Skyward/2025/FY/Annual report: Difference between revisions

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** SkywardBusiness Specialtymix developsis andprincipally delivers tailoredprimary insurance, productsbalanced andbetween servicesE&S forand nicheadmitted markets ^{p. 1}.

* The leadership is supported by an experienced team with broad skills aligned with the company's strategy ^{p. 1}.

* HighThe company's high-quality leadership, underwriting and claims teams, technology DNA, advanced analytics capabilities, diversified book of business, and strong competitive position are believedexpected to positionenable theprofitable company for profitablebusiness growth ^{p. 1}.

* All insurance company subsidiaries are group rated and hold financial strength ratings of ''“A” (Excellent)'' from A.M. Best Company, with a stable outlook ^{p. 1}.

* On September 2, 2025, the company entered into two share purchase agreements (the "Apollo Majority SPAs") with institutional and management shareholders ("Majority Sellers") of Apollo Group Holdings Limited ("Apollo"), referred to as the "Majority Sellers" ^{p. 2}.

* The closing of the transaction ("Closing") was conditioned upon the company acquiring 100% of Apollo's issued share capital (the “Acquisition”) through additional short-form share purchase agreements (the "Apollo Minority SPAs") with the remaining minority shareholders ("Minority Sellers") ^{p. 2}.

* Through Syndicate 1971, Apollo offersprovides a platform liability product for the digital and sharing economy ^{p. 2}.

* Apollo provides capital to syndicates 1969 and 1971 in exchange for a pro-rata share of underwriting income, with third parties providing the remaining capital ^{p. 2}.

* Apollo earns managing agency fees and profit commissions as the managing agent for its own syndicates and for innovative third-party syndicates, known as (platform partners) ^{p. 2}.

* EachThe ofcompany thehas nine distinct underwriting divisions, haseach with dedicated leadership and technical staff experienced in their niches ^{p. 3}.

* This structure aims to effectively serve customer needs, be a value-add partner to distributors, and achieveearn attractive risk-adjusted returns ^{p. 3}.

** TheThis A&Hdivision captivescovers programagriculture, offers tailored medical stop-lossdairy and reinsurancelivestock solutionsrevenue withprotection, dedicatedand underwritingmortgage and claimscredit product oversightlines ^{p. 3}.

** TargetsIt smallsupports insurers, MGAs, and medium-sizedother enterprisesrisk seekingoriginators towith controltailored healthcaretreaty costsprotection byusing self-insuringproportional aand portionexcess of their healthcareloss insurancestructures ^{p. 3}.

** ProductsThe areglobal writtenagriculture onbook ancovers admitted basisweather and distributednatural throughperil-driven retailvolatility and wholesaleother production and brokeryield partnersrisks ^{p. 3}.

** CoversThe agriculture,credit dairyportfolio andprovides livestockprotection revenueagainst protection,losses andfrom mortgagedefault risk for single obligors and multi-buyer trade credit productacross diverse regions and linesindustries ^{p. 3}.

** SupportsThe insurers, MGAs,dairy and otherlivestock riskbusiness originatorsprovides producers with tailored treatyrevenue protection usingagainst proportionalprice andvolatility excessin ofmilk, cattle, and losshog structuresmarkets ^{p. 3}.

** ''DairyCaptives'' andunderwriting livestock business'':division provides revenuegroup protectioncaptive againstsolutions priceby volatilityleveraging inunderwriting milk,and cattle,claims andexpertise from hogother marketsdivisions ^{p. 3}.

*** UtilizesThis derivativedivision instrumentswrites (primarilyproperty, putgeneral optionsliability, andcommercial futures)auto, toexcess mitigateliability, commodityand priceworkers’ riskcompensation relatedlines toof cattle,business hog,on an E&S and milkadmitted pricesbasis ^{p. 3}.

* ''Captives'':Products Providesare groupdistributed captivethrough solutionsretail byagents, leveraging underwritingbrokers, and claimsa expertiseselect fromnetwork otherof divisionswholesalers ^{p. 3}.

** WritesOfferings property,protect generalagainst liability,physical commercialloss autoor damage to assets, excessincluding liabilitybuildings, equipment, and workers’inventory, compensationdue linesto onnatural E&Scatastrophes and admittedother insured basesperils ^{p. 3}.

** IncludesThese generalproducts liability,are excessdistributed liability,through commercialboth auto,wholesale and workers’retail brokers, depending on the compensationproduct ^{p. 3}.

** Distributed''Specialty throughPrograms'' retailunderwriting agents,division brokers,partners andwith aprogram selectadministrators networkfocused ofon wholesalersspecific markets ^{p. 3}.

** ProvidesThis primarybusiness andis excesswritten claims-madeon liabilityan productsadmitted on E&Sbasis and admitteddistributed through retail agents and basesbrokers ^{p. 3}.

** WritesBusiness property,units generaland liability,lines commercialof autobusiness liability,previously excess liability,exited and workers’placed compensationinto linesrun-off onare E&Sreferred andto as admitted"exited basesbusiness" ^{p. 3}.

##** Providing differentiated products, services, and solutions for target markets ^{p. 3}.

##** Attracting and retaining exceptional underwriting and claims talent, aligningincentivized incentivesto align with organizational and corporate goals ^{p. 3}.

##** Amplifying expertise with advanced technology and analytics for superior risk selection, pricing, and claims management ^{p. 3}.

##** Empowering underwriting and claims teams with significant authority for decision-making and expertise application ^{p. 3}.

##** Fostering a culture that promotes nimbleness and responsiveness to market opportunities and dislocation ^{p. 3}.

* UnderwritersClaims are givenhandled freedomquickly toby usespecialized expertiseadjusters andusing judgmentexpertise, inadvanced evaluatingtechnology, and pricing risks, rather than strict rulesanalytics ^{p. 4}.

* Analytics capabilities, includingprovide real-time, detailed information on open claims and benchmarks against closed claims, are used byfor senior leadership and claims teams ^{p. 4}.

* SkyBI provides information and performance metrics across the company in a visualized format, filterable by categories such as distributor, customer segment, line of business, industry, underwriter, and risk feature ^{p. 4}.

* AdvancedUnderwriting technologydecisions combine reliable historical data and newin-depth risk dataevaluation forwith underwritingnew andforms claimsof arerisk adata and competitivepredictive strengthanalytics ^{p. 4}.

* The companydiversity aimsof tothe evolvebook withallows the market,company growingto certainrespond linesto inand favorablecapitalize conditionson market opportunities and limitingdislocations exposureacross ininsurance lessmarket and favorablepricing conditionscycles ^{p. 4}.

* The company maintains an entrepreneurial environment that encourages and rewards a proactive approach to capitalize on market disruption ^{p. 4}.

* High-quality, experiencedThe ''leadership team'' is high-quality, experienced, and aligned with shareholders ^{p. 4}.

* Senior leadership's compensation isincludes structuredmaterial long-term and short-term incentives tied to aligndelivering sustainable, best-in-class withunderwriting shareholdersreturns ^{p. 4}.

* AExecutive materialleadership portionhas of leaders' compensation is inadditional long-term andincentive short-term incentivestargets tied directly to deliveringgrowth sustainable,in best-in-classbook value underwritingper returnsshare ^{p. 4}.

* The goal of the "Rule Our Niche" strategy aimsis to achievegenerate best-in-class underwriting profitability for niches and create superior long-term shareholder value through growth in book value per share ^{p. 5}.

* The company seeks to hire technical underwriting professionals with long-standing industry relationships and claims professionals with niche expertise to ensure steady access toin preferredspecific businessniches ^{p. 5}.

* Another core tenet is leveraging technology DNA to differentiate from competitors ^{p. 5}.

* The company useshas demonstrated an ability to use new forms of risk data and advanced technology in complex, high-severity risk categories within the specialty P&C insurance market ^{p. 5}.

* ''SkyBI'' provides the ability to promptly sense and respond to market changes ^{p. 5}.

* TrendsOne includetrend increasedis the rising demand for specialized insurance due to risingincreasing and complex risks from climate change, severe weather events, supply chain uncertainty, financial inflation, cyber risk, novel health risks, increased litigation, attorney involvement, and jury awards, and healthcare delivery/cost ^{p. 5}.

* The company has reacted quickly to these trends by launching new underwriting units (some not aligned with P&C cycles), entering underserved markets, partnering on advancedwith technology providers, and launching new captive solutions ^{p. 5}.

* ''SkyBI'' enables senior management to monitor performance, including renewal rates, new business pricing, portfolio performance, claims aging, and reserving practices ^{p. 5}.

* The company is committed to maintaining a strong balance sheet withthrough conservative loss reserves and strong capitalization ratios ^{p. 5}.

* This commitment is crucialconsidered imperative for maintaining confidence among customers, distribution partners, reinsurers, regulators, rating agencies, and shareholders ^{p. 5}.

* The company maintains a level of incurred but not reported reserves ("IBNR") reserves that, combined with case reserves, exceedexceeds the actuarial central estimate ^{p. 5}.

* The company believes it succeeds with distribution partners due to its deep expertise in niche markets, high-caliber underwriters, culture of innovation, thoughtful product line-up and design, and responsive servicespeed and quality ^{p. 6}.

* All underwriting divisions dedicate significant time and effort to maintaining and expanding distribution partner loyalty and long-term relationships ^{p. 6}.

* Products are distributed through ''retail agents'', ''wholesale brokers'', ''select program administrators'', and ''captive managers'' ^{p. 6}.

* Within its nine divisions, the company further specializes underwriting teams specializeto focus inon specific niches ^{p. 7}.

* This approach aimsis forbelieved to lead to superior risk selection, and pricing, and sustainable best-in-class underwriting results across market cycles ^{p. 7}.

* The company usesaims newto formsimprove ofunderwriting dataprofessionals' capabilities and analyticsexperience tousing augmentnew underwritingdata professionals'and capabilitiesanalytics for risk selection and pricing ^{p. 7}.

* Underwriting data is captured in the company's business intelligence platform, SkyBI, which forms the foundation for reporting, analytics, and other data capabilities ^{p. 7}.

* SkyBI serves as a comprehensive data repository for reporting, analytics, and other data capabilities, and is a key tool for senior management and business leaders ^{p. 7}.

* The company is highly selective in binding policies;, underwritersencouraging are encouragedunderwriters to move on iffrom premiumopportunities and coverage termsthat do not meet premium and coverage term standards ^{p. 7}.

* When accepting risks, the company carefully establishes terms and prices are carefully establishedsuited to suit the underlying exposure ^{p. 7}.

* In the admitted market, the company ensures approved forms and filed rates are appropriate and adequate for accepted risks, while allowing flexibility for specific or unique exposures ^{p. 7}.

* In the E&S market, the company usesutilizes freedom of rate and form to match risk and coverage to unique needs and exposures ^{p. 7}.

* Policies are crafted to offer affordable and appropriate protection for insureds' exposures, while also makingstructuring coverage to make potential losses more predictable and manage claims costs manageable ^{p. 7}.

* This structure helps identify opportunities and issues early, contributing to the company's nimbleness and ability to leveragecapitalize on market disruptions ^{p. 7}.

* Continuous training is provided to claim staff on claim evaluation, strategy, litigation management, good-faith handling, and best practices to achieve timely and optimal claim outcomes ^{p. 8}.

* Third Party Administrators (TPAs) are utilized for certainspecific instances, such as programs, captives, occupational accident, workers' compensation, and runoff claims ^{p. 8}.

* TPAs are actively managed, overseen, and overseenregularly audited to ensure compliance with Skyward's claims handling and, reserving guidelines, and general best practices ^{p. 8}.

* IndependentLitigation legalguidelines counselhave isbeen retaineddeveloped for liability claims againstprofessionals anand insuredoutside whencounsel warranted,to selectedensure basedappropriate ondefense geographical location andfor expertiseinsureds ^{p. 8}.

* Technology is leveraged tofor gain efficienciesefficiency in claims handling, including a Claims Development Severity Predictor model ^{p. 8}.

* AThe Claims Development Severity Predictor has been created and implemented, which is a predictive model that identifies claims likely to lead to large loss development using key phrases, enabling early identification, proactive management, and summarization of development reasons ^{p. 8}.

* This predictive model allows for early identification, proactive claims management, and summarization of development reasons, and is integrated into the claims review and management workflow ^{p. 8}.

* ThisThe quick strike program aidsaims into evaluatingevaluate accident facts, initiatingand investigationscircumstances quickly,rapidly and, resolvingif appropriate, resolve third-party claims promptly if appropriatequickly ^{p. 8}.

* Managers and adjusters collaborate closely with underwriting partners to inform them of legal trends and emerging claims issues, educating underwriters on loss experience for risk selection ^{p. 8}.

* Technology is central to the company's operations and decision-making, aiming for long-term competitive advantage ^{p. 9}.

* ''SkyBI'' (is a business intelligence platform) providesproviding real-time intelligence to senior leadership and technical teams for superior decision-making ^{p. 9}.

* SkyBI provides information and performance metrics across the company in an easy-to-consumea visualized format ^{p. 9}.

* Data in SkyBI can be filtered by categories such as distributor, customer segment, line of business, specific industry, individual underwriter, and specific risk feature ^{p. 9}.

* SkyBI helps establish clear line of sight to objectives and facilitates decision-making ^{p. 9}.

* ''Predictive Analyticsanalytics Technologytechnology'' augments employee capabilities using new forms of risk data and predictive analytics, including artificial intelligenceAI, for risk selection, pricing, and claims handling ^{p. 9}.

* Underwriting divisions intentionally "Rule Our Niche" by innovating constantly and tailoringwith actions specific to specificeach divisionsdivision/marketsmarket served ^{p. 9}.

* ''Core Transactionaltransactional Platformsplatforms'' (policy administration, underwriting workbench, billing, and claims systems) are designed for nimble scaling and business expansion ^{p. 9}.

* The core platform organization is used for all business except accident & health, global property, agriculture, and credit (re)insurance, and surety, which require dedicated core processing components due to their unique features ^{p. 9}.

* The company faces external threats to its information technologyIT systems, including system failure, customer data theft attempts, and ransomware attacks ^{p. 9}.

* Actions to prevent system and data disruptions include: actively monitoring Cybersecurity and Infrastructure Security Agency’s (“CISA”"CISA") cybersecurity directives and taking immediate action on identified vulnerabilities ^{p. 9}.

* Factors influencing reinsurance purchase changes at renewal include plans for underlying insurance coverage, updated loss activity, capital and surplus levels, risk appetite changes, and the cost/ and availability of reinsurance treaties ^{p. 10}.

* The mix of reinsurance purchased considers efficiency, cost, risk appetite, and specific underlyingfactors riskof factorsunderlying risks ^{p. 10}.

* ''Excess of loss reinsurance'' involves the reinsurer assuming all or parta portion of losses for an individual claim or event exceeding a specified amount, in exchange for a negotiated premium, including catastrophe reinsurance programs ^{p. 10}.

* Third-party stochastic and internal deterministic models are used to analyze aggregationthe risk of loss aggregation for catastrophe reinsurance purchases ^{p. 10}.

* These models provide a quantitative view of PML (Probable Maximum Loss) events, estimating the expected loss levelslevel for a given return period ^{p. 10}.

* Modeling indicates that an event beyond a 1 in 250-year PML would be required to exhaust the ''$36.0 million property catastrophe coverage'' of USD 36.0 million ^{p. 10}.

* The company aims to expose no more than ''3.0% of stockholders’ equity'' to a catastrophic loss less than a 1 in 250-year event ^{p. 10}.

* Reinsurance is sought from reinsurers rated at least "A“A-"” ("Excellent"“Excellent”) or better by A.M. Best ^{p. 10}.

* As of December 31, 2025, ''98% of reinsurance recoverables'' were from reinsurers rated "A“A-"” (Excellent) or better by A.M. Best, or were collateralized ^{p. 10}.

* ''Allowance for uncollectible reinsurance'' was USD $2.3 million at December 31, 2025, and 2024 ^{p. 10}.

|+ Reinsurance (1){{footnote|1=Legal defense expenses can force exposure above the maximum company retention for Excess Casualty, Commercial Auto and General Liability.}} (2){{footnote|1=Reinsurance is subject to a loss ratio cap or aggregate level of loss cover that exceeds a modeled 1:250-year PML event.}} (3){{footnote|1=Catastrophe loss protection is purchased up to $36.0 million in excess of $12.0 million retention, which provides cover for a 1:250-year PML event.}}

! class="col-m" style="text-align:rightleft" | Maximum Company Retention

| class="col-m" style="text-align:rightleft" | $0.90 million per occurrence

| class="col-m" style="text-align:rightleft" | $1.00 million per occurrence

| class="col-m" style="text-align:rightleft" | $2.25 million per occurrence

| class="col-m" style="text-align:rightleft" | $1.50 million per occurrence

| class="col-m" style="text-align:rightleft" | $3.00 million per occurrence

| class="col-m" style="text-align:rightleft" | $5.25 million per occurrence

| class="col-m" style="text-align:rightleft" | $3.50 million per occurrence

| class="col-m" style="text-align:rightleft" | $3.25 million per occurrence

| class="col-m" style="text-align:rightleft" | $5.00 million per occurrence

| class="col-m" style="text-align:rightleft" | $2.33 million per occurrence

|+ Reinsurance (1){{footnote|1=This reinsurer facilitates our eMaxx captive. At December 31, 2025, we held collateral in a statutory trust of $235.2 million on our net reinsurance recoverables.}}

* ''Enterprise Risk Management (ERM)'' is embeddedintegrated ininto nearly every aspect of the company and guides day-to-daydaily activities ^{p. 11}.

* The ''ERM approach'' aims to achieve an acceptable risk-adjusted return for shareholders while maintaining trust and reliability for those served ^{p. 11}.

* The company is intentional in its ''underwriting and asset portfolio construction'' ^{p. 11}.

* ''LiabilityUnderwriting duration and market cyclicalityportfolio'' ofbalances theliability underwritingduration portfolioand aremarket balancedcyclicality ^{p. 11}.

* The ''investmentInvestment strategy'' aims fortargets a diversified target portfolio that balances yield, liquidity, volatility, and potential for principal loss ^{p. 11}.

* The ''Senior Vice President (SVP), Chief Financial Officer (CFO) & Head of ERM - US Operations'' oversees critical ERM processes and chairs the cross-functional corporate ERM Committee ^{p. 11}.

* The company usesformalizes its view of risk and solvency using an ''Economic Capital Model (ECM)'' to formalize its view of risk and solvency in terms ofmeasure potential economic loss ^{p. 11}.

* ''ECM output'' measures potential earnings and capital loss foracross various scenarios ^{p. 11}.

* The ''SVP, CFO & Head of ERM'' works with the ERM Committee to review and maintain a comprehensive ''risk register'', ensuring appropriate mitigations are in place and monitored ^{p. 11}.

* These ''reports'' are submitted regularly to the ''Risk Committee'' by the SVP, CFO & Head of ERM and the ERM Committee ^{p. 11}.

* ''Operational processes and controls'' are constructeddesigned to identify, assess, and manage key risks on an ongoing basiscontinuously ^{p. 11}.

* The ''Underwriting Committee'' overseesis responsible for overseeing changes in risk appetite, product line, and division expansion ^{p. 11}.

* ''Key observations'' from actuarial reviewsstudies are discussed with the ''CEO'' ^{p. 11}.

* The ''SkyBI platform'' provides real-time portfolio, underwriting, claims, and actuarial analytics to support these processes ^{p. 11}.

* ''ERM'' is central to decision-making and day-daily activities, aiming to achieve market-dayleading activitiesrisk-adjusted returns for shareholders and reinforce a culture of accountability, transparency, and sound judgment ^{p. 11}.

* When a claim is reported, a ''case reserve'' is established for the estimated ultimate payment after assessing coverage, damages, and investigationother investigations ^{p. 12}.

* Case reserve estimates are based on reserving practices and the claims adjuster'sadjuster’s experience and knowledge of the claim type and value ^{p. 12}.

* ''IBNR reserves'' are established forin accordance with industry practice to cover estimated future loss payments on incurred but not yet reported claims, and potential development on reported claims ^{p. 12}.

* Additional information on loss reserves is available in Item 7 of Form 10-K, specifically "Management’s Discussion and Analysis of Financial Condition and Results of Operations - “Results of Operations - Losses and LAE” and “Critical Accounting Policies” ^{p. 12}.

* The company aims to maintain a balanced investment portfolio primarily consisting of investments withthat yield predictable and stable returns, supplemented by strategic investments offering attractive risk-adjusted returns ^{p. 13}.

* AnSelect Enterprisestrategic Basedinvestments Assetare Allocationused modelto isaugment usedthe portfolio, forgenerating investmentattractive allocationrisk-adjusted strategyreturns ^{p. 13}.

* ThisAn modelEnterprise isBased integratedAsset intoAllocation themodel Economicis Capitalused Model (as discussed infor the ERM section of Item 1) to assess the impact of investment allocation decisions on capital, liquidity, and risk profile across various market scenariosstrategy ^{p. 13}.

* The investment portfolio mainly comprisesincludes cash and cash equivalents and investment-grade fixed-maturity securities, with additional investments fitting the company's risk appetite ^{p. 13}.

* The company faces competitionCompetition in its underwriting divisions comes from other specialty and standard insurers, as well as program administrators ^{p. 14}.

* Competition is based on factors such asinclude pricing, general reputation, perceived financial strength, broker relationships, product terms and conditions, independent rating agency ratings, speed and reputation of claims payment, and the experience and reputation of underwriting and claims teams ^{p. 14}.

* This restacking allowed the company to provide its growing surety business withto receive the capital needed to operate more effectively within the surety T-listing market ^{p. 15}.

* Skyward Specialty Insurance Group, Inc. has direct relationships with: ''Skyward Service Company'' (Delaware corporation), ''Great Midwest Insurance Company'' (Texas stock insurance company), ''Skyward Underwriters Agency, Inc.'' (Texas corporation), ''Skyward Specialty No. 1 Limited'' (United Kingdom company), and ''Skyward Re'' (Cayman Islands corporation) ^{p. 15}.

* ''Great Midwest Insurance Company'' has a direct relationship with ''Houston Specialty Insurance Company'' (Texas stock insurance company) ^{p. 15}.

* ''Houston Specialty Insurance Company'' has a direct relationship with ''Imperium Insurance Company'' (Texas stock insurance company) ^{p. 15}.

* ''Imperium Insurance Company'' has a direct relationship with ''Oklahoma Specialty Insurance Company'' (Oklahoma insurance corporation) ^{p. 15}.

* The ''A.M. Best rating'' assessesrates insurance companies based on factors relevant to policyholders ^{p. 16}.

* The ''"A" (Excellent) rating'' is the third highest rating offeredassigned by A.M. Best ^{p. 16}.

* A.M. Best evaluates a company's financial and operating performance by reviewing its ''profitability, leverage, liquidity, book of business, reinsurance adequacy and liquidity''soundness, quality and estimated market value of assets, adequacy of losses and loss expense reserves, surplus adequacy, capital structure, management experience and competence, and market presence ^{p. 16}.

* A.M. Best'sThese ratings reflectare its opinionbased on anfactors insurancerelevant company'sto ''financialpolicyholders, strengthagents, operatinginsurance performancebrokers, and abilityintermediaries, and are not specifically related to meetsecurities policyholderissued obligations''by the company ^{p. 16}.

* The company is subject to insurance holding company laws in Texas, where its primary insurance companies are domiciled, and Oklahoma ^{p. 17}.

* ''StateThese statutes require each insurance laws''company generallyin aimthe system to protectregister with the insurance policyholders,department consumers,of andits claimants,state notof stockholdersdomicile ^{p. 17}.

* ''InsuranceTransactions regulation''between isinsurance constantlysubsidiaries changingand duetheir toparents governmentaland agencyaffiliates andgenerally legislativerequire reactionsdisclosure to issuesstate regulators ^{p. 17}.

* SomeNotice stateto legislaturesor haveprior consideredapproval orfrom enactedthe laws that increaseapplicable state authorityinsurance overregulator insuranceis companiesgenerally andrequired holdingfor companyany systemsmaterial to preventor federalextraordinary involvementtransaction ^{p. 17}.

* The company plans towill pursue additional ''trademark registrations'' and other intellectual property protection if deemed beneficial and cost-effective ^{p. 18}.

<blockquote>"In* addition,The wecompany monitormonitors ourits ''trademarks and service marks'' and protectprotects them from unauthorized use as necessary." ^{p. 18}</blockquote>.

* As of ''December 31, 2025Employees'',: theApproximately company611 hadas approximatelyof ''611December employees''31, 2025 ^{p. 19}.

* Employees are not subject to any collective bargaining agreement, and no current efforts to implement such an agreementone are known ^{p. 19}.

* The company aims to be an employer of choice, includingfostering outsidea culture committed to diversity of thethought, background, insuranceand sectorperspective ^{p. 19}.

* The company strives to createcultivate aan cultureexceptional thatworkforce fostersto diversityperpetuate ofits thought,ownership background,culture and perspectiveachieve superior business results ^{p. 19}.

* The''Benefits companypackage's': goalCompetitive, isincluding to attractmedical, developdental, and retainvision diverse talentinsurance, promoting a culture401(k) whereplan, differentpaid viewpointstime areoff, valuedfamily leave, individualsemployee areassistance respectedprograms, and treatedan fairly,employee andstock havepurchase opportunitiesplan available to excelall employees ^{p. 19}.

* The described risks and uncertainties are not exhaustive; additional unstated, unknown, or currently immaterial risks may become significant factors ^{p. 20}.

* ''Inability to purchase third-party reinsurance'' in desired amounts on commercially acceptable terms or terms that adequately protectprovide the companyprotection may materially adversely affect the business, financial condition, and results of operations ^{p. 21}.

* ''Losses and loss expense reserves'' may be inadequate to cover actual losses, which could havematerially aadversely material adverse effect onaffect financial condition, results of operations, and cash flows ^{p. 21}.

* ''Unexpected changes in interpretation of coverage or provisions'', including loss limitations and exclusions, in policies could havematerially aadversely material adverse effect onaffect financial condition and results of operations ^{p. 21}.

* ''Reinsurers may not reimburse claims'' on a timely basis, or at all, which may materially adversely affect the business, financial condition, and results of operations ^{p. 21}.

* ''Failure to accurately and timely pay claims'' could materially and adversely affect the business, financial condition, results of operations, and prospects ^{p. 21}.

* ''Adverse economic factors'', including recession, inflation, high unemployment, or lower economic activity, could lead to fewer policy sales, increased claim frequency, premium defaults, or falsification of claims, affectingimpacting growth and profitability ^{p. 21}.

* ''CyclicalThe natureinsurance ofbusiness theis insurancehistorically businesscyclical'', which may affect financial performance and cause operating results to vary quarter -to -quarter, not being indicative of future performance ^{p. 21}.

* ''Extensive regulation'' may adversely affect the ability to achieve business objectives; non-compliance could leadresult toin penalties, like fines, and suspensions, adversely affecting financial condition and results of operations ^{p. 21}.

* ''Costs will increase significantly'' as a result of operating as a public company, requiring substantial management time to comply with public company regulations ^{p. 21}.

* ''Integration of Apollo'' may present unforeseen challenges, including difficulties in integrating technology systems, business processes, and risk management frameworks, potentially resultingleading into operational disruptions, increased costs, or delays in realizing anticipated strategic benefits from the acquisition ^{p. 21}.

* ''IncreasedReliance consolidationon distribution channels'' in(retail theagents, insurancebrokers, industrywholesalers, mayprogram administrators) exposes the furtherbusiness intensifyto competitionrisks ^{p. 22}.

* ''RelianceCredit on distribution channelsrisk'' (retailis agents,assumed from brokers, wholesalers,who programcollect administrators)premiums exposesbut may not remit them, potentially requiring the company to risksprovide coverage despite non-payment ^{p. 22}.

* Relationships''Deterioration within distributor relationships'' or failure to provide competitive compensation could lead distributors canto beplace discontinuedmore orpremium with becomeother unprofitablecarriers ^{p. 22}.

* In''Digitization certainspeed'' jurisdictions,exposes premiumthe paymentcompany to arisks brokerrelated isto considereddistributors' paymentability to thekeep insurerpace, makingpotentially theleading insuredto notcustomer liable evenloss if thedigital companyexperiences doesn'tare receive thenot premiumprovided ^{p. 22}.

* The company may be required''Inability to providepurchase coveragethird-party despitereinsurance'' noton receivingdesired premiumsor fromcommercially brokers,acceptable whichterms could decline underwriting profits andmaterially adversely affect financialthe conditionbusiness ^{p. 22}.

* The company reviews the ''financialStrategic conditionpurchase of new brokersreinsurance'' andprotects periodicallycapital reviewsfrom existingseverity distributors for profitabilityevents and alignment withreduces businessearnings objectivesvolatility ^{p. 22}.

* Deterioration''Reinsurers inmay distributorexclude relationshipscertain coverages'' or uncompetitivealter compensationterms, couldleading leadto distributorsgaps toin placereinsurance moreprotection premiumand withgreater otherrisk carriersexposure ^{p. 22}.

* ''DigitizationInternal speedand external events'' exposescan theincrease companyexposure to riskslosses, relatedand toloss distributors'reserves abilityare tocontinually keep pace,monitored asusing customersnew mayinformation preferand technology-drivenstatistical experiencestechniques ^{p. 22}.

** Time required to fully assessappreciate covered lossesloss, leading to potential increases in loss estimates over time ^{p. 22}.

** FailureVolatility ofin lossfinancial limitationsmarkets, oreconomic exclusionsevents, orand changesinflationary inconditions increasing claims frequency/coverageseverity issues,and could materially affect financialloss conditioncosts ^{p. 22}.

** VolatilityIncreased incost financialdue marketsto "social inflation" (medical/material costs, economictechnology eventsin vehicles, andattorney externalinvolvement, factorslitigation mayfinancing, increaselawsuit claimabuse) affecting claims frequency/severity and reserve adequacy ^{p. 22}.

** ElevatedIncreased inflationaryclaims conditionsfrequency, wouldeven increasewithout lossliability, could escalate evaluation and handling costs beyond established reserves ^{p. 22}.

** Increased''Decline claimin frequency,financial evenstrength withoutrating'' liability,may couldadversely escalateaffect evaluationthe andamount handlingof costsbusiness beyond established reserveswritten ^{p. 22}.

** New''A.M. linesBest'' ofassigned businessa orfinancial theoriesstrength rating of claims"A" may(Excellent) leadwith toa increasedstable claimoutlook frequencyas and higher handlingof coststhe thanfiling anticipateddate ^{p. 22}.

* Future''Factors loss experience substantially exceeding reservesthat could materiallylead affectto futurea earnings,downgrade'' liquidity,of andthe financial strength rating ^{p. 22}.include:

** Alterations in A.M. Best's capital adequacy assessment methodology that adversely affect the rating ^{p. 22}.

* ''A downgrade or withdrawal of rating'' could cause distribution partners and insureds to choose other competitors, increase reinsurance costs or reduce its availability, or severely limit the ability to write new and renewal insurance contracts ^{p. 22}.

* Rating organizations may heighten''Heightened scrutiny, increasefrom reviewrating frequency/scope, request additional information, or increase capital requirementsorganizations'' due to earnings and capital pressures in the financial institutionsindustry could lead to adverse ratings consequences ^{p. 22}.

* There''Unexpected ischanges noin assuranceinterpretation'' theof ratingcoverage willor remainprovisions, atincluding itsloss current level,limitations and adverse ratings consequencesexclusions, could materially adversely affect financial condition and results of operations ^{p. 22}.

* ''UnexpectedLoss changeslimitations or exclusions'' in interpretationpolicies ofmay coveragenot orbe provisions'',enforceable includingas lossintended limitationsdue andto exclusions,changing couldindustry materiallypractices, affectlegal, financialjudicial, conditionsocial, and resultsother conditions ^{p. 22}.

* No''Court assurancesor thatregulatory lossactions'' limitationscould nullify or void limitations/exclusions, or legislation could modify/bar their use, leading to higher willthan beanticipated enforceablelosses asand intendedLAE ^{p. 22}.

* ''ReinsurersDisputes maywith notreinsurers'' reimbursecan claimsbe timelytime-consuming, orcostly, atand all''uncertain of success, materiallypotentially leading to affectingincreased thenet businesslosses ^{p. 22}.

* ''Reinsurance contractsrecoverables'' requiretotaled premium$1,119.9 paymentsmillion toas reinsurersof whoDecember reimburse31, for covered policy claims2025 ^{p. 22}.

* As''Climate ofchange'' Decembermay 31,increase 2025,frequency theand companyseverity hadof ''$1extreme weather events,119.9 millionsuch inas reinsurancehurricanes recoverables''and wildfires ^{p. 22}.

* ''FailureOccurrence toof accuratelya andnatural timely pay claimsdisaster'' or catastrophe loss could materially and adversely affect the business, even for uninsured losses like the 2025 California wildfires, as policies may be cancelled ^{p. 22}.

* This''Inability couldto slowobtain growthreinsurance incoverage'' affectedat marketsreasonable andrates decreasefor claimssevere workweather and catastrophes could quality,materially adversely affectingaffect operatingthe marginsbusiness ^{p. 22}.

* ''SevereExposure weather,to climate changepandemics, catastrophesoutbreaks, pandemicspublic health crises, and man-madegeopolitical/social events'' may adversely affect thecarries businessrisks ^{p. 22}.

* Catastrophe''Most lossescontracts'' dependare onone-year frequencyterm and severityrenewable; ofassumptions eventsare made about renewal rates and totalrepeat business in insuredfinancial exposureforecasting ^{p. 22}.

* Inability''Damage to obtainreputation'' reinsurancefrom coverageproviding atpolicies reasonableto ratescertain andinsureds adequatecould amountsdecrease demand for severeproducts weather/catastrophesand couldrequire materiallyadditional affectresources theto businessrebuild ^{p. 22}.

* Adverse economic factors like recession, inflation, high unemployment, or lower economic activity cancould lead to fewer policy sales, increased claim frequency, premium defaults, or claim falsification, impacting growth and profitability ^{p. 23}.

* Economic downturns characterized by higher unemployment, declining spending, and reduced corporate revenue generally reduceaffect demand for insurance products, affectingimpacting premium levels and profitability ^{p. 23}.

* Negative economic factors canmay hinderaffect the ability to charge appropriate rates for risk, reduce the number of policies written, and limit opportunities for profitable underwriting ^{p. 23}.

* Existing policyholders mightmay exaggerate or falsify claims to obtain higher payments during an economic downturn ^{p. 23}.

* Demand forThe insurance dependsbusiness onis factorsa suchcyclical asindustry catastrophicwith eventperiods frequency/severity,of capacityintense levels,price newcompetition capital(soft providers,market) and general economic conditions, allperiods of whichcapacity fluctuateshortages andleading canto contributeincreased topremiums price(hard declinesmarket) ^{p. 23}.

* TheThis cyclical market pattern can be more pronounced in the E&S market than in the standard insurance market ^{p. 23}.

* When the standard insurance market hardens, the E&S market typically hardens, and E&S market growth can be significantly more rapid than standard market growth ^{p. 23}.

* When market conditions soften, customers previously in the E&S market may return to the admitted market, exacerbating the effects of rate decreases on financial results ^{p. 23}.

* Quarterly results are expected to continue fluctuating due to general economic conditions, frequency/severity of catastrophes, fluctuating interest rates, claims exceeding loss reserves, industry competition, deviations from expected premium retention, adverse investment performance, and reinsurance coverage costs ^{p. 23}.

* The''Investment companyportfolio performance''s affects results of operations depend partly on the performance of its investment portfolio ^{p. 23}.

* The investment portfolio is diversified and managed by professional investment advisory firms according to an investment policy, with routine reviewoversight byfrom the Investment Committee ^{p. 23}.

* Investments are subject to general economic conditions, market risks, and risksspecific inherentsecurity to specific securitiesrisks ^{p. 23}.

* A low interest rate environment, potentially resulting from federal government actions to slow inflation (e.g., rate cuts, Inflation Reduction Act of 2022), would pressure net investment income, particularly for fixed maturity securities and short-term investments, adversely affecting operating results ^{p. 23}.

* All fixed maturity securities, including those in separately managed accounts and limited partnerships, are subject to ''credit risk'' ^{p. 23}.

* ''Credit risk'' is the risk of investment default or impairment due to deterioration in the financial condition of issuers or guarantors of securities held ^{p. 23}.

* TheInvestments companyalso invests ininclude marketable preferred and common equity securities and exchange-traded funds, which are carried at fair market value and are subject to potential losses and market value declines ^{p. 23}.

* The investment portfolio facesis subject to increased valuation uncertainties when investment markets are illiquid, assuch is the caseas with fixed maturity securities held to maturity, separately managed accounts, and limited partnership investments ^{p. 23}.

* These investment parameters are believed to be within applicable guidelines established by the NAIC, the Texas Department of Insurance, and the Oklahoma Department of Insurance ^{p. 23}.

<blockquote>"Although* weWhile seekcapital topreservation preserveis our capitalsought, wethere cannotis beno certaincertainty that our investment objectives will be achieved, and results may vary substantially over time." ^{p. 23}</blockquote>.

* Investment strategies areaim soughtto thatbe are not correlateduncorrelated with insurance and reinsurance exposures, but losses in the investment portfolio may coincide with underwriting losses, exacerbating adverse effects ^{p. 23}.

* The duration of the investment portfolio is managed based on the duration of losses and LAE reserves to provide sufficient liquidity and avoid liquidating investments to fund claims ^{p. 23}.

<blockquote>"We* Investments may not be able to sell our investmentssellable at favorable prices or at all." ^{p. 23}</blockquote>.

* Sales of investments could result in significant realized losses depending on general market conditions, interest rates, and credit issues with individual securities ^{p. 23}.

* ''Extensive regulationRegulation'': The company is subject to extensive regulation, which may adversely affect theits ability to achieve business objectives ^{p. 24}.

* ''Penalties for Non-Compliance'': Failure to comply with regulations may leadresult toin penalties, including fines and suspensions, adverselynegatively affectingimpacting financial condition and results of operations ^{p. 24}.

* ''Primary insurance subsidiaries,Insurance Subsidiaries'': GMIC, HSIC, and IIC'', are subject to extensive regulation in Texas (their state of domicile) and other operating states ^{p. 24}.

* ''Regulatory Focus'': Most insurance regulations protect policyholders'policyholder interests, not investors'investor or stockholders'stockholder interests ^{p. 24}.

* Regulations''State areRegulation Scope'': Regulations administered by state departments of insurance anddepartments cover capital/ and surplus requirements, investment/ and underwriting limitations, affiliate transactions, dividend limitations, changes in control, solvency, and other financial/non-financial aspects of the business ^{p. 24}.

* ''Regulatory Impact'': Significant changes in laws and regulations could limit discretion or increase business costs ^{p. 24}.

* ''Regulatory Examinations'': State insurance regulators conduct periodic examinations and require annual/other reports on financial condition and holding company issues ^{p. 24}.

* Insurance''Affiliate subsidiariesTransactions'': areCertain parttransactions of anbetween ''"insurance holdingsubsidiaries companyand system"''affiliates underrequire prior notice to the Texas statutesDepartment of Insurance, potentially causing business delays and regulationsadditional expenses ^{p. 24}.

* Insurance''Capital subsidiariesAdequacy'': areThese subjectrequirements toestablish minimum ''risk-based capital requirements''to support business operations and identify inadequately capitalized property and casualty insurers based on theasset/liability NAIC modelrisks and Texasnet written premium lawmix ^{p. 24}.

* The ''U.S. federalTax governmentLaw generallyChanges'': doesChanges notto directlyU.S. regulatetax thelaws insuranceand industry,new excepttax forpolicies flood,could nuclear,significantly negatively impact the overall economy and terrorismthe company's risksbusiness ^{p. 24}.

* Changes to ''U.S.Uncertainty taxof lawsTax Law Changes'': The company cannot andpredict newhow tax policieslaw couldchanges negativelymight impactaffect theit, overallits economystockholders, andor theportfolio businessinvestments ^{p. 24}.

* Rules for U''H.SR. federal1, incomethe taxation"One areBig constantlyBeautiful underBill reviewAct" by(OBBBA)'': legislators,Signed theinto law on IRSJuly 4, and2025, theit U.S.modifies Departmentkey ofbusiness thetax Treasuryprovisions ^{p. 24}.

* On ''JulyOBBBA 4,Impact 2025Assessment'',: Based on H.R.current 1analysis, the ''"Onecompany Bigdoes Beautifulnot Billbelieve Act" (OBBBA)'', wasprovisions signedwill intomaterially lawimpact inits thebusiness and results Unitedof Statesoperations ^{p. 24}.

* The''Net OBBBAOperating alsoLoss includes(NOL) changesLimitations'': The ability to theutilize computationNOL ofcarryforwards taxesand relatedother totax attributes may internationalbe operationslimited ^{p. 24}.

* Based''Gross onFederal currentIncome analysis,Tax theseNOLs'': OBBBAAs provisionsof areDecember not31, expected2025, tothe havecompany ahad materialapproximately impact$40.3 onmillion thein businessgross andfederal resultsincome oftax NOLs operationsavailable ^{p. 24}.

* As of ''DecemberRegulatory 31,Impact 2025on NOLs'',: grossFuture federalregulatory incomechanges taxcould NOLsalso werelimit approximatelythe ''$40.3 million'', availableability to offsetutilize future taxable incomeNOLs ^{p. 24}.

* These''Impact of Limited NOLs'': areIf subjectfuture totaxable annualincome limitationscannot underbe Sectionoffset 382by ofNOLs, thenet Codeincome and arecash setflows tomay expirebe beginningadversely in ''2032''affected ^{p. 24}.

* Future''Capital ownershipRequirements changesfor dueGrowth'': toContinued shiftsoperation inand stockgrowth ownership,will somerequire outsidesubstantial of control, may occurcapital ^{p. 24}.

* Continued''Statutory operationCapital and growthSurplus'': willState insurance regulators require substantialinsurance companies to maintain specified levels of statutory capital and surplus ^{p. 24}.

* No''Dividend intentionLimitations'': toDividend declarepayments andare paylimited cashto dividendsthe onpart commonof stockavailable inpolicyholder thesurplus derived from foreseeablenet futureprofits ^{p. 24}.

* State''Investors insuranceSeeking regulatorsImmediate haveDividends'': broadInvestors powersseeking toimmediate preventcash reductiondividends ofshould statutorynot surpluspurchase tothe inadequatecompany's levelscommon stock ^{p. 24}.

* There''Change isof noControl'': assuranceApplicable thatinsurance dividendslaws upmay tomake maximumit difficult to calculatedeffect amountsa wouldchange beof permittedcontrol ^{p. 24}.

* State''Approval for Acquisition of Control'': Under Texas insurance regulatorslaws, no person may adoptacquire morecontrol restrictiveof statutorya provisionsdomestic regardinginsurer dividendwithout paymentswritten inapproval from the futurestate insurance commissioner ^{p. 24}.

* Investors''Texas mayLaw needon toChange sellof commonControl'': stockTexas afterinsurance pricelaws appreciationapply (whichto maydirect notand occur)indirect asacquisition of 10% or more of the onlyvoting waystock toof realizea futureTexas-domiciled gainsinsurer ^{p. 24}.

* Applicable''Deterrent insuranceto lawsAcquisitions'': These requirements may makediscourage itpotential difficultacquisition toproposals effectand delay, deter, or prevent a ''change of control'', even if desirable to stockholders ^{p. 24}.

* ''AdditionalIf funds''cash mayflows befrom requiredoperations ifare operationalinsufficient cashto flowsfund areoperating insufficientrequirements and cover claim losses, or if the capital position is negatively impacted by investment portfolio decline, catastrophe losses, or adverse reserve development, additional funds may be needed through financings or growth curtailment ^{p. 25}.

* ''EquityIf additional capital is required, equity or debt financing'' may not be available or may be on unfavorable terms, potentially leading to stockholder dilution or restrictive covenants ^{p. 25}.

* ''InabilityEquity to obtain adequate capitalfinancings'' could materiallyresult adverselyin affectdilution operating plans, business, financial condition, or results ofto operationsstockholders ^{p. 25}.

* ''Inability to repayobtain debt''adequate duecapital toon anfavorable event of defaultterms could occurmaterially ifadversely assetsaffect areoperating insufficientplans, orbusiness, iffinancial thecondition, currentor creditresults market and macroeconomic challenges impact the ability to borrow or sellof assets/equityoperations ^{p. 25}.

* ''Loss of key personnel'' or inability to attract and retain qualified personnel could adversely affect operationsthe company ^{p. 26}.

* ''TalentThe talent pool'' for recruitment is limited and fluctuates based on market dynamics, potentially increasingleading to increased compensation expectations and labordifficulty in retaining/recruiting key costspersonnel ^{p. 26}.

* ''SecurityComputer breachesviruses, data losshackers, cyberattacks''employee misconduct, and ITother failuresexternal hazards could disruptexpose operations,systems damageto reputation,security and adversely affect business andbreaches financialor resultscyber-attacks ^{p. 26}.

* ''SecuritySEC measures''and arestate inlaw place,requirements butfor systemspublic andnotification networksof mayincidents stillcould beexacerbate subjectharm to breaches orthe interferencebusiness ^{p. 26}.

* ''ArtificialThe intelligencecompany (AI)''may incur costs to adopt and machinedeploy learningAI growthtechnologies maythat become alterobsolete theearlier competitivethan landscapeexpected ^{p. 26}.

* ''CompetitiveThe position''company mayintends beto harmedgrow ifits competitorsbusiness, leveragewhich AIrequires solutionsadditional morecapital, quicklysystems ordevelopment, effectivelyand skilled personnel ^{p. 26}.

* ''Deficient,Failure inaccurate,to ormanage biasedgrowth AI''effectively content,could analyses, or recommendations couldmaterially adversely affect the business, financial condition, and results, andof reputationoperations ^{p. 26}.

* ''NewThe AIcompany lawshas orexperienced regulations''rapid couldrevenue begrowth burdensome,in costlyrecent years, andbut restrictfuture abilitygrowth torates developmay andnot deploy AIbe technologiessustainable ^{p. 26}.

* ''InorganicThe growthacquisition throughand acquisitions''integration dependsof onApollo identifyingmay targets,adversely favorableaffect negotiationsthe company's business, transactionfinancial completioncondition, and successfulresults integrationof operations ^{p. 26}.

* ''AcquisitionRegulatory and integrationcompliance ofrisks Apollo''increase maydue adverselyto affectexpansion business,into financialnew condition,jurisdictions and resultsmarkets, ofincluding the Lloyd's operationsmarket ^{p. 26}.

* ''AcquisitionAdditional ofindebtedness incurred for the Apollo'' wasacquisition completedcould onlimit Januaryfinancial 1,flexibility or increase the cost of 2026capital ^{p. 26}.

* ''RegulatoryLitigation costs and compliancesettlement risks''amounts increasecan duebe toinflated expansioneven intowhen newcases jurisdictionsdo andnot markets,proceed including the Lloyd'sto marketjudgment ^{p. 26}.

* ''InabilityFailure to successfullyproperly integrateassess Apollo''vendor orrisks, realizeincluding anticipatedsecurity benefitsand stability, could materially and adversely affect business, financial condition, and results of operations ^{p. 26}.

* ''SocialRisks inflation'',associated particularly inwith third-party claims,software use cannot be eliminated and cancould leadnegatively toaffect oversizedthe judgmentsbusiness ^{p. 26}.

* ''LossEfforts ofto keyenforce vendorintellectual relationships''property orrights vendor failure tomay protectface datadefenses, couldcounterclaims, affectand operationscountersuits ^{p. 26}.

* ''RelianceFailure onto vendors''secure, forprotect, computerand hardware/software,enforce claimintellectual adjustment,property humanrights resourcecould benefits,adversely andaffect investmentthe managementbrand and servicesbusiness ^{p. 26}.

* ''ContinuedLitigation relianceregarding onintellectual thirdproperty could be costly, time-partyconsuming, and software''divert ismanagement anticipatedattention ^{p. 26}.

* ''Increased costsOperating as a public company'':, Theespecially companyas expectsa tolarge incuraccelerated filer, incurs increased costs and managementrequires willsubstantial devote substantialmanagement time tofor compliance initiatives due to operating as a public company ^{p. 27}.

* ''Financial reporting and managementother systems'':requirements Themay company'sexceed the preparedness of accounting and other management systems and resources may not be adequately prepared for the financial reporting and other requirements of a public company ^{p. 27}.

* ''Significant expenseslegal, asaccounting, aand largeother acceleratedexpenses filer'':are Asincurred as a public company andthat largewould acceleratednot filer, the company incurs significant legal, accounting, and other expenses notbe presentincurred as a private company ^{p. 27}.

* ''Compliance with federal securities laws'': Federal securities laws, including the Sarbanes-Oxley Act, the Dodd-Frank Act, SEC, and SEC/Nasdaq rules, impose various requirements on public companies, increasing compliance costs and management time ^{p. 27}.

* ''RiskThere ofis unreliablea financialrisk statements'':of Despitenot efforts,being theable company may notto produce reliable financial statements or, file them timely with the SEC, or comply with Nasdaq listing requirements ^{p. 27}.

* ''Sarbanes-Oxley Act Section 404 compliance'':of Compliancethe withSarbanes-Oxley Section 404Act requires substantial accounting expense and significant management effort for system and process evaluation and testing of internal control over financial reporting, leading to substantial accounting expense and management effort ^{p. 27}.

* ''StaffingCompliance forwith Section 404'': Thenecessitates company must maintainmaintaining accounting and finance staff and consultants with public company reporting, technical accounting, and internal control knowledge to satisfy Section 404 requirements and provide internal audit services ^{p. 27}.

* ''Cost and challenge of Section 404 compliance'': The process to document and evaluate internal control over financial reporting is costly and challenging, requiring internal resources, outside consultants, and a detailed work plan ^{p. 27}.

* ''Risk of ineffective internal control'': There is a risk that neither the company nor its independent registered public accounting firm will conclude that internal control over financial reporting is effective within the prescribed timeframe, potentially leading to adverse financial market reactions or SEC investigations ^{p. 27}.

* ''Disclosure controls and procedures'': As a public company, the company must maintain disclosure controls and procedures designed to ensure timely and accurate information disclosure in SEC filings ^{p. 27}.

* ''Limitations of control systems'': Control systems, including disclosure controls and internal control over financial reporting, provide only reasonable, not absolute, assurance against errors and fraud due to inherent limitations ^{p. 27}.

* ''Consequences ofDeficiencies ineffective internal control'': Ifin internal control over financial reporting ismay deemedbe ineffective, remediation costsidentified and scopenot couldremediated be significanttimely, and materialtesting/maintaining weaknessescontrols couldmay impededivert timely and accurate SECmanagement's filingsattention ^{p. 27}.

* ''LimitationsFailure ofto ITGCs'':maintain Evenan effective ITGCssystem provideof onlyinternal reasonable,controls notcould absolute,adversely assuranceaffect the market price of regardingcommon ITGCsstock ^{p. 27}.

* ''FutureThere controlis failures'': Nono assurance can be given that additional material weaknesses or restatements willof notfinancial arise, or that current controlsresults will preventnot irregularitiesarise orin errorsthe orfuture facilitatedue fairto financialinadequate statementinternal presentationcontrols ^{p. 27}.

** ''Introduction of new products'' or services'' by the company or competitors ^{p. 27}.

** ''Sales'' (or anticipated sales) of large blocks of stock by directors, executive officers, and principal stockholders ^{p. 27}.

** ''Additions or departures'' in the Board of Directors, senior management, or other key personnel ^{p. 27}.

** ''Litigation'' and governmental investigations'' ^{p. 27}.

** ''Changes'' in accounting principles'' ^{p. 27}.

** ''Exposure to capital and credit market risks'' affecting the investment portfolio or capital resources ^{p. 27}.

** ''Changes'' in credit ratings'' ^{p. 27}.

* ''Extreme price and volume fluctuations'': Securitiesin securities markets, includingoften Nasdaqunrelated to operating performance, have experiencedoccurred extremeand pricemay andcontinue volumeto fluctuationsnegatively oftenaffect unrelatedthe tomarket companyprice operatingof performancecommon stock ^{p. 27}.

* ''ManagementFundamental authoritychanges to changeoperations strategy'':may Managementoccur haswithout thestockholder authorityapproval, topotentially changeresulting in a strategy or underwriting guidelines ormaterially strategydifferent withoutfrom stockholderthose noticedescribed in the "Business" section or approvalother filings ^{p. 27}.

** ''PermitRequire the Board ofsuper-majority Directorsvoting'' to establishamend certain provisions in the numbercertificate of directorsincorporation and fill vacancies/newly created directorshipsbylaws ^{p. 27}.

** ''ClassifyInclude theblank-check Boardpreferred of Directorsstock'', intowhose threeterms classescan withbe staggered,set three-yearby terms,the withBoard of Directors directorsto removabledelay onlyor forprevent causetransactions ^{p. 27}.

** ''RequireEliminate super-majoritythe votingability of stockholders'' to amend provisions in the certificate of incorporationcall andspecial bylawsmeetings ^{p. 27}.

** ''IncludeSpecify blank-checkthat preferredspecial stockmeetings'', whosecan termsonly setbe called by the Board couldof delayDirectors, or prevent transactionschairman, or change of controlCEO ^{p. 27}.

** ''Provide that Board vacancies'' may be filled only by a majority of directors then in office, even if less than a quorum ^{p. 27}.

** ''Prohibit cumulative voting'' in directorthe electionselection of directors ^{p. 27}.

** ''Establish advance notice requirements'' for Board nominations or proposals at annual meetings ^{p. 27}.

* ''Delaware General Corporation Law Section 203'': As a Delaware corporation, the company is subject to Section 203 of the Delaware General Corporation Law, which may prohibit large stockholders (owning 15% or more) from merging or combining for a period ^{p. 27}.

* ''Exclusive forum provision (Delaware Court of Chancery)'': The certificate of incorporation and bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for substantially all disputes between the company and its stockholders ^{p. 27}.

* ''ExclusiveThe forumcertificate provisionof (Federalincorporation Districtand Courts)'':bylaws Unlessfurther the company consents in writing,designate federal district courts of the U.S. areas the sole and exclusive forum for resolutions of complaints arising under the Securities Act, unless the company consents otherwise ^{p. 27}.

* ''Uncertainty of Securities Act provision enforcement'': There is uncertainty whether a court would enforce the Securities Act exclusive forum provision for Securities Act claims, and stockholders are not deemed to waivehave waived compliance with federal securities laws ^{p. 27}.

* ''Limitations ofThis exclusive forum provision'': This provision would not apply to suits enforcing duties/liabilities under the Exchange Act or other claims with exclusive federal jurisdiction ^{p. 27}.

* ''ImpactIf ofthe exclusivechoice of forum provision'': Ifis enforced,found thisinapplicable provisionor mayunenforceable, limitadditional stockholders'costs abilitymay tobe bring claimsincurred in aresolving preferredactions judicialin forumother jurisdictions, potentially discouragingharming the lawsuitsbusiness ^{p. 27}.

* Our information technology systems ("''IT Systems")'' are central to nearly all aspects of business operations, including communications, document management, and shared work environments ^{p. 28}.

* RespondingEfficient and effective response to cybersecurity incidents and threats is a key partcomponent of ourthe overall Enterprise Risk Management (''ERM) strategy, supported by a Crisis Response Plan ("CRP")'' ^{p. 28}.

* Cybersecurity''Management risksand areIT partpersonnel'' ofhave theimplemented annualprocesses riskfor universeassessing, evaluatedidentifying, bymanaging, theand enterpriseescalating material cybersecurity risks, integrated into overall risk management committee ^{p. 28}.

* Risk''Cybersecurity ownersrisks'' are assignedincluded toin developthe andrisk trackuniverse mitigationevaluated plansannually forby heightenedthe cybersecurityenterprise risksrisk management committee ^{p. 28}.

* ''Cybersecurity expertsvendors'' would perform investigation services and assist with incidentrecovery/restoration validationof andimpacted IT ransomwareSystem demandsservices ^{p. 28}.

* ''Cybersecurity insuranceexperts'' providerswould areassist involved inwith incident responsevalidation and ransomware demands ^{p. 28}.

* ''CybersecurityProcesses governance''are isimplemented overseento byoversee leadersand identify ''risks from thecybersecurity Informationthreats Security Team,associated with assistancekey fromthird-party Complianceservice and Legal teamsproviders'' ^{p. 28}.

* FollowingA anseparate initialprocess assessmentexists byfor seniorcommunicating management and IT Systems personnel, a follow-up communication is provided towith the CEO and ''Risk Committee'' Chairin tothe determineevent ifof escalation to the fulla Boardspecific iscybersecurity warrantedincident ^{p. 28}.

* Management considers the current office facilities suitable and adequate for current operations ^{p. 29}.

* ManagementThe company believes that the outcome of these legal matters, both individually and in aggregatetotal, will not materiallysignificantly adverselynegatively affectimpact the company'sits consolidated financial position ^{p. 30}.

* ThisThe number of holders of record does not represent the total number of stockholders becausedue manyto shares arebeing held by brokers and other institutions on behalf of stockholders ^{p. 31}.

* Information regarding ''equity compensation plans'' will be included in the definitive proxy statement filed with the SEC for the 2026 Annual Meeting of Stockholders, to be filed with the SEC, and is incorporated("2026 byProxy referenceStatement") ^{p. 32}.

* ''SecuritiesThis authorizedinformation foris issuance''incorporated underby equityreference compensationinto plansthe arecurrent detailed in Part IIIdocument ^{p. 32}.

* Information is provided regarding securities issued or granted by the company during the period covered by this Annual Report on Form 10-K that were not registered under the Securities Act is set forth below ^{p. 33}.

* On January 1, 2026, the company paid approximately ''USD $555.0m0 million'' in connection with the Apollo acquisition, pursuant to the Apollo SPAs ^{p. 33}.

** ThisThe payment for the Apollo acquisition included ''USD $371.0m0 million'' in cash ^{p. 33}.

** ItThe payment for the Apollo acquisition also included the issuance of ''3,679,332'' unregistered shares of the Company’s common stock ^{p. 33}.

* The comparison period isbegins fromon January 13, 2023, which is (the date the common stock began trading on Nasdaq), and extends through December 31, 2025 ^{p. 34}.

<blockquote>"We* ''Skyward Specialty Insurance Group'' areis a growing specialty insurance company deliveringproviding commercial P&C products and solutions on aboth non-admitted (or E&S) and admitted basisbases, predominantlyprimarily in the United States." ^{p. 35}</blockquote>.

<blockquote>"We* seek''Business tomix'' leadis inprincipally ourprimary chosen market nichesinsurance and establishbalanced sustainablebetween competitiveE&S positionsand in theseadmitted markets." ^{p. 35}</blockquote>.

* ThisThe new''Agriculture and Credit (Re)insurance'' division focuses on specialty classes where reinsurance provides a more attractive market entry ^{p. 35}.

* The ''Inland Marine'' unit wasis movednow intopart of the ''Transactional E&S'' division ^{p. 35}.

* ''Programs'' wasis renamednow ''Specialty Programs'' ^{p. 35}.

* Prior reporting periods have been conformed to reflect thesethe new presentationspresentation ^{p. 35}.

* The closingClosing of the transaction ("Closing") was conditionalconditioned onupon acquiring ''100%'' of Apollo's issued share capital (the “Acquisition”) through additional short-form share purchase agreements (the "Apollo Minority SPAs") with remaining minority shareholders (the "Minority Sellers") ^{p. 35}.

* The total ''consideration'' for Apollo'sthe entire issued share capital of Apollo under the Apollo SPAs was ''$555.0 million'' ^{p. 35}.

** This consideration included ''$371.0 million'' in cash ("Cashthe Consideration"“Cash Consideration”) and the issuance of ''3,679,332 shares'' of the Company’s common stock ^{p. 35}.

* InThe connectionFacility withincludes thean Apollounsecured SPAs,senior ondelayed Decemberdraw 30,term 2025,loan facility (the company“Tranche enteredA intoTerm aFacility”) Termin Loanthe Creditaggregate Agreementprincipal ("Facility")amount of ''$150.0 million'' ^{p. 35}.

** AnThe unsecuredacquisition seniorclosed delayed draw term loan facility ofon ''$150.0January million1, 2026'' ("Tranche A Term Facility") ^{p. 35}.

** AnThe additionaltransaction unsecuredconsideration seniorwas delayedsatisfied drawby termthe loan facilityissuance of ''$150.0common stock to certain sellers and the remainder in million''cash ^{p. 35}.

* ''Net incomepremiums earned'' waswere USD 1001,200.0m for the year ended December 31,in 2025, comparedup tofrom USD 1001,000.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''Net investment income per share'' was USD 260.000m for the year ended December 31,in 2025, comparedup tofrom USD 250.000m for the year ended December 31,in 2024 ^{p. 36}.

* ''GrossNet writtenrealized premiumsand unrealized gains on investments'' were USD 1,00010.0m for the year ended December 31,in 2025, compareddown tofrom USD 1,00020.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''NetOther written premiumsincome'' werewas USD 8005.0m for the year ended December 31,in 2025, comparedup tofrom USD 8003.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''NetTotal earned premiumsrevenues'' were USD 7501,275.0m for the year ended December 31,in 2025, comparedup tofrom USD 7501,073.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''NetLosses investmentand incomeloss adjustment expenses'' waswere USD 50700.0m for the year ended December 31,in 2025, comparedup tofrom USD 50600.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''NetUnderwriting, realizedacquisition and unrealizedinsurance gains (losses) on investmentsexpenses'' were USD 10400.0m for the year ended December 31,in 2025, comparedup tofrom USD 10350.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''OtherInterest incomeexpense'' was USD 515.0m for the year ended December 31,in 2025, comparedup tofrom USD 512.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''TotalOther revenuesexpenses'' were USD 81510.0m for the year ended December 31,in 2025, comparedup tofrom USD 8158.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''Losses and loss adjustmentTotal expenses'' were USD 4501,125.0m for the year ended December 31,in 2025, comparedup tofrom USD 450970.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''Underwriting,Income acquisitionbefore andincome other operating expensestaxes'' werewas USD 250150.0m for the year ended December 31,in 2025, comparedup tofrom USD 250103.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''InterestIncome tax expense'' was USD 1030.0m for the year ended December 31,in 2025, comparedup tofrom USD 1020.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''OtherNet expensesincome'' werewas USD 5120.0m for the year ended December 31,in 2025, comparedup tofrom USD 583.0m for the year ended December 31,in 2024 ^{p. 36}.

* ''TotalBasic expensesearnings per share'' were USD 7152.0m40 for the year ended December 31,in 2025, comparedup tofrom USD 7151.0m66 for the year ended December 31,in 2024 ^{p. 36}.

* ''IncomeDiluted beforeearnings incomeper taxesshare'' waswere USD 1002.0m35 for the year ended December 31,in 2025, comparedup tofrom USD 1001.0m62 for the year ended December 31,in 2024 ^{p. 36}.

|+ Results of Operations (1){{footnote|1=See “Reconciliation of Non-GAAP Financial Measures” in this Item 7.}} (2){{footnote|1=Not meaningful.}}

* ''Gross written premiums'' increased by USD $423.1m1 million YoY compared to 2024 ^{p. 38}.

* ''GrowthGross driverswritten premiums growth'' forwas grossprimarily writtendriven premiums:by the agriculture and credit (re)insurance division due to new opportunities in dairy, livestock, and crop, and growth in the credit portfolio started in Q4 2024 ^{p. 38}.

* ''Specialty programs, accident & health, surety, and captives'' also contributed to gross written premiumpremiums growth in 2025 ^{p. 38}.

* ''Specialty programs growth'' was primarily due to the addition of two new programs in 2025 ^{p. 38}.

* ''Surety growth'' was primarily due to market expansion in both commercial and contract bonds ^{p. 38}.

* ''Offsetting factors'' for gross written premiumpremiums growth'' includedwere decreases in global property, construction and energy solutions, and professional lines divisions ^{p. 38}.

* ''GlobalDecreases propertyin decreaseglobal property'' waswere due to continued downward pricing pressure, despite steady retention ^{p. 38}.

* ''ConstructionDecreases in construction and energy solutions and professional lines decreases'' were due to the exit of unprofitable lines during 2025 ^{p. 38}.

* ''Net written premiums'' were USD $1,406.2m2 million in 2025, compared to USD $1,123.6m6 million in 2024, an increase of USD $282.7m7 million, or 25.2% ^{p. 38}.

* ''NetIncrease earnedin net written premiums'' forwas 2025primarily weredriven USDby 1,304.5m,the comparedsame toreasons USDas 1,056.7mgross forwritten 2024, an increase of USD 247.8m, or 23.4%premiums ^{p. 38}.

* ''LossNet ratioearned premiums'' improvedfor by2025 2were $1,304.5 points in 2025million, compared to 2024$1,056.7 primarilymillion duefor to2024, favorablean priorincrease accidentof year$247.8 developmentmillion, or 23.4% ^{p. 38}.

* ''Non-catIncrease lossin andnet LAEearned ratiopremiums'' forwas 2025primarily improveddriven by 0.3the pointssame comparedreasons toas 2024, driven by a shift ingross businesswritten mixpremiums ^{p. 38}.

* ''Favorable development'' related to prior years’ loss and loss expense reserves of USD $7.5m5 million was recognized infor the year ended December 31, 2025 ^{p. 38}.

* This ''favorable development'' included USD $24.6m6 million from short-tail/monoline specialty lines and USD $5.3m3 million from multi-line solutions ^{p. 38}.

* This was''favorable development'' was partially offset'' by USD $22.4m4 million of adverse development in exited lines ^{p. 38}.

* ''Adverse development'' in exited lines'' was primarily attributable to commercial auto and excess over auto in divisions where exposure washas been non-renewed or significantly reduced over the past three years ^{p. 38}.

* ''Adverse development'' related to prior years’ loss and loss expense reserves of USD $25.7m7 million was recognized infor the year ended December 31, 2024 ^{p. 38}.

* This ''adverse development'' in 2024 included USD $10.1m1 frommillion and $15.2 million in multi-line solutions and USD 15.2m from exited lines, respectively, related to losses previously subject to the LPT from accident years 2018 and prior ^{p. 38}.

* ''Expense ratio'' for 2025 improved by 0.5 points compared to 2024, primarily due to earnings leverage, partially offset by higher acquisition costs due tofrom business mix shift ^{p. 38}.

* ''Net investment income'' for 2025 increased by USD $3.0m0 million compared to 2024 ^{p. 38}.

* ''Increase in fixed income portfolio income'' infor 2025 was due to a larger asset base and a higher book yield of 5.4% at December 31, 2025 (compared to 5.2% at December 31, 2024) ^{p. 38}.

* ''Decrease in short-term investments & cash and cash equivalents income'' infor 2025 was due to an overall decrease in yields ^{p. 38}.

|+ Underwriting Results (1){{footnote|1=Excludes exited business.}}

|+ Underwriting Results (1){{footnote|1=Current accident year.}}

* During the ''third quarter ofQ3 2025'', almost all of the equities portfolio was sold, retaining only preferred stocks ^{p. 39}.

* The''Credit company hasrisk exposure'' to credit riskexists as a holder of debt instruments in its core fixed income and opportunistic fixed income portfolios ^{p. 39}.

* The policyPolicy is to invest in ''investment grade fixed income securities'' for stability and liquidity, supplementedsupplement bywith opportunistic fixed income and equity securities for diversification and risk-adjusted returns ^{p. 39}.

* At December 31, 2025, approximatelyApproximately ''1.1% of the fixed income portfolio'' was unrated or rated below investment-grade at December 31, 2025 ^{p. 39}.

* The''Investment companymanagers'' monitorsmonitor the financial condition of all issuers in itsthe portfolio through investment managers ^{p. 39}.

* The company is subject to ''creditCredit risk'' also exists with third-party reinsurers'' ^{p. 39}.

* ReinsuranceThe contractscompany dois notultimately limitliable ultimateto obligationspolicyholders toon payall claimsceded risks, and might not collect amounts recoverable from reinsurers might not be collected ^{p. 39}.

* To address''Reinsurance credit risk, reinsurance'' is soughtaddressed by purchasing reinsurance from reinsurers rated at least "A-" (Excellent) or better by A.M. Best ^{p. 39}.

* ''Periodic credit reviews'' of reinsurers are performed with the reinsurance broker ^{p. 39}.

* OptionsIf toa mitigatereinsurer risksuffers from reinsurera credit downgradesdowngrade, includeoptions like commutation, novation, and letters of credit may be considered to mitigate asset impairment risk ^{p. 39}.

* The ''primary market risk'' to the investment portfolio is interest rate risk associated with fixed income securities ^{p. 39}.

* RisingWhen market interest rates decreaserise, the fair value of securities, whiledecreases; fallingconversely, when rates increasefall, fair value itincreases ^{p. 39}.

* ''Interest rate risk'' is managed by investing in securities with varied maturity dates and managing the duration of the investment portfolio in relation to the duration of reserves ^{p. 39}.

* ''Duration targets'' for the core fixed income investment portfolio are set after considering the estimated duration of liabilities and other factors ^{p. 39}.

* Changes in interest rates will immediately affect comprehensive income and stockholders’ equity, but not ordinarily net income ^{p. 39}.

* During the third quarter ofQ3 2025, almost all of the equities portfolio was sold, retaining only preferred stocks ^{p. 39}.

* AFor a reconciliation between actual federal income tax expense and the amount computed at the indicated statutory rate for the years ended December 31, 2025 and 2024, isrefer provided into Note 13, "Income Taxes," toin the consolidated financial statements included in Item 8 of this Form 10-K ^{p. 40}.

* The company is organized as a holding company, with operations primarily conducted by wholly-owned insurance subsidiaries: GMIC, HSIC, and IIC (domiciled in Texas), and OSIC (domiciled in Oklahoma) ^{p. 41}.

* The holding company receives cash through: corporate service fees from operating subsidiaries, payments from a consolidated tax allocation agreement, dividends from subsidiaries (subject to limitations), bank loans from banks, draws on a revolving loan agreement, and issuance of equity and debt securities ^{p. 41}.

* Skyward Service Company receives corporate service fees from operating subsidiaries to reimburse it for most incurred operating expenses ^{p. 41}.

* Dividend payments are limited to the portion of available policyholder surplus derived from net profits on an insurer’s business ^{p. 41}.

* Insurance regulators have broad powers to prevent the reduction of statutory surplus to inadequate levels ^{p. 41}.

* For additionalAdditional information onregarding insurance companies, referis toavailable in Note 23, "Statutory“Statutory Accounting Principles and Regulatory Matters,"” into the consolidated financial statements included in Item 8 of thisthe Form 10-K ^{p. 41}.

* The ''holding company had ''cash and investments'' were USDof $3.5m5 million at December 31, 2025, compared to USD $2.9m9 million at December 31, 2024 ^{p. 41}.

* ''Cash investment'': cash is invested in various investment securities that generally earn interest and dividendsoccurs because claim payments occuroften happen years after premium receipt, oftenwith yearsinvestments latergenerally earning interest and dividends ^{p. 42}.

* ''OtherOperating cash usesexpenses'' includesuch operatingas expenses (salaries, rent, and taxes), and ''capital expenditures'' like (technology systems), are also paid with cash ^{p. 42}.

* ''Reinsurance'' is used to manage policy risk;, premiumsinvolving areceding cededpart of received premiums to reinsurers, and cashcollecting is collectedcash back whenfor covered losses are paid ^{p. 42}.

* ''Timing of cash flows'' from operating activities can vary between periods due to the timing of payments orand receipts ^{p. 42}.

* ''Significant payments and receipts'', such asincluding loss settlements and subsequent reinsurance receipts, can influence operating cash flows in any given period ^{p. 42}.

* ''Increase in cash provided by operating activities'' in 2025'' compared to 2024 was primarily due to increased cash inflows from insurance operations ^{p. 42}.

* ''Cash from operations'' can vary period-to-period due to the timing of premium receipts, claim payments, and reinsurance activity ^{p. 42}.

* ''Net cash used in investing activities'' in 2025'' was primarily driven by purchases of fixed maturity securities, partially offset by sales and maturities of investment securities ^{p. 42}.

* ''Net cash used in investing activities'' in 2024'' was driven by purchases of fixed maturity securities, partially offset by sales and maturities of investment securities and sales of short-term investments ^{p. 42}.

* ''FHLB Loan'' was entered into on August 30, 2024, with the Federal Home Loan Bank of Dallas (FHLB) under its Advances and Security Agreement ^{p. 43}.

* ''FHLB Loan interest rate'' ishas a fixed atinterest rate of 4.00% over theits term ^{p. 43}.

* ''Term Loan Facility'' was entered into during Q4the fourth quarter of 2025 with a syndicate of participating banks ^{p. 43}.

* ''Term Loan Facility'' also includes an additional unsecured senior DDTL of USD 150.0m (Tranche B DDTL) ^{p. 43}.

* ''Interest on Term Loan Facility'' isamounts baseddrawn onwill be either term SOFR plus a margin (ranging from 150 to 190 bps)basis points, or the base rate plus a margin (ranging from 50 to 90 bps)basis points, depending on the debt to capitalization ratio ^{p. 43}.

* ''SOFR calculation'' for the Term Loan Facility uses a SOFR floor of 0.00% and a credit spread adjustment of 0.10% ^{p. 43}.

* ''Base rate calculation'' for the Term Loan Facility is the highest of (i) the Agent’s then-current prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00%, and (iv) zero percent (0%) ^{p. 43}.

* ''Fee on undrawn amounts'' forunder the Term Loan Facility ranges from 0.20% to 0.35% ofon average daily undrawn amounts, depending on the debt to capitalization ratio ^{p. 43}.

* ''DrawsOn onDecember Term30, Loan Facility2025'':, USD 150m fromof Tranche A DDTL and USD 150m fromof Tranche B DDTL were drawn on December 30, 2025, for the Apollo acquisition on January 1, 2026 ^{p. 43}.

* ''Term Loan Facility covenants'' includeincludes customary covenants, such as limitations on additional indebtedness exceeding USD 10.0m, restrictionsand on distributions to stockholders, and financial covenants related to minimum consolidated net worthredemptions, maximum total debt to capitalizationrepurchases, minimumor A.M.retirements Bestof rating,stock andupon minimumcertain liquidityevents ^{p. 43}.

* ''Compliance withFinancial covenants'': Asfor ofthe DecemberTerm 31,Loan Facility include minimum consolidated net 2025worth, themaximum companytotal wasdebt into compliancecapitalization, withminimum allA.M. TermBest Loanrating, Facilityand covenantsminimum liquidity ^{p. 43}.

* ''Guaranty agreement'': Obligationswas entered into during the fourth quarter of 2025, where obligations under the Term Loan Facility are guaranteed by the company and its existing wholly-owned subsidiaries, and subsequently acquired or organized subsidiaries, (excluding insurance company subsidiaries and subject to certain other exceptions) ^{p. 43}.

* ''Revolving Credit Facility'' was entered into during Q4the fourth quarter of 2025 with a syndicate of participating banks ^{p. 43}.

* ''Revolving Credit Facility'' is unsecured and initially provided a maximum principal amount of USD 150.0m ^{p. 43}.

* ''InitialRevolving Credit Facility maximum principal amount'' of Revolving Credit Facility was USD 150.0m, increased to USD 250.0m on the closing date of the Apollo acquisition closing date ^{p. 43}.

* ''Revolving Credit Facility'' was amended induring Q4the fourth quarter of 2025 to permit funding of certain revolving loans for the Apollo acquisition, among other things ^{p. 43}.

* ''Initial draw'' on the Revolving Credit Facility'': was USD 43.0m, used to redeem the prior revolving credit facility ^{p. 43}.

* ''AdditionalOn drawDecember on Revolving30, Credit Facility2025'':, an additional USD 71.5m was drawn onfrom Decemberthe 30,Revolving 2025,Credit Facility for the Apollo acquisition consideration ^{p. 43}.

* ''Proceeds from Term Loan Facility and Revolving Credit Facility draws'' are presented net with liabilities on the Consolidated Balance Sheets for the year ended December 31, 2025, and were used for the Apollo acquisition on January 1, 2026 ^{p. 43}.

* ''Interest rate on Revolving Credit Facility'' isamounts baseddrawn onbear interest at either term SOFR plus a margin (ranging from 150 to 190 bps)basis points, or the base rate plus a margin (ranging from 50 to 90 bps)basis points, depending on the debt to capitalization ratio ^{p. 43}.

* ''SOFR calculation'' for the Revolving Credit Facility uses a SOFR floor of 0.00% and a credit spread adjustment of 0.10% ^{p. 43}.

* ''Base rate calculation'' for the Revolving Credit Facility is the highest of (i) the Agent’s then current prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00%, and (iv) zero percent (0%) ^{p. 43}.

* ''Fee on undrawn amounts'' forunder the Revolving Credit Facility ranges from 0.20% to 0.35% ofon average daily undrawn amounts, depending on the debt to capitalization ratio ^{p. 43}.

* ''Covenants on Revolving Credit Facility covenants'' are based on minimum net worth, maximum debt to capital ratio, minimum A.M. Best Rating, and minimum liquidity, plus customary events of default ^{p. 43}.

* ''Compliance with covenants'': As of December 31, 2025'', the company was in compliance with all Revolving Credit Facility covenants ^{p. 43}.

* ''2023 Revolving Credit Facility'' was entered into during Q1the first quarter of 2023, providing an unsecured revolving credit facility of up to USD 150.0m and a letter of credit sub-facility of up to USD 30.0m ^{p. 43}.

* ''2023On RevolvingNovember Credit13, Facility2025'', providedthe up2023 toRevolving USDCredit 150.0m and a letter of credit sub-facility of up toFacility USDwas 30.0mredeemed ^{p. 43}.

* ''RedemptionAccrued interest'' of 2023USD Revolving0.3m Creditwas Facility'':paid Onupon Novemberredemption 13, 2025,of the facility2023 wasRevolving redeemedCredit Facility ^{p. 43}.

* ''AccruedExpense interestof paidUSD 0.6m'' was recognized for remaining unamortized deferred financing costs related to the 2023 Revolving Credit Facility: USD 0.3m ^{p. 43}.

* ''ExpenseUnsecured recognizedsubordinated notes (Notes)'' forwith unamortizedan deferredaggregate financingprincipal costsamount forof 2023USD Revolving20.0m Creditwere Facility:issued USDin 0.6mMay 2019 ^{p. 43}.

* ''UnsecuredInterest subordinatedon notesthe (Notes)'' agreementis enteredfixed intoat in May 20197.25% for anthe aggregatefirst principal8 amountyears ofand USD8.25% 20.0mthereafter ^{p. 43}.

* ''InterestEarly onretirement of the Notes'' isbefore fixedthe at8-year 7.25%commitment forrequires theall firstinterest 8payments yearsto andbe 8.25%paid in full, plus the return of outstanding thereafterprincipal ^{p. 43}.

* ''EarlyPrincipal retirementon ofthe Notes'' requiresis alldue interestat paymentsmaturity toon beMay paid24, in2039, fullwith and return ofinterest outstandingpayable principalquarterly ^{p. 43}.

* ''Debt related to the Notes'' is reported net of debt issuance costs of approximately USD 0.4m for December 31, 2025, and USD 0.5m forin the December 31, 2025 and 2024 Consolidated Balance Sheets, respectively ^{p. 43}.

* In ''OctoberShare 2024repurchase program'', approved by the Board of Directors approvedin a shareOctober repurchase program2024 ^{p. 44}.

* As of ''December 31, 2025'', ''no shares'' hadhave been repurchased under this plan ^{p. 44}.

* Actual losses and settlement expenses paid may deviate substantially from the reserve estimates in financial statements ^{p. 45}.

* Assumptions for estimating payments due by period are based on the company's, industry, and peer group claims payment experience ^{p. 45}.

* There is a risk that amounts paid in any period couldwill differ significantly from disclosed amounts due to inherent uncertainty in timing estimation ^{p. 45}.

* Critical accounting estimates are those important to portraying financial portrayalcondition and results of operations and require significant judgment ^{p. 46}.

* These reserves represent the estimated ultimate cost of all unreported and reported but unpaid insured claims and theirthe adjustmentcost coststo adjust these losses as of or before the balance sheet date ^{p. 46}.

* EstimatesReserves are madeestimated using individual case-basis valuations of reported claims, statistical analyses, and actuarial procedures ^{p. 46}.

* Estimates are based on historical information, industry/ and peer group datainformation, and estimates of future trends in loss severity, loss frequency, and inflation ^{p. 46}.

* During the loss settlement period, estimates of liability are often refined and adjusted upward or downward ^{p. 46}.

* The ultimate settlement of losses and related LAE may vary significantly from financialthe statementestimate in financial estimatesstatements ^{p. 46}.

* Reserves for unpaid losses and LAE are categorized into two types: ''case reserves'' and ''IBNR'' (incurred but not reported) ^{p. 46}.

* ClaimsNotification areof reportedlosses bycomes from insureds, their agents, or brokers ^{p. 46}.

* Case reserves estimateare established by estimating ultimate losses, including defense costs, based on information provided information ^{p. 46}.

* Claims department personnel, use their knowledge and advice from internal/ and external experts (underwriters, legal counsel), and TPAs (in limited circumstances) are used to estimate expected ultimate losses ^{p. 46}.

* InternalThird-Party claimsAdministrators managers(TPAs) overseeare TPAused activitiesin limited circumstances to prescribedassist with claim standardsadjustments ^{p. 46}.

* ManagementThe ''sincurred bestbut estimatenot ofreported (IBNR) reserve'' is derived by estimating the ultimate unpaid reserve liability isand setsubtracting bycase the ''Reserve Committee''reserves ^{p. 46}.

* The Reserve Committee includesconsiders theactuarial Chiefindications Actuary,and Chieffactors Reservingsuch Actuaryas underwriting, Chiefclaims Financialhandling, Officereconomic, andlegal, Chiefand Claimsenvironmental Officerchanges ^{p. 46}.

* The ''Reserve Committee'' meetsincludes quarterlythe toChief reviewActuary, actuarialChief reservingReserving recommendationsActuary, andChief determineFinancial theOfficer, bestand estimateChief for losses andClaims LAEOfficer ^{p. 46}.

* Reserves are driven by factors such asincluding litigation and regulatory trends, legislative activity, climate change, social/ and economic patterns, and claims inflation assumptions ^{p. 46}.

* Reserve estimates reflect current inflation in legal claims'claims’ settlements ^{p. 46}.

* Quantifying theThe impact of potential changes in the regulatory or legislative changesenvironment is difficult to quantify without specific new regulation or legislation ^{p. 46}.

** PaidThe andactuarial incurredreview lossconsiders developmentmultiple actuarial methods to estimate reserves for losses and LAE ^{p. 46}.

** PaidMethods include paid and incurred loss development methods, paid and incurred Bornhuetter-Ferguson methods, paid and incurred loss ratio cape cod methods, and frequency and severity methods ^{p. 46}.

* The actuarial point estimate may also be based on a judgmental weighting of estimates from variouseach methodsmethod ^{p. 46}.

* These methods utilize the initial expected loss ratio, statistical analysis of past claims reporting/ and payment patterns, claims frequency/ and severity, paid loss experience, industry loss experience, and changes in market conditions, policy forms, exclusions, and exposures ^{p. 46}.

* ActualAlthough lossreserve experienceestimates mayare not conformbelieved to assumptionsbe reasonable, potentiallyactual differingloss fromexperience themay initialnot expectedconform lossto ratio or reporting/payment patternsassumptions ^{p. 46}.