What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-31 compared with 2025-08-06 · 146 added, 126 removed, 300 unchanged (48% of the section changed)

7 unchanged sentences

As a result of these changes, the Company has three reportable segments:

• Agency and Insurance Services consists of (i) three agencies:

Penn-America Insurance Services, LLC, J.H.

Ferguson and Associates, LLC, which includes the Vacant Express division, and Collectibles Insurance Services, LLC that source, underwrite, and service policies and (ii) two strategic insurance product and service businesses:

Liberty Insurance Adjustment Agency, Inc., a claims adjustment and claims service business, and Kaleidoscope Insurance Technologies, Inc., a proprietary insurance software and services provider.

• Agency and Insurance Services includes (i) four agencies focused on sourcing, underwriting, and servicing primary and reinsurance business:

Penn-America Insurance Services, LLC, Valyn Re LLC (formed in October 2025 to provide proportional treaty coverage for both commercial and personal lines), J.H.

Ferguson & Associates, LLC, which includes the Vacant Express division, and Collectibles Insurance Services, LLC and (ii) three specialized insurance product and service businesses:

Kaleidoscope Insurance Technologies, Inc., a developer of proprietary underwriting and policy systems supporting Katalyx Holdings agencies and broader digital initiatives;

Sayata, an artificial intelligence-enabled insurance marketplace;

and Liberty Insurance Adjustment Agency, Inc., a provider of claims evaluation, adjustment, and related services.

• Belmont Insurance Companies - Core (“Belmont Core”) , previously known as the Penn-America segment, consists of insurance company operations for ongoing direct insurance products and assumed reinsurance products, which are offered in the excess and surplus lines marketplace.

1 unchanged sentence

The primary activities of Belmont Non-Core are servicing the run-off of polices/treaties, adjusting claims and estimating loss reserves on de-emphasized and terminated business.

Segment results for the quarter and six months ended June 30, 2024 have been recast to conform to the new reportable segments.

Segment results for the quarter and nine months ended September 30, 2024 have been recast to conform to the new reportable segments.

Financial Highlights

2025 Second Quarter Results of Operations

• Gross written premiums increased 6.1% to $106.8 million.

2025 Third Quarter Results of Operations

• Gross written premiums increased 8.6% to $108.4 million as compared to the same period in 2024.

• Current accident year underwriting income increased 54% to $10.2 million for 2025 compared to $6.6 million of underwriting income for the same period in 2024.

• Net investment income of $14.7 million in 2025 was 3.9% lower than the same period in 2024 due to loss from investment in limited partnerships of $0.6 million.

Net investment income from the Company's fixed maturities portfolio increased 2.3% to $15.3 million.

Book yield on the fixed maturities portfolio increased to 4.54% at June 30, 2025 from 4.49% at March 31, 2025.

• Net investment income of $17.9 million in 2025 was 8.6% higher than the same period in 2024 due to increase in income from investment in limited partnerships of $1.5 million.

• Current accident year combined ratio was 90.4% in 2025 compared to 93.5% for the same period in 2024.

• Net income of $12.5 million, or $0.86 per share diluted, in 2025 compared to $12.8 million, or $0.92 per share diluted, for the same period in 2024.

2025 Second Quarter Consolidated Financial Condition

• Total cash and investments of $1.4 billion at June 30, 2025 and December 31, 2024;

• On August 8, 2025, AM Best affirmed the Financial Strength Rating of A (Excellent) for the U.S.

operating subsidiaries of Global Indemnity Group, LLC.

2025 Third Quarter Consolidated Financial Condition

• Total cash and investments of $1.4 billion at September 30, 2025 and December 31, 2024;

fixed maturities and cash comprise 96% of total investments.

• Total assets of $1.7 billion at June 30, 2025 and December 31, 2024.

• No debt at June 30, 2025 and December 31, 2024.

• Total assets of $1.7 billion at September 30, 2025 and December 31, 2024.

• No debt at September 30, 2025 and December 31, 2024.

• Since the Company's initial public offering in 2003, the total capital returned to shareholders was $644.4 million, comprising $522.2 million of share repurchases and $122.2 million of distributions / dividends.

This includes $15.3 million of distributions during 2025.

• Shareholders' equity increased by $6.1 million to $695.3 million at June 30, 2025 from $687.1 million at March 31, 2025.

• Book value per common share increased to $48.35 at June 30, 2025 from $47.85 at March 31, 2025.

• Shareholders' equity increased by $8.8 million to $704.1 million at September 30, 2025 from $695.3 million at June 30, 2025.

• Book value per common share increased to $48.88 at September 30, 2025 from $48.35 at June 30, 2025.

The Company continued executing its post-reorganization strategy through the acquisition of Sayata and initiating the launch of Valyn Re LLC, a reinsurance managing general agency.

The Company is focused on building significant scale in its Agency and Insurance Services segment under Katalyx Holdings LLC and across wholesale, retail and direct-to-consumer channels.

This is intended to be accomplished through continued organic business growth, increasing operational efficiency, incubation and new products and services launches, including attracting third-party carrier capacity, and strategic acquisitions.

In addition, the Company expects to make continued investments in technology and the Company’s Belmont Core segment.

Results of Operations

The following table summarizes the Company’s results for the quarters and six months ended June 30, 2025 and 2024:

The following table summarizes the Company’s results for the quarters and nine months ended September 30, 2025 and 2024:

Quarters Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(Dollars in thousands)

8 unchanged sentences

Net investment income

Net realized investment gains

Net realized investment gains (losses)

Corporate expenses

5 unchanged sentences

Combined ratio (3)

NM - not meaningful

(1) The loss ratio is a GAAP financial measure that is generally viewed in the insurance industry as an indicator of underwriting profitability and is calculated by dividing net losses and loss adjustment expenses by net earned premiums.

2 unchanged sentences

The following table summarizes the change in premium volume by reportable segment:

Quarters Ended June 30,

Quarters Ended September 30,

Belmont Non-Core

4 unchanged sentences

Net written premiums (4)

Six Months Ended June 30,

Nine Months Ended September 30,

Belmont Non-Core

8 unchanged sentences

(4) Net written premiums equal gross written premiums less ceded written premiums.

Gross written premiums increased by 6.1% to $106.8 million for the quarter ended June 30, 2025 compared to $100.7 million for the same period in 2024 and increased 5.8% to $205.5 million for the six months ended June 30, 2025 compared to $194.2 million for the same period in 2024.

Gross written premiums increased by 8.6% to $108.4 million for the quarter ended September 30, 2025 compared to $99.8 million for the same period in 2024 and increased 6.8% to $313.8 million for the nine months ended September 30, 2025 compared to $294.0 million for the same period in 2024.

Direct written premium produced by the Agency and Insurance Services segment for Belmont Core:

Quarters Ended June 30,

Six Months Ended June 30,

Quarters Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

4 unchanged sentences

Total direct written premiums

• In the aggregate, direct written premiums for Wholesale Commercial, Vacant Express, and Collectibles grew by 10.3% and 9.5% for the quarter and six months ended June 30, 2025, respectively, as compared to same periods in 2024.

• In the aggregate, direct written premiums for Wholesale Commercial, Vacant Express, and Collectibles grew by 8.7% and 9.2% for the quarter and nine months ended September 30, 2025, respectively, as compared to same periods in 2024.

This growth was driven by premium rate increases, new agency appointments, organic growth of existing agents, and new products.

• Direct written premiums for Specialty Products declined by 26.1% and 42.0% for the quarter and six months ended June 30, 2025, respectively, as compared to same periods in 2024 due to terminating products not meeting profitability expectations.

Excluding terminated business, growth in direct written premiums would have been 32.4% and 20.4% for the quarter and six months ended June 30, 2025, respectively.

• Direct written premiums for Specialty Products declined by 45.5% and 43.1% for the quarter and nine months ended September 30, 2025, respectively, as compared to same periods in 2024 due to terminating products not meeting profitability expectations.

Excluding terminated business, Specialty Product's direct written premiums declined 3.9% for the quarter ended September 30, 2025 and grew by 12.3% for the nine months ended September 30, 2025.

Assumed written premium produced by the Belmont segments:

Quarters Ended June 30,

Six Months Ended June 30,

Quarters Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

1 unchanged sentence

Total assumed written premiums

NM - not meaningful

• Belmont Core's assumed business grew to $12.0 million and $23.0 million for the quarter and six months ended June 30, 2025, respectively, from $6.5 million and $9.4 million for the same period in 2024 due to new treaties incepting during 2024 and 2025.

• Belmont Core's assumed business grew to $15.6 million and $38.6 million for the quarter and nine months ended September 30, 2025, respectively, from $9.9 million and $19.3 million for the same period in 2024 due to new treaties incepting during 2024 and 2025 and organic growth from existing treaties.

• Belmont Non-Core's business represents run-off premium from non-renewed treaties.

1 unchanged sentence

The components of income (loss) from the Company’s reportable segments and corresponding underwriting ratios are as follows:

Quarters Ended June 30,

Quarters Ended September 30,

Agency and Insurance Services

19 unchanged sentences

(1) Consists of intersegment revenues, which are eliminated in consolidation.

The Company generated underwriting income of $5.8 million for the quarter ended June 30, 2025 compared to $3.5 million of underwriting income for the same period in 2024.

The current accident year combined ratio improved 2.1 points to 94.6% for the quarter ended June 30, 2025 from 96.7% for the same period in 2024.

• Net earned premiums within the Belmont Core segment increased by 9.1% to $97.5 million for the quarter ended June 30, 2025 compared to $89.4 million for the same period in 2024 due to growth in its gross written premiums.

Property net earned premiums were $40.4 million and $39.1 million for the quarters ended June 30, 2025 and 2024, respectively.

Casualty net earned premiums were $57.1 million and $50.2 million for the quarters ended June 30, 2025 and 2024, respectively.

• Agency and Insurance Services segment recorded $11.5 million of commission income on direct premiums produced for Belmont Core and $3.4 million of service fee income for technology and claims services provided to Belmont Core and Non-Core segments during the quarter ended June 30, 2025.

There were no revenues for

2024 since these affiliated agreements incepted on January 1, 2025.

The Company generated underwriting income of $10.0 million for the quarter ended September 30, 2025 compared to $5.8 million of underwriting income for the same period in 2024.

The current accident year combined ratio improved 3.5 points to 90.4% for the quarter ended September 30, 2025 from 93.5% for the same period in 2024.

• Net earned premiums within the Belmont Core segment increased by 5.8% to $99.4 million for the quarter ended September 30, 2025 compared to $94.0 million for the same period in 2024 due to growth in its gross written premiums.

Property net earned premiums were $40.6 million and $43.0 million for the quarters ended September 30, 2025 and 2024, respectively.

Casualty net earned premiums were $58.7 million and $50.9 million for the quarters ended September 30, 2025 and 2024, respectively.

• Agency and Insurance Services segment recorded $11.0 million of commission income on direct premiums produced for Belmont Core and $3.4 million of service fee income for technology and claims services provided to Belmont Core and Non-Core segments during the quarter ended September 30, 2025.

There were no revenues

for 2024 since these affiliated agreements incepted effective on January 1, 2025.

The commission and service fee income for the Agency and Insurance Services segment are eliminated in the Company's Consolidated Financial Statements.

• Policy and installment fee income was $0.5 million and $0.4 million for the quarters ended June 30, 2025 and 2024, respectively.

• The current accident year loss ratio improved by 2.3 points to 55.6% for the quarter ended June 30, 2025 compared to 57.9% for the same period in 2024 primarily driven by an improvement in the non-catastrophe property loss ratio.

• Net losses and loss adjustment expenses related to prior accident years were less than $0.1 million for the quarters ended June 30, 2025 and 2024.

• Policy and installment fee income was $0.6 million and $0.4 million for the quarters ended September 30, 2025 and 2024, respectively.

• The current accident year loss ratio improved by 4.9 points to 50.1% for the quarter ended September 30, 2025 compared to 55.0% for the same period in 2024 primarily driven by an improvement in both the non-catastrophe and catastrophe property loss ratio.

• Net losses and loss adjustment expenses related to prior accident years were a decrease of less than $0.1 million for the quarters ended September 30, 2025 and 2024.

Please see Note 7 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

Six Months Ended June 30,

Nine Months Ended September 30,

Agency and Insurance Services

19 unchanged sentences

(1) Consists of intersegment revenues, which are eliminated in consolidation.

Underwriting loss of $4.7 million for the six months ended June 30, 2025 includes net losses and loss adjustment expenses related to California Wildfires in January 2025 ("California Wildfires"), totaling $15.7 million, compared to $8.8 million of underwriting income for the same period in 2024.

Excluding California Wildfires, the underwriting income was $11.0 million for the six months ended June 30, 2025.

The current accident year combined ratio, excluding the impact of the

California Wildfires of 8.3 points, was 94.7% for the six months ended June 30, 2025 compared to 95.8% for the same period in 2024.

• Net earned premiums within the Belmont Core segment increased by 6.3% to $189.8 million for the six months ended June 30, 2025 compared to $178.5 million for the same period in 2024 due to growth in its gross written premiums.

Property net earned premiums were $78.1 million and $79.0 million for the six months ended June 30, 2025 and 2024, respectively.

Casualty net earned premiums were $111.7 million and $99.5 million for the six months ended June 30, 2025 and 2024, respectively.

• Agency and Insurance Services segment recorded $22.0 million of commission income on direct premiums produced for Belmont Core and $6.9 million of service fee income for technology and claims services provided to Belmont Core and Non-Core segments for the six months ended June 30, 2025.

There were no revenues for 2024 since these affiliated agreements incepted on January 1, 2025.

Underwriting income of $5.3 million for the nine months ended September 30, 2025 includes net losses and loss adjustment expenses related to California Wildfires in January 2025 ("California Wildfires"), totaling $15.8 million, compared to $14.6

million of underwriting income for the same period in 2024.

Excluding California Wildfires, the underwriting income was $21.1 million for the nine months ended September 30, 2025.

The current accident year combined ratio, excluding the impact of the California Wildfires of 5.5 points, was 93.2% for the nine months ended September 30, 2025 compared to 95.0% for the same period in 2024.

• Net earned premiums within the Belmont Core segment increased by 6.1% to $289.2 million for the nine months ended September 30, 2025 compared to $272.5 million for the same period in 2024 due to growth in its gross written premiums.

Property net earned premiums were $118.7 million and $122.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Casualty net earned premiums were $170.4 million and $150.4 million for the nine months ended September 30, 2025 and 2024, respectively.

• Agency and Insurance Services segment recorded $33.1 million of commission income on direct premiums produced for Belmont Core and $10.3 million of service fee income for technology and claims services provided to Belmont Core and Non-Core segments for the nine months ended September 30, 2025.

There were no revenues for 2024 since these affiliated agreements incepted effective on January 1, 2025.

The commission and service fee income for the Agency and Insurance Services segment are eliminated in the Company's Consolidated Financial Statements.

• Policy and installment fee income was $1.0 million and $0.7 million for the six months ended June 30, 2025 and 2024, respectively.

• The current accident year loss ratio increased by 6.9 points to 63.5% for the six months ended June 30, 2025 compared to 56.6% for the same period in 2024 driven by the California Wildfires which impacted the current accident year loss ratio by 8.3 points.

• Net losses and loss adjustment expenses related to prior accident years were less than $0.1 million for the six months ended June 30, 2025 and 2024.

• Policy and installment fee income was $1.6 million and $1.1 million for the nine months ended September 30, 2025 and 2024, respectively.

• The current accident year loss ratio increased by 2.9 points to 58.9% for the nine months ended September 30, 2025 compared to 56.0% for the same period in 2024 driven by the California Wildfires which impacted the current accident year loss ratio by 5.5 points.

• Net losses and loss adjustment expenses related to prior accident years were a decrease of less than $0.1 million and ($0.1) million for the nine months ended September 30, 2025 and 2024, respectively.

Please see Note 7 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

1 unchanged sentence

Quarters Ended

September 30,

Quarters Ended

September 30,

(Dollars in thousands)

2 unchanged sentences

Total accident year

• The current accident year non-catastrophe property loss ratio improved by 7.4 points during the quarter ended June 30, 2025 as compared to the same period in 2024 driven by lower claims frequency.

• The current accident year catastrophe loss ratio increased by 3.9 points during the quarter ended June 30, 2025 as compared to the same period in 2024 recognizing higher claims severity.

• The current accident year casualty loss ratio improved by 1.3 points during the quarter ended June 30, 2025 mainly driven by improved pricing from rate increases in 2024.

Six Months Ended

• The current accident year non-catastrophe property loss ratio improved by 6.7 points during the quarter ended September 30, 2025 as compared to the same period in 2024 driven by lower claims frequency.

• The current accident year catastrophe loss ratio improved by 5.0 points during the quarter ended September 30, 2025 as compared to the same period in 2024 recognizing lower claims frequency.

• The current accident year casualty loss ratio improved by 0.8 points during the quarter ended September 30, 2025 mainly driven by improved pricing from rate increases in 2024 and 2025.

Nine Months Ended

September 30,

Nine Months Ended

September 30,

(Dollars in thousands)

4 unchanged sentences

Total accident year losses

• The current accident year non-catastrophe property loss ratio was 42.4% for the six months ended June 30, 2025 compared to 44.6% for the same period in 2024, an improvement of 2.2 points driven by lower claims frequency.

• The current accident year catastrophe net losses and loss adjustment expenses increased to $23.1 million for the six months ended June 30, 2025 compared to $6.8 million for the same period in 2024.

Excluding the California Wildfires, catastrophe net losses and loss adjustment expenses would have been $7.4 million or a loss ratio of 9.4% for the six months ended June 30, 2025 compared to $6.8 million of catastrophe net losses and loss adjustment expenses or an 8.6% catastrophe loss ratio for the same period in 2024.

• The current accident year casualty loss ratio improved by 1.5 points for the six months ended June 30, 2025 mainly driven by improved pricing from rate increases in 2024.

The following table summarizes the components of the expense ratio for the quarters and six months ended June 30, 2025 and 2024:

Quarters Ended June 30,

Six Months Ended June 30,

• The current accident year non-catastrophe property loss ratio was 40.1% for the nine months ended September 30, 2025 compared to 43.8% for the same period in 2024, an improvement of 3.7 points driven by lower claims frequency.

• The current accident year catastrophe net losses and loss adjustment expenses increased to $24.4 million for the nine months ended September 30, 2025 compared to $10.3 million for the same period in 2024.

Excluding the California Wildfires, catastrophe net losses and loss adjustment expenses would have been $8.6 million or a loss ratio of 7.2% for the nine months ended September 30, 2025 compared to $10.3 million of catastrophe net losses and loss adjustment expenses or an 8.4% catastrophe loss ratio for the same period in 2024.

• The current accident year casualty loss ratio improved by 1.2 points for the nine months ended September 30, 2025 mainly driven by improved pricing from rate increases in 2024 and 2025.

The following table summarizes the components of the expense ratio for the quarters and nine months ended September 30, 2025 and 2024:

Quarters Ended September 30,

Nine Months Ended September 30,

Net commission expenses

1 unchanged sentence

Expense Ratio

• The increase in the expense ratio for the six months ended June 30, 2025 is primarily due to decline in earned premiums within Belmont Non-Core partially offset by a decrease in the commission expense ratio due to mix of business.

• The increase in the expense ratio for the nine months ended September 30, 2025 is primarily due to the investment in underwriting personnel at Katalyx Holdings LLC.

Net investment income

Net investment income decreased 3.9% to $14.7 million for the quarter ended June 30, 2025 from $15.3 million for the same period in 2024 and decreased 1.1% to $29.5 million for the six months ended June 30, 2025 from $29.8 million for the same period in 2024 mainly driven by performance in limited partnerships offset by improved yield on fixed maturities.

Net investment income increased 8.6% to $17.9 million for the quarter ended September 30, 2025 from $16.5 million for the same period in 2024 and increased 2.3% to $47.4 million for the nine months ended September 30, 2025 from $46.3 million for the same period in 2024 mainly driven by performance in limited partnerships for the quarter and improved yield on fixed maturities for the nine months.

Quarters Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(Dollars in thousands)

2 unchanged sentences

Net investment income

• Net investment income from the Company’s fixed maturities portfolio increased 2.3% and 4.4% for the quarter and six months ended June 30, 2025, respectively, as compared to the same periods in 2024 due to an improved yield.

The book yield on the Company’s fixed maturities portfolio was 4.54% and 4.47% as of June 30, 2025 and June 30, 2024, respectively.

During the six months ended June 30, 2025, approximately $400 million of the fixed maturities portfolio was reinvested at 5.5%, consisting of high quality corporates and structured securities.

As a result of this strategy, duration increased to 1.2 as of June 30, 2025 compared to duration of 0.8 as of December 31, 2024.

• Income from limited partnerships declined to a loss of $0.7 million for the six months ended June 30, 2025 compared to a gain of $0.9 million for the same period in 2024 mainly due to the decline in fair value in one of the Company's limited partnership investments.

The Company's fixed maturities portfolio continues to maintain high quality with an AA- average rating and consist of the following:

• Net investment income from the Company’s fixed maturities portfolio decreased by 3.6% for the quarter ended September 30, 2025 as compared to the same period in 2024 primarily due to a lower average yield in 2025 as compared to 2024.

Net investment income from the Company’s fixed maturities portfolio grew by 2.0% for the nine months ended September 30, 2025 as compared to the same period in 2024 due to a higher average yield in 2025 as compared to 2024.

• Net investment income from equities increased by $0.5 million to $0.7 million for the quarter ended September 30, 2025 and increased by $0.4 million to $1.0 million for the nine months ended September 30, 2025 as compared to the same periods in 2024 primarily driven by the Company's $25 million investment in common equities during the third quarter of 2025.

• Income from limited partnerships increased by $1.5 million for the quarter ended September 30, 2025 and decreased by $0.2 million for the nine months ended September 30, 2025.

These fluctuations were primarily attributable to changes in the fair value of one of the Company's limited partnership investments.

The Company's fixed maturities portfolio continues to maintain high quality with an AA- average rating and consists of the following:

(Dollars in thousands)

September 30,

Structured bonds (1)

2 unchanged sentences

(1) Structured bonds include asset-backed, mortgage-backed, commercial mortgage-backed and collateralized mortgage obligations.

Excluding the structured bonds, the average duration of the Company’s fixed maturities portfolio was 0.6 years as of June 30, 2025, compared with 0.5 years as of December 31, 2024.

Excluding the structured bonds, the average duration of the Company’s fixed maturities portfolio was 0.6 years as of September 30, 2025, compared with 0.5 years as of December 31, 2024.

Structured bonds are subject to conditional prepayment rates whereas the remaining bonds have a set maturity date.

Changes in interest rates can cause principal payments on structured bonds to extend or shorten which can impact duration.

Net Realized Investment Gains

The components of net realized investment gains for the quarters and six months ended June 30, 2025 and 2024 were as follows:

Net Realized Investment Gains (Losses)

The components of net realized investment gains (losses) for the quarters and nine months ended September 30, 2025 and 2024 were as follows:

Quarters Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(Dollars in thousands)

1 unchanged sentence

Fixed maturities

Net realized investment gains

See Note 2 of the notes to the consolidated financial statements in Item 1 of Part I of this report for an analysis of total investment return on a pre-tax basis for the quarters and six months ended June 30, 2025 and 2024.

Net realized investment gains (losses)

Net realized investment losses for the quarter and nine months ended September 30, 2025 were primarily due to changes in fair value on the Company's $25 million investment in common equities held during the quarter.

See Note 3 of the notes to the consolidated financial statements in Item 1 of Part I of this report for an analysis of total investment return on a pre-tax basis for the quarters and nine months ended September 30, 2025 and 2024.

Corporate Expenses

Corporate expenses consist of outside legal fees, other professional fees, directors’ fees, management fees & advisory fees, salaries and benefits for holding company personnel, development costs for new products, impairment losses, and taxes incurred which are not directly related to operations.

Corporate expenses increased $1.1 million to $7.5 million for the quarter ended June 30, 2025 from $6.4 million for the same period in 2024 primarily due to an increase in professional fees related to Company’s newly formed agency and insurance services companies.

Corporate expenses increased $4.3 million to $17.0 million for the six months ended June 30, 2025 compared to $12.8 million for the same period in 2024 primarily driven by $2.9 million of advisory fees consisting mainly of stock compensation approved and granted by the Board of Directors to Fox Paine & Company, LLC in the first quarter of 2025 related to the Company’s internal reorganization and employee costs and professional fees related to investment in the Company’s newly formed agency and insurance services companies.

Corporate expenses increased $1.9 million to $7.8 million for the quarter ended September 30, 2025 from $5.9 million for the same period in 2024 primarily due to an increase in professional fees related to the acquisition of Sayata and an increase in employee and recruiting costs related to investment in the Company’s newly formed Agency and Insurance Services segment.

Corporate expenses increased $6.2 million to $24.9 million for the nine months ended September 30, 2025 compared to $18.7 million for the same period in 2024 primarily driven by $2.9 million of advisory fees consisting mainly of stock compensation approved and granted by the Board of Directors to Fox Paine & Company, LLC in the first quarter of 2025 related to the Company’s internal reorganization, an increase in professional fees related to the acquisition of Sayata, and an increase in employee and recruiting costs related to investment in the Company’s newly formed Agency and Insurance Services segment.

See Note 9 of the notes to the consolidated financial statements in Item 1 of Part I of this report for additional information on the advisory fee.

Income Tax Expense

Income tax expense was $2.8 million on net income before tax of $13.1 million for the quarter ended June 30, 2025.

Income tax expense was $3.5 million on net income before tax of $16.1 million for the quarter ended September 30, 2025.

This compares to income tax expense of $3.1 million on net income before tax of $15.9 million for the same period in 2024.

Income tax expense was $1.7 million on net income before tax of $8.0 million for the six months ended June 30, 2025.

Income tax expense was $5.2 million on net income before tax of $24.1 million for the nine months ended September 30, 2025.

This compares to income tax expense of $8.6 million on net income before tax of $42.8 million for the same period in 2024.

See Note 6 of the notes to the consolidated financial statements in Item 1 of Part I of this report for a comparison of income tax between periods.

The Company had net income of $10.3 million during the quarter ended June 30, 2025 compared to net income of $10.1 million for the same period in 2024.

The Company had net income of $6.4 million during the six months ended June 30, 2025.

Excluding the California Wildfires net losses and loss adjustment expenses of $12.2 million after tax, net income would have been $18.8 million for the six months ended June 30, 2025 compared to net income of $21.5 million for the same period in 2024.

Amounts recorded for unpaid losses and loss adjustment expenses represent management’s best estimate at June 30, 2025.

The Company had net income of $12.5 million during the quarter ended September 30, 2025 compared to net income of $12.8 million for the same period in 2024.

The Company had net income of $18.9 million during the nine months ended September 30, 2025.

Excluding the California Wildfires net losses and loss adjustment expenses of $12.3 million after tax, net income would have been $31.2 million for the nine months ended September 30, 2025 compared to net income of $34.2 million for the same period in 2024.

Amounts recorded for unpaid losses and loss adjustment expenses represent management’s best estimate at September 30, 2025.

Management’s best estimate is as of a particular point in time and is based upon known facts, the Company’s actuarial analyses, current law, and the Company’s judgment.

This resulted in carried gross reserves of $776.1 million and $800.4 million as of June 30, 2025 and December 31, 2024, respectively, and net reserves of $716.6 million and $739.6 million as of June 30, 2025 and December 31, 2024, respectively.

This resulted in carried gross reserves of $761.7 million and $800.4 million as of September 30, 2025 and December 31, 2024, respectively, and net reserves of $702.9 million and $739.6 million as of September 30, 2025 and December 31, 2024, respectively.

A breakout of the Company’s gross and net reserves is as follows:

June 30, 2025

September 30, 2025

Gross Reserves

14 unchanged sentences

Therefore, the Company believes management’s best estimate is more likely influenced by changes in severity than frequency.

on the Company’s current accident year net losses and loss adjustment expenses estimate of $119.7 million for claims occurring during the six months ended June 30, 2025:

The following table, which the Company believes reflects a reasonable range of variability around its best estimate based on historical experience and management’s judgment, reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity on the Company’s current accident year net losses and loss adjustment expenses estimate of $169.6 million for claims occurring during the nine months ended September 30, 2025:

Severity Change

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Frequency Change

The Company’s net reserves for losses and loss adjustment expenses of $716.6 million as of June 30, 2025 relate to multiple accident years.

The Company’s net reserves for losses and loss adjustment expenses of $702.9 million as of September 30, 2025 relate to multiple accident years.

Therefore, the impact of changes in frequency and severity for more than one accident year could be higher or lower than the amounts reflected above.

Reconciliation of non-GAAP financial measures and ratios

The tables below reconcile the non-GAAP financial measures or ratios, which excludes the impact of prior accident year adjustments and the California Wildfires, to its most directly comparable GAAP measure or ratio.

The tables below reconcile the non-GAAP financial measures or ratios, which excludes the impact of prior accident year adjustments in the first table and excludes the impact of prior accident year adjustments and the California Wildfires in the second table, to its most directly comparable GAAP measure or ratio.

The Company believes the non-GAAP financial measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends in the Company's segments may be obscured by prior accident year adjustments and the California Wildfires.

These non-GAAP financial measures or ratios should not be considered as a substitute for the most directly comparable GAAP measures or ratios and do not reflect the overall underwriting profitability of the Company.

Quarters Ended June 30,

Six Months Ended June 30,

Quarters Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

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Reconciliation of non-GAAP financial measures and ratios continued

Six Months Ended

Nine Months Ended

September 30,

(Dollars in thousands)

Current accident year underwriting income excluding California Wildfires

Underwriting income (loss) (1)

Underwriting income (1)

Effect of prior accident year

Current accident year underwriting income (loss) (2)

Current accident year underwriting income (2)

California Wildfires net losses and loss adjustment expenses

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Net income excluding California Wildfires

Net income (loss) (1)

Net income (1)

California Wildfires net losses and loss adjustment expenses (net of tax) (3)

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Underwriting income excluding California Wildfires net losses and loss adjustment expenses

Underwriting income (loss) (1)

Underwriting income (1)

California Wildfires net losses and loss adjustment expenses

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(3) Represents net losses and loss adjustment expenses of $15.8 million less tax benefit of $3.5 million.

(4) See previous table for reconciliation of non-GAAP financial measures or ratios for current accident year catastrophe net losses and loss adjustment expenses.

(4) See previous table for reconciliation of non-GAAP financial measures or ratios to its most directly comparable GAAP measure or ratio for current accident year catastrophe net losses and loss adjustment expenses.

Critical Accounting Estimates and Policies

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Its principal assets are its ownership in the shares of (i) Belmont Holdings GX, Inc., an insurance holding company that owns the following insurance companies:

United National Insurance Company, Diamond State Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, and Penn-Patriot Insurance Company, and (ii) Penn-America Underwriters, LLC, an agency and specialized service holding company.

United National Insurance Company, Diamond State Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, and Penn-Patriot Insurance Company, and (ii) Katalyx Holdings LLC, an agency and specialized service holding company.

Global Indemnity Group, LLC’s current short-term and long-term liquidity needs include but are not limited to the payment of corporate expenses, distributions to shareholders, and share repurchases.

In order to meet its current short-term and long-term needs, its principal sources of cash include investment income, interest and principal payments on intercompany debt with Belmont Holdings GX, Inc., and reimbursement for equity awards granted to employees of Belmont Holdings GX, Inc.

and Penn-America Underwriters, LLC.

Penn-America Underwriters, LLC consists of three insurance agencies, two insurance service companies, and one service company whose current short-term and long-term liquidity needs include but are not limited to the payment of corporate expenses, operating expenses, capital expenditures in developing information technology platforms, and payment for equity awards granted to its employees by Global Indemnity Group, LLC.

In order to meet its current short-term and long-term needs, its principal sources of cash include fees from third parties, commissions / service fees from Belmont Holdings GX, Inc., and capital contributions from Global Indemnity Group, LLC.

and Katalyx Holdings LLC.

Katalyx Holdings LLC includes four insurance agencies, three insurance service companies, and one service company whose current short-term and long-term liquidity needs include but are not limited to the payment of corporate expenses, operating expenses, capital expenditures in developing and integrating information technology platforms and operations, and payment for equity awards granted to its employees by Global Indemnity Group, LLC.

In order to meet its current short-term and long-term needs, its principal sources of cash include fees from third parties, commissions / service fees from Belmont Holdings GX, Inc., commissions from third parties, and capital contributions from Global Indemnity Group, LLC.

Belmont Holdings GX, Inc.’s current short-term and long-term liquidity needs include but are not limited to the payment of corporate expenses, payment of interest and principal on intercompany debt, and payment for equity awards granted to its employees by Global Indemnity Group, LLC.

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The insurance companies’ current short-term and long-term liquidity needs include but are not limited to the payment of claims, commissions, operating expenses, federal taxes, and dividends.

Its principal sources of funds include cash from direct and assumed business written, investment income, and proceeds from sales and maturities of investments.

Their principal sources of funds include cash from direct and assumed business written, investment income, and proceeds from sales and maturities of investments.

The Company continuously reviews and assesses the short-term and long-term needs of each of its holding companies, service companies, and insurance companies.

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Key differences relate to, among other items, deferred acquisition costs, limitations on deferred income taxes, reserve calculation assumptions and surplus notes.

See Note 21 of the notes to the consolidated financial statements in Item 8 of Part II of the Company’s 2024 Annual Report on Form 10-K for further information on

dividend limitations related to the insurance companies.

Extraordinary dividends of $100.0 million, in aggregate, were declared by the Company's insurance subsidiaries for distribution to Belmont Holdings GX, Inc.

See Note 21 of the notes to the consolidated financial statements in Item 8 of Part II of the Company’s 2024 Annual Report on Form 10-K for further information on dividend limitations related to the insurance companies.

Extraordinary dividends of $100.0 million, in aggregate, were

declared by the Company's insurance subsidiaries for distribution to Belmont Holdings GX, Inc.

in June 2025.

The dividends by the Company’s insurance subsidiaries were approved by the respective departments of insurance in Pennsylvania, Indiana and Virginia in July 2025.

These dividends will be paid in the third quarter of 2025.

These dividends were paid in the third quarter of 2025.

Sources of operating cash consist primarily of net written premiums and investment income which are used to pay claims, underwriting expenses and corporate expenses.

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Funds may be used to pay distributions to the Company’s shareholders.

Net cash provided by operating activities was $9.4 million and $36.9 million for the six months ended June 30, 2025 and 2024, respectively, consisting of the following:

Six Months Ended

Net cash provided by operating activities was $15.1 million and $52.3 million for the nine months ended September 30, 2025 and 2024, respectively, consisting of the following:

Nine Months Ended

September 30,

(Dollars in thousands)

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Net investment income

Net federal income taxes paid

Net income taxes paid

Interest paid

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See the consolidated statements of cash flows in the consolidated financial statements in Item 1 of Part I of this report for details concerning the Company’s investing and financing activities.

The Board of Directors approved quarterly distribution payments of $0.35 per common share to all shareholders of record on the close of business on March 21, 2025 and June 20, 2025.

Distributions paid to common shareholders were $10.0 million during the six months ended June 30, 2025.

In addition, distributions of $0.2 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the six months ended June 30, 2025.

The Board of Directors approved quarterly distribution payments of $0.35 per common share to all shareholders of record on the close of business on March 21, 2025, June 20, 2025 and September 29, 2025.

Distributions paid to common shareholders were $10.0 million during the nine months ended September 30, 2025.

The distribution declared on September 29, 2025 for $5.0 million was paid on October 6, 2025.

In addition, distributions of $0.3 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the nine months ended September 30, 2025.

Investment Portfolio

On July 31, 2023, the Company provided the Global Debt Fund, LP with a formal withdrawal request to fully redeem the partnership interest.

Partial redemption proceeds of $4.4 million were received during the quarter and six months ended June 30, 2025.

The Global Debt Fund, LP had a fair market value of $12.5 million at June 30, 2025.

Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s liquidity during the quarter and six months ended June 30, 2025.

Partial redemption proceeds of $4.7 million and $9.2 million were received during the quarter and nine months ended September 30, 2025, respectively.

The Global Debt Fund, LP had a fair market value of $9.6 million at September 30, 2025.

Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s liquidity during the quarter and nine months ended September 30, 2025.

Please see Item 7 of Part II in the Company’s 2024 Annual Report on Form 10-K for information regarding the Company’s liquidity.

Capital Resources

There have been no material changes to the Company’s capital resources during the quarter and six months ended June 30, 2025.

There have been no material changes to the Company’s capital resources during the quarter and nine months ended September 30, 2025.

Please see Item 7 of Part II in the Company’s 2024 Annual Report on Form 10-K for information regarding the Company’s capital resources.

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Forward-looking statements are statements that are not historical facts.

These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of identified transactions or natural disasters, and statements about the future performance, operations, products and services of the companies.

These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of identified transactions or natural disasters, and statements about the future, including future performance, operations, products and services of the companies.

The forward-looking statements contained in this report are primarily based on the Company’s current expectations and projections about future events and trends that it believes may affect the Company’s business, financial condition, results of operations, prospects, business strategy and financial needs.

The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, including, but not limited to, the impact of legislative or regulatory actions, the impact of natural or man-made disasters, the sufficiency of the Company’s reserves, the impact of emerging claims issues, adverse capital market developments impacting investment performance, ability to effectively start-up or integrate new product opportunities, adverse effect of cyber-attacks, and other factors described in the section captioned “Risk Factors” in Item 1A of Part I in the Company’s 2024 Annual Report on Form 10-K.

The outcome of the events described in these forward-looking statements, such as the Company’s ability to execute on its strategy following its corporate reorganization, is subject to risks, uncertainties, assumptions, including, but not limited to, the impact of legislative or regulatory actions, the impact of natural or man-made disasters, the sufficiency of the Company’s reserves, the impact of emerging claims issues, adverse capital market developments impacting investment performance, ability to effectively start-up or integrate new product opportunities, such as the ability to successfully integrate and develop acquired businesses and to establish a reinsurance managing general agency, adverse effect of cyber-attacks, and other factors described in the section captioned “Risk Factors” in Item 1A of Part I in the Company’s 2024 Annual Report on Form 10-K.

These risks are not exhaustive, and new risks and uncertainties emerge from time to time.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis