Good morning, ladies and gentlemen. My name is Jeffrey Stein, and I am the Chairman of Octave Specialty Group. It is my pleasure to welcome you to our 2026 Annual Stockholders Meeting. Given the ease of shareholder access in our last several annual meetings, the Board of Directors determined that the 2026 Annual Meeting will be held in a virtual-only meeting format to allow for maximum stockholder participation. This meeting is being held as scheduled in accordance with the notice of the annual meeting. Under our bylaws, as Chairman of the Board, I will be presiding at the meeting today. It is my pleasure to welcome the other members of our Board of Directors who are all in attendance and, along with myself, have been nominated to serve as directors.
Ian D. Haft, Lisa G. Iglesias, Joan Lamm-Tennant, Kristi A. Matus, Michael D. Price, and Claude LeBlanc, our President and Chief Executive Officer. Our agenda for today's meeting will have two parts. I will turn over the first part to our Corporate Secretary and Assistant General Counsel, Reid Powell, who will walk you through today's formal business, including the four proposals for stockholder consideration. I will then come back and introduce Claude LeBlanc, who will give a brief update on the company. After that, we will open it up for Q&A. In keeping with the digital approach to this year's meeting, it is now shortly after 11:00 A.M. Eastern Time on May 28th, and this meeting is officially called to order. I will now turn it over to Reid to continue the meeting.
Thank you, Mr. Chairman. Before we start our formal meeting, I would like to run through a few rules and formalities for the meeting. First, please note that this meeting is being recorded. However, no stockholder or other person attending via webcast is permitted to use any audio recording device. Secondly, the agenda for today's meeting is set forth on the meeting web portal, along with the rules of conduct for this annual meeting. It is our intention to conduct this meeting in accordance with the agenda and the rules of conduct, considering only those items that are properly presented. To conduct an orderly meeting, we ask that participants adhere to the agenda and abide by the rules of conduct. We will start with a review of the formalities of the meeting. The polls will then open for voting.
Once the votes have been cast and other formalities of the meeting have been completed, Mr. LeBlanc will speak. Questions will be addressed after Mr. LeBlanc's comments and the formalities of the meeting have been completed. Please note that questions are limited to the business of Octave and the matters being addressed at the meeting. Only validated stockholders may ask questions in the designated field on the web portal. We will do our best to answer as many questions as time allows. If we are not able to answer your question today, or if you have other questions about Octave, please feel free to contact Karen Beyer in our investor relations department. Ms. Beyer's contact details can be found on our website. We are also joined here today by representatives of KPMG and Ernst & Young, our independent auditors for 2025 and 2026, respectively.
They will be available during the question and answer session after the meeting to respond to appropriate questions. I would also like to introduce Ms. Anna Hagberg and Mr. Peter Hagberg from Broadridge Financial Solutions. They have been duly appointed by the board as inspectors of election for today's meeting. I have presented to our inspectors the list of stockholders entitled to vote at this meeting and have received from them the oath of the inspectors of election, in which they swear to perform their duties with strict impartiality. They will be tabulating all stockholder votes cast either directly or via proxy. The board fixed the close of business on April 2nd, 2026, as the record date for determining stockholders entitled to vote at this meeting.
An affidavit of distribution has been delivered by Broadridge, our proxy tabulator, attesting to the fact that each stockholder of record was sent on or about April 10th, 2026, either a notice regarding the internet availability of our proxy materials for the annual meeting of stockholders and providing access to our proxy materials, or they were sent the proxy materials themselves. In accordance with Delaware law and our bylaws, the list of stockholders has been available at Octave headquarters for the past 10 days. The list of stockholders shows that, as of the record date, there were 45,013,592 shares of common stock outstanding and entitled to vote at this meeting.
We are informed by the inspectors of election that at the start of this meeting, a majority of the issued and outstanding shares of voting stock of the company entitled to vote on the record date are present in person or by proxy. Therefore, I now declare that a quorum is present for purposes of transacting business. I will file the oaths of office of the inspectors of election, the affidavit of distribution, and the list of stockholders with the records of this meeting and will incorporate the same into the minutes. We will now open the polls for voting. Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there.
Stockholders who have already sent in proxy cards or voted via telephone or internet and do not want to change their vote need not take any further action. There are four proposals to be considered today. We have not received any other items of business in accordance with our bylaws or the SEC's proxy rules. As a result, we will not consider any additional items of business at this meeting, and all nominations and proposals are hereby closed. Comments or questions should be held for the general Q&A period set aside for later in the meeting. We will now turn to proposal number one, the election of seven directors to our board. The following candidates have been nominated by the Board of Directors: Ian D. Haft, Lisa G. Iglesias, Joan Lamm-Tennant, Claude LeBlanc, Kristi A. Matus, Michael D. Price, Jeffrey S. Stein.
No other nominations have been made that require action at this annual meeting. As such, director nominations are closed. Each nominee has been nominated to serve for one year until the next annual meeting of stockholders and until his or her successor has been duly chosen. Proposal 2 is to approve, on a non-binding advisory basis, the compensation of the company's named executive officers as disclosed in the proxy statement. The board recommends a vote for this proposal. Proposal 3 is to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026. The board recommends a vote for this proposal. Proposal 4 is to approve the Octave 2026 Incentive Compensation Plan. The board recommends a vote for this proposal. All the matters to be voted on today have now been formally presented to the meeting.
If any stockholder wishes to vote at this time, they may do so by clicking on the voting button on the web portal and following the instructions there.
As stockholders have now had adequate opportunity to vote, I declare that the polls are now closed. Thank you all for voting. Reid, when will the voting results be made public?
We will be reporting the final vote results in a current report on Form 8-K to be filed within four business days.
Thank you, Reid. There being no further business to come before the meeting, the formal part of this 2026 annual meeting of stockholders of Octave Specialty Group is now adjourned. In a moment, I will turn the meeting over to Mr. LeBlanc, our President and CEO, who will provide an update on the business. After his remarks, we will open the floor for additional questions from stockholders. First, Mr. Powell will read the appropriate legal reminders.
Before Mr. LeBlanc begins, I would like to remind you that statements and answers to any questions provided by the company today may contain forward-looking statements about our business, including but not limited to new business, credit outlooks, market conditions, credit spreads, financial ratings, loss reserves, loss mitigation, loss recovery, investment returns, or other items that may affect our future results. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Any forward-looking statements are not guarantees of future performance or events. Actual performance and events may differ, possibly materially, from such forward-looking statements. Factors that could cause this include the factors described in our first quarter 2026 quarterly report on Form 10-Q and our 2025 annual report on Form 10-K under management's discussion and analysis of financial condition and results of operations and under risk factors.
Octave is not under any obligation, and expressly disclaims any obligation, to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
Thank you, Reid. I would like to welcome those of you joining us today for the Octave 2026 Annual Meeting of Stockholders. This morning, I will provide you with a brief overview of our 2025 accomplishments and the 2026 strategic priorities. 2025 was a defining year for Octave Specialty Group, one that marked both the culmination of a multi-year transformation and a strategic inflection point where our vision became reality. The successful close of the sale of our legacy financial guarantee business in September represented the final step in our transition to a growth-focused specialty P&C insurance platform. That milestone was followed by the rebranding of our company to Octave Specialty Group, reflecting our future direction as a high-performing specialty insurance distribution business. Our goal is to create a leading, scalable global specialty insurance platform, which we are confident will deliver long-term value to our shareholders.
In 2025, we further advanced our strategy with several key strategic actions, including, one, the acquisition of a market-leading supplemental health MGA, ArmadaCare. Two, the formation and subsequent launch of Statera, a Lloyd's Managing Agency. Three, the launch of the 1889 Specialty Insurance Services, a professional liability MGA. Four, the U.S. expansion of Alcor, a commercial property MGA. Five, the launch of our proprietary AI-powered underwriting platform, Hammurabi, which currently supports our employer stop loss business. Lastly, the implementation of a new target operating model for our go-forward strategy, resulting in material corporate cost savings. These strategic actions are expected to accelerate the growth and scale of our distribution platform, strengthen our specialty product diversification, and expand our relationships with distribution and capacity providers.
Insurance distribution is our core business, and our platform delivers value through two complementary growth engines, Octave Ventures, our de novo MGA incubation division, and Octave Partners, our strategic growth division. Octave Partners has a disciplined acquisition and operating strategy focused on high growth MGAs and MGUs in niche markets with leading management teams and meaningful growth opportunities. One notable example was Octave Partners' successful acquisition in 2025 of ArmadaCare, a fully integrated MGA delivering supplemental health and benefit products for C-suite and other senior executives. The launch of Hammurabi, our proprietary AI-powered underwriting platform, developed and led by scientists at UC Berkeley's SkyDeck program, was developed specifically for the medical stop loss market at Xchange Benefits, another one of our A&H MGAs. This new initiative significantly advances Xchange's data, AI, and technology capabilities.
We believe Hammurabi is a competitive differentiator with potential to expand to additional business lines, and we are just beginning to unlock its full potential. Octave Ventures, our other growth engine, formerly known as Beat Capital Partners, is an industry-leading global incubator platform purpose-built to attract high-quality underwriting teams and launch de novo MGAs. Its highly differentiated incubator platform provides leading underwriting teams access to comprehensive business and back-office operations, an advanced data and technology infrastructure, and strategically aligned capital with A+ rated paper. Octave Ventures has demonstrated consistent year-over-year organic revenue growth with recorded organic growth of 55% in 2025. With nine MGA launches completed in 2024 and 2025, Octave Ventures has substantial embedded EBITDA growth potential, which we expect to be realized between 2026 and 2028. When we acquired Beat Capital in 2024, our ownership stake was 60%.
We have since expanded that ownership stake to 70% in the first quarter of 2026 and increased our ownership stakes in five other MGAs. A key competitive advantage for our business model is the access to aligned capital and capacity that enables us to launch new MGAs quickly and efficiently. Most of our de novo MGAs are supported by Lloyd's syndicates 4242 and 1416, which have broad and stable capacity relationships. The syndicates are supported and followed by 36 capacity partners across five continents, reducing reliance on any single partner and allowing continued access to curated underwriting capacity in varying forms and across cycles. The capacity available to the syndicates, including consortia capacity, has increased 27% year-over-year to $867 million at the start of 2026. Nearly 2/3 of that growth came from deepening existing relationships rather than adding partners.
Another key competitive differentiator we are actively and thoughtfully expanding is our data and AI capabilities. In 2025, we made significant progress in implementing key steps to move our platform to a common technology stack. We had a significant advantage to implement this, given the majority of our MGAs are de novos, which were launched on the same platform. We expect to complete our key tech stack harmonization initiatives across our global MGAs in the coming months. At the same time, we commenced the implementation of our data architecture, which we expect will be completed for our U.S. MGAs by year-end. The data architecture and platform is a foundational component of our AI strategy and includes key AI capabilities we will use to gain efficiencies in our business, accelerate the velocity of revenue growth, improve underwriting and risk selection, and provide valuable data for our risk oversight and capacity partners.
2026 will be a transformational year in our data and AI capabilities. Everspan, our hybrid fronting carrier, continues to strengthen its position within Octave's broader growth strategy. After taking decisive actions in 2024 to reposition its book of business and enhance capital efficiency, Everspan emerged at the end of 2025 well-positioned for future growth. Following reserve strengthening in the first nine months of the year, Everspan's performance improved meaningfully in the fourth quarter of 2025, generating a loss ratio of 62.9%, inclusive of the impact of sliding scale commissions. Everspan continues to primarily focus on casualty lines and maintains a fee-focused strategy with managed risk exposure and strong partner selectivity. Everspan successfully renewed 100% of its targeted programs and supported three programs within our insurance distribution platform, with additional ones in the pipeline for 2026.
In connection with the close of the sale of our legacy business and repositioning Octave for future growth, we also took decisive actions in the fourth quarter to implement a new target operating model focused on the reduction of corporate overhead. This included, amongst other actions, reducing the number of executive officers, reducing our corporate headquarter footprint, and restructuring executive officer compensation, leading to an approximate 25% reduction in our total corporate overhead run rate. As we look ahead, we are extremely excited for the future and believe that Octave is well-positioned to deliver strong top-line and bottom-line growth as we continue to execute on our strategy. I would like to recognize the support of our shareholders, together with the hard work and dedication of our employees and our board, which has been instrumental to our success. Thank you.
I will now turn the meeting back to Reid Powell to outline the protocol for questions.
In order to allow all stockholders the opportunity to ask questions, there will be only one question per stockholder at a time. We will begin by taking stockholder questions that are being entered today on the web portal. Please note, we will attempt to answer as many questions as time allows, but only questions that are germane to the meeting will be addressed. If, for any reason, we do not get to your question today, please feel free to contact our investor relations department directly. There being no shareholder questions, I will turn the meeting over to Jeffrey Stein.
Thank you, Reid. Excuse me. We are at the end of the meeting, I would like to thank you all for attending our 2026 Annual Meeting of Stockholders. If you have any other questions, please feel free to contact our investor relations department directly. We look forward to speaking with you again. Thank you.
This now concludes the meeting. Thank you for joining, and have a pleasant day.