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

Because of the exposure of our property and casualty business to catastrophic events and other severe weather events, our operating results and financial condition may vary significantly from one period to the next. Catastrophes can be caused by various natural and man-made disasters, including earthquakes, wildfires, tornadoes, hurricanes, severe winter weather, storms and certain types of terrorism. We currently have catastrophe reinsurance coverage with regard to losses of up to $285,000,000$440,000,000 ($275,000,000$435,000,000 in excess of $10,000,000$5,000,000). Effective January 1, 2025,2026, $5,000,000$10,000,000 of losses in a catastrophe are subject to a quota share reinsurance treaty, which covers 10.0%5% of catastrophe losses such that we retain $4,250,000$5,500,000 of risk per catastrophe occurrence. With respect to any additional catastrophe losses of up to $275,000,000,$440,000,000, we are 100% reinsured under our catastrophe reinsurance program. CatastropheFor the period October 15, 2025 through April 30, 2026, we also purchased catastrophe reinsurance which provides coverage isfor limitedwinter onstorm an annual basislosses to two times the perextent occurrenceof amounts.90% of $5,000,000 in excess of $5,000,000. We may incur catastrophe losses in excess of: (i) those that we project would be incurred, (ii) those that external modeling firms estimate would be incurred, (iii) the average expected level used in pricing or (iv) our current reinsurance coverage limits. Despite our catastrophe management programs, we are exposed to catastrophes that could have a material adverse effect on our operating results and financial condition. Our liquidity could be constrained by a catastrophe, or multiple catastrophes, which may result in extraordinary losses or a downgrade of our financial strength ratings. In addition, the reinsurance losses that are incurred in connection with a catastrophe could have an adverse impact on the terms and conditions of future reinsurance treaties.

A financialratings strength rating assigneddowngrade to our insurance subsidiary was withdrawn at its request; this may impact our revenues and earnings.

Management believes that A.M. Best’s financial strength rating is more significant with regard to commercial liability insurance, as opposed to personal lines business. Since we have discontinued our commercial lines business, we believe that the withdrawal of A.M. Best’s ratings will not result in a material decrease in the amount of business that KICO will be able to write. Also, KICO has a Demotech financial stability rating of A (Exceptional) which generally makes its policies acceptable to mortgage lenders that require homeowners to purchase insurance from highly-rated carriers.

Beginning in March 2020, the global pandemic related to COVID-19 began to impact the global economy and our results of operations. Risks presented by the effects of pandemics like COVID-19 include, among others, the following:

Adverse Legislative and/or Regulatory Action. Federal, state and local government actions to address and contain the impact of pandemic and other public health issues (like COVID-19) may adversely affect us. For example, we may be subject to legislative and/or regulatory action that seeks to retroactively mandate coverage for losses which our insurance policies were not designed or priced to cover. Currently, in some states there is proposed legislation to require insurers to cover business interruption claims irrespective of terms, exclusions or other conditions included in the policies that would otherwise preclude coverage. Regulatory restrictions or requirements could also impact pricing, risk selection and our rights and obligations with respect to our policies and insureds, including our ability to cancel or non-renew policies and our right to collect premiums.

We are subject to statutes and regulations of the state of New York which generally require that any person or entity desiring to acquire direct or indirect control of KICO, our insurance company subsidiary, obtain prior regulatory approval. In addition, a change of control of Kingstonethe Companies,Holding Inc.Company would require such approval. These laws may discourage potential acquisition proposals and may delay, deter or prevent a change of control of our company, including through transactions, and in particular unsolicited transactions. Some of our stockholders might consider such transactions to be desirable. Similar regulations may apply in other states in which we may operate.

We market our insurance products primarily through insurance brokers. A large percentage of our gross premiums written are sourced through a limited number of brokers. For the year ended December 31, 2024,2025, 50our top 25 brokers provided a total of 51.2%39% of our total gross premiums written. The nature of our dependency on these brokers relates to the high volume of business they consistently refer to us. Our relationship with these brokers is based on the quality of the underwriting and claims services we provide to our clients and on our financial strength ratings. Any deterioration in these factors could result in these brokers advising clients to place their risks with other insurers rather than with us. A loss of all or a substantial portion of the business provided by one or more of these brokers could have a material adverse effect on our financial condition and results of operations.

State insurance laws limit the ability of KICO to pay dividends from unassigned surplus and require KICO to maintain specified minimum levels of statutory capital and surplus. Maximum allowable dividends by KICO to us are restricted to the lesser of 10% of surplus or 100% of net investment income (on a statutory accounting basis) for the trailing 36 months, less dividends paid by KICO during such period. As ofAt December 31, 2024,2025, unassigned surplus was $36,152,023. Through September 30, 2025, KICO had unassignedan surplusagreement ofwith approximatelythe $13.7DFS million.that TheKICO aggregatewas maximum amount of dividendsonly permitted by law to be paid by an insurance company does not necessarily define an insurance company’s actual ability to pay dividends. The actual ability to pay dividends may be further constrained by business and regulatory considerations, such asto the impactHolding of dividends on surplus, by our competitive position and by the amount of premiums that we can write. State insurance regulators have broad discretion to limit the payment of dividends by insurance companies. KICO has an agreement with DFS that KICO may only pay dividends to usCompany for purposes of paying operating expenses and debt obligationsobligations, and that the maximum amount of dividends that cancould be paid in a1212 monthmonths periodwas is $12 million$12,000,000 without prior approval. Effective September 30, 2025, the restrictions on KICO to pay dividends were removed by the DFS. As of December 31, 2025, the maximum dividends that KICO can pay to the Holding Company is restricted to the lesser of 10% of statutory surplus as shown by its last statement on file with the DFS, or 100% of net investment income of the preceding 36 months reduced by dividends paid during such period. As of December 31, 2025, the maximum allowable dividend that KICO may pay to KINS was $1,969,796 without DFS approval. See Note 13 - Statutory Financial Information for more information.

Our future success will depend, in part, upon the efforts of Meryl Golden, our President and Chief Executive Officer. The loss of Ms. Golden or other key personnel could prevent us from fully implementing our business strategies and could materially and adversely affect our business, financial condition and results of operations. As we continue to grow, we will need to recruit and retain additional qualified management personnel, but we may not be able to do so. Our ability to recruit and retain such personnel will depend upon a number of factors, such as our results of operations and prospects and the level of competition prevailing in the market for qualified personnel. Ms. Golden and we are parties to an employment agreement which expires on DecemberJanuary 31,10, 2026.2027.

While we can take defensive measures, there can be no assurance that we will be successful in preventing attacks or detecting and stopping them once they have begun. Our business could be significantly damaged by a security breach, data loss or corruption, or cyber attack. In addition to the potentially high costs of investigating and stopping such an event and implementing necessary fixes, we could incur substantial liability if confidential customer or employee information is stolen. In addition, such an event could cause a significant disruption of our ability to conduct our insurance operations. We have a cyber insurance policy to protect against the monetary impact of some of these risks. However, the occurrence of a security breach, data loss or corruption, or cyber-attack, if sufficiently severe, could have a material adverse effect on our business results. See Item IC ("Cybersecurity") in this Annual Report.

We rely on our information technologytechnology, including artificial intelligence, and telecommunication systems, and the failure of these systems could materially and adversely affect our business.

Our business is highly dependent upon the successful and uninterrupted functioning of our information technologytechnology, including artificial intelligence, and telecommunications systems. We rely on these systems to support our operations. The failure of these systems could interrupt our operations and result in a material adverse effect on our business.

We have effective registration statements on Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), covering an aggregate of 2,900,000 shares of our common stock issuable under our Amended and Restated 2014 Equity Participation Plan (the "2014 Plan") and our 2024 Equity Participation Plan (the “2024 Plan”). Pursuant to our 2024 Plan, stock options and restricted stock awards may be granted to our employees and directors. See Note 12 - Stockholders' Equity for more information.

We are a holding company incorporated in Delaware. Anti-takeover provisions in Delaware law and our restated certificate of incorporation and bylaws, as well as regulatory approvals required under state insurance laws, could make it more difficult for a third party to acquire control of us and may prevent stockholders from receiving a premium for their shares of common stock. Our certificate of incorporation provides that our board of directors may issue up to 2,500,000 shares of preferred stock, in one or more series, without stockholder approval and with such terms, preferences, rights and privileges as the board of directors may deem appropriate. These provisions, the control of our executive officers and directors over the election of our directors,provisions and other factors may hinder or prevent a change in control, even if the change in control would be beneficial to, or sought by, our stockholders.

We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2024 was the 12th largest writer of homeowners insurance in New York. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. For the years ended December 31, 20242025 and 2023,2024, respectively, 96.0%98.0% and 88.3%96.0% of KICO’s direct written premiums came from the New York policies. We refer to our New York business as our “Core” business and the business outside of New York as our “non-Core” business.

We derive substantially all of our revenue from KICO, which includes revenues from earned premiums, ceding commissions from quota share reinsurance, net investment income generated from its portfolio, and net realized gains and losses on investment securities. All of KICO’s insurance policies are written for a one year term. Earned premiums represent premiums received from insureds, which are recognized as revenue over the period of time that insurance coverage is provided (i.e., ratably over the one year life of the policy). A significant period of time can elapse from the receipt of insurance premiums to the payment of insurance claims. During this time, KICO invests the premiums, earns investment income and generates net realized and unrealized investment gains and losses on investments. OurThe holdingHolding companyCompany earns investment income from its cash holdings.

Other operating expenses include our corporate expenses as a holding company. These corporate expenses include legal and auditing fees, executive employment costs,costs and equity compensation, directors' fees, and other costs directly associated with being a public company.

Net income (loss) from insurance underwriting business on a standalone basis: Net income (loss) from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net income (loss) without the effect of holding company operations on GAAP net income (loss).income. Management believes that this measure is useful to investors, and it is used by management to reveal the trends in our insurance underwriting business that may be obscured by holding company operations. Holding company operations cause our GAAP net income (loss) to vary significantly between periods as a result of their magnitude and can have a significant impact on GAAP net income (loss).income. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is GAAP net income (loss).income. Net income (loss) from insurance underwriting business on a standalone basis should not be considered a substitute for GAAP net income (loss) and does not reflect our GAAP net income (loss).income.

Bonds are classified as held-to-maturity (“HTM”) or available-for-sale (“AFS”), and stocks are generally classified as AFS. Investments classified as HTM are carried at amortized cost, which requires very little judgement. Investments classified as AFS are generally carried at fair value with an unrealized gain/loss recorded in income. Actual results could vary significantly from the fair values recognized in the consolidatedConsolidated statementsStatements of operationsIncome and comprehensiveComprehensive income (loss).Income.

See the tables below for our Core and non-Core business for policies in force as of December 31, 20242025 and 20232024 and direct written premiums for the years ended December 31, 20242025 and 2023.2024, respectively. For the year ended December 31, 2024,2025, our Core direct written premiumspremiums1 increased by 31.4%14.8% compared to the yearsame endedperiod Decemberin 31, 2023,2024, while Core policies in force increased by 9.3%3.6% as of December 31, 20242025 as compared to December 31, 2023. For the same periods, our non-Core policies in force decreased by 64.9% and non-Core direct written premiums decreased by 58.5%.2024.

(Columns in the table above may not sum to totals due to rounding) (12)For the year ended December 31, 2023 ,2024, our personal lines business was subject to a 30%27% quota share treaty, expiring on January 1, 2024,2025, which included a runoff of an 5.5% portion through the remainder of 2023. Effective January 1, 2024, we entered into a 27% personal lines quota share treaty, which includes a runoff of a 3.0% portion of the prior quota share reinsurance treaty through the endremainder of 2024. Effective January 1, 2025, we entered into a 16% personal lines quota share treaty, under a cutoff basis.

(23)For the yearsyear ended December 31, 20242025 and 20232024 include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO). PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurersinsurers.

Direct Written Premiums(1)

Direct written premiums during the year ended December 31, 2025 (“Year Ended 2025”) were $277,801,000 compared to $241,980,000 during the year ended December 31, 2024 (“Year Ended 2024”) were $241,980,000 compared to $200,175,000 during the year ended December 31, 2023 (“Year Ended 2023”). The increase of $41,805,000,$35,821,000, or 20.9%,14.8%, was primarily due to an increase in premiums from our personal lines business. Direct written premiums from our personal lines business for Year Ended 2025 were $263,188,000, an increase of $35,545,000, or 15.6%, from $227,643,000 in Year Ended 2024. The 15.6% increase in premiums from our personal lines business was primarily due to the organic growth from the Change in Market Dynamics in the New York market and to a lesser extent an increase in rates primarily from an increase in replacement costs.

Direct written premiums from our livery physical damage business for Year Ended 20242025 were $14,248,000,$14,550,000, aan decreaseincrease of $400,000,$302,000, or 2.7%,2.1%, from $14,648,000$14,248,000 in Year Ended 2023.2024. The decreasegrowth in direct written premiums for livery physical damage directreflects writtenincreased premiumsvehicle wasvaluations due toand an increase from the removal of underwriting restrictionrestrictions in place to exclude certainon electric vehicles until theafter approval ofreceiving adequate rate for the risk was received, which happenedapproval in July 2024. The decrease was offset by an increase in the values of the autos insured.

Net written premiums increased $45,573,000,$59,489,000, or 41.9%,38.6%, to $213,719,000 in Year Ended 2025 from $154,230,000 in Year Ended 2024 from $108,657,000 in Year Ended 2023.2024. Net written premiums include direct premiums, less the amount of written premiums ceded under our reinsurance treaties (quota share, excess of loss, and catastrophe). The increase in Year Ended 20242025 iswas primarily due to the additional premiums due to the organic growth from the Change in Market Dynamics in the New York market and to a lesser extent an increase in directrates writtenprimarily premiumsfrom an increase in replacement costs, and achanges decreaseto inour catastrophepersonal premiumlines rates.quota share reinsurance treaty. See "Quota share reinsurance treaties" discussion below.

Effective January 1, 2023,2024, we entered into a 30% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2023 through January 1, 2024 (“2023/2024 Treaty”). Upon expiration of the 2023/2024 Treaty on January 1, 2024 we entered into a new 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 ("“2024/2025 Treaty"”). Upon expiration of the 2024/2025 Treaty on January 1, 2025, we entered into a new 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”). Our personal lines business was subject to the 2025/2026 Treaty in Year Ended 2025, and the 2024/2025 Treaty in theYear Ended 2024. In Year Ended 20242025, and the 2023/2024 Treaty in the Year Ended 2023. Ourour premiums ceded under the quota share treaties decreased by $586,000$26,711,000 in comparison to premiums ceded under quota share treaties in Year Ended 2024 (see table above). The decrease in Year Ended 2025 was attributable to the decrease in the quota share ceding percentage rate, offset by an increase in direct written premiums subject to the 20242025/20252026 Treaty compared to direct written premiums subject to the 20232024/20242025 Treaty. The decreaseinception of the 2025/2026 Treaty was recorded as a cutoff, resulting in cededthe premiumsreturn relatedof $11,471,000 from reinsurers to theus increaseof inpreviously directceded written premiums wasthat offsetwere byunearned theas decreaseof inJanuary quota1, share ceding percentage rates.2025.

In Year Ended 2024,2025, our ceded excess of loss reinsurance premiums decreased $705,000$26,000 compared to the ceded excess of loss premiums for Year Ended 2023.2024. Effective January 1, 2023,2024, we entered into an underlying excess of loss reinsurance treaty (the “Underlying XOL Treaty”) covering the period from January 1, 20232024 through January 1, 2024.2025. The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the Underlying XOL Treaty. Effective January 1, 2024,2025, the Underlying XOL Treaty was renewed covering the period from January 1, 20242025 through JanuaryJune 1,30, 2025.2026. The Underlying XOL Treaty, combined with the excess of loss treaty, provided 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000, together with facultative coverage. Retention was increased to $715,000 from $640,000 under the 2025/2026 Treaty. Under the 2026/2027 Treaty, retention was increased to $825,000 from $715,000.

Most of the premiums written under our personal lines policies are also subject to our catastrophe reinsurance treaties. An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase. An increase in our personal lines business historically resulted in an increase in premiums ceded under our catastrophe treaties if reinsurance rates arewere stable or arewere increasing. UnderWith Kingstoneregard 2.0to andtreaties 3.0entered weinto had a decrease in policies in force, and better catastrophe management, resulting in a decrease in catastrophe exposure, and a decrease in catastrophe premiums. Onon July 1, 20242025 ("2025/2026 Catastrophe Treaty") and 2023,2024 ("2024/2025 Catastrophe Treaty"), we recorded our catastrophe premiums written for the entire treaty period covering July 1 through June 30, resulting in the entire annual premium written being recorded in the third quarter.quarter Ourof 2025 and 2024. The 2025/2026 Catastrophe Treaty covers 80% of losses on the first layer of $5,000,000 in excess of $5,000,000 (Catastrophe coverage of $4,000,000), and losses of $435,000,000 in excess of $5,000,000 (Catastrophe coverage of $430,000,000), for a total catastrophe coverage of $434,000,000. The 2024/2025 Catastrophe Treaty covered 80% of losses on the first layer of $5,000,000 in excess of $5,000,000 (Catastrophe coverage of $4,000,000), and losses of $275,000,000 in excess of $10,000,000 (Catastrophe coverage of $265,000,000), for a total catastrophe coverage of $269,000,000. Catastrophe coverage under the 2025/2026 Catastrophe Treaty increased by $165,000,000 compared to the 2024/2025 Catastrophe Treaty. In Year Ended 2025, our premiums wereceded $30,794,000under our catastrophe treaties increased by $3,069,000 in comparison to premiums ceded under catastrophe treaties in Year Ended 2024,2024 compared(see totable $33,271,000above). The increase in Year Ended 2023,2025 awas decreaseprimarily ofattributable $2,477,000,to orthe 7.4%.$169,000,000 increase in catastrophe coverage discussed above.

Net premiums earned increased $14,114,000$58,629,000 or 12.3%45.6% to $187,127,000 in Year Ended 2025 compared to $128,498,000 in Year Ended 2024 compared to $114,384,000 in Year Ended 2023.2024. The increase was due to the three11 percentage point reduction in quota share rates discussed above, the run-off of a portion of the 2023/2024 Treaty, which increased the premiums ceded and reduced the net premiums earned in Year Ended 2023, the increase in premiums from the Change in Market Dynamics which began in Yearthe Endedthird quarter of 2024, andpartially aoffset decreaseby an increase in catastrophe premiumpremiums rates,due to the increase in catastrophe coverage reflected in ceded catastrophe premiums earned, which increased the amount of growth in net premiums earned.

NM = Not Meaningful (Columns in the table above may not sum to totals due to rounding)

In the Year Ended 2025, we earned provisional ceding commissions of $13,927,000 from personal lines earned premiums ceded under the 2025/2026 Treaty, and in the Year Ended 2024, we earned provisional ceding commissions of $18,829,000 from personal lines earned premiums ceded under the 2024/2025 Treaty, and in Year Ended 2023, we earned provisional ceding commissions of $20,397,000 from personal lines earned premiums ceded under the 2023/2024 Treaty. The decrease of $1,568,000$4,902,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during the Year Ended 20242025 compared to the Year Ended 2023,2024, offset by an increase in ceding commission rates under the 20242025/20252026 Treaty. The decrease in the premiums ceded was due to a decrease in the quota share percentage from 27% in the Year Ended 2024 to 16% in the Year Ended 2025.

Net investment income was $6,824,000$9,799,000 in the Year Ended 20242025 compared to $6,009,000$6,824,000 in the Year Ended 2023,2024, an increase of $815,000,$2,975,000, or 13.6%.43.6%. The average yield on non-cash invested assets was 3.80%4.3% as of December 31, 2025 compared to 3.8% as of December 31, 2024 compared to 3.75% as of December 31, 2023 Cash and invested assets were $221,847,000$321,867,000 as of December 31, 20242025 compared to $172,095,000$237,287,000 as of December 31, 2023,2024, an increase of $49,752,000.$84,580,000.

Net gains(losses) on investments were $415,000$(310,000) in the Year Ended 20242025 compared to net gains of $2,135,000$415,000 in the Year Ended 2023.2024. Unrealized gains(losses) on our equity securities and other investments in the Year Ended 20242025 were $477,000,$(87,000), compared to unrealized gains of $2,153,000$477,000 in the Year Ended 2023.2024. Net realized (losses) on sales of investments were $62,000$(223,000) in the Year Ended 20242025 compared to net realized (losses) of $19,000$(62,000) in the Year Ended 2023.2024.

Other income was $568,000$611,000 in the Year Ended 20242025 compared to $610,000$568,000 in the Year Ended 2023,2024, aan decreaseincrease of $47,000,$43,000, or 6.9%.7.6%.

The underlying loss ratio(1) (loss ratio excluding the impact of catastrophes and prior year development) was 48.2%44.4% for the Year Ended 2024,2025, a decrease of 17.13.8 points from the 65.3%48.2% underlying loss ratio recorded for the Year Ended 2023.2024. OverallThe personalimprovement linesin non-catastrophethe frequencyunderlying loss ratio for the Year Ended 2025 as compared to the Year Ended 2024 was lowerprimarily thandue Yearto Endedan 2023,improvement in the frequency of losses which is believed to be the result of better riskperformance selectionof in the Company’sour Select product rollout as well as the Company’sour active efforts to manage less profitable segments.lines Overallof business. The favorable frequency for the Year Ended 2025 was partially offset by higher overall personal lines non-catastrophe severity for Year Ended 2024 was also improved compared to Year Ended 2023,severity, primarily driven by water claims and a reducedgreater impact from large losses.

We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto physical damage insurance in New York, and in 2025 was the 11th largest writer of homeowners insurance in New York. Beginning in June 2026, KICO began writing homeowners coverage in California on a non-admitted basis. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. Our wholly-owned subsidiary, Kingstone America Insurance Company ("KAIC"), was licensed to write property and casualty insurance by the state of Connecticut on May 1, 2026. We expect KAIC to begin writing policies in Connecticut in the lattersecond parthalf of 2026. For the three months ended MarchJune 31,30, 2026 and 2025, respectively, 98.7%98.5% and 98.3%97.9% of KICO’s direct premiums written came from the New York policies. For the six months ended June 30, 2026 and 2025, respectively, 98.6% and 98.1% of KICO’s direct premiums written came from the New York policies.

In addition, our wholly-owned subsidiary, Cosi Agency, Inc. (“Cosi”), a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies. In April 2026, Cosi became licensed in California, and we expect to expand our underwriting operations toin California during the remainder of 2026 through the policies Cosi writes. Cosi retains the profit between the commission revenue received and the commission expense paid (“Net Cosi Revenue”). Commission expense is reduced by Net Cosi Revenue. Cosi-related operating expenses are minimalprimarily employment costs and are included in other operating expenses.

Other operating expenses include our corporate expenses as a holding company.company and Cosi expenses. These corporate expenses include legal and auditing fees, executive employment costs and equity compensation, directors' fees, and other costs directly associated with being a public company.

In May 2019, due to the poor performance of these lines, we placed a moratorium on new commercial lines and new commercial umbrella submissions while we further reviewed this business. In July 2019, due to the continuing poor performance of these lines, we made the decision to no longer underwrite commercial lines or commercial umbrella risks. In-force policies as of July 31, 2019 for these lines were non-renewed at the end of their annual terms. As of MarchJune 31,30, 2026 and December 31, 2025, there were no commercial liability policies in-force. As of MarchJune 31,30, 2026, these expired policies represented approximately 9.9%9.3% of loss and LAE reserves net of reinsurance recoverables. See discussion below under “Additional Financial Information”.

Underwriting (loss) income: Underwriting (loss) income is net pre-tax (loss) income attributable to our insurance underwriting business before investment activity. It excludes net investment income, net realized gains from investments, gain on sale of real estate, depreciation and amortization, and interest expense (net premiums earned less expenses included in combined ratio). Underwriting (loss) income is a measure of an insurance company’s overall operating profitability before items such as investment income, depreciation and amortization, interest expense and income taxes.

Net (loss) income from insurance underwriting business on a standalone basis: Net (loss) income from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net (loss) income without the effect of holding company operations on GAAP net (loss) income. Management believes that this measure is useful to investors, and it is used by management to reveal the trends in our insurance underwriting business that may be obscured by holding company operations. Holding company operations cause our GAAP net (loss) income to vary significantly between periods as a result of their magnitude and can have a significant impact on GAAP net (loss) income. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is GAAP net (loss) income. Net (loss) income from insurance underwriting business on a standalone basis should not be considered a substitute for GAAP net (loss) income and does not reflect our GAAP net (loss) income.

Property and casualty loss and loss adjustment expense (“LAE”) reserves are established to provide for the estimated cost of settling both reported (“case”) and incurred but not reported (“IBNR”) claims and claims adjusting expenses. The liability for these reserves is estimated on an undiscounted basis, using individual case-basis valuations and paid claims, pending claims, statistical analyses and various actuarial reserving methodologies. Due to the inherent uncertainty of the reserve process, actual loss costs could vary significantly compared to estimated loss costs. The below table provides detail of our reserves as of MarchJune 31,30, 2026 and December 31, 2025:

Our effective tax rate is based on GAAP income at statutory tax rates, adjusted for non-taxable and non-deductible items, and tax credits. Changes in estimates used in preparing the condensed consolidated statements of operationsincome and comprehensive (loss) income could result in significant changes to our deferred tax asset or liability.

Deferred tax assets or liabilities are recognized for estimated future tax consequences which result in differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. These assets and liabilities are carried at the enacted tax rates expected to apply when the asset or liability is expected to be recovered or settled. Changes in estimates and assumptions in the condensed consolidated statements of operationsincome and comprehensive (loss) income, or changes in the enacted tax rate, could result in significant variances between our carried deferred tax and tax recognized on the recovery or settlement of the asset or liability.

Bonds are classified as held-to-maturity (“HTM”) or available-for-sale (“AFS”), and stocks are generally classified as AFS. Investments classified as HTM are carried at amortized cost, which requires very little judgement. Investments in stocks classified as AFS are generally carried at fair value with an unrealized gain/loss recorded in net income. Investments in bonds classified as AFS are generally carried at fair value with an unrealized gain/loss recorded in accumulated other comprehensive income. Actual results could vary significantly from the fair values recognized in the condensed consolidated statements of operationsincome and comprehensive (loss) income.

See the tables below for our policies in force as of MarchJune 31,30, 2026 and 2025 and direct written premiums for the threesix months ended MarchJune 31,30, 2026 and 2025. For the threesix months ended MarchJune 31,30, 2026, our direct written premiums increased by 19.6%19.2% compared to the threesix months ended MarchJune 31,30, 2025, while policies in force increased by 7.2%9.9% as of MarchJune 31,30, 2026 as compared to MarchJune 31,30, 2025.

Relative to geographic expansion, we have conducted a thorough study of selected geographies and states with the help of industry-leading third-party advisors and overlaid important lessons learned from our past challenges to ensure that we do not face such challenges again. We plan to pursue prudent growth at a measured pace in our chosen new states, testing and validating rate adequacy commensurate with risk factors in the new geographies. OurUnder our current plan iswe went live in California in June 2026, and expect to go live in California and Connecticut in 2026,the andsecond twohalf additionalof states in 2027.2026.

ThreeSix Months Ended MarchJune 31,30, 2026 Compared to ThreeSix Months Ended MarchJune 31,30, 2025

NM = Not Meaningful (Columns in the table above may not sum to totals due to rounding) (1)Direct premiums written and net premiums written are non-GAAP measures, defined above under "Key GAAP and Non-GAAP Measures", and reconciled under "Non-GAAP Financial Measures" to the GAAP measure of net premiums earned.

(2)For the threesix months ended MarchJune 31,30, 2025, our personal lines business was subject to a 16% quota share treaty, expiring on January 1, 2026. Effective January 1, 2026, we entered into a 5% personal lines quota share treaty, under a cutoff basis.

(3)The threesix months ended MarchJune 31,30, 2026 and 2025 include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO). PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers.

Direct premiums written during the threesix months ended MarchJune 31,30, 2026 (“ThreeSix Months of 2026”) were $69,603,000$142,097,000 compared to $58,175,000$119,237,000 during the threesix months ended MarchJune 31,30, 2025 (“ThreeSix Months of 2025”). The increase of $11,428,000,$22,860,000, or 19.6%,19.2%, was primarily due to an increase in premiums from our personal lines business. Direct premiums written from our personal lines business for the ThreeSix Months of 2026 were $65,924,000,$134,890,000, an increase of $11,611,000,$22,822,000, or 21.4%,20.4%, from $54,313,000$112,068,000 in the ThreeSix Months of 2025. The 21.4%20.4% increase in premiums from our personal lines business was primarily due to the organic growth from the Change in Market Dynamics in the New York market and to a lesser extentgrowth, an increase in ratesretention, and an increase in average premiums primarily from an increase in replacement costs.

Direct premiums written from our livery physical damage business for the ThreeSix Months of 2026 were $3,662,000,$7,180,000, aan decreaseincrease of $185,000,$43,000, or 4.8%,0.6%, from $3,847,000$7,137,000 in the ThreeSix Months of 2025. The decreaseincrease in direct premiums written for livery physical damage iswas due to an increase in the values of the autos insured offset by a decrease in policies in force.

___________________ (1) Direct premiums written is a non-GAAP measure, defined above under "Key GAAP and Non-GAAP Measures", and reconciled under "Non-GAAP Financial Measures" to the GAAP measure of net premiums earned.

Net premiums written increased $16,584,000,$32,162,000, or 27.2%,28.4%, to $77,593,000$145,382,000 in the ThreeSix Months of 2026 from $61,009,000$113,220,000 in the ThreeSix Months of 2025. Net premiums written includerepresent direct premiums,premiums written, less the amount of written premiums ceded under our reinsurance treaties (quota share, excess of loss, and catastrophe). The increase in the ThreeSix Months of 2026 is primarily due to changes to our personal lines quota share reinsurance treaty,treaty resulting in an increase in retention, the additional premiums due to the organic growth from the Change in Market Dynamics in the New York marketgrowth, and to a lesser extent an increase in ratesaverage premiums primarily from an increase in replacement costs,costs. See quota share reinsurance treaties discussion below.

___________________ (1) Net premiums written premiums is a non-GAAP measure, defined above under "Key GAAP and Non-GAAP Measures", and reconciled under "Non-GAAP Financial Measures" to the GAAP measure of net premiums earned.

Effective January 1, 2025, we entered into a 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”). Upon expiration of the 2025/2026 Treaty on January 1, 2026, we entered into a new 5% quota share reinsurance treaty for our personal lines business written in all states except California (for which the Companywe entered into a new 30% quota share reinsurance treaty) covering the period from January 1, 2026 through January 1, 2027 (“2026/2027 Treaty”). Our personal lines business was subject to the 2026/2027 Treaty in the ThreeSix Months of 2026, and the 2025/2026 Treaty in the ThreeSix Months of 2025. In the ThreeSix Months of 2026, our premiums ceded under quota share treaties decreased by $6,134,000$10,743,000 in comparison to premiums ceded under quota share treaties in the ThreeSix Months of 2025 (see table above). The decrease in the ThreeSix Months of 2026 was attributable to the decrease in the quota share ceding percentage rate, offset by an increase in direct written premiums subject to the 2026/2027 Treaty compared to direct premiums written subject to the 2025/2026 Treaty. The inception of the 2026/2027 Treaty was recorded as a cutoff, resulting in the return of $13,277,000 from reinsurers to us of previously ceded premiums written that were unearned as of January 1, 2026. The inception of the 2025/2026 Treaty was recorded as a cutoff, resulting in the return of $11,471,000 from reinsurers to us of previously ceded premiums written that were unearned as of January 1, 2025.

In the ThreeSix Months of 2026, our ceded excess of loss reinsurance premiums increased $213,000$351,000 compared to the ceded excess of loss premiums for the ThreeSix Months of 2025. Effective January 1, 2025, we renewed an underlying excess of loss reinsurance treaty (the “Underlying XOL Treaty”) covering the period from January 1, 2025 through June 30, 2025. The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the Underlying XOL Treaty. Effective July 1, 2025, the Underlying XOL Treaty was renewed along with the Company'sour excess of loss reinsurance treaty covering the period from July 1, 2025 through June 30, 2026. Combined, the renewed treaties provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. Retention was increased to $825,000 from $715,000 under the 2025/2026 Treaty.

Most of the premiums written under our personal lines policies are also subject to our catastrophe reinsurance treaties. An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase. An increase in our personal lines business historically resulted in an increase in premiums ceded under our catastrophe treaties if reinsurance rates were stable or were increasing. With regard to treaties entered into on July 1, 2025 ("2025/2026 Catastrophe Treaty") and 2024 ("2024/2025 Catastrophe Treaty"), we recorded our catastrophe premiums written for the entire treaty period covering July 1 through June 30, resulting in the entire annual premium written being recorded in the third quarter of 2025 and 2024, respectively. The 2025/2026 Catastrophe Treaty covers 80% of losses on the first layer of 5,000,000 in excess of $5,000,000 (catastrophe coverage of $4,000,000), and losses of $440,000,000 in excess of $10,000,000 (catastrophe coverage of $430,000,000), for a total catastrophe coverage of $434,000,000. The 2024/2025 Catastrophe Treaty covered 95% of losses on the first layer of $5,000,000 in excess of $5,000,000 (catastrophe coverage of $4,750,000), and losses of $280,000,000 in excess of $10,000,000 (catastrophe coverage of $270,000,000), for a total catastrophe coverage of $274,750,000. Catastrophe coverage under the 2025/2026 Catastrophe Treaty increased by $159,250,000 compared to the 2024/2025 Catastrophe Treaty. As a result of recording the entire annual catastrophe premiums at the inception of the treaties, catastrophe premiums in subsequent quarters would be due to premium adjustments. In the ThreeSix Months of 2026, our premiums ceded under our catastrophe treaties was $764,000$684,000 in comparison to nonegative premiums$406,000 ceded under catastrophe treaties in the ThreeSix Months of 2025 (see table above). The changepremiums in the ThreeSix Months of 2026 was due to reinstatement premiums related to winter catastrophe losses, offset by a no loss bonus from one of our reinsurers. The negative premiums in the Six Months of 2025 was due to a no loss bonus from one of our reinsurers.

Net premiums earned increased $12,346,000,$26,598,000, or 28.4%,29.6%, to $55,869,000$116,336,000 in the ThreeSix Months of 2026 from $43,523,000$89,738,000 in the ThreeSix Months of 2025. The increase was due an increase in retention related to the 11 percentage point reduction in quota share rates discussed above, and the increase in premiums from theorganic Change in Market Dynamics,growth, partially offset by an increase in catastrophe premiums due to the increase in catastrophe coverage reflected in ceded catastrophe premiums earned.

Ceding commission revenue was $1,404,000$2,937,000 in the ThreeSix Months of 2026 compared to $2,959,000$6,040,000 in the ThreeSix Months of 2025. The decrease of $1,555,000$3,103,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.

In the ThreeSix Months of 2026, we earned provisional ceding commissions of $1,277,000$2,629,000 from personal lines earned premiums ceded under the 2026/2027 Treaty, and in the ThreeSix Months of 2025, we earned provisional ceding commissions of $3,252,000$6,640,000 from personal lines earned premiums ceded under the 2025/2026 Treaty. The decrease of $1,975,000$4,011,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during the ThreeSix Months of 2026 compared to the ThreeSix Months of 2025, offset by an increase in ceding commission rates under the 2026/2027 Treaty.

Net investment income was $3,338,000$6,766,000 in the ThreeSix Months of 2026 compared to $2,049,000$4,349,000 in the ThreeSix Months of 2025, an increase of $1,289,000,$2,417,000, or 62.9%,55.6%, primarily due to an increase in cash generated from operations invested in fixed-income securities and an increase in average yield on non-cash invested assets. The average yield on non-cash invested assets was 4.3%4.4% as of MarchJune 31,30, 2026 compared to 3.7%4.0% as of MarchJune 31,30, 2025.

Cash and invested assets were $324,793,000$350,981,000 as of MarchJune 31,30, 2026 compared to $321,867,000$273,550,000 as of MarchJune 31,30, 2025, an increase of $2,926,000,$77,431,000, primarily driven by cash flows from operations.

Net (Losses) Gains on Investments

Net losses on investments were $1,015,000$775,000 in the ThreeSix Months of 2026 compared to net lossesgains on investments of $138,000$408,000 in the ThreeSix Months of 2025. Unrealized losses on our equity securities and other investments in the ThreeSix Months of 2026 were $1,012,000,$570,000, compared to unrealized lossesgains on our equity securities and other investments of $136,000$414,000 in the ThreeSix Months of 2025. Net realized losses on sales of investments were $3,000$205,000 in the ThreeSix Months of 2026 compared to net realized losses on sales of investments of $2,000$6,000 in the ThreeSix Months of 2025.

Gain on sale of real estate was $0 in the ThreeSix Months of 2026 compared to $1,966,000 in the ThreeSix Months of 2025. On March 19, 2025 one of our subsidiaries closed on the sale of our headquarters building in Kingston, New York, along with an adjacent mixed-use property (collectively, the “Property”). The purchase price for the Property was $3,600,000. We are now renting a smaller facility in Kingston, New York.

Other income was $181,000$365,000 in the ThreeSix Months of 2026 compared to $140,000$292,000 in the ThreeSix Months of 2025, an increase of $41,000,$73,000, or 29.3%.25.0%.

Net loss and LAE was $45,574,000$69,505,000 for the ThreeSix Months of 2026 compared to $27,175,000$45,102,000 for the ThreeSix Months of 2025. The net loss ratio was 81.6%59.7% in the ThreeSix Months of 2026 compared to 62.4%50.3% in the ThreeSix Months of 2025, an increase of 19.29.4 percentage points.

The higher net loss ratio in the ThreeSix Months of 2026 is due to a greater impact from catastrophes, in particular several large winter storm catastrophe events from January and February. The largest of these events was an extended period of subfreezing temperatures in early February resulting in a large number of pipe freeze claims. The total net catastrophe impact for the ThreeSix Months of 2026 was $14,499,000,$14,006,000, which contributed 26.012.0 points to the net loss ratio. By comparison, the catastrophe impact for the ThreeSix Months of 2025 was 1.71.2 points. Favorable prior accident year reserve development decreased the net loss ratio by 2.32.5 points during the ThreeSix Months of 2026 as compared to decreasing the net loss ratio by 1.40.9 points during the ThreeSix Months of 2025. For the ThreeSix Months of 2026, property claims overall developed better than expected, driven primarily by reserve takedowns on several largefire fireand water damage claims from accident years 2024 and 2025 as well as a large subrogation recovery on a water damage claim from accident year 2023, resulting in favorable development. For the ThreeSix Months of 2025, the favorable prior accident year reserve development was attributable to reserve takedowns on several large fire and water damage claims from accident years 2022 through 2024.2024 as well as a large subrogation recovery on a water damage claim from accident year 2022.

The underlying loss ratio(1) (loss ratio excluding the impact of catastrophes and prior accident year reserve development) was 57.9%50.2% for the ThreeSix Months of 2026, a decreasesmall increase of 4.20.2 points from the 62.1%50.0% underlying loss ratio recorded for the ThreeSix Months of 2025. The improvement in the underlyingnon-catastrophe loss ratiofrequency remained low for the ThreeSix Months of 20262026, as compared to the Three Months of 2025 was primarily due to low non-catastrophe loss frequency, higher average premium, andwith continued discipline in underwriting. ReportedOverall personal lines non-catastrophe claim frequencyseverity for the ThreeSix Months of 2026 was slightly higher than for the Six Months of 2025. The increase was generally in line with theinflation historicaland was offset by higher average while non-catastrophe severity was higher due to a greater impact from large fire claims. However, a significant portion of the incurred loss related to the large claims was ceded to ourpremium per risk excess of loss treaty, resulting in a lower impact on a net basis. Excluding amounts ceded to the per risk excess of loss treaty and adjusting for inflation, severity for the Three Months of 2026 was comparable to the Three Months of 2025.policy.

___________________ (1) Underlying loss ratio is a non-GAAP ratio, which is computed as the GAAP net loss ratio excluding the effect of prior year loss reserve development and catastrophe losses. See "Non-GAAP Financial Measures" for a reconciliation of underlying loss ratio to the GAAP measure of net loss ratio.

Commission expense was $10,195,000$21,769,000 in the ThreeSix Months of 2026 or 14.6%15.2% of direct earned premiums. Commission expense was $9,313,000$19,943,000 in the ThreeSix Months of 2025 or 15.4%16.1% of direct earned premiums The increase of $882,000$1,826,000 in the ThreeSix Months of 2026 compared to the ThreeSix Months of 2025 was primarily due to an increase in direct earned premiums of $9,344,000,$19,822,000, partially offset by a decrease of $255,000$725,000 for an accrual of estimated contingent commission based on the profitability of the business.

Other underwriting expenses were $8,361,000$17,016,000 in the ThreeSix Months of 2026 compared to $7,405,000$15,133,000 in the ThreeSix Months of 2025. The increase of $956,000,$1,883,000, or 12.9%,12.4%, was primarily due to increases in salaries and employment costs as described below, an increase in premium taxes due to the growth in direct earned premiums, and an increase in DFS regulatory fees.

Our largest single component of other underwriting expenses is salaries and employment costs, with costs of $3,865,000$8,153,000 in the ThreeSix Months of 2026 compared to $3,351,000$7,432,000 in the ThreeSix Months of 2025. Salaries and employment costs were 6.97.0 points of the net underwriting expense ratio in the ThreeSix Months of 2026, a reduction of 0.81.3 points from 7.78.3 points in the ThreeSix Months of 2025 primarily due to the economies of scale with the increase in net premiums earned. The dollar increase in salaries and employment costs was due to annual salary increases, and strengthening of our professional team by investing in hiring talent with insurance industry experience due to the growth in premiums written and anticipated new business in accordance with our 5-Year Growth Plan.

Our net underwriting expense ratio in the ThreeSix Months of 2026 was 30.4%,30.5%, compared with 31.3%32.0% in the ThreeSix Months of 2025. The following table shows the individual components of our net underwriting expense ratio for the periods indicated:

Other operating expenses were $2,261,000$3,623,000 for the ThreeSix Months of 2026 compared to $1,036,000$2,189,000 for the ThreeSix Months of 2025. The following table shows a breakdown of the significant components of other operating expenses for the periods indicated:

The increase in the ThreeSix Months of 2026 of $1,225,000,$1,434,000, or 118.2%,65.5%, as compared to the ThreeSix Months of 2025 was primarily due to an increase in equity compensation and professional fees, partially offset by a decrease in loss on extinguishment of debt. The increase in equity compensation is due to additional restricted stock awards granted to our senior leadership team as of December 31, 2025 pursuant to our employee bonus plan, and to our CEO and CFO pursuant to their respective employment agreements. The increase in professional fees is due to legal fees incurred related to board level projects and additional accounting expenses incurred related to our new requirement for the audit of our internal control over financial reporting. The reduction in loss on extinguishment of debt loss is due to writing off the balance of unamortized debt issue costs upon the prepayment of the 2024 Notes in the ThreeSix Months of 2025 as disclosed in Note 7 to the condensed consolidated financial statements.

Depreciation and amortization was $716,000$1,477,000 in the ThreeSix Months of 2026 compared to $624,000$1,237,000 in the ThreeSix Months of 2025. The increase of $92,000,$240,000, or 14.7%,19.4%, in depreciation and amortization was primarily due to the difference between additional depreciation on software acquired compared to software being fully depreciated.

Interest expense in the ThreeSix Months of 2026 was $70,000$129,000 compared to $227,000$305,000 in the ThreeSix Months of 2025, a decrease of $157,000$176,000 or 69.2%.57.7%. In the ThreeSix Months of 2025, as disclosed in Note 7 to the condensed consolidated financial statements, we incurred interest expense in connection with the 2024 Notes which were paid off in the first Three Monthsquarter of 2025. In addition, we also incurred interest expense on the 2022 equipment financing.

Income Tax (Benefit) Expense

Income tax (benefit)expense in the ThreeSix Months of 2026 was $(1,593,000),$2,449,000, which resulted in an effective tax rate of 21.5%.20.2%. Income tax expense in the ThreeSix Months of 2025 was $836,000,$3,750,000, which resulted in an effective tax rate of 17.7%.19.9%. The difference in effective tax rate is due to the effect of permanent differences in the ThreeSix Months of 2026 compared to the ThreeSix Months of 2025. In the ThreeSix Months of 2026, the vesting of restricted stock awards and exercise of stock options resulted in an income tax benefit, due to the increase in the stock price on the vesting date and exercise date as compared to the grant date, which had the effect of reducing the effective tax rate. In the ThreeSix Months of 2025, the vesting of restricted stock awards and exercise of stock options resulted in an income tax benefit, due to the increase in the stock price on the vesting date and exercise date as compared to the grant date, which had the effect of reducing the effective tax rate. In the ThreeSix Months of 2026, the increase in stock price was not as great as the increase in the ThreeSix Months of 2025 on the vesting of restricted stock awards, resulting in a lower tax benefit, which had the effect of increasing the effective tax rate when compared to the prior year.

Net (Loss) Income

Net (loss)income was $(5,808,000)$9,662,000 in the ThreeSix Months of 2026 compared to net income of $3,883,000$15,135,000 in the ThreeSix Months of 2025. The decrease in net income of $9,691,000$5,473,000 was due to the items described above.