Lemonade, Inc.

Previous wording

Under the Agreement, subject to certain terms and conditions, at the start of each month, Hannover Re shall provide financing of up to 80% of our growth spend but not to exceed $20 million per reference cohort. We will repay each amount financed based on a specific percentage of premiums collected for assigned customer cohorts associated with the funded growth spend. This repayment amount will include the funding amount plus a rate of return in accordance with the Counterparty Cap Amount, defined as the sum of (a) the greater of (i)0% or (ii) the three-year U.S. Treasury Bill rate, plus (b)5.8%. Once fully repaid, we will retain all future reference premium related to each assigned customer cohorts. The Agreement also includes certain financial covenants, cancellation and commitment termination provisions.

Current wording

Under the Financing Agreement, subject to certain terms and conditions, at the start of each month, Hannover Re shall provide financing of up to 80% of our growth spend but not to exceed $20 million per reference cohort. We will repay each amount financed based on a specific percentage of premiums collected for assigned customer cohorts associated with the funded growth spend. This repayment amount will include the funding amount plus a rate of return in accordance with the Counterparty Cap Amount, defined as the sum of (a) the greater of (i) 0% or (ii) the three-year U.S. Treasury Bill rate, plus (b) 5.8%. Once fully repaid, we will retain all future reference premium related to each assigned customer cohort. The Financing Agreement also includes certain financial covenants, cancellation and commitment termination provisions.

Previous wording

Beginning January 1, 2027, financing of our sales and marketing growth efforts shall solely be under the Financing Agreement with Hannover Re. Separate reference premium from customer cohorts shall be attributed to financing with Hannover Re. Reference premium from customer cohorts under the Amended and Restated Agreement will continue to be applied to financing with GC.

Current wording

Beginning January 1, 2027, all new financing of our sales and marketing growth efforts shall be under the Financing Agreement with Hannover Re. Separate reference premium from customer cohorts shall be attributed to financing with Hannover Re. Reference premium from customer cohorts under the Amended and Restated Agreement will continue to be applied to financing with GC Customer Value Arranger, LLC (a General Catalyst company) (“GC”).

Previous wording

On June 28, 2023, we entered into a Customer Investment Agreement (the “Agreement”), with GC Customer Value Arranger, LLC (a General Catalyst company) ("GC") under which GC agreed to provide up to $150 million of financing for our sales and marketing growth efforts through December 31, 2024. Under the Agreement, subject to certain terms and conditions specified therein, at the start of each growth period, an Investment Amount of between 50% to 80% of our growth spend (the "Investment Amount") will be advanced by GC. During each growth period, we repay a portion of each outstanding Investment Amount including a 16% rate of return based upon an agreed schedule. Once fully repaid, we retain all future reference income related to each respective Investment Amount.

Current wording

On June 28, 2023, we entered into a Customer Investment Agreement (the “Agreement”), with GC, under which GC agreed to provide up to $150 million of financing for our sales and marketing growth efforts through December 31, 2024. Under the Agreement, subject to certain terms and conditions specified therein, at the start of each growth period, an Investment Amount of between 50% to 80% of our growth spend (the “Investment Amount”) will be advanced by GC. During each growth period, we repay a portion of each outstanding Investment Amount including a 16% rate of return based upon an agreed schedule. Once fully repaid, we retain all future reference income related to each respective Investment Amount.

Previous wording

The Agreement has been amended and restated on several occasions to extend the commitment period and increase the financing agreement. On January 8, 2024, the Agreement was amended and restated to provide up to an additional $140 million of financing December 31, 2025. On February 3, 2025, the Agreement was further amended to provide up to an additional $200 million of financing from January 1, 2026 through December 31, 2026 for our sales and marketing growth efforts. In addition, the Agreement was amended in April 2024, June 2024 and December 2025 to clarify certain provisions with no material changes to terms and conditions. The Agreement, as amended and restated (the “Amended and Restated Agreement”) contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms.

Current wording

The Agreement has been amended and restated on several occasions to extend the commitment period and increase the financing agreement. On January 8, 2024, the Agreement was amended and restated to provide up to an additional $140 million of financing through December 31, 2025. On February 3, 2025, the Agreement was further amended to provide up to an additional $200 million of financing from January 1, 2026 through December 31, 2026 for our sales and marketing growth efforts. In addition, the Agreement was amended in April 2024, June 2024 and December 2025 to clarify certain provisions with no material changes to terms and conditions. The Agreement, as amended and restated (the “Amended and Restated Agreement”) contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms.

Previous wording

As of June 30, 2026, we had $206.4 million of outstanding borrowings under the Amended and Restated Agreement. We incurred interest expense of $13.2 million for the six months ended June 30, 2026.

Current wording

As of September 30, 2026, we had $231.6 million of outstanding borrowings under the Amended and Restated Agreement. We incurred interest expense of $21.3 million for the nine months ended September 30, 2026.

Previous wording

Additionally, seasonal weather patterns impact the level and amount of claims we receive. These patterns include hurricanes, wildfires, and coastal storms in the fall, cold weather patterns, and changing home heating needs in the winter, and tornados and hailstorms in the spring and summer. The mix of geographic exposure and products within our customer base impacts our exposure to these weather patterns. For additional information, see “Risk Factors - Risks Relating to our Industry - Severe weather events and other catastrophes, including the effects of climate change and global pandemics, are inherently unpredictable and may have a material adverse effect on our financial results and financial condition.” in our Annual Report on Form 10-K.

Current wording

Additionally, seasonal weather patterns impact the level and amount of claims we receive. These patterns include hurricanes, wildfires, and coastal storms in the fall, cold weather patterns, and changing home heating needs in the winter, and tornadoes and hailstorms in the spring and summer. The mix of geographic exposure and products within our customer base impacts our exposure to these weather patterns. For additional information, see “Risk Factors - Risks Relating to our Industry - Severe weather events and other catastrophes, including the effects of climate change and global pandemics, are inherently unpredictable and may have a material adverse effect on our financial results and financial condition." in our Annual Report on Form 10-K.

Previous wording

Changing U.S. and global economic conditions may impact our business. Evolving U.S. trade policy, including tariffs imposed on imported goods in 2025, could affect our claims costs. In February 2026, the United States Supreme Court ruled that the use of the International Emergency Economic Powers Act ("IEEPA") to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs that had been in effect since April 2025. While the ruling struck down the IEEPA-based tariffs, it does not prevent the administration from imposing tariffs using other legal authorities. Following the ruling, the administration invoked alternative statutory authorities imposing a global tariff, and the administration has indicated its intention to continue to pursue alternative statutory mechanisms to reinstate or impose new tariffs. Tariffs on building materials may increase home repair costs, tariffs on automotive parts may increase vehicle repair and replacement costs, and tariffs on consumer goods may increase the cost of replacing covered personal property. To the extent tariff-driven cost increases are sustained, we may seek premium rate adjustments, subject to regulatory approval in applicable states; however, there may be a lag between when we experience increased claims costs and when we are able to implement corresponding rate increases, which could negatively impact our loss ratios in the interim. More broadly, inflation, whether driven by tariffs, supply chain disruptions, labor market conditions, or other factors, if any, has impacted and could continue to impact our claims costs, product pricing and investment yield, among other impacts. Capital market volatility may also affect our investment portfolio and access to capital. The actual effects of these macroeconomic factors on our results remains unknown and cannot be estimated with precision.

Current wording

Changing U.S. and global economic conditions may impact our business. Evolving U.S. trade policy, including tariffs imposed on imported goods in 2025, could affect our claims costs. In February 2026, the United States Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the imposition of tariffs, which invalidated a significant portion of tariffs that had been in effect since April 2025. The administration has since imposed tariffs under other statutory authorities and has indicated that it may continue to do so. Tariffs on building materials may increase home repair costs, tariffs on automotive parts may increase vehicle repair and replacement costs, and tariffs on consumer goods may increase the cost of replacing covered personal property. To the extent tariff-driven cost increases are sustained, we may seek premium rate adjustments, subject to regulatory approval in applicable states; however, there may be a lag between when we experience increased claims costs and when we are able to implement corresponding rate increases, which could negatively impact our loss ratios in the interim. More broadly, inflation, whether driven by tariffs, supply chain disruptions, labor market conditions, or other factors, if any, has impacted and could continue to impact our claims costs, product pricing and investment yields, among other impacts. Capital market volatility may also affect our investment portfolio and access to capital. The actual effects of these macroeconomic factors on our results remain unknown and cannot be estimated with precision.

Previous wording

We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability and conflict in Israel and the surrounding region. There is still uncertainty regarding the extent to which the war and its broader macroeconomic implications will impact our operations in Israel. We will continue to evaluate the extent to which this may impact our business, financial condition, or results of operations. These and other uncertainties could result in changes to our current expectations. For additional information, see "Risk Factors - Risks Relating to our Business -We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability in Israel and the surrounding region." in our Annual Report on Form 10-K.

Current wording

We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability and conflict in Israel and the surrounding region. The war and its broader macroeconomic implications may continue to impact our operations in Israel. We will continue to evaluate the extent to which this may impact our business, financial condition, or results of operations. These and other uncertainties could result in changes to our current expectations. For additional information, see “Risk Factors - Risks Relating to our Business -We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability in Israel and the surrounding region.” in our Annual Report on Form 10-K.

Previous wording

We obtain reinsurance to help manage our exposure to property and casualty insurance risks. Although our reinsurance counterparties are liable to us according to the terms of the reinsurance policies, we remain primarily liable to our policyholders as the direct insurers on all risks reinsured. For additional information, see "Risk Factors - Risks Relating to Our Business" and "Risks Relating to Our Industry" in our Annual Report on Form 10-K. As a result, reinsurance does not eliminate the obligation of our insurance subsidiaries to pay all claims, and we are subject to the risk that one or more of our reinsurers will be unable or unwilling to honor its obligations, that the reinsurers will not pay in a timely fashion, or that our losses are so large that they exceed the limits inherent in our reinsurance contracts, each of which could have a material effect on our results of operations and financial condition. Furthermore, reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business.

Current wording

We obtain reinsurance to help manage our exposure to property and casualty insurance risks. Although our reinsurance counterparties are liable to us according to the terms of the reinsurance policies, we remain primarily liable to our policyholders as the direct insurers on all risks reinsured. As a result, reinsurance does not eliminate the obligation of our insurance subsidiaries to pay all claims, and we are subject to the risk that one or more of our reinsurers will be unable or unwilling to honor its obligations, that the reinsurers will not pay in a timely fashion, or that our losses are so large that they exceed the limits inherent in our reinsurance contracts, each of which could have a material effect on our results of operations and financial condition. Furthermore, reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business. For additional information, see “Risk Factors - Risks Relating to Our Business” and “Risks Relating to Our Industry” in our Annual Report on Form 10-K.

Previous wording

We have incurred and expect to continue to incur significant additional general and administrative expense as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and the listing standards of the New York Stock Exchange, additional corporate, director and officer insurance expenses, greater investor relations expenses and increased legal, audit and consulting fees.

Current wording

General and administrative expense also includes costs associated with a public company's operations, including expenses related to compliance with the rules and regulations of the SEC and the listing standards of the New York Stock Exchange, director and officer insurance expenses, investor relations expenses and legal, audit and consulting fees.

Previous wording

We define gross loss ratio, expressed as a percentage, as the ratio of losses and loss adjustment expense to gross earned premium.

Current wording

We define gross loss ratio, expressed as a percentage, as the ratio of gross losses and loss adjustment expense to gross earned premium.

Previous wording

Net earned premium increased $139.5 million, or 124%, to $252.0 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to the earning of increased gross written premium and the impact of the reduced cession rate from the Company's reinsurance program as discussed in more detail in the "Reinsurance" section above.

Current wording

Net earned premium increased $154.8 million, or 111%, to $294.8 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to the earning of increased gross written premium and the impact of the reduced cession rate from the Company's reinsurance program as discussed in more detail in the “Reinsurance” section above.

Previous wording

Gross written premium increased $95.5 million, or 34%, to $380.0 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to a 23% increase in customers year over year driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. In addition, we also saw a 8% increase in premium per customer year over year due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas through our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.

Current wording

Gross written premium increased $117.4 million, or 35%, to $450.7 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily due to a 23% increase in customers year over year driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. In addition, we also saw a 9% increase in premium per customer year over year due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas through our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.

Previous wording

Ceded written premium decreased $75.2 million, or 48%, to $81.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to the impact of the reduced cession rate from the Company's reinsurance program, offset by growth in business across all products. See "Reinsurance" above for further information.

Current wording

Ceded written premium increased $6.1 million, or 11%, to $62.8 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to growth in business across all products, offset by the impact of the reduced cession rate from the Company's reinsurance program. See “Reinsurance” above for further information.

Previous wording

The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium is at 27% and 55% for the six months ended June 30, 2026 and 2025, consistent with the change in our participation rate from our reinsurance contracts as discussed in more detail in the "Reinsurance" section above.

Current wording

The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium was 19% and 49% for the three months ended September 30, 2026 and 2025, respectively, consistent with the change in our participation rate from our reinsurance contracts as discussed in more detail in the “Reinsurance” section above. In addition, ceded earned premium includes a $3.5 million reduction from the commutation of our 2023 Whole Account Quota Share Reinsurance Contracts.

Previous wording

Ceding commission income decreased $10.0 million, or 33%, to $20.4 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, consistent with the reduction in cession rate from the reinsurance program.

Current wording

Ceding commission income decreased $14.8 million, or 46%, to $17.4 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, consistent with the reduction in cession rate from our reinsurance program.

Previous wording

Net investment income increased $0.3 million, or 3% to $9.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by the diversification of the Company's investment portfolio with higher returns offset by investment expenses. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. Government and Non-U.S. Government.

Current wording

Net investment income increased $0.6 million, or 6% to $10.3 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily driven by the diversification of the Company's investment portfolio with higher returns, partially offset by investment expenses. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. Government and Non-U.S. Government.

Previous wording

Commission and other income increased $0.5 million, or 4%, to $12.3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to installment fees and continued growth on premium placed with third-party insurance companies during the period.

Current wording

Commission and other income increased $1.0 million, or 8%, to $13.6 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to installment fees and continued growth on premium placed with third-party insurance companies during the period.

Previous wording

Loss and LAE, net increased $76.5 million, or 99%, to $154.0 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was due to growth in premium and impact of the reduced cession rate from the reinsurance program, offset by reserve releases due to better than expected loss reserve emergence on homeowners multi-peril line of business and car.

Current wording

Loss and LAE, net increased $97.8 million, or 109%, to $187.4 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was due to growth in premium and impact of the reduced cession rate from the reinsurance program, offset by reserve releases due to better than expected loss reserve emergence on homeowners multi-peril line of business and car.

Previous wording

Other insurance expense increased $5.3 million, or 25%, to $26.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Amortization of deferred acquisition costs, net of ceding commissions increased $3.3 million, or 85% as compared to the three months ended June 30, 2025 as a result of growth in business across all products. Credit card processing fees increased $2.0 million, or 35%, as compared to the three months ended June 30, 2025 as a result of the increase in customers and associated premium. Employee-related expense decreased $1.1 million or 18%, as compared to the three months ended June 30, 2025.

Current wording

Other insurance expense increased $5.1 million, or 21%, to $29.2 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Amortization of deferred acquisition costs, net of ceding commissions increased $3.4 million, or 64% as compared to the three months ended September 30, 2025 as a result of growth in business across all products. Credit card processing fees increased $1.5 million, or 23%, as compared to the three months ended September 30, 2025 as a result of the increase in customers and associated premium.

Previous wording

Sales and marketing expense increased $18.1 million, or 30%, to $77.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to brand and performance advertising, which is the largest component of our sales and marketing expenses. Expense related to advertising, other customer acquisition channels and partner payments increased $14.7 million, or 30%, as compared to the three months ended June 30, 2025 consistent with growth in our business. Employee-related expense, including stock-based compensation, increased $1.5 million, or 21%, as compared to three months ended June 30, 2025.

Current wording

Sales and marketing expense increased $25.3 million, or 44%, to $82.7 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 primarily due to brand and performance advertising, which is the largest component of our sales and marketing expenses. Expense related to advertising, other customer acquisition channels and partner payments increased $24.5 million, or 53%, as compared to the three months ended September 30, 2025 consistent with growth in our business. Employee-related expense, including stock-based compensation, increased $0.9 million, or 12%, as compared to three months ended September 30, 2025.

Previous wording

Technology development expense increased $7.6 million, or 34%, to $30.0 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Employee-related expense, including stock-based compensation, and net of capitalized costs for the development of internal-use software, increased $5.7 million, or 31%, as compared to the three months ended June 30, 2025 primarily due to increase in headcount. Software expense increased $1.5 million, or 125%, as compared to the three months ended June 30, 2025.

Current wording

Technology development expense increased $4.5 million, or 18%, to $29.2 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Employee-related expense, including stock-based compensation, and net of capitalized costs for the development of internal-use software, increased $3.4 million, or 17%, as compared to the three months ended September 30, 2025 primarily due to increase in headcount.

Previous wording

General and administrative expense increased $22.0 million, or 85%, to $47.8 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Employee-related expense, including stock-based compensation, increased $7.7 million, or 50%, as compared to three months ended June 30, 2025. Interest expense related to borrowings from financing agreement with GC increased $3.0 million, or 75%, as compared to three months ended June 30, 2025 due to increased borrowings during the period. Bad debt expense increased by $2.1 million or 49%, as compared to three months ended June 30, 2025. Depreciation and amortization decreased by $2.3 million, or 49% as compared to three months ended June 30, 2025. During the three months ended June 30, 2025, we also recorded $11.7 million of tax refund received under the ERC program.

Current wording

General and administrative expense increased $15.8 million, or 45%, to $50.8 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Employee-related expense, including stock-based compensation, increased $5.3 million, or 32%, as compared to three months ended September 30, 2025 primarily due to equity awards granted to the Company's CEO and President in March 2026. Bad debt expense increased by $4.6 million or 88%, as compared to three months ended September 30, 2025. Interest expense related to borrowings from financing agreement with GC increased $3.5 million, or 76%, as compared to three months ended September 30, 2025 due to increased borrowings during the period.

Previous wording

Net loss slightly decreased by $0.5 million, or 1%, to $43.4 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to the factors described above.

Current wording

Net loss increased by $6.2 million, or 17%, to $43.7 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to the factors described above.

Previous wording

Net earned premium increased $247.8 million, or 114%, to $464.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to the earning of increased gross written premium and impact of the reduced cession rate from the Company's reinsurance program as discussed in more detail in the "Reinsurance" section above.

Current wording

Net earned premium increased $402.6 million, or 113%, to $759.4 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to the earning of increased gross written premium and impact of the reduced cession rate from the Company's reinsurance program as discussed in more detail in the “Reinsurance” section above.

Previous wording

Gross written premium increased $185.2 million, or 34%, to $723.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to a 23% increase in customers year over year driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. We also saw a 8% increase in premium per customer year over year primarily due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas from our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.

Current wording

Gross written premium increased $302.6 million, or 35%, to $1,174.6 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily due to a 23% increase in customers year over year driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. We also saw a 9% increase in premium per customer year over year primarily due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas from our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.

Previous wording

Ceded written premium decreased $144.1 million, or 49%, to $151.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to impact of the reduced cession rate from the Company's reinsurance program, offset by growth in business across all products. See "Reinsurance" above for further information.

Current wording

Ceded written premium decreased $138.0 million, or 39%, to $214.6 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to impact of the reduced cession rate from the Company's reinsurance program, offset by growth in business across all products. See “Reinsurance” above for further information.

Previous wording

Net written premium increased $329.3 million, or 136%, to $572.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to factors noted above.

Current wording

Net written premium increased $440.6 million, or 85%, to $960.0 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due to factors noted above.

Previous wording

The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium is at 24% and 55% for the three months ended June 30, 2026 and 2025, respectively, consistent with the change in our participation rate from our reinsurance contracts as discussed in more detail in the "Reinsurance" section above.

Current wording

The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium is at 24% and 53% for the nine months ended September 30, 2026 and 2025, consistent with the change in our participation rate from our reinsurance contracts as discussed in more detail in the “Reinsurance” section above. In addition, ceded earned premium includes a $3.5 million reduction from the commutation of our 2023 Whole Account Quota Share Reinsurance Contracts.

Previous wording

Ceding commission income decreased $13.3 million, or 23%, to $44.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, consistent with the reduction in cession rate from the reinsurance program.

Current wording

Ceding commission income decreased $28.1 million, or 31%, to $61.4 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, consistent with the reduction in cession rate from the reinsurance program.

Previous wording

Net investment income increased $0.6 million, or 3%, to $19.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by the diversification of the Company's investment portfolio with higher returns offset by investment expenses. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. and non-U.S. Government.

Current wording

Net investment income increased $1.2 million, or 4%, to $29.8 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily driven by the diversification of the Company's investment portfolio with higher returns, partially offset by investment expenses. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. Government and Non-U.S. Government.

Previous wording

Commission and other income increased $2.0 million, or 9%, to $24.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to installment fees and continued growth on premium placed with third-party insurance companies during the period.

Current wording

Commission and other income increased $3.0 million, or 9%, to $37.9 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, due to installment fees and continued growth on premium placed with third-party insurance companies during the period.

Previous wording

Loss and LAE, net increased $124.4 million, or 76%, to $287.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to growth in premium offset by reserve releases due to better than expected loss reserve emergence on homeowners multi-peril line of business and car. Net incurred losses included the impact of the California Wildfires in January 2025 in the amount of $19.6 million for the six months ended June 30, 2025.

Current wording

Loss and LAE, net increased $222.2 million, or 88%, to $474.7 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was due to growth in premium offset by reserve releases due to better than expected loss reserve emergence on homeowners multi-peril line of business and car. Net incurred losses included the impact of the California Wildfires in January 2025 in the amount of $19.9 million for the nine months ended September 30, 2025.

Previous wording

Other insurance expense increased $3.3 million, or 7%, to $50.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 consistent with growth in business. Amortization of deferred acquisition costs, net of ceding commissions increased $5.5 million, or 75%, as compared to the six months ended June 30, 2025. Credit card fees increased $4.0 million, or 37%, as compared to the six months ended June 30, 2025, as a result of the increase in customers and associated premium. Insurance regulatory fees increased $1.3 million, or 87%, as compared to the six months ended June 30, 2025. Employee-related expense decreased $2.3 million or 19%, as compared to the six months ended June 30, 2025. During the six months ended June 30, 2025, we recorded the California FAIR Plan assessment charge of $6.9 million related to the January 2025 California Wildfires.

Current wording

Other insurance expense increased $8.4 million, or 12%, to $80.0 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Amortization of deferred acquisition costs, net of ceding commissions increased $8.8 million, or 70%, as compared to the nine months ended September 30, 2025. Credit card processing fees increased $5.5 million, or 32%, as compared to the nine months ended September 30, 2025, as a result of the increase in customers and associated premium. Insurance regulatory fees increased $1.8 million, or 64%, as compared to the nine months ended September 30, 2025. Underwriting data costs increased $1.7 million, or 16%, as compared to the nine months ended September 30, 2025. Employee-related expense decreased $3.0 million, or 17%, as compared to the nine months ended September 30, 2025. During the nine months ended September 30, 2025, we recorded the California FAIR Plan assessment charge of $6.9 million related to the January 2025 California Wildfires.

Previous wording

Sales and marketing expense increased $41.0 million, or 40%, to $143.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to brand and performance advertising, which is the largest component of our sales and marketing expenses. Expense related to advertising, other customer acquisition channels and partner payments increased $30.9 million, or 35%, as compared to the six months ended June 30, 2025 consistent with growth in our business. Employee-related expense, including stock-based compensation, increased $2.4 million, or 17%, as compared to six months ended June 30, 2025. Compensation expense related to the warrant shares of $5.2 million due to the termination of the Warrant Agreement with Chewy was recorded during the six months ended June 30, 2025.

Current wording

Sales and marketing expense increased $66.3 million, or 41%, to $226.5 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to brand and performance advertising, which is the largest component of our sales and marketing expenses. Expense related to advertising, other customer acquisition channels and partner payments increased $55.5 million, or 41%, as compared to the nine months ended September 30, 2025 consistent with growth in our business. Employee-related expense, including stock-based compensation, increased $3.3 million, or 15%, as compared to nine months ended September 30, 2025. Compensation expense related to the warrant shares of $5.2 million was reversed due to the termination of the Warrant Agreement with Chewy during the nine months ended September 30, 2025.

Previous wording

Technology development expense increased $12.5 million, or 28%, to $56.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Employee-related expense, including stock-based compensation, net of capitalized costs for the development of internal-use software, increased $9.9 million, or 28% , for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Software expense increased by $2.4 million, or 100%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Current wording

Technology development expense increased $17.0 million, or 25%, to $86.1 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Employee-related expense, including stock-based compensation, net of capitalized costs for the development of internal-use software, increased $13.4 million, or 24%, for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. Software expense increased by $3.0 million, or 71%, for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025.

Previous wording

General and administrative expense increased $28.3 million, or 46%, to $90.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Employee-related expense, including stock-based compensation, increased by $12.6 million, or 41%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Interest expense related to borrowings from financing agreement with GC increased $5.9 million, or 81%, as compared to six months ended June 30, 2025 due to increased borrowings during the period. Bad debt expense increased $3.4 million, or 38% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Depreciation and amortization expense decreased $4.1 million, or 45% for the six months ended June 30, 2026 compared to six months ended June 30, 2025. During the six months ended June 30, 2025, we also recorded $11.7 million of tax refund received under the ERC program.

Current wording

General and administrative expense increased $44.1 million, or 46%, to $140.8 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Employee-related expense, including stock-based compensation, increased by $18.0 million, or 38%, for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 primarily due to equity awards granted to the Company's CEO and President in March 2026. Interest expense related to borrowings from financing agreement with GC increased $9.4 million, or 79%, as compared to nine months ended September 30, 2025 due to increased borrowings during the period. Bad debt expense increased $8.0 million, or 57% for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Software costs increased $1.0 million, or 20% for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Depreciation and amortization expense decreased $4.9 million, or 39% for the nine months ended September 30, 2026 compared to nine months ended September 30, 2025 due to fully amortized Metromile acquired intangible assets during the third quarter of 2025. During the nine months ended September 30, 2025, we also recorded $11.7 million of tax refund received under the ERC program.

Previous wording

Income tax expense increased $0.5 million, or 22%, to $2.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily driven by increase in foreign income tax expense and unrecognized tax benefits.

Current wording

Income tax expense decreased $0.2 million, or 6%, to $3.3 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily driven by the decrease in expense related to unrecognized tax benefits, partially offset by increases in state and foreign income tax expense.

Previous wording

Net loss decreased $27.1 million, or 25%, to $79.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to the factors described above.

Current wording

Net loss decreased $20.9 million, or 15%, to $122.9 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due to the factors described above.

Previous wording

(1) Includes the impact of canceled unvested warrant shares for contract year 2 related to the termination of the Warrant Agreement with Chewy of $5.2 million which was recorded in the first quarter of 2025 (See Note 11 of the condensed consolidated financial statements).

Current wording

(1) Includes the impact of canceled unvested warrant shares for contract year 2 related to the termination of the Warrant Agreement with Chewy of $5.2 million which was recorded in the first quarter of 2025 (See Note 11 of the unaudited condensed consolidated financial statements).