American Integrity Insurance Group, Inc. (AII) Earnings

Management highlights

- Executive Team Transition • Ben Lurie, former CFO, will transition out of his full-time role, remain on the insurance company board, and support the transition; he was credited for leading the firm's successful IPO and first year as a public company, and will return to lead investor Salon Company. • Brian Foley, former lead investment banker for the IPO at KBW, joins as new CFO, bringing deep existing familiarity with the business to ensure immediate continuity as the firm scales. - Core Market Strategy & Traction (Florida) • The company is transitioning to durable, voluntary-driven growth with a normalized earnings profile, after the wind-down of large-scale Citizens takeout activity. Total policies in force grew 14% YoY, with 18% YoY voluntary customer growth across all distribution channels. • Following Florida legislative tort reforms that improved the litigation environment, the company has reentered the large Tri-County South Florida and middle-aged home markets, which it had previously exited due to unfavorable conditions. Q1 2026 saw 120 new policies written per day in these target markets, a 20x increase YoY, with these two segments each contributing 25% of Florida voluntary new business GWP. • Florida remains underserved after 11 carriers exited the market, and management sees significant room for disciplined, profitable growth; rate adequacy remains regulated and actuarially supported, limiting the sustainability of irrational pricing by new entrants. • The company's 20-year established agent distribution network is a core competitive advantage; top agency partners deliver 3-year non-catastrophe loss ratios consistently below 20%, with strong growth from high-performing partners aligned with profitability goals. - Geographic & Product Expansion • The company is expanding into additional Southeast states (South Carolina, Georgia, North Carolina), with triple-digit percentage YoY in-force policy growth in South Carolina and Georgia, and early progress in newly launched North Carolina. This early traction confirms the company's Florida-focused model is scalable outside the state. • A new commercial residential product line, covering garden-style condos, townhome, and homeowners associations in Florida, launched in late 2025, wrote 81 policies in Q1 2026, with encouraging early results. - Reinsurance Update • The company is nearing completion of its June 1 reinsurance renewal, and expects meaningful, substantive risk-adjusted pricing reduction driven by improved industry underwriting performance, market normalization, and Florida's improved litigation environment from legislative reforms.

Guidance

Management did not issue explicit numerical guidance for full-year 2026, but provided the following forward-looking outlooks: • The company expects to deliver consistent profitability with improving earnings quality, driven by a shift to higher-quality voluntary business and expected reinsurance pricing tailwinds from the upcoming June 1 renewal. • Management confirmed ongoing organic growth is the top capital priority, and will evaluate potential additional capital return (share buybacks or special dividends) only after the conclusion of Atlantic hurricane wind season if excess capital remains. • Management expects continued durable, disciplined profitable growth across its target core Florida expansion segments, new product lines, and Southeastern geographic expansion, with long-term runway for growth given the large underpenetrated size of target markets.

Segment performance

American Integrity Insurance Group operates primarily in personal residential property insurance with a core focus on the Florida market, plus emerging commercial residential and Southeastern U.S. expansion segments. For Q1 2026: - Core Florida Voluntary Personal Lines: Gross written premium growth was driven by targeted expansion segments; Tri-County region HO3 policies contributed 25% of Florida voluntary new business GWP, up from low single digits year-over-year (YoY). Middle-aged home HO3 policies (excluding Tri-County) also contributed 25% of Florida voluntary new business GWP, up from low single digits YoY. Total in-force policies across the company reached 437,000, representing 14% YoY growth. - New Commercial Residential Product: Launched in late 2025, this segment wrote 81 new policies in Q1 2026, with early modest traction. - Southeastern Expansion Markets (South Carolina, Georgia, North Carolina): In-force policies grew 119% YoY in South Carolina and 332% YoY in Georgia; 360 new policies were written in newly entered North Carolina. This segment accounts for less than 4% of total in-force premium today. - Overall Financials: Gross premiums written totaled $220 million, a 3.7% increase YoY. Net premiums earned grew 25.7% YoY to $82.2 million. Net income available to common shareholders was $19.9 million ($1.02 per diluted share), compared to $35.9 million ($2.78 per diluted share) in Q1 2025, when earnings were temporarily elevated by high Citizens takeout activity. The combined ratio was 75%, up from 42.9% in the prior year quarter due to non-recurring favorable items in 2025.

Risks & headwinds

• Pricing pressure from new market entrants in Florida could create short-term irrational pricing dynamics, though management notes regulatory rate oversight and actuarial rate requirements limit the long-term sustainability of unsustainable pricing. • Florida hurricane wind season creates uncertainty for annual underwriting results and capital planning, prompting management to delay capital return decisions until after the season concludes. • Growth into new markets and new product lines carries early execution risk, even as early results have been encouraging.

Analyst Q&A

• Q: When winning share in the new target Tri-County and middle-aged home markets, who is American Integrity gaining share from, and what is the competitive landscape like? /

  A: Management notes over 11 Florida carriers have exited the market in recent years, and the 8-9 new capital-backed entrants are mostly small niche players that will take years to build full voluntary distribution programs. The total volume of available business opportunities is growing rather than shrinking, and regulated rate rules prevent competitors from underpricing business long-term. American Integrity is positioned to capture abundant opportunities, including 1 out of every 3 new home construction opportunities in Florida, alongside 20x YoY growth in target reentered markets. /

• Q: What are the company's capital priorities, and will management pursue buybacks or another special dividend in 2026? /

  A: Organic growth across the company's existing expansion plans is the clear top capital priority. Management notes it is prudent to wait for the conclusion of hurricane wind season before making capital return decisions, but will evaluate both buybacks and special dividends for any excess capital remaining after wind season. /

• Q: How does growth in the new Tri-County and middle-aged home initiatives change reinsurance structure and limit needs for the June 1 renewal? /

  A: This growth improves overall portfolio diversification: Tri-County South Florida adds exposure that balances the company's existing higher concentration in other peak Florida zones, while middle-aged home growth is concentrated in Central Florida where the company non-renewed a large volume of business during the prior litigation crisis. This diversification smooths overall portfolio risk and creates complementary benefits for the company's overall reinsurance structure. /

• Q: How should investors think about remaining Citizens takeout opportunities, and what portion of the existing Citizens book meets the company's underwriting thresholds? /

  A: Management states the era of large-scale profitable Citizens takeouts is over, and only small residual opportunities remain. Any carrier relying on ongoing Citizens takeouts as a core growth engine would be unwise. American Integrity was founded as a takeout company but has already transitioned to become one of the strongest standalone voluntary growth platforms in the Florida market, with organic voluntary growth currently stronger than ever.