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

Risks Related to AFGOSG Common Shares

The price per share of AFG'sOSG's common stock may be subject to a high degree of volatility, including significant price declines.

Although AFG'sOSG's common stock is listed on the New York Stock Exchange ("NYSE"), there can be no assurance as to the liquidity of the trading market or the price at which such shares can be sold. The price of the shares may decline substantially in response to a number of events or circumstances, including but not limited to:

•market perceptions of our success, or lack thereof, in pursuingbuilding and implementingmanaging our Specialty Property and Casualty Insurance and Insurance DistributionID businesses and our new business strategy and tactics more generally;

•the impact or perceived impact of any acquisition, dispositionsdisposition or other strategic transactions,transaction, including entry into a new line of business,business onor the value or long-term prospects of the Company;

•adverse developments in current or future litigationslitigation; and

The price of AFG'sOSG's shares may also be affected by the risks described below. Investments in AFG'sOSG's common stock may be subject to a high degree of volatility.

Our business depends on contractual and working relationships with insurance distribution partners, insurance carriers, reinsurers, policy holderspolicyholders and beneficiaries, third party administrators, and other agents and counterparties. We could suffer material financial loss, reputational harm and/or a loss of business prospects if a business partner, agent or counterparty engages in negligent or fraudulent conduct, whether directly in our relationship with them or indirectly as a result of their conduct in other business relationships.

AmbacOctave may be adversely impacted by P&C industry market cycles.

Ambac’s P&COctave’s businesses are subject to market cycles. Premium pricing in the commercial property and casualty insurance markets has been historically based on underwriting capacity of insurance carriers, general economic conditions, inflation, and other factors. In recent years, we have been in a “hard” market whereby carriers and capacity/capital providers have been raising rates. However, we have observed that in certain lines of business pricing has begun to decrease, while in others, the rate of pricing increase has slowedbegun orto slow as competition has begun to decrease.increase. If carriers and capacity/capital providers lower premium rates more broadly this would be referred to as a “softening” or “soft” market. Given that AmbacOctave generates revenue from both insurance premiums and commissions that are based on insurance premiums, our revenues are affected by the cyclicality of the markets in which we operate. If we enter a soft market, absent mitigating factors, we may experience a reduction in revenues and profits.

Catastrophic events, whether natural or man-made, including natural disasters and environmental and public health events that result in material disruption of economic activity, loss of human life or significant property damage, can have a materially negative impact on our financial and operational performance. Such stresses could result in liquidity strains or permanent losses.

Catastrophic events may cause significant volatility in the markets in which we operate in addition to the global financial markets.operate. Disruptions to these markets could result in a decline in business activity, increased claims, reduced underwriting capacity from insurance companies, reinsurers and other capital providers upon which our P&C businesses are reliant. Catastrophic events may also interrupt the operations of our agents and business partners that distribute our P&C insurance products. Profit commissions and contingent commissions related to certain of our P&C business lines may also be adversely impacted myby catastrophic losses. Individually and/or collectively, these results may have a material adverse impact on our results of operations and financial condition.

Further, we use internally developed and third-party vendor tools and models to assess exposure to losses, including catastrophic losses. The models assume various conditions and probability scenarios and may not accurately predict future losses or lossmeasure development.losses currently incurred. Limitations in these tools and models may adversely affect our results of operations and financial condition.

We could realize losses from our cash and investment accounts if one of the financial institutions we use fail or is taken over by regulatorsregulators.

We maintain cash and investment accounts, including premium trust accounts, at depository institutions in amounts in excess of the limits insured by the FDIC and in countries other than the U.S.FDIC. If one or more of these institutions were to fail or be taken over by their respectivefederal regulators, our access to these funds could be limited and we could experience liquidity problems and potential financial losses. Ambac's cash balances held at banks was $36,190 thousand as of December 31, 2024, including cash of Ambac's insurance distribution subsidiaries held in regional banks of $35,552 thousand as of December 31, 2024.

WeAs described in Part I, Item 1, “Risk Management” in our Annual Report on Form 10-K for the year ended December 31, 2025, we have established risk management policies and practices which seek to mitigate losses within our insuranceexposure programs.to a variety of risks. These policies and practices in the past have not insulated us from risks that were unforeseen and/or which had unanticipated loss severity, and such policies and practices may not do so in the future. There can be no assurance that these policies and practices will be adequate to avoid future unexpected losses or adverse development within our existing loss reserves.losses. If we are not able to identify significant risks, we may not be able to timely mitigate such risks, thereby increasing the amount of losses to which we are exposed. An inability to identify significant risks could also result in the failure to timely establish loss reserves that are sufficient in relation to such risks.

In the normal course of business, we are subject to regulatory and governmental investigations and civic actions, litigation and other forms of disputes in various domestic and foreign jurisdictions. It is not possible to predict the extent to which suitslitigation involvingagainst AFGOSG or one or more other subsidiaries will be filed, and it is also not possible to predict the outcome of litigation. It is possible that there could be unfavorable outcomes in existing or future proceedings. Management may be unable to make meaningful or reasonable estimates of the amount or range of losses that could result from unfavorable outcomes or of the expenses that will be incurred in connection with such lawsuits. Under some circumstances, adverse results in any such proceedings and/or the incurring of significant litigation or other expenses could be material to our business, operations, financial position, profitability or cash flows.

Everspan may be subject to disputes with policyholders regarding the scope and extent of coverage offered under Everspan's policies; be required to defend claimants in suits against its policyholders for covered liability claims; face allegations of improper claims handling; or enter into commercial disputes with its reinsurers, MGA/Us or TPAs regarding their respective contractual obligations and rights. Under some circumstances, the results of such disputes or suits may lead to liabilities beyond those which are anticipated or reserved, including extra-contractual liabilities or liabilities in excess of policy limits.

PoliticalRegulatory developments may materially adversely affect our business.

Our U.S. Specialty Property and Casualty Insurance subsidiaries are highly regulated as insurance carriers in the States of their domicile and the jurisdictions in which they are licensed. Our owned MGA/Us and insurance brokerage subsidiaries are also required to maintain certain entity-level licenses in those jurisdictions and/or the international countries in which they operate, as well as licenses of individual officers or representatives that are essential to their ability to conduct business. Each of the foregoing must also comply with laws generally applicable to insurance entities, including those relating to governance, capital, and operational requirements.

Government laws and regulations applicable to our businesses develop and change rapidly in response to consumer demands and public policies. State legislatures and insurance departments place increasing burdens on insurance carriers and producers with respect to matters such as cybersecurity, data privacy, artificial intelligence, management of technology, corporate governance, environmental and social issues, and enterprise risk management. Such laws and regulations require substantial resources to ensure that the Company has appropriate and effective compliance programs in place. If we are unable to keep pace with changes in applicable law and regulations, or if we otherwise fail in our compliance efforts, the Company may be subject to fines, sanctions, governmental orders or modifications to business practices that individually or collectively impair our business or increase our costs, possibly materially.

Unless otherwise noted, this Management's Discussion and Analysis of Financial Condition and Results of Operations relates solely to our continuing operations and does not include the operations of our Legacy Financial Guarantee business. See "Sale of AAC" below and Note 5. Discontinued Operations of the Notes to Consolidated Financial Statements under Part II, Item 8 of this Annual Report on Form 10-K for additional information about the divestiture of the Legacy Financial Guarantee business.business in September 2025.

•ExpandingGrowing and expanding our Insurance Distribution business based on deep domain knowledge in specialty and niche classes of risk which generate attractive margins at scale. This will be achieved through acquisitions, strategic investments, establishing new businesses “de-novo,” and organic growth and diversificationdiversification, and select acquisitions supported by a centralized technology ledtechnology-led shared services offering;

•Growing our Specialty Property and Casualty Insurance business to generate underwriting profits from a diversified portfolio of commercial and personal liability risks accessed primarily through affiliated and non-affiliated program administrators. In addition, we may seek strategic relationships and/or partnerships with unaffiliated parties in order to expand our product offerings, access to reinsurance capacity and other business or operational advantages.

On September 29, 2025, the Company completed the sale of AAC pursuant to the June 4, 2024, AFG entered into a2024 stock purchase agreement (the "Purchase Agreement") with American Acorn Corporation (the “Buyer”), a Delaware corporation owned by funds managed by Oaktree Capital Management, L.P., pursuant to which andOSG subject to the conditions set forth therein, AFG will sellsold all of the issued and outstanding shares of common stock of AAC, a wholly-owned subsidiary of AFG,OSG, to Buyer for aggregate consideration of $420$420,000 in cash (the "AAC Sale"). The termsBuyer also made an additional payment to OSG in an amount of the$4,300. AAC Sale as contemplated byIn the stock purchase agreement provide that, at the closing of the AAC Sale (the “Closing”),Sale, Buyer will acquireacquired complete common equity ownership of AAC and all of its wholly owned subsidiaries, including Ambac UK.Assurance UK Limited. In connection with and pursuant to the stockPurchase purchaseAgreement, agreement,OSG AFG has agreed to issueissued to Buyer a warrant exercisable for a number of5,092,707 shares of common stock, par value $0.01, of AFGOSG. representingRefer 9.9%to Note 5. Discontinued Operations of the fullyNotes dilutedto sharesthe Consolidated Financial Statements under Part II, Item 8 in this Annual Report on Form 10-K for further details on the sale of AFG’s common stock as of March 31, 2024, pro forma for the issuance of the warrant. The warrant will have an exercise price per share of $18.50 with a six and a half-year term from the date of issuance and will be immediately exercisable. Concurrent with the sale, AFG will purchase AAC's co-investment in the holding company established to purchase Beat, for an amount equal to AAC's $62,000 investment plus 7.5% per annum thereon.AAC.

On January 12, 2024, Everspan Insurance Company entered into a Stock Purchase Agreement with Hagerty Insurance Holdings, Inc., to sell its ownership interests in Consolidated National Insurance Company ("CNIC"), which was one of Everspan's admitted carriers. The closing of this transaction occurred on September 1, 2024, resulting in a gain of approximately $7,504. The sale of CNIC willhas not havehad any adverse impact on the group's operations or growth prospects.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES ($ in thousands)

Ambac'sOctave's Consolidated Financial Statements have been prepared in accordance with GAAP.accounting principles generally accepted in the U.S. ("GAAP"). This section highlights accounting estimates management views as critical because they are most important to the portrayal of the Company's financial condition; and require management to make difficult and subjective judgments regarding matters that are inherently uncertain and subject to change. These estimates are evaluated on an on-goingongoing basis considering historical developments, political events, market conditions, industry trends and other information. There can be no assurance that actual results will conform to estimates and that reported results of operations will not be materially adversely affected by the need to make future accounting adjustments to reflect changes in these estimates from time to time.

Management has identified the following critical accounting policies and estimates: (i) valuation of specialty property and casualty losses and loss adjustment expense reserves, (ii) valuation of financial guarantee loss and loss adjustment expense reserves, and (iii) business combinations including identification and valuation of intangible assets.assets, and (iii) goodwill and intangible asset impairment analysis. Management has discussed each of these critical accounting policies and estimates with the Audit Committee, including the reasons why they are considered critical and how current and anticipated future events impact those determinations. Additional information about these policies can be found in Note 2. Basis of Presentation and Significant Accounting Policies to the Consolidated Financial Statements included in Part II, Item 8 in this Form 10-K.

ValuationSPECIALTY ofPROPERTY SpecialtyAND PropertyCASUALTY andLOSSES CasualtyAND LossesLOSS andEXPENSE Loss Expense ReservesRESERVES

The specialty property and casualty insurance segment consistconsists of Everspan-affiliated carriers. Loss and loss adjustment expense reserves represent management's estimate of the ultimate liability for unpaid losses and loss expenses for claims that have been reported and claims that have been incurred,incurred but not yet reported ("IBNR") as of the balance sheet date.

Loss and loss adjustment expense reserves by line of business were as follows as of December 31, 20242025 and December 31, 20232024:

(2) Includes $35,146$23,530 and $0 total loss and loss expense reserves on a gross and net of reinsurance basis related to legacy liabilities obtained from the acquisitions of Providence Washington Insurance Company, Greenwood Insurance CompanyCompany, and Consolidated Specialty Insurance Company. All legacy liabilities remain obligations of affiliates of the sellers through reinsurance and contractual indemnities.

(2) Includes $43,751$35,146 and $0 total loss and loss expense reserves on a gross and net of reinsurance basis related to legacy liabilities obtained from the acquisitions of Providence Washington Insurance Company, Greenwood Insurance Company, Consolidated National Insurance Company and Consolidated Specialty Insurance Company. All legacy liabilities remain obligations of affiliates of the sellers through reinsurance and contractual indemnities.

Loss and loss adjustment expense reserves, evaluated at a program and line of business level, are estimated based upon experience and using a variety of actuarial methods and are subject to the impact of future changes in factors such as claim severity and frequency, underwriting and claims practices, changes in social and economic conditionsconditions, including the impact of inflation, legal and judicial developments, medical cost trends and upward trends in damage awards. The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios and loss development factors representing reported and paid loss emergence patterns. Our actuarial methods may also rely on external data, such as industry loss ratios, loss development factors, or trend factors. The initial estimate for an accident year is generally based on an exposure-based method using the loss ratio projection method. The loss ratio projection method develops an initial estimate of ultimate claims and claim adjustment expenses for an accident year by multiplying earned premium for the accident year by a projected loss ratio. The projected loss ratio is determined by analyzing prior period experience, and adjusting for loss cost trends, rate level differences, a mix of business changes and industry loss ratios and other known or observed factors influencing the accident year relative to prior accident years.

•The case incurred development method is the same as the paid loss development method,method but is based on cumulative case-incurred losses rather than paid losses.

The actuarial results provide a range of estimated losses by program and line of business including a low, central and high estimate of losses and loss expenses. ManagementAt typicallyDecember selects31, 2025, management selected the respective midpoint loss ratio between the actuarialactuarially determined central and high estimate for itsactive activeand runoff programs and lines of business for each respective accident year when recording loss and loss adjustment expense reserves. BeginningIn Decemberthe 31,prior 2024,year, management decided to set loss reserves for programs that are in runoff atselected the high end of the respective actuarial lossrange ranges,for givenprograms in runoff, but due to (i) increased claims and actuarial oversight, (ii) further run-off of these programprograms canand experience(iii) greaterfurther evaluation of Everspan's aggregate reserve position it was determined to record both active and runoff programs at the midpoint loss volatilityratio thanbetween activethe programs.actuarial central and high estimate.

Since the reserves are based on estimates, the ultimate liability may be more or less than such reserves. Ambac'sOctave's actuarial evaluation at December 31, 20242025, provided a range of losses incurred. Losses at the low end of the range would be below our recorded gross and net loss expense reserves by approximately $33,400$49,900 and $6,900,$12,500, respectively at December 31, 2024,2025, and losses at the high end of the range would exceed our recorded gross and net loss and loss adjustment expense reserve by approximately $4,500$14,600 and $1,000,$2,200, respectivelyrespectively, at December 31, 2024.2025. This range reflects low and high reasonable reserve estimates determined after using judgment to adjust the methods, factors, and assumptions selected within the internal reserve review. This approach produces a range of reasonable reserve estimates but does not represent a distribution of all possible outcomes.

•For the loss development pattern we considered the impact of the reported incurred losses developing faster or slower than expected in our projections. For every 1.0% slower or faster the losses develop, we would expectedexpect our net indicated reserves to increase or decrease, respectively, by approximatelya 0.8%.range of 0.8% to 1.2%. If our reported loss development pattern was 5% slower, the net indicated reserves would be approximately 4%5% higher. If our reported loss development pattern was 5% faster, the net indicated reserves would be approximately 4%4.3% lower.

•For the expected losses we utilize industry benchmark loss ratios and internal pricing loss ratios applied to earned premium. For every 1.0% higher or lower the expected losses are, we would expectedexpect our net indicated reserves to increase or decrease by approximately 0.55%.0.6%. If our expected losses were 5% higher, the net indicated reserves would be approximately 3%3.2% higher. If our expected losses were 5% lower, the net indicated reserves would be approximately 3%3.2% lower.

The acquired entities comprising the Insurance DistributionID segment primarily represent business combinations that were accounted for under the acquisition method of accounting. The acquisition method requires us to allocate the total consideration transferred for each acquisition to the assets acquired, liabilities assumed and noncontrolling interests ("NCI") interests based on their fair values as of the date of acquisition, including identifiable intangible assets. The allocation of the consideration utilizes significant estimates in determining the fair values of net assets acquired, which primarily consist of customer relationship intangible assets, but may include other finite-lived intangible assets including trade names or non-compete agreements. Measurement of the purchase balance sheet also requires valuation of redeemable NCI interests and nonredeemable NCI interests.interests when applicable.

The valuation method used to determine customer relationship intangible assets was the multi periodmulti-period excess earnings method "(MPEEM"), which quantifies the residual (or excess) cash flows generated by the intangible asset and discounts those cash flows to their present value. The significant assumptions used in determining the fair value of customer relationships include estimated revenue growth, customer attrition rates, operating margins, and discount rate. These estimates directly impact the amount of identified intangible assets recognized and the related amortization expense in future periods. As of December 31, 20242025 and 2023,2024, an aggregate of $333,562$463,785 and $47,289,$333,562, respectively, of acquired intangible assets, net of accumulated amortization, was recorded on the Consolidated Balance Sheets, of which $323,720$446,835 and $44,585,$323,720, respectively, represented customer relationships.

The valuation method used to determine the fair value of redeemable NCI interests and related put and call options was the Monte Carlo Simulation. The significant fair value assumptions used in the simulation include the exercise thresholds, EBITDA forecasts, discount rate and long-term growth rate. The valuation method to determine the fair value of nonredeemable NCI interests, which do not contain put or call options, was the discounted cash flow approach. The significant fair value assumptions used in the model include estimated long term revenue and expense forecasts and the discount rate.

Net loss from continuing operations for the years ended December 31, 2024, 20232025 and 2022,2024, was $58,921, $23,232$95,803 and $35,244,$58,921, respectively. The net loss variance in 20242025 compared to 20232024 was primarily driven by: (i) higher costs related to acquisitions and integrations of $26,821, (ii) higher restructuring costs of $7,600,$15,524, (iiiii) higher intangible amortization of $13,450 and$20,442, (iviii) higher interest expense on short-term debt of $9,379,$9,261, and (iv) lower foreign exchange gains of $6,717, partially offset by higherlower Everspanacquisition income,costs includingof the$19,213, $7,500investment gainimpairments of $3,416, gains on the sale of CNIC,subsidiaries of $7,504, and higher ID revenue due to acquisitions and continuing growth of Insurance Distributionthe business.

Ambac'sOctave's results for the year ended December 31, 20242025 compared to the year ended December 31, 2023, and for the year ended December 31, 2023 compared to the year ended December 31, 20222024, were impacted by the following:

Unless otherwise noted, this Management's Discussion and Analysis of Financial Condition and Results of Operations relates solely to our continuing operations and does not include the operations of the Legacy Financial Guarantee business. See "Sale of AAC" belowbelow, Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and "Sale of Ambac Assurance Corporation" in Note 5. Discontinued Operations of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 20252025, for additional information about the divestiture of the Legacy Financial Guarantee business.

•Growing and expanding our Insurance Distribution business based on deep domain knowledge in specialty and niche classes of risk which generate attractive margins at scale. ThisWe willexpect beto achievedachieve throughthis by establishing new businesses “de-novo,” organic growth and diversification, and select acquisitions supported by a centralized technology-led shared services offering;

•Growing our Specialty Property and Casualty Insurance business to generate underwriting profits from a diversified portfolio of commercial and personal liability risks accessed primarily through affiliated and non-affiliated program administrators. In addition, we may seek strategic relationshipsrelationships, and/partnerships or partnershipsother transactions with unaffiliated parties in order to expand our capital base and/or product offerings, access to reinsurance capacity and other business or operational advantages.

For all periods leading up to the sale, AAC's results of operations and OSG's loss on sale are reported within Net income (loss) to shareholders from discontinued operations beforeafter tax on the Consolidated StatementStatements of Comprehensive Income (Loss).

Octave's results for the three and six months ended MarchJune 31,30, 20262026, compared to the three and six months ended MarchJune 31,30, 2025, were materially impacted by the following:

•◦Effective September 1, 2025, Octave exercised its option to convert its $3,500 convertible note investment in Pivixa start-up MGA, resulting in an approximate 74% ownership interest and nowinclusion ownsof approximatelythe 74%.MGA in consolidated results.

◦On September 29, 2025, Octave completed the sale of its legacy financial guarantee business. AAC's results, including Octave's loss on the sale of AAC are reported within discontinued operations. Refer to Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and Note 5. Discontinued Operations of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2025, and for further details on the sale and results for the three and six months ended MarchJune 31,30, 2025. As a result of the sale, Octave repaid all of the outstanding debt used to acquire Octave Ventures, amounting to $150,000, and purchased AAC's co-investment in Octave Ventures of $62 million. Concurrent with the sale, OSG entered into a number of transactions as discussed in the Annual Report on Form 10-K for the year ended December 31, 2025, including transactions intended to lower the long term run-rate of corporate operating expenses.

The following describes the consolidated results of continuing operations of Octave and its subsidiaries for the three and six months ended MarchJune 31,30, 2026 and 2025.

Gross Premiums Written Gross premiums written decreased $1,545 and increased $16,801$15,256 for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same periodperiods inof the prior year.

Net Premiums Written Net premiums written increased $14,445$7,935 and $22,379 for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same periodperiods inof the prior year.

The increase is primarily driven by growth in new and existing programs, including certain programs with a high retention ratioratios partially offset by a reduction in the non-renewalparticipation ofrate certainon programs.an assumed reinsurance program and the shift in the business mix.

Net Premiums Earned Net premiums earned increased $4,323$5,546 and $9,869 for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same periodperiods inof the prior year.

The increase is primarily driven by growth in new and existing programs, including certain programs with a high retention ratio partially offset by the non-renewalshift ofin certainthe programs.business mix.

Commission Income and Commission Expense Commission income increased $31,407$19,406 and $50,813 for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same period in the prior year.

The increase was primarily due to strong ID organic growth in premiums placed as well as the acquisition of ArmadaCare in October of 2025. Commission income included profit commissions (based on underwriting performance) of $6,188$5,620 and $2,266 for the three months ended MarchJune 31,30, 2026,2026 and $4,6912025, respectively, and $11,808 and $6,957 for the threesix months ended MarchJune 31,30, 2025. The increase for the three months ended March 31, 2026, was primarily driven by increase at Octave Ventures2026 and Xchange2025, Benefits.respectively.

Commission expense increased $3,640$1,105 and $4,745 for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods of the prior year. Commission expense represented approximately 22% and 32% of commission income for the three months ended March 31, 2026 and 2025, respectively. The decrease inlower commission expense relative to commission income in 2026 relative to 2025 is related primarily to the ArmadaArmadaCare acquisition aspartially offset by a change in gross-to-net reporting for one MGA. ArmadaCare produces a majority of their business is produced internally and has a lower external broker commisisoncommission modelmodel. as well as change in gross to net reporting at Octave Ventures. Because third parties are paid commissions to obtain business, theThe majority of Octave Ventures' commission income is reported net of any distribution and commission expenses, due to the nature of its program agreements. The majority of the ID segment's other MGA/Us report their commission income gross of distribution and commission expenses.

Program Fees Program fee revenues were $3,644$3,293 and $3,652$3,497 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $6,937 and $7,149 for the six months ended June 30, 2026 and 2025, respectively. Program fee revenues represent the recognition of ceding commissions in excess of direct acquisition costs received from reinsurers and minimum fees received from MGA/Us until related programs reach certain levels of premium ceded. Program fees are charged as a percentage of premiums ceded to reinsurers as a component of total ceding commissions. Program fees for three and six months ended MarchJune 31,30, 2026 are flatslightly lower versus the three and six months ended MarchJune 31,30, 2025, due to growththe shift in existingnet programsretention levels partially offset by impactgrowth of a shift to retained from fronted forin certain programs.

Net Investment Income Net investment income consists of interest income, including the net effect of discount accretion and premium amortization, from fixed maturity securities classified as available for saleavailable-for-sale and net gains (losses) on pooled investment funds that are reported under the equity method. These funds and certain other investments are reported in Other investments on the Consolidated Balance Sheets. For further information about investment funds held, refer to Note 4. Investments of the Notes to Consolidated Financial Statements included this Quarterly Report on Form 10-Q.

Net investment income decreased $460$732 and $1,192 for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same periodperiods inof the prior year due primarily to lower Corporate short-term investment yields and balances following the acquisition of ArmadaCare and lower average Everspan asset balances.

Servicing and Other Fees Servicing and other fees increased $4,398$1,441 and $5,839 for the three and six months ended MarchJune 31,30, 2026.2026, respectively, compared to the same periods of the prior year. Servicing and other fees include revenues earned for providing operational and administrative services to theour Lloyd's syndicatessyndicates, managed by OctaveStatera, Venturesour asLloyd's wellManaging asAgent; program administration,administration; healthpolicy; connections,and set-up and renewal fees related to ArmadaCare and Pivix.fees.

Other Revenues Other revenues includes (i) net investment gains (losses) on securities sold or called, net of investment impairment charges; (ii) foreign exchange gains (losses) from the ID segment; and (iii) net gains (losses) on derivative contracts including FX forward contracts used to manage currency risk within the ID segment. Other revenues for the three months ended MarchJune 31,30, 2026, of $6302026 and for the three months ended March 31, 2025, of $435 and $(1,1242,146), respectively, were driven primarily by foreign exchange gains (losses) on non-functional currency operations of Octave Ventures, net of the offsetting effects of FX forward contracts. Other revenues for the six months ended June 30, 2026 and 2025, of $1,065 and $(3,270), respectively, were driven primarily by foreign exchange gains and (losses) on non-functional currency operations of Octave Ventures, net of the offsetting effects of FX forward contracts.

Loss and loss adjustment expenses incurred increased $9,183$2,368 and $11,551 for the three and six months ended MarchJune 31,30, 20262026, compared to the same periodperiods inof the prior year.

The higher loss and loss adjustment expenses for the three months ended June 30, 2026, is primarily due to the growth in our P&C program business. The higher loss and loss adjustment expenses for the six months ended June 30, 2026, is due to the growth in existingour andP&C additionprogram of new programsbusiness and prior period development primarily related to (i) $2,125 of net losses and $5,787 of LAE (legal expenses) from the first quarter 2026 settlement of a potential litigation matter related to an insurance claim, and (ii) slight reserve strengthening on an excess liability program and claim fees.

General and Administrative Expenses (G&A) The following table provides a summary of G&A expenses for the threeperiods months ended March 31, 2026 and 2025:presented.

The increase of $14,157$11,474 and 25,631 in compensation expenses during the three and six months ended MarchJune 31,30, 2026, respectively, was driven primarily by higher compensation costs due to (i) the acquisitionsacquisition of ArmadaCare and Pivix,launch of new business, (ii) changes in performance factors and timing of long-term incentive grants in 2025, (iii) expansionthe launch of Octaveour Venture'sLloyd's managing agency, and (iv) acceleration of RSUs & PSUs of terminated employees,severance and severance.related costs.

The increasedecrease of $467$600 and $132 in non-compensation G&A expenses for the three monthsand ended March 31, 2026 as compared to the threesix months ended MarchJune 31,30, 2025,2026, respectively, was driven primarily by integrationlower expensespremium related to the ArmadaCaretaxes and Pivixprior acquisitions andyear costs associated with the build-outsale of the Octave Ventures managing agency,AAC, partially offset by athe reductionacquisition inof CorporateArmadaCare, segmentlaunch initiatives.of new business, and higher expenses related to data, AI and related systems.

Intangible Amortization and Depreciation. The increase in intangible amortization and depreciation of $3,038$2,523 and $5,561 for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the threesame monthsperiods endedof Marchthe 31,prior 2025,year, was primarily due to the ArmadaCare acquisition.

Interest Expense The decrease in interest expense of $3,364$2,796 and $6,160 for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the threesame monthsperiods endedof Marchthe 31,prior 2025,year, was due primarily to a lower loan balance,balance and a reduced interest rate,rate. and priorPrior year interest expense also includes duration fees and extension fees.

Provision (Benefit) for Income Taxes The provision (benefit) for income taxes primarily relates to international operations and was $485 for the three months ended June 30, 2026, compared to $(4812,172) for the three months ended MarchJune 31,30, 2025. The provision (benefit) for income taxes was $4 for the six months ended June 30, 2026 compared to $(6172,789) for the threesix months ended MarchJune 31,30, 2025. The tax benefit recognized in the current year includes current tax expense associated with Octave Venturesour UK operations, partially offset by the deferred tax benefitbenefits related to the recognition of UK deferred tax assets generated by Octave Ventures US and amortization of finite-lived intangible assets associated with Octave Ventures UK and US operations.assets.

Octave's ID companies are compensated for their services primarily by commissions paid by insurance carriers for underwriting, structuring and/or administering polices, and in some cases, the managing of claims under an agency agreement. Commission revenues are usuallyprimarily based on a percentage of the premiums placed. In addition, we are eligible to receive profit sharing contingent commissions based on the underwriting results of certain programs underwritten by our MGA/Us. These profit commissions may fluctuate from period to period resulting in some variability in revenue and earnings.

For the three months ended MarchJune 31,30, 2026, the increase in premiums placed was driven by the acquisition of ArmadaCare and changesorganic togrowth. The growth in premiums written, as well as the mix of business writtenwritten, leddrove toan the growthincrease in commission income and commission expense of 85%71% and (35.1)%,37%, respectively. For the six months ended June 30, 2026, commission income and commission expense increased 79% and 36%, respectively, driven by the same factors as those driving the increase for the three months ended June 30, 2026.

The increase in G&A expenses of $15,154$13,461 and $28,616 for the three monthsand ended March 31, 2026 as compared to the threesix months ended MarchJune 31,30, 2025,2026, respectively, was primarily due to the acquisition of ArmadaCare, launch of Pivix as well as increase in staffing for the build outlaunch of new businessesMGAs atand Octavethe Ventures.Managing Agency business and organic staff increases.

ID pretax income (loss) for the three months ended MarchJune 31,30, 2026, was $16,785$(846) compared to a loss of $(2,24310,173) for the three months ended MarchJune 31,30, 2025. ID pretax income for the six months ended June 30, 2026, was $15,939 compared to a loss of $(12,416) for the six months ended June 30, 2025. The higher pretax income for the three and six months ended MarchJune 31,30, 2026, compared to the prior year period mostly related to higher Netnet Commissionscommissions and Feesfees related to the ArmadaCare acquisition and organic growth as well as lower interest expense, offset partially offset by higher G&A expenses and intangible amortization.

The ID EBITDA forincrease of $9,189 and $27,923 during the three monthsand ended March 31, 2026, was $30,817 compared to $12,083 for the threesix months ended MarchJune 31,30, 2025.2026, The increaserespectively, was primarily driven by an increase in commission income due to acquisitionsthe Armada acquisition and organic growth.

Our ID businesses may experience seasonal impacts on their revenues and net results. For example, our A&H businesses collectively produce the majority of their business in the first quarter of each year resulting in revenue and earnings concentrations in the first quarter. Similar concentrations of production, revenue and earnings also occurs in the fourth quarter, driven by our non-A&H businesses, but generally to a lesser degree. Seasonal impacts on the ID segment, and therefore Octave's results, may increase or decrease and shift over time depending on the relative growth of certain classes of business, impact of acquisitions, impact of de-novo MGAs and market conditions. In addition, while our ID business has experienced strong organic growth in 2026, it is important to note that nominal and organic growth rates will fluctuate from period to period due to a number of factors related to our specific businesses as well as macro and industry conditions, including but not limited to the timing and size of new program launches, renewals, market pricing cycles, shifts in capacity availability and risk appetite, and changes in insured exposures.. Furthermore, not all of our ID businesses may grow simultaneously. For example, during the second quarter of 2026 while our ID business produced strong nominal and organic growth rates, certain of our MGAs, such as our property focused MGAs, reduced their underwriting activity resulting in lower commission revenues period over period.

The Specialty Property and Casualty Insurance segment has grown significantly since underwriting its first program in May 2021. Twenty-fourTwenty-seven programs were authorized to issue policies as of MarchJune 31,30, 2026, including Everspan participating in certain programs as a reinsurer. InEverspan 2026, Everspan's continuescontinued to seebuild its production levels buildin 2026 with growth in new and existing programs. Additionally, Everspan's business mix shifted resulting lower loss ratios and a higher net retention ratio. This growth and business mix shift has resulted in an increase in gross and net premiums written, net premiums earned, losses and loss expenses incurred, policy acquisition costs in the three and asix shiftmonths inended Everspan'sJune retention30, ratio2026, compared to the same periods of the prior year. Gross premiums decreased in the three months ended MarchJune 31,30, 2026 comparedand toincreased in the six months ended June 30, 2026. The decrease in the three months ended MarchJune 31,30, 2025.2026, is primarily due to the timing differences related to premium production for one significant program and a reduction in participation percentage of an assumed reinsurance program whereas the increase in the six months ended June 30, 2026 is due to growth in new and existing programs. Although losses and loss expenses have increased, the shift in Everspan's net portfoliobusiness mix has led to an improved loss ratio on active programs.

The change in the Loss and LAE ratio during the three months ended MarchJune 31,30, 2026, was driven by a shift in business mix. The change in the Loss and LAE ratio during the six months ended June 30, 2026, was driven by $2,125 of net losses and $5,787 of LAE (legal expenses) from the settlement of a potential litigation matter related to an insurance claim, partially offset by a shirtshift in business mix. The threesix months ended MarchJune 31,30, 2026, contained prior years loss strengthening equating to 44.5%21.7% of which 39.6%19.0% relates this settlement. The remaining amount primarily relates to an excess liability claim and ULAE. The three and six months ended MarchJune 31,30, 2025, contained minimal prior years loss strengthening equating to 1.1%.1.0% and 1.0%, respectively, driven primarily by excess liability loss experience.

In addition to the increase in the Loss and LAE ratio forFor the three and six months ended MarchJune 31,30, 2026, compared to the threesame monthsprior endedyear March 31, 2025, there was a charge toperiods, acquisition costs resultingwere fromaffected by sliding scale commission arrangements with program partners. SuchSliding chargescale commissions increased the Specialty Property and Casualty Insurance segment's expense ratio by 1.4%1.0% and —%1.2% forduring the three and six months ended MarchJune 31,30, 20262026, respectively. During the three and six months ended June 30, 2025, there was a benefit from sliding scale commission arrangements with program partners resulting in a decrease to acquisition costs that reduced the expense ratio by 2.6% and 1.3%, respectively. Certain Everspan programs were structured to include sliding scale commission arrangements within a loss ratio range. These sliding scale arrangements help mitigate losses, protect underwriting results and limit earnings volatility.

The increasedecrease in G&A expenses of $2,201$763 for the three months ended MarchJune 31,30, 2026 aswas comparedprimarily due to a decrease in premium taxes. The increase of $1,437 for the threesix months ended MarchJune 31,30, 2025,2026 was primarily due to severance and acceleratedrelated incentivecosts; compensationpartially offset by a premium tax true-up in additionthe toprior higher premium taxes driven by increased premiums written.year.

Corporate revenues totaled $345$232 and $587$526 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $577 and $1,113 for the six months ended June 30, 2026 and 2025, respectively. Corporate revenue is mostly generated from investment of OSG's liquid resources and investment results from its previously made strategic investments, including certain minority investments in MGA/Us and an insurtech fund. InvestmentThe revenuesdecline comprisedin of net investment income and net investment gains (losses), including impairments, were $398 and $597revenue for theboth three months ended March 31, 2026 and 2025, respectively. The declineperiods is primarily due to lower average invested assets dueas toa result of the use of funds for the acquisition of ArmadaCare and share repurchases in the fourth quarter of 2025, as well as lower yields on short-term invested assets in 2026.