What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-10-31 · 160 added, 239 removed, 207 unchanged (66% of the section changed)

4 unchanged sentences

For more information regarding the Company’s business and operations, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

In the first quarter of 2025, the Company realigned the composition of its reportable segments to reflect changes in how the Company now manages its operations.

The Company changed the level at which its chief operating decision maker (“CODM”), the Chief Executive Officer of Global Indemnity Group, LLC, regularly reviews operating results and allocate resources to now include Agency and Insurance Services.

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

• 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.

• Belmont Insurance Companies - Non-Core (“Belmont Non-Core”) , previously known as the Non-Core Operations segment, consists of insurance company operations for lines of business that have been de-emphasized or are no longer being written.

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 nine months ended September 30, 2024 have been recast to conform to the new reportable segments.

Financial Highlights

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 $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.

• 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;

2026 First Quarter Results of Operations

• Current accident year underwriting income was $5.5 million for 2026 compared to a current accident year underwriting loss of $10.3 million for the same period in 2025.

The current accident year underwriting loss for 2025 includes net losses and loss adjustment expenses related to California Wildfire events in January 2025 ("California Wildfires") totaling $15.6 million.

Excluding California Wildfires in 2025, the current accident year underwriting income increased 4.0% from $5.3 million in 2025 to $5.5 million in 2026.

o Current accident year combined ratio was 94.9% in 2026 compared to 111.5% for the same period in 2025.

Excluding California Wildfires, the current accident year combined ratio would have been 94.8% in 2025.

• Excluding California Wildfires in 2025, calendar year underwriting income increased from $5.1 million in 2025 to $5.3 million for 2026.

o Calendar year combined ratio was 95.1% in 2026 compared to 111.7% for the same period in 2025.

Excluding California Wildfires, the calendar year combined ratio would have been 95.0% in 2025.

• Gross written premiums were $96.5 million in 2026 compared to $98.7 million for the same period in 2025.

• Net earned premiums grew 5.4% to $98.4 million in 2026 from $93.3 million in 2025.

• Net investment income decreased to $12.2 million in 2026 from $14.8 million in 2025 attributable to a $1.9 million reduction in income from investments in limited partnerships (the Company expects a full recovery to be recorded in the 2 nd quarter of 2026) and $0.6 million reduction in investment income on the fixed maturities portfolio due to an increase in allocation to U.S.

• Net income of $4.2 million, or $0.29 per share diluted, in 2026 compared to net loss of $4.0 million, or ($0.30) per share diluted, for the same period in 2025.

Excluding California Wildfires, net income would have been $8.2 million or $0.58 per share in 2025.

2026 First Quarter Consolidated Financial Condition

• Total cash and investments of $1.4 billion at March 31, 2026 and December 31, 2025;

fixed maturities and cash comprise 98% of total investments.

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

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

• Total assets of $1.7 billion at March 31, 2026 and December 31, 2025.

• No debt at March 31, 2026 and December 31, 2025.

• Since the Company's initial public offering in 2003, the total capital returned to shareholders was $654.6 million, comprising $522.2 million of share repurchases and $132.4 million of distributions / dividends.

This includes $5.1 million of distributions during 2026.

• 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.

• Shareholders' equity was $704.1 million at March 31, 2026 compared to $706.6 million at December 31, 2025.

• Book value per common share was $47.92 at March 31, 2026 compared to $48.96 at December 31, 2025.

Results of Operations

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

The following table summarizes the Company’s results for the quarters ended March 31, 2026 and 2025:

Quarters Ended

September 30,

Nine Months Ended

September 30,

(Dollars in thousands)

2 unchanged sentences

Net earned premiums

Total revenues

Segment revenues

Losses and expenses:

Net losses and loss adjustment expenses

Acquisition costs and other underwriting expenses

Underwriting income (loss)

Acquisition costs and other operating expenses (1)

Segment income (loss)

Net investment income

1 unchanged sentence

Corporate expenses

Income before income taxes

Income tax expense

Income (loss) before income taxes

Income tax (expense) benefit

Net income (loss)

Underwriting Ratios:

3 unchanged sentences

NM - not meaningful

(1) Includes third-party distribution expenses of $1.1 million in 2026.

There were no third-party distribution expenses in 2025.

(2) 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) The expense ratio is a GAAP financial measure that is calculated by dividing the sum of acquisition costs and other underwriting expenses by net earned premiums.

(3) The expense ratio is a GAAP financial measure that is calculated by dividing the sum of acquisition costs and other operating expenses excluding distribution expenses by net earned premiums.

(4) The combined ratio is a GAAP financial measure and is the sum of the Company’s loss and expense ratios.

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

Quarters Ended September 30,

Belmont Non-Core

(Dollars in thousands)

Direct written premiums (1)

Assumed written premiums (2)

Gross written premiums (3)

Net written premiums (4)

Nine Months Ended September 30,

Quarters Ended March 31,

Belmont Non-Core

(Dollars in thousands)

Direct written premiums (1)

Assumed written premiums (2)

Gross written premiums (1)

Net written premiums (2)

(1) Direct written premiums represent the amount received or to be received for insurance policies written, without reduction for reinsurance costs, ceded premiums or other deductions.

(2) Assumed written premiums represent the amount received or to be received for assumed reinsurance treaties, without reduction for reinsurance costs, ceded premiums or other deductions.

(1) Gross written premiums equal the sum of direct and assumed written premiums.

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

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 September 30,

Nine Months Ended September 30,

Gross written premiums for Belmont Core decreased 1.9%:

Quarters Ended March 31,

(Dollars in thousands)

1 unchanged sentence

Vacant Express

Direct written premiums excluding specialty products

Specialty Products

Total direct written premiums

• 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 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 September 30,

Nine Months Ended September 30,

(Dollars in thousands)

Belmont Non-Core

Total assumed written premiums

• 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.

Assumed Reinsurance

Total gross written premiums

• Wholesale Commercial gross written premiums declined 5.2% during the first quarter of 2026 as the Company maintained its pricing and return standards amidst competitive market conditions, particularly as regards property rate reductions.

Wholesale Commercial’s property rate change was flat for the first quarter of 2026.

• Vacant Express and Collectibles' direct written premiums grew by 4.9% and 12.6%, respectively.

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

• Direct written premiums for Specialty Products grew by 2.4% due to new products and organic growth from existing products partially offset by a decline in premiums for products terminated in 2025 due to not meeting profitability expectations.

• Belmont Core's assumed business grew to $11.2 million for the quarter ended March 31, 2026 from $10.9 million for the same period in 2025 due to new treaties incepting during 2025 and 2026 and organic growth from existing treaties.

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

Underwriting Income (Loss)

Segment Income (Loss)

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

Quarters Ended September 30,

Agency and Insurance Services

Belmont Non-Core

(Dollars in thousands)

Net earned premiums

Commission and service fee income (1)

Policy and installment fee income

Total revenues

Losses and expenses:

Net losses and loss adjustment expenses

Net commission expenses

Other underwriting expenses

Total losses and expenses

Underwriting income (loss)

Underwriting Ratios:

Current accident year

Prior accident year

Calendar year loss ratio

Expense ratio

Combined ratio

Accident year combined ratio

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

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 $0.6 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.

Nine Months Ended September 30,

Quarters Ended March 31,

Agency and Insurance Services

8 unchanged sentences

Net commission expenses

Other underwriting expenses

Other operating expenses (1)

Total losses and expenses

Underwriting income (loss)

Segment income (loss)

Underwriting Ratios:

5 unchanged sentences

Accident year combined ratio

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

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 $1.6 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) Other operating expenses consist primarily of personnel expenses and general operating expenses related to underwriting and distribution activities.

Agency and Insurance Services segment

Agency and Insurance Services' segment loss was $0.4 million for the quarter ended March 31, 2026 compared to segment income of $1.8 million for the same period in 2025.

• Direct written premiums produced for Belmont Core was $80.1 million and $87.5 million for the quarters ended March 31, 2026 and 2025, respectively.

Commission income on premiums produced for Belmont Core was $9.5 million and $10.6 million for the quarters ended March 31, 2026 and 2025, respectively, and service fee income for technology and claims services provided to Belmont Core and Non-Core segments was $2.9 million and $3.5 million for the quarters ended March 31, 2026 and 2025, respectively.

These amounts are eliminated in the Company's Consolidated Financial Statements.

• Third-party commission and service fee income of $0.4 million for the quarter ended March 31, 2026.

There was no third-party commission and service fee income for the quarter ended March 31, 2025.

• Policy and installment fee income was $0.5 million and $0.4 million during the quarters ended March 31, 2026 and 2025, respectively.

• Other operating expenses increased $1.0 million to $13.6 million for the quarter ended March 31, 2026 compared to $12.6 million for the same period in 2025 primarily due to $1.1 million in third-party distribution expenses.

There were no third-party distribution expenses in the first quarter of 2025.

Belmont Core segment

Belmont Core's segment income increased 145.3% to $5.2 million for the quarter ended March 31, 2026 compared to a segment loss of $11.6 million for the same period in 2025.

Excluding California Wildfires losses of $15.6 million in 2025, Belmont Core's segment income increased from $4.0 million for the quarter ended March 31, 2025 to $5.2 million for the quarter ended March 31, 2026.

The current accident year combined ratio improved 17.8 points to 94.7% for quarter ended March 31, 2026 from 112.5% for the same period in 2025 mainly due to the California Wildfires which impacted the combined ratio by 16.9 points in 2025.

• Net earned premiums within the Belmont Core segment increased by 6.6% to $98.4 million for the quarter ended March 31, 2026 compared to $92.3 million for the same period in 2025.

Property net earned premiums were $39.3 million and $37.7 million for the quarters ended March 31, 2026 and 2025, respectively.

Casualty net earned premiums were $59.1 million and $54.6 million for the quarters ended March 31, 2026 and 2025, respectively.

• The current accident year loss ratio improved by 16.8 points to 55.2% for the quarter ended March 31, 2026 compared to 72.0% for the same period in 2025 primarily driven by an improvement in the catastrophe loss ratio.

The California Wildfires impacted the 2025 current accident year loss ratio by 16.9 points.

• Net losses and loss adjustment expenses related to prior accident years was less than $0.1 million for the quarters ended March 31, 2026 and 2025.

The current accident year net losses and loss adjustment expenses and loss ratio are summarized as follows:

Quarters Ended

September 30,

Quarters Ended

September 30,

(Dollars in thousands)

Non-catastrophe

Total property

Total accident year

• 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)

Property losses

3 unchanged sentences

Total accident year losses

• 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,

• The current accident year non-catastrophe property loss ratio was 43.3% for the quarter ended March 31, 2026 compared to 45.3% for the same period in 2025, an improvement of 2.0 points, driven by lower claims frequency.

• The current accident year catastrophe net losses and loss adjustment expenses decreased to $2.2 million for the quarter ended March 31, 2026 compared to $17.9 million for the same period in 2025 which included $15.6 million of catastrophe losses related to the California Wildfires.

Excluding California Wildfires in 2025, the current accident year catastrophe loss ratio improved from 6.0% for the quarter ended March 31, 2025 to 5.6% for the quarter ended March 31, 2026.

• The current accident year casualty loss ratio increased by 1.7 points during the quarter ended March 31, 2026 mainly driven by a change in mix of business.

The following table summarizes the components of the expense ratio:

Quarters Ended March 31,

Net commission expenses

1 unchanged sentence

Expense Ratio

• 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.

• Reduction in net commission expense ratio is primarily due to a change in mix of business, and effective February 1, 2026, the distribution of Specialty Products is managed directly by Belmont Core.

Belmont Non-Core segment

Belmont Non-Core segment comprises lines of business that have been de-emphasized or are no longer being written.

Belmont Non-Core recognized a segment loss of $0.3 million and $0.7 million during the quarters ended March 31, 2026 and 2025, respectively.

Net investment income

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.

Net investment income decreased 17.3% to $12.2 million for the quarter ended March 31, 2026 from $14.8 million for the same period in 2025.

Quarters 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 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:

• Net investment income from the Company’s fixed maturities portfolio decreased by 7.9% for the quarter ended March 31, 2026 as compared to the same period in 2025 primarily due to a lower average yield in 2026 as compared to 2025 due to an increase in allocation to U.S.

• Net investment income from equities increased by $0.5 million to $0.6 million for the quarter ended March 31, 2026 as compared to the same period in 2025 primarily driven by the Company's $25 million investment in common equities during the third quarter of 2025.

• Income from limited partnerships decreased by $1.9 million for the quarter ended March 31, 2026 which was attributable to the decline in market value in one of the Company's limited partnership investments during the first quarter of 2026.

We expect a full recovery related to this investment to be recorded in the second quarter of 2026.

The Company's fixed maturities portfolio continues to maintain high quality with an AA- average rating, duration of 1.0 years, 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 September 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 0.4 years as of March 31, 2026 compared with 0.5 years as of December 31, 2025.

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

1 unchanged sentence

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:

The components of net realized investment gains (losses) for the quarters ended March 31, 2026 and 2025 were as follows:

Quarters Ended

September 30,

Nine Months Ended

September 30,

(Dollars in thousands)

2 unchanged sentences

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.

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 ended March 31, 2026 and 2025.

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 $1.9 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 $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 $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.

Corporate expenses decreased $0.5 million to $9.0 million for the quarter ended March 31, 2026 from $9.5 million for the same period in 2025 primarily due to a reduction in professional and advisory fees partially offset by an increase in severance related compensation.

Income Tax Expense (Benefit)

Income tax expense was $1.3 million on net income before tax of $5.5 million for the quarter ended March 31, 2026.

This compares to income tax benefit of $1.1 million on net loss before tax of $5.1 million for the same period in 2025.

See Note 5 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 $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.

Net Income (Loss)

The Company had net income of $4.2 million during the quarter ended March 31, 2026 compared to net loss of $4.0 million for the same period in 2025.

Amounts recorded for unpaid losses and loss adjustment expenses represent management’s best estimate at March 31, 2026.

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 $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.

This resulted in carried gross reserves of $747.1 million and $750.2 million as of March 31, 2026 and December 31, 2025, respectively, and net reserves of $684.4 million and $689.3 million as of March 31, 2026 and December 31, 2025, respectively.

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

September 30, 2025

March 31, 2026

Gross Reserves

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

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:

The following table, which the

Company believes reflects a reasonable range of variability around its best estimate based on historical loss 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 $53.9 million for claims occurring during the quarter ended March 31, 2026:

Severity Change

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Frequency Change

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.

The Company’s net reserves for losses and loss adjustment expenses of $684.4 million as of March 31, 2026 relate to multiple accident years.

Therefore, the impact of changes in loss 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

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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 September 30,

Nine Months Ended September 30,

Quarters Ended March 31,

(Dollars in thousands)

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Net losses and loss adjustment expenses

Non catastrophe property excluding the effect of prior accident year (1)

Effect of prior accident year

Property - Belmont Core

Non catastrophe property (1)

Catastrophe excluding the effect of prior accident year (1)

Effect of prior accident year

Non catastrophe property excluding the effect of prior accident year (2)

Catastrophe (1)

Total property excluding the effect of prior accident year (1)

Effect of prior accident year

Catastrophe excluding the effect of prior accident year (2)

Total property (1)

Total casualty excluding the effect of prior accident year (1)

Effect of prior accident year

Total property excluding the effect of prior accident year (2)

Casualty - Belmont Core

Total casualty (1)

Total property and casualty excluding the effect of prior accident year (1)

Effect of prior accident year

Total casualty excluding the effect of prior accident year (2)

Total - Belmont Core

Total property and casualty (1)

(1) Non-GAAP financial measure / ratio.

Effect of prior accident year

Total property and casualty excluding the effect of prior accident year (2)

(1) Most directly comparable GAAP measure / ratio.

(2) Non-GAAP financial measure / ratio.

Reconciliation of non-GAAP financial measures and ratios continued

Nine Months Ended

September 30,

Quarters Ended March 31,

(Dollars in thousands)

Current accident year underwriting income excluding California Wildfires

Underwriting income (1)

Consolidated current accident year underwriting income excluding California Wildfires

Underwriting income (loss) (1)

Effect of prior accident year (5)

Current accident year underwriting income (2)

Current accident year underwriting income (loss) (2)

California Wildfires net losses and loss adjustment expenses

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Net income excluding California Wildfires

Net income (1)

Net income (loss) (1)

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

Net income excluding California Wildfires (2)

Underwriting income excluding California Wildfires net losses and loss adjustment expenses

Underwriting income (1)

Consolidated calendar year underwriting income (loss) excluding California Wildfires net losses and loss adjustment expenses

Underwriting income (loss) (1)

California Wildfires net losses and loss adjustment expenses

Underwriting income excluding California Wildfires (2)

Current accident year catastrophe net losses and loss adjustment expenses excluding California Wildfires

Current accident year catastrophe net losses and loss adjustment expenses (4)

California Wildfires net losses and loss adjustment expenses

Current accident year catastrophe net losses and loss adjustment expenses excluding California Wildfires (2)

Current accident year combined ratio excluding California Wildfires

Belmont Core segment income excluding California Wildfires

Belmont Core segment income (loss) (1)

Impact of California Wildfires

Belmont Core segment income excluding California Wildfires (2)

Consolidated current accident year combined ratio excluding California Wildfires

Combined ratio (1)

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Current accident year combined ratio excluding California Wildfires (2)

Current accident year catastrophe loss ratio excluding California Wildfires (2)

Current accident year catastrophe loss ratio (4)

Consolidated calendar year combined ratio excluding California Wildfires

Combined ratio (1)

Impact of California Wildfires

Current accident year catastrophe loss ratio excluding California Wildfires (2)

Calendar year combined ratio excluding California Wildfires (2)

Belmont Core current accident year catastrophe loss ratio excluding California Wildfires

Belmont Core current accident year catastrophe loss ratio (4)

Impact of California Wildfires

Belmont Core current accident year catastrophe loss ratio excluding California Wildfires (2)

(1) Most directly comparable GAAP measure / ratio.

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(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.

(5) Includes prior accident year adjustments for net losses and loss adjustment expenses and net commission expenses.

Critical Accounting Estimates and Policies

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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 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.

Katalyx Holdings LLC includes four agencies, three specialized insurance service businesses, and one service company.

Collectively, 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, federal and state taxes, 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 commissions and fees from third parties, commissions / service fees from Belmont Holdings GX, Inc., 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, federal and state taxes, 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 dividends from insurance company subsidiaries and investment income.

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.

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 and state taxes, and dividends.

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.

In addition, the Company periodically reviews opportunities related to business acquisitions and as a result, liquidity needs may arise in the future.

In addition, the Company periodically reviews opportunities related to business acquisitions and the incubation and launch of new products and services.

As a result, liquidity needs may arise in the future.

Belmont Holdings GX, Inc.

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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.

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 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.

See Note 19 of the notes to the consolidated

financial statements in Item 8 of Part II of the Company’s 2025 Annual Report on Form 10-K for further information on dividend limitations related to the insurance companies.

There were no dividends declared by the Company's insurance subsidiaries during the quarter ended March 31, 2026.

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

Operating cash flows are generally used for investing and financing activities.

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

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,

Net cash provided by (used for) operating activities was $17.9 million and $2.4 million for the quarters ended March 31, 2026 and 2025, respectively, consisting of the following:

Quarters Ended March 31,

(Dollars in thousands)

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Net losses and loss adjustment expenses paid

Underwriting and corporate expenses

Operating and corporate expenses

Net investment income

Net income taxes paid

Interest paid

Net cash provided by operating activities

• The decline in cash flows of $37.2 million in 2025 compared to the same period in 2024 is primarily driven by an increase in current accident year catastrophe property net losses and loss adjustment expenses paid and increase in prior accident year casualty net losses and loss adjustment expenses paid from the Belmont Non-Core Casualty lines of business.

The reconciliation of net income to net cash provided by operating activities is generally influenced by the following:

Income tax refund received

Net cash provided by (used for) operating activities

The decrease in cash flows of $20.3 million in 2026 compared to the same period in 2025 consists of:

• $11 million from non-investment cashflows driven by (i) decline in cash from premiums on discontinued assumed reinsurance and discontinued specialty product business and (ii) operating expenses due to higher severance and bonus related compensation, higher contingent commissions, and capital outlays for the Company’s multi-year investment to develop a proprietary cloud-hosted, multi-tenant platform for its property and casualty insurance products offset partially by a decline in net losses and loss adjustment expenses mainly driven by California Wildfires in 2025.

• $9 million from investment income mainly due to the timing of maturities on its U.S.

Treasury bills.

The reconciliation of net income to net cash provided by (used for) operating activities is generally influenced by the following:

• the timing of the Company’s collection of premiums and payment of commissions;

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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, 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.

The Board of Directors approved a quarterly distribution payment of $0.35 per common share to all shareholders of record on the close of business on March 20, 2026.

Distributions paid to common shareholders were $5.0 million during the quarter ended March 31, 2026.

In addition, distributions of $0.1 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the quarter ended March 31, 2026.

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 $4.7 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.

Partial redemption proceeds of $4.9 million were received during the quarter ended March 31, 2026.

The Global Debt Fund, LP had a fair market value of $2.4 million at March 31, 2026.

Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s liquidity during the quarter ended March 31, 2026.

Please see Item 7 of Part II in the Company’s 2025 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 nine months ended September 30, 2025.

There have been no material changes to the Company’s capital resources during the quarter ended March 31, 2026.

Please see Item 7 of Part II in the Company’s 2025 Annual Report on Form 10-K for information regarding the Company’s capital resources.

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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, 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.

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 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 2025 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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There have been no material changes to the Company’s market risk since December 31, 2025.

The Company’s investment grade fixed income portfolio continues to maintain high quality with an AA- average rating and a duration of 1.1 years.

The Company’s fixed income portfolio continues to maintain high quality with an AA- average rating and a duration of 1.0 years.

Please see Item 7A of Part II in the Company’s 2025 Annual Report on Form 10-K for information regarding the Company’s market risk.

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