Global Indemnity Group, LLC 10-Q

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes of the Company included elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to the Company’s plans and strategy, constitutes forward-looking statements that involve risks and uncertainties. Please see "Cautionary Note Regarding Forward-Looking Statements" at the end of this Item 2 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein. 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. Financial Highlights 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. Treasuries. • 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 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 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. 27 Results of Operations The following table summarizes the Company’s results for the quarters ended March 31, 2026 and 2025: Quarters Ended March 31, % (Dollars in thousands) 2026 2025 Change Gross written premiums $ 96,450 $ 98,675 (2.3 %) Net written premiums $ 92,568 $ 95,864 (3.4 %) Net earned premiums $ 98,355 $ 93,316 5.4 % Other income 847 417 103.1 % Segment revenues 99,202 93,733 5.8 % Losses and expenses: Net losses and loss adjustment expenses 53,861 66,738 (19.3 %) Acquisition costs and other operating expenses (1) 40,763 37,507 8.7 % Segment income (loss) 4,578 (10,512 ) 143.6 % Net investment income 12,218 14,782 (17.3 %) Net realized investment gains (losses) (2,243 ) 136 NM Corporate expenses (9,038 ) (9,500 ) (4.9 %) Income (loss) before income taxes 5,515 (5,094 ) 208.3 % Income tax (expense) benefit (1,269 ) 1,105 214.8 % Net income (loss) $ 4,246 $ (3,989 ) 206.4 % Underwriting Ratios: Loss ratio (2) : 54.8 % 71.5 % Expense ratio (3) 40.3 % 40.2 % Combined ratio (4) 95.1 % 111.7 % 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. (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. Premiums The following table summarizes the change in premium volume by reportable segment: Quarters Ended March 31, Belmont Core Belmont Non-Core Total (Dollars in thousands) 2026 2025 2026 2025 2026 2025 Gross written premiums (1) $ 96,507 $ 98,389 $ (57 ) $ 286 $ 96,450 $ 98,675 Net written premiums (2) $ 92,625 $ 95,634 $ (57 ) $ 230 $ 92,568 $ 95,864 (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. 28 Gross written premiums for Belmont Core decreased 1.9%: Quarters Ended March 31, (Dollars in thousands) 2026 2025 % Change Wholesale Commercial $ 61,495 $ 64,884 (5.2 %) Vacant Express 11,452 10,922 4.9 % Collectibles 4,616 4,098 12.6 % Specialty Products 7,747 7,563 2.4 % Assumed Reinsurance 11,197 10,922 2.5 % Total gross written premiums $ 96,507 $ 98,389 (1.9 %) • 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. 29 Segment Income (Loss) The components of income (loss) from the Company’s reportable segments and corresponding underwriting ratios are as follows: Quarters Ended March 31, Agency and Insurance Services Belmont Core Belmont Non-Core Eliminations Total (Dollars in thousands) 2026 2025 2026 2025 2026 2025 2026 2025 2026 2025 Revenues: Net earned premiums $ — $ — $ 98,371 $ 92,260 $ (16 ) $ 1,056 $ — $ — $ 98,355 $ 93,316 Commission and service fee income 12,778 14,049 — — — — (12,390 ) (14,049 ) 388 — Policy and installment fee income 461 387 — — (2 ) 30 — — 459 417 Total revenues 13,239 14,436 98,371 92,260 (18 ) 1,086 (12,390 ) (14,049 ) 99,202 93,733 Losses and expenses: Net losses and loss adjustment expenses — — 54,304 66,452 (2 ) 619 (441 ) (333 ) 53,861 66,738 Net commission expenses — — 32,695 32,404 167 501 (9,524 ) (10,571.0 ) 23,338 22,334 Other operating expenses (1) 13,633 12,632 6,130 4,986 87 700 (2,425 ) (3,145 ) 17,425 15,173 Total losses and expenses 13,633 12,632 93,129 103,842 252 1,820 (12,390 ) (14,049 ) 94,624 104,245 Segment income (loss) $ (394 ) $ 1,804 $ 5,242 $ (11,582 ) $ (270 ) $ (734 ) $ — $ — $ 4,578 $ (10,512 ) Underwriting Ratios: Loss ratio: Current accident year 55.2 % 72.0 % 12.5 % 61.5 % 54.8 % 71.5 % Prior accident year — — — (2.9 %) — — Calendar year loss ratio 55.2 % 72.0 % 12.5 % 58.6 % 54.8 % 71.5 % Expense ratio 39.5 % 40.6 % (1,587.5 %) 113.7 % 40.3 % 40.2 % Combined ratio 94.7 % 112.6 % (1,575.0 %) 172.3 % 95.1 % 111.7 % Accident year combined ratio 94.7 % 112.5 % (381.3 %) 162.3 % 94.9 % 111.5 % (1) Other operating expenses consist primarily of personnel expenses and general operating expenses related to underwriting and distribution activities. 30 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. 31 The current accident year net losses and loss adjustment expenses and loss ratio are summarized as follows: Quarters Ended March 31, Quarters Ended March 31, (Dollars in thousands) 2026 2025 % Change 2026 2025 Point Change Property losses Non-catastrophe $ 17,012 $ 17,085 (0.4 %) 43.3 % 45.3 % (2.0 ) Catastrophe 2,200 17,867 (87.7 %) 5.6 % 47.4 % (41.8 ) Property losses 19,212 34,952 (45.0 %) 48.9 % 92.7 % (43.8 ) Casualty losses 35,092 31,467 11.5 % 59.4 % 57.7 % 1.7 Total accident year losses $ 54,304 $ 66,419 (18.2 %) 55.2 % 72.0 % (16.8 ) • 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, Point 2026 2025 Change Net commission expenses 33.3 % 35.2 % (1.9 ) Other underwriting expenses 6.2 % 5.4 % 0.8 Expense Ratio 39.5 % 40.6 % (1.1 ) • 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. 32 Net investment income 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 March 31, (Dollars in thousands) 2026 2025 Change Fixed maturities $ 13,593 $ 14,752 $ (1,159 ) Equities 587 116 471 Limited partnerships (1,962 ) (86 ) (1,876 ) Net investment income $ 12,218 $ 14,782 $ (2,564 ) • 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. Treasuries. • 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) March 31, 2026 December 31, 2025 Structured bonds (1) $ 396,802 $ 393,156 Other fixed maturities 251,497 291,717 U.S. treasuries 675,263 640,629 Total fixed maturities $ 1,323,562 $ 1,325,502 (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 0.4 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. Changes in interest rates can cause principal payments on structured bonds to extend or shorten which can impact duration. Net Realized Investment Gains (Losses) The components of net realized investment gains (losses) for the quarters ended March 31, 2026 and 2025 were as follows: Quarters Ended March 31, (Dollars in thousands) 2026 2025 Equity securities $ (2,264 ) $ 123 Fixed maturities 21 13 Net realized investment gains (losses) $ (2,243 ) $ 136 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. 33 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 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. 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. Reserves 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 $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: March 31, 2026 Gross Reserves Net Reserves (2) (Dollars in thousands) Case IBNR (1) Total Case IBNR (1) Total Belmont Core $ 155,526 $ 314,211 $ 469,737 $ 152,806 $ 305,830 $ 458,636 Belmont Non-Core 101,992 175,414 277,406 71,125 154,593 225,718 Total $ 257,518 $ 489,625 $ 747,143 $ 223,931 $ 460,423 $ 684,354 December 31, 2025 Gross Reserves Net Reserves (2) (Dollars in thousands) Case IBNR (1) Total Case IBNR (1) Total Belmont Core $ 153,062 $ 308,084 $ 461,146 $ 152,468 $ 300,278 $ 452,746 Belmont Non-Core 102,432 186,613 289,045 71,673 164,874 236,547 Total $ 255,494 $ 494,697 $ 750,191 $ 224,141 $ 465,152 $ 689,293 (1) Net losses and loss adjustment expenses incurred but not reported, including the expected future emergence of case reserves. (2) Does not include reinsurance receivables on paid net losses and loss adjustment expenses. Gross and net reserves related to Belmont Non-Core are declining as it services the run-off of policies/treaties on de-emphasized and terminated business. Each reserve category has an implicit frequency and severity for each accident year as a result of the various assumptions made. If the actual levels of frequency and severity are higher or lower than expected, the ultimate net losses and loss adjustment expenses will be different than management’s best estimate. For most of its reserve categories, the Company believes that frequency can be predicted with greater accuracy than severity. Therefore, the Company believes management’s best estimate is more likely influenced by changes in severity than frequency. The following table, which the 34 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 (Dollars in thousands) -10% -5% 0% 5% 10% Frequency Change -5% (7,810 ) (5,251 ) (2,693 ) (135 ) 2,424 -3% (6,840 ) (4,228 ) (1,616 ) 996 3,609 -2% (6,356 ) (3,716 ) (1,077 ) 1,562 4,201 -1% (5,871 ) (3,205 ) (539 ) 2,128 4,794 0% (5,386 ) (2,693 ) — 2,693 5,386 1% (4,901 ) (2,181 ) 539 3,259 5,979 2% (4,417 ) (1,670 ) 1,077 3,824 6,571 3% (3,932 ) (1,158 ) 1,616 4,390 7,164 5% (2,962 ) (135 ) 2,693 5,521 8,348 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. 35 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 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 March 31, 2026 2025 (Dollars in thousands) Net losses and loss adjustment expenses Loss Ratio Net losses and loss adjustment expenses Loss Ratio Property - Belmont Core Non catastrophe property (1) $ 16,984 43.2 % $ 16,649 44.2 % Effect of prior accident year 28 0.1 % 436 1.1 % Non catastrophe property excluding the effect of prior accident year (2) $ 17,012 43.3 % $ 17,085 45.3 % Catastrophe (1) $ 2,207 5.6 % $ 17,990 47.7 % Effect of prior accident year (7 ) — (123 ) (0.3 %) Catastrophe excluding the effect of prior accident year (2) $ 2,200 5.6 % $ 17,867 47.4 % Total property (1) $ 19,191 48.8 % $ 34,639 91.9 % Effect of prior accident year 21 0.1 % 313 0.8 % Total property excluding the effect of prior accident year (2) $ 19,212 48.9 % $ 34,952 92.7 % Casualty - Belmont Core Total casualty (1) $ 35,113 59.4 % $ 31,813 58.3 % Effect of prior accident year (21 ) — (346 ) (0.6 %) Total casualty excluding the effect of prior accident year (2) $ 35,092 59.4 % $ 31,467 57.7 % Total - Belmont Core Total property and casualty (1) $ 54,304 55.2 % $ 66,452 72.0 % Effect of prior accident year — — (33 ) — Total property and casualty excluding the effect of prior accident year (2) $ 54,304 55.2 % $ 66,419 72.0 % (1) Most directly comparable GAAP measure / ratio. (2) Non-GAAP financial measure / ratio. 36 Reconciliation of non-GAAP financial measures and ratios continued Quarters Ended March 31, (Dollars in thousands) 2026 2025 Consolidated current accident year underwriting income excluding California Wildfires Underwriting income (loss) (1) $ 5,323 $ (10,512 ) Effect of prior accident year (5) 159 184 Current accident year underwriting income (loss) (2) 5,482 (10,328 ) California Wildfires net losses and loss adjustment expenses — 15,600 Current accident year underwriting income excluding California Wildfires (2) $ 5,482 $ 5,272 Net income excluding California Wildfires Net income (loss) (1) $ 4,246 $ (3,989 ) California Wildfires net losses and loss adjustment expenses (net of tax) (3) — 12,216 Net income excluding California Wildfires (2) $ 4,246 $ 8,227 Consolidated calendar year underwriting income (loss) excluding California Wildfires net losses and loss adjustment expenses Underwriting income (loss) (1) $ 5,323 $ (10,512 ) California Wildfires net losses and loss adjustment expenses — 15,600 Underwriting income excluding California Wildfires (2) $ 5,323 $ 5,088 Belmont Core segment income excluding California Wildfires Belmont Core segment income (loss) (1) $ 5,242 $ (11,582 ) Impact of California Wildfires — 15,600 Belmont Core segment income excluding California Wildfires (2) $ 5,242 $ 4,018 Consolidated current accident year combined ratio excluding California Wildfires Combined ratio (1) 95.1 % 111.7 % Effect of prior accident year (5) (0.2 %) (0.2 %) Current accident year combined ratio (2) 94.9 % 111.5 % Impact of California Wildfires — (16.7 %) Current accident year combined ratio excluding California Wildfires (2) 94.9 % 94.8 % Consolidated calendar year combined ratio excluding California Wildfires Combined ratio (1) 95.1 % 111.7 % Impact of California Wildfires — (16.7 %) Calendar year combined ratio excluding California Wildfires (2) 95.1 % 95.0 % Belmont Core current accident year catastrophe loss ratio excluding California Wildfires Belmont Core current accident year catastrophe loss ratio (4) 5.6 % 47.4 % Impact of California Wildfires — (41.4 %) Belmont Core current accident year catastrophe loss ratio excluding California Wildfires (2) 5.6 % 6.0 % (1) Most directly comparable GAAP measure / ratio. (2) Non-GAAP financial measure / ratio. (3) Represents net losses and loss adjustment expenses of $15.6 million less tax benefit of $3.4 million. (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. 37 Critical Accounting Estimates and Policies The Company’s consolidated financial statements are prepared in conformity with GAAP, which require it to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. The most critical accounting policies involve significant estimates and include those used in determining the liability for unpaid losses and loss adjustment expenses, recoverability of reinsurance receivables, investments, fair value measurements, goodwill and intangible assets, deferred acquisition costs, and taxation. For a detailed discussion on each of these policies, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to any of these policies or underlying methodologies during the current year. Liquidity and Capital Resources Sources and Uses of Funds Global Indemnity Group, LLC is a holding company. 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) 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, capital contributions to subsidiaries, 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 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 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 the incubation and launch of new products and services. As a result, liquidity needs may arise in the future. Belmont Holdings GX, Inc. is dependent on dividends from its insurance subsidiaries which are restricted by statute as to the amount of dividends that they may pay without the prior approval of regulatory authorities. The dividend limitations imposed by state laws are based on the statutory financial results of each insurance company that are determined by using statutory accounting practices that differ in various respects from accounting principles used in financial statements prepared in conformity with GAAP. See “Regulation - Statutory Accounting Principles” in Item 1 of Part I of the Company’s 2025 Annual Report on Form 10-K. Key differences relate to, among other items, deferred acquisition costs, limitations on deferred income taxes, reserve calculation assumptions and surplus notes. See Note 19 of the notes to the consolidated 38 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. Cash Flows 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 (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) 2026 2025 Change Net premiums collected $ 89,552 $ 108,751 $ (19,199 ) Net losses and loss adjustment expenses paid (60,409 ) (80,851 ) 20,442 Operating and corporate expenses (61,769 ) (49,498 ) (12,271 ) Net investment income 14,261 23,995 (9,734 ) Income tax refund received 501 — 501 Net cash provided by (used for) operating activities $ (17,864 ) $ 2,397 $ (20,261 ) 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; • the timing of the Company’s settlements with its reinsurers; and • the timing of the Company’s payments of net losses and loss adjustment expenses. 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. Liquidity 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 $4.9 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. 39 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 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. Off Balance Sheet Arrangements The Company has no off balance sheet arrangements. Cautionary Note Regarding Forward-Looking Statements Some of the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report are forward-looking statements within the meaning of Section 21E of the Security Exchange Act of 1934, as amended. These forward-looking statements reflect the Company’s current views as of the date of this report. 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, 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, 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. It is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. The Company cannot provide assurance that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. Forward-looking statements are inherently uncertain and investors are cautioned not to unduly rely upon such statements. The Company’s forward-looking statements speak only as of the date of this report or as of the date they were made. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. Item 3. QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial instrument as the result of changes in interest rates, equity prices, credit risk, illiquidity, foreign exchange rates and commodity prices. The Company’s consolidated balance sheets include the estimated fair values of assets that are subject to market risk. The Company’s primary market risks are interest rate risk and credit risks associated with investments in fixed maturities, equity price risk associated with investments in equity securities, and foreign exchange risk associated with premium received that is denominated in foreign currencies. The Company has no commodity risk. 40 There have been no material changes to the Company’s market risk since December 31, 2025. 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.