Note 19 -- Commitments and Contingencies

Litigation and Other Legal Matters

The Company is party to litigation and other legal matters arising in the ordinary course of business. The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings.

The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, and opinions of internal and external legal counsel. Legal costs in connection with litigation and other legal matters arising in the ordinary course of business are expensed as incurred.

Although the Company cannot predict with certainty the ultimate resolution of the litigation and other legal matters it is party to, the Company does not believe that any known or potential litigation and other legal matters will have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

Rental Income

The Company leases commercial and retail properties, boat slips, and docks to non-affiliates at various terms. There were no significant changes in the Company’s minimum rental payments to be received under operating leases during the three and nine months ended September 30, 2026.

Capital Commitments

As described in Note 5 “Investments” under Limited Partnership Investments, the Company is contractually committed to capital contributions for limited partnership investments. As of September 30, 2026, there was an aggregate unfunded balance of $4,277.

FIGA Assessments

The Company’s insurance subsidiaries, as member insurers, are required to collect and remit pass-through assessments to the Florida Insurance Guaranty Association (“FIGA”) on a quarterly basis. As of September 30, 2026 and December 31, 2025, the FIGA assessments payable by the Company were $3,229 and $2,034, respectively.

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 26, 2026 (“2025 Annual Report”). This section is intended to (i) provide material information relevant to the assessment of our results of operations and cash flows; (ii) enhance the understanding of our financial condition, changes in financial condition, and results of operations; and (iii) discuss material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future performance or of future financial condition.

The following discussion and analysis contains forward-looking statements about our business, operations, and financial performance based on current plans and estimates involving risks, uncertainties, and assumptions, which could differ materially from actual results. Factors that could cause such differences are discussed in the sections of this Quarterly Report on Form 10-Q titled Item 1A “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements, including statements about our plans, objectives, expectations, assumptions or future events, involve risks and uncertainties. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. Typically, forward-looking statements can be identified by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions. The important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include but are not limited to the effects of governmental regulation; changes in insurance regulations; the frequency and extent of claims; uncertainties inherent in reserve estimates; catastrophic events; changes in the demand for, pricing of, availability of or collectability of reinsurance; restrictions on our ability to change premium rates; increased rate pressure on premiums; the severity and impact of cybersecurity incidents; and other risks and uncertainties and other factors listed under Item 1A – “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q as well as the 2025 Annual Report. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made and are not guarantees of future performance. Except as required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OVERVIEW

HCI Group, Inc., together with its subsidiaries (collectively, “we,” “our,” “us,” the “Company,” or “HCI”), is primarily engaged in the property and casualty insurance business. We provide various homeowners’ property and casualty insurance products for properties located in the Florida, which is our primary market, as well as in other states in the northeast and southeast regions of the U.S. Our insurance operations are supported by other insurance-related subsidiaries within the consolidated group.

Exzeo Group, Inc. (“Exzeo”), a publicly traded majority-owned subsidiary, provides turn-key insurance technology and operations solutions based on a proprietary platform of purpose-built software and data analytics applications specifically designed for the property and casualty insurance ecosystem. We utilize Exzeo's internally developed software technologies to identify profitable underwriting opportunities, drive efficiency in claim processing and settlements, and streamline operations across our insurance operations and other insurance-related businesses.

We also provide attorney-in-fact (“AIF”) services for reciprocal insurance exchanges owned by their policyholders. Although we do not have any equity interest in the reciprocal insurance exchanges, we are required to consolidate them as their primary beneficiary. In addition, we have a commercial real estate group primarily engaged in developing and operating commercial properties for investment purposes or our own use.

HCI Group, Inc.’s common stock is currently listed on the New York Stock Exchange (“NYSE”) under the symbol “HCI.” Exzeo completed its initial public offering in November of 2025 and is currently listed on the NYSE under the symbol “XZO.” As of September 30, 2026, HCI Group, Inc. owned approximately 83.6% of Exzeo’s outstanding shares of common stock, inclusive of unvested restricted stock.

We identify our segments based on the manner in which our Chief Executive Officer, who is the chief operating decision maker, evaluates performance and makes decisions regarding the allocation of resources. We have five reportable segments: Insurance Operations, Exzeo, Reciprocal Exchange Operations, Real Estate, and Corporate and Other. Due to their economic characteristics, our property and casualty insurance and reinsurance operations, excluding the insurance operations under Reciprocal Exchange Operations, are grouped together into one reportable segment under Insurance Operations. The Exzeo segment represents Exzeo’s operations related to insurance technology and operations solutions for property and casualty insurance carriers. The Reciprocal Exchange Operations segment represents the insurance operations of consolidated reciprocal insurance exchanges owned by their policyholders. The Real Estate segment represents the operations of our commercial real estate group primarily engaged in developing and operating commercial properties for investment purposes or our own use. The Corporate and Other segment represents the activities of the holding companies and any other operations that do not meet the quantitative and qualitative thresholds for a reportable segment. The determination of segments may change over time due to changes in operational emphasis, revenue, and results of operations. Refer to Note 13 “Segment Information” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q.

All financial information presented in this section has been prepared in U.S. dollars in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and includes the accounts of HCI Group, Inc. and its subsidiaries and consolidated variable interest entities. All intercompany transactions have been eliminated.

FACTORS AFFECTING OPERATING RESULTS

Our general operating and growth strategies are to continually optimize our existing book of insurance business, organically expand our insurance business, manage our costs and expenses, diversify our business operations, develop and deploy new technologies to streamline operational processes, and maintain a strong balance sheet so we can quickly pursue accretive opportunities when they arise. Our growth strategies also include policy assumption from third-party insurance companies with the intention of renewing and/or replacing them with our policies.

Our insurance business has grown both organically and through strategic policy assumptions, which have been a key driver of our expansion. We have participated in legislatively mandated take-out programs, designed to reduce the state’s risk exposure by transitioning policies from Citizens Property Insurance Corporation (“Citizens”), a

Florida state-supported insurer, to private insurers. We selectively pursue additional assumption opportunities with Citizens when they align with our risk appetite and growth strategy. We also assume policies from other insurance companies in Florida and/or any other state in which we operate.

The nature of our business is to cover losses that may arise from, among other things, hurricanes and other catastrophic events such as tornadoes, floods and winter storms. The occurrence of any such catastrophes could have a significant adverse effect on our business, results of operations, and financial condition. To mitigate the risk associated with catastrophic events, we purchase reinsurance from other large insurance companies. Even without catastrophic events, we may incur losses and loss adjustment expenses that deviate substantially from our estimates and that may exceed our reserves, in which case our net income and capital would decrease. Our operating and growth strategies may also be impacted by regulation of our business by the State of Florida and other states in which we operate. For example, insurance regulators must approve our policy forms and premium rates as well as monitor our compliance with financial and regulatory requirements.

Seasonality of Our Business

Our insurance business is seasonal as hurricanes and tropical storms affecting Florida and other southeastern states typically occur during the period from June 1st through November 30th of each year. Winter storms in the northeast usually occur during the period between December 1st and March 31st of each year. Also, our reinsurance treaty year is typically effective on June 1st of each year and any variation in the cost of our reinsurance, whether due to changes in reinsurance rates, coverage levels or changes in the total insured value of our policy base, will occur and be reflected in our financial results beginning on June 1st of each year.

RECENT EVENTS

In March 2026, Fortex Reinsurance SPC, Ltd. (“Fortex”), our wholly-owned Cayman Islands domiciled captive reinsurance subsidiary, received its license to operate as a Class B insurer in the Cayman Islands. Fortex will allow us additional flexibility to selectively retain risk and reduce the cost of third-party reinsurance. Fortex is regulated by the Cayman Islands Monetary Authority.

On October 9, 2026, Hurricane Isaias made landfall in Florida near Destin in the Florida Panhandle as a Category 2 storm. The consolidated pre-tax net loss, including loss adjustment expenses and expected reinsurance recoveries, due to Hurricane Isaias is estimated to be approximately $15.0 million.

KEY PERFORMANCE INDICATORS

We make strategic decisions, measure our performance, evaluate our business, and identify trends in our business using certain key performance indicators, including the operating metrics gross loss ratio, gross expense ratio, and net combined ratio. Computations of our key performance indicators may not be comparable to other similarly titled measures reported by other companies. Additionally, we compute and disclose other ratios for informational purposes only.

Gross Loss Ratio

Gross loss ratio is defined as losses and loss adjustment expenses in relation to gross premiums earned. The gross loss ratio represents the percentage of our premiums used to cover our losses. We use the gross loss ratio as a metric to measure and monitor our underwriting and pricing practices.

Gross Expense Ratio

Gross expense ratio is defined as total expenses excluding losses and loss adjustment expenses and interest

expense in relation to gross premiums earned. The gross expense ratio represents the percentage of our gross premiums used on operating expenses. We use the gross expense ratio as a metric to measure and monitor the efficiency of our operating and overhead costs.

Net Combined Ratio

Net combined ratio is defined as total expenses excluding interest expense in relation to net premiums earned. The net combined ratio represents the combination of the net loss ratio and net expense ratio. We use the net combined ratio as a metric to measure and monitor our overall profitability.

RESULTS OF OPERATIONS

The following table summarizes our results of operations for the three and nine months ended September 30, 2026 and 2025 (in thousands, except per share amounts or as otherwise indicated):

Comparison of the Three Months Ended September 30, 2026 to the Three Months Ended September 30, 2025

Gross Premiums Earned increased primarily due to a higher volume of policies in force as a result of the addition of policies assumed from Citizens during the first and fourth quarters of 2025 while average premium per policy remained relatively consistent.

For the three months ended September 30, 2026, gross premiums earned were $282.4 million from Insurance Operations and $36.8 million from Reciprocal Exchange Operations. For the three months ended September 30, 2025, gross premiums earned were $283.0 million from Insurance Operations and $19.6 million from Reciprocal Exchange Operations.

Premiums Ceded decreased due to lower costs associated with our 2026-2027 catastrophe reinsurance programs, which began on June 1, 2026, and represented 30.7% and 35.2% of gross premiums earned during the three months ended September 30, 2026 and 2025, respectively.

Our premiums ceded represent costs of reinsurance (i) to cover losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance contracts, (ii) to provide additional loss coverage on a high-value individual risk basis through facultative reinsurance, or (iii) to assume a proportional share of losses as defined in a quota share agreement. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned. Under contracts in effect prior to June 1, 2025, reinsurance costs could be adjusted by retrospective provisions under reinsurance contracts. There were no adjustments to premiums ceded related to retrospective provisions for the three months ended September 30, 2026 and 2025.

Net Premiums Earned represent gross premiums earned less premiums ceded.

The following is a reconciliation of our Net Premiums Written to Net Premiums Earned for the three months ended September 30, 2026 and 2025 (in thousands):

Net premiums written represent premiums charged on policies issued during the period less any applicable reinsurance costs and increased primarily due to a higher volume of policies in force while average premium per policy remained relatively consistent. We had approximately 287,000 policies in force as of September 30, 2026 compared with approximately 264,000 policies in force as of September 30, 2025.

Net Investment Income increased primarily as a result of an increase in our invested assets.

Other Revenue increased primarily as a result of the addition of new customers to Exzeo’s insurance technology platform.

Losses and Loss Adjustment Expenses decreased due to favorable development from prior years recorded during the three months ended September 30, 2026, partially offset by an increase due to a higher volume of policies in force. The gross loss ratio for the three months ended September 30, 2026 was 20.7% compared with 22.0% for the three months ended September 30, 2025. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”

Policy Acquisition and Other Underwriting Expenses primarily reflect the amortization of deferred acquisition costs such as commissions payable to agents for production and renewal of policies and premium taxes. The overall increase was primarily due to a higher volume of premiums in force, partially offset by a premium tax refund recognized during the three months ended September 30, 2026.

General and Administrative Personnel Expenses include salaries, wages, payroll taxes, stock-based and other incentive compensation expenses, and employee benefit costs. Factors such as merit increases, changes in headcount, and periodic restricted stock grants, among others, cause fluctuations in this expense. In addition, our personnel expenses are decreased by the capitalization of payroll costs related to projects to develop software for internal use and the payroll costs associated with the processing and settlement of certain catastrophe claims which are recoverable from reinsurers under reinsurance contracts. The quarter-over-quarter increase was driven by additional personnel, annual merit increases, stock-based compensation, and lower reinsurance recoveries related to claims processing for catastrophes.

Interest Expense increased primarily as a result of reinsurance contracts accounted for using the deposit method in connection with the 2026-2027 catastrophe reinsurance programs.

Income Tax Expense increased primarily as a result of an increase in income before income taxes. The effective tax rate for the three months ended September 30, 2026 and 2025 was 25.9% and 25.1%, respectively, and each rate represented the federal statutory tax rate of 21.0%, state taxes (net of federal benefits), and unfavorable non-deductible compensation expenses.

Net Income Attributable to Noncontrolling Interests increased primarily as a result of the dilution of HCI Group, Inc.’s ownership of Exzeo as a result of Exzeo’s initial public offering in November 2025, partially offset by a decrease in net income generated by Reciprocal Insurance Exchange Operations.

Ratios

The gross loss ratio decreased primarily due to favorable development from prior years recorded during the three months ended September 30, 2026.

The gross expense ratio remained relatively consistent for the three months ended September 30, 2026 and 2025.

The net combined ratio decreased primarily due to the favorable movement in ceded premiums and a lower loss ratio resulting from favorable prior-year development recorded during the three months ended September 30, 2026.

Comparison of the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025

Gross Premiums Earned increased primarily due to a higher volume of policies in force as a result of the addition of policies assumed from Citizens during the first and fourth quarters of 2025 while average premium per policy remained relatively consistent.

For the nine months ended September 30, 2026, gross premiums earned were $860.8 million from Insurance Operations and $108.9 million from Reciprocal Exchange Operations. For the nine months ended September 30, 2025, gross premiums earned were $847.4 million from Insurance Operations and $60.6 million from Reciprocal Exchange Operations.

Premiums Ceded decreased due to lower costs associated with our 2026-2027 catastrophe reinsurance programs, which began on June 1, 2026, and represented 31.4% and 34.1% of gross premiums earned during the nine months ended September 30, 2026 and 2025, respectively.

There were no adjustments to premiums ceded related to retrospective provisions for the nine months ended September 30, 2026 and 2025.

Net Premiums Earned represent gross premiums earned less premiums ceded.

The following is a reconciliation of our Net Premiums Written to Net Premiums Earned for the nine months ended September 30, 2026 and 2025 (in thousands):

Net premiums written increased primarily due to a higher volume of policies in force while average premium per policy remained relatively consistent.

Net Investment Income increased primarily as a result of an increase in our invested assets.

Other Revenue increased primarily as a result of the addition of new customers to Exzeo’s insurance technology platform.

Losses and Loss Adjustment Expenses increased due to a higher volume of policies in force, partially offset by favorable development from prior years recorded during the nine months ended September 30, 2026. The gross loss ratio was 21.0% for both the nine months ended September 30, 2026 and 2025. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”

Policy Acquisition and Other Underwriting Expenses increased primarily due to a higher volume of premiums in force, partially offset by a premium tax refund recognized during the nine months ended September 30, 2026.

General and Administrative Personnel Expenses increased due to additional personnel, annual merit increases, stock-based compensation, and lower reinsurance recoveries related to claims processing for catastrophes.

Interest Expense decreased primarily as a result of approximately $172.5 million of 4.75% convertible senior notes being converted during the second quarter of 2025. The conversion also resulted in $1.1 million of debt conversion expense included in other operating expenses.

Income Tax Expense increased primarily as a result of an increase in income before income taxes. The effective tax rate for the nine months ended September 30, 2026 and 2025 was 25.8% and 25.6%, respectively. Each rate represented the federal statutory tax rate of 21.0%, state taxes (net of federal benefits), and unfavorable non-deductible compensation expenses.

Net Income Attributable to Noncontrolling Interests increased primarily as a result of an increase in net income generated by Reciprocal Insurance Exchange Operations as well as the dilution of HCI Group, Inc.’s ownership of Exzeo as a result of Exzeo’s initial public offering in November 2025.

Ratios

The gross loss ratio, gross expense ratio, and net combined ratio each remained relatively consistent for the nine months ended September 30, 2026 and 2025.

LIQUIDITY AND CAPITAL RESOURCES

Throughout our history, our liquidity requirements have been met through issuances of our common and preferred stock, debt offerings, and funds from operations. We expect our future liquidity requirements will be met by funds from operations, primarily the cash received by our insurance subsidiaries from premiums written and investment income. We may consider raising additional capital through debt and/or equity offerings to support our growth and future investment opportunities.

Our insurance subsidiaries require liquidity and adequate capital to meet ongoing obligations to policyholders and claimants and to fund operating expenses. In addition, we attempt to maintain adequate levels of liquidity and surplus to manage any differences between the duration of our liabilities and invested assets. In the insurance industry, cash collected for premiums from policies written is invested, interest and dividends are earned thereon, and losses and loss adjustment expenses are paid out over a period of years. This period of time varies by the circumstances surrounding each claim. With the exception of litigated claims, substantially all of our losses and loss adjustment expenses are fully settled and paid within approximately 100 days of the claim receipt date. Additional cash outflow occurs through payments of underwriting costs such as commissions, taxes, payroll, and general overhead expenses.

As of September 30, 2026, we have $743.5 million of cash and cash equivalents. We believe that we maintain sufficient liquidity to pay claims and expenses, as well as to satisfy commitments in the event of unforeseen events such as reinsurer insolvencies, inadequate premium rates, or reserve deficiencies. We maintain a comprehensive reinsurance program at levels management considers adequate to diversify risk and safeguard our financial position.

In the future, we anticipate our primary use of funds will be to pay claims, reinsurance premiums, interest and principal on our debt, dividends, and to fund operating expenses and real estate acquisitions. From time to time, our use of funds may also include repurchases of shares of our common stock or other strategic initiatives.

Revolving Credit Facility

As of September 30, 2026, we had an outstanding balance of $36.0 million under a senior secured revolving credit facility with Fifth Third Bank (“Revolving Credit Facility”). The Revolving Credit Facility currently provides borrowing capacity of up to $150.0 million and expires on November 5, 2030. Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the one or three month Secured Overnight Financing Rate plus a ten basis points adjustment plus a margin based on the debt-to-capital ratio, with interest payments due in arrears on January 1, April 1, July 1, and October 1.

As of September 30, 2026, we were in compliance with all required covenants and had an available borrowing capacity of $114.0 million.

Long-Term Debt

The following table summarizes the principal and interest payment obligations of our long-term debt as of September 30, 2026 (principal in thousands):

There were no significant changes in long-term debt during the nine months ended September 30, 2026.

At-The-Market Facility

On January 22, 2024, we implemented an “at-the-market” facility (“ATM Facility”) which gives us the ability to raise up to $75.0 million through the issuance of new shares of common stock through a sales agent (“Sales Agent”). We have no obligation to sell, and the Sales Agent has no obligation to buy or sell, any shares of common stock under the ATM Facility. As of September 30, 2026, the remaining availability under the ATM Facility was $75.0 million.

Share Repurchase Program

In March 2026, our Board of Directors authorized a program to repurchase up to $80.0 million, excluding commissions and other costs, of shares of our common stock through February 27, 2027 (“Share Repurchase Program”). The Share Repurchase Program permitted us to repurchase shares for cash periodically in open market purchases, block transactions, privately negotiated transactions in accordance with applicable federal securities laws, or by other means, including through the use of trading programs intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18 under that Act. The Share Repurchase Program did not obligate us to repurchase a specific number of shares of common stock and could have been canceled or suspended at any time without notice.

We completed the Share Repurchase Program on July 17, 2026. During the three and nine months ended September 30, 2026, we repurchased 30,721 and 504,330 shares of common stock for $5.5 million and $80.0 million, respectively, excluding commissions and other costs, under the Share Repurchase Program.

May 2026 Exzeo Share Repurchase Program

In May 2026, Exzeo’s Board of Directors authorized a program to repurchase up to $12.0 million, excluding commissions and other costs, of shares of Exzeo’s common stock (“May 2026 Exzeo Share Repurchase Program”). The May 2026 Exzeo Share Repurchase Program permitted Exzeo to repurchase shares for cash periodically in open market purchases, block transactions, privately negotiated transactions in accordance with applicable federal securities laws, or by other means, including through the use of trading programs intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18 under that Act. The May 2026 Exzeo Share Repurchase Program did not obligate Exzeo to repurchase a specific number of shares of common stock and could have been canceled or suspended at any time without notice.

Exzeo completed the May 2026 Exzeo Share Repurchase Program on July 8, 2026. During the three and nine months ended September 30, 2026, Exzeo repurchased 107,422 and 834,250 shares of its common stock for $2.0 million and $12.0 million, respectively, excluding commissions and other costs, under the May 2026 Exzeo Share Repurchase Program.

August 2026 Exzeo Share Repurchase Program

In August 2026, Exzeo’s Board of Directors authorized a program to repurchase up to $25.0 million, excluding commissions and other costs, of shares of Exzeo’s common stock (“August 2026 Exzeo Share Repurchase Program”). The August 2026 Exzeo Share Repurchase Program permits Exzeo to repurchase shares for cash periodically in open market purchases, block transactions, privately negotiated transactions in accordance with applicable federal securities laws, or by other means, including through the use of trading programs intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18 under that Act. The August 2026 Exzeo Share Repurchase Program does not obligate Exzeo to repurchase a specific number of shares of common stock and may be canceled or suspended at any time without notice.

During the three and nine months ended September 30, 2026, Exzeo repurchased 303,163 shares of its common stock for $5.0 million, excluding commissions and other costs, under the August 2026 Exzeo Share Repurchase Program. As of September 30, 2026, Exzeo may repurchase up to approximately $20.0 million of additional shares of its common stock under the August 2026 Exzeo Share Repurchase Program.

Between October 1, 2026 and November 3, 2026, Exzeo repurchased an additional 210,048 shares of its common stock for $3,360, excluding commissions and other costs, under the August 2026 Exzeo Share Repurchase Program.

Investments

The main objective of our investment policy is to maximize our after-tax investment income with a reasonable level of risk given the current financial market. Our excess cash is invested primarily in money market accounts, certificates of deposit, and available-for-sale fixed-maturity and equity securities.

As of September 30, 2026, we had $1.3 billion of available-for-sale fixed-maturity and equity investments, which are carried at fair value, and our available-for-sale fixed-maturity securities had a weighted-average duration of 4.1 years. Changes in the general interest rate environment affect the returns available on new available-for-sale fixed-maturity investments. While a rising interest rate environment enhances the returns available on new investments, it reduces the market value of existing available-for-sale fixed-maturity investments and thus the availability of gains on disposition. A decline in interest rates reduces the returns available on new available-for-sale fixed-maturity investments but increases the market value of existing available-for-sale fixed-maturity investments, creating the opportunity for realized investment gains on disposition.

In the future, we may alter our investment policy with regard to investments in federal, state and municipal obligations, preferred and common equity securities and real estate mortgages, as permitted by applicable law, including insurance regulations.

Limited Partnership Investments

As of September 30, 2026, we had $16.1 million of limited partnership investments consisting of six private equity funds managed by their general partners. Withdrawals from limited partnership investments are generally not permitted and distributions occur when the underlying investments of the limited partnership investments are

liquidated. Additionally, two of these funds have unexpired capital commitments which are callable at the discretion of the fund’s general partner for funding new investments or expenses of the fund. Although capital commitments for the four remaining funds have expired, the general partners may request additional funds under certain circumstances. As of September 30, 2026, there were unexpired capital commitments of $4.3 million.

Real Estate Investments

Real estate investments have long been a significant component of our overall investment portfolio and help offset the volatility of other higher-risk assets. Thus, we may consider expanding our real estate investments portfolio should an opportunity arise.

Dividends

On October 14, 2026, our Board of Directors declared a quarterly dividend of $0.40 per common share. The dividends are payable on December 18, 2026 to stockholders of record on November 20, 2026.

Sources and Uses of Cash

The following table is a summary of our cash flow activity for the periods presented (in thousands):

Cash Flows for the Nine Months Ended September 30, 2026

Net cash provided by operating activities consisted primarily of cash received from net premiums written and reinsurance recoveries of approximately $49.4 million, partially offset by cash disbursed for operating expenses, losses and loss adjustment expenses, and interest payments.

Net cash used in investing activities consisted primarily of $752.8 million of purchases of available-for-sale fixed-maturity and equity securities, partially offset by $46.8 million of proceeds from sales of available-for-sale fixed-maturity and equity securities and $13.9 million of proceeds from calls, repayments and maturities of available-for-sale fixed-maturity securities.

Net cash used in financing activities consisted primarily of $80.0 million of repurchases of common stock, $17.0 million of repurchases of noncontrolling interests, $15.2 million of common stock dividends, $11.3 million of payments for deposit accounting assets, and $11.3 million of net share settlements. These cash outflows were partially offset by $12.5 million of net subscriber surplus contributions.

Cash Flows for the Nine Months Ended September 30, 2025

Net cash provided by operating activities consisted primarily of cash received from net premiums written and reinsurance recoveries of approximately $116.1 million, partially offset by cash disbursed for operating expenses, losses and loss adjustment expenses, and interest payments.

Net cash provided by investing activities consisted primarily of $440.0 million of proceeds from calls, repayments and maturities of available-for-sale fixed-maturity securities and $33.9 million of proceeds from sales of available-for-sale fixed-maturity and equity securities, partially offset by $317.7 million of purchases of available-for-sale fixed-maturity and equity securities and $28.5 million of purchases of real estate investments.

Net cash used in financing activities consisted primarily of $14.1 million of common stock dividends, a $6.0 million net repayment of our Revolving Credit Facility, and a $1.1 million induced debt conversion payment, partially offset by $17.0 million of proceeds from the issuance of promissory notes and $4.9 million of net subscriber surplus contributions.

OFF-BALANCE SHEET ARRANGEMENTS

As of September 30, 2026, we had unexpired capital commitments for limited partnerships investments of $4.3 million as described above. We do not have any other arrangements giving rise to material obligations not reported in our consolidated balance sheets as described in Item 303 of SEC Regulation S-K.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The accompanying consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to select accounting policies and make estimates that affect amounts reported in the consolidated financial statements and the accompanying notes. Management’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions.

We believe our accounting policies and estimates related to losses and loss adjustment expenses, reinsurance recoverable, income taxes, stock-based compensation expense, and limited partnership investments involve our most significant judgments and estimates and are critical to our consolidated financial statements.

Our critical accounting policies and estimates, as well as their related risks, are more fully described in our 2025 Annual Report. During the nine months ended September 30, 2026, there have been no material changes with respect to any of our critical accounting policies and estimates.

Reserves for Losses and Loss Adjustment Expenses

Our liability for losses and loss adjustment expenses (“Reserves”) is specific to property insurance, which is our insurance subsidiaries’ only line of business. The Reserves include both case reserves on reported claims and our reserves for incurred but not reported (“IBNR”) losses. As of each period-end date, the balance of our Reserves is based on our best estimate of the ultimate cost of reported claims and IBNR losses, based primarily on our historical experience.

IBNR represents our estimate of the ultimate cost of claims that have occurred but have not been reported to us, including claims that may not yet be known to the insured, as well as future development of reported claims. Estimating the IBNR component of our Reserves involves considerable judgment on the part of management. As of September 30, 2026, $500.0 million of the total $549.6 million of Reserves was attributable to our estimate of IBNR. The remaining $49.6 million related to known cases that had been reported but not yet fully settled and represented our best estimate of the cost to settle such claims. As of September 30, 2026, $38.3 million of the $49.6 million in reserves for known cases related to claims incurred during prior years.

Our Reserves decreased from $576.5 million as of December 31, 2025 to $549.6 million as of September 30, 2026. The $26.9 million decrease consisted of (i) reductions in non-catastrophe Reserves of $81.1 million for 2025 and prior loss years; (ii) reductions in catastrophe Reserves of $64.3 million primarily related to Hurricane Ian, Hurricane Helene, and Hurricane Milton; and (iii) an offsetting increase of $118.5 million in non-catastrophe Reserves established for the 2026 loss year. No Reserves were established for catastrophe losses occurring during the nine months ended September 30, 2026. The non-catastrophe Reserves established for the 2026 loss year were primarily attributable to IBNR as of September 30, 2026. The $145.4 million decrease in Reserves related to the 2025 and prior loss years was due to the settlement of claims and favorable development in loss estimates.

Based on all information known to us, we believe our Reserves as of September 30, 2026 are adequate to cover our losses and loss adjustment expenses incurred, including IBNR losses. However, these estimates are continually reviewed by management as they are subject to significant variability and may be impacted by trends in claim severity and frequency or unusual exposures not yet identified. We review historical data and consider various factors, including known and anticipated regulatory and legal developments, changes in social attitudes, inflation, and economic conditions. As experience develops and other data becomes available, these estimates are revised, as required, resulting in increases or decreases to the Reserves. Adjustments are reflected in the results of operations in the period in which they are made, and the liabilities may deviate substantially from prior estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to Note 3 “Recent Accounting Pronouncements” to the consolidated financial statements for further information about recent accounting pronouncements and adoptions.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of September 30, 2026, our investment portfolio included available-for-sale fixed-maturity and equity securities. Our main objective is to maximize after-tax investment income and maintain sufficient liquidity to meet our obligations while minimizing market risk, which is the potential economic loss from adverse fluctuations in securities prices. Accordingly, our investments are generally not for trading or speculative purposes, and any such trading activities are not material. We consider many factors including credit ratings, investment concentrations, regulatory requirements, anticipated fluctuation of interest rates, durations and market conditions in developing investment strategies. Our investment securities are managed primarily by an investment committee appointed by our Board of Directors. From time to time, our investment committee may decide to invest in low-risk assets such as U.S. government bonds.

Our investment portfolio is exposed to interest rate risk, credit risk, and equity price risk. Fiscal and economic uncertainties caused by any government action or inaction may exacerbate these risks and potentially have adverse impacts on the value of our investment portfolio.

We classify our fixed-maturity securities as available-for-sale and report any unrealized gains or losses, net of deferred income taxes, as a component of accumulated other comprehensive income within our stockholders’ equity. As such, any material temporary changes in their fair value can adversely impact our stockholders’ equity. In addition, we recognize any unrealized gains or losses related to our equity securities in our statement of income. As a result, our results of operations can be materially affected by the volatility in the equity market.

Interest Rate Risk

Our available-for-sale fixed-maturity securities are sensitive to potential losses resulting from unfavorable changes in interest rates. We manage this risk by analyzing anticipated movement in interest rates and considering our future capital needs.

The following table illustrates the impact of hypothetical changes in interest rates to the fair value of our available-for-sale fixed-maturity securities as of September 30, 2026 (dollar amounts in thousands):

Credit Risk

Credit risk can expose us to potential losses arising principally from adverse changes in the financial condition of the issuers of our available-for-sale fixed-maturity securities. We mitigate this risk by investing primarily in investment grade available-for-sale fixed-maturity securities, diversifying our portfolio to avoid concentrations by issuer or business sector, and continually monitoring individual securities for declines in credit quality. While we emphasize credit quality in our investment selection process, significant downturns in the markets or general economy may impact the credit quality of our portfolio.

The following table presents the composition of our available-for-sale fixed-maturity securities, by rating, as of September 30, 2026 (dollar amounts in thousands):

Equity Price Risk

Our equity investment portfolio included common stocks, perpetual preferred stocks, mutual funds, and exchange-traded funds. We may incur potential losses due to adverse changes in equity security prices. We manage this risk primarily through industry and issuer diversification and asset mix.

The following table illustrates the composition of our equity securities as of September 30, 2026 (dollar amounts in thousands):

Foreign Currency Exchange Risk

As of September 30, 2026, we did not have any material exposure to foreign currency related risk.

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2026.

Changes in Internal Control Over Financial Reporting

During the three months ended September 30, 2026, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

Refer to Note 19 “Commitments and Contingencies” to the consolidated financial statements under the heading “Litigation and Other Legal Matters” for information regarding legal proceedings and related matters.

ITEM 1A – RISK FACTORS

There have been no material changes to the risk factors disclosed in Part I, Item 1A of the 2025 Annual Report.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Equity Securities

None.

Use of Proceeds from Registered Equity Securities

None.

Issuer Purchases of Equity Securities

Under our publicly announced Share Repurchase Program, we were permitted to repurchase shares for cash periodically in open market purchases, block transactions, privately negotiated transactions in accordance with applicable federal securities laws, or by other means, including through the use of trading programs intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18 under that Act. The timing and total amount of any stock repurchases were determined at management's discretion and depended upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices and other considerations. The Share Repurchase Program did not obligate us to repurchase a specific number of shares of common stock and could have been canceled or suspended at any time without notice.

In addition, we generally withhold shares of our common stock to satisfy our employees’ payroll tax liabilities associated with the vesting of restricted stock awards issued under our share-based compensation plan.

During the three months ended September 30, 2026, we repurchased shares of our common stock as follows (dollar amounts in thousands, except share and per share amounts):

Working Capital Restrictions and Other Limitations on the Payment of Dividends

We are not subject to working capital restrictions or other limitations on the payment of dividends. However, our insurance subsidiaries are subject to restrictions on the dividends and other distributions they may pay. Those restrictions could impact our ability to pay dividends in the future.

Under Florida law, a domestic insurer may not pay any dividend or distribute cash or other property to its stockholders except out of that part of its available and accumulated capital and surplus funds which is derived from realized net operating profits on its business and net realized capital gains. Additionally, a Florida domestic insurer may not make dividend payments or distributions to its stockholders without prior approval of the Florida Office of Insurance Regulation (“FLOIR”) if the dividend or distribution would exceed the larger of (1) the lesser of (a) 10.0% of its capital surplus or (b) net income, not including realized capital gains, plus a two-year carryforward; (2) 10.0% of capital surplus with dividends payable constrained to unassigned funds minus 25% of unrealized capital gains; or (3) the lesser of (a) 10.0% of capital surplus or (b) net investment income plus a three-year carryforward with dividends payable constrained to unassigned funds minus 25% of unrealized capital gains.

Alternatively, a Florida domestic insurer may pay a dividend or distribution without the prior written approval of the FLOIR if (1) the dividend is equal to or less than the greater of (a) 10.0% of the insurer’s capital surplus as regards to policyholders derived from realized net operating profits on its business and net realized capital gains or (b) the insurer’s entire net operating profits and realized net capital gains derived during the immediately preceding calendar year; (2) the insurer will have policy holder capital surplus equal to or exceeding 115.0% of the minimum required statutory capital surplus after the dividend or distribution; (3) the insurer files a notice of the dividend or distribution with the FLOIR at least ten business days prior to the dividend payment or distribution; and (4) the notice includes a certification by an officer of the insurer attesting that, after the payment of the dividend or distribution, the insurer will have at least 115% of required statutory capital surplus as to policyholders. Except as provided above, a Florida-domiciled insurer may only pay a dividend or make a distribution (1) subject to prior approval by the FLOIR or (2) 30 days after the FLOIR has received notice of such dividend or distribution and has not disapproved it within such time.

During the nine months ended September 30, 2026, our insurance subsidiaries made cash distributions of $77.5 million to HCI Group, Inc.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 – MINE SAFETY DISCLOSURES

None.

ITEM 5 – OTHER INFORMATION

During the three months ended September 30, 2026, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

ITEM 6 – EXHIBITS

The exhibits listed on the accompanying Index to Exhibits are filed, furnished or incorporated by reference as part of this Quarterly Report on form 10-Q.

Index to Exhibits

The information required by this Item is set forth on the index to exhibits below.