UNIVERSAL INSURANCE HOLDINGS, INC.

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 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, 2025. 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 of Financial Condition and Results of Operations (“MD&A”) should be read together with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements, related notes and MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2025. This MD&A contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those discussed due to the factors described under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in this report.

Previous wording

Our ability to write and retain policies is influenced by a range of local, national and global factors. Among these, the amount and types of policies we write depend on the regulatory environments in the states in which the Insurance Entities write policies. In particular, the Florida personal residential insurance market is experiencing significant transitions due to a series of law changes passed in December 2022 that were intended to address substantial market disruption.

Current wording

Our ability to write and retain policies is influenced by a range of local, national and global factors. Among these, the amount and types of policies we write depend on the regulatory environments in the states in which the Insurance Entities write policies. In particular, the Florida personal residential insurance market has experienced and continues to experience significant transitions due to a series of law changes passed in December 2022 that were intended to address previous market disruption.

Previous wording

Prior to the significant statutory reforms adopted by Florida in December 2022, the Florida residential property insurance market suffered from declining availability and increasing premiums among authorized insurers. This was attributable to elevated loss and LAE levels and related impacts on reinsurance pricing and availability. During this period, Citizens, Florida’s statutorily-created insurer that generally is intended to be the state’s market of last resort, instead became a market of choice as insurers limited writings and state laws capped Citizens’ annual rate increases at levels well below market levels.

Current wording

Prior to the law changes, the Florida residential property insurance market suffered from declining availability and increasing premiums among authorized insurers. This was attributable to elevated loss and LAE levels and related impacts on insurers’ operating results and reinsurance pricing and availability. During this period, Citizens, Florida’s statutorily-created insurer that generally is intended to be the state’s market of last resort, instead became a market of choice as authorized insurers limited writings and Citizens’ rate levels were suppressed by statutory limitations on its rate changes.

Previous wording

The overall residential property insurance market in Florida has steadily improved since the reforms were enacted. Nonetheless, the ultimate long-term benefits of Florida’s statutory reforms remain unknown and difficult to predict. The Florida political environment, prevailing sentiment among policymakers or the public such as growing concerns with inflation and costs of living, and economic factors beyond insurers’ control may directly or indirectly mitigate the impact of the 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.

Current wording

The overall residential property insurance market in Florida has steadily improved since the reforms were enacted. Even so, the long-term benefits of Florida’s statutory reforms remain unknown and difficult to predict. The Florida political environment, prevailing sentiment among policymakers or the public such as growing concerns with inflation and costs of living, and economic factors beyond insurers’ control may directly or indirectly mitigate the impact of the 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, political or external influences attributing broader rising costs or other market conditions to deficiencies in the reforms rather than other causes 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

Prior to the 2022 reforms, most residential property insurers in Florida, including the Insurance Entities, sought to limit their exposure to rising losses and LAE. Although the Insurance Entities faced little competition from authorized insurers during this period, the Insurance Entities’ own exposure management considerations led them to limit their new business intake. The Insurance Entities historically have enjoyed a high policyholder retention rate from year to year, both prior to the reforms and currently. Even so, the Company’s limited appetite for new business prior to the reforms led to a decline in its in-force Florida policy count. During this time, Citizens grew to become the largest insurer of residential property in Florida by a wide margin.

Current wording

Prior to the 2022 reforms, most residential property insurers in Florida, including the Insurance Entities, sought to limit their exposure to rising losses and LAE. Although the Insurance Entities faced little competition from authorized insurers during this period, the Insurance Entities’ own exposure management considerations led them to limit their new business intake. The Insurance Entities historically have enjoyed a high policyholder retention rate from year to year, both prior to the reforms and currently. Nonetheless, the Company’s limited appetite for new business prior to the reforms led to a decline in its in-force Florida policy count. As other insurers similarly limited their writings during this time, Citizens grew to become the largest insurer of residential property in Florida by a wide margin.

Previous wording

Other established insurers also are expanding new business writings. In addition, a reported 17 new insurers have entered the Florida market in recent years. Unlike the Insurance Entities, some new and established insurers write business predominantly by assuming risks from Citizens. Altogether, renewed activity among authorized insurers has led to a decrease in Citizens’ policy count by approximately one million policies since the reforms. UPCIC has long been, and currently remains, one of the largest residential property insurers in Florida. Still, as the benefits of the reforms continue 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 the Insurance Entities face in Florida therefore varies by policy type, region, and other factors.

Current wording

Other insurers also are expanding new business writings. Established insurers are increasingly expanding their writings by location and policy type. In addition, approximately 20 new insurers have entered the Florida market in recent years. Unlike the Insurance Entities, some new and established insurers write business predominantly by assuming risks from Citizens. Altogether, increased activity among authorized insurers has led to a decrease in Citizens’ policy count by approximately one million policies since the reforms. The current Florida residential property insurance market therefore is characterized by increased competition among authorized insurers, expanded coverage options for consumers, declining average rate levels and a significantly smaller residual insurance market.

Previous wording

Other states have experienced less disruption than Florida. The Insurance Entities therefore experience a high but stable degree of competition when entering and expanding into other states. In these states, the Insurance Entities often compete with national or regional insurers with greater experience in the specific markets. Our growth plan therefore includes developing relationships with the states’ independent agents and gradually expanding our presence as we gain familiarity with new markets. Over time, this has allowed our business outside of Florida to steadily increase as a percentage of our overall business.

Current wording

Other states have experienced less disruption than Florida. The Insurance Entities therefore face a high but stable degree of competition when entering and expanding into other states. In these states, the Insurance Entities often compete with national or regional insurers with greater experience in the specific markets. Our growth plan therefore includes developing relationships with the states’ independent agents and gradually expanding our presence as we gain familiarity with new markets. Over time, this has allowed our business outside of Florida to steadily increase as a percentage of our overall business.

Previous wording

The Company continues to experience higher costs associated with claims that pre-date the reforms. The remaining pre-reform claims typically are litigated claims that have resisted formal and informal efforts at dispute resolution. Although the number of claims subject to pre-reform laws continues to decline, it may be several years before all of them are resolved.

Current wording

The Company continues to experience higher costs associated with claims that pre-date the reforms. The remaining pre-reform claims typically are litigated claims that have resisted formal and informal efforts at dispute resolution. Although the number of claims subject to pre-reform laws has declined substantially, some might be resolved only through litigation and therefore might remain pending for months or longer.

Previous wording

Our business is affected by evolving domestic, national or global economic conditions, including the potential impact from tariffs and other inflationary pressures. Increased labor and materials costs can increase our claims costs. They can also have direct effects on our business, such as increasing the values of properties we insure and the corresponding premium levels, as well as indirect effects such as offsetting and diminishing the perceived benefits of the statutory reforms. We will continue to monitor our business model and strategy as economic conditions develop.

Current wording

Our business is affected by evolving domestic, national or global economic conditions, including the potential impact from tariffs and other inflationary pressures. Increased labor and materials costs can increase our claims costs. They can also have other direct effects on our business, such as increasing the values of properties we insure and the corresponding premium levels, as well as indirect effects such as offsetting and diminishing the perceived benefits of the statutory reforms. We will continue to monitor our business model and strategy as economic conditions develop.

Previous wording

We also rely on global reinsurance markets to mitigate our exposure under policies we write. The availability and pricing of reinsurance can be influenced by global economic conditions such as inflation. Our ability to purchase desired levels of reinsurance at competitive prices also can be influenced by severe weather in Florida and elsewhere. Florida did not suffer a landfalling hurricane in 2025, which is a favorable consideration as we prepare for the mid-year renewal of our catastrophe reinsurance program. However, this benefit might be offset by reinsurers’ assessments of past and potential future events.

Current wording

We also rely on global reinsurance markets to mitigate our exposure under policies we write. The availability and pricing of reinsurance can be influenced by global economic conditions such as inflation. Our ability to purchase desired levels of reinsurance at competitive prices also can be influenced by severe weather in Florida and elsewhere. Florida did not suffer a landfalling hurricane in 2025, which contributed to favorable reinsurance market conditions for the mid-year renewal of our catastrophe reinsurance program. However, the benefit of short-term weather or economic conditions can be tempered by reinsurers’ assessments of past and potential future events.

Previous wording

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

Current wording

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

Previous wording

Expense Ratio (Including Policy Acquisition Cost Ratio and Other Operating Costs and Expenses Ratio) ―calculated as policy acquisition costs and other operating costs and expenses as a percentage of premiums earned, net. Policy acquisition costs and other operating costs and expenses include such items as underwriting costs, facilities, and corporate overhead. The expense ratio, including the sub-expense ratios of policy acquisition cost ratio and other operating costs and expenses ratios, are indicators to management of the Company’s cost efficiency in acquiring and servicing its business and the impact of expense items to overall profitability.

Current wording

Expense Ratio (Including Policy Acquisition Cost Ratio and Other Operating Costs and Expenses Ratio) ―calculated as policy acquisition costs and other operating costs and expenses as a percentage of premiums earned, net. Policy acquisition costs and other operating costs and expenses include such items as underwriting costs, facilities, and corporate overhead. The expense ratio, including the sub-expense ratios of policy acquisition cost ratio and other operating costs and expenses ratio, are indicators to management of the Company’s cost efficiency in acquiring and servicing its business and the impact of expense items to overall profitability.

Previous wording

•All States first event tower extends to $2.575 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 $2.623 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 $2.575 billion tower, the second event exhaustion point would be $1.209 billion.

Current wording

•Assuming a first event completely exhausts the $2.623 billion tower, the second event exhaustion point would be $1.209 billion.

Previous 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.

Current wording

•Full reinstatement is available on$1.098 billion of non-FHCF first event catastrophe coverage for guaranteed second event coverage. For all layers purchased between$45 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 catastrophic event and reinstatement premium is due, we have purchased enough reinstatement premium protection (“RPP”) limit to pay the premium necessary for the reinstatement of these coverages or have secured a specific second event contract.

Previous wording

•Universal Insurance Holdings, Inc. (“UIH”) established the first event layer of $66 million in excess of $45 million in a captive insurance arrangement. See“Item 1—Note 14 (Variable Interest Entities).”

Current wording

•First event layer of 100% of$66 million in excess of$45 million is established by Universal Insurance Holdings, Inc (“UIH”) in captive insurance arrangement. See“Item 1—Note 14 (Variable Interest Entities).”

Previous wording

•Specific third and fourth event private market excess of loss coverage of $86 million in excess of $25 million provides frequency protection for multiple events during the treaty period, an incremental $20 million reduction in retention for a third and fourth event.

Current wording

•Specific third and fourth event private market catastrophe excess of loss coverage of$86 million in excess of$25 million provides frequency protection for multiple events during the treaty period including a$20 million reduction in retention for a third and fourth event.

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 $1.37 billion of coverage for UPCIC, and $22.8 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, 2026, both UPCIC and APPCIC have continued the election of the 90% coverage level. We estimate the total mandatory FHCF layer will provide approximately$1.39 billion of coverage for UPCIC, which inures to the benefit of the open market coverage secured from private reinsurers and we estimate the total mandatory FHCF layer will provide approximately$25.0 million of coverage for APPCIC, which inures to the benefit of the open market coverage secured from private reinsurers.

Previous wording

•On January 7, 2026, the Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to $20.0 million of its outstanding shares of common stock through January 8, 2028. During the three months ended March 31, 2026, the Company repurchased 209,742 shares at an average price of $33.98 per share, totaling$7.1 million. As of March 31, 2026,$13.1 million remains under the share repurchase plan, which expires January 8, 2028.

Current wording

•During the three months ended June 30, 2026, the Company repurchased 121,808 shares for $4.5 million at an average price of $37.19 per share. As of June 30, 2026,$8.6 million remains under the share repurchase plan, which expires January 8, 2028.

Previous wording

•Book value per share was $20.95 at March 31, 2026, compared to $19.67 at December 31, 2025, an increase of 6.5%.

Current wording

•Book value per share was $22.89 at June 30, 2026, compared to $19.67 at December 31, 2025, an increase of 16.4%.

Previous wording

For the three months ended March 31, 2026, net income rose to $54.3 million from $41.4 million in 2025, with diluted EPS increasing to $1.88 from $1.44. Growth in premiums earned, net, investment income, realized gains, and policy fees, combined with total lower operating costs and expenses, contributed to improved performance. Higher unrealized losses and lower commission revenue impacted results in the first quarter of 2026. While losses and LAE costs were reduced, these were partially offset by increases in acquisition costs and other operating costs and expenses. The net loss ratio declined to 63.9% from 70.5% in 2025, and the combined ratio was 89.7%, down from 95.0% in 2025. No catastrophe events or prior-year reserve developments occurred in either period. See the“Overview—Trends and Geographical Distribution—Florida Trends”section for more information.

Current wording

For the three months ended June 30, 2026, net income was $59.2 million compared to $35.1 million in 2025, with diluted EPS increasing to $2.04 from $1.21. Growth in premiums earned, net, investment income, and unrealized gains contributed to improved performance. Lower realized gains and commission revenue partially offset these increases. While losses and LAE costs were reduced, these were partially offset by increases in acquisition costs and other operating costs and expenses. The net loss ratio declined to 64.8% from 72.3% in 2025, and the combined ratio was 91.6%, down from 97.8% in 2025. No catastrophe events or prior-year reserve developments occurred in either period. See the“Overview—Trends and Geographical Distribution—Florida Trends”section for more information.

Previous wording

For the three months ended March 31, 2026, ceded premiums earned increased by $17.0 million, or 10.8%, compared to the same period in 2025. Ceded earned premiums represented 32.8% of direct earned premiums in 2026, rising from 30.7% in 2025. The increase in ceded earned premiums primarily reflects higher reinsurance costs from expanded coverage limits purchased under the 2025–2026 reinsurance program. Further details regarding the Insurance Entities’ 2025-2026 reinsurance programs are provided in the preceding discussion and in“Item 1— Note 4 (Reinsurance)”.

Current wording

Additional information regarding the Insurance Entities’ 2026–27 reinsurance program is provided in the preceding discussion and in“Item 1—Note 4 (Reinsurance).”

Previous wording

Other revenue primarily consists of policy installment fees collected by the Insurance Entities, as well as premium financing and various other sources of income. For the three months ended March 31, 2026, other revenue totaled $2.1 million, compared to $2.3 million for the same period in 2025.

Current wording

Other revenue primarily consists of policy installment fees collected by the Insurance Entities, premium financing revenue, and other revenue sources that are not individually material. Other revenue was $2.1 million for the three months ending June 30, 2026, compared with $2.0 million for the same period in 2025, an increase of $0.1 million, or 2.8%.

Previous wording

Losses, net reflect our adjusting company's claim activities within our holding system for the Insurance Entities and reinsurers. The net pre-tax results adjust LAE in addition to what the Insurance Entities incur. Keeping claims and legal operations in-house—especially in Florida’s litigious environment—boosts efficiency and coordination, leading to cost savings after catastrophes. We maintain staffing to manage catastrophe-related claims and litigation; however, these resources offer minimal net benefits during normal operations. Profits from our claim adjusting company reduce consolidated losses and LAE, but for the quarters ended March 31, 2026, and 2025, there was no significant impact on consolidated results.

Current wording

Losses, net reflect our adjusting company's claim activities within our holding system for the Insurance Entities and reinsurers. The net pre-tax results adjust LAE in addition to what the Insurance Entities incur. Keeping claims and legal operations in-house—especially in Florida’s litigious environment—boosts efficiency and coordination, leading to cost savings after catastrophes. We maintain staffing to manage catastrophe-related claims and litigation; however, these resources offer minimal net benefits during normal operations. Profits from our claim adjusting company reduce consolidated losses and LAE, but for the quarter ended June 30, 2026, and 2025, there was no significant impact on consolidated results.

Previous wording

For the three months ended March 31, 2026, policy acquisition costs and other operating costs and expenses were $92.2 million compared to $87.2 million for the three months ended March 31, 2025, as follows (dollars in thousands):

Current wording

For the three months ended June 30, 2026, policy acquisition costs and other operating costs and expenses were $100.9 million compared to $91.8 million for the three months ended June 30, 2025, as follows (dollars in thousands):

Previous wording

For the three months ended March 31, 2026, policy acquisition costs and other operating costs and expenses increased by $4.9 million, compared to the three months ended March 31, 2025, which was the result of an increase in policy acquisition costs of $3.9 million and an increase in other operating costs and expenses of $1.0 million. The total expense ratio was 25.8% for the three months ended March 31, 2026, compared to 24.5% for the three months ended March 31, 2025.

Current wording

For the three months ended June 30, 2026, policy acquisition costs and other operating costs and expenses increased by $9.0 million, compared with the same period in 2025, reflecting a $6.2 million increase in policy acquisition costs and a $2.8 million increase in other operating costs and expenses. The total expense ratio was 26.8% for the three months ended June 30, 2026, compared to 25.5% for the same period in 2025. The increase in the expense ratio primarily reflected higher acquisition and operating expenses relative to net earned premiums.

Previous wording

As a result of the trends discussed above for losses and LAE and policy acquisition costs and other operating costs and expenses, the combined ratio for the three months ended March 31, 2026, was 89.7% compared to 95.0% for the three months ended March 31, 2025.

Current wording

As a result of the trends discussed above for net premiums earned, losses and LAE and policy acquisition costs and other operating costs and expenses, the combined ratio for the three months ended June 30, 2026, was 91.6% compared to 97.8% for the three months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, income tax expense was $17.4 million, compared to $14.0 million for the three months ended March 31, 2025. Our effective tax rate (“ETR”) decreased to 24.3% for the three months ended March 31, 2026, compared to 25.3% 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 2026, and 2025.

Current wording

For the three months ended June 30, 2026, income tax expense was $20.4 million, compared with $11.3 million for the three months ended June 30, 2025. The increase was primarily attributable to higher pretax income in the 2026 period. The Company’s effective tax rate (“ETR”) was 25.7% for the three months ended June 30, 2026, compared with 24.3% for the same period in 2025. See “Item 1—Note 9 (Income Taxes)” for a table of items reconciling statutory rates to the effective rate for 2026, and 2025.

Previous wording

For the three months ended March 31, 2026, policies in force rose by 50,489 or 5.8%, premium in force increased by $83.9 million or 4.0%, and total insured value grew by $37.1 billion or 10.1%, compared to the three months ended March 31, 2025. Direct premiums written are up in most states we operate in. As of March 31, 2026, we have policies in 19 states and are authorized to do business in Tennessee with a rate filing underway.

Current wording

Direct premiums written have increased in 18 states we operate in since June 30, 2025. As of June 30, 2026, we have policies in 19 states and are authorized to do business in Tennessee with a rate filing underway. Details on recent rate changes impacting premiums are discussed in“Overview—Trends and Geographical Distribution—Florida Trends.”

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 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 71.3% of our direct premiums written for the three months ended March 31, 2026. We seek to produce an underwriting profit (defined as net premiums earned minus losses, loss adjustment expense (“LAE”), policy acquisition costs and other operating costs and expenses) over the long term, along with growing our Other Revenue Sources.

Current wording

Policy Acquisition Costs and Other Operating Costs and Expenses

Previous wording

The maximum amount of dividends that can be paid by Florida insurance companies without prior approval of the FLOIR is subject to restrictions as referenced below and in“Item 1—Note 5 (Insurance Operations).” Dividends from the Insurance Entities can only be paid from accumulated unassigned funds derived from net operating profits and net realized capital gains. Subject to such accumulated unassigned funds, the maximum dividend that may be paid by the Insurance Entities to PSI, without prior approval (an “ordinary dividend”) is further limited to the lesser of statutory net income from operations of the preceding calendar year or statutory unassigned surplus as of the preceding year end. No dividends were paid to PSI by the Insurance Entities during the three months ended March 31, 2026, or the year ended December 31, 2025. As of both dates, UPCIC did not meet the threshold for capacity to pay ordinary dividends; APPCIC met the regulatory threshold but did not declare or pay any dividend.

Current wording

Dividends from the Insurance Entities to Protection Solutions, Inc. (“PSI”) are subject to regulatory limitations and, in certain circumstances, prior approval by the Florida Office of Insurance Regulation (“FLOIR”). Under Florida law, dividends may be paid only from accumulated unassigned funds derived from net operating profits and net realized capital gains. In addition, the maximum amount that may be paid by the Insurance Entities without prior FLOIR approval is limited to the lesser of statutory net income from operations for the preceding calendar year or statutory unassigned surplus as of the preceding year end, subject to available accumulated unassigned funds. No dividends were paid by the Insurance Entities to PSI during the six months ended June 30, 2026 or the year ended December 31, 2025. As of June 30, 2026, UPCIC did not have ordinary dividend capacity under Florida law, while APPCIC met the regulatory threshold but did not declare or pay a dividend. See“Item 1—Note 5 (Insurance Operations)” for additional information regarding dividend limitations applicable to the Insurance Entities.

Previous wording

Capital resources, net increased by $33.5 million for the three months ended March 31, 2026, reflecting a net increase in total stockholders’ equity, partially offset by a decline in debt. The change in stockholders’ equity was the result of our net income in the three months ended March 31, 2026, offset by our treasury share purchases and dividends to shareholders. The change in accumulated other comprehensive loss was the result of an increase in unrealized losses in our debt securities portfolio. See the Condensed Consolidated Statements of Stockholders’ Equity and“Item 1—Note 8 (Stockholders’ Equity)” for an explanation of changes in treasury stock. The reduction in debt during 2026 was primarily the result of principal payments on debt of $0.4 million offset by amortization of debt issuance costs of $0.2 million on our 5.625% Senior Unsecured Notes due 2026. See “—Liquidity and Capital Resources”for more information.

Current wording

Capital resources, net increased by $83.5 million for the six months ended June 30, 2026, reflecting a net increase in total stockholders’ equity, partially offset by a decline in debt. The change in stockholders’ equity was the result of our net income in the six months ended June 30, 2026, offset by our treasury share purchases and dividends to shareholders. The change in accumulated other comprehensive loss was the result of an increase in unrealized losses in our debt securities portfolio. See the “Item 1—Condensed Consolidated Statements of Stockholders’ Equity” and“Item 1—Note 8 (Stockholders’ Equity)” for an explanation of changes in treasury stock. The reduction in debt during 2026 was primarily the result of principal payments on debt of $0.7 million and new debt issuance costs of $2.5 million on the 2031 Notes, offset by amortization of debt issuance costs of $0.6 million on our 2026 Notes. See“Item 1—Note 7 (Debt)”for more information.

Previous wording

Additional paid-in-capital decreased by $0.4 million primarily due to $2.1 million of treasury share repurchases and common stock value acquired and cancelled through withholdings for the intrinsic value and tax liabilities upon exercise of stock options and tax withholdings on performance share units and restricted stock units vested for share-based payment transactions. These were largely offset by the impact of stock options exercises of $0.4 million and share-based compensation expense of $1.3 million for the three months ended March 31, 2026.

Current wording

Additional paid-in-capital increased by $3.0 million, primarily due to $4.9 million of share-based compensation expense and stock options exercises of $3.2 million, offset by $5.1 million of treasury share repurchases and common stock value acquired and cancelled through withholdings for the intrinsic value and tax liabilities upon exercise of stock options and tax withholdings on performance share units and restricted stock units vested for share-based payment transactions for the six months ended June 30, 2026.

Previous wording

As discussed in“Item 1—Note 7 (Debt),” the Company entered into a committed and unsecured $50.0 million revolving credit line with JP Morgan Chase Bank, N.A. This agreement succeeded the previous$50.0 million revolving credit line with J.P. Morgan Chase, N.A. As of March 31, 2026, the Company has not borrowed any amount under this revolving loan. The Company must pay an annual commitment of 0.50% of the unused portion of the commitment. Borrowings mature on May 29, 2026, 364 days after the inception date and carries an interest rate of prime rate plus a margin of 2.0% on borrowings. The credit line is subject to annual renewals. The credit line contains customary financial and other covenants, with which the Company is in compliance.

Current wording

As discussed in“Item 1—Note 7 (Debt),” the Company entered into a committed and unsecured $50.0 million revolving credit facility with JP Morgan Chase Bank, N.A., which replaced the Company’s prior $50.0 million revolving credit facility with the same lender. As of June 30, 2026, no amounts were outstanding under the facility, and $50.0 million was available, subject to the terms and conditions of the facility. The Company pays an annual commitment of 0.375% on the unused portion of the commitment. Borrowings under the facility mature on May 28, 2027, and bear interest at the prime rate plus 2.0%. The facility is subject to annual renewals and contains customary financial and other covenants. The Company was in compliance with these covenants as of June 30, 2026.

Previous wording

In 2006, UPCIC entered into a $25.0 million surplus note with the State Board of Administration of Florida (the “SBA”) under Florida’s Insurance Capital Build-Up Incentive Program (the “ICBUI”). The outstanding balance on this loan is$0.7 million as of March 31, 2026. The surplus note has a twenty-year term, with quarterly payments of interest based on the 10-year Constant Maturity Treasury Index. As of March 31, 2026, UPCIC’s net written premium to surplus ratio and gross written premium to surplus ratio were in excess of the required minimums and, therefore, UPCIC is not subject to increases in interest rates. See“Item 1—Note 7 (Debt)” for additional details. At March 31, 2026, UPCIC was in compliance with the terms of the surplus note and with each of the loan’s covenants as implemented by rules promulgated by the SBA. Total adjusted capital and surplus, which includes the surplus note, was in excess of regulatory requirements for both UPCIC and APPCIC.

Current wording

UPCIC has a surplus note outstanding with the State Board of Administration of Florida under Florida’s Insurance Capital Build-Up Incentive Program. The outstanding balance was $0.4 million as of June 30, 2026. The surplus note has a 20-year term and bears interest based on the 10-year Constant Maturity Treasury Index, with principal and interest payable in accordance with the terms of the note and applicable regulatory requirements. As of June 30, 2026, UPCIC was in compliance with the terms of the surplus note and related covenants. Total adjusted capital and surplus, including the surplus note, exceeded applicable regulatory requirements for both UPCIC and APPCIC. See“Item 1—Note 7 (Debt)” for additional information.

Previous wording

•On January 7, 2026, our Board of Directors authorized the repurchase of an additional $20.0 million of our common stock through January 8, 2028 (the “January 2028 Share Repurchase Program”), pursuant to which we have repurchased 203,637 shares of our common stock at an aggregate cost of approximately $6.9 million in the three months ended March 31, 2026. As of March 31, 2026, we have the ability to purchase approximately $13.1 million of our common stock under the January 2028 Share Repurchase Program.

Current wording

On January 7, 2026, the Board of Directors authorized the repurchase of up to an additional $20.0 million of the Company’s common stock through January 8, 2028 (the “January 2028 Share Repurchase Program”). During the three months ended June 30, 2026, the Company repurchased 121,808 shares of common stock at an aggregate cost of approximately $4.5 million. As of June 30, 2026, approximately $8.6 million remained available for repurchase under the January 2028 Share Repurchase Program.

Previous wording

In total, during the three months ended March 31, 2026, we repurchased an aggregate of 209,742 shares of our common stock in the open market at an aggregate purchase price of $7.1 million. See “Part II—Item 2—Unregistered Sales of Equity Securities and Use of Proceeds” for share repurchase activity during the three months ended March 31, 2026.

Current wording

See“Part II—Item 2—Unregistered Sales of Equity Securities and Use of Proceeds” for share repurchase activity during the three months ended June 30, 2026.

Previous wording

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on the financial condition, results of operations, liquidity, or capital resources of the Company, except for multi-year reinsurance contract commitments for future years that will be recorded at the commencement of the coverage period. See“Item 1—Note 12 (Commitments and Contingencies)” for more information.

Current wording

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on its financial condition, results of operations, liquidity or capital resources. For information regarding contractual commitments entered into in the ordinary course of business, including reinsurance commitments that do not constitute off-balance sheet arrangements see“Item 1—Note 12 (Commitments and Contingencies)” and“Liquidity and Capital Resources—Material Cash Requirements.”

Previous wording

The following table summarizes the dividends declared and paid by the Company during the three months ended March 31, 2026:

Current wording

The following table summarizes the dividends declared and paid by the Company during the six months ended June 30, 2026:

Previous wording

(3)Debt consists of a Surplus note and 5.625% Senior unsecured notes. See“Item 1—Note 7 (Debt).”

Current wording

(3)Debt consists of a Surplus note and 7.75% Senior unsecured notes. See“Item 1—Note 7 (Debt).”