SAFETY INSURANCE GROUP INC

Previous wording

In this discussion, “Safety” refers to Safety Insurance Group, Inc. and “our Company,” “the Company,” “we,” “us” and “our” refer to Safety Insurance Group, Inc. and its consolidated subsidiaries. Our subsidiaries consist of Safety Insurance Company (“Safety Insurance”), Safety Indemnity Insurance Company (“Safety Indemnity”), Safety Property and Casualty Insurance Company (“Safety P&C”), Safety Northeast Insurance Company (“Safety Northeast”), Safety Northeast Insurance Agency, Inc. (“SNIA”), and Safety Management Corporation (“SMC”), which is SNIA’s holding company.

Current wording

In this discussion, “Safety” refers to Safety Insurance Group, Inc. and “our Company,” “the Company,” “we,” “us” and “our” refer to Safety Insurance Group, Inc. and its consolidated subsidiaries. Our subsidiaries consist of Safety Insurance Company (“Safety Insurance”), Safety Indemnity Insurance Company (“Safety Indemnity”), Safety Property and Casualty Insurance Company (“Safety P&C”), Safety Northeast Insurance Company (“Safety Northeast”), Safety Northeast Insurance Agency, Inc. (“SNIA”), and Safety Management Corporation, which is SNIA’s holding company.

Previous wording

We are a leading provider of private passenger automobile, commercial automobile, homeowners and commercial other-than-auto insurance in Massachusetts. In addition to private passenger automobile insurance (which represented 55.8% of our direct written premiums in 2024), we offer a portfolio of other insurance products, including commercial automobile (15.2% of 2024 direct written premiums), homeowners (24.3% of 2024 direct written premiums) and dwelling fire, umbrella and business owner policies (totaling 4.7% of 2024 direct written premiums). Operating exclusively in Massachusetts, New Hampshire, and Maine through our insurance company subsidiaries, Safety Insurance, Safety Indemnity, Safety P&C and Safety Northeast (together referred to as the “Insurance Subsidiaries”), we have established strong relationships with independent insurance agents, who numbered 828 in 1,079 locations throughout these three states at December 31, 2024. We have used these relationships and our extensive knowledge of the Massachusetts market to become the third largest private passenger automobile carrier and the second largest commercial automobile insurance carrier in Massachusetts, capturing an approximate 9.7% and 12.9% share, respectively, of the Massachusetts private passenger and commercial automobile markets in 2024 according to statistics compiled by the Commonwealth Automobile Reinsurers (“CAR”) based on automobile exposures. We are also the third largest homeowners insurance carrier in Massachusetts with a 6.3% share of the Massachusetts homeowners insurance market.

Current wording

We are a leading provider of private passenger automobile, commercial automobile, homeowners and commercial other-than-auto insurance in Massachusetts. In addition to private passenger automobile insurance (which represented 54.9% of our direct written premiums in 2025), we offer a portfolio of other insurance products, including commercial automobile (15.2% of 2025 direct written premiums), homeowners (25.2% of 2025 direct written premiums) and dwelling fire, umbrella and business owner policies (totaling 4.7% of 2025 direct written premiums). Operating exclusively in Massachusetts, New Hampshire, and Maine through our insurance company subsidiaries, Safety Insurance, Safety Indemnity, Safety P&C, and Safety Northeast (together referred to as the “Insurance Subsidiaries”), we have established strong relationships with independent insurance agents, who numbered 797 in 1,063 locations throughout these three states at December 31, 2025. We have used these relationships and our extensive knowledge of the Massachusetts market to become the third largest private passenger automobile carrier and the second largest commercial automobile insurance carrier in Massachusetts, capturing an approximate 9.4% and 13.0% share, respectively, of the Massachusetts private passenger and commercial automobile markets in 2025, according to statistics compiled by the Commonwealth Automobile Reinsurers (“CAR”) based on automobile exposures. We are also the third largest homeowners insurance carrier in Massachusetts with a 7.0% share of the Massachusetts homeowners insurance market in 2024.

Previous wording

Our Insurance Subsidiaries began writing insurance in New Hampshire during 2008 and in Maine in 2016. In November 2020, we formed a fourth insurance subsidiary, Safety Northeast, which became licensed to write insurance products in Massachusetts.

Current wording

Our Insurance Subsidiaries began writing insurance in New Hampshire during 2008 and in Maine in 2016. In November 2020, we formed a fourth insurance subsidiary, Safety Northeast, which became licensed to write insurance products in Massachusetts. The table below shows the amount of direct written premiums written in each state during the three months ended March 31, 2026 and 2025.

Previous wording

*Direct and Net Written Premiums.*For the three months ended September 30, 2025 direct written premium growth and net written premium growth were 5.0% and 5.7%, respectively, compared to the prior period. The increase in premium is driven by rate increases. For the nine months ended September 30, 2025, average written premium per policy increased 8.7%, 6.2% and 9.8% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2024.

Current wording

Direct and Net Written Premiums. For the three months ended March 31, 2026, direct written premium growth and net written premium growth were 0.3% and 0.2%, respectively. The increase in premium is driven by rate increases. For the three months ended March 31, 2026, average written premium per policy increased 4.0%, 6.1% and 9.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2025.

Previous wording

The maximum number of shares of common stock between both the Amended 2018 Plan and 2002 Incentive Plan with respect to which awards may be granted is 3,200,000. No further grants will be allowed under the 2002 Incentive Plan. At September 30, 2025, there were 235,663 shares available for future grant.

Current wording

The maximum number of shares of common stock between both the Amended 2018 Plan and 2002 Incentive Plan with respect to which awards may be granted is 3,200,000. No further grants will be allowed under the 2002 Incentive Plan. At March 31, 2026, there were 160,334 shares available for future grant.

Previous wording

A summary of share based awards granted under the Incentive Plan during the nine months ended September 30, 2025 is as follows:

Current wording

A summary of share based awards granted under the Incentive Plan during the three months ended March 31, 2026 is as follows:

Previous wording

We reinsure with other insurance companies a portion of our potential liability under the policies we have underwritten, thereby protecting us against an unexpectedly large loss or a catastrophic occurrence that could produce large losses, primarily in our homeowners line of business. We are selective in choosing our reinsurers, seeking only those companies that we consider to be financially stable and adequately capitalized. In an effort to minimize exposure to the insolvency of a reinsurer, we continually evaluate and review the financial condition of our reinsurers. Most of our reinsurers have an A.M. Best rating of “A+” (Superior) or “A” (Excellent).

Current wording

We reinsure with other insurance companies a portion of our potential liability under the policies we have underwritten, thereby protecting us against an unexpectedly large loss or a catastrophic occurrence that could produce large losses, primarily in our homeowners line of business. We are selective in choosing our reinsurers, seeking only those companies that we consider to be financially stable and adequately capitalized. In an effort to minimize exposure to the insolvency of a reinsurer, we continually evaluate and review the financial condition of our reinsurers. Most of our other reinsurers have an A.M. Best rating of “A+” (Superior) or “A” (Excellent).

Previous wording

We maintain reinsurance coverage to help lessen the effect of losses from catastrophic events, maintaining coverage during 2025 that protects us in the event of a “138-year storm” (that is, a storm of a severity expected to occur once in a 138-year period). We use various software products to measure our exposure to catastrophe losses and the probable maximum loss to us for catastrophe losses such as hurricanes.

Current wording

We maintain reinsurance coverage to help lessen the effect of losses from catastrophic events, maintaining coverage during 2026 that protects us in the event of a "140-year storm" (that is, a storm of a severity expected to occur once in a 140-year period). We use various software products to measure our exposure to catastrophe losses and the probable maximum loss to us for catastrophe losses such as hurricanes.

Previous wording

For 2025, we have purchased three layers of excess catastrophe reinsurance providing $675,000 of coverage for property losses in excess of $75,000 up to a maximum of $750,000. Our reinsurers’ co-participation is 85.0% of $75,000 for the 1st layer, 85.0% of $250,000 for the 2nd layer and 85.0% of $350,000 for the 3rd layer.

Current wording

For 2026, we have purchased three layers of excess catastrophe reinsurance providing $770,000 of coverage for property losses in excess of $80,000 up to a maximum of $850,000. Our reinsurers’ co-participation is 85.0% of $120,000 for the 1st layer, 85.0% of 250,000 for the 2nd layer and 90.0% of $400,000 for the 3rd layer.

Previous wording

We also have casualty excess of loss reinsurance for large casualty losses occurring in our automobile, homeowners, dwelling fire, and business owner lines of business in excess of $2,000 up to a maximum of $10,000. We have property excess of loss reinsurance coverage for large property losses, with coverage in excess of $3,000 up to a maximum of $25,000, for our homeowners, and business owners. In addition, we have liability excess of loss reinsurance for umbrella large losses in excess of $1,000 up to a maximum of $10,000. We also have various reinsurance agreements with Hartford Steam Boiler Inspection and Insurance Company, of which the primary contract is a quota share agreement under which we cede 100% of the premiums and losses for the equipment breakdown coverage under our business owner policies.

Current wording

We also have casualty excess of loss reinsurance for large casualty losses occurring in our automobile, homeowners, dwelling fire, and business owner lines of business in excess of $2,000 up to a maximum of $10,000. We have property excess of loss reinsurance coverage for large property losses, with coverage in excess of $3,000 up to a maximum of $20,000, for our homeowners, and business owners. In addition, we have liability excess of loss reinsurance for umbrella large losses in excess of $1,000 up to a maximum of $10,000. We also have various reinsurance agreements with Hartford Steam Boiler Inspection and Insurance Company, of which the primary contract is a quota share agreement under which we cede 100% of the premiums and losses for the equipment breakdown coverage under our business owner policies.

Previous wording

At September 30, 2025, we had $160,638 recoverable from CAR, which consisted of loss adjustment expense reserves, unearned premiums and reinsurance recoverable.

Current wording

At March 31, 2026, we had $179,203 recoverable from CAR comprised of loss adjustment expense reserves, unearned premiums and reinsurance recoverable.

Previous wording

Non-GAAP operating income and non-GAAP operating income per diluted share consist of our GAAP net income adjusted by the net realized gains (losses) on investments, changes in net unrealized gains on equity securities, credit loss benefit (expense) and taxes related thereto. Net income and earnings per diluted share are the GAAP financial measures that are most directly comparable to non-GAAP operating income and non-GAAP operating income per diluted share, respectively. A reconciliation of the GAAP financial measures to these non-GAAP measures is included in the financial highlights below.

Current wording

Non-GAAP operating income and non-GAAP operating income per diluted share consist of our GAAP net income adjusted by the net realized gains (losses) on investments, changes in net unrealized gains on equity securities, credit loss benefit (expense) and taxes related thereto. Net income (loss) and earnings (loss) per diluted share are the GAAP financial measures that are most directly comparable to non-GAAP operating income (loss) and non-GAAP operating income (loss) per diluted share, respectively. A reconciliation of the GAAP financial measures to these non-GAAP measures is included in the financial highlights below.

Previous wording

Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024

Current wording

Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025

Previous wording

Direct Written Premiums. Direct written premiums for the three months ended September 30, 2025 increased by $15,999, or 5.0%, to $334,181 from $318,182 for the comparable 2024 period. Direct written premiums for the nine months ended September 30, 2025 increased by $77,948, or 8.7%, to $978,980 from $901,032 for the comparable 2024 period. The increases in direct written premiums and net written premiums are a result of rate increases. For the nine months ended September 30, 2025, average written premium per policy increased 8.7%, 6.2% and 9.8% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2024.

Current wording

Direct Written Premiums. Direct written premiums for the three months ended March 31, 2026 increased by $805, or 0.3%, to $299,775 from $298,970 for the comparable 2025 period. The increase in direct written premiums is the result of rate increases. For the three months ended March 31, 2026, average written premium per policy increased 4.0%, 6.1% and 9.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2025.

Previous wording

Net Written Premiums. Net written premiums for the three months ended September 30, 2025 increased by $16,603, or 5.7%, to $309,215 from $292,612 for the comparable 2024 period. Net written premiums for the nine months ended September 30, 2025 increased by $65,628, or 7.8%, to $903,470 from $837,842 for the comparable 2024 period. The increases were primarily due to the factors that increased direct written premiums.

Current wording

Net Written Premiums. Net written premiums for the three months ended March 31, 2026 increased by $651, or 0.2%, to $275,431 from $274,780 for the comparable 2025 period. The increase was primarily due to the factors that increased direct written premiums.

Previous wording

Net Earned Premiums. Net earned premiums for the three months ended September 30, 2025 increased by $32,364, or 12.5%, to $291,021 from $258,657 for the comparable 2024 period. Net earned premiums for the nine months ended September 30, 2025 increased by $104,170, or 14.0%, to $845,824 from $741,654 for the comparable 2024 period. The increases were primarily due to prior year growth in policy counts and rate increases earning into top-line results.

Current wording

Net Earned Premiums. Net earned premiums for the three months ended March 31, 2026 increased by $18,296, or 6.7%, to $290,986 from $272,690 for the comparable 2025 period. The increase was primarily due to rate increases earning into top-line results.

Previous wording

Net Realized Gains on Investments. Net realized gains on investments were $1,338 for the three months ended September 30, 2025 compared to $1,314 for the comparable 2024 period. Net realized gains on investments was $7,732 for the nine months ended September 30, 2025 compared to $4,521 for the comparable 2024 period. The increase in net realized gains during the nine-month period reflects the sale of equity securities in a gain position during the first quarter of 2025.

Current wording

Net Realized Gains on Investments. Net realized gains on investments was $6,631 for the three months ended March 31, 2026 compared to $4,263 for the comparable 2025 period. The increase is driven by higher realized gains from the sale of equity securities compared to prior years.

Previous wording

The gross unrealized gains and losses on investments in fixed maturity securities, including redeemable preferred stocks that have characteristics of fixed maturities, short term investments, equity securities, including interests in mutual funds, and other invested assets were as follows for the periods indicated:

Current wording

The gross unrealized gains and losses on investments in fixed maturity securities, equity securities, including interests in mutual funds, and other invested assets were as follows for the periods indicated:

Previous wording

(1)Residential mortgage-backed securities consist primarily of obligations of U.S. Government agencies including collateralized mortgage obligations issued, guaranteed and/or insured by the following issuers: Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) and the Federal Home Loan Bank (FHLB).

Current wording

(1)Residential mortgage-backed securities consists primarily of obligations of U.S. Government agencies including collateralized mortgage obligations issued, guaranteed and/or insured by the following issuers: Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA) and the Federal Home Loan Bank (FHLB).

Previous wording

(2)Equity securities include common stock, preferred stock, mutual funds and interests in mutual funds held to fund the Company’s executive

Current wording

(2)Equity securities include common stock, mutual funds and interests in mutual funds held to fund the Company’s executive deferred compensation plan.

Previous wording

(3)Our investment portfolio includes 706 securities in an unrealized loss position at September 30, 2025.

Current wording

(3)Our investment portfolio included 936 securities in an unrealized loss position at March 31, 2026.

Previous wording

The composition of our fixed income security portfolio as defined by Nationally Recognized Statistical Rating Organizations was as follows:

Current wording

The composition of our fixed income security portfolio by Moody’s rating was as follows:

Previous wording

As of September 30, 2025, our portfolio of fixed maturity investments was comprised principally of investment grade corporate fixed maturity securities, U.S. government and agency securities, and asset-backed securities. The portion of our non-investment grade portfolio of fixed maturity investments is primarily comprised of variable rate secured and senior bank loans and high yield bonds.

Current wording

As of March 31, 2026, our portfolio of fixed maturity investments was comprised principally of investment-grade corporate securities, U.S. government and agency securities, asset-backed securities, and investment-grade collateralized loan obligations. The portion of our non-investment grade portfolio of fixed maturity investments is primarily comprised of variable rate secured and senior bank loans and high yield bonds.

Previous wording

As of September 30, 2025 and December 31, 2024, the Company concluded that $966 and $1,198, respectively, of unrealized losses were due to credit factors and were recorded as an allowance for expected credit losses expense. The Company concluded that outside of the securities that were recognized as credit impaired, the unrealized losses recorded on the fixed maturity portfolio at September 30, 2025 and December 31, 2024 resulted from fluctuations in market interest rates and other temporary market conditions as opposed to fundamental changes in the credit quality of the issuers of such securities. Based upon the analysis performed, the Company’s decision to hold these securities, the Company’s current level of liquidity and our history of positive cash flows, management believes it is more likely than not that it will not be required to sell any of its securities before the anticipated recovery in the fair value to its amortized cost basis.

Current wording

As of March 31, 2026, the Company concluded that $348 of unrealized losses were due to credit factors and were recorded as an allowance for expected credit losses. As of December 31, 2025, the Company concluded that none of the unrealized losses in the fixed maturity portfolio were due to credit factors; therefore, no allowance for credit losses was reported. The Company concluded that outside of the securities that were recognized as credit impaired, the unrealized losses recorded on the fixed maturity portfolio at March 31, 2026 and December 31, 2025 resulted from fluctuations in market interest rates and other temporary market conditions as opposed to fundamental changes in the credit quality of the issuers of such securities. Based upon the analysis performed, the Company’s decision to hold these securities, the Company’s current level of liquidity and our history of positive operating cash flows, management believes it is more likely than not that it will not be required to sell any of its securities before the anticipated recovery in the fair value to its amortized cost basis.

Previous wording

*Commission Income:*Commission income includes revenues from new and renewal commissions paid by insurance carriers, which we recognize when earned. Commission income was $2,415 and $1,963 for the three months ended September 30, 2025 and 2024, respectively. Commission income was $6,795 and $5,798 for the nine months ended September 30, 2025 and 2024, respectively. The year-over-year change is driven by policy count growth and increased premium rates across the property and casualty insurance market.

Current wording

*Commission Income:*Commission income includes revenues from new and renewal commissions paid by insurance carriers, which we recognize when earned. Commission income was $2,150 and $2,095 for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Finance and Other Service Income. Finance and other service income includes revenues from premium installment charges, which we recognize when earned, and other miscellaneous income and fees. Finance and other service income for the three months ended September 30, 2025 increased by $336, or 5.4%, to $6,589 from $6,253 for the comparable 2024 period. Finance and other service income for the nine months ended September 30, 2025, increased by $2,117, or 12.3%, to $19,361 from $17,244 for the comparable 2024 period. The increase is primarily driven by the increase in policy counts and changes to our fee assessment policies.

Current wording

Finance and Other Service Income. Finance and other service income includes revenues from premium installment charges, which we recognize when earned, and other miscellaneous income and fees. Finance and other service income for the three months ended March 31, 2026 decreased by $486, or 7.7%, to $5,801 from $6,287 for the comparable 2025 period. The decrease is primarily driven by a decrease in policy counts and changes to our fee assessment policies.

Previous wording

Our GAAP loss ratio for the three months ended September 30, 2025 decreased to 70.4% from 70.6% for the comparable 2024 period. Our GAAP loss ratio for the nine months ended September 30, 2025 decreased to 69.7% from 70.6% for the comparable 2024 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended September 30, 2025 was 63.1% compared to 62.7% for the comparable 2024 period. Our GAAP loss ratio excluding loss adjustment expenses for the nine months ended September 30, 2025 was 61.8% compared to 61.8% for the comparable 2024 period. Total prior year favorable development included in the pre-tax results for the three months ended September 30, 2025 was $9,707 compared to $8,563 for the comparable 2024 period. Total prior year favorable development included in the pre-tax results for the nine months ended September 30, 2025 was $33,180 compared to $38,938 for the comparable 2024 period. The decrease in favorable prior year development in 2025 is primarily attributable to the inclusion of $8,644 of FAIR Plan development in the prior year.

Current wording

Our GAAP loss ratio for the three months ended March 31, 2026 increased to 85.1% from 69.8% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended March 31, 2026 was 75.7% compared to 61.4% for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the three months ended March 31, 2026 was $10,549 compared to $12,238 for the comparable 2025 period.

Previous wording

Interest Expense. Interest expense was $426 and $124 for the three months ended September 30, 2025 and 2024, respectively. Interest expense was $972 for the nine months ended September 30, 2025 compared to $385 for the comparable 2024 period. The credit facility commitment fee included in interest expense was $14 and $45 for the nine months ended September 30, 2025 and 2024, respectively. The increase in interest expense during the current quarter is primarily due to the new loan agreement entered into with Citizens Bank on March 27, 2025, which carries an interest rate of SOFR rate plus 1.25%, compared to the repaid FHLB loan that had a fixed rate of 1.42%. Additionally, the Company no longer incurs a credit facility commitment fee as of March 27, 2025, since a loan is currently outstanding under the facility.

Current wording

Interest Expense. Interest expense was $618 and $104 for the three months ended March 31, 2026 and 2025. The increase in interest expense is due to borrowings under the Company’s existing Credit Agreement with Citizens Bank on March 27, 2025, which carries an interest rate of SOFR rate plus 1.25%, compared to the repaid FHLB of Boston loan that had a fixed rate of 1.42%.

Previous wording

Income Tax Expense. Our effective tax rate was 21.8% and 21.3% for the three months ended September 30, 2025 and 2024, respectively. The effective tax rate was 21.8% and 21.5% for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate in 2025 was higher than the statutory rate primarily due to the effects of stock-based compensation and permanent differences regarding executive compensation.

Current wording

Income Tax Expense. Our effective tax rate was 19.8% and 22.4% for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2026 was lower than the statutory rate primarily due to the effects of the change in unrealized gains on equity securities. The effective tax rate for the three months ended March 31, 2025 was higher than the statutory rate primarily due to the effects of executive compensation expense.

Previous wording

*Net Income.*Net income for the three months ended September 30, 2025 was $28,310 compared to net income of $25,889 for the comparable 2024 period. Net income for the nine months ended September 30, 2025 was $79,143 compared to $62,603 for the comparable 2024 period.

Current wording

Net (Loss) Income. Net loss for the three months ended March 31, 2026 was $14,323 compared to net income of $21,896 for the comparable 2025 period.

Previous wording

Non-GAAP Operating Income. Non-GAAP operating income, as defined above, was $21,883 for the three months ended September 30, 2025 compared to $16,524 for the comparable 2024 period. Non-GAAP operating income was $62,397 for the nine months ended September 30, 2025 compared to $47,542 for the comparable 2024 period.

Current wording

Non-GAAP Operating (Loss) Income. Non-GAAP operating loss as defined above was $10,204 for the three months ended March 31, 2026 compared to non-GAAP operating income of $18,996 for the comparable 2025 period. The decrease in Non-GAAP operating income was primarily the result of an increase in losses and loss adjustment expenses compared to the prior period. Non-GAAP operating loss for the quarter ended March 31, 2026 was $0.72 per diluted share, compared to non-GAAP operating income of $1.28 per diluted share for the comparable 2025 period.

Previous wording

Net cash provided by operating activities was $120,948 and $78,269 during the nine months ended 2025 and 2024, respectively. Our operations typically generate positive cash flows from operations as most premiums are received in advance of the time when claim and benefit payments are required. Positive operating cash flows are expected in the future to meet our liquidity requirements.

Current wording

Net cash used for operating activities was $17,034 during the three months ended March 31, 2026 compared to net cash provided by operating activities of $3,173 during the three months ended March 31, 2025. Our operations typically generate positive cash flows from operations as most premiums are received in advance of the time when claim and benefit payments are required. Net cash used for operating activities during the three months ended March 31, 2026 was the result of the timing of expense payments and Winter Storm payments. Positive operating cash flows are expected in the future to meet our liquidity requirements.

Previous wording

Net cash used for investing activities was $83,276 and $13,730 during the nine months ended September 30, 2025 and 2024, respectively. Fixed maturities, equity securities, and other invested assets purchased were $349,275 for the nine months ended September 30, 2025 compared to $237,338 for the comparable prior year period. Proceeds from maturities, redemptions, calls and sales, of securities were $266,399 during the nine months ended September 30, 2025 compared to $229,884 for the comparable prior year period.

Current wording

Net cash provided by investing activities was $11,556 and $16,129 during the three months ended March 31, 2026 and 2025, respectively. Fixed maturities, equity securities, and other invested assets purchased were $101,182 for the three months ended March 31, 2026 compared to $59,383 for the comparable prior year period. Proceeds from maturities, redemptions, calls and sales, of securities were $114,580 during the three months ended March 31, 2026 compared to $75,844 for the comparable prior year period.

Previous wording

Net cash used for financing activities was $40,413 and $40,093 during the nine months ended September 30, 2025 and 2024, respectively. Net cash used for financing activities during the nine months ended September 30, 2025 consisted of dividend payments to shareholders and debt activity.

Current wording

Net cash used for financing activities was $13,592 and $13,568 during the three months ended March 31, 2026 and 2025, respectively. Net cash used for financing activities during the three months ended March 31, 2026 consisted of dividend payments to shareholders.

Previous wording

Our Insurance Subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to their parent without prior approval of the Commissioner of the Division of Insurance of Massachusetts (the “Commissioner”). The Massachusetts statute limits the dividends an insurer may pay in any twelve-month period, without the prior permission of the Commissioner, to the greater of (i) 10% of the insurer’s surplus as of the preceding December 31 or (ii) the insurer’s net income for the twelve-month period ending the preceding December 31, in each case determined in accordance with statutory accounting practices. Our insurance company subsidiaries may not declare an “extraordinary dividend” (defined as any dividend or distribution that, together with other distributions made within the preceding twelve months, exceeds the limits established by Massachusetts statute) until thirty days after the Commissioner has received notice of the intended dividend and has not objected. As historically administered by the Commissioner, this provision requires the Commissioner’s prior approval of an extraordinary dividend. Under Massachusetts law, an insurer may pay cash dividends only from its unassigned funds, also known as earned surplus, and the insurer’s remaining surplus must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs. At December 31, 2024, the statutory surplus of Safety Insurance was $758,789, and its statutory net income for 2024 was $43,387. As a result, a maximum of $75,879 is available in 2025 for such dividends without prior approval of the Commissioner. As a result of this Massachusetts statute, the Insurance Subsidiaries had restricted net assets in the amount of $682,910 at December 31, 2024. During the nine months ended September 30, 2025, Safety Insurance paid dividends to Safety of $38,859.

Current wording

Our Insurance Subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to their parent without prior approval of the Commissioner of the Division of Insurance of Massachusetts (the “Commissioner”). The Massachusetts statute limits the dividends an insurer may pay in any twelve-month period, without the prior permission of the Commissioner, to the greater of (i) 10% of the insurer’s surplus as of the preceding December 31 or (ii) the insurer’s net income for the twelve-month period ending the preceding December 31, in each case determined in accordance with statutory accounting practices. Our insurance company subsidiaries may not declare an “extraordinary dividend” (defined as any dividend or distribution that, together with other distributions made within the preceding twelve months, exceeds the limits established by Massachusetts statute) until thirty days after the Commissioner has received notice of the intended dividend and has not objected. As historically administered by the Commissioner, this provision requires the Commissioner’s prior approval of an extraordinary dividend. Under Massachusetts law, an insurer may pay cash dividends only from its unassigned funds, also known as earned surplus, and the insurer’s remaining surplus must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs. At December 31, 2025, the statutory surplus of Safety Insurance was $833,432, and its statutory net income for 2025 was $83,092. As a result, a maximum of $83,343 is available in 2026 for such dividends without prior approval of the Commissioner. As a result of this Massachusetts statute, the Insurance Subsidiaries had restricted net assets in the amount of $750,089 at December 31, 2025. During the three months ended March 31, 2026, Safety Insurance paid dividends to Safety of $13,098.

Previous wording

On August 6, 2025, our Board approved and declared an increase in the quarterly cash dividend from $0.90 to $0.92 per share. We plan to continue to declare and pay quarterly cash dividends, depending on our financial position and the regularity of our cash flows.

Current wording

On May 6, 2026, our Board of Directors approved and declared a quarterly cash dividend of $0.92 per share which will be paid on June 12, 2026 to shareholders of record on June 1, 2026. We plan to continue to declare and pay quarterly cash dividends in 2026, depending on our financial position and the regularity of our cash flows.

Previous wording

On February 23, 2022, the Board of Directors approved a share repurchase program of up to$50,000 of the Company’s outstanding common shares. As of September 30, 2025, the Board of Directors has cumulatively authorized increases to the existing share repurchase program of up to $200,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require us to repurchase any specific number of shares and may be modified, suspended or terminated at any time without prior notice. No share repurchases were made by the Company under the program during the three and nine months ended September 30, 2025. As of September 30, 2025 and December 31, 2024, the Company had purchased 3,215,690 shares of common stock at a cost of $155,240.

Current wording

On February 23, 2022, the Board of Directors approved a share repurchase program of up to $50,000 of the Company’s outstanding common shares. As of March 31, 2026, the Board of Directors has cumulatively authorized increases to the existing share repurchase program of up to $200,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require us to repurchase any specific number of shares and may be modified, suspended or terminated at any time without prior notice. No share repurchases were made by the Company under the program during the three months ended March 31, 2026. As of March 31, 2026 and December 31, 2025, the Company had purchased 3,478,060 shares of common stock at a cost of $175,240.

Previous wording

The NAIC has adopted a formula and model law to implement risk-based capital requirements for most property and casualty insurance companies, which are designed to determine minimum capital requirements and to raise the level of protection that statutory surplus provides for policyholder obligations. Under Massachusetts law, insurers having less total adjusted capital than that required by the risk-based capital calculation will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. The risk-based capital law provides for four levels of regulatory action. The extent of regulatory intervention and action increases as the level of total adjusted capital to risk-based capital falls. As of December 31, 2024, the Insurance Subsidiaries had total capital of $758,789, which is in excess of amounts requiring company or regulatory action at any prescribed risk-based capital action level. Minimum statutory capital and surplus, or company action level risk-based capital, was $236,219 at December 31, 2024.

Current wording

The NAIC has adopted a formula and model law to implement risk-based capital requirements for most property and casualty insurance companies, which are designed to determine minimum capital requirements and to raise the level of protection that statutory surplus provides for policyholder obligations. Under Massachusetts law, insurers having less total adjusted capital than that required by the risk-based capital calculation will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. The risk-based capital law provides for four levels of regulatory action. The extent of regulatory intervention and action increases as the level of total adjusted capital to risk-based capital falls. As of December 31, 2025, the Insurance Subsidiaries had total capital of $833,432, which is in excess of amounts requiring company or regulatory action at any prescribed risk-based capital action level. Minimum statutory capital and surplus, or company action level risk-based capital, was $232,798 at December 31, 2025.

Previous wording

Such techniques assume that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting our ultimate losses, total reserves, and resulting IBNR reserves. It is possible that the final outcome may fall above or below these amounts as a result of a number of factors, including immature data, sparse data, or significant growth in a line of business. Using these methodologies our actuaries established a range of reasonably possible estimations for net reserves of approximately $537,736 to $603,892 as of September 30, 2025. In general, the low and high values of the ranges represent reasonable minimum and maximum values of the indications based on the techniques described above. Our selected point estimate of net loss and LAE reserves based upon the analysis of our actuaries was $577,917 as of September 30, 2025.

Current wording

Such techniques assume that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting our ultimate losses, total reserves, and resulting IBNR reserves. It is possible that the final outcome may fall above or below these amounts as a result of a number of factors, including immature data, sparse data, or significant growth in a line of business. Using these methodologies our actuaries established a range of reasonably possible estimations for net reserves of approximately $622,192 to $688,388 as of March 31, 2026. In general, the low and high values of the ranges represent reasonable minimum and maximum values of the indications based on the techniques described above. Our selected point estimate of net loss and LAE reserves based upon the analysis of our actuaries was $661,279 as of March 31, 2026.

Previous wording

At September 30, 2025, our total IBNR reserves for our private passenger automobile line of business was comprised of ($102,934) related to estimated ultimate decreases in the case reserves, including anticipated recoveries (i.e. salvage and subrogation), and $43,585 related to our estimation for not yet reported losses.

Current wording

At March 31, 2026, our total IBNR reserves for our private passenger automobile line of business was comprised of ($90,778) related to estimated ultimate decreases in the case reserves, including anticipated recoveries (i.e. salvage and subrogation), and $43,260 related to our estimation for not yet reported losses.