UNIVERSAL INSURANCE HOLDINGS, INC.

Previous wording

Unless the context otherwise requires, all references to “we,” “us,” “our,” and “Company” refer to Universal Insurance Holdings, Inc. (“UVE”) and its wholly-owned subsidiaries. You should read the following discussion together with our unaudited condensed consolidated financial statements (“Financial Statements”) and the related notes thereto included in “Part I, Item 1—Financial Statements,” and our audited condensed consolidated financial statements and the related notes thereto included in “Part II, Item 8—Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for any one quarter are not necessarily indicative of results to be expected for any quarter or for the year.

Current wording

Unless the context otherwise requires, all references to “we,” “us,” “our,” and “Company” refer to Universal Insurance Holdings, Inc. (“UVE”) and its wholly-owned subsidiaries. You should read the following discussion together with our unaudited condensed consolidated financial statements (“Financial Statements”) and the related notes thereto included in “Part I, Item 1—Financial Statements,” and our audited consolidated financial statements and the related notes thereto included in “Part II, Item 8—Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for any one quarter are not necessarily indicative of results to be expected for any quarter or for the year.

Previous wording

In addition to historical information, this report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These forward-looking statements may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets,” and other words with similar meanings. These statements may address, among other things, our strategy for growth, catastrophe exposure and other risk management, product development, investment results, regulatory approvals, market position, expenses, financial results, litigation and reserves. We believe that these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. A detailed discussion of the risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is set forth below, which are a summary of those in the section titled “Risk Factors” (Part I, Item 1A) of our Annual Report on Form 10-K for the year ended December 31, 2024. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Current wording

In addition to historical information, this report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These forward-looking statements may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets,” and other words with similar meanings. These statements may address, among other things, our strategy for growth, catastrophe exposure and other risk management, product development, investment results, regulatory approvals, market position, expenses, financial results, projections, estimates, litigation and reserves. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results or outcomes could differ materially from those projected or assumed in any of our forward-looking statements. There may be other factors not presently known to us or which we currently consider to be immaterial that could cause our actual results to differ materially from those projected in any forward-looking statements we make. We believe that these statements are based on reasonable estimates, assumptions and plans. A detailed discussion of the risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is set forth below, which are a summary of those in the section titled “Risk Factors” (Part I, Item 1A) of our Annual Report on Form 10-K for the year ended December 31, 2024. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Previous wording

•If we fail to adequately price the risks we underwrite, or if emerging trends outpace our ability to adjust prices timely, or if we lose desirable exposures to competitors by overpricing our risks, we may experience underwriting losses depleting surplus at the Insurance Entities and capital at the holding company.

Current wording

•If we fail to adequately price the risks we underwrite and/or the estimates we make, or if emerging trends outpace our ability to adjust prices timely, or if we lose desirable exposures to competitors by overpricing our risks, we may experience underwriting losses depleting surplus at the Insurance Entities and capital at the holding company.

Previous wording

•Reinsurance subjects us to the credit risk of our reinsurers, which could have a material adverse effect on our operating results and financial condition.

Current wording

•Reinsurance subjects the Company to the credit risk of our reinsurers, which could have a material adverse effect on our operating results and financial condition.

Previous wording

•Regulations limiting rate changes and requiring us to participate in loss sharing or assessments may decrease our profitability.

Current wording

•Regulations limiting rate changes and requiring the Company to participate in loss sharing or assessments may decrease our profitability.

Previous wording

•Our indebtedness could adversely affect our financial results and prevent us from fulfilling our obligations under the Notes.

Current wording

•Our indebtedness could adversely affect our financial results and prevent the Company from fulfilling our obligations under the Notes.

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 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.

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 policyholders 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 72.3% of our direct premiums written for the nine months ended September 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 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.

Current wording

The evolving impacts of the reforms are altering 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 and 2025 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

In addition, the reforms have prompted many admitted market insurers, including us, to expand the availability of products. Approximately 14 new insurers have also entered the market since the reforms were enacted. Expanded writings by existing and new admitted market insurers have led to Citizens’ policy count declining from its October 2023 peak of 1.4 million policies to approximately 780,000 policies as of June 2025. Citizens projects that it will have less than 700,000 policies by the end of 2025. With the benefits of the reforms continuing to emerge, new and existing competitors in the post-reform market often remain selective as to the policy types, locations, coverage limits or other characteristics of policies they write, leading to segmentation in the market. The degree of competition in the evolving Florida market therefore varies by territory, policy form and other factors. As a result, our ability to write the volume or types of policies we seek differs by territory, policy type and other characteristics and is changing as the market evolves.

Current wording

In addition, the reforms have prompted many admitted market insurers, including the Company, to expand the availability of products. Approximately 17 new insurers have also entered the market since the reforms were enacted. Expanded writings by existing and new admitted market insurers have led to Citizens’ policy count declining from its October 2023 peak of 1.4 million policies to approximately 770,000 policies as of September 2025. Citizens projects that it will have fewer than 700,000 policies by the end of 2025. With the benefits of the reforms continuing to emerge, new and existing competitors in the post-reform market often remain selective as to the policy types, locations, coverage limits or other characteristics of policies they write, leading to segmentation in the market. The degree of competition in the evolving Florida market therefore varies by territory, policy form and other factors. As a result, our ability to write the volume or types of policies we seek differs by territory, policy type and other characteristics and is changing as the market evolves.

Previous 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.

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 has established significant in-house legal services to address litigated or represented claims as cost-effectively as possible. The Company's legal claims department includes a team focused on identifying and collecting subrogation. Subrogation enables the Company to recover payments from at-fault parties, reducing losses for both policyholders and the Company when third-party damages occur.

Previous wording

The active 2024 hurricane season demonstrated the benefits of the statutory reforms as Florida experienced three land-falling storms without significant setbacks to the emerging competitive environment, the general moderation and reduction of rate levels, or the improved availability and pricing of reinsurance. Nonetheless, hurricanes and other large loss events reduce insurers’ surplus and can limit capacity for writing additional policies even in an improving market. This can moderate the impact of the reforms compared to hurricane-free periods in which insurers and reinsurers can more readily replenish and deploy capital. The full impact of the law changes on our operational initiatives and associated costs is unknown and may evolve differently following an active hurricane season than in a non-catastrophe environment. We will continue to monitor these impacts and market conditions on recording and reporting of claims costs, rate levels, and competitive conditions.

Current wording

While no major storm has made landfall in 2025 to date, the active 2024 hurricane season demonstrated the benefits of the statutory reforms as Florida experienced three land-falling storms without significant setbacks to the emerging competitive environment, the general moderation and reduction of rate levels, or the improved availability and pricing of reinsurance. Nonetheless, hurricanes and other large loss events reduce insurers’ surplus and can limit capacity for writing additional policies even in an improving market. This can moderate the impact of the reforms compared to hurricane-free periods in which insurers and reinsurers can more readily replenish and deploy capital. The full impact of the law changes on our operational initiatives and associated costs is unknown and may evolve differently following an active hurricane season than in a non-catastrophe environment. We will continue to monitor these impacts and market conditions on recording and reporting of claims costs, rate levels, and competitive conditions.

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. 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.

Current wording

In 2024, UPCIC implemented new homeowners policy rates, resulting in an average rate decrease of 1.5% compared to previous rates, effective for new policies August 15, 2024 and renewal policies May 17, 2025. These rate changes were implemented under use and file rating laws and subsequently received regulatory approval. In October 2025, UPCIC implemented new homeowners policies rates for new and renewal business policies, pending regulatory approval, resulting in an average rate decrease of 5.1% compared to previous rates with an effective date of October 16, 2025.

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

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 Company’s business. The non-GAAP measures should not be viewed as a substitute for those determined in accordance with

Previous wording

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

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.”

Previous wording

Core Loss Ratio ― a common operational metric used in the insurance industry to describe the ratio of current accident year expected losses and LAE, excluding current accident year weather events beyond those expected, to premiums earned. Core loss ratio is an important measure identifying profitability trends of premiums in force. Core losses consist of losses and LAE excluding current accident year weather events beyond those expected and prior years’ reserve development. The financial benefit from the management of claims, including claim fees ceded to reinsurers, is recorded in the condensed consolidated financial statements as a reduction to core losses. The core loss ratio can be measured on a direct basis, using direct earned premiums, or on a net basis, using premiums earned, net (i.e., direct premiums earned less ceded premiums earned).

Current wording

Core Losses and Core Loss Ratio ― a common operational metric used in the insurance industry to describe the ratio of current accident year expected losses and LAE, excluding current accident year weather events beyond those expected, to premiums earned. Core loss ratio is an important measure identifying profitability trends of premiums in force. Core losses consist of losses and LAE excluding current accident year weather events beyond those expected and prior years’ reserve development. The financial benefit from the management of claims, including claim fees ceded to reinsurers, is recorded in the condensed consolidated financial statements as a reduction to core losses. The core loss ratio can be measured on a direct basis, using direct earned premiums, or on a net basis, using premiums earned, net (i.e., direct premiums earned less ceded premiums earned).

Previous 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.

Current wording

•All States first event tower extends to $2.5 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 $2.526 billion tower, the second event exhaustion point would be $1.209 billion.

Current wording

•Assuming a first event completely exhausts the $2.5 billion tower, the second event exhaustion point would be $1.209 billion.

Previous 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.

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 $1.3 billion of coverage for UPCIC, and $21.5 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

•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.

Current wording

•Net investment income increased by 19.0%, due to higher portfolio reinvestment rates as investments matured and were reinvested, as well as an increase in the amount of invested assets.

Previous 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.”

Current wording

Direct premiums written increased by $18.4 million, or 3.2%, for the three months ended September 30, 2025, driven by premium growth in our other states business of $29.8 million, or 22.2%, as compared to the three months ended September 30, 2024 offset by a reduction in premium written within our Florida business of $11.4 million, or 2.6%. 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 11,545, or 1.3%, from 872,343 at June 30, 2025 to 883,888 at September 30, 2025. A summary of the recent rate changes which are affecting 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. 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.

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 September 30, 2025. In addition, we are authorized to do business in Tennessee. As of September 30, 2025, policies in force increased by 39,349 policies, or 4.7%; premium in force increased $88.9 million, or 4.3%; and total insured value increased $37.0 billion, or 10.6%, compared to September 30, 2024.

Previous 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.”

Current wording

Direct premium earned increased by $26.4 million, or 5.2%, for the three months ended September 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

Reinsurance enables our Insurance Entities to limit potential exposures to catastrophic events and other covered events, but it also increases costs, resulting in lower net earned premiums. These costs are generally recognized over the annual policy period (June 1-May 31). For the six months ended June 30, 2025, ceded premium earned increased $27.0 million to $320.8 million, (30.9% of direct premium earned), compared to $293.7 million, (30.2% of direct premiums earned) for the same period in 2024. The increase in 2025 is attributable to reduced free protection relative to 2024, when participation in Florida’s RAP program provided certain reinsurance at no cost for part of the 2024 period. Slightly higher costs related to the new 2025-2026 reinsurance contracts, compared with the 2024-2025 reinsurance contracts, also increased costs in 2025 when compared to 2024. Refer to the previous discussion and“Item 1— Note 4 (Reinsurance)” for further information on the 2025-2026 reinsurance programs.

Current wording

Reinsurance enables our Insurance Entities to limit potential exposures to catastrophic events and other covered events, but it also increases costs, resulting in lower net earned premiums. These costs are generally recognized over the annual policy period (June 1-May 31). For the three months ended September 30, 2025, ceded premium earned increased $12.4 million to $174.4 million, (32.7% of direct premium earned), compared to $162.0 million, (31.9% of direct premiums earned) for the same period in 2024, reflecting additional coverage purchased under the 2025-2026 reinsurance program. Refer to the previous discussion and“Item 1— Note 4 (Reinsurance)” for further information on the 2025-2026 reinsurance programs.

Previous 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.

Current wording

Net investment income was $18.3 million for 2025, compared to $15.4 million in 2024, representing a 19.0% increase. This change was due to increased investments in our portfolio and new investments generating higher average book yields than maturing assets, partially offset by reduced yields from invested cash balances in 2025.

Previous wording

The yield curve continues to decline over time, particularly in the front end of the curve, which is impacting short duration cash reinvestment rates, along with longer duration rates, resulting in fixed income price increases and decreasing yields. We continue to monitor geopolitical events impacting the U.S. Treasuries market. See “Item 1— Note 3 (Investments)” for information on investment income.

Current wording

The yield curve continues to decline over time, particularly in the front end of the curve, which is impacting short duration cash reinvestment rates, resulting in fixed income price increases and decreasing yields. We continue to monitor geopolitical events impacting the U.S. Treasuries market. See “Item 1— Note 3 (Investments)” for information on investment income.

Previous 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.

Current wording

Net realized losses for the quarter were mainly due to optimizing the fixed income portfolio to lock in longer duration yields. Net unrealized gains for the quarter were driven by equity market tailwinds. 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. 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.

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 $1.6 million, or 12.6%, from $13.0 million for 2024 to $14.6 million for 2025. This change was mainly attributable to increased reinsurance spending by the Insurance Entities.

Previous wording

Policy fees were $5.6 million for both 2025 and 2024. Other revenue, representing revenue from policy installment fees, premium financing, and other miscellaneous income, was $2.0 million in 2025 compared to $2.3 million in 2024.

Current wording

Policy fees were $5.4 million for 2025 and $5.2 million in 2024. Other revenue, representing revenue from policy installment fees, premium financing, and other miscellaneous income, was $2.0 million in 2025 compared to $2.1 million in 2024.

Previous 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.

Current wording

Net losses and LAE, after estimated reinsurance recoveries and estimated subrogation recoveries, were $252.3 million with a 70.2% net loss ratio for the three months ended September 30, 2025, compared to $317.0 million and a 91.7% net loss ratio for the prior-year quarter. The net loss ratio decreased in 2025 mainly due to the absence of hurricanes making landfall during 2025, while Hurricanes Debby and Helene negatively affected 2024. This was slightly offset by higher reinsurance costs in third quarter of 2025, which reduced net earned premiums.

Previous 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.

Current wording

During the three months ended September 30, 2025, there was $3.9 million of unfavorable net prior year development, compared to a $2.2 million favorable net prior year development during 2024. This prior year development for the 2025 period 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, changing building codes, 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. 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 Debby and Helene 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

Legislation passed in late 2022 aims to reduce claim costs in Florida as the benefits of the reforms are realized. The Company is seeing some benefits of this legislation in 2025 for policies issued after the effective date of the reforms. The transition to the new laws will take several years as many reforms only apply to policies written or renewed after the effective date. Claims under prior laws are still being adjusted, and it will be several years before the impact of abusive practices under the old laws is completely removed, allowing the full benefits of the legislation to be realized.

Current wording

Legislation passed in late 2022 aims to reduce claim costs in Florida as the benefits of the reforms are realized. The Company is seeing benefits of this legislation in 2025 for policies issued after the effective date of the reforms. The transition to the new laws will take several years as many reforms only apply to policies written or renewed after the effective date. Claims under prior laws are still being adjusted, and it will be several years before the impact of abusive practices under the old laws is completely removed, allowing the full benefits of the legislation to be realized.

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 three months ended June 30, 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 company structure. 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. There was minimal financial impact on consolidated losses and LAE from the claims adjusting company during the three months ended September 30, 2025 and 2024.

Previous wording

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

Current wording

For 2025, general and administrative expenses were $94.3 million compared to $87.1 million during 2024, as follows (dollars in thousands):

Previous wording

For 2025, general and administrative expenses increased by $4.7 million, compared to 2024, which was the result of an increase in policy acquisition costs of $5.3 million and a decrease in other operating costs of $0.5 million. The total general and administrative expense ratio was 25.5% for 2025 compared to 25.3% for 2024.

Current wording

For 2025, general and administrative expenses increased by $7.2 million, compared to 2024, which was the result of an increase in policy acquisition costs of $4.9 million and an increase in other operating costs of $2.3 million. The total general and administrative expense ratio was 26.2% for 2025 compared to 25.2% for 2024.

Previous 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.

Current wording

•The policy acquisition costs increased by $4.9 million due to higher commissions resulting from a 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 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.

Current wording

•Other operating costs increased by $2.3 million due to higher employee related expenses including stock-based compensation and employee benefits and welfare, and higher policy issuance related costs. The other operating cost ratio was 8.5% for 2025, compared to 8.2% for 2024.

Previous 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.

Current wording

As a result of the trends discussed in premium revenues, losses and LAE, and general and administrative expenses, the combined ratio for 2025 was 96.4% compared to 116.9% for 2024.

Previous wording

Income tax expense was $11.3 million and $12.5 million for the three months ended June 30, 2025 and 2024, respectively. Our effective tax rate (“ETR”) decreased to 24.3% for 2025, as compared to 26.1% for 2024. See “Item 1—Note 9 (Income Taxes)” for a table of items reconciling statutory rates to the effective rate for 2025 and 2024.

Current wording

For the three months ended September 30, 2025, income tax expense totaled $12.9 million as compared to an income tax benefit of $2.0 million for the three months ended September 30, 2024. The income tax expense for the quarter reflects positive overall net income, which is attributed to the absence of significant weather events. This differs from the income tax benefit recorded in previous year, which was due to losses related to Hurricanes Debby and Helene. Our effective tax rate (“ETR”) increased to 24.5% for the three months ended September 30, 2025, as compared to 10.8% for the same period last year. See “Item 1—Note 9 (Income Taxes)” for a table of items reconciling statutory rates to the effective rate for 2025 and 2024.

Previous wording

Other comprehensive income, net of taxes for the three months ended June 30, 2025 was $10.3 million compared to other comprehensive income of $1.0 million for the prior year quarter reflecting after-tax changes in fair value of available-for-sale debt securities held in our investment portfolio and reclassifications out of accumulated other comprehensive income (loss) for available-for-sale debt securities sold. This quarter’s results reflect favorable shifts in market prices during 2025 compared to 2024. During 2025, maturing securities and investment returns were reinvested at market rates, reducing unrealized losses on maturing securities. The maturity of the remaining securities in an unrealized loss position has also reduced during the year. Over time, unrealized losses on securities in an unrealized loss position lessen as the remaining maturity shortens and securities approach their maturity or par value. See the discussion above and “Part II—Item 8—Note 14 (Other Comprehensive Income (Loss))” for additional information about the amounts comprising other comprehensive income (loss), net of taxes for these periods and “Part II—Item 8—Note 3 (Investments)” for explanations on changes in investments.

Current wording

Other comprehensive income, net of taxes for the three months ended September 30, 2025 was $10.0 million compared to other comprehensive income of $30.1 million for the prior year quarter, reflecting after-tax changes in fair value of available-for-sale debt securities held in our investment portfolio and reclassifications out of accumulated other comprehensive income (loss) for available-for-sale debt securities sold. This quarter’s results reflect favorable shifts in market prices during 2025 compared to 2024. During 2025, maturing debt securities and investment returns were reinvested at market rates, reducing unrealized losses on maturing debt securities. The maturity of the remaining debt securities in an unrealized loss position has also reduced during the year. Over time, unrealized losses on debt securities in an unrealized loss position lessen as the remaining maturity shortens and debt securities approach their maturity or par value. See the discussion above and “Item 1—Note 11 (Other Comprehensive Income (Loss))” for additional information about the amounts comprising other comprehensive income (loss), net of taxes for these periods and “Item 1—Note 3 (Investments)” for explanations on changes in investments.