarding AOBs and roof claims is an example of these trends. For example, in recent years, Florida homeowners

have been assigning the benefit of their insurance recovery to third parties, which has resulted in increases in the size and

number of claims and the amount of litigation, interference in the adjustment of claims, the assertion of bad faith actions

and one-way rights to claim attorneys’ fees. One-way fee shifting allows policyholders to recover attorneys’ fees from their

insurer when the policyholder prevails in a coverage action. The Florida legislature enacted several reform bills in recent

years with the intention to limit AOB and frivolous litigation. Recently, Florida has repealed its one-way fee shifting statute

and altered bad faith actions such that mere negligence alone is insufficient to constitute bad faith and imposed a good faith

requirement on policyholders. While the frequency of non-catastrophe claims has recently decreased due in part to these

reforms, the severity of such claims has continued to increase. However, there can be no assurance that this new legislation

will reduce the future impact of AOB or litigated claims practices nor is there any assurance that future changes to these or

other standards or statutes may occur. In addition, there can be no assurance that the Florida legislature will not reverse

these reforms or that future legislation will not mitigate or eliminate the effects of these reforms altogether or impose new

burdens on us.

As we continue to expand in South Carolina, North Carolina and Georgia and into new states, we are and will continue to

be subject to legislation, statutes and standards in jurisdictions that may differ materially from those in Florida. Our

expansion into new states could expose us to varying regulatory environments, which could have an adverse effect on our

results of operations, financial results, or ability to continue our business in new states.

In addition, many legal actions and proceedings have been brought on behalf of classes of complainants, which can

increase the size of judgments. The propensity of policyholders and third-party claimants to litigate and the willingness of

courts to expand causes of loss and the size of awards may render the loss reserves of AIIC inadequate for current and

future losses. In addition, as industry practices and social and other environmental conditions change, unexpected and

unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either

extending coverage beyond our underwriting intent or by increasing the number or size of claims. In some instances, these

changes may not become apparent until sometime after we have issued insurance policies that are affected by the changes.

As a result, the full extent of liability under our insurance policies may not be known at the time such policies are issued or

renewed, and our financial position or results of operations may be adversely affected.

All states have guaranty funds that can assess us to pay the claims of insolvent insurers. Florida, where a substantial portion

of our business resides, also has a FHCF, which can assess us if it needs funds to provide reinsurance-like coverage to us

and all residential insurers, and additionally, we can also be assessed to pay for shortfalls at Citizens, which provides

insurance to residential consumers unable to procure insurance from the private market. While we can recoup or pass

through these assessments to our policyholders, in many cases we may not be able to recoup them within the same annual

accounting period creating a short-term drain on our resources. In addition, Citizens is structured to be an insurer of last

resort, but based on varying involvement by the Florida legislature, the Governor of Florida and others, at times can instead

compete against us and offer lower rates, causing us to lose market share or not underwrite as many new policies as we

desire.

We write insurance policies covering homeowners, renters, condominium owners, and mobile home policyholders that

cover property losses including those caused by hurricanes and other catastrophes. We manage our risk through strict

underwriting, spreading our risk across our service area, and through the purchase of reinsurance. A substantial portion of

our business is located in Florida, which is particularly susceptible to hurricanes. The FLOIR requires that we manage risk

through reinsurance by purchasing up to or exceeding a 1-in-130 year storm, including coverage for multiple hurricane

events in one season. Notwithstanding these requirements and our efforts to plan for and manage risk, a particularly strong

storm, or a series of multiple storms in one hurricane season could exceed our reinsurance protection and may have a

material adverse impact on our results of operations and financial condition.

The state-run FHCF charges all insurers premiums for coverage to assume part of the risk of their hurricane related losses.

In addition, the FHCF may issue pre- and post-event bonds to raise capital to meet its commitment to us and other insurers.

In the event of a significantly large storm, or multiple storms, the FHCF may not have the resources to pay us all of the

coverage we purchased from them, including that the capital markets may not be able to support a large bond issuance by

the FHCF. Further, Florida law allows the FHCF to not pay the remaining amount they owe insurers if they do not have

enough resources to cover such claims.

From time to time, political events and positions affect the insurance market, including efforts to suppress rates to a level

that may not allow us to reach targeted levels of profitability. For example, if our loss ratio compares favorably to that of

the industry, state regulatory authorities may impose rate rollbacks, require us to pay premium refunds to policyholders, or

challenge or otherwise delay our efforts to raise rates even if the homeowners industry generally is not experiencing

regulatory challenges to rate increases.

In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in

assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require insurers to offer

coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge. In these

markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading

to an unacceptable return on equity. Our results of operations and financial condition could be adversely affected by any of

these factors.

Various state insurance regulators have increased their focus on risks within an insurer’s holding company system that may

pose enterprise risk to the insurer. In 2012, the NAIC adopted significant amendments to the Insurance Holding Company

Act and related regulations (the “NAIC Amendments”). The NAIC Amendments are designed to respond to perceived gaps

in the regulation of insurance holding company systems in the United States. One of the major changes is a requirement

that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance

regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an

insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of

the insurer or its insurance holding company system as a whole. Other changes include the requirement that a controlling

person submit prior notice to its domiciliary insurance regulator of a divestiture of control, detailed minimum requirements

for cost sharing and management agreements between an insurer and its affiliates and expanding of the agreements

between an insurer and its affiliates to be filed with its domiciliary insurance regulator, including states (if any) in which

the insurer is commercially domiciled. The NAIC Amendments must be adopted by the individual state legislatures and

insurance regulators in order to be effective, and many states have already done so.

In 2012, the NAIC also adopted the Risk Management and Own Risk and Solvency Assessment Model Act (the “ORSA

Model Act”). The ORSA Model Act, as adopted by the various states, requires an insurance holding company system’s

Chief Risk Officer to submit annually to its lead state insurance regulator an ORSA. The ORSA is an internal assessment,

tailored to the nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or insurance group,

of the material and relevant risks associated with the business plan of an insurer or insurance group and the sufficiency of

capital resources to support those risks. Insurers that exceed $500 million in gross premiums written may be subjected to

additional reporting and compliance requirements and costs.

There is also risk that insurance holding company systems may become subject to group capital requirements at the holding

company level. In December 2020, the NAIC adopted additional amendments to the Insurance Holding Company System

Regulatory Act and the Insurance Holding Company System Model Regulation to provide a framework intended to

complement the current holding company analytics framework by providing additional information to the lead state

regulator for use in assessing group risks and capital adequacy. The amendments to the ORSA Model Act and Insurance

Holding Company System Model Regulation adopt a group capital calculation and liquidity stress test. We cannot predict

whether or when these amendments may be adopted by Florida or the impact, if any, that the new regulatory requirements

may have on our business, financial condition or results of operation.

disclosing unremediated material weaknesses and analysis of any limitations of internal control. As the Company grows

and exceeds these premium thresholds, additional costs and duties under these statutes and rules must be implemented,

which can materially affect our results of operations.

From time to time, public policy preferences and perceptions affect the insurance market, including insurers’ efforts to

effectively maintain rates that allow us to reach targeted levels of rate adequacy and profitability. Despite efforts to address

rate needs and other operational issues analytically, facts and history demonstrate that public policymakers, when faced

with unexpected events and adverse public sentiment, have acted and may in the future act in ways that impede our ability

to maintain a satisfactory correlation between rates and risk. This has included, and in the future may include,

policymakers’ failures to take steps to address the causes of adverse market conditions. Such acts or failures to act may

affect our ability to obtain approval for or implement rate changes that we believe are necessary to attain rate adequacy

along with targeted levels of profitability and returns on equity. Additionally, because AIIC often must obtain regulatory

approval prior to changing rates, delays in the filing, review or implementation of rate changes can adversely affect our

ability to attain rate adequacy. This is especially the case in hard markets such as the current Florida market, where many

insurers are submitting filings for significant rate increases and thereby affecting the FLOIR’s workload and its ability to

timely review filings.

Our ability to afford reinsurance required to reduce our catastrophe risk also depends in part on our ability to adjust rates

for our costs.

Additionally, we are required to participate in guaranty funds for insolvent insurance companies and other statutory

insurance entities. The guaranty funds and other statutory entities periodically levy assessments against all applicable

insurance companies doing business in the state, and the amounts and timing of those assessments are unpredictable.

Although we seek to recoup these assessments from our policyholders, we might not be able to fully do so and at any point

in time or for any period, our operating results and financial condition could be adversely affected by any of these factors.

AIIC is subject to RBC standards and other minimum capital and surplus requirements imposed under applicable state

laws. The RBC standards, based upon the Risk-Based Capital Model Act adopted by the NAIC, require us to report our

results of RBC calculations to the FLOIR and the NAIC. These RBC standards provide for different levels of regulatory

attention depending upon the ratio of an insurance company’s total adjusted capital, as calculated in accordance with NAIC

guidelines, to its authorized control level RBC. Authorized control level RBC is determined using the NAIC’s RBC

formula, which measures the minimum amount of capital that an insurance company needs to support its overall business

operations.

An insurance company with total adjusted capital that (i) is at less than 200% of its authorized control level RBC, or (ii)

falls below 300% of its RBC requirement and also fails a trend test, is deemed to be at a “company action level,” which

would require the insurance company to file a plan that, among other things, contains proposals of corrective actions the

company intends to take that are reasonably expected to result in the elimination of the company action level event.

Additional action level events occur when the insurer’s total adjusted capital falls below 150%, 100%, and 70% of its

authorized control level RBC. The lower the percentage, the more severe the regulatory response, including, in the event of

a mandatory control level event (total adjusted capital falls below 70% of the insurer’s authorized control level RBC),

placing the insurance company into receivership.

In addition, AIIC is required to maintain certain minimum capital and surplus and to limit premiums written to specified

multiples of capital and surplus. AIIC could exceed these ratios if its volume increases faster than anticipated or if its

surplus declines due to catastrophe or non-catastrophe losses or excessive underwriting and operational expenses.

Any failure by AIIC to meet the applicable RBC or minimum statutory capital requirements imposed by the laws of Florida

(or other states where we currently or may eventually conduct business) could subject AIIC to further examination or

corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision

or receivership, which could have a material adverse impact on our reputation and financial condition. Any such failure

also could adversely affect our financial strength and stability ratings.

Any changes in existing RBC requirements, minimum statutory capital requirements, or applicable writings ratios may

require us to increase our statutory capital levels, which we may be unable to do, or require us to reduce the amount of

premiums we write, which could adversely affect our business and our operating results.

As a public company, we incur significant legal, accounting and other expenses that we did not previously incur as a

private company, including costs associated with public company reporting and corporate governance requirements. For

example, we are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable

requirements of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), as well as rules and regulations

implemented by the SEC and the New York Stock Exchange (“NYSE”), including the establishment and maintenance of

effective disclosure controls and procedures and internal control over financial reporting and changes in corporate

governance practices, subject to any applicable phase-in periods or other exemptions.

We expect that continuing to comply with these rules and regulations will substantially increase our legal and financial

compliance costs and make some activities more time-consuming and costly. In addition, our management team will have

to continue to adapt to the requirements of being a public company. In particular, we expect to incur significant expenses

and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the

Sarbanes-Oxley Act, which will increase to the extent we are no longer an emerging growth company, as defined by the

Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and are not a smaller reporting company. We cannot

predict or estimate the amount of additional costs we may incur as a result of being a public company or the timing of such

costs, which could adversely affect our operating results.

We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and

accounting systems to meet our reporting obligations as a public company. However, the measures we take may not be

sufficient to satisfy our obligations as a public company. In addition, these rules and regulations have and will continue to

increase our legal and financial compliance costs and will make some activities more time-consuming and costly. These

additional obligations could have a material adverse effect on our business, financial condition, results of operations, cash

flows and prospects.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating

uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-

consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of

specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory

and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs

necessitated by ongoing revisions to disclosure and governance practices. We have and will continue to invest resources to

comply with evolving laws, regulations and standards, and this investment may result in increased general and

administrative expenses and a diversion of our management’s time and attention from revenue-generating activities to

compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended

by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may

initiate legal proceedings against us and there could be a material adverse effect on our business, financial condition, results

of operations, cash flows and prospects.

The increased costs associated with operating as a public company may decrease our net income or result in a net loss and

may require us to reduce costs in other areas of our business or increase the prices of our solution. Additionally, if these

requirements divert management’s attention from other business concerns, they could have an adverse effect on our

business, operating results or financial condition.

Our primary market risk exposures are changes in interest rates, which impact our investment income and returns.

Fluctuations in interest rates could expose us to increased financial risk. Since September 2024, the U.S. Federal Reserve

has reduced the target range for the federal funds rate by an aggregate of 175 basis points. Declines in market interest rates

can have an adverse effect on our investment income to the extent that we invest cash in new interest-bearing investments

that yield less than our portfolios’ average rate of return or purchase longer-term or riskier assets in order to obtain

adequate investment yields resulting in a duration gap when compared to the duration of liabilities. Conversely, increases

in market interest rates also have in the past and can have an adverse effect on the value of our investment portfolios by

decreasing the fair values of the available-for-sale debt securities that comprise a large portion of our investment. In

addition, inflation, such as what we are seeing in the current economic environment, has adversely impacted our business

and financial results and could in the future.

The performance of our investment portfolios is independent of the revenue and income generated from our insurance

operations, and there is typically no direct correlation between the financial results of these two activities. Thus, to the

extent that our investment portfolios do not perform well due to the factors discussed above or otherwise, our results of

operations may be materially adversely affected even if our insurance operations perform favorably. Further, because the

returns on our investment portfolios are subject to market volatility, our overall results of operations could likewise be

volatile from period to period even if we do not experience significant financial variances in our insurance operations.

As a part of our cash management strategy, we maintain deposits in a United States financial institution in an amount

intended to satisfy our immediate liquidity needs. Any amounts in excess of $100,000 are swept on a daily basis into a

money market fund custodied outside of the financial institution and invested in short-term obligations issued or

guaranteed by the United States government. Although balances we hold at the financial institution fluctuate daily based on

a variety of factors, any exposure over the FDIC limit of $250,000 is limited to short intraday windows. However, in the

event of a failure of the financial institution, there is a chance we may be unable to access such funds and may incur a loss

to the extent such balance exceeds the FDIC insurance limit during the day prior to a sweep, which could have a negative

impact on our liquidity and financial condition.

Our IPO occurred in May 2025. Therefore, there has only recently been a public market for our Common Stock. Although

we list our Common Stock on the NYSE, an active trading market for our Common Stock may not further develop or be

sustained. A public trading market having the desirable characteristics of depth, liquidity and orderliness depends upon the

existence of willing buyers and sellers at any given time, such existence being dependent upon the individual decisions of

buyers and sellers over which neither we nor any market maker has control. The failure of an active and liquid trading

market to further develop and continue would likely have a material adverse effect on the value of our Common Stock. An

inactive market may also impair our ability to raise capital to continue to fund operations by issuing additional shares of

our Common Stock or other equity or equity-linked securities and may impair our ability to make acquisitions using any

such securities as consideration. The trading price of our Common Stock may fluctuate substantially in response to

numerous factors, many of which are beyond our control. These fluctuations could cause you to lose all or part of your

investment in our Common Stock. Factors that could cause fluctuations in the trading price of our Common Stock include

the following:

•results of operations that vary from the expectations of securities analysts and investors;

•results of operations that vary from those of our competitors;

•changes in expectations as to our future financial performance, including financial estimates and investment

recommendations by securities analysts and investors;

•changes in economic conditions for companies in our industry;

•changes in market valuations of, or earnings and other announcements by, companies in our industry;

•declines in the market prices of stocks generally, particularly those of insurance companies;

•strategic actions by us or our competitors;

•changes in general economic or market conditions or trends in our industry or the economy as a whole and, in

particular, in the insurance environment;

•changes in business or regulatory conditions;

•future sales of our Common Stock or other securities;

•investor perceptions of the investment opportunity associated with our Common Stock relative to other investment

alternatives;

•the public’s response to press releases or other public announcements by us or third parties, including our filings

with the SEC;

•announcements relating to litigation or governmental investigations;

•guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this guidance;

•the development and sustainability of an active trading market for our stock;

•changes in accounting principles; and

•other events or factors, including those resulting from system failures and disruptions, natural or man-made

disasters, extreme weather events, war, acts of terrorism, an outbreak of highly infectious or contagious diseases

or responses to these events.

Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or disproportionate

to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect

the market price of our Common Stock, regardless of our actual operating performance. In addition, price volatility may be

greater if the public float and trading volume of our Common Stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were

involved in securities litigation, it could have a substantial cost and divert resources and the attention of management from

our business regardless of the outcome of such litigation.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal

control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements in accordance with GAAP. We are in the early stages of the costly and

challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to

comply with Section 404 of the Sarbanes-Oxley Act. We may not be able to complete our evaluation, testing and any

required remediation in the time required. If we are unable to assert that our internal control over financial reporting is

effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause

the price of our Common Stock to decline, and we may be subject to investigation or sanctions by the SEC.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among

other things, the effectiveness of our internal control over financial reporting as of the end of the fiscal year that coincides

with the filing of our second annual report on Form 10-K. This assessment will need to include disclosure of any material

weaknesses identified by our management in our internal control over financial reporting. We are also currently required to

disclose changes made in our internal control and procedures on a quarterly basis. However, our independent registered

public accounting firm is not required to report on the effectiveness of our internal control over financial reporting pursuant

to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed

with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our

independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level

at which our controls are documented, designed or operating.

Additionally, the existence of the material weakness in our internal control over financial reporting that we identified, or

any additional material weakness or a significant deficiency, requires management to devote significant time and incur

significant expense to remediate any such material weaknesses or significant deficiencies, and management may not be

able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of the

material weakness in our internal control over financial reporting that we identified or any additional material weakness in

our internal control over financial reporting could also result in errors in our financial statements that could require us to

restate our financial statements, cause us to fail to meet our reporting obligations and cause stockholders to lose confidence

in our reported financial information, all of which could materially and adversely affect our business and stock price. To

comply with the requirements of being a public company, we are undertaking various costly and time-consuming actions,

such as implementing new internal controls and procedures and hiring accounting or internal audit staff, which may

adversely affect our business, financial condition, results of operations, cash flows and prospects.

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies.” As defined in the JOBS Act,

a public company whose initial public offering of common equity securities occurs after December 8, 2011, and whose

annual net sales are less than $1.235 billion will, in general, qualify as an “emerging growth company” until the earliest of:

•the last day of its fiscal year following the fifth anniversary of the date of its initial public offering of common

equity securities;

•the last day of its fiscal year in which it has annual gross revenue of $1.235 billion or more;

•the date on which it has, during the previous three-year period, issued more than $1 billion in nonconvertible debt;

and

•the date on which it is deemed to be a “large accelerated filer,” which will occur at such time as we (i) have an

aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as

of the last business day of its most recently completed second fiscal quarter, (ii) have been required to file annual

and quarterly reports under the Exchange Act, for a period of at least 12 months, and (iii) have filed at least one

annual report pursuant to the Exchange Act.

We are an emerging growth company and may remain an “emerging growth company” until as late as the fifth anniversary

of our IPO. For so long as we are an “emerging growth company,” we will, among other things:

•not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act;

•not be required to hold a nonbinding advisory stockholder vote on executive compensation pursuant to Section

14A(a) of the Exchange Act;

•not be required to seek stockholder approval of any golden parachute payments not previously approved pursuant

to Section 14A(b) of the Exchange Act;

•be exempt from the requirement of the Public Company Accounting Oversight Board regarding the

communication of critical audit matters in the auditor’s report on the consolidated financial statements; and

•be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy

statements.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period

provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. This permits

an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will

not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is

required for other public companies.

We cannot predict if investors will find our Common Stock less attractive as a result of our decision to take advantage of

some or all of the reduced disclosure requirements above. If some investors find our Common Stock less attractive as a

result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

We are not contractually obligated to pay regular cash dividends on our Common Stock. Any decision to declare and pay

dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things,

general and economic conditions, our results of operations and financial condition, our available cash and current and

anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, and such other factors that

our Board of Directors may deem relevant.

In addition, our ability to pay dividends is, and may be, limited by covenants of any future outstanding indebtedness we or

our subsidiaries incur. Therefore, any return on investment in our Common Stock may be solely dependent upon the

appreciation of the price of our Common Stock on the open market, which may not occur.

Certain provisions of Delaware law, our amended and restated certificate of incorporation (the “Charter”) and amended and

restated bylaws (the “Bylaws”) may have an anti-takeover effect and may delay, defer, or prevent a merger, acquisition,

tender offer, takeover attempt, or other change of control transaction that a stockholder might consider in its best interest,

including those attempts that might result in a premium over the market price for the shares held by our stockholders.

These provisions provide for, among other things:

•a classified Board of Directors (until the declassification of our Board of Directors is completed by the annual

meeting of stockholders to be held in 2031 (the “Sunset Date”));

•the ability of our Board of Directors to issue one or more series of preferred stock without stockholder approval;

•our stockholders may not take action by consent without a meeting and may only take action at a meeting of

stockholders;

•vacancies on our Board of Directors are able to be filled only by our Board of Directors and not by stockholders;

•advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring

matters before an annual meeting of stockholders;

•stockholders are unable to call a special meeting of stockholders;

•no cumulative voting in the election of directors;

•until the full declassification of our Board of Directors by the Sunset Date, directors may be removed only for

cause and only upon the affirmative vote of holders of at least a majority of the voting power of our outstanding

shares of capital stock entitled to vote thereon; and

•that certain provisions of the Charter may be amended only by the affirmative vote of holder of at least 66 2/3% of

the voting power of our then-outstanding capital stock entitled to vote thereon.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer

may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to

obtain a premium for their shares.

In addition, we have opted out of Section 203 of the General Corporation Law of the State of Delaware, as amended (the

“DGCL”), but our Charter provides that engaging in any of a broad range of business combinations with any “interested”

stockholder (generally defined as any stockholder with 15% or more of our outstanding voting stock and any entity or

person affiliated with or controlling or controlled by such stockholder) for a period of three years following the time on

which the stockholder became an “interested” stockholder is prohibited (except with respect to Sowell Investment Holdings

Co., LLC (“Sowell & Co.”) and any of its respective affiliates and any of their respective direct or indirect transferees of

shares of Common Stock).

Pursuant to our Charter, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the

State of Delaware (or, if the Court of Chancery does not have jurisdiction, the United States District Court for the District

of Delaware) is, to the fullest extent permitted by law, the sole and exclusive forum for (i) a derivative action, suit or

proceeding brought on behalf of our Company, (ii) an action, suit or proceeding asserting a claim of breach of a fiduciary

duty owed by any current or former director, officer or other employee or stockholder of the Company to the Company or

to the Company’s stockholders, (iii) an action, suit or proceeding arising pursuant to any provision of the DGCL or our

Charter or our Bylaws or as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware, or

(iv) an action, suit or proceeding asserting a claim against our Company governed by the internal affairs doctrine. This

provision does not apply to any action or proceeding asserting a claim under the Securities Act or the Exchange Act for

which the federal courts have exclusive jurisdiction or any other claim for which the federal courts have exclusive

jurisdiction. Furthermore, our Charter provides that, unless we consent in writing to the selection of an alternative forum,

the federal district courts of the United States are the sole and exclusive forum for the resolution of any complaint asserting

a cause of action arising under the Securities Act, Exchange Act or any other claim for which federal courts of the United

States have exclusive jurisdiction, against us or any director, officer, employee or agent of ours. However, Section 22 of

the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce a duty or

liability created by the Securities Act or the rules and regulations thereunder; accordingly, we cannot be certain that a court

would enforce such provision. Our Charter provides that any person or entity purchasing or otherwise acquiring any

interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our Charter described

above; however, investors cannot waive compliance with the federal securities laws and the rules and regulations

thereunder. The forum selection provisions in our Charter may have the effect of discouraging lawsuits against us or our

directors and officers and may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us. If the

enforceability of our forum selection provision were to be challenged, we may incur additional costs associated with

resolving such a challenge. While we currently have no basis to expect any such challenge would be successful, if a court

were to find our forum selection provision to be inapplicable or unenforceable, we may incur additional costs associated

with having to litigate in other jurisdictions, which could have an adverse effect on our business, financial condition and

results of operations and result in a diversion of the time and resources of our employees, management and Board of

Directors.

The trading market for our Common Stock is influenced by the research and reports that industry or securities analysts

publish about us or our business. We do not have any control over these analysts. As a newly public company, we may be

slow to attract research coverage. In the event we obtain securities or industry analyst coverage, if any of the analysts who

cover us provide inaccurate or unfavorable research, issue an adverse opinion regarding our stock price or if our results of

operations do not meet their expectations, our stock price could decline. Moreover, if one or more of these analysts cease

coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn

could cause our stock price or trading volume to decline.

Our Charter authorizes us to issue one or more series of preferred stock. Our Board of Directors has the authority to

determine the preferences, limitations and relative rights of the shares of preferred stock and to fix the number of shares

constituting any series and the designation of such series, without any further vote or action by our stockholders. Our

preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our Common

Stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our

Common Stock at a premium to the market price, and materially adversely affect the market price and the voting and other

rights of the holders of our Common Stock.

None.

Item 1C. Cybersecurity

We rely on digital technology to conduct our business and interact with customers, policyholders, agents, and vendors.

With this reliance on technology comes the associated security risks from using today’s communication technology and

networks.

The goal of our cybersecurity risk management strategy is to protect the privacy, integrity and availability of our critical

systems and information. Our processes identify, assess and manage material risk from cybersecurity threats as part of our

entity-wide risk management efforts. To safeguard our data and the data of our customers, management utilizes a multi-

layered approach consisting first of an external security operations center company that specializes in the detection and

containment of cyber-attacks. For protection of endpoint devices connected to our network, we use the tailored security

software of a third-party consultant company for managed detection and response. Perimeter defense technology is used to

filter e-mail for threats from malware viruses and e-mail phishing attempts. We also detect threats through the use of our

firewalls that monitor incoming and outgoing network traffic.

Tools utilized to prevent threats include multifactor authentication, e-mail security services, mobile e-mail security

policies, virtual private networks, third-party security experts, and timely applied software patches, among others. We

engage in monthly penetration testing, annual disaster recovery testing, internal and external audits of our cybersecurity

controls and simulated cyberattack scenarios to gauge our preparedness for these situations. In addition, employees are

required to pass a mandatory cybersecurity training course annually and receive periodic phishing simulations to facilitate

recognizing phishing attempts. We carry Cyber Insurance, which includes access to a cyber incident response team in the

case of a cybersecurity event.

Management of cybersecurity also extends to third-party service providers we use for specialized purposes such as payroll

processing, investment tracking, regulatory financial reporting, and equity compensation plan administration. Our

communication with these providers is protected by the safeguards within our security operation center. In addition, we

annually obtain a Service Organization Controls (“SOC”) report on the suitability and operating effectiveness of the

providers’ controls, known as a SOC 1 Type 2 Report. The report is prepared by an independent service auditor. We review

such reports to confirm the existence of effective controls over unauthorized access at third party service providers.

We respond to cybersecurity events in accordance with our Cyber Security Incident Response Plan (“CSIRP”), which

follows the guidance of the National Institute of Standards and Technology Cybersecurity Framework and provides for

assessment, mitigation, and if necessary, remediation of any effects of a system breach. We also conduct annual breach

simulations with internal information technology teams to test each step of our CSIRP.

To date, we have not experienced any risks from cybersecurity threats, including as a result of any previous cybersecurity

incidents, that have materially affected or are reasonably likely to affect us or our business strategy, results of operations or

financial condition. Although we believe our defenses against cyber-intrusions are sufficient, we continue to update our

prevention programs to respond to sophisticated and rapidly evolving attempts to overcome our security measures. Such

continuing threats could have a variety of adverse business impacts.

Cybersecurity is a critical component of our overall risk management process, and both management and the Board of

Directors are actively involved in the oversight of risks from cybersecurity threats. Our Board of Directors oversees our

cybersecurity efforts and is informed regularly regarding such cybersecurity efforts and risks from cybersecurity threats.

Our Board of Directors delegates certain tasks and responsibilities to be performed by senior management which is

responsible for the identification and assessment of material risks from cybersecurity incidents. The members of

management responsible for managing cybersecurity threats are the Head of Information Technology (“IT”) and our

Director of Infrastructure and Operations, along with our Engineering Manager. The IT leadership team has extensive

experience in managing information systems including the defense of computer networks against cyber intrusions. The

Network Security Engineer is dedicated to overseeing our multi-layered cybersecurity defenses and leads monthly security

meetings attended by IT managers. The Head of IT, Director of Infrastructure and Operations and Engineering Manager are

regularly informed about the latest developments in cybersecurity, including potential threats and innovative risk

management techniques and report to the Board of Directors on a regular basis. This ongoing knowledge acquisition is

crucial for the effective prevention, detection, mitigation and remediation of cybersecurity incidents. Our information

systems are routinely reviewed for compliance with information security policies and standards. Outcomes of reviews and

audits are reported to the Head of IT, Director of Infrastructure and Operations and Engineering Manager.

Our corporate offices and primary insurance operations are located in Tampa, FL where we occupy approximately 57,640

square feet of office space for annual rent and rent-related operating payments of approximately $2.4 million. The term of

the lease expires in February 2026. On February 20, 2025, we entered into a 152-month lease agreement for approximately

75,000 square feet of new office space, where we will gain access to office suites in phases beginning in the first half of

2026. The asset has not been made available for use by us, and once made available for use, we will record the

corresponding right-of-use asset and lease liability. We will pay approximately $45.7 million over the term of the lease. We

believe that our facilities are adequate for our current needs. We currently do not own any real property.

From time to time, we are subject to routine legal proceedings in the ordinary course of business. We believe that the

ultimate resolution of these matters will not have a material adverse effect on our business, financial condition, results of

operations or cash flows.

This item is not applicable.

Our Common Stock is traded on the NYSE under the symbol “AII”.

As of February 19, 2026, there were 26 holders of record of our Common Stock. This number is based on the actual

number of holders registered at such date and does not include holders whose shares are held in nominee or “street name”

by various brokerage firms and other nominees.

We did not declare or pay any dividends during 2025. On February 24, 2026, our Board of Directors declared a special

cash dividend of $1.02 per share of Common Stock payable on March 30, 2026 to stockholders of record at the close of

business on March 16, 2026. The aggregate amount of the payment to be made in connection with this special cash

dividend will be approximately $20 million, and we plan to pay such dividend using cash on hand.

of Directors may, from time to time, reassess whether to declare dividends in the future. The profitability of our business

fluctuates each year based on a variety of factors, including the frequency and severity of catastrophe storms in the

Southeast United States, and in years where we generate excess profit, we may look to return excess capital to stockholders

via dividends or other capital return mechanisms. Any further determination to pay dividends on our Common Stock will

be at the discretion of our Board of Directors, subject to applicable laws, and will depend on our financial condition, results

of operations, capital requirements, general business conditions, and other factors that our Board of Directors considers

relevant. Our future ability to pay cash dividends on our Common Stock may also be limited by the terms of any future

debt securities, preferred stock or credit facility. If we elect to pay dividends in the future, we may reduce or elect to

discontinue the payment of such dividends at any time.

To the extent we rely on dividends from AIIC to pay dividends to our stockholders, the maximum amount of dividends that

can be paid by Florida insurance companies without prior approval of the FLOIR is subject to restrictions. Dividends from

AIIC can only be paid from accumulated unassigned funds derived from net operating profits and net realized capital gains.

Subject to such accumulated unassigned funds the maximum dividend that may be paid by AIIC to the Company without

prior approval is further limited to the lessor of statutory net income from operations of the preceding calendar year or

statutory unassigned surplus as of the preceding year end. As of the December 31, 2025, AIIC has not declared dividends.

On May 7, 2025, in connection with our IPO, we issued 417,470 shares of Common Stock in connection with grants of

restricted stock outside of our long-term incentive plan to certain of our officers and employees, after giving effect to the

withholding of approximately 234,587 shares of Common Stock to satisfy the estimated tax withholding and remittance

obligations. The offers, sales, and issuances of the securities were deemed to be exempt from registration under Rule 506

promulgated under the Securities Act and/or under Section 4(a)(2) of the Securities Act as a transaction by an issuer not

involving a public offering.

On May 9, 2025, we completed our IPO, and all shares of Common Stock sold were registered pursuant to a registration

statement on Form S-1 (File No. 333-286524), as amended, declared effective by the SEC on May 7, 2025. We received

net proceeds of $82 million, after (i) deducting underwriting discounts and commissions totaling $7.0 million as well as

$4.2 million of other expenses related to the offering, (ii) using approximately $3.8 million of the proceeds from the

offering to satisfy tax withholding and remittance obligations related to the net settlement of shares of restricted stock

issued in connection with the IPO and (iii) using $3.0 million of the proceeds of the offering to terminate the management

services agreement by and between James Sowell Company, L.P. and AIIG. Pending their further use, the net proceeds

from our IPO have been invested in investment grade instruments.

The were no repurchases of our Common Stock during the twelve months ended December 31, 2025.

Inc. and its consolidated subsidiaries.

predominantly in Florida. Florida represented over 96.3% of our direct premiums written and 93.7% of our policies in-

force as of December 31, 2025. As of December 31, 2025, 69.1% of our in-force premium is in the insurance market in

which we underwrite and sell policies to policyholders where we may freely choose or reject without the assistance of

residual market mechanisms (the “Voluntary Market”). Moreover, 95.0% of our Voluntary Market in-force premium was

in our core Florida market and 5.0% was in South Carolina, Georgia, and North Carolina, where we have strategically

expanded to support and enhance our relationships with our builder agency network.

We strive to generate consistent adjusted underwriting profits, exclusive of investment income or gains and losses from the

sale of invested assets. Our goal is to achieve long-term profitability across economic and insurance cycles by maintaining

a conservative financial position, increasing premiums written and risk exposure when we believe market conditions are

favorable, and reducing risk exposure during periods when we believe market conditions are unfavorable and earning

profits is more challenging. AIIC, our statutory insurance carrier, maintains a Financial Stability Rating of

“A” (Exceptional) by Demotech, and a financial strength rating of “BBB+” with a stable outlook from the Kroll Bond

Rating Agency, LLC. Additionally, the Company maintains a BB+ rating, with stable outlook, from the Kroll Bond Rating

Agency, LLC.

We generate revenue primarily from insurance premiums earned, net of reinsurance ceded. We also generate revenue from

policy fees, installment income fees, income generated through the investment of our assets, and realized gains or losses on

the sale of our invested assets. Our financial results are highly seasonal due to the occurrence of hurricanes and tropical

storms typically between June 1st and November 30th of each year in Florida and the other states in which we operate. Our

reinsurance purchasing, including our catastrophe excess of loss reinsurance coverages, which commence on June 1st

annually, also materially influences our financial results and are impacted by changes in reinsurance rates or alterations in

terms and conditions, including in attachment or loss retention levels.

Florida Trends. Prior to the legislative reforms passed in December 2022, the legal and regulatory environment in Florida

posed significant challenges for property and casualty insurers, particularly due to excessive litigation and aggressive

claims practices relating to issues such as assignment of benefits abuse, extended statute of limitations, and attorney fee

multipliers led to disproportionately high litigation rates in Florida relative to other geographies. These factors increased

claims costs and reinsurance expenses, impacting the profitability of insurers operating in Florida. Recent legislative

changes, however, have improved operating conditions in the Florida insurance market, including a reduction in claims

litigation activity since the reforms were enacted in December 2022. We believe these legislative reforms provide greater

opportunities for us to profitably underwrite residential property insurance in Florida.

Citizens “Take-out” Program. In late 2024, we strategically expanded our policy base, assuming 68,844 policies,

representing $112.4 million in assumed unearned premiums from Citizens Property Insurance Corporation (“Citizens”). In

2025, we assumed 33,867 policies from Citizens, representing $73.2 million in assumed unearned premiums. These

policies we assume carry no upfront acquisition costs and are covered by our current treaty year reinsurance program.

In late 2025, we began selectively participating in commercial policy take-outs from Citizens. These take-outs represented

149 policies out of the 33,867 total assumed policies and represent $5.9 million of the $73.2 million in assumed unearned

premiums. These policies are subject to the same underwriting and profitability standards as our residential assumptions

and are intended to complement our existing portfolio.

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

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

recent regulatory changes, improvements in the data made available on Citizens policies, and rate increases implemented

by Citizens that have made pricing more comparable to the Voluntary Market have increased the attractiveness of assuming

policies from Citizens. While we expect there will continue to be opportunities to assume policies from Citizens, we

believe the number of policies available that meet our underwriting and profitability standards has declined and may

continue to decline over time.

Changing Climate Conditions. Over the past two decades, the increasing frequency and severity of severe weather events

have highlighted the unpredictable nature of climate trends. Climate change has the potential to influence the occurrence

and intensity of natural disasters, including convective storms, hurricanes, tornadoes, hailstorms, severe winter storms, and

flooding, among others. This unpredictability creates challenges in assessing future risks and exposures.

We continuously monitor climate data and collaborate with climate change and catastrophe modeling experts to refine our

risk assessment models, enhancing our preparedness for evolving climate-related challenges.

Seasonality of our Business. Our business is seasonal as hurricanes and other named storms typically occur in the

geographies where we operate between June 1st and November 30th of each year. This may result in significant variability

in our losses and loss adjustment expenses (“LAE”) depending on the number, location and strength of hurricanes and

other named storms during these months as compared to other months. In addition, because our catastrophe reinsurance

program renews on June 1st each year, the ceded premiums written recorded in the second quarter are typically

substantially higher than any other quarter during a fiscal year. In some instances, this will cause our reported net

premiums written to be negative (or substantially lower than other quarters) in the second quarter of each year.

Inflation. We may be adversely affected during periods of high inflation, primarily because of increased labor and material

costs, which could cause claims and claim expenses to increase. This has been evident since the COVID-19 pandemic in

early 2020. In addition, periods of high inflation can lead to periods of high interest rates, which may impact the

performance of our investment portfolios. The impact of inflation on our results cannot be known with any certainty;

however, we revise our reserves for unpaid losses as additional information becomes available, and reflect adjustments to

our reserves, if any, in our earnings in the periods in which we determine the adjustments are necessary. We monitor

inflation trends and factor them into the pricing of our new business and renewal policies.

Cost and Availability of Reinsurance. We purchase excess of loss and quota share reinsurance as part of our capital

management strategy and in an effort to reduce volatility of earnings and protect our balance sheet from the impact of

potential catastrophe events. Our ability to implement an effective reinsurance strategy is dependent, in part, on the cost

and availability of reinsurance coverage. In recent years, reinsurance rates have significantly increased and terms and

conditions have tightened (including reductions on what we are able to charge for claims administration), particularly for

catastrophe exposed property lines of business. This can be attributed to a variety of factors, including high inflation and a

rising interest rate environment, social inflation, the frequency and severity of natural catastrophes including large

hurricanes in Florida such as Hurricane Ian and Milton, and reinsurance capacity constraints. We ceded 72.5% and 73.3%

of our gross premiums earned in the years ended December 31, 2025 and December 31, 2024, respectively.

On May 9, 2025, we completed our initial public offering (the “IPO”) of an aggregate of 6,875,000 shares of the

Company’s common stock, par value $0.001 per share (the “Common Stock”), at a price to the public of $16.00 per share,

6,250,000 of which shares were sold by the Company and 625,000 of which shares were sold by certain selling

stockholders. The gross proceeds to us from the IPO were $100 million, and gross proceeds to the selling stockholders

from the IPO were $10 million, before deducting underwriting discounts and commissions and estimated offering

expenses. On May 13, 2025, the underwriters completed the exercise of their option to purchase an additional 1,031,250

additional shares of Common Stock from the selling stockholders resulting in an additional $16.5 million in gross proceeds

to the selling stockholders, before deducting underwriting discounts and commissions. We did not receive any gross

proceeds from the sales of shares of Common Stock by the selling stockholders. In connection with our IPO, we effected a

net issuance of 417,470 shares of restricted stock to certain of our employees and consultants (the “Restricted Stock

Grant”) after giving effect to the withholding of approximately 234,587 shares of Common Stock to satisfy the estimated

tax withholding and remittance obligations (the “Restricted Stock Grant Net Settlement”). We incurred a one-time share-

based compensation expense of $10.4 million in connection with the Restricted Stock Grant and paid $3.8 million in

connection with the Restricted Stock Grant Net Settlement. The compensation expense for these awards was recognized in

the second quarter of 2025. Immediately prior to the IPO, the owners of the equity interests of American Integrity

Insurance Group, LLC (“AIIG”) contributed all of their equity interests to the Company in exchange for an aggregate of

12,904,495 shares of Common Stock.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:

(1)Loss ratio is a key business metric and is the ratio of losses and LAE to net premiums earned plus policy fees. Management uses

this operating metric to analyze our loss trends and believes it is useful for investors to evaluate this component separately from our

other operating expenses.

(2)Expense ratio is a key business metric and is the ratio of policy acquisition expenses and general and administrative expenses to net

premiums earned plus policy fees. Management uses this metric to analyze our expense trends and believes it is useful for investors

to evaluate these components separately from our loss and loss adjustment expenses.

(3)Combined ratio is a key business metric, defined as the sum of the loss ratio and the expense ratio. Management uses this operating

metric to analyze our total expense trends and believes it is a key indicator for investors when evaluating the overall profitability of

(4)Return on equity is a key business metric, defined as net income, annualized, divided by the average beginning and ending

shareholders’ equity during the applicable period. This metric is annualized for interim periods by multiplying by the applicable

ratio in order to present return on equity consistently.

(5)Ceded catastrophe excess of loss premiums ratio is a key business metric and a non-GAAP measure defined as ceded catastrophe

excess of loss premiums earned divided by gross premiums earned. We view this ratio as meaningful to our business as it provides a

view into the cost of our catastrophe reinsurance program. The most directly comparable GAAP financial measure is the ratio of

ceded premiums earned to gross premiums earned. The ceded catastrophe excess of loss premiums ratio measure should not be

considered a substitute for ceded premiums earned and does not reflect the overall profitability of our business.

(6)Underlying loss and loss adjustment expense ratio is a key business metric and a non-GAAP measure defined as the ratio of loss

and LAE, net, less current year net catastrophe losses and net prior year reserve development divided by net premiums earned plus

policy fees. We view this ratio as meaningful to our business as it allows us to analyze our loss trends before the impact of

catastrophe losses and prior year reserve development. The most directly comparable GAAP measure is the loss ratio. The

underlying loss and LAE ratio should not be considered a substitute for the loss ratio and does not reflect the overall profitability of

(7)Gross underlying non-catastrophe loss and loss adjustment expense ratio is a key business metric and a non-GAAP measure defined

as the ratio of net underlying loss and LAE plus ceded non-catastrophe losses divided by total gross earned premiums and policy

fees. We view this ratio as meaningful to our business as it allows us to analyze our loss trends before the impact of reinsurance and

to evaluate the cost of non-catastrophe losses for every dollar of gross premium earned. Catastrophe reinsurance windfalls from

Citizens take-outs, changes in catastrophe reinsurance pricing, and changes in the structure of our quota share program can have a

significant impact on underlying loss and LAE ratios. The most directly comparable GAAP measure is the loss ratio. The gross

underlying non-catastrophe loss and LAE ratio should not be considered a substitute for the loss ratio and does not reflect the

overall profitability of our business.

Policies In-Force

Policies in-force represents the number of active insurance policies with coverage in effect as of the end of the period

referenced. We utilize the change in the number of policies in-force to assess the trajectories of our operations.

In-force premium represents the annual premium for active insurance policies with coverage in effect as of the end of the

period referenced. Since 2023, we have seen average in-force premiums decline moderately due to lower average rates per

insurance policy as a result of improving litigation trends and regulatory reform. In addition, the new states we are

expanding into, including South Carolina, Georgia and North Carolina, tend to have lower average rates than Florida.

However, through our continued expansion into the Tri-County region of Florida and into insuring middle-aged homes, we

plan to capitalize on higher average premiums.

The following table shows our policies in-force and in-force premiums by product as of December 31, 2025 and