Property and Casualty Insurance Activity

3 Months Ended

Mar. 31, 2026

Property and Casualty Insurance Activity

Property and Casualty Insurance Activity

Property and Casualty Insurance Activity

Premiums Earned

Premiums written, ceded and earned are as follows:

	Direct		Assumed		Ceded		Net
Three months ended March 31, 2026
Premiums written	$	69,603,381	$	-	$	7,989,856	$	77,593,237
Change in unearned premiums	385,341		-		(22,109,764)		(21,724,423)
Premiums earned	$	69,988,722	$	-	$	(14,119,908)	$	55,868,814
Three months ended March 31, 2025
Premiums written	$	58,174,996	$	-	$	2,834,411	$	61,009,407
Change in unearned premiums	2,470,381		-		(19,956,725)		(17,486,344)
Premiums earned	$	60,645,377	$	-	$	(17,122,314)	$	43,523,063

Premium receipts in advance of the policy effective date are recorded as advance premiums. The balance of advance premiums as of March 31, 2026 and December 31, 2025 was $5,897,368 and $4,003,453, respectively.

Loss and Loss Adjustment Expense Reserves

The following table provides a reconciliation of the beginning and ending balances for unpaid loss and LAE reserves:

	Three months ended March 31,		Year ended December 31,
	2026		2025
Balance at beginning of period	$	140,538,618	$	126,210,428
Less reinsurance recoverables	(33,232,365)		(32,322,637)
Net balance, beginning of period	107,306,253		93,887,791
Incurred related to:
Current year	46,838,450		85,349,385
Prior years	(1,264,066)		(1,083,663)
Total incurred	45,574,384		84,265,722
Paid related to:
Current year	10,747,362		40,940,473
Prior years	13,527,440		29,906,787
Total paid	24,274,802		70,847,260
Net balance at end of period	128,605,835		107,306,253
Add reinsurance recoverables	43,142,827		33,232,365
Balance at end of period	$	171,748,662	$	140,538,618

Incurred losses and LAE are presented in the accompanying condensed consolidated statements of operations and comprehensive (loss) income net of reinsurance recoveries under reinsurance contracts of $14,655,978 and $7,059,344 for the three months ended March 31, 2026 and 2025, respectively.

Prior year incurred loss and LAE development is based upon estimates by line of business and accident year. Prior year loss and LAE development incurred during the three months ended March 31, 2026 and 2025 was $1,264,066 favorable and $599,275 favorable, respectively. During the three months ended March 31, 2026 property claims overall developed better than expected driven primarily by reserve takedowns on several large fire claims from accident years 2024 and 2025 as well as a large subrogation recovery on a water damage claim from accident year 2023, resulting in favorable development. During the three months ended March 31, 2025, property claims overall developed better than expected, driven primarily by reserve takedowns on several large fire and water damage claims from accident years 2022 through 2024, resulting in favorable development.

Loss and LAE Reserves

The reserving process for loss and LAE reserves provides for the Company’s best estimate at a particular point in time of the ultimate unpaid cost of all losses and LAE incurred, including settlement and administration of losses, and is based on facts and circumstances then known including losses that have occurred but that have not yet been reported. The process relies on standard actuarial reserving methodologies, judgments relative to estimates of ultimate claim severity and frequency, the length of time before losses will develop to their ultimate level (‘tail’ factors), and the likelihood of changes in the law or other external factors that are beyond the Company’s control. Several actuarial reserving methodologies are used to estimate required loss reserves. The process produces carried reserves set by management based upon the actuaries’ best estimate and is the cumulative combination of the best estimates made by line of business, accident year, and loss and LAE. The amount of loss and LAE reserves for individual reported claims (the “case reserve”) is determined by the claims department and changes over time as new information is gathered. Such information is critical to the review of appropriate IBNR reserves and includes a review of coverage applicability, comparative liability on the part of the insured, injury severity, property damage, replacement cost estimates, and any other information considered pertinent to estimating the exposure presented by the claim. The amounts of loss and LAE reserves for unreported claims and development on known claims (IBNR reserves) are determined using historical information aggregated by line of business as adjusted to current conditions. Since this process produces loss reserves set by management based upon the actuaries’ best estimate, there is no explicit or implicit provision for uncertainty in the carried loss reserves.

Due to the inherent uncertainty associated with the reserving process, the ultimate liability may differ, perhaps substantially, from the original estimate. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current period’s results. Reserves are closely monitored and are recomputed periodically using the most recent information on reported claims and a variety of statistical techniques. On at least a quarterly basis, the Company reviews by line of business existing reserves, new claims, changes to existing case reserves, and paid losses with respect to the current and prior periods. Several methods are used, varying by line of business and accident year, in order to select the estimated period-end loss reserves. These methods include the following:

Paid Loss Development – historical patterns of paid loss development are used to project future paid loss emergence in order to estimate required reserves.

Incurred Loss Development – historical patterns of incurred loss development, reflecting both paid losses and changes in case reserves, are used to project future incurred loss emergence in order to estimate required reserves.

Paid Bornhuetter-Ferguson (“BF”) – an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been paid, based on historical paid loss development patterns. The estimate of required reserves assumes that the remaining unpaid portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of paid losses exists at the early stages of the claims development process.

Incurred Bornhuetter-Ferguson (“BF”) - an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been reported, based on historical incurred loss development patterns. The estimate of required reserves assumes that the remaining unreported portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of reported losses exists at the early stages of the claims development process.

Incremental Claim-Based Methods – historical patterns of incremental incurred losses and paid LAE during various stages of development are reviewed and assumptions are made regarding average loss and LAE development applied to remaining claims inventory. Such methods more properly reflect changes in the speed of claims closure and the relative adequacy of case reserve levels at various stages of development. These methods may provide a more accurate estimate of IBNR for lines of business with relatively few remaining open claims but for which significant recent settlement activity has occurred.

Frequency / Severity Based Methods – historical measurements of claim frequency and average paid claim size (severity) are reviewed for more mature accident years where a majority of claims have been reported and/or closed. These historical averages are trended forward to more recent periods in order to estimate ultimate losses for newer accident years that are not yet fully developed. These methods are useful for lines of business with slow and/or volatile loss development patterns, such as liability lines where information pertaining to individual cases may not be completely known for many years. The claim frequency and severity information for older periods can then be used as reasonable measures for developing a range of estimates for more recent immature periods.

Management’s best estimate of required reserves is generally based on an average of the methods above, with appropriate weighting of methods based on the line of business and accident year being projected. In some cases, additional methods or historical data from industry sources are employed to supplement the projections derived from the methods listed above.

Three key assumptions that materially affect the estimate of loss reserves are the loss ratio estimate for the current accident year used in the BF methods, the loss development factor selections used in the loss development methods, and the loss severity assumptions used in the frequency / severity method described above. The loss ratio estimates used in the BF methods are selected after reviewing historical accident year loss ratios adjusted for rate changes, trend, and mix of business. The severity assumptions used in the frequency / severity method are determined by reviewing historical average claim severity for older more mature accident periods, trended forward to less mature accident periods.

The Company reviews the carried reserves levels on a regular basis as additional information becomes available and makes adjustments in the periods in which such adjustments are determined to be necessary. The Company is not aware of any claim trends that have emerged or that would cause future adverse development that have not already been contemplated in setting current carried reserves levels.

In New York State, lawsuits for negligence are subject to certain limitations and must be commenced within three years from the date of the accident or are otherwise barred. Accordingly, the Company’s exposure to unreported claims (“pure” IBNR) for accident dates of March 31, 2023 and prior is limited, although there remains the possibility of adverse development on reported claims (“case development” IBNR). In certain rare circumstances states have retroactively revised a statute of limitations. The Company is not aware of any such effort that would have a material impact on the Company’s results.

The following is information about incurred and paid claims development as of March 31, 2026, net of reinsurance, as well as the cumulative reported claims by accident year and total IBNR reserves as of March 31, 2026 included in the net incurred loss and allocated expense amounts. The historical information regarding incurred and paid claims development for the years ended December 31, 2017 to December 31, 2025 is presented as supplementary unaudited information.

All Lines of Business

(in thousands, except reported claims data)

	Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance																				As of March 31, 2026
Accident Year	For the Years Ended December 31,																		Three Months Ended March 31, 2026		IBNR		Cumulative Number of Reported Claims by Accident Year
	2017		2018		2019		2020		2021		2022		2023		2024		2025
	(Unaudited 2017 - 2025)																		(Unaudited)
2017	$	31,605	$	32,169	$	35,304	$	36,160	$	36,532	$	36,502	$	36,819	$	37,268	$	37,359	$	37,350	$	148	3,401
2018			54,455		56,351		58,441		59,404		61,237		61,145		61,686		61,897		61,796		649		4,238
2019					75,092		72,368		71,544		71,964		73,310		74,363		76,337		76,506		1,953		4,509
2020							63,083		62,833		63,217		63,562		64,400		65,888		65,837		927		5,896
2021									96,425		96,673		96,134		96,771		98,411		98,485		1,237		5,838
2022											79,835		78,759		78,078		77,319		77,211		2,388		4,721
2023													78,978		72,025		70,128		69,949		5,113		4,100
2024															57,860		54,364		54,280		6,451		3,143
2025																	77,556		76,590		18,794		2,385
2026																			43,788		10,680		976
																	Total		$	661,790

All Lines of Business

(in thousands)

	Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	For the Years Ended December 31,																		Three Months Ended March 31, 2026
	2017		2018		2019		2020		2021		2022		2023		2024		2025
	(Unaudited 2017 - 2025)																		(Unaudited)
2017	$	16,704	$	24,820	$	28,693	$	31,393	$	32,529	$	33,522	$	34,683	$	35,046	$	35,336	$	35,352
2018			32,383		44,516		50,553		52,025		54,424		56,199		57,185		57,798		58,611
2019					40,933		54,897		58,055		60,374		63,932		66,109		68,648		69,614
2020							39,045		50,719		53,432		56,523		59,220		60,859		60,987
2021									56,282		77,756		82,317		85,314		90,865		92,199
2022											45,856		65,732		68,170		70,703		71,358
2023													46,280		56,952		59,571		59,783
2024															29,013		40,086		40,857
2025																	36,572		44,280
2026																			10,171
																	Total		$	543,212
Net liability for unpaid loss and allocated loss adjustment expenses for the accident years presented																			$	118,579
All outstanding liabilities before 2017, net of reinsurance																			1,716
Liabilities for loss and allocated loss adjustment expenses, net of reinsurance																			$	120,295

(Components may not sum to totals due to rounding)

Reported claim counts are measured on an occurrence or per event basis. A single claim occurrence could result in more than one loss type or claimant; however, the Company counts claims at the occurrence level as a single claim regardless of the number of claimants or claim features involved.

The reconciliation of the net incurred and paid loss development tables to the loss and LAE reserves in the condensed consolidated balance sheet is as follows:

Reconciliation of the Disclosure of Incurred and Paid Loss Development

to the Liability for Loss and LAE Reserves

(in thousands)	As of March 31, 2026
Liabilities for allocated loss and loss adjustment expenses, net of reinsurance	$	120,295
Total reinsurance recoverable on unpaid losses	43,143
Unallocated loss adjustment expenses	8,311
Total gross liability for loss and LAE reserves	$	171,749

Reinsurance

On January 1, 2025, the Company entered into a 16% quota share reinsurance treaty for its personal lines business, which primarily consisted of homeowners’ and dwelling fire policies, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”). Upon the expiration of the 2025/2026 Treaty on January 1, 2026, the Company entered into a new 5% quota share reinsurance treaty for its personal lines business written in all states except California (for which the Company entered into a new 30% quota share reinsurance treaty) covering the period from January 1, 2026 through January 1, 2027 (“2026/2027 Treaty”).

The Company’s excess of loss and catastrophe reinsurance treaties expired on June 30, 2025 and the Company entered into new excess of loss and catastrophe reinsurance treaties effective July 1, 2025. The new catastrophe reinsurance treaties include the issuance of a $125,000,000 catastrophe bond ("Series 2025-1 Notes"). The Series 2025-1 Notes were priced at 4.5% and issued through a Bermuda-registered special purpose insurer, 1886 Re Ltd., providing KICO with $125,000,000 of collateralized reinsurance protection. The Series 2025-1 Notes offer multi-year protection against named storm events across New York, New Jersey, Connecticut, Massachusetts and

Rhode Island on an indemnity trigger and per-occurrence basis. The Series 2025-1 Notes, which were structured and placed by AON Securities LLC, cover four annual risk periods from July 1, 2025, through June 30, 2029.

Effective January 1, 2025, the Company renewed an underlying excess of loss reinsurance treaty ("Underlying XOL Treaty") covering the period from January 1, 2025 through June 30, 2025. The treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the treaty. Effective July 1, 2025, the Underlying XOL Treaty was renewed along with the Company's excess of loss reinsurance treaty covering the period from July 1, 2025 through June 30, 2026. Combined, the renewed treaties provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. For the period October 1, 2024 through April 30, 2025, the Company purchased catastrophe reinsurance which provides coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. For the period October 15, 2025 through April 30, 2026, the Company purchased catastrophe reinsurance which provides coverage for winter storm losses to the extent of 90% of $5,000,000 in excess of $5,000,000.

Material terms for reinsurance treaties in effect for the treaty years shown below are as follows:

	Treaty Period
	2026/2027 Treaty						2025/2026 Treaty
Line of Business	July 1, 2026 to January 1, 2027			January 2, 2026 to June 30, 2026			July 1, 2025 to January 1, 2026			January 2, 2025 to June 30, 2025
Personal Lines:
Homeowners, dwelling fire and canine legal liability
Quota share treaty:
Percent ceded (6)	5		%	5		%	16		%	16		%
Risk retained on initial
$1,000,000 of losses (4) (5) (6)	$	950,000		$	950,000		$	840,000		$	840,000
Losses per occurrence
subject to quota share
reinsurance coverage	$	1,000,000		$	1,000,000		$	1,000,000		$	1,000,000
Expiration date	January 1, 2027			January 1, 2027			January 1, 2026			January 1, 2026
Excess of loss coverage and
facultative facility
coverage (1) (4) (5)	$	(5)		$	8,250,000		$	8,250,000		$	8,400,000
				in excess of			in excess of			in excess of
				$	750,000		$	750,000		$	600,000
Total reinsurance coverage
per occurrence (4) (5)	$	50,000		$	8,175,000		$	8,285,000		$	8,360,000
Losses per occurrence
subject to reinsurance
coverage (5)	$	1,000,000		$	9,000,000		$	9,000,000		$	9,000,000
Expiration date	(5)			June 30, 2026			June 30, 2026			June 30, 2025
Catastrophe Reinsurance:
Initial loss subject to personal
lines quota share treaty (5)	$	10,000,000		$	10,000,000		$	10,000,000		$	10,000,000
Risk retained per catastrophe
occurrence (5) (6) (7) (8)	(5)			$	5,500,000		$	5,000,000		$	4,250,000
Catastrophe loss coverage
in excess of quota share
coverage (2) (5) (8)	(5)			$	434,500,000		$	435,000,000		$	275,000,000
Reinstatement premium
protection (3)	(5)			Yes			Yes			Yes

(1)For personal lines, includes the addition of an automatic facultative facility allowing KICO to obtain homeowners single risk coverage up to $9,000,000 in total insured value, which covers direct losses from $3,500,000 to $9,000,000 through June 30, 2026.

(2)Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts, except for one occurrence on 80% of the first layer of $5,000,000 in excess of $5,000,000, and one occurrence on 52% of the top layer of $240,000,000 in excess of $200,000,000, which is covered under the catastrophe

bond. Duration of 168 consecutive hours for a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone, except for winter storm coverage, which is covered under a specific declared catastrophe event.

(3)For the period July 1, 2024 through June 30, 2025 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000. For the period July 1, 2025 through June 30, 2026 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000.

(4)For the period January 1, 2024 through June 30, 2025, the Underlying XOL Treaty provides 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Excludes losses from named storms. Reduces retention to $530,000 from $730,000 under the quota share treaty that expired on January 1, 2025. Retention increases to $640,000 from $530,000 under the 2025/2026 Treaty. For the period July 1, 2025 through June 30, 2026, the Underlying XOL Treaty combined with the excess of loss treaty provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. Increased retention to $715,000 from $640,000 under the 2025/2026 Treaty, and increased retention to $825,000 under the 2026/2027 Treaty (see note 5 below).

(5)Excess of loss coverage and facultative facility and catastrophe reinsurance treaties will expire on June 30, 2026, with none of these coverages to be in effect during the period from July 1 2026 through January 1, 2027. If and when these treaties are renewed on July 1, 2026, the excess of loss and facultative facility, underlying excess of loss treaty, and the catastrophe reinsurance treaty, will be as provided for therein. Reinsurance coverage in effect from July 1, 2026 through January 1, 2027 is currently only covered under the 2026/2027 Treaty. The 2026/2027 Treaty will expire on January 1, 2027.

(6)For the 2025/2026 Treaty, 6% of the 16% total of losses ceded under this treaty were excluded from a named catastrophe event. For the 2026/2027 Treaty, there is no exclusion for catastrophe events.

(7)Plus losses in excess of catastrophe coverage.

(8)Effective July 1, 2025 through June 30, 2026, catastrophe coverage is 80% of the first layer of $5,000,000 in excess of $5,000,000. The remaining coverage is at 100% of $430,000,000 in excess of $10,000,000. For the period October 1, 2024 through April 30, 2025, additional catastrophe reinsurance treaty provided coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. For the period October 15, 2025 through April 30, 2026, additional catastrophe reinsurance treaty will provide coverage for winter storm losses to the extent of 90% of $5,000,000 in excess of $5,000,000. Retention for winter storms is $5,200,000 under the 2025/2026 Treaty from January 1, 2025 through April 30, 2025, $3,900,000 from October 15, 2025 through January 1, 2026, the expiration date of the 2025/2026 Treaty, and $5,000,000 under the 2026/2027 Treaty through April 30, 2026.

	Treaty Year
Line of Business	July 1, 2025 to June 30, 2026			July 1, 2024 to June 30, 2025
Personal Lines:
Personal Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage	90		%	90		%
Percent ceded - excess of $1,000,000 of coverage	95		%	95		%
Risk retained	$	300,000		$	300,000
Total reinsurance coverage per occurrence	$	4,700,000		$	4,700,000
Losses per occurrence subject to quota share reinsurance coverage	$	5,000,000		$	5,000,000
Expiration date	June 30, 2026			June 30, 2025
Commercial Lines (1)

(1)Coverage on all commercial lines policies expired in September 2020; reinsurance coverage is based on treaties in effect on the date of loss.

The Company’s reinsurance program has been structured to enable the Company to grow its premium volume while maintaining regulatory capital and other financial ratios generally within or below the expected ranges used for regulatory oversight purposes. The reinsurance program also provides income as a result of ceding commissions earned pursuant to the quota share reinsurance contracts. The Company’s participation in reinsurance arrangements does not relieve the Company of its obligations to policyholders.

Ceding Commission Revenue

The Company earned ceding commission revenue under the 2025/2026 Treaty for the three months ended March 31, 2025 based on: (i) a fixed provisional commission rate at which provisional ceding commissions were earned, and (ii) a sliding scale ("Sliding Scale") of commission rates and ultimate treaty year loss ratio on the policies reinsured under this agreement based upon which contingent ceding commissions are earned. The Sliding Scale included minimum and maximum commission rates in relation to specified ultimate loss ratios. The commission rate and contingent ceding commissions earned increase when the estimated ultimate loss ratio decreases and, conversely, the commission rate and contingent ceding commissions earned decrease when the estimated ultimate loss ratio increases.

The Company earned ceding commission revenue under the 2026/2027 Treaty for the three months ended March 31, 2026 based on only a fixed provisional commission rate at which provisional ceding commissions were earned, with no provision for Sliding Scale ceding commission.

Ceding commission revenue consists of the following:

	Three months ended March 31,
	2026		2025
Provisional ceding commissions earned	$	1,276,750	$	3,252,404
Contingent ceding commissions earned	127,126		(293,713)
	$	1,403,876	$	2,958,691

Provisional ceding commissions are settled monthly. Balances due to or from reinsurers for contingent ceding commissions on the 2025/2026 Treaty will be settled annually based on the Loss Ratio of the treaty year that ends on January 1. Balances due to or from reinsurers for Sliding Scale contingent ceding commissions on quota share treaties are settled periodically based on the Loss Ratio of each treaty year that ends on June 30 for the expired treaties (which had June 30 expiration dates) that were subject to Sliding Scale contingent commissions. The Loss Ratios from prior years’ treaties are subject to change as incurred losses from those periods develop, resulting in an increase or decrease in the commission rate and Sliding Scale contingent ceding commissions earned. As of March 31, 2026 and December 31, 2025, contingent ceding commissions receivable from reinsurers under the 2025/2026 Treaty was approximately $1,882,000 and $1,754,000, respectively, which is recorded in other assets on the accompanying condensed consolidated balance sheets. As of March 31, 2026 and December 31, 2025, net contingent ceding commissions payable to reinsurers under all other treaties was

approximately $733,000 and $732,000, respectively, which is recorded in reinsurance balances payable on the accompanying condensed consolidated balance sheets.

Expected Credit Losses – Uncollectible Reinsurance

The Company reviews reinsurance receivables which relate to both amounts already billed on ceded paid losses as well as ceded reserves that will be billed when losses are paid in the future. The Company has not recorded an allowance for uncollectible reinsurance as there is no perceived credit risk. The principal credit quality indicator used in the valuation of the allowance for reinsurance receivables is the financial strength rating of the reinsurer sourced from major rating agencies. Changes in the allowance for credit losses are presented as a component of other underwriting expenses on the condensed consolidated statements of operations and comprehensive (loss) income.