Employers Holdings, Inc.

Previous wording

We are a Nevada holding company. Through our insurance subsidiaries, we provide workers’ compensation insurance coverage to small and mid-sized businesses engaged in low-to-medium hazard industries. Workers’ compensation insurance is provided under a statutory system wherein most employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. We provide workers’ compensation insurance throughout most of the United States, with a concentration in California, where 47% of our in-force premiums are generated. Our revenues primarily consist of net premiums earned, net investment income, and net realized and unrealized gains and losses on investments.

Current wording

We are a Nevada holding company. Through our insurance subsidiaries, we provide workers’ compensation insurance coverage to small and mid-sized businesses engaged in low-to-medium hazard industries. Workers’ compensation insurance is provided under a statutory system wherein most employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. We provide workers’ compensation insurance throughout most of the United States, with a concentration in California, where 46% of our trailing twelve month gross written premiums are generated. Our revenues primarily consist of net premiums earned, net investment income, and net realized and unrealized gains and losses on investments.

Previous wording

We also continue to execute a number of ongoing business initiatives, including: achieving internal and customer-facing business process excellence and efficiency; delivering self-service options to policyholders, agents, and injured workers; further diversifying our risk exposure across geographic markets and economic sectors; and broadening our appetite expansion.

Current wording

We continue to execute ongoing business initiatives focused on achieving process excellence and efficiency, as well as, delivering self-service options to policyholders, agents, and injured workers. Additionally, we are actively pursuing strategies to diversify our geographic and economic sector risk exposures, expand our risk appetite, and broaden our product offerings.

Previous wording

Our net income was $29.7 million and $42.5 million for the three and six months ended June 30, 2025, respectively, compared to $31.7 million and $60.0 million for the corresponding periods of 2024. The key factors that affected our financial performance during the three and six months ended June 30, 2025, compared to the same periods of 2024, included:

Current wording

Our net (loss) income was $(8.3) million and $34.2 million for the three and nine months ended September 30, 2025, respectively, compared to $30.3 million and $90.3 million for the corresponding periods of 2024. The key factors that affected our financial performance during the three and nine months ended September 30, 2025, compared to the same periods of 2024, included:

Previous wording

•Net realized and unrealized gains on investments of $20.9 million and $8.1 million compared to $2.2 million and $13.6 million;

Current wording

•Net realized and unrealized gains on investments of $21.2 million and $29.3 million compared to $10.9 million and $24.5 million;

Previous wording

•Underwriting (loss) income of $(11.0) million and $(14.6) million compared to $10.8 million and $7.8 million.

Current wording

•Underwriting (loss) income of $(57.1) million and $(71.8) million compared to $(0.7) million and $7.4 million; and

Previous wording

Our 2025 underwriting results reflect moderate increases in net premiums earned offset by higher losses and LAE. Commission expense and underwriting expenses were higher in the second quarter, but lower in the first half of 2025 compared to the same periods of 2024. Our 2025 investment results benefited from strong net investment income and favorable net realized and unrealized gains.

Current wording

Our 2025 underwriting results demonstrate moderate growth in net premiums earned, accompanied by reductions in both commission expense and underwriting expenses. These improvements were offset by higher losses and LAE compared to the same periods of 2024. Our 2025 investment results were strong, driven by solid net investment income and favorable net realized and unrealized gains.

Previous wording

Our 2024 underwriting results reflect moderate increases in net premiums earned, compared to the same periods of 2023, due to higher new and renewal business premiums, as well as continued favorable prior year loss reserve development and lower underwriting expenses. Our 2024 investment results benefited from strong and steady net investment income and moderate net realized and unrealized gains.

Current wording

Our 2024 underwriting results reflect moderate increases in net premiums earned, compared to the same periods of 2023, due to higher new and renewal business premiums, as well as favorable prior year loss reserve development and lower underwriting expenses. Our 2024 investment results benefited from strong and steady net investment income and moderate net realized and unrealized gains.

Previous wording

Our consolidated financial results of operations for the six months ended June 30, 2025 and 2024 are as follows:

Current wording

Our consolidated financial results of operations for the three and nine months ended September 30, 2025 and 2024 are as follows:

Previous wording

Underwriting income or loss is determined by deducting losses and LAE, commission expense, and underwriting expenses from net premiums earned. Our underwriting results for the six months ended June 30, 2025 and 2024 are as follows:

Current wording

Underwriting income or loss is determined by deducting losses and LAE, commission expense, and underwriting expenses from net premiums earned. Our underwriting results for the three and nine months ended September 30, 2025 and 2024 are as follows:

Previous wording

Gross premiums written were $203.3 million and $415.4 million for the three and six months ended June 30, 2025, respectively, compared to $207.9 million and $418.7 million for the corresponding periods of 2024. For the three and six months ended June 30, 2025, the declines in gross premiums written were driven primarily by reductions in new business. Nonetheless, we closed another quarter with a record number of policies in-force. Total in-force policies at June 30, 2025 were 134,421 compared to 133,121 in-force policies at March 31, 2025, and 130,767 in-force policies at December 31, 2024.

Current wording

Gross premiums written were $183.9 million and $599.3 million for the three and nine months ended September 30, 2025, respectively, compared to $181.2 million and $599.9 million for the corresponding periods of 2024. For the three months ended September 30, 2025, the increase in gross premiums written was largely driven by growth in renewal business premiums. For the nine months ended September 30, 2025, gross premiums written were flat, as increases in renewal business premiums were offset by decreases in new business premiums. Nonetheless, we closed another quarter with a record number of policies in-force. Total in-force policies at September 30, 2025 were 135,414 compared to 134,421 in-force policies at June 30, 2025, and 130,767 in-force policies at December 31, 2024.

Previous wording

Net premiums written were $201.5 million and $411.8 million for the three and six months ended June 30, 2025, respectively, compared to $206.1 million and $415.2 million for the corresponding periods of 2024. Reinsurance premiums ceded were $1.8 million and $3.6 million for the three and six months ended June 30, 2025, respectively, compared to $1.8 million and $3.5 million for the corresponding periods of 2024.

Current wording

Net premiums written were $182.4 million and $594.2 million for the three and nine months ended September 30, 2025, respectively, compared to $179.6 million and $594.8 million for the corresponding periods of 2024. Reinsurance premiums ceded were $1.5 million and $5.1 million for the three and nine months ended September 30, 2025, respectively, compared to $1.6 million and $5.1 million for the corresponding periods of 2024.

Previous wording

Our calendar year loss and LAE ratio is analyzed to measure profitability in a particular year and to evaluate the adequacy of premium rates charged in a particular year to cover expected losses and LAE from all periods, including development (whether favorable or unfavorable) of reserves established in prior periods. In contrast, our accident year loss and LAE ratios are analyzed to evaluate underwriting performance and the adequacy of the premium rates charged in a particular year in relation to ultimate losses and LAE from insured events occurring during that year. The loss and LAE ratios provided in this report are on a calendar year basis, except where they are expressly identified as accident year loss and LAE ratios.

Current wording

Our calendar year loss and LAE ratio is analyzed to measure profitability in a particular year and to evaluate the adequacy of premium rates charged in a particular year to cover expected losses and LAE from all periods, including development (whether favorable or adverse) of reserves established in prior periods. In contrast, our accident year loss and LAE ratios are analyzed to evaluate underwriting performance and the adequacy of the premium rates charged in a particular year in relation to ultimate losses and LAE from insured events occurring during that year. The loss and LAE ratios provided in this report are on a calendar year basis, except where they are expressly identified as accident year loss and LAE ratios.

Previous wording

The increase in our calendar year losses and LAE during the three and six months ended June 30, 2025, as compared to the same periods of 2024, was primarily due to a higher current accident year loss and LAE estimate as unfavorable loss trends have been observed, predominantly in California due to the rapid increase in cumulative trauma (CT) claims. As a result of this increased loss activity, we increased our current accident year loss and LAE ratio to 69.0%, which required an increase to the 2025 first quarter loss and LAE estimate of $5.5 million that resulted in the 70.7% calendar year loss and LAE ratio for the three months ended June 30, 2025. In addition, we reallocated observed favorable loss reserve development from accident years 2020 and prior to more recent accident years 2022 through 2024, which resulted in no net prior accident year development on our voluntary business for the quarter.

Current wording

The increase in our calendar year losses and LAE during the three months ended September 30, 2025, as compared to the same period of 2024, was primarily due to a higher current accident year loss and LAE estimate and reserve strengthening related to prior accident years. During the three months ended September 30, 2025, we increased the current accident year loss and LAE ratio to 72.0%, a three point increase from the year-to-date loss and LAE ratio of 69.0% at June 30, 2025. The increase was attributable to increased cumulative trauma (CT) claim frequency in California. Incurred losses and LAE for the three months ended September 30, 2025 include a cumulative adjustment of $11.4 million to year-to-date incurred losses and LAE at June 30, 2025 to reflect the three point increase to the current accident year loss and LAE ratio.

Previous wording

Prior accident year unfavorable loss reserve development totaled $1.6 million during the six months ended June 30, 2025, which included $0.7 million net unfavorable loss reserve development on our voluntary risk business and $0.9 million net unfavorable loss reserve development on our assigned risk business. Prior accident year favorable loss reserve development totaled $9.2 million during the six months ended June 30, 2024, which included $9.3 million net favorable loss reserve development on our voluntary risk business, partially offset by $0.1 million of net unfavorable loss reserve development on our assigned risk business.

Current wording

Prior accident year adverse loss reserve development during the three months ended September 30, 2025 included $0.4 million of net favorable loss reserve development on our assigned risk business. Prior accident year favorable loss reserve development on our assigned risk business totaled $0.1 million during the three months ended September 30, 2024.

Previous wording

Prior accident year unfavorable loss reserve development on our assigned risk business totaled $0.3 million during the three months ended June 30, 2025. Prior accident year favorable loss reserve development totaled $9.1 million during the three months ended June 30, 2024, which included $9.3 million net favorable loss reserve development on our voluntary risk business, partially offset by $0.2 million of net unfavorable loss reserve development on our assigned risk business.

Current wording

Prior accident year adverse loss reserve development totaled $39.4 million during the nine months ended September 30, 2025, which included $38.9 million net adverse loss reserve development on our voluntary risk business and $0.5 million net adverse loss reserve development on our assigned risk business. Prior accident year favorable loss reserve development on our voluntary risk business totaled $9.3 million during the nine months ended September 30, 2024.

Previous wording

We refined the presentation of certain expenses associated with our involuntary premium during 2024. This revision, which was immaterial, reduced both our second quarter 2024 and the first half of 2024 commission expense and commission expense ratio by approximately $0.8 million and $1.2 million and 0.4 points and 0.3 points, respectively, and increased our respective underwriting expenses and underwriting expense ratio by the same amounts. These revisions had no effect on our total expenses or net income.

Current wording

We refined the presentation of certain expenses associated with our involuntary premium during 2024. This revision, which was immaterial, reduced both our third quarter 2024 and the first nine months of 2024 commission expense and commission expense ratio by approximately $0.6 million and $1.8 million and 0.3 percentage points, respectively, and increased our respective underwriting expenses and underwriting expense ratio by the same amounts. These revisions had no effect on our total expenses or net income.

Previous wording

Our commission expense ratio was 13.2% and 12.9% for the three and six months ended June 30, 2025, respectively, compared to 13.9% and 13.7% for the corresponding periods of 2024, and our commission expense was $26.1 million and $49.1 million for the three and six months ended June 30, 2025, respectively, compared to $26.0 million and $51.1 million for the corresponding periods of 2024. Our commission expense for the three months ended June 30, 2025, was relatively flat compared to 2024. The decrease in our commission expense for the six months ended June 30, 2025 was primarily related to a release of commissions payable associated with non-performing policies sent to collections.

Current wording

Our commission expense ratio was 12.0% and 12.6% for the three and nine months ended September 30, 2025, respectively, compared to 13.8% for each of the corresponding periods of 2024, and our commission expense was $23.0 million and $72.1 million for the three and nine months ended September 30, 2025, respectively, compared to $25.8 million and $76.9 million for the corresponding periods of 2024. The decrease in our commission expense for the three and nine months ended September 30, 2025, was primarily related to lower agency incentive accruals, which are specific to individual contracts and vary with agency targets, and a release of commissions payable associated with non-performing policies sent to collections.

Previous wording

The reduction in our commission expense ratio for the three months ended June 30, 2025 was primarily related to an increase in the proportion of renewal premiums, which are typically subject to a lower commission rate, and lower agency incentive accruals. The reduction in our commission expense ratio for the six months ended June 30, 2025 was primarily related to an increase in the proportion of renewal premiums, which are typically subject to a lower commission rate, a release of commissions payable associated with non-performing policies sent to collections, and lower agency incentive accruals.

Current wording

The reduction in our commission expense ratio for the three months ended September 30, 2025 was primarily related to an increase in the proportion of renewal premiums, which are typically subject to a lower commission rate, and lower agency incentive accruals. The reduction in our commission expense ratio for the nine months ended September 30, 2025 was primarily related to an increase in the proportion of renewal premiums, which are subject to a lower commission rate, a release of commissions payable associated with non-performing policies sent to collections, and lower agency incentive accruals.

Previous wording

Our underwriting expense ratio was 21.7% and 22.6% for the three and six months ended June 30, 2025, respectively, compared to 22.4% and 23.7% for the corresponding periods of 2024, and our underwriting expenses were $43.1 million and $86.0 million for the three and six months ended June 30, 2025, respectively, compared to $42.2 million and $88.4 million for the corresponding periods of 2024. The reduction in our underwriting expense ratio for the three and six months ended June 30, 2025 was driven by our disciplined focus on expense reduction.

Current wording

Our underwriting expense ratio was 20.6% and 21.9% for the three and nine months ended September 30, 2025, respectively, compared to 23.5% and 23.6% for the corresponding periods of 2024, and our underwriting expenses were $39.6 million and $125.7 million for the three and nine months ended September 30, 2025, respectively, compared to $43.8 million and $132.0 million for the corresponding periods of 2024. The reduction in our underwriting expense ratio for the three and nine months ended September 30, 2025 was driven by our disciplined focus on expense reduction.

Previous wording

The increase in underwriting expenses for the three months ended June 30, 2025, was primarily the result of an increase in the net CECL provision on premiums receivable of $2.3 million and lower AO and other expense allocations of $3.9 million, partially offset by decreases in compensation-related expenses of $2.6 million, depreciation and amortization of $2.1 million, and policyholder dividends of $0.7 million, each compared to the same period of 2024.

Current wording

The decrease in underwriting expenses for the three months ended September 30, 2025, was primarily the result of decreases in (i) compensation-related expenses of $4.0 million, of which $2.0 million related to incentives; (ii) policyholder dividends of $0.8 million; and (iii) net CECL provision on premiums receivable of $0.5 million. These decreases were partially offset by lower internal AO and other expense allocations of $2.0 million, each compared to the same period of 2024.

Previous wording

The decrease in underwriting expenses for the six months ended June 30, 2025, was primarily the result of decreases in compensation-related expenses of $4.2 million, depreciation and amortization of $2.5 million, and policyholder dividends of $0.8 million, partially offset by lower AO and other expense allocations of $5.2 million, each compared to the same period of 2024.

Current wording

The decrease in underwriting expenses for the nine months ended September 30, 2025, was primarily the result of decreases in (i) compensation-related expenses of $7.9 million, of which $5.3 million related to incentives; (ii) depreciation and amortization of $2.7 million; and (iii) policyholder dividends of $1.7 million. These decreases were partially offset by lower internal AO and other expense allocations of $7.4 million, each compared to the same period of 2024.

Previous wording

Net investment income increased 0.7% and 10.0% during the three and six months ended June 30, 2025, respectively, compared to the same periods of 2024. The increase for the six months ended June 30, 2025 was primarily the result of returns from our investments in private equity limited partnerships, along with higher book yields on our fixed maturity securities.

Current wording

Net investment income decreased 1.9% and increased 6.2% during the three and nine months ended September 30, 2025, respectively, compared to the same periods of 2024. The decrease for the three months ended September 30, 2025 was due to lower invested balances, along with lower yields on cash equivalents and short-term investments throughout the quarter. The increase for the nine months ended September 30, 2025 was primarily the result of returns from our investments in private equity limited partnerships, along with higher book yields on our fixed maturity securities.

Previous wording

Net realized and unrealized gains on investments were $20.9 million and $8.1 million for the three and six months ended June 30, 2025, respectively, compared to $2.2 million and $13.6 million for the corresponding periods of 2024. The net realized and unrealized gains on investments for the three months ended June 30, 2025 and 2024 included $21.0 million and $5.7 million of net realized and unrealized gains on equity securities and other investments, respectively, partially offset by $0.1 million and $3.5 million of net realized losses on fixed maturity securities, respectively. The net realized and unrealized gains on investments for the six months ended June 30, 2025 and 2024 included $9.1 million and $18.0 million of net realized and unrealized gains on equity securities and other investments, respectively, partially offset by $1.0 million and $4.4 million of net realized losses on fixed maturity securities, respectively.

Current wording

Net realized and unrealized gains on investments were $21.2 million and $29.3 million for the three and nine months ended September 30, 2025, respectively, compared to $10.9 million and $24.5 million for the corresponding periods of 2024. The Net realized and unrealized gains on investments for the three months ended September 30, 2025 and 2024 included $23.7 million and $12.8 million of net realized and unrealized gains on equity securities and other investments, respectively, partially offset by $2.5 million and $1.9 million of net realized losses on fixed maturity securities, respectively. The Net realized and unrealized gains on investments for the nine months ended September 30, 2025 and 2024 included $32.8 million and $30.8 million of net realized and unrealized gains on equity securities and other investments, respectively, partially offset by $3.5 million and $6.3 million of net realized losses on fixed maturity securities, respectively.

Previous wording

The net investment gains on our equity securities during the three and six months ended June 30, 2025 were largely consistent with the performance of the U.S. equity markets. The net investment gains on our other investments during the three months ended June 30, 2025 resulted primarily from an increase in the underlying value of the private equity limited partnership interests we own. The net investment losses on our other investments during the six months ended June 30, 2025 was primarily driven by the reduction in net asset value due to distributed investment returns from our investments in private equity limited partnerships. The net realized investment losses on our fixed maturity securities during the three and six months ended June 30, 2025 were primarily the result of sales associated with the rebalancing of our fixed maturity investment portfolio.

Current wording

The net investment gains on our equity securities during the three and nine months ended September 30, 2025 were largely consistent with the performance of the U.S. equity markets. The net investment gains on our other investments during the three months ended September 30, 2025 resulted primarily from an increase in the underlying value of the private equity limited partnership interests we own. The net investment gains on our other investments during the nine months ended September 30, 2025 resulted primarily from an increase in the underlying value of the private equity limited partnership interests we own partially offset by a reduction in net asset value due to distributed investment returns from those same investments. The net realized investment losses on our fixed maturity securities during the three and nine months ended September 30, 2025 were primarily the result of sales associated with the rebalancing of our fixed maturity investment portfolio partially offset in each period by a $0.5 million decrease in our allowance for CECL.

Previous wording

The net investment gains and losses on our equity securities during the three and six months ended June 30, 2024 were the result of price appreciation for our investment holdings. The net investment gains on our other investments during the three and six months ended June 30, 2024 resulted primarily from an increase in the underlying value of the private equity limited partnership interests we own. The net realized investment losses on our fixed maturity securities during the three and six months ended June 30, 2024 were primarily the result of sales associated with the rebalancing of our fixed maturity investment portfolio partially offset by a $1.3 million and $0.8 million decrease in our allowance for CECL, respectively.

Current wording

The Net investment gains and losses on our equity securities during the three and nine months ended September 30, 2024 were largely consistent with the performance of the U.S. equity markets. The net investment gains on our other investments during the nine months ended September 30, 2024 resulted primarily from an increase in the underlying value of the private equity limited partnership interests we own. The net realized investment losses on our fixed maturity securities during the three and nine months ended September 30, 2024 were primarily the result of sales associated with the rebalancing of our fixed maturity investment portfolio partially offset by a $0.5 million and $1.3 million decrease in our allowance for CECL, respectively.

Previous wording

Other income consists of net gains and losses on fixed assets, non-investment interest, and other miscellaneous income and expense items.

Current wording

Other income (loss) consists of net gains and losses on fixed assets, non-investment interest, and other miscellaneous income and expense items.

Previous wording

Interest and financing expenses were less than $0.1 million and $0.1 million for the three and six months ended June 30, 2025, respectively, compared to less than $0.1 million for each of the corresponding periods of 2024.

Current wording

Interest and financing expenses were $0.2 million and $0.3 million for the three and nine months ended September 30, 2025, respectively, compared to less than $0.1 million and $0.1 million for the corresponding periods of 2024.

Previous wording

Income tax expense was $7.3 million and $10.4 million for the three and six months ended June 30, 2025, compared to $8.3 million and $15.3 million for the corresponding periods of 2024. The effective tax rates were 19.7% for each of the three and six months ended June 30, 2025, compared to 20.8% and 20.3% for the corresponding periods of 2024. The effective rates during each of the periods presented included income tax benefits and exclusions associated with tax-advantaged investment income, LPT adjustments, Deferred Gain amortization and related adjustments, and tax credits utilized.

Current wording

Income tax (benefit) expense was $(2.9) million and $7.4 million for the three and nine months ended September 30, 2025, respectively, compared to $6.4 million and $21.8 million for the corresponding periods of 2024. The effective tax rates were 25.9% and 17.8% for the three and nine months ended September 30, 2025, respectively, compared to 17.4% and 19.4% for the corresponding periods of 2024. The effective rates during each of the periods presented deviate favorably from the statutory rate of 21.0% due to, in part, income tax benefits and exclusions associated with tax-advantaged investment income, LPT adjustments, Deferred Gain amortization and related adjustments, and tax credits utilized.

Previous wording

We believe that our total capital position remains strong and that the liquidity available to EHI and its subsidiaries remains adequate and will be sufficient for our financing needs in the next 12 months and in the longer-term period thereafter. As a result, we do not currently foresee a need to: (i) suspend dividends at either EHI or its insurance subsidiaries; (ii) forego repurchases of EHI's common stock; (iii) seek additional required capital; or (iv) seek any material non-investment asset sales, though we may decide to pursue those or other options if our financial circumstances change or it we deem it strategically advantageous to do so.

Current wording

We believe that our total capital position remains strong and that the liquidity available to EHI and its subsidiaries remains adequate and will be sufficient for our financing needs in the next 12 months and in the longer-term period thereafter. As a result, we do not currently foresee a need to: (i) suspend dividends at either EHI or its insurance subsidiaries; (ii) forego repurchases of EHI's common stock; (iii) seek additional required capital; or (iv) seek any material non-investment asset sales, though we may decide to pursue those or other options if our financial circumstances change or if we deem it strategically advantageous to do so.

Previous wording

During the second quarter of 2025, EPIC declared a $23.9 million dividend payment to EGI, which was paid in July 2025 and subsequently distributed to EHI. As a result of that dividend payment, EPIC cannot pay dividends for the remainder of 2025 without prior regulatory approval.

Current wording

During the second quarter of 2025, EPIC made a $23.9 million dividend payment to EGI, which in turn distributed that amount to EHI. As a result of that dividend payment, EPIC cannot pay dividends for the remainder of 2025 without prior regulatory approval.

Previous wording

During the second quarter of 2025, EAC declared a $23.6 million dividend payment to EGI, which was paid in July 2025 and subsequently distributed to EHI. As a result of that dividend payment, EAC cannot pay dividends for the remainder of 2025 without prior regulatory approval.

Current wording

During the second quarter of 2025, EAC made a $23.6 million dividend payment to EGI, which in turn distributed that amount to EHI. As a result of that dividend payment, EAC cannot pay dividends for the remainder of 2025 without prior regulatory approval.

Previous wording

Total cash and investments at the holding company were $37.8 million at June 30, 2025, consisting of $5.8 million of cash and cash equivalents, $6.7 million of fixed maturity securities, and $25.3 million of equity securities.

Current wording

Total cash and investments at the holding company were $41.2 million at September 30, 2025, consisting of $9.4 million of cash and cash equivalents, $6.1 million of fixed maturity securities, and $25.7 million of equity securities.

Previous wording

EHI had no borrowings under the Credit Agreement during the six months ended June 30, 2025.

Current wording

EHI had no borrowings under the Credit Agreement during the nine months ended September 30, 2025.

Previous wording

Total cash and investments held by our operating subsidiaries was $2,491.7 million at June 30, 2025, consisting of $63.5 million of cash and cash equivalents, and restricted cash, $2,070.3 million of fixed maturity securities, $250.3 million of equity securities, $98.6 million of other invested assets, and $9.0 million of short-term investments. Sources of immediate and unencumbered liquidity at our operating subsidiaries as of June 30, 2025 consisted of $63.3 million of cash and cash equivalents, $242.8 million of publicly traded equity securities whose proceeds are available within two business days and $688.6 million of highly liquid fixed maturity securities whose proceeds are also available within two business days. We believe that our subsidiaries’ liquidity needs over the next 12 months and for the longer-term period thereafter will be met with cash from operations, investment income, and maturing investments.

Current wording

Total cash and investments held by our operating subsidiaries was $2,505.5 million at September 30, 2025, consisting of $157.6 million of cash and cash equivalents, and restricted cash, $1,973.4 million of fixed maturity securities, $264.6 million of equity securities, $104.3 million of other invested assets, and $5.6 million of short-term investments. Sources of immediate and unencumbered liquidity at our operating subsidiaries as of September 30, 2025 consisted of $157.4 million of cash and cash equivalents, $257.1 million of publicly traded equity securities whose proceeds are available within two business days, and $721.8 million of highly liquid fixed maturity securities whose proceeds are also available within two business days. We believe that our subsidiaries’ liquidity needs over the next 12 months and for the longer-term period thereafter will be met with cash from operations, investment income, and maturing investments.

Previous wording

Various state laws and regulations require us to hold investment securities or letters of credit on deposit with certain states in which we do business. Securities having a fair value of $655.3 million and $630.9 million were on deposit at June 30, 2025 and December 31, 2024, respectively. These laws and regulations govern both the amount and types of investment securities that are eligible for deposit. Additionally, standby letters of credit from the FHLB have been issued in lieu of $170.0 million of securities on deposit at both June 30, 2025 and December 31, 2024.

Current wording

Various state laws and regulations require us to hold investment securities or letters of credit on deposit with certain states in which we do business. Securities having a fair value of $575.9 million and $630.9 million were on deposit at September 30, 2025 and December 31, 2024, respectively. These laws and regulations govern both the amount and types of investment securities that are eligible for deposit. Additionally, standby letters of credit from the FHLB have been issued in lieu of $170.0 million of securities on deposit at both September 30, 2025 and December 31, 2024.

Previous wording

We purchase reinsurance annually to protect us against the costs of severe claims and certain catastrophic events. On July 1, 2025, we entered into a new reinsurance program that is effective through June 30, 2026. The reinsurance program consists of one treaty covering excess of loss and catastrophic loss events in four layers of coverage, which includes a 10% co-participation share within each layer of coverage retained by the Company. Our reinsurance coverage is $190.0 million in excess of our $10.0 million retention on a per occurrence basis, including a maximum any one life limit of $20.0 million, subject to certain exclusions. We believe that our reinsurance program currently meets our needs.

Current wording

We purchase reinsurance annually to protect us against the costs of severe claims and certain catastrophic events. On July 1, 2025, we entered into a new reinsurance program that is effective through June 30, 2026. The reinsurance program consists of one treaty covering excess of loss and catastrophic loss events in four layers of coverage, which includes a 10% co-participation share within each layer of coverage retained by us. Our reinsurance coverage is $190.0 million ($171.0 million net of our co-participation) in excess of our $10.0 million retention on a per occurrence basis, including a maximum any one life limit of $20.0 million, subject to certain exclusions. We believe that our reinsurance program currently meets our needs.

Previous wording

The table below shows our net cash flows for the six months ended:

Current wording

The table below shows our net cash flows:

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2025, included net premiums received of $385.4 million and investment income received of $58.1 million. The cash provided by these operating activities were partially offset by net claims payments of $274.9 million, underwriting expenses paid of $92.1 million, commissions paid of $50.2 million, and federal income taxes paid of $11.6 million.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2025, included net premiums received of $584.3 million and investment income received of $85.2 million. The cash provided by these operating activities were partially offset by net claims payments of $417.4 million, underwriting expenses paid of $120.7 million, commissions paid of $74.4 million, other non-recurring expenses paid of $1.1 million, and federal income taxes paid of $11.6 million.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2024, included net premiums received of $372.5 million and investment income received of $52.7 million. The cash provided by these operating activities were largely offset by net claims payments of $252.9 million, underwriting and general and administrative expenses paid of $94.4 million, commissions paid of $51.1 million, and federal income taxes paid of $14.5 million.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2024, included net premiums received of $575.4 million, investment income received of $79.8 million, and cash received of $14.6 million for the Contingent Commission. The cash provided by these operating activities were largely offset by net claims payments of $381.7 million, underwriting and general and administrative expenses paid of $124.1 million, commissions paid of $77.6 million, and federal income taxes paid of $23.0 million.

Previous wording

Net cash provided by investing activities for the six months ended June 30, 2025, related primarily to returns from our investments, investment sales, maturities, and redemptions whose proceeds were used to fund claims payments, underwriting expenses, stockholder dividend payments, and common stock repurchases. Those investing cash inflows were partially offset by investments of premiums received and the reinvestment of funds from investment sales, maturities, redemptions and interest income.

Current wording

Net cash provided by investing activities for the nine months ended September 30, 2025, related primarily to returns from our investments, investment sales, maturities, and redemptions whose proceeds were used to fund claims payments, underwriting expenses, stockholder dividend payments, and common stock repurchases. Those investing cash inflows were partially offset by investments of premiums received and the reinvestment of funds from investment sales, maturities, redemptions and interest income.