KINGSTONE COMPANIES, INC.

Previous wording

We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto physical damage insurance in New York, and in 2025 was the 11th largest writer of homeowners insurance in New York. Beginning in June 2026, KICO began writing homeowners coverage in California on a non-admitted basis. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. Our wholly-owned subsidiary, Kingstone America Insurance Company ("KAIC"), was licensed to write property and casualty insurance by the state of Connecticut on May 1, 2026. We expect KAIC to begin writing policies in Connecticut in the second half of 2026. For the three months ended June 30, 2026 and 2025, respectively, 98.5% and 97.9% of KICO’s direct premiums written came from the New York policies. For the six months ended June 30, 2026 and 2025, respectively, 98.6% and 98.1% of KICO’s direct premiums written came from the New York policies.

Current wording

We offer property and casualty insurance products through our wholly-owned subsidiaries, Kingstone Insurance Company (“KICO”) and Kingstone America Insurance Company ("KAIC"). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and livery physical damage insurance in New York, and in 2025 was the 11th largest writer of homeowners insurance in New York. Beginning in June 2026, KICO began writing homeowners coverage in California on a non-admitted basis. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. KAIC was licensed to write property and casualty insurance by the state of Connecticut on May 1, 2026. KAIC started writing business in Connecticut beginning in September 2026. For the three months ended September 30, 2026 and 2025, respectively, 98.4% and 98.0% of KICO’s direct premiums written came from the New York policies. For the nine months ended September 30, 2026 and 2025, respectively, 98.5% and 98.1% of KICO’s direct premiums written came from the New York policies.

Previous wording

In addition, our wholly-owned subsidiary, Cosi Agency, Inc. (“Cosi”), a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies. In April 2026, Cosi became licensed in California, and we expect to expand our underwriting operations in California during the remainder of 2026 through the policies Cosi writes. Cosi retains the profit between the commission revenue received and the commission expense paid (“Net Cosi Revenue”). Commission expense is reduced by Net Cosi Revenue. Cosi-related operating expenses are primarily employment costs and are included in other operating expenses.

Current wording

Our wholly-owned subsidiary, Cosi Agency, Inc. (“Cosi”), is a multi-state licensed general agency. In April 2026, Cosi became licensed in California, and we expect to expand our underwriting operations in California during the remainder of 2026 through the policies Cosi writes. Cosi-related operating expenses are primarily employment costs and are included in other operating expenses.

Previous wording

Our expenses include the insurance underwriting expenses of KICO and other operating expenses. Insurance companies incur a significant amount of their total expenses from losses incurred by policyholders, which are referred to as claims. In settling these claims, various loss adjustment expenses (“LAE”) are incurred such as insurance adjusters’ fees and legal expenses. In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits.

Current wording

Our expenses include the insurance underwriting expenses of KICO and KAIC and other operating expenses. Insurance companies incur a significant amount of their total expenses from losses incurred by policyholders, which are referred to as claims. In settling these claims, various loss adjustment expenses (“LAE”) are incurred such as insurance adjusters’ fees and legal expenses. In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits.

Previous wording

Other operating expenses include our corporate expenses as a holding company and Cosi expenses. These corporate expenses include legal and auditing fees, executive employment costs and equity compensation, directors' fees, and other costs directly associated with being a public company.

Current wording

Other operating expenses include our corporate expenses of Kingstone Companies, Inc. (the "Holding Company"). These corporate expenses include legal and auditing fees, executive employment costs and equity compensation, directors' fees, and other costs directly associated with being a public company.

Previous wording

In May 2019, due to the poor performance of these lines, we placed a moratorium on new commercial lines and new commercial umbrella submissions while we further reviewed this business. In July 2019, due to the continuing poor performance of these lines, we made the decision to no longer underwrite commercial lines or commercial umbrella risks. In-force policies as of July 31, 2019 for these lines were non-renewed at the end of their annual terms. As of June 30, 2026 and December 31, 2025, there were no commercial liability policies in-force. As of June 30, 2026, these expired policies represented approximately 9.3% of loss and LAE reserves net of reinsurance recoverables. See discussion below under “Additional Financial Information”.

Current wording

In May 2019, due to the poor performance of these lines, we placed a moratorium on new commercial lines and new commercial umbrella submissions while we further reviewed this business. In July 2019, due to the continuing poor performance of these lines, we made the decision to no longer underwrite commercial lines or commercial umbrella risks. In-force policies as of July 31, 2019 for these lines were non-renewed at the end of their annual terms. As of September 30, 2026 and December 31, 2025, there were no commercial liability policies in-force. As of September 30, 2026, these expired policies represented approximately 8.9% of loss and LAE reserves net of reinsurance recoverables.

Previous wording

Our condensed consolidated financial statements include the accounts of Kingstone Companies, Inc. and all wholly-owned subsidiaries. The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions in certain circumstances that affect amounts reported in our condensed consolidated financial statements and related notes. In preparing these condensed consolidated financial statements, our management has utilized information including our past history, industry standards, and the current economic environment, and other factors, in forming its estimates and judgments of certain amounts included in the condensed consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by our management in formulating its estimates in these financial statements may not materialize.

Current wording

Our condensed consolidated financial statements include the accounts of Kingstone Companies, Inc. and all wholly-owned subsidiaries. The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires our management to make estimates and assumptions in certain circumstances that affect amounts reported in our condensed consolidated financial statements and related notes. In preparing these condensed consolidated financial statements, our management has utilized information including our past history, industry standards, and the current economic environment, and other factors, in forming its estimates and judgments of certain amounts included in the condensed consolidated financial statements, giving due consideration to materiality.

Previous wording

See below a description of these critical accounting estimates. Also see Note 2 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Our critical accounting policies are more fully described in our Management's Discussion and Analysis of Financial Condition and Results of Operations presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025, filed on March 16, 2026. There have been no changes in our critical accounting policies from December 31, 2025.

Previous wording

See the tables below for our policies in force as of June 30, 2026 and 2025 and direct written premiums for the six months ended June 30, 2026 and 2025. For the six months ended June 30, 2026, our direct written premiums increased by 19.2% compared to the six months ended June 30, 2025, while policies in force increased by 9.9% as of June 30, 2026 as compared to June 30, 2025.

Current wording

See the tables below for our policies in-force as of September 30, 2026 and 2025 and direct premiums written for the three months and nine months ended September 30, 2026 and 2025. For the nine months ended September 30, 2026, our direct premiums written increased by 17.4% compared to the nine months ended September 30, 2025, while policies in-force increased by 11.0% as of September 30, 2026 as compared to September 30, 2025.

Previous wording

1 Direct premiums written is a non-GAAP measure defined above under "Key GAAP and Non-GAAP Measures". See "Non-GAAP Financial Measures" below for a reconciliation of direct premiums written to the GAAP measure of net premiums earned.

Current wording

1 Direct premiums written is a non-GAAP measure defined below under "Key GAAP and Non-GAAP Measures". See discussion of "Net Premiums Earned" below for a reconciliation of GAAP net premiums earned to direct premiums written.

Previous wording

On April 14, 2025, KICO entered into an agreement to offer a quote for a replacement policy to selected homeowners policyholders in Downstate New York as one of our competitors pivoted focus away from admitted personal lines business (the "Withdrawal Plan"). The Withdrawal Plan, which includes this transaction, has been approved by the New York State Department of Financial Services ("DFS"). This competitor wrote approximately $70 million in written premium. The Withdrawal Plan has enabled KICO to work with new distribution partners to further increase its footprint in Downstate New York by offering an alternative policy to selected homeowners policyholders with effective dates that started in late third quarter of 2025. This transaction is being handled in a similar manner to the paragraph above, except that we are streamlining the process by providing a quote for eligible policyholders to our producers.

Current wording

On April 14, 2025, KICO entered into an agreement to offer a quote for a replacement policy to selected homeowners policyholders in Downstate New York as one of our competitors pivoted focus away from admitted personal lines business (the "Withdrawal Plan"). The Withdrawal Plan, which included this transaction, was approved by the New York State Department of Financial Services ("DFS"). This competitor wrote approximately $70 million in written premium. The Withdrawal Plan has enabled KICO to work with new distribution partners to further increase its footprint in Downstate New York by offering an alternative policy to selected homeowners policyholders with effective dates that started in late third quarter of 2025. This transaction was handled in a similar manner to the paragraph above, except that we streamlined the process by providing a quote for eligible policyholders to our producers.

Previous wording

Relative to geographic expansion, we have conducted a thorough study of selected geographies and states with the help of industry-leading third-party advisors and overlaid important lessons learned from our past challenges to ensure that we do not face such challenges again. We plan to pursue prudent growth at a measured pace in our chosen new states, testing and validating rate adequacy commensurate with risk factors in the new geographies. Under our current plan we went live in California in June 2026, and expect to go live in Connecticut in the second half of 2026.

Current wording

Relative to geographic expansion, we have conducted a thorough study of selected geographies and states with the help of industry-leading third-party advisors and overlaid important lessons learned from our past challenges to ensure that we do not face such challenges again. We plan to pursue prudent growth at a measured pace in our chosen new states, testing and validating rate adequacy commensurate with risk factors in the new geographies. KICO began writing business in California in June 2026 on a non-admitted basis and KAIC began writing business in Connecticut on an admitted basis in September 2026.

Previous wording

Net loss ratio: The net loss ratio is a GAAP measure of the underwriting profitability of an insurance company’s business. Expressed as a percentage, this is the ratio of net losses and LAE incurred to net premiums earned.

Current wording

Net loss ratio: The net loss ratio is a GAAP measure of the underwriting profitability of an insurance company’s business. Expressed as a percentage, this is the ratio of net losses and loss adjustment expenses ("LAE") incurred to net premiums earned.

Previous wording

Direct premiums written, net premiums written: Direct premiums written is a non-GAAP measure, which represent the total premiums charged on policies issued by an insurance company during the respective fiscal period. Net premiums written is a non-GAAP measure, which are direct premiums written less premiums ceded to reinsurers. Net premiums earned, the GAAP measure most comparable to direct premiums written and net premiums written, are net premiums written that are pro-rata earned during the fiscal period presented. All of our policies are written for a twelve-month period. Management uses direct premiums written and net premiums written, along with other measures, to gauge our performance and evaluate results. Direct premiums written and net premiums written are provided as supplemental information, not as a substitute for net premiums earned, and do not reflect the Company’s net premiums earned.

Current wording

Direct premiums written, net premiums written: Direct premiums written is a non-GAAP measure, which represent the total premiums charged on policies issued by an insurance company during the respective fiscal period. Net premiums written is a non-GAAP measure, which are direct premiums written less premiums ceded to reinsurers. Net premiums earned, the GAAP measure most comparable to direct premiums written and net premiums written, are net premiums written that are pro-rata earned during the fiscal period presented. All of our policies are written for a twelve-month period. Management uses direct premiums written and net premiums written, along with other measures, to gauge our performance and evaluate results. Direct premiums written and net premiums written are provided as supplemental information, not as a substitute for net premiums earned, and do not reflect our net premiums earned.

Previous wording

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

Current wording

Three and Nine Months Ended September 30, 2026 Compared to Three and Nine Months Ended September 30, 2025

Previous wording

The following table summarizes the changes in the results of our operations (in thousands) for the periods indicated:

Current wording

The following table summarizes the changes in the results of our operations (in thousands) for the three months ended September 30, 2026 (“Three Months of 2026”) and nine months ended September 30, 2026 (“Nine Months of 2026”) compared to the three months ended September 30, 2025 (“Three Months of 2025”) and nine months ended September 30, 2025 (“Nine Months of 2025"):

Previous wording

(2)For the three months ended June 30, 2025, our personal lines business was subject to a 16% quota share treaty, expiring on January 1, 2026. Effective January 1, 2026, we entered into a 5% personal lines quota share treaty, under a cutoff basis.

Current wording

1 For the Three Months of 2025 and Nine Months of 2025, our personal lines business was subject to a 16% quota share treaty, expiring on January 1, 2026. Effective January 1, 2026, we entered into a 5% personal lines quota share treaty, under a cutoff basis.

Previous wording

(3)The three months ended June 30, 2026 and 2025 include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO). PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers.

Current wording

2 For the Three Months and Nine Months of 2026 and 2025, loss and loss adjustment expenses include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services ("PCS") unit of the Insurance Services Office ("ISO"). PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers.

Previous wording

The following table reconciles GAAP net premiums earned to net premiums written and direct premiums written for the periods presented:

Current wording

The following table reconciles GAAP net premiums earned to net premiums written 1 and to direct premiums written 1 for the periods presented:

Previous wording

Net premiums written increased $15,578,000, or 29.8%, to $67,789,000 in Three Months of 2026 from $52,211,000 in Three Months of 2025. Net written premiums represent direct premiums written, less the amount of written premiums ceded under our reinsurance treaties (quota share, excess of loss, and catastrophe). The increase in Three Months of 2026 is primarily due to changes to our personal lines quota share reinsurance treaty resulting in an increase in retention, the additional premiums due to organic growth, and an increase in average premiums, primarily from an increase in replacement costs, See quota share reinsurance treaties discussion below.

Current wording

Net premiums written increased $12.5 million, or 39.4%, to $44.1 million in the Three Months of 2026 from $31.6 million in the Three Months of 2025. Net premiums written increased $44.6 million, or 30.8%, to $189.5 million in the Nine Months of 2026 from $144.9 million in the Nine Months of 2025. Net premiums written represent direct premiums written, less the amount of written premiums ceded under our reinsurance treaties (quota share, excess of loss, and catastrophe). The increase in both periods was primarily due to changes to our personal lines quota share reinsurance treaty resulting in an increase in retention, the additional premiums due to organic growth, and an increase in average renewal premiums primarily from an increase in replacement costs. See quota share reinsurance treaties discussion below.

Previous wording

Effective January 1, 2025, we entered into a 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”). Upon expiration of the 2025/2026 Treaty on January 1, 2026, we entered into a new 5% quota share reinsurance treaty for our personal lines business written in all states except California (for which we entered into a new 30% quota share reinsurance treaty) covering the period from January 1, 2026 through January 1, 2027 (“2026/2027 Treaty”). Our personal lines business was subject to the 2026/2027 Treaty in the Three Months of 2026, and the 2025/2026 Treaty in the Three Months of 2025. In the Three Months of 2026, our premiums ceded under quota share treaties decreased by $4,609,000 in comparison to premiums ceded under quota share treaties in the Three Months of 2025 (see table above). The decrease in the Three Months of 2026 was attributable to the decrease in the quota share ceding percentage rate, offset by an increase in direct written premiums subject to the 2026/2027 Treaty compared to direct premiums written subject to the 2025/2026 Treaty.

Current wording

Effective January 1, 2025, we entered into a 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”). Upon expiration of the 2025/2026 Treaty on January 1, 2026, we entered into a new 5% quota share reinsurance treaty for our personal lines business written in all states except California (for which we entered into a new 30% quota share reinsurance treaty) covering the period from January 1, 2026 through January 1, 2027 (“2026/2027 Treaty”). Our personal lines business was subject to the 2026/2027 Treaty in the Three Months and Nine Months of 2026, and the 2025/2026 Treaty in the Three Months and Nine Months of 2025. In the Three Months of 2026, our premiums ceded under quota share treaties decreased by $5.9 million in comparison to premiums ceded under quota share treaties in the Three Months of 2025 (see table above). In the Nine Months of 2026, our premiums ceded under quota share treaties decreased by $16.7 million in comparison to premiums ceded under quota share treaties in the Nine Months of 2025 (see table above). The decrease in both periods was attributable to the decrease in the quota share ceding percentage rate, offset by an increase in direct written premiums subject to the 2026/2027 Treaty compared to direct premiums written subject to the 2025/2026 Treaty. The inception of the 2026/2027 Treaty was recorded as a cutoff, resulting in the return of $13.3 million from reinsurers to us of previously ceded premiums written that were unearned as of January 1, 2026. The inception of the 2025/2026 Treaty was recorded as a cutoff, resulting in the return of $11.5 million from reinsurers to us of previously ceded premiums written that were unearned as of January 1, 2025.

Previous wording

In the Three Months of 2026, our ceded excess of loss reinsurance premiums increased $138,000 compared to the ceded excess of loss premiums for Three Months 2025. Effective January 1, 2025, we renewed an underlying excess of loss reinsurance treaty (the “Underlying XOL Treaty”) covering the period from January 1, 2025 through June 30, 2025. The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the Underlying XOL Treaty. Effective July 1, 2025, the Underlying XOL Treaty was renewed along with our excess of loss reinsurance treaty covering the period from July 1, 2025 through June 30, 2026. Combined, the renewed treaties provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. Retention was increased to $825,000 from $715,000 under the 2025/2026 Treaty.

Current wording

In the Three Months of 2026, our ceded excess of loss reinsurance premiums increased $1.3 million compared to the ceded excess of loss premiums for Three Months of 2025. In the Nine Months of 2026, our ceded excess of loss reinsurance premiums increased $1.6 million compared to the ceded excess of loss premiums for the Nine Months of 2025. Effective January 1, 2025, we renewed an underlying excess of loss reinsurance treaty (the “Underlying XOL Treaty”) covering the period from January 1, 2025 through June 30, 2025. The Underlying XOL Treaty provided 50% reinsurance coverage for losses and LAE of $0.4 million in excess of $0.6 million. Losses from named storms were excluded from the Underlying XOL Treaty. Effective July 1, 2025, the Underlying XOL Treaty was renewed along with our excess of loss reinsurance treaty covering the period from July 1, 2025 through June 30, 2026. Combined, the renewed treaties provide 50% reinsurance coverage for losses of $0.3 million in excess of $0.8 million, and 100% reinsurance coverage for losses in excess of $1.0 million up to $9.0 million together with facultative coverage. Retention was increased to $0.8 million from $0.7 million under the 2025/2026 Treaty. Effective July 1, 2026, the Underlying XOL Treaty was renewed along with our excess of loss reinsurance treaty covering the period from July 1, 2026 through June 30, 2027 ("2026/2027 XOL Treaties"). Combined, the renewed 2026/2027 XOL Treaties provide 50% reinsurance coverage for losses of $250 thousand in excess of $750 thousand, and 100% reinsurance coverage for losses in excess of $1.0 million up to $11.0 million together with facultative coverage.

Previous wording

Most of the premiums written under our personal lines policies are also subject to our catastrophe reinsurance treaties. An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase. An increase in our personal lines business historically resulted in an increase in premiums ceded under our catastrophe treaties if reinsurance rates were stable or were increasing. With regard to treaties entered into on July 1, 2025 ("2025/2026 Catastrophe Treaty") and 2024 ("2024/2025 Catastrophe Treaty"), we recorded our catastrophe premiums written for the entire treaty period covering July 1 through June 30, resulting in the entire annual premium written being recorded in the third quarter of 2025 and 2024, respectively. The 2025/2026 Catastrophe Treaty covers 80% of losses on the first layer of 5,000,000 in excess of $5,000,000 (catastrophe coverage of $4,000,000), and losses of $440,000,000 in excess of $10,000,000 (catastrophe coverage of $430,000,000), for a total catastrophe coverage of $434,000,000. The 2024/2025 Catastrophe Treaty covered 95% of losses on the first layer of $5,000,000 in excess of $5,000,000 (catastrophe coverage of $4,750,000), and losses of $280,000,000 in excess of $10,000,000 (catastrophe coverage of $270,000,000), for a total catastrophe coverage of $274,750,000. Catastrophe coverage under the 2025/2026 Catastrophe Treaty increased by $159,250,000 compared to the 2024/2025 Catastrophe Treaty. As a result of recording the entire annual catastrophe premiums at the inception of the treaties, catastrophe premiums in subsequent quarters would be due to premium adjustments. In the Three Months of 2026, our premiums ceded under our catastrophe treaties was negative$80,000 in comparison to negative$406,000 ceded under catastrophe treaties in the Three Months of 2025 (see table above). The negative premiums in the Three Months of 2026 was due to reinstatement premiums related to winter catastrophe losses. The negative premiums in the Three Months of 2025 was due to a no loss bonus from one of our reinsurers.

Current wording

Most of the premiums written under our personal lines policies are also subject to our catastrophe reinsurance treaties. An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase. An increase in our personal lines business historically resulted in an increase in premiums ceded under our catastrophe treaties if reinsurance rates were stable or were increasing. With regard to treaties entered into on July 1, 2025 ("2025/2026 Catastrophe Treaty") and 2024 ("2024/2025 Catastrophe Treaty"), we recorded our catastrophe premiums written for the entire treaty period covering July 1 through June 30, resulting in the entire annual premium written being recorded in the third quarter of 2025 and 2024, respectively. The 2025/2026 Catastrophe Treaty covers 80% of losses on the first layer of $5.0 million in excess of $5.0 million (catastrophe coverage of $4.0 million), and losses of $430.0 million in excess of $10.0 million (catastrophe coverage of $430.0 million), for a total catastrophe coverage of $434.0 million. The 2024/2025 Catastrophe Treaty covered 95% of losses on the first layer of $5.0 million in excess of $5.0 million (catastrophe coverage of $4.8 million), and losses of $270.0 million in excess of $10.0 million (catastrophe coverage of $270.0 million), for a total catastrophe coverage of $274.8 million. Catastrophe coverage under the 2025/2026 Catastrophe Treaty increased by $159.2 million compared to the 2024/2025 Catastrophe Treaty. Effective July 1, 2026, we purchased $495.0 million of catastrophe reinsurance in excess of $5.0 million, compared to $435.0 million of catastrophe reinsurance in excess of $5.0 million in the expiring treaty. As a result of recording the entire annual catastrophe premiums at the inception of the treaties, catastrophe premiums in subsequent quarters would be due to premium adjustments. In the Three Months of 2026, our premiums ceded under our catastrophe treaties was $36.3 million in comparison to $33.1 million ceded under catastrophe treaties in the Three Months of 2025 (see table above). In the Nine Months of 2026, our premiums ceded under our catastrophe treaties was $37.0 million in comparison to $32.7 million ceded under catastrophe treaties in the Nine Months of 2025 (see table above).

Previous wording

Net premiums earned increased $14,252,000, or 30.8%, to $60,467,000 in Three Months of 2026 from $46,215,000 in Three Months of 2025. The increase was due to an increase in retention related to the 11 percentage point reduction in quota share rates discussed above, and the increase in premiums from organic growth, partially offset by an increase in catastrophe premiums due to the increase in catastrophe coverage reflected in ceded catastrophe premiums earned.

Current wording

Net premiums earned increased $14.5 million, or 30.2%, to $62.4 million in the Three Months of 2026 from $47.9 million in the Three Months of 2025. Net premiums earned increased $41.1 million, or 29.8%, to $178.7 million in the Nine Months of 2026 from $137.7 million in the Nine Months of 2025. The increase in both periods was due an increase in retention related to the 11 percentage point reduction in quota share rates discussed above, and the increase in direct premiums written, partially offset by an increase in catastrophe premiums due to the increase in catastrophe coverage reflected in ceded catastrophe premiums earned.

Previous wording

Ceding commission revenue was $1,533,000 in Three Months of 2026 compared to $3,081,000 in Three Months of 2025. The decrease of $1,548,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.

Current wording

Ceding commission revenue was $1.7 million in the Three Months of 2026 compared to $4.9 million in Three Months of 2025. Ceding commission revenue was $4.7 million in the Nine Months of 2026 compared to $10.9 million in the Nine Months of 2025. The decrease of $3.2 million and $6.3 million, respectively, is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.

Previous wording

In Three Months of 2026, we earned provisional ceding commissions of $1,352,000 from personal lines earned premiums ceded under the 2026/2027 Treaty, and in Three Months of 2025, we earned provisional ceding commissions of $3,388,000 from personal lines earned premiums ceded under the 2025/2026 Treaty. The decrease of $2,036,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during the Three Months of 2026 compared to the Three Months of 2025, offset by an increase in ceding commission rates under the 2026/2027 Treaty.

Current wording

In the Three Months of 2026, we earned provisional ceding commissions of $1.4 million from personal lines earned premiums ceded under the 2026/2027 Treaty, and in the Three Months of 2025, we earned provisional ceding commissions of $3.6 million from personal lines earned premiums ceded under the 2025/2026 Treaty. In the Nine Months of 2026, we earned provisional ceding commissions of $4.1 million from personal lines earned premiums ceded under the 2026/2027 Treaty, and in the Nine Months of 2025, we earned provisional ceding commissions of $10.2 million from personal lines earned premiums ceded under the 2025/2026 Treaty. The decrease of $2.1 million and $6.1 million, respectively, in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties in the Three Months and Nine Months of 2026 and 2025, offset by an increase in ceding commission rates under the 2026/2027 Treaty.

Previous wording

Net investment income was $6,766,000 in the Six Months of 2026 compared to $4,349,000 in the Six Months of 2025, an increase of $2,417,000, or 55.6%, primarily due to an increase in cash generated from operations invested in fixed-income securities and an increase in average yield on non-cash invested assets. The average yield on non-cash invested assets was 4.4% as of June 30, 2026 compared to 4.0% as of June 30, 2025.

Current wording

Net investment income was $3.8 million in the Three Months of 2026 compared to $2.5 million in the Three Months of 2025, an increase of $1.3 million, or 50.3%. Net investment income was $10.5 million in the Nine Months of 2026 compared to $6.8 million in the Nine Months of 2025, an increase of $3.7 million, or 53.7%. The increase in both periods was primarily due to an increase in cash generated from operations invested in fixed-income securities and an increase in average yields on invested assets. The average yield on invested assets was 4.6% as of September 30, 2026 compared to 4.0% as of September 30, 2025.

Previous wording

Cash and invested assets were $350,981,000 as of June 30, 2026 compared to $273,550,000 as of June 30, 2025, an increase of $77,431,000, primarily driven by cash flows from operations.

Current wording

Cash and invested assets were $357.8 million as of September 30, 2026 compared to $300.8 million as of September 30, 2025, an increase of $57.1 million, primarily driven by cash flows from operations.

Previous wording

Net losses on investments were $775,000 in the Six Months of 2026 compared to net gains on investments of $408,000 in the Six Months of 2025. Unrealized losses on our equity securities and other investments in the Six Months of 2026 were $570,000, compared to unrealized gains on our equity securities and other investments of $414,000 in the Six Months of 2025. Net realized losses on sales of investments were $205,000 in the Six Months of 2026 compared to net realized losses on sales of investments of $6,000 in the Six Months of 2025.

Current wording

Net losses on investments were $0.6 million in the Three Months of 2026 compared to net gains of $0.2 million in the Three Months of 2025. Net losses on investments were $1.3 million in the Nine Months of 2026 compared to net gains on investments of $0.6 million in the Nine Months of 2025. The change from net gains to net losses on investments in both periods was driven by an increase in unrealized losses on equity securities and other investments. Unrealized losses on our equity securities and other investments in the Three Months of 2026 were $0.5 million, compared to unrealized gains of $0.2 million in the Three Months of 2025. Unrealized losses on our equity securities and other investments in the Nine Months of 2026 were $1.1 million, compared to unrealized gains on our equity securities and other investments of $0.6 million in the Nine Months of 2025. .

Previous wording

Gain on sale of real estate was $0 in the Six Months of 2026 compared to $1,966,000 in the Six Months of 2025. On March 19, 2025 one of our subsidiaries closed on the sale of our headquarters building in Kingston, New York, along with an adjacent mixed-use property (collectively, the “Property”). The purchase price for the Property was $3,600,000. We are now renting a smaller facility in Kingston, New York.

Current wording

Gain on sale of real estate was $0 in the Nine Months of 2026 compared to $2.0 million in the Nine Months of 2025. On March 19, 2025 one of our subsidiaries closed on the sale of our headquarters building in Kingston, New York, along with an adjacent mixed-use property (collectively, the “Property”). The purchase price for the Property was $3.6 million. We are now renting a smaller facility in Kingston, New York.

Previous wording

Loss and Loss Adjustment Expense Reserves

Current wording

The following table reconciles the GAAP loss and loss adjustment expense to underlying losses 1 for the periods presented:

Previous wording

For the Three Months of 2026, the underlying loss ratio (loss ratio excluding the impact of catastrophes and prior year development) was higher than for the Three Months of 2025. The underlying loss ratio(1) was 43.1% for the Three Months of 2026, an increase of 4.4 points from the 38.7% for the Three Months of 2025. Overall personal lines non-catastrophe severity for the Three Months of 2026 was higher than for the Three Months of 2025, but the increase was partially offset by higher average premium. Overall personal lines non-catastrophe frequency for the Three Months of 2026 was higher than the same period in 2025 but lower than the long-term average.

Current wording

The underlying loss ratio was 33.5% for the Three Months of 2026, a decrease of 10.6 points from the 44.1% underlying loss ratio recorded for the Three Months of 2025. The lower underlying loss ratio was mainly driven by better loss settlement due to improvements in claims operations. Overall personal lines non-catastrophe frequency for the Three Months of 2026 was also slightly lower than both for the Three Months of 2025 and the long-term average. The underlying loss ratio was 44.5% for the Nine Months of 2026, a decrease of 3.5 points from the 48.0% underlying loss ratio recorded for Nine Months of 2025. The lower underlying loss ratio was mainly driven by better loss settlement due to improvements in claims operations. Overall personal lines non-catastrophe frequency for Nine Months of 2026 was in line with the Nine Months of 2025 and lower than the long-term average.

Previous wording

There were four newly designated catastrophe events for the Three Months of 2026, none of which had a significant impact on the net loss ratio, and development on events from first quarter of 2026 was favorable. The estimated total net catastrophe impact for the Three Months of 2026 was $(493,000), which contributed -0.8 points to the net loss ratio. By comparison, the impact to the net loss ratio from catastrophes for the Three Months of 2025 was 0.6 points.

Current wording

For the Three Months of 2026, there were nine newly designated catastrophe events which had a moderate impact on the net loss ratio, and development on events from prior quarters was favorable. Of the nine events, only two had a meaningful impact, including the nor’easter at the end of September. The estimated total net catastrophe impact for the Three Months of 2026 was $4.7 million, which contributed 7.5 points to the net loss ratio. By comparison, the catastrophe impact for the Three Months of 2025 was 0.2 points. For the Nine Months of 2026, there were twenty-four newly designated catastrophe events, including several large winter storm events in January and February. The estimated total net catastrophe impact for the Nine Months of 2026 was $18.7 million, which contributed 10.4 points to the net loss ratio. By comparison, the catastrophe impact for the Nine Months of 2025 was 0.8 points.

Previous wording

Commission expense was $11,573,000 in the Three Months of 2026 or 15.7% of direct earned premiums. Commission expense was $10,630,000 in the Three Months 2025 or 16.9% of direct earned premiums. The increase of $943,000 was primarily due to an increase in direct earned premiums of $10,478,000, offset by a decrease of $470,000 in the Three Months of 2026 compared to the Three Months of 2025 for an accrual of estimated contingent commission based on the profitability of the business.

Current wording

Commission expense was $12.2 million in the Three Months of 2026 compared to $10.3 million in the Three Months of 2025. The increase of $1.9 million was primarily due to an increase in direct earned premiums and an increase of $0.4 million for an accrual of estimated contingent commission based on the profitability of the business. Commission expense was $34.0 million in the Nine Months of 2026 compared to $30.3 million in the Nine Months of 2025. The increase of $3.7 million in the Nine Months of 2026 compared to the Nine Months of 2025 was primarily due to an increase in direct earned premiums, partially offset by a decrease of $0.4 million for an accrual of estimated contingent commission based on the profitability of the business.

Previous wording

Other underwriting expenses were $8,655,000, or 11.8% of direct earned premiums, in the Three Months of 2026 compared to $7,727,000, or 12.3% of direct earned premiums, in the Three Months of 2025. The increase of $928,000, or 12.0%, was primarily due to increases in salaries and employment costs as described below, an increase in underwriting fees due to growth and an increase in premium taxes due to the increase in direct earned premiums, and an increase in DFS regulatory fees.

Current wording

Other underwriting expenses were $8.9 million in the Three Months of 2026 compared to $8.4 million in the Three Months of 2025. The increase of $0.5 million, or 6.5%, was primarily due to increases in salaries and employment costs, underwriting fees, premium taxes, IT expenses, and Department of Financial Services ("DFS") regulatory fees. Other underwriting expenses were $25.9 million in the Nine Months of 2026 compared to $23.5 million in the Nine Months of 2025. The increase of $2.4 million, or 10.3%, was primarily due to increases in salaries and employment costs, an increase in premium taxes, an increase in IT expenses, and an increase in DFS regulatory fees.

Previous wording

Our net underwriting expense ratio in the Three Months of 2026 was 30.6% compared to 32.7% in the Three Months of 2025. The following table shows the individual components of our net underwriting expense ratio for the periods indicated:

Current wording

Our net underwriting expense ratio in the Three Months of 2026 was 30.7% compared to 28.4% in the Three Months of 2025. Our net underwriting expense ratio in the Nine Months of 2026 was 30.6%, compared with 30.8% in the Nine Months of 2025 as the Company continues to benefit from economies of scale and continued diligent expense management.

Previous wording

The increase in the Six Months of 2026 of $1,434,000, or 65.5%, as compared to the Six Months of 2025 was primarily due to an increase in equity compensation and professional fees, partially offset by a decrease in loss on extinguishment of debt. The increase in equity compensation is due to additional restricted stock awards granted to our senior leadership team as of December 31, 2025 pursuant to our employee bonus plan, and to our CEO and CFO pursuant to their respective employment agreements. The increase in professional fees is due to legal fees incurred related to board level projects and additional accounting expenses incurred related to our new requirement for the audit of our internal control over financial reporting. The reduction in loss on extinguishment of debt loss is due to writing off the balance of unamortized debt issue costs upon the prepayment of the 2024 Notes in the Six Months of 2025 as disclosed in Note 7 to the condensed consolidated financial statements.

Current wording

Other operating expenses were $1.5 million for the Three Months of 2026 compared to $1.3 million for the Three Months of 2025. The increase in the Three Months of 2026 as compared to the Three Months of 2025 was primarily due to an increase in equity compensation. Other operating expenses were $5.1 million for the Nine Months of 2026 compared to $3.5 million for the Nine Months of 2025. The increase in the Nine Months of 2026 of $1.6 million, or 45.2%, as compared to the Nine Months of 2025 was primarily due to an increase in equity compensation and professional fees, partially offset by a decrease in loss on extinguishment of debt. The increase in equity compensation in both periods was due to additional restricted stock awards granted to our senior leadership team as of December 31, 2025 pursuant to our employee bonus plan, and to our CEO and CFO pursuant to their respective employment agreements. In the Nine Months of 2026, the increase in professional fees was due to legal fees incurred related to board level projects and additional accounting expenses incurred related to our new requirement for the audit of our internal control over financial reporting. The reduction in loss on extinguishment of debt loss was due to writing off the balance of unamortized debt issue costs upon the prepayment of the 2024 Notes in the Nine Months of 2025 as disclosed in Note 7 to the condensed consolidated financial statements.

Previous wording

Depreciation and amortization was $761,000 in the Three Months of 2026 compared to $613,000 in the Three Months of 2025. The increase of $148,000, or 24.1%, in depreciation and amortization was primarily due to the difference between additional depreciation on software acquired compared to software being fully depreciated.

Current wording

Depreciation and amortization was $0.8 million in the Three Months of 2026 compared to $0.6 million in the Three Months of 2025. Depreciation and amortization was $2.3 million in the Nine Months of 2026 compared to $1.9 million in the Nine Months of 2025. The increase in depreciation and amortization of $0.2 million, or 25.0%, in the Three Months of 2026 and $0.4 million, or 21.3%, in Nine Months of 2026 was primarily due to the difference between additional depreciation on software acquired compared to software being fully depreciated.

Previous wording

Interest expense in the Six Months of 2026 was $129,000 compared to $305,000 in the Six Months of 2025, a decrease of $176,000 or 57.7%. In the Six Months of 2025, as disclosed in Note 7 to the condensed consolidated financial statements, we incurred interest expense in connection with the 2024 Notes which were paid off in the first quarter of 2025. In addition, we also incurred interest expense on the 2022 equipment financing.

Current wording

Interest expense in the Three Months of 2026 was $54 thousand compared to $73 thousand in the Three Months of 2025. Interest expense from both periods is from the 2022 equipment financing. Interest expense in the Nine Months of 2026 was $183 thousand compared to $377 thousand in the Nine Months of 2025. In the Nine Months of 2025, as disclosed in Note 7 to the condensed consolidated financial statements, we incurred interest expense in connection with the 2024 Notes which were paid off in the first quarter of 2025 in addition to the interest expense incurred on the 2022 equipment financing.

Previous wording

Income tax expense in the Six Months of 2026 was $2,449,000, which resulted in an effective tax rate of 20.2%. Income tax expense in the Six Months of 2025 was $3,750,000, which resulted in an effective tax rate of 19.9%. The difference in effective tax rate is due to the effect of permanent differences in the Six Months of 2026 compared to the Six Months of 2025. In the Six Months of 2026, the vesting of restricted stock awards and exercise of stock options resulted in an income tax benefit, due to the increase in the stock price on the vesting date and exercise date as compared to the grant date, which had the effect of reducing the effective tax rate. In the Six Months of 2025, the vesting of restricted stock awards and exercise of stock options resulted in an income tax benefit, due to the increase in the stock price on the vesting date and exercise date as compared to the grant date, which had the effect of reducing the effective tax rate. In the Six Months of 2026, the increase in stock price was not as great as the increase in the Six Months of 2025 on the vesting of restricted stock awards, resulting in a lower tax benefit, which had the effect of increasing the effective tax rate when compared to the prior year.

Current wording

Income tax expense in the Three Months of 2026 was $4.7 million, which resulted in an effective tax rate of 21.2%. Income tax expense in the Three Months of 2025 was $2.8 million, which resulted in an effective tax rate of 20.7%. The difference in the effective tax rate is due to the effect of permanent differences in the Three Months of 2026 compared to the Three Months of 2025. Income tax expense in the Nine Months of 2026 was $7.2 million, which resulted in an effective tax rate of 20.8%. Income tax expense in the Nine Months of 2025 was $6.6 million, which resulted in an effective tax rate of 20.2%. The difference in effective tax rate is due to the effect of permanent differences in the Nine Months of 2026 compared to the Nine Months of 2025. In the Nine Months of 2026, the vesting of restricted stock awards and exercise of stock options resulted in an income tax benefit, due to the increase in the stock price on the vesting date and exercise date as compared to the grant date, which had the effect of reducing the effective tax rate. In the Nine Months of 2025, the vesting of restricted stock awards and exercise of stock options resulted in an income tax benefit, due to the increase in the stock price on the vesting date and exercise date as compared to the grant date, which had the effect of reducing the effective tax rate. In the Nine Months of 2026, the increase in stock price was not as great as the increase in the Nine Months of 2025 on the vesting of restricted stock awards, resulting in a lower tax benefit, which had the effect of increasing the effective tax rate when compared to the prior year.

Previous wording

The following table presents a breakdown of the amortized cost, estimated fair value, and gross unrealized gains and losses of our investments in fixed-maturity securities classified as available-for-sale for which an allowance for credit loss has not been recorded, as of June 30, 2026 and December 31, 2025:

Current wording

The following table presents a breakdown of the amortized cost, allowance for credit losses, estimated fair value, and gross unrealized gains and losses on our available-for-sale fixed-maturity securities, including those classified as short-term investments as of September 30, 2026 and December 31, 2025: