HCI Group, Inc.

Previous wording

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 wording

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 Florida, which is our primary market, as well as in other states in the northeast and southeast regions of the U.S. Our insurance operations are supported by other insurance-related subsidiaries within the consolidated group.

Previous wording

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 wording

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 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.

Previous wording

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 wording

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 primarily engaged in developing and operating commercial properties for investment purposes or our own use.

Previous wording

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 wording

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 June 30, 2026, HCI Group, Inc. owned approximately 83.1% of Exzeo’s outstanding shares of common stock, inclusive of unvested restricted stock.

Previous wording

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 wording

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 owned by their policyholders. The Real Estate segment represents the operations of our commercial real estate group primarily engaged in developing and operating commercial properties for investment purposes or 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.

Previous wording

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 wording

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

Previous wording

Our insurance business is seasonal as hurricanes and tropical storms affecting Florida, our primary market, and other southeastern states typically occur during the period from June 1 st through November 30 th of each year. Winter storms in the northeast usually occur during the period between December 1 st and March 31 st of each year. Also, our reinsurance treaty year is typically effective on June 1 st of each year and any variation in the cost of our reinsurance, whether due to changes in reinsurance rates, coverage levels or changes in the total insured value of our policy base, will occur and be reflected in our financial results beginning on June 1 st of each year.

Current wording

Our insurance business is seasonal as hurricanes and tropical storms affecting Florida and other southeastern states typically occur during the period from June 1 st through November 30 th of each year. Winter storms in the northeast usually occur during the period between December 1 st and March 31 st of each year. Also, our reinsurance treaty year is typically effective on June 1 st of each year and any variation in the cost of our reinsurance, whether due to changes in reinsurance rates, coverage levels or changes in the total insured value of our policy base, will occur and be reflected in our financial results beginning on June 1 st of each year.

Previous 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):

Current wording

The following table summarizes our results of operations for the three and six months ended June 30, 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 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.

Current wording

For the three months ended June 30, 2026, gross premiums earned were $287.2 million from Insurance Operations and $35.6 million from Reciprocal Exchange Operations. For the three months ended June 30, 2025, gross premiums earned were $282.3 million from Insurance Operations and $21.6 million from Reciprocal Exchange Operations.

Previous wording

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 wording

Premiums Ceded represented 31.7% and 33.9% of gross premiums earned during the three months ended June 30, 2026 and 2025, respectively.

Previous wording

Net Premiums Written represent premiums charged on policies issued during the period less any applicable reinsurance costs.

Current wording

Net premiums written represent premiums charged on policies issued during the period less any applicable reinsurance costs and increased primarily due to a higher volume of policies in force while average premium per policy remained relatively consistent. We had approximately 290,100 policies in force as of June 30, 2026 compared to approximately 270,100 policies in force as of June 30, 2025.

Previous wording

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 wording

Losses and Loss Adjustment Expenses increased primarily due to a higher volume of policies in force. The gross loss ratio for the three months ended June 30, 2026 was 22.2% compared to 21.3% for the three months ended June 30, 2025. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”

Previous wording

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 wording

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 June 30, 2026 and 2025 was 25.3% and 25.5%, respectively, and each rate represented the federal statutory tax rate of 21.0%, state taxes (net of federal benefits), and unfavorable non-deductible compensation expenses.

Previous wording

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 wording

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 Group, Inc.’s ownership of Exzeo as a result of Exzeo’s initial public offering in November 2025.

Previous wording

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 wording

The gross loss ratio, gross expense ratio, and net combined ratio each remained relatively consistent for the three months ended June 30, 2026 and 2025.

Previous 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.

Current wording

As of June 30, 2026, we have $872.3 million 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

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 wording

As of June 30, 2026, we had an outstanding balance of $36.0 million under 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.

Previous 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.

Current wording

As of June 30, 2026, we were in compliance with all required covenants and had an available borrowing capacity of $114.0 million.

Previous wording

There were no significant changes in long-term debt during the three months ended March 31, 2026.

Current wording

There were no significant changes in long-term debt during the six months ended June 30, 2026.

Previous wording

In March 2026, our Board of Directors authorized a program to repurchase up to $80.0 million, excluding commissions and fees, of shares of our common stock through February 27, 2027 (the “Share Repurchase Program”). The Share Repurchase Program permits us to repurchase shares for cash periodically in open market purchases, block transactions, privately negotiated transactions in accordance with applicable federal securities laws, or by other means, including through the use of trading programs intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18 under that Act. The timing and total amount of any stock repurchases will be determined at management's discretion and depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices and other considerations. The Share Repurchase Program does not obligate us to repurchase a specific number of shares of common stock, and may be canceled or suspended at any time without notice.

Current wording

In March 2026, our Board of Directors authorized a program to repurchase up to $80.0 million, excluding commissions and other costs, of shares of our common stock through February 27, 2027 (the “Share Repurchase Program”). The Share Repurchase Program permits us to repurchase shares for cash periodically in open market purchases, block transactions, privately negotiated transactions in accordance with applicable federal securities laws, or by other means, including through the use of trading programs intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18 under that Act. The Share Repurchase Program does not obligate us to repurchase a specific number of shares of common stock, and may be canceled or suspended at any time without notice.

Previous wording

As of May 6, 2026, we repurchased 265,416 shares of common stock for $41.5 million, excluding commissions and fees, and may repurchase up to $38.5 million, excluding commissions and fees, of shares of our common stock under the Share Repurchase Program.

Current wording

During the three and six months ended June 30, 2026, we repurchased 363,538 and 473,609 shares of common stock for $57.0 million and $74.5 million, respectively, excluding commissions and other costs, under the Share Repurchase Program. As of June 30, 2026, we may repurchase up to $5.5 million, excluding commissions and other costs, of shares of our common stock under the Share Repurchase Program.

Previous wording

During the three months ended March 31, 2026, we repurchased 110,071 shares of common stock for $17.5 million, excluding commissions and fees, under the Share Repurchase Program. As of March 31, 2026, we may repurchase up to $62.5 million, excluding commissions and fees, of shares of its common stock under the Share Repurchase Program.

Current wording

During the three and six months ended June 30, 2026, Exzeo repurchased 726,828 shares of its common stock for $10.0 million, excluding commissions and other costs, under the Exzeo Share Repurchase Program. As of June 30, 2026, Exzeo may repurchase up to $2.0 million, excluding commissions and other costs, of shares of its common stock under the Exzeo Share Repurchase Program.

Previous 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.

Current wording

As of June 30, 2026, we had $1.2 billion 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 4.6 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 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.

Current wording

As of June 30, 2026, we had $16.4 million of limited partnership investments consisting 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 June 30, 2026, there were unexpired capital commitments of $3.8 million.

Previous wording

Cash Flows for the Three Months Ended March 31, 2026

Current wording

Cash Flows for the Six Months Ended June 30, 2026

Previous 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.

Current wording

Net cash provided by operating activities consisted primarily of cash received from net premiums written and reinsurance recoveries of approximately $34.2 million, partially offset by cash disbursed for operating expenses, losses and loss adjustment expenses, and interest payments.

Previous wording

Net cash provided by investing activities consisted primarily of proceeds from calls, repayments and maturities of available-for-sale fixed-maturity securities of $81.2 million, proceeds from sales of available-for-sale fixed-maturity and equity securities of $12.2 million, and proceeds from the sale of real estate property of $0.8 million, partially offset by purchases of available-for-sale fixed-maturity and equity securities of $24.3 million, purchases of real estate investments of $1.9 million, and purchases of property and equipment of $1.7 million.

Current wording

Net cash used in investing activities consisted primarily of $547.8 million of purchases of available-for-sale fixed-maturity and equity securities, partially offset by $38.8 million of proceeds from sales of available-for-sale fixed-maturity and equity securities and $8.5 million of proceeds from calls, repayments and maturities of available-for-sale fixed-maturity securities.

Previous wording

Net cash used in financing activities consisted primarily of $17.5 million of repurchases of common stock and $5.2 million of common stock dividends, partially offset by net subscriber surplus contributions of $2.7 million and proceeds from the exercise of stock options of $0.8 million.

Current wording

Net cash used in financing activities consisted primarily of $74.5 million of repurchases of common stock, $11.3 million of payments for deposit accounting assets, $11.2 million of net share settlements, $10.3 million of common stock dividends, and $10.0 million of repurchases of noncontrolling interests. These cash outflows were partially offset by $6.8 million of net subscriber surplus contributions.

Previous wording

Cash Flows for the Three Months Ended March 31, 2025

Current wording

Cash Flows for the Six Months Ended June 30, 2025

Previous wording

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.

Current wording

Net cash provided by operating activities consisted primarily of cash received from net premiums written and reinsurance recoveries of approximately $59.4 million, partially offset by cash disbursed for operating expenses, losses and loss adjustment expenses, and interest payments.

Previous wording

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 wording

Net cash provided by investing activities consisted primarily of $263.6 million of proceeds from calls, repayments and maturities of available-for-sale fixed-maturity securities and $25.0 million proceeds from sales of available-for-sale fixed-maturity and equity securities, partially offset by $159.9 million of purchases of available-for-sale fixed-maturity and equity securities and $8.9 million of purchases of real estate investments.

Previous wording

Net cash used in financing activities consisted primarily of $4.3 million of common stock dividends, net repayment of our Revolving Credit Facility of $2.0 million, $0.6 million of net share settlements, and repayments of long-term debt of $0.1 million, partially offset by net subscriber surplus contributions of $0.8 million.

Current wording

Net cash used in financing activities consisted primarily of $8.9 million of common stock dividends, net repayment of our Revolving Credit Facility of $4.0 million, and an induced debt conversion payment of $1.1 million, partially offset by net subscriber surplus contributions of $2.7 million.

Previous 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.

Current wording

As of June 30, 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 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 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.

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. During the six months ended June 30, 2026, there have been no material changes with respect to any of our critical accounting policies and estimates.

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 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.

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 June 30, 2026, $506.9 million of the total $559.0 million of Reserves was attributable to our estimate of IBNR. The remaining $52.1 million related 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 June 30, 2026, $42.6 million of the $52.1 million in reserves for known cases related to claims incurred during prior years.

Previous 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.

Current wording

Our Reserves decreased from $576.5 million as of December 31, 2025 to $559.0 million as of June 30, 2026. The $17.5 million decrease was comprised of (i) reductions in our non-catastrophe Reserves of $54.4 million for 2025 and prior loss years; (ii) reductions in our catastrophe Reserves of $46.5 million primarily related to Hurricane Ian, Hurricane Helene, and Hurricane Milton; and (iii) partially offset by $83.4 million in reserves established for the 2026 loss year. The Reserves established for 2026 claims were primarily driven by IBNR as of June 30, 2026. The decrease of $100.9 million related to our 2025 and prior loss-years reserves was due to settlement of such claims.

Previous wording

Based on all information known to us, we consider our Reserves as of March 31, 2026 to be adequate to cover our claims for losses that have been incurred as of that date including losses yet to be reported to us. However, these estimates are continually reviewed by management as they are subject to significant variability and may be impacted by trends in claim severity and frequency or unusual exposures that have not yet been identified. As part of the process, we review historical data and consider various factors, including known and anticipated regulatory and legal developments, changes in social attitudes, inflation and economic conditions. As experience develops and other data becomes available, these estimates are revised, as required, resulting in increases or decreases to the Reserves. Adjustments are reflected in the results of operations in the period in which they are made, and the liabilities may deviate substantially from prior estimates.

Current wording

Based on all information known to us, we believe our Reserves as of June 30, 2026 are adequate to cover our claims for losses incurred, including losses not yet reported to us. However, these estimates are continually reviewed by management as they are subject to significant variability and may be impacted by trends in claim severity and frequency or unusual exposures not yet identified. We review historical data and consider various factors, including known and anticipated regulatory and legal developments, changes in social attitudes, inflation, and economic conditions. As experience develops and other data becomes available, these estimates are revised, as required, resulting in increases or decreases to the Reserves. Adjustments are reflected in the results of operations in the period in which they are made, and the liabilities may deviate substantially from prior estimates.