MARKEL GROUP INC.

1. Summary of Significant Accounting Policies

Markel Group Inc. (Markel Group) is a holding company comprised of a diverse group of businesses and investments with specialty insurance at its core. See note 2 for details regarding reportable segments.

a)Basis of Presentation. The consolidated balance sheet as of September 30, 2025 and the related consolidated statements of income and comprehensive income and changes in equity for the quarters and nine months ended September 30, 2025 and 2024 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024 are unaudited. In the opinion of management, all adjustments necessary for fair presentation of such consolidated financial statements have been included. Such adjustments consist only of normal, recurring items. Interim results are not necessarily indicative of results of operations for the entire year. The consolidated balance sheet as of December 31, 2024 was derived from Markel Group's audited annual consolidated financial statements.

The accompanying consolidated financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) and include the accounts of Markel Group and its consolidated subsidiaries, as well as variable interest entities (VIEs) that meet the requirements for consolidation (the Company). All significant intercompany balances and transactions have been eliminated in consolidation. The Company consolidates the results of its operating businesses outside of insurance on a one-month lag, with the exception of significant transactions or events that occur during the intervening period. Certain prior period amounts have been reclassified to conform to the current period presentation.

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ materially from the estimates and assumptions used in preparing the consolidated financial statements.

The consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company's annual consolidated financial statements and notes. For a more complete description of the Company's business and accounting policies, readers are urged to review the Company's 2024 Annual Report on Form 10‑K.

Beginning with this Quarterly Report on Form 10-Q, the Company changed the presentation of its consolidated statements of income and comprehensive income to present net investment gains outside of operating revenues. Net investment gains continue to be included in net income. Prior periods have been conformed to this presentation.

b)Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires public companies, on an annual basis, to provide enhanced rate reconciliation disclosures, including disclosure of specific categories and additional information for reconciling items that meet a quantitative threshold. The standard also requires public companies to, among other things, disaggregate income taxes paid by federal, state, and foreign taxes. ASU No. 2023-09 becomes effective for the Company's 2025 Annual Report on Form 10-K. The standard only impacts required disclosures and will not impact the Company's financial position, results of operations, or cash flows. The Company is currently evaluating the impact of ASU No. 2023-09 on its disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. The standard requires disclosure of certain prescribed costs and expenses within the notes to consolidated financial statements. ASU No. 2024-03 becomes effective for the Company's 2027 Annual Report on Form 10-K. The standard only impacts required disclosures and will not impact the Company's financial position, results of operations, or cash flows. The Company is currently in the early stages of evaluating the impact of ASU No. 2024-23 on its disclosures.

2. Segment Reporting Disclosures

The Company hasfour reportable segments: Markel Insurance, Industrial, Financial, and Consumer and Other.

In the first half of 2025, management made changes to the structure and leadership of its insurance operations, resulting in changes to its operating and reportable segments, primarily the creation of the Markel Insurance segment. Markel Insurance's underwriting operations were previously reported through the Company's Insurance and Reinsurance segments.

Management made additional changes to the Company's operating and reportable segments in the third quarter of 2025 to reflect changes in how the chief operating decision maker assesses the Company's diverse set of businesses and investments. The businesses previously reported under the Markel Ventures segment, as well as the Company's State National and Nephila businesses, which previously were not included in a reportable segment, are now reported in three new reportable segments: Industrial, Financial, and Consumer and Other. Additionally, the results from the Company's investing activities, previously reported in the Investing segment, are now attributed to the Company's segments or corporate operations based on the subsidiary that holds the investments. Markel Insurance's subsidiaries hold the most significant portion of the Company's investments. Prior periods have been recast to conform to the current presentation.

The Markel Insurance segment is the Company's core specialty insurance business, which is comprised of underwriting and other insurance-related activities. The Markel Insurance segment aligns with its network of insurance subsidiaries under the common leadership of the Markel Insurance chief executive officer. In August 2025, Markel Insurance sold the renewal rights for business written in its Global Reinsurance division, and the division entered into run-off. The Global Reinsurance division's gross premium volume in 2024 was $1.2 billion. As many of the contracts previously written within this division are multi-year agreements, the Company expects premiums to continue earning over the next two to three years and loss reserves are expected to take several additional years to run off.

The Industrial segment consists of businesses that distribute building products, provide fire protection and life safety solutions, and manufacture a variety of products, including precast concrete, car hauler equipment, food processing equipment, flooring for dry van trailers, dredges, and wall systems. Other businesses in the Industrial segment provide equipment rental services and erosion control and stormwater management services.

The Financial segment consists of businesses that operate in the insurance services and investment management industries, including the Company's State National and Nephila businesses, as well as certain insurance-linked securities investment management businesses that are in run-off.

The Consumer and Other segment consists of businesses that produce ornamental houseplants, build homes, design leather handbags, and own and operate manufactured housing communities. Other businesses in the Consumer and Other segment provide information technology consulting services, retail intelligence, concierge primary care, and sponsorship of international teachers.

The Company's corporate operations, which are not an operating or reportable segment, are comprised of holding company activities, which include capital allocation, leadership support, and performing the responsibilities consistent with sound governance and required of a public company. Historically, corporate expenses were fully allocated to the Company's segment results, however, beginning in the third quarter of 2025, the Company discontinued allocating corporate expenses that are not integral to operating its underlying businesses.

Intersegment transactions primarily consist of loans from Markel Insurance to a corporate subsidiary to fund certain non-insurance acquisitions and from a corporate subsidiary to certain non-insurance businesses to fund strategic growth investments and projects. The Company's chief operating decision maker considers these loans, and the related interest income, to be similar to invested assets held by the respective segment. Interest income on these intersegment loans is included in the respective segment's profit and is eliminated in consolidation.

Segment profit for all of the Company's segments is measured by adjusted operating income, which does not include net investment gains, amortization of acquired intangible assets, or impairment of goodwill. Net investment gains and losses, which are primarily comprised of unrealized gains and losses on equity securities, are evaluated separately by the chief operating decision maker when assessing periodic segment financial performance due to the inherent volatility of these gains and losses, which can temporarily obscure the underlying segment performance. The chief operating decision maker believes such amounts are more meaningful when evaluated over longer periods of time. Amortization of acquired intangible assets and impairment of goodwill, which arise from purchase accounting for acquisitions, are not considered a cost of operating the underlying businesses.

a)The following tables summarize the Company's segment disclosures. The Company's chief operating decision maker reviews net investment gains and losses by segment separately from the Company's segment profit.

b) The chief operating decision maker also reviews capital expenditures attributable to the Industrial and Consumer and Other segments.

c) The following table reconciles segment assets to the Company's consolidated balance sheets.

d) As a result of the Company's segment changes, the Company reassessed its reporting units. For any changes in reporting units that required a reallocation of goodwill, the Company tested goodwill for impairment immediately prior to the change in reporting units and determined that there wasno impairment of goodwill. The Company expects to complete its annual tests for goodwill impairment in the fourth quarter of 2025.

3. Acquisitions

Educational Partners International

In September 2024, the Company acquired a 68% ownership interest in Educational Partners International (EPI), a company that sponsors international teachers for placements in schools in the U.S. Total consideration for the Company's investment was $167.7 million, all of which was cash. The Company has the option to acquire the remaining equity interests and the remaining equity holders have the option to sell their interests to the Company in the future. Through January 15, 2025, the Company's investment was accounted for under the equity method, as the Company did not have control over the business due to regulatory approval that was still pending. On January 16, 2025, the Company received regulatory approval, which resulted in the control and consolidation of EPI.

Upon consolidation, the purchase price was preliminarily allocated to the acquired assets and liabilities of EPI based on estimated fair value at the consolidation date. In the third quarter of 2025, the Company completed the process of determining the fair value of the assets acquired and liabilities assumed with EPI and recognized goodwill of $65.3 million, intangible assets of $182.0 million and redeemable noncontrolling interest of $81.2 million. The final purchase price allocation reflected no significant differences from the preliminary purchase price allocation. Goodwill is primarily attributable to expected future earnings and cash flow potential of EPI, and it is expected to be deductible for income tax purposes. Intangible assets include $160.0 million attributed to an indefinite-lived intangible asset for a designation from the U.S. Department of State that authorizes EPI to sponsor international teachers for placements in schools in the U.S. The remaining intangible assets include $10.0 million of trade names, $2.0 million of technology, and $10.0 million of other intangible assets, which are being amortized over 15 years,5 years, and 15 years, respectively. Results attributable to EPI are included in the Company's Consumer and Other segment.

Valor Environmental

In June 2024, the Company acquired 98% of Valor Environmental (Valor), an environmental services company providing erosion control and related services to commercial development sites and homebuilders throughout the U.S. Total consideration for the transaction was $156.4 million, all of which was cash. The Company has the option to acquire the remaining equity interests and the remaining equity holders have the option to sell their interests to the Company in the future.

Upon acquisition, the purchase price was preliminarily allocated to the acquired assets and liabilities of Valor based on estimated fair value at the acquisition date. In the first quarter of 2025, the Company completed the process of determining the fair value of the assets acquired and liabilities assumed with Valor and recognized goodwill of $73.4 million and intangible assets of $92.5 million. The final purchase price allocation reflected differences from the preliminary purchase price allocation upon completion of a third-party valuation, including a $43.5 million increase in the amount recognized for intangible assets and an increase in the corresponding deferred tax liability. The final purchase price allocation adjustments resulted in a $34.2 million net decrease to goodwill from the preliminary amount recognized. Goodwill is primarily attributable to expected future earnings and cash flow potential of Valor, and a portion of it isnot deductible for income tax purposes. Intangible assets include $82.0 million of customer relationships, $6.0 million of trade names, and $4.5 million of other intangible assets, which are being amortized over 17 years,15 years, and 5 years, respectively. Results attributable to Valor are included in the Company's Industrial segment.

4. Investments

a) The following tables summarize the Company's available-for-sale investments. Agency mortgage-backed securities include securities issued by U.S. government-sponsored enterprises and U.S. government agencies. The net unrealized holding gains (losses) in the tables below are presented before taxes.

b)The following tables summarize gross unrealized investment losses on available-for-sale investments by the length of time that securities have continuously been in an unrealized loss position.

At September 30, 2025, the Company held 950 available-for-sale securities in an unrealized loss position with a total estimated fair value of $8.0 billion and gross unrealized losses of $361.1 million. Of these 950 securities,849 securities had been in a continuous unrealized loss position for one year or longer and had a total estimated fair value of $6.6 billion and gross unrealized losses of $353.5 million.

At December 31, 2024, the Company held 1,485 available-for-sale securities in an unrealized loss position with a total estimated fair value of $12.6 billion and gross unrealized losses of $743.0 million. Of these 1,485 securities,966 securities had been in a continuous unrealized loss position for one year or longer and had a total estimated fair value of $7.4 billion and gross unrealized losses of $633.1 million.

The Company completes a detailed analysis each quarter to assess whether the decline in the fair value of any investment below its cost basis is the result of a credit loss. All available-for-sale securities with unrealized losses are reviewed. The Company considers many factors in completing its quarterly review of securities with unrealized losses for credit-related impairment to determine whether a credit loss exists, including the extent to which fair value is below cost, the implied yield to maturity, rating downgrades of the security, and whether or not the issuer has failed to make scheduled principal or interest payments. The Company also takes into consideration information about the financial condition of the issuer and industry factors that could negatively impact the issuer.

If the decline in fair value of an available-for-sale security below its amortized cost is considered to be the result of a credit loss, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit loss, which is recorded as an allowance and recognized in net income. The allowance is limited to the difference between the fair value and the amortized cost of the security. Any remaining decline in fair value represents the non-credit portion of the impairment, which is recognized in other comprehensive income. The Company didnot have an allowance for credit losses for any available-for-sale securities as of September 30, 2025 or December 31, 2024. As of September 30, 2025 and December 31, 2024, gross unrealized losses on available-for-sale securities were the result of declines in the fair value of the investments due to increases in interest rates, which are expected to reverse as the securities mature, and foreign currency movements related to available-for-sale securities denominated in a foreign currency.

Quarterly, the Company also considers whether it intends to sell an available-for-sale security or if it is more likely than not that it will be required to sell a security before recovery of its amortized cost. In these instances, a decline in fair value is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security.

c) The amortized cost and estimated fair value of fixed maturity securities at September 30, 2025 are shown below by contractual maturity.

d) The following table presents the components of net investment income.

e) The following table presents the components of net investment gains included in net income and the change in net unrealized losses included in other comprehensive income. Gross realized investment gains and losses on fixed maturity securities, short-term investments, and other investments were not material to the consolidated financial statements and are presented on a net basis in the following table.

5. Fair Value Measurements

FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, establishes a three-level hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets or liabilities fall within different levels of the hierarchy, the classification is based on the lowest level input that is significant to the fair value measurement of the asset or liability.

Classification of assets and liabilities within the hierarchy considers the markets in which the assets and liabilities are traded and the reliability and transparency of the assumptions used to determine fair value. The hierarchy requires the use of observable market data when available. The levels of the hierarchy are defined as follows:

•Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets.

•Level 2 – Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and market-corroborated inputs.

•Level 3 – Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement.

In accordance with ASC 820, the Company determines fair value based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods, including the market, income, and cost approaches. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The following section describes the valuation methodologies used by the Company to measure assets and liabilities at fair value, including an indication of the level within the fair value hierarchy in which each asset or liability is generally classified.

Available-for-sale investments and equity securities. Available-for-sale investments and equity securities are recorded at fair value on a recurring basis. Available-for-sale investments include fixed maturity securities and short-term investments. Fair value is determined by the Company after considering various sources of information, including information provided by a third-party pricing service. The pricing service provides prices for substantially all of the Company's fixed maturity securities and equity securities. In determining fair value, the Company generally does not adjust the prices obtained from the pricing service. The Company obtains an understanding of the pricing service's valuation methodologies and related inputs, which include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, duration, credit ratings, estimated cash flows, and prepayment speeds. The Company validates prices provided by the pricing service by reviewing prices from other pricing sources and analyzing pricing data in certain instances.

The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Level 1 investments include those traded on an active exchange, such as the New York Stock Exchange. Level 2 investments include U.S. Treasury securities, U.S. government-sponsored enterprises, municipal bonds, foreign government, agency, and supranational bonds, mortgage-backed securities, and corporate and university debt securities. Level 3 investments include the Company's investments in insurance-linked securities funds that are in run-off, which are not traded on an active exchange and are valued using unobservable inputs.

Fair value for available-for-sale investments and equity securities is measured based upon quoted prices in active markets, if available. Due to variations in trading volumes and the lack of quoted market prices, fixed maturity securities are classified as Level 2 investments. The fair value of fixed maturity securities is normally derived through recent reported trades for identical or similar securities, making adjustments through the reporting date based upon available market observable data previously described. If there are no recent reported trades, the fair value of fixed maturity securities may be derived through the use of matrix pricing or model processes, where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Significant inputs used to determine the fair value of obligations of states, municipalities and political subdivisions, corporate and university bonds and obligations of foreign governments, agencies and supranationals include reported trades, benchmark yields, issuer spreads, bids, offers, credit information, and estimated cash flows. Significant inputs used to determine the fair value of mortgage-backed securities include the type of underlying assets, benchmark yields, prepayment speeds, collateral information, tranche type and volatility, estimated cash flows, credit information, default rates, recovery rates, issuer spreads, and the year of issue.

Senior long-term debt and other debt. Senior long-term debt and other debt is carried at amortized cost with the estimated fair value disclosed on the consolidated balance sheets. Senior long-term debt and other debt is classified as Level 2 within the fair value hierarchy due to variations in trading volumes and the lack of quoted market prices. The Company determines fair value through a third-party pricing service and generally does not adjust the prices obtained from the pricing service. The Company obtains an understanding of the pricing service's valuation methodologies and related inputs, which include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, duration, credit ratings, and estimated cash flows.

The following tables present the balances of assets measured at fair value on a recurring basis by level within the fair value hierarchy.

Except as disclosed in note 3, the Company didnot have any assets or liabilities measured at fair value on a non-recurring basis during the nine months ended September 30, 2025 and 2024.

6. Products, Services and Other Revenues

The following tables present revenues from contracts with customers by type and segment, all of which are included in products revenues and services and other revenues, along with a reconciliation to total products revenues and services and other revenues.

Receivables from contracts with customers were $709.8 million and $593.8 million as of September 30, 2025 and December 31, 2024, respectively.

7. Unpaid Losses and Loss Adjustment Expenses

The following table presents a reconciliation of consolidated beginning and ending reserves for losses and loss adjustment expenses.

For the nine months ended September 30, 2025, current accident year losses and loss adjustment expenses included $56.6 million of net losses and loss adjustment expenses attributed to the series of wildfires that occurred in southern California in January 2025 (California Wildfires). The net losses and loss adjustment expenses attributed to the California Wildfires as of September 30, 2025 represent the Company's best estimate based upon information currently available. This loss estimate was based on claims received, policy level reviews, and an analysis of ceded reinsurance contracts. The Company's estimate is based on various assumptions about coverage and liability and is therefore subject to change. While the Company believes its net reserves for the California Wildfires as of September 30, 2025 are adequate, it continues to closely monitor reported claims and may adjust the estimate of ultimate net losses as new information becomes available.

For the nine months ended September 30, 2025, losses and loss adjustment expenses included $360.5 million of favorable development on prior years loss reserves, which included $314.8 million of net favorable development on the Company's marine and energy, property, programs, general liability, and workers' compensation product lines within its Markel Insurance segment. Favorable development on the Markel Insurance segment's prior years loss reserves was net of $142.3 million of adverse development on run-off risk-managed directors and officers product lines.

In July 2025, the Company commuted a portfolio of ceded reinsurance contracts with certain Nephila Reinsurers (see note 9) consisting of property catastrophe and brokerage property exposures for policy years 2023 and prior. Gross and ceded reserves for losses and loss adjustment expenses on the commuted contracts totaled $312.2 million and resulted in cash payments of $292.6 million.

For the nine months ended September 30, 2024, current accident year losses and loss adjustment expenses included $62.0 million of net losses and loss adjustment expenses attributed to Hurricane Helene.

For the nine months ended September 30, 2024, losses and loss adjustment expenses included $344.2 million of favorable development on prior years loss reserves, which included $289.9 million of net favorable development on the Company's international professional liability product lines, as well as its general liability, property, and credit and surety product lines within its Markel Insurance segment.

8. Reinsurance

The following tables summarize the effect of reinsurance and retrocessional reinsurance on premiums written and earned. Fronting premiums are attributable to business written on behalf of third-party capacity providers, substantially all of which are ceded.

Substantially all of the incurred losses and loss adjustment expenses related to the Company's fronted premiums were ceded. These gross losses totaled $1.2 billion and $3.4 billion for the quarter and nine months ended September 30, 2025, respectively, and $975.0 million and $2.2 billion for the quarter and nine months ended September 30, 2024.

The following table summarizes the effect of reinsurance and retrocessional reinsurance on losses and loss adjustment expenses in the Company's underwriting operations.

9. Related Party Transactions

The Company engages in certain related party transactions in the normal course of business at arm's length.

Fund Management

The Company provides investment and insurance management services through Nephila Holdings Ltd. (together with its subsidiaries, Nephila). Nephila serves as the investment manager to several Bermuda based private funds (the Nephila Funds). To provide access for the Nephila Funds to a variety of insurance-linked securities in the property catastrophe, climate, and specialty insurance markets, Nephila also acts as an insurance manager to certain Bermuda licensed reinsurers and as the managing agent to Lloyd's Syndicate 2357 and Lloyd's Syndicate 2358 (collectively, the Nephila Reinsurers). Neither the Nephila Funds nor the Nephila Reinsurers are consolidated by the Company. Nephila receives management fees for investment and insurance management services based on either the net asset value of the accounts managed or gross premium volume for the underlying risks to which the investors subscribed. For the quarter and nine months ended September 30, 2025, total fund management revenues attributed to unconsolidated entities managed by Nephila were $30.3 million and $85.0 million, respectively. For the quarter and nine months ended September 30, 2024, total fund management revenues attributed to unconsolidated entities managed by Nephila were $25.1 million and $66.2 million, respectively.

Fronting

The Company engages in fronting activities in both its State National business and its Markel Insurance business. Within both of these businesses, the Company's fronting activities include programs with the Nephila Reinsurers through which the Company writes insurance policies that are fully ceded to the Nephila Reinsurers in exchange for fronting fees. Through these programs, Nephila utilizes certain of the Company's licensed insurance companies to write a portion of its portfolio of U.S. catastrophe-exposed property and specialty risks. Gross premiums written through these programs that were ceded to the Nephila Reinsurers were $162.9 million and $1.8 billion for the quarter and nine months ended September 30, 2025, respectively. Gross premiums written through these programs that were ceded to the Nephila Reinsurers were $94.3 million and $1.2 billion for the quarter and nine months ended September 30, 2024, respectively.

As of September 30, 2025 and December 31, 2024, reinsurance recoverables on the consolidated balance sheets included $604.3 million and $968.9 million, respectively, due from the Nephila Reinsurers. Under its programs with the Nephila Reinsurers, the Company bears underwriting risk for annual aggregate agreement year losses in excess of a limit the Company believes is unlikely to be exceeded. To the extent losses under these programs exceed the prescribed limits, the Company is obligated to pay such losses to the cedents without recourse to the Nephila Reinsurers. While the Company believes losses under these programs are unlikely, those losses, if incurred, could be material to the Company's consolidated results of operations and financial condition. In July 2025, the Company commuted a portfolio of ceded reinsurance contracts with certain Nephila Reinsurers. See note 7 for further details.

Beginning in the second quarter of 2024, in order for the Nephila Reinsurers to obtain reinsurance protection for a portion of their exposures, the Company also fronted ceded reinsurance contracts, primarily in the form of industry loss warranties, for the Nephila Reinsurers. Through this arrangement, the underlying risk of the Nephila Reinsurers was retroceded back to the Company and then fully ceded to third-party reinsurers. For the quarter and nine months ended September 30, 2025, the Company's gross written premiums from the Nephila Reinsurers under this fronting program were $7.0 million and $81.5 million, respectively, all of which were ceded to third parties. For the nine months ended September 30, 2024, the Company's gross written premiums from the Nephila Reinsurers under this fronting program were $168.0 million, all of which were ceded to third parties.

The Company has also entered into other assumed and ceded reinsurance transactions with the Nephila Reinsurers in the normal course of business, which are not material to the Company's consolidated financial statements.

Hagerty

The Company holds a minority ownership interest in Hagerty, Inc. (Hagerty), which operates primarily as a managing general agent focused on the global automobile enthusiast market and also includes Hagerty Reinsurance Limited (Hagerty Re), a Bermuda Class 3 reinsurance company. Through the Company's underwriting operations, the Company underwrites insurance for Hagerty, a portion of which is ceded to Hagerty Re. The amounts attributed to these arrangements are summarized in the following table.

As of September 30, 2025 and December 31, 2024, reinsurance recoverables on the consolidated balance sheets included $328.9 million and $308.8 million, respectively, due from Hagerty Re.

10. Shareholders' Equity

a) The Company has 50,000,000 shares ofno par value common stock authorized. The following table presents a rollforward of changes in common shares issued and outstanding.

b) The Company also has 10,000,000 shares ofno par value preferred stock authorized, of which 600,000 shares were issued and outstanding at December 31, 2024. In June 2025, the Company redeemed in full its outstanding 600,000 6.00% Fixed-Rate Reset Non-Cumulative Series A preferred shares for $1,000 per share, for an aggregate value of $600.0 million. At September 30, 2025, none of the Company's preferred shares were issued and outstanding. The Company declared and paid dividends on outstanding preferred shares of $18.0 million, or $30 per share, in the second quarters of both 2025 and 2024.

c) Net income per common share was determined by dividing adjusted net income to common shareholders by the applicable weighted average common shares outstanding. Weighted average basic common shares outstanding include restricted stock units that are no longer subject to any contingencies for issuance, but for which corresponding shares have not been issued. Diluted net income per common share is computed by dividing adjusted net income to common shareholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period. The following table presents basic net income per common share and diluted net income per common share.

11. Contingencies

Contingencies arise in the normal course of the Company's operations and are not expected to have a material impact on the Company's financial condition or results of operations.