AII 10-K & 10-Q changes, risk factors and insider trading

We are a profitable and growing insurance group headquartered in Tampa, Florida. Through our insurance carrier subsidiary, American Integrity Insurance Company (“AIIC”), we provide personal residential property insurance for single-family homeowners and condominium owners, as well as coverage for vacant dwellings and investment properties, predominantly in Florida. Florida represented 93.0%92.0% of our policies in-force as of MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, 70.7%73.2% of our in-force premium was in the insurance market in which we underwrite and sell policies to policyholders where we choose to offer coverage without the assistance of residual market mechanisms (the “Voluntary Market”).

Moreover, 94.4%93.7% of our Voluntary Market in-force premium was in our core Florida market and 5.6%6.3% was collectively in South Carolina, Georgia, and North Carolina, where we have strategically expanded to support and enhance our relationships with our builder agency network.

Citizens “Take-out” Program. InPursuing the first quarter of 2026, we assumed 584 policiestake-outs from Citizens Property Insurance Corporation (“Citizens”), representingmay $1.2distort millionthe incomparability assumed unearned premiums. These policies we assume carry no upfront acquisition costs and are covered byof our currentfinancial treaty year reinsurance program which may impact comparabilityresults between periods depending on the number of policies and unearned premiums assumed. In 2026, we expect take-outs to be a smaller portion of our gross premiums written compared to 2024 and 2025.

While we expect there will continue to be opportunities to assume some policies from Citizens, we believe the number of policies available that meet our underwriting and profitability standards has declined and may continue to decline over time. Policies assumed via the Citizens take-out program carry immaterial upfront acquisition costs and are covered by our current treaty year reinsurance program which may impact comparability between periods. As a result, periods of heavy take-out activity result in lower expense ratios and loss ratios.

Cost and Availability of Reinsurance. We purchase excess of loss and quota share reinsurance as part of our capital management strategy and in an effort to reduce volatility of earnings and protect our balance sheet from the impact of potential catastrophe events. Our ability to implement an effective reinsurance strategy is dependent, in part, on the cost and availability of reinsurance coverage. We ceded 64.4%60.5% and 68.9%69.7% of our gross premiums earned in the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.

The following table summarizes our results of operations for the three and six months ended MarchJune 31,30, 2026 and three months ended March 31, 2025:

(78)Gross underlying loss and loss adjustment expense ratio is a key business metric and a non-GAAP measure defined as the ratio of net underlying loss and LAE plus ceded non-catastrophe losses divided by total gross premiums earned premiums and policy fees. We view this ratio as meaningful to our business as it allows us to analyze our loss trends before the impact of reinsurance and to evaluate the cost of non-catastrophe losses for every dollar of gross premiumpremiums earned. The most directly comparable GAAP measure is the loss ratio. The gross underlying loss and LAE ratio should not be considered a substitute for the loss ratio and does not reflect the overall profitability of our business.

Policies in-force represents the number of active insurance policies with coverage in effect as of the end of the period referenced. We utilize the change in the number of policies in-force to assess the trajectories of our operations.

The following table shows our policies in-force and in-force premium by product as of MarchJune 31,30, 2026 and MarchJune 31,30, 2025:

The following table shows our policies in-force and in-force premiums by county as of MarchJune 31,30, 2026 and MarchJune 31,30, 2025:

Policies in-force were 461,714 as of June 30, 2026, an increase of 15.7% compared to policies in-force of 399,138 as of June 30, 2025, and an increase of 5.6% compared to policies in-force of 437,308 as of March 31, 2026, an increase of 14.1% compared to policies in-force of 383,332 as of March 31, 2025.2026. The increase in our policies in-force was primarily due to new policies written through the Voluntary Market and the 2025 Citizens take-outs.

During the three months ended MarchJune 31,30, 2026, we wrote 29,86742,863 policies in the Voluntary Market, which was an increase of 5,31315,077 compared to 24,55427,786 new policies written in the Voluntary Market during the three months ended MarchJune 31,30, 2025. We experienced policy retention rates of 84.4% during the second quarter of 2026, up from 81.5% during the second quarter of 2025 and up from 83.6% during the first quarter of 2026.

We experienced policy retention rates of 83.6% during the first quarter of 2026, up from 78.1% during the first quarter of The following table shows our policies in-force and in-force premium by source:

(3)There were 68,844 policies assumed from Citizens during 2024; and 56,45053,831 policies, or 82.0%,78.2%, were still in-force as of MarchJune 31,30, 2026.

(4)There were 33,861 policies assumed from Citizens during 2025; and 29,95328,887 policies, or 88.5%,85.3%, were still in-force as of MarchJune 31,30, 2026.

(5)There were 584665 policies assumed from Citizens during the threesix months ended MarchJune 31,30, 2026; and 577641 policies, or 98.8%,96.4%, were still in-force as of MarchJune 31,30, 2026.

Gross premiums earnedwritten increased by $39.6 million, or 13.8%, to $230.8$326.6 million for the three months ended MarchJune 31,30, 2026, fromcompared $210.2to $287.0 million for the three months ended MarchJune 31,30, 2025. The $20.6 million, or 9.8%, increase was dueprimarily largelydriven to our increase in gross premiums written related to theby growth in theour Voluntary Market.Market writings.

NetGross premiums earned grewincreased byto $16.8 million, or 25.7%, reaching $82.2$242.3 million for the three months ended MarchJune 31,30, 2026, up from $65.4$223.7 million for the three months ended MarchJune 31,30, 2025. ThisThe $18.6 million, or 8.3%, increase was due largely to theour increase in gross premiums earned outpacing the increase in ceded premiums earned.written.

PolicyCeded feespremiums increasedearned $0.5decreased $20.0 million, or 24.5%,12.7%, to $2.7$137.6 million for the three months ended MarchJune 31,30, 20262026, from $2.2$157.6 million for the three months ended MarchJune 31,30, 2025. The increasedecrease in policiesceded writtenpremiums duringearned thewas threeprimarily months ended March 31, 2026 contributeddue to the increasereduction in policyour fees.non-catastrophe quota share reinsurance arrangement.

Net investmentpremiums incomeearned increasedgrew $1.6by $38.5 million, or 37.8%,58.2%, toreaching $5.7$104.7 million for the three months ended MarchJune 31,30, 20262026, up from $4.1$66.2 million for the three months ended MarchJune 31,30, 2025. TheThis increase was due largely to the increase in net investment income was due to an increase in invested assets driven by the increased in-forcegross premiums earned and the proceedsdecrease fromin ourceded IPO.premiums earned.

OtherPolicy incomefees wasincreased $0.3$0.7 million, or 25.1%, to $3.7 million for the three months ended MarchJune 31,30, 2026, infrom line with $0.2$3.0 million for the three months ended MarchJune 31,30, 2025. The increase in policies written during the three months ended June 30, 2026 contributed to the increase in policy fees.

GeneralLosses and administrative expensesLAE increased $11.0$12.0 million, or 218.8%,56.5%, to $16.0$33.2 million for the three months ended MarchJune 31,30, 2026 from $5.0$21.2 million for the three months ended MarchJune 31,30, 2025. The increase in losses and LAE was primarily driven by lowerhigher cedingnet commissionspremiums associatedearned withand athe reduction inof our non-catastrophe quota share reinsurance arrangement from 40% to 25% on January 1, 2026.

Income tax (benefit) expense was $12.3 million and $(3.4) million for the three months ended June 30, 2026 and 2025, respectively. Our effective tax rate for the three months ended MarchJune 31,30, 2026 and 2025 was 26.9%26.4% and 11.2%,(14.1)%, respectively. The increase in the effective tax rate was primarily due to the absence of discrete tax benefits recognized in the prior year period,period asincurred in connection with the 2025 period included a $24 million pretax income adjustment related to non-taxable entities that resulted in $5.0 million of discrete tax benefits.IPO. For the three months ended MarchJune 31,30, 2026, our effective tax rate differed from the U.S. federal statutory rate of 21% primarily due to state income taxes.

Loss ratio is the ratio of losses and LAE to net premiums earned plus policy fees. We add policy fees to net premiums earned when calculating our loss and expense ratios to include the total revenue produced by a policy, given they are earned when a policy is written. Our loss ratio increasedremained byunchanged 6.4at percentage points30.6% for the three months ended MarchJune 31,30, 2026,2026 to 37.3%, compared to 30.9% for the three months ended March 31,and 2025. The increase in the loss ratio reflects the impact of the Citizens take-out windfall on net premiums earned for the three months ended MarchJune 31,30, 2025.2025 and no prior year reserve development for the three months ended June 30, 2026.

Expense ratio is the ratio of policy acquisition expenses and general and administrative expenses to net premiums earned plus policy fees. Our expense ratio increaseddecreased by 25.69.5 percentage points to 37.6%32.8% for the three months ended MarchJune 31,30, 2026 compared to 12.0%42.3% for the three months ended MarchJune 31,30, 2025, driven by the increaseabsence inof policiesone-time writtenIPO related expenses incurred during the three months ended MarchJune 31,30, 2026,2025 and partially offset by the absence of Citizens take-out windfallwindfalls forin the threesecond monthsquarter endedof March2026 31, 2025, and less ceding commission duecompared to the reductionsecond inquarter ourof non-catastrophe quota share reinsurance arrangement from 40% to 25% on January 1, 2026.2025.

Combined ratio is the sum of the loss ratio and the expense ratio. We utilize combined ratio to assess our underwriting performance. A combined ratio below 100% indicates an underwriting profit, while a combined ratio exceeding 100% indicates an underwriting loss. Our combined ratio increaseddecreased to 75.0%63.4% for the three months ended MarchJune 31,30, 2026 from 42.9%72.9% for the three months ended MarchJune 31,30, 2025 due to the increasesdecrease in our expense ratio and loss ratio.

Return on equity is defined as net income, divided by the average beginning and ending shareholders’ equity during the applicable period. This metric is annualized for interim periods by multiplying by the applicable ratio in order to present return on equity consistently. Our return on equity decreased to 23.7%38.7% for the three months ended MarchJune 31,30, 2026 from 87.5%45.1% for the three months ended MarchJune 31,30, 2025. The decrease in our return on equity was primarily due to lessthe windfallincrease fromin Citizensaverage take-outsshareholders’ forequity following the threeIPO, monthswhich endedresulted Marchin 31,a 2026larger versusequity base compared to the threeprior months ended March 31, 2025.period.