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Item 7. Management’s Discussion and Analysis

2026-03-03 compared with 2025-03-04 · 271 added, 340 removed, 775 unchanged (44% of the section changed)

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You should read this discussion and analysis together with our audited consolidated financial statements and related notes included elsewhere in this Form 10-K.

James River Group Holdings, Ltd.

is a Bermuda-based holding company.

We own and operate a group of specialty insurance companies with the objective of generating compelling returns on tangible equity while limiting underwriting and investment volatility.

James River Group Holdings, Inc.

owns and operates a group of specialty property and casualty insurance companies focused on underwriting small and middle market casualty risks within the U.S.

excess and surplus (“E&S”) lines market.

Our objective is to generate compelling returns on tangible common equity while limiting underwriting and investment volatility.

We seek to accomplish this by earning profits from insurance underwriting and generating meaningful risk-adjusted investment returns, while managing our capital.

For the year ended December 31, 2024, approximately 76.2% of our gross written premiums and 88.7% of our net written premiums from continuing operations originated from the U.S.

E&S lines market, which we believe puts us among the top three publicly traded insurers as ranked by highest concentrations of E&S risk.

For the year ended December 31, 2025, approximately 84.5% of our gross written premiums and 95.9% of our net written premiums originated from the U.S.

E&S lines market, which we believe puts us among the top publicly traded insurers as ranked by highest concentrations of E&S risk.

We also have a specialty admitted insurance business in the United States.

We intend to concentrate substantially all of our underwriting in casualty insurance, and for the year ended December 31, 2024, 96.3% of our gross written premiums from continuing operations were derived from casualty insurance.

We focus on writing business in specialty markets where our underwriters have particular expertise and where we have long-standing distribution relationships;

maintaining a strong balance sheet with appropriate reserves;

monitoring reinsurance recoverables carefully;

managing our investment portfolio actively without taking undue risk;

using technology to monitor trends in our business;

responding rapidly to market opportunities and challenges;

and actively managing our capital.

We intend to concentrate substantially all of our underwriting in casualty insurance, and for the year ended December 31, 2025, 96.7% of our gross written premiums were derived from casualty insurance.

We focus on writing business in specialty markets where our underwriters have particular expertise and where we have long-standing distribution relationships, maintaining a strong balance sheet with appropriate reserves, monitoring reinsurance recoverables carefully, managing our investment portfolio actively without taking undue risk, using technology to monitor trends in our business, responding rapidly to market opportunities and challenges, and actively managing our capital.

We report our continuing operations in three segments:

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The Excess and Surplus Lines segment distributes its products primarily through wholesale insurance brokers.

Members of our management team have participated in this market for over three decades and have long-standing relationships with the wholesale agents who place E&S lines accounts.

Members of our management team have participated in this market for over twenty years and have long-standing relationships with the wholesale agents who place E&S lines accounts.

The Excess and Surplus Lines segment produced 82.1% of our gross written premiums and 95.7% of our net written premiums for the year ended December 31, 2025.

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All of the Company’s U.S.-domiciled insurance subsidiaries are party to an intercompany pooling agreement that distributes the net underwriting results among the group companies based on their approximate pro-rata level of statutory capital and surplus to the total Company statutory capital and surplus.

Additionally, the Company’s U.S.-domiciled insurance subsidiaries were previously parties to intercompany quota share reinsurance agreements that in periods prior to January 1, 2018 ceded 70% of their premiums and losses to JRG Re, and from January 1, 2018 through December 31, 2021, ceded 70% of their premiums and losses to Carolina Re Ltd., a former wholly-owned subsidiary of James River Group (“Carolina Re”).

During 2022, Carolina Re commuted the outstanding obligations ceded under the intercompany quota-share reinsurance agreements back to the Company’s U.S.-based insurance subsidiaries with effect from January 1, 2022.

Carolina Re concluded all operations and was dissolved in December 2023.

During 2023, JRG Re commuted the outstanding obligations ceded under the intercompany quota share reinsurance agreements back to the Company's U.S.-based insurance subsidiaries with effect from January 1, 2023.

We report all segment information in this ‘‘Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ prior to the effects of intercompany reinsurance, consistent with the manner in which we evaluate the operating performance of our reportable segments.

Best Company financial strength rating for our group’s regulated insurance subsidiaries is “A-” (Excellent) with a negative outlook.

Best Company financial strength rating for our group’s insurance subsidiaries is “A-” (Excellent) with a negative outlook.

This rating reflects A.M.

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Best have an impact on the ability of our insurance subsidiaries to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that our subsidiaries receive.

We believe the “A-” (Excellent) ratings assigned to our insurance subsidiaries allow our subsidiaries to actively pursue relationships with the agents and brokers identified in their marketing plans.

We believe the “A-” (Excellent) ratings assigned to our insurance subsidiaries allow our Excess and Surplus Lines segment to actively pursue relationships with the agents and brokers identified in its marketing plans.

We discuss certain key metrics, described below, which we believe provide useful information about our business and the operational factors underlying our financial performance.

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We believe that the disclosure of underwriting profit by individual segment and of the Company as a whole is useful to investors, analysts, rating agencies and other users of our financial information in evaluating our performance because our objective is to consistently earn underwriting profits.

We evaluate the performance of our segments and allocate resources based primarily on underwriting profit.

We evaluate the performance of our segments and allocate resources based primarily on the potential for underwriting profit.

We define underwriting profit as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) less losses and loss adjustment expenses on business from continuing operations not subject to retroactive reinsurance accounting and other operating expenses.

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See “Underwriting Performance Ratios” for a reconciliation of underwriting ratios.

Accident year loss ratio , expressed as a percentage, is the ratio of losses and loss adjustment expenses for the current accident year (excluding development on prior accident year reserves) to net earned premiums for the current year (excluding ceded earned premium associated adverse development covers covering prior accident years and net earned premium adjustments on certain reinsurance treaties with reinstatement premiums associated with prior years).

Accident year loss ratio , expressed as a percentage, is the ratio of losses and loss adjustment expenses for the current accident year (excluding development on prior accident year reserves) to net earned premiums for the current year (excluding ceded earned premium associated with adverse development covers covering prior accident years and net earned premium adjustments on certain reinsurance treaties with reinstatement premiums associated with prior years).

Expense ratio , expressed as a percentage, is the ratio of other operating expenses net of gross fee income included in other income to net earned premiums.

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We believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance.

Adjusted net operating income is defined as income available to common shareholders excluding a) income (loss) from discontinued operations b) the impact of retroactive reinsurance accounting, c) net realized and unrealized gains (losses) on investments, d) certain non-operating expenses such as professional service fees related to certain lawsuits, various strategic initiatives, and the filing of registration statements for the offering of securities, e) severance costs associated with terminated employees, and f) deemed dividends recorded with the amendment of the Series A Preferred Shares.

Adjusted net operating income is defined as income available to common shareholders excluding a) income (loss) from discontinued operations, b) the impact of retroactive reinsurance accounting, c) net realized and unrealized gains (losses) on investments, d) certain non-operating expenses such as professional service fees related to certain lawsuits, various strategic initiatives, and the filing of registration statements for the offering of securities, e) severance costs associated with terminated employees, f) deemed dividends recorded with the amendment of the Series A Preferred Shares, and g) the one-time tax benefit from the Domestication for business interest expenses.

Adjusted net operating income is a non-GAAP measure and should not be viewed as a substitute for net income calculated in accordance with GAAP.

Our definition of adjusted net operating income may not be comparable to that of other companies.

“Reconciliation of Non-GAAP Measures” for a reconciliation of income available to common shareholders to adjusted net operating income.

See “Reconciliation of Non-GAAP Measures” for a reconciliation of income available to common shareholders to adjusted net operating income.

Tangible equity is defined as shareholders' equity plus mezzanine Series A Preferred Shares (as defined below) and the unrecognized deferred retroactive reinsurance gain less goodwill and intangible assets, net of amortization.

We believe tangible equity is a good measure to evaluate the strength of our balance sheet and to compare returns relative to this measure.

Key financial measures that we use to assess our longer term financial performance include the percentage growth in our tangible equity per share and our return on tangible equity.

Tangible equity is a non-GAAP measure and should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP.

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See “Reconciliation of Non-GAAP Measures” for a reconciliation of shareholders' equity to tangible equity.

Adjusted net operating return on tangible equity is defined as annualized adjusted net operating income expressed as a percentage of the average quarterly tangible equity balances in the respective period.

Tangible equity per share represents tangible equity divided by the sum of total common shares outstanding plus the common shares resulting from an assumed conversion of the outstanding Series A Preferred Shares into common shares (at the conversion price effective as of the last day of the applicable period).

Tangible common equity is defined as shareholders' equity plus the unrecognized deferred retroactive reinsurance gain less goodwill and intangible assets, net of amortization.

We believe tangible common equity is a good measure to evaluate the strength of our balance sheet and to compare returns relative to this measure.

Key financial measures that we use to assess our longer term financial performance include the percentage growth in our tangible common equity per share and our return on tangible common equity.

Tangible common equity is a non-GAAP measure and should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP.

Our definition of tangible common equity may not be comparable to that of other companies.

See “Reconciliation of Non-GAAP Measures” for a reconciliation of shareholders' equity to tangible common equity.

Tangible common equity per share represents tangible common equity divided by the total shares of common stock outstanding.

Adjusted net operating return on tangible common equity is defined as annualized adjusted net operating income expressed as a percentage of the average quarterly tangible common equity balances in the respective period.

Net retention is defined as the ratio of net written premiums to gross written premiums.

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Our Reserve Committee consists of our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and Chief Actuary.

Additionally, the presidents, chief financial officers and segment actuaries of each of our insurance segments participate in the Reserve Committee meetings for their respective segments.

Additionally, the presidents, chief financial officers, Chief Claims Officer, and segment actuaries of each of our insurance segments participate in the Reserve Committee meetings for their respective segments.

The Reserve Committee meets quarterly to review the actuarial recommendations made by each segment actuary and use their best judgment to determine the best estimate to be recorded for the reserve for losses and loss adjustment expenses on our balance sheet.

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The Expected Loss method multiplies earned premiums by an initial expected loss ratio.

In our Excess and Surplus Lines segment and for our Workers’ Compensation book in the Specialty Admitted Insurance segment, the initial expected loss ratio is estimated based on adjusting book of business prior year experience to current cost and rate level.

In our Excess and Surplus Lines segment, the initial expected loss ratio is estimated based on adjusting book of business prior year experience to current cost and rate level.

In our programs business within the Specialty Admitted Insurance segment, the expected loss ratio is based on the actuarial pricing of the individual account.

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The Incurred Loss Development method uses historical loss reporting patterns by accident year to estimate future loss reporting patterns.

In this method, our actuaries review historical loss reporting patterns to develop incurred loss development factors that are applied to current reported losses to calculate ultimate losses.

In this method, our actuaries review historical loss reporting patterns to develop incurred loss development factors that are applied to current reported losses to calculate expected ultimate losses.

Paid Loss Development Method

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As a result, we rely heavily on the Expected Loss Method in estimating reserves for the current accident year.

The Company generally sets the initial expected loss ratio for the current accident year consistent with the internal actuaries’ pricing assumptions adjusted upward where warranted based on management's judgment in order to produce the best estimate.

We believe that this is a reasonable and appropriate reserving assumption for the current accident year since our pricing assumptions are actuarially driven and since we expect to make an acceptable return on the new business that we write.

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Judgment is also required to make actuarial adjustments, if needed, for changes in claims processing and case reserving that could cause current reported loss and paid loss development patterns to deviate from historical patterns.

For the Excess and Surplus Lines segment, the segment actuary performs a study on each of these parameters at least annually and makes recommendations for the initial expected loss ratios, the incurred and paid loss development factors and the weighting of the actuarial methods by accident year and line of business.

Members of the Reserve Committee review and approve the parameter review actuarial recommendations, and absent any developments requiring an earlier review, these approved parameters are generally used in the reserve estimation process for the next four quarters at which time a new parameter study is performed.

For the Excess and Surplus Lines segment, the segment actuary performs a study on each of these parameters at least annually as part of the Detailed Valuation Review ("DVR") and makes recommendations for the initial expected loss ratios, the incurred and paid loss development factors and the weighting of the actuarial methods by accident year and line of business.

Members of the Reserve Committee review and approve the actuarial recommendations, and absent any developments requiring an earlier review, these approved parameters are generally used in the reserve estimation process for the next four quarters at which time a new study is performed.

For the Specialty Admitted Insurance segment, expected loss ratios, loss development factors, and loss cost trends are reviewed and updated at least annually.

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Changes in reserves (60,665) — 97,527

The impact of recording the net reserve for losses and loss adjustment expenses at the highest value from the sensitivity analysis above would be to increase losses and loss adjustment expenses incurred by $63.5 million, reduce after-tax net income by $50.2 million, reduce shareholders’ equity by $50.2 million and reduce shareholders’ tangible equity by $50.2 million, in each case at or for the year ended December 31, 2024.

The impact of recording the net reserve for losses and loss adjustment expenses at the highest value from the sensitivity analysis above would be to increase losses and loss adjustment expenses incurred by $97.5 million, reduce after-tax net income by $77.0 million, reduce shareholders’ equity by $77.0 million and reduce tangible equity by $77.0 million, in each case at or for the year ended December 31, 2025.

The impact of recording the net reserve for losses and loss adjustment expenses at the lowest value from the sensitivity analysis above would be to reduce losses and loss adjustment expenses incurred by $60.7 million, increase after-tax net income by $47.9 million, increase shareholders’ equity by $47.9 million, and increase tangible equity by $47.9 million, in each case at or for the year ended December 31, 2025.

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Judicial and regulatory bodies have frequently interpreted insurance contracts in a manner that expands coverage beyond that which was contemplated at the time that the policy was issued.

In addition, many of our policies are issued on an occurrence basis, and insureds suffering a loss frequently seek coverage beyond the policies’ original intent.

In addition, insureds suffering a loss frequently seek coverage beyond the policies’ original intent.

Our reserves are driven by a number of important assumptions, including litigation and regulatory trends, legislative activity, climate change, social and economic patterns and claims inflation assumptions.

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In the event of significant new regulation or legislation, we will attempt to quantify its impact on our business but no assurance can be given that our attempt to quantify such inputs will be accurate or successful.

IBNR reserve estimates are inherently less precise than case reserve estimates.

IBNR reserve estimates are dependent on many assumptions and are inherently subjective.

A 5% change in net IBNR reserves at December 31, 2025 would equate to a $39.5 million change in the reserve for losses and loss adjustment expenses at such date, a $31.2 million change in after-tax net income, a 5.8% change in shareholders’ equity and a 5.7% change in tangible equity, in each case at or for the year ended December 31, 2025.

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At a high level, actual loss emergence on prior accident years in excess of actuarial expectations implies adverse development, while actual loss emergence less than expected emergence implies favorable development.

We experienced $76.1 million of net adverse development in 2024 on the reserve for losses and loss adjustment expenses held at December 31, 2023 (excluding adverse prior year development subject to retroactive reinsurance accounting - see “ Retroactive Reinsurance Accounting ” below).

This reserve development included $76.7 million of net adverse development in the Excess and Surplus Lines segment and $607,000 of net favorable development in the Specialty Admitted Insurance segment.

We experienced $31.6 million of net adverse development in 2023 on the reserve for losses and loss adjustment expenses held at December 31, 2022 (excluding adverse prior year development subject to retroactive reinsurance accounting - see “ Retroactive Reinsurance Accounting ” below).

We experienced $1.5 million of net favorable development in 2025 on the reserve for losses and loss adjustment expenses held at December 31, 2024 (excluding adverse prior year development subject to deferral under retroactive reinsurance accounting - see “ Retroactive Reinsurance Accounting ” below).

This reserve development included $5.0 million of net favorable development in the Excess and Surplus Lines segment and $3.5 million of net adverse development in the Specialty Admitted Insurance segment.

The $5.0 million of net favorable development in the Excess and Surplus Lines segment is net of $51.4 million ceded to the E&S Top Up ADC.

The E&S Top Up ADC is not in a gain position, thus it is not subject to retroactive reinsurance accounting and there are no deferrals related to the E&S Top Up ADC in 2025.

Accordingly, all cessions to the E&S Top Up ADC in 2025 reduce net incurred losses and loss adjustment expenses.

Additionally, the net favorable development excludes $27.2 million of adverse development ceded to the Commercial Auto LPT and E&S ADC that was deferred under retroactive reinsurance accounting.

The $27.2 million is included in net incurred losses and loss adjustment expenses on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).

We experienced $76.1 million of net adverse development in 2024 on the reserve for losses and loss adjustment expenses held at December 31, 2023 (excluding adverse prior year development subject to deferral under retroactive reinsurance accounting - see “ Retroactive Reinsurance Accounting ” below).

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For the years ended December 31, 2025, 2024, and 2023, management concluded that $203,000, $3.3 million, and $397,000 of the net realized and unrealized gains (losses) were due to credit-related impairments, respectively.

Fair values are measured in accordance with ASC 820, Fair Value Measurements.

Fair values are measured in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurements.

The guidance establishes a framework for measuring fair value and a three-level hierarchy based upon the quality of inputs used to measure fair value.

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quoted price (unadjusted) in active markets for identical assets, (2) Level 2:

inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument and (3) Level 3:

inputs to the valuation methodology include quoted prices for

similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument and (3) Level 3:

inputs to the valuation methodology are unobservable for the asset or liability.

The fair values of fixed maturity securities and equity securities have been determined using fair value prices provided by our investment accounting services provider or investment managers, who utilize internationally recognized independent pricing services.

The prices provided by the independent pricing services are generally based on observable market data in

active markets ( e.g.

The prices provided by the independent pricing services are generally based on observable market data in active markets ( e.g.

broker quotes and prices observed for comparable securities).

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Adopted Accounting Standards

The guidance in ASU 2023-07 —Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures was designed to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the new standard effective with this Form 10-K by providing additional segment disclosures in Note 20.

The new standard did not have a material impact on the Company's financial statements.

No accounting standards were adopted during the year ended December 31, 2024 that had a material impact on our financial statements.

Prospective Accounting Standards

The guidance in ASU 2023-09 —Income Taxes (Topic 740):

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This ASU is effective for fiscal years beginning after December 15, 2024.

Although the Company continues to evaluate the impact of adopting this new accounting standard, the amendments are disclosure-related and are not expected to have a material impact on the Company's financial statements.

The Company adopted the new standard effective with this Form 10-K by providing additional disclosures in Note 15.

The new standard did not have a material impact on the Company's financial statements.

No accounting standards were adopted during the year ended December 31, 2025 that had a material impact on our financial statements.

Prospective Accounting Standards

The guidance in ASU 2024-03 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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The Company is in the process of evaluating the impact of this new guidance on the disclosures in its financial statements.

The guidance in ASU 2025-06, Intangibles-Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal -Use Software removes the concept of project stages and requires the capitalization of software costs when management has committed to funding the software project and it is probable that the project will be completed.

This ASU is effective for fiscal years beginning after December 15, 2027, but early adoption is permitted as of the beginning of an annual reporting period.

The Company is evaluating the impact of adopting this new guidance, but does not expect that the standard will have a material impact on our financial statements.

There are no other prospective accounting standards which are expected to have a material impact on our financial statements subsequent to December 31, 2025 .

Recent Strategic Actions

James River Group Holdings, Ltd.

In the fourth quarter of 2024, the Board of Directors concluded the strategic review process announced in November of 2023.

While the strategic review process has been completed, in the ordinary course of business the Company and Board of Directors expect to consider opportunities consistent with its fiduciary duty.

Combined Loss Portfolio Transfer and Adverse Development Cover

On July 2, 2024, James River Insurance and James River Casualty (together, “James River”), entered into a Combined Loss Portfolio Transfer and Adverse Development Cover Reinsurance Contract (the “E&S ADC”) with State National Insurance Company, Inc.

(“State National”).

The transaction closed upon signing.

The E&S ADC was effective January 1, 2024 (the “Effective Date”) and applies to James River’s Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned during 2010-2023 (both years inclusive), excluding, among others, losses related to commercial auto policies issued to a former large insured or its affiliates (the “Subject Business”).

Pursuant to the E&S ADC, (a) State National reinsures 85% of losses paid on and after the Effective Date in respect of the Subject Business in excess of $716.6 million up to an aggregate limit of $467.1 million (with State National’s share of the aggregate limit being $397.0 million) in exchange for a reinsurance premium paid by James River equal to $313.2 million, (b) James River continues to manage claims and to manage and collect the benefit of other existing third-party reinsurance on the Subject Business, which third-party reinsurance inures to the benefit of the E&S ADC, and (c) James River is entitled to a profit commission of 50% of any favorable development on the business ceded to State National below 104.5% of carried reserves, which profit commission shall not exceed $87.0 million in total.

The Company has $41.2 million of aggregate limit remaining on the E&S ADC at December 31, 2024.

Enstar Strategic Partnership

The Company commenced a multi-pronged strategic partnership with Enstar Group Limited (“Enstar”).

As part of this, on November 11, 2024, Enstar, through its subsidiary Cavello Bay Reinsurance Limited (“Cavello Bay”), entered into (i) a subscription agreement to purchase $12.5 million of the Company’s common shares at a share price of $6.40, which shares are in addition to 637,640 shares Enstar previously purchased in the open market, and (ii) an adverse development cover agreement with James River (“E&S Top Up ADC”), such transactions together, the “Enstar Transactions”.

Pursuant to the E&S Top Up ADC, in exchange for a premium of $52.8 million (less an amount equal to the federal excise tax payable on the premium), Cavello Bay reinsures, effective January 1, 2024, 100% of the losses associated with James River’s Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned during 2010-2023 (both years inclusive).

This agreement excludes losses related to commercial auto policies issued to a former large insured or its affiliates.

It is subject to a retention by James River of $1,183.7 million (the limit of the E&S ADC) and up to an aggregate limit of $75.0 million.

The Enstar Transactions closed on December 23, 2024.

The Company recognized a $52.8 million reduction in pre-tax income in connection with the E&S Top Up ADC upon closing.

Series A Preferred Share Amendment

On November 11, 2024, the Company amended the Certificate of Designations held by GPC Partners to, among other things, (i) convert $37.5 million of the outstanding Series A Preferred Shares to common stock at a per share price of $6.40 (the “Minimum Price”), (ii) increase the voluntary conversion price from 127.5% to 130% of the Minimum Price, (iii) increase the mandatory conversion price from 130% to 200% of the voluntary conversion price, (iv) delay the first date on which the dividend rate re-sets from March 1, 2027 to October 1, 2029, (v) cap the dividend rate at 8%, (vi) eliminate the adverse development anti-dilution adjustment provision, and (vii) limit transfers of the Series A Preferred Shares without the Company’s consent if, after the transfer, the transferee would hold 9.9% or more of the voting equity of the Company or, in the event of an A.M.

Best downgrade of James River Insurance below A- (Excellent), 19.9% of the voting equity.

Sale of JRG Re

On November 8, 2023, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Fleming Intermediate Holdings LLC, a Cayman Islands limited liability company (the “Buyer”).

Pursuant to the Stock Purchase Agreement, and on the terms and subject to the conditions therein, the Buyer agreed to purchase from the Company all of the common shares of JRG Re.

JRG Re comprised the remaining operations of the former Casualty Reinsurance segment, and the sale of JRG Re, which closed on April 16, 2024, resulted in the Company’s disposition of its casualty reinsurance business and related assets.

Pursuant to the terms of the Stock Purchase Agreement, the aggregate purchase price received by the Company, after giving effect to estimated adjustments based on changes in JRG Re’s adjusted net worth between March 31, 2023 and the closing, totaled approximately $291.4 million (the “Closing Date Purchase Price”).

The aggregate Closing Date Purchase Price was comprised of (i) $152.4 million paid in cash by the Buyer and (ii) an aggregate $139.0 million dividend and distribution from contributed surplus by JRG Re to the Company.

In accordance with the Stock Purchase Agreement, the cash portion of the purchase price was calculated based on an estimated balance sheet of JRG Re as of the date of closing.

The estimated balance sheet is subject to final post-closing adjustments, which resulted in the downward adjustment to the purchase price discussed below.

The Buyer delivered a closing statement to the Company, and pursuant to the procedures in the Stock Purchase Agreement, the Company has given its notice of disagreement with the Buyer’s closing statement.

In its notice of disagreement, the Company (i) agreed with an $11.4 million downward adjustment to the Closing Date Purchase Price due to losses from JRG Re’s operations between the date of the balance sheet used to produce the estimated closing statement and the Closing Date, which downward adjustment was paid to the Buyer on October 18, 2024, and (ii) disputed $54.1 million in aggregate downward adjustments to the Closing Date Purchase Price claimed by the Buyer, which the Company believes are unsupported by the facts known to the Company and the terms of the Stock Purchase Agreement.

The Stock Purchase Agreement provides procedures for resolving disputes between the parties regarding the closing statement and it is possible that the resolution of these disputes could result in a significant reduction to the amount of the purchase price.

We have determined that the sale of JRG Re met the criteria to be classified as held for sale at December 31, 2023 and that the sale represented a strategic shift that will have a major effect on the Company's operations.

Accordingly, the results of JRG Re's operations have been presented as discontinued operations, and the assets and liabilities of JRG Re at December 31, 2023 have been classified as held for sale and segregated for all periods presented in this Annual Report on Form 10-K.

The $139.0 million pre-closing dividend was completed in the first quarter of 2024.

It included the forgiveness of $133.2 million owed from JRG Holdings to JRG Re and $5.8 million paid in cash to JRG Holdings.

In the fourth quarter of 2023, after giving effect to the pre-closing dividend, we recorded an estimated loss on sale of $80.4 million to write down the carrying value of JRG Re to its estimated fair value based upon the estimated sales price of the transaction less costs to sell and other adjustments in accordance with the Stock Purchase Agreement.

For the year ended December 31, 2024, the estimated loss on the sale was revised to $78.3 million.

The loss on disposal for the year ended December 31, 2024 of $4.1 million includes the $2.1 million gain for the change in the estimated loss on sale and expenses incurred of $6.2 million.

Domestication of James River Group Holdings, Inc.

(“JRG Holdings”)

On November 7, 2025, we changed our jurisdiction of incorporation from Bermuda to Delaware, and we refer to this change as the “Domestication”.

On the effective date, our common shares issued and outstanding immediately prior to the effective time of the Domestication automatically converted by operation of law into an equivalent number of shares of common stock of James River Group Holdings, Inc., a Delaware corporation.

The Company recognized a one-time tax benefit of $14.1 million related to business interest expense effective with the Domestication.

The Domestication is expected to lower the Company’s effective tax rate, as holding company expenses and interest expense (previously incurred in Bermuda and ineligible for U.S.

tax deduction) will receive a U.S.

tax deduction in future periods, as well as bring additional operating efficiencies.

In connection with the Domestication, the Company dissolved James River Group Holdings UK Limited, its prior UK intermediate holding company, effective December 23, 2025.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

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Other operating expenses (181,548) (188,613) (3.7) %

Underwriting (loss) profit (1), (2)

Underwriting profit (loss) (1), (2)

20,286 (105,554) —

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Net investment income 83,440 93,089 (10.4) %

Net realized and unrealized gains on investments 3,625 10,441 (65.3) %

Net realized and unrealized (losses) gains on investments (2,195) 3,625 —

Other income and expense 1,663 (14) —

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Amortization of intangible assets (363) (363) —

Impairment of intangible assets — (2,500) —

(Loss) income from continuing operations before taxes (71,120) 86,914 —

Income tax (benefit) expense on continuing operations (7,634) 25,705 —

Net (loss) income from continuing operations (63,486) 61,209 —

Income (loss) from continuing operations before taxes 50,543 (71,120) —

Income tax expense (benefit) on continuing operations 723 (7,634) —

Net income (loss) from continuing operations 49,820 (63,486) —

Net loss from discontinued operations (2,393) (17,634) (86.4) %

Net loss (81,120) (107,684) (24.7) %

Net income (loss) 47,427 (81,120) —

Dividends on Series A Preferred Shares (7,876) (37,149) (78.8) %

Net loss available to common shareholders $ (118,269) $ (118,184) 0.1 %

Adjusted net operating (loss) income (1)

Net income (loss) available to common shareholders $ 39,551 $ (118,269) —

Adjusted net operating income (loss) (1)

$ 54,140 $ (41,503) —

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Accident year loss ratio 65.3 % 66.2 %

(1) Underwriting (loss) profit and adjusted net operating (loss) income are non-GAAP measures.

(1) Underwriting profit (loss) and adjusted net operating income (loss) are non-GAAP measures.

See “Reconciliation of Non-GAAP Measures.”

(2) Underwriting results include gross fee income of $13.4 million and $21.0 million for the years ended December 31, 2025 and 2024, respectively.

The Company reported a net loss from continuing operations of $63.5 million for the year ended December 31, 2024 compared to net income from continuing operations of $61.2 million for the year ended December 31, 2023.

The net loss from continuing operations in the current year was largely attributable to the Excess and Surplus Lines segment which was impacted by $76.7 million of net adverse reserve development (including a $52.2 million reserve charge upon execution of the E&S ADC in the third quarter) and $52.8 million of ceded premium recorded upon execution of the E&S Top Up ADC in the fourth quarter.

Adjusted net operating loss was $41.5 million for the year ended December 31, 2024 compared to adjusted net operating income of $50.3 million for the year ended December 31, 2023.

Underwriting results were a loss of $105.6 million (combined ratio of 117.6%) for the year ended December 31, 2024 compared to profit of $24.5 million (combined ratio of 96.5%) for the year ended December 31, 2023.

The underwriting loss in the current year was largely driven by net adverse reserve development (see loss ratio discussion below) and the $52.8 million of ceded premium associated with the E&S Top Up ADC which increased our combined ratio by 9.5 points.

Underwriting results for the years ended December 31, 2024 and 2023 also include $13.7 million and $16.4 million, respectively, of premium

adjustments associated with prior years including reinstatement premium in the Excess and Surplus Lines segment which reduced net written and net earned premiums, and underwriting profit.

The Company produced net income from continuing operations of $49.8 million and adjusted net operating income of $54.1 million for the year ended December 31, 2025 compared to a net loss from continuing operations of $63.5 million and an adjusted net operating loss of $41.5 million for the year ended December 31, 2024.

The year-over-year improvement was largely driven by reserve development on prior accident years in the Excess and Surplus Lines segment which was $5.0 million favorable for the year ended December 31, 2025 compared to $76.7 million adverse for the year ended December 31, 2024 (including a $52.2 million reserve charge upon execution of the E&S ADC), and $52.8 million of ceded premium recorded upon execution of the E&S Top Up ADC in 2024.

Net income from continuing operations for the year ended December 31, 2025 also includes a one-time tax benefit of $14.1 million from the Domestication (discussed above in Strategic Actions and below in Income Tax Expense section).

Underwriting results were a profit of $20.3 million (combined ratio of 96.6%) for the year ended December 31, 2025 compared to a loss of $105.6 million (combined ratio of 117.6%) for the year ended December 31, 2024.

The improvement in underwriting results reflects the same factors mentioned above including reserve development on prior accident years (see loss ratio discussion below) and the $52.8 million of ceded premium associated with the E&S Top Up ADC in the prior year which

increased our prior year combined ratio by 9.5 points.

Underwriting results for the years ended December 31, 2025 and 2024 also include $12.3 million and $13.7 million, respectively, of premium adjustments associated with prior years including reinstatement premium in the Excess and Surplus Lines segment which reduced net written and net earned premiums, and underwriting profit.

The impact of the premium adjustments was a 1.9 and 2.6 percentage point increase in our combined ratios in the respective years.

Our loss ratio increased from 69.9% in the prior year to 86.2% in the current year primarily driven by higher net adverse reserve development and the impact of the ceded premium associated with the E&S Top Up ADC (+7.0 points).

Net adverse reserve development on prior accident years (excluding adverse prior year development from continuing operations that is subject to retroactive reinsurance accounting - see discussion below) was $76.1 million or 12.7 percentage points adverse for the year ended December 31, 2024 compared to $31.6 million or 4.5 percentage points adverse for the year ended December 31, 2023.

Our loss ratio improved from 86.2% in the prior year to 66.4% in the current year primarily driven by reserve development on prior accident years and the impact of the ceded premium associated with the E&S Top Up ADC in the prior year (a 7.0 point addition to the prior year loss ratio).

Reserve development on prior accident years (excluding adverse prior year development from continuing operations that is subject to deferral under retroactive reinsurance accounting - see discussion below) was $1.5 million or 0.3 percentage points favorable for the year ended December 31, 2025 compared to $76.1 million or 12.7 percentage points adverse for the year ended December 31, 2024.

The favorable reserve development for the year ended December 31, 2025 included $5.0 million of net favorable development in the Excess and Surplus Lines segment and $3.5 million of net adverse development in the Specialty Admitted Insurance segment.

The adverse reserve development for the year ended December 31, 2024 included $76.7 million of net adverse development in the Excess and Surplus Lines segment, including the $52.2 million reserve charge upon execution of the E&S ADC (consideration paid in excess of initial reserves), and $607,000 of net favorable development in the Specialty Admitted Insurance segment.

The adverse reserve development for the year ended December 31, 2023 included $32.6 million of net adverse reserve development in the Excess and Surplus Lines segment and $1.0 million of net favorable development in the Specialty Admitted Insurance segment.

Our expense ratio increased from 26.6% in the prior year to 31.4% in the current year largely driven by higher compensation and bad debt expenses, and lower net earned premiums in the Excess and Surplus Lines segment which was impacted by the $52.8 million of ceded premium on the E&S Top Up ADC (+2.5 point impact on consolidated expense ratio), partially offset by a lower current year expense ratio for the Specialty Admitted Insurance segment driven by lower commissions and lower expenses for compensation and taxes, licenses, and fees.

Investment income grew by $9.0 million or 10.8% over the prior year principally driven by higher yields and higher invested assets in our continuing operations following the commutation of an internal quota share arrangement with JRG Re in the second and third quarters of 2023.

Net realized and unrealized gains on investments for the year ended December 31, 2024 include $1.5 million of unfavorable mark-to-market adjustments on our equity securities and bank loan participations reflecting decreases in their fair values in the period compared to $12.8 million of favorable mark-to-market adjustments on equity securities and bank loan participations in the prior year (see “ Investing Results ” below).

On September 29, 2023, the Company completed the sale of the renewal rights to the IRWC business in the Specialty Admitted Insurance segment.

Upon closing of the transaction, the Company recognized a $2.2 million gain on sale included in other income in the prior year representing the minimum guaranteed consideration to be received in the transaction.

The Company also recognized an impairment charge of $2.5 million related to the trademark intangible asset associated with the IRWC business.

The Company entered into a definitive agreement on November 8, 2023 to sell JRG Re.

The sale closed on April 16, 2024 and discontinued operations for both periods include the operating results of JRG Re which were a loss of $13.6 million for the year ended December 31, 2024 compared to a loss of $33.9 million in the prior year.

The losses from discontinued operations primarily reflect net adverse development of $7.1 million and $35.5 million in the respective years on treaties not subject to the loss portfolio transfer agreement previously entered into by JRG Re.

The current year loss also reflects $9.5 million of realized and unrealized losses on fixed maturity securities.

Discontinued operations in the current year also includes $6.2 million of certain transaction-related expenses associated with the sale and a change in the estimate of the loss on sale which together resulted in a $4.1 million loss on disposal in the current year.

In the prior year, discontinued operations included $53.2 million of losses recognized on JRG Re's fixed maturity investments (the Company no longer had the intent or ability to hold securities in an unrealized loss position until a recovery of their fair value could occur), $1.4 million of professional services and other costs to sell JRG Re, and an $80.4 million loss on the held-for sale classification of JRG Re's net assets adjusting them down to the anticipated closing price in the transaction.

The Company accounted for the amendment of the Series A Preferred Shares on November 11, 2024 as an extinguishment of the pre-amendment Series A Preferred Shares due to the significance of qualitative and quantitative changes to the shares.

The Company estimated the fair value of the new Series A Preferred Shares to be $133.1 million on the date of issuance and classified the new Series A Preferred Shares as mezzanine equity.

Premium adjustments associated with prior years including reinstatement premium in the Excess and Surplus Lines segment increased the respective loss ratios by 1.4 and 2.0 points.

The loss ratio for the current year also benefited from a lower current accident year loss ratio and segment mix with the Excess and Surplus Lines segment representing 93.2% of consolidated net earned premiums in the year ended December 31, 2025 compared to 85.3% in the year ended December 31, 2024.

Our expense ratio improved from 31.4% in the prior year to 30.2% in the current year reflecting general and administrative expense reductions across all segments and favorable commission adjustments related to run-off programs in our Specialty Admitted Insurance segment.

The prior year expense ratio was impacted by the $52.8 million of ceded premium on the E&S Top Up ADC (a 2.5 point addition to the prior year consolidated expense ratio).

Premium adjustments associated with prior years including reinstatement premium in the Excess and Surplus Lines segment increased the respective consolidated expense ratios by 0.6 and 0.7 points in the respective years.

Refer to the Segment Results section below for further discussion of the segment expense ratios.

Investment income decreased by $9.6 million or 10.4% from the prior year principally due to a lower interest rate environment in 2025 which impacted yields across several areas of the portfolio.

Net realized and unrealized losses on investments of $2.2 million for the year ended December 31, 2025 include $5.3 million of net realized losses from repositioning the bank loan portfolio away from tariff impacted issuers and sales of equity securities, partially offset by $3.2 million of favorable mark-to-market adjustments on our equity securities and bank loan participations reflecting increases in their fair values in the period.

Net realized and unrealized gains on investments of $3.6 million for the year ended December 31, 2024 include $5.1 million of net realized gains largely due to gains on sales of equity securities from a reduction in the portfolio's common equity allocation in the fourth quarter of 2024 that exceeded losses on our sales of bank loans and equity securities and $1.5 million of unfavorable mark-to-market adjustments on our equity securities and bank loan participations (see “ Investing Results ” below for more discussion).

In 2025, the Company recognized a one-time tax benefit of $14.1 million related to business interest expense effective with the Domestication (discussed above in Strategic Actions ).

The Company closed on the sale of JRG Re on April 16, 2024.

Discontinued operations include the operating results of JRG Re through the closing as well as losses recognized on the disposal.

JRG Re's operating results through the closing in 2024 were a loss of $13.6 million primarily reflecting net adverse development of $7.1 million on treaties not subject to the loss portfolio transfer agreement previously entered into by JRG Re and $9.5 million of realized and unrealized losses on fixed maturity securities.

The loss on disposal for the year ended December 31, 2024 was $4.1 million and included a $2.1 million gain for the change in the estimated loss on sale and selling costs incurred of $6.2 million.

For the year ended December 31, 2025, the loss on disposal was $2.4 million including a $523,000 downward adjustment to the closing date purchase price plus interest and $1.9 million of additional selling costs incurred by the Company related to the sale of JRG Re.

The Company amended the Series A Preferred Shares on November 11, 2024.

The amendment was considered an extinguishment of the pre-amendment Series A Preferred Shares for accounting purposes due to the significance of qualitative and quantitative changes to the shares.

The Company recorded deemed dividends of $27.0 million within retained deficit for the difference between the $144.9 million carrying value of the extinguished pre-amendment Series A preferred shares and the combined $133.1 million estimated fair value of the new Series A Preferred Shares and the $38.8 million fair value of the new common shares issued through conversion of Series A Preferred Shares in the amendment.

Also included in the dividends on Series A Preferred Shares were declared dividends of $7.9 million and $10.1 million for the years ended December 31, 2025 and 2024, respectively.

Adjusted net operating results declined from the prior year primarily reflecting lower underwriting results with a partial offset for higher investment income.

Tangible equity decreased by 9.9% mainly due to the net loss in 2024.

Tangible equity per share decreased 33.6% reflecting the net loss and dilution from the Enstar common share investment and the Series A Preferred Share amendment in the current year.

Adjusted net operating results improved $95.6 million from the prior year due to profitable underwriting results, partially offset by lower investment income.

Growth in tangible common equity of 34.9% for the year ended December 31, 2025 was largely driven by net income and unrealized gains on fixed maturities in other comprehensive income due to a decline in interest rates.

Our 15.3% adjusted net operating return on tangible common equity for the year ended December 31, 2025 compares to a 12.4% loss for the year ended December 31, 2024.

Loss Portfolio Transfers and Adverse Development Covers

Loss portfolio transfers and adverse development covers are forms of reinsurance utilized by the Company to transfer losses and loss adjustment expenses and associated risk of adverse development on covered subject business, as defined in the respective agreements, to an assuming reinsurer in exchange for a reinsurance premium.

Loss portfolio transfers and adverse development covers are forms of retroactive reinsurance utilized by the Company to transfer losses and loss adjustment expenses and associated risk of adverse development on covered subject business, as defined in the respective agreements, to an assuming reinsurer in exchange for a reinsurance premium.

This reinsurance can bring economic finality (up to the limit of such agreements, if applicable) on the subject risks when they no longer meet the Company's risk appetite or are no longer aligned with the Company's risk management guidelines.

Commercial Auto Loss Portfolio Transfer

On September 27, 2021, James River entered into a loss portfolio transfer transaction (the “Commercial Auto LPT”) with Aleka Insurance, Inc.

On September 27, 2021, James River Insurance and James River Casualty Company (together, “James River”) entered into a loss portfolio transfer transaction (the “Commercial Auto LPT”) with Aleka Insurance, Inc.

(“Aleka”), a captive insurance company affiliate of Rasier LLC, to reinsure substantially all of the Excess and Surplus Lines segment's legacy portfolio of commercial auto policies previously issued to Rasier LLC and its affiliates (collectively, “Rasier”) for which James River is not otherwise indemnified by Rasier.

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The Company has $41.2 million of aggregate limit remaining on the E&S ADC at December 31, 2024.

Pursuant to the E&S ADC, (a) State National reinsures 85% of losses paid on and after the Effective Date in respect of the Subject Business in excess of $716.6 million up to an aggregate limit of $467.1 million (with State National’s share of the aggregate limit being $397.0 million) in exchange for a reinsurance premium paid by James River equal to $313.2 million, and (b) James River continues to manage claims and to manage and collect the benefit of other existing third-party reinsurance on the Subject Business, which third-party reinsurance inures to the benefit of the E&S ADC.

Additional adverse development of $35.0 million (net of the Company's 15% retention) recognized on the subject business of the E&S ADC in the year ended December 31, 2025 exhausted the remaining limit of the E&S ADC.

Adverse Development Cover

On November 11, 2024, Enstar, through its subsidiary Cavello Bay Reinsurance Limited, entered into an adverse development cover agreement with James River (the “E&S Top Up ADC”), pursuant to which, in exchange for a premium of $52.8 million (less an amount equal to the federal excise tax payable on the premium), Cavello Bay reinsures, effective January 1, 2024, 100% of the losses associated with James River’s Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned during 2010-2023 (both years inclusive).

The E&S Top Up ADC excludes losses related to commercial auto policies issued to a former large insured or its affiliates and is subject to a retention by James River of $1,183.7 million (the limit of the E&S ADC) and up to an aggregate limit of $75.0 million.

On November 11, 2024, Enstar Group Limited (“Enstar”), through its subsidiary Cavello Bay Reinsurance Limited (“Cavello Bay”), entered into an adverse development cover agreement with James River (“E&S Top Up ADC”), pursuant to which, in exchange for a premium of $52.8 million (less an amount equal to the federal excise tax payable on the premium), Cavello Bay reinsures, effective January 1, 2024, 100% of the losses associated with James River’s Excess and Surplus Lines segment casualty portfolio losses attaching to premium earned during 2010-2023 (both years inclusive).

The E&S Top Up ADC closed on December 23, 2024.

The Company recognized a $52.8 million reduction in pre-tax income in connection with the adverse development cover upon closing.

The Company has $75.0 million of aggregate limit remaining on the E&S Top Up ADC at December 31, 2024.

In 2025, $51.4 million of adverse development was ceded to the E&S Top Up ADC, reducing the aggregate limit remaining on the E&S Top Up ADC to $23.6 million at December 31, 2025.

Retroactive Reinsurance Accounting

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Gains are deferred under retroactive reinsurance accounting and recognized in earnings in proportion to actual paid recoveries under the agreements using the recovery method.

While the deferral of gains can introduce volatility in our results in the short-term, over the life of the contract, we would expect no economic impact to the Company as long as the counterparty performs under the contract and losses are within the limit.

The impact of retroactive reinsurance accounting is not indicative of our current and ongoing operations.

While the deferral of gains can introduce volatility in the Company's operating results in the short-term, over the life of the contract, we would expect no

economic impact to the Company as long as the counterparty performs under the contract.

The impact of retroactive reinsurance accounting is not indicative of the Company's current and ongoing operations.

The following tables summarize the retroactive reinsurance accounting for the Commercial Auto LPT and the E&S ADC for the years ended December 31, 2025 and 2024.

The E&S Top Up ADC was not subject to retroactive reinsurance accounting as it was not in a gain position as of December 31, 2025.

Year Ended December 31,

2024 2023 2022

(in thousands)

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Deferred retroactive reinsurance gain at beginning of period $ 9,222 $ 20,733

Adverse prior year development on subject business 3,051 64,403 46,697

(Favorable) adverse prior year development on subject business (7,848) 3,051

Retroactive reinsurance benefits under the recovery method 1,553 (14,562)

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Deferred retroactive reinsurance gain at beginning of period $ 48,748 $ —

Adverse prior year development on subject business 48,748 — —

Adverse prior year development ceded on subject business 35,045 48,748

Retroactive reinsurance benefits under the recovery method — —

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$ 600,288 $ 600,196 — %

Gross written premiums for the Excess and Surplus Lines segment (which represents 71.0% of our consolidated gross written premiums from continuing operations in 2024) increased 1.0% from the prior year reflecting growth in our casualty underwriting divisions, partially offset by a decline in Excess Property.

Amid moderating rate increases and increased competition, we are remaining selective in our Excess Property portfolio.

Total policy submissions for Core E&S lines (excluding commercial auto) in 2024 increased 7.5% from the prior year largely due to a 7.7% increase in new business submissions as the segment focused on growing new business with smaller account sizes.

Renewal rates for the Excess and

Surplus Lines segment were up 9.0% compared to 2023.

The change in gross written premiums was notable in several divisions as shown below:

Gross written premiums for the Excess and Surplus Lines segment (which represents 82.1% of our consolidated gross written premiums in 2025) decreased 5.3% from the prior year due to increasingly competitive markets and the Company's

focus on gaining smaller accounts while pulling away from certain larger accounts that no longer fall within our underwriting appetite.

Total policy submissions in 2025 increased 4.2% over 2024, but the percentage of binders to quotes declined modestly and the average premium per policy was down 8.4% from the prior year.

Renewal rates for the Excess and Surplus Lines segment were up 8.9% compared to 2024.

The change in gross written premiums by primary underwriting division is shown below:

Year Ended December 31,

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Excess Casualty $ 324,507 $ 325,017 (0.2) %

General Casualty 237,632 202,861 17.1 %

Primary Casualty 312,176 327,589 (4.7) %

Manufacturers & Contractors 157,082 176,494 (11.0) %

Specialty 130,333 134,675 (3.2) %

Excess Property 38,937 53,254 (26.9) %

Environmental 20,096 13,832 45.3 %

All other Core E&S divisions 176,717 176,761 — %

Total Core E&S divisions 989,210 977,972 1.1 %

Commercial Auto $ 27,819 $ 29,379 (5.3) %

Excess and Surplus Lines gross written premium $ 963,035 $ 1,017,029 (5.3) %

The components of gross written premiums for the Specialty Admitted Insurance segment (which represents 29.0% of our 2024 consolidated gross written premiums) are as follows:

Year Ended December 31,

2024 2023 % Change

($ in thousands)

Fronting and program premium $ 410,391 $ 455,767 (10.0) %

Individual risk workers’ compensation premium 4,352 45,542 (90.4) %

Specialty Admitted gross written premium $ 414,743 $ 501,309 (17.3) %

Our fronting written premium decreased from the prior year driven by the June 2023 non-renewal of a large California workers' compensation program which represented $21.3 million and $96.5 million of gross written premiums for the years ended December 31, 2024 and 2023, respectively.

Excluding the non-renewed program, our fronting written premium increased 8.3% over the prior year driven primarily by the continued expansion of existing fronting relationships.

Our largest fronting relationship represented $175.7 million or 42.4% of segment gross written premium in 2024 compared to $163.1 million or 32.5% in 2023.

The Company has received notifications of non-renewal of the programs with this agent which will decrease future written premiums over time, and result in a run-off of the account beginning July 1, 2025.

Individual risk workers' compensation premium declined due to the September 2023 sale of the renewal rights to that business.

Gross written premiums for the Specialty Admitted Insurance segment (which represents 17.9% of our 2025 consolidated gross written premiums) declined 49.5% from the prior year reflecting non-renewals of programs and the continued run-off of the workers's compensation book.

We are being selective with fronting opportunities, focusing on low net retentions and placing strong, rated, reinsurance support.

The fronting and reinsurance markets are currently very competitive, and we have refined our underwriting appetite meaningfully over the last few years.

The segment currently has four active programs.

Net Retention

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Total 48.5 % 40.6 %

The lower net premium retention for the Excess and Surplus Lines segment in 2024 reflects the $52.8 million of ceded premium recorded upon execution of the E&S Top Up ADC in the fourth quarter of 2024 and premium adjustments associated with prior years including reinstatement premium which reduced net written premiums and the net retention ratios.

Premium adjustments associated with prior years including reinstatement premium which reduced net written premiums in both years also impacted the net retention ratios.

The premium adjustments totaled $12.3 million and $13.7 million in the years ended December 31, 2025 and 2024, respectively.

In addition, the renewal of a quota share treaty, effective July 1, 2023, increased premium cessions across all underwriting divisions other than Excess Casualty and resulted in lower retentions for the segment.

The net premium retention for the Specialty Admitted Insurance segment decreased in 2024 as fronting business, where we retain a much smaller percentage, represents a greater portion of the book following the sale of the renewal rights to the individual risk workers' compensation business in the prior year third quarter.

The net retention on the fronting business was

17.0% for the year ended December 31, 2024, up from 15.3% for the year ended December 31, 2023 due to the mix of business and changes in reinsurance as coverages renew.

The net premium retention for the Specialty Admitted Insurance segment decreased in 2025 due to a focus on low net retentions, the impact of certain non-renewals in our fronting business, and changes in reinsurance as coverages renew.

Segment Results

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Underwriting expenses (141,944) (140,978) 0.7 %

Underwriting (loss) profit (1)

Underwriting profit (loss) (1)

$ 59,472 $ (77,455) —

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Accident year loss ratio 63.5 % 64.3 %

(1) Underwriting (Loss) Profit is a non-GAAP Measure.

(1) Underwriting Profit (Loss) is a non-GAAP Measure.

See “Reconciliation of Non-GAAP Measures.”

The Excess and Surplus Lines segment produced an underwriting loss of $77.5 million (combined ratio of 115.1%) in 2024 compared to an underwriting profit of $54.3 million (combined ratio of 91.1%) in 2023.

Underwriting results for the year ended December 31, 2024 were impacted by $76.7 million or 15.0 percentage points of net adverse reserve development, including a $52.2 million reserve charge upon execution of the E&S ADC (consideration paid in excess of initial reserves).

The underwriting loss also reflects $52.8 million of ceded premium recorded upon execution of the E&S Top Up ADC in the fourth quarter of 2024.

The E&S Top Up ADC ceded premium increased the segment combined ratio by 10.7 points.

Underwriting results for the year ended December 31, 2023 included $32.6 million or 5.3 percentage points of net adverse reserve development in our loss estimates for prior accident years.

Underwriting results for the years ended December 31, 2024 and 2023 also include $13.7 million and $16.4 million, respectively, of premium adjustments associated with prior years including reinstatement premium which reduced net written and net earned premiums, and underwriting profit.

The Excess and Surplus Lines segment produced an underwriting profit of $59.5 million (combined ratio of 89.4%) in 2025 compared to an underwriting loss of $77.5 million (combined ratio of 115.1%) in 2024.

The year-over-year improvement was largely driven by reserve development on prior accident years which was $5.0 million or 0.9 points favorable for the year ended December 31, 2025 compared to $76.7 million or 15.0 points adverse for the year ended December 31, 2024 (including a $52.2 million reserve charge upon execution of the E&S ADC in 2024), and $52.8 million of ceded premium recorded upon execution of the E&S Top Up ADC in 2024 which increased the 2024 segment combined ratio by 10.7 points.

The $5.0 million of net favorable development is net of $51.4 million ceded to the E&S Top Up ADC.

The E&S Top Up ADC is not in a gain position, thus it is not subject to retroactive reinsurance accounting and there are no deferrals related to the E&S Top Up ADC in 2025.

Accordingly, all cessions to the E&S Top Up ADC in 2025 reduce net incurred losses and loss adjustment expenses.

Additionally, the net favorable development excludes $27.2 million of adverse development ceded to the Commercial Auto LPT and E&S ADC that was deferred under retroactive reinsurance accounting.

The $27.2 million is included in net incurred losses and loss adjustment expenses on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).

Underwriting results for the years ended December 31, 2025 and 2024 also include $12.3 million and $13.7 million, respectively, of premium adjustments associated with prior years including reinstatement premium which reduced net written premiums, net earned premiums, and underwriting profit.

The impact of the premium adjustments was a 1.9 and 3.0 percentage point increase in the segment combined ratios in the respective years.

The higher loss ratio of 87.6% for the year ended December 31, 2024 as compared to the 68.9% loss ratio for the year ended December 31, 2023 primarily reflects the higher net adverse reserve development (15.0 percentage points in 2024 compared to 5.3 percentage points in 2023), and an 8.2 point increase in 2024's ratio due to the E&S Top Up ADC ceded premium.

The segment loss ratio of 64.0% for the year ended December 31, 2025 improved from 87.6% for the year ended December 31, 2024 reflecting reserve development on prior accident years (0.9 points favorable compared to 15.0 points adverse, respectively) and the impact of the ceded premium associated with the E&S Top Up ADC in the prior year (an 8.2 point impact on the 2024 loss ratio).

The impact of the premium adjustments was a 1.4 and 2.3 percentage point increase in the segment loss ratios in the respective years.

The expense ratio increased from 22.2% in 2023 to 27.5% in 2024 reflecting higher compensation and bad debt expenses, and lower net earned premiums including a 2.5 point increase in the 2024 expense ratio due to the E&S Top Up ADC ceded premium of $52.8 million.

The expense ratio improved from 27.5% in 2024 to 25.4% in 2025 reflecting lower general and administrative expenses, including lower compensation and bad debt expenses, and the impact of lower net earned premiums in 2024 including a 2.5 point increase in the 2024 expense ratio due to the E&S Top Up ADC ceded premium of $52.8 million.

Specialty Admitted Insurance Segment

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Underwriting expenses (6,111) (12,663) (51.7) %

Underwriting profit (1), (2)

Underwriting (loss) profit (1), (2)

$ (5,693) $ 6,873 —

Loss ratio 77.8 % 76.3 %

Expense ratio 14.4 % 19.6 %

Combined ratio 92.2 % 95.9 %

Accident year loss ratio 78.5 % 77.3 %

(1) Underwriting Profit is a non-GAAP Measure.

(1) Underwriting (loss) profit is a non-GAAP Measure.

See “Reconciliation of Non-GAAP Measures.”

(2) Underwriting profit includes fee income of $21.0 million and $24.2 million for the years ended December 31, 2024 and 2023, respectively.

The Specialty Admitted Insurance segment generated underwriting profits of $6.9 million and $4.1 million (combined ratios of 92.2% and 95.9%) for the years ended December 31, 2024 and 2023, respectively.

Lower written and earned premium volumes in 2024 reflect the Company's actions to reduce the workers' compensation book of business in the segment, including the non-renewal of a large California workers' compensation program and the sale of the renewal rights to the individual risk workers’ compensation business in the prior year.

Net favorable development in our loss estimates for prior accident years was $607,000 and $1.0 million (0.7 and 1.0 percentage points) for the years ended December 31, 2024 and 2023, respectively.

The favorable development in both 2024 and 2023 was attributable to lower than expected loss emergence in the workers’ compensation book for prior accident years.

The higher current accident year loss ratio in 2024 was primarily driven by changes in the mix of business for the segment.

The segment expense ratio for 2024 benefited from lower commissions driven by sliding scale and other adjustments on certain programs, as well as lower expenses for compensation and taxes, licenses, and fees following the reductions to our workers' compensation book in the prior year.

The sale of the renewal rights to the individual risk workers' compensation business included the transfer of employees associated with the business.

(2) Underwriting (loss) profit includes fee income of $13.4 million and $21.0 million for the years ended December 31, 2025 and 2024, respectively.

The Specialty Admitted Insurance segment had an underwriting loss of $5.7 million for the year ended December 31, 2025 compared to an underwriting profit of $6.9 million for the year ended December 31, 2024.

Lower written and earned premium volumes in 2025 reflect several non-renewals of programs and the continued run-off of the workers' compensation book of business.

We are being selective with fronting opportunities, focusing on low net retentions and placing strong, rated, reinsurance support.

The fronting and reinsurance markets are currently very competitive, and we have refined our underwriting appetite meaningfully over the last few years.

The segment currently has four active programs.

Net reserve development in our loss estimates for prior accident years was $3.5 million adverse for the year ended December 31, 2025 compared to $607,000 favorable for the year ended December 31, 2024.

Underwriting expenses for the segment decreased 51.7%, from $12.7 million in the prior year to $6.1 million in 2025.

We are closely managing expenses for the segment as was evident in lower compensation and other general and administrative expenses in 2025.

The lower premium volume in the current year resulted in lower taxes, licenses, and fees expense and the segment also benefited from certain sliding scale and other adjustments on certain programs which lowered commission expense.

Corporate and Other Segment

Other operating expenses for the Corporate and Other segment include personnel costs associated with the Bermuda and U.S.

holding companies, professional fees, share based compensation for the full Company, and various other corporate expenses that were not reimbursed by our subsidiaries, including costs associated with rating agencies and strategic initiatives.

Other operating expenses for the Corporate and Other segment include personnel costs associated with our holding companies, professional fees, public company expenses, fees for our Board of Directors, long term incentive compensation for the full Company, and various other corporate expenses that were not reimbursed by our subsidiaries, including costs associated with our rating agency and strategic initiatives.

The expenses are included in our calculation of consolidated underwriting profit, and in our consolidated expense ratio and combined ratio.

Total operating expenses of the Corporate and Other segment were $33.5 million and $35.0 million for the years ended December 31, 2025 and 2024, respectively.

The higher current year expenses as compared to the prior year were largely driven by higher compensation and insurance costs.

The reduction in operating expenses from the prior year was primarily attributable to reduced compensation expenses and lower professional fees.

Investing Results

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The Company's private investments generated income of $3.2 million and $4.9 million for the years ended December 31, 2025 and 2024, respectively.

Excluding private investments, our net investment income for the year ended December 31, 2024 increased 11.7% over the prior year principally due to higher yields on cash, cash equivalents, restricted cash equivalents, and short-term investments.

Excluding private investments, our net investment income for the year ended December 31, 2025 decreased 9.1% from the prior year principally due to a lower interest rate environment which impacted yields across several areas of the portfolio, and a reduction in the portfolio's common equity allocation in the fourth quarter of 2024.

Major categories of the Company’s net investment income are summarized as follows:

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The majority of the portfolio, or $1,404.8 million, is comprised of fixed maturity securities that are classified as available-for-sale and carried at fair value with unrealized gains and losses on these securities reported, net of applicable taxes, as a separate component of accumulated comprehensive income or loss.

Also included in our investments are $142.4 million of bank loan participations, $86.5 million of equity securities, $97.1 million of short-term investments, and $36.7 million of other invested assets.

Also included in our investments are $155.1 million of bank loan participations, $73.1 million of equity securities, and $64.2 million of other invested assets.

Bank loan participations generally provide a higher yield than our portfolio of fixed maturity securities and are primarily senior, secured floating-rate debt rated “BB”, “B”, or “CCC” by Standard & Poor’s or an equivalent rating from another nationally recognized statistical rating organization, and are therefore below investment grade.

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The Company invests selectively in private debt and equity opportunities.

These investments comprise the Company’s other invested assets and are primarily focused in renewable energy, limited partnerships, and notes receivable for structured private specialty credit.

Equity interests in various renewable energy LLCs generated investment income of $1.7 million and $2.9 million for the years ended December 31, 2024 and 2023, respectively.

These investments comprise the Company’s other invested assets and are primarily focused in renewable energy limited liability companies ("LLCs"), limited partnerships, and notes receivable for structured private credit.

Income from the Company’s investments in renewable energy LLCs and limited partnerships is recognized under the equity method of accounting.

Equity interests in various renewable energy LLCs generated investment losses of $369,000 and income of $1.7 million for the years ended December 31, 2025 and 2024, respectively.

The Company’s former Non-Executive Chairman invested in certain of these LLCs.

During the fourth quarter of 2022, the underlying projects in two of our LLCs were sold at the manager's discretion.

We received proceeds of $2.0 million and $3.6 million from these sales during the years ended December 31, 2024 and 2023.

We received additional proceeds of $2.0 million from these sales during the year ended December 31, 2024.

The remaining investments had a carrying value of $7.3 million at December 31, 2025.

Investments in loans for renewable energy projects had investment income of $138,000 and $244,000 for the years ended December 31, 2024 and 2023, respectively.

During 2024, the Company received the remaining principal of $1.4 million on the notes receivable.

Previously, the Company held investments in loans for renewable energy projects at a fixed interest rate of 12%.

During the year ended December 31, 2024, we received the final principal repayments of $1.4 million.

Investments in loans for renewable energy projects had investment income of $138,000 for the year ended December 31, 2024.

The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, private equity general partnership interests, commercial mortgage-backed securities, specialty private credit, and tranches of distressed home loans.

Investment income from these partnerships was $2.4 million and $1.6 million for the years ended December 31, 2024 and 2023,

respectively .

Together, these limited partnerships had a carrying value of $15.1 million at December 31, 2024.

Income from the Company’s investments in renewable energy LLCs and limited partnerships is recognized under the equity method of accounting.

At December 31, 2024, the Company held $13.9 million in two notes receivable for structured private credit.

Previously, the Company held $4.5 million of subordinated notes issued by a bank holding company that matured on August 12, 2023.

The Company’s former Non-Executive Chairman was previously the Lead Independent Director of the bank holding company and an investor in the bank holding company.

Interest income from both notes was $584,000 and $340,000 for the years ended December 31, 2024 and 2023, respectively.

For the year ended December 31, 2024, the Company recognized net realized and unrealized investment gains of $3.6 million, including $1.1 million of net realized investment losses on the sale of fixed maturity securities, $3.2 million of net realized investment losses on the sale of bank loans securities, $9.6 million of net realized investment gains on the sale of equity securities, $620,000 of losses for the change in fair value of bank loans, $873,000 of losses for the change in fair value of equity securities, and an impairment loss of $207,000 for one fixed maturity security due to the Company's inability to hold the security until a recovery in its value to the amortized cost basis.

For the year ended December 31, 2023, the Company recognized net realized and unrealized investment gains of $10.4 million, including $339,000 of net realized investment losses on the sale of fixed maturity securities, $3.5 million of net realized investment losses on the sale of bank loans, $1.5 million of net realized investment gains on the sale of equity securities, $9.0 million of gains for the change in fair value of bank loans, and $3.7 million of gains for the change in fair value of equity securities.

Investment income from these partnerships was $1.8 million and $2.4 million for the years ended December 31, 2025 and 2024, respectively.

During the year ended December 31, 2025, the Company redeemed its investment in one of the limited partnerships for $5.9 million in proceeds.

The limited partnerships had a carrying value of $13.5 million at December 31, 2025.

At December 31, 2025 the Company held $43.4 million in ten collateralized notes receivable for structured private credit.

Interest income from the notes was $1.8 million and $584,000 for the years ended December 31, 2025 and 2024, respectively.

For the year ended December 31, 2025, the Company recognized net realized and unrealized investment losses of $2.2 million, including $74,000 of net realized investment gains on the sale of fixed maturity securities, $3.5 million of net realized investment losses on the sale of bank loans securities, $2.0 million of net realized investment losses on the sale of equity securities, $777,000 of gains for the change in fair value of bank loans, and $2.4 million of gains for the change in fair value of equity securities.

For the year ended December 31, 2024, the Company recognized net realized and unrealized investment gains of $3.6 million, including $1.1 million of net realized investment losses on the sale of fixed maturity securities, $3.2 million of net realized investment losses on the sale of bank loans, $9.6 million of net realized investment gains on the sale of equity securities, $620,000 of losses for the change in fair value of bank loans, $873,000 of losses for the change in fair value of equity securities, and an impairment loss of $207,000 for one fixed maturity security due to the Company's inability to hold the security until a recovery in its value to the amortized cost basis.

In conjunction with its outside investment managers, the Company performs quarterly reviews of all securities within its investment portfolio to determine whether any impairment has occurred.

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BBB 144,589 10.3 %

Below BBB and unrated — — %

Total $ 1,404,774 100.0 %

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Other Income and Expense

Other income and expense items netted to expense of $14,000 and income of $424,000 for the years ended December 31, 2024 and 2023, respectively.

Other income and expense items netted to income of $1.7 million and expense of $14,000 for the years ended December 31, 2025 and 2024, respectively.

Included in 2025 are $3.3 million of income related to broker incentive rebates in the Excess and Surplus Lines segment and $311,000 of income related to interest income from trust preferred securities, partially offset by non-operating expenses of $2.0 million primarily consisting of legal and other professional fees and other expenses related to various strategic initiatives.

Included in 2024 are non-operating expenses of $6.1 million primarily consisting of legal and other professional fees and other expenses related to various strategic initiatives, partially offset by $5.4 million of broker incentive rebates in the Excess and Surplus Lines segment and $660,000 of income related to interest income from trust preferred securities and distributions from a joint venture interest.

I ncluded in 2023 are a $2.2 million gain on the sale of the renewal rights to the IRWC business in the Specialty Admitted Insurance segment, $1.3 million of broker incentive rebates in the Excess and Surplus Lines segment, and $693,000 of income related to interest income from trust preferred securities and distributions from a joint venture interest, partially offset by non-operating expenses of $3.8 million primarily consisting of legal fees related to a purported class action lawsuit and legal and other professional fees and other expenses related to various strategic initiatives including the sale of renewal rights to the IRWC business in the Specialty Admitted Insurance segment.

Interest Expense

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See “—Liquidity and Capital Resources—Sources and Uses of Funds” below for information regarding our senior debt facilities and trust preferred securities.

Declining interest rates in 2025 led to lower interest expense as compared to 2024.

Amortization of Intangibles

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The Company completed its impairment tests and fair value analysis for goodwill and other intangible assets during the fourth quarter of 2025 and 2024.

No impairment was present for the years ended December 31, 2024 or 2023 except for the $2.5 million related to the trademark intangible asset in 2023 as mentioned above.

No impairment was present for the years ended December 31, 2025 or 2024.

Income Tax Expense

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For the years ended December 31, 2025 and 2024, our effective tax rate was 1.4% and 10.7%, respectively.

The Company does not receive a U.S.

tax deduction for losses in Bermuda.

Bermuda had losses in both years because of Bermuda holding company expenses.

Income tax expense in 2025 reflects a one-time benefit of $14.1 million for the effects of domestication on the business interest expense deduction.

Absent the one-time item, the effective tax rate for 2025 is 29.3% reflecting the impact of Bermuda expenses that were not deductible for tax prior to the domestication in November 2025.

For U.S.-sourced income, the Company’s U.S.

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As a result, the Company has concluded that no valuation allowance is required for the deferred tax asset associated with unrealized losses on its investments at December 31, 2025.

The Company also has a deferred tax asset of $14.1 million at December 31, 2025 associated with the effects of domestication on the business interest expense deduction.

The carryforward period for this tax benefit is unlimited and does not expire but the annual utilization on the consolidated U.S.

federal income tax return is limited to the separate company (in this case our ultimate holding company) that generated the benefit.

The Company has developed tax planning strategies that we

believe are prudent and feasible to increase the utilization of the carryforward in future tax years.

These strategies include reducing interest expense and increasing investment income and overall pre-tax income - both at that specific entity (the ultimate holding company).

As a result, the Company has concluded that no valuation allowance is required for the deferred tax asset at December 31, 2025.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

For a discussion of our results for the year ended December 31, 2023 as compared to year ended December 31, 2022, please refer to our 2023 Form 10-K filed with the SEC on February 29, 2024.

For a discussion of our results for the year ended December 31, 2024 as compared to year ended December 31, 2023, please refer to our 2024 Form 10-K filed with the SEC on March 4, 2025.

Liquidity and Capital Resources

Sources and Uses of Funds

Our sources of funds consist primarily of premiums written, investment income, reinsurance recoveries, proceeds from sales and redemptions of investments, borrowings on our credit facilities, and the issuance of common shares and Series A Preferred Shares.

We use operating cash flows primarily to pay operating expenses, losses and loss adjustment expenses, reinsurance premiums, and income taxes.

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Change in cash, cash equivalents, and restricted cash equivalents $ (121,628) $ 31,101 $ 83,570

Cash provided by operating activities excluding restricted cash equivalents of $1.4 million for the year ended December 31, 2025 was negatively impacted by timing of reinsurance settlements and lower premium collections in the Specialty Admitted Insurance segment due to the non-renewal of several programs.

Cash used in operating activities excluding restricted cash equivalents of $203.3 million for the year ended December 31, 2024 principally reflects $313.2 million and $52.8 million of reinsurance premium paid in 2024 related to the E&S ADC and E&S Top Up ADC, respectively.

Cash provided by operating activities excluding restricted cash equivalents of $118.7 million and $221.5 million for the years ended December 31, 2023 and 2022, respectively, was driven by the growth in our U.S.

Cash provided by operating activities excluding restricted cash equivalents of $118.7 million for the year ended December 31, 2023 was driven by the growth in our U.S.

segments and the collection of premiums receivable at a quicker rate than payments of loss and loss adjustment expenses.

The cash provided by operating activities declined in 2023 relative to 2022 due to the suspension of underwriting activities of JRG Re in 2023.

Cash (used in) provided by operating activities from continuing operations excluding restricted cash equivalents was $(178.2) million, $234.6 million, and $246.6 million for the years ended December 31, 2024, 2023, and 2022, respectively, compared to cash used in operating activities of discontinued operations of $25.1 million, $115.9 million, and $25.1 million in the respective years.

Cash used in investing activities of $116.0 million for the year ended December 31, 2025 reflects efforts to enhance the yield in our investment portfolio by investing available cash and cash equivalents into higher yielding investments.

Cash provided by investing activities of $307.0 million in 2024 reflects the $96.4 million of proceeds from the sale of JRG Re and the sale of investments to fund the reinsurance premiums for the E&S ADC and E&S Top Up ADC.

In 2023, cash provided by investing activities of $16.7 million was driven by the suspension of underwriting activities of JRG Re and the withdrawal of invested assets in that company to fund claims and operating expenses.

Cash used in investing activities for 2022 of $328.2 million reflects our efforts to enhance the yield in our investment portfolio by investing available cash and cash equivalents into higher yielding investments.

Cash and cash equivalents (excluding restricted cash equivalents) comprised 13.3%, 18.9%, and 13.9% of total cash and invested assets at December 31, 2025, 2024, and 2023, respectively.

Cash provided by (used in) investing activities from continuing operations was $243.9 million, $(98.4) million, and $(336.7) million for the years ended December 31, 2024, 2023, and 2022, respectively, compared to cash provided by investing activities of discontinued operations of $63.1 million, $115.1 million, and $8.5 million in the respective years.

Cash (used in) provided by financing activities above relate entirely to continuing operations for all years.

Cash used in financing activities of $28.8 million for the year ended December 31, 2024 includes a $21.5 million repayment of an unsecured loan under the 2017 facility, $12.5 million received for the common share investment by Enstar, $12.8 million of dividends paid on the Series A Preferred Shares, $6.2 million of dividends paid to common shareholders, and $847,000 of payroll taxes withheld and remitted on net settlement of restricted share units (“RSUs”).

Cash used in financing activities of $21.1 million for the year ended December 31, 2023 includes $7.7 million of dividends paid to common shareholders, $10.5 million of dividends paid on the Series A Preferred Shares, $1.1 million of paid issuance costs related to the amendment of the 2013 Facility in July, 2023, and $1.7 million of payroll taxes withheld and remitted on net settlement of RSUs.

Cash provided by financing activities of $89.7 million for the year ended December 31, 2022 includes $144.9 million of net proceeds (after expenses) from the

issuance and sale of 150,000 Series A Preferred Shares on March 1, 2022.

The proceeds were used for general corporate purposes and to repay $40.0 million of loans outstanding on the 2017 Facility (as defined below) on March 28, 2022.

Financing activities for the year ended December 31, 2022 also include $7.8 million of dividends paid to common shareholders, $6.1 million of dividends paid on the Series A Preferred Shares, and $1.3 million of payroll taxes withheld and remitted on net settlement of RSUs.

Cash provided by financing activities of $13.2 million for the year ended December 31, 2025 includes a $25.0 million borrowing under the Previous Credit Agreement (as defined below), $1.2 million of issuance costs paid upon the Company's entry into the Credit Agreement (as defined below), $7.9 million of dividends paid on the Series A Preferred Shares, $2.0 million of dividends paid to common shareholders, and $745,000 of payroll taxes withheld and remitted on net settlement of restricted share units (“RSUs”).

Cash used in financing activities of $28.8 million for the year ended December 31, 2024 includes a $21.5 million repayment of an unsecured loan under our prior revolving credit facility with BMO Bank N.A., $12.5 million received for the common stock investment by Enstar, $12.8 million of dividends paid on the Series A Preferred Shares, $6.2 million of dividends paid to common shareholders, and $847,000 of payroll taxes withheld and remitted on net

settlement of restricted share units (“RSUs”).

Cash used in financing activities of $21.1 million for the year ended December 31, 2023 includes $7.7 million of dividends paid to common shareholders, $10.5 million of dividends paid on the Series A Preferred Shares, $1.1 million of paid issuance costs related to the amendment of the Company’s previous Third Amended and Restated Credit Agreement dated as of July 7, 2023 (the “Previous Credit Agreement”), and $1.7 million of payroll taxes withheld and remitted on net settlement of RSUs.

As permitted under the agreements establishing the Indemnity Trust and the LPT Trust, we have withdrawn collateral from the Indemnity Trust and the LPT Trust to fund the Loss Fund Trust as required under the Administrative Services Agreement.

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See “ Amounts Recoverable from an Indemnifying Party and Reinsurer on Legacy Commercial Auto Book ” below.

We are organized as a Bermuda holding company with our operations conducted by our wholly-owned subsidiaries.

Accordingly, our holding company may receive cash through loans from banks, issuance of equity and debt securities, corporate service fees or dividends received from our subsidiaries and/or other transactions.

holding company may receive cash in a similar manner and also through payments from our subsidiaries pursuant to our U.S.

consolidated tax allocation agreement.

Our operations are conducted by our wholly-owned subsidiaries.

Accordingly, our holding companies may receive cash through loans from banks, issuance of equity and debt securities, corporate service fees, dividends received from our subsidiaries, or through payments from our subsidiaries pursuant to our consolidated tax allocation agreement.

The payment of dividends by our subsidiaries to us is limited by statute.

In general, the laws and regulations applicable to our domestic insurance subsidiaries limit the aggregate amount of dividends or other distributions that they may declare or pay within any 12-month period without advance regulatory approval.

In general, the laws and regulations applicable to our insurance subsidiaries limit the aggregate amount of dividends or other distributions that they may declare or pay within any 12-month period without advance regulatory approval.

Generally, the limitations are based on the greater of statutory net income for the preceding year or 10.0% of statutory surplus at the end of the preceding year.

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Insurance Regulation—State Regulation” for additional information.

The maximum amount of dividends available to the U.S.

holding company from our U.S.

insurance subsidiaries during 2025 without regulatory approval is $64.3 million.

Holders of the Series A Preferred Shares are entitled to a dividend at the rate of 7% of the $1,000 liquidation preference per share (the “Liquidation Preference”) per annum, paid in cash, in-kind in common shares or in Series A Preferred Shares, at our election.

The maximum amount of dividends available to our holding companies from our insurance subsidiaries during 2026 without regulatory approval is $96.1 million.

Holders of the Series A Preferred Shares are entitled to a dividend at the rate of 7% of the $1,000 liquidation preference per share (the “Liquidation Preference”) per annum, paid in cash, in-kind in common stock or in Series A Preferred Shares, at our election.

On October 1, 2029, and each five-year anniversary thereafter, the dividend rate will reset to a rate equal to the five-year U.S.

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Cash dividends paid were $7.9 million, $12.8 million, and $10.5 million in the respective years.

At December 31, 2024, our Bermuda holding company had $64.5 million of cash and cash equivalent assets.

holding company had $9.5 million of cash and invested assets at December 31, 2024, comprised of cash and cash equivalents of $6.0 million, preferred stock of $3.1 million, and other invested assets of $464,000, which are not subject to regulatory restrictions.

Additionally, our U.K.

intermediate holding company had no invested assets and cash of less than $10,000 at December 31, 2024.

At December 31, 2025, our holding companies had $40.2 million of cash and invested assets, comprised of cash and cash equivalents of $39.8 million and other invested assets of $369,000, which are not subject to regulatory restrictions.

Credit Agreements

The Company has a $257.5 million senior revolving credit facility (as amended or amended and restated, the “2013 Facility”).

The 2013 Facility is comprised of the following at December 31, 2024:

• A $212.5 million unsecured revolving facility to meet the working capital needs of the Company.

All unpaid principal on the revolver is due at maturity.

Interest accrues quarterly and is payable in arrears, currently at 1-month SOFR (the Company, per the terms of the credit agreement, can elect between one, three, or six month interest periods) plus a 0.1% SOFR index adjustment and a SOFR margin (1.75% at December 31, 2024), which is subject to change according to terms in the credit agreement.

At December 31, 2024 and 2023, the Company had a drawn balance of $185.8 million outstanding on the unsecured revolver.

• A $45.0 million secured revolving facility to issue letters of credit for the benefit of third-party reinsureds.

At December 31, 2024, the Company had $7.5 million of letters of credit issued under the secured facility, all of which are collateralized by a back-to-back letter of credit issued by Comerica Bank on behalf of JRG Re.

On July 7, 2023, the Company entered into a Third Amended and Restated Credit Agreement for the 2013 Facility which, among other things, extended the maturity date of such facility until July 7, 2026 and increased the applicable interest rate and letter of credit fees.

The 2013 Facility has been amended from time to time, including on April 16, 2024 when the 2013 Facility was amended in connection with the closing of the sale of JRG Re by the Company to (i) release JRG Re as a borrower and release all collateral pledged by JRG Re thereunder, and (ii) decrease the secured revolving facility commitment from $102.5 million to $45.0 million.

Additionally, the Third Amended and Restated Credit Agreement provides for an accordion feature that permits the Company to request that one or more lenders (without the consent of the other lenders) or one or more financial institutions which were not previously party to the Third Amended and Restated Credit Agreement (with the consent of the administrative agent) provide it with increases in the secured or unsecured revolving credit facilities of up to an aggregate of $100.0 million, which is unchanged from the accordion feature set forth in the Second Amended and Restated Credit Agreement.

The Company’s ability to request such increases in the revolving credit facility is subject to its compliance with customary conditions set forth in the Third Amended and Restated Credit Agreement.

The 2013 Facility contains certain financial and other covenants (including minimum net worth, maximum ratio of total adjusted debt outstanding to total capitalization, and financial strength ratings) with which the Company was in compliance at December 31, 2024.

On August 2, 2017, the Company and its former wholly-owned subsidiary, JRG Re, together as borrowers, entered into a credit agreement (the "2017 Facility") that provided the Company with a revolving line of credit of up to $100.0 million, which was used for loans and letters of credit made or issued, at the borrowers' option, on a secured or unsecured basis.

The loans and letters of credit made or issued under the revolving line of credit were used to finance the Borrowers’ general corporate purposes.

Obligations under the 2017 Facility carried a variable rate of interest subject to terms in the credit agreement.

The 2017 Facility was amended from time to time since its inception in 2017, including on April 16, 2024 in connection with the closing of the sale of JRG Re by the Company to (i) release JRG Re as a borrower and release all collateral pledged by JRG Re thereunder, (ii) increase the applicable interest rates, (iii) eliminate the letter of credit portion of the facility, and (iv) to build in an automatic decrease of the facility amount by the amount of each letter of credit outstanding under the 2017 Facility as of the date of the amendment with effect from the date each such letter of credit is cancelled.

The 2017 Facility was terminated in November 2024.

On June 12, 2025, JRG Holdings entered into a Credit Agreement (the “Credit Agreement”).

The Credit Agreement replaced the Previous Credit Agreement, which provided for a $212.5 million unsecured revolving credit facility and a $45.0 million secured revolving credit facility.

The Credit Agreement provides for a $212.5 million unsecured revolving credit facility available for general corporate purposes and matures on June 12, 2028.

Following the sale of JRG Re, the Company no longer has a need for the secured revolving credit facility provided by the Previous Credit Agreement.

The interest rates applicable to the loans under the Credit Agreement are generally based on SOFR plus a specified margin based on the Company’s Leverage Ratio (as defined in the Credit Agreement).

In addition, JRG Holdings will pay an unused facility fee on each lender’s commitment.

At December 31, 2025, JRG Holdings had a drawn balance of $210.8 million outstanding on the unsecured revolver of the Credit Agreement, including $25.0 million previously borrowed on January 27, 2025 under the Previous Credit Agreement which was contributed to our regulated insurance entities.

The Credit Agreement provides for an accordion feature that permits JRG Holdings to request that one or more lenders (without the consent of the other lenders) or new financial institutions (with the consent of the Administrative Agent) provide it with increases in the credit facility of up to an aggregate of $30.0 million , subject to satisfaction of certain conditions.

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default.

The Credit Agreement also includes financial covenants, including a maximum leverage ratio and minimum consolidated net worth, RBC ratio and financial strength rating requirements with which the Company was in compliance at December 31, 2025 .

In connection with the Credit Agreement, James River Group, Inc.

(“James River Group”), a Delaware corporation and wholly owned subsidiary of JRG Holdings, entered into a Continuing Guaranty of Payment dated June 12, 2025 (a “Payment

Pursuant to its Payment Guaranty, James River Group guarantees the payment and performance of the obligations of JRG Holdings under the Credit Agreement and other loan documents.

Senior Debt and Trust Preferred Securities

On May 26, 2004, we issued $15.0 million of senior debt due April 29, 2034.

The senior debt is not redeemable by the holder or subject to sinking fund requirements.

Interest accrues quarterly and is payable in arrears at a floating rate per annum equal to the 3-month SOFR and 3.85% margin plus a spread adjustment of 0.26%.

Interest accrues quarterly and is payable in arrears at a floating rate per annum equal to the 3-month SOFR plus 4.11%.

This senior debt is redeemable at par prior to its stated maturity at our option in whole or in part.

The terms of the senior debt contain certain covenants, with which we are in compliance at December 31, 2024, and which, among other things, restrict our ability to assume senior indebtedness secured by our U.S.

holding company's common stock or its subsidiaries' capital stock or to issue shares of its subsidiaries' capital stock.

The terms of the senior debt contain certain covenants, with which we are in compliance at December 31, 2025, and which, among other things, restrict our ability to issue senior indebtedness secured by James River Group’s common stock or its subsidiaries’ capital stock or to issue shares of its subsidiaries’ capital stock.

From May 2004 through January 2008, we sold trust preferred securities through five Delaware statutory trusts sponsored and wholly-owned by the Company or its subsidiaries.

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At December 31, 2025 and December 31, 2024, the Company's leverage ratio was 27.5% and 26.6%, respectively.

The leverage ratio is defined in our senior credit agreements as the ratio of adjusted consolidated debt to total capital.

The leverage ratio is defined in our Credit Agreement as the ratio of adjusted consolidated debt to total capital.

Adjusted consolidated debt treats trust preferred securities as equity capital up to 15% of total capital.

Total capital is defined as total debt

plus tangible equity excluding accumulated other comprehensive income.

Total capital is defined as total debt plus tangible equity excluding accumulated other comprehensive income.

The maximum leverage ratio permitted by the agreements is 35.0%.

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In proportional quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses arising out of a defined class of business in exchange for a corresponding percentage of premiums.

These proportional quota share reinsurance agreements generally include a ceding commission paid by the reinsurer to the Company to cover acquisition costs associated with the insurance ceded.

The Company also utilizes facultative reinsurance to reduce the amount of exposure it retains on individual accounts according to its guidelines for accepting risk across various industry segments, locations and types of exposure.

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Also in our Excess and Surplus Lines segment, a specialty casualty treaty providing $9.0 million in excess of $2.0 million coverage is subject to reinstatement premiums for treaty years spanning July 1, 2017 through July 1, 2022.

Based upon the modeling of our Excess and Surplus Lines and Specialty Admitted segments, it would take an event greater than the 1 in 1,000 year PML to exhaust our $20.0 million property catastrophe reinsurance.

Based upon the property catastrophe modeling of our Excess and Surplus Lines and Specialty Admitted Insurance segments, it would take an event greater than the 1 in 1,000 year PML to exhaust our $22.0 million property catastrophe reinsurance.

In the event of a catastrophe loss exhausting our $22.0 million property catastrophe reinsurance, we estimate our pre-tax cost would not exceed 2.5% of shareholders’ equity, including reinstatement premiums and net retentions.

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See “ Amounts Recoverable from an Indemnifying Party and Reinsurer on Legacy Commercial Auto Book ” below for further information on this reinsurance agreement.

The E&S ADC with State National applies to James River’s Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned during 2010-2023 (both years inclusive), excluding, among others, losses related to commercial

auto policies issued to a former large insured or its affiliates.

The E&S ADC with State National reinsures James River’s Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned during 2010-2023 (both years inclusive), excluding, among others, losses related to commercial auto policies issued to a former large insured or its affiliates.

See “ Combined Loss Portfolio Transfer and Adverse Development Cover ” above for further information on this reinsurance agreement.

The E&S Top Up ADC with Enstar, through its subsidiary Cavello Bay Reinsurance Limited, reinsures 100% of the losses associated with James River’s Excess & Surplus Lines segment portfolio losses attaching to premium earned during 2010-2023 (both years inclusive).

This agreement excludes losses related to commercial auto policies issued to a former large insured or its affiliates.

This agreement excludes losses related to commercial auto policies issued to a former large insured or its

It is subject to a retention by James River of $1,183.7 million (the limit of the E&S ADC) and up to an aggregate limit of $75.0 million.

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Line of Business Coverage

Auto Programs Quota share coverage for 62.5%-100% of limits up to $1.5 million liability and $1.5 million physical damage per occurrence.

Auto Programs All programs are quota share coverage for 100% of limits up to $1.0 million liability and $1.0 million physical damage per occurrence;

except for one program with a primary limit of $750,000 liability.

General Liability & Professional Liability – Programs Quota share coverage for 100% of limits up to $1.0 million per occurrence.

Umbrella and Excess Casualty - Programs Quota share coverage for at least 85% of limits up to $10.0 million per occurrence, and 82% of excess of loss coverage for $5.0 million in excess of $10.0 million.

Property within Package - Programs Quota share coverage for 100% of limits up to $40.0 million per risk.

Umbrella and Excess Casualty - Programs Quota share coverage for 100% of limits up to $25.0 million per occurrence.

Property within Package - Programs Uncapped quota share coverage for 100% of limits.

Excess Property Quota share coverage for 100% of limits up to $45.0 million per occurrence.

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The segment is covered for $22.0 million in excess of $3.0 million per occurrence to manage its property exposure to an approximate 1 in 1,000 year PML.

For individual risk workers' compensation business, now in runoff, we purchased $29.5 million excess of $500,000 per occurrence.

This coverage expired on December 31, 2023.

In the aggregate, we believe our pre-tax group-wide PML from a 1 in 1,000 year property catastrophe event would not exceed 2.5% of shareholders’ equity, inclusive of reinstatement premiums payable.

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(in thousands)

State National Insurance Company (including E&S ADC of $397.0 million) $ 401,148 A

Swiss Reinsurance America Corporation 341,526 A+

State National Insurance Company (E&S ADC) 365,549 A

Berkley Insurance Company 194,180 A+

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Motors Insurance Corporation 77,644 A

Endurance Assurance Corporation 45,111 A+

Cavello Bay Reinsurance Limited (E&S Top Up ADC) 51,394 A

American European Insurance Company 43,039 B- (1)

SiriusPoint America Insurance Company 37,084 A-

Aleka Insurance Company (Commercial Auto LPT) 35,315 Unrated (1)

North Carolina Reinsurance Facility 35,300 Unrated (2)

Top 10 Total 1,380,166

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Total $ 2,026,110

(1) This reinsurer is unrated.

All material reinsurance amounts from this reinsurer are collateralized.

(1) This reinsurer is below A-.

All material reinsurance recoverable amounts from this reinsurer are collateralized.

(2) The North Carolina Reinsurance Facility is a residual market mechanism for automobile insurance in North Carolina.

Amounts Recoverable from an Indemnifying Party and Reinsurer on Legacy Commercial Auto Book

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James River has indemnity agreements with Rasier (non-insurance entities) (collectively, the “Indemnity Agreements”) and is contractually entitled to reimbursement for the portion of the losses and loss adjustment expenses paid on behalf of Rasier under the Rasier Commercial Auto Policies and other expenses incurred by James River.

On September 27, 2021, James River entered into the Commercial Auto LPT with Aleka to reinsure substantially all of the Rasier Commercial Auto Policies for which James River is not otherwise indemnified by Rasier under the Indemnity Agreements.

Under the terms of the Commercial Auto LPT, effective as of July 1, 2021, James River ceded to Aleka approximately $345.1 million of commercial auto liabilities relating to Rasier Commercial Auto Policies written in the years 2013-2019, which amount constituted the reinsurance premium.

Since inception, due to adverse paid and reported loss trends on the legacy Rasier business, the Company has recognized adverse prior year development of $114.2 million on the reserves subject to the Commercial Auto LPT, bringing the cumulative amount ceded under the Commercial Auto LPT to $459.3 million at December 31, 2024.

Each of Rasier and Aleka are required to post collateral under the Indemnity Agreements and the Commercial Auto LPT:

• Pursuant to the Indemnity Agreements, Rasier is required to post collateral equal to 102% of James River's estimate of the amounts that are recoverable or may be recoverable under the Indemnity Agreements, including, among other things, case loss and loss adjustment expense reserves, IBNR loss and loss adjustment expense reserves, extra contractual obligations and excess policy limits liabilities.

The collateral is provided through a collateral trust arrangement (the “Indemnity Trust”) in favor of James River by Aleka.

In connection with the execution of the Commercial Auto LPT, James River returned $691.3 million to the Indemnity Trust, representing the remaining balance of the amount withdrawn in October 2019, as was permitted under the indemnification agreements with Rasier and the associated trust agreement.

At December 31, 2024, the balance in the Indemnity Trust was $64.7 million, and, together with the balance of the Loss Fund Trust (as defined below) attributable to the Indemnity Agreements as described below, the total balance of collateral securing Rasier’s obligations under the Indemnity Agreements was $82.1 million.

• Pursuant to the Commercial Auto LPT, Aleka is required to post collateral equal to 102% of James River's estimate of Aleka's obligations under the Commercial Auto LPT, calculated in accordance with standard actuarial principles and based on reserves recorded in the Company's statutory financial statements.

The collateral is provided through a collateral trust arrangement (the “LPT Trust”) established in favor of James River by Aleka.

At December 31, 2024, the balance in the LPT Trust was $30.1 million, and, together with the balance of the Loss Fund Trust (as defined below) attributable to the Commercial Auto LPT as described below, the total balance of collateral securing Aleka’s obligations under the Commercial

Auto LPT was $37.8 million.

In addition, on September 27, 2021, James River entered into the Commercial Auto LPT with Aleka to reinsure substantially all of the Rasier Commercial Auto Policies for which James River is not otherwise indemnified by Rasier under the Indemnity Agreements.

Each of Rasier and Aleka are required to post collateral equal to 102% of James River's estimate of the respective party's obligations in trusts pursuant to the terms of the Indemnity Agreements and the Commercial Auto LPT, respectively.

At December 31, 2025, the total balance of collateral securing Rasier's obligations under the Indemnity Agreements was $41.3 million and Aleka's obligations under the Commercial Auto LPT was $19.9 million.

At December 31, 2025, the total reinsurance recoverables under the Commercial Auto LPT was $12.4 million.

In connection with the execution of the Commercial Auto LPT, James River and Aleka entered into an administrative services agreement (the “Administrative Services Agreement”) with a third party claims administrator (the “Administrator”) pursuant to which the Administrator handles the claims on the Rasier Commercial Auto Policies for the remaining life of those claims.

The claims paid by the Administrator are reimbursable by James River, and pursuant to the Administrative Services Agreement, James River established a loss fund trust account for the benefit of the Administrator (the “Loss Fund Trust”) to collateralize its claims payment reimbursement obligations.

James River funds the Loss Fund Trust using funds withdrawn from the Indemnity Trust, funds withdrawn from the LPT Trust, and its own funds, in each case in an amount equal to the pro rata portion of the required Loss Fund Trust balance attributable to the Indemnity Agreements, the Commercial Auto LPT and James River’s existing third party reinsurance agreements, respectively.

At December 31, 2024, the balance in the Loss Fund Trust was $28.7 million, including $17.4 million representing collateral supporting Rasier’s obligations under the Indemnity Agreements and $7.7 million representing collateral supporting Aleka’s obligations under the Commercial Auto LPT.

Funds posted to the Loss Fund Trust are classified as restricted cash equivalents on the Company's balance sheet.

While the Commercial Auto LPT brings economic finality to substantially all of the Rasier Commercial Auto Policies, the Company has credit exposure to Rasier and Aleka under the Indemnity Agreements and the Commercial Auto LPT if the estimated losses and expenses of the Rasier Commercial Auto Policies grow at a faster pace than the growth in our collateral balances.

In addition, the Company has credit exposure if its estimates of future losses and loss adjustment expenses and other amounts recoverable under the Indemnity Agreements and the Commercial Auto LPT, which are the basis for establishing the collateral balances, are lower than actual amounts paid or payable.

The amount of credit exposure in any of these instances could be material.

To mitigate these risks, the Company closely and frequently monitors exposure compared to collateral held, and requests additional collateral in accordance with the terms of the Commercial Auto LPT and Indemnity Agreements when its analysis indicates that the Company has uncollateralized exposure.

Best Company financial strength rating for our group’s regulated U.S.

subsidiaries is “A-” (Excellent) with a negative outlook.

The amount of the Company's credit exposure in any of these instances could be material.

To mitigate these risks, the Company closely and frequently monitors its exposure compared to the collateral held, and requests additional collateral in accordance with the terms of the Commercial Auto LPT and Indemnity Agreements when its analysis indicates that it has uncollateralized exposure.

Best Company financial strength rating for our group’s regulated insurance subsidiaries is “A-” (Excellent) with a negative outlook.

This rating reflects A.M.

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The financial strength ratings assigned by A.M.

Best have an impact on the ability of our regulated subsidiaries to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that our subsidiaries receive.

Best have an impact on the ability of our insurance subsidiaries to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that our subsidiaries receive.

We believe the “A-” (Excellent) ratings assigned to our U.S.

insurance subsidiaries allow our subsidiaries to actively pursue relationships with the agents and brokers identified in their marketing plans.

insurance subsidiaries allow our Excess and Surplus Lines segment to actively pursue relationships with the agents and brokers identified in its marketing plans.

Series A Preferred Shares

The Company closed on the issuance and sale of 150,000 Series A Preferred Shares on March 1, 2022 for an aggregate purchase price of $150.0 million, or $1,000 per share, in a private placement.

The Series A Preferred Shares are convertible into the Company’s common shares at the option of the holder at any time, or at the Company’s option under certain circumstances.

Dividends on the Series A Preferred Shares accrue quarterly at the rate of 7% of the Liquidation Preference per annum, which may be paid in cash, in-kind in common shares or in Series A Preferred Shares, at the Company’s election.

On November 11, 2024, the Company amended the Certificate of Designations setting forth the terms of the Series A Preferred Shares to, among other things, convert 37,500 outstanding Series A Preferred Shares with a liquidation value of $37.5 million to common shares at a per share price of $6.40.

The Series A Preferred Shares are convertible into shares of common stock at the option of the holder at any time, or at the Company’s option under certain circumstances.

Dividends on the Series A Preferred Shares accrue quarterly at the rate of 7% of the Liquidation Preference per annum, which may be paid in cash, in-kind in common stock or in Series A Preferred Shares, at the Company’s election.

Following the conversion, 112,500 Series A Preferred Shares remain outstanding.

The Company issued 8,002,755 common shares in the year ended December 31, 2024, increasing the total common shares outstanding from 37,641,563 at December 31, 2023 to 45,644,318 at December 31, 2024.

On November 11, 2024, Enstar Group Limited (“Enstar”), through its subsidiary Cavello Bay Reinsurance Limited, entered into a subscription agreement to purchase $12.5 million of the Company’s common shares at a share price of $6.40.

The Enstar investment closed on December 23, 2024, resulting in the issuance of 1,953,125 common shares.

In 2024, 190,255 of common shares were issued related to the vesting of restricted share units (“RSUs”).

The Company issued 324,266 shares of common stock related to the vesting of restricted share units (“RSUs”) in the year ended December 31, 2025, increasing the total shares of common stock outstanding from 45,644,318 at December 31, 2024 to 45,968,584 at December 31, 2025.

Share Based Compensation Expense

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The Company projects the level of achievement for each award during the performance period and periodically adjusts the number of outstanding awards to reflect the number of awards expected to vest.

In 2024, a downward performance adjustment was made to the outstanding PRSUs granted in 2023.

In 2025 and 2024, performance adjustments were made to the outstanding PRSUs granted in 2024 and 2023.

Material Cash Requirements

We believe the cash generating capability of our operations, together with our revolving credit facilities, and ability to raise capital through future equity offerings, will be adequate to meet our short and long-term cash requirements and provide the financial strength necessary to support our business growth.

We believe the cash generating capability of our operations, together with our revolving credit facility, and ability to raise capital through future equity offerings, will be adequate to meet our short and long-term cash requirements and provide the financial strength necessary to support our business growth.

The following table illustrates our material cash requirements by due date as of December 31, 2025:

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Interest on debt obligations was calculated using the SOFR rate as of December 31, 2025 with the assumption that interest rates would remain flat over the remainder of the period that the debt was outstanding.

The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly traded small cap equities, loans of middle market private equity sponsored companies, private equity general partnership interests, commercial mortgage-backed securities, and tranches of distressed home loans.

At December 31, 2024, the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $4.7 million in these limited partnerships.

At December 31, 2025, the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $92.4 million in private investment opportunities, principally in structured private credit in the form of capital efficient rated notes.

Off-Balance Sheet Arrangements

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Our definition of underwriting profit may not be comparable to that of other companies.

The following table reconciles the underwriting (loss) profit of the operating segments by individual segment to consolidated (loss) income before income taxes for the years ended December 31, 2024, 2023 and 2022.

The following table reconciles the underwriting profit (loss) of the operating segments by individual segment to consolidated income (loss) before income taxes for the years ended December 31, 2025, 2024 and 2023.

Year Ended December 31,

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(in thousands)

Underwriting (loss) profit of the operating segments:

Underwriting profit (loss) of the operating segments:

Excess and Surplus Lines $ 59,472 $ (77,455) $ 54,347

Specialty Admitted Insurance (5,693) 6,873 4,077

Total underwriting (loss) profit of the operating segments (70,582) 58,424 87,285

Total underwriting profit (loss) of the operating segments 53,779 (70,582) 58,424

Other operating expenses of the Corporate and Other segment (33,493) (34,972) (33,940)

Underwriting (loss) profit (1)

Underwriting profit (loss) (1)

20,286 (105,554) 24,484

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Net investment income 83,440 93,089 84,046

Net realized and unrealized gains (losses) on investments 3,625 10,441 (15,720)

Net realized and unrealized (losses) gains on investments (2,195) 3,625 10,441

Other income 3,665 6,131 4,216

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Impairment of intangible assets — — (2,500)

(Loss) income from continuing operations before income taxes $ (71,120) $ 86,914 $ 53,272

(1) Underwriting (loss) profit includes gross fee income of $21.0 million, $24.2 million, and $23.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Income (loss) from continuing operations before income taxes $ 50,543 $ (71,120) $ 86,914

(1) Underwriting profit (loss) includes gross fee income of $13.4 million, $21.0 million, and $24.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Reconciliation of Adjusted Net Operating Income

Adjusted net operating income is defined as income available to common shareholders excluding a) income (loss) from discontinued operations, b) the impact of retroactive reinsurance accounting, c) net realized and unrealized gains (losses) on investments, d) certain non-operating expenses such as professional service fees related to certain lawsuits, various strategic initiatives, and the filing of registration statements for the offering of securities, e) severance costs associated with terminated employees, and f) deemed dividends recorded with the amendment of the Series A Preferred Shares.

Adjusted net operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and our definition of adjusted net operating income may not be comparable to that of other companies.

Our (loss) income available to common shareholders for the years ended December 31, 2024, 2023 and 2022 reconciles to our adjusted net operating (loss) income as follows:

Our income (loss) available to common shareholders for the years ended December 31, 2025, 2024 and 2023 reconciles to our adjusted net operating income (loss) as follows:

Year Ended December 31,

2025 2024 2023

Taxes Net Loss (Loss) Income

(Loss) Income Income

Taxes Net Income Loss

Loss (Loss) Income

Taxes Net (Loss)

(in thousands)

(Loss) income available to common shareholders $ (125,903) $ (118,269) $ (92,479) $ (118,184) $ 40,637 $ 22,223

Income (loss) available to common shareholders $ 40,274 $ 39,551 $ (125,903) $ (118,269) $ (92,479) $ (118,184)

Loss from discontinued operations 2,393 2,390 17,634 17,634 168,893 168,893

Losses and loss adjustment expenses - retroactive reinsurance 28,750 22,713 37,237 29,418 4,991 3,943

Net realized and unrealized investment (gains) losses (3,625) (2,865) (10,441) (8,248) 15,720 12,418

Net realized and unrealized investment losses (gains) 2,195 1,734 (3,625) (2,865) (10,441) (8,248)

Other expenses 1,986 1,830 6,145 5,573 1,588 1,938

Impairment of intangible assets — — — — 2,500 1,975

One-time tax benefit in connection with domestication — (14,078) — — — —

Series A deemed dividends — — 27,006 27,006 — —

Adjusted net operating (loss) income $ (41,506) $ (41,503) $ 75,052 $ 50,317 $ 76,731 $ 51,710

Tangible Equity and Tangible Equity per Share

Adjusted net operating income (loss) $ 75,598 $ 54,140 $ (41,506) $ (41,503) $ 75,052 $ 50,317

Tangible Equity (per Share) and Tangible Common Equity (per Share)

Tangible equity is defined as shareholders' equity plus mezzanine Series A Preferred Shares and the deferred retroactive reinsurance gain less goodwill and intangible assets, net of amortization.

Our definitions of tangible equity and tangible equity per share may not be comparable to that of other companies, and they should not be viewed as a substitute for shareholders’ equity and shareholders’ equity per share calculated in accordance with GAAP.

The following table reconciles shareholders’ equity to tangible equity as of December 31, 2024, 2023 and 2022:

Tangible equity per share represents tangible equity divided by the sum of total shares of common stock outstanding plus the shares of common stock resulting from an assumed conversion of the outstanding Series A Preferred Shares into common shares (at the conversion price effective as of the last day of the applicable period).

Tangible common equity is defined as shareholders' equity plus the deferred retroactive reinsurance gain less goodwill and intangible assets, net of amortization.

Tangible common equity per share represents tangible common equity divided by the total shares of common stock outstanding.

Our definitions of tangible equity, tangible equity per share, tangible common equity and tangible common equity per share may not be comparable to that of other companies, and they should not be viewed as a substitute for shareholders’ equity and shareholders’ equity per share calculated in accordance with GAAP.

The following table reconciles shareholders’ equity to tangible common equity as of December 31, 2025, 2024 and 2023:

As of December 31,

2025 2024 2023

Equity Equity

per share Equity Equity

(in thousands, except per share amounts)

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Tangible equity 544,070 437,719 485,608

Series A redeemable preferred shares 133,115 133,115 144,898

Tangible common equity $ 410,955 $ 304,604 $ 340,710

Common shares outstanding 45,968,584 45,644,318 37,641,563

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Common shares outstanding after assumed conversion of Series A Preferred Shares 59,490,218 59,165,952 43,612,747

Equity per share:

Shareholders' equity $ 11.71 $ 10.10 $ 14.20

Tangible equity $ 9.15 $ 7.40 $ 11.13

Tangible common equity $ 8.94 $ 6.67 $ 9.05

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-K

Item 7. Management’s Discussion and Analysis