As filed with the Securities and Exchange Commission on September 25, 2025.

Registration No. 333-   

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Exzeo Group, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Florida		6331		85-2578837
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

1000 Century Park Drive

Tampa, Florida 33607

813-776-1000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Paresh Patel, Chief Executive Officer

Kevin Mitchell, President

Exzeo Group, Inc.

1000 Century Park Drive

Tampa, Florida 33607

813-776-1000

(Name, address, including zip code, and telephone number including area code, of agent for service)

 

 

Copies of all communications, including communications sent to agent for service, should be sent to:

 

Curt P. Creely Carrie Long Megan Odroniec Foley & Lardner LLP 100 North Tampa Street, Suite 2700 Tampa, Florida 33602 (813) 229-2300		Thomas S. Levato DLA Piper LLP (US) 1251 Avenue of the Americas 27th Floor New York, New York 10020 (212) 335-4500

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☐
				Emerging growth company		☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

TABLE OF CONTENTS

 

		Page
PROSPECTUS SUMMARY			1
RISK FACTORS			13
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			47
USE OF PROCEEDS			49
DIVIDEND POLICY			50
CAPITALIZATION			51
DILUTION			52
BUSINESS			54
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			72
MANAGEMENT			95
EXECUTIVE COMPENSATION			102
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			112
PRINCIPAL SHAREHOLDERS			120
DESCRIPTION OF CAPITAL STOCK			121
SHARES ELIGIBLE FOR FUTURE SALE			129
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF OUR COMMON STOCK			132
UNDERWRITING			136
LEGAL MATTERS			144
EXPERTS			144
WHERE YOU CAN FIND MORE INFORMATION			144
INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS			F-1

Neither we nor the underwriters have authorized anyone to provide you with any information other than that contained in this prospectus and any free writing prospectus prepared by or on behalf of us that we have referred to you. If anyone provides you with additional, different or inconsistent information, we and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, such information. Offers to sell, and solicitations of offers to buy, shares of our common stock are being made only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, operating results and prospects may have changed since such date.

Presentation and Other Information

In this prospectus, “Exzeo,” the “company,” “our company,” “we,” “us” and “our” refer to Exzeo Group, Inc. and its consolidated subsidiaries.

No action is being taken by us or the underwriters in any jurisdiction outside the United States to permit a public offering of shares of common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States must inform themselves about and observe any restrictions relating to this offering and the distribution of this prospectus applicable to that jurisdiction.

Certain monetary amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Percentage amounts included in this prospectus have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this prospectus may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements or the figures included elsewhere in this prospectus. Certain other amounts that appear in this prospectus may not sum due to rounding.

Market and Industry Data

This prospectus includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys, filings of public companies in our industry and internal company surveys. These sources include government and industry sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the industry and market data to be reliable as of the date of this prospectus, this information could prove to be inaccurate. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein. Such data and assumptions, including those relating to a specified market’s projected growth or future performance, are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause future performance to differ materially from such data and estimates. See “Cautionary Note Regarding Forward-Looking Statements.”

Non-GAAP Financial Measures

We present our results of operations in a way that we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. Some of the measurements are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”) under SEC rules and regulations. We refer to these measures as “non-GAAP financial measures.” For example, in this prospectus, we present Adjusted EBITDA and Adjusted Revenue, which are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. We believe that non-GAAP financial measures, which may be defined and calculated differently by other companies, help explain and enhance the understanding of our results of operations. However, these measures should not be

viewed as a substitute for those determined in accordance with GAAP. Reconciliations of our non-GAAP financial measures to the most comparable GAAP figures are included in this prospectus. For further discussion, see “Prospectus Summary—Summary Consolidated Financial Information.”

Trademarks and Service Marks

This prospectus contains references to a number of trademarks and service marks which are our registered trademarks or service marks or which are our trademarks or service marks for which we have pending applications or common law rights. Trade names, trademarks and service marks of other companies appearing in this prospectus are the property of their respective holders. Solely for convenience, the trademarks, service marks and trade names are referred to in this prospectus without the ^®, ^TM or ^SM symbols, but such references are not intended to indicate, in any way, that we or other owner thereof will not assert, to the fullest extent under applicable law, our or such owner’s rights to these trademarks, service marks and trade names. We do not intend our use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of us by, such other companies.

Until      , all dealers that buy, sell or trade these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscription.

 

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and uncertainties, together with all of the other information contained in this prospectus, before deciding to invest in our common stock. Our business, financial condition, results of operations, and prospects could be materially and adversely affected by any of these risks or uncertainties, as well as by risks or uncertainties not currently known to us, or that we do not currently believe are material. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

We may not maintain profitability in the future.

We may incur significant losses in the future for a number of reasons, including insufficient growth in the number of new customers, a failure to retain our existing customers, and increasing competition, as well as other risks described in this “Risk Factors” section, and we may encounter unforeseen expenses, difficulties, complications and delays, and other unknown factors. We expect to continue to make investments in the development and expansion of our business, which may not result in increased or sufficient revenue or growth, as a result of which we may not be able to maintain profitability in the future.

We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

Our revenue and results of operations could vary significantly from quarter to quarter and year to year and may fail to match periodic expectations as a result of a variety of factors, many of which are outside of our control. Our results may vary from period to period as a result of fluctuations in the number of customers purchasing our insurance technology and operations solutions as well as fluctuations in the timing and amount of our expenses. In addition, the property and casualty insurance industry we serve is subject to its own cyclical trends and uncertainties, including periods of intense pricing competition due to excessive underwriting capacity, periods when shortages of underwriting capacity permit more favorable underwriting profits as well as extreme weather which is often seasonal and may result in volatility in claims reporting and payment patterns. Fluctuations and variability across the industry may also affect our revenue. As a result, comparing our results of operations on a period-to-period basis may not be meaningful, and the results of any one period should not be relied on as an indication of future performance. Our results of operations may not meet the expectations of investors or public market analysts who follow us, which may adversely affect our stock price. In addition to other risk factors discussed in this “Risk Factors” section and elsewhere in this prospectus, factors that may contribute to the variability of our quarterly and annual results include:

 

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our ability to attract and retain new customers and retain our existing customers, including in a cost-effective manner;

 

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our ability to accurately forecast revenue and losses and appropriately plan our expenses;

 

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the effects of increased competition on our business;

 

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our ability to successfully expand our business in existing markets and successfully enter new markets;

 

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our ability to obtain, maintain, protect, defend, and enforce our existing intellectual property and to create or otherwise acquire new intellectual property;

 

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our ability to grow our business and effectively manage that growth;

 

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our ability to keep pace with technology changes in the insurance technology industry and the property and casualty insurance industry;

 

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the success of our sales and marketing efforts;

 

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costs associated with defending claims, including intellectual property infringement, misappropriation, or other claims and related judgments or settlements;

 

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the impact of, and changes in, governmental or other regulations affecting our business;

 

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the attraction and retention of qualified employees and key personnel;

 

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the effectiveness of our internal controls; and

 

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changes in our tax rates or exposure to additional tax liabilities.

We may lose our existing customers and/or fail to acquire new customers.

Our future operating results will depend, in part, on the rate at which we acquire new customers and on our ability to maintain our relationships with existing customers as measured by the amount of managed premium on our Insurance-as-a-Service platform. Our ability to support this expansion depends on the performance of our customer, onboarding, and support teams, which are critical to ensuring high customer satisfaction, adoption, and retention.

We believe that growth of our business and revenue depends upon our ability to expand our business in the geographic markets that we currently serve by retaining our existing customers and adding new customers and to expand our business into new geographic markets across the nation. Expanding into new geographic markets takes time, requires us to navigate and comply with new regulations, and may occur more slowly than we expect. If we lose our existing customers, our value will diminish, materially and adversely impacting our business, operating results and financial condition, our ability to implement our business plan, and, unless we have acquired significant new customers, our ability to continue to operate. In addition, the loss of future customers could lead to diminished revenue, which would adversely impact our profitability. If we fail to remain competitive on customer experience, pricing, and service options, our ability to grow our business may also be adversely affected.

Further, our ability to attract new customers may be adversely affected by the fact that we are majority-owned by HCI, who competes with certain potential customers. Prospective customers who view HCI as a competitor may be reluctant to engage with us, or may elect to seek products and services from other providers, which could materially and adversely impact our growth prospects and results of operations. In addition, customers who compete with HCI may be hesitant to share sensitive business information or data with us, out of concern that such information or data could be accessible to, or used by, HCI to the detriment of the customer, which may further inhibit our ability to win new business.

While a key part of our business strategy is to retain and add customers in our existing markets, we also intend to expand our operations into new markets. In doing so, we may incur losses or otherwise fail to enter new markets successfully. Our expansion into new markets may place us in unfamiliar competitive environments and involve various risks, including competition, government regulation, the need to invest significant resources, and the possibility that returns on such investments will not be achieved for several years or at all.

There are many factors that could negatively affect our ability to grow our customer base, including if:

 

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our proprietary Insurance-as-a-Service platform of products and services fails to achieve market acceptance;

 

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competing platforms, solutions, products, and services that serve as substitutes for, or represent an improvement over, our platform, solutions, products, and services are introduced and gain market share;

 

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we lose customers to new market entrants and/or existing competitors;

 

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we do not obtain regulatory approvals necessary for expansion into new markets;

 

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we fail to effectively market and advertise;

 

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we suffer reputational harm to our brand including from negative publicity, whether accurate or inaccurate;

 

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we fail to provide effective updates to our existing platform, solutions, products, and services or to keep pace with technological improvements in our industry;

 

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technical or other problems frustrate the policyholder experience, particularly if those problems prevent us from processing and paying claims in a fast and reliable manner, or affect the functionality of the policy administration and underwriting systems; or

 

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we fail to obtain, maintain, protect, defend, and enforce our intellectual property and proprietary rights.

Our inability to overcome these challenges could impair our ability to attract and retain new customers and retain our existing customers and could have a material adverse effect on our business, operating results, and financial condition.

In addition, if the market for our platform, solutions, products, and services grows more slowly than anticipated, or if demand for our platform, solutions, products, and services does not grow as quickly as anticipated, whether as a result of competition, pricing sensitivities, product obsolescence, technological change, unfavorable economic conditions, uncertain geopolitical environment, budgetary constraints of our customers, or other factors, our business, results of operations, and financial condition would be adversely affected.

We have relied on a small number of customers, all of which are affiliated with HCI, for all of our revenue, and we expect to continue to rely on a relatively small number of customers (including our existing customers) for a substantial portion of our revenue. The loss of any of these customers would significantly harm our business, results of operations, and financial condition.

All of our revenue prior to this offering comes from a small number of customers, all of which are affiliated with HCI, and we expect that our future revenue will continue to be dependent on a relatively small number of customers in the property and casualty insurance industry, which may be adversely affected by worldwide economic, environmental, public health, and political conditions. While we expect this reliance to decrease over time as our customer base and revenue grow, we expect that we will continue to depend upon a relatively small number of customers (including our existing customers) for a significant portion of our revenue for the foreseeable future. The loss of any of these customers or a reduction in revenue from any of these customers would significantly harm our business, results of operations, and financial condition. If we fail to successfully sell our insurance technology and operations solutions to one or more of these anticipated or existing customers or fail to identify additional potential customers or such customers purchase fewer of our insurance technology and operations solutions, defer or terminate agreements, fail to renew their agreements or otherwise terminate or scale back their relationship with us, our business, results of operations, and financial condition would be harmed. Additionally, if one or more of these anticipated customers do not enter into an agreement with us in any particular period, or if we fail to achieve any required performance criteria for one or more of these relatively small number of customers, our quarterly and annual results of operations may fluctuate significantly.

Our success will depend on the continuous development and improvement of our proprietary Insurance-as-a-Service platform of products and services, including the development and implementation of new features and analytical models.

To date, our Insurance-as-a-Service platform of products and services has only been utilized internally by affiliates of our company. Our future success will depend on the continuous development and improvement of our proprietary Insurance-as-a-Service platform of products and services, including further refinements and enhancements to our data engine, analytical models, proprietary underwriting algorithms, and agent and customer interfaces. The success of our efforts to further develop and refine our Insurance-as-a-Service platform depends

 

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on several factors, including the timely completion, introduction and effectiveness of such refinements and enhancements. We may not be successful in either developing these refinements and enhancements or in bringing them into use in a timely fashion. Our Insurance-as-a-Service platform is expensive and complex, and its continuous development, maintenance and operation may entail unforeseen difficulties, including performance problems or undetected defects, errors, failures, bugs, or vulnerabilities. We may encounter technical obstacles, especially in implementing our platform for new third-party customers, and it is possible that we may discover additional problems that prevent our technology from operating properly. Any of these possibilities would result in a material adverse effect on our business, results of operations, and financial condition.

Estimates of market opportunity may prove to be inaccurate.

Market opportunity estimates, including those we have generated ourselves, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of potential customers covered by our market opportunity estimates will purchase our insurance technology and operations solutions at all or generate any particular level of revenue for us. Any expansion of our business depends on a number of factors, including the cost, performance, and perceived value associated with our platform, solutions, products, and services and those offered by our competitors.

We face intense competition in our industry, which could negatively impact our business, results of operations and financial condition and cause our market share to decline.

The market for our insurance technology and operations solutions is intensely competitive and fragmented. This market is subject to changing technology, shifting customer needs, and introductions of new products, solutions, and services. Competitors vary in size and in the breadth and scope of the products, solutions, and services offered. In addition, the competitors we face in any particular sale may change depending on, among other things, the breadth and scope of the products, solutions, and services being sold, the geography in which we are operating, and the size of the insurance carrier to which we are selling. The principal competitive factors in our industry include total cost of ownership, product functionality, flexibility, and performance, customer references, and in-depth knowledge of the property and casualty insurance industry. Competitors may also compete on the basis of the time and cost required for implementation of the applicable products, solutions, and services and/or unique features or functions.

Additionally, we believe that many of our prospective customers operate firmly entrenched legacy systems, some of which have been in operation for decades. We expect that our implementation cycles will be lengthy and variable and will require the investment of significant time and expense. These expenses and associated operating risks attendant on any significant process of technology implementation may cause prospective customers to prefer maintaining their legacy systems. Also, maintaining legacy systems may be so time consuming and costly for prospective customers that they do not have adequate resources to devote to the purchase and implementation of our insurance technology and operations solutions. We also expect to compete against technology consulting firms that either helped create such legacy systems or may own, in full or in part, subsidiaries that develop software and systems for the property and casualty insurance industry. As we work to expand our business and begin to market our insurance technology and operations solutions to new customers who are not affiliates of HCI, we will also begin to compete with software and service providers we have not competed against previously. Such potential competitors offer data and analytics tools that may, in time, become more competitive with our offerings. In addition, instead of purchasing property and casualty insurance technology and operations solutions from a third party, including one of our direct competitors, our customers may decide to internally develop their own systems.

We expect the intensity of competition to remain high in the future. In addition to existing competitors in this market, we believe investment in emerging insurance technology or InsurTech companies, which seek to

 

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innovate and disrupt the insurance industry, is growing rapidly and could produce new competitive threats. Continuing intense competition could result in increased pricing pressure, increased sales and marketing expenses, and greater investments in research and development, each of which could negatively impact our profitability. In addition, the failure to increase or the loss of market share would harm our business, results of operations, financial condition, and/or future prospects.

Current and potential competitors have longer operating histories, greater name recognition, and greater financial, technical, sales, marketing and other resources than we do, as well as larger customer bases. As a result, such competitors may be able to devote greater resources to the development, promotion and sale of their solutions, products, and/or services than we can devote to ours, which could allow them to respond more quickly than we can to new or emerging technologies and changes in customer needs, thus leading to their wider market acceptance. To the extent any competitor has existing relationships with potential customers for other applications, those customers may be unwilling to purchase our solutions because such existing relationships create customer “stickiness.” For instance, if a potential customer uses one product or solution from a competitor that is key to the customer’s day-to-day operations, they may be more likely to turn to such competitor in the future to the extent they require further products or solutions, rather than purchasing products or solutions from us. We may not be able to compete effectively and competitive pressures may prevent us from acquiring and maintaining the customer base necessary for us to increase our revenue and profitability.

In addition, our industry is evolving rapidly, and we anticipate the market for products, solutions, and services like those we provide will become increasingly competitive. New competitors may emerge that offer products, solutions, and services either comparable to ours or better suited than ours to address the demand for such products, solutions, and services, which could reduce demand for our offerings. To compete effectively, we will likely be required to increase our investment in product development and technology, as well as the personnel and third-party services required to improve reliability and lower the cost of delivery of our solutions. This may increase our costs more than we anticipate and may adversely impact our results of operations.

Current and potential competitors may also establish cooperative relationships among themselves or with third parties to further enhance their resources and offerings. Current or potential competitors may be acquired by other vendors or third parties with greater available resources. As a result of such acquisitions, current or potential competitors might be more able than we are to adapt quickly to new technologies and customer needs, to devote greater resources to the promotion or sale of their solutions, products, and services, to initiate or withstand substantial price competition, or to take advantage of emerging opportunities by developing and expanding their offerings more quickly than we can. Additionally, they may hold larger portfolios of patents and other intellectual property rights as a result of such relationships or acquisitions. If we are unable to compete effectively with these evolving competitors for market share, our business, results of operations, and financial condition would be materially and adversely affected.

Natural catastrophes and environmental risks may have significant adverse effects on our customers’ property and casualty insurance businesses, which may prevent us from maintaining or expanding our customer base and increasing our revenue.

Our customers are property and casualty insurers that have experienced, and will continue to experience in the future, losses from catastrophes that have adversely impacted and may in the future adversely impact their businesses. Catastrophes can be caused by various events, including, without limitation, hurricanes, tsunamis, floods, typhoons, windstorms, earthquakes, hail, tornadoes, explosions, volcanic eruptions, severe weather, excessive heat, epidemics, pandemics, and fires. Climate change and other environmental factors are contributing to an increase in erratic weather patterns globally and intensifying the impact of certain types of catastrophes. The risks associated with natural catastrophes are inherently unpredictable, and it is difficult to forecast the timing of such events or estimate the amount of losses they will generate. Recently, for example, various parts of the United States have suffered extensive damage due to hurricanes, droughts, floods, severe heat and cold events, fires, and other natural disasters. The combined and expected effect of those losses on insurance carriers

 

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is significant. Such losses and losses due to future events may adversely impact our existing and potential customers, which may prevent us from maintaining or expanding our customer base and increasing our revenue, as such events may cause customers to postpone new service engagements, discontinue or reduce existing service engagements, or, in severe cases, cease operations entirely. The failure of our existing or one or more potential customers due to these external pressures could result in the loss of those customers or otherwise negatively affect our revenue and growth.

There may be consolidation in the insurance industry, which could reduce the use of our platform, solutions, products, and services and adversely affect our revenues.

Mergers or consolidations among our customers could reduce our number of existing customers and potential customers. This could adversely affect our revenues even if these events do not reduce the aggregate number of customers or the activities of the consolidated entities. If our existing customers or future customers merge with or are acquired by other entities that are not our customers, or that purchase more limited solutions, products, and services from us, they may discontinue or reduce the scope of solutions, products, and services we provide to them. Any of these developments could materially and adversely affect our business, results of operations, and financial condition.

Large potential customers may have substantial negotiating leverage, which may require that we agree to terms and conditions that result in increased cost of sales, decreased revenue, and lower average selling prices and gross margins, all of which could harm our results of operations.

Our target market for potential customers includes large property and casualty insurers. These customers may have significant bargaining power when negotiating new agreements with us and have the ability to buy similar products, solutions, and services from other companies or to develop such products, solutions, and services internally. These customers may have and may continue to seek advantageous pricing and other commercial and performance terms that may require us to develop additional features in the products we utilize in providing services to them or add complexity to our customer agreements. These customers may also delay making payments under agreements, or at renewal, in an attempt to obtain more favorable terms from us. We may be required to reduce the average price of our products, solutions, and services in response to these pressures. If we are unable to avoid reducing our average prices, our results of operations could be harmed.

We may fail to set the optimal pricing and packaging of our insurance technology and operations solutions, which could negatively impact our growth strategy and ability to effectively compete in the market.

We may face challenges in selling our insurance technology and operations solutions to insurers that have internally developed their own proprietary software, and we face competition from emerging and established vendors. As a result, these companies may offer lower prices, additional solutions, products, or services, or other incentives that may impact our ability to maintain our prices.

The market for our insurance technology and operations solutions is constantly evolving, and our pricing and packaging decisions are made based on the best information available at the time, but may change significantly in the future from our expectations. We expect that we will continually analyze and refine our pricing and packaging models to adapt to this dynamic environment. For example, we may need to change our pricing in future periods in response to market demands, the inflation and interest rate environment, or increased costs. Our contracts are generally multi-year in duration and unforeseen changes could impact the profitability of certain contracts. Further, as competitors introduce new solutions, products, and services that compete with ours or reduce their prices, we may be unable to attract new customers or retain existing customers based on our historical pricing. In addition, if our mix or bundle of solutions, products, and services sold changes, then we may need to, or choose to, revise our pricing. As a result, we may be required or choose to reduce our prices or change our pricing model, which could harm our business, results of operations, and financial condition. In addition, we cannot predict whether our current or prospective customers, or the market in general, will accept

 

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these changes. If these adjustments do not gain acceptance, our business and operational results could be adversely affected. Failure to identify an optimal pricing and packaging strategy may harm our business and operational outcomes. Should customers reject our new or modified pricing plans, we may face increasing challenges in attracting new customers and retaining existing ones, particularly if we attempt to apply new pricing models to current customers.

Because the business conducted by our customers is highly concentrated in Florida and other coastal states, adverse economic conditions, natural disasters, or regulatory changes in these states could adversely affect our customers’ and, in turn, our financial condition, results of operations, and cash flows.

A significant portion of the business conducted by our customers is concentrated in Florida and other coastal states. The insurance business is primarily a state-regulated industry, and therefore, state legislatures may enact laws that adversely affect the insurance industry. Because the business conducted by our customers is concentrated in Florida and other coastal states, both we and our customers face greater exposure to unfavorable changes in regulatory conditions in those states than companies whose operations are more diversified through a greater number of states. In addition, the occurrence of adverse economic conditions, natural or other disasters, or other circumstances specific to or otherwise significantly impacting these states could adversely affect the financial condition, results of operations, and cash flows of our customers, which could, in turn, adversely affect our financial condition, results of operations, and cash flows in the event that our customers are unable to pay us in accordance with the terms of our agreements with them.

We expect that our sales cycles may be lengthy and variable, may depend upon factors outside our control, and may cause us to expend significant time and resources.

The sales cycle for our Insurance-as-a-Service platform of products and services may be lengthy and unpredictable, require extensive pre-purchase evaluation by potential new customers, involve a significant operational decision by potential new customers, and be affected by factors outside of our control. Our sales efforts will involve educating potential new customers about the use and benefits of our platform, including the technical capabilities of our platform, the potential cost savings achievable by organizations deploying our platform, and the benefits and risks associated with cloud-based products. Customers may undertake a significant evaluation process, involving not only our platform of products and services, but also those of our competitors. We expect to spend substantial time, effort, and money in our sales efforts without any assurance that our efforts will produce sales, and our customers have significant negotiating power during the sales process which may result in a lengthy sales cycle and significant contractual complexity. Additionally, we may be unable to predict the size and terms of the initial contract with a potential customer until late in the sales cycle, which would affect our ability to accurately forecast revenue. In addition, if we commit to include specific features in our platform at the request of a customer or group of customers, we may be unable to recognize revenue until the specific features have been delivered as part of our platform of products and services. Providing this additional functionality may be time consuming and may involve factors that are outside of our control. Potential future customers may also insist that we commit to certain time frames in which our platform of products and services will be operational or that, once operational, our platform of products and services will be able to meet certain operational requirements. Our ability to meet such timeframes and requirements may involve factors that are outside of our control, and failure to meet such timeframes and requirements could result in us failing to attract and/or retain new customers, incurring penalties and costs, and/or making additional resource commitments, which would adversely affect our business and results of operations.

Before our Insurance-as-a-Service platform of products and services can be utilized by our customers, it must be integrated with our customers’ and/or third parties’ systems and customer and/or third-party data must be added to it. This process can be complex, time consuming, and expensive for our customers and can result in delays in the implementation and deployment of our platform of products and services. Failing to meet the expectations of our customers with respect to our platform of products and services could result in a loss of customers and negative publicity about us and our platform of products and services. Such failure could result from deficiencies

 

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in our platform’s capabilities, performance issues, or inadequate service by us. The consequences of such failure could include monetary credits, reduced fees for additional products or services or upon renewal of existing agreements for products and services, potential reversals of previously recognized revenue, renegotiating existing customers’ contractual terms, and a customer’s refusal to pay their contractually obligated fees and costs. In addition, time-consuming and delayed implementations may also increase the amount of services personnel we must allocate to the implementation for it to be successful, thereby increasing our costs and adversely affecting our business, results of operations, and financial condition.

We utilize models to provide services to our customers in key areas such as underwriting, reserving, risk management, reinsurance purchasing, and the evaluation of catastrophe risk, and our customers and our business could be adversely impacted if these models are inadequate or unfit for the purpose for which they are being used.

We employ various modeling techniques (for example, scenario, predictive, stochastic, and/or forecasting models) to analyze and estimate exposures and risks for our customers. We utilize modeled outputs and related analyses to assist us in providing services to our customers, for example, related to underwriting and pricing, reserving, risk management, reinsurance purchasing, and the evaluation of catastrophe risk through estimates of probable maximum losses, or “PMLs.” The modeled outputs and related analyses, both from proprietary and third-party models, are subject to various assumptions, professional judgment, uncertainties, and the inherent limitations of any statistical analysis, including the use and quality of historical internal and industry data. These models may turn out to be inadequate representations of the underlying subject matter, including as a result of inaccurate inputs or application thereof (whether due to data error, human error, or otherwise). Further, to the extent we incorporate automation and machine learning as part of our modeling process, this may lead to heightened risk. Consequently, actual losses from loss events, whether from individual components (for example, wind, flood, earthquake, etc.) or in the aggregate, may differ materially from modeled results. If, based upon these models or other factors, we misprice products or underestimate the frequency and/or severity of loss events, our results of operations, financial condition, and liquidity may be adversely affected. In addition, PMLs are based on results of stochastic models that consider a wide range of possible events, their losses and probabilities. It is important to consider that stochastic events are not an exact representation of actual events. Thus, an actual event does not necessarily resemble one of the stochastic events, and the specific characteristics of the actual event can lead to substantial differences between actual and modelled losses.

With respect to the evaluation of catastrophe risk, our modeling utilizes a mix of historical data, scientific theory, and mathematical methods. Output from multiple commercially available vendor models serves as a key input in our PML estimation process. We believe that there is considerable inherent uncertainty in the data and parameter inputs for these vendor models. In that regard, there is no universal standard in the preparation of insured data for use in the models and the running of modeling software. In our view, the accuracy of the models depends heavily on the availability of detailed insured loss data from actual recent large catastrophes. Due to the limited number of events, there is significant potential for substantial differences between the modeled loss estimate and actual company experience for a single large catastrophe event. This potential difference could be even greater for perils with limited or no modeled annual frequency. We perform our own vendor model validation (including sensitivity analysis and backtesting, where possible) and supplement model output with historical loss information and analysis and management judgment. In addition, we derive our own estimates for non-modeled perils. Despite this, our PML estimates are subject to a high degree of uncertainty, and actual losses from catastrophe events may differ materially.

We rely on highly skilled and experienced personnel and if we are unable to attract, retain, or motivate key personnel or hire qualified personnel, our business may be seriously harmed. In addition, the loss of our Chief Executive Officer and Chairman, President, Chief Financial Officer or other key senior management personnel could harm our business and future prospects.

Our performance largely depends on the talents and efforts of highly-skilled and experienced individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled and

 

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experienced personnel and, if we are unable to hire and train a sufficient number of qualified employees for any reason, we may not be able to maintain or implement our current business strategy or grow our business. Moreover, certain of our competitors in the insurance and insurance technology or InsurTech industries may seek to hire our existing employees, may compete with us in hiring new employees, and may have greater resources than we do. We cannot assure you that we will provide adequate incentives to attract, retain, and motivate employees in the future. If we do not succeed in attracting, retaining, and motivating highly qualified personnel, our business may be seriously harmed. Our operations are highly dependent on the efforts of our senior executive officers, particularly our Chief Executive Officer and Chairman of our board of directors, Paresh Patel, our President, Kevin Mitchell, and our Chief Financial Officer, Suela Bulku. The loss of Paresh Patel, architect of our proprietary policy administration and underwriting technology, Kevin Mitchell, or Suela Bulku could materially adversely impact our business, results of operations, and financial condition. Further, to the extent that our business grows, we will need to attract and retain additional qualified management personnel in a timely manner, and we may not be able to do so. Our future success depends on our continuing ability to identify, hire, develop, motivate, retain, and integrate highly skilled personnel in all areas of our organization.

We may not continue to grow at historical rates in the future.

Our limited operating history may make it difficult to evaluate our current business and our future prospects. While our revenue has grown in recent periods, this growth rate may not be sustainable and should not be considered indicative of future performance, and we may not realize sufficient revenue to maintain profitability in the future. As we focus on growing our business, we expect our revenue growth rates may slow in future periods for a number of reasons, which may include lack of a broader demand for our products, increasing competition, a decrease in the growth of our overall market, and our failure to capitalize on growth opportunities.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new platform features, solutions, products, and services or enhance our existing platform, solutions, products, and services, improve our operating infrastructure, or acquire complementary businesses and technologies. Many factors will affect our capital needs as well as their amount and timing, including our growth and profitability, regulatory requirements, market disruptions, and other developments. If our present capital is insufficient to meet our current or future operating requirements, we may need to raise additional funds through financings or curtail our growth. We expect to evaluate financing opportunities from time to time, and our ability to obtain financing in the future will depend, among other things, on our development efforts, business plans, and operating performance, as well as the condition of the capital markets at the time we seek financing. We cannot be certain that financing will be available to us on favorable terms, or at all.

If we raise funds through future issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Moreover, any debt financing that we secure in the future could subject us to restrictive covenants relating to our capital raising activities, our ability to make certain types of investments or payments, and other financial and operational matters, which may increase our difficulty to obtain capital or to pursue business opportunities, including new platform, product, and service offerings and potential acquisitions. We may not be able to obtain financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business, revenue, results of operations, and financial condition may be materially harmed.

 

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Future acquisitions or investments contain inherent strategic, execution, and compliance risks that could disrupt our business and harm our financial condition.

We may pursue acquisitions or investments to grow our business in line with our strategic objectives. There is no guarantee that these acquisitions or investments (whether for internal technology or products used or for external uses) will achieve the desired return sought. Or, these acquisitions or investments could cause additional risk due to the liabilities or unforeseen expenses such acquisitions or investments may bring, such as higher than expected costs due to market competition for the acquisition/investment, regulatory approval requirements, delays in implementation, lost opportunities that could have been pursued with cash being used, litigation or regulatory enforcement post-acquisition or investment, contingent liabilities, implementation cost, misalignment of culture, loss of technology through theft or trade secrets exchanged, loss of key partners/vendors, timing within overall economic environment, carrying costs, and tax liabilities. Additionally, the risks from future acquisitions or investments could result in impairment charges against goodwill or increases in the liabilities on our consolidated balance sheet, as well as missed earnings results.

Litigation and legal proceedings filed by or against us and our subsidiaries could have a material adverse effect on our business, results of operations and financial condition.

From time to time, we may be subject to allegations and may be party to litigation and other legal proceedings relating to our business operations. Litigation and other legal proceedings may include complaints from or litigation by customers related to alleged breaches of contract or otherwise.

We expect to face risks associated with litigation of various types arising in the normal course of our business operations, including, without limitation, general commercial, breach of contract, indemnification, and employment disputes. We cannot predict with any certainty what impact such litigation would have on our business. If we were to be involved in litigation and it was determined adversely, it could require us to pay significant damages or to change aspects of our operations, either of which could have a material adverse effect on our financial results. Even claims without merit can be time-consuming and costly to defend and may divert management’s attention and resources away from our business and adversely affect our business, results of operations, and financial condition. In addition to increasing costs, a significant volume of customer complaints or litigation could also adversely affect our brand and reputation, regardless of whether such allegations have merit or whether we are liable. We cannot predict with certainty the costs of defense, the costs of prosecution, insurance coverage, or the ultimate outcome of litigation or other legal proceedings filed by or against us, including remedies or damage awards, and adverse results in such litigation and other legal proceedings may harm our business and financial condition.

Our business may be materially adversely impacted by U.S. and global market and economic conditions adverse to the insurance industry.

We expect to continue to derive most of our revenue from the insurance technology and operations solutions we provide to the property and casualty insurance industry. Given the concentration of our business activities in this industry, we will be particularly exposed to certain economic downturns affecting the insurance industry, in particular the property and casualty insurance industry. U.S. and global market and economic conditions have been, and continue to be, disrupted and volatile. General business and economic conditions that could affect us and our customers include fluctuations in economic growth, debt and equity capital markets, liquidity of the global financial markets, the availability and cost of credit, investor and consumer confidence, inflation, and the strength of the economies in which our customers operate. A poor economic environment could result in significant decreases in demand for our insurance technology and operations solutions, including the delay, reduction in scope or duration or cancellation of current or anticipated agreements, or could present difficulties in collecting accounts receivables from our customers due to their deteriorating financial condition. In addition, customers may be acquired by or merged into other entities that use our competitors’ products, or they may decide to terminate their relationships with us for other reasons. As a result, our sales could decline if a customer is merged with or acquired by another company that has a poor economic outlook or is closed.

 

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Our brand may not become as widely known or accepted as competitors’ brands or the brand may become tarnished.

Many of our competitors have brands that are well-recognized. As a new entrant into the broader insurance technology and services market, we expect to spend considerable amounts of money and other resources on creating brand awareness and building our reputation with potential customers. We may not be able to build brand awareness to levels matching our competitors, and our efforts at building, maintaining, and enhancing our reputation with customers could fail and/or may not be cost-effective. Complaints or negative publicity about our business practices, our marketing and advertising campaigns, our compliance with applicable laws, data privacy or security issues, and other aspects of our business, whether real or perceived, could diminish confidence in our brand, which could adversely affect our reputation and business. As we work to enter new markets, we will need to establish our reputation with new customers, and to the extent we are not successful in creating positive impressions, our business in these newer markets could be adversely affected. While we may choose to engage in a broader marketing campaign to further promote our brand, this effort may not be successful or cost effective. If we are unable to maintain or enhance our reputation or enhance customer awareness of our brand in a cost-effective manner, our business, results of operations, and financial condition could be materially adversely affected.

Risks Related to Intellectual Property, Data Privacy, and Cybersecurity

Our intellectual property and proprietary rights are valuable, and any inability to obtain, maintain, protect, defend, and enforce them could reduce the value of our products and brand.

Our trade secrets, trademarks, copyrights, and other intellectual property rights are important assets for us. Our ability to compete effectively will be dependent in part on our ability to obtain, maintain, protect, defend, and enforce our intellectual property and other proprietary rights, including our proprietary technology. We rely on, and expect to continue to rely on, various agreements with our employees, independent contractors, consultants, and other third parties with whom we have relationships, as well as trademark, trade dress, domain name, copyright, and trade secret laws and regulations, to protect our brand and other intellectual property rights. Such agreements, laws, and regulations may not effectively prevent unauthorized use or disclosure of our confidential information, intellectual property, or technology and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, intellectual property, or technology, and we may fail to consistently obtain, police, and enforce such agreements. Additionally, various factors outside our control pose a threat to our intellectual property rights, as well as to our products and technologies. For example, we may fail to obtain effective intellectual property protection. Also, the efforts we have taken to protect our intellectual property rights may not be sufficient or effective in all cases. For example, governmental entities that grant intellectual property rights may deny our applications for such rights despite our best efforts. Additionally, granted intellectual property rights are subject to challenge. Successful challenges may result in such rights being narrowed in scope or declared invalid or unenforceable. Despite our efforts to obtain and protect broad intellectual property rights, there can be no assurance our intellectual property rights will be sufficient to protect against others offering platforms and solutions that are substantially similar to ours and compete with our business, and unauthorized parties may attempt to copy aspects of our technology and use information that we consider proprietary. Competitors or other third parties may also attempt to circumvent or design around our intellectual property rights. In each case, our ability to compete could be significantly impaired.

We have filed, and may continue in the future to file, applications to protect certain of our innovations and intellectual property. We have not applied for any patents and cannot give assurances that any patent applications will be made by us or that, if they are made, they will be granted. We do not know whether any of our applications will result in the issuance of a trademark or copyright, as applicable, or whether the examination process will require us to narrow our claims or otherwise limit the scope of such intellectual property. In addition, we may not receive competitive advantages from the rights granted under our intellectual property. Our existing intellectual property, and any intellectual property granted to us or that we otherwise acquire in the future, may be contested, circumvented, or invalidated, and we may not be able to prevent third parties from

 

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infringing our intellectual property rights. Therefore, the exact effect of the protection of this intellectual property cannot be predicted with certainty. Because obtaining patent protection requires disclosing our inventions to the public, such disclosure may facilitate our competitors developing improvements to our innovations. Given this risk, we have chosen not to, and in the future may sometimes choose not to seek patent protection for certain innovations and instead rely on trade secret protection. Any failure to adequately obtain such patent protection, or other intellectual property protection, could later prove to adversely impact our business.

We currently hold various domain names relating to our brand, including Exzeo.com. Failure to protect our domain names could adversely affect our reputation and brand and make it more difficult for users to find our website. We may be unable, without significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon, or otherwise decrease the value of our trademarks and other proprietary rights.

In addition to registered intellectual property rights such as trademark and domain name registrations, we rely on non-registered proprietary information and technology, such as trade secrets, confidential information, know-how, and technical information. Certain information or technology that we endeavor to protect as trade secrets may not be eligible for trade secret protection in all jurisdictions, or the measures we undertake to establish and maintain such trade secret protection may be inadequate. In order to protect our proprietary information and technology, we rely in part on agreements with our employees, independent contractors, consultants, and other third parties that place restrictions on the use and disclosure of this intellectual property and confidential information. In some cases, these agreements may not adequately protect our trade secrets or confidential information, these agreements may be breached, or this intellectual property, including trade secrets, may otherwise be disclosed or become known to our competitors, which could cause us to lose a competitive advantage resulting from this intellectual property. However, our employees, independent contractors, consultants, or other third parties with whom we do business may nonetheless use intellectual property owned by others in their work for us, and disputes may arise as to the rights in related or resulting know-how and inventions. Current or future legal requirements may require us to disclose certain proprietary information or technology, such as our proprietary algorithms to regulators or other third parties, including our competitors, which could impair or result in the loss of trade secret protection for such information or technology. In addition, any changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection of our trade secrets or other proprietary information could harm our business, results of operations, and competitive position.

We may be required to spend significant resources in order to monitor and protect our intellectual property rights, and some violations may be difficult or impossible to detect. To prevent substantial unauthorized use of our intellectual property and proprietary rights, it may be necessary to prosecute actions for infringement, misappropriation, or other violations of our intellectual property and proprietary rights against third parties. In addition, third parties may seek to challenge, invalidate, or circumvent our trademarks, copyrights, trade secrets, or other intellectual property and proprietary rights, or any applications for any of the foregoing, including through administrative processes such as re-examination or interference, or litigation. The legal standards relating to the validity, enforceability, and scope of protection of intellectual property and proprietary rights are uncertain and still evolving. The value of our intellectual property and proprietary rights could also diminish if others assert rights therein or ownership thereof, and we may be unable to successfully resolve any such conflicts in our favor or to our satisfaction. Litigation to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. There can be no assurance that we will be successful in such action, even when our rights have been infringed, misappropriated, or otherwise violated. Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights or asserting that we infringe third-party intellectual property rights, and if such defenses, counterclaims, or countersuits are successful, we could lose valuable intellectual

 

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property and proprietary rights. The unauthorized copying or use of our proprietary technology, as well as any costly litigation or diversion of our management’s attention and resources, could impair the functionality of our platform, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform, or harm our reputation or brand. In addition, we may be required to license additional technology from third parties to develop and market new offerings or platform features, which may not be on commercially reasonable terms or at all and could adversely affect our ability to compete.

While we take precautions designed to protect our intellectual property, it may still be possible for competitors and other unauthorized third parties to copy our technology and use our proprietary brand, content, and information to create or enhance competing products, which could adversely affect our competitive position in our rapidly evolving and highly competitive industry. Some license provisions that protect against unauthorized use, copying, transfer, and disclosure of our technology may be unenforceable under the laws of certain jurisdictions and foreign countries. While we enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with our third-party providers and strategic partners, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how, and trade secrets or that has developed intellectual property on our behalf, and these agreements may be insufficient to protect us, especially if breached. Further, no assurance can be given that these agreements will be effective in controlling access to, and use, distribution, misuse, misappropriation, reverse engineering, or disclosure of, our technology, platform, products, and proprietary information. Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings. Moreover, these agreements may not provide an adequate remedy for breaches or in the event of unauthorized use or disclosure of our confidential information or technology, or infringement of our intellectual property. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, trade secrets and know-how can be difficult to protect and some courts inside and outside the United States are less willing or unwilling to protect trade secrets and know-how. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us, and our competitive position would be materially and adversely harmed. Additionally, individuals not subject to invention assignment agreements may make adverse ownership claims to our current and future intellectual property, and, to the extent that our employees, independent contractors, consultants, or other third parties with whom we do business use intellectual property owned by others, as to the rights in related or resulting know-how and inventions.

Changes to existing laws or regulations or new laws or regulations could impede our use of our confidential information, intellectual property, or technology, or require that we disclose our confidential information, intellectual property, or technology to our competitors, which could impair our competitive position and could have a material adverse effect on our business, operating results, and financial condition.

We use open source software in our proprietary Insurance-as-a-Service platform, which may pose particular risks in a manner that could have a negative effect on our business.

We use open source software in our proprietary Insurance-as-a-Service platform and anticipate continuing to use open source software in the future. Some open source software licenses require those who distribute open source software as part of their own software product to publicly disclose all or part of the source code of such software product or to make available any derivative works of the open source code on unfavorable terms or at no cost, and we may be subject to such terms. The terms of certain open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide our platform of products and services. Additionally, we could face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we develop using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open

 

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source license. These claims could result in litigation and could require us to make our software source code freely available, purchase a costly license, or cease offering the implicated products and services unless and until we can re-engineer such source code to eliminate use of such open source software. This re-engineering process could require us to expend significant additional research and development resources, and we may not be able to complete the re-engineering process successfully. We may also incur significant legal expenses defending such allegations or be subject to significant damages. If we are required by the terms of any open source license to release our proprietary source code, it could allow our competitors to create similar software with lower development effort and time and ultimately could result in a loss of customers for us.

In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties, assurance of title, or controls on the origin or operation of the open source software, which are risks that cannot be eliminated, and could, if not properly addressed, negatively affect our business. There is typically no support available for open source software, and we cannot ensure that the authors of open source software will implement or push updates to address security risks or will not abandon further development and maintenance. We have established processes to help alleviate these risks, including a review process for screening requests from our development teams for the use of open source software, but we cannot be sure that all of our use of open source software is in a manner that is consistent with our current policies and procedures, or will not subject us to liability. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on our business, financial condition and operating results.

Claims by others that we infringe, misappropriate, or otherwise violate, or have infringed, misappropriated, or otherwise violated, their proprietary technology or other intellectual property rights could harm our business.

From time to time, third parties may assert claims of infringement, misappropriation, or other violations of intellectual property rights against us. As we become more well known and face increasing competition, the possibility of receiving a larger number of intellectual property claims against us grows. In addition, various “nonpracticing entities” and other intellectual property rights holders may attempt to assert intellectual property claims against us or seek to monetize intellectual property rights they own to extract value through licensing or other settlements. Although we may have meritorious defenses, there can be no assurance that we will be successful in defending against these allegations or in reaching a business resolution that is satisfactory to us. Many potential litigants, including some of our competitors, have the ability to dedicate substantial resources to the assertion of their intellectual property rights. Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim, could distract our management from our business, and could require us to cease use of such intellectual property.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, we risk compromising our confidential and proprietary information during this type of litigation. We may be required to pay substantial damages, royalties, or other fees in connection with a claimant securing a judgment against us, we may be subject to an injunction or other restrictions that prevent us from using or licensing our intellectual property, or from operating under our brand, or we may agree to a settlement that prevents us from using, selling, or licensing certain portions of our insurance technology and operations solutions, which could adversely affect our business, results of operations, and financial condition. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. Our use of third-party software, data, and other intellectual property rights also may be subject to claims of infringement or misappropriation. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that such personnel have divulged proprietary or other confidential information to us. Further, we may be unaware of intellectual property rights or proprietary rights of others that may cover some or all of our insurance technology and operations solutions.

With respect to any intellectual property rights claim, we may have to seek out a license to continue operations found or alleged to violate such rights, which may not be available, or if available, may not be available on

 

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favorable or commercially reasonable terms and may significantly increase our operating expenses. Some licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. If a third party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology, which could require significant time (during which we would be unable to continue to use, sell, or license the affected part of our insurance technology and operations solutions), effort, and expense and may ultimately not be successful. Any of these events could adversely affect our business, results of operations, and financial condition.

Our business and Insurance-as-a-Service platform make extensive use of third-party data.

We utilize third-party data to support and develop our Insurance-as-a-Service platform of products and services. We anticipate that we will continue to rely on this third-party data in the future. We cannot ensure that this third-party data will continue to be available to us on commercially reasonable terms, if at all. Any defects or errors in the third-party data could adversely affect the operation of our Insurance-as-a-Service platform. Many of the risks associated with the use of third-party data cannot be eliminated, and these risks could negatively affect our brand and business.

In addition, we leverage data, technology, and proprietary underwriting algorithms to enhance risk management. For instance, we leverage dynamic data sources obtained through various sources and apply advanced statistical methods to model that data into our pricing algorithm. We expect to improve our ability to manage risk and price risk accurately over time as we incorporate new external data sources and utilize the experience gained over time with our own customer base. These enhancements are expected to lead to better underwriting, lower loss frequency, and lower loss ratios over time – after adjusting for weather-related events. Our success in this area depends on our ability to continuously incorporate new data sources as they become available and effectively apply them to improve our ability to accurately and competitively price risk.

An unauthorized disclosure or loss of customer or employee data or information or other sensitive, confidential, or personal information, including by cyber-attack or other security breach, or a suspected or actual violation of federal or state data privacy or protection laws, regulations, or other obligations, could cause a loss of data or information, give rise to remediation or other expenses, expose us to liability under federal and state laws, and subject us to litigation and investigations, which could have an adverse effect on our business, cash flows, financial condition, and results of operations.

As part of our normal operations, we collect, retain, use, store, transmit, and otherwise process certain sensitive and confidential information, including personal information. We are subject to various federal and state privacy laws, rules and regulations, and contractual obligations regarding the use, storage, sharing, disclosure, protection, and other processing of certain sensitive or confidential information, including the Gramm-Leach-Bliley Act and its state-law progeny. For example, we may currently be, or may become, subject to certain state and federal privacy laws that require enhanced protection of certain types of data or new obligations with regard to data retention, transfer, disclosure, or other processing, all of which may significantly impact our business. Given the rapid development of data protection, privacy, and security laws and regulations, we expect to encounter inconsistent interpretation and enforcement of these laws and regulations.

Our facilities and systems, and those of our third-party service providers and vendors, may be vulnerable to cyber-attacks, security breaches, ransomware, unauthorized activity and access, malicious code, acts of vandalism, computer viruses, theft of data, misplaced or lost data, fraud, misconduct or misuse, social engineering attacks and denial of service attacks, phishing attacks, programming or human errors, physical break-ins, or other disruptions, any of which could result in the loss or disclosure of confidential or personal policyholder or employee information or our own proprietary information, software, methodologies, and business secrets. Our information security risks have increased recently in part because of new technologies, the use of the internet and telecommunications technologies (including mobile and other connected devices) to conduct financial and other business transactions, and the increased sophistication and activities of organized crime,

 

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perpetrators of fraud, hackers, terrorists, and others. In addition to cyber-attacks or other security breaches involving the theft of sensitive, confidential, or personal information, we and our third-party service providers now also face threats from sophisticated hackers who engage in attacks against organizations that are designed to disrupt key business services.

We rely on service providers and vendors to provide certain technology, systems, and services that we use in connection with various functions of our business, including PCI DSS (Payment Card Industry Data Security Standard) compliant credit card processing, and we may entrust them with confidential or personal information. The information systems of our third-party service providers and vendors are also vulnerable to an increasing threat of continually evolving cybersecurity risks. Unauthorized parties may attempt to gain access to these systems or our information through fraud or other means of deceiving our associates, third-party service providers, or vendors. Hardware, software, or applications we obtain from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. The methods used to obtain unauthorized access, disable or degrade service, or sabotage systems are also constantly changing and evolving and may be difficult to anticipate or detect for long periods of time. Ever-evolving threats mean our third-party service providers and vendors must continually evaluate and adapt their own respective systems and processes, and there is no assurance that they will be adequate to safeguard against all data security breaches or misuses of data. Any future significant compromise or breach of our data security via a third-party service provider or vendor could result in additional significant costs, lost revenues, fines, lawsuits, and damage to our reputation.

Notwithstanding our efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks, and we cannot ensure that we will be able to identify, prevent, or contain the effects of possible cyber-attacks or other cybersecurity risks in the future that may bypass our security measures or disrupt our information technology systems or business. While we have implemented safeguards and processes to thwart unwanted intrusions and to protect the data in our platform and computer systems, whether housed internally or externally by third parties, such safeguards and the cybersecurity measures taken by our third-party service providers may be unable to anticipate or detect these techniques or implement adequate preventative measures quickly enough to prevent all attempts to compromise our platform. Additionally, our remediation efforts may not be successful or timely. Further, notwithstanding any contractual rights or remedies we may have, because we do not control our third-party service providers, including their security measures and the processing of data by our third-party service providers, we cannot ensure the integrity or security of measures they take to protect customer information and prevent data loss.

Noncompliance or perceived noncompliance with any privacy or security laws, rules, regulations, or contractual obligations, or our privacy policies, or any security breach, cyber-attack, or cybersecurity breach, and any incident involving the misappropriation, loss, or other unauthorized disclosure or use of, or access to, sensitive, confidential, or personal information, could require us to expend significant capital and other resources to continue to modify or enhance our protective measures and to remediate any damage caused by such breaches or violations. In addition, this could result in interruptions to our operations and damage to our reputation, misappropriation of confidential or personal information, or regulatory enforcement actions or investigations, material fines and penalties, litigation, or other liability or actions which could have a material adverse effect on our business, cash flows, financial condition, and results of operations. As the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.

We make public statements about our use and disclosure of personal information through our privacy policies, information provided on our website and/or press statements. Although we endeavor to comply with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so. The publication of our privacy policies and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair, or

 

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misrepresentative of our actual practices. Moreover, from time to time, concerns may be expressed about whether our platform, products, solutions, and services compromise the privacy of customers and others. Any concerns about our data privacy and security practices, even if unfounded, could damage the reputation of our business, discourage potential customers from using our platform, products, solutions, and services, and have a material adverse effect on our business.

In addition, our insurance coverage may not be adequate to cover costs, expenses, and losses associated with such events, and in any case, such insurance may not cover all of the types of costs, expenses, and losses we could incur to respond to and remediate a security breach. Any incidents may result in loss of, or increased costs of, our cybersecurity insurance. We also cannot ensure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims related to a security incident or breach, or that the insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or coinsurance requirements, could adversely affect our reputation and our business, financial condition, and results of operations. In addition to costs associated with investigating and fully disclosing a data breach, we could be subject to regulatory proceedings or private claims by affected individuals resulting in substantial monetary fines or damages, and our reputation would likely be harmed.

Our information technology systems may fail or be disrupted or subject to errors, bugs, vulnerabilities, or defects, which could adversely affect our business.

Our business and our Insurance-as-a-Service platform of products and services are highly dependent upon the successful and uninterrupted functioning of our computer and data processing systems. Our information technology systems are complex, and therefore undetected errors, failures, bugs, vulnerabilities, or defects may be present in our products and services or occur in the future in our products and services, our technology or software, or technology or software we license in from third parties, including open source software, especially when updates or new products are released. The failure or disruption of these systems could interrupt our operations and result in a material adverse effect on our business.

The growth of our business is dependent upon the successful development and implementation of advanced computer and data processing systems as well as the development and deployment of new information technologies to streamline our operations, including our policy administration, underwriting, and data analytics services. The failure of these systems to function as planned could slow our growth and adversely affect our future business volume and results of operations. Real or perceived errors, failures, bugs, vulnerabilities, or defects in our information technology systems could result in negative publicity, loss of or delay in market acceptance of our products and services, harm to our brand, and weakening of our competitive position. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend significant additional resources in order to help correct the problem. Any real or perceived errors, failures, bugs, vulnerabilities, or defects in our information technology systems could also impair our ability to attract new customers, retain existing customers, or expand their use of our products and services, which would adversely affect our business, results of operations, and financial condition. Additionally, our computer and data processing systems could become obsolete or could cease to provide a competitive advantage which could negatively affect our future results of operations. We may also be subject to liability claims for damages related to real or perceived errors, failures, bugs, vulnerabilities, or defects in our information technology systems. A material liability claim may harm our business and results of operations.

We conduct our business primarily from offices located in Tampa, Florida, where tropical storms could damage our facilities or interrupt our power supply. The loss or significant impairment of functionality in these facilities for any reason could have a material adverse effect on our business, although we believe we have sufficient redundancies to replace our facilities if functionality is impaired. In the event of a disaster causing a complete loss of functionality at our Tampa location, we plan to temporarily use our secondary office in Ocala, Florida to continue our operations.

 

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Any disruption of our Internet connections, including to any third-party cloud providers that host any of our websites or web-based services, could affect the success of our Insurance-as-a-Service platform of products and services and our business.

Any system failure, including network, software, or hardware failure, that causes an interruption in our network or a decrease in the responsiveness of our website or our Insurance-as-a-Service platform could result in reduced revenue and potential breaches of our customer contracts. Continued growth in Internet usage could cause a decrease in the quality of Internet connection service. Websites have experienced service interruptions as a result of outages and other delays occurring throughout the worldwide Internet network infrastructure. In addition, there have been several incidents in which individuals have intentionally caused service disruptions of websites. If these outages, delays, or service disruptions frequently occur in the future, usage of our web-based services and our Insurance-as-a-Service platform could grow more slowly than anticipated or decline and we may lose revenue and customers.

If the third-party cloud providers that host any of our websites or web-based services were to experience a system failure, the performance of our websites and web-based services, including our Insurance-as-a-Service platform, would be harmed. Currently, we rely on two third-party cloud providers to host our websites and web-based services. As a result, it may take significant resources if we need to switch to another cloud provider for any reason. Any disruption of or interference with our use of these third-party cloud providers could impair our ability to deliver our insurance technology and operations solutions to our customers, resulting in customer dissatisfaction, damage to our reputation, loss of customers, and harm to our operations and our business. In general, third-party cloud providers are vulnerable to damage from fire, floods, earthquakes, acts of terrorism, power loss, telecommunications failures, break-ins, and similar events. The controls implemented by our current or future third-party cloud providers may not prevent or timely detect such system failures, and we do not control the operation of third-party cloud providers that we use. Our current or future third-party cloud providers could decide to close their facilities without adequate notice. In addition, any financial difficulties, such as bankruptcy, faced by our current or future third-party cloud providers, or any of the service providers with whom we or they contract, may have negative effects on our business. If our current or future third-party cloud providers are unable to keep up with our growing needs for capacity or any spikes in customer demand, it could have an adverse effect on our business. Any changes in service levels by our current or future third-party cloud providers could result in loss or damage to our customers’ stored information and any service interruptions at these third-party cloud providers could hurt our reputation, cause us to lose customers, harm our ability to attract new customers, or subject us to potential liability. Our property and business interruption insurance coverage may not be adequate to fully compensate us for losses that may occur. Additionally, our systems are not fully redundant, and we have not yet implemented a complete disaster recovery plan or business continuity plan. Although the redundancies we do have in place will permit us to respond, at least to some degree, to service outages, our current or future third-party cloud providers that host our Insurance-as-a-Service platform are vulnerable in the event of failure. We do not yet have adequate structure or systems in place to recover from a third-party cloud provider’s severe impairment or total destruction, and recovery from the total destruction or severe impairment of any of our third-party cloud providers could be difficult and may not be possible at all.

In addition, our customers depend on Internet service providers, online service providers, and other website operators for access to our website and Insurance-as-a-Service platform. These providers could experience outages, delays and other difficulties due to system failures unrelated to our systems. Any of these events could seriously harm our business, results of operations, and financial condition.

The increasing adoption by states of cybersecurity regulations could impose additional compliance burdens on us and expose us to additional liability.

In response to the growing threat of cyber-attacks, certain jurisdictions have begun to consider new cybersecurity measures, including the adoption of cybersecurity regulations. Some jurisdictions have enacted more generalized data privacy and security laws, rules, and regulations that apply to certain data that we process. Although we take

 

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steps to comply with financial industry cybersecurity regulations and other data privacy and security laws, our failure to comply with new or existing cybersecurity laws, rules, and regulations could result in material regulatory actions, litigation, fines, reputational harm, and other penalties. In addition, efforts to comply with new or existing cybersecurity or privacy laws, rules, and regulations could impose significant costs on our business, which could materially and adversely affect our business, financial condition, and results of operations.

Risks Related to Regulation of Our Business

We operate in a highly regulated environment, and any failure to comply with applicable insurance, data privacy, or other regulatory requirements could materially and adversely affect our business, financial condition, and results of operations.

Our business operates within a complex, evolving, and highly regulated legal environment across federal, state, and international jurisdictions. We provide Insurance-as-a-Service solutions to property and casualty insurers, and as such, we are subject to a wide array of regulatory obligations relating to insurance operations, consumer protection, data privacy, cybersecurity, and compensation practices. While we do not underwrite insurance risk or issue policies in our own name, we perform delegated functions such as policy administration, claims handling, premium collection, and underwriting support on behalf of licensed insurers. These services subject us to various state laws and regulations, including licensing and registration requirements, fiduciary responsibilities, and financial oversight. Noncompliance, even if inadvertent, could lead to enforcement actions, monetary penalties, license suspension or revocation, reputational harm, or restrictions on our ability to operate in certain markets.

Our customers upload to and store their customer and other data in our cloud-based platform. We must monitor and comply with a wide variety of laws and regulations regarding the data stored and processed on our cloud-based platform as well as in the operation of our business. Non-compliance with these laws could result in penalties or significant legal liability.

The legal environment of cloud-based technology businesses is evolving, and we are subject to a variety of laws and regulations that involve matters central to our business. Many of these laws and regulations are still evolving and being tested in courts and could be interpreted in ways that could harm our business. These may involve privacy, data protection and personal information, content, intellectual property, data security, and data retention and deletion. In particular, we are subject to federal and state laws regarding privacy and protection of data. Federal and state laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the evolving industry in which we operate, and may be interpreted and applied inconsistently from state to state and inconsistently with our current policies and practices.

Regulatory scrutiny of delegated authority and claims administration functions may increase our regulatory compliance costs, limit our flexibility, and adversely affect our business.

Our business depends on the ability to act under delegated authority from licensed insurance entities. State regulators, guided in part by the National Association of Insurance Commissioners (“NAIC”), are increasingly scrutinizing the use of managing general agents and third-party administrators, especially where such entities perform core insurance functions. Several states require that managing general agent and third-party administrator agreements be submitted for review or approval and impose restrictions on the scope of delegated authority.

In connection with our delegated claims administration functions, we are also subject to fair claims practices laws that prohibit, among other things, misrepresentations of coverage, unreasonable delays, or unfair settlement practices. In some states, claims adjusters must be licensed and comply with continuing education and conduct requirements. Any failure by us or by third-party adjusters we oversee, to comply with these standards may expose us to administrative actions, penalties, or litigation.

 

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Emerging regulatory initiatives could impose additional burdens on companies like ours, including mandatory disclosures, expanded fiduciary requirements, governance standards, and oversight obligations. These changes may require us to renegotiate customer contracts, enhance internal compliance infrastructure, or limit the services we are permitted to perform, all of which could adversely affect our business operations and profitability.

Failure to maintain required licenses in one or more jurisdictions could disrupt our business and impair our ability to grow.

We are required to maintain a variety of licenses across jurisdictions, including insurance agency, managing general agent, and claims adjuster licenses, as well as registrations in states where we perform regulated functions. Licensing requirements vary by jurisdiction and often include background checks, disclosures of ownership and key personnel, continuing education, and annual renewals.

A lapse in any required license, whether due to administrative oversight, changes in state law, or increased regulatory scrutiny, could result in our inability to service existing customers or enter new markets. In certain cases, losing a license in one jurisdiction could result in negative publicity that affects our relationships with insurance carriers and managing general agents.

We are subject to stringent fiduciary duties with respect to insurance premium funds, and noncompliance could result in regulatory enforcement or reputational harm.

In many jurisdictions, insurance premiums collected and held by managing general agents or third-party administrators are considered fiduciary assets. We may be required to maintain premium trust accounts, implement reconciliation and segregation protocols, and ensure the timely remittance of funds to insurers. Failure to adhere to these fiduciary responsibilities, whether due to internal error, systems failure, or fraud, could lead to state enforcement actions, fines, and possible revocation of licensure. Any such incident could also damage our reputation with customers and regulators and undermine our credibility as a reliable insurance services provider.

We are subject to extensive and evolving data privacy and cybersecurity regulation, which could increase our compliance burden and exposure to liability.

Our operations involve the collection, storage, and processing of significant volumes of sensitive personal and financial data, including information from insurance policyholders, applicants, and claims. We are subject to a growing body of federal and state data privacy and cybersecurity laws, such as the NAIC Insurance Data Security Model Law (adopted in several states). These laws require the implementation of comprehensive data protection programs, security risk assessments, breach notification protocols, and vendor oversight processes. Although we take steps to comply with applicable cybersecurity regulations, our failure to comply with new or existing cybersecurity regulations could result in regulatory actions and other penalties. In addition, efforts to comply with new or existing cybersecurity regulations could impose significant costs on our business.

Regulatory frameworks governing data privacy and cybersecurity are rapidly evolving. Future regulations could require us to modify or restrict the use of certain technologies, increase governance and disclosure requirements, or impose additional compliance costs. Noncompliance with data privacy or cybersecurity regulations could result in investigations, enforcement actions, litigation, or reputational damage.

Our relationships with insurance carriers are subject to regulatory oversight and third-party risk.

The insurance companies with which we do business are themselves subject to regulation by state departments of insurance, including solvency and reserve requirements. We cannot guarantee that all of our insurance company partners are in compliance with all applicable regulations. If any of these partners face regulatory action, insolvency, or are otherwise adversely impacted, we may be required to expend resources addressing related inquiries or disruptions to our operations. This could divert management attention and negatively affect our results of operations.

 

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Our international operations in India expose us to regulatory risks under Indian law and cross-border compliance obligations.

Our proprietary technology platform is developed and maintained by our subsidiary in India. These international operations expose us to a range of regulatory obligations under Indian law, including employment, tax, data protection, and cybersecurity requirements. In particular, India’s Digital Personal Data Protection Act, enacted in 2023, and related implementing regulations expected to be operational in 2025, is a new legal framework designed to protect individuals’ personal data and introduces obligations related to consent management, data handling, breach notification, and cross-border data transfers that may affect how we conduct business.

We may also be affected by restrictions on data localization, changes to labor laws, or new corporate compliance mandates in India. Additionally, our cross-border operations must comply with anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, which imposes obligations relating to internal controls, recordkeeping, and the prohibition of bribery of foreign officials.

Failure to comply with applicable Indian or U.S. regulations could result in fines, sanctions, reputational harm, or disruption to our technology development. Although policies and procedures are designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies. Geopolitical instability, policy shifts, or infrastructure disruptions in India could also interfere with our technology operations, potentially impairing our ability to deliver services to customers.

Changes in state insurance laws or regulations, or new interpretations of existing laws, could impose significant additional compliance costs or impede our ability to operate certain aspects of our business.

Insurance regulation continues to evolve in response to market innovation, increased use of technology, and heightened consumer protection concerns. State regulators and the NAIC are increasingly focused on governance of delegated authority arrangements and third-party risk management, particularly where core insurance functions are outsourced. New legislation or regulatory guidance, such as model acts adopted by individual states, could impose more stringent operational, financial, or governance obligations on us.

Any such changes could require us to modify our business practices, increase investment in compliance infrastructure, or limit our ability to offer certain services, any of which could adversely affect our business and results of operations.

Federal regulation of the insurance industry is evolving and may increase our compliance obligations and costs.

The U.S. federal government generally has not directly regulated the insurance industry. However, the federal government has undertaken initiatives or considered legislation in several areas that may affect the insurance industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) also established the Federal Insurance Office (“FIO”), which is authorized to study, monitor, and report to Congress on the insurance industry and to recommend that the Financial Stability Oversight Council designate an insurer as an entity posing risks to U.S. financial stability in the event of the insurer’s material financial distress or failure. Any additional regulations established as a result of the Dodd-Frank Act or actions in response to the FIO could increase our costs of compliance or lead to disciplinary action. In addition, legislation has been introduced from time to time that, if enacted, could result in the federal government assuming a more direct role in the regulation of the insurance industry, including federal licensing in addition to or in lieu of state licensing and reinsurance for natural catastrophes. We cannot predict whether future federal laws or regulations will be enacted, nor how existing federal initiatives may evolve. However, any expansion of federal regulation could increase our compliance costs, lead to duplicative or conflicting requirements, or require changes to our business practices, which could adversely affect our business, financial condition, and results of operations.

 

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Risks Related to Our Relationship with HCI

HCI controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other shareholders from influencing significant decisions.

Following the completion of this offering, our parent company, HCI, will continue to control shares representing a majority of the voting power of all of our issued and outstanding shares of common stock. Immediately after this offering, HCI will own 75,000,000 shares of our common stock, which will represent approximately   % of our total outstanding shares of common stock and voting power (assuming no exercise of the underwriters’ option to purchase additional shares of common stock from us). As long as HCI continues to control shares representing a majority of our voting power, it will generally be able to determine the outcome of all corporate actions requiring shareholder approval (unless supermajority approval of such matter is required), including the election of directors. Even if HCI were to control less than a majority of our voting power, HCI may be able to influence the outcome of corporate actions so long as it owns a significant portion of our voting power. If HCI does not dispose of its shares of our common stock, HCI could retain control over us for an extended period of time or indefinitely.

Investors in this offering will not be able to affect the outcome of any shareholder vote while HCI controls the majority of our voting power. Due to its ownership and rights under our amended and restated articles of incorporation and bylaws that will be in effect immediately prior to the completion of this offering, HCI will be able to control, subject to applicable law, the composition of our board of directors, which in turn will be able to control all matters affecting us, including, among other things:

 

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any determination with respect to our business direction and policies, including the appointment and removal of officers and, in the event of a vacancy on our board of directors, additional or replacement directors;

 

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any determinations with respect to mergers, business combinations or dispositions of assets;

 

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determination of our management policies;

 

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determination of the composition of the committees on our board of directors;

 

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our financing policy;

 

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our compensation and benefit programs and other human resources policy decisions;

 

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termination of, changes to, or determinations under our agreements with HCI;

 

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changes to any other agreements that may adversely affect us;

 

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our dividend policy; and

 

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determinations with respect to our tax returns.

See “Description of Capital Stock.”

Because HCI’s interests may differ from ours or from those of our other shareholders, actions that HCI takes with respect to us, as our controlling shareholder, may not be favorable to us or our other shareholders.

If HCI sells a controlling interest in us to a third party in a private transaction, you may not realize any change-of-control premium on shares of our common stock, and we may become subject to the control of a currently unknown third party.

Following the completion of this offering, HCI will continue to hold approximately   % of our voting power (assuming no exercise of the underwriters’ option to purchase additional shares of common stock from us). HCI will have the ability, should it choose to do so, to sell some or all of its shares of our common stock in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of us.

 

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The ability of HCI to privately sell its shares of our common stock, with no requirement for a concurrent offer to be made to acquire all of our shares that will be publicly traded hereafter, could prevent you from realizing any change-of-control premium on your shares of our common stock that may otherwise accrue to HCI on its private sale of the shares of our common stock it holds. Additionally, if HCI privately sells shares representing a significant portion of our common stock, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with other shareholders.

HCI’s interests may conflict with our interests and the interests of our other shareholders. Conflicts of interest between HCI and us could be resolved in a manner unfavorable to us and our other shareholders.

Various conflicts of interest between us and HCI could arise. HCI’s interests as our controlling shareholder may differ from our interests or those of our other shareholders. Additionally, ownership interests of our Chief Executive Officer and chairman of our board of directors, Paresh Patel, in our common stock and in the stock of HCI, or his service as a director and officer of both companies, could create or appear to create potential conflicts of interest when he is faced with decisions relating to us or our business. These decisions could include:

 

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corporate opportunities;

 

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the impact that operating decisions for our business may have on HCI’s consolidated financial statements;

 

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differences in tax positions between HCI and us, particularly in light of the tax allocation agreement among HCI and its subsidiaries, including us;

 

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the impact that operating or capital decisions (including the incurrence of indebtedness) for our business may have on HCI’s current or future indebtedness or the covenants under that indebtedness;

 

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future, potential commercial arrangements between HCI (or its affiliates) and us or between HCI and third parties;

 

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business combinations involving us;

 

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our dividend policy;

 

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management stock ownership; and

 

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the intercompany agreements between HCI (or its affiliates) and us.

See “Certain Relationships and Related Party Transactions.”

Furthermore, disputes may arise between HCI (or its affiliates) and us relating to our past and ongoing relationships and these potential conflicts of interest may make it more difficult for us to favorably resolve such disputes, including those related to:

 

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tax, employee benefits, indemnification, and other matters arising from this offering;

 

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the nature, quality, and pricing of services HCI agrees to provide to us;

 

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the nature, quality, and pricing of services we agree to provide to HCI and/or its affiliates;

 

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sales or other disposals by HCI of all or a portion of its ownership interest in us; and

 

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business combinations involving us.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated party. While we are controlled by HCI, we may not have the leverage to negotiate amendments to our agreements with HCI and/or its affiliates, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.

 

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Our Chief Executive Officer and Chairman of our board of directors may have actual or potential conflicts of interest because of his financial interests in HCI or because of his positions with HCI.

Following this offering, Paresh Patel, our Chief Executive Officer and Chairman of our board of directors, will continue to serve as Chairman of the board of directors of HCI and as HCI’s Chief Executive Officer. Mr. Patel also owns HCI common stock, options to purchase HCI common stock, and other HCI equity awards. Mr. Patel’s position at HCI and his ownership of HCI equity and equity awards creates, or may create the appearance of, conflicts of interest when he is faced with decisions that could have different implications for HCI than the decisions have for us. Additionally, because of his positions with HCI, Mr. Patel owns equity interests in both us and HCI. Continuing ownership of HCI shares could create, or appear to create, potential conflicts of interest if we and HCI face decisions that could have implications for both us and HCI. See “Management—Executive Officers and Directors.” Mr. Patel is our only director, officer or employee who will serve as an officer or director of, or otherwise be employed by, HCI following the offering. Potential conflicts of interest may also arise out of commercial arrangements that we currently have with HCI and its affiliates or that we and HCI or its affiliates may enter into in the future. See “Certain Relationships and Related Party Transactions.”

We have, and expect to continue to have, significant customer concentration, and substantially all of our revenues to date are from customers who are affiliated with our controlling shareholder, HCI.

All of our revenue prior to this offering comes from a small number of customers. All of these customers are also affiliates of HCI, our controlling shareholder. While we have one current customer that is not affiliated with HCI, we do not anticipate generating significant revenue from this customer in fiscal 2025. As a result, we expect our revenue for the foreseeable future will continue to be heavily dependent on customers affiliated with HCI. The loss of any of these customers, a reduction in revenue from any of these customers or an interruption in business from any of these customers would significantly harm our business, results of operations, and financial condition. While we expect this reliance to decrease over time as our customer base and revenue grow, we expect that we will continue to depend upon a relatively small number of customers (including affiliates of HCI) for a significant portion of our revenue for the foreseeable future.

We may be unable to achieve some or all of the anticipated benefits of being a standalone public company.

We may be unable to achieve the full strategic and financial benefits expected as a result of being a standalone public company, or such benefits may be delayed or not occur at all. These anticipated benefits include the following:

 

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allowing investors to evaluate the distinct merits, performance and future prospects of our business, independent of HCI;

 

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enhancing our ability to focus on our own operating priorities, strategies, and specific market dynamics;

 

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improving our strategic and operational flexibility, allowing us to better target innovation and respond more effectively to different customer needs and the competitive environment for our business;

 

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allowing us to adopt a capital structure better suited to our financial profile and business needs, without competing for capital with HCI’s other businesses;

 

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creating an independent equity structure that will facilitate our ability to effect future acquisitions utilizing our capital stock;

 

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articulating a clear investment proposition and capital allocation policy to attract a long-term investor base aligned with our strategic goals; and

 

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enhancing employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives of our business.

 

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We may be unable to achieve some or all of the benefits that we expect to achieve as a standalone public company in the time we expect, if at all, for a variety of reasons, including management distractions and potential operational disruptions during the transition; increased exposure to market volatility; and reduced business diversification compared to HCI. Failure to realize the expected benefits of becoming a standalone public company, or delays in doing so, could adversely affect our business, financial condition, cash flows, and results of operations.

We may not be able to effectively perform the administrative and back-office services that we previously received from HCI at the same levels and costs as were previously provided by HCI.

We have previously obtained, but no longer obtain, certain administrative and back-office services from HCI, as we have replicated, developed, or replaced functions and administrative services that we previously received from HCI.

We may not be able to perform these services, either internally or through third-party vendors, on terms and conditions, including cost, comparable to those that we previously received in the past from HCI. Additionally, we may be unable to sustain the services at the same levels or obtain the same benefits as when we were receiving such services and benefits from HCI. If we do not maintain our own adequate systems and business functions at the same levels and costs previously received from HCI, or if we are unable to obtain them from other providers at the same levels and costs previously received from HCI, we may not be able to operate our business effectively or at comparable costs, and our profitability may decline. In addition, we have historically received informal support from HCI. The level of this informal support could diminish or be eliminated following this offering.

Third parties may seek to hold us responsible for liabilities of HCI, which could result in a decrease in our income.

Third parties may seek to hold us responsible for HCI’s liabilities. If those liabilities are significant and we are ultimately held liable for them, we cannot assure that we will be able to recover the full amount of our losses from HCI.

We may be required to make cash payments to HCI for prior tax years under the Tax Allocation Agreement with HCI.

We are a party to a tax allocation agreement with HCI (the “Tax Allocation Agreement”) that requires that we pay to HCI the amount of U.S. federal income tax we would owe for each taxable year if we had filed a U.S. federal income tax return for such year as a separate company. If we incur a loss (or have unused tax credits) for a taxable year that can be carried back to prior years, HCI is required to pay us the amount of U.S. federal income tax refund we would be entitled to receive, computed on a separate company basis. If no carryback is allowed, however, HCI is obligated to pay us the amount of the reduction in the consolidated U.S. federal income taxes of HCI’s affiliated group that results from such group’s use of our losses or credits. The Tax Allocation Agreement will automatically terminate with respect to us if our membership in HCI’s affiliated group terminates, but certain rights and obligations arising under the Tax Allocation Agreement will survive termination. Following the completion of this offering, we may be required to make cash payments to HCI in respect of taxes for prior years under the Tax Allocation Agreement, which payments could harm our results of operations and financial condition.

 

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We could incur substantial additional costs and experience temporary business interruptions, and we may not be adequately prepared to meet the requirements of an independent, publicly traded company on a timely or cost-effective basis.

We have historically operated as part of HCI and have had access to various corporate functions. Following this offering, we will need to provide internally or obtain from unaffiliated third parties the services we will no longer receive from HCI. We may be unable to replace these services in a timely manner or on terms and conditions as favorable as those we receive from HCI.

In anticipation of operating as an independent, publicly traded company, we have been installing and implementing information technology infrastructure to support certain of our business functions, including accounting and financial reporting, human resources, legal and compliance, communications, engineering, manufacturing and distribution, and sourcing. We may incur substantially higher costs than currently anticipated as we transition from the existing transactional and operational systems and data centers we currently use as part of HCI. If we are unable to transition effectively, we may incur temporary interruptions in business operations. Any delay in implementing, or operational interruptions suffered while implementing, our new information technology infrastructure could disrupt our business and have a material adverse effect on our results of operations.

Following this offering, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting, and other expenses that we did not incur as part of HCI. In addition, we will be directly subject to reporting and other obligations under the Exchange Act and the Listing Rules of the New York Stock Exchange. The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. Beginning with our second required Annual Report on Form 10-K, we intend to comply with Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), which will require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm on the effectiveness of internal control over financial reporting. However, while we remain an emerging growth company, we will not be required to include an attestation report by our independent registered public accounting firm on the effectiveness of internal control over financial reporting. Under the Sarbanes-Oxley Act, we are also required to maintain effective disclosure controls and procedures. To comply with these requirements, we may need to upgrade our systems, implement additional financial and management controls, reporting systems, and procedures and hire additional accounting and finance staff. These reporting and other obligations may place significant demands on management, administrative, and operational resources, including accounting systems and resources. If we are unable to upgrade our financial and management controls, reporting systems, information technology systems, and procedures in a timely and effective fashion, our ability to comply with financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired, and we may be unable to conclude that our internal control over financial reporting is effective. If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of shares of our common stock could decline and we could be subject to sanctions or investigations by the Securities and Exchange Commission (“SEC”) or other regulatory authorities, which would require additional financial and management resources.

Moreover, we cannot be certain that these measures would ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Even if we were to conclude, and our auditors were to concur, that our internal control over financial reporting provided reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, because of its inherent limitations, internal control over financial reporting might not prevent or detect fraud or misstatements. This, in turn, could have an adverse impact on trading prices for shares of our common stock, and could adversely affect our ability to access the capital markets.

 

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We have no operating history as an independent, publicly traded company, and our historical consolidated financial information is not necessarily representative of the results we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.

We derived the historical consolidated financial information included in this prospectus from HCI’s consolidated financial statements, and this information does not necessarily reflect the results of operations and financial position we would have achieved as an independent, publicly traded company during the periods presented, or those that we will achieve in the future. This is primarily because of the following factors:

 

•

We have operated as part of HCI, and HCI has performed various corporate functions for us. Our historical consolidated financial information reflects allocations of corporate expenses from HCI for these functions. These allocations may not reflect the costs we will incur for similar services in the future as an independent, publicly traded company.

 

•

We may enter into transactions with HCI that did not exist prior to this offering, such as HCI’s provision of transition and other services, and undertake indemnification obligations, which will cause us to incur new costs.

 

•

Our historical consolidated financial information does not reflect changes that we expect to experience in the future as a result of our separation from HCI, including changes in the financing, cash management, operations, cost structure, and employee needs of our business. As part of HCI, we enjoyed certain benefits from HCI’s operating diversity, reputation, size, purchasing power, ability to borrow, and available capital for investments, and we may lose these benefits after this offering. As an independent entity, we may be unable to purchase goods, services, and technologies, obtain insurance and health care benefits, computer software licenses, or other services or licenses, or access capital markets, on terms as favorable to us as those we obtained as part of HCI, and our results of operations may be adversely affected.

We will also face additional costs and demands on management’s time associated with being an independent, publicly traded company, including costs and demands related to investor and public relations, public financial reporting, and corporate governance, including board of director fees and expenses. For additional information about our past financial performance and the basis of presentation of our consolidated financial statements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and the notes thereto included elsewhere in this prospectus.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

We are not currently required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act and are, therefore, not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Although we will be required to disclose changes made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. As an emerging growth company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of (i) the year following our first annual report required to be filed with the SEC or (ii) the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, or operating.

As a subsidiary of a public company, we do not currently have our own independent internal audit function, as our internal audit function is part of HCI’s audit function. To comply with the requirements of being a public

 

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company, we have undertaken various actions, and will need to take additional actions, such as implementing numerous internal controls and procedures and hiring additional accounting or internal audit staff or consultants. Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business. Additionally, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected. We could also become subject to investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate and we could face restricted access to capital markets.

Risks Related to Our Common Stock and the Securities Markets

There is no existing market for our common stock and an active, liquid trading market for our common stock may not develop following this offering.

Prior to this offering, there has been no public market for our common stock. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market or how liquid that market may become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you purchase. The initial public offering price of our common stock will be determined by negotiation between us and the underwriters. This price will not necessarily reflect the price at which investors in the market will be willing to buy and sell shares of our common stock following this offering. In addition, the market price of our common stock may decline below the initial public offering price, and you may not be able to resell your shares at, or above, the initial public offering price.

The market price of our common stock may be highly volatile, and you may not be able to resell your shares at or above the initial public offering price.

Prior to this offering, there has been no public market for shares of our common stock. In addition, the market price of our common stock following this offering is likely to be highly volatile, may be higher or lower than the initial public offering price, and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our common stock since you might be unable to sell your shares at or above the price you paid in this offering. The following factors, in addition to other factors described in this “Risk Factors” section and included elsewhere in this prospectus, may have a significant impact on the market price of our common stock:

 

•

the occurrence of severe weather conditions and other catastrophes;

 

•

our operating and financial performance, quarterly or annual earnings relative to similar companies;

 

•

publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;

 

•

the public’s reaction to our press releases, our other public announcements, and our filings with the SEC;

 

•

announcements by us or our competitors of acquisitions, business plans, or commercial relationships;

 

•

any major change in our board of directors or senior management;

 

•

additional sales of our common stock by us, our directors, executive officers or principal shareholders;

 

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•

adverse market reaction to any indebtedness we may incur or securities we may issue in the future;

 

•

short sales, hedging, and other derivative transactions in our common stock;

 

•

exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates, and performance of insurance-linked investments;

 

•

our creditworthiness, financial condition, performance, and prospects;

 

•

our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time;

 

•

perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;

 

•

regulatory or legal developments;

 

•

changes in general market, economic, and political conditions;

 

•

conditions or trends in our industry, geographies or customers;

 

•

changes in accounting standards, policies, guidance, interpretations or principles; and

 

•

threatened or actual litigation or government investigations.

In addition, broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance, and factors beyond our control may cause our stock price to decline rapidly and unexpectedly. In addition, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, results of operations, and prospects. Any adverse determination in litigation could also subject us to significant liabilities.

Additionally, if our common stock is not listed on, or becomes delisted from, the NYSE for any reason, and is quoted on an OTC Market, a trading system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on the NYSE or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

We will evaluate whether to pay cash dividends on shares of our common stock in the future.

Once this offering is complete and we are a standalone, publicly traded company, our board of directors will evaluate whether to pay cash dividends to our shareholders. The timing, declaration, amount, and payment of future dividends to shareholders, if any, will fall within the discretion of our board of directors. Our board of directors’ decisions regarding the payment of dividends will depend on consideration of many factors, such as our financial condition, earnings, sufficiency of distributable reserves, opportunities to retain future earnings for use in the operation of our business and to fund future growth, capital requirements, debt service obligations, legal requirements, regulatory constraints, and other factors that our board of directors deems relevant. There can be no assurance that we will pay a dividend in the future or continue to pay any dividend if we do commence the payment of dividends. See “Dividend Policy.”

Investors purchasing common stock in this offering will experience immediate and substantial dilution as a result of this offering and any future equity issuances.

The initial public offering price of our common stock will be substantially higher than the pro forma net tangible book value per share of our outstanding common stock prior to completion of this offering. Accordingly, if you

 

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purchase our common stock in this offering, you will pay substantially more for your shares than the amounts paid by our existing shareholders for their shares and you will suffer immediate dilution of approximately $    per share in pro forma net tangible book value of our common stock. In addition, if the underwriters exercise their option to purchase additional shares from us, or if we issue additional equity securities in the future, investors purchasing shares of common stock in this offering will experience additional dilution. See “Dilution.”

Holders of our common stock may be diluted due to equity issuances.

In the future, holders of our common stock may be diluted because of equity issuances for acquisitions, capital market transactions, or otherwise, including any equity awards that we will grant to our directors, officers, and employees. Such awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock. We also plan to issue additional stock-based awards, including annual awards, new hire awards, and periodic retention awards, as applicable, to our directors, officers, and other employees under our employee benefits plans as part of our ongoing equity compensation program.

We have broad discretion over the use of the net proceeds from this offering and it is possible that we will not use them effectively.

We cannot specify with any certainty the particular uses of the net proceeds that we will receive from this offering. Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure by our management to apply these proceeds effectively could adversely affect our business, results of operations, and financial condition. Pending their use, we may invest our proceeds in a manner that does not produce income or that loses value. Our investments may not yield a favorable return to our investors and may negatively impact the price of our common stock.

A substantial portion of the outstanding shares of our common stock after this offering will be restricted from immediate resale, but may be sold on a stock exchange in the near future. The large number of shares eligible for public sale could depress the market price of our common stock.

The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after this offering, and the perception that these sales could occur may also depress the market price of our common stock. Based on the    shares of our common stock outstanding as of    , 2025, we will have    shares of our common stock outstanding after this offering, assuming no exercise of the underwriters’ option to purchase additional shares from us. Our executive officers and directors, as well as holders of all of our currently outstanding shares, have entered into lock-up agreements with the underwriters under which they have agreed, or will agree, subject to specific exceptions, not to sell any of our stock for 180 days following the date of this prospectus. We refer to such period as the lock-up period. The underwriters may release certain shareholders from the lock-up agreements prior to the end of the lock-up period.

As a result of these agreements, and subject to the provisions of Rule 144, as promulgated under the Securities Act (“Rule 144”), or Rule 701, as promulgated under the Securities Act (“Rule 701”), shares of our common stock will be available for sale in the public market as follows:

 

•

beginning on the date of this prospectus, all shares of our common stock sold in this offering will be immediately available for sale in the public market; and

 

•

beginning 181 days after the date of this prospectus, the remainder of the shares of our common stock will be eligible for sale in the public market from time to time thereafter, subject in some cases to the

 

42

volume and other restrictions of Rule 144, including the availability of current public information about us.

Sales of our common stock as restrictions end may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales could also cause the trading price of our common stock to fall and make it more difficult for you to sell shares of our common stock. See “Shares Eligible for Future Sale.”

We are an emerging growth company and the information we provide shareholders may be different from information provided by other public companies, which may result in a less active trading market for our common stock and higher volatility in our stock price.

We are an “emerging growth company” as defined by the JOBS Act. We will continue to be an emerging growth company until the earliest to occur of the following:

 

•

the last day of the fiscal year in which our total annual gross revenues first meet or exceed $1.235 billion (as adjusted for inflation);

 

•

the date on which we have, during the prior three-year period, issued more than $1.0 billion in non-convertible debt;

 

•

the last day of the fiscal year in which we (i) have an aggregate worldwide market value of common stock held by non-affiliates of $700 million or more (measured at the end of each fiscal year) as of the last business day of our most recently completed second fiscal quarter and (ii) have been a reporting company under the Exchange Act for at least one year (and filed at least one annual report under the Exchange Act); or

 

•

the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act.

For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to:

 

•

not being required to comply with the auditor attestation requirements of the assessment of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act;

 

•

exemption from new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies;

 

•

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements, and registration statements; and

 

•

exemptions from the requirement of holding a nonbinding advisory vote on executive compensation and shareholder approval on golden parachute compensation not previously approved.

We may choose to take advantage of some or all of these reduced burdens while we qualify as an emerging growth company. We have taken advantage of some of these reduced burdens in this prospectus, and currently intend to do so in future filings while we qualify as an emerging growth company. For as long as we take advantage of any reduced burdens, the information we provide shareholders may be different from information provided by other public companies. In addition, it is possible that some investors will find our common stock less attractive as a result of these elections, which may result in a less active trading market for our common stock and higher volatility in our stock price.

 

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Some provisions of Florida law and our amended and restated articles of incorporation and bylaws that will be in effect immediately prior to the completion of this offering may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our shareholders, and may prevent attempts by our shareholders to replace or remove our current management.

Upon the closing of this offering, our status as a Florida corporation and the anti-takeover provisions of the Florida Business Corporation Act, which we sometimes refer to as the FBCA, may discourage, delay, or prevent a change in control even if a change in control would be beneficial to our shareholders.

The control share acquisition statute, Section 607.0902 of the FBCA, generally provides that in the event a person acquires voting shares of the company in excess of 20% of the voting power of all of our issued and outstanding shares, such acquired shares will not have any voting rights unless such rights are restored by the holders of a majority of the votes of each class or series entitled to vote separately, excluding shares held by the person acquiring the control shares or any of our officers or employees who are also directors of the company. Certain acquisitions of shares are exempt from these rules, such as shares acquired pursuant to the laws of intestate succession or pursuant to a gift or testamentary transfer, pursuant to a merger or share exchange effected in compliance with the FBCA if we are a party to the agreement, or pursuant to an acquisition of our shares if the acquisition has been approved by our board of directors before the acquisition. The control share acquisition statute generally applies to any “issuing public corporation,” which means a Florida corporation which has:

 

•

One hundred or more shareholders;

 

•

Its principal place of business, its principal office, or substantial assets within Florida; and

 

•

Either (i) more than 10% of its shareholders are resident in Florida; (ii) more than 10% of its shares are owned by residents of Florida; or (iii) one thousand shareholders are resident in Florida. The residence of a shareholder is presumed to be the address appearing in the corporate records of the company.

Shares held by banks (except as trustee or guardian), brokers, or nominees are disregarded for purposes of calculating these percentages or numbers.

The affiliated transaction (or so-called “business combination”) statute, Section 607.0901 of the FBCA, provides that we may not engage in certain mergers, consolidations, sales of assets, issuances of stock, reclassifications, recapitalizations, and other affiliated transactions with any “interested shareholder” for a period of three years following the time that such shareholder became an interested shareholder, unless:

 

•

Prior to the time that such shareholder became an interested shareholder, our board of directors approved either the affiliated transaction or the transaction which resulted in the shareholder becoming an interested shareholder; or

 

•

Upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our voting shares outstanding at the time the transaction commenced; or

 

•

At or subsequent to the time that such shareholder became an interested shareholder, the affiliated transaction is approved by our board of directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting shares which are not owned by the interested shareholder.

An “interested shareholder” is generally defined as any person who is the beneficial owner of more than 15% of our outstanding voting shares.

The voting requirements set forth above do not apply to a particular affiliated transaction if one or more conditions are met, including, but not limited to, the following: if the affiliated transaction has been approved by a majority of our disinterested directors; if we have not had more than 300 shareholders of record at any time

 

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during the three years preceding the date the affiliated transaction is announced; if the interested shareholder has been the beneficial owner of at least 80% of our outstanding voting shares for at least three years preceding the date the affiliated transaction is announced; if the interested shareholder is the beneficial owner of at least 90% of our outstanding voting shares, exclusive of shares acquired directly from the company in a transaction not approved by a majority of disinterested directors; or if the consideration to be paid to the holders of each class or series of voting shares in the affiliated transaction meets certain requirements of the statute with respect to form and amount, among other things.

Both the control share acquisition statute and the affiliated transactions statute may have the effect of discouraging or preventing certain change of control or takeover transactions involving us.

In addition, our amended and restated articles of incorporation and bylaws that will be in effect immediately prior to the completion of this offering contain provisions that may make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our shareholders, including transactions in which shareholders might otherwise receive a premium for their shares. These provisions include:

 

•

our board of directors is classified into three classes of directors with staggered three-year terms;

 

•

nothing in our amended and restated articles of incorporation precludes future issuances without shareholder approval of the authorized but unissued shares of our common stock;

 

•

advance notice procedures apply for shareholders to nominate candidates for election as directors or to bring matters before an annual meeting of shareholders;

 

•

our shareholders will only be able to take action at a meeting of shareholders and not by written consent;

 

•

a special meeting of shareholders can only be called by our chairman of our board of directors, our chief executive officer, our president (in the absence of a chief executive officer), a majority of our board of directors or the holders of 10% or more of all of our votes entitled to be cast on any issue proposed to be considered at the special meeting of shareholders;

 

•

no provision in our amended and restated articles of incorporation or bylaws provides for cumulative voting, which limits the ability of minority shareholders to elect director candidates;

 

•

directors will only be able to be removed for cause;

 

•

our amended and restated articles of incorporation authorize undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock; and

 

•

certain litigation against us can only be brought in Florida.

These provisions could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and cause us to take corporate actions other than those you desire. See “Description of Capital Stock.”

Our bylaws that will be in effect immediately prior to the completion of this offering designates the state courts located within the State of Florida as the exclusive forum for substantially all disputes between us and our shareholders and the federal district courts as the exclusive forum for Securities Act claims, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.

Our bylaws that will be in effect immediately prior to the completion of this offering provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed

 

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by any of our current or former directors, officers, or other employees to us or our shareholders, (iii) any action arising pursuant to any provision of the FBCA, our amended and restated articles of incorporation, or our bylaws, or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be a state court located within the State of Florida (or, if a state court located within the State of Florida does not have jurisdiction, the federal district court for the Middle District of Florida); provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or to any claim for which the federal courts have exclusive jurisdiction. Our bylaws that will be in effect immediately prior to the completion of this offering also provide that, unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts shall be the exclusive forum for the resolution of any claims arising under the Securities Act. Under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.

By becoming a shareholder in our company, you will be deemed to have notice of and have consented to the provisions of our bylaws related to choice of forum. The choice of forum provisions in our bylaws may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. Additionally, the enforceability of choice of forum provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our bylaws to be inapplicable or unenforceable in such action. If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. In particular, statements about the markets in which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, or future events or performance contained in this prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, or could affect our share price. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to, the following:

 

•

we may not maintain profitability in the future;

 

•

we expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance;

 

•

we may lose our existing customers and/or fail to acquire new customers;

 

•

we expect to continue to rely on a relatively small number of customers, including our existing customers, all of which are affiliated with HCI, for a substantial portion of our revenue;

 

•

our success will depend on the continuous development and improvement of our proprietary Insurance-as-a-Service platform of products and services, including the development and implementation of new features and analytical models;

 

•

estimates of market opportunity may prove to be inaccurate;

 

•

we face intense competition in our industry, which could negatively impact our business, results of operations and financial condition and cause our market share to decline;

 

•

natural catastrophes and environmental risks may have significant adverse effects on our customers’ property and casualty insurance businesses, which may prevent us from maintaining or expanding our customer base and increasing our revenue;

 

•

there may be consolidation in the insurance industry, which could reduce the use of our platform, solutions, products, and services and adversely affect our revenues;

 

•

our intellectual property and proprietary rights are valuable, and any inability to obtain, maintain, protect, defend, and enforce them could reduce the value of our products and brand;

 

•

an unauthorized disclosure or loss of customer or employee data or information or other sensitive, confidential, or personal information, including by cyber-attack or other security breach, or a suspected or actual violation of federal or state data privacy or protection laws, regulations, or other obligations, could cause a loss of data or information, give rise to remediation or other expenses, expose us to liability under federal and state laws, and subject us to litigation and investigations, which could have an adverse effect on our business, cash flows, financial condition, and results of operations;

 

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•

our information technology systems may fail or be disrupted or subject to errors, bugs, vulnerabilities, or defects, which could adversely affect our business;

 

•

any disruption of our Internet connections, including to any third-party cloud providers that host any of our websites or web-based services, could affect the success of our Insurance-as-a-Service platform of products and services and our business;

 

•

we operate in a highly regulated environment, and any failure to comply with applicable insurance, data privacy, or other regulatory requirements could materially and adversely affect our business, financial condition, and results of operations;

 

•

regulatory scrutiny of delegated authority and claims administration functions may increase our regulatory compliance costs, limit our flexibility, and adversely affect our business;

 

•

we are subject to stringent fiduciary duties with respect to insurance premium funds, and noncompliance could result in regulatory enforcement or reputational harm;

 

•

we are subject to extensive and evolving data privacy and cybersecurity regulation, which could increase our compliance burden and exposure to liability;

 

•

our international operations in India expose us to regulatory risks under Indian law and cross-border compliance obligations;

 

•

HCI controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other shareholders from influencing significant decisions;

 

•

If HCI sells a controlling interest in us to a third party in a private transaction, you may not realize any change-of-control premium on shares of our common stock, and we may become subject to the control of a currently unknown third party;

 

•

HCI’s interests may conflict with our interests and the interests of our other shareholders and conflicts of interest between HCI and us could be resolved in a manner unfavorable to us and our other shareholders;

 

•

our Chief Executive Officer and Chairman of our board of directors may have actual or potential conflicts of interest because of his financial interests in HCI or because of his positions with HCI;

 

•

we have, and expect to continue to have, significant customer concentration, and substantially all of our revenues to date are from customers who are affiliated with our controlling shareholder, HCI;

 

•

we may be unable to achieve some or all of the anticipated benefits of being a standalone public company; and

 

•

other risks and factors described under “Risk Factors” and elsewhere in this prospectus.

Given the risks and uncertainties set forth in this prospectus, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this prospectus are not guarantees of future performance and our actual results of operations, financial condition, and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this prospectus. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this prospectus, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this prospectus speaks only as of the date of such statement. Except as required by federal securities laws, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this prospectus.

 

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USE OF PROCEEDS

The net proceeds to us from the sale of shares of common stock by us in this offering will be approximately $    million, assuming an initial public offering price of $    per share (the midpoint of the range set forth on the cover of this prospectus), and after deducting underwriting discounts and commissions and estimated offering expenses.

We intend to use the net proceeds from this offering for general corporate purposes, including working capital, software and technology research and development, operating expenses and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses or technologies. However, currently we do not have agreements or commitments for any material acquisitions or investments.

We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering or the amounts we actually spend on the uses set forth above. Pending the use of proceeds from this offering as described above, we plan to invest the net proceeds that we receive in this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit or direct or guaranteed obligations of the U.S. government. Our management will have broad discretion in the application of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds.

 

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DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We currently intend to retain any future earnings and do not expect to pay any dividends on our common stock in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our board of directors may deem relevant. Our ability to pay dividends may also be restricted by the terms of any future credit agreement or any future debt or preferred equity securities of us or our subsidiaries.

 

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CAPITALIZATION

The following table sets forth our cash and cash equivalents, as well as our total capitalization, as of June 30, 2025:

 

•

on an actual basis; and

 

•

on a pro forma basis, giving effect to the receipt of the estimated net proceeds from the sale and issuance by us of    shares of our common stock in this offering (assuming no exercise of the underwriters’ option to purchase additional shares of common stock from us) at an assumed initial public offering price of $    per share (the midpoint of the range set forth on the cover of this prospectus), and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table together with our consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

 

		As of June 30, 2025
(in thousands)		Actual				Pro forma(1)
Cash and cash equivalents		$	110,732			$
Stockholders’ equity:
Preferred stock, par value $0.001; no shares authorized, issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma			—				—
Common stock, par value $0.001; 184,000,000 shares authorized and 82,701,189 shares issued and outstanding, actual;     shares authorized and     shares issued and outstanding, pro forma			83
Additional paid-in capital			74,185
Accumulated deficit			(17,717	)
Total stockholders’ equity			56,551
Total capitalization		$	160,812			$

(1)

Each $1.00 increase (decrease) in the assumed initial public offering price of $    per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, additional paid in capital, total stockholders’ equity and total capitalization by $    million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The information in the table above excludes:

 

•

6,350,000 shares of our common stock issuable upon the exercise of options under our 2021 Omnibus Plan at an exercise price of $23.00 per share;

 

•

3,275,776 shares of common stock reserved for future issuance under the 2021 Omnibus Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan; and

 

•

10,000,000 shares of our common stock reserved for future issuance under our 2025 Omnibus Plan, which will become effective in connection with this offering (which number includes 3,275,776 shares of common stock available for future issuance under the 2021 Omnibus Plan), and shares of our common stock that become available pursuant to provisions in the 2025 Omnibus Plan that automatically increase the share reserve under the 2025 Omnibus Plan.

 

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DILUTION

If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock immediately after this offering. Dilution in pro forma net tangible book value per share to new investors represents the difference between the amount per share paid by purchasers of shares of our common stock in this offering and the pro forma net tangible book value per share of our common stock immediately after completion of this offering.

Net tangible book value per share is determined by dividing our total tangible assets less our total liabilities and common stock in stockholders’ equity by the number of shares of our common stock outstanding. Our historical net tangible book value as of June 30, 2025, was approximately $   , or $   per share.

After giving further effect to receipt of the net proceeds from our issuance and the sale of     shares of our common stock in this offering, based on an assumed initial public offering price of $    per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of June 30, 2025 would have been $    million, or $    per share. This amount represents an immediate increase in pro forma net tangible book value of $    per share to our existing shareholders and an immediate dilution of approximately $    per share to new investors participating in this offering. The following table illustrates this dilution:

 

Assumed initial public offering price per share of common stock						$
Historical net tangible book value (deficit) per share as of June 30, 2025		$
Increase per share attributable to new investors purchasing shares of common stock in this offering
Pro forma net tangible book value per share immediately after this offering
Dilution in pro forma net tangible book value per share to new common stock investors in this offering						$

The following table presents, on a pro forma basis as of June 30, 2025, after giving effect to the sale by us of shares of our common stock in this offering, the difference between the directors, officers and their affiliates and the new investors purchasing shares of our common stock in this offering with respect to the number of shares of our common stock purchased from us, the total consideration paid or to be paid to us, and the average price per share paid or to be paid to us by such persons during the last five years and new investors, before deducting underwriting discounts and commissions and estimated offering expenses payable by us:

 

Shares Purchased

Total Consideration

Average Price

Number

Percent

Amount

Percent

Per Share

($ in millions)

Directors, officers and their affiliates

%

$

%

$

New investors

%

%

Total

%

$

%

If the underwriters exercise in full their option to purchase     additional shares of our common stock from us in this offering, the pro forma net tangible book value per share after this offering would be $    per share and the dilution to new investors in this offering would be $    per share. If the underwriters exercise such

 

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option in full, the number of shares held by new investors will increase to approximately     shares of our common stock, or approximately   % of the total number of shares of our common stock outstanding after this offering.

In addition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity, as common stock, or other securities that are convertible into our common stock, such as convertible debt securities, the issuance of these securities could result in further dilution to our shareholders.

The number of shares of our common stock to be outstanding immediately after this offering is based on shares of our common stock outstanding as of    , 2025. The number of shares of our common stock to be outstanding after this offering excludes:

 

•

6,350,000 shares of our common stock issuable upon the exercise of options under the 2021 Omnibus Plan at an exercise price of $23.00 per share;

 

•

3,275,776 shares of common stock reserved for future issuance under the 2021 Omnibus Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan; and

 

•

10,000,000 shares of our common stock reserved for future issuance under our 2025 Omnibus Plan, which will become effective in connection with this offering (which number includes 3,275,776 shares of common stock available for future issuance under the 2021 Omnibus Plan), and shares of our common stock that become available pursuant to provisions in the 2025 Omnibus Plan that automatically increase the share reserve under the 2025 Omnibus Plan.

 

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OUR BUSINESS

Company Overview

Exzeo provides turnkey insurance technology and operations solutions to insurance carriers and their agents based on a proprietary platform of purpose-built software and data analytics applications that are specifically designed for the property and casualty, or P&C, insurance ecosystem. Exzeo’s Insurance-as-a-Service (IaaS) platform, which we refer to as the “Exzeo Platform,” currently includes nine highly configurable software and data analytics applications that are purpose-built to serve insurance companies and other customers in the insurance value chain.

Through the Exzeo Platform, Exzeo provides technology-based solutions and services for all operational and administrative activities and functions needed by P&C insurance carriers and their agents, including quoting and underwriting, policy management, claims processing management, data reporting, and financial reporting. As a result, the Exzeo Platform streamlines and automates the interaction between insurance carriers and their policyholders.

Exzeo was established in 2012 as the technology and innovation division of HCI Group, Inc., or HCI, a leading underwriter of homeowners insurance in Florida and 12 other states. Exzeo’s initial customers are insurance carriers or their managing general agent that are owned or managed by HCI and its subsidiaries, and Exzeo has derived substantially all of its revenues to date from such customers. In addition to working with existing customers to expand their business, Exzeo intends to develop new customer partnerships with additional carriers and their agents by introducing them to the advantage of our technology. Exzeo was founded with a clear mission: to develop a platform that enhances underwriting margins, reduces operating expenses, enables rapid expansion across both geographic markets and product lines, and delivers a streamlined, user-friendly experience for both carriers and policyholders.

Exzeo’s data-centric technology and mission inspired its name, which is derived from the combination of three words that describe the “Big Data” it collects and utilizes in its products and services: Exabyte (a million trillion – 10¹⁸ – bytes), Zettabyte (10²¹ bytes) and Yottabyte (10²⁴ bytes).

Exzeo generates revenue from underwriting and management services, claim services, and other technology services that are provided through and powered by the Exzeo Platform. Exzeo provides its solutions and technologies to customers under contracts with a variable fee structure that is typically based on a percentage of premium managed through the Exzeo Platform. Exzeo believes that this fee structure is beneficial to customers because it is designed to allow customers to scale while optimizing for operational efficiencies and without significant up-front technology expenditures.

We currently hold insurance agency or managing general agent licenses, as appropriate, in 29 states. Through the Exzeo Platform, we currently provide services in the following 13 states in which our customers have operations: Florida, Connecticut, Georgia, Massachusetts, Montana, North Carolina, New Jersey, New Mexico, Nevada, Rhode Island, South Carolina, South Dakota, and Utah. We intend to expand our operations (and obtain additional licenses as needed) in the 21 remaining states based upon growth plans of our existing customers or the existing geographies and growth plans of new customers with which we engage.

The Exzeo Platform

The Exzeo Platform is a proprietary software, analytics, and visualization tools platform that can support, enhance and/or replace legacy operational systems that are inefficient but commonplace across the insurance industry.

With the Exzeo Platform, Exzeo has created and refined several out-of-the-box software offerings that can be tailored to a customer’s specific insurance portfolio and operational needs. The Exzeo Platform accumulates,

 

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verifies, and analyzes proprietary and third-party data within its large data warehouse that is critical to making profitable insurance decisions in near real-time and without the need of human underwriting input. A team of over 175 developers and data scientists work and collaborate daily to build, implement and upgrade the Exzeo Platform.

The Exzeo Platform is designed to be highly scalable and to optimize the performance of companies that operate in the insurance markets to the benefit of policyholders, capital providers, and other participants in the P&C insurance value chain. Exzeo’s technology-led solutions currently support the management of over $1.2 billion of in-force premium across 13 states and 4 insurance companies.

Long-Standing P&C Software Development

 

Source: Company data

(1)	Customer Premiums-in-Force managed by Exzeo.

The Exzeo Platform has three core components: advanced underwriting solutions, data analytics solutions, and insurance management solutions.

 

•

Advanced Underwriting Solutions – Successful decision-making in the insurance industry requires the ability both to consume large sets of structured and unstructured data and to transform those data into actionable underwriting decisions. Exzeo has a 13-year track-record of turning Big Data into predictive algorithms to enhance underwriting decisions. Exzeo’s technology platform uses a micro-site organizational structure to give customers maximum flexibility to optimize for underwriting characteristics specific to an individual insurance company’s risk appetite. By making precise decisions at the individual risk level, Exzeo’s models help insurers build portfolios focused on profitable risk accumulation.

 

•

Data Analytics Solutions – The Exzeo Platform transforms both structured and unstructured data into an actionable format to power its advanced decision-based models and workflow systems. We believe that this purely data-driven decision approach enhances capabilities across a carrier’s entire organization, including underwriting, portfolio construction, and claims management.

 

•

Insurance Management Solutions – The Exzeo Platform is designed to handle all day-to-day activities of insurance carriers. Exzeo provides front-end distribution management, underwriting and pricing models, policy administration and claims management and currently supports the operations of

 

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managing general agents, attorney-in-fact companies, and insurance/reinsurance carriers and capital providers. The Exzeo Platform utilizes automated underwriting that requires minimal information from the insurance agent and leverages the extensive internal data repository that Exzeo continues to develop and curate. Delivered through a flexible, web-based interface, Exzeo’s suite of applications is designed to offer scalable and efficient solutions for insurance company management and operations.

The Exzeo Value Proposition

Exzeo has an innovative approach that we believe enables customers to fundamentally reimagine their investments in technology. Exzeo offers a differentiated platform designed to achieve two paramount objectives:

 

•

Delivering a comprehensive suite of products that supports the full underwriting infrastructure, and

 

•

Providing a technology solution purpose-built to drive enhanced underwriting performance for its customers.

The Exzeo Platform is structured primarily as a variable-cost model to its customers, wherein insurance companies are charged based on the volume of premium managed through the platform. Upfront expenditures by customers to begin utilizing the platform are minimal, enabling carriers to adopt the solution with limited initial financial burden.

We believe that this model inherently aligns Exzeo’s incentives with those of its customers. Exzeo is motivated to support customers in optimizing profitability within their existing premium portfolios while facilitating growth in the most profitable lines of business. Consequently, we believe that the success of Exzeo is directly and meaningfully aligned with the success of its customers.

We believe that the effectiveness of the Exzeo Platform is demonstrated by its initial carrier customers’ market-leading results. Exzeo’s customers experienced an approximate 12 percentage point improvement in their average loss ratio compared to the Florida homeowners’ insurance industry average loss ratio during the years 2017-2024 (representing the period post-application of the Exzeo Platform to our initial customers), and Exzeo’s customers enjoyed increased efficiency with an expense ratio (i.e., the dollar amount of operating cost needed to manage $1 of premium) of its customers improving by approximately 14 percentage points in 2024 compared to 2017. See “—Exzeo Platform Customer Case Studies – HCI’s Industry Leading Underwriting Margins.”

Industry Overview

Overview of the P&C Insurance Industry

The P&C insurance industry is large, fragmented, highly regulated, and complex. P&C insurance protects policyholders against a range of losses on items of value, including homes, commercial property and vehicles, as well as from unforeseen events including natural disaster, litigation, and bodily injury. P&C insurance is pervasive and purchased by nearly all businesses and individuals. While some forms of P&C insurance are optional, others such as homeowners’ insurance, are often obligatory (e.g. required by mortgage financing). The P&C insurance industry is highly competitive, and carriers compete primarily on product differentiation, pricing options, customer service and experience, marketing and advertising, affiliate programs and channel strategies.

The key functional areas in P&C insurance are underwriting and policy management, claims management, and billing. Underwriting and policy management are the cornerstone functions of all P&C insurance carriers’ operations. These processes involve collecting information from potential policyholders, determining appropriate coverage and terms, pricing the policy, issuing the policy and updating and maintaining the policy over its lifetime. Claims management includes loss report intake, investigation and evaluation of incidents, claims negotiation, payment processing and litigation management. Billing includes account creation, policyholder invoicing, payment collection, commission calculation and disbursement. Each of these functions involves multiple touch points and information exchanges between individuals, carriers, agents, adjusters and systems.

 

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Total premiums collected by insurance carriers, known as Direct Written Premiums or DWP, is a key industry metric used in sizing the insurance market. According to S&P Global Market Intelligence, a global market research and insights firm, DWP for US P&C insurance was $1.1 trillion in 2024. We believe there are approximately 2,700 P&C insurance carriers within the United States. Carriers within the United States are regulated on a state-by-state basis.

Effective policy management by P&C insurance companies requires information and insurance technology systems that integrate with other internal systems and can control workflow, enable extensive configurability and provide visibility to users. Additionally, stringent archiving and audit requirements, along with frequent changes in underwriting, reporting and regulatory policy, have imposed a significant burden on systems and staff, which struggle to adequately support such requirements in technology environments dominated by legacy systems.

Increasing Demand for Insurance-as-a-Service

Carriers invest substantial time and resources to develop and maintain their technology assets. We believe reliance on legacy systems, often on-premises, limits carriers’ ability to respond to many of the significant challenges facing the industry, including:

 

•

Heightened end-user expectations. Today’s policyholders and other end-users expect seamless and tailored experiences with every interaction, which has led to the increase in demand for digital distribution and servicing capabilities. For instance, personal and commercial insurance end-users expect improved digital experiences with real time multi-channel service.

 

•

Increased competition in the marketplace. Carriers are diversifying into new geographies and lines of business to drive profitable growth in direct written premiums. In response to escalating competition, carriers are investing in new technology solutions to increase speed to market, improve the underwriting process and reduce operating expenses.

 

•

New and evolving risks. Carriers are under pressure to offer new and more complex insurance products to address evolving use cases. Emerging risk categories, such as climate change, political risks and cybersecurity, are creating demand for new insurance products. These new and evolving risks require carriers to be increasingly agile in their product development.

 

•

Increased number of catastrophic events. Natural disasters with large scale catastrophic losses have become more frequent. More than ever, carriers need access to accurate, complete and large datasets about risk to accurately underwrite.

 

•

The rise of the large-scale data analytics. Carriers have predominately relied on traditional data sources for underwriting, pricing and claims handling. The rise of large-scale data analytics, such as centralized data warehouses containing diverse datasets, is significantly increasing the amount of data available to carriers, enabling carriers to assess risk on a more granular level, identify losses faster, simplify claims processing and mitigate fraud. Taking advantage of the new volumes of data requires open and flexible core systems that allow carriers to move more quickly and make data-driven decisions.

 

•

Emerging capabilities and advancing technologies. Carriers can better analyze risk through enhanced pricing models, artificial intelligence and machine learning technology. These emerging technologies offer carriers the opportunity to better understand and price risk in real time and a potential competitive advantage to realize the value from data science research. As a result, carriers are more aggressively investing in technology to keep up with innovations and integrations.

 

•

Digitization of insurance. In the property insurance sub-sector, processing a single event such as a claim can require numerous transactions, involving consumers, lenders, contractors, adjustors, litigation and others. The complexity seen in one property claim grows exponentially more difficult to manage at scale, and complexity is continuing to increase across the P&C insurance economy. Seamless integrations that enable information sharing across technology systems which cover the full-suite of insurance carrier operations are now more important than ever.

 

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These challenges are placing increased pressure on carriers to improve consumer experience, business agility and speed to market. However, many carriers rely on legacy systems that are difficult to change, update or integrate without significant cost.

We believe that carriers will increasingly look to adopt Insurance-as-a-Service solutions, like the Exzeo Platform, that maximize efficiency of their systems, optimize underwriting outcomes and reduce operating expenses, while ultimately serving their customers more effectively.

Market Opportunity

The Exzeo Platform is built to serve the significant market opportunity that we believe exists at the intersection of P&C insurance, technology infrastructure and data analytics.

Exzeo’s core competency is in property insurance. Exzeo was initially developed to serve customers operating in the Florida homeowners’ insurance market, an $18 billion annual direct written premium market in 2024 according to S&P Global Market Intelligence. Since 2021, Exzeo’s customers have expanded their operations to an additional 12 other states. These 13 operating states represent more than $47 billion of annual direct written premium. Exzeo’s managed premium represents a less than 2% market share in its operating states, with only a 4% market share in its largest market, Florida.

While Exzeo currently supports customers in 13 states, the company has the infrastructure and regulatory approvals in place to deliver its data and services in 16 additional states—serving both new and existing customers expanding into new states. Over the next twelve months, Exzeo plans to obtain the necessary approvals to operate in the remaining 21 states, thereby positioning the company for nationwide coverage.

Given the substantial opportunity in the $173 billion annual premium US homeowners’ insurance market, Exzeo expects to remain focused on its core market in the near-term. However, similar factors and experience are relevant in underwriting both personal and commercial properties. Nationwide, commercial property insurance represents $67 billion of annual direct written premium in 2024 according to S&P Global Market Intelligence.

 

Note: 2024 statutory Direct Premiums Written (“DPW”); Source: S&P Global Market Intelligence, statutory filings

(1)	Includes all states with reported DPW over $0; Homeowners line of business is using the “Homeowners MP” LOB classification from S&P Global Market Intelligence and statutory filings

(2)	Commercial Property line of business is using the “Commercial Multi Peril” LOB classification from S&P Global Market Intelligence and statutory filings

 

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Cumulatively, across personal and commercial property insurance, we believe that Exzeo’s core addressable market could exceed $240 billion in annual insurance premium and represents a significant opportunity to grow premium managed by Exzeo. Additionally, Exzeo’s technology is designed to be highly flexible and can be adapted to serve additional product lines within the broader P&C marketplace, which represented approximately $1.062 trillion in annual direct written premium in 2024 according to S&P Global Market Intelligence.

 

Note: 2024 statutory Direct Premiums Written (“DPW”); Source: S&P Global Market Intelligence, statutory filings

(1)	Includes all states with reported DPW over $0.

(2)	Calculated as Total HCI Homeowners DPW / Industry National Homeowners DPW; Homeowners line of business is using the “Homeowners MP” LOB classification from S&P Global Market Intelligence and statutory filings.

Exzeo’s core focus and expertise is building integrated, end-to-end insurance management technology. It is estimated that the U.S. property & casualty (P&C) insurance industry will spend approximately $43 billion on information technology software, services and infrastructure in 2025 according to Gartner. Approximately 75% of this spend is expected to be allocated to software (model and application development and implementation) and services (maintenance, support and advisory). The insurance industry makes this investment to increase operating efficiency and improve underwriting decision-making. Exzeo’s objectives and business strategy are focused on expanding its share of this spend.

 

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Source: Gartner, Inc., Forecast: Enterprise IT Spending for the Insurance Market, Worldwide, 2022-2028, 4Q24 Update, James Ingham and Inna Agamirzian, January 31, 2025

Disclaimer: Pie charts created by, and calculations performed by, Truist Securities based on Gartner research; Note: TAM figures represent 2025 Spending figures based on Gartner research

(1)	Represents 2023 – 2028 CAGR based on Gartner research (sourced above).

(2)	Includes TAM for Exzeo core solutions.

Solutions Overview

The Exzeo Platform includes several core components that collectively address all critical functions of P&C insurance carrier operations, including quoting and underwriting, policy administration, claims management, data analytics, reporting, and financial management.

Exzeo generates revenue from three primary sources: underwriting and management services, claim services, and other technology services. Underwriting and management services include policy issuance and renewal, reinsurance placement, and administrative support, with fees tied to a percentage of premiums written or assumed, plus related policy fees. Claim services involve investigating, adjusting, and settling claims, including catastrophe-related claims, with pricing based on fees per claim or a percentage of covered losses. Other technology services are primarily derived from proprietary software solutions offered through software-as-a-service, or SaaS, service agreements, with fees based on policy or claim volumes, fixed charges, or percentages of claims handled.

 

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Below is a summary of Exzeo’s core solutions and services delivered through the Exzeo Platform: Quoting and Underwriting:

 

•

CasaClue – Intelligent data repository with the ability to transform data from multiple sources to enable precise risk selection.

 

•

Harmony – Comprehensive policy administration platform that streamlines the entire policy lifecycle, from quoting to binding, while offering advanced underwriting capabilities. Its intuitive design enhances user experiences, ensuring a seamless and efficient workflow.

 

•

AtlasViewer – A mapping and data visualization platform that integrates location-based data from multiple sources, providing users with a comprehensive and tailored view of risk. By transforming data into actionable insights, AtlasViewer helps drive smarter business decisions.

Policy Management:

 

•

Harmony – Next-generation policy administration platform that easily supports multiple companies and their products.

 

•

SAMS – Web-based system designed to automate and streamline the process of managing insurance policies.

 

•

Mercury – Integrated workflow solution designed to ensure uniform routing and seamless policy change tracking, thereby enhancing efficiency, maintaining consistency and staying compliant with automated processes.

Claims Management:

 

•

ClaimColony – End-to-end claims management platform used by carriers, third-party administrators, independent adjusters and insurance litigation services.

 

•

AtlasViewer – A tool providing a unique, visual way to look at claims and manage the claims lifecycle, driving better efficiency and improving operational outcomes.

 

•

JustEZ – The JustEZ app helps sync inspections from various carriers, schedule appointments, sync photos to cloud and write scoping reports. JustEZ is built to help adjusters do more inspections better.

 

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Data, Reporting & Financials:

 

•

AtlasViewer – Application that simplifies secure data sharing with stakeholders, enhancing transparency and communication. It has powerful mapping and visualization tools that provide real-time insights and enable better decision-making.

 

•

Exahub – Centralized data platform built to efficiently store and manage complex, diverse datasets. Designed for seamless large-scale data analytics, enterprise data warehousing, and cloud-based solutions, Exahub ensures scalability, speed and reliability for data-driven decision-making.

 

•

ExzeoIQ – Provides transparent reporting for customers including month end financials, data calls, exposure management, and overall risk management.

Exzeo Platform Customer Case Studies

We believe that the value and advantages of the Exzeo Platform and Exzeo’s solutions are illustrated by the performance and growth of Exzeo’s initial customers’ since the launch of the Exzeo Platform, as follows:

HCI’s Industry Leading Underwriting Margins

We believe that Exzeo’s technology and solutions have facilitated HCI’s underwriting performance over the last 10 years since its launch, as we believe that Exzeo has enabled HCI to underwrite better, to be more efficient and to grow its business more effectively. HCI’s carriers have experienced an approximate 12 percentage point improvement in their average loss ratio compared to the Florida homeowners’ insurance industry average loss ratio during the years 2017-2024 (representing the period post-application of the Exzeo Platform to our initial customers), and Exzeo’s customers enjoyed increased efficiency with an expense ratio (i.e., the dollar amount of operating cost needed to manage $1 of premium) of its customers improving by approximately 14 percentage points in 2024 compared to 2017. If we expand this analysis nationwide, a similar trend emerges: when comparing HCI’s 10-year average homeowners insurance net loss ratio to the same number for the nationwide P&C industry, Exzeo has enabled HCI to outperform by approximately 10 percentage points.

 

Source: S&P Global Market Intelligence, Company filings, statutory filings

(1)	HCI FL Homeowners LoB Direct Loss Ratio vs P&C Industry FL Homeowners LoB Direct Loss Ratio; DPE = Direct Premiums Earned, DLI = Direct Losses Incurred, DLR = Direct Loss Ratio = DLI / DPE

(2)	HCI GAAP Expense Ratio for FY 2017 – 2024

(3)	Peers include ACIC, HRTG and UVE

 

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HCI’s Rapid Scaling While Using Exzeo Platform

We believe that Exzeo has made a significant contribution to HCI’s ability to scale quickly, both geographically and in total premium written since the full implementation of the Exzeo Platform.

Following several years of implementation of Exzeo’s technology in Florida, HCI announced its plans for a nationwide expansion in August 2020. By the end of 2021, HCI expanded its operations and sold policies in ten new states beyond Florida exclusively using the Exzeo Platform.

Additionally, HCI has leveraged the Exzeo Platform to pre-underwrite over one million policies at Citizens Property Insurance Corporation, the Florida state-backed carrier of last resort, identify the most attractive policies and ultimately grow its in-force premium by approximately $470 million, a 61% increase when comparing first quarter 2025 to third quarter 2023. HCI was able to grow its insurance book significantly in a short period of time while having to hire almost no additional employees.

Exzeo Powers CORE’s Launch and Speed to Market

We believe that Exzeo also increases its customers’ speed to market. For example, in late 2023, HCI identified an opportunity in the commercial residential insurance market in Florida. By February 2024, HCI’s newest carrier, the Condo Owners Reciprocal Exchange (CORE), had commenced operations. In a matter of a few months, Exzeo’s technology infrastructure and management expertise enabled HCI to swiftly enter a new line of business and grow quickly in this new market. By year end 2024, CORE had in-force premium of $67 million.

Our Growth Strategy

Based on the use of the Exzeo Platform and the performance and growth of our current customers to date, we intend to pursue multiple opportunities to expand our customer base and grow managed premium for current and future customers. The following are the key elements of our growth strategy:

 

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Improve customer margins: The P&C insurance industry is a results-driven industry where the success of insurers is measured by their ability to produce solid underwriting results. We intend to work with our existing customers to enable them to continue to profitably grow their premium over time and to work with new carriers to profitably grow their business with the use of the Exzeo Platform and our solutions.

 

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Expand customer base: In addition to working with existing customers to expand their business, we intend to develop new customer partnerships with additional carriers and their agents by introducing them to the advantage of our technology and variable fee structure. While we currently have one customer that is not affiliated with HCI, we do not expect to generate significant revenue from this customer in the current fiscal year. As such, a key component of our growth strategy is to broaden our customer base beyond affiliates of HCI and reduce our reliance on a concentrated group of customers over time.

 

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Facilitate the rapid growth of our customers: Insurance companies have different approaches to growth due to capital flexibility, market opportunity, and other factors. Exzeo gives customers flexibility to pursue their growth objectives including quickly capitalizing on growth opportunities in a cost-efficient manner, while giving them the tools to make sound underwriting decisions. We intend to work with customers to facilitate rapid growth through the use and advantages of our platform.

 

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Allow customers to grow into new states: Exzeo allows customers to grow in their existing markets but also expand their geographic footprint. Exzeo will work with existing and new customers on our platform to execute on expansion into new states and across the nation and to realize their growth objectives.

 

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Allow customers to enter new lines of business: Exzeo’s technology is also customizable to meet the demands of customers to expand into new product lines. And to the benefit of the customer, Exzeo’s

 

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variable-fee structure means that customers can grow new product lines at a pace that meets both their growth and profitability targets. We intend to work with customers to explore and expand into new lines to facilitate their growth.

We recognize the need for an expanded sales and marketing team as revenue and customer profile expand. We intend to invest in and grow our current sales and marketing team to support our future customer growth and diversification. Management will provide strategic direction as we add additional team members in order to seek out new customer partnerships.

Competitive Environment

The market for insurance services and technology solutions focused on the P&C industry is competitive and fragmented. We compete with a wide range of entities, including established enterprise software vendors, specialized insurtech companies, legacy insurance technology providers, and in some cases, internal development teams within insurance carriers. We believe that the drive toward digital modernization in the insurance industry is fueling strong competition across every stage of the insurance value chain. We believe Exzeo is well-positioned to differentiate itself among competitors, given its unique and tailored platform and the success of its customers.

We view our competitors as falling into three categories: (1) insurance technology providers, (2) underwriting services providers and (3) insurance data providers.

 

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Insurance technology providers include companies like Guidewire, Duck Creek and Majesco that provide web-based core insurance technology platforms, centered on policy management systems. Like Exzeo, these competitors seek to provide stable technology infrastructure that carriers use as the backbone of their internal operations.

 

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Underwriting service providers include managing general underwriters (MGUs) and program administrators like Ryan Specialty and Brown & Brown that underwrite, price and manage insurance policies for carriers. Like Exzeo, these competitors seek to enable carriers to distinguish profitable from unprofitable policies and to manage aggregate exposures.

 

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Insurance data providers include companies like Verisk and Moody’s RMS that curate third party and proprietary data for use in underwriting and pricing decisions by carriers. Like Exzeo, these competitors seek to provide accurate and detailed data that form the basis for decision making.

Despite these competitive pressures, we believe our proprietary platform, deep industry expertise, and integrated approach provide significant differentiation. Our industry-specific applications are designed to work together seamlessly, delivering operational efficiency, improved data-driven decision-making, and faster time to market for our customers. However, our competitors may possess greater name recognition, larger sales forces, longer operating histories, and greater financial and technical resources, which may enable them to innovate more rapidly or offer more aggressive pricing or bundling strategies.

Exzeo Subsidiaries and Corporate Structure

Exzeo provides its solutions principally through its wholly owned subsidiary, Exzeo Insurance Services, Inc., or EIS, which is a Florida corporation that holds a managing general agency license in the State of Florida and equivalent licenses in other states which it provides services to customers. EIS enters into managing general agency agreements or policy administration services agreements with its insurance-industry customers under which EIS may serve as the managing general agent of an insurance carrier or may provide services to a carrier’s managing general agent in exchange for a fee based largely on a percentage of managed premium. Under these agreements, through the Exzeo Platform, EIS provides policy issuance and renewal services, as well as management services, including soliciting and negotiating reinsurance for authorized programs and managing

 

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and maintaining a policy administration system and providing claims management services. In addition to EIS, Exzeo also owns and operates Dark Horse Re, LLC, a reinsurance broker subsidiary formed in November 2023 that arranges and negotiates reinsurance contracts for insurance company customers, and from which we had a small amount of revenue from customers not affiliated with HCI in the amount of $1.75 million in the six months ended June 30, 2025 and $0.5 million in fiscal year 2024.

Software development and data analytics capabilities for the Exzeo Platform are supported by Exzeo USA, Inc., or Exzeo USA, and Cypress Tech Development Company, Inc., or Cypress Tech, both of which are wholly owned subsidiaries of Exzeo that design and maintain components of Exzeo’s technology infrastructure. Cypress Tech also owns Exzeo Software Private Limited, or Exzeo India, a wholly owned subsidiary domiciled in India, which provides research and development services to the other subsidiaries of Exzeo along with technical support services.

Although EIS currently outsources claims adjustment and other claims management services to Griston Claim Management, Inc., a separate subsidiary of HCI (“Griston”), Griston and its personnel provide such services through the Exzeo Platform under license from Exzeo, and we may in the future use other providers of claim management services. The claims management services that we currently subcontract to Griston consist principally of activities that require human capital, including field adjusters and desk adjusters who manage the individual claims process for our customers and insureds. We have made a business decision that this physical or other human-performed work relating to the adjustment of claims is most efficiently handled via outsourcing to a claims vendor (such as Griston or other readily-available claims vendors) rather than by having our company staff a large claims department itself. In servicing our customers, the adjusters and other persons who perform these tasks use the reporting, scheduling, workflow management, and other tools in our proprietary ClaimColony suite to make the process faster and more efficient for the benefit of our customers. While we have historically chosen Griston for the provision of claims adjustment and related human-performed services, other vendors may be chosen in the future based upon needs or requirements of particular customers, claims volume, geography, and other factors, and these other vendors would utilize the Exzeo Platform for their activities. We do not believe that Griston would be a competitor of our company in the future. While Griston may offer its claims adjustment services to others in the future, Griston cannot offer the claims technology or platform to manage claims without the involvement of or a license from our company, as Griston merely provides the physical and human-performed adjustment services that are routinely outsourced by insurers and managing general agents.

Following this offering, Exzeo Group, Inc. will continue to be a majority owned subsidiary of HCI but will be managed and operated primarily as an independent public company. Immediately prior to this offering, HCI holds approximately 90.69% of our outstanding common stock, and current and former employees and directors of Exzeo hold the remaining approximately 9.31%. After giving effect to the offering at a price per share of $    (the midpoint of the range set forth on the cover of this prospectus) and assuming the exercise in full of the underwriters’ option, HCI will own approximately   % of our outstanding common stock, current and former employees and directors of Exzeo will own approximately   %, and investors in this offering will own approximately   %.

 

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The following graphic illustrates the corporate structure and ownership of Exzeo and its subsidiaries:

 

Human Capital Management

As of September 23, 2025, we had approximately 352 full-time employees, the majority of which are based in the United States. We also engage with contractors, vendors, and consultants. We have invested substantial time and resources into building our team. Our success depends in large part on our collective effort across our areas of expertise and across sites in Tampa, Florida and Ocala, Florida. Therefore, it is crucial that we continue to attract and retain high-performing employees from all demographics by providing competitive compensation and benefits, and fostering a diverse, inclusive, and safe workplace, while making opportunities for all employees to grow and develop in their careers. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.

Work Environment

 

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We adhere to a harassment prevention policy which details how to report and respond to harassment issues and prohibits any form of retaliation. This includes mandatory harassment prevention training for all employees.

 

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We are committed to paying a living wage to all of our full-time employees. We offer competitive benefits to our employees including alternative plans for health coverage and short-term and long-term disability insurance at no cost to the employee. We also award restricted stock and stock options to certain of our employees to align their interests with shareholder interests.

 

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Diversity

We value a diverse and inclusive work environment and accordingly our workforce consists of individuals of many races, religions, and national origins with a variety of backgrounds and specialties, enriching our collective knowledge and skill base. We forbid any form of discrimination based upon race, gender, religion, or ethnicity. We embrace talent from all backgrounds, seek out diverse perspectives, and facilitate and invite open and authentic conversations.

Intellectual Property

The insurance technology and software industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding patent and other intellectual property rights. Our success and ability to compete depend in part upon our ability to protect our proprietary technology, to establish and adequately protect our intellectual property rights, and to protect against third-party claims and litigation related to intellectual property. To accomplish these objectives, we rely on a combination of trademark, copyright, and trade secret laws in the United States and other jurisdictions, as well as contractual protections.

We also rely on several registered and unregistered trademarks, as well as pending applications for such registrations, in order to protect our brand both in the United States and internationally. We have registered the trademark “EXZEO” and related design marks in the United States and other jurisdictions.

We also seek to protect our intellectual property rights by entering into confidentiality and invention assignment agreements with our employees and contractors, as well as confidentiality agreements with third parties.

Despite these precautions, it may be possible for unauthorized parties to copy or use our proprietary information to create products or services that compete with ours. Policing unauthorized use of our technology and intellectual property rights can be difficult. The enforcement of our intellectual property rights depends on any legal actions, which can be costly and time consuming, against infringers being successful, which may not always be the case even when our rights have been infringed.

Research and Development

We continuously engage in research and development activities aimed at enhancing the components of the Exzeo Platform and the services and solutions that we offer through the Platform. Our research and development efforts focus on the complex requirements of P&C insurers with particular emphasis on capabilities, operational efficiency, data analytics, security, and privacy in the cloud. These efforts are intended to help our customers improve their operations, efficiency, and underwriting and claims management activities.

Properties

Our principal office facility is located in Tampa, Florida, where we lease an office comprised of approximately 28,400 square feet from Century Park Holding, LLC, a subsidiary of HCI. Our lease agreement with Century Park Holding, LLC will expire on December 31, 2032.

We also lease a secondary office in Ocala, Florida comprised of approximately 25,300 square feet. This facility is leased from Silver Springs Property Investment, LLC, a subsidiary of HCI. The lease is scheduled to expire on December 31, 2027.

We also lease an additional office in Noida, India comprised of substantially 15,000 square feet. This facility is leased from RKR Software Solutions Private Limited. The lease is scheduled to expire on January 31, 2031.

 

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Government Regulations

We operate in a highly regulated and continually evolving legal and regulatory environment that spans federal, state, and international jurisdictions. Our Insurance-as-a-Service platform delivers a comprehensive suite of technology and operational solutions to property and casualty (P&C) insurers. As such, we are subject to a complex array of regulatory requirements related to insurance operations, consumer protection, data privacy, cybersecurity, and compensation practices.

In addition, our proprietary technology and analytics platform, developed and supported in India, introduces cross-border regulatory obligations, including data handling and international compliance standards. Meeting these regulatory requirements demands substantial and ongoing investment in compliance infrastructure, personnel, and governance practices. Any failure to comply with applicable laws and regulations could lead to enforcement actions, monetary penalties, reputational damage, or restrictions on our ability to operate in key markets.

Insurance Regulatory Environment

We operate in a highly regulated and evolving legal environment that governs the provision of insurance-related services across multiple state jurisdictions. Exzeo provides its insurance technology and operational solutions to customers primarily through its wholly-owned subsidiary, EIS, a Florida corporation licensed as a managing general agent (“MGA”) in the State of Florida and holding equivalent licenses in other states where it provides services. EIS enters into managing general agency agreements or policy administration services agreements with property and casualty insurance carriers or their managing general agents. Under these agreements, EIS may act as the managing general agent of an insurance carrier or may provide services to a carrier’s MGA in exchange for fees that are primarily based on a percentage of managed premium.

Although neither Exzeo nor EIS assumes underwriting risk or issues insurance policies in their own names, EIS supports insurance carriers and their MGAs by providing a range of delegated operational services critical to the insurance value chain. These services include policy issuance and renewal, reinsurance negotiation support, management and maintenance of policy administration systems, and claims management services. Accordingly, we are subject to regulatory oversight from state insurance departments, which impose requirements related to licensing, contractual practices, fiduciary obligations, consumer protection, and financial reporting.

Because EIS operates under delegated authority from licensed insurance entities, it must comply with a patchwork of state-specific laws and regulations. These laws typically address licensing and registration, the disclosure of corporate and ownership structures, minimum financial responsibility requirements (such as surety bonds or errors and omissions insurance), recordkeeping standards, and periodic reporting. In jurisdictions that have adopted elements of the National Association of Insurance Commissioners (“NAIC”) Third-Party Administrator Model Act, we may be required to comply with additional requirements, including mandatory records retention and heightened fiduciary responsibilities when handling insurance-related funds.

Under applicable state laws, insurance premiums are considered fiduciary assets. As part of our services, EIS may collect and manage such premiums, which requires compliance with specific legal obligations, including the maintenance of segregated premium trust accounts, timely remittance to insurers, reconciliation protocols, and in some states, posting of financial guarantees such as surety bonds. We have implemented internal controls, compliance policies, and audit procedures designed to ensure adherence to these fiduciary obligations.

EIS may also assist insurance carrier customers in the preparation and submission of rate and form filings to state regulators. This process requires us to navigate a decentralized and often inconsistent regulatory landscape, as some states mandate prior approval for such filings, while others follow “file-and-use” or “use-and-file” systems. Our compliance team works to ensure that all filings meet statutory requirements and align with carrier expectations and applicable regulatory standards.

 

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When performing delegated claims management functions, we are subject to laws governing fair claims practices. These include prohibitions on improper settlement conduct, delays in communication, or misrepresentation of policy coverage. In certain jurisdictions, individuals performing or overseeing claims adjusting services must be appropriately licensed, and we are responsible for ensuring that EIS personnel comply with such licensing and continuing education requirements.

The regulatory framework governing insurance service providers like EIS continues to evolve, with regulators placing greater scrutiny on delegated authority arrangements, outsourcing relationships, and consumer protection mechanisms. In parallel, emerging regulatory trends, such as heightened standards around cybersecurity, third-party risk oversight, and enterprise governance, may increase our compliance obligations either directly or indirectly through our contracts with insurer customers.

We monitor regulatory developments and maintain ongoing dialogue with insurance regulators and our customers to ensure transparency and alignment on compliance responsibilities. While we believe we are currently in material compliance with applicable laws and regulations, changes in regulatory interpretation, enhanced enforcement activity, or the enactment of new rules could increase compliance costs or affect the scope of services we are able to provide.

Licensing of our Employees and Adjusters

In certain states where we operate, insurance claims adjusters must be licensed, and some jurisdictions impose annual continuing education requirements. In most instances, employees performing underwriting support services are not required to be licensed agents. As of September 8, 2025, 103 employees of our subsidiary, EIS, were required to maintain and did maintain the appropriate licenses to conduct activities in the applicable states in which we operate.

Federal and State Legislative and Regulatory Changes

The U.S. federal government’s oversight of the insurance industry was expanded under the Dodd-Frank Act with the establishment of the FIO in the U.S. Department of the Treasury. Although FIO has little actual regulatory power, it has the authority to monitor all aspects of the insurance sector and to represent the United States on prudential aspects of international insurance matters, including at the International Association of Insurance Supervisors (the “IAIS”). In addition, the FIO serves as an advisory member of the Financial Stability Oversight Council, assists the secretary of the U.S. Department of the Treasury with administration of the Terrorism Risk Insurance Program, and advises the secretary of the U.S. Department of the Treasury on important national and international insurance matters. In addition, the FIO has the ability to recommend to the Financial Stability Oversight Council the designation of an insurer as “systemically significant” and therefore subject to regulation by the Federal Reserve as a bank holding company.

In addition, a number of federal laws affect and apply to the insurance industry, including various privacy and data protection laws, the Fair Credit Reporting Act (“FCRA”), and the economic and trade sanctions implemented by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury. OFAC maintains and enforces economic sanctions against certain foreign countries and groups and prohibits U.S. persons from engaging in certain transactions with certain persons or entities. OFAC has imposed civil penalties on persons, including insurance and reinsurance companies, arising from violations of its economic sanctions program.

Data Privacy and Cybersecurity

As a provider of insurance technology and operational services that involve the collection, processing, and storage of personal, financial, and claims-related information from policyholders and applicants, we are subject to a range of federal and state data protection and cybersecurity laws. Many states have adopted versions of the

 

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NAIC Insurance Data Security Model Law, which imposes requirements on licensed entities to maintain written information security programs, perform regular risk assessments, implement safeguards to protect consumer data, and provide timely breach notifications to regulators and affected individuals.

In addition to the NAIC model law, certain states have enacted their own cybersecurity and data protection regulations, and other jurisdictions may adopt new or more stringent standards that diverge from existing frameworks. Legislative and regulatory developments at both the federal and state levels—whether industry-specific or generally applicable to financial services or technology providers—could expand our compliance obligations and increase operational complexity.

We have implemented internal cybersecurity policies and maintain a written information security program designed to comply with applicable regulatory requirements. We also conduct periodic assessments and testing of our cybersecurity controls to help ensure readiness and responsiveness in an evolving threat environment. See “Risk Factors—Risks Related to Intellectual Property, Data Privacy, and Cybersecurity.”

Regulatory Considerations for India-Based Technology Operations

Through our subsidiary domiciled in India, Exzeo Software Private Limited, we operate a technology center that is integral to the development, enhancement, and maintenance of our proprietary software platform and the provision of operational support for our U.S.-based services. As part of these activities, our Indian operations process personal data, including the personal information of individuals located outside India, in connection with services provided to our U.S. operations. This international structure subjects us to a range of regulatory and compliance requirements in both India and the United States.

In India, we are required to comply with various domestic laws governing employment practices, labor relations, taxation, corporate governance, cybersecurity, and data protection. Our processing of personal data in India— particularly data concerning non-Indian individuals—may be subject to India’s evolving legal framework governing digital privacy and information security. This includes the Digital Personal Data Protection Act, 2023, and forthcoming implementing rules, which impose obligations on entities processing personal data within India, regardless of the data subject’s nationality or residency. These obligations may include requirements related to consent, data retention, breach notification, and cross-border data transfers. We are monitoring the development and implementation of these regulations to ensure continued compliance.

Additionally, as a U.S.-based company with operations abroad, we are subject to the Foreign Corrupt Practices Act (FCPA) and similar anti-corruption and anti-bribery laws in other jurisdictions. These laws prohibit unlawful payments to foreign government officials and require companies to maintain accurate books and records and internal controls. We have adopted and implemented policies, training, and monitoring procedures designed to promote compliance with these legal requirements.

Legal Proceedings

We are subject to routine legal proceedings in the normal course of operating our business. We are currently not involved in any legal proceedings which reasonably could be expected to have a material adverse effect on our business, results of operations or financial condition.

Emerging Growth Company Status

We are an “emerging growth company,” as defined by the JOBS Act. We will continue to be an emerging growth company until the earliest to occur of the following:

 

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the last day of the fiscal year in which our total annual gross revenues first meet or exceed $1.235 billion (as adjusted for inflation);

 

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the date on which we have, during the prior three-year period, issued more than $1.0 billion in non-convertible debt;

 

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the last day of the fiscal year in which we (i) have an aggregate worldwide market value of common stock held by non-affiliates of $700 million or more (measured at the end of each fiscal year) as of the last business day of our most recently completed second fiscal quarter and (ii) have been a reporting company under the Exchange Act for at least one year (and have filed at least one annual report under the Exchange Act); or

 

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the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act.

For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002, exemption from new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies, reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive compensation and shareholder approval on golden parachute compensation not previously approved. We may choose to take advantage of some or all of these reduced burdens. For example, we have taken advantage of the reduced disclosure obligations regarding executive compensation in this prospectus. For as long as we take advantage of the reduced reporting obligations, the information we provide shareholders may be different from information provided by other public companies. In addition, it is possible that some investors will find our common stock less attractive as a result of these elections, which may result in a less active trading market for our common stock and higher volatility in the price of our common stock.

We have elected to not take advantage of the extended transition period that allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies, which means that the financial statements included in this prospectus, as well as financial statements we file in the future, will be subject to all new or revised accounting standards generally applicable to public companies. Our election not to take advantage of the extended transition period is irrevocable.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this prospectus. This section is intended to provide management’s perspective on our financial performance, material trends, and uncertainties that may affect our business, financial condition, results of operations, and cash flows. This discussion contains forward-looking statements that are based on current expectations and assumptions and involve risks and uncertainties. Actual results may differ materially from those expressed or implied in these forward-looking statements due to various factors, including those described in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this prospectus. Our historical results of operations may not be indicative of future results.

Company Overview

Exzeo Group, Inc., or Exzeo, is engaged in the business of providing turnkey insurance technology and operations solutions to insurance carriers and their agents, who we refer to as our “customers,” based on a proprietary platform of purpose-built software and data analytics applications that are specifically designed for the property and casualty, or P&C, insurance ecosystem. Exzeo’s Insurance-as-a-Service (IaaS) platform, which we refer to as the “Exzeo Platform,” currently includes nine highly configurable software and data analytics applications that are purpose-built to serve the insurance value chain. The Exzeo Platform provides technology-based solutions for all operational and administrative activities and functions by insurance carriers and their agents, including quoting and underwriting, policy management, claims processing management, data reporting, and financial reporting. As a result, the Exzeo Platform streamlines and automates the interaction between insurance carriers and their policyholders.

Exzeo was established in 2012 as the technology and innovation division of HCI Group, Inc., or HCI, a leading underwriter of homeowners insurance in Florida that now writes policies in 12 additional states. Since its founding, Exzeo has been led by experienced technology and insurance operators with deep domain expertise who are focused on developing advanced data analytics algorithms and software tools that enable carriers to maximize efficiency of their systems, optimize underwriting outcomes and ultimately serve their customers more effectively.

The Exzeo Platform is a proprietary software, analytics, and visualization tools platform that can support, enhance and/or replace legacy operational systems that are inefficient but commonplace across the insurance industry. The Exzeo Platform is developed and maintained by Exzeo USA, Inc., a Florida corporation and wholly-owned subsidiary of our company, and Exzeo Software Private Limited, an indirect wholly-owned subsidiary of our company, which license the Exzeo Platform to Exzeo Insurance Services, Inc. (“EIS”).

Exzeo provides its solutions to carrier customers principally through its wholly-owned subsidiary, EIS, which is a Florida corporation that holds a managing general agency license in the State of Florida and equivalent licenses in other states in which it provides services to customers. EIS enters into managing general agency agreements or policy administration services agreements with its insurance-industry customers under which EIS may serve as the managing general agent of an insurance carrier or may provide services to a carrier’s managing general agent in exchange for a fee based largely on a percentage of managed premium. Under these agreements, EIS utilizes the Exzeo Platform to provide policy issuance and renewal services, as well as management services, including soliciting and negotiating reinsurance for authorized programs and managing and maintaining a policy administration system and providing claims management services. The Exzeo Platform has three core components: advanced underwriting solutions, data analytics solutions, and insurance management solutions.

 

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Advanced Underwriting Solutions – Exzeo brings over a decade of expertise in developing and training underwriting data models that Exzeo believes are demonstrated with its initial customers to

 

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deliver superior results compared to industry peers. These models efficiently process large data sets and distill them into actionable underwriting insights for carriers. By making precise decisions at the individual risk level, Exzeo’s models help insurers build portfolios focused on profitable risk accumulation.

 

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Data Analytics Solutions – The Exzeo Platform transforms both structured and unstructured data into an actionable format to power its advanced decision-based models and workflow systems. This purely data-driven decision approach enhances capabilities across a carrier’s entire organization, including underwriting, portfolio construction, and claims management.

 

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Insurance Management Solutions – EIS uses the Exzeo Platform to handle all of the day-to-day activities of insurance carriers. Through the platform, EIS provides front-end distribution management, underwriting and pricing models, policy administration and claims management, as individual products or as a fully integrated set of solutions that solely utilize the Exzeo Platform. The insurance solutions offered by EIS currently support the operations of managing general agents, attorney-in-fact companies, and insurance/reinsurance carriers and capital providers. The Exzeo Platform includes efficient, automated underwriting that requires minimal information from the insurance agent and uses the extensive internal data repository that Exzeo develops and curates. Delivered through a flexible, web-based interface, Exzeo’s suite of applications offers scalable and efficient solutions.

Discontinued Operations

Prior to July 2024, Exzeo was also engaged in the P&C insurance business, primarily focusing on homeowners’ multi-peril policies in the State of Florida, via its subsidiary TypTap Insurance Company (“TTIC”). On July 1, 2024, Exzeo transferred all 2,500,000 outstanding shares of TTIC to HCI in exchange for the settlement of promissory notes issued by Exzeo. The sale of TTIC constituted a disposal of a significant component of Exzeo, resulting in a strategic shift in Exzeo’s business and a major effect on Exzeo’s operations and financial results. The results of TTIC are reflected in Exzeo’s consolidated financial statements as discontinued operations and, therefore, are presented as assets and liabilities of discontinued operations on the consolidated balance sheets and income from discontinued operations on the consolidated statements of income. As a result, and unless specifically stated, all discussions regarding results for years ended December 31, 2024, 2023 and 2022 and for the six months ended June 30, 2025 and 2024, reflect results from our continuing operations. As the transaction was between entities under common control and there was no change in control of TTIC, the purchase was accounted for as a common control transaction, which was recognized as an equity transaction. The purpose of this transaction was to restructure Exzeo, allowing it to focus on expanding its technology and insurance solutions services. This restructuring also reduced Exzeo’s debt, thereby improving its capital structure and balance sheet. Refer to “Note 3—Discontinued Operations” in the notes to our audited consolidated financial statements for further discussion of this transaction included within the audited consolidated financial statements.

Key Factors and Trends Affecting Results of Operations

We believe our performance and future success depends on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section entitled “Risk Factors.”

 

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Underwriting performance and continued investments in our technology. We leverage data, technology, and proprietary underwriting algorithms to enhance risk management. For instance, we leverage dynamic data sources obtained through various sources and apply advanced statistical methods to model that data into our pricing algorithm. We expect to improve our ability to manage risk and price risk accurately over time as we incorporate new external data sources and utilize the experience gained over time with HCI’s policyholder base. These enhancements are expected to lead to better underwriting, lower loss frequency, and lower loss ratios over time – after adjusting for weather-related events. Our success in this area depends on our ability to continuously incorporate new data sources as they become available and effectively apply them to improve our ability to accurately and competitively price risk.

 

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Intense competition in our market. The market to provide core system software to the P&C insurance industry is highly competitive and fragmented. This market is subject to changing technology, shifting customer needs and introductions of new products and services. Our competitors vary in size and in the breadth and scope of the products and services offered. The principal competitive factors in our industry include total cost of ownership, product functionality, flexibility and performance, customer references and in-depth knowledge of the P&C insurance industry. We believe that we compete favorably with our competitors on the basis of each of these factors. However, many of our current or potential competitors have greater financial and other resources, greater name recognition and longer operating histories than we do.

 

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New customer success and retention. We have relied and expect to continue to rely on customer relationships with a relatively small number of carriers in the P&C insurance industry for a substantial portion of our revenue, and the loss of any of these customers or a reduction in revenue from any of these customers would significantly harm our business, results of operations and financial condition. While we currently have one customer that is not affiliated with HCI, we do not expect to generate significant revenue from this customer in the current fiscal year. As part of our growth strategy, we are focused on expanding our customer base by developing new partnerships with additional carriers and their agents. Our future operating results will depend, in part, on the rate at which we acquire new customers that are not affiliates of HCI and maintain our relationships with existing customers as measured by the amount of managed premium on our platform. We believe that introducing these prospective customers to the advantages of our technology and variable fee structure will be critical to diversifying our revenue and reducing customer concentration over time. Our ability to support this expansion depends on the continued performance of our customer success, onboarding, and support teams, which are critical to ensuring high customer satisfaction, adoption, and retention.

 

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National expansion strategy / Expansion into new geographies and use cases. We believe national expansion will be a key driver of our long-term growth and success of our business. As of June 30, 2025, we provide services to P&C companies in the states of Connecticut, Florida, Georgia, Massachusetts, Montana, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, South Carolina, South Dakota and Utah. We expect to apply our highly scalable model nationally, with a tailored approach to each state that is driven by the regulatory environment and local market dynamics. We hope to expand rapidly and efficiently across different geographies while maintaining a high level of control over the specific strategy within each state. State expansion should create a broader base from which to grow premiums while increasing the geographic diversity in the policyholder base and risk portfolio that we manage. We believe that broader geographic diversification will also improve our ability to secure favorable terms from reinsurers, which would improve the overall cost structure and profitability for our customers.

 

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Regulatory matters. The legal environment of cloud-based technology businesses is evolving in the United States, and we are subject to a variety of laws and regulations in the United States that involve matters central to our business. Many of these laws and regulations are still evolving and being tested in courts and could be interpreted in ways that could harm our business. These may involve privacy, data protection and personal information, content, intellectual property, data security, and data retention and deletion. In particular, we are subject to federal and state laws regarding privacy and protection of people’s data. U.S. federal and state laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the evolving industry in which we operate, and may be interpreted and applied inconsistently from state to state and inconsistently with our current policies and practices.

 

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Data privacy. Our customers and their policyholders upload to and store their data in our cloud-based platform. This presents legal challenges to our business and operations, such as consumer privacy rights and intellectual property rights. We must monitor and comply with a wide variety of laws and

 

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regulations regarding the data stored and processed on our cloud-based platform as well as in the operation of our business. Non-compliance with these laws could result in penalties or significant legal liability. We have invested, and continue to invest, human and technology resources into our compliance efforts and our data privacy compliance efforts generally.

 

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Transition to a standalone public company. We will become subject to the reporting and compliance obligations of the federal and state securities laws, as well as stock exchange requirements. Operating as a standalone public company will require us to establish additional governance structure and corporate functions. Such expanded capabilities will include external financial reporting, internal audit, treasury, investor relations, board of directors and officers, and stock administration resulting in additional costs incurred.

Summary of Key Performance Metrics

We review a number of metrics, including the following key operating operational measures, as we make strategic decisions, measure our performance, evaluate our business, and identify trends in our business:

 

In thousands, except percentages and counts		As of June 30,								As of December 31,
		2025				2024				2024				2023				2022
Managed Premium		$	1,220,280			$	502,758			$	580,276			$	384,143			$	319,532
Managed Policies			270,094				97,595				112,475				93,016				94,441
Premium Per Policy		$	4,518			$	5,151			$	5,159			$	4,130			$	3,383
Gross Dollar Retention Rate			88.8	%			97.4	%			95.1	%			96.6	%			105.1	%
Net Dollar Retention Rate			242.7	%			148.8	%			151.1	%			120.2	%			162.0	%
Annual Recurring Revenue		$	195,257			$	118,679			$	138,462			$	98,361			$	82,244

Managed Premium

Managed premium is defined as the aggregate gross dollar value of in-force premiums that are processed, managed, or administered by our software solutions as of the period end date. This excludes any applicable policy fee income associated with managed policies. Premium pricing may vary by state due to a combination of factors including regulatory requirements; however, the majority of the policies are written in the state of Florida. Revenue is primarily derived from usage-based pricing models, which are structured based on the amount of managed premiums processed, in most cases. We view this as an important metric because it is an indicator of overall size of our platform. However, managed premium is an operational metric and should not be considered a substitute for revenue or other financial results.

Managed premiums attributable to insurance policies written in the state of Florida represented 84.8%, 77.3%, and 79.5% of total managed premiums for the years ended December 31, 2024, 2023, and 2022, respectively, and 90.0% and 82.7% for the six months ended June 30, 2025 and 2024, respectively.

Managed Policies

Managed policies is defined as the number of currently active policies managed by us on our platform as of the period end date. We consider managed policies a key metric for evaluating our financial performance, as growth in the number of managed policies not only drives revenue growth, but we also believe that an increase in managed policies may reflect broader brand awareness and deeper market penetration of our Exzeo Platform.

Premiums Per Policy

Premiums per policy is defined as the managed premium divided by managed policies. We view premium per policy as an important metric which provides information as to the average size of our customers’ policyholder relationships. Growth in the metric can be indicative of increased coverages offered to our customers.

 

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Gross Dollar Retention Rate

Gross dollar retention rate measures the percentage of managed premium retained from our customers’ existing policyholders. We calculate gross dollar retention rate by measuring the managed premium attributable to policyholders who remained active as of the end of the current period and dividing this amount by the managed premium attributable to those same policyholders as of the end of the corresponding prior-year period (i.e. twelve months earlier) We believe the gross dollar retention rate is a valuable indicator of platform engagement among existing policyholders and provides insight into our ability to retain and sustain premium volume over time through our services.

The managed premiums attributable to policyholders active at the end of the prior calendar year used to recalculate the gross dollar retention rates were $365,419, $308,781, and $207,228 for December 31, 2024, 2023 and 2022, respectively, and $446,209 and $329,145 as of June 30, 2025 and 2024, respectively.

Net Dollar Retention Rate (“NRR”)

We use NRR as a key performance metric to measure the success of our carrier customer relationships and the growth of our revenue from new and existing carrier customers. To calculate NRR, we divide the amount of managed premium from new and existing policyholders of our customers at the end of the current period, by the amount of managed premium attributable to the policyholders active as of the respective prior-year period (i.e., twelve months earlier).

Our NRR is influenced by both the growth of existing carrier customers on the platform as well as the addition of new carrier customers. We believe that maintaining a high NRR is critical to achieving sustained long-term growth and reflects the strength of our value proposition to existing as well as future customers.

Annual Recurring Revenue (“ARR”)

We use ARR as a key operational metric to assess the scale of our recurring revenue generated from managed premium. ARR is defined as the sum of each customer’s managed premiums, multiplied by their respective contractual fee rates, plus any applicable policy fee income associated with managed policies as of the period end date. ARR excludes revenue from non-recurring sources, such as catastrophe services.

Components of Operating Results

Revenue

Exzeo generates revenue from three primary sources: underwriting and management services, claim services, and other technology services. Underwriting and management services include policy issuance and renewal, reinsurance placement, and administrative support, with fees tied to a percentage of premiums written or assumed, plus related policy fees. Claim services involve investigating, adjusting, and settling claims, including catastrophe-related claims, with pricing based on percentage of premiums written or assumed, fees per claim or a percentage of indemnification costs or both. Other technology services are primarily derived from proprietary software solutions offered through SaaS service agreements, with fees based on a combination of policy or claim volumes, fixed charges, or percentages of claims handled.

Cost of revenue

Cost of revenue consists of expenses directly attributable to the delivery of services that generate revenue. These include salaries and benefits of employees engaged in providing underwriting, management, administrative, and claim services, commissions for which Exzeo collects fees inclusive of agent commissions and subsequently pays the applicable commissions to agents, amortization of software intangible assets used to provide services, and allocated overhead costs from supporting departments. Information technology services that support policy

 

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underwriting, administrative functions, and claim handing services are also included. Claim handling costs are comprised of expenses incurred throughout the claims process, including adjustment, investigation, defense, recording, and payment functions. Allocated expenses from departments supporting these functions are also included in cost of revenue.

Gross profit (loss)

Gross profit represents profit or loss after cost of sales, as defined previously, and is the difference between revenues and cost of revenue. The increase in gross profit in the recent periods presented was primarily driven by growth in our managed premiums, which allows us to leverage our relatively fixed cost structure. As we continue to scale and find operational efficiencies, we expect gross margins to improve over time.

Selling, general and administrative expenses

Selling, general and administrative expenses represent costs associated with supporting operations and primarily consists of employee compensation, including stock-based compensation and benefits for our finance, IT, human resources, legal, sales, and general management functions, as well as facilities and professional services.

Research and development

Research and development costs consist primarily of personnel expenses, including salaries and benefits, bonuses, stock-based compensation and related overhead costs for employees engaged in the design and development of Exzeo’s offerings and other internally used systems and applications.

Depreciation and amortization

Depreciation and amortization costs reflect expenses associated with the ongoing use of our tangible long-lived assets, including computer hardware, office equipment and leasehold improvements.

Investment income

Investment income represents interest earned from short-term investments. The principal factors that influence net investment income are the size of our investment portfolio and the yield on that portfolio.

Interest expense

Interest expense primarily consists of the allocation of interest from borrowing and funding associated with notes payable and loans to HCI.

Income tax expense (benefit)

Income tax expense (benefit) primarily consists of domestic corporate federal and state income taxes related to the sale of our services. The effective tax rate can be affected by many factors, including changes in tax laws, states of operation, regulation or rates, new interpretations of existing laws or regulations and changes to our overall levels of income before tax.

Results of Operations

The following table presents selected financial information for Exzeo including the amounts expressed as a percentage of total revenue for the periods indicated and the percentage change year-over-year for the six months ended June 30, 2025 and 2024, respectively.

 

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		For the Six Months Ended June 30,								Percentage of Revenue (1)								Increase (Decrease)
In Thousands		2025				2024				2025				2024				2025 vs. 2024
Revenue		$	108,498			$	60,305				100.0	%			100.0	%			79.9	%
Cost of revenue			46,122				36,919				42.5	%			61.2	%			24.9	%
Gross profit			62,376				23,386				57.5	%			38.8	%			166.7	%
Operating expenses
Selling, general and administrative			5,666				4,232				5.2	%			7.0	%			33.9	%
Research and development			4,575				3,290				4.2	%			5.5	%			39.1	%
Depreciation and amortization			211				156				0.2	%			0.3	%			35.3	%
Total operating expenses			10,452				7,678				9.6	%			12.8	%			36.1	%
Operating income			51,924				15,708				47.9	%			26.0	%			230.6	%
Investment income			1,161				142				1.1	%			0.2	%			717.6	%
Interest expense			—				(3,306	)			0.0	%			(5.5	%)			(100.0	%)
Income before taxes			53,085				12,544				48.9	%			20.8	%			323.2	%
Income tax expense			13,471				3,433				12.4	%			5.7	%			292.4	%
Net income after taxes		$	39,614			$	9,111				36.5	%			15.1	%			334.8	%

 

(1)	Percentage may not total due to rounding.

 

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The following table presents selected financial information for Exzeo including the amounts expressed as a percentage of total revenue for the periods indicated and the percentage change year-over-year for the years ended December 31, 2024, 2023, and 2022, respectively.

 

In Thousands		For the Years Ended December 31,												Percentage of Revenue(1)												Increase (Decrease)
		2024				2023				2022				2024				2023				2022				2024 vs. 2023				2023 vs. 2022
Revenue		$	133,948			$	88,333			$	45,631				100.0	%			100.0	%			100.0	%			51.6	%			93.6	%
Cost of revenue			80,739				71,061				71,740				60.3	%			80.4	%			157.2	%			13.6	%			(0.9	%)
Gross profit (loss)			53,209				17,272				(26,109	)			39.7	%			19.6	%			(57.2	%)			208.1	%			(166.2	%)
Operating expenses
Selling, general and administrative . . .			8,343				7,898				7,339				6.2	%			8.9	%			16.1	%			5.6	%			7.6	%
Research and development			6,514				6,528				4,130				4.9	%			7.4	%			9.1	%			(0.2	%)			58.1	%
Depreciation and amortization			335				292				175				0.3	%			0.3	%			0.4	%			14.8	%			67.1	%
Total operating expenses			15,192				14,718				11,644				11.3	%			16.7	%			25.5	%			3.2	%			26.4	%
Operating income (loss)			38,017				2,554				(37,753	)			28.4	%			2.9	%			(82.7	%)			N.M	.			(106.8	%)
Investment income			548				52				30				0.4	%			0.1	%			0.1	%			N.M	.			73.3	%
Interest expense			(3,329	)			(1,723	)			(882	)			(2.5	%)			(2.0	%)			(1.9	%)			93.2	%			95.4	%
Income (loss) from continuing operations, before taxes . . . .			35,236				883				(38,605	)			26.3	%			1.0	%			(84.6	%)			N.M	.			(102.3	%)
Income tax expense (benefit)
from continuing operations . . .			9,168				(12,018	)			3,409				6.8	%			(13.6	%)			7.5	%			(176.3	%)			(452.5	%)
Net income (loss) from continuing operations, after taxes		$	26,068			$	12,901			$	(42,014	)			19.5	%			14.6	%			(92.1	%)			102.1	%			(130.7	%)

 

(1)	Percentage may not total due to rounding.

N.M.—Percentage not qualitatively meaningful

Revenue

Comparison of the Six Months Ended June 30, 2025 and 2024

The following table sets forth, for the periods presented, summary information regarding our disaggregated revenue:

 

		For the Six Months Ended June 30,								Percentage of Revenue (1)								Increase (Decrease)
In thousands		2025				2024				2025				2024				2025 vs. 2024
Underwriting and management		$	88,545			$	45,122				81.6	%			74.8	%			96.2	%
Claim services (2)			15,452				11,930				14.2	%			19.8	%			29.5	%
Other technology services			4,501				3,253				4.2	%			5.4	%			38.4	%
Total revenue		$	108,498			$	60,305				100.0	%			100.0	%			79.9	%

 

(1)	Percentage may not total due to rounding.

 

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