Frontline Insurance Reciprocal Exchange Rating Report

Table of Contents

Ratings

Rating Summary

Outlook

Key Credit Considerations

Direct Alignment with Frontline’s Admitted Florida Residential Property Platform

Strong Local Market Position and Demonstrated Production Base

Experienced Management and Scalable Operating Infrastructure

Conservative Initial Investment Profile

Adequate Projected Capitalization and Subscriber Surplus Formation

Underwriting Continuity Supports Projected Profitability

Adequate Reinsurance Program

Geographic and Earnings Concentration

Exposure to Event Risk

Rating Sensitivities

Overview

Insurance Entity Financials

Stress Testing

Balance Sheet Management

Quality of Capital/Underwriting Leverage

Asset Quality and Investment Risk

Financial Flexibility and Access to Capital

Liquidity and Asset/Liability Management

Operating Fundamentals

Drivers of Profitability

Consistency of Profitability

Earnings Diversification: Product/Geography

Exposure to Event Risk

Company Profile and Risk Management

Management Profile and Strategy

Market Position

Distribution

Risk Management

External Considerations

Sovereign/Transfer & Convertibility (T&C) Risk

Rating Summary

Frontline Insurance Reciprocal Exchange (“FIRE” or the “Exchange”) is a newly formed Florida-domiciled reciprocal insurer established to write admitted Florida residential property business, primarily homeowners and fire/dwelling coverage. The rating reflects adequate initial capitalization and manageable projected underwriting leverage for the planned operating profile, recurring statutory capital formation through subscriber surplus contributions, and a conservative initial investment profile emphasizing liquidity and capital preservation. FIRE also benefits from alignment with Frontline Insurance Group’s (“Frontline”) established admitted Florida residential property platform, primarily through First Protective Insurance Company (FPIC), including existing pricing, underwriting, reserving, claims, reinsurance, and independent agency distribution capabilities. Frontline’s local market position, brand recognition, demonstrated recent production trends, experienced…

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