Octave Specialty Group, Inc. Q4 FY2025 earnings call

• Octave operated as a stand - alone specialty insurance platform in the fourth quarter of 2025, a milestone of multiyear strategic transformation.
• Insurance distribution business revenue grew 65% over 2024, fueled by 14% organic growth. 9 of 22 MGAs were launched in 2024 and 2025, with over 40% of MGA portfolio in early growth stages.
• Octave Ventures had organic revenue growth of approximately 18% in 2024 and approximately 47% in 2025, with strong pipeline of future MGA opportunities.
• MGAs are geographically and product - diversified, with 9 in London and Bermuda, 13 in US; diversified by line of business.
• Expanded aligned capacity through Lloyd's syndicates and curated capital partners, over $2 billion entering 2026.
• Acquisition of ArmadaCare enhances product diversification, deepens position in specialty A&H market, generates recurring revenue streams.
• Launched 1889 Specialty, a management liability and professional lines MGA.
• Executing initiative to unify operating infrastructure onto single integrated data and technology architecture, integrating AI - driven tools for improved risk selection, pricing sophistication and operational efficiency.
• Everspan repositioned, now positioned for reasonable and controlled growth in 2026, focus on casualty markets.

For the Insurance Distribution segment, in the fourth quarter of 2025, premium production grew 9%, commission revenue grew 13%, and organic revenue growth was just over 8%. Adjusted EBITDA from continuing operations to stockholders increased to $1.4 million compared to $0.5 million in the fourth quarter of 2024, with the Insurance Distribution adjusted EBITDA margin in the fourth quarter of '25 at 15%, up from 12% last year. For Everspan, gross premium written was $80 million, net premium written was $23 million, net earned premium was $18 million. Net loss and LAE ratio was 61.8% in the fourth quarter of '25, but including the impact of sliding scale commissions, the effective loss and LAE ratio was 62.9%. The combined ratio was 99.4% in the fourth quarter of '25, the first time below 100%.

• Insurance Distribution segment expects organic revenue growth of at least 20% and adjusted EBITDA of approximately $40 million for full year 2026.
• Specialty Insurance segment (including Everspan) expects gross written premiums of around $410 million and adjusted EBITDA of approximately $7.5 million for full year 2026.
• Corporate adjusted expenses expected to be below $30 million for 2026.
• Consolidated basis expects to generate adjusted net income of around $0.50 per share for 2026.

Q: How do you see the strong pipeline of de novo start - ups for 2026?

A: Seeing opportunities in US market, targeting 2 to 4 per year, focusing on growth of launched entities in '24 and '25.

Q: How do we think about the cash flow in 2026?

A: Cash flow improving, NCI buy - in this year will be less than $50 million, funding from cash and marginal additional borrowing.

Q: Thoughts on net investment income and equity - based comp in 2026?

A: Net investment income relatively flat to marginally higher; equity comp down a few million dollars from 2025.

Q: Rough guidance on quarterly earnings spread?

A: Seasonality continues, heavily weighted towards first and fourth quarter, new businesses starting to reach breakeven and move towards profitability moderating seasonality slightly.

Q: Pricing environment in accident and health, casualty and non - cat property?

A: Non - cat property: 5% - 10% rate reductions on some programs, others stable; Casualty: some rate increases, some stable, excess casualty lines with double - digit rate increases; A&H: very strong organic growth, pricing close to double digit, 10% - 12%, revenue growth significant due to new products and growth initiatives.