Reinsurance

12 Months Ended

Dec. 31, 2025

Reinsurance Disclosures [Abstract]

Reinsurance

In order to limit the Company’s potential exposure to individual risks and catastrophic events, the Company

purchases reinsurance from third-party reinsurers as well as the FHCF, a state-mandated catastrophe fund for Florida

policies only. Most of the Company’s reinsurance partners were rated “A-” or higher by A.M. Best Company, Inc.

(“A.M. Best”) or “BBB” or higher by Standard & Poor’s Financial Services LLC (“S&P”) or were fully

collateralized.

In 2024, the Company also began participating in a “take-out program” through which the Company assumes

insurance policies held by Citizens. The take-out program is a legislatively mandated program designed to reduce

the state’s risk exposure by encouraging private companies to assume policies from Citizens.

The Company remains contingently liable in the event the reinsuring companies do not meet their obligations under

these reinsurance contracts. Given the quality of the reinsuring companies, management believes this possibility to

be remote. See Note 8 – “Liability for Unpaid Losses and Loss Adjustment Expenses” for recoveries due from

reinsurers relating to paid and unpaid losses and LAE under these treaties.

2025 – 2026 Reinsurance Program

Catastrophe Excess of Loss Reinsurance

Effective June 1, 2025, the Company entered into catastrophe excess of loss reinsurance agreements covering its

insurance subsidiary, AIIC. The catastrophe reinsurance program is indemnity-based and includes a combination of

coverage from traditional reinsurers, the FHCF, Insurance Linked Securities (“ILS”) investors through Integrity Re

III Ltd., and the Company’s segregated cell captive reinsurer.

The 2025–2026 reinsurance program provides third-party reinsurance coverage of $1.93 billion for a single

catastrophic event, with total third-party coverage of $2.59 billion across all occurrences, representing a 45%

increase over the prior year’s treaty limit. The Company’s net retention for the first and second events is $35.0

million, consisting of $10.0 million retained by AIIC and $25.0 million retained by the Company’s segregated cell

captive reinsurer. The retention for third and fourth catastrophic events decreases to $15.8 million and $10.0 million,

respectively, and is retained solely by AIIC.

The FHCF covers Florida-admitted risks only, and the Company elected to participate at 90% for the 2025 hurricane

season, consistent with the prior year. The FHCF provides coverage for named hurricanes only and provides no

coverage after the one-time limit is exhausted. Reinsurance premiums for the FHCF are paid on a total insured value

basis. In the event of a FHCF loss assessment, the Company may recoup the assessments from its policyholders.

Integrity Re III Ltd., a Bermuda-based special purpose insurer and unrelated party issued new catastrophe bonds

totaling $565.0 million as part of the program, marking the eighth and largest ILS transaction sponsored by the

Company.

All reinsurers participating in the program are either rated “A-” or higher by A.M. Best or are fully collateralized, to

mitigate counterparty credit risk. The entire program is structured without parametric covers and is fully indemnity-

based.

Total net consolidated catastrophe reinsurance premiums ceded to third parties are expected to be approximately

$433.3 million for the 2025–2026 treaty year, a 28% increase compared to the prior year.

Catstyle provides reinsurance coverage for layer one of AIIC’s catastrophe reinsurance program effective June 1,

2023 through May 31, 2024, June 1 2024 through May 31, 2025 and June 1 2025 through May 31, 2026. Catstyle is

a segregated account controlled by the Company. Catstyle is collateralized by the Company through contributions to

a trust account. Catstyle eliminates in consolidation. Refer to Note 3 – “Variable Interest Entity,” for further

information.

Reinstatement Premium Protection Agreement

The Company enters into reinstatement premium protection treaties each year that are effective covering the period

June 1 through May 31. Though the treaties overlap fiscal years, the terms are the same for each coverage period.

The reinstatement premium protection agreements reinsure the reinstatement premium payment obligations which

accrue under the commercial catastrophe excess of loss agreements for first event coverage. The coverage is limited

to 100% of the original contracted reinsurance placement.

Net Quota Share Reinsurance

The Company’s Net Quota Share coverage is proportional reinsurance. Effective December 31, 2024 to December

31, 2025, the Company entered into quota share agreements that generally provide coverage for 40% of all losses net

of other reinsurance coverages, the aggregate of which shall not exceed 116.6% of net ceded premiums earned. The

reinsurers’ net liability on catastrophe losses shall not exceed 2.5% of gross premiums earned net of inuring

reinsurance premium. In the determination of ceded premiums under the agreements, the maximum amount allowed

by the reinsurers for other inuring reinsurance coverages is limited to 31% of gross premiums earned for the term of

the contract. The reinsurers allow the Company a provisional ceding commission of 53.00% to 58.00%, depending

on the reinsurer, that adjusts based on loss experience.

The Company recognized ceding commission of $164,717 and $114,882 in 2025 and 2024, respectively.

Additionally, the agreements provide a profit commission based on attainment of certain underwriting results. In

2025 and 2024, the Company recognized a profit commission in the amount of $0 and $3,508.

Effective December 31, 2025 to December 31, 2026, the Company entered into quota share agreements that

generally provide coverage for 25% of all losses net of other reinsurance coverages, the aggregate of which shall not

exceed 116.6% of net ceded premiums earned. The reinsurers’ net liability on catastrophe losses shall not exceed

2.5% of gross premiums earned net of inuring reinsurance premium. In the determination of ceded premiums under

the agreements, the maximum amount allowed by the reinsurers for other inuring reinsurance coverages is limited to

31% of gross premiums earned for the term of the contract. The reinsurers allow the Company a provisional ceding

commission of 68.25% to 69.00%, depending on the reinsurer, that adjusts based on loss experience.

Flood Quota Share Reinsurance

Effective January 1, 2025, the Company entered into quota share agreements that cover policies classified by the

Company as primary flood business and generally provide coverage of 100% of all losses, not to exceed a ceded

reinsurance limit of $6,000 each policy, with buildings not to exceed $5,000 and contents not to exceed $1,000. The

Company is allowed a flat ceding commission of 27% on net written premium ceded. The Company recognized

ceding commission of approximately $823 in 2025. Additionally, the agreement provides a profit commission based

on attainment of certain underwriting results. There was no profit commission recognized in 2025 on these

agreements.

Per Risk Excess of Loss

Effective April 1, 2025, the Company entered into per risk excess of loss agreements that provide coverage of

$4,000 in excess of $1,500 not to exceed $15,000 for all losses occurring during the term of the agreements.

Effective April 1, 2024, the Company entered into per risk excess of loss agreements that provide coverage of

$5,000 in excess of $1,000 not to exceed $17,500 for all losses occurring during the term of the agreements.

Facultative Excess of Loss

Effective April 1, 2025, the Company entered into facultative reinsurance agreements that provide coverage for

qualifying ceded individual risks of $6,000 in excess of $6,000 not to exceed $12,000 with respect to all risks ceded

under these agreements involved in one loss occurrence. Prior to April 1, 2025, the Company was a party to similar

agreements that were effective April 1, 2024.

Home Systems Protection Reinsurance

Effective June 15, 2013, the Company entered into an agreement that provides 100% of the Company’s liability for

business classified as home systems protection and service line failures, for amounts up to $50 and $10, respectively,

for any one accident any one policy. The agreement is continuous until terminated.

Citizens Assumed Reinsurance

During the year ended December 31, 2025, the Company’s insurance subsidiary, AIIC, assumed approximately

33,867 residential policies, representing approximately $73,243 in assumed unearned premiums. The ratio of

assumed premiums earned to net premiums earned for the year ended December 31, 2025 was 54.1%. The ratio of

assumed premiums earned to net premiums earned for the year ended December 31, 2024 was 16.6%.

Effect of Reinsurance

The effects of reinsurance on premiums written and earned were as follows:


	Year Ended December 31,
	2025		2024
	Written	Earned	Written	Earned
Direct premiums	$871,391	$753,519	$655,255	$651,967
Assumed Premiums	73,243	131,439	112,423	30,249
Gross Premiums	944,634	884,958	767,678	682,216
Ceded premiums	(673,721)	(642,035)	(573,234)	(500,161)
Net premiums	$270,913	$242,923	$194,444	$182,055

The Company’s reinsurance arrangements affected certain items in the consolidated statements of operations and

comprehensive income for the years ended December 31, 2025 and December 31, 2024 by the following amounts:


	Year Ended December 31,
	2025	2024
Ceded premiums earned	$(642,035)	$(500,161)
Ceded losses and loss adjustment expenses incurred	(60,300)	517,549
Ceded policy acquisition expenses	164,717	114,882

For the years ended December 31, 2025 and December 31, 2024, recoveries received under reinsurance contracts

were $132,741 and $380,741, respectively.

In May 2024, the Company commuted its 2021 and 2022 reinsurance contracts with Horseshoe Re. Horseshoe Re

issued a payment of $1,805 to the Company in satisfaction of all liabilities and obligations under the contract. The

balance was applied to and reduced ceded losses and loss adjustment expenses by $2,492, resulting in a loss of $687.

In December 2024, the Company commuted its 2021 and 2022 reinsurance contracts with Ark Bermuda Limited.

Ark Bermuda Limited issued a payment of $2,470 to the Company in satisfaction of all liabilities and obligations

under the contract. The balance was applied to and reduced ceded losses and loss adjustment expenses by $3,719,

resulting in a loss of $1,249.