American Integrity Insurance Group, Inc. (AII) Earnings

Management highlights

- Overall Company Performance & Milestones * The company achieved record Q2 2026 results, with 43,000 new voluntary business policies (a company record), representing 54% year-over-year growth and 44% sequential growth from Q1 2026. * Record pre-tax income of $46.4 million, the highest quarterly level in company history, up 93% year-over-year. Total enforced premium crossed $1 billion, with 462,000 policies in force, up 15.7% year-over-year and 5.6% sequentially. * Net income was $34.1 million ($1.74 per diluted share), adjusted net income was $34.9 million ($1.78 per diluted share), with a combined ratio of 63.4%, down from 72.9% year-over-year, demonstrating strong underwriting profitability alongside rapid growth. - Growth Strategy Traction * All three core strategic growth initiatives (Tri-County Florida expansion, reentry to middle-aged home segment, Southeast geographic expansion) delivered accelerating traction, all within the company's existing underwriting core competencies, no risky expansion into unfamiliar lines or risks. * Growth is driven primarily by long-standing agency distribution partners, rather than new partnerships: agents are consolidating business with a smaller set of trusted stable carriers, and American Integrity's service consistency, underwriting reliability, and long market tenure position it to capture additional share from existing partners. - Florida Market & Regulatory Update * Florida's 4-year-old legislative insurance reforms continue to deliver expected positive results: industry-wide litigation activity is steadily declining, loss cost trends are favorable, and reinsurance pricing has improved meaningfully. * The reform environment is creating a stable, sustainable marketplace with no irrational competition, and as consumers experience benefits of reform, it becomes increasingly politically durable, supporting a stable operating environment. - Catastrophe Reinsurance Renewal Outcome * The June 1, 2026 catastrophe excess of loss reinsurance renewal delivered strong results: the company renewed at risk-adjusted rate reductions of 15-20% (consistent with broader market declines), maintained target 1-in-130 year probable maximum loss (PML) protection, and improved the retention structure. * Aggregate event retention was reduced from $95 million to $75 million (improving the company's net risk profile) even as peak season exposure grew 19% year-over-year, with total catastrophe protection of $3 billion, including $2.25 billion of third-party coverage for a single event. Total expected annual catastrophe reinsurance cost remains in the $430-$440 million range, unchanged from prior guidance. - Balance Sheet & Capital * Shareholders' equity grew to $369.5 million at quarter end, book value per share hit $18.86, up 22.3% year-over-year and 10.1% sequentially from Q1 2026, demonstrating consistent value creation for shareholders.

Guidance

- Expected annual catastrophe reinsurance cost is maintained at the prior guidance range of $430 to $440 million, with no upward or downward revision. - The company confirms it has sufficient existing capital to support its current strong organic growth trajectory, with no need for additional capital to fund planned expansion. - Net investment income is expected to continue steady growth after the company deployed ~$200 million of excess cash into high-quality fixed income securities shortly after quarter end, with new money yields in the high 4% to near 5% range. - Management expects the current favorable operating environment in Florida to remain durable, with continued profitable growth from the company's core strategic initiatives in the second half of 2026.

Segment performance

American Integrity is structured around core geographic and customer segments, with the following Q2 2026 performance: 1) Core Florida Market: Gross premiums written grew 13.8% year-over-year to $327 million total companywide, with Florida representing the vast majority of the portfolio. Within Florida's voluntary new business: Tri-County region contributed 33% of voluntary new business gross written premium (up from a very small share in Q2 2025), with 7,600 new voluntary policies written, a 40x year-over-year increase. Middle-aged homes (a reentered core segment) contributed 24% of voluntary new business gross written premium (up from 4% in Q2 2025), with 9,000 new voluntary policies written, a 21x year-over-year increase. 2) Southeast Expansion States (Georgia, South Carolina, North Carolina): New business policies written increased 40% year-over-year, and new business gross written premium increased 50% year-over-year. This segment represented 18% of total voluntary new business policies and 10% of total voluntary new business gross written premium in Q2 2026, remaining a small share of the overall portfolio.

Risks & headwinds

- All forward-looking statements are subject to inherent risks and uncertainties, including hurricane catastrophe activity during the Florida peak season, which could impact actual results relative to expectations. - Florida political risk surrounding the durability of existing insurance reforms is partially mitigated by demonstrated positive results, but remains an underlying long-term operating risk for the company's core market. - Elevated mortgage rates have slowed Florida new construction volumes somewhat, creating pressure on new business production from that channel, partially offset by growth in other segments and geographic markets. - Market competition could potentially lead to irrational pricing in Florida, though management notes no such irrational competition is present in the current environment.

Analyst Q&A

• Q: As the middle-aged home segment you reentered after Florida's reforms grows, how do its margins compare to your traditional core business? /

  A: While the underlying gross loss ratio for middle-aged homes is modeled to be a few points higher than the overall portfolio, the pricing charged fully accommodates this additional risk. Management confirms profitability and margins for this segment are entirely consistent with the company's combined ratio targets and match margins of other business lines, as it is a segment the company has deep historical expertise in. Many of the policies are reentering the book from existing agents the company has worked with for decades, supporting strong underwriting quality. /

• Q: What did you mean by saying Florida's reforms become more durable over time, and has the rate environment adjusted to reflect the benefits of reforms? /

  A: The comment on durability refers to growing confidence from investors and reinsurers in the long-term stability of Florida's insurance market, not uncertainty about whether reforms will remain in place. The 'lawyer tax' driven by excessive litigation, which reforms addressed, has been largely resolved across the industry, allowing for rate reductions that align with lower loss costs. Reinsurance cost reductions and moderate inflation are the remaining dynamic factors in pricing, and the company has adjusted its pricing appropriately to reflect these changed market conditions. /

• Q: How should we expect the net underlying loss ratio to behave in Q3 2026 if there is no major hurricane loss, similar to the benign weather in Q3 2025? /

  A: The non-catastrophe quota share treaty cedes a small amount of catastrophe losses, so in a quarter with no hurricane losses, this structure temporarily creates a modestly elevated core loss ratio. The ceded premium adjustment that reverses this impact is not settled until the end of the treaty year in Q4, so the temporary elevation will only reverse in the final quarter of 2026, creating similar timing dynamics to what was seen in 2025. /

• Q: As you grow rapidly, how much capacity do you have to continue this growth trajectory, and what metrics should we monitor to gauge capacity? /

  A: Management confirms the company has a very healthy capital position, with strong RBC ratios and sufficient capital on hand to continue its current historic growth rate with its existing capital base. The company does not need to raise additional capital to fund its planned expansion, even as it retains a larger share of premium after cutting its non-catastrophe quota share.