Kinsale Capital Group, Inc.

Previous wording

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2025, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2025, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

We have one reportable segment, our Excess and Surplus Lines Insurance segment, which offers property and casualty ("P&C") insurance products through the E&S market. For the first three months of 2025, the percentage breakdown of our gross written premiums was 72.5% casualty and 27.5% property. Our commercial underwriting divisions include Commercial Property, Excess Casualty, Small Business Casualty, General Casualty, Construction, Allied Health, Small Business Property, Products Liability, Entertainment, Commercial Auto, Energy, Excess Professional, Life Sciences, Professional Liability, Environmental, Inland Marine, Health Care, Management Liability, Public Entity, Aviation, Agribusiness, Product Recall, Ocean Marine, and Railroad. We also write homeowners' coverage in the personal lines market, which in aggregate represented 2.8% of our gross written premiums in the first three months of 2025.

Current wording

We have one reportable segment, our Excess and Surplus Lines Insurance segment, which offers property and casualty ("P&C") insurance products through the E&S market. For the first six months of 2025, the percentage breakdown of our gross written premiums was 69.3% casualty and 30.7% property. Our commercial underwriting divisions include Commercial Property, Excess Casualty, Small Business Casualty, General Casualty, Construction, Allied Health, Small Business Property, Entertainment, Products Liability, Commercial Auto, Energy, Excess Professional, Life Sciences, Professional Liability, Inland Marine, Environmental, Health Care, Management Liability, Public Entity, Agribusiness Casualty, Aviation, Ocean Marine, Product Recall, Agribusiness Property and Railroad. We also write homeowners' coverage in the personal lines market, which in aggregate represented 2.7% of our gross written premiums in the first six months of 2025.

Previous wording

Net income was $89.2 million for the three months ended March 31, 2025 compared to $98.9 million for the three months ended March 31, 2024, a decrease of 9.8%. The decrease in net income for the first three months of 2025 over the same period last year was primarily due to a combination of higher catastrophe losses incurred during the period and lower unrealized gains on equity investments offset in part by continued profitable growth and an increase in net investment income.

Current wording

Net income was $134.1 million for the three months ended June 30, 2025 compared to $92.6 million for the three months ended June 30, 2024, an increase of 44.9%. The increase in net income for the second quarter of 2025 from the same period last year was primarily due to higher returns on equity investments, continued profitable growth and higher investment income.

Previous wording

During the three months ended March 31, 2025, prior accident years developed favorably by $14.6 million, of which $16.7 million was attributable to the 2021 through 2024 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily from the 2017 through 2019 accident years and more conservative actuarial assumptions in the 2021 through 2023 accident years for lines of business exposed to construction liability.

Current wording

During the three months ended June 30, 2025, prior accident years developed favorably by $15.4 million, of which $19.1 million was attributable to the 2020 through 2024 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily in our construction liability business in the 2016 through 2019 accident years and adjustments to actuarial assumptions in the 2020 through 2024 accident years to reflect inflation uncertainty around construction defect exposures.

Previous wording

The expense ratio was 20.0% for the three months ended March 31, 2025 compared to 20.7% for the three months ended March 31, 2024. The decrease in the expense ratio was primarily due to lower relative net commissions due to higher ceding commissions earned under the commercial property quota share treaty as a result of an increase to the ceding commission rate effective with the June 2024 renewal. Direct commissions paid as a percentage of gross written premiums was 14.8% and 14.7% for the three months ended March 31, 2025 and 2024, respectively.

Current wording

The expense ratio was 20.7% for the three months ended June 30, 2025 compared to 21.1% for the three months ended June 30, 2024. The decrease in the expense ratio was primarily due to routine variability in other underwriting expenses offset in part by lower ceding commissions due to increased retention on our reinsurance treaties. Direct commissions paid as a percent of gross written premiums was 14.8% and 14.7% for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

The following table summarizes net investment income, change in the fair value of equity securities and net realized investment gains for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes net investment income, change in the fair value of equity securities and net realized investment gains (losses) for the three months ended June 30, 2025 and 2024:

Previous wording

During the first three months of 2025, the change in fair value of equity securities of $3.0 million reflected primarily unrealized gains arising during the period on our common stock holdings of $9.4 million offset in part by a decline in the fair value of our exchange traded funds ("ETFs") of $(6.5) million.

Current wording

During the second quarter of 2025, the change in fair value of equity securities primarily reflected unrealized gains arising during the period on our exchange-traded funds ("ETFs") of $15.1 million, common stocks of $13.1 million and non-redeemable preferred stock of $0.4 million generally consistent with the broader U.S. stock market.

Previous wording

Underwriting income was $67.5 million for the three months ended March 31, 2025 compared to $65.1 million for the three months ended March 31, 2024, an increase of 3.7%. The corresponding combined ratios were 82.1% for the three months ended March 31, 2025 compared to 79.5% for the three months ended March 31, 2024. The increase in underwriting income for the first three months of 2025 compared to the same period last year was primarily due to continued growth in the business offset in part by higher catastrophe losses incurred.

Current wording

Underwriting income was $162.9 million for the six months ended June 30, 2025 compared to $141.1 million for the six months ended June 30, 2024, an increase of 15.4%. The corresponding combined ratios were 78.8% for the six months ended June 30, 2025 compared to 78.6% for the six months ended June 30, 2024. The increase in underwriting income for the first six months of 2025 compared to the same period last year was primarily due to continued growth in the business and higher favorable development of loss reserves from prior accident years offset in part by higher catastrophe losses incurred.

Previous wording

Gross written premiums were $484.3 million for the three months ended March 31, 2025 compared to $448.6 million for the three months ended March 31, 2024, an increase of $35.6 million, or 7.9%. Gross written premiums in our Commercial Property Division, our largest division, decreased 18.4% relative to the prior year period due to rate declines and an increasingly competitive environment including from standard carriers. Excluding our Commercial Property Division, gross written premiums grew 16.7%. The average premium per policy written was $14,200 in the first three months of 2025 compared to $15,300 in the first three months of 2024. Excluding our personal insurance division, which has a relatively low premium per policy written, the average premium per policy written was $14,700 for the first three months of 2025 and $16,000 for the first three months of 2024. The decrease in average premium per policy for the first three months of 2025 over the same period last year was due primarily to a decrease in gross written premiums in our Commercial Property Division.

Current wording

Gross written premiums were $1.0 billion for the six months ended June 30, 2025 compared to $978.4 million for the six months ended June 30, 2024, an increase of $61.4 million, or 6.3%. Gross written premiums in our Commercial Property Division, our largest division, decreased 17.5% relative to the prior year period due to rate declines and an increasingly competitive environment including from standard carriers. Excluding our Commercial Property Division, gross written premiums grew 15.5% due primarily to continued strong submission flow from brokers across most divisions. The average premium per policy written was $14,200 in the first six months of 2025 compared to $15,800 in the first six months of 2024. Excluding our personal insurance division, which has a relatively low premium per policy written, the average premium per policy written was $14,800 for the first six months of 2025 and $16,600 for the first six months of 2024. The decrease in average premium per policy for the first six months of 2025 over the same period last year was due primarily to a decrease in gross written premiums in our Commercial Property Division.

Previous wording

Net written premiums increased by $30.7 million, or 8.7%, to $381.7 million for the three months ended March 31, 2025 from $351.1 million for the three months ended March 31, 2024. The increase in net written premiums for the first three months of 2025 compared to the same period last year was primarily due to higher gross written premiums. The net retention ratio was 78.8% for the three months ended March 31, 2025 compared to 78.2% for the same period last year. The increase in the net retention ratio was primarily due to an increase in our retention on our casualty treaty effective with the June 2024 renewal and change in the mix of business.

Current wording

Net written premiums increased by $59.1 million, or 7.6%, to $840.4 million for the six months ended June 30, 2025 from $781.3 million for the six months ended June 30, 2024. The increase in net written premiums for the first six months of 2025 compared to the same period last year was primarily due to higher gross written premiums. The net retention ratio was 80.8% for the six months ended June 30, 2025 compared to 79.9% for the same period last year. The increase in the net retention ratio was primarily due to an increase in our retention on our excess casualty reinsurance treaty effective with the June 2024 renewal and change in the mix of business.

Previous wording

Net earned premiums increased by $56.3 million, or 18.2%, to $365.8 million for the three months ended March 31, 2025 from $309.5 million for the three months ended March 31, 2024 due to growth in gross written premiums.

Current wording

Net earned premiums increased by $107.4 million, or 16.7%, to $749.4 million for the six months ended June 30, 2025 from $642.0 million for the six months ended June 30, 2024 due primarily to growth in gross written premiums.

Previous wording

The loss ratio was 62.1% for the three months ended March 31, 2025 compared to 58.8% for the three months ended March 31, 2024. The increase in the loss ratio for the first three months of 2025 compared to the first three months of 2024 was due primarily to higher catastrophe losses incurred in the period. This increase was offset in part by a lower current accident year loss ratio and higher relative net favorable development of prior-year loss reserves both of which were the result of lower-than-expected reported losses particularly in our property lines of business. Net catastrophe losses incurred during the three months ended March 31, 2025 were primarily related to the Palisades Fire.

Current wording

The loss ratio was 58.5% for the six months ended June 30, 2025 compared to 57.7% for the six months ended June 30, 2024. The increase in the loss ratio for the first six months of 2025 compared to the first six months of 2024 was due primarily to higher catastrophe losses incurred in the period primarily related to the Palisades Fire. This increase was offset in part by higher relative net favorable development of prior-year loss reserves and a lower current accident year loss ratio both of which were the result of lower-than-expected reported losses, particularly in our property lines of business.

Previous wording

During the three months ended March 31, 2024, prior accident years developed favorably by $8.4 million, of which $16.3 million was attributable to the 2021 through 2023 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily from the 2018 and 2019 accident years due to construction defect claims and from the 2020 accident year due to a large property claim.

Current wording

During the six months ended June 30, 2024, prior accident years developed favorably by $17.9 million, of which $30.7 million was attributable to the 2021 through 2023 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily from the 2017 through 2019 accident years due to construction defect claims that are more exposed to inflation and from the 2020 accident year due to a large property claim.

Previous wording

Net investment income increased by 33.1% to $43.8 million for the three months ended March 31, 2025 from $32.9 million for the three months ended March 31, 2024. The increase in the first three months of 2025 compared to the same period last year was primarily due to growth in our investment portfolio largely generated from the investment of strong operating cash flows. Our investment portfolio, excluding cash equivalents and unrealized gains and losses, had an annualized gross investment return of 4.3% for both the three months ended March 31, 2025 and 2024.

Current wording

Net investment income increased by 31.3% to $90.3 million for the six months ended June 30, 2025 from $68.8 million for the six months ended June 30, 2024. The increase in the first six months of 2025 compared to the same period last year was primarily due to growth in our investment portfolio largely generated from the investment of strong operating cash flows. Our investment portfolio, excluding cash equivalents and unrealized gains and losses, had an annualized gross investment return of 4.3% for both the six months ended June 30, 2025 and 2024.

Previous wording

During the first quarter of 2024, the change in fair value of equity securities of $18.1 million included changes in unrealized gains related to ETFs and common stocks of $16.6 million and changes in unrealized gains related to non-redeemable preferred stock of $1.5 million. The change in the fair value of ETFs and common stocks during the first three months of 2024 primarily reflected higher valuations in the broader U.S. stock market.

Current wording

During the first six months of 2024, the change in fair value of equity securities of $21.2 million included changes in unrealized gains related to common stocks of $12.3 million and ETFs of $6.3 million and changes in unrealized gains related to non-redeemable preferred stock of $2.6 million. The change in the fair value of ETFs and common stocks during the first six months of 2024 primarily reflected higher valuations in the broader U.S. stock market and the change in fair value of preferred stock relates primarily to the disposition of certain preferred stock securities in a loss position.

Previous wording

Net realized investment gains were $0.5 million and $3.9 million for the three months ended March 31, 2025 and 2024, respectively and were primarily related to sales of common stocks and ETFs due to opportunistic repositioning of our equity portfolio.

Current wording

Net realized investment gains were $0.7 million and $6.7 million for the six months ended June 30, 2025 and 2024, respectively and were primarily related to sales of common stocks and ETFs due to opportunistic repositioning of our equity portfolio.

Previous wording

Our effective tax rate was 20.6% for the three months ended March 31, 2025 compared to 14.6% for the three months ended March 31, 2024. The effective tax rate was lower than the federal statutory rate of 21% primarily due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income. The effective tax rate was higher for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to a lower volume of stock option exercises.

Current wording

Our effective tax rate was 20.4% for the six months ended June 30, 2025 compared to 17.3% for the six months ended June 30, 2024. The effective tax rate was lower than the federal statutory rate of 21% primarily due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income. The effective tax rate was higher for the six months ended June 30, 2025 compared to the same period in 2024 due primarily to a lower volume of stock option exercises.

Previous wording

Our annualized return on equity was 23.3% for the three months ended March 31, 2025 compared to 35.1% for the three months ended March 31, 2024. Our annualized operating return on equity was 22.5% for the three months ended March 31, 2025 compared to 28.9% for the three months ended March 31, 2024. The decrease in annualized operating return on equity for the three months ended March 31, 2025 compared to the prior period was due primarily to higher average stockholders' equity and higher net catastrophe losses primarily related to the Palisades Fire. Average stockholder's equity increased as a result of profitable growth and an increase in the fair value of our fixed income portfolio.

Current wording

Our annualized return on equity was 27.9% for the six months ended June 30, 2025 compared to 32.7% for the six months ended June 30, 2024. Our annualized operating return on equity was 24.7% for the six months ended June 30, 2025 compared to 28.8% for the six months ended June 30, 2024. The decrease in annualized operating return on equity for the six months ended June 30, 2025 compared to the prior period was due primarily to higher average stockholders' equity and higher net catastrophe losses primarily related to the Palisades Fire. Average stockholders' equity increased as a result of profitable growth and an increase in the fair value of our fixed income portfolio.

Previous wording

In October 2024, the Company's Board of Directors authorized a share repurchase program authorizing the repurchase of up to $100.0 million of the Company's common stock. The shares may be repurchased from time to time in open market purchases, privately-negotiated transactions, block purchases, accelerated share repurchase agreements or a combination of methods and pursuant to safe harbors provided by Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934. The timing, manner, price and amount of any repurchases under the share repurchase program will be determined by the Company in its discretion. The stock repurchase program does not require the Company to repurchase any specific number of shares, and may be modified, suspended or terminated at any time. At March 31, 2025, the Company had $80.0 million of capacity remaining under its share repurchase program.

Current wording

In October 2024, the Company's Board of Directors authorized a share repurchase program authorizing the repurchase of up to $100.0 million of the Company's common stock. The shares may be repurchased from time to time in open market purchases, privately-negotiated transactions, block purchases, accelerated share repurchase agreements or a combination of methods and pursuant to safe harbors provided by Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934. The timing, manner, price and amount of any repurchases under the share repurchase program will be determined by the Company in its discretion. The stock repurchase program does not require the Company to repurchase any specific number of shares, and may be modified, suspended or terminated at any time. At June 30, 2025, the Company had $70.0 million of capacity remaining under its share repurchase program.

Previous wording

Our cash flows for thethree months ended March 31, 2025 and 2024 were:

Current wording

Our cash flows for thesix months ended June 30, 2025 and 2024 were:

Previous wording

Net cash provided by operating activities was approximately $229.8 million for the three months ended March 31, 2025 compared to $210.4 million for the same period in 2024. This increase was largely driven by higher premium volume and the timing of claim payments and reinsurance recoveries.

Current wording

Net cash provided by operating activities was approximately $498.9 million for the six months ended June 30, 2025 compared to $489.3 million for the same period in 2024. This increase was largely driven by higher premium volume and the timing of claim payments and reinsurance recoveries.

Previous wording

Net cash used in investing activities was $181.0 million for the three months ended March 31, 2025 compared to $192.5 million for the three months ended March 31, 2024. Net cash used in investing activities during the first three months of 2025 included purchases of fixed-maturity securities of $369.5 million, which included primarily corporate bonds and asset- and mortgage-backed securities. During the first three months of 2025, we received proceeds of $107.0 million from sales of fixed-maturity securities, largely corporate bonds, asset-backed securities and, to a lesser extent, municipal securities and $144.7 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the three months ended March 31, 2025, purchases of equity securities of$42.7 million consisted primarily of common stocks. During the first three months of 2025, we received proceeds of $11.6 million from sales of common stocks. Cash used in investing activities was partially offset by unsettled purchases of cash equivalents totaling $15.0 million as of March 31, 2025.

Current wording

Net cash used in investing activities was $440.2 million for the six months ended June 30, 2025 compared to $432.2 million for the six months ended June 30, 2024. Net cash used in investing activities during the first six months of 2025 included purchases of fixed-maturity securities of $939.5 million, which included primarily corporate bonds and asset- and mortgage-backed securities. During the first six months of 2025, we received proceeds of $282.7 million from sales of fixed-maturity securities, largely corporate bonds, asset-backed securities and, to a lesser extent, municipal securities and $359.0 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the six months ended June 30, 2025, purchases of equity securities of$94.9 million consisted of common stocks and ETFs. During the first six months of 2025, we received proceeds of $11.6 million from sales of common stocks.

Previous wording

Net cash used in investing activities of $192.5 million during the first three months of 2024 included purchases of fixed-maturity securities of $297.4 million, which included primarily corporate bonds, asset- and mortgage-backed securities, and to a lesser extent, U.S. Treasuries and municipal securities. During the first three months of 2024, we received proceeds of $67.8 million from sales of fixed-maturity securities, largely corporate bonds, municipal securities, U.S. Treasuries and government agency bonds and $80.5 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the three months ended March 31, 2024, purchases of equity securities of$49.8 million consisted of common stocks and ETFs. During the first three months of 2024, we received proceeds of $10.1 million from sales of ETFs.

Current wording

Net cash used in investing activities of $432.2 million during the six months of 2024 included purchases of fixed-maturity securities of $759.8 million, which included primarily corporate bonds, asset- and mortgage-backed securities, and to a lesser extent, U.S. Treasuries and municipal securities. During the first six months of 2024, we received proceeds of $189.3 million from sales of fixed-maturity securities, largely corporate bonds, mortgage- and asset-backed securities, municipal securities, U.S. Treasuries and government agency bonds and $200.6 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the six months ended

Previous wording

During the first three months of 2025, cash used in financing activities reflected dividends paid of $0.17 per common share, or $4.0 million in aggregate, share repurchases of $10.0 million and payroll taxes withheld and remitted on restricted stock awards of $6.2 million, offset in part by proceeds received from our equity compensation plans of $0.2 million.

Current wording

During the first six months of 2025, cash used in financing activities reflected dividends paid of $0.34 per common share, or $7.9 million in aggregate, share repurchases of $20.0 million and payroll taxes withheld and remitted on restricted stock awards of $6.3 million, offset in part by proceeds received from our equity compensation plans of $0.5 million.

Previous wording

During the first three months of 2024, cash used in financing reflected dividends paid of $0.15 per common share, or $3.5 million in aggregate. In addition, for the three months ended March 31, 2024, payroll taxes withheld and remitted on restricted stock awards were $5.8 million, offset in part by proceeds received from our equity compensation plans of $0.9 million.

Current wording

During the first six months of 2024, cash used in financing reflected dividends paid of $0.30 per common share, or $7.0 million in aggregate. In addition, for the six months ended June 30, 2024, payroll taxes withheld and remitted on restricted stock awards were $7.0 million, offset in part by proceeds received from our equity compensation plans of $1.2 million.

Previous wording

(1) Our property quota share reinsurance reduces the financial impact of property losses on our commercial property, small business property, high value homeowners and inland marine policies up to a loss recovery of $189.9 million for an event. This reinsurance is not applicable to any individual policy with a limit of $2.0 million or less.

Current wording

(1) Our property quota share reinsurance reduces the financial impact of property losses up to a loss recovery of $177.2 million for an event. This reinsurance is not applicable to any individual policy with a limit of $2.0 million or less.

Previous wording

(2) Our property catastrophe reinsurance reduces the financial impact of a catastrophe event involving multiple claims and policyholders. Our property catastrophe reinsurance includes a reinstatement provision which requires us to pay reinstatement premiums after a loss has occurred in order to preserve coverage. Including the reinstatement of coverage, the maximum aggregate loss recovery limit is $350.0 million. This coverage applies after the coverage provided by the commercial property quota share treaty.

Current wording

(2) Our property catastrophe reinsurance reduces the financial impact of a catastrophe event involving multiple claims and policyholders. Our property catastrophe reinsurance includes a reinstatement provision which requires us to pay reinstatement premiums after a loss has occurred in order to preserve coverage. Including the reinstatement of coverage, the maximum aggregate loss recovery limit is $500.0 million. This coverage applies after the coverage provided by the commercial property quota share treaty.

Previous wording

(4) For excess casualty policies with a per-occurrence limit higher than $2.5 million, the ceding percentage varies such that the retention is always $2.5 million or less. For example, for a $5.0 million limit excess policy, our retention would be 50%, whereas for a $10.0 million limit excess policy, our retention would be 25%. For policies for which we also write an underlying primary limit, the combined retention on the primary and excess policies would not exceed $2.5 million. This reinsurance is not applicable to any individual policy with a per-occurrence limit of $2.5 million or less.

Current wording

(4) For excess casualty policies with a per-occurrence limit higher than $3.0 million, the ceding percentage varies such that the retention is always $3.0 million or less. For example, for a $5.0 million limit excess policy, our retention would be 60%, whereas for a $10.0 million limit excess policy, our retention would be 30%. For policies for which we also write an underlying primary limit, the combined retention on the primary and excess policies would not exceed $3.0 million. This reinsurance is not applicable to any individual policy with a per-occurrence limit of $3.0 million or less.

Previous wording

Reinsurance contracts do not relieve us from our obligations to policyholders. Failure of the reinsurer to honor its obligation could result in losses to us, and therefore, we established an allowance for credit risk based on historical analysis of credit losses for highly rated companies in the insurance industry. In formulating our reinsurance programs, we are selective in our choice of reinsurers and we consider numerous factors, the most important of which are the financial stability of the reinsurer, its history of responding to claims and its overall reputation. In an effort to minimize our exposure to the insolvency of our reinsurers, we review the financial condition of each reinsurer regularly. In addition, we continually monitor for rating downgrades involving any of our reinsurers. At March 31, 2025, all reinsurance contracts that our insurance subsidiary was a party to were with companies with A.M. Best ratings of "A-" (Excellent) or better. As of March 31, 2025, we recorded an allowance for credit losses of $0.9 million related to our reinsurance balances.

Current wording

Reinsurance contracts do not relieve us from our obligations to policyholders. Failure of the reinsurer to honor its obligation could result in losses to us, and therefore, we established an allowance for credit risk based on historical analysis of credit losses for highly rated companies in the insurance industry. In formulating our reinsurance programs, we are selective in our choice of reinsurers and we consider numerous factors, the most important of which are the financial stability of the reinsurer, its history of responding to claims and its overall reputation. In an effort to minimize our exposure to the insolvency of our reinsurers, we review the financial condition of each reinsurer regularly. In addition, we continually monitor for rating downgrades involving any of our reinsurers. At June 30, 2025, all reinsurance contracts that our insurance subsidiary was a party to were with companies with A.M. Best ratings of "A-" (Excellent) or better. As of June 30, 2025, we recorded an allowance for credit losses of $1.0 million related to our reinsurance balances.

Previous wording

At March 31, 2025, total stockholders' equity and tangible stockholders' equity were $1.6 billion compared to total stockholders' equity and tangible stockholders' equity of $1.5 billion at December 31, 2024. The increases in both total and tangible stockholders' equity over the prior year-end balances were due to profits generated during the period and an increase in the fair value of our fixed-maturity investments offset in part by share repurchases, payment of dividends and net activity related to our share-based compensation plan. Tangible stockholders’ equity is a non-GAAP financial measure. See "—Reconciliation of non-GAAP financial measures" for a reconciliation of stockholders' equity in accordance with GAAP to tangible stockholders' equity.

Current wording

At June 30, 2025, total stockholders' equity and tangible stockholders' equity were $1.7 billion compared to total stockholders' equity and tangible stockholders' equity of $1.5 billion at December 31, 2024. The increases in both total and tangible stockholders' equity over the prior year-end balances were due to profits generated during the period, an increase in the fair value of our fixed-maturity investments and net activity related to our share-based compensation plan offset in part by share repurchases and payment of dividends. Tangible stockholders’ equity is a non-GAAP financial measure. See "—Reconciliation of non-GAAP financial measures" for a reconciliation of stockholders' equity in accordance with GAAP to tangible stockholders' equity.

Previous wording

At March 31, 2025, our cash and invested assetsof $4.3 billion consisted of fixed-maturity securities, equity securities, short-term investments, cash and cash equivalents and real estate investments. At March 31, 2025, the majority of the investment portfolio was composed of fixed-maturity securities of $3.7 billion that were classified as available-for-sale. Available-for-sale investments are carried at fair value with unrealized gains and losses on these securities, net of applicable taxes, reported as a separate component of accumulated other comprehensive income. At March 31, 2025, we also held $433.1 million of equity securities, which included common stocks, ETFs and non-redeemable preferred stock, $38.8 million of short-term investments, $142.0 million of cash and cash equivalents and $15.0 million of real estate investments.

Current wording

At June 30, 2025, our cash and invested assetsof $4.6 billion consisted of fixed-maturity securities, equity securities, short-term investments, cash and cash equivalents and real estate investments. At June 30, 2025, the majority of the investment portfolio was composed of fixed-maturity securities of $3.9 billion that were classified as available-for-sale. Available-for-sale investments are carried at fair value with unrealized gains and losses on these securities, net of applicable taxes, reported as a separate component of accumulated other comprehensive income. At June 30, 2025, we also held $513.9 million of equity securities, which included common stocks, ETFs and non-redeemable preferred stock, $34.3 million of short-term investments, $138.1 million of cash and cash equivalents and $15.0 million of real estate investments.

Previous wording

Ourfixed-maturity securities, including cash equivalents, had a weighted average duration of 3.0 years at both March 31, 2025 and December 31, 2024 and an average rating of "AA-" at both March 31, 2025 and December 31, 2024.

Current wording

Ourfixed-maturity securities, including cash equivalents, had a weighted average duration of 3.1 years and 3.0 years at June 30, 2025 and December 31, 2024, respectively, and an average rating of "AA-" at both June 30, 2025 and December 31, 2024.

Previous wording

Net income for the three months ended March 31, 2025 and 2024, reconciles to underwriting income as follows:

Current wording

Net income for the three and six months ended June 30, 2025 and 2024, reconciles to underwriting income as follows:

Previous wording

Net income for the three months ended March 31, 2025 and 2024, reconciles to net operating earnings as follows:

Current wording

Net income for the three and six months ended June 30, 2025 and 2024, reconciles to net operating earnings as follows: