SAFETY INSURANCE GROUP INC

Previous wording

The following discussion contains forward-looking statements. We intend statements which are not historical in nature to be, and are hereby identified as “forward-looking statements” to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, the Company’s senior management may make forward-looking statements orally to analysts, investors, the media and others. This safe harbor requires that we specify important factors that could cause actual results to differ materially from those contained in forward-looking statements made by or on behalf of us. We cannot promise that our expectations in such forward-looking statements will turn out to be correct. Our actual results could be materially different from and worse than our expectations. See “Forward-Looking Statements” below for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.

Current wording

The following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to the safe harbor created by that Act. In addition, the Company’s senior management may make forward-looking statements orally to analysts, investors, the media and others. This safe harbor requires that we specify important factors that could cause actual results to differ materially from those contained in forward-looking statements made by or on behalf of us. There can be no assurances that our expectations in such forward-looking statements will turn out to be correct. Our actual results could be materially different from and worse than our expectations. See “Forward-Looking Statements” below for specific important factors that could cause actual results to differ materially from those contained in forward-looking statements.

Previous wording

The table below shows the amount of direct written premiums written in each state during the three and six months ended June 30, 2026 and 2025.

Current wording

The table below shows the amount of direct written premiums written in each state during the three and nine months ended September 30, 2026 and 2025.

Previous wording

During the quarter ended March 31, 2026, the Northeast region was impacted by two severe winter weather events (“Winter Storms”). Beginning on January 23, 2026 through January 26, 2026, the Northeast region experienced a severe winter weather event, which developed into a nor’easter, bringing blizzard conditions including excess snowfall, subzero temperatures and wind gusts reaching 75 miles per hour. Beginning on February 22, 2026, the Northeast region experienced a severe winter weather event, which produced record-breaking snowfall and hurricane-force wind gusts. Areas in the region received up to 36 inches of snowfall and wind gusts exceeding 80 miles per hour. As a result of the Winter Storms, the Company received approximately 1,800 reported claims totaling $42,736 of losses and loss adjustment expenses for the six months ended June 30, 2026.

Current wording

During the quarter ended March 31, 2026, the Northeast region was impacted by two severe winter weather events (“Winter Storms”). Beginning on January 23, 2026 through January 26, 2026, the Northeast region experienced a severe winter weather event, which developed into a nor’easter, bringing blizzard conditions including excess snowfall, subzero temperatures and wind gusts reaching 75 miles per hour. Beginning on February 22, 2026, the Northeast region experienced a severe winter weather event, which produced record-breaking snowfall and hurricane-force wind gusts. Areas in the region received up to 36 inches of snowfall and wind gusts exceeding 80 miles per hour. As a result of the Winter Storms, the Company received approximately 1,800 reported claims totaling $44,300 of losses and loss adjustment expenses for the nine months ended September 30, 2026.

Previous wording

*Direct and Net Written Premiums.*For the three months ended June 30, 2026, direct written premium and net written premium decreased 1.2% and 1.9%, respectively, compared to the prior period. The decrease was primarily due to the cancellation of certain underperforming agency relationships. For the six months ended June 30, 2026, the Company experienced policy count declines of 8.8% in Private Passenger Automobile and 4.0% in Homeowners lines, partially offset by 2.7% growth in Commercial Automobile policies, compared to the same period in 2025. Average written premium per policy increased 2.9%, 6.4% and 10.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, primarily reflecting rate increases.

Current wording

*Direct and Net Written Premiums.*For the three months ended September 30, 2026, direct written premium and net written premium decreased 4.3% and 4.2%, respectively, compared to the prior period. The decreases are due to a softening, more competitive market, in addition to the cancellation of certain underperforming agency relationships. For the nine months ended September 30, 2026, the Company experienced policy count declines in Private Passenger Automobile and in Homeowners lines, partially offset by growth in Commercial Automobile policies, compared to the same period in 2025. Average written premium per policy increased 2.0%, 6.0% and 9.7% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, primarily reflecting rate increases.

Previous wording

Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended June 30, 2026 increased by $887, or 0.5%, to $195,119 from $194,232 for the comparable 2025 period. Losses and loss adjustment expenses incurred for the six months ended June 30, 2026 increased by $58,087, or 15.1%, to $442,609 from $384,522 for the comparable 2025 period. Our losses and loss adjustment expenses ratio for the three months ended June 30, 2026 decreased to 66.9% from 68.8% for the comparable 2025 period. The decrease in our losses and loss adjustment expense ratio for the three months ended June 30, 2026 is primarily driven by improved reported accident frequency in our Private Passenger Automobile line of business. Our losses and loss adjustment expense ratio for the six months ended June 30, 2026 increased to 76.0% from 69.3% for the comparable 2025 period. The increase in losses and loss adjustment expense ratio for the six months ended June 30, 2026 is due to the impact of Winter Storms.

Current wording

Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended September 30, 2026 decreased by $7,357, or 3.6%, to $197,625 from $204,982 for the comparable 2025 period. Losses and loss adjustment expenses incurred for the nine months ended September 30, 2026 increased by $50,730, or 8.6%, to $640,234 from $589,504 for the comparable 2025 period. Our losses and loss adjustment expenses ratio for the three months ended September 30, 2026 decreased to 67.2% from 70.4% for the comparable 2025 period. The decrease in our losses and loss adjustment expense ratio for the three months ended September 30, 2026 is primarily driven by improved reported accident frequency in our Private Passenger Automobile line of business. Our losses and loss adjustment expense ratio for the nine months ended September 30, 2026 increased to 73.0% from 69.7% for the comparable 2025 period. The increase in losses and loss adjustment expense ratio for the nine months ended September 30, 2026 is due to the impact of Winter Storms.

Previous wording

A summary of share based awards granted under the Incentive Plan during the six months ended June 30, 2026 is as follows:

Current wording

A summary of share based awards granted under the Incentive Plan during the nine months ended September 30, 2026 is as follows:

Previous wording

At June 30, 2026, we had $181,032 recoverable from CAR, which consisted of loss adjustment expense reserves, unearned premiums and reinsurance recoverable.

Current wording

At September 30, 2026, we had $167,257 recoverable from CAR, which consisted of loss adjustment expense reserves, unearned premiums and reinsurance recoverable.

Previous wording

On July 23, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MAPFRE U.S.A. Corp., a Massachusetts corporation (“Parent”), and Splash Merger Sub, Inc., a Delaware corporation and wholly owned direct subsidiary of Parent (“Merger Subsidiary”), pursuant to which the Company is to be acquired by Parent. Upon the terms and conditions set forth in the Merger Agreement, Merger Subsidiary will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). At the effective time of the Merger, each issued and outstanding share of the Company’s common stock (other than certain excluded shares and shares held by stockholders who properly exercise appraisal rights) will be cancelled and converted into the right to receive $105.00 per share in cash, without interest thereon. In addition, at or immediately prior to the effective time, our outstanding equity awards, including stock options and restricted stock units, will be cancelled and converted into the right to receive cash payments based on the Merger consideration, subject to the terms of the Merger Agreement.

Current wording

On July 23, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MAPFRE U.S.A. Corp., a Massachusetts corporation (“Parent”), and Splash Merger Sub, Inc., a Delaware corporation and wholly owned direct subsidiary of Parent (“Merger Subsidiary”), pursuant to which the Company is to be acquired by Parent. Upon the terms and conditions set forth in the Merger Agreement, Merger Subsidiary will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). At the effective time of the Merger, each issued and outstanding share of the Company’s common stock (other than certain excluded shares and shares held by stockholders who properly exercise appraisal rights) will be cancelled and converted into the right to receive $105.00 per share in cash, without interest thereon. In addition, as of immediately prior to the effective time, our outstanding restricted stock awards and performance awards will, to the extent not vested, become fully vested (with performance conditions deemed satisfied at the level set forth in the Merger Agreement) and will be cancelled and converted into the right to receive cash payments based on the Merger consideration, together with accrued and unpaid dividends, subject to the terms of the Merger Agreement.

Previous wording

The respective obligations of the Company, Parent and Merger Subsidiary to consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of customary closing conditions, including, among others, approval by the holders of a majority of the voting powers of the outstanding shares of Company common stock entitled to vote on the Merger and the receipt of certain regulatory approvals, including from insurance regulators in Massachusetts. In addition, Parent’s and Merger Subsidiary’s obligation to consummate the

Current wording

The respective obligations of the Company, Parent and Merger Subsidiary to consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of customary closing conditions, including, among others, approval by the holders of a majority of the voting power of the outstanding shares of Company common stock entitled to vote on the Merger, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of certain other regulatory approvals, including from insurance regulators in Massachusetts. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on September 14, 2026. On November 3, 2026, the Company’s stockholders approved the Merger. Completion of the Merger remains subject to the satisfaction or waiver of the remaining closing conditions, including the receipt of required regulatory approvals. In addition, Parent’s and Merger Subsidiary’s obligation to consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of a condition that there has not occurred a material adverse effect on the Company since the date of the Merger Agreement that is continuing.

Previous wording

The Company expects to incur significant costs, expenses, and fees for professional services and other transaction costs in connection with the Merger. Additionally, if the Merger Agreement is terminated under specified circumstances, the Company may be required to pay Parent a termination fee of $46.2 million and Parent may in certain circumstances be required to pay the Company a termination fee of $111.8 million.

Current wording

The Company has incurred approximately $3,766 in legal fees through September 30, 2026 in connection with the Merger, and expects to continue to incur significant costs, expenses, and fees for professional services and other transaction costs. Additionally, if the Merger Agreement is terminated under specified circumstances, the Company may be required to pay Parent a termination fee of $46.2 million and Parent may in certain circumstances be required to pay the Company a termination fee of $111.8 million. Either party may terminate the Merger Agreement if the Merger is not consummated by July 23, 2027, subject to an automatic extension to January 23, 2028 under certain circumstances relating to the receipt of required regulatory approvals.

Previous wording

Management has included certain non-GAAP financial measures in presenting the Company’s results. Management believes that these non-GAAP measures better explain the Company’s results of operations and allow for a more complete understanding of the underlying trends in the Company’s business. These measures should not be viewed as a substitute for those determined in accordance with GAAP. In addition, our definitions of these items may not be comparable to the definitions used by other companies.

Current wording

Management has included certain non-GAAP financial measures in presenting the Company’s results. Management believes that these non-GAAP measures are useful to investors because they exclude certain items, such as realized and unrealized investment gains and losses and credit losses, the timing and amounts of which can be volatile and largely unrelated to the Company’s underlying results of operations, facilitating a period-to-period comparison of in the Company’s business. These measures should not be viewed as a substitute for those determined in accordance with GAAP. In addition, our definitions of these items may not be comparable to the definitions used by other companies.

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 the income tax effects of those adjustments. 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 under “Results of Operations” below.

Previous wording

Three and Six Months Ended June 30, 2026 Compared to Three and Six Months Ended June 30, 2025

Current wording

Three and Nine Months Ended September 30, 2026 Compared to Three and Nine Months Ended September 30, 2025

Previous wording

Direct Written Premiums. Direct written premiums for the three months ended June 30, 2026 decreased by $3,994, or 1.2%, to $341,835 from $345,829 for the comparable 2025 period. Direct written premiums for the six months ended June 30, 2026 decreased by $3,189, or 0.5%, to $641,610 from $644,799 for the comparable 2025 period. The decreases in direct written premiums and net written premiums reflect lower policy counts resulting from the cancellation of certain underperforming agency relationships. For the six months ended June 30, 2026, average written premium per policy increased 2.9%, 6.4% and 10.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2025.

Current wording

Direct Written Premiums. Direct written premiums for the three months ended September 30, 2026 decreased by $14,478, or 4.3%, to $319,703 from $334,181 for the comparable 2025 period. Direct written premiums for the nine months ended September 30, 2026 decreased by $17,667, or 1.8%, to $961,313 from $978,980 for the comparable 2025 period. The decreases in direct written premiums and net written premiums reflect lower policy counts resulting from the cancellation of certain underperforming agency relationships. For the nine months ended September 30, 2026, average written premium per policy increased 2.0%, 6.0% and 9.7% 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 June 30, 2026 decreased by $5,965, or 1.9%, to $313,510 from $319,475 for the comparable 2025 period. Net written premiums for the six months ended

Current wording

Net Written Premiums. Net written premiums for the three months ended September 30, 2026 decreased by $13,048, or 4.2%, to $296,167 from $309,215 for the comparable 2025 period. Net written premiums for the nine months ended September 30, 2026 decreased by $18,362, or 2.0%, to $885,108 from $903,470 for the comparable 2025 period. The decreases were primarily due to the factors that decreased direct written premiums.

Previous wording

Net Earned Premiums. Net earned premiums for the three months ended June 30, 2026 increased by $9,540, or 3.4%, to $291,653 from $282,113 for the comparable 2025 period. Net earned premiums for the six months ended June 30, 2026 increased by $27,836, or 5.0%, to $582,639 from $554,803 for the comparable 2025 period. The increases were primarily due to rate increases earning into top-line results.

Current wording

Net Earned Premiums. Net earned premiums for the three months ended September 30, 2026 increased by $2,849, or 1.0%, to $293,870 from $291,021 for the comparable 2025 period. Net earned premiums for the nine months ended September 30, 2026 increased by $30,685, or 3.6%, to $876,509 from $845,824 for the comparable 2025 period. The increases were primarily due to rate increases earning into top-line results.

Previous wording

Net Investment Income. Net investment income for the three months ended June 30, 2026 increased $835, or 5.3%, to $16,559 from $15,724 for the comparable 2025 period. Net investment income for the six months ended June 30, 2026 increased by $3,299, or 10.9%, to $33,597 from $30,298 for the comparable 2025 period. The increase for the three and six months ended June 30, 2026, compared to the same periods in 2025, is primarily driven by higher assets under management, reinvestment rates that exceeded the yields on maturing securities, and strong alternative asset returns. Net effective annualized yield on the investment portfolio was 4.0% for the three months June 30, 2026 compared to 4.2% for the comparable 2025 period. Net effective annualized yield on the investment portfolio was 4.1% for the six months ended June 30, 2026 compared to 4.0% for the comparable 2025 period. The investment portfolio’s duration on fixed maturities was 3.8 years at June 30, 2026 compared to 3.9 years at December 31, 2025.

Current wording

Net Investment Income. Net investment income for the three months ended September 30, 2026 increased $2,337, or 15.0%, to $17,872 from $15,535 for the comparable 2025 period. Net investment income for the nine months ended September 30, 2026 increased by $5,636, or 12.3%, to $51,469 from $45,833 for the comparable 2025 period. The increase for the three and nine months ended September 30, 2026, compared to the same periods in 2025, is primarily driven by higher assets under management, reinvestment rates that exceeded the yields on maturing securities, and strong alternative asset returns. Net effective annualized yield on the investment portfolio was 4.2% for the three months September 30, 2026 compared to 4.0% for the comparable 2025 period. Net effective annualized yield on the investment portfolio was 4.1% for the nine months ended September 30, 2026 compared to 4.0% for the comparable 2025 period. The investment portfolio’s duration on fixed maturities was 3.8 years at September 30, 2026 compared to 3.9 years at December 31, 2025.

Previous wording

Earnings from Partnership Investments. Earnings from partnership investments were $3,329 for the three months ended June 30, 2026 compared to $346 for the comparable 2025 period. Earnings from partnership investments were $7,234 for the six months ended June 30, 2026 compared to $2,458 for the comparable 2025 period. The year-over-year increase reflects higher investment appreciation and the impact of timing differences between valuation changes and the recognition of realized gains. Cash distributions received from partnerships may not correspond to earnings recognized in the same period, as gains are typically recognized over time based on changes in fair value. The timing and magnitude of these returns can vary depending on the performance and transactional activity of the underlying partnerships.

Current wording

Earnings from Partnership Investments. Earnings from partnership investments were $6,078 for the three months ended September 30, 2026 compared to $2,929 for the comparable 2025 period. Earnings from partnership investments were $13,312 for the nine months ended September 30, 2026 compared to $5,387 for the comparable 2025 period. The year-over-year increase reflects higher investment appreciation and the impact of timing differences between valuation changes and the recognition of realized gains. Cash distributions received from partnerships may not correspond to earnings recognized in the same period, as gains are typically recognized over time based on changes in fair value. The timing and magnitude of these returns can vary depending on the performance and transactional activity of the underlying partnerships.

Previous wording

Net Realized Gains on Investments. Net realized gains on investments were $1,418 for the three months ended June 30, 2026 compared to $2,131 for the comparable 2025 period. Net realized gains on investments was $8,049 for the six months ended June 30, 2026 compared to $6,394 for the comparable 2025 period. The increase in net realized gains during the six-month period reflects the sale of equity securities in a gain position during the first quarter of 2026.

Current wording

Net Realized Gains on Investments. Net realized gains on investments were $10,353 for the three months ended September 30, 2026 compared to $1,338 for the comparable 2025 period. Net realized gains on investments was $18,402 for the nine months ended September 30, 2026 compared to $7,732 for the comparable 2025 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 and third quarters of 2026.

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, including redeemable preferred stocks that have characteristics of fixed maturities, 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 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).

Current 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).

Previous wording

(3)Our investment portfolio includes 833 securities in an unrealized loss position at June 30, 2026.

Current wording

(3)Our investment portfolio includes 1,134 securities in an unrealized loss position at September 30, 2026.

Previous wording

As of June 30, 2026 the Company concluded that $355 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 June 30, 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 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 September 30, 2026 the Company concluded that $351 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 September 30, 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 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 $2,252 and $2,285 for the three months ended June 30, 2026 and 2025, respectively. Commission income was $4,402 and $4,380 for the six months ended June 30, 2026 and 2025, respectively. The year-over-year change is driven by 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 $2,298 and $2,415 for the three months ended September 30, 2026 and 2025, respectively. Commission income was $6,700 and $6,795 for the nine months ended September 30, 2026 and 2025, respectively. The year-over-year change reflects increased competition within the property and casualty insurance market.

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 June 30, 2026 decreased by $727, or 11.2%, to $5,758 from $6,485 for the comparable 2025 period. Finance and other service income for the six months ended June 30, 2026, decreased by $1,213, or 9.5%, to $11,559 from $12,772 for the comparable 2025 period. The decrease is primarily driven by the decline in policy counts.

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 September 30, 2026 decreased by $795, or 12.1%, to $5,794 from $6,589 for the comparable 2025 period. Finance and other service income for the nine months ended September 30, 2026, decreased by $2,008, or 10.4%, to $17,353 from $19,361 for the comparable 2025 period. The decrease is primarily driven by the decline in policy counts and the elimination of certain finance charges associated with Massachusetts private passenger automobile policies.

Previous wording

Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended June 30, 2026 increased by $887, or 0.5%, to $195,119 from $194,232 for the comparable 2025 period. Losses and loss adjustment expenses incurred for the six months ended June 30, 2026 increased by $58,087, or 15.1%, to $442,609 from $384,522 for the comparable 2025 period.

Current wording

Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended September 30, 2026 decreased by $7,357, or 3.6%, to $197,625 from $204,982 for the comparable 2025 period. Losses and loss adjustment expenses incurred for the nine months ended September 30, 2026 increased by $50,730, or 8.6%, to $640,234 from $589,504 for the comparable 2025 period.

Previous wording

Our GAAP loss ratio for the three months ended June 30, 2026 decreased to 66.9% from 68.8% for the comparable 2025 period. Our GAAP loss ratio for the six months ended June 30, 2026 increased to 76.0% from 69.3% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended June 30, 2026 was 59.5% compared to 60.9% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the six months ended June 30, 2026 was 67.6% compared to 61.1% for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the three months ended June 30, 2026 was $10,569 compared to $11,235 for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the six months ended June 30, 2026 was $21,118 compared to $23,473 for the comparable 2025 period.

Current wording

Our GAAP loss ratio for the three months ended September 30, 2026 decreased to 67.2% from 70.4% for the comparable 2025 period. Our GAAP loss ratio for the nine months ended September 30, 2026 increased to 73.0% from 69.7% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended September 30, 2026 was 59.5% compared to 63.1% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the nine months ended September 30, 2026 was 64.9% compared to 61.8% for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the three months ended September 30, 2026 was $10,139 compared to $9,707 for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the nine months ended September 30, 2026 was $31,257 compared to $33,180 for the comparable 2025 period.

Previous wording

Underwriting, Operating and Related Expenses. Underwriting, operating and related expenses for the three months ended June 30, 2026 increased by $1,087, or 1.3%, to $83,883 from $82,796 for the comparable 2025 period. Underwriting, operating and related expenses for the six months ended June 30, 2026 increased by $2,517, or 1.5%, to $166,164 from $163,647 for the comparable 2025 period. Our GAAP expense ratio for the three months ended June 30, 2026 decreased to 28.8% from 29.3% for the comparable 2025 period. Our GAAP expense ratio for the six months ended June 30, 2026 decreased to 28.5% from 29.5% for the comparable 2025 period. The decrease in the GAAP expense ratio during the three and six months ended June 30, 2026 was due to higher earned premium.

Current wording

Underwriting, Operating and Related Expenses. Underwriting, operating and related expenses for the three months ended September 30, 2026 increased by $2,350, or 2.8%, to $85,377 from $83,027 for the comparable 2025 period. Underwriting, operating and related expenses for the nine months ended September 30, 2026 increased by $4,867, or 2.0%, to $251,541 from $246,674 for the comparable 2025 period. Our GAAP expense ratio for the three months ended September 30, 2026 increased to 29.1% from 28.5% for the comparable 2025 period. Our GAAP expense ratio for the nine months ended September 30, 2026 decreased to 28.7% from 29.2% for the comparable 2025 period. The decrease in the GAAP expense ratio during the nine months ended September 30, 2026 was due to higher earned premium.

Previous wording

Interest Expense. Interest expense was $814 and $442 for the three months ended June 30, 2026 and 2025, respectively. Interest expense was $1,432 for the six months ended June 30, 2026 compared to $546 for the comparable 2025 period. 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%.

Current wording

Interest Expense. Interest expense was $621 and $426 for the three months ended September 30, 2026 and 2025, respectively. Interest expense was $2,053 for the nine months ended September 30, 2026 compared to $972 for the comparable 2025 period. 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 21.1% and 21.4% for the three months ended June 30, 2026 and 2025, respectively. The effective tax rate was 22.0% and 21.9% for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate in 2026 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 21.8% for the three months ended September 30, 2026 and 2025. The effective tax rate was 21.9% and 21.8% for the nine months ended September 30, 2026 and 2025, respectively. The effective tax rate in 2026 was higher than the statutory rate primarily due to the effects of stock-based compensation and permanent differences regarding executive compensation.

Previous wording

*Net Income.*Net income for the three months ended June 30, 2026 was $34,517 compared to net income of $28,937 for the comparable 2025 period. Net income for the six months ended June 30, 2026 was $20,194 compared to $50,833 for the comparable 2025 period.

Current wording

*Net Income.*Net income for the three months ended September 30, 2026 was $30,019 compared to net income of $28,310 for the comparable 2025 period. Net income for the nine months ended September 30, 2026 was $50,213 compared to $79,143 for the comparable 2025 period.

Previous wording

Non-GAAP Operating Income. Non-GAAP operating income, as defined above, was $29,674 for the three months ended June 30, 2026 compared to $21,519 for the comparable 2025 period. Non-GAAP operating income was $19,470 for the six months ended June 30, 2026 compared to $40,515 for the comparable 2025 period.

Current wording

Non-GAAP Operating Income. Non-GAAP operating income, as defined above, was $28,551 for the three months ended September 30, 2026 compared to $21,883 for the comparable 2025 period. Non-GAAP operating income was $48,021 for the nine months ended September 30, 2026 compared to $62,397 for the comparable 2025 period.

Previous wording

Net cash provided by operating activities was $21,294 and $35,496 during the six months ended 2026 and 2025, 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 provided by operating activities was $78,991 and $120,948 during the nine months ended September 30, 2026 and 2025, 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.

Previous wording

Net cash used for investing activities was $323 and $18,217 during the six months ended June 30, 2026 and 2025, respectively. Fixed maturities, equity securities, and other invested assets purchased were $216,213 for the six months ended June 30, 2026 compared to $159,014 for the comparable prior year period. Proceeds from maturities, redemptions, calls and sales, of securities were $218,359 during the six months ended June 30, 2026 compared to $141,197 for the comparable prior year period.

Current wording

Net cash used for investing activities was $56,557 and $83,276 during the nine months ended September 30, 2026 and 2025, respectively. Fixed maturities, equity securities, and other invested assets purchased were $411,509 for the nine months ended September 30, 2026 compared to $349,275 for the comparable prior year period. Proceeds from maturities, redemptions, calls and sales, of securities were $358,378 during the nine months ended September 30, 2026 compared to $266,399 for the comparable prior year period.

Previous wording

Net cash used for financing activities was $26,954 and $26,844 during the six months ended June 30, 2026 and 2025, respectively. Net cash used for financing activities during the six months ended June 30, 2026 consisted of dividend payments to shareholders.

Current wording

Net cash used for financing activities was $40,318 and $40,413 during the nine months ended September 30, 2026 and 2025, respectively. Net cash used for financing activities during the nine months ended September 30, 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, 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 six months ended June 30, 2026, Safety Insurance paid dividends to Safety of $26,897.

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

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 June 30, 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 and six months ended June 30, 2026. As of June 30, 2026 and December 31, 2025, the Company had purchased 3,478,060 shares of common stock at a cost of $175,240.

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 September 30, 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 and nine months ended September 30, 2026. As of September 30, 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, 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.

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

Previous wording

Management determines our loss and loss adjustment expense (“LAE”) reserves estimate based upon the analysis of our actuaries. A reasonable estimate is derived by selecting a point estimate within a range of indications as calculated by our actuaries using generally accepted actuarial techniques. The key assumption in most actuarial analysis is that past patterns of frequency and severity will repeat in the future, unless a significant change in the factors described above takes place.

Current wording

calculated by our actuaries using generally accepted actuarial techniques. The key assumption in most actuarial analysis is that past patterns of frequency and severity will repeat in the future, unless a significant change in the factors described above takes place.

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 $616,475 to $685,439 as of June 30, 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 $657,605 as of June 30, 2026.

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 $625,731 to $691,437 as of September 30, 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 $666,473 as of September 30, 2026.