UNIVERSAL INSURANCE HOLDINGS, INC.

Previous wording

We are a vertically integrated holding company offering property and casualty insurance and value-added insurance services. In addition, we generate revenue from our investment portfolio, reinsurance brokerage services, the receipt of managing general agency fees from policy holders and from other sources of revenue (collectively “Other Revenue Sources”). We develop, market and underwrite insurance products for consumers predominantly in the personal residential homeowners’ line of business and perform substantially all insurance-related services for our insurance entities, including risk management, claims management, and distribution. Our insurance entities, Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC” and together with UPCIC, the “Insurance Entities”), offer insurance products through both an appointed independent agent network and our online distribution channels across 19 states with Florida representing 73.7% of our direct premiums written for the three months ended March 31, 2025. We seek to produce an underwriting profit (defined as earned premiums-net minus losses, loss adjustment expense (“LAE”), policy acquisition costs and other operating costs) over the long term, along with growing our Other Revenue Sources.

Current wording

We are a vertically integrated holding company offering property and casualty insurance and value-added insurance services. In addition, we generate revenue from our investment portfolio, reinsurance brokerage services, the receipt of managing general agency fees from policy holders and from other sources of revenue (collectively “Other Revenue Sources”). We develop, market and underwrite insurance products for consumers predominantly in the personal residential homeowners’ line of business and perform substantially all insurance-related services for our insurance entities, including risk management, claims management, and distribution. Our insurance entities, Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC” and together with UPCIC, the “Insurance Entities”), offer insurance products through both an appointed independent agent network and our online distribution channels across 19 states with Florida representing 74.6% of our direct premiums written for the six months ended June 30, 2025. We seek to produce an underwriting profit (defined as earned premiums-net minus losses, loss adjustment expense (“LAE”), policy acquisition costs and other operating costs) over the long term, along with growing our Other Revenue Sources.

Previous wording

The following Management’s Discussion and Analysis (“MD&A”) is intended to assist in an understanding of our financial condition and results of operations. This MD&A should be read in conjunction with our Financial Statements and accompanying Notes appearing elsewhere in this Report (the “Notes”). In addition, reference should be made to our audited Condensed Consolidated Financial Statements and accompanying Notes to Condensed Consolidated Financial Statements and“Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024. Except for the historical information contained herein, the discussions in this MD&A contain forward-looking statements that involve risks and uncertainties. Our future results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed above under“—Cautionary Note Regarding Forward-Looking Statements.”

Current wording

The following Management’s Discussion and Analysis (“MD&A”) is intended to assist in an understanding of our financial condition and results of operations. This MD&A should be read in conjunction with our Financial Statements and accompanying Notes appearing elsewhere in this Report (the “Notes”). In addition, reference should be made to our audited Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements and“Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024. Except for the historical information contained herein, the discussions in this MD&A contain forward-looking statements that involve risks and uncertainties. Our future results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed above under“—Cautionary Note Regarding Forward-Looking Statements.”

Previous wording

We seek to achieve long-term rate adequacy and earnings for the Insurance Entities while managing our risks through market cycles and looking to take advantage of what we believe to be market opportunities. The Florida personal lines homeowners’ market in recent years has operated under distressed conditions wherein insurance companies’ major costs items, such as losses, LAE and reinsurance, significantly increased and led to insurance companies’ striving to recover or mitigate these costs through rate and underwriting action. Even as we took these steps and increased our estimates of expected losses, in recent years we have recorded adverse claim development on prior years’ loss reserves to address the impacts of Florida’s market disruptions on claim cost trends.

Current wording

We seek to achieve long-term rate adequacy and earnings for the Insurance Entities while managing our risks through market cycles and looking to take advantage of what we believe to be market opportunities. Prior to significant statutory reforms adopted in December 2022, the Florida personal lines residential insurance market experienced distressed conditions wherein insurance companies’ major costs items, such as losses, LAE and reinsurance, increased and led to rising premiums and reduced product availability for consumers. In addition to taking steps to adjust rate levels, manage exposures and refine our prospective outlook of expected losses, we recorded adverse claim development on prior years’ loss reserves to address the impacts of Florida’s market disruptions on claim cost trends.

Previous wording

As a result of market conditions in Florida, personal residential insurance premiums have risen significantly, many insurers have reduced coverages, and underwriting standards have tightened. Due to these conditions and factors more generally affecting the U.S. and global reinsurance markets, reinsurance for Florida property insurance risk also has been subject to increases in pricing and less favorable terms in recent years. These market forces combined to decrease insurance availability among admitted insurers, and consequently to increase the policy count of Citizens. Although Citizens was created to be the “market of last resort” or residual property insurance market in Florida, its rate increases are limited by law, resulting in its policies typically being priced lower than admitted market policies. This causes Citizens, for many policy types and areas of Florida, to become viewed as a desirable lower-cost alternative to the admitted market. Even as the Florida market stabilizes and shows signs of improvement, the difference between Citizens’ rates and those of the admitted market, which have accumulated over several years, can delay the ability of admitted market insurers to be an effective alternative to Citizens for some policy types depending on coverage, location or other characteristics. The Company’s competitive position compared to Citizens, and the competitive position of the admitted market as a whole, might improve over the next several years as Citizens phases-in mandatory flood insurance requirement. Admitted market insurers in Florida are not subject to the same mandate.

Current wording

As insurance availability declined among admitted insurers prior to the statutory reforms, Citizens’ policy count increased from below 500,000 in mid-2020 to more than 1.4 million in 2023. Citizens’ ability to adjust rates is limited by law. Therefore, while Citizens was created to be the residual property insurance market in Florida, in periods of increasing premiums its policies may be priced lower than those in the admitted market. This causes Citizens, for many policy types and areas of Florida, to become viewed as a desirable lower-cost alternative to the admitted market. Even as the Florida market shows signs of improvement, this might continue for several years due to statutory and potential public policy limitations on Citizens’ ability to adjust rates. The Insurance Entities’ competitive position compared to Citizens, and the competitive position of the admitted market as a whole, might improve over the next several years as Citizens’ rate levels continue to adjust, more policies reach Citizens’ maximum limits due to replacement cost increases, and more of Citizens’ policyholders become subject to a statutory requirement to purchase flood insurance.

Previous wording

After several prior efforts at legal reforms that had limited effect, in December 2022 the Florida Legislature enacted substantial law changes intended to mitigate rising claims costs and further premium increases while also enhancing service standards for the benefit of policyholders. These laws required insurers, including the Insurance Entities, to implement faster claims-response standards, increased penalties for non-compliance, enhanced regulatory oversight of insurers’ financial conditions and holding company systems, and added other consumer protections. The reforms also sought to curtail certain claimants’ abusive claims practices against insurance carriers, which contributed substantially to the Florida market’s recent problems. Among the reforms, the Florida Legislature eliminated policyholders’ former one-way statutory right to attorneys’ fees and eliminated the ability of policyholders to assign their insurance benefits to third parties. The Florida Legislature also reduced the post-loss time period for submitting claims to one year as contrasted with prior laws permitting claims to be reported two years or even three years after loss events, which led to extended solicitations of claims by contractors, public adjusters, and attorneys and created challenges for insurers in evaluating the cause and amount of the late-reported claims.

Current wording

Law changes adopted in December 2022 sought to curtail certain claimants’ abusive claims practices against insurance carriers, which contributed substantially to the Florida market’s previous problems. Among the reforms, the Florida Legislature eliminated policyholders’ former one-way statutory right to attorneys’ fees and eliminated the ability of policyholders to assign their insurance benefits to third parties. The Florida Legislature also reduced the post-loss time period for submitting claims to one year as contrasted with prior laws permitting claims to be reported two years or even three years after loss events, which led to extended solicitations of claims by contractors, public adjusters, and attorneys and created challenges for insurers in evaluating the cause and amount of the late-reported claims. These law changes and other related measures have reduced expected loss and loss adjustment expenses for recent exposure periods, which should lead to insurers’ base rate levels flattening and starting to decline. The law changes also enhanced service standards for the benefit of policyholders through faster claims-response requirements, increased penalties for non-compliance, enhanced regulatory oversight of insurers’ financial conditions and holding company systems, and other consumer protections.

Previous wording

The most significant statutory reforms took effect for policies issued after December 16, 2022. Remaining pre-reform claims typically reflect disproportionately high incidences of represented and litigated claims. As a result, losses and LAE associated with these claims remain high, exceeding historical patterns in Florida and in other states. Although the Insurance Entities’ number of remaining claims subject to pre-reform laws continues to decline, it will be several years before all of these claims are settled or brought to an adjudicated conclusion. We are optimistic that the legislative reforms will gradually improve the Florida claims environment as the number of claims associated with the pre-reform era continues to decline and more of the Insurance Entities’ claims benefit from the reforms.

Current wording

Although the Insurance Entities’ number of remaining claims subject to pre-reform laws continues to decline, it will be several years before all of these claims are settled or brought to an adjudicated conclusion. We are optimistic that the legislative reforms will continue to gradually improve the Florida claims environment as claims associated with the pre-reform era continue to be resolved and more of the Insurance Entities’ claims benefit from the reforms.

Previous wording

We seek to achieve long-term rate adequacy for the Insurance Entities. In doing so, we consider many factors influencing the residential property insurance markets in Florida and the other states in which we transact business. Among the factors considered in our ratemaking process, we take into account the recent claims environment, losses, LAE, expenses, and, in Florida, the actual and projected benefits of the statutory reforms. Favorable effects of the reforms led many insurers, including us, to file overall 2024 rates equal to or slightly lower than the prior year's rates. The impact of the reforms varies by territory, as different areas of Florida historically have had different incidences of represented and litigation claims most affected by the reforms. Rate levels also remain subject to broad considerations affecting the economy or insurance industry as a whole, such as inflation affecting labor and materials and litigation financing.

Current wording

The evolving impacts of the reforms are beginning to alter the competitive landscape in the Florida residential property insurance market. Favorable effects of the reforms led many insurers, including us, to file overall average base rates in 2024 equal to or slightly lower than the prior year's rates. The impact of the reforms varies by territory, as different areas of Florida historically have had different incidences of represented and litigation claims most affected by the reforms. Rate levels also remain subject to broad considerations affecting the insurance industry or the economy as a whole, such as inflation affecting labor and materials and litigation financing.

Previous wording

The ultimate benefits of Florida’s statutory reforms are unknown and difficult to predict. The Florida political environment, prevailing sentiment among policymakers or the public, and economic factors beyond insurers’ control may directly or indirectly mitigate the effectiveness of recent reforms. These influences can mask the reforms’ benefits or diminish their perceived effectiveness even when the market shows signs of improvement through moderating rate levels, increased product availability and competition, and reductions in Citizens’ policy count. Over time, these political or external influences can result in policymakers questioning the merits of the reforms, considering proposals to reverse them, or pursuing other law changes or interpretations that could negate improvements in the Florida market and renew concerns with rising costs and reduced availability.

Current wording

The ultimate long-term benefits of Florida’s statutory reforms are unknown and difficult to predict. If future court decisions negatively impact the reforms or other aspects of the residential property insurance business, recent improvements in the market could be moderated or reversed. In addition, the Florida political environment, prevailing sentiment among policymakers or the public, and economic factors beyond insurers’ control may directly or indirectly mitigate the effectiveness of recent reforms. These influences can mask the reforms’ benefits or diminish their perceived effectiveness even when the market shows objective signs of improvement through moderating rate levels, increased product availability and competition, and reductions in Citizens’ policy count. Over time, these political or external influences can result in policymakers questioning the merits of the reforms, considering proposals to reverse them, or pursuing other law changes or interpretations that could negate improvements in the Florida market and renew concerns with rising costs and reduced availability.

Previous wording

Evolving domestic, national or global economic conditions, including the potential impact from tariffs, may affect our business model, particularly by applying inflationary pressure on our costs for settling claims and the rate-making process. Additionally, interest rate uncertainty driven by Federal Reserve actions related to inflationary trends and federal deficits could present further financial challenges. We will continue to monitor our business model and strategy as these events develop.

Current wording

Evolving domestic, national or global economic conditions, including the potential impact from tariffs, also may affect our business model, particularly by applying inflationary pressure on our costs for settling claims and the rate-making process. Additionally, interest rate uncertainty driven by Federal Reserve actions related to inflationary trends and federal deficits could present further financial challenges. We will continue to monitor our business model and strategy as these events develop.

Previous wording

Rate filings rely upon past loss and expense data and take time to develop, file and implement. We therefore can experience significant delays between identifying needed rate adjustments, filing the associated rate changes, and ultimately collecting and earning the resulting increased premiums. Further, the ultimate effectiveness of Florida’s reforms is still unknown and difficult to quantify, especially because future market conditions or claims patterns might differ from recent or past experience. This uncertainty can be compounded by other anticipated changes affecting rating or risk selection, such as FLOIR’s implementation of updated windstorm mitigation discounts. The effects of a revised discount program currently are unknown and difficult to predict both at the individual policy level and at the aggregate level with respect to insurers’ competitive positions. Similarly, the Company evaluates and periodically adjusts its policy forms in response to market factors and competitive considerations. While policy form changes can be beneficial in the Company’s risk management initiatives, like with rate adjustments, we can experience delays between identifying desired changes, filing and gaining regulatory approval of the changes, and implementing the new forms.

Current wording

Our ability to successfully transact business in the Florida market is influenced by regulatory policies and processes in the state. Rate filings largely rely upon past loss and expense data and take time to develop, file and implement. In both rising and declining premium environments, we therefore can experience significant delays between identifying needed rate adjustments, filing the associated rate changes, and ultimately collecting and earning the resulting adjusted premiums. This challenge can be compounded following active hurricane seasons as regulatory directives may preclude filing or implementing rate changes. Further, the ultimate effectiveness of Florida’s reforms is still unknown and difficult to quantify, especially because future market conditions or claims patterns might differ from recent or past experience. This uncertainty can be compounded by other anticipated changes affecting rating or risk selection, such as FLOIR’s anticipated implementation of updated windstorm mitigation discounts. The effects of a revised discount program currently are unknown and difficult to predict both at the individual policy level and at the aggregate level with respect to insurers’ competitive positions. Similarly, the Company evaluates and periodically adjusts its policy forms in response to market factors and competitive considerations. While policy form changes can be beneficial in the Company’s risk management initiatives, like with rate adjustments, we can experience delays between identifying desired changes, filing, and gaining regulatory approval of the changes, and implementing the new forms.

Previous wording

The Company updates its claims-handling procedures over time in response to market trends. The Company has adopted initiatives to adjust and pay straightforward, meritorious claims as promptly as possible to mitigate the adverse impacts that can be seen with claims that remain open for longer periods. The Company also has increasingly used video and other technology to facilitate reviews of damaged property and improve efficiency in the claims process. In addition, we develop in-house expertise to respond to certain types of claims such as water damage claims, represented claims, and large-loss claims. The Company additionally has established significant in-house legal services to address the high volume of litigated or represented claims as cost-effectively as possible, as well as a subrogation unit that seeks to mitigate losses for the benefit of policyholders and the Company when damages are caused by third parties.

Current wording

The Company updates its claims-handling procedures over time in response to market trends. The Company has adopted and continually refines initiatives to adjust and pay straightforward, meritorious claims as promptly as possible to mitigate the adverse impacts that can be seen with claims that remain open for longer periods. The Company also has increasingly used video and other technology to facilitate reviews of damaged property and improve efficiency in the claims process. In addition, we have developed in-house expertise to respond to emerging claims, trends, or specialized types of claims such as water damage claims, represented claims, and large-loss claims. The Company additionally has established significant in-house legal services to address litigated or represented claims as cost-effectively as possible, as well as a subrogation unit that seeks to mitigate losses for the benefit of policyholders and the Company when damages are caused by third parties.

Previous wording

In July 2023, UPCIC filed a 7.5% rate increase on Florida personal residential homeowners’ line of business, effective July 17, 2023, for new business and November 4, 2023, for renewal business. Additionally, in October 2023, UPCIC filed a 4.1% rate increase on Florida personal dwelling-fire lines of business, effective January 15, 2024, for both new and renewal business. Both of these rate increases were implemented under use and file rating laws and subsequently received regulatory approval. In August 2024, UPCIC implemented new homeowners rates for new policies, resulting in an average rate decrease of 1.5% compared to previous rates. Rates for renewal business are being implemented with an effective date of May 17th, 2025.

Current wording

In July 2023, UPCIC filed a 7.5% rate increase on Florida personal residential homeowners’ line of business, effective July 17, 2023, for new business and November 4, 2023, for renewal business. Additionally, in October 2023, UPCIC filed a 4.1% rate increase on Florida personal dwelling-fire lines of business, effective January 15, 2024, for both new and renewal business. In 2024, UPCIC filed a 5.3% rate decrease on Florida personal dwelling-fire lines of business, effective July 30, 2025, for both new and renewal business. These rate changes were implemented under use and file rating laws and subsequently received regulatory approval. In August 2024, UPCIC implemented new homeowners rates for new policies, resulting in an average rate decrease of 1.5% compared to previous rates. Rates for renewal business are being implemented with an effective date of May 17, 2025.

Previous wording

•Alabama: +8.0% effective March 13, 2025 for new business and renewal business

Current wording

•Illinois: +8.0%, effective August 12, 2025, for new business and October 1, 2025, for renewal business

Previous wording

In addition to our key performance indicators and other financial measures presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), management also uses certain non-GAAP financial measures to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that non-GAAP financial measures, which may be defined differently by other companies, help to explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The non-GAAP measures should not be viewed as a substitute for those determined in accordance with GAAP. The calculation of these key financial measures including the reconciliation of non-GAAP measures to the nearest GAAP measure are found below under“―Non-GAAP Financial Measures.”

Current wording

In addition to our key performance indicators and other financial measures presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), management also uses certain non-GAAP financial measures to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that non-GAAP financial measures, which may be defined differently by other companies, help to explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the

Previous wording

Adjusted net income (loss) available to common stockholders ― is a non-GAAP measure that is calculated as GAAP net income (loss) available to common stockholders, less net realized gains (losses) on investments and net changes in unrealized gains (losses) on investments, net of tax. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Current wording

Adjusted net income (loss) available to common stockholders ― is a non-GAAP measure that is calculated as GAAP net income (loss) available to common stockholders, less net realized gains (losses) on investments and net changes in unrealized gains (losses) on equity investments, net of tax. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Previous wording

Adjusted operating income (loss) ― is a non-GAAP measure that is calculated as GAAP operating income (loss), less net realized gains (losses) on investments and net changes in unrealized gains (losses) on investments. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Current wording

Adjusted operating income (loss) ― is a non-GAAP measure that is calculated as GAAP operating income (loss), less net realized gains (losses) on investments and net changes in unrealized gains (losses) on equity investments. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Previous wording

Adjusted return on common equity (Adjusted “ROCE”) ― is a non-GAAP measure that is calculated as actual or annualized adjusted net income available to common stockholders divided by average adjusted common stockholders’ equity, with the denominator excluding current period income statement net realized gains (losses) on investments and net changes in unrealized gains (losses) on investments, net of tax. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Current wording

Adjusted return on common equity (Adjusted “ROCE”) ― is a non-GAAP measure that is calculated as actual or annualized adjusted net income available to common stockholders divided by average adjusted common stockholders’ equity, with the denominator excluding current period income statement net realized gains (losses) on investments and net changes in unrealized gains (losses) on equity investments, net of tax. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Previous wording

Core revenue ― is a non-GAAP measure that is calculated as total GAAP revenue, less net realized gains (losses) on investments and net changes in unrealized gains (losses) on investments. Management believes this metric is meaningful, as it allows investors to evaluate underlying revenue trends and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Current wording

Core revenue ― is a non-GAAP measure that is calculated as total GAAP revenue, less net realized gains (losses) on investments and net changes in unrealized gains (losses) on equity investments. Management believes this metric is meaningful, as it allows investors to evaluate underlying revenue trends and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Previous wording

•All States first event tower extends to $2.415 billion with no co-participation in any of the layers, no limitation on loss adjustment expenses and no accelerated deposit premiums.

Current wording

•All States first event tower extends to $2.526 billion with no co-participation in any of the layers, no limitation on loss adjustment expenses and no accelerated deposit premiums.

Previous wording

•Assuming a first event completely exhausts the $2.415 billion tower, the second event exhaustion point would be $1.134 billion.

Current wording

•Assuming a first event completely exhausts the $2.526 billion tower, the second event exhaustion point would be $1.209 billion.

Previous wording

•Additionally, a second event private market excess of loss coverage of $66 million in excess of $45 million succeeds the captive in the event of a loss from a second event, resulting in a $66 million reduction in retention on a consolidated basis for a second event.

Current wording

•Full reinstatement is available on the combined $1.098 billion of the All States first-event catastrophe coverage for a guaranteed second-event coverage. Additionally, a second event private market excess of loss coverage of $66 million in excess of $45 million succeeds the captive in the event of a loss from a second event, resulting in a $66 million reduction in retention on a consolidated basis for a second event.

Previous wording

•Full reinstatement is available on the combined $1.023 billion of the All States first-event catastrophe coverage for a guaranteed second-event coverage. For all layers purchased between $111 million and the projected attachment point of the FHCF layer, to the extent that all of our coverage or a portion thereof is exhausted in a first catastrophic event and reinstatement premium is due, we have purchased enough reinstatement premium protection coverage (“RPP”) to fund the reinstatement premiums due on the reinstatement of these coverages. Losses exceeding the RPP limit would be subject to reinstatement premiums.

Current wording

•For all layers purchased between $111 million and the projected attachment point of the FHCF layer, to the extent that all of our coverage or a portion thereof is exhausted in a first catastrophic event and reinstatement premium is due, we have purchased enough reinstatement premium protection coverage (“RPP”) to fund the reinstatement premiums due on the reinstatement of these coverages. Losses exceeding the RPP limit would be subject to reinstatement premiums.

Previous wording

•For the FHCF Reimbursement Contracts effective June 1, 2024, the Insurance Entities have continued the election at the 90% coverage level. We estimate the total mandatory FHCF coverage will provide approximately $1.26 billion of coverage for UPCIC, and $20.4 million for APPCIC which complements and inures to the benefit of the All States coverage secured from private market reinsurers and discussed above.

Current wording

•For the FHCF Reimbursement Contracts effective June 1, 2025, the Insurance Entities have continued the election at the 90% coverage level. We estimate the total mandatory FHCF coverage will provide approximately $1.296 billion of coverage for UPCIC, and $21.4 million for APPCIC which complements and inures to the benefit of the All States coverage secured from private market reinsurers and discussed above.

Previous wording

•To further insulate future years, the Insurance Entities have secured certain multi-year treaties, providing $240 million of capacity that extends portions of the catastrophe coverage to include the 2025-2026 treaty year.

Current wording

•To further insulate future years, the Insurance Entities have secured certain multi-year treaties, providing $352 million of capacity that extends portions of the catastrophe coverage to include the 2026-2027 treaty year.

Previous wording

•Net investment income was up 18.8%, attributed to higher portfolio reinvestment rates as investments matured and were reinvested, along with income from increased cash investments.

Current wording

•Net investment income increased by 17.7%, due to higher portfolio reinvestment rates as investments matured and were reinvested, as well as an increase in income earning assets.

Previous wording

Net income was $41.4 million for the three months ended March 31, 2025, compared to net income of $33.7 million for the three months ended March 31, 2024. Diluted earnings per share in 2025 was $1.44 compared to $1.14 in 2024. Positive factors in 2025 included higher net premiums earned, investment income and commission revenue, offset by lower unrealized gains and higher operating costs. There was no prior-year net loss reserve development and no catastrophes in the first quarters of 2025 or 2024. Direct and net premiums earned grew by 6.5% in 2025, due to premium growth in 17 states and more policies in force in 15 states. The net loss ratio was 70.5% in 2025 compared to 71.9% in 2024, with the combined ratio at 95.0% compared to 95.5% in 2024.

Current wording

Net income was $35.1 million for 2025, compared to net income of $35.4 million for 2024. Diluted earnings per share for 2025 was $1.21 compared to $1.21 in 2024. Positive factors in 2025 included higher net premiums earned, investment income, realized gains, and commission revenue, offset by unrealized losses in 2025 compared to unrealized gains in 2024 and higher acquisition costs. There were no catastrophes in the second quarters of 2025 or 2024. Direct premiums earned grew by 6.7% in 2025, due to premium growth in 17 states and policies in force growth in 14 states. The net loss ratio was 72.3% in 2025 compared to 70.6% in 2024, with the combined ratio at 97.8% for 2025 compared to 95.9% for 2024.

Previous wording

Direct premiums written increased by $20.9 million, or 4.7%, for the three months ended March 31, 2025, driven by premium growth in our other states business of $31.7 million, or 34.7%, as compared to the three months ended March 31, 2024 offset by a reduction in premium within our Florida business of $10.8 million, or 3.0%. The primary factors contributing to the increase in direct written premiums were new and previous rate changes, increased policies in force during 2025 and policy inflation adjustments. There was an increase in policies in force across 15 states. In total, policies in force increased 9,291, or 1.1%, from 855,526 at December 31, 2024 to 864,817 at March 31, 2025. A summary of the recent rate increases which are driving increases in written premium is discussed above under“Overview—Trends and Geographical Distribution—Florida Trends.”

Current wording

Direct premiums written increased by $18.5 million, or 3.2%, for the three months ended June 30, 2025, driven by premium growth in our other states business of $29.8 million, or 25.4%, as compared to the three months ended June 30, 2024 offset by a reduction in premium written within our Florida business of $11.3 million, or 2.5%. The primary factors contributing to the increase in direct written premiums were new and previous rate changes, increased policies in force during 2025 and policy inflation adjustments. There was an increase in policies in force across 14 states. In total, policies in force increased by 7,526, or 0.9%, from 864,817 at March 31, 2025 to 872,343 at June 30, 2025. A summary of the recent rate increases which are driving increases in written premium is discussed above under“Overview—Trends and Geographical Distribution—Florida Trends.”

Previous wording

The Insurance Entities oversee their operations by monitoring policy counts, premiums, insured values, and other relevant factors. They periodically review and adjust policy rates and update underwriting guidelines, which influence new business volume and premium trends. Additionally, policy retention plays a crucial role in determining premium trends. These factors influence the amount of reinsurance coverage obtained annually. For the three months ended March 31, 2025, we saw an increase in policies in force of 9,291, or 1.1%, from 855,526 at December 31, 2024 to 864,817 at March 31, 2025. Direct premiums written continue to increase across the majority of states in which we conduct business. We had policies in force in 19 states at March 31, 2025. In addition, we are authorized to do business in Tennessee. As of March 31, 2025, policies in force increased by 44,739 policies, or 5.5%, premium in force increased $130.7 million, or 6.7%; and total insured value increased $38.6 billion, or 11.7%, compared to March 31, 2024.

Current wording

The Insurance Entities oversee their operations by monitoring policy counts, premiums, insured values, and other relevant factors. They periodically review and adjust policy rates and update underwriting guidelines, which influence new business volume and premium trends. Additionally, policy retention plays a crucial role in determining premium trends. These factors influence the amount of reinsurance coverage obtained annually. Direct premiums written continue to increase across the majority of states in which we conduct business. We had policies in force in 19 states at June 30, 2025. In addition, we are authorized to do business in Tennessee. As of June 30, 2025, policies in force increased by 38,910 policies, or 4.7%; premium in force increased $114.5 million, or 5.7%; and total insured value increased $38.4 billion, or 11.4%, compared to June 30, 2024.

Previous wording

Direct premium earned increased by $31.2 million, or 6.5%, for the three months ended March 31, 2025. This increase is due to premiums written over the past year, including rate filings, policy adjustments from inflation, and higher policy counts. See the discussion above for the― “Overview-Summary of Recent Rate Changes.”

Current wording

Direct premium earned increased by $32.8 million, or 6.7%, for the three months ended June 30, 2025. This increase is due to premiums written over the past year, including rate filings, policy adjustments from inflation, and higher policy counts. See the discussion above for the― “Overview-Summary of Recent Rate Changes.”

Previous wording

Net investment income was $16.1 million for the three months ended March 31, 2025, compared to $13.5 million for the same period in 2024, representing an 18.8% increase. This change was due to new investments generating higher returns and an increase of $55.3 million in invested balances during the quarter, partially offset by reduced yields from invested cash balances in 2025.

Current wording

Net investment income was $17.3 million for 2025, compared to $14.7 million in 2024, representing a 17.7% increase. This change was due to new investments generating higher returns and an increase of $128.7 million in invested balances during the quarter, partially offset by reduced yields from invested cash balances in 2025.

Previous wording

See―“Analysis of Financial Condition” for details on changes in total invested assets balances during 2025.

Current wording

Net realized and unrealized gains for the quarter were mainly due to portfolio adjustments, including exiting profitable and underperforming positions. See―“Analysis of Financial Condition” for details on changes in total invested assets balances during 2025.

Previous wording

The majority of commissions are those earned by our licensed reinsurance intermediary, Blue Atlantic Reinsurance Corporation (“BARC”) These commissions are paid to BARC by traditional open market third-party reinsurers for placing reinsurance with our Insurance Entities. BARC does not earn commissions on reinsurance provided by the Florida Hurricane Catastrophe Fund (FHCF), catastrophe bonds or Florida’s RAP program. Commissions paid to BARC are recognized on a pro-rata basis over the underlying reinsurance treaty period, which typically runs from June 1 st to May 31 st of the following year. For the three months ended March 31, 2025, commission revenue was $16.3 million, compared to $11.0 million for the three months ended March 31, 2024. Commission revenue rose by $5.2 million, or 47.5%, mainly from commissions on reinstatement premiums from hurricanes Helene and Milton, earned during the quarter ended March 31, 2025. Additional commissions came from increased reinsurance spending as the Insurance Entities replaced the expiring Florida RAP program and catastrophe bond in 2024. These reinsurance contracts did not pay commissions.

Current wording

The majority of commissions are those earned by our licensed reinsurance intermediary, Blue Atlantic Reinsurance Corporation (“BARC”). These commissions are paid to BARC by traditional open market third-party reinsurers for placing reinsurance with our Insurance Entities. BARC does not earn commissions on reinsurance provided by the Florida Hurricane Catastrophe Fund (FHCF), catastrophe bonds or Florida’s RAP program. Commissions paid to BARC are recognized on a pro-rata basis over the underlying reinsurance treaty period, which typically runs from June 1 st to May 31 st of the following year. Commission revenue increased $4.2 million, or 35.7%, from $11.7 million for 2024 to $15.9 million for 2025. This change was mainly attributable to increased reinsurance spending by the Insurance Entities replacing expiring Florida RAP and catastrophe bond contracts that did not generate commission. Additionally, commissions earned from reinstatement premiums related to Hurricanes Helene and Milton contributed to the total increase.

Previous wording

Net losses and LAE, after estimated reinsurance recoveries and estimated subrogation recoveries, were $250.6 million with a 70.5% net loss ratio for the three months ended March 31, 2025, compared to $240.2 million and a 71.9% net loss ratio for the prior-year quarter. The increase in the net losses for the three months ended March 31, 2025, was primarily due to estimated losses associated with increased premium volume in 2025. There was no prior-year development on catastrophe or non-catastrophe losses for the three months ending March 31, 2025 and 2024.

Current wording

Net losses and LAE, after estimated reinsurance recoveries and estimated subrogation recoveries, were $260.3 million with a 72.3% net loss ratio for the three months ended June 30, 2025, compared to $243.6 million and a 70.6% net loss ratio for the prior-year quarter. The increase in the net loss ratio for 2025 was primarily due to increased cost of reinsurance in the second quarter of 2025, which lowered net earned premiums, thus increasing the net loss ratio when compared to 2024. Increased premium volume in 2025 resulted in proportionate increase in net losses and LAE.

Previous wording

Unfavorable prior-year development arises when claims are settled for amounts exceeding previous estimates or when the liabilities for prior-year claims increase. This situation results from rising claims costs, inflation, and increased expenses associated with litigated claims. Further details can be found under “Overview—Trends and Geographical Distribution—Florida Trends” mentioned above. In the quarters ended March 31, 2025, and 2024, there was no net prior-year development. We continue to observe favorable claim trends on Florida losses after the effective date of the Florida reform legislation (December 16, 2022). However, claims under policies predating the reforms exhibit greater uncertainty. Consequently, these claims in aggregate have experienced and may in the future experience adverse development as claim settlements deviate from previously estimated amounts.

Current wording

During 2025, there was $71 thousand of prior year development, compared to no net prior year development during 2024. This prior year development was associated with increases in net losses and LAE for prior year catastrophe events. Unfavorable prior-year development arises when claims are settled for amounts exceeding previous estimates or when the liabilities for prior-year claims increase. This situation often results from rising claims costs, the impact of material and labor inflation, and increased expenses associated with litigated claims. Further details can be found under “Overview—Trends and Geographical Distribution—Florida Trends” mentioned above. We continue to observe favorable claim trends on Florida losses after the effective date of the Florida reform legislation (December 16, 2022). However, claims under policies predating the reforms exhibit greater uncertainty. Consequently, these claims in aggregate have experienced and may in the future experience adverse development as claim settlements deviate from previously estimated amounts.

Previous wording

During 2025, the Company continues to settle catastrophe losses on Hurricanes Helene and Milton which occurred in 2024 along with hurricanes from prior years. There was no net prior-year development on prior-year hurricane losses during the three months ended March 31, 2025 and 2024. Our reinsurance program provided the Insurance Entities with adequate protection beyond our retention limit for these prior hurricanes.

Current wording

During 2025, the Company continues to settle catastrophe losses on Hurricanes Helene and Milton which occurred in 2024 along with hurricanes from prior years. Our reinsurance program provided the Insurance Entities with adequate protection beyond our retention limit for these prior hurricanes.

Previous wording

Consolidated net losses and LAE include results from our adjusting company's activities within our holding system. Adjusting claims internally offers savings for our Insurance Entities and reinsurers. Our claims team and legal group work together efficiently in Florida to handle claims, achieving synergies that third parties cannot. This coordination improves claim handling and saves money by reducing LAE at a consolidated level, especially after catastrophes. We maintain adequate staffing levels to manage claims and litigation efforts related to catastrophes. The expenses associated with these resources during regular operations may result in minimal net benefits. Profits from our claim adjusting company reduce consolidated losses and LAE; for the quarters ended March 31, 2025 and 2024, there was no significant financial impact from the claims adjusting companies’ profits on consolidated results.

Current wording

Consolidated net losses and LAE include results from our adjusting company's activities within our holding system. Adjusting claims internally offers savings for our Insurance Entities and reinsurers. Our claims team and legal group work together efficiently in Florida to handle claims, achieving synergies that third parties cannot. This coordination improves claim handling and saves money by reducing LAE at a consolidated level, especially after catastrophes. We maintain adequate staffing levels to manage claims and litigation efforts related to catastrophes. The expenses associated with these resources during regular operations may result in minimal net benefits. Profits from our claim adjusting company reduce consolidated losses and LAE; for the three months ended June 30, 2025 and 2024, there was no significant financial impact from the claims adjusting companies’ profits on consolidated results.

Previous wording

For the three months ended March 31, 2025, general and administrative expenses were $87.2 million compared to $78.7 million during the three months ended March 31, 2024, as follows (dollars in thousands):

Current wording

For 2025, general and administrative expenses were $91.8 million compared to $87.1 million during 2024, as follows (dollars in thousands):

Previous wording

•The policy acquisition costs increased by $5.8 million due to higher commissions resulting from a 6.5% increase in net earned premiums compared to the previous year, as well as increased commissions on the growth of premium outside of Florida, which incurs higher commissions. Additionally, increased agent bonus commission and premium tax in 2025 contributed to higher acquisition costs.

Current wording

•The policy acquisition costs increased by $5.3 million due to higher commissions resulting from a 4.4% increase in net earned premiums compared to the previous year, as well as increased commissions on the growth of premium outside of Florida, which incurs higher commissions. Additionally, accruals for expected increased agent bonus commission in 2025 contributed to higher acquisition costs.

Previous wording

•Other operating costs increased by $2.8 million due to employee compensation, benefits, and welfare, and policy related costs. The other operating cost ratio was 7.5% for the three months ended March 31, 2025, compared to 7.2% for the three months ended March 31, 2024.

Current wording

•Other operating costs decreased by $0.5 million due to lower employee related expenses including stock-based compensation and employee benefits and welfare, partially offset by higher policy issuance related costs. The other operating cost ratio was 8.3% for 2025, compared to 8.9% for 2024.

Previous wording

As a result of the trends discussed in net premiums earned and net operating expense, the combined ratio for the three months ended March 31, 2025 was 95.0% compared to 95.5% for the three months ended March 31, 2024.

Current wording

As a result of the trends discussed in net premiums earned and net operating expense, the combined ratio for 2025 was 97.8% compared to 95.9% for 2024.