Porch Group, Inc.

Porch Insurance

In January 2026, the Reciprocal launched Porch Insurance, a new homeowners insurance offering that expands upon the historical HOA insurance product. While the HOA product is primarily designed to provide standard coverage, Porch Insurance is structured as a more comprehensive home protection solution that combines expanded insurance coverage with a membership‑based model. The new Porch Insurance product includes broader protections intended to address common household incidents that can result in unexpected out‑of‑pocket expenses and is designed to support faster recovery from everyday losses.

In addition to enhanced coverage, Porch Insurance includes membership benefits that extend value beyond traditional insurance by providing ongoing support related to homeownership, including maintenance, repairs, and life events such as product recalls and moving. These benefits are designed to complement the insurance coverage and are fulfilled through other Porch service offerings. Together, the combination of expanded coverage and service‑based benefits differentiates Porch Insurance from the legacy HOA product and aligns with our strategy to deliver a more integrated home services experience.

As Porch Insurance grows, this new product may provide opportunities to grow Reciprocal Written Premium (“RWP”, see Key Performance Measures and Operating Metrics section for definition), which indirectly affects the Insurance Services segment’s results through commissions and fees earned by Porch. Porch Insurance is designed to support faster premium growth by improving conversion through a differentiated product offering and pricing for good risks, alongside continued expansion in agencies and quote volume that drives the top of the funnel.

Reinsurance Programs for the Reciprocal

As of April 1, 2026, coverage for excess-of-loss catastrophe reinsurance from a panel of third-party reinsurers started at $35.0 million per occurrence for all perils, up to a loss of $365.0 million. We also purchased reinstatement premium protection for the first three layers of our third-party placed excess-of-loss (“XOL”) program. In addition, our captive reinsurance business provides reinsurance support to improve capital efficiency for the Reciprocal. Our captive reinsurer provides reinsurance coverage for risks with low earnings volatility.

In July 2026, the Reciprocal obtained approximately $100.0 million of multi-peril collateralized catastrophe reinsurance protection through a catastrophe bond transaction. This coverage attaches above the top of the Reciprocal’s third-party excess-of-loss reinsurance tower, providing additional catastrophe protection beyond the $365.0 million upper limit of the XOL program described above. Under the arrangement, Harbor Crest Re Ltd., a bankruptcy-remote special purpose insurance vehicle, issued $100.0 million of Class A principal-at-risk notes and entered into a reinsurance agreement providing protection for certain losses arising from named storms, winter storms, severe weather events, wildfires, and fire-following earthquake events in the United States. The coverage is structured on an indemnity and per-occurrence basis and provides approximately four years of reinsurance protection. The proceeds from the notes are held in collateral accounts and are available to satisfy the reinsurer’s obligations under the reinsurance agreement. Premiums ceded under the arrangement will be recognized as ceded earned premium over the coverage period, while any recoveries are recognized in the period covered losses are incurred and recovery becomes probable. Costs directly attributable to obtaining the reinsurance coverage are deferred and amortized over the applicable coverage period, while other transaction costs are expensed as incurred. The Reciprocal entered into the transaction as part of its broader risk management and reinsurance strategy to diversify sources of catastrophe protection and enhance capital efficiency.

Share Repurchase from the Reciprocal

In June 2026, we, through our wholly owned captive reinsurance business, repurchased approximately 2.1 million shares of our common stock from the Reciprocal for approximately $15.0 million, or $7.17 per share. By converting a portion of the Reciprocal’s Porch common stock holdings into cash, this transaction increases the Reciprocal’s statutory surplus given that a large portion of the value of shares of Porch common stock is counted as non-admitted assets in statutory filings. The Reciprocal still holds approximately 16.2 million shares of Porch common stock, providing continued upside potential should the share price appreciate. While this increases the Reciprocal’s surplus, there is no impact to income before income taxes under U.S. generally accepted accounting principles (“GAAP”). Additionally, the shares of Porch common stock held by our captive reinsurer and the Reciprocal remain as treasury shares under GAAP and under Delaware law are not considered outstanding for quorum and are not entitled to vote.

Debt Repayment

During the third quarter of 2026, we used approximately $7.8 million of cash to repay the entire outstanding principal amount, and accrued interest, of our 0.75% Convertible Senior Unsecured Notes due in September 2026 (the “2026 Notes”). The 2026 Notes matured on September 15, 2026, and were settled entirely in cash, with no shares of common stock issued. Following the repayment, no 2026 Notes remained outstanding as of September 30, 2026.

Proposed Acquisition

On October 13, 2026, we entered into a Stock and Membership Interest Purchase Agreement pursuant to which our wholly owned subsidiary, Homeowners of America Holding Corporation (“HOA Holdco”), will acquire Allied Underwriters, LLC, and Lonestar Lagniappe Reinsurance Holdings, LLC, for approximately $95.0 million payable at closing, and the Reciprocal will acquire Allied Trust Insurance Company for approximately $105.0 million, consisting of $55.0 million in cash payable at closing and $50.0 million payable in approximately equal monthly installments over the twelve-month period following closing, or earlier at the Reciprocal’s discretion. The amounts payable at closing are subject to adjustment for closing indebtedness and, in the case of the Reciprocal, Allied Trust Insurance Company’s statutory surplus, and the transaction is subject to customary closing conditions. The transaction has not closed as of the date these condensed consolidated financial statements were issued and, accordingly, no amounts related to the acquisition have been recognized in our condensed consolidated financial statements as of September 30, 2026, other than an immaterial amount of professional fees. The closing will not occur earlier than January 1, 2027, and we currently expect the acquisition to close in the first quarter of 2027.

HOA Holdco may elect to satisfy up to $20.0 million of its closing consideration in newly issued shares of our common stock, with the balance payable in cash, and the Reciprocal may elect to satisfy up to $50.0 million of its deferred installment payments with shares of our common stock from its existing holdings. The number of shares will be based on the Nasdaq closing price on the business day preceding the applicable payment date. A significant portion of the value of the shares of our common stock currently held by the Reciprocal is treated as a non-admitted asset in the Reciprocal’s statutory filings. Shares of our common stock currently held by the Reciprocal are not entitled to vote or be counted for quorum purposes under Delaware law. Upon transfer to the seller, those shares will no longer be subject to such restrictions. The number of shares deliverable is not determinable at this time and will depend on the trading price of our common stock on the applicable determination dates and on whether HOA Holdco or the Reciprocal elects to pay cash in lieu of shares.