The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses (“LAE”):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
	(in thousands)						(in thousands)
Reserve for losses and LAE net of reinsurance recoverables at beginning of period	$	199,185		$	118,761		$	155,299		$	97,653
Add: Balance acquired from FIA(1)		—			—			6,788			—
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year		78,946			40,536			174,703			100,225
Prior years		(6,134	)		(221	)		(16,964	)		(2,642	)
Total incurred		72,812			40,315			157,739			97,583
Deduct: Loss and LAE payments, net of reinsurance, related to:
Current year		15,655			16,153			38,312			27,909
Prior years		12,629			5,649			37,801			30,053
Total payments		28,284			21,802			76,113			57,962
Reserve for losses and LAE net of reinsurance recoverables at end of period		243,713			137,274			243,713			137,274
Add: Reinsurance recoverables on unpaid losses and LAE at end of period		440,559			360,164			440,559			360,164
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$	684,272		$	497,438		$	684,272		$	497,438

(1)

Represents amounts recognized in Reserve for losses and LAE net of reinsurance recoverables upon acquisition of FIA on 1/1/2025, in accordance with ASC 805, Business Combinations. See Note 12 for additional information regarding the acquisition.

Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders’ equity.

The Company experienced favorable prior year development of $6.1 million and favorable prior year development of $0.2 million during the three months ended September 30, 2025 and 2024, respectively.

The Company experienced favorable prior year development of $17.0 million and favorable prior year development of $2.6 million during the nine months ended September 30, 2025 and 2024, respectively.

Favorable prior year development during the three months ended September 30, 2025 and 2024 was primarily due to lower than anticipated severity of attritional losses.

Favorable prior year development during the nine months ended September 30, 2025 and 2024 was primarily due to lower than anticipated severity of attritional losses.