What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-05 compared with 2025-08-15 · 416 added, 351 removed, 774 unchanged (50% of the section changed)

10 unchanged sentences

Our actual results and financial condition may differ, possibly materially, from these projections and statements and therefore you should not place undue reliance on them.

Factors that could cause our actual results and financial condition to differ, possibly materially, from those in the specific projections and statements are discussed throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations and in "Risk Factors" included under Part II.

Other Information included within this filing, however, these factors should not be construed as exhaustive.

Factors that could cause our actual results and financial condition to differ, possibly materially, from those in the specific projections and statements are discussed throughout the Management's Discussion and Analysis of Financial Condition and Results of Operations and in "Risk Factors" in Item 1A.

of Part II of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 that was filed with the U.S.

Securities and Exchange Commission ("SEC") on August 15, 2025, however, those factors should not be construed as exhaustive.

Forward-looking statements speak only as of the date they are made and we undertake no obligation to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.

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Related Party Transactions for further information regarding the Company's relationship with AmTrust.

As of June 30, 2025, Maiden Reinsurance owns approximately 22.4% of the Company's total outstanding common shares which is eliminated for accounting and financial reporting purposes on the Company's condensed consolidated financial statements.

As of September 30, 2025, Maiden Reinsurance owns 22.4% of the Company's total outstanding common shares which is eliminated for accounting and financial reporting purposes on the Company's condensed consolidated financial statements.

On April 29, 2025, former Maiden shareholders approved the proposal to remove the 9.5% voting limitation at the Company's special general meeting of its shareholders (the "Special Meeting").

The ownership of the common shares by Maiden Reinsurance was made in compliance with Maiden Reinsurance's investment policy and approved by the Vermont Department of Financial Regulation ("Vermont DFR").

The ownership of common shares by Maiden Reinsurance was made in compliance with Maiden Reinsurance's investment policy and approved by the Vermont Department of Financial Regulation ("Vermont DFR").

Current Operations

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Our focus on growing our fee business may include but may consider selectively deploying underwriting capacity to optimize shareholder returns in support of this business.

We continue to actively pursue with our existing partners reinsurance mechanisms that would selectively deploy the Company’s underwriting capacity and facilitate and accelerate the growth of our Program Services segment .

We believe this will create the greatest risk-adjusted shareholder returns in order to increase EBITDA and book value for our common shareholders, both near and long-term.

1 unchanged sentence

The recognition of the deferred tax asset on our balance sheet remains a leading priority for the Company to increase its GAAP book value.

As a result of the Combination, as of June 30, 2025 , we invested $206.5 million into alternative investments which include equity securities, equity method investments and other investments in a wide variety of asset classes.

As a result of the Combination, as of September 30, 2025 , we invested $215.7 million into alternative investments which include equity securities, equity method investments and other investments in a wide variety of asset classes.

Please refer to the "Liquidity and Capital Resources" section on " Other Investments, Equity Method Investments and Equity Investments" for further information on these alternative asset classes and a detailed discussion of their investment returns.

3 unchanged sentences

Accordingly, we expect our alternative investment portfolio to be reduced in future periods as we believe it is critical to reposition our balance sheet and increase our liquidity in support of the current initiatives being pursued.

We have not made, and do not expect to make any such additional commitments to alternative investments at this time.

While we believe that the Combination with Maiden will increase the likelihood of achieving our stated objectives, there can be no assurance that the run-off of its insurance liabilities will run-off at levels that will allow us to achieve those goals.

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NOL Carryforwards

We believe the Combination will create opportunities to utilize Maiden's NOL carryforwards of $454.8 million at June 30, 2025.

Approximately $374.2 million of these NOL carryforwards expire in various years beginning in 2029.

As of June 30, 2025, $80.6 million or 17.7% of the Company's NOL carryforwards have no expiry date under the relevant U.S.

We believe the Combination and our ability to increease EBITDA will create opportunities to utilize Maiden's NOL carryforwards of $446.6 million at September 30, 2025.

Approximately $365.3 million of NOL carryforwards expire in various years beginning in 2029.

As of September 30, 2025, $81.3 million or 18.2% of the Company's NOL carryforwards have no expiry date under the relevant U.S.

The NOL carryforwards combined with additional net deferred tax assets ("DTA") primarily related to Maiden's insurance liabilities result in net U.S.

DTA (before valuation allowance) of $126.5 million or $16.34 per common share at June 30, 2025.

DTA (before valuation allowance) of $126.5 million or $16.34 per common share at September 30, 2025.

Maiden's net U.S.

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Additionally, Kestrel's DTA of $7.5 million, which relates to tax basis intangibles, is not presently recognized on the Company's condensed consolidated balance sheets as a full valuation allowance is carried against it.

At this time, the Company believes it is necessary to maintain a full valuation allowance against both net DTA's as more evidence is needed regarding the utilization of these losses.

At this time, the Company believes it is necessary to maintain a full valuation allowance against both net DTA balances as more evidence is needed regarding the utilization of these losses.

As circumstances further develop, we will continuously evaluate the amount of the valuation allowance held against the net DTA.

For further details on the NOL carryforwards, please see " Note 13 — Income Taxes " included under Part 1 Item 1 " Financial Information " of the Quarterly Report on Form 10–Q for the six months ended June 30, 2025.

Three and Six Months Ended June 30, 2025 and 2024 Financial Highlights

For the Three Months Ended June 30, 2025 2024 Change

For further details on the NOL carryforwards, please see " Note 13 — Income Taxes " included under Part 1 Item 1 " Financial Information " of the Quarterly Report on Form 10–Q for the nine months ended September 30, 2025.

Three and Nine Months Ended September 30, 2025 and 2024 Financial Highlights

For the Three Months Ended September 30, 2025 2024 Change

Summary Consolidated Statement of Income Data (unaudited):

($ in thousands except per share data)

Net income from continuing operations

Net loss from continuing operations

$ (4,088) $ (429) $ (3,659)

1 unchanged sentence

(965) — (965)

Net income (loss) 69,927 (547) 70,474

Basic and diluted earnings (loss) per common share:

Net income attributable to common shareholders (2)

(5,053) (429) (4,624)

Basic and diluted loss per common share:

Net loss attributable to common shareholders (2)

(0.65) (0.16) (0.49)

Gross premiums written 3,760 — 3,760

Net premiums earned 6,836 — 6,836

Underwriting and fee income (3)

Underwriting and fee (loss) income (3)

(8,020) 110 (8,130)

2 unchanged sentences

Non-GAAP measures:

Non-GAAP operating earnings (loss) (1)

Non-GAAP operating loss (1)

(15,091) (429) (14,662)

Non-GAAP basic and diluted operating earnings (loss) per common share (1)

Non-GAAP basic and diluted operating loss per common share (1)

(1.95) (0.16) (1.79)

1 unchanged sentence

(40.7) % (36.3) % (4.4)

For the Six Months Ended June 30, 2025 2024 Change

For the Nine Months Ended September 30, 2025 2024 Change

Summary Consolidated Statement of Income Data (unaudited):

($ in thousands except per share data)

Net income from continuing operations

Net income (loss) from continuing operations

$ 65,940 $ (1,353) $ 67,293

Loss from discontinued operations, net of income tax (1,460) — (1,460)

Net income (loss)

64,480 (1,353) 65,833

Basic and diluted earnings (loss) per common share:

Net income attributable to Kestrel common shareholders (2)

Net income (loss) attributable to Kestrel common shareholders (2)

12.70 (0.49) 13.19

1 unchanged sentence

Net premiums earned 9,258 — 9,258

Underwriting and fee income (3)

Underwriting and fee (loss) income (3)

(1,762) 467 (2,229)

2 unchanged sentences

Non-GAAP measures:

Non-GAAP operating earnings (loss) (1)

Non-GAAP operating loss (1)

(12,023) (1,353) (10,670)

Non-GAAP basic and diluted operating earnings (loss) per common share (1)

Non-GAAP basic and diluted operating loss per common share (1)

(2.38) (0.49) (1.89)

1 unchanged sentence

(21.7) % (35.0) % 13.3

June 30, 2025 December 31, 2024 Change

September 30, 2025 December 31, 2024 Change

Consolidated Financial Condition ($ in thousands except per share data)

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See " Key Financial Measures " for additional information.

(4) Total investments and cash and cash equivalents includes both restricted and unrestricted.

(4) Total investments and cash and cash equivalents includes both restricted and unrestricted amounts of these assets.

(5) Total capital resources is the sum of the Company's principal amount of debt and shareholders' equity.

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A reconciliation of the Company's underwriting results can be found in the Condensed Consolidated Financial Statements in the " Notes to Condensed Consolidated Financial Statements (unaudited) Note 3.

Segment Information " included under Item 1.

Segment Information " under Item 1.

"Financial Statements" of this Quarterly Report on Form 10-Q.

The Company does not present certain non-GAAP measures such as combined ratio and its related components in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of little value to readers as they evaluate the financial results of the Company.

The Company does not present certain non-GAAP measures such as combined ratio and its related components in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of little value to readers as they evaluate the financial results of the Company.

While an important metric of success, underwriting and fee income does not reflect all components of profitability, as it does not recognize the impact of investment income earned on premiums between the time premiums are received and the time loss payments are ultimately paid to clients.

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Results of Operations

The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three and six months ended June 30, 2025 and 2024:

For the Three Months Ended June 30, For the Six Months Ended June 30,

The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three and nine months ended September 30, 2025 and 2024:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

12 unchanged sentences

(4,353) (590) (7,435) (1,990)

Underwriting & fee income (2)

Underwriting & fee (loss) income (2)

(8,020) 110 (1,762) 467

6 unchanged sentences

Gain on bargain purchase — — 73,590 —

Foreign exchange and other losses

Foreign exchange and other gains (losses)

2,854 — (2,155) —

1 unchanged sentence

Income tax expense

Net income (loss) from continuing operations

(7) — (102) —

Interest in loss of equity method investments

(24) — (24) —

Net (loss) income from continuing operations

(4,088) (429) 65,940 (1,353)

Loss from discontinued operations, net of income tax (965) — (1,460) —

Net income (loss) $ 69,927 $ (547) $ 69,533 $ (924)

Net (loss) income $ (5,053) $ (429) $ 64,480 $ (1,353)

(1) Underwriting and fee income related general and administrative expenses is a non-GAAP measure.

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(3) The Company does not present certain non-GAAP measures such as combined ratio and its related components in its results of operation, as it believes that as the run-off of its reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate our financial results.

Net income (loss)

Net (loss) income

As a result of the completion of the Combination Agreement on May 27, 2025, the Company acquired Maiden's operations, which includes significant underwriting and investment activities, along with operating expenses and interest expense associated with Maiden's debt.

Maiden's results of operations are reported herein for the period May 28, 2025 to June 30, 2025 and significantly impact the comparisons between periods for both the three and six months ended in 2024.

Maiden's results of operations are reported herein for the period May 28, 2025 to September 30, 2025 and significantly impact the comparisons to operating results in the three and nine months ended September 30, 2024.

Because the prior year period results of operations do not include the operations of Maiden, the year-over-year comparisons are generally not directly comparable.

Results for the three months ended June 30, 2025

Net income for the three months ended June 30, 2025 was $69.9 million compared to a net loss of $0.5 million for the same respective period in 2024.

Net income for the three months ended June 30, 2025 was substantially the result of the gain on bargain purchase of $73.6 million which was related to the completion of the Combination on May 27, 2025 as discussed in Note 15.

Results for the three months ended September 30, 2025

Net loss for the three months ended September 30, 2025 was $5.1 million compared to a net loss of $0.4 million for the same respective period in 2024.

An underwriting loss from the Legacy Reinsurance segment combined with higher operating and interest expenses was partially offset by Program Services fee income, investment income and gains from investment activities along with foreign exchange gains.

The change in our financial results for the third quarter of 2025 compared to the third quarter of 2024 consisted of:

• underwriting and fee loss of $8.0 million for the three months ended September 30, 2025 compared to fee income of $0.1 million in the same period in 2024 largely due to:

• Our Legacy Reinsurance segment experienced adverse prior year loss development ("PPD") of $6.6 million in the third quarter of 2025, detailed as follows:

• Our AmTrust Reinsurance Legacy business experienced adverse PPD of $6.9 million in the third quarter of 2025.

• Our Diversified Reinsurance Legacy business experienced favorable PPD of $0.3 million in the third quarter of 2025.

• On a current accident year basis, the underwriting loss for the Legacy Reinsurance segment was $2.4 million for the three months ended September 30, 2025.

• Program Services segment produced fee income of $1.0 million for the three months ended September 30, 2025 compared to fee income of $0.1 million for the same respective period in 2024.

Fee revenue increased to $1.6 million for the three months ended September 30, 2025 compared to $0.7 million for the same period in 2024 derived from fees from both new and existing client programs.

Increased premium volume accounted for $1.1 million of fee revenue for the three months ended September 30, 2025.

• combined income from investment activities totaled $9.0 million for the three months ended September 30, 2025 compared to $0.1 million for the same period in 2024 primarily due to the following:

• net investment income increased to $3.5 million for the three months ended September 30, 2025 compared to $0.1 million that was earned for the same respective period in 2024;

• realized and unrealized investment gains of $5.5 million for the three months ended September 30, 2025 compared to investment losses of $0.0 million for the same respective period in 2024;

• interest in loss of equity method investments was $24.0 thousand for the three months ended September 30, 2025 compared to $0.0 million for the same respective period in 2024.

• corporate general and administrative expenses increased to $6.4 million for the three months ended September 30, 2025 compared to $0.6 million for the same period in 2024.

Corporate expenses for the three months ended September 30, 2025 included $1.9 million in non-recurring expenses for employee separation, insurance and Combination-related costs.

Excluding these non-recurring expenses, our adjusted corporate expenses for the three months ended September 30, 2025 increased by $3.9 million compared to the same period in 2024, which were the result of the Combination with Maiden;

• foreign exchange and other gains of $2.9 million for the three months ended September 30, 2025, compared to foreign exchange and other losses of $0.0 million for the same period in 2024, primarily due to appreciation of the U.S dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

Results for the nine months ended September 30, 2025

Net income for the nine months ended September 30, 2025 was $64.5 million compared to net loss of $1.4 million in 2024.

Net income for the nine months ended September 30, 2025 was substantially the result of the gain on bargain purchase of $73.6 million from the completion of the Combination on May 27, 2025 as discussed in Note 15.

Business Combination included in Part 1.

Financial Information.

Excluding the gain on bargain purchase, net loss was $3.7 million for the three months ended June 30, 2025 compared to net loss of $0.5 million for the same period in 2024.

Increases in underwriting and fee income as well as investment income were more than offset by higher operating and interest expense along with foreign exchange losses.

The change in our financial results for the second quarter of 2025 compared to the second quarter of 2024 was primarily due to the following factors:

• underwriting and fee income of $6.1 million for the three months ended June 30, 2025 compared to $0.0 million in the same period in 2024 largely due to:

• favorable prior year loss development ("PPD") in our Legacy Reinsurance segment of $7.8 million in the second quarter of 2025 compared to adverse PPD of $0.0 million during the same period in 2024, detailed as follows:

• Our AmTrust Reinsurance Legacy business experienced favorable PPD of $7.9 million in the second quarter of 2025.

• Our Diversified Reinsurance Legacy business experienced adverse PPD of $0.1 million in the second quarter of 2025.

• On a current accident year basis, underwriting loss for the Legacy Reinsurance segment was $1.5 million for the three months ended June 30, 2025.

• Program Services segment produced a loss of $0.2 million for the three months ended June 30, 2025 compared to loss of $12.0 thousand for the same period in 2024.

Fee revenue decreased to $0.5 million for the three months ended June 30, 2025 compared to $0.6 million for the same period in 2024.

• combined income from investment activities totaled $2.6 million for the three months ended June 30, 2025 compared to $0.1 million for the same period in 2024 primarily due to the following:

• net investment income increased to $1.5 million for the three months ended June 30, 2025 compared to $0.1 million that was earned for the same respective period in 2024;

• realized and unrealized investment gains of $1.1 million for the three months ended June 30, 2025 compared to losses of $— million for the same respective period in 2024.

• corporate general and administrative expenses increased to $2.6 million for the three months ended June 30, 2025 compared to $0.6 million for the same period in 2024.

Corporate expenses increased primarily due to $1.7 million of non-recurring employee separation costs;

• foreign exchange and other losses of $5.0 million for the three months ended June 30, 2025, compared to foreign exchange and other losses of $0.0 million for the same period in 2024, primarily due to significant weakening of the U.S dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

Results for the six months ended June 30, 2025

Net income for the six months ended June 30, 2025 was $69.9 million compared to net loss of $0.9 million in 2024.

Net income for the six months ended June 30, 2025 was substantially the result of the gain on bargain purchase of $73.6 million which was related to the completion of the Combination on May 27, 2025.

Excluding the gain on bargain purchase, net loss was $4.1 million for the six months ended June 30, 2025 compared to a net loss of $0.9 million for the same period in 2024.

Increases in underwriting and fee income as well as investment income were more than offset by higher operating and interest expense along with foreign exchange losses.

The change in our financial results for the six months ended June 30, 2025 compared to 2024 was primarily due to:

• underwriting and fee income of $6.3 million in the year ended June 30, 2025 compared to an underwriting and fee income of $0.4 million in 2024 largely due to:

• favorable PPD of $7.8 million in our Legacy Reinsurance segment for the six months ended June 30, 2025.

AmTrust Reinsurance Legacy business had favorable PPD of $7.9 million in 2025;

Diversified Reinsurance Legacy business had adverse PPD of $0.1 million in 2025.

• on a current accident year basis, the underwriting loss for the Legacy Reinsurance segment was $1.5 million for the six months ended June 30, 2025.

• Program Services segment results decreased by $0.3 million, primarily due to reduced capacity permitted on certain programs and specific lines of business.

This was due to lower fee revenue of $1.4 million for the six months ended June 30, 2025 compared to $1.8 million for the same period in 2024.

Fee revenue decreased by $0.4 million.

• combined income from investment activities of $2.6 million for the six months ended June 30, 2025 compared to $0.1 million in 2024 primarily due to the following:

• net investment income increased to $1.6 million for the six months ended June 30, 2025 compared to $0.1 million that was earned in 2024;

• realized and unrealized investment gains of $1.1 million for the six months ended June 30, 2025 compared to losses of $0.0 million in 2024.

• corporate general and administrative expenses increased to $3.2 million for the six months ended June 30, 2025 compared to $1.4 million in 2024.

Corporate expenses increased primarily due to $1.7 million of non-recurring employee separation costs;

• foreign exchange and other losses of $5.0 million for the six months ended June 30, 2025 compared to foreign exchange and other losses of $0.0 million earned in 2024, largely due to significant weakening of the U.S dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

Excluding the gain on bargain purchase, net loss was $9.1 million for the nine months ended September 30, 2025 compared to a net loss of $1.4 million for the same period in 2024.

An underwriting loss from the Legacy Reinsurance segment as well as higher operating and interest expenses and foreign exchange losses was partially offset by Program Services fee income, and investment income and gains from investment activities.

The change in our financial results for the nine months ended September 30, 2025 compared to 2024 consisted of:

• underwriting and fee loss of $1.8 million in the nine months ended September 30, 2025 compared to fee income of $0.5 million for the same respective period in 2024 largely due to:

• Our Legacy Reinsurance segment experienced favorable PPD of $1.2 million for the nine months ended September 30, 2025 detailed as follows:

• Our AmTrust Reinsurance Legacy business experienced favorable PPD of $1.0 million for the nine months ended September 30, 2025.

• Our Diversified Reinsurance Legacy business experienced favorable PPD of $0.2 million for the nine months ended September 30, 2025.

• On a current accident year basis, the underwriting loss for the Legacy Reinsurance segment was $3.9 million for the nine months ended September 30, 2025.

• Program Services segment produced fee income of $1.0 million for the nine months ended September 30, 2025 compared to fee income of $0.5 million for the same period in 2024.

Fee revenue increased to $3.0 million for the nine months ended September 30, 2025 compared to $2.5 million for the same period in 2024 derived from fees from both new and existing client programs.

Increased premium volume accounted for $0.5 million of fee revenue for the nine months ended September 30, 2025.

• combined income from investment activities of $11.6 million for the nine months ended September 30, 2025 compared to $0.2 million in 2024 primarily due to the following:

• net investment income increased to $5.1 million for the nine months ended September 30, 2025 compared to $0.2 million that was earned in 2024;

• realized and unrealized investment gains of $6.6 million for the nine months ended September 30, 2025 compared to losses of $0.0 million in 2024;

• interest in loss of equity method investments was $24.0 thousand for the nine months ended September 30, 2025 compared to $0.0 million for the same respective period in 2024.

• corporate general and administrative expenses increased to $9.6 million for the nine months ended September 30, 2025 compared to $2.0 million in 2024.

Corporate expenses for the nine months ended September 30, 2025 include $3.9 million for non-recurring employee separation, insurance and Combination-related costs.

Excluding these non-recurring expenses, our adjusted corporate expenses for the nine months ended September 30, 2025 increased by $3.7 million compared to the same period in 2024, which were the result of the Combination with Maiden;

• foreign exchange and other losses of $2.2 million for the nine months ended September 30, 2025 compared to foreign exchange and other losses of $0.0 million earned in 2024, largely due to significant weakening of the U.S dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

Net Premiums Written

Net premiums written by our reportable segment, reconciled to the total consolidated net premiums written for the three and six months ended June 30, 2025 and 2024 are detailed below:

For the Three and Six Months Ended June 30, 2025 2024 Change in

Net premiums written by our reportable segment, reconciled to the total consolidated net premiums written for the three and nine months ended September 30, 2025 and 2024 are detailed below:

For the Three Months Ended September 30, 2025 2024 Change in

($ in thousands) Total Total $

2 unchanged sentences

Total Legacy Reinsurance Segment $ 3,895 $ — $ 3,895

For the Nine Months Ended September 30, 2025 2024 Change in

($ in thousands) Total Total $

Diversified Legacy Business $ 4,967 $ — $ 4,967

AmTrust Reinsurance Legacy Business 23 — 23

Total Legacy Reinsurance Segment (1)

$ 4,990 $ — $ 4,990

(1) Legacy Reinsurance segment results only include the post-combination period of May 28 to June 30, 2025.

Net premiums written for the three and six months ended June 30, 2025 increased to $1.1 million:

• Premiums written in the Diversified Reinsurance legacy business was $1.4 million for the three and six months ended June 30, 2025.

Net premiums written for the three and nine months ended September 30, 2025 increased to $3.9 million and $5.0 million, respectively, which was split as follows:

• Premiums written in the Diversified Reinsurance legacy business were $3.6 million and $5.0 million for the three and nine months ended September 30, 2025, respectively.

As discussed in Note 14.

1 unchanged sentence

"Financial Information", Maiden LF and Maiden GF are no longer writing new business and their non-underwriting related assets and liabilities are presented as held-for-sale in our condensed consolidated financial statements.

• Negative premiums written in the AmTrust Reinsurance legacy business were $0.3 million for the three and six months ended June 30, 2025.

The cessation of active reinsurance underwriting on prospective risks included the termination of the AmTrust Quota Share and European Hospital Liability Quota Share effective January 1, 2019.

• Premiums written in the AmTrust Reinsurance legacy business were $0.3 million and $23.0 thousand for the three and nine months ended September 30, 2025, respectively, which emanated from premium adjustments to both the AmTrust Quota Share and European Hospital Liability Quota Share, which had been terminated effective January 1, 2019.

Please refer to the analysis below of our Diversified Reinsurance and AmTrust Reinsurance Legacy Business in the Legacy Reinsurance segment for further details.

Net Premiums Earned

Net premiums earned were $2.4 million for the three and six months ended June 30, 2025.

Net premiums earned by our reportable segment, reconciled to the total consolidated net premiums earned, for the three and six months ended June 30, 2025 are detailed as follows:

For the Three and Six Months Ended June 30, 2025 2024 Change in

Net premiums earned for the three and nine months ended September 30, 2025 were $6.8 million and $9.3 million, respectively.

Net premiums earned by our reportable segment, reconciled to the total consolidated net premiums earned, for the three and nine months ended September 30, 2025 and 2024 are detailed as follows:

For the Three Months Ended September 30, 2025 2024 Change in

($ in thousands) Total Total $

2 unchanged sentences

Total Legacy Reinsurance Segment $ 6,836 $ — $ 6,836

For the Nine Months Ended September 30, 2025 2024 Change in

($ in thousands) Total Total $

Diversified Reinsurance Legacy Business $ 5,266 $ — $ 5,266

AmTrust Reinsurance Legacy Business 3,992 — 3,992

Total Legacy Reinsurance Segment (1)

$ 9,258 $ — $ 9,258

(1) Legacy Reinsurance segment results only include the post-combination period of May 28, 2025 to June 30, 2025.

Net premiums earned under Diversified Reinsurance reinsurance business for the three and six months ended June 30, 2025 was $1.4 million.

Please note that Maiden LF and Maiden GF are no longer writing new business and their non-underwriting related assets and liabilities are represented as held-for-sale in our condensed consolidated financial statements as discussed above.

Net premiums earned under AmTrust Reinsurance reinsurance business for the three and six months ended June 30, 2025 was $1.0 million.

Please refer to the analysis below of our Diversified Reinsurance and AmTrust Reinsurance in the Maiden Legacy segment for further details.

Net premiums earned under Diversified Reinsurance legacy business for the three and nine months ended September 30, 2025 were $3.9 million and $5.3 million, respectively.

Maiden LF and Maiden GF are no longer writing new business and their non-underwriting related assets and liabilities are represented as held-for-sale in our condensed consolidated financial statements as discussed above.

Net premiums earned under AmTrust Reinsurance legacy business for the three and nine months ended September 30, 2025 were $3.0 million and $4.0 million, respectively.

Please refer to the analysis below of our Diversified Reinsurance and AmTrust Reinsurance under the Maiden Legacy segment further below for further details.

Fee Revenue is primarily produced by our Program Services segment.

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Support services provided for these insurance and reinsurance brokerage arrangements include compliance and regulatory reporting and administrative support which culminate in the placement of bound insurance coverage.

Fee revenue was $0.5 million and $1.4 million for the three and six months ended June 30, 2025, respectively, compared to $0.6 million and $1.8 million for the same respective periods in 2024.

Fee revenue decreased by $33.0 thousand and $0.4 million due to a reduction in permitted capacity for certain programs and lines of business.

Fee revenue earned for the three and nine months ended September 30, 2025 was $1.6 million and $3.0 million, respectively, compared to $0.7 million and $2.5 million for the same periods in 2024, respectively.

Fee revenue increased by $0.9 million and $0.5 million compared to the respective prior periods in 2024 primarily due to increased premium volume from both new and existing client programs.

Increased premium volume accounted for $1.1 million and $0.5 million of fee revenue for the three and nine months ended September 30, 2025, respectively.

Net Investment Income

Net investment income increased by $1.5 million for the three and six months ended June 30, 2025, compared to the same respective periods in 2024 due to the inclusion of Maiden's AFS fixed income portfolio and alternative investment portfolios in connection with the Combination.

Annualized average book yields decreased to 3.2% for the three and six months ended June 30, 2025, compared to 4.4% for the same respective periods in 2024.

Net loan receivable from related party interest income was $0.7 million for the three and six months ended June 30, 2025.

The net loan carried a weighted average interest rate on a balance of $107.5 million of 5.8% for the three and six months ended June 30, 2025.

Floating rate investments comprised 49.0% of our fixed income investments at June 30, 2025 compared to 0.0% at June 30, 2024.

The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three and six months ended June 30, 2025 and 2024:

For the Three Months Ended June 30, For the Six Months Ended June 30,

Net investment income for the three and nine months ended September 30, 2025 increased by $3.4 million and $4.9 million, respectively, compared to the same respective periods in 2024 due to inclusion of Maiden's legacy fixed income and alternative investment portfolios in connection with the Combination.

Annualized average book yields decreased to 3.7% and 3.6% for the three and nine months ended September 30, 2025, compared to 4.4% and 4.5% for the same respective periods in 2024.

Net interest income from our loan receivable from related party was $1.6 million and $2.3 million for the three and nine months ended September 30, 2025, respectively.

The net loan receivable from related party had an average balance of $104.6 million and carried a weighted average interest rate of 6.1% and 6.2% for the three and nine months ended September 30, 2025, respectively.

Floating rate investments comprised 48.2% of our total fixed income investments at September 30, 2025 compared to 0.0% at September 30, 2024.

The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three and nine months ended September 30, 2025 and 2024:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

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Annualized investment book yield 3.7 % 4.4 % 3.6 % 4.5 %

(1) Fixed income assets include available-for-sale ("AFS") securities, cash and restricted cash, funds withheld receivable, and loan receivable from related party.

(1) Fixed income assets include available-for-sale ("AFS") securities, cash and restricted cash, funds withheld receivable, and net loan receivable from related party.

These amounts are an average of the amounts disclosed in our quarterly U.S.

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Net Realized and Unrealized Investment Gains

Net realized and unrealized investment gains of $1.1 million were recognized for the three and six months ended June 30, 2025.

Net realized and unrealized investment gains for the three and six months ended June 30, 2025 are summarized in the table below by investment category:

For the Three and Six Months Ended June 30, 2025

Net realized gains (losses):

Net realized and unrealized investment gains of $5.5 million and gains of $6.6 million were recognized for the three and nine months ended September 30, 2025, respectively.

Net realized and unrealized investment gains for the three and nine months ended September 30, 2025 are summarized in the table below by investment category:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2025

Net realized gains:

Fixed maturity securities $ 624 $ 1,388

Total net realized losses 764

Net unrealized gains (losses):

Total net realized gains 624 1,388

Net unrealized gains:

Other investments 4,711 4,959

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Net realized and unrealized investment gains

$ 5,494 $ 6,552

Net unrealized gains for the three and nine months ended September 30, 2025 reflect fair value adjustments, primarily from Maiden's legacy alternative investment portfolios.

Net Loss and LAE

Net loss and LAE was $6.0 million for the three and six months ended June 30, 2025.

Net losses were impacted by net favorable PPD of $7.8 million for the three and six months ended June 30, 2025.

Excluding PPD, current year losses were $1.8 million for the three and six months ended June 30, 2025.

Net loss and LAE incurred for the three and nine months ended September 30, 2025 were $10.4 million and $4.4 million, respectively.

Net incurred losses were impacted by net adverse PPD of $6.6 million and net favorable PPD of $1.2 million for the three and nine months ended September 30, 2025, respectively.

Excluding the impact of PPD, current year losses were $3.8 million and $5.6 million for the three and nine months ended September 30, 2025, respectively.

The cessation of active reinsurance underwriting on prospective risks included the termination of the AmTrust Quota Share and European Hospital Liability Quota Share effective January 1, 2019.

The net loss development is discussed in greater detail in the Legacy Reinsurance segment discussion and analysis and entirely associated with run-off of unearned premium for terminated reinsurance contracts in the legacy reinsurance operations.

The net prior year loss development is discussed in greater detail in the Legacy Reinsurance segment discussion and analysis and is entirely associated with the run-off of unearned premium for terminated reinsurance contracts in the legacy reinsurance operations.

Commission and Other Acquisition Expenses

Commission and other acquisition expenses were $0.4 million for the three and six months ended June 30, 2025.

Commission and other acquisition expenses incurred for the three and nine months ended September 30, 2025 were $1.7 million and $2.1 million, respectively.

Please see the Legacy Reinsurance segment analysis below for further information.

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General and administrative expenses include both segment and corporate expenses segregated for analytical purposes as a component of underwriting income.

Total general and administrative expenses increased by $3.9 million and $3.4 million for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to the inclusion of Maiden's general and administrative expenses as a result of the Combination subsequent to May 27, 2025.

Corporate expenses increased primarily due to $1.7 million in non-recurring employee separation costs.

Excluding these non-recurring expenses, our adjusted operating expenses increased by $2.2 million and increased by $1.7 million for the three and six months ended June 30, 2025, compared to the same periods in 2024.

Corporate expenses also included vesting of certain stock-based awards which were $0.2 million for the six months ended June 30, 2025 compared to $0.0 million for the same period in 2024.

General and administrative expenses for the three and six months ended June 30, 2025 and 2024 were comprised of:

For the Three Months Ended June 30, For the Six Months Ended June 30,

Total general and administrative expenses incurred for the three and nine months ended September 30, 2025 increased by $9.6 million and increased by $13.0 million, respectively, compared to the same respective periods in 2024 primarily due to inclusion of Maiden's general and administrative operating expenses subsequent to May 27, 2025.

General and administrative expenses for the three and nine months ended September 30, 2025 and 2024 were comprised of:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

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$ 10,783 $ 1,181 $ 17,006 $ 3,980

Corporate expenses for the three and nine months ended September 30, 2025 included $1.9 million and $3.9 million for non-recurring employee separation, insurance and Combination-related costs.

Excluding these non-recurring expenses, our adjusted corporate expenses for the three and nine months ended September 30, 2025 increased by $3.9 million and $3.7 million compared to the same respective periods in 2024.

These increases as well as increases in our segment expenses were the result of the Combination with Maiden for the three and nine months ended September 30, 2025, respectively.

Corporate expenses also included vesting of certain stock-based awards which were $0.5 million for the nine months ended September 30, 2025 compared to $0.0 million for the same period in 2024.

Interest and Amortization Expenses

Total interest and amortization expenses were $1.5 million and $0.0 million for the three and six months ended June 30, 2025 and 2024, respectively.

This included $1.8 million of interest expense on the outstanding senior notes issued by Maiden in 2016 and Maiden Holdings North America, Ltd.

("Maiden NA") in 2013 ("Senior Notes") in the three and six months ended June 30, 2025, respectively, that were acquired upon completion of the merger.

The difference between the principal amount of the acquired debt and the fair market value of the acquired debt is being amortized over the remaining life of the Senior Notes up to par value.

The amortization for the fair value adjustment was $0.1 million for the three and six months ended June 30, 2025

Total interest and amortization expenses incurred for the three and nine months ended September 30, 2025 were $4.1 million and $5.6 million, respectively, which included:

• Interest expense of $4.8 million and $6.6 million on the outstanding senior notes issued by Maiden in 2016 and Maiden Holdings North America, Ltd.

("Maiden NA") in 2013 ("Senior Notes") in the three and nine months ended September 30, 2025, respectively, that were acquired upon completion of the merger;

• Amortization expense for the fair value adjustment on the Senior Notes was $0.3 million and $0.4 million for the three and nine months ended September 30, 2025, respectively.

The difference between the principal amount of the acquired Senior Notes and their fair market value at closing of the Combination is being amortized over those securities' remaining life;

partially offset by:

• Fair value adjustment amortization of $0.9 million and $1.3 million for the net loan receivable from related party for the three and nine months ended September 30, 2025, respectively.

Please refer to " Notes to Condensed Consolidated Financial Statements (unaudited) Note 7.

Long Term Debt " for further details on the Senior Notes.

The weighted average effective interest rate for the Senior Notes was 11.7% for the three and six months ended June 30, 2025, respectively.

The weighted average effective interest rate for the Senior Notes was 11.7% for the three and nine months ended September 30, 2025, respectively.

Gain on Bargain Purchase and Change in Earn out Liability

As discussed in Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) and "Note 15.

Business Combination" included in this Form 10-Q, the gain on bargain purchase of $73.6 million is the differential between the fair value of net assets of Maiden acquired on May 27, 2025 as a result of the Combination and the consideration effectively transferred to Kestrel shareholders on that date.

Business Combination" included in this Form 10-Q, the gain on bargain purchase of $73.6 million is the differential between the fair value of net assets of Maiden acquired on May 27, 2025 as a result of the Combination and the equity consideration effectively transferred to Maiden shareholders on that date.

Pursuant to terms of the Combination, former Kestrel shareholders are eligible to earn additional contingent consideration up to the lesser of (x) 2.75 million common shares of Kestrel Group and (y) $45.0 million payable in common shares of Kestrel Group, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to the closing and any extensions of such businesses or related or ancillary businesses existing thereafter subsequent to completion of the transaction through May 31, 2028 ("Performance Period").

During the three and six months ended June 30, 2025, the earn out liability increased by $2.7 million based upon current estimates of the Kestrel business for the Performance Period, including the performance of the program services business through June 30, 2025.

Foreign Exchange and Other Losses

During the three and nine months ended September 30, 2025, the fair value of the earn out liability decreased by $2.7 million and $0.0 million based upon current estimates of the Kestrel business for the Performance Period, including the performance of the Program Services business through September 30, 2025.

Foreign Exchange and Other Gains (Losses)

Foreign currency fluctuations are primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets in our Legacy Reinsurance segment.

Net foreign exchange and other losses of $5.0 million were realized for the three and six months ended June 30, 2025 compared to net foreign exchange and other losses of $0.0 million for the same period in 2024.

For the three and six months ended June 30, 2025, net foreign exchange losses of $5.1 million were attributable to significant weakening of the U.S.

Net foreign exchange and other gains of $2.9 million and losses of $2.2 million were realized for the three and nine months ended September 30, 2025, respectively, compared to net foreign exchange and other losses of $0.0 million for the same periods in 2024.

For the three months ended September 30, 2025, net foreign exchange gains of $2.9 million were attributable to appreciation of the U.S.

dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

Our non-USD denominated liabilities at June 30, 2025 included net loss reserves of $341.3 million.

Our foreign currency asset exposures at June 30, 2025 included $139.4 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy, $33.2 million of real estate investments denominated in Canadian dollars, as well as $12.1 million of funds withheld receivable.

Foreign exchange losses of $2.2 million for the nine months ended September 30, 2025 were attributable to significant weakening of the U.S.

dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

Our non-USD denominated liabilities at September 30, 2025 included net loss reserves of $310.8 million.

Our foreign currency asset exposures at September 30, 2025 included $137.8 million of fixed maturity euro denominated bonds managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy, $32.5 million of real estate investments denominated in Canadian dollars, as well as $11.9 million of funds withheld receivable denominated in euro.

Underwriting Results by Reportable Segment

Program Services Segment

The segment results for our Program Services segment for the three and six months ended June 30, 2025 were as follows:

For the Three Months Ended June 30, For the Six Months Ended June 30,

The segment results for Program Services for the three and nine months ended September 30, 2025 were as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

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(664) (590) (2,003) (1,990)

Segment (loss) income

$ 957 $ 110 $ 969 $ 467

Program Services segment results decreased by $0.2 million and $0.3 million for the three and six months ended June 30, 2025 compared to the same respective periods in 2024.

Fee revenue from our Program Services segment was $0.5 million and $1.4 million for the three and six months ended June 30, 2025 compared to $0.6 million and $1.8 million for the same respective periods in 2024.

Fee revenue decreased by $33.0 thousand and $0.4 million due to a reduction in permitted capacity for certain programs and lines of business.

Program Services segment results for the three and nine months ended September 30, 2025 increased by $0.8 million and $0.5 million, respectively, compared to the same periods in 2024 due to increased premium volume from both new and existing client programs..

Increased premium volume accounted for $1.1 million and $0.5 million of fee revenue for the three and nine months ended September 30, 2025, respectively.

The Company continues to actively pursue reinsurance mechanisms with its existing partners that would selectively deploy the Company’s underwriting capacity and facilitate and accelerate both its fee and premium revenue growth.

Legacy Reinsurance Segment

The following details the results for the two components of the Legacy Reinsurance segment which is comprised of Diversified Reinsurance Legacy Business and the AmTrust Reinsurance Legacy Business.

The underwriting results for our Legacy Reinsurance segment for the three and six months ended June 30, 2025 were as follows:

For the Three and Six Months Ended June 30, 2025

The following details underwriting results for the two components of our Legacy Reinsurance segment which is comprised of Diversified Reinsurance Legacy Business and the AmTrust Reinsurance Legacy Business.

The underwriting results for our Legacy Reinsurance segment for the three and nine months ended September 30, 2025 were as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2025

Gross premiums written

$ 3,760 $ 4,856

Net premiums written

$ 3,895 $ 4,990

Net premiums earned

$ 6,836 $ 9,258

Net loss and LAE

(10,406) (4,445)

Commission and other acquisition expenses

(1,718) (2,112)

General and administrative expenses

(3,689) (5,432)

Underwriting loss

$ (8,977) $ (2,731)

Diversified Reinsurance Legacy Business:

The underwriting results for Diversified Reinsurance legacy business for the three and six months ended June 30, 2025 were as follows:

For the Three and Six Months Ended June 30, 2025

The underwriting results for Diversified Reinsurance legacy business for the three and nine months ended September 30, 2025 were as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2025

Gross premiums written

$ 3,452 $ 4,833

Net premiums written

$ 3,587 $ 4,967

Net premiums earned

$ 3,876 $ 5,266

Net loss and LAE

(1,501) (2,340)

Commission and other acquisition expenses

(1,356) (1,734)

General and administrative expenses

(2,387) (3,670)

Underwriting loss

Underwriting loss by business unit is detailed in the table below for Diversified Reinsurance business during the three and six months ended June 30, 2025:

For the Three and Six Months Ended June 30, 2025

$ (1,368) $ (2,478)

Underwriting loss by business unit is detailed in the table below for Diversified Reinsurance business during the three and nine months ended September 30, 2025:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2025

International $ (515) $ (1,286)

GLS (975) (1,296)

Other run-off lines 122 104

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"Financial Information" for more details.

Net Loss and LAE — Net loss and LAE were $0.8 million for the three and six months ended June 30, 2025.

The net loss and LAE was impacted by net adverse PPD of $0.1 million for the three and six months ended June 30, 2025, respectively.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses were $0.4 million for the three and six months ended June 30, 2025.

Net Loss and LAE — Net loss and LAE incurred in the three and nine months ended September 30, 2025 were $1.5 million and $2.3 million, respectively.

The net incurred losses were impacted by net favorable PPD of $0.3 million and $0.2 million for the three and nine months ended September 30, 2025, respectively.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses incurred in the three and nine months ended September 30, 2025 were $1.4 million and $1.7 million, respectively.

This is driven by lower premiums written and earned by Maiden LF and GF as they are not writing any new business having entered into the AmTrust Renewal Rights Agreements in 2024.

General and Administrative Expenses — General and administrative expenses were $1.3 million for the three and six months ended June 30, 2025.

General and Administrative Expenses — General and administrative expenses incurred in the three and nine months ended September 30, 2025 were $2.4 million and $3.7 million, respectively.

AmTrust Reinsurance Legacy Business:

The underwriting results for AmTrust Reinsurance Legacy business for the three and six months ended June 30, 2025 were as follows:

For the Three and Six Months Ended June 30, 2025

The underwriting results for AmTrust Reinsurance Legacy business for the three and nine months ended September 30, 2025 were as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2025

Gross premiums written

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Net premiums earned

$ 2,960 $ 3,992

Net loss and LAE

(8,905) (2,105)

Commission and other acquisition expenses

General and administrative expenses

Underwriting income

The negative written premiums for the three and six months ended June 30, 2025 reflect the termination of the AmTrust Quota Share and the European Hospital Liability Quota Share as of January 1, 2019 which has resulted in no new business written under these contracts since 2018.

The table below provides detail on net premiums earned in the three and six months ended June 30, 2025:

For the Three and Six Months Ended June 30, 2025

(1,302) (1,762)

Underwriting loss

$ (7,609) $ (253)

The nominal written premiums for the three and nine months ended September 30, 2025 reflect the termination of the AmTrust Quota Share and the European Hospital Liability Quota Share as of January 1, 2019 which has resulted in no new business written under these contracts since 2018.

The table below provides detail on net premiums earned in the three and nine months ended September 30, 2025:

For the Three Months Ended September 30, 2025

($ in thousands) Total

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Total AmTrust Reinsurance

Net Loss and LAE — Net loss and LAE expenses of $6.8 million for the three and six months ended June 30, 2025 was largely due to favorable PPD of $7.9 million.

The table below shows PPD for the AmTrust Reinsurance Legacy business for the three and six months ended June 30, 2025:

For the Three and Six Months Ended June 30, 2025

For the Nine Months Ended September 30, 2025

($ in thousands) Total

Net Premiums Earned

Small Commercial Business

Specialty Risk and Extended Warranty

Total AmTrust Reinsurance

Net Loss and LAE — Net loss and LAE expenses incurred for the three and nine months ended September 30, 2025 were $8.9 million and $2.1 million, respectively.

Net incurred losses for the three and nine months ended September 30, 2025 were impacted by adverse PPD of $6.9 million and favorable PPD of $1.0 million, respectively.

The table below shows total PPD for the AmTrust Reinsurance Legacy business for the three and nine months ended September 30, 2025:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2025

Prior Year Loss Development adverse (favorable) ($ in thousands)

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Total AmTrust Prior Year Development $ 6,911 $ (1,002)

Net favorable PPD for the three and six months ended June 30, 2025 was $7.9 million which was largely due to foreign exchange fluctuations on loss reserves denominated in non-USD.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses were negative $0.0 million for the three and six months ended June 30, 2025.

General and Administrative Expenses — General and administrative expenses were $0.5 million for the three and six months ended June 30, 2025.

Net incurred losses for the three and nine months ended September 30, 2025 included adverse PPD of $6.9 million and favorable PPD of $1.0 million, respectively.

Total PPD was largely due to additional development recognized on European Hospital Liability business due to adjustments for certain death claims and a reduction in recoveries anticipated under the LPT/ADC Agreement, which were partially offset by favorable development on worker's compensation and other lines of business in the AmTrust Quota Share.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses incurred in the three and nine months ended September 30, 2025 were $0.4 million and $0.4 million, respectively.

General and Administrative Expenses — General and administrative expenses incurred in the three and nine months ended September 30, 2025 were $1.3 million and $1.8 million, respectively.

Liquidity and Capital Resources

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The jurisdictions in which our operating subsidiaries are licensed to write business impose regulations requiring companies to maintain or meet statutory solvency and liquidity requirements and also place restrictions on the declaration and payment of dividends and other distributions.

As a result of the completion of the Combination on May 27, 2025, the Company has acquired significant investable assets and additional sources of investment income as discussed in Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) "Note 4.

As a result of the completion of the Combination on May 27, 2025, the Company has acquired significant investable assets and additional sources of investment income from Maiden as discussed in Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) "Note 4.

Investments " and "Note 15.

Business Combination" included in this Form 10-Q.

As of June 30, 2025, the Company had investable assets of $565.5 million compared to $4.3 million as of December 31, 2024.

As of September 30, 2025, the Company had investable assets of $568.5 million compared to $4.3 million as of December 31, 2024.

Investable assets include the combined total of our fixed maturity securities and other investments, cash and restricted cash including cash equivalents, net loan receivable from a related party and funds withheld receivable.

Maiden Reinsurance re-domesticated from Bermuda to Vermont on March 16, 2020.

We are actively engaged with the Vermont DFR regarding Maiden Reinsurance's longer term business plan, including its investment policy, changes to which require prior regulatory approval as stipulated by Vermont law or the Vermont DFR for active underwriting, capital management or other strategic initiatives, including our Combination Agreement with Kestrel.

Maiden Reinsurance has received all necessary approvals required to date by the Vermont DFR in respect of its business plan, including GLS activities and investment policy amendments in 2021.

Maiden Reinsurance's Investment Policy, as approved and as amended by the Vermont DFR in the second quarter 2025, maintains our established investment management and governance practices.

Maiden Reinsurance has received all necessary approvals required to date by the Vermont DFR in respect of its business plan, including GLS activities and investment policy amendments made in 2021 and 2025.

Maiden Reinsurance's Investment Policy, as approved and as amended by the Vermont DFR in the second quarter of 2025, maintains our established investment management and governance practices.

The amended Investment Policy however includes significant modifications to this policy as follows:

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and 2) Maiden Reinsurance will make no new commitments for alternative assets, consistent with the practice it had already adopted ahead of this policy amendment.

Maiden Reinsurance expects to fulfill its remaining commitments to existing investments, which totals $38,441 in unfunded commitments as of June 30, 2025.

Maiden Reinsurance expects to fulfill its remaining commitments to existing investments, which totals $33.4 million in unfunded commitments as of September 30, 2025.

In May 2025, the Vermont DFR approved:

1) an annual dividend program to be paid by Maiden Reinsurance to Maiden NA, with notification to the Vermont DFR as dividends are paid;

1) an annual dividend program to be paid by Maiden Reinsurance to Maiden NA, which requires prior approval by the Vermont DFR prior to payment of dividends under the program;

and 2) an extraordinary dividend of $40.0 million and this dividend formed the basis for the consideration received by the Company's shareholders pursuant to the terms of the Combination Agreement.

During the six months ended June 30, 2025, Maiden Reinsurance paid dividends of $13.8 million to Maiden NA as part of the approved annual dividend program.

During the six months ended June 30, 2025, Maiden NA did not pay any dividends to Maiden Holdings.

To date, the Vermont DFR has approved all dividend requests under the current program, and during the nine months ended September 30, 2025, Maiden Reinsurance paid dividends of $21.3 million to Maiden NA as part of the approved annual dividend program.

During the nine months ended September 30, 2025, Maiden NA did not pay any dividends to Maiden Holdings.

We may experience continued volatility in our results of operations which could negatively impact our financial condition and create a reduction in the amount of available distribution or dividend capacity from our regulated reinsurance subsidiaries, which would also reduce liquidity.

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Cash is currently used primarily to pay loss and LAE, ceded reinsurance premium, general and administrative expenses, and interest expense, with the remainder in excess of our operating requirements made available to our investment managers for investment in accordance with our investment policy as well as for capital management such as repurchasing our shares.

During the six months ended June 30, 2025, we experienced negative operating cash flows as we run off the AmTrust Reinsurance Legacy Business reserves as shown in the cash flows table further below.

During the nine months ended September 30, 2025, we experienced negative operating cash flows as we run off the AmTrust Reinsurance Legacy Business reserves as shown in the cash flows table further below.

We currently expect a trend of positive investing cash flows through 2025, and we will use funds from cash and investment portfolios, fee revenue premiums, investment income and proceeds from investment sales and redemptions to meet our expected claims payments and operational expenses.

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The Company’s management believes our current sources of liquidity are adequate to meet its cash requirements for the next twelve months as we generally expect operating cash flows to be sufficiently offset by investing cash flows.

The consideration and related significant expenses associated with completing the combination has utilized substantial amounts of Maiden's current liquidity.

The consideration and related significant expenses associated with completing the combination has utilized substantial amounts of Maiden's current unrestricted liquidity.

While we continue to expect our cash flows to be sufficient to meet our cash requirements and to operate our business, as our reinsurance liabilities continue to run-off our balance sheet increasingly consists of more illiquid securities which we are seeking to dispose of for more liquid assets.

Our inability to monetize these illiquid assets on a timely basis while fulfilling our ongoing obligations may restrain our liquidity further and we may need to consider measures to ensure we continue to fulfill those obligations.

Further, while no new alternative asset commitments have been or will be made, Maiden's historical asset management strategy which was part of the Combination can be impacted by both investment specific and broader financial market conditions and may not produce the expected liquidity and cash flows these investments are designed to achieve, or the timing thereof may also be impacted by those factors.

At June 30, 2025, unrestricted cash, cash equivalents and fixed maturity investments were $28.0 million compared to $4.3 million held at December 31, 2024, an increase of $23.7 million during the six months ended June 30, 2025.

conditions and may not produce the expected liquidity and cash flows these investments are designed to achieve, or the timing thereof may also be impacted by those factors.

At September 30, 2025, unrestricted cash, cash equivalents and fixed maturity investments were $27.6 million compared to $4.3 million held at December 31, 2024, an increase of $23.3 million during the nine months ended September 30, 2025.

This was a result of the Combination on May 27, 2025, in which the Company acquired significant investable assets.

Please see the related discussion on investing and financing cash flows below.

The table below summarizes our operating, investing and financing cash flows for the six months ended June 30, 2025 and 2024:

For the Six Months Ended June 30, 2025 2024

The table below summarizes our operating, investing and financing cash flows for the nine months ended September 30, 2025 and 2024:

For the Nine Months Ended September 30, 2025 2024

($ in thousands)

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Cash Flows used in Operating Activities

Cash flows used in operating activities for the six months ended June 30, 2025 was $20.7 million compared to cash flows used in operating activities of $0.6 million for the six months ended June 30, 2024.

The increase in cash used in operating activities for the six months ended June 30, 2025 was due to claim payments for ongoing runoff of reinsurance liabilities.

Cash flows used in operating activities for the nine months ended September 30, 2025 was $30.4 million compared to cash flows used in operating activities of $1.1 million for the nine months ended September 30, 2024.

The increase in cash used in operating activities for the nine months ended September 30, 2025 was due to claim payments for ongoing runoff of reinsurance liabilities.

Cash Flows provided by Investing Activities

Cash provided by investing activities was $88.3 million for the six months ended June 30, 2025 compared to net cash used in investing activities of $0.0 million for the same period in 2024.

Cash flows provided by investing activities for the six months ended June 30, 2025 was primarily due to $79.8 million of cash acquired from the purchase of Maiden business due to the Combination which closed on May 27, 2025.

For the six months ended June 30, 2025, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $10.1 million.

The size of the fixed income investment portfolio will diminish as claims payments continued to be made in the runoff of existing loss reserves for the terminated AmTrust Quota Share and the European Hospital Liability Quota Share contracts.

For the six months ended June 30, 2025 and 2024, investing cash flows included purchases of alternative investments which exceeded proceeds from the sales and redemptions.

There were net purchases of $1.6 million for alternative investments during the six months ended June 30, 2025 compared to net purchases of alternative investments of $0.0 million for the same period in 2024.

These net purchases were mainly due to pre-existing commitments for private equity fund investments for the six months ended June 30, 2025.

Cash provided by investing activities was $104.4 million for the nine months ended September 30, 2025 compared to net cash used in investing activities of $0.0 million for the same period in 2024.

Cash flows provided by investing activities for the nine months ended September 30, 2025 was primarily due to $79.8 million of cash acquired from the purchase of Maiden business due to the Combination which closed on May 27, 2025.

For the nine months ended September 30, 2025, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $24.9 million.

The size of the fixed income investment portfolio will diminish as claims payments continue to be made in the runoff of existing loss reserves for the terminated AmTrust Quota Share and the European Hospital Liability Quota Share contracts.

For the nine months ended September 30, 2025 and 2024, investing cash flows included purchases of alternative investments which exceeded proceeds from the sales and redemptions.

There were net purchases of $7.0 million for alternative investments during the nine months ended September 30, 2025 compared to net purchases of alternative investments of $0.0 million for the same period in 2024.

These net purchases were mainly due to pre-existing commitments for private equity fund investments for the nine months ended September 30, 2025.

Cash Flows used in Financing Activities

Cash flows used in financing activities were $40.0 million for the six months ended June 30, 2025 compared to $0.0 million for the same period in 2024.

Cash flows used in financing activities were $40.0 million for the nine months ended September 30, 2025 compared to $0.0 million for the same period in 2024.

This was due to cash dividends paid to Kestrel equityholders pursuant to the terms of the Combination Agreement which was completed on May 27, 2025.

No dividends on common shares were paid during the six months ended June 30, 2025 and 2024.

No dividends on common shares were paid during the nine months ended September 30, 2025 and 2024.

Restrictions, Collateral and Specific Requirements

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The Company's restrictions, collateral and specific requirements are discussed in " Management's Discussion and Analysis of Financial Condition and Results of Operations " section.

Please also refer to " Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) included in this Form 10-Q for details of fair values for collateral requirements and restricted assets at June 30, 2025 particularly in these notes:

Note 4.(e) Restricted Cash, Cash Equivalents and Investments;

Related Party Transactions.

At June 30, 2025 and December 31, 2024, restricted cash and cash equivalents and fixed maturity investments used as collateral were $211.4 million and $0.0 million, respectively.

This collateral represents 88.3% and 0.0% of the fair value of total fixed maturity investments, cash, restricted cash and cash equivalents at June 30, 2025 and December 31, 2024, respectively.

At September 30, 2025 and December 31, 2024, restricted cash and cash equivalents and fixed maturity investments used as collateral were $211.6 million and $0.0 million, respectively.

This collateral represents 88.5% and 0.0% of the fair value of total fixed maturity investments, cash, restricted cash and cash equivalents at September 30, 2025 and December 31, 2024, respectively.

Cash and Investments

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Business Combination" included in this Form 10-Q.

As a result, the substantial majority of our current investments are held by Maiden Reinsurance, whose amended investment policy was recently approved by the Vermont DFR, as noted.

As of June 30, 2025, Maiden Reinsurance owned approximately 22.4% of our total outstanding common shares which is eliminated for accounting and financial reporting purposes on our condensed consolidated financial statements.

As a result, the substantial majority of our current investments are held by Maiden Reinsurance, whose amended investment policy was approved by the Vermont DFR, as noted.

As of September 30, 2025, Maiden Reinsurance owned 22.4% of our total outstanding common shares which is eliminated for accounting and financial reporting purposes on our condensed consolidated financial statements.

The voting power of Maiden Reinsurance, with respect to its common shares, was previously capped at 9.5% pursuant to the Maiden's bye-laws;

however Maiden's shareholders approved the proposal to remove the 9.5% voting limitation on all shareholders at its Special Meeting on April 29, 2025.

Treasury shares include 2,237,534 common shares owned by Maiden Reinsurance which are not treated as outstanding common shares on the Condensed Consolidated Balance Sheet at June 30, 2025.

The market value of our common shares held by Maiden Reinsurance was $59.3 million at June 30, 2025.

Accordingly, our fixed income investment portfolio is invested in liquid, investment-grade fixed maturity securities which are all designated as AFS at June 30, 2025.

Further, as Maiden's insurance liabilities continue to run-off and the required capital to operate its business for regulatory purposes decreased, Maiden expanded Maiden Reinsurance’s investment policy which has been approved by the Vermont DFR.

Treasury shares include 2,237,534 common shares owned by Maiden Reinsurance which are not treated as outstanding common shares on the Condensed Consolidated Balance Sheet at September 30, 2025.

The market value of our common shares held by Maiden Reinsurance was $61.1 million at September 30, 2025.

Accordingly, our fixed income investment portfolio is invested in liquid, investment-grade fixed maturity securities which are all designated as AFS at September 30, 2025.

Further, as Maiden's insurance liabilities continue to run-off and the required capital to operate its business for regulatory purposes decreased, as previously discussed Maiden had expanded Maiden Reinsurance’s investment policy, which had been approved by the Vermont DFR.

Under this investment policy, Maiden expanded the range of asset classes it invested in to enhance the income and total returns its investment portfolio produces.

We categorize these investments as alternative investments which include " Other Investments " and "Equity Securities" on our Condensed Consolidated Balance Sheets.

As of June 30, 2025 and December 31, 2024, our cash and investments consisted of:

June 30, 2025 December 31, 2024

We categorize these investments as alternative investments which include " Other Investments ", "Equity Method Investments" and "Equity Securities" on our Condensed Consolidated Balance Sheets.

As of September 30, 2025 and December 31, 2024, our cash and investments consisted of:

September 30, 2025 December 31, 2024

($ in thousands)

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Investments " included under Part I Item 1 " Financial Information" of this Form 10-Q for further discussion on our AFS fixed income securities.

The net purchases of other investments for the six months ended June 30, 2025 were due to securities transactions executed after the completion of the Combination.

The net purchases of other investments for the nine months ended September 30, 2025 were due to securities transactions executed after the completion of the Combination.

Other than purchases due to pre-existing commitments for private equity funds, we will not be making new commitments to alternative investments in the foreseeable future.

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The values of, and returns on, such investments may also be more volatile.

We believe the Maiden alternative investment portfolio assumed in the Combination provides diversification against our fixed-income investments and an opportunity for improved risk-adjusted return.

However, we believe this portfolio is not suitable for our plans to grow our Program Services segment and in addition to the changes in our investment policy as described above, we are actively looking to dispose of these assets to further improve our liquidity position and strengthen our ability to grow.

We believe the legacy Maiden alternative investment portfolio assumed in the Combination provides diversification against our fixed-income investments and an opportunity for improved risk-adjusted return.

However, we believe this portfolio is not suitable for our plans to expand our Program Services segment and in addition to the changes in our investment policy as described above, we are actively looking to dispose of these assets to further improve our liquidity position and strengthen our ability to grow.

Further, the returns of these investments may be more volatile and we may experience significant unrealized gains or losses in any particular quarter or year.

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Cash & Cash Equivalents

At June 30, 2025, we consider the levels of cash and cash equivalents held to be within our targeted ranges.

At September 30, 2025, we consider the levels of cash and cash equivalents held to be within our targeted ranges.

During periods when interest rates experience greater volatility, we have periodically maintained more cash and cash equivalents to better assess current market conditions and opportunities within our defined risk appetite, and may do so in future periods.

Fixed Maturity Investments

The average yield and average duration of our fixed maturities, by asset class, and our cash and cash equivalents (restricted and unrestricted) are as follows at June 30, 2025 and December 31, 2024:

June 30, 2025 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield (1)

The average yield and average duration of our fixed maturities, by asset class, and our cash and cash equivalents (restricted and unrestricted) are as follows at September 30, 2025 and December 31, 2024:

September 30, 2025 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield (1)

Average duration (2)

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(2) Average duration in years.

During the six months ended June 30, 2025, the yield on the 10-year U.S.

During the nine months ended September 30, 2025, the yield on the 10-year U.S.

Treasury bond decreased by 42 basis points to 4.16%.

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Treasury rate is the key risk-free determinant in the fair value of many of the fixed maturity securities in our portfolio.

The decrease in risk-free rates during the six months ended June 30, 2025 generated net unrealized gains of $0.5 million on our fixed maturity investment portfolio which increased our book value per common share by $0.06 during the period.

Current outlooks for global monetary policy have become more uncertain in recent months, as a combination of potential significant changes in U.S.

fiscal and trade policy and the attendant uncertainty on the impacts of these policies on both U.S.

and global economic outlooks and inflation appear to be causing central banks to either adopt a neutral stance or apply further tightening should data dictate such actions, particularly inflation and labor market data.

Our investment portfolios, in particular our fixed maturity portfolio, may be adversely impacted by unfavorable market conditions caused by these measures, which could cause continued volatility in our results of operations and negatively impact our financial condition.

The decrease in risk-free rates during the nine months ended September 30, 2025 generated net unrealized gains of $0.7 million on our fixed maturity investment portfolio which increased our book value per common share by $0.09 during the period.

Current outlooks for global monetary policy have become more uncertain in recent months, as a combination of significant changes in U.S.

fiscal and trade policy while simultaneously, labor market conditions are noticeably weakening.

The impacts of these policies and conditions on both U.S.

and global economic outlooks and inflation appear to be causing central banks to adopt a less restrictive monetary policy stance primarily through interest rate cuts.

Should interest rates continue to fall our investment portfolios, in particular our fixed maturity assets, may produce less income and thus impact our financial condition.

Associated increases in the values of our fixed maturity investments may be more limited given the significant share of fixed maturity investments that we hold that are floating rate securities.

Interest rate risk is the price sensitivity of a security to changes in interest rates.

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We also monitor the duration and structure of our investment portfolio as discussed below.

As of June 30, 2025, the aggregate hypothetical change in fair value from an immediate 100 basis points increase in interest rates, assuming credit spreads remain constant, in our fixed maturity investments portfolio would decrease the fair value of that portfolio by $3.7 million.

As of September 30, 2025, the aggregate hypothetical change in fair value from an immediate 100 basis points increase in interest rates, assuming credit spreads remain constant, in our fixed maturity investments portfolio would decrease the fair value of that portfolio by $3.6 million.

Actual shifts in interest rates may not change by the same magnitude across the maturity spectrum or on an individual security and, as a result, the impact on the fair value of our fixed maturity securities may be materially different from the resulting change in value described above.

To limit our exposure to unexpected interest rate increases which would reduce the value of our fixed income securities and reduce our shareholders' equity, we attempt to maintain the duration of our fixed maturity investment portfolio combined with our cash and cash equivalents, both restricted and unrestricted, within a reasonable range of the duration of our loss reserves.

At June 30, 2025, these respective durations in years were as follows:

June 30, 2025

At September 30, 2025, these respective durations in years were as follows:

September 30, 2025

Fixed maturities and cash and cash equivalents

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Reserve for loss and LAE - net of LPT/ADC Agreement reserves 2.9

During the six months ended June 30, 2025, the weighted average duration of our fixed maturity investment portfolio was 0.9 year while the duration for gross reserve for loss and LAE was 5.7 years.

During the nine months ended September 30, 2025, the weighted average duration of our fixed maturity investment portfolio was 0.9 years while the duration for gross reserve for loss and LAE was 5.9 years.

The differential in duration between these assets and liabilities may fluctuate over time and in the case of fixed maturities, historically has been affected by factors such as market conditions, changes in asset mix and prepayment speeds in the case of both our U.S.

agency mortgage-backed securities ("Agency MBS") and commercial mortgage-backed securities held.

At June 30, 2025, the duration of our loss reserves net of the LPT/ADC Agreement was higher than the duration of our fixed maturity investment portfolio.

At September 30, 2025, the duration of our loss reserves net of the LPT/ADC Agreement was higher than the duration of our fixed maturity investment portfolio.

To limit our exposure to unexpected interest rate increases that could reduce the value of our fixed maturity securities and reduce our shareholders' equity, the Company holds floating rate securities whose fair values are less sensitive to interest rates.

At June 30, 2025, 49.0% of our fixed income investments were comprised of floating rate securities which are detailed in the table below:

June 30, 2025 December 31, 2024

At September 30, 2025, 48.2% of our fixed income investments were comprised of floating rate securities which are detailed in the table below:

September 30, 2025 December 31, 2024

($ in thousands) Fair Value % of Total Fair Value % of Total

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(1) Total fixed income investments at fair value include AFS fixed maturities, cash and restricted cash, funds withheld receivable, and net loan receivable from related party.

At June 30, 2025, 100.0% of the Company’s U.S.

At September 30, 2025, 100.0% of the Company’s U.S.

agency bond holdings are mortgage-backed.

agency MBS comprise 10.9% of our fixed maturity investment portfolio at June 30, 2025.

agency MBS comprise 11.1% of our fixed maturity investment portfolio at September 30, 2025.

Given their relative size to our total investments, if faster prepayment patterns were to occur over an extended period of time, this could potentially limit the growth in our investment income in certain circumstances or reduce the total amount of investment income we earn.

The fair value of our U.S.

Agency MBS holdings at June 30, 2025 were as follows:

June 30, 2025

Agency MBS holdings at September 30, 2025 were as follows:

September 30, 2025

($ in thousands) Fair Value % of Total

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Agency MBS $ 22,122 100.0 %

At June 30, 2025, 100.0% of our fixed maturity investments consisted of investment grade securities.

At September 30, 2025, 100.0% of our fixed maturity investments consisted of investment grade securities.

We define a security as being below investment grade if it has an S&P credit rating of BB+ or equivalent, or less.

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Credit ratings below are assigned by S&P, or an equivalent rating agency.

The security holdings by sector and financial strength rating of our corporate bond holdings at June 30, 2025 were as follows:

June 30, 2025 A+, A, A- BBB+, BBB, BBB- Fair Value % of Corporate bonds portfolio

The security holdings by sector and financial strength rating of our corporate bond holdings at September 30, 2025 were as follows:

September 30, 2025 A+, A, A- BBB+, BBB, BBB- Fair Value % of Corporate bonds portfolio

Corporate bonds

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62.0 % 38.0 % $ 16,744 100.0 %

The table below includes the Company’s four largest corporate holdings at fair value and as a percentage of all fixed income securities held as at June 30, 2025.

The table below includes the Company’s four largest corporate holdings at fair value and as a percentage of all fixed income securities held as at September 30, 2025.

The Company's four largest corporate holdings are 100.0% euro denominated, with 17.5% in the Consumer Sector and 47.5% in the Financial Institutions sector.

June 30, 2025 Fair Value % of Holdings Rating (1)

September 30, 2025 Fair Value % of Holdings Rating (1)

($ in thousands)

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(1) Ratings as assigned by S&P, or equivalent

At June 30, 2025, we held the following types of non-U.S.

At September 30, 2025, we held the following types of non-U.S.

dollar denominated securities:

June 30, 2025

September 30, 2025

($ in thousands) Fair Value % of Total

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dollar denominated securities $ 137,806 100.0 %

At June 30, 2025, 100.0% of non-U.S.

At September 30, 2025, 100.0% of non-U.S.

dollar denominated securities were invested in euro denominated bonds.

At June 30, 2025, the non-U.S.

At September 30, 2025, the non-U.S.

government issuers all have a rating of A+ or higher by Fitch Ratings.

We do not employ any credit default protection against any of the fixed maturities held in non-U.S.

dollar denominated currencies at June 30, 2025.

dollar denominated currencies at September 30, 2025.

For our non-U.S.

dollar denominated corporate bonds, the following table summarizes the composition of the fair value of our fixed maturity investments at the dates indicated by ratings at June 30, 2025:

June 30, 2025

dollar denominated corporate bonds, the following table summarizes the composition of the fair value of our fixed maturity investments at the dates indicated by ratings at September 30, 2025:

September 30, 2025

($ in thousands) Fair Value % of Total

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Private credit investments consist of loans and other debt securities of privately held entities or investment sponsors.

Our alternative investments as of June 30, 2025 consisted of the following asset categories:

June 30, 2025

Our alternative investments as of September 30, 2025 consisted of the following asset categories:

September 30, 2025

($ in thousands) Carrying Value % of Total

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Total alternative investments $ 215,659 100.0 %

Our allocation to alternative investments increased to 46.3% of our total cash and investments held as of June 30, 2025, reflecting assets assumed in the Combination.

Our allocation to alternative investments increased to 47.4% of our total cash and investments held as of September 30, 2025, reflecting assets acquired in the Combination.

In addition to the categories described above, we also evaluate our alternative investments by the following asset classes:

June 30, 2025

September 30, 2025

($ in thousands) Carrying Value % of Total

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• Private Equity – this asset class consists of both fund investments with leading private equity sponsors and direct equity investments in private companies, sometimes in conjunction with our private equity fund sponsors.

As of June 30, 2025, $2.7 million or 17.7% of investments in the private equity asset class consisted of investments in private equity funds and $12.3 million or 82.3% consisted of direct equity investments in private companies.

As of September 30, 2025, $4.0 million or 24.2% of investments in the private equity asset class consisted of investments in private equity funds and $12.5 million or 75.8% consisted of direct equity investments in private companies.

• Private Credit - this asset class consists of both fund investments with leading private credit sponsors and direct credit investments in private companies, sometimes in conjunction with our private credit fund sponsors.

Private credit investments in both funds and on a direct basis will typically be secured lending arrangements with non-rated entities, often with additional protective provisions to enhance the security and returns of these investments.

As of June 30, 2025, $1.7 million or 100.0% of the private credit asset class consisted of direct investments in debt securities of private companies.

As of September 30, 2025, all of the private credit asset class consisted of direct investments in debt securities of private companies.

• Alternatives – this asset class consists of structured financing arrangements which typically have incentive features to enhance the Company’s returns.

As part of these arrangements, the Company requires collateral or bankruptcy-remote structures to protect its investments.

As of June 30, 2025, $77.0 million or 97.9% of investments in the alternatives asset class were direct investments and $1.7 million or 2.1% of the alternatives asset class were invested in funds.

As of September 30, 2025, $82.2 million or 97.9% of investments in the alternatives asset class were direct investments and $1.8 million or 2.1% of the alternatives asset class were invested in funds.

One investment in a collateralized direct lending entity of $53.6 million represents 63.8% of this asset class and is discussed further in "Note 4 — Investments" included in Part I Item 1.

"Financial Information" in this Quarterly Report on Form 10-Q for the six months ended June 30, 2025.

"Financial Information" in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2025.

Prior to the Combination, Maiden had carried the investment in a collateralized direct lending entity at cost less an allowance for expected credit losses.

• Venture Capital – this asset class consists of both fund investments with venture capital firms focused primarily on “insurtech” or “fintech” early-stage investments as well as direct investments in start-up companies in this sector, including equity investments in individual companies made in conjunction with our venture capital fund sponsors.

As of June 30, 2025, $12.5 million or 47.2% of investments in the venture capital asset class consisted of investments in funds and $13.9 million or 52.8% consisted of direct equity investments in start-up companies.

As of June 30, 2025, $14.7 million or 55.5% of our venture capital investments were invested in funds or companies that would be considered “insurtech” investments.

As of September 30, 2025, $14.5 million or 50.3% of investments in the venture capital asset class consisted of investments in funds and $14.3 million or 49.7% consisted of direct equity investments in start-up companies.

As of September 30, 2025, $15.1 million or 52.3% of our venture capital investments were invested in funds or companies that would be considered “insurtech” investments.

• Real Estate – this asset class consists of long-term equity investments in three real estate projects.

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One investment is a minority stake as a limited partner with a leading property developer with a highly successful track record, where the Company will earn returns from both operating income from rentals and future sales of properties.

As of June 30, 2025, the Company has $46.0 million invested in this project and expects investment returns to commence in earnest in 2026 and beyond.

As of September 30, 2025, the fair value of this project is $46.0 million and the Company expects investment returns to commence in earnest in 2026 and beyond.

The first properties developed with this project have been recently completed with occupancies now underway.

The second multi-family residential investment is a majority stake with general partner rights wherein the Company is providing the capital backing to an experienced and successful developer in the subject market, while also taking minority equity stakes in individual projects.

To date, this development project has secured five properties in attractive locations and is currently in the zoning and planning stages.

As of June 30, 2025, the Company has $33.2 million invested in this project and has commenced earning limited amounts of fee income from this project.

As of September 30, 2025, the Company has $32.5 million invested in this project and has commenced earning limited amounts of fee income from this project.

As part of its investment, the Company has also provided certain loan guarantees which are discussed in more detail in Note 11 — Commitments, Contingencies and Guarantees included in Part I Item 1.

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Finally, the Company has a minority equity stake in an iconic office building in a major city in the U.S., with an attractive and growing tenant roll.

As of June 30, 2025, the Company has $5.6 million invested in this project and to date has earned preferred returns and received certain distributions.

As of September 30, 2025, the Company has $6.3 million invested in this project and to date has earned preferred returns and received certain distributions.

In addition to preferred returns, the Company expects to receive future distributions of operating income from this investment.

C ertain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties.

As noted, c ertain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties.

In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to certain parties such that it may be required to make payments now or in the future.

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Investment Results

Our investment portfolio returns included in earnings increased to $2.6 million for the three and six months ended June 30, 2025, compared to $0.1 million for the same respective periods in 2024, largely due to the acquisition of Maiden's AFS and alternative investment portfolios in connection with the Combination.

Our investment portfolio returns included in earnings increased to $9.0 million and $11.6 million for the three and nine months ended September 30, 2025, respectively, compared to $0.1 million and $0.2 million for the same respective periods in 2024.

This was largely due to the acquisition of Maiden's AFS fixed income and alternative investment portfolios in connection with the Combination.

The Company earned unrealized gains on the alternative investment portfolio, as well as interest income on the net loan receivable from related party and the AFS fixed income portfolio.

The following table summarizes our investment results for the three and six months ended June 30, 2025 and 2024:

For the Three Months Ended June 30, For the Six Months Ended June 30,

The following table summarizes our investment results for the three and nine months ended September 30, 2025 and 2024:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

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Total net investment income 3,494 52 5,059 170

Net realized losses:

Net realized gains:

Fixed income assets (1)

Total net realized losses 764 — 764 —

624 — 1,388 —

Total net realized gains

624 — 1,388 —

Net unrealized gains:

Other investments, including equities (4)

4,870 — 5,164 —

Total net unrealized gains

4,870 — 5,164 —

Interest in loss of equity method investments:

Interest in loss of equity method investments

(24) — (24) —

Interest in loss of equity method investments

(24) — (24) —

Total investment return included in earnings (A)

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Fixed income investments include AFS securities as well as funds withheld receivable, and net loan receivable from related party.

Gross and net investment returns for these assets only include the post-Combination period of May 28, 2025 to June 30, 2025.

Gross and net investment returns for these assets only include the post-Combination period of May 28, 2025 to September 30, 2025.

Average aggregate fixed income assets include AFS portfolio, cash and restricted cash, funds withheld receivable, and loan to related party and is computed as an average of the amounts disclosed in our quarterly U.S.

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GAAP consolidated financial statements.

Gross and net investment returns for other investments, including equities, only include the post-Combination period of May 28, 2025 to June 30, 2025.

The following table details total investment returns for our fixed income investments for the three and six months ended June 30, 2025 and 2024:

Gross and net investment returns for other investments, including equities, only include the post-Combination period of May 28, 2025 to September 30, 2025.

The following table details total investment returns for our fixed income investments for the three and nine months ended September 30, 2025 and 2024:

Fixed Income Investments (1)

For the Three Months Ended June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

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Net realized gains

624 — 1,388 —

Change in AOCI (3)

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Net Investment Returns 1.2 % 1.1 % 3.8 % 3.4 %

Our net investment returns increased to 1.5% for the three and six months ended June 30, 2025, compared to 1.1% and 2.2% for the respective periods in 2024.

The floating rate investments comprise 49.0% of our fixed income investments at June 30, 2025.

The net loan receivable from related party had an outstanding net balance of $107.5 million at June 30, 2025 and the average yield on the loan was 5.8% for the three and six months ended June 30, 2025.

Please refer to " Notes to Condensed Consolidated Financial Statements - Note 4 — Investments " included under Part I, Item 1 " Financial Information" of this Quarterly Report on Form 10-Q for further detail on investment returns from fixed income investments held by the Company at June 30, 2025 and 2024.

The following table details total investment returns for our alternative investments for the three and six months ended June 30, 2025, respectively:

Our net investment returns increased to 1.2% and 3.8% for the three and nine months ended September 30, 2025, compared to 1.1% and 3.4% for the respective periods in 2024.

The floating rate investments comprise 48.2% of our fixed income investments at September 30, 2025.

The net loan receivable from related party had an outstanding net balance of $101.7 million at September 30, 2025 with an average yield of 6.1% and 6.2% for the three and nine months ended September 30, 2025, respectively.

The following table details total investment returns for our alternative investments for the three and nine months ended September 30, 2025, respectively:

Alternative Investments (2)

For the Three and Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2025

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Gross investment returns (5)

$ 5,077 $ 5,455

Average invested assets, at fair value (4)

$ 211,064 $ 107,830

Gross Investment Returns (5)

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GAAP consolidated financial statements.

Gross and net investment returns for alternative investments only include the post-Combination period of May 28, 2025 to June 30, 2025.

The following table details total investment returns for alternative investments by asset class at June 30, 2025:

June 30, 2025 Private Equity Private Credit Alternative Assets Venture Capital Real Estate Total

Gross and net investment returns for alternative investments only include the post-Combination period of May 28, 2025 to September 30, 2025.

The following table details total investment returns for alternative investments by asset class for the nine months ended September 30, 2025:

September 30, 2025 Private Equity Private Credit Alternative Assets Venture Capital Real Estate Total

($ in thousands)

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Other Balance Sheet Changes

The following table summarizes other material balance sheet changes at June 30, 2025 compared to December 31, 2024.

The following table summarizes other material balance sheet changes at September 30, 2025 compared to December 31, 2024.

Substantially all of the increases in the balance sheet items below relate to the completion of the Combination with Maiden on May 27, 2025, as discussed in Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) "Note 4.

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Business Combination" included in this Form 10-Q:

($ in thousands) June 30, 2025 December 31, 2024 Change in $

($ in thousands) September 30, 2025 December 31, 2024 Change in $

Reinsurance balances receivable, net

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19,615 — 19,615

Earn out liability 2,679 — 2,679

Liability for investments purchased

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Capital Resources

During the six months ended June 30, 2025, book value per common share increased to $19.39 and diluted book value per common share increased to $19.31, compared to $1.67 at December 31, 2024.

This was largely due to the Combination completed on May 27, 2025, which produced substantially all of the increase in shareholders' equity for the six months ended June 30, 2025 as described in discussed in Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) "Note 1.

During the nine months ended September 30, 2025, book value per common share increased to $18.57 and diluted book value per common share increased to $18.25, compared to $1.67 at December 31, 2024.

This was due to the Combination completed on May 27, 2025, which produced substantially all of the increase in shareholders' equity for the nine months ended September 30, 2025 as described in discussed in Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) "Note 1.

Basis of Presentation " and "Note 15.

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Capital resources consist of funds deployed in support of our operations.

The following table shows the movement in our capital resources at June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024 Change in $

The following table shows the movement in our capital resources at September 30, 2025 and December 31, 2024:

September 30, 2025 December 31, 2024 Change in $

($ in thousands)

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Additional paid-in capital 177,101 10,107 166,994

Accumulated other comprehensive income 559 — 559

Accumulated other comprehensive loss

(916) — (916)

Retained earnings (accumulated deficit) 18,952 (5,528) 24,480

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Total capital resources increased by $401.5 million compared to December 31, 2024 due to the following items:

• retained earnings increased by $29.5 million due to the net income of $69.5 million reported for the six months ended June 30, 2025 partly offset by a $40.0 million cash distribution to shareholders at closing of the Combination;

• net increase in additional paid-in capital of $166.8 million largely due to shares issued as consideration for the combination pursuant to the terms of the Combination Agreement of $166.5 million as well as stock based compensation expense of $0.2 million;

• net increase in AOCI of $0.6 million due to:

(1) net unrealized gains of $0.5 million on our AFS investment portfolio due to market price movements in the six months ended June 30, 2025, and (2) an increase in foreign currency translation adjustment of $0.1 million in the six months ended June 30, 2025 due to the impact of depreciation of the U.S.

• retained earnings increased by $24.5 million due to net income of $64.5 million reported for the nine months ended September 30, 2025 partly offset by a $40.0 million cash distribution to shareholders at closing of the Combination;

• additional paid-in capital increased by $167.0 million largely due to common shares issued as consideration for the Combination of $166.5 million as well as stock based compensation expense of $0.5 million;

• AOCI decreased by $0.9 million driven by:

(1) net unrealized gains of $0.7 million on our AFS investment portfolio due to market price movements in the nine months ended September 30, 2025, and (2) a decrease in foreign currency translation adjustment of $1.6 million in the nine months ended September 30, 2025 due to the impact of depreciation of the U.S.

dollar on the re-measurement of net assets denominated in British pound and euro;

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" Financial Information" of this Quarterly Report on Form 10-Q for a discussion of the equity instruments issued by the Company.

Book value and diluted book value per common share at June 30, 2025 and December 31, 2024 were as follows:

($ in thousands except share and per share data) June 30, 2025 December 31, 2024

Book value and diluted book value per common share at September 30, 2025 and December 31, 2024 were as follows:

($ in thousands except share and per share data) September 30, 2025 December 31, 2024

Ending common shareholders’ equity

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Diluted book value per common share

At June 30, 2025, Kestrel Group had outstanding publicly-traded senior notes which were issued in 2016 ("2016 Senior Notes") by its now wholly owned subsidiary Maiden and outstanding publicly-traded senior notes which were issued in 2013 ("2013 Senior Notes") by its now wholly owned subsidiary, Maiden NA.

These are collectively referred to as the Company's outstanding senior notes ("Senior Notes").

At September 30, 2025, Kestrel Group had outstanding publicly-traded senior notes which were issued in 2016 ("2016 Senior Notes") by its now wholly owned subsidiary Maiden and outstanding publicly-traded senior notes which were issued in 2013 ("2013 Senior Notes") by its now wholly owned subsidiary, Maiden NA, collectively referred to as the Company's outstanding senior notes ("Senior Notes").

The Senior Notes are unsecured and unsubordinated obligations of the Company.

that certain indenture dated as of June 14, 2016, providing that the Company will fully and unconditionally guarantee Maiden’s 6.625% Senior Notes due 2046 and (ii) Maiden NA, as issuer, the Company, as guarantor, and Wilmington Trust Company, as trustee, entered into a fourth supplemental indenture (together with the Second Supplemental Indenture, the “Supplemental Indentures”) to that certain indenture dated as of June 24, 2011, providing that the Company will fully and unconditionally guarantee MHNA’s 7.75% Senior Notes due 2043.

The Company did not enter into any short-term borrowing arrangements during the six months ended June 30, 2025.

On May 27, 2025 in connection with the Combination, (i) Maiden, as issuer, the Company, as guarantor, and Wilmington Trust, National Association, as trustee, entered into a second supplemental indenture (the “Second Supplemental Indenture”) to that certain indenture dated as of June 14, 2016, providing that the Company will fully and unconditionally guarantee Maiden’s 6.625% Senior Notes due 2046 and (ii) Maiden NA, as issuer, the Company, as guarantor, and Wilmington Trust Company, as trustee, entered into a fourth supplemental indenture (together with the Second Supplemental Indenture, the “Supplemental Indentures”) to that certain indenture dated as of June 24, 2011, providing that the Company will fully and unconditionally guarantee MHNA’s 7.75% Senior Notes due 2043.

The Company did not enter into any short-term borrowing arrangements during the nine months ended September 30, 2025.

Please refer to " Notes to Condensed Consolidated Financial Statements (unaudited) Note 7.

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In 2025, the Vermont DFR approved an annual dividend program from Maiden Reinsurance to Maiden NA, but required prior approval of quarterly dividends before payment.

Subsequent to those approvals, plus the approval for the $40.0 million extraordinary dividend to provide for consideration to the Kestrel shareholders pursuant to the terms of the Combination Agreement, Maiden Reinsurance has paid total dividends of $122.5 million to Maiden NA as of June 30, 2025.

To date the Vermont DFR has approved all dividend requests under this program.

The summarized financial information below has been presented on a combined basis for the issuer Maiden NA and the guarantor Maiden, excluding all other subsidiaries.

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Intercompany balances with subsidiaries that are not issuers or guarantors and any related party transactions were separately disclosed below and are not included in the total assets and total liabilities presented for Maiden NA and Maiden.

The net loss for Maiden NA and Maiden was due to interest and amortization expenses on the Senior Notes as well as general and administrative expenses.

The net loss in Maiden NA also reflects income tax expense incurred for the respective period.

Summarized financial information of Maiden NA and Maiden as of June 30, 2025 and for the three and six months ended June 30, 2025 were as follows:

The net loss for Maiden Holdings was due to interest and amortization expenses on the Senior Notes as well as general and administrative expenses.

The net income in Maiden NA reflects investment income earned for the respective periods.

Summarized financial information of Maiden NA and Maiden as of September 30, 2025 and for the three and nine months ended September 30, 2025 were as follows:

Maiden NA Maiden Holdings

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Total revenue for the quarter-to-date period 13,047 154

Net loss for the quarter-to-date period

Net income (loss) for the quarter-to-date period

9,696 (7,792)

With respect to the related party loan payable for Maiden above, under the conditions stipulated in the Vermont DFR approval for the Combination Agreement, Maiden Reinsurance (as the lender) is no longer permitted to include the corresponding related party loan receivable from Maiden Holdings (and related accrued interest) as an admitted asset for statutory capital and reporting purposes.

Total revenue for year-to-date period 13,061 154

Net income (loss) for year-to-date period

8,571 (11,664)

With respect to the related party loan payable for Maiden above, under the conditions stipulated in the Vermont DFR approval for the Combination, Maiden Reinsurance (as the lender) is no longer permitted to include the corresponding related party loan receivable from Maiden Holdings (and related accrued interest) as an admitted asset for statutory capital and reporting purposes.

As a result, Maiden Reinsurance's ratio of risk-based capital to total adjusted capital was significantly reduced, which remains sufficient to not only support the dividends related to the Combination and recurring annual dividends (which require prior approval by the Vermont DFR) but our ability to selectively underwrite business in support of our Program Services segment in the future.

The ratio of Debt to Total Capital Resources at June 30, 2025 and December 31, 2024 was computed as follows:

($ in thousands) June 30, 2025 December 31, 2024

The ratio of Debt to Total Capital Resources at September 30, 2025 and December 31, 2024 was computed as follows:

($ in thousands) September 30, 2025 December 31, 2024

Senior notes - principal amount

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The Company is not bound to such guarantees without its express authorization.

As discussed above, at June 30, 2025, guarantees of $71.6 million have been provided to lenders by Maiden Reinsurance on behalf of the real estate joint venture, however, the likelihood of Maiden Reinsurance incurring any losses pertaining to project level financing guarantees was determined to be remote.

As discussed above, at September 30, 2025, guarantees of $70.0 million have been provided to lenders by Maiden Reinsurance on behalf of the real estate joint venture, however, the likelihood of Maiden Reinsurance incurring any losses pertaining to project level financing guarantees was determined to be remote.

Therefore, no liability has been accrued under ASC 450-20.

Non-GAAP Measures

In addition to our key financial measures presented in accordance with GAAP in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income and Comprehensive Income, management uses certain non-GAAP financial measures to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders.

Please refer to our Key Financial Measures presented in the "Overview to Critical Accounting Policies" section for financial measures in accordance with GAAP in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income and Comprehensive Income.

In addition, management uses certain non-GAAP financial measures to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders.

Management believes that these measures, which may be defined differently by other companies, explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business.

These non-GAAP financial measures should not be viewed as a substitute for those determined in accordance with U.S.

GAAP and are summarized below.

Non-GAAP operating earnings (loss) and non-GAAP diluted operating earnings (loss) per common share :

Management believes that the use of non-GAAP operating earnings and non-GAAP diluted operating earnings per common share enables investors and other users of the Company’s financial information to analyze its performance in a manner similar to how management analyzes performance.

Management also believes that these measures generally follow industry practice therefore allowing the users of financial information to compare the Company’s performance with its industry peer group, and that the equity analysts and certain rating agencies which follow the Company, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons.

Non-GAAP operating earnings should not be viewed as a substitute for U.S.

GAAP net income.

Non-GAAP operating earnings (loss) is an internal performance measure used by management as these measures focus on the underlying fundamentals of the Company's operations by excluding, on a recurring basis:

(1) net realized investment gains (losses);

(2) foreign exchange and other gains (losses);

and and (3) interest in income (loss) of equity method investments.

It also excludes on a non-recurring basis:

(1) loss from discontinued operations, net of income tax;

(2) the bargain purchase gain resulting from the Combination Agreement;

and (3) the change in the fair value of the earn out liability.

We excluded net realized investment gains (losses), and foreign exchange and other gains (losses) as we believe these are influenced by market opportunities and other factors.

We do not believe the net loss from discontinued operations, the bargain purchase gain on the Combination Agreement, and the change in the fair value of the earn out liability are representative of our ongoing and future business.We believe all of these amounts are substantially independent of our business and any potential future underwriting process, therefore their inclusion would distort the analysis of underlying trends in our operations.

As defined and described in the Key Financial Measures section , m anagement uses certain key financial measures, some of which are non-GAAP measures, to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders.

GAAP and are summarized in Key Financial Measures presented in the "Overview to Critical Accounting Policies" section.

Non-GAAP operating loss was $15.1 million for the three months ended September 30, 2025 compared to non-GAAP operating loss of $0.4 million for the same period in 2024.

Non-GAAP operating loss was $12.0 million for the nine months ended September 30, 2025, compared to non-GAAP operating loss of $1.4 million for the nine months ended September 30, 2024.

Non-GAAP Operating Return on Average Common Equity ("Non-GAAP Operating ROACE"):

Management uses non-GAAP operating return on average common shareholders' equity as a measure of profitability that focuses on the return to common shareholders.

It is calculated using non-GAAP operating income or loss available to common shareholders (as defined above) divided by average common shareholders' equity.

Non-GAAP Operating ROACE for the three and nine months ended September 30, 2025 and 2024 was as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

Non-GAAP operating loss

$ (15,091) $ (429) $ (12,023) $ (1,353)

Opening adjusted shareholders’ equity 150,086 4,913 4,606 5,837

Ending adjusted shareholders’ equity 143,774 4,484 143,774 4,484

Average adjusted shareholders’ equity 146,930 4,699 74,190 5,161

Non-GAAP Operating ROACE

(40.7) % (36.3) % (21.7) % (35.0) %

The calculation, reconciliation to nearest GAAP measure and discussion of relevant non-GAAP measures used by management are as follows:

For the Three Months Ended June 30, 2025 2024

For the Three Months Ended September 30, 2025 2024

($ in thousands except per share data)

Net income (loss) $ 69,927 $ (547)

Net loss attributable to Kestrel common shareholders

$ (5,053) $ (429)

Add (subtract):

Net realized and unrealized investment gains

Foreign exchange and other losses

Bargain purchase gain (73,590) —

Foreign exchange and other gains

Interest in loss of equity method investments

Net loss from discontinued operations

Change in fair value of earn out consideration (2,679) —

Non-GAAP operating earnings (loss)

Non-GAAP operating loss

$ (15,091) $ (429)

Diluted earnings (loss) per share attributable to common shareholders

Diluted (loss) per share attributable to common shareholders

$ (0.65) $ (0.16)

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Net realized and unrealized investment gains (0.71) —

Foreign exchange and other losses 1.08 —

Bargain purchase gain (15.88) —

Loss from discontinued operations, net of income tax 0.11 —

Foreign exchange and other gains (0.37) —

Interest in loss of equity method investments

Net loss from discontinued operations, net of income tax

Change in fair value of earn out consideration (0.35) —

Non-GAAP diluted operating earnings (loss) per share attributable to common shareholders

Non-GAAP diluted operating loss per share attributable to common shareholders

$ (1.95) $ (0.16)

For the Six Months Ended June 30, 2025 2024

For the Nine Months Ended September 30, 2025 2024

($ in thousands except per share data)

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Foreign exchange and other losses

Interest in loss of equity method investments

Bargain purchase gain (73,590) —

Net loss from discontinued operations

Change in fair value of earn out consideration 2,679 —

Non-GAAP operating earnings (loss)

Non-GAAP operating loss

$ (12,023) $ (1,353)

Diluted income (loss) per share attributable to common shareholders

Diluted earnings (loss) per share attributable to common shareholders

$ 12.70 $ (0.49)

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Foreign exchange and other losses 0.44 —

Interest in loss of equity method investments

Bargain purchase gain (14.54) —

Net loss from discontinued operations

Change in fair value of earn out consideration 0.73 —

Non-GAAP diluted operating earnings (loss) per share attributable to common shareholders

$ 0.80 $ (0.34)

Non-GAAP operating earnings was $3.5 million for the three months ended June 30, 2025 compared to non-GAAP operating loss of $0.5 million for the same period in 2024.

Non-GAAP operating earnings was $3.1 million for the six months ended June 30, 2025, compared to non-GAAP operating loss of $0.9 million for the six months ended June 30, 2024.

Non-GAAP Operating ROACE

Non-GAAP Operating Return on Average Common Equity ("Non-GAAP Operating ROACE"):

Management uses non-GAAP operating return on average common shareholders' equity as a measure of profitability that focuses on the return to common shareholders.

It is calculated using non-GAAP operating earnings available to common shareholders (as defined above) divided by average common shareholders' equity.

Non-GAAP Operating ROACE for the three and six months ended June 30, 2025 and 2024 was as follows:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2025 2024 2025 2024

Non-GAAP operating earnings (loss)

$ 3,462 $ (547) $ 3,068 $ (924)

Opening adjusted shareholders’ equity 4,227 5,460 4,606 5,837

Ending adjusted shareholders’ equity 150,085 4,913 150,085 4,913

Average adjusted shareholders’ equity 77,156 5,187 77,346 5,375

Non-GAAP Operating ROACE

Non-GAAP diluted operating loss per share attributable to common shareholders

$ (2.38) $ (0.49)

Currency and Foreign Exchange

We conduct business in a variety of foreign (non-U.S.) currencies, exclusively in our Legacy Reinsurance sgement, the principal exposures being the euro and the British pound.

We conduct business in a variety of foreign (non-U.S.) currencies, exclusively in our Legacy Reinsurance segment, the principal exposures being the euro and the British pound.

Assets and liabilities denominated in foreign currencies are exposed to changes in currency exchange rates.

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To the extent that these exposures are not fully hedged or the hedges are ineffective, our results of operations or equity may be adversely affected.

At June 30, 2025, no such hedges or hedging strategies were in force or had been entered into.

At September 30, 2025, no such hedges or hedging strategies were in force or had been entered into.

We measure monetary assets and liabilities denominated in foreign currencies at period end exchange rates, with the resulting foreign exchange gains and losses recognized in the unaudited Condensed Consolidated Statements of Income.

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The effect of the translation adjustments for foreign operations is included in AOCI.

Net foreign exchange losses of $5.1 million were generated during the three and six months ended June 30, 2025, compared to net foreign exchange losses of $0.0 million for the three and six months ended June 30, 2024.

The foreign exchange losses for the three and six months ended June 30, 2025 were caused by significant depreciation in the value of the U.S.

Net foreign exchange gains of $2.9 million and foreign exchange losses of $2.2 million were generated during the three and nine months ended September 30, 2025, respectively, compared to net foreign exchange losses of $0.0 million for the three and nine months ended September 30, 2024.

For the three months ended September 30, 2025, net foreign exchange gains of $2.9 million were attributable to appreciation of the U.S.

dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

The foreign exchange losses for the nine months ended September 30, 2025 were caused by significant depreciation in the value of the U.S.

dollar relative to the euro and the British pound due to uncertainty around international trade and associated U.S.

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These losses were primarily unrealized and resulted from the effects of revaluation of our net insurance liabilities that are required to be settled in foreign currencies at each balance sheet date.

At June 30, 2025, the increase in foreign currency translation adjustments of $0.1 million for the six months ended June 30, 2025 was primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets.

Our non-USD denominated liabilities at June 30, 2025 included reserve for net loss and LAE on our Legacy Reinsurance segment of $341.3 million.

Our foreign currency asset exposures at June 30, 2025 include $139.4 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy, $33.2 million of real estate investments denominated in Canadian dollars, as well as $12.1 million of funds withheld receivable.

At September 30, 2025, the decrease in foreign currency translation adjustments of $1.6 million for the nine months ended September 30, 2025 was primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets.

Our non-USD denominated liabilities at September 30, 2025 included reserve for net loss and LAE on our Legacy Reinsurance segment of $310.8 million.

Our foreign currency asset exposures at September 30, 2025 include $137.8 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy, $32.5 million of real estate investments denominated in Canadian dollars, as well as $11.9 million of funds withheld receivable.

Effects of Inflation

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Off-Balance Sheet Arrangements

At June 30, 2025, we did not have any off-balance sheet arrangements as defined by Item 303(a) (4) of Regulation S-K.

At September 30, 2025, we did not have any off-balance sheet arrangements as defined by Item 303(a) (4) of Regulation S-K.

Recent Accounting Pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis