NEW YORK, August 03, 2026--(BUSINESS WIRE)--Following the issuance of a news release earlier today announcing that Bowhead Specialty Holdings Inc. ("Bowhead", the "Company" or "us") (NYSE: BOW), has entered into a definitive merger agreement under which American Family will acquire Bowhead, the Company today announced financial results for the second quarter ended June 30, 2026(1) and cancelled the previously scheduled conference call to discuss its second quarter ended June 30, 2026 financial results.
Second Quarter 2026 Highlights
Gross written premiums increased 28.2% to $297.9 million.
Net income of $16.1 million, or $0.48 per diluted share.
Adjusted net income(2) of $16.1 million, or $0.48 per diluted share(2).
Return on equity of 13.8% and adjusted return on equity(2) of 13.8%.
Book value per share $14.39 and diluted book value per share of $14.12.
Bowhead Chief Executive Officer, Stephen Sills, commented, "Since Bowhead's founding, we have benefited from a strong and trusting relationship with American Family, whose support and partnership have enabled us to build the company we are today. Over the years, they have developed a deep understanding of our business, our culture, and the underwriting discipline that defines Bowhead. I believe this transaction delivers compelling value to our stockholders while bringing together two organizations that share a long history, aligned values, and a commitment to disciplined underwriting and long-term success. I am proud of what the Bowhead team has accomplished, and I believe this combination recognizes the strength of the Bowhead franchise while continuing to enhance our ability to create value for our insureds, distribution partners and employees. I look forward to joining American Family and continuing to lead the Bowhead franchise."
Mr. Sills continued, "Turning to our second quarter results, Bowhead once again delivered a strong quarter highlighted by consistent strong top and bottom line growth. Gross written premiums in the second quarter grew over 28% year-over-year, while adjusted net income grew over 26%, and diluted adjusted earnings per share grew just under 30%."
Underwriting Results
The 28.2% increase in gross written premiums to $297.9 million in the second quarter of 2026 was driven by our increasing renewal book, new business and continued growth in our platform across all divisions:
Our Casualty division led the growth with a 32.5% increase to $199.8 million;
Professional Liability increased 0.6% to $55.1 million;
Healthcare Liability increased 23.9% to $29.1 million;
Baleen Specialty increased 311.1% to $13.9 million.
Our loss ratio of 67.3% for the second quarter of 2026 increased 1.1 points compared to 66.2% in the same period of 2025 due to an increase in our current accident year loss ratio. The higher current accident year loss ratio was driven by lower ceded loss activity under our excess of loss treaties, and to a lesser extent, changes in our portfolio mix.
As communicated in the past, the development in our prior accident year losses were driven by expected loss ratios applied to net additional premiums that were billed and fully earned in the quarter, but associated with policies from prior accident years. Once again, these amounts were not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims.
Our expense ratio was 28.6% for the three months ended June 30, 2026, reflecting a decrease of 2.0 points compared to 30.6% for the same period in 2025. This decrease in our expense ratio was primarily driven by the 3.4 point decrease in our operating expense ratio and a 0.3 point increase in other insurance-related income, which contributed to the lowering of our expense ratio. These improvements were partially offset by the 1.7 point increase in our net acquisition costs ratio.
The decrease in our operating expense ratio was due to the continued scaling of our business, where net earned premiums grew at a higher rate than our expenses, as well as the prudent management of our expenses, including estimates of deferrable costs.
The increase in our net acquisition costs ratio was driven by the increase in earned broker commissions due to changes in our portfolio mix and higher commission rates, an increase in the ceding fee we pay to American Family and deferred employment related underwriting costs, partially offset by an increase in earned ceding commissions from our ceded reinsurance treaties.
Investment Results
Net investment income increased 37.6% in the quarter to $18.8 million, driven by a higher balance of investments. Our investment portfolio had a book yield of 4.7% and a new money rate of 4.9% as of June 30, 2026.
The weighted average effective duration of our investment portfolio, which included cash equivalents, was 3.3 years and had an average rating of "AA-" as of June 30, 2026.
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(1) | Comparisons in this release are made to June 30, 2025 financial results unless otherwise noted. | |
(2) | Non-GAAP financial measure. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP measures. |
Summary of Operating Results
The following table summarizes the Company's results of operations for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||
($ in thousands, except percentages and per share data) | |||||||||||||||||||||
Gross written premiums | $ | 297,894 | $ | 232,361 | 28.2 | % | $ | 514,635 | $ | 407,209 | 26.4 | % | |||||||||
Ceded written premiums | (116,869 | ) | (83,508 | ) | 39.9 | % | (193,268 | ) | (141,587 | ) | 36.5 | % | |||||||||
Net written premiums | $ | 181,025 | $ | 148,853 | 21.6 | % | $ | 321,367 | $ | 265,622 | 21.0 | % | |||||||||
Revenues | |||||||||||||||||||||
Net earned premiums | $ | 143,953 | $ | 119,137 | 20.8 | % | $ | 280,762 | $ | 228,954 | 22.6 | % | |||||||||
Net investment income | 18,820 | 13,677 | 37.6 | % | 36,847 | 26,236 | 40.4 | % | |||||||||||||
Net realized investment losses | (11 | ) | (11 | ) | — | % | (32 | ) | (15 | ) | 113.3 | % | |||||||||
Other insurance-related income | 1,095 | 460 | 138.0 | % | 1,974 | 805 | 145.2 | % | |||||||||||||
Total revenues | 163,857 | 133,263 | 23.0 | % | 319,551 | 255,980 | 24.8 | % | |||||||||||||
Expenses | |||||||||||||||||||||
Net losses and loss adjustment expenses | 96,945 | 78,900 | 22.9 | % | 188,427 | 152,327 | 23.7 | % | |||||||||||||
Net acquisition costs | 15,820 | 11,038 | 43.3 | % | 29,713 | 20,834 | 42.6 | % | |||||||||||||
Operating expenses | 26,384 | 25,849 | 2.1 | % | 52,187 | 49,785 | 4.8 | % | |||||||||||||
Non-operating expenses | — | 437 | (100.0 | )% | — | 548 | (100.0 | )% | |||||||||||||
Warrant expense | 783 | 783 | — | % | 1,558 | 1,558 | — | % | |||||||||||||
Interest expense and financing fees | 3,266 | 261 | 1151.3 | % | 6,429 | 508 | 1165.6 | % | |||||||||||||
Foreign exchange (gains) losses | (2 | ) | 79 | (102.5 | )% | 6 | 33 | (81.8 | )% | ||||||||||||
Total expenses | 143,196 | 117,347 | 22.0 | % | 278,320 | 225,593 | 23.4 | % | |||||||||||||
Income before income taxes | 20,661 | 15,916 | 29.8 | % | 41,231 | 30,387 | 35.7 | % | |||||||||||||
Income tax expense | (4,523 | ) | (3,574 | ) | 26.6 | % | (9,083 | ) | (6,620 | ) | 37.2 | % | |||||||||
Net income | $ | 16,138 | $ | 12,342 | 30.8 | % | $ | 32,148 | $ | 23,767 | 35.3 | % | |||||||||
Key Operating and Financial Metrics: | |||||||||||||||||||||
Adjusted net income(1) | $ | 16,145 | $ | 12,758 | 26.5 | % | $ | 32,178 | $ | 24,238 | 32.8 | % | |||||||||
Loss ratio | 67.3 | % | 66.2 | % | 67.1 | % | 66.5 | % | |||||||||||||
Expense ratio | 28.6 | % | 30.6 | % | 28.5 | % | 30.4 | % | |||||||||||||
Combined ratio | 95.9 | % | 96.8 | % | 95.6 | % | 96.9 | % | |||||||||||||
Return on equity(2) | 13.8 | % | 12.4 | % | 13.9 | % | 12.2 | % | |||||||||||||
Adjusted return on equity(1)(2) | 13.8 | % | 12.8 | % | 13.9 | % | 12.5 | % | |||||||||||||
Diluted earnings per share | $ | 0.48 | $ | 0.36 | 33.3 | % | $ | 0.96 | $ | 0.70 | 37.1 | % | |||||||||
Diluted adjusted earnings per share(1) | $ | 0.48 | $ | 0.37 | 29.7 | % | $ | 0.96 | $ | 0.72 | 33.3 | % |
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NM - Percentage change is not meaningful. | ||
(1) | Non-GAAP financial measure. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP measures. | |
(2) | For the three and six months ended June 30, 2026 and 2025, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity. |
Condensed Consolidated Balance Sheets
June 30, 2026 | December 31, 2025 | |||||
($ in thousands, except share data) | ||||||
Assets | ||||||
Investments | ||||||
Fixed maturity securities, available for sale, at fair value (amortized cost of $1,593,861 and $1,364,228, respectively) | $ | 1,585,217 | $ | 1,371,006 | ||
Total investments | 1,585,217 | 1,371,006 | ||||
Cash and cash equivalents | 141,748 | 193,545 | ||||
Restricted cash and cash equivalents | 23,073 | 40,225 | ||||
Accrued investment income | 13,686 | 10,958 | ||||
Premium balances receivable | 122,370 | 84,415 | ||||
Reinsurance recoverable, net | 466,205 | 399,676 | ||||
Prepaid reinsurance premiums | 227,048 | 191,821 | ||||
Deferred policy acquisition costs | 45,491 | 35,284 | ||||
Property and equipment, net | 11,951 | 10,636 | ||||
Income taxes receivable | 4,307 | 3,073 | ||||
Deferred tax assets, net | 29,574 | 22,476 | ||||
Other assets | 10,622 | 8,261 | ||||
Total assets | $ | 2,681,292 | $ | 2,371,376 | ||
Liabilities | ||||||
Reserve for losses and loss adjustment expenses | $ | 1,318,644 | 1,129,936 | |||
Unearned premiums | 628,266 | 552,594 | ||||
Reinsurance balances payable | 85,577 | 65,778 | ||||
Debt | 146,573 | 146,447 | ||||
Income taxes payable | 314 | 314 | ||||
Accrued expenses | 11,604 | 19,047 | ||||
Other liabilities | 16,375 | 7,986 | ||||
Total liabilities | 2,207,353 | 1,922,102 | ||||
Commitments and contingencies (Note 13) | ||||||
Mezzanine equity | ||||||
Performance stock units | 1,578 | 1,008 | ||||
Stockholders' equity | ||||||
Common stock | 329 | 328 | ||||
($0.01 par value; 400,000,000 shares authorized, 32,943,005 and 32,783,451 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively) | ||||||
Additional paid-in capital | 330,017 | 325,889 | ||||
Accumulated other comprehensive gain (loss) | (6,828 | ) | 5,354 | |||
Retained earnings | 148,843 | 116,695 | ||||
Total stockholders' equity | 472,361 | 448,266 | ||||
Total mezzanine equity and stockholders' equity | 473,939 | 449,274 | ||||
Total liabilities, mezzanine equity and stockholders' equity | $ | 2,681,292 | $ | 2,371,376 |
Gross Written Premiums
The following tables present gross written premiums by underwriting division for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30, | |||||||||||||||||
2026 | % of Total | 2025 | % of Total | $ Change | % Change | ||||||||||||
($ in thousands, except percentages) | |||||||||||||||||
Casualty | $ | 199,764 | 67.0 | % | $ | 150,720 | 64.9 | % | $ | 49,044 | 32.5 | % | |||||
Professional Liability | 55,085 | 18.5 | % | 54,752 | 23.5 | % | 333 | 0.6 | % | ||||||||
Healthcare Liability | 29,133 | 9.8 | % | 23,505 | 10.1 | % | 5,628 | 23.9 | % | ||||||||
Baleen Specialty | 13,912 | 4.7 | % | 3,384 | 1.5 | % | 10,528 | 311.1 | % | ||||||||
Gross written premiums | $ | 297,894 | 100.0 | % | $ | 232,361 | 100.0 | % | $ | 65,533 | 28.2 | % |
Six Months Ended June 30, | |||||||||||||||||
2026 | % of Total | 2025 | % of Total | $ Change | % Change | ||||||||||||
($ in thousands, except percentages) | |||||||||||||||||
Casualty | $ | 347,032 | 67.4 | % | $ | 273,034 | 67.1 | % | $ | 73,998 | 27.1 | % | |||||
Professional Liability | 82,746 | 16.1 | % | 80,752 | 19.8 | % | 1,994 | 2.5 | % | ||||||||
Healthcare Liability | 59,578 | 11.6 | % | 47,293 | 11.6 | % | 12,285 | ... |