AII

Business Context and Reporting Period

American Integrity Insurance Group, Inc. (AII) is a property and casualty insurer headquartered in Tampa, Florida, focusing primarily on residential property insurance in Florida, with expansion into Georgia and South Carolina. This Form 10-Q covers the quarterly period ended September 30, 2025. The reporting period includes the Company's Initial Public Offering (IPO) completed on May 9, 2025, and a corporate contribution that converted the Company from a private LLC to a public Delaware corporation.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Gross premiums written increased 39.3% to $738.2 million for the nine months ended September 30, 2025, compared to $530.1 million in the prior year. This was driven by the "Citizens" take-out program and growth in the Voluntary Market.
• Profitability: Net income surged 151% to $78.8 million for the nine-month period, compared to $31.3 million in 2024. The effective tax rate dropped to 8.2% from 22.2% due to a one-time deferred tax asset gain ($9.7 million) resulting from the change in tax status during the IPO.
• Underwriting Performance: The combined ratio improved significantly to 64.0% (nine months) and 78.9% (three months), down from 77.0% and 94.3% respectively in the prior year. This improvement was aided by the absence of significant storm activity in Florida during the current period.
• Policy Count: Policies in-force increased 48.6% to 406,094 as of September 30, 2025, from 273,222 in the prior year.
• Capitalization: Shareholders' equity more than doubled to $315.9 million from $162.4 million at year-end 2024, reflecting IPO proceeds and retained earnings.

Guidance, Outlook, Risks, and Unusual Items

• Unusual Items: The nine-month results include one-time expenses related to the IPO, including $10.4 million in stock-based compensation, $3.0 million for the termination of a management services agreement, and other transition costs. Conversely, a $9.7 million one-time tax benefit was recognized due to the corporate conversion.
• Outlook: Management expects continued growth through the Citizens take-out program and voluntary market expansion. The Company maintains a disciplined capital management approach to fund claims and growth without external financing.
• Material Weakness in Internal Controls: The Company disclosed a material weakness in internal control over financial reporting related to claims payments, reserve reconciliations, and ceding commission reconciliations. Remediation efforts are underway, including hiring additional personnel and enhancing documentation.
• Risks: Key risks include exposure to catastrophic weather events (hurricanes), the adequacy of loss reserves, regulatory changes in Florida, and the availability and cost of reinsurance. The Company relies heavily on third-party distribution partners.

Investor Verification Checklist

• Internal Control Remediation: Verify the progress of remediation efforts regarding the disclosed material weakness in internal controls over financial reporting.
• Loss Reserve Adequacy: Monitor future loss development trends, particularly given the Company's concentration in Florida and the inherent uncertainty of catastrophe modeling.
• Citizens Take-Out Sustainability: Assess the long-term profitability and renewal rates of policies assumed from Citizens Property Insurance Corporation.
• Reinsurance Costs: Track the impact of rising reinsurance rates on the expense ratio and combined ratio in future periods.
• Regulatory Environment: Stay informed on Florida legislative reforms and their potential impact on rate adequacy and litigation costs.