| |
Delaware
(State or other jurisdiction of
incorporation or organization) |
| |
6331
(Primary Standard Industrial
Classification Code Number) |
| |
82-4925734
(I.R.S. Employer
Identification Number) |
|
| |
Marc D. Jaffe
Erika L. Weinberg Gary D. Boss Latham & Watkins LLP 1271 Avenue of the Americas New York, NY 10020 (212) 906-1200 |
| |
Eric Crespolini
Ategrity Specialty Holdings LLC 9 West 57th Street, 33rd Floor, New York, NY 10019 Telephone: (212) 509-1600 |
| |
Dwight S. Yoo
Elena M. Coyle Ryan J. Dzierniejko Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, NY 10001 (212) 735-3000 |
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Large accelerated filer
☐
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Accelerated filer
☐
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Non-accelerated filer
☒
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Smaller reporting company
☐
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Emerging growth company
☒
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Page
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| | | | | F-1 | | | |
| |
Premium by Risk Duration(1)
|
| |
Premium by Product(1)
|
|
| |
|
| |
|
|
| |
Premium by Policy Size(1)
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Premium by Vertical(1)
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|
| |
Number of Distribution Partners
|
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Premium by Channel(1)
|
|
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|
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|
|
| | | |
Three months ended
March 31, |
| |
Year ended
December 31, |
| ||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2025
|
| |
2024
|
| |
2024
|
| |
2023
|
| ||||||||||||
| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Gross written premiums
|
| | | $ | 116,143 | | | | | $ | 81,605 | | | | | $ | 437,036 | | | | | $ | 352,591 | | |
|
Ceded written premiums
|
| | | | (26,272) | | | | | | (19,349) | | | | | | (137,830) | | | | | | (84,375) | | |
|
Net written premiums
|
| | | | 89,871 | | | | | | 62,256 | | | | | | 299,206 | | | | | | 268,216 | | |
|
Net premiums earned
|
| | | | 78,301 | | | | | | 68,278 | | | | | | 290,635 | | | | | | 231,464 | | |
|
Fee income
|
| | | | 560 | | | | | | 125 | | | | | | 918 | | | | | | 660 | | |
|
Net investment income
|
| | | | 7,895 | | | | | | 5,253 | | | | | | 24,046 | | | | | | 11,366 | | |
|
Net realized and unrealized gains (losses) on investments
|
| | | | (4,599) | | | | | | 2,388 | | | | | | 28,140 | | | | | | (2,269) | | |
|
Other income
|
| | | | 965 | | | | | | 24 | | | | | | 95 | | | | | | 95 | | |
|
Total revenues
|
| | | | 83,122 | | | | | | 76,068 | | | | | | 343,834 | | | | | | 241,316 | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Losses and loss adjustment expenses
|
| | | $ | 46,862 | | | | | $ | 41,047 | | | | | $ | 175,234 | | | | | $ | 154,107 | | |
|
Underwriting, acquisition and insurance expenses
|
| | | | 24,885 | | | | | | 23,389 | | | | | | 98,567 | | | | | | 72,155 | | |
|
Interest expense(1)
|
| | | | 447 | | | | | | 550 | | | | | | 2,042 | | | | | | 2,237 | | |
|
Other expenses
|
| | | | 238 | | | | | | 54 | | | | | | 1,727 | | | | | | 196 | | |
|
Total expenses
|
| | | | 72,432 | | | | | | 65,040 | | | | | | 277,570 | | | | | | 228,695 | | |
|
Income before income taxes
|
| | | | 10,690 | | | | | | 11,028 | | | | | | 66,264 | | | | | | 12,621 | | |
|
Income tax expense
|
| | | | 2,240 | | | | | | 2,070 | | | | | | 12,316 | | | | | | 2,518 | | |
|
Net income
|
| | | | 8,450 | | | | | | 8,958 | | | | | | 53,948 | | | | | | 10,103 | | |
|
Less: Net income (loss) attributable to non-controlling interest–General Partner
|
| | | | (11) | | | | | | 1,202 | | | | | | 6,858 | | | | | | 55 | | |
|
Net income attributable to members
|
| | | $ | 8,461 | | | | | $ | 7,756 | | | | | $ | 47,090 | | | | | $ | 10,048 | | |
| | |||||||||||||||||||||||||
| | | |
As of
March 31, |
| |
As of
December 31, |
| ||||||||||||
|
($ in thousands, except percentages)
|
| |
2025
|
| |
2024
|
| |
2023
|
| |||||||||
|
Investments, cash and cash equivalents
|
| | | $ | 739,314 | | | | | $ | 788,459 | | | | | $ | 617,585 | | |
|
Premiums receivable, net
|
| | | | 54,991 | | | | | | 53,500 | | | | | | 49,103 | | |
|
Deferred policy acquisition costs, net
|
| | | | 24,684 | | | | | | 21,552 | | | | | | 23,245 | | |
|
Reinsurance recoverable, net
|
| | | | 135,239 | | | | | | 133,616 | | | | | | 125,671 | | |
|
Ceded unearned premiums
|
| | | | 60,628 | | | | | | 68,205 | | | | | | 37,852 | | |
|
Total assets
|
| | | | 1,148,042 | | | | | | 1,123,438 | | | | | $ | 882,042 | | |
|
Reserves for unpaid losses and loss adjustment expenses
|
| | | $ | 421,478 | | | | | $ | 403,576 | | | | | $ | 320,936 | | |
|
Unearned premiums
|
| | | | 216,821 | | | | | | 212,828 | | | | | | 173,905 | | |
|
Payable to reinsurers
|
| | | | 19,553 | | | | | | 27,160 | | | | | | 15,669 | | |
|
Total liabilities
|
| | | $ | 720,736 | | | | | $ | 724,631 | | | | | $ | 559,845 | | |
|
Total members’ equity
|
| | | $ | 426,817 | | | | | $ | 398,307 | | | | | $ | 321,697 | | |
| | | |
Three months ended
March 31, |
| |
Year ended
December 31, |
| ||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2025
|
| |
2024
|
| |
2024
|
| |
2023
|
| ||||||||||||
|
Loss ratio(1)
|
| |
59.8%
|
| |
60.1%
|
| |
60.3%
|
| |
66.6%
|
| ||||||||||||
|
Expense ratio(2)
|
| |
31.1%
|
| |
34.1%
|
| |
33.6%
|
| |
30.9%
|
| ||||||||||||
|
Combined ratio(3)
|
| |
90.9%
|
| |
94.2%
|
| |
93.9%
|
| |
97.5%
|
| ||||||||||||
|
Return on members’ equity(4)
|
| |
8.2%
|
| |
9.5%
|
| |
13.1%
|
| |
3.4%
|
| ||||||||||||
| Other Data/Non-GAAP Metrics: | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Underwriting income(5)
|
| | | $ | 7,114 | | | | | $ | 3,967 | | | | | $ | 17,752 | | | | | $ | 5,862 | | |
|
Adjusted net income attributable to members(6)
|
| | | $ | 8,542 | | | | | $ | 7,756 | | | | | $ | 48,266 | | | | | $ | 10,048 | | |
|
Adjusted return on members’ equity(4)(7)
|
| |
8.3%
|
| |
9.5%
|
| |
13.4%
|
| |
3.4%
|
| ||||||||||||
| | | |
Three months ended
March 31, |
| |
Year ended
December 31, |
| ||||||||||||||||||
|
($ in thousands, except percentages and share or unit counts) |
| |
2025
|
| |
2024
|
| |
2024
|
| |
2023
|
| ||||||||||||
| Per Unit Information: | | | | | | ||||||||||||||||||||
|
Net income attributable to members’ units
|
| | | $ | 8,166 | | | | | $ | 7,756 | | | | | $ | 46,730 | | | | | $ | 10,048 | | |
|
Earnings per unit:
Basic |
| | | | 0.02 | | | | | | 0.02 | | | | | | 0.12 | | | | | | 0.03 | | |
|
Diluted
|
| | | | 0.02 | | | | | | 0.02 | | | | | | 0.12 | | | | | | 0.03 | | |
|
Weighted average units used in computing earnings per unit:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
|
| | | | 429,573,467 | | | | | | 386,397,466 | | | | | | 390,738,224 | | | | | | 349,938,678 | | |
|
Diluted
|
| | | | 436,085,672 | | | | | | 386,400,736 | | | | | | 390,756,416 | | | | | | 349,948,799 | | |
|
As adjusted net income attributable to common stockholders(1)
|
| | | | 8,166 | | | | | | | | | |
|
| | | | | | | |||
|
As adjusted earnings per share attributable
to common stock:(1) |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
|
| | | | 0.20 | | | | | | | | | |
|
| | | | | | | |||
|
Diluted
|
| | | | 0.20 | | | | | | | | | |
|
| | | | | | | |||
|
As adjusted weighted average shares used in
computing earnings per share:(1) |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
|
| | | | 40,288,309 | | | | | | | | | |
|
| | | | | | | |||
|
Diluted
|
| | | | 40,899,068 | | | | | | | | | |
|
| | | | | | | |||
|
Pro forma net income attributable to
common stockholders(2) |
| | | | 8,106 | | | | | | | | | |
|
| | | | | | | |||
|
Pro forma earnings per share attributable to
common stock:(2) |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
|
| | | | 0.17 | | | | | | | | | |
|
| | | | | | | |||
|
Diluted
|
| | | | 0.17 | | | | | | | | | |
|
| | | | | | | |||
|
Pro forma weighted average shares used in computing earnings per share:(2)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
|
| | | | 46,954,976 | | | | | | | | | |
|
| | | | | | | |||
|
Diluted
|
| | | | 48,157,634 | | | | | | | | | |
|
| | | | | | | |||
|
($ in thousands, except per share data)
|
| |
Three months ended
March 31, 2025 |
| |||
|
Net income attributable to members’ units as reported
|
| | | $ | 8,166 | | |
|
Increase in share-based payments to stockholders(a)
|
| | | | 60 | | |
|
Pro forma net income attributable to stockholders(b)
|
| | | | 8,106 | | |
| Pro forma weighted average shares used in computing earnings per share:(c) | | | | | | | |
|
Basic
|
| | | | 46,954,976 | | |
|
Diluted
|
| | | | 48,157,634 | | |
| Pro forma earnings per share attributable to common stock: | | | | | | | |
|
Basic
|
| | | | 0.17 | | |
|
Diluted
|
| | | | 0.17 | | |
|
(Dollars in thousands)
|
| |
Actual
|
| |
As adjusted(1)(2)
|
| ||||||
|
Cash and cash equivalents
|
| | | $ | 38,924 | | | | | $ | 125,097 | | |
| Members’ Equity: | | | | | | | | | | | | | |
|
LLC units (430,764,369 issued units, actual)
|
| | | | 380,904 | | | | | | — | | |
|
Stockholders’ Equity:
|
| | | | | | | | |||||
|
Common stock–par value $0.001 per share (500,000,000 authorized shares, as
adjusted; 47,066,674 issued shares, as adjusted) |
| | | | — | | | | | | 47 | | |
|
Preferred stock–par value $0.001 per share (100,000,000 authorized shares, as
adjusted; zero issued shares, as adjusted) |
| | | | — | | | | | | — | | |
|
Additional paid-in capital
|
| | | | — | | | | | | 467,030 | | |
|
Retained earnings
|
| | | | 43,030 | | | | | | 43,030 | | |
|
Accumulated other comprehensive income
|
| | | | 2,883 | | | | | | 2,883 | | |
|
Total members’/stockholders’ equity
|
| | | | 426,817 | | | | | | 512,990 | | |
|
Non-controlling interest
|
| | | | 489 | | | | | | 489 | | |
|
Total capitalization
|
| | | $ | 427,306 | | | | | $ | 513,479 | | |
| |
Assumed initial public offering price per share
|
| | | | | | | | | $ | 15.00 | | |
| |
Net tangible book value per share as of March 31, 2025
|
| | | $ | 10.56 | | | | | | | | |
| |
Increase in as adjusted net tangible book value per share attributable to new investors in this offering
|
| | | $ | 0.33 | | | | | | | | |
| |
As adjusted net tangible book value per share immediately after this offering
|
| | | | | | | | | $ | 10.90 | | |
| |
Dilution in as adjusted net tangible book value per share to new investors
|
| | | | | | | | | $ | 4.10 | | |
| | ||||||||||||||
| | | | |
Shares Purchased
|
| |
Total Consideration
|
| |
Average
Price Per Share |
| |||||||||||||||||||||
| | | | |
Number
|
| |
Percent
|
| |
Dollars
(in millions) |
| |
Percent
|
| ||||||||||||||||||
| |
Existing securityholders
|
| | | | 40,400,007 | | | | | | 85.8% | | | | | $ | 376.8 | | | | | | 79.0% | | | | | $ | 9.33 | | |
| |
New investors
|
| | | | 6,666,667 | | | | | | 14.2% | | | | | $ | 100.0 | | | | | | 21.0% | | | | | $ | 15.00 | | |
| |
Total
|
| | | | 47,066,674 | | | | | | 100.0% | | | | | $ | 476.8 | | | | | | 100.0% | | | | | | | | |
| | | |
Three months ended March 31,
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2025
|
| |
2024
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
|
Gross written premiums
|
| | | $ | 116,143 | | | | | $ | 81,605 | | | | | $ | 34,538 | | | |
42.3%
|
| |||
|
Ceded written premiums
|
| | | | (26,272) | | | | | | (19,349) | | | | | | (6,923) | | | |
35.8%
|
| |||
|
Net written premiums
|
| | | | 89,871 | | | | | | 62,256 | | | | | | 27,615 | | | |
44.4%
|
| |||
|
Net premiums earned
|
| | | | 78,301 | | | | | | 68,278 | | | | | | 10,023 | | | |
14.7%
|
| |||
|
Fee income
|
| | | | 560 | | | | | | 125 | | | | | | 435 | | | |
348.0%
|
| |||
|
Losses and loss adjustment expenses
|
| | | | 46,862 | | | | | | 41,047 | | | | | | 5,815 | | | |
14.2%
|
| |||
|
Underwriting, acquisition and insurance expenses
|
| | | | 24,885 | | | | | | 23,389 | | | | | | 1,496 | | | |
6.4%
|
| |||
|
Underwriting income(1)
|
| | | | 7,114 | | | | | | 3,967 | | | | | | 3,147 | | | |
79.3%
|
| |||
|
Net investment income
|
| | | | 7,895 | | | | | | 5,253 | | | | | | 2,642 | | | |
50.3%
|
| |||
|
Net realized and unrealized gains (losses) on investments
|
| | | | (4,599) | | | | | | 2,388 | | | | | | (6,987) | | | |
(292.6)%
|
| |||
|
Interest expense
|
| | | | (447) | | | | | | (550) | | | | | | 103 | | | |
(18.7)%
|
| |||
|
Other income
|
| | | | 965 | | | | | | 24 | | | | | | 941 | | | | | | NM | | |
|
Other expenses
|
| | | | (238) | | | | | | (54) | | | | | | (184) | | | |
340.7%
|
| |||
|
Income before income taxes
|
| | | | 10,690 | | | | | | 11,028 | | | | | | (338) | | | |
(3.1)%
|
| |||
|
Income tax expense
|
| | | | 2,240 | | | | | | 2,070 | | | | | | 170 | | | |
8.2%
|
| |||
|
Net income
|
| | | $ | 8,450 | | | | | $ | 8,958 | | | | | $ | (508) | | | |
(5.7)%
|
| |||
|
Less: Net income attributable to non-controlling interest-General Partner
|
| | | | (11) | | | | | | 1,202 | | | | | | (1,213) | | | |
(100.9)%
|
| |||
|
Net income attributable to members
|
| | | $ | 8,461 | | | | | $ | 7,756 | | | | | $ | 705 | | | |
9.1%
|
| |||
|
Key Metrics
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Adjusted net income attributable to members(1)
|
| | | $ | 8,542 | | | | | $ | 7,756 | | | | | | | | | | | | | | |
|
Loss ratio
|
| |
59.8%
|
| |
60.1%
|
| | | | | | | | | | | | | ||||||
|
Expense ratio
|
| |
31.1%
|
| |
34.1%
|
| | | | | | | | | | | | | ||||||
|
Combined ratio
|
| |
90.9%
|
| |
94.2%
|
| | | | | | | | | | | | | ||||||
|
Return on members’ equity(2)
|
| |
8.2%
|
| |
9.5%
|
| | | | | | | | | | | | | ||||||
|
Adjusted return on members’ equity(1)(2)
|
| |
8.3%
|
| |
9.5%
|
| | | | | | | | | | | | | ||||||
| | | |
Three months ended March 31,
|
| ||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2025
|
| |
% of total
|
| |
2024
|
| |
% of total
|
| |||||||||
|
Casualty
|
| | | $ | 82,140 | | | | | | 70.7% | | | | | $ | 50,506 | | | |
61.9
|
|
|
Property
|
| | | | 34,003 | | | | | | 29.3% | | | | | | 31,099 | | | |
38.1
|
|
|
Gross written premiums
|
| | | $ | 116,143 | | | | | | 100.0% | | | | | $ | 81,605 | | | |
100.0%
|
|
| | ||||||||||||||||||||||
| | | |
Three months ended March 31,
|
| |||||||||||||||
|
($ in thousands, except percentages)
|
| |
2025
|
| |
% of net
earned premiums |
| |
2024
|
| |
% of net
earned premiums |
| ||||||
|
Policy acquisition costs
|
| | | $ | 14,598 | | | |
18.6%
|
| | | | 14,961 | | | |
21.9%
|
|
|
Other operating and general expenses, net of fee income(1)
|
| | | | 9,727 | | | |
12.4%
|
| | | | 8,303 | | | |
12.2%
|
|
|
Underwriting, acquisition and insurance expenses, net of fee income
|
| | | $ | 24,325 | | | |
31.1%
|
| | | $ | 23,264 | | | |
34.1%
|
|
| | |||||||||||||||||||
| | | |
Three months ended March 31,
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2025
|
| |
2024
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
| Investment income | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Fixed maturity securities
|
| | | $ | 6,264 | | | | | $ | 887 | | | | | $ | 5,377 | | | |
606.2%
|
| |||
|
Short-term investments
|
| | | | 570 | | | | | | 1,514 | | | | | | (944) | | | |
(62.4)%
|
| |||
|
Cash equivalents
|
| | | | 436 | | | | | | 1,992 | | | | | | (1,556) | | | |
(78.1)%
|
| |||
|
Equity securities
|
| | | | — | | | | | | 22 | | | | | | (22) | | | |
(100.0)%
|
| |||
|
Note receivable from affiliate
|
| | | | 250 | | | | | | 250 | | | | | | — | | | |
0.0%
|
| |||
|
Securities sold, not yet purchased
|
| | | | — | | | | | | (132) | | | | | | 132 | | | |
100.0%
|
| |||
|
Total fixed income
|
| | | | 7,520 | | | | | | 4,533 | | | | | | 2,987 | | | |
65.9%
|
| |||
|
Utility & Infrastructure Investments
|
| | | | 511 | | | | | | 726 | | | | | | (215) | | | |
(29.6)%
|
| |||
|
Other expenses
|
| | | | (136) | | | | | | (6) | | | | | | (130) | | | | | | NM | | |
|
Net investment income
|
| | | $ | 7,895 | | | | | $ | 5,253 | | | | | $ | 2,642 | | | |
50.3%
|
| |||
|
Net realized and unrealized gains (losses) on investments
|
| | | $ | (4,599) | | | | | $ | 2,388 | | | | | $ | (6,987) | | | |
(292.6)%
|
| |||
| | |||||||||||||||||||||||||
| | | |
Year ended December 31,
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2024
|
| |
2023
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
|
Gross written premiums
|
| | | $ | 437,036 | | | | | $ | 352,591 | | | | | $ | 84,445 | | | |
23.9%
|
| |||
|
Ceded written premiums
|
| | | | (137,830) | | | | | | (84,375) | | | | | | (53,455) | | | |
(63.4)%
|
| |||
|
Net written premiums
|
| | | | 299,206 | | | | | | 268,216 | | | | | | 30,990 | | | |
11.6%
|
| |||
|
Net premiums earned
|
| | | | 290,635 | | | | | | 231,464 | | | | | | 59,171 | | | |
25.6%
|
| |||
|
Fee income
|
| | | | 918 | | | | | | 660 | | | | | | 258 | | | |
39.1%
|
| |||
|
Losses and loss adjustment expenses
|
| | | | 175,234 | | | | | | 154,107 | | | | | | 21,127 | | | |
13.7%
|
| |||
|
Underwriting, acquisition and insurance expenses
|
| | | | 98,567 | | | | | | 72,155 | | | | | | 26,412 | | | |
36.6%
|
| |||
|
Underwriting income(1)
|
| | | | 17,752 | | | | | | 5,862 | | | | | | 11,890 | | | |
202.8%
|
| |||
|
Net investment income
|
| | | | 24,046 | | | | | | 11,366 | | | | | | 12,680 | | | |
111.6%
|
| |||
|
Net realized and unrealized gains (losses) on investments
|
| | | | 28,140 | | | | | | (2,269) | | | | | | 30,409 | | | | | | NM | | |
| | | |
Year ended December 31,
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2024
|
| |
2023
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
|
Interest expense
|
| | | | 2,042 | | | | | | 2,237 | | | | | | (195) | | | |
(8.7)%
|
| |||
|
Other income
|
| | | | 95 | | | | | | 95 | | | | | | — | | | |
0.0%
|
| |||
|
Other expenses
|
| | | | 1,727 | | | | | | 196 | | | | | | 1,531 | | | |
781.1%
|
| |||
|
Income before income taxes
|
| | | | 66,264 | | | | | | 12,621 | | | | | | 53,643 | | | |
425.0%
|
| |||
|
Income tax expense
|
| | | | 12,316 | | | | | | 2,518 | | | | | | 9,798 | | | |
389.1%
|
| |||
|
Net income
|
| | | $ | 53,948 | | | | | $ | 10,103 | | | | | $ | 43,845 | | | |
434.0%
|
| |||
|
Less: Net income attributable to non-controlling interest-General Partner
|
| | | | 6,858 | | | | | | 55 | | | | | | 6,803 | | | | | | NM | | |
|
Net income attributable to members
|
| | | $ | 47,090 | | | | | $ | 10,048 | | | | | $ | 37,042 | | | |
368.7%
|
| |||
| Key Metrics | | | | | | | | | | | | | | | | ||||||||||
|
Adjusted net income attributable to members(1)
|
| | | $ | 48,266 | | | | | $ | 10,048 | | | | | | | | | | | | | | |
|
Loss ratio
|
| |
60.3%
|
| |
66.6%
|
| | | | | | | | | | | | | ||||||
|
Expense ratio
|
| |
33.6%
|
| |
30.9%
|
| | | | | | | | | | | | | ||||||
|
Combined ratio
|
| |
93.9%
|
| |
97.5%
|
| | | | | | | | | | | | | ||||||
|
Return on members’ equity
|
| |
13.1%
|
| |
3.4%
|
| | | | | | | | | | | | | ||||||
|
Adjusted return on members’ equity(1)
|
| |
13.4%
|
| |
3.4%
|
| | | | | | | | | | | | | ||||||
| | | |
Year ended December 31,
|
| ||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2024
|
| |
% of total
|
| |
2023
|
| |
% of total
|
| |||||||||
|
Casualty
|
| | | $ | 263,328 | | | | | | 60.3% | | | | | $ | 203,916 | | | |
57.8%
|
|
|
Property
|
| | | | 173,708 | | | | | | 39.7% | | | | | | 148,675 | | | |
42.2%
|
|
|
Gross written premiums
|
| | |
$
|
437,036
|
| | | |
|
100.0%
|
| | | |
$
|
352,591
|
| | |
100.0%
|
|
| | ||||||||||||||||||||||
| | | |
Year ended December 31,
|
| ||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2024
|
| |
% of net
earned premiums |
| |
2023
|
| |
% of net
earned premiums |
| |||||||||
|
Policy acquisition costs
|
| | | $ | 60,692 | | | | | | 20.9% | | | | | | 46,201 | | | |
20.0%
|
|
|
Other operating and general expenses, net of fee income(1)
|
| | | | 36,957 | | | | | | 12.7% | | | | | | 25,294 | | | |
10.9%
|
|
|
Underwriting, acquisition and insurance expenses, net of fee income . . . . . . . .
|
| | |
$
|
97,649
|
| | | |
|
33.6%
|
| | | |
$
|
71,495
|
| | |
30.9%
|
|
| | ||||||||||||||||||||||
| | | |
Year ended December 31,
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
2024
|
| |
2023
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
| Investment income | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Fixed maturity securities
|
| | | $ | 14,296 | | | | | $ | 1,974 | | | | | $ | 12,322 | | | |
624.2%
|
| |||
|
Short-term investments
|
| | | | 2,703 | | | | | | — | | | | | | 2,703 | | | | | | NM | | |
|
Cash equivalents
|
| | | | 5,122 | | | | | | 6,368 | | | | | | (1,246) | | | |
(19.6)%
|
| |||
|
Equity securities
|
| | | | 44 | | | | | | — | | | | | | 44 | | | | | | NM | | |
|
Note receivable from affiliate
|
| | | | 1,002 | | | | | | 1,002 | | | | | | — | | | |
0.0%
|
| |||
|
Securities sold, not yet purchased
|
| | | | (569) | | | | | | (795) | | | | | | 226 | | | |
28.4%
|
| |||
|
Total fixed income
|
| | | | 22,598 | | | | | | 8,549 | | | | | | 14,049 | | | |
164.3%
|
| |||
|
Utility & Infrastructure Investments
|
| | | | 1,669 | | | | | | 3,030 | | | | | | (1,361) | | | |
(44.9)%
|
| |||
|
Other expenses
|
| | | | (221) | | | | | | (213) | | | | | | (8) | | | |
(3.8)%
|
| |||
|
Net investment income
|
| | | $ | 24,046 | | | | | $ | 11,366 | | | | | $ | 12,680 | | | |
111.6%
|
| |||
|
Net realized and unrealized gains (losses) on investments
|
| | | $ | 28,140 | | | | | $ | (2,269) | | | | | $ | 30,409 | | | | | | NM | | |
| | |||||||||||||||||||||||||
| | | |
Three months
ended March 31, |
| |
Year ended
December 31, |
| ||||||||||||||||||
|
($ in thousands)
|
| |
2025
|
| |
2024
|
| |
2024
|
| |
2023
|
| ||||||||||||
|
Income before income taxes
|
| | | $ | 10,690 | | | | | $ | 11,028 | | | | | $ | 66,264 | | | | | $ | 12,621 | | |
| Less: | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Net investment income
|
| | | | (7,895) | | | | | | (5,253) | | | | | | (24,046) | | | | | | (11,366) | | |
|
Net realized and unrealized (gains) losses on investments
|
| | | | 4,599 | | | | | | (2,388) | | | | | | (28,140) | | | | | | 2,269 | | |
|
Other income
|
| | | | (965) | | | | | | (24) | | | | | | (95) | | | | | | (95) | | |
| Add: | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest expense
|
| | | | 447 | | | | | | 550 | | | | | | 2,042 | | | | | | 2,237 | | |
|
Other expenses
|
| | | | 238 | | | | | | 54 | | | | | | 1,727 | | | | | | 196 | | |
|
Underwriting income
|
| | | $ | 7,114 | | | | | $ | 3,967 | | | | | $ | 17,752 | | | | | $ | 5,862 | | |
| | |||||||||||||||||||||||||
| | | |
Three months
ended March 31, |
| |
Year ended
December 31, |
| ||||||||||||||||||
|
($ in thousands)
|
| |
2025
|
| |
2024
|
| |
2024
|
| |
2023
|
| ||||||||||||
|
Net income attributable to members
|
| | | $ | 8,461 | | | | | $ | 7,756 | | | | | $ | 47,090 | | | | | $ | 10,048 | | |
|
Adjustments:
Other non-operating expenses(1) |
| | | | 103 | | | | | | 0 | | | | | | 1,489 | | | | | | — | | |
|
Tax impact
|
| | | | (22) | | | | | | 0 | | | | | | (313) | | | | | | — | | |
|
Adjusted net income attributable to members
|
| | | $ | 8,542 | | | | | $ | 7,756 | | | | | $ | 48,266 | | | | | $ | 10,048 | | |
| | |||||||||||||||||||||||||
| | | |
Three months
ended March 31,(1) |
| |
Year ended
December 31, |
| ||||||||||||||||||
|
($ in thousands)
|
| |
2025
|
| |
2024
|
| |
2024
|
| |
2023
|
| ||||||||||||
|
Numerator: Adjusted net income attributable to members
(annualized) |
| | | $ | 34,168 | | | | | $ | 31,024 | | | | | $ | 48,266 | | | | | $ | 10,048 | | |
|
Denominator: Average members’ equity
|
| | | $ | 412,562 | | | | | $ | 326,871 | | | | | $ | 360,002 | | | | | $ | 297,415 | | |
|
Adjusted return on members’ equity
|
| |
8.3%
|
| |
9.5%
|
| | | | 13.4% | | | | | | 3.4% | | | ||||||
| | |||||||||||||||||||||||||
| | | |
Three months
ended March 31, |
| |
Year ended
December 31, |
| ||||||||||||||||||
|
($ in thousands)
|
| |
2025
|
| |
2024
|
| |
2024
|
| |
2023
|
| ||||||||||||
|
Net cash provided by operating activities
|
| | | $ | 20,955 | | | | | $ | 34,931 | | | | | $ | 125,611 | | | | | $ | 85,707 | | |
|
Net cash (used in) provided by investing activities
|
| | | | (21,747) | | | | | | (149,852) | | | | | | (363,270) | | | | | | 14,512 | | |
|
Net cash (used in) provided by financing activities
|
| | | | 13,143 | | | | | | (414) | | | | | | (414) | | | | | | 32,275 | | |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
| | | $ | 12,351 | | | | | $ | (115,335) | | | | | $ | (238,073) | | | | | | 132,494 | | |
| | |||||||||||||||||||||||||
| | | |
March 31,
|
| |
December 31,
|
| ||||||||||||||||||||||||
| | | |
2025
|
| |
2024
|
| |
2023
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
Fair value
|
| |
% of total
|
| |
Fair value
|
| |
% of total
|
| |
Fair value
|
| |
% of total
|
| ||||||||||||
|
Cash and cash equivalents
|
| | | $ | 38,924 | | | |
5.3%
|
| | | $ | 26,573 | | | |
3.3%
|
| | | $ | 264,646 | | | | | | 41.9% | | |
|
Fixed maturity securities
|
| | | | 457,416 | | | |
61.9%
|
| | | | 438,752 | | | |
54.7%
|
| | | | 98,200 | | | | | | 15.6% | | |
|
Short-term investments
|
| | | | 53,154 | | | |
7.2%
|
| | | | 52,612 | | | |
6.6%
|
| | | | — | | | | | | 0.0% | | |
|
Utility & Infrastructure Investments
|
| | | | 176,039 | | | |
23.8%
|
| | | | 270,242 | | | |
33.7%
|
| | | | 253,045 | | | | | | 40.1% | | |
| Equities | | | | | — | | | |
0.0%
|
| | | | — | | | |
0.0%
|
| | | | 1,000 | | | | | | 0.2% | | |
|
Note receivable from affiliate
|
| | | | 13,501 | | | |
1.8%
|
| | | | 13,501 | | | |
1.7%
|
| | | | 13,501 | | | | | | 2.1% | | |
|
Other Invested assets
|
| | | | 280 | | | |
NM
|
| | | | 280 | | | |
NM
|
| | | | 694 | | | | | | 0.1% | | |
|
Total cash and invested assets
|
| | | $ | 739,314 | | | |
100.0%
|
| | | $ | 801,960 | | | |
100.0%
|
| | | $ | 631,086 | | | | | | 100.0% | | |
| | |||||||||||||||||||||||||||||||
| | | |
As of March 31, 2025
|
| |||||||||||||||
|
($ in thousands, except percentages)
|
| |
Amortized
cost |
| |
Estimated fair
value |
| |
% of total
fair value |
| |||||||||
| Fixed maturity securities: | | | | | | | | | | | | | | | | | | | |
|
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
| | | $ | 84,034 | | | | | $ | 84,313 | | | | | | 16.5% | | |
|
Corporate
|
| | | | 368,935 | | | | | | 372,360 | | | | | | 72.9% | | |
|
Commercial mortgage and asset-backed securities
|
| | | | 789 | | | | | | 743 | | | | | | 0.1% | | |
|
Total fixed maturity securities
|
| | | $ | 453,758 | | | | | $ | 457,416 | | | | | | 89.6% | | |
|
Short-term investments
|
| | | | 53,154 | | | | | | 53,154 | | | | | | 10.4% | | |
|
Total
|
| | | $ | 506,912 | | | | | $ | 510,570 | | | | | | 100.0% | | |
| | |||||||||||||||||||
| | | |
As of December 31, 2024
|
| |||||||||||||||
|
($ in thousands, except percentages)
|
| |
Amortized
cost |
| |
Estimated fair
value |
| |
% of total
fair value |
| |||||||||
| Fixed maturity securities: | | | | | | | | | | | | | | | | | | | |
|
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
| | | $ | 84,456 | | | | | $ | 84,195 | | | | | | 17.1% | | |
|
Corporate
|
| | | | 349,693 | | | | | | 353,805 | | | | | | 72.0% | | |
|
Commercial mortgage and asset-backed securities
|
| | | | 816 | | | | | | 752 | | | | | | 0.2% | | |
|
Total fixed maturity securities
|
| | | $ | 434,965 | | | | | $ | 438,752 | | | | | | 89.3% | | |
|
Short-term investments
|
| | | | 52,612 | | | | | | 52,612 | | | | | | 10.7% | | |
|
Total
|
| | | $ | 487,577 | | | | | $ | 491,364 | | | | | | 100.0% | | |
| | |||||||||||||||||||
| | | |
As of December 31, 2023
|
| |||||||||||||||
|
($ in thousands, except percentages)
|
| |
Amortized
cost |
| |
Estimated fair
value |
| |
% of total
fair value |
| |||||||||
| Fixed maturity securities: | | | | | | | | | | | | | | | | | | | |
|
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
| | | $ | 68,583 | | | | | $ | 66,985 | | | | | | 68.2% | | |
|
Corporate
|
| | | | 12,331 | | | | | | 11,294 | | | | | | 11.5% | | |
|
Commercial mortgage and asset-backed securities
|
| | | | 22,875 | | | | | | 19,921 | | | | | | 20.3% | | |
|
Total fixed maturity securities
|
| | | $ | 103,789 | | | | | $ | 98,200 | | | | | | 100.0% | | |
|
Short-term investments
|
| | | | — | | | | | | — | | | | | | 0.0% | | |
|
Total
|
| | | $ | 103,789 | | | | | $ | 98,200 | | | | | | 100.0% | | |
| | |||||||||||||||||||
| | | |
March 31, 2025
|
| |||||||||||||||
|
($ in thousands, except percentages)
|
| |
Amortized
cost |
| |
Estimated fair
value |
| |
% of
Fair value |
| |||||||||
|
One year or less
|
| | | $ | 15,694 | | | | | $ | 15,857 | | | | | | 3.5% | | |
|
After one year through five years
|
| | | | 255,388 | | | | | | 257,716 | | | | | | 56.3% | | |
|
After five years through ten years
|
| | | | 163,402 | | | | | | 164,908 | | | | | | 36.1% | | |
|
After ten years
|
| | | | 18,485 | | | | | | 18,192 | | | | | | 4.0% | | |
|
Commercial and residential mortgage-backed and other asset-backed
|
| | | | 789 | | | | | | 743 | | | | | | 0.2% | | |
|
Total fixed maturity securities
|
| | | $ | 453,758 | | | | | $ | 457,416 | | | | | | 100.0% | | |
| | |||||||||||||||||||
| | | |
As of
March 31, |
| |
As of
December 31, |
| ||||||||||||
| | | |
2025
|
| |
2024
|
| |
2023
|
| |||||||||
|
($ in thousands, except percentages)
|
| |
% of total(1)
|
| |
% of total(1)
|
| |
% of total(1)
|
| |||||||||
|
Utilities
|
| | | | 59.1% | | | | | | 60.6% | | | | | | 65.3% | | |
|
Pipelines
|
| | | | 24.0% | | | | | | 20.0% | | | | | | 17.6% | | |
|
Real Estate
|
| | | | 7.4% | | | | | | 10.1% | | | | | | 8.9% | | |
|
Other Sectors
|
| | | | 9.5% | | | | | | 9.3% | | | | | | 8.2% | | |
| Total | | | | | 100.0% | | | | | | 100.0% | | | | | | 100.0% | | |
| | |||||||||||||||||||
|
Grant Date
|
| |
Type of
Award |
| |
Number of Shares
Underlying Equity Awards Granted |
| |
Exercise
Price per Share |
| |
Per Share
Fair Value of Shares on Grant Date |
| |
Estimated Fair
Value Per Option |
| |||||||||||||||
|
January 1, 2024
|
| | | | Options | | | | | | 386,870 | | | | | $ | 10.66 | | | | | $ | 5.86 | | | | | $ | 0.53 | | |
|
January 1, 2024
|
| | | | Options | | | | | | 281,360 | | | | | $ | 21.32 | | | | | $ | 5.86 | | | | | $ | 0.11 | | |
|
January 1, 2024
|
| | | | Options | | | | | | 281,360 | | | | | $ | 31.99 | | | | | $ | 5.86 | | | | | $ | 0.11 | | |
|
December 8, 2024
|
| | | | Options | | | | | | 2,541,407 | | | | | $ | 9.38 | | | | | $ | 7.89 | | | | | $ | 2.35 | | |
|
December 8, 2024
|
| | | | Options | | | | | | 14,068 | | | | | $ | 10.66 | | | | | $ | 7.89 | | | | | $ | 2.13 | | |
|
December 8, 2024
|
| | | | Options | | | | | | 77,960 | | | | | $ | 10.66 | | | | | $ | 7.89 | | | | | $ | 2.13 | | |
|
December 8, 2024
|
| | | | Options | | | | | | 93,787 | | | | | $ | 10.66 | | | | | $ | 7.89 | | | | | $ | 2.13 | | |
|
December 20, 2024
|
| | | | Options | | | | | | 400,875 | | | | | $ | 10.66 | | | | | $ | 7.89 | | | | | $ | 1.71 | | |
|
December 20, 2024
|
| | | | Options | | | | | | 178,298 | | | | | $ | 10.66 | | | | | $ | 7.89 | | | | | $ | 2.13 | | |
| | | |
March 31, 2025
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
Gross
|
| |
% of total
|
| |
Net
|
| |
% of total
|
| ||||||||||||
|
Case reserves
|
| | | $ | 120,848 | | | | | | 28.7% | | | | | $ | 93,938 | | | | | | 31.4% | | |
|
IBNR
|
| | | | 300,630 | | | | | | 71.3% | | | | | | 204,794 | | | | | | 68.6% | | |
|
Total
|
| | | $ | 421,478 | | | | | | 100.0% | | | | | | 298,732 | | | | | | 100.0% | | |
| | |||||||||||||||||||||||||
| | | |
December 31, 2024
|
| |||||||||||||||||||||
|
($ in thousands, except percentages)
|
| |
Gross
|
| |
% of total
|
| |
Net
|
| |
% of total
|
| ||||||||||||
|
Case reserves
|
| | | $ | 120,317 | | | | | | 29.8% | | | | | $ | 90,036 | | | | | | 31.7% | | |
|
IBNR
|
| | | | 283,259 | | | | | | 70.2% | | | | | | 193,944 | | | | | | 68.3% | | |
|
Total
|
| | | $ | 403,576 | | | | | | 100.0% | | | | | | 283,980 | | | | | | 100.0% | | |
| | |||||||||||||||||||||||||
| | | |
Potential impact as of March 31, 2025
|
| |||||||||||||||||||||||||||||||||||||||
|
Line of business
($ in thousands) |
| |
Net reserves
for unpaid losses and loss adjustment expenses |
| |
7.5% higher
|
| |
Pre-tax
income |
| |
Members’
equity |
| |
7.5% lower
|
| |
Pre-tax
income |
| |
Members’
equity |
| |||||||||||||||||||||
|
Casualty
|
| | | $ | 246,264 | | | | | $ | 264,734 | | | | | $ | (18,470) | | | | | $ | (14,591) | | | | | $ | 227,794 | | | | | $ | 18,470 | | | | | $ | 14,591 | | |
|
Property
|
| | | $ | 52,468 | | | | | $ | 56,403 | | | | | $ | (3,935) | | | | | $ | (3,109) | | | | | $ | 48,533 | | | | | $ | 3,935 | | | | | $ | 3,109 | | |
| | | |
Potential impact as of December 31, 2024
|
| |||||||||||||||||||||||||||||||||||||||
|
Line of business
($ in thousands) |
| |
Net reserves
for unpaid losses and loss adjustment expenses |
| |
7.5% higher
|
| |
Pre-tax
income |
| |
Members’
equity |
| |
7.5% lower
|
| |
Pre-tax
income |
| |
Members’
equity |
| |||||||||||||||||||||
|
Casualty
|
| | | $ | 236,966 | | | | | $ | 254,738 | | | | | $ | (17,772) | | | | | $ | (14,040) | | | | | $ | 219,194 | | | | | $ | 17,772 | | | | | $ | 14,040 | | |
|
Property
|
| | | $ | 47,014 | | | | | $ | 50,540 | | | | | $ | (3,526) | | | | | $ | (2,786) | | | | | $ | 43,488 | | | | | $ | 3,526 | | | | | $ | 2,786 | | |
| |
Premium by Risk Duration
|
| |
Premium by Product
|
|
| |
|
| |
|
|
| |
Premium by Policy Size
|
| |
Premium by Vertical
|
|
| |
|
| |
|
|
| |
Number of Distribution Partners
|
| |
Premium by Channel(1)
|
|
| |
|
| |
|
|
| | | |
As of March 31, 2025
|
| ||||||
|
($ in thousands, except percentages)
|
| |
Fair Value
|
| |
% of total
|
| |||
|
Cash and cash equivalents
|
| | | $ | 38,924 | | | |
5.3%
|
|
|
Fixed maturity securities
|
| | | | 457,416 | | | |
61.9%
|
|
|
Short-term investments
|
| | | | 53,154 | | | |
7.2%
|
|
|
Utility & Infrastructure Investments
|
| | | | 176,039 | | | |
23.8%
|
|
|
Note receivable from affiliate
|
| | | | 13,501 | | | |
1.8%
|
|
|
Other Invested assets
|
| | | | 280 | | | |
NM
|
|
|
Total cash and invested assets
|
| | | $ | 739,314 | | | |
100.0%
|
|
| | ||||||||||
| | | |
As of December 31, 2024
|
| ||||||
|
($ in thousands, except percentages)
|
| |
Fair Value
|
| |
% of total
|
| |||
|
Cash and cash equivalents
|
| | | $ | 26,573 | | | |
3.3%
|
|
|
Fixed maturity securities
|
| | | | 438,752 | | | |
54.7%
|
|
|
Short-term investments
|
| | | | 52,612 | | | |
6.6%
|
|
|
Utility & Infrastructure Investments
|
| | | | 270,242 | | | |
33.7%
|
|
|
Note receivable from affiliate
|
| | | | 13,501 | | | |
1.7%
|
|
|
Other Invested assets
|
| | | | 280 | | | |
NM
|
|
|
Total cash and invested assets
|
| | | $ | 801,960 | | | |
100.0%
|
|
| | ||||||||||
|
Name
|
| |
Age
|
| |
Position
|
| |||
|
Justin Cohen
|
| | | | 50 | | | | Chief Executive Officer, Director | |
|
Chris Schenk
|
| | | | 43 | | | |
President, Chief Underwriting Officer
|
|
|
Neelam Patel
|
| | | | 47 | | | | Chief Financial Officer | |
|
Stuart J. Zimmer
|
| | | | 56 | | | | Director, Chair | |
|
Tom Hulst
|
| | | | 59 | | | | Director | |
|
William Mercer
|
| | | | 56 | | | | Director Nominee | |
|
Robert C. Merton, Ph.D.
|
| | | | 80 | | | | Director Nominee | |
|
Mitchell Pressman
|
| | | | 60 | | | | Director Nominee | |
|
John (Jack) L. Sennott, Jr.
|
| | | | 59 | | | | Director Nominee | |
|
Name and principal position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus(1)
($) |
| |
Option
awards(2) ($) |
| |
All other
compensation(3) ($) |
| |
Total
($) |
| ||||||||||||||||||
|
Justin Cohen
Chief Executive Officer |
| | | | 2024 | | | | | | 64,904 | | | | | | — | | | | | | 3,400,408 | | | | | | — | | | | | | 3,465,312 | | |
|
Chris Schenk
President and Chief Underwriting Officer |
| | | | 2024 | | | | | | 470,000 | | | | | | 282,000 | | | | | | 266,250 | | | | | | 17,250 | | | | | | 1,035,500 | | |
|
Neelam Patel(4)
Chief Financial Officer |
| | | | 2024 | | | | | | 107,805 | | | | | | 575,000 | | | | | | 200,000 | | | | | | 9,135 | | | | | | 891,940 | | |
|
Name
|
| |
2024 Annual base salary
($) |
| |||
|
Justin Cohen
|
| | | $ | 65,000 | | |
|
Chris Schenk
|
| | | $ | 470,000 | | |
|
Neelam Patel
|
| | | $ | 400,000 | | |
|
Name
|
| |
2024 Options granted
(#) |
| |||
|
Justin Cohen
|
| | | | 2,541,407 | | |
|
Chris Schenk
|
| | | | 949,591 | | |
|
Neelam Patel
|
| | | | 93,787 | | |
| | | | | | | | | |
Option awards(1)
|
| |||||||||||||||||||||||||||
|
Name
|
| |
Grant date
|
| |
Number of
securities underlying unexercised options (#) exercisable |
| |
Number of
securities underlying unexercised options (#) unexercisable |
| |
Equity
incentive plan awards: number of securities underlying unexercised unearned options (#) |
| |
Option
exercise price per share ($) |
| |
Option
expiration date |
| ||||||||||||||||||
|
Justin Cohen
|
| | | | 12/8/2024 | | | | | | | | | | | | 2,541,407(2) | | | | | | | | | | | $ | 9.38 | | | | | | 12/8/2034 | | |
|
Chris Schenk
|
| | | | 1/1/2022 | | | | | | 5,862(3) | | | | | | 8,793(3) | | | | | | | | | | | $ | 10.66 | | | | | | 1/1/2032 | | |
| | | | | | 1/1/2022 | | | | | | | | | | | | | | | | | | 43,963(4) | | | | | $ | 10.66 | | | | | | 1/1/2032 | | |
| | | | | | 1/1/2024 | | | | | | | | | | | | 386,870(5) | | | | | | | | | | | $ | 10.66 | | | | | | 1/1/2034 | | |
| | | | | | 1/1/2024 | | | | | | | | | | | | 281,360(6) | | | | | | | | | | | $ | 21.32 | | | | | | 1/1/2034 | | |
| | | | | | 1/1/2024 | | | | | | | | | | | | 281,360(7) | | | | | | | | | | | $ | 31.99 | | | | | | 1/1/2034 | | |
|
Neelam Patel
|
| | | | 12/8/2024 | | | | | | | | | | | | 93,787(8) | | | | | | | | | | | $ | 10.66 | | | | | | 12/8/2034 | | |
|
Name
|
| |
Fees earned
or paid in cash ($) |
| |
Option
awards ($)(1) |
| |
All other
compensation ($)(2) |
| |
Total
($) |
| ||||||||||||
|
Tom Hulst
|
| | | | 65,000 | | | | | | 30,000 | | | | | | 5,362 | | | | | | 100,362 | | |
|
Percentage
|
| |
Director
Nominees |
| |||
|
40% or greater
|
| | | | 4 | | |
|
<40% but ≥ 30%
|
| | | | 3 | | |
|
<30% but ≥ 20%
|
| | | | 2 | | |
|
<20% but ≥ 10%
|
| | | | 1 | | |
|
Less than 10%
|
| | | | 0 | | |
| | | |
Shares of
common stock beneficially owned before this offering |
| |
Shares of
common stock beneficially owned after this offering |
| |
Shares of
common stock beneficially owned after this offering assuming full exercise of overallotment option |
| |||||||||||||||||||||||||||
|
Name of beneficial owner
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
| |
Number
|
| |
%
|
| ||||||||||||||||||
|
Named Executive Officers, Directors, and Director Nominees:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Stuart J. Zimmer(1)
|
| | | | 40,203,053 | | | | | | 99.5% | | | | | | 40,203,053 | | | | | | 85.4% | | | | | | 40,203,053 | | | | | | 83.6% | | |
|
Tom Hulst(2)
|
| | | | 37,515 | | | | | | * | | | | | | 37,515 | | | | | | * | | | | | | 37,515 | | | | | | * | | |
|
Justin Cohen(3)
|
| | | | 1,524,845 | | | | | | 3.6% | | | | | | 1,524,845 | | | | | | 3.1% | | | | | | 1,524,845 | | | | | | 3.0% | | |
|
Neelam Patel
|
| | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | |
|
Chris Schenk(4)
|
| | | | 198,711 | | | | | | * | | | | | | 198,711 | | | | | | * | | | | | | 198,711 | | | | | | * | | |
|
William Mercer
|
| | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | |
|
Robert C. Merton
|
| | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | |
|
Mitchell Pressman(5)
|
| | | | 93,787 | | | | | | * | | | | | | 93,787 | | | | | | * | | | | | | 93,787 | | | | | | * | | |
|
John (Jack) L. Sennott, Jr.
|
| | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | |
|
All Executive Officers, Directors, and Director Nominees as a group
(9 persons) |
| | | | 42,057,911 | | | | | | 99.8% | | | | | | 42,057,911 | | | | | | 86.2% | | | | | | 42,057,911 | | | | | | 84.5% | | |
|
Name
|
| |
Number of shares
|
| |||
|
J.P. Morgan Securities LLC
|
| | | | | | |
|
Barclays Capital Inc.
|
| | | | | | |
|
Citigroup Global Markets Inc.
|
| | | | | | |
|
TD Securities (USA) LLC
|
| | | | | | |
|
Wells Fargo Securities, LLC
|
| | | | | | |
|
Total
|
| | | | 6,666,667 | | |
| | |||||||
| | | | |
No exercise of
option to purchase additional shares |
| |
Full exercise of
option to purchase additional shares |
| ||||||
| |
Per Share
|
| | | $ | | | | | $ | | | ||
| |
Total
|
| | | $ | | | | | $ | | | ||
| | | |
Page
|
| |||
|
Unaudited Condensed Consolidated Financial Statements as of March 31, 2025 and December 31, 2024
and for the three months ended March 31, 2025 and 2024 |
| | | | | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | ||||||
| Audited Financial Statements as of and for the years ended December 31, 2024 and 2023 | | | | | | | |
| | | | | F-30 | | | |
| | | | | F-31 | | | |
| | | | | F-32 | | | |
| | | | | F-33 | | | |
| | | | | F-34 | | | |
| | | | | F-35 | | | |
|
Financial Statement Schedules
|
| | | | | | |
| | | | | F-73 | | | |
| | | | | F-74 | | | |
| | | | | F-80 | | | |
| | | | | F-81 | | | |
| | | |
March 31, 2025
(Unaudited) |
| |
December 31,
2024 |
| ||||||
| | | |
(in thousands)
|
| |||||||||
| Assets: | | | | | | | | | | | | | |
|
Fixed maturity securities available-for-sale, at fair value (amortized cost: $453,758 in 2025 and $434,965 in 2024)
|
| | | $ | 457,416 | | | | | $ | 438,752 | | |
|
Utility & Infrastructure Investments, at fair value (cost of $172,753 in 2025 and $216,075 in 2024)
|
| | | | 176,039 | | | | | | 270,242 | | |
|
Short-term investments
|
| | | | 53,154 | | | | | | 52,612 | | |
|
Note receivable from affiliate
|
| | | | 13,501 | | | | | | 13,501 | | |
|
Other invested assets
|
| | | | 280 | | | | | | 280 | | |
|
Total invested assets
|
| | | | 700,390 | | | | | | 775,387 | | |
|
Cash and cash equivalents
|
| | | | 38,924 | | | | | | 26,573 | | |
|
Due from broker
|
| | | | 151 | | | | | | — | | |
|
Investment income due and accrued
|
| | | | 6,352 | | | | | | 5,642 | | |
|
Premiums receivable, net of allowance for credit losses of $4,389 in 2025 and $5,907 in 2024
|
| | | | 54,991 | | | | | | 53,500 | | |
|
Deferred policy acquisition costs, net of ceding commissions
|
| | | | 24,684 | | | | | | 21,552 | | |
|
Prepaid reinsurance premiums
|
| | | | 6,786 | | | | | | 3,905 | | |
|
Deferred income tax asset, net
|
| | | | 9,584 | | | | | | 9,670 | | |
|
Reinsurance recoverable, net of allowance for credit losses of $0 in 2025 and
$0 in 2024 |
| | | | 135,239 | | | | | | 133,616 | | |
|
Receivable from affiliates, net
|
| | | | 97,346 | | | | | | 16,857 | | |
|
Ceded unearned premiums
|
| | | | 60,628 | | | | | | 68,205 | | |
|
Other assets
|
| | | | 12,967 | | | | | | 8,531 | | |
|
Total assets
|
| | | $ | 1,148,042 | | | | | $ | 1,123,438 | | |
| Liabilities, members’ equity and non-controlling interest: | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | |
|
Reserves for unpaid losses and loss adjustment expenses
|
| | | | 421,478 | | | | | | 403,576 | | |
|
Unearned premiums
|
| | | | 216,821 | | | | | | 212,828 | | |
|
Securities sold, not yet purchased, at fair value (cost of $0 in 2025 and $932
in 2024) |
| | | | — | | | | | | 930 | | |
|
Payable to reinsurers
|
| | | | 19,553 | | | | | | 27,160 | | |
|
Due to broker
|
| | | | — | | | | | | 9,189 | | |
|
Accounts payable and accrued expenses
|
| | | | 36,520 | | | | | | 38,061 | | |
|
Funds held under reinsurance treaties
|
| | | | 2,057 | | | | | | 2,092 | | |
|
Income tax payable
|
| | | | 20,771 | | | | | | 26,488 | | |
|
Other liabilities
|
| | | | 3,536 | | | | | | 4,307 | | |
|
Total liabilities
|
| | | | 720,736 | | | | | | 724,631 | | |
| Members’ equity: | | | | | | | | | | | | | |
|
Members’ equity
|
| | | | 380,904 | | | | | | 360,741 | | |
|
Retained earnings
|
| | | | 43,030 | | | | | | 34,569 | | |
|
Accumulated other comprehensive income (loss)
|
| | | | 2,883 | | | | | | 2,997 | | |
|
Total members’ equity
|
| | | | 426,817 | | | | | | 398,307 | | |
|
Non-controlling interest – General Partner
|
| | | | 489 | | | | | | 500 | | |
|
Total members’ equity and non-controlling interest
|
| | | | 427,306 | | | | | | 398,807 | | |
|
Total liabilities, members’ equity and non-controlling interest
|
| | | $ | 1,148,042 | | | | | $ | 1,123,438 | | |
| | |||||||||||||
| | | |
Three Months Ended March 31,
|
| |||||||||
| | | |
2025
|
| |
2024
|
| ||||||
| | | |
(in thousands, except per unit amounts)
|
| |||||||||
| Revenues | | | | | | | | | | | | | |
|
Gross written premiums
|
| | | $ | 116,143 | | | | | $ | 81,605 | | |
|
Ceded written premiums
|
| | | | (26,272) | | | | | | (19,349) | | |
|
Net written premiums
|
| | | | 89,871 | | | | | | 62,256 | | |
|
Change in unearned premiums
|
| | | | (11,570) | | | | | | 6,022 | | |
|
Net premiums earned
|
| | | | 78,301 | | | | | | 68,278 | | |
|
Fee income
|
| | | | 560 | | | | | | 125 | | |
|
Net investment income
|
| | | | 7,895 | | | | | | 5,253 | | |
|
Net realized and unrealized gains (losses) on investments
|
| | | | (4,599) | | | | | | 2,388 | | |
|
Other income
|
| | | | 965 | | | | | | 24 | | |
|
Total revenues
|
| | | | 83,122 | | | | | | 76,068 | | |
| Expenses | | | | | | | | | | | | | |
|
Losses and loss adjustment expenses
|
| | | | 46,862 | | | | | | 41,047 | | |
|
Underwriting, acquisition and insurance expenses
|
| | | | 24,885 | | | | | | 23,389 | | |
|
Interest expense
|
| | | | 447 | | | | | | 550 | | |
|
Other expenses
|
| | | | 238 | | | | | | 54 | | |
|
Total expenses
|
| | | | 72,432 | | | | | | 65,040 | | |
|
Income before income taxes
|
| | | | 10,690 | | | | | | 11,028 | | |
|
Income tax expense
|
| | | | 2,240 | | | | | | 2,070 | | |
|
Net income
|
| | | | 8,450 | | | | | | 8,958 | | |
|
Less: Net income (loss) attributable to non-controlling interest – General Partner
|
| | | | (11) | | | | | | 1,202 | | |
|
Net income attributable to members
|
| | | | 8,461 | | | | | | 7,756 | | |
| Other comprehensive income (loss): | | | | | | | | | | | | | |
|
Unrealized gains (losses), net of taxes
|
| | | | (114) | | | | | | 2,509 | | |
|
Less: Unrealized gains, net of taxes attributable to non-controlling interest
|
| | | | — | | | | | | — | | |
|
Total comprehensive income attributable to members
|
| | | $ | 8,347 | | | | | $ | 10,265 | | |
| Earnings per unit: | | | | | | | | | | | | | |
|
Basic
|
| | | $ | 0.02 | | | | | $ | 0.02 | | |
|
Diluted
|
| | | $ | 0.02 | | | | | $ | 0.02 | | |
| Weighted-average units outstanding: | | | | | | | | | | | | | |
|
Basic
|
| | | | 429,573,467 | | | | | | 386,397,466 | | |
|
Diluted
|
| | | | 436,085,672 | | | | | | 386,400,736 | | |
| | | |
Members’
Equity |
| |
Retained
Earnings (Deficit) |
| |
Accumulated
Other Comprehensive Income (Loss) |
| |
Total
Members’ Equity |
| |
Non-
Controlling Interest |
| |
Total Members’
Equity and Non-Controlling Interest |
| ||||||||||||||||||
| | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
|
Balance at January 1, 2024
|
| | | $ | 338,634 | | | | | $ | (12,521) | | | | | $ | (4,416) | | | | | $ | 321,697 | | | | | $ | 500 | | | | | $ | 322,197 | | |
|
Share-based compensation
|
| | | | 82 | | | | | | — | | | | | | — | | | | | | 82 | | | | | | — | | | | | | 82 | | |
|
Net income
|
| | | | — | | | | | | 7,756 | | | | | | — | | | | | | 7,756 | | | | | | 1,202 | | | | | | 8,958 | | |
|
Other comprehensive income,
net of taxes |
| | | | — | | | | | | — | | | | | | 2,509 | | | | | | 2,509 | | | | | | — | | | | | | 2,509 | | |
|
Balance as of March 31,
2024 |
| | | $ | 338,716 | | | | | $ | (4,765) | | | | | $ | (1,907) | | | | | $ | 332,044 | | | | | $ | 1,702 | | | | | $ | 333,746 | | |
|
Balance at January 1, 2025
|
| | | $ | 360,741 | | | | | $ | 34,569 | | | | | $ | 2,997 | | | | | $ | 398,307 | | | | | $ | 500 | | | | | $ | 398,807 | | |
|
Member units issued
|
| | | | 20,000 | | | | | | — | | | | | | — | | | | | | 20,000 | | | | | | — | | | | | | 20,000 | | |
|
Share-based compensation
|
| | | | 163 | | | | | | — | | | | | | — | | | | | | 163 | | | | | | — | | | | | | 163 | | |
|
Net income (loss)
|
| | | | — | | | | | | 8,461 | | | | | | — | | | | | | 8,461 | | | | | | (11) | | | | | | 8,450 | | |
|
Other comprehensive loss, net
of taxes |
| | | | — | | | | | | — | | | | | | (114) | | | | | | (114) | | | | | | — | | | | | | (114) | | |
|
Balance as of March 31,
2025 |
| | | $ | 380,904 | | | | | $ | 43,030 | | | | | $ | 2,883 | | | | | $ | 426,817 | | | | | $ | 489 | | | | | $ | 427,306 | | |
| | |||||||||||||||||||||||||||||||||||||
| | | |
Three Months Ended March 31,
|
| |||||||||
| | | |
2025
|
| |
2024
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
| OPERATING ACTIVITIES | | | | | | | | | | | | | |
|
Net income
|
| | | $ | 8,450 | | | | | $ | 8,958 | | |
|
Adjustments to reconcile net income to net cash provided by operating activities
|
| | | | 12,505 | | | | | | 25,973 | | |
|
Net cash provided by operating activities
|
| | | | 20,955 | | | | | | 34,931 | | |
| INVESTING ACTIVITIES | | | | | | | | | | | | | |
|
Purchase of fixed maturity securities, available-for-sale
|
| | | | (67,091) | | | | | | (29,144) | | |
|
Proceeds from sale of fixed maturity securities, available-for-sale
|
| | | | 58,935 | | | | | | 21,214 | | |
|
Proceeds from maturities and redemptions of fixed maturity securities, available-for-sale
|
| | | | 285 | | | | | | 5,157 | | |
|
Purchases of Utility & Infrastructure Investments
|
| | | | (10,000) | | | | | | — | | |
|
Proceeds from redemptions of Utility & Infrastructure Investments
|
| | | | 8,996 | | | | | | 414 | | |
|
Purchase of other assets
|
| | | | (25) | | | | | | (38) | | |
|
Change in Treasury bills, net
|
| | | | (12,871) | | | | | | (17,722) | | |
|
Change in short-term investments, net
|
| | | | 24 | | | | | | (129,953) | | |
|
Proceeds from sale of securities sold, not yet purchased
|
| | | | — | | | | | | 94 | | |
|
Purchases to cover securities sold, not yet purchased
|
| | | | — | | | | | | (288) | | |
|
Proceeds from sale of other invested assets
|
| | | | — | | | | | | 414 | | |
|
Net cash used in investing activities
|
| | | | (21,747) | | | | | | (149,852) | | |
| FINANCING ACTIVITIES | | | | | | | | | | | | | |
|
Issuance of Members’ units
|
| | | | 20,000 | | | | | | — | | |
|
Capital distribution
|
| | | | (6,857) | | | | | | (414) | | |
|
Net cash provided by (used in) financing activities
|
| | | | 13,143 | | | | | | (414) | | |
|
Net change in cash and cash equivalents
|
| | | | 12,351 | | | | | | (115,335) | | |
|
Cash and cash equivalents, at beginning of period
|
| | | | 26,573 | | | | | | 264,646 | | |
|
Cash and cash equivalents, at end of period
|
| | | $ | 38,924 | | | | | $ | 149,311 | | |
| Supplementary cash flow information: | | | | | | | | | | | | | |
|
Cash paid for interest
|
| | | $ | 449 | | | | | $ | 546 | | |
| | | | |
March 31,
2025 |
| |
December 31,
2024 |
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Assets | | | | | | | | | | | | | |
| |
Cash
|
| | | $ | 5 | | | | | $ | 5 | | |
| |
Investments in the Absolute Return Utility & Infrastructure Fund, at fair value
|
| | | | 165,914 | | | | | | 270,242 | | |
| |
Investment in affiliated fund, at fair value (cost of $191 in 2025 and $191 in 2024)
|
| | | | 280 | | | | | | 280 | | |
| |
Due from the Absolute Return Utility & Infrastructure Fund
|
| | | | 97,200 | | | | | | 16,857 | | |
| |
Total assets
|
| | | $ | 263,399 | | | | | $ | 287,384 | | |
| | Liabilities and partners’ capital | | | | | | | | | | | | | |
| | Liabilities: | | | | | | | | | | | | | |
| |
Withdrawals payable
|
| | | | 97,200 | | | | | | 16,858 | | |
| |
Accrued expenses and other liabilities
|
| | | | 51 | | | | | | 88 | | |
| |
Total liabilities
|
| | | | 97,251 | | | | | | 16,946 | | |
| | Partners’ capital: | | | | | | | | | | | | | |
| |
Limited partners
|
| | | | 165,659 | | | | | | 269,938 | | |
| |
General partner
|
| | | | 489 | | | | | | 500 | | |
| |
Total partners’ capital:
|
| | | | 166,148 | | | | | | 270,438 | | |
| |
Total liabilities and partners’ capital:
|
| | | $ | 263,399 | | | | | $ | 287,384 | | |
| | ||||||||||||||
| | | | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | March 31, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
| | | $ | 84,034 | | | | | $ | 279 | | | | | $ | — | | | | | $ | 84,313 | | |
| |
Corporate
|
| | | | 368,935 | | | | | | 4,632 | | | | | | (1,207) | | | | | | 372,360 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | 789 | | | | | | — | | | | | | (46) | | | | | | 743 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 453,758 | | | | | $ | 4,911 | | | | | $ | (1,253) | | | | | $ | 457,416 | | |
| | ||||||||||||||||||||||||||
| | | | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | December 31, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
| | | $ | 84,456 | | | | | $ | 21 | | | | | $ | (282) | | | | | $ | 84,195 | | |
| |
Corporate
|
| | | | 349,693 | | | | | | 6,257 | | | | | | (2,145) | | | | | | 353,805 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | 816 | | | | | | — | | | | | | (64) | | | | | | 752 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 434,965 | | | | | $ | 6,278 | | | | | $ | (2,491) | | | | | $ | 438,752 | | |
| | ||||||||||||||||||||||||||
| | | | |
Amortized Cost
|
| |
Fair Value
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | March 31, 2025 | | | | | | | | | | | | | |
| |
Due in one year or less
|
| | | $ | 15,694 | | | | | $ | 15,857 | | |
| |
Due after one year through five years
|
| | | | 255,388 | | | | | | 257,716 | | |
| |
Due after five years through ten years
|
| | | | 163,402 | | | | | | 164,908 | | |
| |
Due after ten years
|
| | | | 18,485 | | | | | | 18,192 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | 789 | | | | | | 743 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 453,758 | | | | | $ | 457,416 | | |
| | ||||||||||||||
| | | | |
Less Than 12 Months
|
| |
12 Months or More
|
| |
Total
|
| |||||||||||||||||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
| | | | |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| ||||||||||||||||||
| | March 31, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Corporate
|
| | | $ | 93,087 | | | | | $ | (1,207) | | | | | $ | — | | | | | $ | — | | | | | $ | 93,087 | | | | | $ | (1,207) | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | 110 | | | | | | (4) | | | | | | 633 | | | | | | (42) | | | | | | 743 | | | | | | (46) | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 93,197 | | | | | $ | (1,211) | | | | | $ | 633 | | | | | $ | (42) | | | | | $ | 93,830 | | | | | $ | (1,253) | | |
| | ||||||||||||||||||||||||||||||||||||||
| | | | |
Less Than 12 Months
|
| |
12 Months or More
|
| |
Total
|
| |||||||||||||||||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
| | | | |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| ||||||||||||||||||
| | December 31, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Fixed maturity securities, available-for-sale:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
| | | $ | 71,408 | | | | | $ | (282) | | | | | $ | — | | | | | $ | — | | | | | $ | 71,408 | | | | | $ | (282) | | |
| |
Corporate
|
| | | | 95,079 | | | | | | (2,145) | | | | | | — | | | | | | — | | | | | | 95,079 | | | | | | (2,145) | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | — | | | | | | — | | | | | | 752 | | | | | | (64) | | | | | | 752 | | | | | | (64) | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 166,487 | | | | | $ | (2,427) | | | | | $ | 752 | | | | | $ | (64) | | | | | $ | 167,239 | | | | | $ | (2,491) | | |
| | ||||||||||||||||||||||||||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Investment income | | | | | | | | | | | | | |
| |
Fixed maturity securities, available-for-sale:
|
| | | $ | 6,318 | | | | | $ | 951 | | |
| |
Utility & Infrastructure Investments
|
| | | | 1,858 | | | | | | 1,990 | | |
| |
Short-term investments
|
| | | | 570 | | | | | | 1,514 | | |
| |
Note receivable from affiliate
|
| | | | 250 | | | | | | 250 | | |
| |
Cash equivalents
|
| | | | 436 | | | | | | 1,992 | | |
| |
Equity securities
|
| | | | — | | | | | | 22 | | |
| |
Securities sold, not yet purchased
|
| | | | — | | | | | | (132) | | |
| |
Gross investment income
|
| | | | 9,432 | | | | | | 6,587 | | |
| |
Management fees(1)
|
| | | | (1,401) | | | | | | (1,328) | | |
| |
Other income
|
| | | | — | | | | | | — | | |
| |
Other expenses(1)
|
| | | | (136) | | | | | | (6) | | |
| |
Net investment income
|
| | | $ | 7,895 | | | | | $ | 5,253 | | |
| | ||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Fixed maturity securities, available-for-sale | | | | | | | | | | | | | |
| |
Change in net unrealized gains (losses)
|
| | | $ | (124) | | | | | $ | 3,178 | | |
| |
Total
|
| | | $ | (124) | | | | | $ | 3,178 | | |
| | ||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Gross realized gains: | | | | | | | | | | | | | |
| |
Fixed maturity securities, available-for-sale
|
| | | $ | 2,835 | | | | | $ | 80 | | |
| |
Equity securities
|
| | | | — | | | | | | 62 | | |
| |
Securities sold, not yet purchased
|
| | | | 15 | | | | | | 295 | | |
| |
Utility & Infrastructure Investments
|
| | | | 34,062 | | | | | | 13,850 | | |
| |
Total
|
| | | | 36,912 | | | | | | 14,287 | | |
| | Gross realized (losses): | | | | | | | | | | | | | |
| |
Fixed maturity securities, available-for-sale
|
| | | | (2) | | | | | | (3,217) | | |
| |
Utility & Infrastructure Investments
|
| | | | — | | | | | | (2) | | |
| |
Total
|
| | | | (2) | | | | | | (3,219) | | |
| | Net unrealized gains (losses) on investments: | | | | | | | | | | | | | |
| |
Securities sold, not yet purchased
|
| | | | — | | | | | | (71) | | |
| |
Utility & Infrastructure Investments
|
| | | | (41,509) | | | | | | (8,609) | | |
| |
Total
|
| | | | (41,509) | | | | | | (8,680) | | |
| |
Net realized and unrealized gains (losses)
|
| | | $ | (4,599) | | | | | $ | 2,388 | | |
| | ||||||||||||||
| | | | |
March 31, 2025
|
| |
December 31, 2024
|
| ||||||||||||||||||||||||||||||
| | | | |
Cost
|
| |
Net
Unrealized Gains (Losses) |
| |
Fair
Value |
| |
Cost
|
| |
Net
Unrealized Gains (Losses) |
| |
Fair
Value |
| ||||||||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
| |
Absolute Return Utility & Infrastructure Fund
|
| | | $ | 162,753 | | | | | $ | 3,161 | | | | | $ | 165,914 | | | | | $ | 216,075 | | | | | $ | 54,167 | | | | | $ | 270,242 | | |
| |
MidCap Limited Partnership
|
| | | | 10,000 | | | | | | 125 | | | | | | 10,125 | | | | | | — | | | | | | — | | | | | | — | | |
| |
Total Utility &Infrastructure Investments
|
| | | $ | 172,753 | | | | | $ | 3,286 | | | | | $ | 176,039 | | | | | $ | 216,075 | | | | | $ | 54,167 | | | | | $ | 270,242 | | |
| | ||||||||||||||||||||||||||||||||||||||
|
Investment in securities
|
| |
Cost(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | |
(in thousands)
|
| |||||||||||||||
| March 31, 2025 | | | | | | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | 286,535 | | | | | $ | 300,778 | | | | | | 70.47% | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | (146,461) | | | | | $ | (147,770) | | | | | | -34.62% | | |
|
Investment in securities
|
| |
Cost(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | |
(in thousands)
|
| |||||||||||||||
| December 31, 2024 | | | | | | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | 452,622 | | | | | $ | 484,614 | | | | | | 121.67% | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | (253,151) | | | | | $ | (259,941) | | | | | | -65.26% | | |
|
Investment in securities
|
| |
Quantity(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | |
(in thousands)
|
| |||||||||||||||
| March 31, 2025 | | | | | | | | | | | | | | | | | | | |
|
American Electric Power Co
|
| | | | 2,351,351 | | | | | $ | 21,400 | | | | | | 5.01% | | |
|
Investment in securities
|
| |
Quantity(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | |
(in thousands)
|
| |||||||||||||||
| December 31, 2024 | | | | | | | | | | | | | | | | | | | |
|
Targa Resources Corp
|
| | | | 1,331,300 | | | | | $ | 23,024 | | | | | | 5.78% | | |
|
Arthur J. Gallagher & Co
|
| | | | 750,000 | | | | | $ | 20,626 | | | | | | 5.18% | | |
|
Ryan Specialty Group Holdings Inc
|
| | | | 3,700,000 | | | | | $ | 23,000 | | | | | | 5.77% | | |
|
The Boeing Company
|
| | | | 2,224,500 | | | | | $ | 38,148 | | | | | | 9.58% | | |
|
Real Estate – Welltower Inc.
|
| | | | 2,775,294 | | | | | $ | 33,888 | | | | | | 8.51% | | |
|
The Boeing Company
|
| | | | (2,257,000) | | | | | $ | (38,706) | | | | | | -9.72% | | |
| | | | |
Fair Value Measurements Using
|
| |||||||||||||||||||||
| | | | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | March 31, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Fixed maturity securities, available-for-sale:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations guaranteed by the U.S. Government
|
| | | $ | — | | | | | $ | 84,313 | | | | | $ | — | | | | | $ | 84,313 | | |
| |
Corporate
|
| | | | — | | | | | | 372,360 | | | | | | — | | | | | | 372,360 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | — | | | | | | 743 | | | | | | — | | | | | | 743 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | | — | | | | | $ | 457,416 | | | | | | — | | | | | | 457,416 | | |
| |
Total assets
|
| | | $ | — | | | | | $ | 457,416 | | | | | $ | — | | | | | $ | 457,416 | | |
| | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Securities sold, not yet purchased: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| |
Total liabilities
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | ||||||||||||||||||||||||||
| | | | |
Fair Value Measurements Using
|
| |||||||||||||||||||||
| | | | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
| | December 31, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations guaranteed by the U.S. Government
|
| | | $ | — | | | | | $ | 84,195 | | | | | $ | — | | | | | $ | 84,195 | | |
| |
Corporate
|
| | | | — | | | | | | 353,805 | | | | | | — | | | | | | 353,805 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | — | | | | | | 752 | | | | | | — | | | | | | 752 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | | — | | | | | | 438,752 | | | | | | — | | | | | | 438,752 | | |
| |
Total assets
|
| | | $ | — | | | | | $ | 438,752 | | | | | $ | — | | | | | $ | 438,752 | | |
| | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Securities sold, not yet purchased: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities
|
| | | $ | — | | | | | $ | (930) | | | | | $ | — | | | | | $ | (930) | | |
| |
Total liabilities
|
| | | $ | — | | | | | $ | (930) | | | | | $ | — | | | | | $ | (930) | | |
| | ||||||||||||||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Beginning balance
|
| | | $ | 5,907 | | | | | $ | 2,953 | | |
| |
Current period change for estimated uncollectible premiums
|
| | | | — | | | | | | 508 | | |
| |
Write-offs of uncollectible premiums receivable
|
| | | | (1,518) | | | | | | — | | |
| |
Ending balance
|
| | | $ | 4,389 | | | | | $ | 3,461 | | |
| | ||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Balance, beginning of period
|
| | | $ | 21,552 | | | | | $ | 23,245 | | |
| |
Policy acquisition costs deferred:
|
| | | | | | | | | | | | |
| |
Direct commissions
|
| | | | 21,046 | | | | | | 17,332 | | |
| |
Ceded commissions
|
| | | | (6,935) | | | | | | (4,787) | | |
| |
Underwriting and other insurance expenses
|
| | | | 1,665 | | | | | | 107 | | |
| |
Sub-total
|
| | | | 15,776 | | | | | | 12,652 | | |
| |
Amortization of policy acquisition costs
|
| | | | (12,644) | | | | | | (12,397) | | |
| |
Net change
|
| | | | 3,132 | | | | | | 255 | | |
| |
Balance, end of period
|
| | | $ | 24,684 | | | | | $ | 23,500 | | |
| | ||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Policy acquisition costs
|
| | | $ | 14,598 | | | | | $ | 14,961 | | |
| |
Other operating and general expenses
|
| | | | 10,287 | | | | | | 8,428 | | |
| |
Total underwriting, acquisition and insurance expenses
|
| | | $ | 24,885 | | | | | $ | 23,389 | | |
| | ||||||||||||||
| | | | |
March 31, 2025
|
| |
December 31, 2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Lease Balances: | | | | | | | | | | | | | |
| |
Operating lease right-of-use assets
|
| | | $ | 2,149 | | | | | $ | 2,278 | | |
| |
Operating lease liabilities
|
| | | $ | (2,586) | | | | | $ | (2,738) | | |
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Lease Cost: | | | | ||||||||||
| |
Operating lease cost
|
| | | $ | 164 | | | | | $ | 164 | | |
| |
Sublease income
|
| | | | (188) | | | | | | (188) | | |
| |
Net lease (income)
|
| | | $ | (24) | | | | | $ | (24) | | |
| | ||||||||||||||
| | | | |
As of
|
| |||||||||
| | | | |
March 31,
2025 |
| |
December 31,
2024 |
| ||||||
| |
Weighted-average remaining lease term – operating leases
|
| |
3.67 years
|
| |
3.92 years
|
| ||||||
| |
Weighted-average discount rate – operating leases
|
| | | | 5.25% | | | | | | 5.25% | | |
| | | | |
March 31,
2025 |
| |||
| | | | |
(in thousands)
|
| |||
| | Future Minimum Lease Payments | | | | | | | |
| |
2025
|
| | | $ | 561 | | |
| |
2026
|
| | | | 765 | | |
| |
2027
|
| | | | 783 | | |
| |
2028
|
| | | | 731 | | |
| |
Thereafter
|
| | | | — | | |
| |
Total lease payments
|
| | | | 2,840 | | |
| |
Less: imputed interest
|
| | | | (254) | | |
| |
Present value of lease liabilities
|
| | | $ | 2,586 | | |
| | ||||||||
| | | | |
Three Months Ended
March 31, |
| | | | |||||||||
| | | | |
2025
|
| |
2024
|
| | ||||||||
| | | | |
(in thousands)
|
| | |||||||||||
| | Balance, beginning of period | | | | | | | | | | | | | | | ||
| |
Reserves for unpaid losses and loss adjustment expenses
|
| | | $ | 403,576 | | | | | $ | 320,936 | | | | ||
| |
Reinsurance recoverable
|
| | | | (119,596) | | | | | | (102,723) | | | | ||
| |
Reserves for unpaid losses and loss adjustment expenses, net of reinsurance
|
| | | | 283,980 | | | | | | 218,213 | | | | ||
| | Current Activity | | | | | | | | | | | | | | | ||
| |
Incurred losses and loss adjustment expenses, net of reinsurance:
|
| | | | | | | | | | | | | | ||
| |
Current year
|
| | | | 46,862 | | | | | | 38,702 | | | | ||
| |
Prior year
|
| | | | — | | | | | | 2,345 | | | | ||
| |
Total net losses and loss and adjustment expenses incurred
|
| | | | 46,862 | | | | | | 41,047 | | | | ||
| |
Payments:
|
| | | | | | | | | | | | | | ||
| |
Current year
|
| | | | (3,043) | | | | | | (6,233) | | | | ||
| |
Prior year
|
| | | | (29,067) | | | | | | (17,632) | | | | ||
| |
Total payments
|
| | | | (32,110) | | | | | | (23,865) | | | | ||
| | Balance, end of period | | | | | | | | | | | | | | | ||
| |
Reserves for unpaid losses and loss adjustment expenses, net of reinsurance
|
| | | | 298,732 | | | | | | 235,395 | | | | ||
| |
Reinsurance recoverable
|
| | | | 122,746 | | | | | | 103,720 | | | | ||
| |
Reserves for unpaid losses and loss adjustment expenses, gross of reinsurance
|
| | | $ | 421,478 | | | | | $ | 339,115 | | | | ||
| | |||||||||||||||||
| | | | |
Three Months Ended
March 31, |
| | | | |||||||||
| | | | |
2025
|
| |
2024
|
| | ||||||||
| | | | |
(in thousands)
|
| | |||||||||||
| | Written premiums: | | | | | | | | | | | | | | | ||
| |
Direct
|
| | | $ | 116,143 | | | | | $ | 81,605 | | | | ||
| |
Ceded
|
| | | | (26,272) | | | | | | (19,349) | | | | ||
| |
Net written
|
| | | $ | 89,871 | | | | | $ | 62,256 | | | | ||
| | Earned premiums: | | | | | | | | | | | | | | | ||
| |
Direct
|
| | | $ | 112,150 | | | | | $ | 89,763 | | | | ||
| |
Ceded
|
| | | | (33,849) | | | | | | (21,485) | | | | ||
| |
Net earned
|
| | | $ | 78,301 | | | | | $ | 68,278 | | | | ||
| | Losses and loss adjustment expenses: | | | | | | | | | | | | | | | ||
| |
Direct
|
| | | $ | 56,835 | | | | | $ | 53,947 | | | | ||
| |
Ceded
|
| | | | (9,973) | | | | | | (12,900) | | | | ||
| |
Net losses and loss adjustment expenses
|
| | | $ | 46,862 | | | | | $ | 41,047 | | | | ||
| | |||||||||||||||||
| | | | |
Number of
Options |
| |
Weighted-
Average Exercise Price |
| |
Weighted-
Average Fair Value of Underlying Member Unit |
| |
Weighted
Average Fair Value per Option at Grant Date |
| |
Weighted-
Average Remaining Contractual Term (in years) |
| |||||||||
| |
Outstanding as of January 1, 2025
|
| | | | 46,273,132 | | | | | $ | 1.12 | | | | | | | | | | | | 9.61 | | |
| |
Granted
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
| |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
| |
Expired
|
| | | | — | | | | | | | | | | | | | | | | | | | | |
| |
Forfeited
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
| |
Outstanding as of March 31, 2025
|
| | | | 46,273,132 | | | | | $ | 1.12 | | | | | | | | | | | | 9.36 | | |
| |
Vested & Exercisable
|
| | | | 2,387,500 | | | | | $ | 1.75 | | | | | | | | | | | | 8.56 | | |
| | ||||||||||||||||||||||||||
| | | | |
Three Months Ended
March 31, 2025 |
| |||||||||
| | | | |
Units
|
| |
Weighted-
Average Grant-Date Fair Value |
| ||||||
| | Non-vested: | | | | | | | | | | | | | |
| |
Beginning Balance
|
| | | | 33,400 | | | | | $ | 0.99 | | |
| |
Granted
|
| | | | — | | | | | | — | | |
| |
Vested
|
| | | | (33,400) | | | | | $ | 0.99 | | |
| |
Forfeited
|
| | | | — | | | | | | | | |
| |
Closing Balance
|
| | | | — | | | | | $ | 0.99 | | |
| | ||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Revenues | | | | | | | | | | | | | |
| |
Net premiums earned
|
| | | $ | 78,301 | | | | | $ | 68,278 | | |
| |
Fee income
|
| | | | 560 | | | | | | 125 | | |
| |
Net investment income
|
| | | | 7,895 | | | | | | 5,253 | | |
| |
Net realized and unrealized gains (losses) on investments
|
| | | | (4,599) | | | | | | 2,388 | | |
| |
Other income
|
| | | | 965 | | | | | | 24 | | |
| |
Total revenues
|
| | | | 83,122 | | | | | | 76,068 | | |
| | Expenses | | | | | | | | | | | | | |
| |
Losses and loss adjustment expenses
|
| | | | 46,862 | | | | | | 41,047 | | |
| |
Policy acquisition costs
|
| | | | 14,598 | | | | | | 14,961 | | |
| |
Other operating and general expenses
|
| | | | 10,287 | | | | | | 8,428 | | |
| |
Interest expense
|
| | | | 447 | | | | | | 550 | | |
| |
Other expenses
|
| | | | 238 | | | | | | 54 | | |
| |
Total expenses
|
| | | | 72,432 | | | | | | 65,040 | | |
| |
Income before income taxes
|
| | | | 10,690 | | | | | | 11,028 | | |
| |
Income tax expense
|
| | | | 2,240 | | | | | | 2,070 | | |
| |
Net income
|
| | | | 8,450 | | | | | | 8,958 | | |
| |
Less: Net income (loss) attributable to non-controlling interest – General Partner
|
| | | | (11) | | | | | | 1,202 | | |
| |
Segment net income
|
| | | $ | 8,461 | | | | | $ | 7,756 | | |
| | Reconciliation of profit or loss: | | | | | | | | | | | | | |
| |
Adjustments and reconciling items
|
| | | | — | | | | | | — | | |
| |
Consolidated net income attributable to members
|
| | | $ | 8,461 | | | | | $ | 7,756 | | |
| | ||||||||||||||
| | | |
Three Months Ended
March 31, |
| |||||||||||||||||||||
| | | |
2025
|
| |
2024
|
| ||||||||||||||||||
| | | |
(in thousands)
|
| |||||||||||||||||||||
|
Product Group
|
| |
Amount
|
| |
% of GWP
|
| |
Amount
|
| |
% of GWP
|
| ||||||||||||
|
Casualty
|
| | | $ | 82,140 | | | | | | 71% | | | | | $ | 50,506 | | | | | | 62% | | |
|
Property
|
| | | | 34,003 | | | | | | 29% | | | | | | 31,099 | | | | | | 38% | | |
|
Total Gross Written Premium
|
| | | $ | 116,143 | | | | | | 100% | | | | | $ | 81,605 | | | | | | 100% | | |
| | |||||||||||||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands, except for
units and per unit data) |
| |||||||||
| | Numerator: | | | | | | | | | | | | | |
| |
Net income available to Members
|
| | | $ | 8,461 | | | | | $ | 7,756 | | |
| |
Income allocable to participating securities
|
| | | | 295 | | | | | | — | | |
| |
Net income attributable to Members’ units
|
| | | $ | 8,166 | | | | | $ | 7,756 | | |
| | Denominator: | | | | | | | | | | | | | |
| |
Weighted-average units outstanding – basic, including participating securities
|
| | | | 445,084,742 | | | | | | 386,397,466 | | |
| |
Weighted-average participating securities
|
| | | | (15,511,275) | | | | | | — | | |
| |
Weighted-average units outstanding – basic
|
| | | | 429,573,467 | | | | | | 386,397,466 | | |
| |
Dilutive effect of share-based compensation
|
| | | | 6,512,205 | | | | | | 3,270 | | |
| |
Weighted-average units outstanding – diluted
|
| | | | 436,085,672 | | | | | | 386,400,736 | | |
| |
Earnings per unit – basic
|
| | | $ | 0.02 | | | | | $ | 0.02 | | |
| |
Earnings per unit – diluted
|
| | | $ | 0.02 | | | | | $ | 0.02 | | |
| | ||||||||||||||
| | | | |
Three Months Ended
March 31, |
| |||||||||
| | | | |
2025
|
| |
2024
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Unrealized (losses) gains arising during the period, pre-tax
|
| | | $ | (124) | | | | | $ | 3,178 | | |
| |
Income tax benefit (expense)
|
| | | | 10 | | | | | | (669) | | |
| |
Unrealized (losses) gains arising during the period, net of taxes
|
| | | | (114) | | | | | | 2,509 | | |
| |
Other comprehensive (losses) income
|
| | | $ | (114) | | | | | $ | 2,509 | | |
| | ||||||||||||||
| | | |
As of December 31,
|
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
| Assets: | | | | | | | | | | | | | |
|
Fixed maturity securities available-for-sale, at fair value (amortized cost of $434,965 in 2024 and $103,789 in 2023)
|
| | | $ | 438,752 | | | | | $ | 98,200 | | |
|
Equity securities, at fair value (cost of $0 in 2024 and $1,000 in 2023)
|
| | | | — | | | | | | 1,000 | | |
|
Utility & infrastructure investments, at fair value (cost of $216,075 in 2024 and $221,175 in 2023)
|
| | | | 270,242 | | | | | | 253,045 | | |
|
Short-term investments
|
| | | | 52,612 | | | | | | — | | |
|
Other invested assets
|
| | | | 280 | | | | | | 694 | | |
|
Total invested assets
|
| | | | 761,886 | | | | | | 352,939 | | |
|
Cash and cash equivalents
|
| | | | 26,573 | | | | | | 264,646 | | |
|
Investment income due and accrued
|
| | | | 5,642 | | | | | | 1,098 | | |
|
Premiums receivable, net of allowance for credit losses of $5,907 in 2024 and $2,953 in 2023
|
| | | | 53,500 | | | | | | 49,103 | | |
|
Deferred policy acquisition costs, net of ceding commissions
|
| | | | 21,552 | | | | | | 23,245 | | |
|
Note receivable from affiliate
|
| | | | 13,501 | | | | | | 13,501 | | |
|
Prepaid reinsurance premiums
|
| | | | 3,905 | | | | | | 396 | | |
|
Deferred income tax asset, net
|
| | | | 9,670 | | | | | | 7,221 | | |
|
Reinsurance recoverable, net of allowance for credit losses of $0 in 2024 and $0 in
2023 |
| | | | 133,616 | | | | | | 125,671 | | |
|
Ceded unearned premiums
|
| | | | 68,205 | | | | | | 37,852 | | |
|
Other assets
|
| | | | 25,388 | | | | | | 6,370 | | |
|
Total assets
|
| | | $ | 1,123,438 | | | | | $ | 882,042 | | |
| Liabilities, members’ equity and non-controlling interest: | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | |
|
Reserves for unpaid losses and loss adjustment expenses
|
| | | | 403,576 | | | | | | 320,936 | | |
|
Unearned premiums
|
| | | | 212,828 | | | | | | 173,905 | | |
|
Securities sold, not yet purchased, at fair value (cost of $932 in 2024 and $12,379
in 2023) |
| | | | 930 | | | | | | 12,130 | | |
|
Payable to reinsurers
|
| | | | 27,160 | | | | | | 15,669 | | |
|
Due to broker
|
| | | | 9,189 | | | | | | — | | |
|
Accounts payable and accrued expenses
|
| | | | 38,061 | | | | | | 17,899 | | |
|
Funds held under reinsurance treaties
|
| | | | 2,092 | | | | | | 4,589 | | |
|
Income tax payable
|
| | | | 26,488 | | | | | | 8,852 | | |
|
Other liabilities
|
| | | | 4,307 | | | | | | 5,865 | | |
|
Total liabilities
|
| | | | 724,631 | | | | | | 559,845 | | |
| Members’ equity: | | | | | | | | | | | | | |
|
Members’ equity
|
| | | | 360,741 | | | | | | 338,634 | | |
|
Retained earnings (deficit)
|
| | | | 34,569 | | | | | | (12,521) | | |
|
Accumulated other comprehensive income (loss)
|
| | | | 2,997 | | | | | | (4,416) | | |
|
Total members’ equity
|
| | | | 398,307 | | | | | | 321,697 | | |
|
Non-controlling interest−General Partner
|
| | | | 500 | | | | | | 500 | | |
|
Total members’ equity and non-controlling interest
|
| | | | 398,807 | | | | | | 322,197 | | |
|
Total liabilities, members’ equity and non-controlling interest
|
| | | $ | 1,123,438 | | | | | $ | 882,042 | | |
| | |||||||||||||
| | | |
For the Years Ended December 31,
|
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
| Revenues | | | | | | | | | | | | | |
|
Gross written premiums
|
| | | $ | 437,036 | | | | | $ | 352,591 | | |
|
Ceded written premiums
|
| | | | (137,830) | | | | | | (84,375) | | |
|
Net written premiums
|
| | | | 299,206 | | | | | | 268,216 | | |
|
Change in unearned premiums
|
| | | | (8,571) | | | | | | (36,752) | | |
|
Net premiums earned
|
| | | | 290,635 | | | | | | 231,464 | | |
|
Fee income
|
| | | | 918 | | | | | | 660 | | |
|
Net investment income
|
| | | | 24,046 | | | | | | 11,366 | | |
|
Net realized and unrealized gains (losses) on investments
|
| | | | 28,140 | | | | | | (2,269) | | |
|
Other income
|
| | | | 95 | | | | | | 95 | | |
|
Total revenues
|
| | | | 343,834 | | | | | | 241,316 | | |
| Expenses | | | | | | | | | | | | | |
|
Losses and loss adjustment expenses
|
| | | | 175,234 | | | | | | 154,107 | | |
|
Underwriting, acquisition and insurance expenses
|
| | | | 98,567 | | | | | | 72,155 | | |
|
Interest expense
|
| | | | 2,042 | | | | | | 2,237 | | |
|
Other expenses
|
| | | | 1,727 | | | | | | 196 | | |
|
Total expenses
|
| | | | 277,570 | | | | | | 228,695 | | |
|
Income before income taxes
|
| | | | 66,264 | | | | | | 12,621 | | |
|
Income tax expense
|
| | | | 12,316 | | | | | | 2,518 | | |
|
Net income
|
| | | | 53,948 | | | | | | 10,103 | | |
|
Less: Net income attributable to non-controlling interest−General
Partner |
| | | | 6,858 | | | | | | 55 | | |
|
Net income attributable to members
|
| | | | 47,090 | | | | | | 10,048 | | |
| Other comprehensive income: | | | | | | | | | | | | | |
|
Unrealized gains, net of taxes
|
| | | | 7,413 | | | | | | 3,246 | | |
|
Less: Unrealized gains, net of taxes attributable to non-controlling interest
|
| | | | — | | | | | | — | | |
|
Total comprehensive income attributable to members
|
| | | $ | 54,503 | | | | | $ | 13,294 | | |
| Earnings per member’s unit: | | | | | | | | | | | | | |
|
Basic
|
| | | $ | 0.12 | | | | | $ | 0.03 | | |
|
Diluted
|
| | | $ | 0.12 | | | | | $ | 0.03 | | |
| Weighted-average units outstanding: | | | | | | | | | | | | | |
|
Basic
|
| | | | 390,738,224 | | | | | | 349,938,678 | | |
|
Diluted
|
| | | | 390,756,416 | | | | | | 349,948,799 | | |
| | | |
Members’
Equity |
| |
Retained
Earnings (Deficit) |
| |
Accumulated
Other Comprehensive Income (Loss) |
| |
Total
Members’ Equity |
| |
Non-
Controlling Interest |
| |
Total Members’
Equity and Non-Controlling Interest |
| ||||||||||||||||||
| | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
|
Balance at January 1, 2023
|
| | | $ | 303,364 | | | | | $ | (22,569) | | | | | $ | (7,662) | | | | | $ | 273,133 | | | | | $ | 3,584 | | | | | $ | 276,717 | | |
|
Member units issued
|
| | | | 35,243 | | | | | | — | | | | | | — | | | | | | 35,243 | | | | | | — | | | | | | 35,243 | | |
|
Share-based compensation
|
| | | | 27 | | | | | | — | | | | | | — | | | | | | 27 | | | | | | — | | | | | | 27 | | |
|
Distributions
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,139) | | | | | | (3,139) | | |
|
Net income
|
| | | | — | | | | | | 10,048 | | | | | | — | | | | | | 10,048 | | | | | | 55 | | | | | | 10,103 | | |
|
Other comprehensive income,
net of taxes |
| | | | — | | | | | | — | | | | | | 3,246 | | | | | | 3,246 | | | | | | — | | | | | | 3,246 | | |
|
Balance at December 31, 2023
|
| | | $ | 338,634 | | | | | $ | (12,521) | | | | | $ | (4,416) | | | | | $ | 321,697 | | | | | $ | 500 | | | | | $ | 322,197 | | |
|
Member units issued
|
| | | | 20,100 | | | | | | — | | | | | | — | | | | | | 20,100 | | | | | | — | | | | | | 20,100 | | |
|
Share-based compensation
|
| | | | 2,007 | | | | | | — | | | | | | — | | | | | | 2,007 | | | | | | — | | | | | | 2,007 | | |
|
Distributions
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,858) | | | | | | (6,858) | | |
|
Net income
|
| | | | — | | | | | | 47,090 | | | | | | — | | | | | | 47,090 | | | | | | 6,858 | | | | | | 53,948 | | |
|
Other comprehensive income,
net of taxes |
| | | | — | | | | | | — | | | | | | 7,413 | | | | | | 7,413 | | | | | | — | | | | | | 7,413 | | |
|
Balance at December 31,
2024 |
| | | $ | 360,741 | | | | | $ | 34,569 | | | | | $ | 2,997 | | | | | $ | 398,307 | | | | | $ | 500 | | | | | $ | 398,807 | | |
| | |||||||||||||||||||||||||||||||||||||
| | | |
For the Years Ended
December 31, |
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
| OPERATING ACTIVITIES | | | | | | | | | | | | | |
|
Net income
|
| | | $ | 53,948 | | | | | $ | 10,103 | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | |
|
Amortization of premium/discount on fixed maturity securities, available-for-sale
|
| | | | (3,807) | | | | | | 326 | | |
|
Net realized and unrealized gains (losses) on investments
|
| | | | (27,921) | | | | | | 2,412 | | |
|
Net investment income
|
| | | | (3,102) | | | | | | (2,979) | | |
|
Depreciation and amortization
|
| | | | 699 | | | | | | 227 | | |
|
Share-based compensation
|
| | | | 2,007 | | | | | | 27 | | |
|
Expenses allocated from affiliate
|
| | | | — | | | | | | 244 | | |
| Change in operating assets and liabilities: | | | | | | | | | | | | | |
|
Deferred income taxes
|
| | | | (4,412) | | | | | | (6,970) | | |
|
Investment income due and accrued
|
| | | | (4,544) | | | | | | (575) | | |
|
Premiums receivable, net
|
| | | | (4,398) | | | | | | (6,166) | | |
|
Deferred policy acquisition costs, net of ceding commissions
|
| | | | 1,693 | | | | | | (3,597) | | |
|
Note receivable from affiliate
|
| | | | — | | | | | | — | | |
|
Prepaid reinsurance premiums
|
| | | | (3,509) | | | | | | (143) | | |
|
Income tax receivable
|
| | | | — | | | | | | 4,344 | | |
|
Reinsurance recoverable
|
| | | | (7,945) | | | | | | 1,656 | | |
|
Ceded unearned premiums
|
| | | | (30,353) | | | | | | (1,674) | | |
|
Other assets
|
| | | | (19,488) | | | | | | (857) | | |
|
Reserves for unpaid losses and loss adjustment expenses
|
| | | | 82,640 | | | | | | 44,498 | | |
|
Unearned premiums
|
| | | | 38,924 | | | | | | 38,427 | | |
|
Payable to reinsurers
|
| | | | 11,491 | | | | | | 143 | | |
|
Accounts payable and accrued expenses
|
| | | | 30,163 | | | | | | 5,551 | | |
|
Funds held under reinsurance treaties
|
| | | | (2,497) | | | | | | (6,817) | | |
|
Income tax payable
|
| | | | 17,636 | | | | | | 8,852 | | |
|
Other liabilities
|
| | | | (1,614) | | | | | | (1,325) | | |
|
Net cash provided by operating activities
|
| | | | 125,611 | | | | | | 85,707 | | |
| INVESTING ACTIVITIES | | | | | | | | | | | | | |
|
Purchase of fixed maturity securities, available-for-sale
|
| | | | (389,306) | | | | | | (136,964) | | |
|
Proceeds from sale of fixed maturity securities, available-for-sale
|
| | | | 99,377 | | | | | | 124,323 | | |
|
Maturities and redemptions of fixed maturity securities, available-for-sale
|
| | | | 17,665 | | | | | | 15,173 | | |
|
Purchase of equity securities
|
| | | | — | | | | | | (1,000) | | |
|
Redemptions of Utility & Infrastructure investments
|
| | | | 414 | | | | | | 2,725 | | |
|
Purchase of other assets
|
| | | | (164) | | | | | | (66) | | |
|
Change in Treasury bills, net
|
| | | | (39,199) | | | | | | — | | |
|
Change in short-term investments, net
|
| | | | (53,381) | | | | | | — | | |
|
Purchases to cover securities sold, not yet purchased
|
| | | | 1,257 | | | | | | (56,974) | | |
|
Proceeds from sale of securities sold, not yet purchased
|
| | | | (348) | | | | | | 67,703 | | |
|
Proceeds from sale of other invested assets
|
| | | | 415 | | | | | | — | | |
|
Purchase of other invested assets
|
| | | | — | | | | | | (408) | | |
|
Net cash (used in) provided by investing activities
|
| | | | (363,270) | | | | | | 14,512 | | |
| FINANCING ACTIVITIES | | | | | | | | | | | | | |
|
Issuance of Members’ units
|
| | | | — | | | | | | 35,000 | | |
|
Capital distribution
|
| | | | (414) | | | | | | (2,725) | | |
|
Net cash (used in) provided by financing activities
|
| | | | (414) | | | | | | 32,275 | | |
|
Net change in cash and cash equivalents
|
| | | | (238,073) | | | | | | 132,494 | | |
|
Cash and cash equivalents, at beginning of period
|
| | | | 264,646 | | | | | | 132,152 | | |
|
Cash and cash equivalents, at end of period
|
| | | $ | 26,573 | | | | | $ | 264,646 | | |
| Supplementary cash flow information: | | | | | | | | | | | | | |
|
Cash paid for interest
|
| | | $ | 2,124 | | | | | $ | 2,192 | | |
|
Cash paid for taxes
|
| | | $ | — | | | | | $ | — | | |
| Supplementary non-cash investing and financing activities: | | | | | | | | | | | | | |
|
Members’ units issued in exchange for U.S. Treasury bills
|
| | | $ | 20,100 | | | | | $ | — | | |
|
Note receivable from affiliate received from the sale of property and equipment, net
|
| | | $ | — | | | | | $ | 13,501 | | |
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Beginning balance
|
| | | $ | 2,953 | | | | | $ | — | | |
| |
Current period change for estimated uncollectible premiums
|
| | | | 2,954 | | | | | | 2,953 | | |
| |
Write-offs of uncollectible premiums receivable
|
| | | | — | | | | | | — | | |
| |
Ending balance
|
| | | $ | 5,907 | | | | | $ | 2,953 | | |
| | ||||||||||||||
| | | | |
As of December 31,
|
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Assets | | | | | | | | | | | | | |
| |
Cash
|
| | | $ | 5 | | | | | $ | 27 | | |
| |
Investments in the Absolute Return Utility & Infrastructure Fund, at fair value
|
| | | | 270,242 | | | | | | 253,045 | | |
| |
Investment in affiliated fund, at fair value (cost $191)
|
| | | | 280 | | | | | | 281 | | |
| |
Due from the Absolute Return Utility & Infrastructure Fund
|
| | | | 16,857 | | | | | | 413 | | |
| |
Total assets
|
| | | $ | 287,384 | | | | | $ | 253,766 | | |
| | Liabilities and partners’ capital | | | | | | | | | | | | | |
| | Liabilities: | | | | | | | | | | | | | |
| |
Withdrawals payable
|
| | | $ | 16,858 | | | | | $ | 414 | | |
| |
Accrued expenses and other liabilities
|
| | | | 88 | | | | | | 34 | | |
| |
Total liabilities
|
| | | | 16,946 | | | | | | 448 | | |
| | Partners’ capital: | | | | | | | | | | | | | |
| |
Limited partners
|
| | | $ | 269,938 | | | | | $ | 252,818 | | |
| |
General partner
|
| | | | 500 | | | | | | 500 | | |
| |
Total partners’ capital:
|
| | | | 270,438 | | | | | | 253,318 | | |
| |
Total liabilities and partners’ capital:
|
| | | $ | 287,384 | | | | | $ | 253,766 | | |
| | ||||||||||||||
| | | | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | December 31, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available-for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
| | | $ | 84,456 | | | | | $ | 21 | | | | | $ | (282) | | | | | $ | 84,195 | | |
| |
Corporate
|
| | | | 349,693 | | | | | | 6,257 | | | | | | (2,145) | | | | | | 353,805 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | 816 | | | | | | — | | | | | | (64) | | | | | | 752 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 434,965 | | | | | $ | 6,278 | | | | | $ | (2,491) | | | | | $ | 438,752 | | |
| | ||||||||||||||||||||||||||
| | | | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | December 31, 2023 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available-for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Corporate
|
| | | $ | 68,583 | | | | | $ | 752 | | | | | $ | (2,350) | | | | | $ | 66,985 | | |
| |
Municipal taxable
|
| | | | 12,331 | | | | | | — | | | | | | (1,037) | | | | | | 11,294 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | 22,875 | | | | | | — | | | | | | (2,955) | | | | | | 19,921 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 103,789 | | | | | $ | 752 | | | | | $ | (6,342) | | | | | $ | 98,200 | | |
| | ||||||||||||||||||||||||||
| | | | |
Amortized Cost
|
| |
Fair Value
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | December 31, 2024 | | | | | | | | | | | | | |
| |
Due in one year or less
|
| | | $ | — | | | | | $ | — | | |
| |
Due after one year through five years
|
| | | | 256,299 | | | | | | 258,631 | | |
| |
Due after five years through ten years
|
| | | | 158,930 | | | | | | 160,262 | | |
| |
Due after ten years
|
| | | | 18,920 | | | | | | 19,107 | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | 816 | | | | | | 752 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 434,965 | | | | | $ | 438,752 | | |
| | ||||||||||||||
| | | | |
Less Than 12 Months
|
| |
12 Months or More
|
| |
Total
|
| |||||||||||||||||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
| | | | |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value(1) |
| |
Gross
Unrealized (Losses) |
| ||||||||||||||||||
| | December 31, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
guaranteed by the U.S. government
|
| | | $ | 71,408 | | | | | $ | (282) | | | | | $ | — | | | | | $ | — | | | | | $ | 71,408 | | | | | $ | (282) | | |
| |
Corporate
|
| | | | 95,079 | | | | | | (2,145) | | | | | | — | | | | | | — | | | | | | 95,079 | | | | | | (2,145) | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | — | | | | | | — | | | | | | 752 | | | | | | (64) | | | | | $ | 752 | | | | | | (64) | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | $ | 166,487 | | | | | $ | (2,427) | | | | | $ | 752 | | | | | $ | (64) | | | | | $ | 167,239 | | | | | $ | (2,491) | | |
| | ||||||||||||||||||||||||||||||||||||||
| | | | |
Less Than 12 Months
|
| |
12 Months or More
|
| |
Total
|
| |||||||||||||||||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
| | | | |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| |
Gross
Unrealized (Losses) |
| ||||||||||||||||||
| | December 31, 2023 | | | | | | | | ||||||||||||||||||||||||||||||
| | Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Municipal taxable
|
| | | $ | 345 | | | | | $ | (10) | | | | | $ | 10,799 | | | | | $ | (1,027) | | | | | $ | 11,144 | | | | | $ | (1,037) | | |
| |
Corporate
|
| | | | — | | | | | | — | | | | | | 44,798 | | | | | | (2,350) | | | | | | 44,798 | | | | | | (2,350) | | |
| |
Commercial and residential mortgage and other asset-backed
|
| | | | — | | | | | | — | | | | | | 19,921 | | | | | | (2,955) | | | | | | 19,921 | | | | | | (2,955) | | |
| |
Total fixed maturity securities, available-for- sale
|
| | | $ | 345 | | | | | $ | (10) | | | | | $ | 75,518 | | | | | $ | (6,332) | | | | | $ | 75,863 | | | | | $ | (6,342) | | |
| | ||||||||||||||||||||||||||||||||||||||
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Investment income | | | | | | | | | | | | | |
| |
Fixed-maturity securities
|
| | | $ | 14,736 | | | | | $ | 2,279 | | |
| |
Utility & Infrastructure investments
|
| | | | 6,830 | | | | | | 7,933 | | |
| |
Short-term investments
|
| | | | 2,703 | | | | | | — | | |
| |
Cash equivalents
|
| | | | 5,122 | | | | | | 6,368 | | |
| |
Note receivable from affiliate
|
| | | | 1,002 | | | | | | 1,002 | | |
| |
Equity securities
|
| | | | 44 | | | | | | — | | |
| |
Securities sold, not yet purchased
|
| | | | (569) | | | | | | (795) | | |
| |
Gross investment income
|
| | | | 29,868 | | | | | | 16,787 | | |
| |
Management fees(1)
|
| | | | (5,601) | | | | | | (5,208) | | |
| |
Other expenses(1)
|
| | | | (221) | | | | | | (213) | | |
| |
Net investment income
|
| | | $ | 24,046 | | | | | $ | 11,366 | | |
| | ||||||||||||||
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Fixed maturity securities, available-for-sale | | | | ||||||||||
| |
Change in net unrealized gains
|
| | | $ | 9,377 | | | | | $ | 4,110 | | |
| |
Total
|
| | | $ | 9,377 | | | | | $ | 4,110 | | |
| | ||||||||||||||
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Gross realized gains: | | | | | | | | | | | | | |
| |
Fixed maturity securities, available for sale
|
| | | $ | 4,295 | | | | | $ | 161 | | |
| |
Short-term investments
|
| | | | 18 | | | | | | — | | |
| |
Equity securities
|
| | | | 38 | | | | | | — | | |
| |
Cash equivalents
|
| | | | 4 | | | | | | — | | |
| |
Securities sold, not yet purchased
|
| | | | 1,130 | | | | | | 219 | | |
| |
Utility & Infrastructure investments
|
| | | | 43,831 | | | | | | 30,503 | | |
| |
Total
|
| | | | 49,316 | | | | | | 30,883 | | |
| | Gross realized (losses): | | | | | | | | | | | | | |
| |
Fixed maturity securities, available for sale
|
| | | | (9,285) | | | | | | (19) | | |
| |
Short-term investments
|
| | | | (16) | | | | | | — | | |
| |
Cash equivalents
|
| | | | (2) | | | | | | — | | |
| |
Securities sold, not yet purchased
|
| | | | (479) | | | | | | — | | |
| |
Utility & Infrastructure investments
|
| | | | (22,017) | | | | | | (4,273) | | |
| |
Total
|
| | | | (31,799) | | | | | | (4,292) | | |
| | Net unrealized gains (losses) on investments: | | | | | | | | | | | | | |
| |
Securities sold, not yet purchased
|
| | | | 15 | | | | | | (64) | | |
| |
Utility & Infrastructure investments
|
| | | | 10,608 | | | | | | (28,796) | | |
| |
Total
|
| | | | 10,623 | | | | | | (28,860) | | |
| |
Net realized and unrealized gains (losses)
|
| | | $ | 28,140 | | | | | $ | (2,269) | | |
| | ||||||||||||||
| | | | |
As of December 31,
|
| |||||||||||||||||||||||||||||||||
| | | | |
2024
|
| |
2023
|
| ||||||||||||||||||||||||||||||
| | | | |
Cost
|
| |
Net
Unrealized Gains (Losses) |
| |
Fair
Value |
| |
Cost
|
| |
Net
Unrealized Gains (Losses) |
| |
Fair Value
|
| ||||||||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
| |
Absolute Return Utility & Infrastructure Fund
|
| | | $ | 216,075 | | | | | $ | 54,167 | | | | | $ | 270,242 | | | | | $ | 221,175 | | | | | $ | 31,870 | | | | | $ | 253,045 | | |
| | ||||||||||||||||||||||||||||||||||||||
|
Investment in securities
|
| |
Cost(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | |
(in thousands)
|
| |||||||||||||||
| December 31, 2024 | | | | | |||||||||||||||
| Assets: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | 452,622 | | | | | $ | 484,614 | | | | | | 121.67% | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | (253,151) | | | | | $ | (259,941) | | | | | | -65.26% | | |
|
Investment in securities
|
| |
Cost(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | | | | | | | |
(in thousands)
|
| | | | | | | |||
| December 31, 2023 | | | | | |||||||||||||||
| Assets: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | 207,556 | | | | | $ | 228,237 | | | | | | 70.95% | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | |
|
Total common stock
|
| | | $ | (245,047) | | | | | $ | (252,246) | | | | | | -78.41% | | |
|
Investment in securities
|
| |
Quantity(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | |
(in thousands)
|
| | | | | | | |||||||||
| December 31, 2024 | | | | | |||||||||||||||
|
Targa Resources Corp
|
| | | | 1,331,300 | | | | | $ | 23,024 | | | | | | 5.78% | | |
|
Arthur J. Gallagher & Co
|
| | | | 750,000 | | | | | $ | 20,626 | | | | | | 5.18% | | |
|
Ryan Specialty Group Holdings Inc
|
| | | | 3,700,000 | | | | | $ | 23,000 | | | | | | 5.77% | | |
|
The Boeing Company
|
| | | | 2,224,500 | | | | | $ | 38,148 | | | | | | 9.58% | | |
|
Real Estate–Welltower Inc.
|
| | | | 2,775,294 | | | | | $ | 33,888 | | | | | | 8.51% | | |
|
The Boeing Company
|
| | | | (2,257,000) | | | | | $ | (38,706) | | | | | | -9.72% | | |
|
Investment in securities
|
| |
Quantity(1)
|
| |
Fair Value(1)
|
| |
Percentage of
Members’ Equity |
| |||||||||
| | | | | | | | | |
(in thousands)
|
| | | | | | | |||
| December 31, 2023 | | | | | |||||||||||||||
|
Targa Resources Corp
|
| | | | 201,847 | | | | | $ | 17,534 | | | | | | 5.45% | | |
|
Ryan Specialty Group Holdings Inc
|
| | | | 447,763 | | | | | $ | 19,263 | | | | | | 5.99% | | |
|
Agree Realty Corporation
|
| | | | 278,160 | | | | | $ | 17,510 | | | | | | 5.44% | | |
|
Utilities Select Sector SPDR Fund
|
| | | | (443,061) | | | | | $ | (28,059) | | | | | | -8.72% | | |
|
U.S. Treasury Securities, 1.500% to 4.375%, due 01/31/2027 to 11/15/2052
|
| | | | (22,582,646) | | | | | $ | (20,907) | | | | | | -6.50% | | |
| | | | |
December 31, 2024
Fair Value Measurements Using |
| |||||||||||||||||||||
| | | | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | Assets | | | | | | ||||||||||||||||||||
| | Fixed maturity securities, available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities and obligations guaranteed by the U.S. Government
|
| | | $ | — | | | | | $ | 84,195 | | | | | $ | — | | | | | $ | 84,195 | | |
| |
Corporate
|
| | | | — | | | | | | 353,805 | | | | | | — | | | | | | 353,805 | | |
| |
Commercial and residential mortgage and other
asset-backed |
| | | | — | | | | | | 752 | | | | | | — | | | | | | 752 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | | — | | | | | | 438,752 | | | | | | — | | | | | | 438,752 | | |
| |
Total assets
|
| | | $ | — | | | | | $ | 438,752 | | | | | $ | — | | | | | $ | 438,752 | | |
| | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Securities sold, not yet purchased: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities
|
| | | $ | — | | | | | $ | (930) | | | | | $ | — | | | | | $ | (930) | | |
| |
Total liabilities
|
| | | $ | — | | | | | $ | (930) | | | | | $ | — | | | | | $ | (930) | | |
| | ||||||||||||||||||||||||||
| | | | |
December 31, 2023
Fair Value Measurements Using |
| |||||||||||||||||||||
| | | | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fixed maturity securities, available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Municipal taxable
|
| | | $ | — | | | | | $ | 11,294 | | | | | $ | — | | | | | $ | 11,294 | | |
| |
Commercial and residential mortgage and other
asset-backed |
| | | | — | | | | | | 19,921 | | | | | | — | | | | | | 19,921 | | |
| |
Corporate
|
| | | | — | | | | | | 66,985 | | | | | | — | | | | | | 66,985 | | |
| |
Total fixed maturity securities, available-for-sale
|
| | | | — | | | | | | 98,200 | | | | | | — | | | | | | 98,200 | | |
| |
Equity securities
|
| | | | — | | | | | | — | | | | | | 1,000 | | | | | | 1,000 | | |
| |
Total assets
|
| | | $ | — | | | | | $ | 98,200 | | | | | $ | 1,000 | | | | | $ | 99,200 | | |
| | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Securities sold, not yet purchased: | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities
|
| | | $ | — | | | | | $ | (12,130) | | | | | $ | — | | | | | $ | (12,130) | | |
| |
Total liabilities
|
| | | $ | — | | | | | $ | (12,130) | | | | | $ | — | | | | | $ | (12,130) | | |
| | ||||||||||||||||||||||||||
| | | | |
Years Ended December 31,
|
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Beginning balance
|
| | | $ | 1,000 | | | | | $ | — | | |
| |
Transfers in to Level 3
|
| | | | — | | | | | | — | | |
| |
Transfers out of Level 3
|
| | | | — | | | | | | — | | |
| |
Purchases
|
| | | | — | | | | | | 1,000 | | |
| |
Sales
|
| | | | (1,038) | | | | | | — | | |
| |
Maturities, calls and paydowns
|
| | | | — | | | | | | — | | |
| |
Amortization of discount
|
| | | | — | | | | | | — | | |
| | Total gains or losses (realized/unrealized): | | | | | | | | | | | | | |
| |
Included in earnings
|
| | | | 38 | | | | | | — | | |
| |
Included in other comprehensive income
|
| | | | — | | | | | | — | | |
| |
Ending balance
|
| | | $ | (0) | | | | | $ | 1,000 | | |
| | ||||||||||||||
| | | | |
Cost
|
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | December 31, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities
|
| | | $ | (932) | | | | | $ | 2 | | | | | $ | — | | | | | $ | (930) | | |
| |
Total securities sold, not yet purchased
|
| | | $ | (932) | | | | | $ | 2 | | | | | $ | — | | | | | $ | (930) | | |
| | ||||||||||||||||||||||||||
| | | | |
Cost
|
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized (Losses) |
| |
Fair
Value |
| ||||||||||||
| | | | |
(in thousands)
|
| |||||||||||||||||||||
| | December 31, 2023 | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
U.S. Treasury securities
|
| | | $ | (12,379) | | | | | $ | 315 | | | | | $ | (66) | | | | | $ | (12,130) | | |
| |
Total securities sold, not yet purchased
|
| | | $ | (12,379) | | | | | $ | 315 | | | | | $ | (66) | | | | | $ | (12,130) | | |
| | ||||||||||||||||||||||||||
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Balance at beginning of year
|
| | | $ | 23,245 | | | | | $ | 19,648 | | |
| |
Policy acquisition costs deferred:
|
| | | | | | | | | | | | |
| |
Direct commissions
|
| | | | 75,248 | | | | | | 60,217 | | |
| |
Ceded commissions
|
| | | | (29,273) | | | | | | (13,385) | | |
| |
Underwriting and other insurance expenses
|
| | | | 2,078 | | | | | | 830 | | |
| |
Sub-total
|
| | | | 48,053 | | | | | | 47,662 | | |
| |
Amortization of policy acquisition costs
|
| | | | (49,746) | | | | | | (44,065) | | |
| |
Net change
|
| | | | (1,693) | | | | | | 3,597 | | |
| |
Balance at end of year
|
| | | $ | 21,552 | | | | | $ | 23,245 | | |
| | ||||||||||||||
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| |
Policy acquisition costs
|
| | | $ | 60,692 | | | | | $ | 46,201 | | |
| |
Other operating and general expenses
|
| | | | 37,875 | | | | | | 25,954 | | |
| |
Total underwriting, acquisition and insurance expenses
|
| | | $ | 98,567 | | | | | $ | 72,155 | | |
| | ||||||||||||||
| | | | |
As of December 31,
|
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Lease Balances: | | | | | | | | | | | | | |
| |
Operating lease right-of-use assets
|
| | | $ | 2,278 | | | | | $ | 2,776 | | |
| |
Operating lease liabilities
|
| | | $ | (2,738) | | | | | $ | (3,311) | | |
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Lease Cost: | | | | | | | | | | | | | |
| |
Operating lease cost
|
| | | $ | 655 | | | | | $ | 655 | | |
| |
Sublease income
|
| | | | (750) | | | | | | (750) | | |
| |
Net lease (income)
|
| | | $ | (95) | | | | | $ | (95) | | |
| | ||||||||||||||
| | | | |
As of December 31,
|
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| |
Weighted-average remaining lease term–operating leases
|
| |
3.92 years
|
| |
4.92 years
|
| ||||||
| |
Weighted-average discount rate–operating leases
|
| | | | 5.25% | | | | | | 5.25% | | |
| | | | |
As of December 31,
2024 |
| |||
| | | | |
(in thousands)
|
| |||
| | Future Minimum Lease Payments | | | |||||
| |
2025
|
| | | $ | 747 | | |
| |
2026
|
| | | | 765 | | |
| |
2027
|
| | | | 783 | | |
| |
2028
|
| | | | 731 | | |
| |
Thereafter
|
| | | | — | | |
| |
Total lease payments
|
| | | | 3,026 | | |
| |
Less: imputed interest
|
| | | | (288) | | |
| |
Present value of lease liabilities
|
| | | $ | 2,738 | | |
| | ||||||||
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Balance at Beginning of Period | | | | | | | | | | | | | |
| |
Reserves for unpaid losses and loss adjustment expenses
|
| | | $ | 320,936 | | | | | $ | 276,438 | | |
| |
Reinsurance recoverable
|
| | | | (102,723) | | | | | | (107,559) | | |
| |
Reserves for unpaid losses and loss adjustment expenses, net of reinsurance
|
| | | | 218,213 | | | | | | 168,879 | | |
| | Current Activity | | | | | | | | | | | | | |
| |
Incurred losses and loss adjustment expenses, net of reinsurance:
|
| | | | | | | | | | | | |
| |
Current year
|
| | | | 169,816 | | | | | | 136,869 | | |
| |
Prior year
|
| | | | 5,418 | | | | | | 17,238 | | |
| |
Total net losses and loss and adjustment expenses incurred
|
| | | | 175,234 | | | | | | 154,107 | | |
| |
Payments:
|
| | | | | | | | | | | | |
| |
Current year
|
| | | | (46,258) | | | | | | (36,753) | | |
| |
Prior year
|
| | | | (63,209) | | | | | | (68,020) | | |
| |
Total payments
|
| | | | (109,467) | | | | | | (104,773) | | |
| | Balance at End of Period | | | | | | | | | | | | | |
| |
Reserves for unpaid losses and loss adjustment expenses, net of reinsurance
|
| | | | 283,980 | | | | | | 218,213 | | |
| |
Reinsurance recoverable
|
| | | | 119,596 | | | | | | 102,723 | | |
| |
Reserves for unpaid losses and loss adjustment expenses, gross of reinsurance
|
| | | $ | 403,576 | | | | | $ | 320,936 | | |
| | ||||||||||||||
| | | |
Incurred Losses and Allocated Loss Adjustment Expenses,
Net of Reinsurance |
| |
As of December 31, 2024
|
| | | ||||||||||||||||||||||||||||||||||||||||||||||
| | | |
Year Ended December 31,
|
| |
Total of IBNR
Liabilities plus Expected Development on Reported Claims |
| |
Cumulative
# of Reported Claims(1) |
| | | |||||||||||||||||||||||||||||||||||||||||||
|
Accident Year
|
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| | | ||||||||||||||||||||||||||||||||||
| | | |
(in thousands)
|
| | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||
| | | |
Unaudited
|
| | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||
| Property | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
|
2019
|
| | | $ | 12,259 | | | | | $ | 12,285 | | | | | | 12,569 | | | | | $ | 14,111 | | | | | $ | 13,928 | | | | | $ | 13,859 | | | | | $ | — | | | | | | 449 | | | | | ||||
|
2020
|
| | | | | | | | | | 48,551 | | | | | | 50,816 | | | | | | 53,852 | | | | | | 54,762 | | | | | | 55,570 | | | | | | 523 | | | | | | 1,023 | | | | | ||||
|
2021
|
| | | | | | | | | | | | | | | | 69,484 | | | | | | 57,259 | | | | | | 57,225 | | | | | | 58,175 | | | | | | 579 | | | | | | 951 | | | | | ||||
|
2022
|
| | | | | | | | | | | | | | | | | | | | | | 56,070 | | | | | | 68,363 | | | | | | 68,835 | | | | | | 1,560 | | | | | | 1,302 | | | | | ||||
|
2023
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 51,049 | | | | | | 50,209 | | | | | | 3,124 | | | | | | 1,040 | | | | | ||||
|
2024
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 70,365 | | | | | | 16,070 | | | | | | 1,169 | | | | | ||||
|
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 317,013 | | | | | | | | | | | | | | | | | ||||
| | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | |
Cumulative Paid Losses and Allocated Loss Adjustment Expenses,
Net of Reinsurance |
| |||||||||||||||||||||||||||||||||
| | | |
Year Ended December 31,
|
| |||||||||||||||||||||||||||||||||
|
Accident Year
|
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| ||||||||||||||||||
| | | |
(in thousands)
|
| | | | | | | |||||||||||||||||||||||||||
| | | |
Unaudited
|
| | ||||||||||||||||||||||||||||||||
| Property | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
2019
|
| | | $ | 3,897 | | | | | $ | 11,368 | | | | | | 13,152 | | | | | $ | 13,417 | | | | | $ | 13,855 | | | | | $ | 13,846 | | |
|
2020
|
| | | | | | | | | | 21,385 | | | | | | 40,799 | | | | | | 48,611 | | | | | | 52,374 | | | | | | 54,363 | | |
|
2021
|
| | | | | | | | | | | | | | | | 33,544 | | | | | | 50,814 | | | | | | 54,691 | | | | | | 56,979 | | |
|
2022
|
| | | | | | | | | | | | | | | | | | | | | | 28,062 | | | | | | 58,294 | | | | | | 64,533 | | |
|
2023
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 32,592 | | | | | | 45,000 | | |
|
2024
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40,025 | | |
|
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 274,746 | | |
|
Liabilities for unpaid losses and allocated loss adjustment expenses.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 42,267 | | |
| | |||||||||||||||||||||||||||||||||||||
| | | |
Incurred Losses and Allocated Loss Adjustment Expenses,
Net of Reinsurance |
| |
As of December 31, 2024
|
| ||||||||||||||||||||||||||||||||||||||||||
| | | |
Year Ended December 31,
|
| |
Total of IBNR
Liabilities plus Expected Development on Reported Claims |
| |
Cumulative
# of Reported Claims(1) |
| |||||||||||||||||||||||||||||||||||||||
|
Accident
Year |
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| ||||||||||||||||||||||||||||||
| | | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | | |
Unaudited
|
| | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||
| Casualty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
2019
|
| | | $ | 7,951 | | | | | $ | 7,954 | | | | | | 8,417 | | | | | $ | 9,522 | | | | | $ | 10,383 | | | | | $ | 11,872 | | | | | $ | 1,433 | | | | | | 160 | | |
|
2020
|
| | | | | | | | | | 28,600 | | | | | | 30,186 | | | | | | 30,920 | | | | | | 29,779 | | | | | | 31,693 | | | | | | 3,373 | | | | | | 609 | | |
|
2021
|
| | | | | | | | | | | | | | | | 52,226 | | | | | | 53,775 | | | | | | 53,865 | | | | | | 54,152 | | | | | | 7,968 | | | | | | 1,392 | | |
|
2022
|
| | | | | | | | | | | | | | | | | | | | | | 64,915 | | | | | | 69,921 | | | | | | 71,333 | | | | | | 17,235 | | | | | | 1,835 | | |
|
2023
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 78,413 | | | | | | 78,850 | | | | | | 50,533 | | | | | | 1,568 | | |
|
2024
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 90,145 | | | | | | 76,328 | | | | | | 1,278 | | |
|
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 338,045 | | | | | | | | | | |||||
| | |||||||||||||||||||||||||||||||||||||||||||||||||
| | | |
Cumulative Paid Losses and Allocated Loss Adjustment Expenses,
Net of Reinsurance |
| |||||||||||||||||||||||||||||||||
| | | |
Year Ended December 31,
|
| |||||||||||||||||||||||||||||||||
|
Accident Year
|
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| ||||||||||||||||||
| | | |
(in thousands)
|
| | | | | | | |||||||||||||||||||||||||||
| | | |
Unaudited
|
| | | | | | | |||||||||||||||||||||||||||
| Casualty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
2019
|
| | | $ | 10 | | | | | $ | 170 | | | | | | 1,445 | | | | | $ | 3,518 | | | | | $ | 5,881 | | | | | $ | 8,203 | | |
|
2020
|
| | | | | | | | | | 315 | | | | | | 5,276 | | | | | | 11,410 | | | | | | 19,576 | | | | | | 23,713 | | |
|
2021
|
| | | | | | | | | | | | | | | | 1,199 | | | | | | 9,007 | | | | | | 20,687 | | | | | | 31,178 | | |
|
2022
|
| | | | | | | | | | | | | | | | | | | | | | 4,515 | | | | | | 17,261 | | | | | | 32,703 | | |
|
2023
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,039 | | | | | | 11,717 | | |
|
2024
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,941 | | |
|
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 110,455 | | |
|
Liabilities for unpaid losses and allocated loss adjustment expenses.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 227,590 | | |
| | |||||||||||||||||||||||||||||||||||||
| | | | |
Average Annual Percentage(1) Payout of Incurred Claims by Age
|
| |||||||||||||||||||||||||||||||||
| | | | |
Year 1
|
| |
Year 2
|
| |
Year 3
|
| |
Year 4
|
| |
Year 5
|
| |
Year 6
|
| ||||||||||||||||||
| |
Property
|
| | | | 50.3% | | | | | | 35.2% | | | | | | 10.0% | | | | | | 4.9% | | | | | | 3.5% | | | | | | -0.1% | | |
| |
Casualty
|
| | | | 3.3% | | | | | | 14.3% | | | | | | 20.4% | | | | | | 21.2% | | | | | | 14.9% | | | | | | 19.6% | | |
| | | | |
As of December 31,
|
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Net outstanding liabilities for unpaid losses and loss adjustment expenses: | | | | | | | | | | | | | |
| |
Property
|
| | | $ | 42,267 | | | | | $ | 33,522 | | |
| |
Casualty
|
| | | | 227,590 | | | | | | 176,918 | | |
| |
Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance
|
| | | | 269,857 | | | | | | 210,440 | | |
| | Reinsurance recoverable on unpaid losses and loss adjustment expenses: | | | | | | | | | | | | | |
| |
Property
|
| | | | 30,635 | | | | | | 40,379 | | |
| |
Casualty
|
| | | | 88,961 | | | | | | 62,344 | | |
| |
Total reinsurance recoverable on unpaid losses and loss adjustment expenses
|
| | | | 119,596 | | | | | | 102,723 | | |
| |
Impact of Loss Portfolio Transfer
|
| | | | (2,051) | | | | | | (4,499) | | |
| |
Net unallocated loss adjustment expenses
|
| | | | 16,174 | | | | | | 12,272 | | |
| |
Gross liability for unpaid losses and loss adjustment expenses
|
| | | $ | 403,576 | | | | | $ | 320,936 | | |
| | ||||||||||||||
| | | | |
For the Years Ended
December 31, |
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Written premiums: | | | | | | | | | | | | | |
| |
Direct
|
| | | $ | 437,036 | | | | | $ | 352,591 | | |
| |
Ceded
|
| | | | (137,830) | | | | | | (84,375) | | |
| |
Net written
|
| | | | 299,206 | | | | | | 268,216 | | |
| | Earned premiums: | | | | | | | | | | | | | |
| |
Direct
|
| | | $ | 398,112 | | | | | $ | 314,164 | | |
| |
Ceded
|
| | | | (107,477) | | | | | | (82,700) | | |
| |
Net earned
|
| | | | 290,635 | | | | | | 231,464 | | |
| | Losses and loss adjustment expenses: | | | | | | | | | | | | | |
| |
Direct
|
| | | | 230,474 | | | | | | 205,192 | | |
| |
Ceded
|
| | | | (55,240) | | | | | | (51,085) | | |
| |
Net losses and loss adjustment expenses
|
| | | $ | 175,234 | | | | | $ | 154,107 | | |
| | ||||||||||||||
| | | |
2024
|
|
|
Fair value of underlying Member units
|
| |
$0.55–$0.77
|
|
|
Risk-free rate(1)
|
| |
4.2%–4.3%
|
|
|
Dividend yield(2)
|
| |
0%– 0%
|
|
| Volatility(3) | | |
35%–33%
|
|
|
Expected life(4)
|
| |
2 years–0.6 years
|
|
| | | |
Number
of Options |
| |
Weighted-
Average Exercise Price |
| |
Weighted-
Average Fair Value of Underlying Member Unit |
| |
Weighted
Average Fair Value per Option at Grant Date |
| |
Weighted-
Average Remaining Contractual Term (in years) |
| |||||||||||||||
|
Outstanding as of January 1, 2023
|
| | | | 578,750 | | | | | $ | 1.00 | | | | | | | | | | | | | | | | | | | | |
|
Granted
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |
|
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |
|
Expired
|
| | | | (315,000) | | | | | | 1.00 | | | | | | | | | | | | | | | | | | | | |
|
Forfeited
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |
|
Outstanding as of December 31, 2023
|
| | | | 263,750 | | | | | $ | 1.00 | | | | | | | | | | | | | | | | | | 6.0 | | |
|
Granted
|
| | | | 46,009,382 | | | | | | 1.13 | | | | | $ | 0.65 | | | | | $ | 0.10 | | | | | | | | |
|
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |
|
Expired
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |
|
Forfeited
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |
|
Outstanding as of December 31, 2024
|
| | | | 46,273,132 | | | | | $ | 1.12 | | | | | | | | | | | | | | | | | | 9.61 | | |
|
Vested & Exercisable
|
| | | | 148,500 | | | | | $ | 1.00 | | | | | | | | | | | | | | | | | | 5.84 | | |
| | |||||||||||||||||||||||||||||||
| | | |
For the Years Ended December 31,
|
| |||||||||||||||||||||
| | | |
2024
|
| |
2023
|
| ||||||||||||||||||
| | | |
Units
|
| |
Weighted-Average
Grant-Date Fair Value |
| |
Units
|
| |
Weighted-Average
Grant-Date Fair Value |
| ||||||||||||
| Non-vested | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Beginning Balance
|
| | | | 66,700 | | | | | $ | 0.99 | | | | | | 100,000 | | | | | $ | 0.99 | | |
|
Granted
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
|
Vested
|
| | | | (33,300) | | | | | $ | 0.99 | | | | | | (33,300) | | | | | $ | 0.99 | | |
|
Forfeited
|
| | | | — | | | | | | | | | | | | — | | | | | | — | | |
|
Closing Balance
|
| | | | 33,400 | | | | | $ | 0.99 | | | | | | 66,700 | | | | | $ | 0.99 | | |
| | |||||||||||||||||||||||||
| | | | |
For the Years Ended December 31,
|
| |||||||||
| | | | |
2024
|
| |
2023
|
| ||||||
| | | | |
(in thousands)
|
| |||||||||
| | Revenues | | | | ||||||||||
| |
Net premiums earned
|
| | | $ | 290,635 | | | | | $ | 231,464 | | |
| |
Fee income
|
| | | | 918 | | | | | | 660 | | |
| |
Net investment income
|
| | | | 24,046 | | | | | | 11,366 | | |
| |
Net realized and unrealized gains (losses) on investments
|
| | | | 28,140 | | | | | | (2,269) | | |
| |
Other income
|
| | | | 95 | | | | | | 95 | | |
| |
Total revenues
|
| | | | 343,834 | | | | | | 241,316 | | |
| | Expenses | | | | | | | | | | | | | |
| |
Losses and loss adjustment expenses
|
| | | | 175,234 | | | | | | 154,107 | | |
| |
Policy acquisition costs
|
| | | | 60,692 | | | | | | 46,201 | | |
| |
Other operating and general expenses
|
| | | | 37,875 | | | | | | 25,955 | | |
| |
Interest expense
|
| | | | 2,042 | | | | | | 2,237 | | |
| |
Other expenses
|
| | | | 1,727 | | | | | | 196 | | |
| |
Total expenses
|
| | | | 277,570 | | | | | | 228,695 | | |
| |
Income before income taxes
|
| | | | 66,264 | | | | | | 12,621 | | |
| |
Income tax expense
|
| | | | 12,317 | | | | | | 2,518 | | |
| |
Net income
|
| | | | 53,947 | | | | | | 10,103 | | |
| |
Less: Net income attributable to non-controlling interest-General Partner
|
| | | | 6,858 | | | | | | 55 | | |
| |
Segment net income
|
| | | $ | 47,089 | | | | | $ | 10,048 | | |
| | Reconciliation of profit or loss: | | | | | | | | | | | | | |
| |
Adjustments and reconciling items
|
| | | | — | | | | | | — | | |
| |
Consolidated net income attributable to members
|
| | | $ | 47,089 | | | | | $ | 10,048 | | |
| | ||||||||||||||
| | | |
For the Years Ended December 31,
|
| |||||||||||||||||||||
| | | |
2024
|
| |
2023
|
| ||||||||||||||||||
| | | |
(in thousands)
|
| |||||||||||||||||||||
|
Product Group
|
| |
Amount
|
| |
% of GWP
|
| |
Amount
|
| |
% of GWP
|
| ||||||||||||
|
Casualty
|
| | | $ | 263,328 | | | | | | 60% | | | | | $ | 203,916 | | | | | | 58% | | |
|
Property
|
| | | | 173,708 | | | | | | 40% | | | | | | 148,675 | | | | | | 42% | | |
|
Total Gross Written Premium
|
| | | $ | 437,036 | | | | | | 100% | | | | | $ | 352,591 | | | | | | 100% | | |
| | |||||||||||||||||||||||||
| | | |
For the Years Ended December 31,
|
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands, except for
units and per unit data) |
| |||||||||
| Numerator: | | | | ||||||||||
|
Net income to Members
|
| | | $ | 47,090 | | | | | $ | 10,048 | | |
|
Income allocable to participating securities
|
| | | | 360 | | | | | | — | | |
|
Net income attributable to Members’ units
|
| | | $ | 46,730 | | | | | $ | 10,048 | | |
| Denominator: | | | | | | | | | | | | | |
|
Weighted-average units outstanding-basic
|
| | | | 393,747,242 | | | | | | 349,938,678 | | |
|
Weighted-average participating securities
|
| | | | (3,009,018) | | | | | | — | | |
|
Weighted-average units outstanding-basic
|
| | | | 390,738,224 | | | | | | 349,938,678 | | |
|
Dilutive effect of share-based compensation
|
| | | | 18,192 | | | | | | 10,121 | | |
|
Weighted-average units outstanding-Diluted
|
| | | | 390,756,416 | | | | | | 349,948,799 | | |
|
Earnings per unit-basic
|
| | | $ | 0.12 | | | | | $ | 0.03 | | |
|
Earnings per unit-diluted
|
| | | $ | 0.12 | | | | | $ | 0.03 | | |
| | |||||||||||||
| | | |
As of and for the years
ended December 31, |
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
|
Statutory net income (loss)
|
| | | $ | 6,011 | | | | | $ | 10,033 | | |
|
Statutory capital and surplus
|
| | | $ | 76,537 | | | | | $ | 66,682 | | |
|
Minimum required statutory capital and surplus
|
| | | $ | 48,000 | | | | | $ | 48,000 | | |
| | | |
For the Years Ended
December 31, |
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
|
Unrealized gains arising during the period, pre-tax
|
| | | $ | 9,377 | | | | | $ | 4,110 | | |
|
Income tax (expense)
|
| | | | (1,964) | | | | | | (864) | | |
|
Unrealized gains arising during the period, net of taxes
|
| | | | 7,413 | | | | | | 3,246 | | |
|
Other comprehensive income
|
| | | $ | 7,413 | | | | | $ | 3,246 | | |
| | |||||||||||||
| | | |
For the Years Ended
December 31, |
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
|
Federal income tax expense at applicable statutory rates (current)
|
| | | $ | 16,728 | | | | | $ | 9,489 | | |
|
Federal income tax (benefit) at applicable statutory rates (deferred)
|
| | | | (4,412) | | | | | | (6,971) | | |
|
Total income tax expense
|
| | | $ | 12,316 | | | | | $ | 2,518 | | |
| | |||||||||||||
| | | |
For the Years Ended, December 31,
|
| |||||||||||||||||||||
| | | |
2024
|
| |
2023
|
| ||||||||||||||||||
| | | |
Amount
|
| |
Percentage
|
| |
Amount
|
| |
Percentage
|
| ||||||||||||
| | | |
(in thousands)
|
| | | | | | | |
(in thousands)
|
| | | | | | | ||||||
|
Income tax expense at federal income tax rate
|
| | | $ | 13,915 | | | | | | 21.0% | | | | | $ | 2,650 | | | | | | 21.0% | | |
|
Other
|
| | | | (1,599) | | | | | | -2.4% | | | | | | (132) | | | | | | -1.0% | | |
|
Income tax expense
|
| | | $ | 12,316 | | | | | | 18.6% | | | | | $ | 2,518 | | | | | | 20.0% | | |
| | |||||||||||||||||||||||||
| | | |
For the Years Ended
December 31, |
| |||||||||
| | | |
2024
|
| |
2023
|
| ||||||
| | | |
(in thousands)
|
| |||||||||
| Deferred tax assets: | | | | ||||||||||
|
Unearned premiums
|
| | | $ | 6,074 | | | | | $ | 5,817 | | |
|
Reserves for unpaid losses and loss adjustment expenses
|
| | | | 4,709 | | | | | | 3,732 | | |
|
Unrealized losses on fixed-maturity securities, available-for-sale
|
| | | | — | | | | | | 1,311 | | |
|
Accrued expenses
|
| | | | 747 | | | | | | 442 | | |
|
Contingent commissions
|
| | | | 3,305 | | | | | | 1,581 | | |
|
Allowance for credit losses
|
| | | | 1,240 | | | | | | 620 | | |
|
Other
|
| | | | 822 | | | | | | 521 | | |
|
Total deferred tax assets
|
| | | | 16,897 | | | | | | 14,024 | | |
| Deferred tax liabilities: | | | | | | | | | | | | | |
|
Deferred policy acquisition costs, net of ceding commissions
|
| | | | (4,526) | | | | | | (4,882) | | |
|
Unrealized gains fixed maturity securities
|
| | | | (582) | | | | | | — | | |
|
Property and equipment
|
| | | | (137) | | | | | | (170) | | |
|
Deferred intercompany gain
|
| | | | (208) | | | | | | — | | |
|
Pass through entities
|
| | | | (1,553) | | | | | | (1,544) | | |
|
Accrued market discount
|
| | | | (221) | | | | | | (207) | | |
|
Total deferred tax liabilities
|
| | | | (7,227) | | | | | | (6,803) | | |
|
Net deferred tax assets
|
| | | $ | 9,670 | | | | | $ | 7,221 | | |
| | |||||||||||||
|
(in thousands)
|
| |
Cost
|
| |
Fair Value
(if applicable) |
| |
Amount on
Balance Sheet |
| |||||||||
| December 31, 2024 | | | | | | | | | | | | | | | | | | | |
| Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | |
|
U.S. Treasury securities and obligations guaranteed by the U.S. Government
|
| | | $ | 84,456 | | | | | $ | 84,195 | | | | | $ | 84,195 | | |
|
Corporate
|
| | | | 349,693 | | | | | | 353,805 | | | | | | 353,805 | | |
|
Commercial and residential mortgage-back and other asset-backed
|
| | | | 816 | | | | | | 752 | | | | | | 752 | | |
|
Total fixed maturity securities, available-for-sale
|
| | | | 434,965 | | | | | | 438,752 | | | | | | 438,752 | | |
|
Short-term investments
|
| | | | 52,612 | | | | | | 52,612 | | | | | | 52,612 | | |
|
Total investments
|
| | | $ | 487,577 | | | | | $ | 491,364 | | | | | $ | 491,364 | | |
| | |||||||||||||||||||
|
(in thousands)
|
| |
Cost
|
| |
Fair Value
(if applicable) |
| |
Amount on
Balance Sheet |
| |||||||||
| December 31, 2023 | | | | | | | | | | | | | | | | | | | |
| Fixed maturity securities, available-for-sale: | | | | | | | | | | | | | | | | | | | |
|
Corporate
|
| | | $ | 68,583 | | | | | $ | 66,985 | | | | | $ | 66,985 | | |
|
Municipal taxable
|
| | | | 12,331 | | | | | | 11,294 | | | | | | 11,294 | | |
|
Commercial mortgage and asset-backed
|
| | | | 22,875 | | | | | | 19,921 | | | | | | 19,921 | | |
|
Total fixed maturity securities, available-for-sale
|
| | | | 103,789 | | | | | | 98,200 | | | | | | 98,200 | | |
| Equity securities: | | | | | | | | | | | | | | | | | | | |
|
Preferred stocks
|
| | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | |
|
Total equity securities
|
| | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | |
|
Total investments
|
| | | $ | 104,789 | | | | | $ | 99,200 | | | | | $ | 99,200 | | |
| | |||||||||||||||||||
| | | |
As of December 31,
|
| |||||||||
|
(in thousands)
|
| |
2024
|
| |
2023
|
| ||||||
| Assets | | | | | | | | | | | | | |
| Investments: | | | | | | | | | | | | | |
|
Fixed maturity securities available-for-sale, at fair value (amortized cost: 2024–$24,350, 2023–$23,182)
|
| | | $ | 25,052 | | | | | $ | 23,835 | | |
|
Equity securities, at fair value (cost: 2024–$0, 2023–$1,000)
|
| | | | — | | | | | | 1,000 | | |
|
Investment in Utility Limited Partnership, at fair value (cost: 2024–$21,168, 2023–$48,045)
|
| | | | 21,168 | | | | | | 48,045 | | |
|
Investment in subsidiaries
|
| | | | 351,723 | | | | | | 228,516 | | |
|
Total investment
|
| | | | 397,943 | | | | | | 301,396 | | |
|
Cash and cash equivalents
|
| | | | 1,041 | | | | | | 32,213 | | |
|
Investment income due and accrued
|
| | | | 372 | | | | | | 19 | | |
|
Receivable from affiliates
|
| | | | 2,087 | | | | | | 1,740 | | |
|
Other assets
|
| | | | 3,504 | | | | | | 371 | | |
|
Total assets
|
| | | $ | 404,947 | | | | | $ | 335,739 | | |
| Liabilities and members’ equity | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | |
|
Securities sold, not yet purchased, at fair value (cost: 2024–$0, 2023–$12,379)
|
| | | | — | | | | | | 12,130 | | |
|
Due to broker
|
| | | | 946 | | | | | | — | | |
|
Accounts payable and accrued expenses
|
| | | | 2,847 | | | | | | 503 | | |
|
Income tax payable
|
| | | | 2,441 | | | | | | 1,137 | | |
|
Deferred income tax liability, net
|
| | | | 406 | | | | | | 272 | | |
|
Total liabilities
|
| | | | 6,640 | | | | | | 14,042 | | |
| Members’ equity: | | | | | | | | | | | | | |
|
Members’ equity
|
| | | | 360,741 | | | | | | 338,634 | | |
|
Retained earnings (deficit)
|
| | | | 34,569 | | | | | | (12,521) | | |
|
Accumulated other comprehensive income (loss)
|
| | | | 2,997 | | | | | | (4,416) | | |
|
Total members’ equity
|
| | | | 398,307 | | | | | | 321,697 | | |
|
Total liabilities and members’ equity
|
| | | $ | 404,947 | | | | | $ | 335,739 | | |
| | |||||||||||||
| | | |
For the Years Ended December 31,
|
| |||||||||
|
(in thousands)
|
| |
2024
|
| |
2023
|
| ||||||
| Revenues: | | | | | | | | | | | | | |
|
Net Investment Income
|
| | | $ | 3,213 | | | | | $ | 908 | | |
|
Net realized and unrealized gains (losses) on investments
|
| | | | 6,403 | | | | | | (100) | | |
|
Total Revenues
|
| | | | 9,616 | | | | | | 808 | | |
| Expenses | | | | | | | | | | | | | |
|
Compensation and benefits
|
| | | | 935 | | | | | | 747 | | |
|
Interest expense
|
| | | | (40) | | | | | | — | | |
|
Other expenses
|
| | | | 50 | | | | | | — | | |
|
Total expenses
|
| | | | 945 | | | | | | 747 | | |
|
Income before income taxes
|
| | | | 8,671 | | | | | | 61 | | |
|
Income tax expense (benefit)
|
| | | | 1,780 | | | | | | (29) | | |
|
Net income before equity in net income of subsidiaries
|
| | | | 6,891 | | | | | | 90 | | |
|
Equity in undistributed earnings of subsidiaries
|
| | | | 40,199 | | | | | | 9,958 | | |
|
Net income
|
| | | | 47,090 | | | | | | 10,048 | | |
| Other comprehensive income: | | | | | | | | | | | | | |
|
Net unrealized gains on securities available for sale
|
| | | | 39 | | | | | | 895 | | |
|
Equity in other comprehensive income of subsidiaries
|
| | | | 7,374 | | | | | | 2,351 | | |
|
Total comprehensive income
|
| | | $ | 54,503 | | | | | $ | 13,294 | | |
| | |||||||||||||
| | | |
For the Years Ended December 31,
|
| |||||||||
|
(in thousands)
|
| |
2024
|
| |
2023
|
| ||||||
| OPERATING ACTIVITIES | | | | | | | | | | | | | |
|
Net income
|
| | | $ | 47,090 | | | | | | 10,048 | | |
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
| | | | | | | | | | | | |
|
Realized and unrealized gains (losses) on investments
|
| | | | (5,850) | | | | | | — | | |
|
Amortization of premium on fixed maturity securities, available-for-sale
|
| | | | (38) | | | | | | — | | |
|
Net investment income (loss)
|
| | | | (1,299) | | | | | | 469 | | |
|
Net realized gain and unrealized appreciation on securities sold, not yet purchased
|
| | | | (379) | | | | | | (155) | | |
|
Depreciation and amortization
|
| | | | (2) | | | | | | — | | |
|
Share-based compensation
|
| | | | — | | | | | | 244 | | |
|
Equity in undistributed earnings of subsidiaries
|
| | | | (40,199) | | | | | | (9,958) | | |
|
Change in operating assets and liabilities:
|
| | | | | | | | | | | | |
|
Deferred income taxes
|
| | | | 123 | | | | | | (412) | | |
|
Investment income due and accrued
|
| | | | (304) | | | | | | 121 | | |
|
Other assets
|
| | | | (3,503) | | | | | | — | | |
|
Receivables from affiliates
|
| | | | (347) | | | | | | 260 | | |
|
Accounts payable and accrued expenses
|
| | | | 2,345 | | | | | | 503 | | |
|
Income tax payable
|
| | | | 1,304 | | | | | | 123 | | |
|
Net cash (used in) provided by operating activities
|
| | | | (1,059) | | | | | | 1,243 | | |
| INVESTING ACTIVITIES | | | | | | | | | | | | | |
|
Purchase of fixed maturity securities, available-for-sale
|
| | | | (230) | | | | | | (136,964) | | |
|
Proceeds from sale of fixed maturity securities, available-for-sale
|
| | | | 12,071 | | | | | | 122,769 | | |
|
Sale of equity securities
|
| | | | — | | | | | | (1,000) | | |
|
Change in Treasury bills, net
|
| | | | (39,199) | | | | | | — | | |
|
Change in short-term investments, net
|
| | | | (3,467) | | | | | | — | | |
|
Purchases to cover securities sold, not yet purchased
|
| | | | 1,210 | | | | | | (56,974) | | |
|
Proceeds from sale of securities sold, not yet purchased
|
| | | | (348) | | | | | | 67,703 | | |
|
Purchase of investment in subsidiaries
|
| | | | (31,928) | | | | | | (15,000) | | |
|
Redemptions of investment in the Utility Limited Partnership
|
| | | | 31,778 | | | | | | 15,000 | | |
|
Net cash used in investing activities
|
| | | | (30,113) | | | | | | (4,466) | | |
| FINANCING ACTIVITIES | | | | | | | | | | | | | |
|
Issuance of member units
|
| | | | — | | | | | | 35,000 | | |
|
Net cash provided by financing activities
|
| | | | — | | | | | | 35,000 | | |
|
Net change in cash and cash equivalents
|
| | | | (31,172) | | | | | | 31,777 | | |
|
Cash and cash equivalents, at beginning of period
|
| | | | 32,213 | | | | | | 436 | | |
|
Cash and cash equivalents, at end of period
|
| | | $ | 1,041 | | | | | $ | 32,213 | | |
| Supplementary cash flow information: | | | | | | | | | | | | | |
|
Cash paid for interest
|
| | | $ | — | | | | | $ | — | | |
|
Cash paid for taxes
|
| | | $ | — | | | | | $ | — | | |
| Supplementary non-cash investing and financing activities: | | | | | | | | | | | | | |
|
Member units issued
|
| | | $ | 20,100 | | | | | $ | — | | |
| | | |
As of December 31, 2024
|
| |||||||||||||||
|
(in thousands)
|
| |
As Previously
Reported |
| |
Restatement
Adjustment |
| |
As Restated
|
| |||||||||
| Assets | | | | | | | | | | | | | | | | | | | |
| Investments: | | | | | | | | | | | | | | | | | | | |
|
Investment in subsidiaries
|
| | | $ | 351,613 | | | | | $ | 110 | | | | | $ | 351,723 | | |
|
Total investments
|
| | | | 397,833 | | | | | | 110 | | | | | | 397,943 | | |
|
Total assets
|
| | | $ | 404,837 | | | | | $ | 110 | | | | | $ | 404,947 | | |
| Liabilities and members’ equity | | | | | | | | | | | | | | | | | | | |
|
Total liabilities
|
| | | | 6,640 | | | | | | — | | | | | | 6,640 | | |
| Members’ equity: | | | | | | | | | | | | | | | | | | | |
|
Members’ equity
|
| | | | 360,741 | | | | | | — | | | | | | 360,741 | | |
|
Retained earnings
|
| | | | 12,971 | | | | | | 21,598 | | | | | | 34,569 | | |
|
Accumulated other comprehensive income
|
| | | | 24,485 | | | | | | (21,488) | | | | | | 2,997 | | |
|
Total members’ equity
|
| | | | 398,197 | | | | | | 110 | | | | | | 398,307 | | |
|
Total liabilities and members’ equity
|
| | | $ | 404,837 | | | | | $ | 110 | | | | | $ | 404,947 | | |
| | |||||||||||||||||||
| | | |
As of December 31, 2023
|
| |||||||||||||||
|
(in thousands)
|
| |
As Previously
Reported |
| |
Restatement
Adjustment |
| |
As Restated
|
| |||||||||
| Assets | | | | | | | | | | | | | | | | | | | |
| Investments: | | | | | | | | | | | | | | | | | | | |
|
Investment in subsidiaries
|
| | | $ | 228,296 | | | | | $ | 220 | | | | | $ | 228,516 | | |
|
Total investments
|
| | | | 301,176 | | | | | | 220 | | | | | | 301,396 | | |
|
Total assets
|
| | | $ | 335,519 | | | | | $ | 220 | | | | | $ | 335,739 | | |
| Liabilities and members’ equity | | | | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | |
|
Total liabilities
|
| | | | 14,042 | | | | | | — | | | | | | 14,042 | | |
| Members’ equity: | | | | | | | | | | | | | | | | | | | |
|
Members’ equity
|
| | | | 338,635 | | | | | | (1) | | | | | | 338,634 | | |
|
Retained earnings (deficit)
|
| | | | 6,080 | | | | | | (18,601) | | | | | | (12,521) | | |
|
Accumulated other comprehensive loss
|
| | | | (23,238) | | | | | | 18,822 | | | | | | (4,416) | | |
|
Total members’ equity
|
| | | | 321,477 | | | | | | 220 | | | | | | 321,697 | | |
|
Total liabilities and members’ equity
|
| | | $ | 335,519 | | | | | $ | 220 | | | | | $ | 335,739 | | |
| | |||||||||||||||||||
| | | |
For the Year Ended December 31, 2024
|
| |||||||||||||||
|
(in thousands)
|
| |
As Previously
Reported |
| |
Restatement
Adjustment |
| |
As Restated
|
| |||||||||
|
Income before income taxes
|
| | | $ | 8,671 | | | | | $ | — | | | | | $ | 8,671 | | |
|
Income tax expense
|
| | | | 1,780 | | | | | | — | | | | | | 1,780 | | |
|
Net income before equity in net income of subsidiaries
|
| | | | 6,891 | | | | | | — | | | | | | 6,891 | | |
|
Equity in undistributed earnings of subsidiaries
|
| | | | — | | | | | | 40,199 | | | | | | 40,199 | | |
|
Net income
|
| | | | 6,891 | | | | | | 40,199 | | | | | | 47,090 | | |
| Other comprehensive income: | | | | | | | | | | | | | | | | | | | |
|
Net unrealized (losses) gains on fixed maturity securities available-for-sale
|
| | | | (1,019) | | | | | | 1,058 | | | | | | 39 | | |
|
Equity in other comprehensive income (loss) of subsidiaries
|
| | | | 8,869 | | | | | | (1,495) | | | | | | 7,374 | | |
|
Total comprehensive income
|
| | | $ | 14,741 | | | | | $ | 39,762 | | | | | $ | 54,503 | | |
| | |||||||||||||||||||
| | | |
For the Year Ended December 31, 2023
|
| |||||||||||||||
|
(in thousands)
|
| |
As Previously
Reported |
| |
Restatement
Adjustment |
| |
As Restated
|
| |||||||||
|
Income before income taxes
|
| | | $ | 61 | | | | | $ | — | | | | | $ | 61 | | |
|
Income tax expense
|
| | | | (29) | | | | | | — | | | | | | (29) | | |
|
Net income before equity in net income of subsidiaries
|
| | | | 90 | | | | | | — | | | | | | 90 | | |
|
Equity in undistributed earnings of subsidiaries
|
| | | | — | | | | | | 9,958 | | | | | | 9,958 | | |
|
Net income
|
| | | | 90 | | | | | | 9,958 | | | | | | 10,048 | | |
| Other comprehensive income: | | | | | | | | | | | | | | | | | | | |
|
Net unrealized gains on fixed maturity securities available-for-sale
|
| | | | 895 | | | | | | — | | | | | | 895 | | |
|
Equity in other comprehensive income (loss) of subsidiaries
|
| | | | 12,089 | | | | | | (9,738) | | | | | | 2,351 | | |
|
Total comprehensive income
|
| | | $ | 13,074 | | | | | $ | 220 | | | | | $ | 13,294 | | |
| | |||||||||||||||||||
| | | |
For the Year Ended December 31, 2024
|
| |||||||||||||||
|
(in thousands)
|
| |
As Previously
Reported |
| |
Restatement
Adjustment |
| |
As Restated
|
| |||||||||
| OPERATING ACTIVITIES | | | | | | | | | | | | | | | | | | | |
|
Net income
|
| | | $ | 6,891 | | | | | $ | 40,199 | | | | | $ | 47,090 | | |
|
Adjustments to reconcilie net income to net cash provided by operating activities:
|
| | | | | | | | | | | | | | | | | | |
|
Unrealized gains (losses) on investments in subsidiaries
|
| | | | (949) | | | | | | 949 | | | | | | — | | |
|
Unrealized gains (losses) on investments
|
| | | | — | | | | | | (5,850) | | | | | | (5,850) | | |
|
Net investment income
|
| | | | — | | | | | | (1,299) | | | | | | (1,299) | | |
|
Net unrealized gains on investment in Utility Limited
Partnership |
| | | | (6,200) | | | | | | 6,200 | | | | | | — | | |
|
Equity in undistributed earnings of subsidiaries
|
| | | | — | | | | | | (40,199) | | | | | | (40,199) | | |
|
Net cash used in operating activities
|
| | |
|
(1,059)
|
| | | |
|
—
|
| | | |
|
(1,059)
|
| |
|
Net change in cash and cash equivalents
|
| | | | (31,172) | | | | | | — | | | | | | (31,172) | | |
|
Cash and cash equivalents, at beginning of period
|
| | | | 32,213 | | | | | | — | | | | | | 32,213 | | |
|
Cash and cash equivalents, at end of period
|
| | | $ | 1,041 | | | | | $ | — | | | | | $ | 1,041 | | |
| | |||||||||||||||||||
| | | |
For the Year Ended December 31, 2023
|
| |||||||||||||||
|
(in thousands)
|
| |
As Previously
Reported |
| |
Restatement
Adjustment |
| |
As Restated
|
| |||||||||
| OPERATING ACTIVITIES | | | | | | | | | | | | | | | | | | | |
|
Net income
|
| | | $ | 90 | | | | | $ | 9,958 | | | | | $ | 10,048 | | |
|
Adjustments to reconcilie net income to net cash provided by operating activities:
|
| | | | | | | | | | | | | | | | | | |
|
Equity in undistributed earnings of subsidiaries
|
| | | | — | | | | | | (9,958) | | | | | | (9,958) | | |
|
Net cash provided by (used in) operating activities
|
| | | | 1,243 | | | | | | — | | | | | | 1,243 | | |
|
Net change in cash and cash equivalents
|
| | | | 31,777 | | | | | | — | | | | | | 31,777 | | |
|
Cash and cash equivalents, at beginning of period
|
| | | | 436 | | | | | | — | | | | | | 436 | | |
|
Cash and cash equivalents, at end of period
|
| | | $ | 32,213 | | | | | $ | — | | | | | $ | 32,213 | | |
| | |||||||||||||||||||
|
(in thousands)
|
| |
Valuation
Allowance for Deferred Tax Assets |
| |
Allowance for
Uncollectible Reinsurance Recoverable |
| |
Allowance for
Uncollectible Premium Receivable |
| |||||||||
|
Balance at January 1, 2023
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
|
Charged to costs and expenses
|
| | | | — | | | | | | — | | | | | | 2,953 | | |
|
Balance at December 31, 2023
|
| | | $ | — | | | | | $ | — | | | | | $ | 2,953 | | |
|
Charged to costs and expenses
|
| | | | — | | | | | | — | | | | | | 2,954 | | |
|
Balance at December 31, 2024
|
| | | $ | — | | | | | $ | — | | | | | $ | 5,907 | | |
| | |||||||||||||||||||
| | | |
As of and For the Years Ended
December 31, |
| |||||||||
|
(in thousands)
|
| |
2024
|
| |
2023
|
| ||||||
|
Deferred policy acquisition costs, net of ceding commissions(1)
|
| | | | 21,552 | | | | | | 23,245 | | |
|
Reserves for unpaid losses and loss adjustment expenses
|
| | | | 403,576 | | | | | | 320,936 | | |
|
Unearned premiums
|
| | | | 212,828 | | | | | | 173,905 | | |
|
Net earned premium(1)
|
| | | | 290,635 | | | | | | 231,464 | | |
|
Net investment income
|
| | | | 24,046 | | | | | | 11,366 | | |
|
Loss and loss adjustment expenses(1)
|
| | | | 175,234 | | | | | | 154,107 | | |
|
Loss and loss adjustment expenses prior year(1)
|
| | | | 5,418 | | | | | | 17,238 | | |
|
Amortization of policy acquisition costs(1)
|
| | | | 49,746 | | | | | | 44,065 | | |
|
Paid claims and claim adjustment expenses(1)
|
| | | | 113,356 | | | | | | 111,972 | | |
|
Net premiums written(1)
|
| | | | 299,206 | | | | | | 268,216 | | |
|
Ceded unearned premium
|
| | | | 68,205 | | | | | | 37,852 | | |
|
Deferred ceding commission
|
| | | | 15,258 | | | | | | 6,030 | | |
| | J.P. Morgan | | | | | |
Barclays
|
|
| | Citigroup | | | TD Securities | | |
Wells Fargo Securities
|
|
| |
Securities and Exchange Commission registration fee
|
| | | $ | 18,780 | | |
| |
Financial Industry Regulatory Authority, Inc. (FINRA) filing fee
|
| | | | 18,900 | | |
| |
Stock exchange listing fee
|
| | | | 325,000 | | |
| |
Printing and engraving expenses
|
| | | | 310,000 | | |
| |
Legal fees and expenses
|
| | | | 2,850,000 | | |
| |
Accounting fees and expenses
|
| | | | 3,300,000 | | |
| |
Miscellaneous expenses
|
| | | | 4,000 | | |
| |
Total
|
| | | $ | 6,826,680 | | |
| | ||||||||
| |
Exhibit
number |
| |
Description
|
|
| | 1.1* | | | | |
| | 3.1* | | | | |
| | 3.2* | | | | |
| | 5.1 | | | | |
| | 10.1*§ | | | | |
| | 10.2*§ | | | | |
| | 10.3*# | | | | |
| | 10.4# | | | | |
| | 10.5*# | | | | |
| | 10.6*§ | | | | |
| | 10.7+ | | | | |
| | 10.8* | | | | |
| | 10.9*+ | | | | |
| | 10.10* | | | Tax Allocation Agreement, dated as of April 1, 2018, by and among Ategrity Specialty Holdings LLC, Ategrity Specialty Insurance Company, Ategrity Specialty Insurance Limited and Zimmer Financial Services Group LLC. | |
| | 10.11* | | | | |
| | 10.12* | | | Amended and Restated Limited Partnership Agreement, dated as of April 1, 2018, by and among ZP Utility Insurance Fund, L.P., ZP Utility Insurance GP, LLC, as general partner, and Ategrity Specialty Insurance Company and Ategrity Specialty Insurance Limited, as limited partners. | |
| | 10.13*+ | | | | |
| | 10.14*+ | | | | |
| | 10.15*+ | | | | |
| | 10.16*§ | | | | |
| | 10.17*§ | | | | |
| | 10.18*§ | | | | |
| | 10.19* | | | | |
| | 10.20*+§ | | | |
| |
Exhibit
number |
| |
Description
|
|
| | 10.21* | | | | |
| | 21.1* | | | | |
| | 23.1 | | | | |
| | 23.2 | | | | |
| | 24.1* | | | | |
| | 99.1* | | | | |
| | 99.2* | | | | |
| | 99.3* | | | | |
| | 99.4* | | | | |
| | 107.1 | | | |
| |
Signature
|
| |
Title
|
| |
Date
|
|
| |
/s/ Justin Cohen
Justin Cohen
|
| |
Chief Executive Officer and Director
(Principal Executive Officer) |
| |
June 3, 2025
|
|
| |
/s/ Neelam Patel
Neelam Patel
|
| |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
| |
June 3, 2025
|
|
| |
*
Stuart J. Zimmer
|
| |
Director, Chair
|
| |
June 3, 2025
|
|
| |
*
Tom Hulst
|
| |
Director
|
| |
June 3, 2025
|
|
| |
*By:
/s/ Justin Cohen
Attorney-in-fact
|
| | | | | | |
Exhibit 5.1
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Brownstein Hyatt Farber Schreck, LLP 702.382.2101 main |
June 3, 2025
Ategrity Specialty Holdings LLC
9 West 57th Street, 33rd Floor
New York, New York 10019
To the addressee set forth above:
We have acted as local Nevada counsel to Ategrity Specialty Holdings LLC, a Delaware limited liability company (the “Company”), in connection with the filing by the Company of Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-286059) (as so amended, the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), including the preliminary prospectus contained therein (the “Prospectus”), relating to the offering and sale by the Company, after its conversion from a Delaware limited liability company to Ategrity Specialty Insurance Company Holdings, a Nevada corporation (the “Nevada Corporation”, and such conversion, the “Conversion”), pursuant to an underwriting agreement by and between the Company and J.P. Morgan Securities LLC and Barclays Capital Inc., as representatives of the underwriters (the “Underwriting Agreement”), of up to 6,666,667 shares (the “Firm Shares”) of the Nevada Corporation’s common stock, par value $0.001 per share (the “Common Stock”), and up to an additional 1,000,000 shares of Common Stock (the “Option Shares” and, together with the Firm Shares, the “Shares”) pursuant to an over-allotment option under the Underwriting Agreement. This opinion letter is being furnished at your request in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.
In our capacity as such counsel, we are familiar with the proceedings taken and proposed to be taken by the Company and the Nevada Corporation in connection with the registration of the Shares as described in the Registration Statement and the Prospectus. For purposes of this opinion letter, and except to the extent set forth in the opinion paragraph below, we have assumed that all such proceedings have been timely completed or will be timely completed in the manner presently proposed in the Registration Statement and the Prospectus.
For purposes of issuing this opinion letter, we have made such legal and factual examinations and inquiries, including an examination of originals or copies certified or otherwise identified to our satisfaction as being true copies of (i) the Registration Statement (including the Prospectus), (ii) the forms of the articles of incorporation and bylaws of the Nevada Corporation filed as exhibits to the Registration Statement (collectively, the “Governing Documents”), (iii) the form of the Underwriting Agreement filed as an exhibit to the Registration Statement, and (iv) such agreements, instruments and other documents, or forms thereof, as we have deemed necessary or appropriate, and we have obtained from officers and other representatives and agents of the Company, and have relied upon, such certificates, representations and assurances as we have deemed necessary or appropriate.
Ategrity Specialty Holdings LLC
June 3, 2025
Page 2
Without limiting the generality of the foregoing, in our examination and in issuing this opinion letter, we have, with your permission, assumed without independent verification that (i) the Underwriting Agreement has been or will be duly authorized, executed and delivered by each party thereto, in substantially the form thereof filed as an exhibit to the Registration Statement; (ii) the obligations of each party set forth in the Underwriting Agreement will be its valid and binding obligations, enforceable in accordance with their respective terms; (iii) (A) the Company has taken or will take all limited liability company action required under Delaware law in connection with the authorization, execution and delivery of the Underwriting Agreement, (B) the Conversion will be effective under the laws of the State of Delaware and the laws of the State of Nevada prior to any issuance of Shares, (C) each of the Governing Documents, in the respective forms thereofof that have been filed as exhibits to the Registration Statement, will be effective and in full force and effect prior to any issuance of Shares, and (D) all Shares will be offered, issued and sold in compliance with all applicable laws, the Governing Documents and the Underwriting Agreement (romanettes (iii)(A) through (iii)(D) above are referred to collectively herein as the “Corporate Proceedings”)); (iv) except to the extent set forth in the opinion paragraph below, the statements of fact and representations and warranties set forth in the documents we have reviewed, including the Underwriting Agreement, are or will at all relevant times be, true and correct as to factual matters; (v) each natural person executing a document, at the time of such execution, has or will have sufficient legal capacity to do so; and (vi) all documents submitted to us as originals are authentic, the signatures on all documents that we have examined are genuine, and all documents submitted to us as certified, conformed, photostatic, electronic or facsimile copies conform to the original documents.
We are qualified to practice law in the State of Nevada. The opinion set forth herein is expressly limited to and based exclusively on the general corporate laws of the State of Nevada, and we do not purport to be experts on, or to express any opinion with respect to the applicability thereto or the effect thereon of, the laws of any other jurisdiction. We express no opinion concerning, and we assume no responsibility as to laws or judicial decisions related to, or any orders, consents or other authorizations or approvals as may be required by, any federal laws, rules or regulations, including, without limitation, any federal securities laws, rules or regulations, or any state securities or “blue sky” laws, rules or regulations.
Ategrity Specialty Holdings LLC
June 3, 2025
Page 3
Based upon the foregoing and in reliance thereon, and having regard to legal considerations and other information that we deem relevant, we are of the opinion that if and when all Corporate Proceedings have been taken and completed, including in respect of any offering, issuance or sale of the Shares, the Shares will be duly authorized by the Nevada Corporation, and if, when and to the extent such Shares are issued and sold in accordance with all applicable terms and conditions set forth in, and in the manner contemplated by, the Underwriting Agreement (including payment in full of any and all consideration required for such Shares as prescribed thereunder), and as described in the Registration Statement and the Prospectus, such Shares will be validly issued, fully paid and nonassessable.
The opinion expressed herein is based upon the applicable laws of the State of Nevada and the facts in existence on the date hereof. In delivering this opinion letter to you, we disclaim any obligation to update or supplement the opinion set forth herein or to apprise you of any changes in such laws or facts after such time as the Registration Statement is declared effective. No opinion is offered or implied as to any matter, and no inference may be drawn, beyond the strict scope of the specific issues expressly addressed by the opinion set forth herein.
We consent to your filing this opinion letter as an exhibit to the Registration Statement and to the reference to our firmin the Prospectus under the heading “Legal Matters”. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Brownstein Hyatt Farber Schreck, LLP
Exhibit 10.4
|
ATEGRITY SPECIALTY INSURANCE COMPANY HOLDINGS 2025 INCENTIVE AWARD PLAN |
ARTICLE I.
Purpose
The Plan’s purpose is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. Capitalized terms used in the Plan are defined in Article XI.
ARTICLE II.
Eligibility
Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein.
ARTICLE III.
Administration and Delegation
3.1 Administration. The Plan is administered by the Administrator. The Administrator has authority to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations in the Plan. The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable. The Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award Agreement as it deems necessary or appropriate to administer the Plan and any Awards. The Administrator’s determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.
3.2 Appointment of Committees. To the extent Applicable Laws permit, the Board may delegate any or all of its powers under the Plan to one or more Committees or officers of the Company or any of its Subsidiaries. The Board may abolish any Committee or re-vest in itself any previously delegated authority at any time.
ARTICLE IV.
Stock Available for Awards
4.1 Number of Shares. Subject to adjustment under Article VIII and the terms of this Article IV, Awards may be made under the Plan covering up to the Overall Share Limit. As of the Plan’s effective date under Section 10.3, the Company will cease granting awards under the Prior Plan; however, Prior Plan Awards will remain subject to the terms and conditions of the Prior Plan. Shares issued under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares.
4.2 Share Recycling. If all or any part of an Award or Prior Plan Award expires, lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised/settled or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award or Prior Plan Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award or Prior Plan Award, the unused Shares covered by the Award or Prior Plan Award will, as applicable, become or again be available for Award grants under the Plan. Further, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award or Prior Plan Award and/or to satisfy any applicable tax withholding obligation (including Shares retained by the Company from the Award or Prior Plan Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards or Prior Plan Awards shall not count against the Overall Share Limit.
1
4.3 Incentive Stock Option Limitations. Notwithstanding anything to the contrary herein, no more than 268,292 Shares may be issued pursuant to the exercise of Incentive Stock Options.
4.4 Substitute Awards. In connection with an entity’s merger or consolidation with the Company or the Company’s acquisition of an entity’s property or stock, the Administrator may grant Awards in substitution for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate. Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan. Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Service Providers prior to such acquisition or combination.
4.5 Non-Employee Director Compensation. Notwithstanding any provision to the contrary in the Plan, the Administrator may establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan. The Administrator will from time to time determine the terms, conditions and amounts of all such non-employee Director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time; provided that, the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any fiscal year of the Company may not exceed $750,000, increased to $1,000,000 in the fiscal year in which the Plan’s effective date occurs or in the fiscal year of a non-employee Director’s initial service as a non-employee Director. The Administrator may make exceptions to this limit for individual non-employee Directors in extraordinary circumstances, as the Administrator may determine in its discretion, provided that the non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee Directors.
2
ARTICLE V.
Stock Options and Stock Appreciation Rights
5.1 General. The Administrator may grant Options or Stock Appreciation Rights to Service Providers subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive Stock Options. The Administrator will determine the number of Shares covered by each Option and Stock Appreciation Right, the exercise price of each Option and Stock Appreciation Right and the conditions and limitations applicable to the exercise of each Option and Stock Appreciation Right. A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine or provide in the Award Agreement.
5.2 Exercise Price. The Administrator will establish each Option’s and Stock Appreciation Right’s exercise price and specify the exercise price in the Award Agreement. Unless otherwise determined by the Administrator, the exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option or Stock Appreciation Right.
5.3 Duration. Each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that the term of an Option or Stock Appreciation Right will not exceed ten years. Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Stock Appreciation Right (other than an Incentive Stock Option) (i) the exercise of the Option or Stock Appreciation Right is prohibited by Applicable Laws, as determined by the Company, or (ii) Shares may not be purchased or sold by the applicable Participant due to any Company insider trading policy (including blackout periods) or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be automatically extended until the date that is thirty (30) days after the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option or Stock Appreciation Right. Notwithstanding the foregoing, if the Participant, prior to the end of the term of an Option or Stock Appreciation Right, violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right of the Participant and the Participant’s transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall terminate immediately upon such violation, unless the Company otherwise determines. In addition, if, prior to the end of the term of an Option or Stock Appreciation Right, the Participant is given notice by the Company or any of its Subsidiaries of the Participant’s Termination of Service by the Company or any of its Subsidiaries for Cause, and the effective date of such Termination of Service is subsequent to the date of the delivery of such notice, the right of the Participant and the Participant’s transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s service as a Service Provider will not be terminated for Cause as provided in such notice or (ii) the effective date of the Participant’s Termination of Service by the Company or any of its Subsidiaries for Cause (in which case the right of the Participant and the Participant’s transferees to exercise any Option or Stock Appreciation Right issued to the Participant will terminate immediately upon the effective date of such Termination of Service).
3
5.4 Exercise. Options and Stock Appreciation Rights may be exercised by delivering to the Company a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise the Option or Stock Appreciation Right, together with, as applicable, payment in full (i) as specified in Section 5.5 for the number of Shares for which the Award is exercised and (ii) as specified in Section 9.5 for any applicable taxes. Unless the Administrator otherwise determines, an Option or Stock Appreciation Right may not be exercised for a fraction of a Share.
5.5 Payment Upon Exercise. Subject to Section 10.8, any Company insider trading policy (including blackout periods) and Applicable Laws, the exercise price of an Option must be paid by:
(a) cash, wire transfer of immediately available funds or by check payable to the order of the Company, provided that the Company may limit the use of one of the foregoing payment forms if one or more of the payment forms below is permitted;
(b) if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;
(c) to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value;
(d) to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date;
(e) to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines is good and valuable consideration; or
(f) to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator.
ARTICLE VI.
Restricted Stock; Restricted Stock Units
6.1 General. The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to the Company’s right to repurchase all or part of such Shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such Shares) if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award. In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement. The Administrator will determine and set forth in the Award Agreement the terms and conditions for each Restricted Stock and Restricted Stock Unit Award, subject to the conditions and limitations contained in the Plan.
4
6.2 Restricted Stock.
(a) Dividends. Participants holding Shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such Shares, unless the Administrator provides otherwise in the Award Agreement. In addition, unless the Administrator provides otherwise, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Common Stock of property other than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
(b) Stock Certificates. The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of Shares of Restricted Stock, together with a stock power endorsed in blank.
6.3 Restricted Stock Units.
(a) Settlement. The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election, in a manner intended to comply with Section 409A.
(b) Stockholder Rights. A Participant will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until the Shares are delivered in settlement of the Restricted Stock Unit.
(c) Dividend Equivalents. If the Administrator provides, a grant of Restricted Stock Units may provide a Participant with the right to receive Dividend Equivalents. Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Restricted Stock Units with respect to which the Dividend Equivalents are granted and subject to other terms and conditions as set forth in the Award Agreement.
ARTICLE VII.
Other Stock or Cash Based Awards
Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock or Cash Based Awards may be paid in Shares, cash or other property, or any combination of the foregoing, as the Administrator determines. Subject to the provisions of the Plan, the Administrator will determine the terms and conditions of each Other Stock or Cash Based Award, including any purchase price, performance goal(s) (which may be based on the Performance Criteria), transfer restrictions, and vesting conditions, which will be set forth in the applicable Award Agreement.
5
ARTICLE VIII.
Adjustments for Changes in Common Stock
and Certain Other Events
8.1 Equity Restructuring. In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article VIII, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include adjusting the number and type of securities subject to each outstanding Award and/or the Award’s exercise price or grant price (if applicable), granting new Awards to Participants, and making a cash payment to Participants. The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.
8.2 Corporate Transactions. In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Laws or accounting principles may be made within a reasonable period of time after such change), is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:
(a) To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;
(b) To provide that such Award shall vest and, to the extent applicable, be exercisable as to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;
(c) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;
(d) To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV hereof on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price or applicable performance goals), and the criteria included in, outstanding Awards;
(e) To replace such Award with other rights or property selected by the Administrator; and/or
(f) To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.
6
8.3 Administrative Stand Still. In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the share price of Common Stock, including any Equity Restructuring or any securities offering or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award for up to sixty days before or after such transaction.
8.4 General. Except as expressly provided in the Plan or the Administrator’s action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation. Except as expressly provided with respect to an Equity Restructuring under Section 8.1 above or the Administrator’s action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award’s grant or exercise price. The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company’s right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares. The Administrator may treat Participants and Awards (or portions thereof) differently under this Article VIII.
ARTICLE IX.
General Provisions Applicable to Awards
9.1 Transferability. Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Stock Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except by will or the laws of descent and distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, will include references to a Participant’s authorized transferee that the Administrator specifically approves.
9.2 Documentation. Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. Each Award may contain terms and conditions in addition to those set forth in the Plan.
9.3 Discretion. Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.
9.4 Termination of Status. The Administrator will determine how a Participant’s Disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant’s Service Provider status affects an Award (including whether and when a Termination of Service has occurred) and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.
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9.5 Withholding. Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by Applicable Laws to be withheld in connection with such Participant’s Awards by the date of the event creating the tax liability. The Company may deduct an amount sufficient to satisfy such tax obligations based on the applicable statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs) from any payment of any kind otherwise due to a Participant. Subject to Section 10.8 and any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company, provided that the Company may limit the use of the foregoing payment forms if one or more of the payment forms below is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares retained from the Award creating the tax obligation, valued at their fair market value, (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to satisfy the tax obligations, or (B) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to satisfy the tax withholding; provided that such amount is paid to the Company at such time as may be required by the Administrator, or (iv) to the extent permitted by the Administrator, any combination of the foregoing payment forms approved by the Company. If any tax withholding obligation will be satisfied under clause (ii) of the immediately preceding sentence by the Company’s retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant’s behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant’s acceptance of an Award under the Plan will constitute the Participant’s authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.
9.6 Amendment of Award; Repricing. The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Stock Option to a Non-Qualified Stock Option. The Participant’s consent to such action will be required unless (i) the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Award, or (ii) the change is permitted under Article VIII or pursuant to Section 10.6. Further, the Administrator may, without the approval of the stockholders of the Company, reduce the exercise price per share of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an exercise price per share that is less than the exercise price per share of the original Options or Stock Appreciation Rights.
9.7 Conditions on Delivery of Stock. The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Company’s satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy any Applicable Laws. The Company’s inability to obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained.
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9.8 Acceleration. The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.
9.9 Additional Terms of Incentive Stock Options. The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Option’s grant date, and the term of the Option will not exceed five years. All Incentive Stock Options will be subject to and construed consistently with Section 422 of the Code. By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (i) two years from the grant date of the Option or (ii) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer. Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or ceases to qualify as an “incentive stock option” under Section 422 of the Code. Any Incentive Stock Option or portion thereof that fails to qualify as an “incentive stock option” under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Stock Option.
ARTICLE X.
Miscellaneous
10.1 No Right to Employment or Other Status. No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement.
10.2 No Rights as Stockholder; Certificates. Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares. Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). The Company may place legends on stock certificates issued under the Plan that the Administrator deems necessary or appropriate to comply with Applicable Laws.
10.3 Effective Date and Term of Plan. Unless earlier terminated by the Board, the Plan will become effective on the day prior to the Public Trading Date and will remain in effect until the tenth anniversary of the earlier of (i) the date the Board adopted the Plan or (ii) the date the Company’s stockholders approved the Plan, but Awards previously granted may extend beyond that date in accordance with the Plan. If the Plan is not approved by the Company’s stockholders, the Plan will not become effective, no Awards will be granted under the Plan, and the Prior Plan will continue in full force and effect in accordance with its terms.
10.4 Amendment of Plan. The Administrator may amend, suspend or terminate the Plan at any time; provided that no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participant’s consent. No Awards may be granted under the Plan during any suspension period or after Plan termination. Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination. The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.
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10.5 Provisions for Foreign Participants. The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.
10.6 Section 409A.
(a) General. The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply. Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant’s consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt this Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award’s grant date. The Company makes no representations or warranties as to an Award’s tax treatment under Section 409A or otherwise. The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant “nonqualified deferred compensation” subject to taxes, penalties or interest under Section 409A. Notwithstanding any contrary provision of the Plan or any Award Agreement, any payment of “nonqualified deferred compensation” under the Plan that may be made in installments shall be treated as a right to receive a series of separate and distinct payments.
(b) Separation from Service. If an Award constitutes “nonqualified deferred compensation” under Section 409A, any payment or settlement of such Award upon a termination of a Participant’s Service Provider relationship will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participant’s “separation from service” (within the meaning of Section 409A), whether such “separation from service” occurs upon or after the termination of the Participant’s Service Provider relationship. For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms means a “separation from service.”
(c) Payments to Specified Employees. Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of “nonqualified deferred compensation” required to be made under an Award to a “specified employee” (as defined under Section 409A and as the Administrator determines) due to his or her “separation from service” will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such “separation from service” (or, if earlier, until the specified employee’s death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest). Any payments of “nonqualified deferred compensation” under such Award payable more than six months following the Participant’s “separation from service” will be paid at the time or times the payments are otherwise scheduled to be made.
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10.7 Limitations on Liability. Notwithstanding any other provisions of the Plan and to the extent allowable pursuant to Applicable Law and the Company’s certificate of incorporation and bylaws, (a) no individual acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary, and (b) the Company will indemnify and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan’s administration or interpretation, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Administrator’s approval) arising from any act or omission concerning this Plan unless arising from such person’s own fraud or bad faith.
10.8 Lock-Up Period. The Company may, at the request of any underwriter representative or otherwise, in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any Shares or other Company securities during a period of up to one hundred eighty days following the effective date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter.
10.9 Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan. The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security number, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”). The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant’s participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 10.9 in writing, without cost, by contacting the local human resources representative. The Company may cancel Participant’s ability to participate in the Plan and, in the Administrator’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 10.9. For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.
10.10 Severability. If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.
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10.11 Governing Documents. If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has approved, the Plan will govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will not apply.
10.12 Governing Law. The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Nevada, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Nevada.
10.13 Claw-back Provisions. All Awards (including any proceeds, gains or other economic benefit the Participant actually or constructively receives upon receipt or exercise of any Award or the receipt or resale of any Shares underlying the Award) will be subject to any Company claw-back policy, including any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as set forth in such claw-back policy or the Award Agreement.
10.14 Titles and Headings. The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan’s text, rather than such titles or headings, will control.
10.15 Conformity to Securities Laws. Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Laws. Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in conformance with Applicable Laws. To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Laws.
10.16 Relationship to Other Benefits. No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder.
10.17 Broker-Assisted Sales. In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.
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ARTICLE XI.
Definitions
As used in the Plan, the following words and phrases will have the following meanings:
11.1 “Administrator” means the Board or a Committee to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.
11.2 “Applicable Laws” means any applicable law, including without limitation: (a) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether U.S. or non-U.S., federal, state or local; and (c) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.
11.3 “Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Dividend Equivalents or Other Stock or Cash Based Awards.
11.4 “Award Agreement” means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.
11.5 “Board” means the Board of Directors of the Company.
11.6 “Cause” means (i) if a Participant is a party to a written employment or consulting agreement with the Company or any of its Subsidiaries or an Award Agreement in which the term “cause” is defined (a “Relevant Agreement”), “Cause” as defined in the Relevant Agreement, and (ii) if no Relevant Agreement exists, (A) the Administrator’s determination that the Participant failed to substantially perform the Participant’s duties (other than a failure resulting from the Participant’s Disability); (B) the Administrator’s determination that the Participant failed to carry out, or comply with any lawful and reasonable directive of the Board or the Participant’s immediate supervisor; (C) the occurrence of any act or omission by the Participant that could reasonably be expected to result in (or has resulted in) the Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or indictable offense or crime involving moral turpitude; (D) the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the premises of the Company or any of its Subsidiaries or while performing the Participant’s duties and responsibilities for the Company or any of its Subsidiaries; or (E) the Participant’s commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against the Company or any of its Subsidiaries.
11.7 “Change in Control” means and includes each of the following:
(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (c) below) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or
(b) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
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(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:
(i) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and
(ii) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.
Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b) or (c) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
The Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.
11.8 “Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.
11.9 “Committee” means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent Applicable Laws permit. To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a “non-employee director” within the meaning of Rule 16b-3; however, a Committee member’s failure to qualify as a “non-employee director” within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.
11.10 “Common Stock” means the common stock of the Company.
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11.11 “Company” means Ategrity Specialty Insurance Company Holdings, a Nevada corporation, or any successor.
11.12 “Consultant” means any person, including any adviser, engaged by the Company or its parent or Subsidiary to render services to such entity if the consultant or adviser: (i) renders bona fide services to the Company; (ii) renders services not in connection with the offer or sale of securities in a capital-raising transaction and does not directly or indirectly promote or maintain a market for the Company’s securities; and (iii) is a natural person.
11.13 “Designated Beneficiary” means the beneficiary or beneficiaries the Participant designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant’s rights if the Participant dies or becomes incapacitated. Without a Participant’s effective designation, “Designated Beneficiary” will mean the Participant’s estate.
11.14 “Director” means a Board member.
11.15 “Disability” means a permanent and total disability under Section 22(e)(3) of the Code, as amended.
11.16 “Dividend Equivalents” means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares.
11.17 “Employee” means (i) any employee of the Company or its Subsidiaries or (ii) any person or to whom the Company or one of its Subsidiaries has extended a formal, written offer of employment.
11.18 “Equity Restructuring” means a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other Company securities) or the share price of Common Stock (or other Company securities) and causes a change in the per share value of the Common Stock underlying outstanding Awards.
11.19 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
11.20 “Fair Market Value” means, as of any date, the value of a Share determined as follows: (i) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (ii) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (iii) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion. Notwithstanding the foregoing, with respect to any Award granted on the pricing date of the Company’s initial public offering, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.
11.21 “Greater Than 10% Stockholder” means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively.
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11.22 “Incentive Stock Option” means an Option intended to qualify as an “incentive stock option” as defined in Section 422 of the Code.
11.23 “Non-Qualified Stock Option” means an Option not intended or not qualifying as an Incentive Stock Option.
11.24 “Option” means an option to purchase Shares, which will either be an Incentive Stock Option or a Non-Qualified Stock Option.
11.25 “Other Stock or Cash Based Awards” means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property.
11.26 “Overall Share Limit” means the sum of (i) 268,292 Shares and (ii) any Shares which are subject to Prior Plan Awards which become available for issuance under the Plan pursuant to Article IV.
11.27 “Participant” means a Service Provider who has been granted an Award.
11.28 “Performance Criteria” means the criteria (and adjustments) that the Administrator may select for an Award to establish performance goals for a performance period, which may include (but is not limited to) the following: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders’ equity; total stockholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the Company’s performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary, or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies. The Administrator may provide for exclusion of the impact of an event or occurrence which the Administrator determines should appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary items, and other unusual, infrequently occurring or non-recurring charges or events, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) acquisitions or divestitures, (e) reorganization or change in the corporate structure or capital structure of the Company, (f) an event either not directly related to the operations of the Company, Subsidiary, division, business segment or business unit or not within the reasonable control of management, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) the refinancing or repurchase of bank loans or debt securities, (j) unbudgeted capital expenditures, (k) the issuance or repurchase of equity securities and other changes in the number of outstanding shares, (l) conversion of some or all of convertible securities to Common Stock, (m) any business interruption event (n) the cumulative effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles, or (o) the effect of changes in other laws or regulatory rules affecting reported results.
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11.29 “Plan” means this 2025 Incentive Award Plan.
11.30 “Prior Plan” means the Ategrity Specialty Holdings LLC Equity Incentive Plan, as amended and restated.
11.31 “Prior Plan Award” means an award outstanding under the Prior Plan as of the Plan’s effective date in Section 10.3.
11.32 “Public Trading Date” means the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system, or, if earlier, the date on which the Company becomes a “publicly held corporation” for purposes of Treasury Regulation Section 1.162-27(c)(1).
11.33 “Restricted Stock” means Shares awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.
11.34 “Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date awarded to a Participant under Article VI, subject to certain vesting conditions and other restrictions.
11.35 “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act.
11.36 “Section 409A” means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder.
11.37 “Securities Act” means the Securities Act of 1933, as amended.
11.38 “Service Provider” means an Employee, Consultant or Director.
11.39 “Shares” means shares of Common Stock.
11.40 “Stock Appreciation Right” means a stock appreciation right granted under Article V.
11.41 “Subsidiary” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
11.42 “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.
11.43 “Termination of Service” means Participant ceasing to be a Service Provider.
* * * * *
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|
ATEGRITY
SPECIALTY INSURANCE COMPANY HOLDINGS |
STOCK OPTION GRANT NOTICE
Capitalized terms not specifically defined in this Stock Option Grant Notice (the “Grant Notice”) have the meanings given to them in the 2025 Incentive Award Plan (as amended from time to time, the “Plan”) of Ategrity Specialty Insurance Company Holdings (the “Company”).
The Company has granted to the participant listed below (“Participant”) the stock option described in this Grant Notice (the “Option”), subject to the terms and conditions of the Plan and the Stock Option Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.
| Participant: | |
| Grant Date: | |
| Exercise Price per Share: | |
| Shares Subject to the Option: | |
| Final Expiration Date: | |
| Vesting Commencement Date: | |
| Vesting Schedule: | |
| Type of Option: |
By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
| ATEGRITY SPECIALTY INSURANCE COMPANY HOLDINGS | PARTICIPANT | ||
| By: | |||
| Name: | |||
| Title: | |||
Exhibit A
STOCK OPTION AGREEMENT
Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.
GENERAL
1.1 Grant of Option. The Company has granted to Participant the Option effective as of the grant date set forth in the Grant Notice (the “Grant Date”).
1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.
ARTICLE II.
PERIOD OF EXERCISABILITY
2.1 Commencement of Exercisability. The Option will vest and become exercisable according to the vesting schedule in the Grant Notice (the “Vesting Schedule”) except that any fraction of a Share as to which the Option would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated. Notwithstanding anything in the Grant Notice, the Plan or this Agreement to the contrary, unless the Administrator otherwise determines, the Option will immediately expire and be forfeited as to any portion that is not vested and exercisable as of Participant’s Termination of Service for any reason.
2.2 Duration of Exercisability. The Vesting Schedule is cumulative. Any portion of the Option which vests and becomes exercisable will remain vested and exercisable until the Option expires. The Option will be forfeited immediately upon its expiration.
2.3 Expiration of Option. The Option may not be exercised to any extent by anyone after, and will expire on, the first of the following to occur:
(a) The final expiration date in the Grant Notice;
(b) Except as the Administrator may otherwise approve, the expiration of three (3) months from the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Cause or by reason of Participant’s death or Disability;
(c) Except as the Administrator may otherwise approve, the expiration of one (1) year from the date of Participant’s Termination of Service by reason of Participant’s death or Disability; and
(d) Except as the Administrator may otherwise approve, Participant’s Termination of Service for Cause.
ARTICLE III.
EXERCISE OF OPTION
3.1 Exercise of Option. Subject to the conditions set forth in this Agreement, the Option, to the extent vested, may be exercised in whole or in part at any time and from time to time by giving 10 days written notice of exercise to the Administrator specifying the portion of the Option to be exercised. Notwithstanding any terms or conditions in the Plan, unless otherwise determined by the Administrator, Participant shall only exercise the Option and purchase Shares by a net exercise arrangement pursuant to which the Company will issue to Participant the number of Shares determined in accordance with the following formula:
X = Y (A-B) /A where:
X = the number of Shares to be issued to Participant
Y = the number of Shares with respect to which the Option is being exercised
A = the Fair Market Value of the Shares on the date of exercise
B = the Exercise Price
The Option may only be exercised for whole Shares. However, to the extent that the application of the above formula results in a fractional number, Participant shall be entitled to make a cash payment to the Company to purchase the remaining portion of the Share at the Fair Market Value.
3.2 Person Eligible to Exercise. During Participant’s lifetime, only Participant may exercise the Option. After Participant’s death, any exercisable portion of the Option may, prior to the time the Option expires, be exercised by Participant’s Designated Beneficiary as provided in the Plan.
3.3 Tax Withholding.
(a) Unless otherwise determined by the Administrator, the Company shall retain Shares otherwise issuable under the Option (e.g., upon exercise of the Option) to cover the withholding tax arising in connection with the Option.
(b) Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant’s tax liability.
ARTICLE IV.
OTHER PROVISIONS
4.1 Adjustments. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
4.2 Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the person entitled to exercise the Option) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
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4.3 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
4.4 Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
4.5 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
4.6 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Option will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
4.7 Entire Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.
4.8 Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.
4.9 Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof.
4.10 Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.
4.11 Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
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4.12 Incentive Stock Options. If the Option is designated as an Incentive Stock Option:
(a) Participant acknowledges that to the extent the aggregate fair market value of shares (determined as of the time the option with respect to the shares is granted) with respect to which stock options intended to qualify as “incentive stock options” under Section 422 of the Code, including the Option, are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such stock options do not qualify or cease to qualify for treatment as “incentive stock options” under Section 422 of the Code, such stock options (including the Option) will be treated as non-qualified stock options. Participant further acknowledges that the rule set forth in the preceding sentence will be applied by taking the Option and other stock options into account in the order in which they were granted, as determined under Section 422(d) of the Code. Participant acknowledges that amendments or modifications made to the Option pursuant to the Plan that would cause the Option to become a Non-Qualified Stock Option will not materially or adversely affect Participant’s rights under the Option, and that any such amendment or modification shall not require Participant’s consent. Participant also acknowledges that if the Option is exercised more than three (3) months after Participant’s Termination of Service as an Employee, other than by reason of death or Disability, the Option will be taxed as a Non-Qualified Stock Option.
(b) Participant will give prompt written notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or other transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of such Shares to Participant. Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.
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|
ATEGRITY SPECIALTY INSURANCE COMPANY HOLDINGS 2025 INCENTIVE AWARD PLAN |
RESTRICTED STOCK GRANT NOTICE
Capitalized terms not specifically defined in this Restricted Stock Grant Notice (the “Grant Notice”) have the meanings given to them in the 2025 Incentive Award Plan (as amended from time to time, the “Plan”) of Ategrity Specialty Insurance Company Holdings (the “Company”).
The Company has granted to the participant listed below (“Participant”) the shares of Restricted Stock described in this Grant Notice (the “Restricted Shares”), subject to the terms and conditions of the Plan and the Restricted Stock Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.
| Participant: | |
| Grant Date: | |
| Number of Restricted Shares: | |
| Vesting Commencement Date: | |
| Vesting Schedule: |
By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
| ATEGRITY SPECIALTY INSURANCE COMPANY HOLDINGS | PARTICIPANT | ||
| By: | |||
| Name: | |||
| Title: | |||
Exhibit A
RESTRICTED STOCK AGREEMENT
Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.
GENERAL
1.1 Issuance of Restricted Shares. The Company will issue the Restricted Shares to the Participant effective as of the grant date set forth in the Grant Notice and will cause (a) a stock certificate or certificates representing the Restricted Shares to be registered in Participant’s name or (b) the Restricted Shares to be held in book-entry form. If a stock certificate is issued, the certificate will be delivered to, and held in accordance with this Agreement by, the Company or its authorized representatives and will bear the restrictive legends required by this Agreement. If the Restricted Shares are held in book-entry form, then the book-entry will indicate that the Restricted Shares are subject to the restrictions of this Agreement.
1.2 Incorporation of Terms of Plan. The Restricted Shares are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.
ARTICLE II.
VESTING, FORFEITURE AND ESCROW
2.1 Vesting. The Restricted Shares will become vested Shares (the “Vested Shares”) according to the vesting schedule in the Grant Notice except that any fraction of a Share that would otherwise become a Vested Share will be accumulated and will become a Vested Share only when a whole Vested Share has accumulated.
2.2 Forfeiture. In the event of Participant’s Termination of Service for any reason, Participant will immediately and automatically forfeit to the Company any Shares that are not Vested Shares (the “Unvested Shares”) at the time of Participant’s Termination of Service, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company. Upon forfeiture of Unvested Shares, the Company will become the legal and beneficial owner of the Unvested Shares and all related interests and Participant will have no further rights with respect to the Unvested Shares.
2.3 Escrow.
(a) Unvested Shares will be held by the Company or its authorized representatives until (i) they are forfeited, (ii) they become Vested Shares or (iii) this Agreement is no longer in effect. By accepting this Award, Participant appoints the Company and its authorized representatives as Participant’s attorney(s)-in-fact to take all actions necessary to effect any transfer of forfeited Unvested Shares (and Retained Distributions (as defined below), if any, paid on such forfeited Unvested Shares) to the Company as may be required pursuant to the Plan or this Agreement and to execute such representations or other documents or assurances as the Company or such representatives deem necessary or advisable in connection with any such transfer. The Company, or its authorized representative, will not be liable for any good faith act or omission with respect to the holding in escrow or transfer of the Restricted Shares.
(b) All cash dividends and other distributions made or declared with respect to Unvested Shares (“Retained Distributions”) will be held by the Company until the time (if ever) when the Unvested Shares to which such Retained Distributions relate become Vested Shares. The Company will establish a separate Retained Distribution bookkeeping account (“Retained Distribution Account”) for each Unvested Share with respect to which Retained Distributions have been made or declared in cash and credit the Retained Distribution Account (without interest) on the date of payment with the amount of such cash made or declared with respect to the Unvested Share. Retained Distributions (including any Retained Distribution Account balance) will immediately and automatically be forfeited upon forfeiture of the Unvested Share with respect to which the Retained Distributions were paid or declared.
(c) As soon as reasonably practicable following the date on which an Unvested Share becomes a Vested Share, the Company will (i) cause the certificate (or a new certificate without the legend required by this Agreement, if Participant so requests) representing the Share to be delivered to Participant or, if the Share is held in book-entry form, cause the notations indicating the Share is subject to the restrictions of this Agreement to be removed and (ii) pay to Participant the Retained Distributions relating to the Share.
2.4 Rights as Stockholder. Except as otherwise provided in this Agreement or the Plan, upon issuance of the Restricted Shares by the Company, Participant will have all the rights of a stockholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and to receive dividends or other distributions paid or made with respect to the Restricted Shares.
ARTICLE III.
TAXATION AND TAX WITHHOLDING
3.1 Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of the Restricted Shares and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.
3.2 Section 83(b) Election. If Participant makes an election under Section 83(b) of the Code with respect to the Restricted Shares, Participant will deliver a copy of the election to the Company promptly after filing the election with the Internal Revenue Service.
3.3 Tax Withholding.
(a) The Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the Restricted Shares as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise deliverable under the Award.
(b) Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Restricted Shares, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Restricted Shares. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the Restricted Shares or the subsequent sale of the Restricted Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure this Award to reduce or eliminate Participant’s tax liability.
ARTICLE IV.
RESTRICTIVE LEGENDS AND TRANSFERABILITY
4.1 Legends. Any certificate representing a Restricted Share will bear the following legend until the Restricted Share becomes a Vested Share:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
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4.2 Transferability. The Restricted Shares and any Retained Distributions are subject to the restrictions on transfer in the Plan and may not be sold, assigned or transferred in any manner unless and until they become Vested Shares. Any attempted transfer or disposition of Unvested Shares or related Retained Distributions prior to the time the Unvested Shares become Vested Shares will be null and void. The Company will not be required to (a) transfer on its books any Restricted Share that has been sold or otherwise transferred in violation of this Agreement or (b) treat as owner of such Restricted Share or accord the right to vote or pay dividends to any purchaser or other transferee to whom such Restricted Share has been so transferred. The Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, or make appropriate notations to the same effect in its records.
ARTICLE V.
OTHER PROVISIONS
5.1 Adjustments. Participant acknowledges that the Restricted Shares are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
5.2 Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
5.3 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
5.4 Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
5.5 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
5.6 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Restricted Shares will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
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5.7 Entire Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.
5.8 Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.
5.9 Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Award.
5.10 Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.
5.11 Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
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|
ATEGRITY SPECIALTY INSURANCE COMPANY HOLDINGS 2025 INCENTIVE AWARD PLAN |
RESTRICTED STOCK Unit Grant Notice
Capitalized terms not specifically defined in this Restricted Stock Unit Grant Notice (the “Grant Notice”) have the meanings given to them in the 2025 Incentive Award Plan (as amended from time to time, the “Plan”) of Ategrity Specialty Insurance Company Holdings (the “Company”).
The Company has granted to the participant listed below (“Participant”) the Restricted Stock Units described in this Grant Notice (the “RSUs”), subject to the terms and conditions of the Plan and the Restricted Stock Unit Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.
| Participant: | |
| Grant Date: | |
| Number of RSUs: | |
| Vesting Commencement Date: | |
| Vesting Schedule: |
By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
| ATEGRITY SPECIALTY INSURANCE COMPANY HOLDINGS | PARTICIPANT | ||
| By: | |||
| Name: | |||
| Title: | |||
Exhibit A
RESTRICTED STOCK UNIT AGREEMENT
Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
Article I.
general
1.1 Award of RSUs. The Company has granted the RSUs to Participant effective as of the grant date set forth in the Grant Notice (the “Grant Date”). Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash, in either case, as set forth in this Agreement. Participant will have no right to the distribution of any Shares or payment of any cash until the time (if ever) the RSUs have vested.
1.2 Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.
1.3 Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.
Article II.
VESTING; forfeiture AND SETTLEMENT
2.1 Vesting; Forfeiture. The RSUs will vest according to the vesting schedule in the Grant Notice except that any fraction of an RSU that would otherwise be vested will be accumulated and will vest only when a whole RSU has accumulated. In the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company.
2.2 Settlement.
(a) RSUs will be paid in Shares or cash at the Company’s option as soon as administratively practicable after the vesting of the applicable RSU, but in no event more than sixty (60) days after the RSU’s vesting date. Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Laws until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.
(b) If an RSU is paid in cash, the amount of cash paid with respect to the RSU will equal the Fair Market Value of a Share on the day immediately preceding the payment date.
Article III.
TAXATION AND TAX WITHHOLDING
3.1 Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.
3.2 Tax Withholding.
(a) The Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the RSUs as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Award.
(b) Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.
Article IV.
other provisions
4.1 Adjustments. Participant acknowledges that the RSUs, the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
4.2 Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
4.3 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
4.4 Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
4.5 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
4.6 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement, the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
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4.7 Entire Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.
4.8 Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.
4.9 Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement. Participant shall not be entitled to any Dividend Equivalents with respect to the Restricted Stock Units to reflect any dividends payable on the Shares subject to the RSUs.
4.10 Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.
4.11 Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
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Exhibit 10.7
FORM OF
SERVICES AGREEMENT
This Services Agreement, dated as of [ ⬤ ], 2025 (the “Effective Date”), is entered into by and between ZIMMER FINANCIAL SERVICES GROUP LLC, a Delaware limited liability company (hereinafter referred to as “Zimmer”), and ATEGRITY SPECIALTY HOLDINGS LLC, a Delaware limited liability company (hereinafter referred to as “Ategrity”). Zimmer and Ategrity shall hereinafter be collectively referred to as the “Parties” and each of them as a “Party.”
RECITALS
A. WHEREAS, Zimmer is the controlling shareholder of Ategrity and desires to support Ategrity in its continued growth.
B. WHEREAS, Zimmer has offered to provide Ategrity and its subsidiaries with general assistance and expertise, as well as the specific services set forth in this Services Agreement (the “Services”).
C. WHEREAS, Ategrity accepts the provision of such Services from Zimmer.
D. WHEREAS, Ategrity acknowledges that Zimmer may provide such services through its subsidiaries and affiliated entities as it deems appropriate.
E. WHEREAS, the Parties desire to define the terms and conditions under which the Services may be rendered to Ategrity according to its needs and to fix the remuneration of the Services on a reasonable basis.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual agreements in this Services Agreement, the Parties hereby agree as follows:
Article 1
Services
Zimmer may provide to Ategrity and its subsidiaries, at Ategrity’s request, with the Services in various fields as further detailed below, for the sole use and benefit of Ategrity:
1. Human Resources. Zimmer may provide customary human resources services, including, but not limited to, payroll administration and compliance, benefits and compensation planning, hiring and onboarding, and employee resources regarding worker’s compensation, salary, benefits, and personnel disputes.
2. Tax. Zimmer may provide, and may coordinate with third party vendors to provide, customary tax compliance services within the United States and Bermuda, including, but not limited to, tax compliance, audits and tax planning activities, providing advice related to corporate and investment tax matters, coordinating payments with the Internal Revenue Services and related to tax sharing agreements and investments.
3. Legal and Corporate Secretary. Zimmer may provide legal services related to governance and legal matters, including, but not limited to, providing advice to Ategrity’s management and board of directors and providing assistance with respect to executive compensation, securities law, and other legal matters, as well as Zimmer personnel providing services as corporate secretary to Ategrity.
4. Transaction Advisory. Zimmer may provide financial, modeling, and accounting support for strategic or lending opportunities.
5. Information Technology. Zimmer may provide, and may coordinate with third party vendors to provide, services to develop, implement, operate, and support Ategrity’s information technology requirements.
6. Actuarial. Zimmer may provide actuarial services and analyses.
7. Audit. Zimmer may provide certain internal audit services.
8. Investment Accounting. Zimmer may provide investment accounting services, including coordinating with administrators and providing reporting on portfolio investments.
9. Investor Relations. Zimmer may provide investor relations services, including in with respect to public relations and interactions with the investor community.
Zimmer shall perform (or cause to be performed) the Services (i) in a professional manner, (ii) with the same degree of care as it exercises in performing their own functions of a like or similar nature, and (iii) in a timely manner in accordance with the provisions of this Services Agreement and consistent with historical practice (except to the extent otherwise provided herein).
Article 2
SERVICES MANAGER; secondments
Each Party will each appoint a single “Services Manager” for each Service. The initial Services Manager will serve as the primary point of contact for the other Party for matters related to such Service. Either Party may replace any of its Services Managers with an individual of comparable qualifications and experience by notifying the other Party of such new appointment.
Any Party may propose a secondment of employees of Zimmer or its affiliates to Ategrity for a designated purpose related to Services. Any proposal for secondment must include the designated purpose and scope of each secondment position, including duties, responsibilities, and deliverables; duration of the secondment; number of secondees and minimum expertise, qualifications, and experience required; work location and position within Ategrity’s organization of each secondee; and estimated costs of the secondment.
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Ategrity shall consider the expertise and experience of each such nominee in light of the expertise and experience required for the approved and authorized secondment position, shall determine the acceptability of any nominee for any secondee position, and shall select or reject any nominee. Although each secondee shall report to and be directed by Ategrity, each secondee shall remain at all times the employee of Zimmer or an affiliate thereof. Either Party may withdraw or suspend any position identified for secondment at any time and may terminate a secondment with or without cause. The cost payable by Ategrity with respect to such secondee shall be mutually agreed by the Parties in advance of such secondment.
Article 3
FACILITIeS SERVICES
Zimmer agrees to make available to Ategrity a designated space and access to certain shared space within its principal place of business at 9 West 57th Street, 33rd Floor New York, New York 10019 (the “Designated Premises”) for use by the personnel of Ategrity, which shall include the following:
1. access to and right to use the Designated Premises;
2. provision of office furnishings and office supplies, and access to and right to use such office furnishings and office supplies;
3. access to and right to use building mailroom facilities and services;
4. provision of and right to use all utilities at the Designated Premises, including, but not limited to, water, gas, and electricity, as applicable; and
5. provision of and right to use internet services at the Zimmer Premises.
Article 4
COMPENSATION FOR THE SERVICES; PAYMENT
In consideration of the Services provided by Zimmer to Ategrity, Ategrity shall pay Zimmer a fee (the “Fees”) equal to Zimmer’s total costs (total direct and indirect costs) in providing the Services hereunder plus 5.0% of those total costs. The allocation of cost between the Parties shall be determined as among the Parties by reference to reasonable metrics, in each case as listed on Schedule A attached to this Services Agreement.
Zimmer shall provide Ategrity with an invoice on a quarterly basis in an amount consistent with the Fees as described in Article 3 and Schedule A attached, and all amounts invoiced will be payable within 90 days of the invoice date.
Article 5
EXPENSES
Ategrity shall reimburse Zimmer for its allocable share of any reasonable and documented out-of-pocket expenses that are actually incurred by Zimmer in the course of performing the Services under this Services Agreement. Expenses shall be re-invoiced at cost unless otherwise provided herein.
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Article 6
TERM AND TERMINATION
Term. The term of this Services Agreement shall be for a period of five years, effective as of the Effective Date, and will automatically renew for two-year periods thereafter unless any Party provides the other Party with 90 days’ written notice before expiration of its intention not to renew.
Termination for Material Breach. If either Party is in material breach of this Services Agreement, the other Party may terminate this Services Agreement, at the end of a written 30-day notice and cure period if the breach has not been cured.
Notwithstanding the foregoing, this Services Agreement shall be automatically terminated and without prior notice by any Party, if Zimmer ceases to be an affiliate of Ategrity unless Zimmer provides prior written notice waiving such automatic termination.
Article 7
ENTIRE AGREEMENT
This Services Agreement memorializes and supersedes any prior oral or written agreements among the Parties regarding the matters described herein.
Article 8
Amendments and Waivers
No provision of this Services Agreement, including the schedules hereto, may be amended except by an agreement in writing signed by both Parties.
Any term or provision of this Services Agreement may be waived, or the time for its performance may be extended, by the Party or the Parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently given for the purposes of this Services Agreement if, as to any Party, it is executed by a writing signed by an authorized representative of such Party. Waiver by any Party of any default by the other Party of any provision of this Services Agreement shall not be construed to be a waiver by the waiving Party of any subsequent or other default, nor shall it in any way affect the validity of this Services Agreement or prejudice the rights of the other Party, thereafter, to enforce each and every such provision. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof, or the exercise of any other right, power or privilege. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies that either Party would otherwise have.
Article 9
CONFIDENTIALITY and Data Protection
Confidential Information. “Confidential Information” means non-public information disclosed orally or in writing by a Party or its affiliate (“Discloser”) to the other Party or its affiliate (“Recipient”) about (without limitation) its business, employees, finances, customers, operations, products, technology, plans, or pricing, that is designated as confidential or reasonably should be considered confidential given the nature of the information and the circumstances of its disclosure.
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Protection of Confidential Information. Recipient will use the same degree of care that it uses to protect the confidentiality of its own information of a like nature, but in no event less than reasonable care, (a) not to use Discloser’s Confidential Information for a purpose inconsistent with the activities contemplated under this Services Agreement, and (b) to limit access to Discloser’s Confidential Information to those of Recipient’s and its affiliates’ employees, directors, contractors, advisors and auditors who need such access for activities contemplated under this Services Agreement and who are legally or contractually bound to protect the Confidential Information as provided in this Article 9. Confidential Information excludes information that: (i) is or becomes generally known to the public without breach of a duty owed to Discloser, (ii) was known to Recipient before its disclosure hereunder without breach of a duty owed to Discloser, (iii) is received from a third party without breach of a duty owed to Discloser, or (iv) is independently developed by Recipient without use of Discloser’s Confidential Information.
Requests for Confidential Information. If Recipient receives a government or other third-party request for Discloser’s Confidential Information, Recipient will direct the requestor to, and promptly notify, Discloser if legally permitted to do so. Recipient will comply with such a third-party request only if so required by law; in such an event, Recipient will seek to limit the disclosure to that Confidential Information which Recipient is legally required to disclose.
Data Privacy. Each Party shall at all times protect Personal Data received under this Agreement in accordance with applicable law. “Personal Data” means any information relating to (i) an identified or identifiable natural person and, (ii) an identified or identifiable legal entity (where such information is protected similarly to personal data or personally identifiable information under applicable law).
Data Breach. If a Recipient becomes aware of an unauthorized access to or disclosure, loss or alteration of Discloser’s Confidential Information, Recipient will promptly notify Discloser, seek to mitigate the breach, and preserve forensic evidence, and provide information to Discloser about the nature and scope of the breach.
Article 10
INDEPENDENT CONTRACTOR
In performing the Services hereunder, Zimmer shall operate as, and has the status of, an independent contractor. No Party’s employees shall be considered employees or agents of the other Party, nor shall the employees of either Party be eligible or entitled to any benefits, perquisites, or privileges given or extended to any of the other Party’s employees. Nothing contained in this Services Agreement shall be deemed or construed to create a joint venture or partnership between the Parties. Nothing in this Services Agreement shall be deemed to create an employment relationship between Ategrity and the employees and/or agents of Zimmer or its affiliates who perform the Services pursuant to this Services Agreement, or make Zimmer and Ategrity joint employers thereof. Zimmer shall have the sole responsibility for the day-to-day control and supervision of the individuals it employs in connection with this Services Agreement (subject to the terms of any secondment). Zimmer retains any and all liability with respect to the actions, activities and conduct of such individuals in full (including any employment- related claims, litigation or other assertions of liability or responsibility).
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Article 11
INTELLECTUAL PROPERTY
Except as otherwise agreed by the Parties in writing, each Party and its affiliates shall each remain the exclusive owner of all right, title and interest throughout the world in and to all their respective intellectual property rights, whether provided to one another in the performance or receipt of the Services, or in any other context given the relationships of the Parties under this Services Agreement. Nothing in this Services Agreement shall be deemed to grant to any party hereto by implication, estoppel or otherwise, license rights, ownership rights or any other intellectual property rights in any technology, inventions, work processes, hardware, software or any other tangible or intangible assets owned, controlled or licensed a party. No Party shall have any rights or licenses with respect to any software, hardware or facility of another party solely by virtue of this Services Agreement. All rights and licenses not expressly granted in this Services Agreement are expressly reserved by the relevant party.
Article 12
Privilege; Conflicts of Interest
It is understood that the attorneys providing legal services pursuant to this Services Agreement have been retained by Ategrity for the express purpose of providing legal advice to Ategrity and that their communication with Ategrity will be subject to the attorney-client privilege to the extent permitted by law and by applicable ethical requirements.
The Parties agree that to the extent a conflict of interest arises for any attorney providing legal services pursuant to this Services Agreement, the attorney will evaluate and consider mitigating steps to address such conflict consistent with the principles and obligations of professional responsibility, which may include such attorney disclosing such conflict to the relevant officers and director of Ategrity, and if required, determining to recuse him or herself from any particular matter that presents a conflict of interest.
Article 13
COMPLIANCE WITH LAWS
In the performance of its duties and obligations under this Services Agreement, each Party shall comply with all applicable laws. The Parties shall cooperate fully in obtaining and maintaining in effect all permits and licenses that may be required for the performance of the Services.
Article 14
APPLICABLE LAW- DISPUTES
This Services Agreement shall be governed by the internal laws of the State of New York without regard to its conflicts or choice of law rules, as applicable.
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EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SERVICES AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS SERVICES AGREEMENT. EACH PARTY TO THIS SERVICES AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS SERVICES AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Article 14.
Article 15
Limitation of Liability
Notwithstanding anything to the contrary contained in this SERVICES agreement, WITH THE EXCEPTION OF CLAIMS ARISING FROM A PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT or FRAUD, (A) NEITHER PARTY, NOR ITS AFFILIATES, CONTRACTORS, SUPPLIERS OR AGENTS, SHALL HAVE ANY LIABILITY HEREUNDER FOR ANY PUNITIVE, INCIDENTAL, CONSEQUENTiAL, SPECIAL OR INDIRECT DAMAGES, WHETHER OR NOT SUCH DAMAGES WERE FORESEEABLE Or A PARTY WAS NOTIFIED IN ADVANCE OF the POSSIBILITY OF SUCH DAMAGES, AND (B) THE AGGREGATE LIABILITY OF A SERVICE PROVIDER FOR DAMAGES HEREUNDER IN CONNECTION WITH ITS PERFORMANCE OF (OR ITS FAILURE TO PERFORM) ITS OBLIGATIONS HEREUNDER SHALL NOT EXCEED the amount paid for the services under this services agreement OVER THE PRIOR YEAR. FOR PURPOSES OF THIS SERVICES AGREEMENT, “FRAUD” MEANS actual and intentional common law fraud under NEW YORK law; provided that the term “Fraud” shall exclude fraud or claims based on constructive knowledge, equitable fraud, constructive fraud, promissory fraud, reckless or negligent misrepresentation or omission and other theories.
Article 16
SEVERABILITY
In the event that any provision of this Services Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Services Agreement shall continue in full force and effect and shall be interpreted so as reasonably necessary to effect the intent of the Parties hereto. The Parties hereto shall use all reasonable efforts to replace such void or unenforceable provision of this Services Agreement with a valid and enforceable provision that shall achieve, to the greatest extent possible, the economic, business and other purposes of such void or unenforceable provision.
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Article 17
SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES
This Services Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. This Services Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Parties (not to be unreasonably withheld, conditioned or delayed), and any attempt to assign any rights or obligations arising under this Services Agreement without such consent shall be void ab initio and without force or effect, provided that any assumption of this Services Agreement as part of the chapter 11 bankruptcy case of any Party shall not be considered an assignment for purposes of this Article 17.
This Services Agreement is for the sole benefit of the Parties and their respective affiliates and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Services Agreement.
Article 18
Notices
All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (a) when delivered personally to the recipient, (b) when sent by electronic mail, on the date of transmission to such recipient, (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid), or (d) four business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid.
Article 19
COUNTERPARTS
This Services Agreement may be executed in any number of counterparts that may be necessary. All counterparts will constitute the Services Agreement. Any provision hereof requiring written consent, confirmation, or other similar communication may be satisfied through electronic communication, including the use of electronic signatures for execution of this Services Agreement.
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IN WITNESS WHEREOF, the Parties have caused this Services Agreement to be executed on the date first above written.
| Zimmer Financial Services Group LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
| Ategrity Specialty Holdings LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
Omitted Schedule
Schedule A to this exhibit, which is described under Article 4 above, has been omitted pursuant to Item 601(a)(5) of Regulation S-K because it does not contain information material to an investment or voting decision and that information is not otherwise disclosed in this exhibit or the disclosure document. The registrant will furnish supplementally a copy of Schedule A to the Securities and Exchange Commission or its staff upon request.
Schedule A
[Summary of Fees and allocation methodology]
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption “Experts” and to the use of our report dated March 04, 2025 (except for the effects of the restatement of the financial statement schedules disclosed in Notes 1 to Schedule I and Schedule II, and the effects of the subsequent events described in Note 24 to the consolidated financial statements as to which the date is June 03, 2025), in the Registration Statement (Form S-1 No. 333-286059) and related Prospectus of Ategrity Specialty Holdings LLC for the registration of shares of its common stock.
/s/ Ernst & Young LLP
Tysons, Virginia
June 03, 2025