HCI Group, Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
HCI$186.03-3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001193125-25-272275
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-211993
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 98 current paragraphs.
23 unchanged; 23 reworded; 50 added; 36 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (50)
Current report
ITEM 2 –MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”) on February 26, 2026 (the “2025 Annual Report”). This section is intended to (i) provide material information relevant to the assessment of our results of operations and cash flows; (ii) enhance the understanding of our financial condition, changes in financial condition, and results of operations; and (iii) discuss material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future performance or of future financial condition.
Current report
The following discussion and analysis contains forward-looking statements about our business, operations, and financial performance based on current plans and estimates involving risks, uncertainties, and assumptions, which could differ materially from actual results. Factors that could cause such differences are discussed in the sections of this Quarterly Report on Form 10-Q titled Item 1A “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Current report
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Current report
In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements, including statements about our plans, objectives, expectations, assumptions or future events, involve risks and uncertainties. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. Typically, forward-looking statements can be identified by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions. The important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include but are not limited to the effects of governmental regulation; changes in insurance regulations; the frequency and extent of claims; uncertainties inherent in reserve estimates; catastrophic events; changes in the demand for, pricing of, availability of or collectability of reinsurance; restrictions on our ability to change premium rates; increased rate pressure on premiums; the severity and impact of cybersecurity incidents; and other risks and uncertainties and other factors listed under Item 1A – “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q as well as the 2025 Annual Report. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made and are not guarantees of future performance. Except as required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Current report
OVERVIEW
Current report
HCI Group, Inc., together with its subsidiaries (collectively, “we,” “our,” “us,” the “Company,” or “HCI”), is primarily engaged in the property and casualty insurance business. We provide various homeowners’ property and casualty insurance products for properties located in the State of Florida, which is our primary market, as well as in other states in the northeast and southeast regions of the U.S.
Current report
Our insurance operations are supported by other insurance-related subsidiaries within the consolidated group.
Current report
Exzeo Group, Inc. (“Exzeo”), a publicly traded majority-owned subsidiary, provides turn-key insurance technology and operations solutions based on a proprietary platform of purpose-built software and data analytics applications that are specifically designed for the property and casualty insurance ecosystem. We utilize Exzeo's internally developed software technologies to identify profitable underwriting opportunities, drive efficiency in claim processing and settlements, and streamline operations across our insurance operations and other insurance-related businesses.
Current report
We also provide attorney-in-fact (“AIF”) services for reciprocal insurance exchanges owned by their policyholders. Although we do not have any equity interest in the reciprocal insurance exchanges, we are required to consolidate them as their primary beneficiary. In addition, we have a commercial real estate group that is primarily engaged in the business of developing and operating commercial properties for investment purposes or for our own use.
Current report
HCI Group, Inc.’s common stock is currently listed on the New York Stock Exchange (“NYSE”) under the symbol “HCI.” Exzeo completed its initial public offering in November of 2025 and is currently listed on the NYSE under the symbol “XZO.” As of March 31, 2026, HCI Group, Inc. owned approximately 82.5% of Exzeo’s outstanding shares of common stock, inclusive of unvested restricted stock.
Current report
We identify our segments based on the manner in which our Chief Executive Officer, who is the chief operating decision maker, evaluates performance and makes decisions regarding the allocation of resources. We have five reportable segments: Insurance Operations, Exzeo, Reciprocal Exchange Operations, Real Estate, and Corporate and Other. Due to their economic characteristics, our property and casualty insurance and reinsurance operations, excluding the insurance operations under Reciprocal Exchange Operations, are grouped together into one reportable segment under Insurance Operations. The Exzeo segment represents Exzeo’s operations related to insurance technology and operations solutions for property and casualty insurance carriers. The Reciprocal Exchange Operations segment represents the insurance operations of consolidated reciprocal insurance exchanges that are owned by their policyholders. The Real Estate segment represents the operations of our commercial real estate group that is primarily engaged in the business of developing and operating commercial properties for investment purposes or for our own use. The Corporate and Other segment represents the activities of the holding companies and any other operations that do not meet the quantitative and qualitative thresholds for a reportable segment. The determination of segments may change over time due to changes in operational emphasis, revenue, and results of operations. Refer to Note 13 “Segment Information” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q.
Current report
All financial information presented in this section has been prepared in U.S. dollars in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and includes the accounts of HCI Group, Inc. and its subsidiaries and consolidated variable interest entities. All intercompany transactions have been eliminated.
Current report
FACTORS AFFECTING OPERATING RESULTS
Current report
Our general operating and growth strategies are to continually optimize our existing book of insurance business, organically expand our insurance business, manage our costs and expenses, diversify our business operations, develop and deploy new technologies to streamline operational processes, and maintain a strong balance sheet so we can quickly pursue accretive opportunities when they arise. Our growth strategies also include policy assumption from third-party insurance companies with the intention of renewing and/or replacing them with our policies.
Current report
Our insurance business has grown both organically and through strategic policy assumptions, which have been a key driver of our expansion. We have participated in legislatively mandated take-out programs, designed to reduce the state’s risk exposure by transitioning policies from Citizens Property Insurance Corporation (“Citizens”), a Florida state supported insurer, to private insurers. We selectively pursue additional assumption opportunities with Citizens when they align with our risk appetite and growth strategy. We also assume policies from other insurance companies in Florida and/or any other state in which we operate.
Current report
The nature of our business is to cover losses that may arise from, among other things, hurricanes and other catastrophic events such as tornadoes, floods and winter storms. The occurrence of any such catastrophes could have a significant adverse effect on our business, results of operations, and financial condition. To mitigate the risk associated with catastrophic events, we purchase reinsurance from other large insurance companies. Even without catastrophic events, we may incur losses and loss adjustment expenses that deviate substantially from our estimates and that may exceed our reserves, in which case our net income and capital would decrease. Our operating and growth strategies may also be impacted by regulation of our business by the State of Florida and other states in which we operate. For example, insurance regulators must approve our policy forms and premium rates as well as monitor our compliance with financial and regulatory requirements.
Current report
RECENT EVENTS
Current report
In March 2026, Fortex Reinsurance SPC, Ltd. (“Fortex”), our wholly-owned Cayman Islands domiciled captive reinsurance subsidiary, received its license to operate as a Class B insurer in the Cayman Islands. Fortex will allow us additional flexibility to selectively retain risk and reduce the cost of third party reinsurance. Fortex is regulated by the Cayman Islands Monetary Authority.
Current report
KEY PERFORMANCE INDICATORS
Current report
We make strategic decisions, measure our performance, evaluate our business, and identify trends in our business using certain key performance indicators, including the operating metrics gross loss ratio, gross expense ratio, and net combined ratio. Computations of our key performance indicators may not be comparable to other similarly titled measures reported by other companies. Additionally, we compute and disclose other ratios for informational purposes only.
Current report
Gross Loss Ratio
Current report
Gross loss ratio is defined as losses and loss adjustment expenses in relation to gross premiums earned. The gross loss ratio represents the percentage of our premiums used to cover our losses. We use the gross loss ratio as a metric to measure and monitor our underwriting and pricing practices.
Current report
Gross Expense Ratio
Current report
Gross expense ratio is defined as total expenses excluding losses and loss adjustment expenses and interest expense in relation to gross premiums earned. The gross expense ratio represents the percentage of our gross premiums used on operating expenses. We use the gross expense ratio as a metric to measure and monitor the efficiency of our operating and overhead costs.
Current report
Net Combined Ratio
Current report
Premiums Ceded increased primarily due to the growth in the volume of policies in force. Premiums ceded represented 31.9% and 33.2% of gross premiums earned during the three months ended March 31, 2026 and 2025, respectively.
Current report
Net Premiums Earned represent gross premiums earned less premiums ceded.
Current report
Net premiums written decreased as the first quarter of 2025 included an assumption of $22.0 million of written premium from Citizens. We had approximately 297,800 policies in force as of March 31, 2026 compared to approximately 278,400 policies in force as of March 31, 2025.
Current report
Net investment income increased primarily as a result of an increase in our invested assets.
Current report
Losses and Loss Adjustment Expenses increased primarily due to a higher volume of policies in force as well as some weather-related events in the northeast during the three months ended March 31, 2026. The gross loss ratio for the three months ended March 31, 2026 was 20.1% compared to 19.7% for the three months ended March 31, 2025. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”
Current report
Income Tax Expense increased primarily as a result of an increase in income before income taxes. The effective tax rate for the three months ended March 31, 2026 and 2025 was 26.3% and 26.0%, respectively. Incorporated within each rate is the federal statutory tax rate of 21.0%, state taxes (net of federal benefits), and unfavorable non-deductible compensation expenses.
Current report
Net income attributable to noncontrolling interests increased primarily as a result of an increase in net income generated by Reciprocal Insurance Exchange Operations as well as the dilution of HCI’s ownership of Exzeo as a result of Exzeo’s initial public offering in November 2025.
Current report
The gross loss ratio, gross expense ratio, and net combined ratio each remained relatively consistent from the three months ended March 31, 2025 to the three months ended March 31, 2026.
Current report
Revolving Credit Facility
Current report
As of March 31, 2026, we are party to a senior secured revolving credit facility with Fifth Third Bank (“Revolving Credit Facility”). The Revolving Credit Facility currently provides borrowing capacity of up to $150.0 million and expires on November 5, 2030. Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the one or three month Secured Overnight Financing Rate plus a ten basis points adjustment plus a margin based on the debt-to-capital ratio, with interest payments due in arrears on January 1, April 1, July 1, and October 1.
Current report
Long-Term Debt
Current report
There were no significant changes in long-term debt during the three months ended March 31, 2026.
Current report
See Note 9 “Long-Term Debt” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q.
Current report
Share Repurchase Program
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Removed paragraphs (36)
Previous report
Our results of operations for the three months ended September 30, 2025 reflect net income of approximately $67,888,000 or $4.90 diluted earnings per share, compared with net income of approximately $9,392,000 or $0.52 diluted earnings per share for the three months ended September 30, 2024. The quarter-over-quarter increase was primarily due to an increase in net premiums earned, offset by a decrease in losses and loss adjustment expenses.
Previous report
Revenue
Previous report
Premiums Ceded for the three months ended September 30, 2025 and 2024 represented 35.2% and 41.3%, respectively, of gross premiums earned. The decrease in this ratio was primarily due to the reversal of the $12,369,000 of previously accrued benefits related to retrospective provisions due to the effect of Hurricane Helene during the three months ended September 30, 2024. This decrease was partially offset by higher reinsurance costs due to growth in the number of policies in force and total insured value.
Previous report
Net Premiums Earned reflect the gross premiums earned less reinsurance costs as described above.
Previous report
Expenses
Previous report
Losses and Loss Adjustment Expenses decreased as the three months ended September 30, 2025 did not have any losses from catastrophic events while the three months ended September 30, 2024 included net losses of $40,000,000 from Hurricane Helene and net losses of $6,500,000 from Hurricane Debby, partially offset by some favorable developments from prior-period losses. In addition, while we have a higher volume of policies in force, we have experienced a reduction in claim and litigation frequency over the comparative periods. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”
Previous report
General and Administrative Personnel Expenses include salaries, wages, payroll taxes, stock-based and other incentive compensation expenses, and employee benefit costs. Factors such as merit increases, changes in headcount, and periodic restricted stock grants, among others, cause fluctuations in this expense. In addition, our personnel expenses are decreased by the capitalization of payroll costs related to projects to develop software for internal use and the payroll costs associated with the processing and settlement of certain catastrophe claims which are recoverable from reinsurers under reinsurance contracts. The quarter-over-quarter increase was primarily attributable to an increase in incentive compensation.
Previous report
Interest Expense decreased primarily as a result of the conversion of the 4.75% Convertible Senior Notes during 2025.
Previous report
Other Operating Expenses decreased due to a decrease in bank service charges and other miscellaneous operating expenses, partially offset by an increase in charitable contributions.
Previous report
Income Tax Expensefor the three months ended September 30, 2025 and 2024 resulted in effective tax rates of 25.1% and 33.3%, respectively. The decrease in the effective tax rate period-over-period was primarily attributable to a decrease in certain non-deductible compensation expenses.
Previous report
The net loss ratio (losses and loss adjustment expenses in relation to net premiums earned) decreased due to the decrease in losses and loss adjustment expenses and the increase in net premiums earned.
Previous report
The net expense ratio (total expenses excluding losses and loss adjustment expenses and interest expense in relation to net premiums earned) decreased primarily due to the increase in net premiums earned, partially offset by the increase in policy acquisition and other underwriting expenses and the increase in general and administrative personnel expenses.
Previous report
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Previous report
Our results of operations for the nine months ended September 30, 2025 reflect net income of approximately $212,397,000 or $15.47 diluted earnings per share, compared with net income of approximately $123,447,000 or $8.59 diluted earnings per share for the nine months ended September 30, 2024. The period-over-period increase was primarily due to an increase in net premiums earned, offset by a decrease in losses and loss adjustment expenses.
Previous report
Revenue
Previous report
Premiums Ceded for the nine months ended September 30, 2025 and 2024 represented 34.1% and 32.4%, respectively, of gross premiums earned. The increase in this ratio was primarily attributable to higher reinsurance costs due to growth in the number of policies in force and total insured value. This increase was partially offset by the impact from the reversal of previously accrued benefits was included in the corresponding prior period as described earlier.
Previous report
For the nine months ended September 30, 2025, there was no adjustment to premiums ceded related to retrospective provisions as opposed to a decrease of $6,279,000 for the nine months ended September 30, 2024.
Previous report
Net Premiums Written increased primarily due to an increase in the volume of policies in force as well as an increase in average policy rates, partially offset by an increase in premiums ceded.
Previous report
Net Premiums Earned reflect the gross premiums earned less reinsurance costs as described above.
Previous report
Expenses
Previous report
Losses and Loss Adjustment Expenses decreased as the nine months ended September 30, 2025 did not have any losses from catastrophic events while the nine months ended September 30, 2024 included net losses of $40,000,000 from Hurricane Helene and net losses of $6,500,000 from Hurricane Debby, partially offset by some favorable developments from prior-period losses. In addition, while we have a higher volume of policies in force, we have experienced a reduction in claim and litigation frequency over the comparative periods. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”
Previous report
General and Administrative Personnel Expenses increased primarily due to an increase in stock-based and other incentive compensation and employee health benefits.
Previous report
Interest Expense decreased primarily as a result of the conversion of the 4.75% Convertible Senior Notes during 2025.
Previous report
Other Operating Expenses decreased primarily due to a decrease in bank service charges and other miscellaneous operating expenses, partially offset by a debt conversion expense of $1,125,000 incurred in connection with the conversion of the 4.75% Convertible Senior Notes in the second quarter of 2025.
Previous report
Income Tax Expensefor the nine months ended September 30, 2025 and 2024 resulted in effective tax rates of 25.6% and 26.3%, respectively. The decrease in the effective tax rate period-over-period was primarily attributable to a decrease in certain non-deductible compensation expenses.
Previous report
Ratios:
Previous report
The net loss ratio decreased due to the decrease in losses and loss adjustment expenses and the increase in net premiums earned.
Previous report
The net expense ratio increased primarily due to the increase in policy acquisition and other underwriting expenses and the increase in general and administrative personnel expenses, partially offset by the increase in net premiums earned.
Previous report
Our net combined ratio decreased due to the factors described above.
Previous report
Revolving Credit Facility and Long-Term Debt
Previous report
During the nine months ended September 30, 2025, we converted $172,500,000 in aggregate principal of 4.75% Convertible Senior Notes due 2042 into consideration of 2,187,063 shares of HCI’s common stock and $1,133,000 in cash. The cash consideration included an inducement payment of $1,125,000 and $8,000 paid in lieu of fractional shares.
Previous report
During the nine months ended September 30, 2025, we entered into a $17,000,000 loan agreement which bears interest at 5.65% with a maturity date of August 1, 2035. The loan is secured by commercial real estate in Haines City, Florida.
Previous report
On November 5, 2025, we amended and restated our revolving credit facility with Fifth Third Bank. The amendment increased the available borrowing capacity from $75,000,000 to $150,000,000 and released the real estate previously securing the facility.
Previous report
Real Estate Investment
Previous report
Net cash provided by operating activities for the nine months ended September 30, 2024 was approximately $257,129,000, which consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $73,927,000 less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments. Net cash used in investing activities of $205,062,000 was primarily due to the purchases of fixed-maturity and equity securities of $728,775,000, the purchases of real estate investments of $14,181,000, the purchases of property and equipment of $2,991,000, and additional investments in limited partnership interests of $1,204,000, offset by the proceeds from calls, repayments and maturities of fixed-maturity securities of $410,207,000, the proceeds from sales of fixed-maturity and equity securities of $129,112,000, and distributions received from limited partnership investments of $2,760,000. Net cash used in financing activities totaled $69,701,000, which was primarily due to the redemption of redeemable noncontrolling interests of $100,000,000, $12,354,000 of cash dividend payments, cash dividends paid to redeemable noncontrolling interests of $2,923,000, $1,037,000 of share repurchases, purchases of noncontrolling interests of $480,000, redemption of promissory notes of $466,000, and repayments of long-term debt of $387,000, offset by net borrowing under the line of credit agreement of $46,000,000 and net contribution from noncontrolling interests of $2,045,000.
Previous report
We have prepared our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires us to make estimates and judgments to develop amounts reflected and disclosed in our consolidated financial statements. Material estimates that are particularly susceptible to significant change in the near term are related to our losses and loss adjustment expenses, which include amounts estimated for claims incurred but not yet reported. We base our estimates on various assumptions and actuarial data we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates.
Reworded paragraphs (23)
Previous wording
The net combined ratio (total expenses excluding interest expense in relation to net premiums earned) is the measure of overall underwriting profitability before other income. Our combined ratio decreased due to the factors described above.
Current wording
Net combined ratio is defined as total expenses excluding interest expense in relation to net premiums earned. The net combined ratio represents the combination of the net loss ratio and net expense ratio. We use the net combined ratio as a metric to measure and monitor our overall profitability.
Previous wording
The following table summarizes our results of operations for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share amounts or as otherwise indicated):
Current wording
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025 (in thousands, except per share amounts or as otherwise indicated):
Previous wording
Gross Premiums Earned increased primarily due to a higher volume of policies in force as a result of the addition of policies assumed from Citizens during the fourth quarter of 2024 and first quarter of 2025. For the three months ended September 30, 2025, gross premiums earned were $282,950,000 from Insurance Operations and $19,562,000 from Reciprocal Exchange Operations. For the three months ended September 30, 2024, gross premiums earned were $249,314,000 from Insurance Operations and $17,430,000 from Reciprocal Exchange Operations.
Current wording
Gross Premiums Earned increased primarily due to a higher volume of policies in force as a result of the addition of policies assumed from Citizens during the first and fourth quarters of 2025. For the three months ended March 31, 2026, gross premiums earned were $291.2 million from Insurance Operations and $36.5 million from Reciprocal Exchange Operations. For the three months ended March 31, 2025, gross premiums earned were $282.1 million from Insurance Operations and $19.4 million from Reciprocal Exchange Operations.
Previous wording
Our premiums ceded represent costs of reinsurance (i) to cover losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance contracts, (ii) to provide additional loss coverage on a high-value individual risk basis through facultative reinsurance, or (iii) to assume a proportional share of losses as defined in a quota share agreement. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned. Under contracts in effect prior to June 1, 2025, reinsurance costs could be decreased by a reduction in premiums ceded attributable to retrospective provisions under reinsurance contracts. For the three months ended September 30, 2025, there was no adjustment to premiums ceded related to retrospective provisions as opposed to an increase of $7,707,000 for the three months ended September 30, 2024.
Current wording
Our premiums ceded represent costs of reinsurance (i) to cover losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance contracts, (ii) to provide additional loss coverage on a high-value individual risk basis through facultative reinsurance, or (iii) to assume a proportional share of losses as defined in a quota share agreement. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned. Under contracts in effect prior to June 1, 2025, reinsurance costs could be adjusted by retrospective provisions under reinsurance contracts. There were no adjustments to premiums ceded related to retrospective provisions for the three months ended March 31, 2026 and 2025.
Previous wording
Net Premiums Written represent the premiums charged on policies issued during a fiscal period less any applicable reinsurance costs. The increase in 2025 primarily resulted from an increase in the volume of policies in force. We had approximately 264,000 policies in force as of September 30, 2025 as compared with approximately 235,000 policies in force at September 30, 2024.
Current wording
Net Premiums Written represent premiums charged on policies issued during the period less any applicable reinsurance costs.
Previous wording
The following is a reconciliation of our total Net Premiums Written to Net Premiums Earned for the three months ended September 30, 2025 and 2024 (in thousands):
Current wording
The following is a reconciliation of our Net Premiums Written to Net Premiums Earned for the three months ended March 31, 2026 and 2025 (in thousands):
Previous wording
Policy Acquisition and Other Underwriting Expenses primarily reflect the amortization of deferred acquisition costs such as commissions payable to agents for production and renewal of policies and premium taxes. The increase in amortized costs was primarily due to higher premiums in force in the comparative periods.
Current wording
Policy Acquisition and Other Underwriting Expenses primarily reflect the amortization of deferred acquisition costs such as commissions payable to agents for production and renewal of policies and premium taxes. The overall increase was primarily due to a higher volume of premiums in force in the comparative periods.
Previous wording
We believe that we maintain sufficient liquidity to pay claims and expenses, as well as to satisfy commitments in the event of unforeseen events such as reinsurer insolvencies, inadequate premium rates, or reserve deficiencies. We maintain a comprehensive reinsurance program at levels management considers adequate to diversify risk and safeguard our financial position.
Current wording
As of March 31, 2026, we have $1.0 billion of cash and cash equivalents. We believe that we maintain sufficient liquidity to pay claims and expenses, as well as to satisfy commitments in the event of unforeseen events such as reinsurer insolvencies, inadequate premium rates, or reserve deficiencies. We maintain a comprehensive reinsurance program at levels management considers adequate to diversify risk and safeguard our financial position.
Previous wording
In the future, we anticipate our primary use of funds will be to pay claims, reinsurance premiums, interest, dividends and to fund operating expenses and real estate acquisitions.
Current wording
In the future, we anticipate our primary use of funds will be to pay claims, reinsurance premiums, interest and principal on our debt, dividends, and to fund operating expenses and real estate acquisitions. From time to time, our use of funds may also include repurchases of shares of our common stock or other strategic initiatives.
Previous wording
As of September 30, 2025, the revolving credit facility had additional available borrowing capacity of $37,000,000. We remain in compliance with all covenants set forth in our debt agreements as of the reporting date. Refer to Note 10 “Revolving Credit Facility” and Note 11 “Long-Term Debt” to the consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Current wording
As of March 31, 2026, we had an outstanding balance of $36.0 million and had an available borrowing capacity of $114.0 million under the Revolving Credit Facility. As of March 31, 2026, we were in compliance with all required covenants. Refer to Note 8 “Revolving Credit Facility” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
The following table summarizes the principal and interest payment obligations of our indebtedness as of September 30, 2025:
Current wording
The following table summarizes the principal and interest payment obligations of our long-term debt as of March 31, 2026 (principal in thousands):
Previous wording
On January 22, 2024, we implemented an “at-the-market” facility (the “ATM Facility”) which gives us the ability to raise up to $75,000,000 through the issuance of new shares of common stock through a sales agent (the “Sales Agent”). We have no obligation to sell, and the Sales Agent has no obligation to buy or sell, any shares of common stock under the ATM Facility. As of September 30, 2025 the remaining availability under the ATM Facility was $75,000,000.
Current wording
On January 22, 2024, we implemented an “at-the-market” facility (the “ATM Facility”) which gives us the ability to raise up to $75.0 million through the issuance of new shares of common stock through a sales agent (the “Sales Agent”). We have no obligation to sell, and the Sales Agent has no obligation to buy or sell, any shares of common stock under the ATM Facility. As of March 31, 2026 the remaining availability under the ATM Facility was $75.0 million.
Previous wording
As of September 30, 2025, we had $626,573,000 of available-for-sale fixed-maturity and equity investments, which are carried at fair value. Changes in the general interest rate environment affect the returns available on new available-for-sale fixed-maturity investments. While a rising interest rate environment enhances the returns available on new investments, it reduces the market value of existing available-for-sale fixed-maturity investments and thus the availability of gains on disposition. A decline in interest rates reduces the returns available on new available-for-sale fixed-maturity investments but increases the market value of existing available-for-sale fixed-maturity investments, creating the opportunity for realized investment gains on disposition.
Current wording
As of March 31, 2026, we had $979.9 million of available-for-sale fixed-maturity and equity investments, which are carried at fair value, and our available-for-sale fixed-maturity securities had a weighted-average duration of 5.1 years. Changes in the general interest rate environment affect the returns available on new available-for-sale fixed-maturity investments. While a rising interest rate environment enhances the returns available on new investments, it reduces the market value of existing available-for-sale fixed-maturity investments and thus the availability of gains on disposition. A decline in interest rates reduces the returns available on new available-for-sale fixed-maturity investments but increases the market value of existing available-for-sale fixed-maturity investments, creating the opportunity for realized investment gains on disposition.
Previous wording
Our limited partnership investments consist of six private equity funds managed by their general partners. Withdrawals from limited partnership investments are generally not permitted and distributions occur when the underlying investments of the limited partnership investments are liquidated. Additionally, two of these funds have unexpired capital commitments which are callable at the discretion of the fund’s general partner for funding new investments or expenses of the fund. Although capital commitments for the four remaining funds have expired, the general partners may request additional funds under certain circumstances. As of September 30, 2025, there were unexpired capital commitments of $2,985,000. Refer to Note 5 “Investments” to the consolidated financial statements under “Limited Partnership Investments” included in this Quarterly Report on Form 10-Q for additional information.
Current wording
Our limited partnership investments consist of six private equity funds managed by their general partners. Withdrawals from limited partnership investments are generally not permitted and distributions occur when the underlying investments of the limited partnership investments are liquidated. Additionally, two of these funds have unexpired capital commitments which are callable at the discretion of the fund’s general partner for funding new investments or expenses of the fund. Although capital commitments for the four remaining funds have expired, the general partners may request additional funds under certain circumstances. As of March 31, 2026, there were unexpired capital commitments of $3.8 million. Refer to Note 5 “Investments” of our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
Real estate has long been a significant component of our overall investment portfolio. It diversifies our portfolio and helps offset the volatility of other higher-risk assets. Thus, we may consider expanding our real estate investment portfolio should an opportunity arise.
Current wording
Real estate investments have long been a significant component of our overall investment portfolio. It diversifies our portfolio and helps offset the volatility of other higher-risk assets. Thus, we may consider expanding our real estate investments portfolio should an opportunity arise.
Previous wording
On October 21, 2025, our Board of Directors declared a quarterly dividend of $0.40 per common share. The dividends will be paid on December 19, 2025 to stockholders of record on November 21, 2025.
Current wording
On April 22, 2026, our Board of Directors declared a quarterly dividend of $0.40 per common share. The dividends are payable on June 18, 2026 to stockholders of record on May 15, 2026.
Previous wording
Cash Flows for the Nine Months Ended September 30, 2025
Current wording
Cash Flows for the Three Months Ended March 31, 2026
Previous wording
Net cash provided by operating activities for the nine months ended September 30, 2025 was approximately $333,679,000, which consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $116,149,000 less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments. Net cash provided by investing activities of $122,820,000 was primarily due to the proceeds from calls, repayments and maturities of available-for-sale fixed-maturity securities of $440,019,000, the proceeds from sales of available-for-sale fixed-maturity and equity securities of $33,875,000, partially offset by the purchases of available-for-sale fixed-maturity and equity securities of $317,667,000, and purchases of real estate investments of $28,528,000. Net cash used in financing activities totaled $852,000, which was primarily due to $14,107,000 of cash dividend payments, net repayment of our revolving credit facility of $6,000,000, an induced debt conversion payment of $1,125,000, $724,000 of share repurchases, and repayments of long-term debt of $430,000, partially offset by the proceeds from issuing promissory notes of $17,000,000 and net contributions from noncontrolling interests of $4,909,000.
Current wording
Net cash provided by operating activities consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $20.1 million less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments.
Previous wording
Cash Flows for the Nine Months Ended September 30, 2024
Current wording
Cash Flows for the Three Months Ended March 31, 2025
Previous wording
As of September 30, 2025, we had unexpired capital commitments for limited partnerships investments of $2,985,000 as described above. We do not have any other arrangements giving rise to material obligations that are not reported in our consolidated balance sheets as described in Item 303 of SEC Regulation S-K.
Current wording
As of March 31, 2026, we had unexpired capital commitments for limited partnerships investments of $3.8 million as described above. We do not have any other arrangements giving rise to material obligations that are not reported in our consolidated balance sheets as described in Item 303 of SEC Regulation S-K.
Previous wording
Our accounting policies and estimates and their related risks that we consider to be critical are more fully described in our 2024 Annual Report. During the nine months ended September 30, 2025, there were no other material changes with respect to any of our critical accounting policies and estimates.
Current wording
Our accounting policies and estimates and their related risks that we consider to be critical are more fully described in our 2025 Annual Report. For the three months ended March 31, 2026, there have been no material changes with respect to any of our critical accounting policies.
Previous wording
The IBNR represents our estimate of the ultimate cost of all claims that have occurred but have not been reported to us, and in some cases may not yet be known to the insured, and future development of reported claims. Estimating the IBNR component of our Reserves involves considerable judgment on the part of management. As of September 30, 2025, $542,552,000 of the total $615,635,000 of Reserves is attributable to our estimate of IBNR. The remaining $73,083,000 relates to known cases which have been reported but not yet fully settled and represents our best estimate of the cost to settle such claims. As of September 30, 2025, $62,586,000 of the $73,083,000 in reserves for known cases relates to claims incurred during prior years.
Current wording
The IBNR represents our estimate of the ultimate cost of all claims that have occurred but have not been reported to us, and in some cases may not yet be known to the insured, and future development of reported claims. Estimating the IBNR component of our Reserves involves considerable judgment on the part of management. As of March 31, 2026, $506.1 million of the total $566.8 million of Reserves is attributable to our estimate of IBNR. The remaining $60.7 million relates to known cases which have been reported but not yet fully settled and represents our best estimate of the cost to settle such claims. As of March 31, 2026, $52.7 million of the $60.7 million in reserves for known cases relates to claims incurred during prior years.
Previous wording
Our Reserves decreased from $845,900,000 as of December 31, 2024 to $615,635,000 as of September 30, 2025. The $230,265,000 decrease is comprised of (i) reductions in our catastrophe Reserves of $240,572,000 primarily related to Hurricane Ian, Hurricane Helene, and Hurricane Milton; (ii) reductions in our non-catastrophe Reserves of $64,637,000 for 2024 and $37,465,000 for 2023 and prior loss years; and (iii) partially offset by $112,409,000 in reserves established for the 2025 loss year. The Reserves established for 2025 claims are primarily driven by IBNR as of September 30, 2025. The decrease of $342,674,000 related to our 2024 and prior loss-years reserves is due to settlement of such claims as well as a favorable change in estimated losses from Hurricane Milton and other non-catastrophe losses.
Current wording
Our Reserves decreased from $576.5 million as of December 31, 2025 to $566.8 million as of March 31, 2026. The $9.7 million decrease is comprised of (i) reductions in our non-catastrophe Reserves of $34.7 million for 2025 and prior loss years; (ii) reductions in our catastrophe Reserves of $22.1 million primarily related to Hurricane Ian, Hurricane Helene, and Hurricane Milton; and (iii) partially offset by $47.1 million in reserves established for the 2026 loss year. The Reserves established for 2026 claims are primarily driven by IBNR as of March 31, 2026. The decrease of $56.8 million related to our 2025 and prior loss-years reserves is due to settlement of such claims.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Net cash used in investing activities consisted primarily of purchases of available-for-sale fixed-maturity and equity securities of $344.0 million and purchases of real estate investments of $0.8 million, partially offset by proceeds from sales of available-for-sale fixed-maturity and equity securities of $17.0 million, proceeds from calls, repayments and maturities of available-for-sale fixed-maturity securities of $2.0 million, and proceeds from sales of real estate investments of $0.8 million.
Current report — wording carried from elsewhere
Net cash provided by operating activities consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $30.7 million less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Gross Premiums Earned increased due to a higher volume of policies in force as a result of the addition of policies assumed from Citizens during the fourth quarter of 2024 and first quarter of 2025. For the nine months ended September 30, 2025, gross premiums earned were $847,354,000 from Insurance Operations and $60,648,000 from Reciprocal Exchange Operations. For the nine months ended September 30, 2024, gross premiums earned were $754,755,000 from Insurance Operations and $33,859,000 from Reciprocal Exchange Operations.
Previous report — wording carried elsewhere
The following is a reconciliation of our total Net Premiums Written to Net Premiums Earned for the nine months ended September 30, 2025 and 2024 (in thousands):
Previous report — wording carried elsewhere
Policy Acquisition and Other Underwriting Expenses increased primarily due to a higher volume of policies in force in the comparative periods.