Related Party Transactions |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions | Related Party Transactions Technology Transactions As part of the Technology Transactions as further described in Note 4, Investments, the Company obtained a license to continue using the technology assets in its operations at a cost of $0.8 million per annum, with the ability to non-renew the license at the end of each one-year period. The Company also agreed to provide services relating to the assets to ZTG with the actual internal and external costs incurred by the Company in performing the services to be paid by ZTG. The following amounts were recorded in the three months ended June 30, 2026 and 2025, respectively, related to the Technology Transactions: (a) $0.2 million, and $0.3 million, respectively, of interest income on the Promissory Note, which is included in net investment income; (b) $0.2 million, and $0.2 million, respectively, of licensing fee expense, which is included in underwriting, acquisition and insurance expenses; and (c) $0.5 million, and $0.6 million, respectively, of service charges billed to ZTG, which are included in underwriting, acquisition and insurance expenses as an offset. The following amounts were recorded in the six months ended June 30, 2026 and 2025, respectively, related to the Technology Transactions: (a) $0.5 million, and $0.5 million, respectively, of interest income on the Promissory Note, which is included in net investment income; (b) $0.4 million, and $0.4 million, respectively, of licensing fee expense, which is included in underwriting, acquisition and insurance expenses; and (c) $1.1 million, and $1.7 million, respectively, of service charges billed to ZTG, which are included in underwriting, acquisition and insurance expenses as an offset. As of June 30, 2026 and December 31, 2025, the receivable from ZTG was $0.5 million and $0.6 million, respectively, and the payable to ZTG was $0.2 million and $0.2 million, respectively, included in other assets and accounts payable and accrued expenses, respectively, in the condensed consolidated balance sheets. AtegrityOne Transaction The Company entered into a transaction with ZTG, effective April 1, 2025, to acquire software developed by ZTG for the Company, for the purchase price of $3.2 million, which was paid following a redemption on March 31, 2025, of our interests from the Utility Limited Partnership in such amount. The Company recorded the acquired software in other assets in the condensed consolidated balance sheets. Affiliate Service Agreements and Sublease The Company entered into a Management & Cost Sharing Agreement effective September 30, 2023 with ZIS, pursuant to which, amongst other things, ZIS may provide certain Services (as defined therein) to the Company and its affiliates. Commencing October 1, 2024, ZIS began providing employee benefit administration services to the Company that were previously provided to the Company by a third-party vendor. As of June 30, 2026 and December 31, 2025, $0.4 million and $0.7 million, respectively, was due to ZIS under this agreement, included in accounts payable and accrued expenses in the condensed consolidated balance sheets. The Company’s expense related to such services provided by ZIS was $0.8 million and $1.5 million for the three and six months ended June 30, 2026, respectively, and $0.6 million and $1.1 million for the three and six months ended June 30, 2025, respectively, included in underwriting, acquisition and insurance expenses in the condensed consolidated statements of operations. On June 10, 2025, the Company entered into a Shared Services Agreement with ZFSG (the “Shared Services Agreement”), pursuant to which ZFSG provides the Company with certain services, such as, human resources, tax, legal and corporate secretary, transaction advisory, information technology and investor relations. The Company reimburses ZFSG for its out-of-pocket expenses incurred in the course of performing such services, on a cost-plus basis. The Shared Services Agreement also permits the Company to make use of ZFSG’s office space and facilities at 9 West 57th Street, New York, New York. The term of the Shared Services Agreement is for a period of five years, with automatic renewals for two-year periods thereafter. The Company’s expense related to the Shared Services Agreement was $213 thousand and $306 thousand, respectively, for the three and six months ended June 30, 2026, included in underwriting, acquisition and insurance expenses in the condensed consolidated statements of operations. The Company had not recorded any expense for the Shared Services Agreement for the three or six months ended June 30, 2025. As described in Note 10, Leases, the Company subleases office space to ZFSG under a sublease agreement effective July 1, 2022. The base rent under the sublease is equal to the base rent payable by the Company under the related head lease, and the sublease and head lease are coterminous. Ategrity Specialty Insurance Company Holdings IMA The Company entered into an Amended & Restated Investment Management Agreement, dated October 1, 2024 (as amended, the “ASH IMA”) with the Investment Manager, pursuant to which we appointed the Investment Manager to manage a portfolio of assets and granted the Investment Manager the full and exclusive authority and discretion to effect investment transactions through the portfolio, subject to the Investment Guidelines set forth therein. Ategrity Limited IMAs Ategrity Limited entered into an Amended & Restated Investment Management Agreement, dated October 1, 2024 and an Investment Management Agreement, dated December 1, 2024 (as amended, the “Ategrity Limited IMAs”) with the Investment Manager, pursuant to which Ategrity Limited appointed the Investment Manager to manage portfolios of assets and granted the Investment Manager the full and exclusive authority and discretion to effect investment transactions through the portfolios, subject to the Investment Guidelines set forth in each Ategrity Limited IMA. The Company recorded fees under the Ategrity Limited IMAs and the ASH IMA of $90 thousand and $178 thousand for the three and six months ended June 30, 2026, respectively, and $64 thousand and $115 thousand for the three and six months ended June 30, 2025, respectively. The fees were included as an offset to net investment income in the condensed consolidated statements of operations. As of June 30, 2026 and December 31, 2025, $90 thousand and $87 thousand, respectively, was due to the Investment Manager under these agreements, and was included in accounts payable and accrued expenses in the condensed consolidated balance sheets. MidCap Limited Partnership Agreement On January 1, 2025, the Company entered into the Amended and Restated Limited Partnership Agreement with the MidCap Limited Partnership with an initial investment of $10 million, as further described in Note 4, Investments. Utility Limited Partnership As described in Note 3, Consolidated Variable Interest Entity, on March 31, 2025, the Company redeemed $97.2 million from the Utility Limited Partnership. On May 1, 2026, the Company, through Ategrity Limited, made an additional investment of $10.0 million in the Utility Limited Partnership. Loans to Affiliates As described in Note 4, Investments, the Company has related party loans receivable from affiliates consisting of the Promissory Note issued by ZFSG and the ZIS Loan. The Company recorded interest income related to these investments of $1.5 million and $3.1 million for the three and six months ended June 30, 2026, respectively, and $1.5 million and $1.8 million for the three and six months ended June 30, 2025, respectively, included in net investment income in the condensed consolidated statements of operations. During the three and six months ended June 30, 2026, the Company recognized $1.3 million and $2.6 million, of interest income on the ZIS Loan, respectively. As of June 30, 2026 and December 31, 2025, accrued interest receivable on the ZIS Loan was $1.3 million and $2.9 million, respectively, and the Promissory Note was $0.2 million and $0.2 million, respectively. Advisory Fee On March 31, 2025, ZFSG paid the Company an advisory fee equal to $940 thousand relating to certain advisory services provided to ZFSG by the Company that the Company recorded in other income in the condensed consolidated statements of operations for the three months ended March 31, 2025. No similar advisory fee was recorded during the three and six months ended June 30, 2026. Fee Waiver for Utility Limited Partnership The Investment Manager waived Fixed Fees of $2.6 million due under the Investment Management Agreement during the six months ended June 30, 2025. No similar Fixed Fees were waived during the three and six months ended June 30, 2026. Tax Allocation Agreement The Company is party to the Tax Agreement with ZFSG, which governs the allocation of consolidated federal and state income tax liabilities and related settlements among members of the consolidated group. Refer to Note 20, Income Taxes for additional information regarding amounts paid or received under this agreement and balances due to ZFSG as of June 30, 2026 and December 31, 2025. Employee Agreements On May 16, 2025, ZFSG entered into a consulting agreement with the Company’s CEO, under which the CEO agreed to provide consulting services to a subsidiary of ZFSG for matters unrelated to the Company. Pursuant to the consulting agreement, ZFSG paid the CEO a $0.7 million consulting fee in May 2025 and an additional $0.3 million consulting fee pursuant to such agreement was paid in June 2026. The terms of the consulting agreement did not affect the CEO’s compensation as the Company’s CEO and any fees paid for consulting services were separate from his standard compensation. On June 30, 2025, ZFSG entered into a letter agreement with the Company’s CEO appointing him as a Board observer for ZFSG (“ZFSG Board Letter”) and ZIS entered into a letter agreement with the Company’s CEO appointing him as a director for ZIS (“ZIS Board Letter”). Under each of the ZFSG Board Letter and ZIS Board Letter, the Company’s CEO will receive a fee of $0.1 million per annum (pro-rated for partial years of service starting in 2027). ZIS and ZFSG may terminate their respective agreements at any time without notice. On July 25, 2025, ZFSG made a payment of $0.1 million to the Company’s CEO under the ZFSG Board Letter and ZIS made a payment of $0.1 million to the Company’s CEO under the ZIS Board Letter. The Company’s CEO was an employee of the Investment Manager until the IPO. During 2025, the Investment Manager paid the Company’s CEO $0.4 million in salary for services provided to the Investment Manager and made a $0.7 million severance payment following the termination of his employment agreement with the Investment Manager. During the first quarter of 2026, the Investment Manager paid the Company’s CEO a pro-rated annual performance bonus for 2025 of $0.9 million in accordance with the terms of his employment agreement with the Investment Manager. The Company was not a party to the employment agreement and did not fund or reimburse any amounts paid by the Investment Manager under the agreement. Stockholders’ Agreement Following the pricing of the IPO, the Company entered into a stockholders’ agreement with ZFSG (the “Stockholders’ Agreement”). Pursuant to such Stockholders’ Agreement, ZFSG has the right, among other rights, to designate a specified number of directors to be nominated for election to the Company’s Board of Directors, based on ZFSG and its affiliates’ ownership percentages, calculated using the total shares of the Company’s common stock outstanding at such time. Affiliate Balances The amounts presented above are included in other assets and accounts payable and accrued expenses in the condensed consolidated balance sheets and primarily relate to technology services, shared services, and investment management arrangements described above.
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