What changed in this filing

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Item 1. Financial Statements

2026-05-08 compared with 2025-11-05 · 614 added, 852 removed, 1117 unchanged (57% of the section changed)

4 unchanged sentences

dollars, except share and per share data)

September 30,

2026 December 31,

ASSETS (Unaudited) (Audited)

Fixed maturities, available-for-sale, at fair value (Amortized cost:

2025 - $ 197,941 )

Fixed maturities:

available-for-sale, at fair value (Amortized cost:

$ 118,376 $ 165,035

Equity securities, at fair value (Cost:

Equity securities:

at fair value (Cost:

11,748 11,748

1 unchanged sentence

Other investments

175,670 173,358

Total investments 339,337 383,673

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Accrued investment income 4,872 5,003

Reinsurance balances receivable, net (includes $ 7,712 from related parties in 2025).

Reinsurance balances receivable, net (includes $ 0 and $ 2 from related parties in 2026 and 2025, respectively.

Allowance for expected credit losses:

2026 - $ 14 ;

Reinsurance recoverable on unpaid losses (Allowance for expected credit losses:

2025 - $ 14 )

Reinsurance recoverable on unpaid losses:

(Allowance for expected credit losses:

436,381 461,197

Net loan receivable from related party 78,606 86,883

Intangible assets (includes $ 9,169 from related parties in 2025)

Funds withheld receivable (Allowance for expected credit losses:

Intangible assets 8,509 9,347

Funds withheld receivable:

(Allowance for expected credit losses:

Other assets 17,636 17,740

1 unchanged sentence

$ 964,227 $ 1,009,955

Reserve for loss and loss adjustment expenses (includes $ 589,815 from related parties in 2025)

Reserve for loss and loss adjustment expenses (includes $ 514,149 and $ 554,507 from related parties in 2026 and 2025, respectively)

$ 593,350 $ 637,169

Unearned premiums (includes $ 19,401 from related parties in 2025)

Liability for securities purchased 11,692 —

Unearned premiums (includes $ 16,815 and $ 17,227 from related parties in 2026 and 2025, respectively)

16,891 17,406

Accrued expenses and other liabilities (includes $ 27,468 and $ 16,443 from related parties in 2026 and 2025, respectively)

57,426 52,032

Senior notes - principal amount 262,361 262,361

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Total liabilities

842,790 881,671

Commitments and Contingencies

Common shares ($ 0.01 par value;

9,979,477 and 2024 - 2,749,996 shares issued;

7,741,943 and 2024 - 2,749,996 shares outstanding)

10,108,600 and 2025:

9,979,477 shares issued;

7,824,030 and 2025:

7,741,943 shares outstanding)

Additional paid-in capital 178,982 177,534

Accumulated other comprehensive loss

Retained Earnings (accumulated deficit) 18,952 ( 5,528 )

Accumulated other comprehensive income

(Accumulated deficit) retained earnings ( 6,234 ) 1,197

Treasury shares, at cost (2026:

2,284,570 shares, 2025:

2,237,534 shares)

( 51,949 ) ( 51,463 )

Total shareholders’ equity

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KESTREL GROUP LTD

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands of U.S.

dollars, except per share data)

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

2025 2024 2025 2024

For the Three Months Ended March 31,

Gross premiums written

$ 3,760 $ — $ 4,856 $ —

Net premiums written

$ 3,895 $ — $ 4,990 $ —

Change in unearned premiums

2,941 — 4,268 —

Net premiums earned

6,836 — 9,258 —

1,621 700 2,972 2,457

Net investment income

3,494 52 5,059 170

Net realized and unrealized investment gains

5,494 — 6,552 —

Total revenues

17,445 752 23,841 2,627

Net loss and loss adjustment expenses

10,406 — 4,445 —

Commission and other acquisition expenses

1,718 — 2,112 —

General and administrative expenses

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

Interest and amortization expenses

4,128 — 5,647 —

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

Gain on bargain purchase — — ( 73,590 ) —

Foreign exchange and other (gains) losses

( 2,854 ) — 2,155 —

Foreign exchange and other gains

Total expenses

21,502 1,181 ( 42,225 ) 3,980

Net (loss) income before income taxes

Net loss before income taxes

( 6,946 ) ( 302 )

1 unchanged sentence

Interest in loss of equity method investments

( 24 ) — ( 24 ) —

Net (loss) income from continuing operations

Net loss from continuing operations

( 6,953 ) ( 394 )

Loss from discontinued operations, net of income tax ( 478 ) —

Net (loss) income

$ ( 7,431 ) $ ( 394 )

Basic and diluted (loss) earnings from continuing operations per share attributable to Kestrel common shareholders

Basic and diluted loss from continuing operations per share attributable to Kestrel common shareholders

$ ( 0.90 ) $ ( 0.14 )

Basic and diluted loss from discontinued operations per share attributable to Kestrel common shareholders

( 0.12 ) — ( 0.29 ) —

Basic and diluted (loss) earnings per share attributable to Kestrel common shareholders

Basic and diluted loss per share attributable to Kestrel common shareholders

$ ( 0.96 ) $ ( 0.14 )

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KESTREL GROUP LTD

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(in thousands of U.S.

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

2025 2024 2025 2024

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

Other comprehensive income (loss)

Net unrealized holdings gains on AFS fixed maturities

Net unrealized gains on held for sale fixed maturities ( 20 ) — ( 13 ) —

For the Three Months Ended March 31,

Net loss $ ( 7,431 ) $ ( 394 )

Other comprehensive loss

Net unrealized holdings losses on AFS fixed maturities

Net unrealized losses on held for sale AFS fixed maturities ( 15 ) —

Adjustment for reclassification of net realized gains recognized in net loss

Foreign currency translation adjustment 241 —

Other comprehensive loss, before tax

( 1,475 ) — ( 916 ) —

Income tax expense related to components of other comprehensive income — — — —

Income tax expense related to components of other comprehensive loss

Other comprehensive loss, after tax

( 1,475 ) — ( 916 ) —

Comprehensive (loss) income

Comprehensive loss

$ ( 7,810 ) $ ( 394 )

3 unchanged sentences

(in thousands of U.S.

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

2025 2024 2025 2024

For the Three Months Ended March 31,

Common shares

Beginning balance

$ 100 $ 27 $ 27 $ 27

Shares issued on Combination Agreement — — 73 —

Issuance of common shares from vesting of stock based compensation 1 —

Ending balance

100 27 100 27

Additional paid-in capital

1 unchanged sentence

177,534 10,107

Issuance of common shares from vesting of stock based compensation ( 1 ) —

Share-based compensation expense 1,449 15

Shares issued as consideration for Combination — — 166,539 —

Ending balance

178,982 10,122

Accumulated other comprehensive loss

Accumulated other comprehensive income

Beginning balance

Change in net unrealized investment gains

Change in net unrealized investment losses

Foreign currency translation adjustment

( 1,694 ) — ( 1,620 ) —

Ending balance

( 916 ) — ( 916 ) —

Retained earnings (accumulated deficit)

1 unchanged sentence

1,197 ( 5,528 )

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

Distribution to shareholders — — ( 40,000 ) —

Net loss ( 7,431 ) ( 394 )

Ending balance

2 unchanged sentences

Beginning balance

( 51,463 ) — — —

Shares issued to Maiden Reinsurance — — ( 51,463 ) —

Shares repurchased ( 486 ) —

Ending balance

( 51,463 ) — ( 51,463 ) —

Total shareholders' equity

4 unchanged sentences

(in thousands of U.S.

For the Nine Months Ended September 30, 2025 2024

For the Three Months Ended March 31, 2026 2025

Cash flows from operating activities

Net income (loss)

$ ( 7,431 ) $ ( 394 )

net loss from discontinued operations

Adjustments to reconcile net income to net cash flows from operating activities:

Other non-cash expenses (credit losses, depreciation, amortization, share-based compensation, leases) ( 18 ) 51

Adjustments to reconcile net loss to net cash flows from operating activities:

Other non-cash expenses (credit losses, depreciation, amortization, leases) 9 18

Interest in loss of equity method investments

Net realized and unrealized investment gains

Gain on bargain purchase ( 73,590 ) —

Foreign exchange and other losses

Share-based compensation expense 1,449 15

Foreign exchange and other gains

Changes in assets – (increase) decrease:

19 unchanged sentences

Proceeds from sale and redemption of other investments 1,231 —

Cash acquired from purchase of business 79,807 —

Net loan receivable from related party 9,477 —

2 unchanged sentences

Cash flows from financing activities:

Dividends paid – Kestrel equityholders ( 40,000 ) —

Repurchase of common shares ( 486 ) —

Net cash used in financing activities

21 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by U.S.

GAAP for complete financial statements.

GAAP for complete financial statements and therefore the following notes should be read in conjunction with those disclosed in the Company's Annual Report on Form 10-K for December 31, 2025.

All significant intercompany transactions and accounts have been eliminated.

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Actual results could differ from those estimates.

Kestrel Group Ltd transitioned from Article 5 to Article 7 of Regulation S-X as promulgated by the SEC since its core business fundamentally shifted from a general commercial operation to primarily functioning as an insurance company under its recent business combination as discussed further below.

Kestrel Group transitioned from Article 5 to Article 7 of Regulation S-X as promulgated by the SEC since its core business fundamentally shifted from a general commercial operation to primarily functioning as an insurance company under its recent business combination as discussed further below.

This change in SEC filing status necessitated significant adjustments to how the Company presents its balance sheet, income statement and other financial statements, to align with the specific requirements of Article 7 for insurance companies.

1 unchanged sentence

Certain prior year comparatives have been reclassified to conform to current period presentation.

The effect of these reclassifications had no impact on previously reported shareholders' equity or net income, except the 2024 Kestrel equity was recast to conform with the current number of common shares issued to Kestrel equityholders and revised equity structure.

Please see section on Accounting Treatment for the Combination for further details on reclassifications.

The effect of these reclassifications had no impact on previously reported shareholders' equity or net income, except the 2024 Kestrel equity was recast to conform with the 2025 number of common shares issued to Kestrel equityholders and revised equity structure.

Please see section on Accounting Treatment for the Combination for further details.

Introductory Note

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The Combination creates a capital light, fee-based insurance platform with the ability to selectively deploy underwriting capacity to optimize shareholder returns.

As of September 30, 2025, Maiden Reinsurance Ltd.

(“Maiden Reinsurance”) owns approximately 22.4 % of the Company's total outstanding common shares, which is eliminated for accounting and financial reporting purposes in our condensed consolidated financial statements.

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

On April 29, 2025, all proposals related to Maiden’s business combination with Kestrel were approved by Maiden’s shareholders.

As of March 31, 2026, Maiden Reinsurance Ltd.

(“Maiden Reinsurance”) owns approximately 22.1 % of the Company's total issued and outstanding common shares, which is eliminated for accounting and financial reporting purposes in our condensed consolidated financial statements.

The voting power of Maiden Reinsurance, with respect to its common shares, is no longer capped due to an approval by Maiden shareholders to remove the voting limitation prior to the Combination.

Pursuant to the terms of the Combination, at the closing of the transaction on May 27, 2025, each issued and outstanding common share of Maiden, par value $ 0.01 per share, was automatically canceled and converted into the right to receive one-twentieth ( 0.05 ) of a common share in Kestrel Group.

1 unchanged sentence

Shareholders' Equity for details of authorized share capital under the combined company.

The equityholders of Kestrel LLC at the closing date received an aggregate of $ 40.0 million in upfront cash and 2,749,996 common shares of the combined company.

In addition, the former equityholders of Kestrel Group LLC remain entitled to receive contingent consideration up to the lesser of (x) $ 45.0 million payable in common shares of Kestrel Group upon the achievement of certain financial milestones, and (y) 2.75 million common shares of Kestrel Group.

The equityholders of Kestrel LLC at the closing date received an aggregate of $ 40,000 in upfront cash and 2,749,996 common shares of the combined company.

In addition, the former equityholders of Kestrel LLC remain entitled to receive contingent consideration up to the lesser of (x) $ 45,000 payable in common shares of Kestrel Group upon the achievement of certain financial milestones, and (y) 2,750,000 common shares of Kestrel Group.

Following completion of the Combination, the board of directors of Kestrel Group consists of seven directors, made up of four directors selected by Kestrel Intermediate Ledbetter Holdings LLC, two of whom are independent under applicable securities laws and stock exchange rules, and three directors selected by AmTrust Financial Services, Inc.

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

Legacy Reinsurance Operations

The Combination was completed with both parties in receipt of necessary regulatory approvals, including from the Vermont DFR which included approval for the extraordinary dividend required to complete the transaction.

Under the conditions stipulated in the Vermont DFR approval, Maiden Reinsurance is no longer permitted to include the intercompany loan receivable from Maiden Holdings (and related accrued interest) as an admitted asset for statutory capital and reporting purposes.

The Combination was completed with both parties in receipt of necessary regulatory approvals, including from the Vermont Department of Financial Regulation ("Vermont DFR") which included approval for the extraordinary dividend required to complete the transaction.

Under the conditions stipulated in the Vermont DFR approval, Maiden Reinsurance is no longer permitted to include the intercompany loan receivable from Maiden (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, however the ratio remains sufficient to not only support the dividends related to the Combination with Kestrel and recurring annual dividends (and which require prior approval by the Vermont DFR) but the ability to selectively underwrite business in support of the Company's Program Services segment in the future.

KESTREL GROUP LTD

3 unchanged sentences

Basis of Presentation (continued)

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 with Kestrel and recurring annual dividends (and which require prior approval by the Vermont DFR) but the ability to selectively underwrite business in support of the Company's Program Services segment in the future.

Accounting Treatment for the Combination

16 unchanged sentences

Kestrel LLC generally does not assume significant underwriting risk and produces lines of business such as casualty, workers’ compensation, catastrophe-exposed property, and non-catastrophe-exposed property, with diverse risk durations, sizes, and product types.

As noted, Kestrel will continue to write business through its exclusive use of four A.M.

Best A- FSC XV insurance carriers, Sierra Specialty Insurance Company, Rochdale Insurance Company, Park National Insurance Company and Republic Fire and Casualty Insurance Company (collectively, “AmTrust Insurance Companies”), all subsidiaries of AmTrust Financial Services, Inc.

As noted, Kestrel continues to write business through its exclusive use of four A.M.

Pursuant to the terms of the Combination Agreement, Kestrel retains the option to acquire the AmTrust Insurance Companies from AmTrust for a period of up to three years after closing of the Combination.

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In June 2025, the Swedish Financial Supervisory Authority (“SFSA”) declined to approve the sale of Maiden GF and Maiden LF.

The proposed acquirer whose application was denied by the SFSA and Maiden have now entered into an amended sale agreement for the acquisition of only Maiden GF at the previously agreed valuation, The proposed acquirer believes it will satisfactorily address the deficiencies identified by the SFSA in its June 2025 decision.

The proposed acquirer whose application was denied by the SFSA and Maiden have subsequently entered into an amended sale agreement for the acquisition of only Maiden GF at the previously agreed valuation.

The proposed acquirer believes it will satisfactorily address the deficiencies identified by the SFSA in its June 2025 decision.

This amended transaction remains subject to customary regulatory approvals.

The sale of Maiden GF will be an all-cash transaction and pursuant to the proposed terms of the agreement, certain existing staff of Maiden GF will transition to the proposed acquirer.

Maiden GF is not writing any new business and its non-insurance related assets and liabilities are represented as held-for-sale in our Condensed Consolidated Financial Statements.

Please refer to Note 14.

Assets Held for Sale for additional information regarding the effect of the pending sale of Maiden GF on the Company's Condensed Consolidated Financial Statements.

KESTREL GROUP LTD

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Basis of Presentation (continued)

The sale will continue to be an all-cash transaction and pursuant to the proposed terms of the agreement, certain existing staff of Maiden GF will transition to the proposed acquirer.

In the wake of the decision of the SFSA, management continues to evaluate strategic alternatives for that business as well as Maiden LF, including a possible sale to a different third-party or a possible run-off and liquidation of the entity.

Maiden LF and Maiden GF are not writing any new business and their non-insurance related assets and liabilities are represented as held-for-sale in our condensed consolidated financial statements.

Please refer to "Note 14.

Assets Held for Sale" for additional information regarding the effect of the pending transactions on the Company's Condensed Consolidated Financial Statements.

Except as explicitly described as held for sale or as discontinued operations, and unless otherwise noted, all discussions and amounts presented herein relate to the Company's continuing operations except for net income, and net income attributable to Kestrel common shareholders.

In the wake of the June 2025 decision of the SFSA, management has further evaluated strategic alternatives for Maiden LF and on April 7, 2026 the Company has decided to proceed with the managed run-off of Maiden LF.

The held-for-sale assets and liabilities of Maiden LF at December 31, 2025 were reclassified as held and used in light of the recent decision to place Maiden LF into run off operations.

KESTREL GROUP LTD

3 unchanged sentences

Significant Accounting Policies

The following contains a description of the Company's significant accounting policies for the nine months ended September 30, 2025:

Basis of Reporting and Consolidation — These Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S.

GAAP") and include the accounts of Kestrel Group and all of its subsidiaries.

These Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the period and all such adjustments are of a normal recurring nature.

All significant intercompany transactions and accounts have been eliminated.

Certain prior year comparatives have been reclassified to conform to the current year presentation.

The effect of these reclassifications had no impact on previously reported shareholders' equity or net income.

For financial reporting purposes, the net assets of Kestrel Group are stated at historical carrying values and its condensed consolidated financial statements are presented as the predecessor to the combined company in the historical financial statements following consummation of the transaction on May 27, 2025.

The assets and liabilities of Maiden are recorded at the fair values measured as of the acquisition date.

The operating results of Maiden are only presented within the consolidated results of Kestrel from the date of acquisition going forward.

Please refer to Note 15.

Business Combination for additional details regarding the accounting treatment for the Combination Agreement.

Estimates — The preparation of U.S.

GAAP Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could materially differ from those estimates.

The significant estimates include, but are not limited to, reserve for loss and loss adjustment expenses ("loss and LAE");

unearned premium for AmTrust, recoverability of reinsurance balances receivable, reinsurance recoverable on unpaid losses, and funds withheld receivable;

valuation of financial instruments and deferred tax assets;

and the determination of an allowance for estimated credit losses on certain types of financial instruments which requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

Other significant estimates are related to the Combination Agreement including the value of business acquired ("VOBA") and the earn out liability, both of which are discussed in Note 15.

Business Combination.

Short-term investments - These investments are comprised of securities due to mature within one year of the date of purchase.

The Company held no short-term investments as at September 30, 2025 and 2024.

Equity securities - Equity securities currently include privately held common and preferred stocks.

Privately held common and preferred stocks are valued using significant inputs that are unobservable where there is little or no market activity.

Unadjusted third party pricing sources or management's assumptions and internal valuation models may be used to determine their fair values.

For investments without a readily determinable fair value, the measurement alternative can be elected to report the qualifying investment at cost, less impairment if any, plus or minus observable price changes in orderly transactions for an identical or similar investment of the same issuer.

Other investments — The Company accounts for its other investments at fair value in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC 321 , Investments – Equity Securities ("ASC 321").

Other investments are comprised of the following types of investments:

• Privately held equity investments:

These are direct equity investments in common and preferred stock of privately held entities.

The fair values are estimated using guideline public company data to determine a price-to-book ratio trading multiple which was applied to book values shown on the quarterly financial statements as well as recent private market transactions.

These investments are also comprised of investments in insurtech and other insurance focused companies.

The fair value of start-up insurance entities are determined using recent private market transactions where applicable.

Any changes in fair value are reported in net realized and unrealized gains (losses) and recognized in net earnings.

• Private credit funds:

These are privately held equity investments in limited partnerships or common stock of entities that lend money valued using the most recently available or quarterly net asset value ("NAV") statements as provided by the external fund manager or third-party administrator.

Any changes in fair value are reported in realized gains (losses) and recognized in net earnings.

• Private equity funds:

These are comprised of private equity funds, private equity co-investments with sponsoring entities and investments in real estate limited partnerships and joint ventures .

The fair value is estimated based on the most recently available NAV as advised by the external fund manager or third-party administrator.

Any changes in fair value are reported in realized gains (losses) and recognized in net earnings.

• Investments in direct lending entities:

These investments are carried at their fair market value with any changes in fair value reported in realized gains (losses) during the period.

• Equity method investments:

The Company elected the fair value option for certain of its equity method investments, and these investments are reported at their fair values with any changes in fair value reported in realized and unrealized gains (losses) during the period.

These are included in Level 3 of the fair value hierarchy due to unobservable market data used for valuation.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Significant Accounting Policies (continued)

The valuation of other investments is further described in Note 5 — Fair Value Measurements .

Due to a lag in the valuations of certain funds reported by the investment managers, the Company may record changes in valuation with up to a three-month lag.

The Company regularly reviews and discusses fund performance with the investment managers or sponsors to corroborate the reasonableness of the reported NAV and to assess whether any events have occurred within the lag period that would affect the valuation of the investments.

Equity Method Investments — Investments in which the Company has significant influence over the operating and financial policies of the investee are classified as equity method investments and accounted for using the equity method of accounting.

In applying the equity method of accounting, investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the investee's net income or loss, net of any contributions and distributions received.

Adjustments are based on the most recent available financial information from the investee.

Changes in the carrying value of equity method investments are recorded in net income (loss) as the interest in income (loss) of equity method investments.

The Company records its share of the investee’s other comprehensive income ("OCI") activity based on its proportionate share of the investee's common stock or capital, and books any OCI activity directly to the equity method investments account, with the offset recorded to the Company's accumulated other comprehensive income ("AOCI").

Fixed Maturity Investments — The Company classifies its fixed maturity investments as available-for-sale ("AFS").

The AFS portfolio is reported at fair value and any unrealized gains or losses are reported as a component of accumulated other comprehensive income ("AOCI") in shareholders' equity.

The fair value of fixed maturity investments is generally determined from quotations received from third-party nationally recognized pricing services ("Pricing Service"), or when such prices are not available, by reference to broker or underwriter bid indications.

Purchases and sales of investments are recorded on a trade date basis.

Realized gains or losses on investment sales are determined based on the first in first out cost method.

Net investment income is recognized when earned and includes accrued interest and dividend income together with amortization of market premiums and discounts using the constant yield method, net of investment management fees.

government agency mortgage-backed securities ("Agency MBS") and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary.

Any changes required due to movements in effective yields and maturities are recognized on a prospective basis through yield adjustments.

A security is potentially impaired when its fair value falls below its amortized cost.

The Company evaluates AFS securities for impairment when fair value is below amortized cost on a quarterly basis.

If the Company intends to sell or will be required to sell the security before its anticipated recovery, the full amount of the impairment loss is charged to net income (loss) and included in net investment gains (losses).

If the Company does not intend to sell or will not be required to sell the security before its anticipated recovery, an allowance for expected credit losses is established and the portion of the loss relating to credit factors is recorded in net income (loss).

The non-credit impairment amount of the loss (which could be related to interest rates and/or market conditions) is recognized in other comprehensive income.

To estimate the allowance for expected credit losses for most of the AFS securities, the Company analyzes projected cash flows which are primarily driven by assumptions regarding loss severity, probability of default and projected recovery rates.

The Company's determination of default and loss severity rates are based on credit rating, credit analysis and macroeconomic forecasts.

Unrealized losses on securities issued or backed, either explicitly or implicitly by the U.S.

government are not analyzed for credit losses.

The Company has concluded that any possibility of a credit loss on these securities is highly unlikely due to the explicit U.S.

government guarantee related to certain securities (e.g., Government National Mortgage Association issuances) and the implicit guarantee related to other securities that has been validated by past actions (e.g., U.S.

government bailout of Federal National Mortgage Association and Federal Home Loan Mortgage Corporation during the 2008 credit crisis).

Although these securities are not analyzed for credit losses, they are evaluated for impairment based on the Company's intention to sell and likely to sell requirement.

As the Company's fixed maturity investment portfolio is a large component of its consolidated assets, any impairment of fixed maturity securities could be material to the Company's financial condition and results particularly during periods of dislocation in the financial markets.

Fair Value Measurements — ASC Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the measurement date.

Additionally, ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

The hierarchy is broken down into three levels based on the reliability of inputs:

• Level 1 — Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access.

Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Examples of assets and liabilities utilizing Level 1 inputs include:

Treasury bonds;

• Level 2 — Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, or valuations based on models where the significant inputs are observable (e.g.

interest rates, yield curves, prepayment speeds, default rates, loss severity, etc.) or can be corroborated by observable market data.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Significant Accounting Policies (continued)

• Examples of assets and liabilities utilizing Level 2 inputs include:

government-sponsored agency securities;

government and supranational obligations;

commercial mortgage-backed securities ("CMBS");

collateralized loan obligations ("CLO");

corporate and municipal bonds;

• Level 3 — Valuations based on models where significant inputs are not observable.

The unobservable inputs reflect our own assumptions about assumptions that market participants would use, developed on the basis of the best information available in the particular circumstances.

Examples of assets and liabilities utilizing Level 3 inputs include:

an investment in preference shares of a start-up insurance producer.

The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the applicable transaction.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment.

Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in the Level 3 hierarchy.

The Company uses prices and inputs that are current as at the measurement date.

In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments.

This condition could cause a financial instrument to be reclassified between hierarchy levels.

For investments that have quoted market prices in active markets, the Company uses the quoted market prices as fair value and includes these in the Level 1 hierarchy.

The Company receives quoted market prices from a third party nationally recognized Pricing Service.

When quoted market prices are unavailable, the Company utilizes the Pricing Service to determine an estimate of fair value.

The fair value estimates are included in the Level 2 hierarchy.

The Company will challenge any prices for its investments which are considered not to be representative of fair value.

If quoted market prices and an estimate from the Pricing Service are unavailable, the Company produces an estimate of fair value based on dealer quotations for recent activity in positions with the same or similar characteristics to that investment being valued.

The Company determines whether the fair value estimate is in the Level 2 or Level 3 hierarchy depending on the level of observable inputs available when estimating the fair value.

The Company bases its estimates of fair values for assets on the bid price as it represents what a third party market participant would be willing to pay in an orderly transaction.

Financial Instruments provides a measurement basis election for most financial instruments using a choice of either historical cost or fair value, including equity method investments, allowing reporting entities to mitigate potential mismatches that arise under the current mixed measurement attribute model.

In connection with the Combination Agreement on May 27, 2025, the assets and liabilities of Maiden were recorded at their fair values measured as of the acquisition date.

The Company has elected the fair value option for certain equity method investments and direct lending investments, and these investments are reported at their fair values as of September 30, 2025.

Please see Note 4 (b).

Investments for further details.

Cash and Cash Equivalents — The Company maintains cash accounts in several banks and brokerage institutions.

Cash equivalents consist of investments in money market funds and short-term investments with an original maturity of 90 days or less and are stated at cost, which approximates fair value.

Restricted cash and cash equivalents are separately reported in the Consolidated Balance Sheets.

The Company maintains certain cash and investments in trust accounts used primarily as collateral for unearned premiums and loss and LAE reserves owed to insureds.

The Company is required to maintain minimum balances in these restricted accounts based on pre-determined formulas.

Please see " Note 4.

(e) Investments " for further details.

Premiums and Related Expenses — For pro-rata contracts and excess-of-loss contracts where no deposit or minimum premium is specified in the contract, premium written is recognized based on estimates of ultimate premiums provided by the ceding companies.

Initial estimates of premium written are recognized in the period in which the underlying risks are incepted.

Subsequent adjustments, based on reports of actual premium by the ceding companies, or revisions in estimates, are recorded in the period in which they are determined.

Reinsurance premiums assumed are generally earned on a pro-rata basis over the terms of the underlying policies or reinsurance contracts.

Contracts and policies written on a "losses occurring" basis cover claims that may occur during the term of the contract or policy, which is typically twelve months.

Accordingly, the premium is earned evenly over the term.

Contracts which are written on a "risks attaching" basis cover claims which attach to the underlying insurance policies written during the terms of such contracts.

Premiums earned on such contracts usually extend beyond the original term of the reinsurance contract, typically resulting in recognition of premiums earned over a 24-month period.

Reinsurance premiums on specialty risk and extended warranty are earned based on the estimated program coverage period.

These estimates are based on the expected distribution of coverage periods by contract at inception, because a single contract may contain multiple coverage period options, and these estimates are revised based on the actual coverage period selected by the original insured.

Unearned premiums represent the portion of premiums written which is applicable to the unexpired term of the contract or policy in force.

These premiums can be subject to estimates based upon information received from ceding companies and any subsequent differences arising on such estimates are recorded in the period in which they are determined.

Assumed and ceded reinsurance contracts that lack a significant transfer of risk are treated as deposits.

No deposit contracts are held as at September 30, 2025 and December 31, 2024.

Acquisition expenses represent the costs of writing business that vary with, and are primarily related to, the production of that business.

Policy and contract acquisition expenses, including assumed commissions, are deferred and recognized as expense as the related premiums are earned.

The Company considers anticipated investment income in determining the recoverability of these costs and believes they are fully recoverable.

A premium deficiency will be recognized if the sum of anticipated loss and LAE, unamortized acquisition expenses less anticipated investment income exceed unearned premiums.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Significant Accounting Policies (continued)

Loss and LAE — Loss and LAE represent the estimated ultimate net costs of all reported and unreported losses incurred through December 31 of the latest fiscal year.

The reserve for loss and LAE is estimated using a statistical analysis of actuarial data and is not discounted for the time value of money.

Although considerable variability is inherent in the estimates of reserves for loss and LAE, management believes that the reserve for loss and LAE is adequate based on known information to date.

In estimating loss reserves, the Company utilizes a variety of standard actuarial methods.

These estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.

Such adjustments are included and reported in current operations as favorable or unfavorable prior period development.

Reinsurance — Reinsurance premiums and loss and LAE ceded to other companies are accounted for on a basis consistent with those used in accounting for original policies issued and pursuant to the terms of the reinsurance contracts.

The Company records premiums earned and loss and LAE incurred and ceded to other companies as reduction of premium revenue and loss and LAE, respectively.

The unexpired portion of reinsurance purchased by the Company (retrocession or reinsurance premiums ceded) is included in other assets and amortized over the contract period in proportion to the amount of insurance protection provided.

The ultimate amount of premiums, including adjustments, is recognized as premiums ceded and amortized over the applicable contract period to which they apply.

Premiums earned are reported net of reinsurance in the Consolidated Statements of Income.

Reinsurance recoverable on unpaid losses relate to the portion of reserves and paid losses and LAE that are ceded to other companies.

Reinsurance recoverable on unpaid losses are separately recorded as an asset in the Consolidated Balance Sheets.

The Company remains contingently liable for all loss payments in the event of failure to collect from reinsurers.

Earn Out Liability — The fair value of the earn out consideration contingent liability was determined through a probability-weighted analysis of the expected future cash flows and other applicable valuation techniques.

Any changes in the fair value of the earn out liability are charged to net income (loss) during the period.

Please see details for the earn out liability in Note 11.

Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.

Intangible Assets — The fair value of intangible assets includes two components acquired as a result of the Combination:

• Value of business acquired ("VOBA"):

The value of business acquired replaced deferred acquisition costs in the fair value accounting required under ASC 805.

The VOBA asset reflects the expected profit or loss embedded in the unearned premium carried at the closing date and will be amortized over the earning pattern of the unearned premium reserve.

The fair value of VOBA was determined after taking into consideration certain key assumptions, including the estimated cost of capital, investment yield, loss ratio and related expenses.

Please see details for the VOBA in Note 15.

Business Combination in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q which is recorded as part of Intangible Assets on the Condensed Consolidated Balance Sheets.

• Fair value adjustment to historical loss reserves and LAE and reinsurance recoverable on unpaid losses:

The adjustment to record the estimated fair value of the reserve for loss and loss adjustment expenses and reinsurance recoverable on unpaid losses that were acquired under the Combination.

This amount reflects a decrease to adjust to the present value of loss and loss adjustment expenses and reinsurance recoverable based on estimated payout patterns, partially offset by an increase in net loss and loss adjustment expenses to the estimated market-based risk margin.

The risk margin represents the estimated cost of capital required by a market participant to assume the net loss and loss adjustment expenses.

The fair value of the net reserve for loss and loss adjustment expenses was determined using certain key assumptions, including the estimated cost of capital and investment yield.

This is amortized based on the claims settlement and timing of reinsurance recovery payments.

Please see details for the fair value discount on reserves and recoverables in Note 15.

Business Combination in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q which is recorded as part of Intangible Assets on the Consolidated Balance Sheets.

Retroactive Reinsurance - Retroactive reinsurance agreements are those in which a reinsurer agrees to reimburse the ceding company for liabilities incurred as a result of past insurable loss events.

The Company does not record any income or expense on recognition of the reinsurance contract's assets and liabilities at inception, except for any gains realized as a result of bargain purchase acquisitions which are recorded as part of foreign exchange and other gains (losses) immediately in income during the period it arises.

Any subsequent remeasurement of the value of liabilities is recorded to net loss and LAE in the Condensed Consolidated Statements of Income.

For a ceded retroactive agreement, the excess of the amounts ultimately collectible under the agreement over the consideration paid is recognized as a deferred gain liability which is amortized into income over the settlement period of the ceded reserves once the paid losses have exceeded the minimum retention.

The amount of the deferral is recalculated each period based on actual loss payments and updated estimates of ultimate losses.

If the consideration paid exceeds the ultimate losses collectible under the agreement, the net loss on the retroactive reinsurance agreement is recognized within income immediately.

At the inception of a run-off retroactive reinsurance contract, if the estimated undiscounted ultimate losses payable are in excess of the premiums received, a deferred charge asset is recorded for the excess;

whereas, if the premiums received are in excess of the estimated undiscounted ultimate losses payable, a deferred gain liability is recorded for the excess, such that we do not record any gain or loss at the inception of these retroactive reinsurance contracts.

The premium consideration that we charge the ceding companies under retroactive reinsurance contracts may be lower than the undiscounted estimated ultimate losses payable due to the time value of money.

After receiving the premium consideration in full from cedents at the inception of the contract, the premiums received are invested over an extended period of time, thereby generating investment income.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Significant Accounting Policies (continued)

The Company expects to generate profits from these retroactive reinsurance contracts when taking into account the premium received and expected investment income, less contractual obligations and expenses.

Deferred charge assets will be recorded in other assets (if and when applicable), and any deferred gain liabilities will be shown separately in the Consolidated Balance Sheets, and amortized over the estimated claim payment period of the related contract with the periodic amortization reflected in income as a component of net loss and LAE.

The amortization of deferred charge assets and deferred gain liabilities will be adjusted at each reporting period to reflect new estimates of the amount and timing of remaining loss and LAE payments.

Changes in the estimated amount and timing of payments of unpaid losses may have an effect on the unamortized deferred charge assets and deferred gain liabilities and the amount of periodic amortization.

Leases — The Company's leases are all classified as operating leases and none of them have non-lease components.

For operating leases that have a lease term of more than twelve months, the Company recognized a lease liability (presented as part of accrued expenses and other liabilities) and a right-of-use asset (presented as part of other assets) in the Consolidated Balance Sheets at the present value of the remaining lease payments until expiration.

As the lease contracts generally do not provide an implicit discount rate, the Company uses a weighted-average discount rate of 7.2 %, representing its estimated secured incremental borrowing rate, in calculating the present value of the lease liability.

The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing.

The Company recognizes the related leasing expense on a straight-line basis over the effective lease term in the Company's Consolidated Statements of Income.

Depreciable Fixed Assets - The Company's depreciable fixed assets consist of furniture and equipment, computer hardware and software, including renewals and betterments, which are capitalized at their original cost, while maintenance and repairs are expensed on a current basis.

Depreciation on furniture and equipment, computer hardware and software is computed using the straight-line method over the estimated useful life of the asset after provision for salvage value, if any.

Leasehold improvements are capitalized and depreciated over the effective lease term or useful life, whichever is shorter, of the related leased assets.

Amortization of computer software and leasehold improvements and depreciation of furniture, equipment and computer hardware are included within general and administrative expenses on the consolidated statements of income.

Upon retirement or other disposal of fixed assets, the cost and related accumulated depreciation are removed from the respective fixed asset accounts and any gains or losses are included in the consolidated statements of income.

Derivative Instruments — The Company has certain reinsurance contracts that are accounted for as derivatives.

These reinsurance contracts provide indemnification to an insured or cedant as a result of a change in a variable as opposed to an identifiable insurable event.

The Company considers these contracts to be part of its underwriting operations.

The derivatives are initially valued at cost which approximates fair value.

In subsequent measurement periods, the fair values of the underwriting-related derivatives are determined using internally developed discounted cash flow models using appropriate discount rates.

The selection of an appropriate discount rate is judgmental and is the most significant unobservable input used in the valuation of these derivatives.

A significant increase (decrease) in this input in isolation could result in a significantly lower (higher) fair value measurement for the derivative contract.

The fair value changes in underwriting-related derivative instruments is included within other insurance (expense) revenue.

The underwriting-related derivative liability is presented as part of accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets and adjusted as a non-cash item in net cash flows from operating activities in the Condensed Consolidated Statement of Cash Flows.

Income Taxes — The Company accounts for income taxes using ASC Topic 740 " Income Taxes" for subsidiaries operating in taxable jurisdictions.

Deferred income taxes reflect the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes.

A valuation allowance is recorded if it is more likely than not that some or all of a deferred tax asset may not be realized.

The Company considers future taxable income and feasible tax planning strategies in assessing the need for a valuation allowance.

In the event the Company determines that it will not be able to realize all or part of its deferred income tax assets in the future, an adjustment to the deferred income tax assets would be charged to income in the period in which such determination is made.

In addition, if the Company subsequently assesses that the valuation allowance is no longer needed, a benefit would be recorded to income in the period in which such determination is made.

GAAP allows for the recognition of tax benefits of uncertain tax positions only where the position is more likely than not to be sustained assuming examination by tax authorities.

A liability is established for any tax benefit claimed in a tax return in excess of this threshold.

Income tax related interest and penalties would be included as income tax expense.

The Company has not recorded or accrued any interest or penalties during the periods ended September 30, 2025 and 2024.

Share-Based Compensation Expense — Pursuant to the 2025 Equity Incentive Plan, the Company is authorized to issue restricted share awards and performance-based restricted shares, share options and other equity-based awards to its employees and directors.

The Company recognizes the compensation expense for share options and restricted share grants based on the fair value of the award on the date of grant, over the requisite service vesting period.

Forfeitures are accounted for if and when they occur.

The estimated fair value of the grant is amortized ratably over its vesting period as a charge to compensation expense (as a component of general and administrative expenses) and an increase to additional paid-in capital in the Condensed Consolidated Shareholders’ Equity.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Significant Accounting Policies (continued)

Earnings Per Share — Basic earnings per share are computed based on the weighted-average number of common shares outstanding and exclude any dilutive effects of share options, and unvested restricted shares units.

Dilutive earnings per share are computed using the weighted-average number of common shares outstanding during the period adjusted for the dilutive impact of share options.

The two-class method is used to determine earnings per share based on dividends declared on common shares and participating securities (i.e.

distributed earnings) and participation rights of participating securities in any undistributed earnings.

Each unvested restricted share granted by the Company to certain employees and directors is considered a participating security and the two-class method is used to calculate net income attributable to common shareholders per common share – basic and diluted.

However, any undistributed losses are not allocated to the participating securities.

Treasury Shares — Treasury shares include common shares owned by Maiden Reinsurance which are eliminated for accounting and financial reporting purposes in the Company’s Consolidated Balance Sheet at September 30, 2025.

Since treasury shares are not considered outstanding for share count purposes, the common shares held by Maiden Reinsurance are excluded from the average number of common shares outstanding for basic and diluted earnings per share.

Foreign Currency Transactions — The functional currency of the Company and many of its subsidiaries is the U.S.

For these companies, monetary assets and liabilities denominated in foreign currencies are translated at year-end exchange rates, with resulting foreign exchange gains and losses recognized in the Consolidated Statements of Income.

Revenues and expenses in foreign currencies are converted at average exchange rates during the year.

Monetary assets and liabilities include cash and cash equivalents, reinsurance balances receivable, reinsurance recoverable on unpaid losses, funds withheld receivable, reserve for loss and LAE and accrued expenses and other liabilities.

Accounts that are classified as non-monetary such as unearned premiums are not revalued.

Assets and liabilities of foreign subsidiaries and divisions, whose functional currency is not the U.S.

dollar, are translated at exchange rates at the end of the reporting period.

Revenues and expenses of these entities are translated at average exchange rates during the reporting period.

The effects of the foreign currency translation adjustment for foreign entities are included in AOCI.

The amount of the cumulative translation adjustment at September 30, 2025 was $( 1,620 ).

Revenue Recognition - Fee Revenue

In accordance with FASB ASC Topic 606, Revenue from Contracts with Customers, Kestrel recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer.

Revenue is measured as the amount of consideration Kestrel expects to receive in exchange for providing services to customers and is generally governed by a capacity distribution agreement as a specified percentage of the premium.

Capacity distribution fees are collected from program managers or MGAs for the placement of an effective insurance policy on behalf of the Company's customer.

These agreements may also include other provisions, such as minimum fee arrangements or cancellation provisions, which may impact revenue recognition.

The establishment and maintenance of an Authorized Program on behalf of our customer, as well as the resulting placement of effective insurance policies, are considered a single performance obligation.

The customer obtains control over the services promised by the Company at the effective date of bound insurance coverage.

The Company recognizes revenue when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services.

Except for contractual arrangements with minimum annual fees, the effective date of bound insurance coverage is considered the point in time when Kestrel’s performance obligation is met.

Control passes to the customer at the effective date of bound insurance coverage, at which point the customer has accepted the services.

For contractual arrangements with minimum annual fees, Kestrel amortizes the minimum fee over the contract period.

At September 30, 2025, the amount of contract assets was $ 1,605 which is included in Other Assets on the Company's condensed consolidated balance sheets (December 31, 2024 - $ 968 ).

Please see Note 3.

Segment Information for further details.

Discontinued Operations

Under the accounting guidance contained in Accounting Standards Codification Topic 205, a business that, upon acquisition, meets the held-for-sale criteria is not analyzed under the strategic shift test.

Instead, it is reported in discontinued operations automatically based on its held-for-sale classification.

The strategic shift test does not apply because the acquired businesses were not previously part of Kestrel Group, the acquiring entity, and are currently classified as held-for-sale on the acquisition date.

Therefore, the unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2025 exclude the non-insurance related operations of Maiden GF and Maiden LF because those businesses are not considered part of Kestrel’s continuing operations.

Please refer to Note 14.

Assets Held for Sale for further information on the discontinued operations related to Maiden GF and Maiden LF.

There have been no material changes to the significant accounting policies as described in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 other than the following:

Recently Adopted Accounting Standards

Effective January 1, 2025, the Company adopted Accounting Standard Updates ("ASU") 2021-08, Business Combinations (Topic 805) , Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date.

Generally, this guidance will result in the accounting acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the accounting acquiree.

With adoption of ASU 2021-08, the Company did not acquire any contract liabilities under Topic 606.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Significant Accounting Policies (continued)

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-05 Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The amendments in this ASU affect entities that apply the practical expedient and accounting policy election when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, Business Combinations.

The amendments in this ASU provide as follows:

A practical expedient.

In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

Accounting policy election.

An entity other than a public business entity that elects the practical expedient is permitted to make an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses.

The amendments were effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

The Company adopted ASU 2025-05 on January 1, 2026, and did not experience significant changes to its previous method of estimating expected credit losses on accounts receivable upon adoption.

Recently Issued Accounting Standards Not Yet Adopted

Improvements to Income Tax Disclosures

In December 2023, FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" an amendment of Income Taxes (Topic 740).

The amendments in this ASU require the Company to provide disclosures on an annual basis that (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

The amendments in this Update also require that the Company disclose on an annual basis the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than five percent of total income taxes paid (net of refunds received).

Finally, the amendments in this Update require that all entities disclose the income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign;

and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.

For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024.

The Company is still evaluating the guidance provided by this Update, however, it is not anticipated to have any material impact on its current annual tax disclosures.

Expense Disaggregation Disclosures

2 unchanged sentences

In particular, all public companies must disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, and (d) intangible asset amortization that is included in each relevant expense caption.

The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements.

The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The amendments in this ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements.

The Company does not plan to early adopt ASU 2024-03 and will provide the required expense disclosures on a prospective basis.

At this time, the Company anticipates that further expense information on employee compensation will be the primary requirement under this ASU.

The Company already provides disclosures regarding intangible asset amortization in Note 15.

Business Combination.

KESTREL GROUP LTD

3 unchanged sentences

Segment Information

As a result of the the Company's recently completed Combination, Kestrel has two reportable segments:

As a result of the Company's recently completed Combination, Kestrel has two reportable segments:

Program Services segment and the Legacy Reinsurance segment.

9 unchanged sentences

Related Party Transactions for additional information regarding these agreements.

The Diversified portion of this reportable segment consists of a run-off portfolio of predominantly third-party property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe, as well as business produced by Maiden LF and Maiden GF along with transactions entered into by GLS as described in Note 1.

Basis of Presentation under Maiden Legacy Operations.

The Diversified Reinsurance portion of this reportable segment consists of a run-off portfolio of predominantly third-party property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe, including business produced by Maiden LF and Maiden GF along with transactions entered into by GLS as described in Note 1.

Basis of Presentation under Legacy Reinsurance Operations.

The Company evaluates segment performance based on segment profit separately from results of our investment portfolio.

Underwriting and fee income or loss is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses.

Underwriting and fee income or loss is calculated as net premiums earned plus fee revenue less net loss and loss adjustment expenses ("LAE"), commission and other acquisition expenses.

General and administrative expenses are allocated to the segments on an actual basis except salaries and benefits where management’s judgment is applied;

however, general corporate expenses are not allocated to the reportable segments.

In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, reinsurance recoverable on unpaid losses, funds withheld receivable, net loan receivable from related party, intangible assets and restricted cash and investments.

All remaining assets are allocated to Corporate.

Kestrel’s chief operating decision maker ("CODM") is the Company's Chief Executive Officer, for both the Program Services segment and the Legacy Reinsurance segment.

The significant segment expenses as reported in the computation of underwriting results in the tables below are used by the Company's CODM in assessing segment performance on a quarterly basis and supports their decision on how to allocate resources within the Company, primarily with regard to the Company's Program Services segment, which is the Company's active and most strategically important operating segment.

KESTREL GROUP LTD

3 unchanged sentences

Segment Information (continued)

The following tables summarize the underwriting results of our reportable segments and the reconciliation of our reportable segments' underwriting results to consolidated net loss from continuing operations for the three months ended September 30, 2025 and 2024, respectively:

For the Three Months Ended September 30, 2025 Legacy Reinsurance Program Services Total

The following tables summarize the results of our reportable segments and the reconciliation of our reportable segments' results to the condensed consolidated net loss from continuing operations for the three months ended March 31, 2026 and 2025, respectively:

For the Three Months Ended March 31, 2026 Legacy Reinsurance Program Services Total

Gross premiums written

15 unchanged sentences

Interest and amortization expenses

Change in fair value of earn out liability 2,679

Foreign exchange and other gains, net

3 unchanged sentences

Net loss from continuing operations

For the Three Months Ended September 30, 2024 Legacy Reinsurance Program Services Total

For the Three Months Ended March 31, 2025 Legacy Reinsurance Program Services Total

$ — $ 807 $ 807

5 unchanged sentences

Other general and administrative expenses

Net loss from continuing operations

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Segment Information (continued)

The following tables summarize the underwriting results of our reportable segments and the reconciliation of our reportable segments' underwriting results to consolidated net income (loss) from continuing operations for the nine months ended September 30, 2025 and 2024, respectively:

For the Nine Months Ended September 30, 2025 Legacy Reinsurance (1)

Program Services Total

Gross premiums written

$ 4,856 $ — $ 4,856

Net premiums written

$ 4,990 $ — $ 4,990

Net premiums earned

$ 9,258 $ — $ 9,258

— 2,972 2,972

Net loss and LAE

( 4,445 ) — ( 4,445 )

Commission and other acquisition expenses

( 2,112 ) — ( 2,112 )

General and administrative expenses

( 5,432 ) ( 2,003 ) ( 7,435 )

Underwriting (loss) and fee income

$ ( 2,731 ) $ 969 $ ( 1,762 )

Reconciliation to net income

Net investment income and net realized and unrealized investment gains

Interest and amortization expenses

Gain on bargain purchase 73,590

Foreign exchange and other losses, net

Other general and administrative expenses

Income tax expense

Interest in loss from equity method investments

Net income from continuing operations

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

For the Nine Months Ended September 30, 2024 Legacy Reinsurance Program Services Total

$ — $ 2,457 $ 2,457

General and administrative expenses

— ( 1,990 ) ( 1,990 )

$ — $ 467 $ 467

Reconciliation to net loss

Net investment income 170

Other general and administrative expenses

Net loss from continuing operations

For the Three Months Ended March 31, 2026 Legacy Reinsurance (1)

Program Services Total

For the Three Months Ended March 31, 2025 Legacy Reinsurance Program Services Total

KESTREL GROUP LTD

3 unchanged sentences

Segment Information (continued)

The following tables summarize the financial position of the Company's reportable segments including a reconciliation to the Company's consolidated total assets at September 30, 2025 and December 31, 2024:

September 30, 2025 Legacy Reinsurance Program Services Total

The following tables summarize the financial position of the Company's reportable segments including a reconciliation to the Company's condensed consolidated total assets at March 31, 2026 and December 31, 2025:

March 31, 2026 Legacy Reinsurance Program Services Total

Reinsurance balances receivable, net

2 unchanged sentences

436,381 — 436,381

Deferred commission and other acquisition expenses

Loan to related party

101,689 — 101,689

Net loan receivable from related party 78,606 — 78,606

Intangible assets 8,509 — 8,509

Restricted cash and cash equivalents and investments

Cash and cash equivalents and investments (1)

159,503 2,588 162,091

9 unchanged sentences

December 31, 2025 Legacy Reinsurance Program Services Total

Restricted cash and cash equivalents and investments

Reinsurance balances receivable, net

$ 724 $ — $ 724

Reinsurance recoverable on unpaid losses

461,197 — 461,197

Loan to related party

86,883 — 86,883

Intangible assets, net 9,347 — 9,347

Cash and cash equivalents and investments (1)

163,767 3,165 166,932

Funds withheld receivable

10,956 — 10,956

Other assets (2)

227 2,477 2,704

Total assets - reportable segments

1 unchanged sentence

Corporate assets

Assets held for sale

$ 733,101 $ 5,642 $ 1,009,955

Cash & investments for the Legacy Reinsurance segment are restricted as discussed in Note 4(e).

The Company is required to provide collateral for its reinsurance liabilities under various legacy reinsurance agreements and utilizes trust accounts to collateralize business with reinsurance counterparties.

The assets in trust as collateral are primarily cash and highly rated fixed maturities.

Other assets for the Program Services segment is entirely comprised of Program fee receivables related to written premiums that are still unpaid at the reporting date.

Unpaid amount are generally paid with 30 - 60 days after inception of the policy unless the program allows for premiums to be paid on installments.

Other assets also includes fees due from Programs for contractual arrangements with minimum annual fees.

Kestrel amortizes the minimum fee over the contract period.

The financial information relating to net premiums written by major line of business within the Legacy Reinsurance segment for the three and nine months ended September 30, 2025 are detailed below:

For the Three Months Ended September 30, 2025

Unpaid amounts are generally paid with 30 - 60 days after inception of the policy unless the program allows for premiums to be paid on installments.

Other assets also includes estimated amounts due from Programs when there is a contractual lag in reporting from the balance sheet date.

The financial information relating to net premiums written by major line of business within the Legacy Reinsurance segment for the three months ended March 31, 2026 are detailed below:

For the Three Months Ended March 31, 2026

Net premiums written

2 unchanged sentences

Legacy Reinsurance Segment $ 2,654

For the Nine Months Ended September 30, 2025

Net premiums written Total

Diversified Legacy Reinsurance $ 4,967

AmTrust Legacy Reinsurance 23

Legacy Reinsurance Segment (1)

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

KESTREL GROUP LTD

3 unchanged sentences

Segment Information (continued)

The financial information for net premiums earned by major line of business within the Legacy Reinsurance segment for the three and nine months ended September 30, 2025 are detailed below:

For the Three Months Ended September 30, 2025

The financial information for net premiums earned by major line of business within the Legacy Reinsurance segment for the three months ended March 31, 2026 are detailed below:

For the Three Months Ended March 31, 2026

Net premiums earned

2 unchanged sentences

Legacy Reinsurance Segment $ 3,157

For the Nine Months Ended September 30, 2025

Net premiums earned Total

Diversified Legacy Reinsurance $ 5,266

AmTrust Legacy Reinsurance 3,992

Legacy Reinsurance Segment (1)

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

KESTREL GROUP LTD

8 unchanged sentences

a) Fixed Maturities

The amortized cost, gross unrealized gains and losses, and fair value of fixed maturities at September 30, 2025 are as follows:

September 30, 2025 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value

The amortized cost, gross unrealized gains and losses, and fair value of AFS fixed maturity investments at March 31, 2026 and December 31, 2025 are as follows:

March 31, 2026 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value

agency bonds – mortgage-backed

$ 20,400 $ 549 $ ( 2 ) $ 20,947

government bonds 62,685 — ( 377 ) 62,308

Collateralized loan obligations 28,479 13 ( 13 ) 28,479

Corporate bonds

6,734 — ( 92 ) 6,642

Total AFS fixed maturity investments $ 118,298 $ 562 $ ( 484 ) $ 118,376

December 31, 2025 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value

treasury bonds

6 unchanged sentences

7,977 2 ( 2 ) 7,977

Total fixed maturity investments

$ 197,941 $ 781 $ ( 64 ) $ 198,658

December 31, 2024 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value

Total AFS fixed maturity investments $ 164,352 $ 860 $ ( 177 ) $ 165,035

The Company separately presents the accrued interest receivable balance on its AFS fixed maturity investments on the Condensed Consolidated Balance Sheets under accrued investment income.

The amount of accrued interest receivable on AFS securities was $ 727 at September 30, 2025.

The Company has elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the AFS fixed maturity securities for the purposes of identifying and measuring any impairments under the allowance for expected credit losses standard.

The amount of accrued interest receivable on AFS securities was $ 644 at March 31, 2026 (December 31, 2025:

The Company elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the AFS fixed maturity securities for the purposes of identifying and measuring any impairments under the allowance for expected credit losses standard.

Write-offs of accrued interest receivable balances are recognized in net investment gains and losses in the period in which they are deemed uncollectible.

There was no write-off recognized on the accrued interest receivable during the three and nine months ended September 30, 2025.

The contractual maturities of our fixed maturities are shown below.

There was no write-off recognized on the accrued interest receivable for the three months ended March 31, 2026.

The contractual maturities of our fixed maturities at March 31, 2026 are shown below.

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

September 30, 2025 Amortized cost Fair value

March 31, 2026 Amortized cost Fair value

Due in one year or less

7 unchanged sentences

Collateralized loan obligations 28,479 28,479

Total fixed maturity investments

$ 197,941 $ 198,658

Total AFS fixed maturity investments $ 118,298 $ 118,376

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

The following tables summarize fixed maturities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:

Less than 12 Months 12 Months or More Total

September 30, 2025 Fair

March 31, 2026 Fair

value Unrealized

1 unchanged sentence

value Unrealized

agency bonds – mortgage-backed

$ 580 $ ( 2 ) $ — $ — $ 580 $ ( 2 )

government bonds 62,307 ( 377 ) — — 62,307 ( 377 )

Collateralized loan obligations 21,227 ( 13 ) — — 21,227 ( 13 )

Total temporarily impaired fixed maturities

Corporate bonds

6,642 ( 92 ) — — 6,642 ( 92 )

At September 30, 2025, there were 12 securities in an unrealized loss position for less than 12 months with a fair value of $ 61,997 and unrealized losses of $ 64 .

Total temporarily impaired AFS fixed maturity investments $ 90,756 $ ( 484 ) $ — $ — $ 90,756 $ ( 484 )

At March 31, 2026, there were 26 securities in an unrealized loss position with a fair value of $ 90,756 and unrealized losses of $ 484 , all of which have been in an unrealized loss position for less than twelve months.

Less than 12 Months 12 Months or More Total

December 31, 2025 Fair

value Unrealized

government bonds $ 29,142 $ ( 154 ) $ — $ — $ 29,142 $ ( 154 )

Collateralized loan obligations 36,370 ( 21 ) — — 36,370 ( 21 )

Corporate bonds

7,466 ( 2 ) — — 7,466 ( 2 )

Total temporarily impaired AFS fixed maturity investments $ 72,978 $ ( 177 ) $ — $ — $ 72,978 $ ( 177 )

At December 31, 2025, there were 18 securities in an unrealized loss position with a fair value of $ 72,978 and unrealized losses of $ 177 , all of which have been in an unrealized loss position for less than twelve months.

Allowance for Expected Credit Losses & Non-Credit Related Impairment Costs

2 unchanged sentences

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

The non-credit impairment amount of the loss (which could be related to interest rates and/or market conditions) is recognized in other comprehensive income.

The non-credit impairment amount of the loss (which could be related to interest rates and/or market conditions) is recognized in other comprehensive income ("OCI").

6 unchanged sentences

Although these securities are not analyzed for credit losses, they are evaluated for impairment based on the Company's intention to sell and likely requirement to sell.

Based on the Company's analysis at September 30, 2025, net unrealized gains on the Company’s AFS fixed maturity securities were due to non-credit factors and were expected to be recovered as the related securities approach maturity.

At September 30, 2025, the Company did not intend to sell the securities in an unrealized loss position and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of their amortized costs.

Therefore, there was no allowance recorded for expected credit losses on AFS securities for the three and nine months ended September 30, 2025.

The following tables summarize the credit ratings of our fixed maturities as at September 30, 2025:

September 30, 2025 Amortized cost Fair value % of Total

Based on the Company's analysis at March 31, 2026, net unrealized gains on the Company’s AFS fixed maturity securities were due to non-credit factors and were expected to be recovered as the related securities approach maturity.

At March 31, 2026, the Company did not intend to sell the securities in an unrealized loss position and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of their amortized costs.

Therefore, no allowance was recorded for expected credit losses on AFS securities for the three months ended March 31, 2026.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

The following tables summarize the credit ratings of our fixed maturities as at March 31, 2026 and December 31, 2025:

March 31, 2026 Amortized cost Fair value % of Total

agency bonds – mortgage-backed

$ 20,400 $ 20,947 17.7 %

42,602 42,550 35.9 %

18,832 18,756 15.8 %

35,961 35,632 30.1 %

BBB+, BBB, BBB-

503 491 0.5 %

Total fixed maturities (1)

$ 118,298 $ 118,376 100.0 %

December 31, 2025 Amortized cost Fair value % of Total

treasury bonds

9 unchanged sentences

$ 164,352 $ 165,035 100.0 %

December 31, 2024 Amortized cost Fair value

(1) Ratings above are based on Standard & Poor’s ("S&P"), or equivalent, ratings .

5 unchanged sentences

In addition, even if certain other investments and equity method investments are not eligible for redemption or sales are restricted, we may still receive income distributions from those investments.

The collateralized investments in direct lending entities of $ 53,616 at September 30, 2025 are carried at fair market value.

The collateralized investments in direct lending entities of $ 52,687 at March 31, 2026 (December 31, 2025:

$ 53,275 ) are carried at fair market value.

Financial Instruments provides a measurement basis election for most financial instruments using a choice of either historical cost or fair value, including other investments, allowing reporting entities to mitigate potential mismatches that arise under the current mixed measurement attribute model.

In connection with the Combination on May 27, 2025, the assets and liabilities of Maiden were recorded at their fair values measured as of the acquisition date.

The Company has elected the fair value option for its investments in direct lending entities, and these investments are reported at fair value as of September 30, 2025.

The Company has elected the fair value option for its investments in direct lending entities, and these investments are reported at fair value as of March 31, 2026 and December 31, 2025.

Please see Note 5(d).

Fair Value Measurements for additional information regarding this investment.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

Other investments

The table shows the composition of the Company's other investments at fair value as of September 30, 2025:

September 30, 2025

Fair value % of Total

The table shows the composition of the Company's other investments at fair value as of March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Fair value % of Total Fair Value % of Total

Private equity funds (1)

$ 32,905 18.7 % $ 31,732 18.3 %

Privately held equity investments (1)

9,518 5.4 % 9,248 5.4 %

Private credit investments (1)

308 0.2 % 192 0.1 %

Equity method investments with fair value option elected 80,252 45.7 % 78,911 45.5 %

1 unchanged sentence

Total other investments at fair value $ 175,670 100.0 % $ 173,358 100.0 %

(1) Private equity funds, private credit investments, and one privately held equity investment are measured at fair value using the NAV practical expedient.

Please see Note 5.

Fair Value Measurements for further details.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

Equity Securities

3 unchanged sentences

There is no active market for these investments.

The following table provides the cost and fair values of the equity securities held at September 30, 2025:

September 30, 2025

Cost Fair Value

The following table provides the cost and fair values of the equity securities held at March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Cost Fair Value Cost Fair Value

Privately held common stocks $ 5,135 $ 4,838 $ 5,135 $ 4,838

1 unchanged sentence

Total equity securities $ 11,145 $ 11,748 $ 11,145 $ 11,748

All privately held securities held at September 30, 2025 are subject to contractual sale restrictions.

All privately held securities held at March 31, 2026 are subject to contractual sale restrictions.

Each of these investments are subject to agreements that restrict the transfer, sale, and indemnification of these privately held investments indefinitely.

4 unchanged sentences

Total equity securities subject to contractual sale restrictions $ 11,748

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

Equity Method Investments

The equity method investments currently include real estate investments accounted for under the equity method and other investments measured at fair value.

The table below shows the total value of the Company's equity method investments as of September 30, 2025 including those classified as other investments under the fair value option:

September 30, 2025

Carrying Value % of Total

Real estate investments at equity method $ 32,518 30.4 %

Total equity method investments accounted for under the Equity Method 32,518 30.4 %

Real estate investments at fair value option elected 46,000 42.9 %

Other equity method investments at fair value option elected 28,611 26.7 %

Total equity method investments with fair value option (included in Other Investments) 74,611 69.6 %

Total equity method investments $ 107,129 100.0 %

The equity method investments above include limited partnerships which are variable interests issued by variable interest entities ("VIEs").

The equity method investments include real estate investments accounted for under the equity method and other investments measured at fair value.

The equity method investments include limited partnerships which are variable interests issued by variable interest entities ("VIEs").

The Company is not the primary beneficiary of these VIEs as it does not have the power to direct the activities that are most significant to the economic performance of these VIEs.

2 unchanged sentences

Generally, the maximum exposure to loss on these interests is limited to the amount of commitment made by the Company as more fully described in "Note 11 - Commitments, Contingencies and Guarantees" in these condensed consolidated financial statements.

As a result of the Combination on May 27, 2025, the assets and liabilities of Maiden were recorded at their fair values measured as of the acquisition date.

The Company has elected the fair value option for certain of its equity method investments, and these investments are reported at their fair values as of September 30, 2025.

The table below shows the carrying/fair values and beneficial ownership percentage of the Company's equity method investments, including those measured using the fair value option and reported in other investments, as of September 30, 2025, the summarized financial data of each equity method investment for the nine months ended September 30, 2025 and the Company's realized and unrealized gains (losses) on these investments for the nine months ended September 30, 2025:

September 30, 2025 For the Nine Months Ended September 30, 2025 For the Nine Months Ended September 30, 2025

The table below shows the total value of the Company's equity method investments as of March 31, 2026 and December 31, 2025 including those classified as other investments under the fair value option:

March 31, 2026 December 31, 2025

Carrying Value % of Total Carrying Value % of Total

Real estate investments at equity method $ 33,543 29.5 % $ 33,532 29.8 %

Real estate investments at fair value option elected 51,000 44.8 % 51,000 45.4 %

Other equity method investments at fair value option elected 29,252 25.7 % 27,911 24.8 %

Total equity method investments with fair value option 80,252 70.5 % 78,911 70.2 %

Total equity method investments $ 113,795 100.0 % $ 112,443 100.0 %

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

The table below shows the carrying/fair values and beneficial ownership percentage of the Company's equity method investments, including those measured using the fair value option and reported in other investments, as of March 31, 2026, the summarized financial data of each equity method investment at December 31, 2025 and the Company's realized and unrealized gains (losses) or interest in income (loss) of equity method investments on these investments for the three months ended March 31, 2026:

March 31, 2026 For the Year Ended December 31, 2025

For the Three Months Ended March 31, 2026

Carrying Value Beneficial Ownership Investee Revenue (1)

8 unchanged sentences

Total equity method investments $ 113,795 $ 1,641

The Company inclu ded summarized financial data of its equity method investees as reported at June 30, 2025 as this period represents the most recent audited financial statements available at the time of filing the Company's Form 10-Q for the three and nine months ended September 30, 2025.

The Company inclu ded summarized financial data of its equity method investees as reported at December 31, 2025 as this period represents the most recent audited financial statements available at the time of filing the Company's Form 10-Q for the three months ended March 31, 2026.

Fair value adjustments have been recorded under realized and unrealized gains (losses) for those equity method investments reported at fair value.

Investment results for equity method investments only include the post-combination period of May 28, 2025 to September 30, 2025

Seiden LP and Seiden MGMT LP are measured using equity method accounting at September 30, 2025.

The interest in loss of equity method investments has been recorded on its own line item on the income statement and not within realized and unrealized gains (losses).

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

Seiden LP and Seiden MGMT LP are measured using equity method accounting at March 31, 2026.

The interest in loss of equity method investments has been recorded on its own line item on the statements of operations instead of through realized and unrealized gains (losses).

c) Net Investment Income

Net investment income was derived from the following sources 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,

2025 2024 2025 2024

Net investment income was derived from the following sources for the three months ended March 31, 2026 and 2025:

For the Three Months Ended March 31,

Fixed maturities

$ 1,570 $ — $ 2,184 $ —

Income on funds withheld 28 —

2 unchanged sentences

Cash and cash equivalents 446 34

3,561 52 5,128 170

Investment expenses

( 67 ) — ( 69 ) —

Net investment income

$ 3,494 $ 52 $ 5,059 $ 170

d) Net Realized and Unrealized Investment Gains (Losses)

Realized gains or losses on the sale of investments are determined on the basis of the first in first out cost method.

The following tables show the net realized and unrealized investment gains (losses) included in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2025:

For the Three Months Ended September 30, 2025 Gross gains Gross losses Net

Fixed maturities

$ 624 $ — $ 624

Equity securities 159 — 159

Other investments 5,376 ( 665 ) 4,711

Net realized and unrealized investment gains (losses) $ 6,159 $ ( 665 ) $ 5,494

For the Nine Months Ended September 30, 2025 Gross gains Gross losses Net

Realized gains or losses on the sale of investments are determined on the basis of the specific identification method.

The following tables show the net realized and unrealized investment gains (losses) included in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2026:

For the Three Months Ended March 31, 2026 Gross gains Gross losses Net

Fixed maturities

$ 70 $ ( 18 ) $ 52

Equity securities 205 — 205

Other investments 3,659 ( 2,372 ) 1,287

5,888 ( 929 ) 4,959

Net realized and unrealized investment gains (losses) $ 3,729 $ ( 2,390 ) $ 1,339

Realized and unrealized gains and losses from equity securities detailed above include both sales and distributions of equity securities and unrealized gains and losses coming from fair value changes.

Net unrealized gains recognized for equity securities still held at the reporting date for the three and nine months ended September 30, 2025, respectively, included:

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

Net gains recognized for equity securities

Net gains recognized for equity securities divested

Net unrealized gains recognized for equity securities still held at the reporting date

Proceeds from sales of AFS fixed maturity investments were $ 7,878 and $ 15,190 for the three and nine months ended September 30, 2025, respectively.

For the Three Months Ended March 31, 2026

KESTREL GROUP LTD

3 unchanged sentences

Investments (continued)

Net unrealized gains included in accumulated other comprehensive income ("AOCI") were as follows at September 30, 2025:

September 30, 2025

Proceeds from sales of AFS fixed maturity investments were $ 38,117 for the three months ended March 31, 2026.

Net unrealized gains included in accumulated other comprehensive income ("AOCI") at March 31, 2026 and December 31, 2025 were as follows:

March 31, 2026 December 31, 2025

Net unrealized gains on fixed maturity investments

Net unrealized losses on held for sale AFS investments

Total net unrealized losses 704

Deferred income tax

Net unrealized gains, net of deferred income tax

Change, net of deferred income tax

$ ( 620 ) $ 679

e) Restricted Cash and Cash Equivalents and Investments

1 unchanged sentence

The assets in trust as collateral are primarily cash and highly rated fixed maturities.

The fair values of the Company's restricted assets at September 30, 2025 are:

September 30, 2025

The fair values of the Company's restricted assets at March 31, 2026 and December 31, 2025 are as follows:

March 31, 2026 December 31, 2025

Restricted cash – third party agreements $ 44,863 $ 7,767

2 unchanged sentences

Restricted investments – in trust for third party agreements at fair value (amortized cost 2026:

12,368 52,350

Restricted investments – in trust for related party agreements at fair value (amortized cost 2026:

Restricted investments – liability for investments purchased for related party agreements ( 8,167 )

99,976 102,368

Total restricted investments

112,344 154,718

Total restricted cash and investments

$ 159,503 $ 163,864

KESTREL GROUP LTD

21 unchanged sentences

• Level 3 — Valuations based on models where significant inputs are not observable.

The unobservable inputs reflect our own assumptions about assumptions that market participants would use developed on the basis of the best information available in the particular circumstances.

The unobservable inputs reflect the Company's own assumptions about assumptions that market participants would use developed on the basis of the best information available in the particular circumstances.

Examples of assets and liabilities utilizing Level 3 inputs include:

15 unchanged sentences

ASC 825, "Disclosure About Fair Value of Financial Instruments" , requires all entities to disclose the fair value of their financial instruments for assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value.

The following describes the valuation techniques used by the Company to determine the fair value of financial instruments that are measured at fair value on a recurring basis held at September 30, 2025.

The following describes the valuation techniques used by the Company to determine the fair value of financial instruments that are measured at fair value on a recurring basis held at March 31, 2026.

government and U.S.

52 unchanged sentences

The fair values are estimated using quarterly financial statements and/or recent private market transactions and thus are included under Level 3 of the fair value hierarchy due to unobservable market data used for valuation.

• Private credit investments:

• Private credit funds:

These are privately held equity investments in common stock of entities that lend money valued using the most recently available or quarterly net asset value ("NAV") statements as provided by the external fund manager or third-party administrator and therefore measured using the NAV as a practical expedient.

11 unchanged sentences

These are included in Level 3 of the fair value hierarchy due to unobservable market data used for valuation.

Contingent Receivables - The Company holds a contingent receivable related to a prior private equity investment in the insurance distribution industry.

Pursuant to the terms of the asset purchase agreement, the Company will receive a series of distributions.

The Company uses unobservable inputs to estimate the net present value of these potential distributions and the expected proceeds are classified as a receivable and reported in Other Assets on the Consolidated Balance Sheet.

Under ASC 805, the earn out consideration for this receivable is adjusted to fair value at each reporting period with any changes in fair value reported immediately in income through foreign exchange and other gains (losses) on the condensed consolidated statement of operations.

Derivative Instruments:

The Company entered into a reinsurance contract that is accounted for as a derivative.

The Company has a reinsurance contract that is accounted for as a derivative.

This reinsurance contract provides indemnification to an insured or cedant as a result of a change in a variable as opposed to an identifiable insurable event.

The Company considers this contract to be part of its underwriting operations.

This derivative is initially valued at cost which approximates fair value.

In subsequent measurement periods, the fair value of this derivative is determined using internally developed discounted cash flow models using appropriate discount rates.

The selection of an appropriate discount rate is judgmental and is the most significant unobservable input used in the valuation of this derivative.

The fair value changes in underwriting-related derivative instruments is included within other insurance revenue (expense), net.

The derivative liability on retroactive reinsurance is presented as part of accrued expenses and other liabilities.

A significant increase (decrease) in this input in isolation may result in a significantly lower (higher) fair value measurement for the derivative contract.

As the significant inputs used to price these derivatives are unobservable, the fair values of this contract is classified as Level 3 in the fair value hierarchy.

This derivative was initially valued at cost which approximates fair value.

In subsequent measurement periods, the fair value of this derivative was determined using internally developed discounted cash flow models using appropriate discount rates.

KESTREL GROUP LTD

3 unchanged sentences

Fair Value of Financial Instruments (continued)

The selection of an appropriate discount rate is judgmental and is the most significant unobservable input used in the valuation of this derivative.

The derivative liability on retroactive reinsurance is presented as part of accrued expenses and other liabilities.

A significant increase (decrease) in this input in isolation may result in a significantly lower (higher) fair value measurement for the derivative contract.

As the significant inputs used to price these derivatives are unobservable, the fair values of this contract is classified as Level 3 in the fair value hierarchy.

(b) Fair Value Hierarchy

2 unchanged sentences

In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active trading markets and the lowest priority to unobservable inputs that reflect significant market assumptions.

At September 30, 2025, the Company classified its financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:

September 30, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value

At March 31, 2026 and December 31, 2025, the Company classified its financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:

March 31, 2026 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value

Fixed maturities

treasury bonds $ 38,730 $ — $ — $ — $ 38,730

agency bonds – mortgage-backed $ — $ 20,947 $ — $ — $ 20,947

3 unchanged sentences

Equity securities — 4,838 6,910 — 11,748

Contingent Receivable — — 10,159 — 10,159

Other investments

4 unchanged sentences

December 31, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value

Fixed maturities

treasury bonds $ 43,673 $ — $ — $ — $ 43,673

agency bonds – mortgage-backed — 21,618 — — 21,618

government bonds — 29,143 — — 29,143

Collateralized loan obligations — 62,624 — — 62,624

Corporate bonds — 7,977 — — 7,977

Equity securities — 4,838 6,910 — 11,748

Contingent Receivable — — 9,955 — 9,955

Other investments

— — 135,018 38,340 173,358

Total investments $ 43,673 $ 126,200 $ 151,883 $ 38,340 $ 360,096

As a percentage of total assets

4.3 % 12.5 % 15.0 % 3.8 % 35.6 %

Underwriting-related derivative liability $ — $ — $ 3,984 $ — $ 3,984

The Company utilizes the Pricing Service to assist in determining the fair value of its investments;

2 unchanged sentences

The Company analyzes and reviews the information and prices received from the Pricing Service to ensure that the prices provided represent a reasonable estimate of fair value.

The Pricing Service was utilized to estimate fair value measurements for 100.0 % of our fixed maturities at September 30, 2025.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value Measurements (continued)

The Pricing Service was utilized to estimate fair value measurements for 100.0 % of our fixed maturities at March 31, 2026 and December 31, 2025, respectively.

The Pricing Service utilizes market quotations for fixed maturity securities that have quoted market prices in active markets.

1 unchanged sentence

treasury bonds generally do not trade actively on a daily basis, the Pricing Service prepares estimates of fair value measurements using relevant market data, benchmark curves, sector groupings and matrix pricing and these have been classified as Level 2 within the fair value hierarchy.

At September 30, 2025, the Company did not adjust any pricing provided to it based on the review performed by its investment managers.

There were no transfers to or from Level 3 during the three and nine months ended September 30, 2025, respectively.

At March 31, 2026 and December 31, 2025, no securities in our fixed maturity investment portfolio were priced using a non-binding quotation from a broker and/or custodian as opposed to the Pricing Service.

At March 31, 2026 and December 31, 2025, the Company did not adjust any pricing provided to it based on the review performed by its investment managers.

There were no transfers to or from Level 3 during the three months ended March 31, 2026.

At September 30, 2025, the Company holds Level 3 financial instruments which currently consist of alternative investments of $ 144,308 and an underwriting-related derivative liability of $ 3,984 on a reinsurance contract written by GLS which is included in accrued expenses and other liabilities.

The Level 3 investments include collateralized investments in direct lending entities of $ 53,616 at September 30, 2025 which are carried at fair market value using significant unobservable inputs.

These direct loans are illiquid and require long-term capital commitments, and so significant judgment was used in its valuation.

Therefore, these investments are classified as Level 3 in the fair value hierarchy.

The fair values for equity securities of $ 11,350 are estimated using quarterly unaudited capital and financial statements provided by the investee or recent private market transactions, where applicable.

At March 31, 2026, the Company holds Level 3 financial instruments including investments of $ 152,840 (December 31, 2025:

$ 151,883 ), a contingent investment receivable of $ 10,159 (December 31, 2025:

$ 9,955 ) included in other assets, and an underwriting-related derivative liability of $ 3,984 (December 31, 2025:

$ 3,984 ) on a reinsurance contract written by GLS which is included in accrued expenses and other liabilities.

The Level 3 investments include collateralized investments in direct lending entities of $ 52,687 at March 31, 2026 (December 31, 2025:

$ 53,275 ) which are carried at fair market value using significant unobservable inputs.

These direct loans are illiquid and require long-term capital commitments, and so significant judgment was used in its valuation using discounted cash flows.

However, collateral is held in excess of the fair value of this investment.

Due to significant unobservable inputs required in its valuation, investments in direct lending entities are classified as Level 3 in the fair value hierarchy.

The fair values for privately held equity investments of $ 9,742 at March 31, 2026 (December 31, 2025:

$ 9,742 ) are estimated using quarterly unaudited capital and financial statements provided by the investee, option pricing models or market comparable transactions where applicable.

Any changes to the financial information provided by the investee could result in a significantly higher or lower valuation at the reporting date.

Due to significant unobservable inputs in these valuations, the Company classifies the fair values as Level 3 within the fair value hierarchy .

The Company has elected the fair value option for certain of its equity method investments at the acquisition date.

The fair values for these investments are presented in other investments and are estimated using quarterly unaudited capital and financial statements provided by the investee or recent private market transactions, where applicable.

Due to significant unobservable inputs in these valuations, the Company classifies the fair values as Level 3 in the fair value hierarchy .

The Company elected the fair value option for certain of its equity method investments at the acquisition date.

The fair values of $ 80,252 at March 31, 2026 (December 31, 2025:

$ 78,911 ) are presented in other investments and estimated using quarterly unaudited capital and financial statements provided by the investee, discounted cash flows and option pricing models, where applicable.

Any changes to the financial information provided by the investee could result in a significantly higher or lower valuation at the reporting date.

Due to significant unobservable inputs in valuations, the Company classifies the fair values as Level 3 within the fair value hierarchy.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value of Financial Instruments (continued)

The fair value of underwriting-related derivative instruments of $ 3,984 is determined using a discounted cash flow model in which the Company examines current market conditions, historical results as well as contract specific information that may impact future cash flows in order to assess the reasonableness of inputs used in the valuation model .

Due to significant unobservable inputs in these valuations, the Company classifies the fair values as Level 3 within the fair value hierarchy .

The following table provides a summary of quantitative information regarding the significant unobservable inputs used in determining the fair value of other investments measured at fair value on a recurring basis under the Level 3 classification at September 30, 2025:

Fair Value Valuation Technique Unobservable Inputs Range

Privately held equity investments - common shares $ 5,340 Quarterly financial statements Price/book ratios of comparable public companies

Privately held equity investments - preferred shares 10,741 Quarterly financial statements Privately calculated enterprise valuations

Other investments - Investments in direct lending entities 53,616 Quarterly financial statements Privately calculated enterprise valuations

Equity method investments measured at fair value option 74,611 Quarterly financial statements Privately calculated enterprise valuations

Total Level 3 investments $ 144,308

Underwriting-related derivative liability $ 3,984 Discounted cash flows Duration matched discount rates 5.0 % to 6.0 %

The following table shows the reconciliation of beginning and ending balances for investments measured at fair value on a recurring basis using Level 3 inputs for the three and nine months ended September 30, 2025, respectively.

Due to significant unobservable inputs in valuations, the Company classifies the fair values as Level 3 in the fair value hierarchy.

The Company holds a contingent receivable related to a prior private equity investment in the insurance distribution industry where the Company will receive a series of distributions under terms of the asset purchase agreement.

The net present value of these potential distributions is $ 10,159 at March 31, 2026 (December 31, 2025:

$ 9,955 ) which was reported in Other Assets on the Condensed Consolidated Balance Sheets.

Under ASC 805, the earn out consideration for this receivable is adjusted to fair value using discounted cash flows at each reporting period with any changes in fair value reported immediately in net income.

Due to significant unobservable inputs in its valuation, the Company classifies the fair values as Level 3 in the fair value hierarchy.

The fair value of underwriting-related derivative instruments of $ 3,984 at March 31, 2026 and December 31, 2025 was determined using a discounted cash flow model in which the Company examines current market conditions, historical results as well as contract specific information that may impact future cash flows in order to assess the reasonableness of inputs used in the valuation model .

Due to significant unobservable inputs in these valuations, the Company classifies the fair values as Level 3 in the fair value hierarchy .

The following table shows the reconciliation of beginning and ending balances for investments measured at fair value on a recurring basis using Level 3 inputs for the three months ended March 31, 2026.

The Company includes any related interest and dividend income in net investment income and thus are excluded from the reconciliation in the table below:

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

For the Three Months Ended March 31, 2026

Balance - beginning of period $ 151,883

Acquired Level 3 investments — 137,188

Purchases 1,026

2 unchanged sentences

Total Level 3 investments - end of period $ 152,840

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value Measurements (continued)

Financial Instrument Fair Value Valuation Technique Significant Unobservable Valuation Inputs Range of Unobservable Inputs (Low/High/Weighted Average) Impact of Increases in Inputs

Private equity investments - preferred shares $ 4,578 Market comparable companies & Option Pricing Models Value Change - Market/Industry Factors ( 3.0 )% 5.0 % ( 0.3 )% Higher fair value

Private equity investments - preferred shares 2,332 Value Change - Company Performance 10.0 % 10.0 % 10.0 % Higher fair value

Term to Exit 3.0 years 3.0 years 3.0 years Lower fair value

Equity Volatility 40.0 % 65.0 % 56.6 % Lower fair value

Private equity investments - preferred shares 1,559 Market comparable companies & Option Pricing Models Value Change - Market/Industry Factors ( 3.0 )% 7.5 % 1.7 % Higher fair value

Private equity investments - preferred shares 1,273 Value Change - Company Performance 10.0 % 10.0 % 10.0 % Higher fair value

Term to Exit 2.5 years 3.0 years 2.7 years Lower fair value

Equity Volatility 65.0 % 92.5 % 80.1 % Lower fair value

Investment in direct lending entities 52,687 Discounted cash flows Discount rate 22.0 % 22.0 % 22.0 % Lower fair value

— Discounted cash flows Discount Rate 10.0 % 25.0 % 18.0 % Lower fair value

Silverstone Ventures 29,252 Term to Exit 3.0 years 9.0 years 3.6 years Lower fair value

Extell Hudson Waterfront Holdings Discounted cash flows & option pricing models Discount Rate 6.8 % 6.8 % 6.8 % Lower fair value

Exit Cap Rate 5.5 % 5.5 % 5.5 % Lower fair value

51,000 Equity Volatility 37.4 % 37.4 % 37.4 % Lower fair value

Term to Exit 5.7 years 5.7 years 5.7 years Lower fair value

Discount for Lack of Marketability - OPM 15.0 % 18.0 % 16.5 % Lower fair value

Discount for Lack of Marketability 10.0 % 10.0 % 10.0 % Lower fair value

Total Level 3 Investments $ 142,681

Contingent Receivable $ 10,159 Discounted cash flows & Option pricing models EBITDA & Commission Discount Rate 9.2 % 9.2 % 9.2 % Lower fair value

EBITDA & Commission Equity Volatility Rate 25.0 % 25.0 % 25.0 % Lower fair value

Underwriting-related derivative liability $ 3,984 Discounted cash flows Duration matched discount rates 5.5 % 5.5 % 5.5 % Lower fair value

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value Measurements (continued)

(d) Financial Instruments Disclosed, But Not Carried, at Fair Value

The fair value of financial instruments accounting guidance also applies to financial instruments disclosed, but not carried, at fair value, except for certain financial instruments related to insurance contracts .

At September 30, 2025, the carrying values of cash equivalents (including restricted amounts), accrued investment income, reinsurance balances receivable and certain other assets and liabilities approximate fair values due to their inherent short duration.

At March 31, 2026, the carrying values of cash equivalents (including restricted amounts), accrued investment income, reinsurance balances receivable and certain other assets and liabilities approximate fair values due to their inherent short duration.

As these financial instruments are not actively traded, the fair values of these financial instruments are classified as Level 2 in the fair value hierarchy.

At September 30, 2025, the carrying value of the net loan receivable from related party approximates fair value.

At March 31, 2026, the carrying value of the net loan receivable from related party approximates fair value.

The fair value of the net loan receivable is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar loans with similar credit risk.

2 unchanged sentences

Long-Term Debt ) are based on indicative market pricing obtained from a third-party pricing service which uses observable market inputs, and therefore the fair values of these liabilities are classified as Level 2 in the fair value hierarchy.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value of Financial Instruments (continued)

The following table presents the respective principal amount and fair values for the Senior Notes as at September 30, 2025:

September 30, 2025

Principal Amount Fair Value

The following table presents the respective principal amount and fair values for the Senior Notes as at March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Principal Amount Fair Value Carrying Value Fair Value

Senior Notes - MHLA – 6.625 %

10 unchanged sentences

As discussed in Note 1.

Basis of Presentation , pursuant to the terms of the Combination, at the closing of the transaction on May 27, 2025, each issued and outstanding common share of Maiden, par value $ 0.01 per share, was automatically canceled and converted into the right to receive one-twentieth ( 0.05 ) of a common share in Kestrel Group Ltd.

The equityholders of Kestrel at the closing date received 2,749,996 common shares of the Kestrel Group.

Fractional shares for both Maiden and Kestrel were paid out in cash at the closing date.

The equityholders of Kestrel LLC at the closing date received 2,749,996 common shares of the Kestrel Group.

Fractional shares for both Maiden and Kestrel LLC were paid out in cash at the closing date.

The Company’s authorized share capital after the Combination consists of 42,500,000 common shares.

1 unchanged sentence

Kestrel Group common shareholders are entitled to receive dividends.

For the three and nine months ended September 30, 2025, the Company's Board of Directors did not declare any dividends to common shareholders.

For the three months ended March 31, 2026, the Company's Board of Directors did not declare any dividends to common shareholders.

Holders of Kestrel Group common shares have no pre-emptive, redemption, conversion or sinking fund rights.

2 unchanged sentences

Under the Kestrel Group bye-laws, the holders of at least a majority of the Kestrel Group common shares voting in person or by proxy at a meeting must approve any merger, amalgamation, business combination or similar transaction with another company.

At September 30, 2025, the aggregate authorized share capital of the Company is 42,500,000 shares of which 9,979,477 common shares were issued.

At March 31, 2026, the aggregate authorized share capital of the Company is 42,500,000 shares of which 10,108,600 common shares were issued.

This includes 7,824,030 common shares outstanding, and 2,284,570 treasury shares as discussed further below.

The remaining 32,520,523 shares are undesignated at September 30, 2025.

At September 30, 2025, there are 136,197 common shares that will be issued and outstanding upon vesting of restricted shares.

The remaining 32,391,400 shares are undesignated at March 31, 2026 which include 655,643 common shares that will be issued and outstanding upon vesting of restricted shares.

b) Common Shares issuable under Incentive Plans

5 unchanged sentences

• 1,205,000 common shares are issuable under the Kestrel Group Ltd 2025 Equity Incentive Plan (“Kestrel Group Plan”).

During the three months ended March 31, 2026, there were 648,569 restricted share awards granted to employees under the Kestrel Group Plan.

c) Treasury Shares

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 following tables set forth financial information regarding the changes in the balances of each component of AOCI:

For the Three Months Ended September 30, 2025 Change in net unrealized gains on investment Foreign currency translation Total

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 Sheets at March 31, 2026 and December 31, 2025, respectively.

During the three months ended March 31, 2026, the Company repurchased 47,036 common shares at an average price of $ 10.32 per share from employees, which represent tax withholding in respect of tax obligations on the vesting of non-performance-based restricted shares.

There were no share repurchases from employees during the same period in 2025.

The table below includes the total number of treasury shares outstanding at March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Number of common shares held by Maiden Reinsurance treated as treasury shares 2,237,534 2,237,534

Number of treasury shares due to common share repurchases by Kestrel Group 47,036 —

Total number of treasury shares at the end of the reporting period 2,284,570 $ 2,237,534

d) Accumulated Other Comprehensive Income ("AOCI")

The following table sets forth financial information regarding the changes in the balances of each component of AOCI:

For the Three Months Ended March 31, 2026 Change in net unrealized gains on investment Foreign currency translation Total

Beginning balance $ 679 $ 237 $ 916

Other comprehensive income (loss) before reclassifications 219 ( 1,694 ) ( 1,475 )

Amounts reclassified from AOCI to net income, net of tax — — —

Net current period other comprehensive income (loss)

Other comprehensive (loss) income before reclassifications ( 612 ) 241 ( 371 )

Amounts reclassified from AOCI to net loss, net of tax

( 8 ) — ( 8 )

Ending balance $ 704 $ ( 1,620 ) $ ( 916 )

For the Nine Months Ended September 30, 2025 Change in net unrealized gains on investment Foreign currency translation Total

Beginning balance

Other comprehensive income before reclassifications 704 ( 1,620 ) ( 916 )

Amounts reclassified from AOCI to net income, net of tax

Net current period other comprehensive income (loss)

Net current period other comprehensive (loss) income

( 620 ) 241 ( 379 )

Ending balance $ 59 $ 478 $ 537

$ 704 $ ( 1,620 ) $ ( 916 )

KESTREL GROUP LTD

3 unchanged sentences

Long-Term Debt

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 Holdings North America, Ltd.

At March 31, 2026, 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 Holdings North America, Ltd.

("Maiden NA").

2 unchanged sentences

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 following tables detail the issuances of Senior Notes outstanding at September 30, 2025:

September 30, 2025 2016 Senior Notes 2013 Senior Notes Total

The following tables detail the issuances of Senior Notes outstanding at March 31, 2026 and December 31, 2025:

March 31, 2026 2016 Senior Notes 2013 Senior Notes Total

Principal amount $ 110,000 $ 152,361 $ 262,361

1 unchanged sentence

Carrying value $ 66,504 $ 108,218 $ 174,722

December 31, 2025 2016 Senior Notes 2013 Senior Notes Total

Principal amount

$ 110,000 $ 152,361 $ 262,361

unamortized issuance costs 43,627 44,332 87,959

Carrying value $ 66,373 $ 108,029 $ 174,402

Original fair value adjustment at acquisition date $ 43,928 $ 44,764

3 unchanged sentences

Effective interest rate 11.77 % 11.63 %

Total interest and amortization expense incurred on the Senior Notes for the three and nine months ended September 30, 2025 was $ 5,077 and $ 6,976 , respectively, of which $ 1,342 was accrued as interest payable at September 30, 2025.

Total interest and amortization expense incurred on the Senior Notes for the three months ended March 31, 2026 was $ 5,096 ;

of which $ 1,342 was accrued as interest payable at March 31, 2026 and December 31, 2025, respectively.

Under the Combination, the Senior Notes were acquired at their respective fair market values on May 27, 2025, therefore 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 $ 301 and $ 415 for the three and nine months ended September 30, 2025.

The amortization for the fair value adjustment was $ 320 for the three months ended March 31, 2026.

Under the terms of the 2013 Senior Notes, the 2013 Senior Notes can be redeemed, in whole or in part, at Maiden NA's option at any time and from time to time, until maturity at a redemption price equal to 100 % of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date.

1 unchanged sentence

Please refer to Note 11.

Commitments, Contingencies and Guarantees for recent litigation regarding the 2013 Senior Notes.

Under the terms of the 2016 Senior Notes, the 2016 Senior Notes can be redeemed, in whole or in part, at Maiden Holdings' option at any time and from time to time, until maturity at a redemption price equal to 100 % of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date.

Maiden Holdings is required to give at least thirty days and not more than sixty days notice prior to the redemption date.

Commitments, Contingencies and Guarantees for ongoing litigation regarding the 2013 Senior Notes.

Under the terms of the 2016 Senior Notes, the 2016 Senior Notes can be redeemed, in whole or in part, at Maiden's option at any time and from time to time, until maturity at a redemption price equal to 100 % of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date.

Maiden is required to give at least thirty days and not more than sixty days notice prior to the redemption date.

KESTREL GROUP LTD

7 unchanged sentences

In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these agreements, the Company would not realize the full value of the reinsurance recoverable balances.

The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the nine months ended September 30, 2025 was as follows:

For the Nine Months Ended September 30, 2025

The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the three months ended March 31, 2026 was as follows:

For the Three Months Ended March 31, 2026

Premiums written

2 unchanged sentences

Loss and LAE ceded

The Company's reinsurance recoverable on unpaid losses balance as at September 30, 2025 was $ 492,790 presented in the Condensed Consolidated Balance Sheets.

As of September 30, 2025, the total allowance for expected credit losses on the Company's reinsurance recoverable balance was $ 1,459 .

The following table provides a reconciliation of the beginning and ending balances of the allowance for expected credit losses on reinsurance recoverable for the three and nine months ended September 30, 2025:

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

The Company's reinsurance recoverable on unpaid losses balance as at March 31, 2026 was $ 436,381 (December 31, 2025:

$ 461,197 ) presented in the Condensed Consolidated Balance Sheets.

As of March 31, 2026, the Company's total allowance for expected credit losses on its reinsurance recoverable balance was $ 1,930 (December 31, 2025:

The following table provides a reconciliation of the beginning and ending balances of the allowance for expected credit losses on reinsurance recoverable for the three months ended March 31, 2026:

For the Three Months Ended March 31, 2026

Allowance for expected credit losses on reinsurance recoverable, beginning of period $ 1,740

Expected credit losses on recoverables where credit losses were not previously recognized — 1,655

Decrease in allowance for expected credit losses on reinsurance recoverable where credit losses were previously recognized

( 196 ) ( 196 )

Increase in allowance for expected credit losses on reinsurance recoverable where credit losses were previously recognized

Allowance for expected credit losses on reinsurance recoverable, end of period $ 1,930

1 unchanged sentence

treaty reinsurance business held by Maiden Reinsurance were 100.0 % retroceded to Cavello in exchange for a ceding commission.

The reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $ 33,220 at September 30, 2025.

The recoverable due from Cavello is net of an allowance for expected credit losses of $ 598 as at September 30, 2025.

The reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $ 32,181 at March 31, 2026 (December 31, 2025:

The recoverable due from Cavello is net of an allowance for expected credit losses of $ 700 as at March 31, 2026 (December 31, 2025:

On July 31, 2019, Maiden Reinsurance and Cavello entered into a Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") pursuant to which Cavello assumed the loss reserves as of December 31, 2018 associated with the AmTrust Quota Share in excess of a $ 2,178,535 retention up to $ 600,000 , in exchange for a retrocession premium of $ 445,000 .

2 unchanged sentences

The LPT/ADC Agreement meets the criteria for risk transfer and is thus accounted for as retroactive reinsurance.

As of September 30, 2025, the reinsurance recoverable on unpaid losses under the LPT/ADC Agreement was $ 458,004 which was net of an allowance for expected credit losses of $ 695 as at September 30, 2025.

As of March 31, 2026, the reinsurance recoverable on unpaid losses under the LPT/ADC Agreement was $ 403,037 (December 31, 2025:

$ 427,013 ) which was net of an allowance for expected credit losses of $ 1,227 as at March 31, 2026 (December 31, 2025:

KESTREL GROUP LTD

6 unchanged sentences

Related Party Transactions.

As of September 30, 2025, the amount of collateral required was $ 390,388 .

Under the terms of the LPT/ADC Agreement, the covered losses associated with the Commutation and Release Agreement with AmTrust are eligible to be covered but recoverable only when such losses are paid or settled by AII or its affiliates, provided such losses and other related amounts shall not exceed $ 312,786 .

Cavello's parent company, Enstar Group Limited, has credit ratings of BBB+ from both Standard & Poor's and Fitch Ratings at September 30, 2025.

As of March 31, 2026, the amount of collateral required was $ 362,501 (December 31, 2025:

Under the terms of the LPT/ADC Agreement, covered losses associated with the Commutation and Release Agreement with AmTrust are eligible to be covered but recoverable only when such losses are paid or settled by AII or its affiliates, provided such losses and other related amounts shall not exceed $ 312,786 .

Cavello's parent company, Enstar Group Limited, has credit ratings of BBB+ from both Standard & Poor's and Fitch Ratings at March 31, 2026.

On February 13, 2026, S&P Global Ratings affirmed the BBB+ issuer credit rating on Enstar, and affirmed the A issuer credit and financial strength ratings on its operating subsidiary, Cavello.

On July 18, 2025, the Company received correspondence from Cavello disputing the dates of loss assigned by Maiden Reinsurance’s cedant in the underlying reinsurance contract to a significant number of claims regarding certain coverage.

18 unchanged sentences

the year in which the loss event occurred) or by underwriting year (i.e.

the year in which the contract generating the premium and losses incepted).

the inception year in which the contract generating the premium and losses incepted).

In cases where the Company uses underwriting year information, reserves are subsequently allocated to the respective accident year.

The reserve for loss and LAE consists of:

September 30, 2025

March 31, 2026 December 31, 2025

Reserve for reported loss and LAE

$ 279,203 $ 312,567

Reserve for losses incurred but not reported ("IBNR")

314,147 324,602

Reserve for loss and LAE

$ 593,350 $ 637,169

The following table represents a reconciliation of our beginning and ending gross and net loss and LAE reserves:

For the Nine Months Ended September 30, 2025

For the Three Months Ended March 31, 2026

Gross loss and LAE reserves, January 1

3 unchanged sentences

Net paid losses related to:

Net Maiden Legacy run-off business acquired 221,109

Effect of foreign exchange rate movements

Net loss and LAE reserves, September 30 184,877

Reinsurance recoverable on unpaid losses, September 30 492,790

Gross loss and LAE reserves, September 30 $ 677,667

Net loss and LAE reserves, March 31 156,969

Reinsurance recoverable on unpaid losses, March 31 436,381

Gross loss and LAE reserves, March 31 $ 593,350

Actuarial Methods Used to Estimate Loss and LAE Reserves

29 unchanged sentences

With the guidance of the methods above, actuarial judgment is applied in the determination of ultimate losses.

In general, the Company’s segments have varying levels of seasoning with which the Company has direct experience and as a result, differing methods are utilized to estimate loss and LAE reserves in each segment.

In general, the Company’s lines of business have varying levels of seasoning with which the Company has direct experience and as a result, differing methods are utilized to estimate loss and LAE reserves in each line of business.

For the Diversified Reinsurance legacy business, the Company utilizes the ELR approach at the onset of reserving an account, the BF method for business with less but maturing loss experience, and as the experience matures the LD method.

8 unchanged sentences

Prior period loss development ("PPD") arises from changes to loss estimates recognized in the current year that relate to loss reserves established in previous calendar years.

The favorable or unfavorable PPD reflects changes in management's best estimate of the ultimate losses under the relevant reinsurance policies after considerable review of changes in actuarial assessments.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Reserve for Loss and Loss Adjustment Expenses (continued)

The following table summarizes total PPD for our Legacy Reinsurance segment for the three and nine months ended September 30, 2025:

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

The favorable or unfavorable PPD reflects changes in management's best estimate of ultimate losses under the relevant reinsurance policies after considerable review of changes in actuarial assessments.

The following table summarizes total PPD for our Legacy Reinsurance segment for the three months ended March 31, 2026:

For the Three Months Ended March 31, 2026

Prior Year Loss Development (favorable) adverse

4 unchanged sentences

Diversified Business

In the Diversified Reinsurance legacy operations, the favorable PPD was $ 291 and $ 166 for the three and nine months ended September 30, 2025, respectively, which was primarily driven by favorable development in run-off business.

In the Diversified Reinsurance legacy operations, favorable PPD was $ 274 for the three months ended March 31, 2026 primarily driven by favorable development in international run-off business.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Reserve for Loss and Loss Adjustment Expenses (continued)

Legacy Reinsurance Segment:

AmTrust Business

The table below shows PPD for the AmTrust Reinsurance legacy operations for the three and nine months ended September 30, 2025:

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

The table below shows PPD for the AmTrust Reinsurance legacy operations for the three months ended March 31, 2026:

For the Three Months Ended March 31, 2026

Prior Year Loss Development (favorable) adverse

3 unchanged sentences

Total AmTrust Reinsurance PPD $ 551

The PPD for AmTrust Reinsurance was primarily driven by adverse development in the European Hospital Liability Quota Share for the three and nine months ended September 30, 2025, 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 offset by favorable development on worker's compensation and other lines of business in the AmTrust Quota Share.

In the AmTrust Legacy Reinsurance operations, adverse PPD was $ 551 for the three months ended March 31, 2026.

Total PPD was due to adjustment for greater than expected amount of earned exposure in 2025 that was reported in the three months ended March 31, 2026 on Specialty Risk and Extended Warranty business in the AmTrust Quota Share, and a modest reduction in recoveries anticipated under the LPT/ADC Agreement.

KESTREL GROUP LTD

11 unchanged sentences

Barry Zyskind, George Karfunkel and Leah Karfunkel were individually shareholders of Maiden prior to closing of the Combination, and received common shares at the closing of the Combination in proportion to their respective equity interests in Maiden prior to the closing.

In connection with the Combination, the Kestrel equityholders at the closing date received 2,749,996 common shares of the combined company.

The proportionate interest in these shares include 1,811,764 Common Shares issued to KILH for the benefit of Terry Ledbetter and Luke Ledbetter, constituting 18.2 % of the Company's issued Common Shares at September 30, 2025, and 776,470 Common Shares issued to AmTrust, constituting 7.7 % of the Company's issued Common Shares at September 30, 2025.

The Kestrel equityholders at the closing date of the Combination received 2,749,996 common shares of the combined company.

The proportionate interest in these shares include 1,811,764 Common Shares issued to KILH for the benefit of Terry Ledbetter and Luke Ledbetter, constituting 18.0 % of the Company's issued Common Shares at March 31, 2026, and 776,040 Common Shares issued to AmTrust, constituting 7.7 % of the Company's issued Common Shares at March 31, 2026.

Barry Zyskind is the beneficial owner of 318,714 Common Shares, constituting 4.1 % of the Common Shares outstanding.

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As a result, Kestrel Group relies on its strategic partnership with AmTrust as a related party.

At March 31, 2026, the shares previously owned by KILH are now held indirectly by Terry Ledbetter and Luke Ledbetter.

Terry Lee Ledbetter beneficially owns 1,038,921 common shares ( 133,039 common shares held directly and 905,882 common shares held indirectly by Terry Lee Ledbetter together with Reta Laurie Ledbetter, through his or her role as co-trustee of Terry Lee Ledbetter and Reta Laurie Ledbetter 2000 Revocable Trust).

Luke Ledbetter beneficially owns 1,038,921 common shares ( 133,039 common shares held directly and 905,882 common shares held indirectly through his role as trustee of each of the Bradford Luke Ledbetter 2006 Grantor Trust No.

2 and the Shari Ann Ledbetter Irrevocable 2019 Trust).

Together, these trusts hold approximately 20.6 % of total issued Kestrel Group common shares and through KILH hold the right to nominate (a) two non-independent directors to the Kestrel Group board of directors for so long as KILH and its affiliates own at least 25 % of the shares of Kestrel Group issued to them at the closing of the Combination, and (b) two independent directors to the Kestrel Group board of directors for so long as KILH and its affiliates own at least 5 % of the shares of Kestrel Group and at least 25 % of the shares of Kestrel Group issued to them at the closing of the Combination.

Management Agreement with AmTrust

As part of the July 26, 2022 Unit Purchase Agreement, AmTrust North America Inc.

acquired a 30 % minority interest in Kestrel with the option for the Company to purchase certain insurance carriers owned by AmTrust North America Inc.

The Company also receives professional and administrative services through an expense reimbursement arrangement under the management agreement referenced below with AmTrust North America Inc.

The Company incurred costs related to this agreement of $ 93 and $ 337 during the three and nine months ended September 30, 2025, respectively, compared to $ 91 and $ 707 for the same respective periods in 2024.

These amounts are presented in general and administrative fees in the condensed consolidated statement of operations and include professional services such as statutory financial reporting, IT processing, legal contracting, and insurance company compliance functions.

The Company also has an exclusive management contract with AmTrust North America Inc.

to produce business through its use of A.M.

Best A- FSC XV insurance carriers, including Sierra Specialty Insurance Company, Rochdale Insurance Company, Park National Insurance Company, and Republic Fire and Casualty Insurance Company, all subsidiaries of AmTrust.

In connection with the Combination Agreement, Kestrel will have the option to acquire these insurers from AmTrust for a period of up to three years after the closing date.

All fee revenue earned during the three and nine months ended September 30, 2025 and 2024 were based on the net premiums associated with this agreement.

acquired a 30 % minority interest in Kestrel LLC with the option for Kestrel LLC to purchase certain insurance carriers owned by AmTrust North America Inc.

Kestrel LLC also receives professional and administrative services through an expense reimbursement arrangement under the management agreement referenced below with AmTrust North America Inc.

The Company incurred costs related to this agreement of $ 137 during the three months ended March 31, 2026 compared to $ 148 for the same respective period in 2025.

These amounts are presented in general and administrative expenses in the condensed consolidated statement of operations and include professional services such as statutory financial reporting, IT processing, legal contracting, and insurance company compliance functions.

KESTREL GROUP LTD

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Related Party Transactions (continued)

Kestrel LLC also has an exclusive management contract with AmTrust North America Inc.

to produce business through its use of A.M.

In connection with the Combination, Kestrel has the option to acquire these insurers from AmTrust for a period of up to three years after the closing date.

All fee revenue earned during the three months ended March 31, 2026 and 2025 were based on the net premiums associated with this agreement.

Board of Directors of the Company

Following completion of the Combination, the board of directors of Kestrel Group consists of seven directors, made up of four directors selected by KILH, two of whom are independent under applicable securities laws and stock exchange rules, and three directors selected by AmTrust, two of whom are independent under applicable securities laws and stock exchange rules.

Please also refer to Note.

Commitments for details of the related party lease agreement with Terry Ledbetter, who is the Company's Executive Chairman, which is effective until January 31, 2026.

The following describes the legacy reinsurance transactions that have transpired between Maiden and AmTrust:

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Maiden Reinsurance paid a ceding commission of 5 % on contracts assumed under the European Hospital Liability Quota Share.

Effective July 1, 2016, the European Hospital Liability Quota Share was amended such that Maiden Reinsurance assumes from AEL 32.5 % of the premiums and losses of all policies written or renewed on or after July 1, 2016 until June 30, 2017 and 20 % of all policies written or renewed on or after July 1, 2017.

Thereafter, on January 30, 2019, Maiden Reinsurance, AEL and AIU DAC agreed to terminate the European Hospital Liability Quota Share on a run-off basis effective as of January 1, 2019.

KESTREL GROUP LTD

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Related Party Transactions (continued)

Thereafter, on January 30, 2019, Maiden Reinsurance, AEL and AIU DAC agreed to terminate the European Hospital Liability Quota Share on a run-off basis effective as of January 1, 2019.

Effective July 1, 2022, Maiden Reinsurance and AIU DAC entered into an agreement ("Commutation Agreement") which provided for AIU DAC to assume all reserves ceded by AIU DAC to Maiden Reinsurance with respect to AIU DAC’s French Medical Malpractice exposures for underwriting years 2012 through 2018 reinsured by Maiden Reinsurance under the European Hospital Liability Quota Share.

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As a result of the Commutation Agreement, Maiden Reinsurance reduced its exposure to AmTrust's Hospital Liability business, but still has exposure to Italian medical malpractice liabilities under the European Hospital Liability Quota Share.

The table below shows the effect of both of these quota share arrangements with AmTrust on the Company's Condensed Consolidated Income Statements for the three and nine months ended September 30, 2025, respectively:

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

The table below shows the effect of both of these quota share arrangements with AmTrust on the Company's Condensed Consolidated Income Statements for the three months ended March 31, 2026:

For the Three Months Ended March 31, 2026

Gross and net premiums written $ 1,879

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3 to the AmTrust Quota Share, AmTrust has agreed to eliminate the minimum excess funding requirement of $ 54,000 in the AmTrust Quota Share between All and Maiden.

Collateral on the AmTrust Quota Share will now solely be tied to a contractually agreed percentage and is expected to be reduced from a current level of 107.5 % to 105 % during the third quarter of 2025 when its obligations are expected to decline below the $ 500,000 threshold.

Collateral on the AmTrust Quota Share is tied to a contractually agreed percentage and was reduced from a level of 107.5 % to 105 % during the third quarter of 2025 when its obligations declined below the $ 500,000 threshold.

The terms of Post Termination Endorsement No.

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Pursuant to the terms of Post Termination Endorsement No.

1 to the European Hospital Liability Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AEL and AIU DAC by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to the greater of 120 % of the Exposure (as defined therein) and the amount of security required to offset the increase in the Solvency Capital Requirement (“SCR”) that results from the hanges in the SCR which arise out of Maiden Reinsurance's re-domestication as compared to the SCR calculation if Maiden Reinsurance had remained domesticated in a Solvency II equivalent jurisdiction with a solvency ratio above 100 % and provided collateral equivalent to 100 % of the Exposure.

1 to the European Hospital Liability Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AEL and AIU DAC by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to the greater of 120 % of the Exposure (as defined therein) and the amount of security required to offset the increase in the Solvency Capital Requirement (“SCR”) that results from the changes in the SCR which arise out of Maiden Reinsurance's re-domestication as compared to the SCR calculation if Maiden Reinsurance had remained domesticated in a Solvency II equivalent jurisdiction with a solvency ratio above 100 % and provided collateral equivalent to 100 % of the Exposure.

Pursuant to the terms of Post Termination Endorsement No.

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On December 31, 2025, Maiden Reinsurance and AmTrust entered into a Loan Agreement (the “Premium Repayment Loan Agreement”) by which Maiden Reinsurance will repay AII the principal amount of $ 24,259 representing settlement of a dispute over cessions of uncollectible ceded premiums written made by AII to Maiden Reinsurance, payable by Maiden Reinsurance in quarterly installments through the maturity date of December 31, 2032.

This settlement is netted against the loan receivable from related party on the Consolidated Balance Sheets at September 30, 2025.

This settlement is netted against the loan receivable from related party on the Condensed Consolidated Balance Sheets at March 31, 2026.

AmTrust may offset any amount payable against any amount due and unpaid by Maiden Reinsurance, under any agreement between AmTrust or its affiliate and Maiden Reinsurance or its affiliate, including without limitation, the European Hospital Liability Quota Share, dated April 1, 2011, as amended.

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• The outstanding balances under the AR Loan Agreement and Premium Repayment Loan Agreement are presented on a net basis.

The outstanding net loan receivable was $ 101,689 at September 30, 2025.

There was no allowance for expected credit losses recognized on the loan at September 30, 2025.

Net interest income on the net loan receivable was $ 1,604 and $ 2,263 for the three and nine months ended September 30, 2025, respectively, with an effective yield of 6.1 % and 6.2 %, respectively.

The outstanding net loan receivable was $ 78,606 at March 31, 2026 (December 31, 2025:

There was no allowance for expected credit losses recognized on the loan receivable at March 31, 2026 and December 31, 2025.

Net interest income on the net loan receivable was $ 1,137 for the three months ended March 31, 2026, with an effective yield of 5.5 %.

• The Company separately presents accrued interest on its net loan receivable on the Condensed Consolidated Balance Sheet under accrued investment income.

The accrued interest receivable on the net loan receivable was $ 1,137 at March 31, 2026 (December 31, 2025:

The Company elected the practical expedient under Topic 326 to exclude accrued interest for purposes of identifying and measuring any impairments under the allowance for expected credit losses standard.

b) European Hospital Liability Quota Share

Collateral has been provided to both AEL and AIU DAC under the European Hospital Liability Quota Share.

For AEL, the amount of the collateral held in reinsurance trust accounts at September 30, 2025 was $ 137,806 and the accrued interest was $ 663 .

Asset Management Agreement

Effective July 1, 2007, Maiden entered into an asset management agreement with AII Insurance Management Limited ("AIIM"), a wholly owned subsidiary of AmTrust, pursuant to which AIIM agreed to provide investment management services to the Company.

Effective January 1, 2018, AIIM provides investment management services for a quarterly fee of 0.02125 % of the average value of the account.

The agreement may be terminated upon 30 days written notice by either party.

The Company recorded $ 46 and $ 48 of investment management fees for the three and nine months ended September 30, 2025, respectively, under this agreement.

For AEL, the amount of the collateral held in reinsurance trust accounts at March 31, 2026 was $ 95,606 (December 31, 2025:

$ 97,876 ) and the accrued interest was $ 572 (December 31, 2025:

KESTREL GROUP LTD

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Related Party Transactions (continued)

Asset Management Agreement

Effective January 1, 2018, AIIM provides investment management services for a quarterly fee of 0.02125 % of the average value of the account.

The agreement may be terminated upon 30 days written notice by either party.

The Company recorded $ 36 of investment management fees for the three months ended March 31, 2026 under this agreement.

On September 9, 2020, Maiden Reinsurance, AmTrust and AIIM entered into a novation agreement, effective July 1, 2020, which provided for the novation of the asset management agreement, dated January 1, 2018 between Maiden Reinsurance and AIIM, and the release by Maiden Reinsurance of AIIM's obligations under the asset management agreement.

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Renewal Rights Transaction - IIS Business

On May 3, 2024, Maiden LF and Maiden GF entered into a Renewal Rights and Asset Purchase Agreement with AmTrust Nordic AB, a Swedish unit of AmTrust, which is expected to cover certain programs of Maiden LF and Maiden GF's primary business written in Sweden, Norway and other Nordic countries.

On June 20, 2024, Maiden LF and Maiden GF entered into a Renewal Rights and Asset Purchase Agreement with AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC"), both wholly owned subsidiaries of AmTrust, which is expected to cover certain programs of Maiden LF and Maiden GF's primary business written in the United Kingdom and Ireland.

Under these agreements, those AmTrust subsidiaries in collaboration with existing Maiden LF and Maiden GF distribution partners, will offer renewals to select policyholders in exchange for a fee at standard market terms for business successfully renewed.

All programs written by Maiden LF and GF, including those covered by the agreements as described above, are in the process of being cancelled in accordance with either their contractual terms or as applicable, the requirements of these agreements.

As at September 30, 2025, Maiden LF and Maiden GF had substantially completed all the main contractual obligations as per the AmTrust Renewal Rights Agreements.

On May 3, 2024, Maiden LF and Maiden GF entered into a Renewal Rights and Asset Purchase Agreement with AmTrust Nordic AB, a Swedish unit of AmTrust, to cover certain programs of Maiden LF and Maiden GF's primary business written in Sweden, Norway and other Nordic countries.

On June 20, 2024, Maiden LF and Maiden GF entered into a Renewal Rights and Asset Purchase Agreement with AEL and AIU DAC, both wholly owned subsidiaries of AmTrust, to cover certain programs of Maiden LF and Maiden GF's primary business written in the United Kingdom and Ireland.

Under these agreements, the AmTrust subsidiaries in collaboration with existing Maiden LF and Maiden GF distribution partners, offered renewals to select policyholders in exchange for a fee at standard market terms for business successfully renewed.

All programs written by Maiden LF and GF, including those covered by the agreements as described above, were cancelled in accordance with either their contractual terms or as applicable, the requirements of these agreements.

At March 31, 2026, Maiden LF and Maiden GF had substantially completed all the main contractual obligations as per the respective agreements.

KESTREL GROUP LTD

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Commitments, Contingencies and Guarantees

The following describes the Company's current commitments, contingencies and concentrations as of September 30, 2025:

There are no material changes from the commitments, contingencies and concentrations previously disclosed in the Company’s Form 10-K for the year ended December 31, 2025.

The following describes the Company's current commitments, contingencies and concentrations as of March 31, 2026:

a) Concentrations of Credit Risk

At September 30, 2025, the Company’s assets where significant concentrations of credit risk may exist include total investments, cash and cash equivalents, net loan receivable from related party, reinsurance balances receivable, reinsurance recoverable on paid and unpaid losses and funds withheld receivable.

At March 31, 2026, the Company’s assets where significant concentrations of credit risk may exist include total investments, cash and cash equivalents, net loan receivable from related party, reinsurance balances receivable, reinsurance recoverable on paid and unpaid losses and funds withheld receivable.

Please refer to " Note 8.

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Segment Information , the Company's Program Services segment consists of a cohesive suite of fronting services that are integrated and interdependent.

For the three and nine months ended September 30, 2025 and 2024, this revenue stream is highly concentrated due to capacity distribution agreements with an individual customer.

For the three months ended March 31, 2026 and 2025, this revenue stream is highly concentrated due to capacity distribution agreements with an individual customer.

For the three months ended March 31, 2026, fee revenue from this client accounted for $ 2,418 or 77.5 % of total fee revenue earned (2025:

$ 352 or 43.6 %).

The Company evaluates the financial condition of its reinsurers, program managers and MGAs and monitors its concentration of credit risk on an ongoing basis.

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AmTrust has a financial strength/credit rating of A- (Excellent) from A.M.

Best at September 30, 2025.

Best at March 31, 2026.

To mitigate credit risk, the Company generally has a contractual right of offset thereby allowing claims to be settled net of any premiums or loan receivable.

The Company believes these balances as at September 30, 2025 will be fully collectible.

The Company believes these balances as at March 31, 2026 will be fully collectible.

b) Investment Commitments and Related Financial Guarantees

The Company's total unfunded commitments on other investments and equity method investments was $ 33,448 at September 30, 2025.

The table below shows the total unfunded commitments by type of investment as at September 30, 2025:

September 30, 2025

Fair Value % of Total

The total unfunded commitments on other investments and equity method investments was $ 23,061 at March 31, 2026 (December 31, 2025:

The table below shows total unfunded commitments by type of investment as at March 31, 2026 and December 31, 2025, respectively:

March 31, 2026 December 31, 2025

Fair Value % of Total Fair Value % of Total

Total unfunded commitments on other investments $ 9,859 42.8 % $ 11,164 44.9 %

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

As discussed above, at September 30, 2025, guarantees of $ 69,990 were provided to lenders by the Company on behalf of real estate joint ventures, however, the likelihood of the Company incurring any losses pertaining to project level financing guarantees was determined to be remote.

As discussed above, at March 31, 2026, guarantees of $ 72,175 (December 31, 2025:

$ 73,170 ) were provided to lenders by the Company on behalf of real estate joint ventures, however, the likelihood of the Company incurring any losses pertaining to project level financing guarantees was determined to be remote.

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

Other Contingent Commitments

As a result of the Combination Agreement, Kestrel Equityholders are entitled to receive in contingent consideration up to the lesser of (x) an aggregate number of Kestrel Group common shares equal to $ 45.0 million divided by certain volume weighted average prices of such shares, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to closing and any extensions of such businesses or related or ancillary businesses existing thereafter, subject to other terms and conditions as set forth in the combination agreement and (y) 2.75 million common shares of Kestrel Group.

On September 30, 2025, the fair value of this contingent consideration was $ 0 .

The fair value of the earn out liability decreased by $ 2,679 and $ 0 for the three and nine months ended September 30, 2025, respectively, which was recorded in the condensed consolidated statements of net income during the reporting period.

As a result of the Combination Agreement, Kestrel Equityholders are entitled to receive in contingent consideration up to the lesser of (x) an aggregate number of Kestrel Group common shares equal to $ 45,000 divided by certain volume weighted average prices of such shares, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to closing and any extensions of such businesses or related or ancillary businesses existing thereafter, subject to other terms and conditions as set forth in the combination agreement and (y) 2,750,000 common shares of Kestrel Group.

KESTREL GROUP LTD

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Commitments, Contingencies and Guarantees (continued)

At September 30, 2025, the Company holds a contingent receivable in the insurance distribution industry.

Pursuant to the terms of the investment agreement, the Company will receive a series of distributions.

The Company currently estimates that the net present value of these potential distributions is $ 14,347 which has been classified as receivable and reported in Other Assets on the condensed consolidated balance sheets at September 30, 2025.

Under ASC 805, the earn out consideration for this receivable is adjusted to fair value at each reporting period with any changes in fair value reported immediately in net income.

On March 31, 2026 and December 31, 2025, the fair value of this contingent consideration was $ 0 as business subject to the earn out consideration computation was re-evaluated based upon current estimates of the Kestrel business for the Performance Period, including performance of the Program Services business through March 31, 2026.

At March 31, 2026, the Company holds a contingent receivable in the insurance distribution industry.

Pursuant to the terms of the asset purchase agreement, the Company will receive a series of distributions.

The Company currently estimates that the net present value of these potential distributions is $ 10,159 which is classified as receivable and reported in Other Assets on the Condensed Consolidated Balance Sheets at March 31, 2026 (December 31, 2025:

Under ASC 805, the earn out consideration for this receivable is adjusted to fair value at each reporting period with gains of $ 203 for the three months ended March 31, 2026 reported immediately in net loss through foreign exchange and other gains.

c) Operating Lease Commitments

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For operating leases that have a lease term of more than twelve months, and whose operating lease payments are above a certain threshold, the Company recognizes a lease liability and a right-of-use asset in the Condensed Consolidated Balance Sheets at the present value of the remaining lease payments until expiration.

Kestrel’s principal executive offices are presently located at 8333 Douglas Avenue, Suite 1360 in Dallas, Texas.

The Dallas office is leased through Ledbetter Interests, Ltd., an entity affiliated with Terry Ledbetter, who is the Company's Executive Chairman, pursuant to a Lease Agreement dated October 23, 2019.

Kestrel Service Corporation, Kestrel’s wholly owned subsidiary, reimburses Terry Ledbetter via an expense reimbursement provision under his employment agreement for the use of this leased office space.

This Lease Agreement expires January 31, 2026 and will not be renewed.

This lease does not meet the minimum threshold for lease liability recognition and therefore its rent payments are expensed as incurred.

Kestrel also leases office space for the corporate office in Austin, Texas, through Kestrel Service Corporation, that expires in 2027.

The Austin office will be the principal executive office effective February 1, 2026.

The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Kestrel leases office space for the corporate office in Austin, Texas, through Kestrel Service Corporation, that expires in December 2027.

The Austin office is the Company's principal executive office since February 1, 2026.

Lease payments have an escalating fee schedule, which range from a 3 % to 4 % increase each year.

Termination of the lease is generally prohibited unless there is a violation under the lease agreement.

Maiden also leases office space in a building in New York City that commenced in April 2024, which created a significant right-of-use asset and lease liability upon completion of leasehold improvements for the ten-year operating lease.

This lease comprises most of the lease liabilty and right-of-use asset recognized on the condensed consolidated balance sheet at September 30, 2025.

The Company also leases office space in a building in New York City which Maiden has leased since April 2024;

this created a right-of-use asset and lease liability upon completion of leasehold improvements for the ten-year operating lease.

This lease comprises a majority of the lease liabilty and right-of-use asset recognized on the Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025.

As the lease contracts generally do not provide an implicit discount rate, the Company used the weighted-average discount rate of 7.2 %, representing its secured incremental borrowing rate, in calculating the present value of the lease liability.

At September 30, 2025, the Company's future lease obligations of $ 2,108 (December 31, 2024 - $ 244 ) were calculated based on the present value of future annual rental commitments excluding taxes, insurance and other operating costs for non-cancellable operating leases discounted using its secured incremental borrowing rate.

At March 31, 2026, the Company's future lease obligations of $ 2,000 (December 31, 2025:

$ 2,054 ) were calculated based on the present value of future annual rental commitments excluding taxes, insurance and other operating costs for non-cancellable operating leases discounted using its secured incremental borrowing rate.

This amount has been recognized on the Condensed Consolidated Balance Sheet as a lease liability within accrued expenses and other liabilities with the right-of-use asset presented as part of other assets .

At September 30, 2025, the Company's right-of-use lease asset was $ 2,085 (December 31, 2024 - $ 223 ).

The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company's weighted-average remaining lease term is approximately 8.4 years at September 30, 2025.

Under Topic 842, Leases , the Company continues to recognize the related leasing expense on a straight-line basis over the lease term on the Condensed Consolidated Statements of Income.

The Company's total office lease expense was $ 156 and $ 298 for three and nine months ended September 30, 2025 (2024:

$ 48 and $ 142 ) recognized within general and administrative expenses consistent with the prior accounting treatment under Topic 840.

At September 30, 2025, the scheduled maturity of the Company's operating lease liabilities are expected to be as follows:

September 30, 2025

At March 31, 2026, the Company's right-of-use lease asset was $ 1,972 (December 31, 2025:

The Company's weighted-average remaining lease term is approximately 8.0 years at March 31, 2026.

Under Topic 842, Leases , the Company continues to recognize the related leasing expense on a straight-line basis over the lease term on the Condensed Consolidated Statements of Operations.

The Company's total office lease expense was $ 111 for three months ended March 31, 2026 (2025:

$ 49 ) recognized within general and administrative expenses consistent with the prior accounting treatment under Topic 840.

At March 31, 2026, the scheduled maturity of the Company's operating lease liabilities are expected to be as follows:

March 31, 2026

Thereafter 1,144

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Total discounted operating lease liabilities $ 2,000

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Commitments, Contingencies and Guarantees (continued)

d) Legal Proceedings

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Based on the Company's opinion, the eventual outcome of these legal proceedings is not expected to have a material adverse effect on its financial condition or results of operations.

A putative class action complaint was filed against Maiden Holdings, Arturo M.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Commitments, Contingencies and Guarantees (continued)

A putative class action complaint was filed against Maiden Holdings, Ltd., Arturo M.

Raschbaum, Karen L.

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The Amended Complaint asserts violations of Section 10(b) of the Exchange Act and Rule 10b-5 (and Section 20(a) for control person liability) arising in large part from allegations that Maiden failed to take adequate loss reserves in connection with reinsurance provided to AmTrust.

Plaintiffs further claim that certain of Maiden Holdings’ representations concerning its business, underwriting and financial statements were rendered false by the allegedly inadequate loss reserves, that these misrepresentations inflated the price of Maiden Holdings' common stock, and that when the truth about the misrepresentations was revealed, the Company’s stock price fell, causing Plaintiffs to incur losses.

Plaintiffs further claim that certain of Maiden's representations concerning its business, underwriting and financial statements were rendered false by the allegedly inadequate loss reserves, that these misrepresentations inflated the price of Maiden's common stock, and that when the truth about the misrepresentations was revealed, Maiden's stock price fell, causing plaintiffs to incur losses.

On September 11, 2020, a motion to dismiss was filed on behalf of all defendants.

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On February 7, 2023, the District Court denied plaintiffs’ motion for reconsideration of the District Court’s decision denying plaintiffs’ objection to the Magistrate Judge’s December 2021 ruling on discovery.

On May 26, 2023, the Company filed a Renewed Motion to Dismiss the Second Amended Complaint or, in the Alternative, for Summary Judgment.

On May 26, 2023, Maiden filed a Renewed Motion to Dismiss the Second Amended Complaint or, in the Alternative, for Summary Judgment.

On December 19, 2023, the U.S.

District Court for the District of New Jersey granted summary judgment on plaintiffs’ claim for securities fraud under Section 10(b) of the Securities Exchange Act to Maiden Holdings, Ltd.

and individual defendants Arturo Raschbaum, Karen Schmitt, and John Marshaleck.

The Court held that the factual record failed to support, as a matter of law, plaintiffs’ allegations that the defendants had made false statements regarding the Company’s loss reserves.

District Court for the District of New Jersey granted summary judgment on plaintiffs’ claim for securities fraud under Section 10(b) of the Securities Exchange Act to Maiden and individual defendants Arturo Raschbaum, Karen Schmitt, and John Marshaleck.

The Court held that the factual record failed to support, as a matter of law, plaintiffs’ allegations that the defendants had made false statements regarding Maiden's loss reserves.

The Court also dismissed plaintiffs’ claims that the individual defendants were liable as control persons under Section 20(a) of the Securities Exchange Act for any such alleged false statements.

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On August 20, 2025, the United States Court of Appeals for the Third Circuit vacated the U.S.

District Court for the District of New Jersey’s order granting summary judgment to Maiden and individual defendants Arturo Raschbaum, Karen Schmitt, and John Marshalek .

District Court for the District of New Jersey’s order granting summary judgment to Maiden and individual defendants Arturo Raschbaum, Karen Schmitt, and John Marshaleck .

The Third Circuit disagreed with the District Court’s holding that the current case record required judgment for Maiden, as a matter of law, on the issue of whether Maiden’s loss reserves were misleading.

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The Third Circuit therefore vacated the opinion of the District Court and remanded the case to the District Court with instructions to permit plaintiffs to pursue discovery with respect to their claims for securities fraud under Section 10(b) of the Securities Exchange Act.

The Third Circuit denied defendants’ petition for rehearing on September 16, 2025, but defendants may still seek to appeal the decision.

The Third Circuit denied defendants' petition for rehearing on September 16, 2025.

Discovery is now proceeding in the action.

Maiden believes it has procedural and substantive defenses to the asserted claims, and it intends to oppose and defend against these claims .

On December 26, 2024, WUSO Holding Corporation and 683 Capital Partners filed a lawsuit against Maiden Holdings North America, Ltd.

and Maiden Holdings in the Supreme Court of the State of New York, County of New York, captioned WUSO Holding Corporation and 683 Capital Partners, LP v.

On December 26, 2024, WUSO Holding Corporation and 683 Capital Partners filed a lawsuit against Maiden NA and Maiden in the Supreme Court of the State of New York, County of New York, captioned WUSO Holding Corporation and 683 Capital Partners, LP v.

Maiden Holdings North America, Ltd.

and Maiden Holdings, Ltd., Index No.

The complaint alleges that Maiden’s sale of Maiden Reinsurance North America, Inc., which closed approximately six years ago from the date of the complaint, breached a sole provision of Maiden’s indenture governing its 2013 Senior Notes.

The complaint alleges that Maiden’s sale of Maiden Reinsurance North America, Inc., which closed approximately six years before the date of the complaint, breached a sole provision of Maiden’s indenture governing its 2013 Senior Notes.

Plaintiffs allege that principal and interest payable under the 2013 Senior Notes are due currently, rather than upon the stated maturity date of the 2013 Senior Notes.

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On August 6, 2025, plaintiffs filed a notice of appeal, triggering a six month deadline to perfect their appeal in the First Judicial Department of the New York Appellate Division.

To the extent that plaintiffs do perfect and pursue their appeal of this decision, Maiden will oppose any such action.

Plaintiffs subsequently requested extensions to perfect their appeal, which the court granted, setting a deadline of April 8, 2026.

Plaintiffs filed their brief on the April 8, 2026 deadline and Maiden intends to file a brief in opposition.

In addition to filing the notice of appeal, on August 12, 2025, plaintiffs filed a separate complaint against Maiden in the Supreme Court of the State of New York, County of New York.

In the new complaint, plaintiffs allege that they have standing and authorization to bring suit, contending that they satisfied the no-action clause in the indenture because, on June 10, 2025, they requested, on behalf of holders of at least 25 % of the outstanding 2013 Senior Notes, that the indenture trustee commence a related action, accompanied by an offer to indemnify, and the indenture trustee did not institute such proceedings within 60 days of the request.

On October 6, 2025, a motion to dismiss was filed on behalf of Maiden.

Plaintiffs’ opposition is due November 17, 2025, and Maiden will file its reply on December 16, 2025.

We cannot predict when the Court will issue a decision on the motion.

On October 6, 2025, Maiden filed a motion to dismiss, and the Court held oral argument on the fully-briefed motion.

On April 20, 2026, the Court issued an order denying the motion to dismiss and directing the defendants to submit an answer to the complaint by May 18, 2026.

Maiden believes it has substantial procedural and substantive defenses to the asserted claims, and it intends to vigorously defend against these claims.

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It is currently uncertain as to the effect of such litigation on our business, operating results and financial condition.

Arbitration Proceedings

On November 26, 2025, the Company reported that a subsidiary of GLS, pursuant to the terms of the underlying reinsurance contract, demanded and participated in an arbitration with one of its ceding companies.

Under the subject reinsurance agreement, GLS provides the ceding company in question with (i) reinsurance premium protection (“RPP”) coverage with aggregate limits of approximately $ 25,000 , and (ii) adverse development coverage (“ADC”) with remaining aggregate limits of $ 25,500 .

KESTREL GROUP LTD

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dollars, except share and per share data)

Commitments, Contingencies and Guarantees (continued)

GLS is asserting that the cedant has committed multiple breaches of the reinsurance agreement, along with other material misrepresentations.

Based on these assertions, GLS is seeking full rescission of the reinsurance agreement and related relief, including the ability to recoup losses previously paid, and has denied payment of certain invoices for contractual performance pending the outcome of this arbitration.

GLS previously paid net losses of $ 10,805 related to the RPP coverage.

GLS has not paid any losses subject to the ADC coverage of the reinsurance agreement in question.

As of March 31, 2026, GLS has liabilities of $ 3,984 subject to the RPP coverage and $ 7,500 in reserves for the ADC coverage.

GLS received premiums totaling $ 9,734 and $ 9,800 for the RPP and ADC coverages, respectively.

GLS is vigorously pursuing its claims for rescission and recovery of amounts previously paid.

The matter is currently proceeding in arbitration, and an arbitration hearing has now been completed with a decision likely in the second quarter of 2026.

The cedant disputes GLS assertions, denying that it breached the agreement, and seeks to continue the contract in full force.

The outcome of the arbitration is inherently uncertain.

If GLS is successful, it may be entitled to recover up to $ 10,000 in losses previously paid and may be relieved of its remaining obligations under the reinsurance agreement in addition to other requested relief.

If GLS is unsuccessful, GLS may be required to continue performing under the contract, including potentially paying additional amounts under the RPP coverage, subject to a cap, and being liable for additional amounts under the ADC coverage.

The Company's subsidiary Maiden Reinsurance Ltd.

has provided a parental guarantee to guarantee the performance and obligations of GLS as finally determined in connection with the arbitration.

At this time, the Company cannot reasonably estimate the amount or range of any gain or loss that may result from this matter.

Accordingly, no accrual or gain contingency has been recorded in the Company’s reserves and other liabilities.

An adverse outcome could be material to the Company’s results of operations or cash flows for a particular period.

KESTREL GROUP LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Earnings per Common Share

The following shows a summary of the elements used in calculating basic and diluted earnings per common share for the three and nine months ended September 30, 2025 and 2024, respectively:

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

2025 2024 2025 2024

Net (loss) income from continuing operations

The following shows a summary of the elements used in calculating basic and diluted earnings per common share for the three months ended March 31, 2026 and 2025, respectively:

For the Three Months Ended March 31,

Net loss from continuing operations

$ ( 6,953 ) $ ( 394 )

Amount allocated to participating common shareholders (1)

— — ( 315 ) —

Net (loss) income available to Kestrel common shareholders before discontinued operations

Net loss available to Kestrel common shareholders before discontinued operations

( 6,953 ) ( 394 )

Loss from discontinued operations, net of income tax ( 478 ) —

Amount of loss from discontinued operations allocated to participating common shareholders (1)

Net (loss) income attributable to Kestrel common shareholders $ ( 5,053 ) $ ( 429 ) $ 64,171 $ ( 1,353 )

Net loss attributable to Kestrel common shareholders $ ( 7,431 ) $ ( 394 )

Weighted average number of common shares – basic and diluted (1)

7,752,415 2,749,996

Basic and diluted (loss) earnings from continuing operations per share attributable to Kestrel shareholders

Basic and diluted loss from continuing operations per share attributable to Kestrel shareholders

$ ( 0.90 ) $ ( 0.14 )

Basic and diluted loss from discontinued operations per share attributable to Kestrel shareholders

( 0.12 ) — ( 0.29 ) —

Basic and diluted (loss) earnings per share attributable to Kestrel shareholders:

Basic and diluted loss per share attributable to Kestrel shareholders:

$ ( 0.96 ) $ ( 0.14 )

(1) There were no potentially dilutive securities for the three and nine months ended September 30, 2025 and 2024.

The Company recognized income tax expense of $ 7 and $ 102 for the three and nine months ended September 30, 2025 compared to $ 0 for the same respective periods in 2024 .

(1) At March 31, 2025, there were 655,643 unvested restricted shares and 4,275 stock options that may be potentially dilutive in periods where income is reported.

These securities were not included in the loss per share calculations for the three months ended March 31, 2026.

(2) For the three months ended March 31, 2025, the number of common shares outstanding decreased as a result of the reverse stock split, therefore the computations of basic and diluted EPS was adjusted retroactively for all periods presented to reflect that change in capital structure.

As discussed in Note 1.

Organization , pursuant to the terms of the Combination, at the closing of the transaction on May 27, 2025, each issued and outstanding common share of Maiden, par value $ 0.01 per share, was automatically canceled and converted into the right to receive one-twentieth ( 0.05 ) of a common share in Kestrel Group.

The equityholders of Kestrel LLC at the closing date received 2,749,996 common shares of the Kestrel Group.

The Company recognized income tax expense of $ 6 for the three months ended March 31, 2026 compared to income tax expense of $ 92 for the same period in 2025.

The effective tax rate on the Company's net loss differs from the statutory rate of zero percent under Bermuda law due to tax on foreign operations, primarily the U.S.

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and International net deferred tax assets as more evidence is needed regarding the utilization of these losses.

At September 30, 2025, the Company has available net operating loss carry-forwards of $ 446,633 (December 31, 2024:

At March 31, 2026, the Company has available net operating loss ("NOL") carry-forwards of $ 476,297 (December 31, 2025:

$ 473,094 ) for income tax purposes.

Approximately $ 387,594 (December 31, 2025:

$ 0 ) of net operating loss ("NOL") carryforwards expire in various years beginning in 2029.

As of September 30, 2025, approximately $ 81,331 or 18.2 % of the Company's NOL carryforwards have no expiry date under the relevant U.S.

tax law (December 31, 2024 - $ 358 or 100.0 %).

$ 388,724 ) of NOL carryforwards expire in various years beginning in 2029.

As of March 31, 2026, approximately $ 88,703 or 18.6 % of the Company's NOL carryforwards have no expiry date under the relevant U.S.

tax law (December 31, 2025:

$ 84,370 or 17.8 %).

KESTREL GROUP LTD

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Assets Held for Sale

Sale of Swedish Subsidiaries and Related IIS Operations

Pending Sale of Maiden GF

As discussed in Note 1.

Basis of Presentation" , on November 29, 2024, Maiden entered into an agreement to sell its Swedish subsidiaries, Maiden LF and Maiden GF to a group of international insurance and reinsurance companies headquartered in the United Kingdom.

Maiden GF and Maiden LF were the principal operating subsidiaries of the Company’s International Insurance Services (“IIS”) platform.

The transaction was subject to customary regulatory approvals.

In June 2025, the SFSA declined to approve the sale of Maiden GF and Maiden LF.

Basis of Presentation , on November 29, 2024, Maiden entered into an agreement to sell its Swedish subsidiary Maiden GF to a group of international insurance and reinsurance companies headquartered in the United Kingdom.

Maiden GF was one of the principal operating subsidiaries of the Company’s IIS platform.

Maiden has entered into an amended sale agreement for the acquisition of only Maiden GF at the previously agreed valuation.

The proposed acquirer believes it will satisfactorily address deficiencies identified by the SFSA in its June 2025 decision.

This amended transaction remains subject to customary regulatory approval.

The sale will continue to be an all-cash transaction and pursuant to the proposed terms of the agreement, certain existing staff of Maiden GF will transition to the proposed acquirer.

In the wake of the decision of the SFSA, management continues to evaluate strategic alternatives for that business, including a possible sale to a different third-party or a possible run-off and liquidation of the entity.

Maiden LF and Maiden GF are not writing any new business and their non-insurance related assets and liabilities are represented as held-for-sale in our condensed consolidated financial statements.

Pursuant to the terms of the Proposed Swedish Subsidiaries Sale agreement, it is presently intended that any remaining historic business upon closing will be fully retroceded to Maiden Reinsurance thus there will be continuing involvement regarding the historical insurance operations.

Pursuant to the terms of the Proposed Swedish Subsidiaries Sale, this transaction met the relevant held for sale criteria at September 30, 2025 and accordingly, any non-insurance related assets and liabilities related to the sale consideration are classified as held-for-sale in the Condensed Consolidated Balance Sheets as at September 30, 2025.

The held-for-sale assets and liabilities and discontinued operations in the tables further below do not include any insurance related balances.

The sale will be an all-cash transaction and pursuant to the proposed terms of the agreement, certain existing staff of Maiden GF will transition to the proposed acquirer.

Maiden GF is not writing any new business and its non-insurance related assets and liabilities are represented as held-for-sale in our Condensed Consolidated Balance Sheets.

Pursuant to the terms of the proposed sale agreement, it is presently intended that any remaining historic business upon closing will be fully retroceded to Maiden Reinsurance thus there will be continuing involvement regarding the historical insurance operations.

This transaction therefore met the relevant held for sale criteria at March 31, 2026 and accordingly, any non-insurance related assets and liabilities related to the sale consideration are classified as held-for-sale in the Condensed Consolidated Balance Sheets as at March 31, 2026 and December 31, 2025 The held-for-sale assets and liabilities and discontinued operations in the tables further below do not include any insurance related balances for Maiden GF.

Under the accounting guidance in ASC Topic 205, a business that, upon acquisition, meets the held-for-sale criteria is not analyzed under the strategic shift test.

Instead, it is reported in discontinued operations automatically based on its held-for-sale classification.

The strategic shift test does not apply because the acquired businesses were not previously part of Kestrel Group who represents the acquiring entity and therefore would be classified as held-for-sale on the acquisition date.

As the condensed consolidated statement of operations of Maiden included operations of Maiden GF and Maiden LF for the periods presented, adjustments to exclude the discontinued non-insurance activities of Maiden GF and Maiden LF were made for the three and nine months ended September 30, 2025.

All insurance related balances are excluded from the held-for-sale assets and liabilities which amounted to net insurance liabilities of $ 4,692 as at September 30, 2025.

The Company estimated the fair value of the net assets held-for-sale to be based on the estimated selling price less costs to sell and these assets are classified as Level 2 within the fair value hierarchy as of September 30, 2025.

The assets and liabilities classified as held for sale on the Company's Condensed Consolidated Balance Sheets as at September 30, 2025 include the following:

September 30,

The strategic shift test did not apply because the acquired businesses were not previously part of Kestrel Group who represents the acquiring entity and therefore Maiden GF operations are classified as held-for-sale on the acquisition date.

As the condensed consolidated statement of operations included the operations of Maiden GF, adjustments to exclude the discontinued non-insurance activities of Maiden GF were made for the three months ended March 31, 2026.

All underwriting related balances are excluded from held-for-sale assets and liabilities which consist of net insurance liabilities of $ 1,471 as at March 31, 2026 (December 31, 2025:

The assets and liabilities classified as held for sale on the Company's Condensed Consolidated Balance Sheets as at March 31, 2026 and December 31, 2025 include the following:

2026 December 31,

Fixed maturities, available-for-sale, at fair value $ 4,537 $ 4,630

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Total liabilities held for sale $ 401 $ 662

The following table summarizes the major classes of items constituting the results from discontinued operations for the three and nine months ended September 30, 2025 presented in the Condensed Consolidated Statements of Income:

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

The following table summarizes the major classes of items constituting the net loss of Maiden GF from discontinued operations for the three months ended March 31, 2026 presented in the Condensed Consolidated Statements of Operations:

For the Three Months Ended March 31, 2026

Net investment income $ 31

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Net loss from discontinued operations

$ ( 965 ) $ ( 1,460 )

As discussed in Note 1.

Basis of Presentation , in the wake of the June 2025 decision of the SFSA, management has further evaluated strategic alternatives for Maiden LF and on April 7, 2026, the Company decided to proceed with the managed run-off of Maiden LF.

The held-for-sale assets and liabilities of Maiden LF at December 31, 2025 were reclassified as held and used in light of the recent decision to place Maiden LF into run off operations.

The net loss from discontinued operations for the three months ended March 31, 2026 would have been $ 437 had Maiden LF remained held-for-sale.

KESTREL GROUP LTD

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On May 27, 2025, Kestrel LLC completed the business combination with Maiden, pursuant to the terms of the Combination Agreement.

The equityholders of Kestrel LLC at the closing date received an aggregate of $ 40.0 million in upfront cash and 2,749,996 common shares of the combined company.

In addition, the former equityholders of Kestrel LLC remain entitled to receive contingent consideration up to the lesser of (x) $ 45.0 million payable in common shares of Kestrel Group upon the achievement of certain financial milestones, and (y) 2.75 million common shares of Kestrel Group.

The equityholders of Kestrel LLC at the closing date received an aggregate of $ 40,000 in upfront cash and 2,749,996 common shares of the combined company.

After the closing of the Combination Agreement, the group was rebranded as Kestrel Group and is the successor company to Maiden.

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Purchase Price and Purchase Price Allocation

Management performed an estimation of fair values of Maiden and its subsidiaries' assets and liabilities as of May 27, 2025.

The estimated fair values of the assets and liabilities are based on discussions with Maiden’s management, valuation studies, the transaction due diligence, and information presented in Maiden’s SEC filings.

The final purchase price and estimated purchase price allocation herein may be different than the information previously filed with the SEC, and such differences could be material.

The Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identifies adjustments to the liabilities initially recognized, as well as any additional liabilities that existed at the acquisition date, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized.

The Company will finalize the purchase price allocation during the twelve-month period following the acquisition date.

Management performed a fair valuation of Maiden and its subsidiaries' assets and liabilities as of May 27, 2025.

The fair values of the assets and liabilities acquired were based on discussions with Maiden’s management, valuation studies, the transaction due diligence, and information presented in Maiden’s SEC filings.

The final purchase price and purchase price allocation herein may be different than the information previously filed with the SEC, and such differences could be material.

Purchase Price

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Total consideration effectively transferred $ 115,537

At the closing date on May 27, 2025, the fair value of Maiden's net assets acquired were $ 183,843 which exceeded the consideration effectively transferred of $ 115,537 , resulting in a bargain purchase gain of $ 68,306 as shown in the table on the next page.

This gain was recognized immediately in the Consolidated Statement of Operations for Kestrel in the year ended December 31, 2025.

As discussed in Note 11.

Commitments, Contingencies and Guarantees , Kestrel Equityholders are entitled to receive in contingent consideration up to the lesser of (x) an aggregate number of Kestrel Group common shares equal to $ 45,000 divided by certain volume weighted average prices of such shares, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to closing and any extensions of such businesses or related or ancillary businesses existing thereafter, subject to other terms and conditions as set forth in the combination agreement and (y) 2,750,000 common shares of Kestrel Group.

On March 31, 2026, the fair value of this contingent consideration was $ 0 as business subject to the earn out consideration computation continues to be re-evaluated based upon current estimates of the Kestrel business for the Performance Period, including performance of the Program Services business through March 31, 2026.

KESTREL GROUP LTD

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Business Combination (continued)

Estimated Purchase Price Allocation

The following table summarizes allocation of the estimate of the purchase price to the assets acquired and liabilities assumed as of May 27, 2025:

Final Purchase Price Allocation

The following table summarizes final allocation of the purchase price to the assets acquired and liabilities assumed as of May 27, 2025:

Fixed maturities, available-for-sale, at fair value $ 208,855

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Total consideration effectively transferred $ 115,537

At the closing date on May 27, 2025, the fair value of Maiden's net assets acquired were $ 189,127 which exceeded the consideration effectively transferred of $ 115,537 , resulting in a bargain purchase gain of $ 73,590 as shown in the table above.

This gain was recognized immediately in the condensed consolidated statement of income of Kestrel for the nine months ended September 30, 2025.

As discussed in Note 11.

Commitments, Contingencies and Guarantees , Kestrel Equityholders are entitled to receive in contingent consideration up to the lesser of (x) an aggregate number of Kestrel Group Ltd common shares equal to $ 45.0 million divided by certain volume weighted average prices of such shares, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to closing and any extensions of such businesses or related or ancillary businesses existing thereafter, subject to other terms and conditions as set forth in the combination agreement and (y) 2.75 million common shares of Kestrel Group.

On September 30, 2025, the fair value of this contingent consideration was reduced to $ 0 as the business subject to the earnout computatiom continues to be re-evaluated.

The fair value of the earn out liability decreased by $ 2,679 and $ 0 for the three and nine months ended September 30, 2025, respectively, and recognized in the condensed consolidated statement of income on its own line item.

In connection with the Combination on May 27, 2025, the assets and liabilities of Maiden were recorded at fair value measured as of the acquisition date.

Therefore, the net reserves for losses and LAE were remeasured at fair value, and based on discounted cash flow valuation techniques, a discount to net loss reserves was required which was recorded in intangible assets.

At the closing date of May 27, 2025, the intangible assets acquired also consist of VOBA, as defined in Note 2.

Significant Accounting Policies .

The following table presents the components of intangible assets acquired at May 27, 2025 and September 30, 2025:

May 27, 2025 September 30, 2025

Value of Business Acquired $ 2,207 $ 1,832

Fair value discount on acquired net reserves for losses and LAE 9,657 8,538

Total Intangible Assets at acquisition $ 11,864 $ 10,370

At the closing date of May 27, 2025, the intangible assets acquired also consist of the value of business acquired ("VOBA").

The following table presents the weighted average amortization period and other components of intangible assets acquired at May 27, 2025 and March 31, 2026.

Accumulated amortization for the intangible assets was $ 3,355 at March 31, 2026:

Weighted Average Amortization Period May 27, 2025 Accumulated Amortization at March 31, 2026

March 31, 2026

Value of Business Acquired 5.0 years $ 2,207 $ ( 619 ) $ 1,588

Fair value discount on net reserves acquired 32.0 years 9,657 ( 2,736 ) 6,921

Total Intangible Assets 27.3 years $ 11,864 $ ( 3,355 ) $ 8,509

The aggregate amortization expense for intangible assets was $ 838 for the three months ended March 31, 2026, including $ 799 of amortization for the fair value on net reserves acquired reported in general and administrative expenses and $ 39 of amortization on the fair value of business acquired reported in commission and other acquisition expenses (2025 - $ 0 ).

The following table presents the estimated aggregate amortization expense for the five succeeding fiscal years on intangible assets held at March 31, 2026:

2026 2027 2028 2029 2030

Amortization expense:

VOBA $ 691 $ 476 $ 247 $ 102 $ 72

Amortization expense:

fair value discount on net reserves acquired 1,399 1,413 1,243 1,066 632

Total amortization expense $ 2,090 $ 1,889 $ 1,490 $ 1,168 $ 704

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 1. Financial Statements