Bowhead Specialty Holdings Inc. Reports Fourth Quarter and Full Year 2025 Results
NEW YORK--( BUSINESS WIRE)--Bowhead Specialty Holdings Inc. (NYSE: BOW), a specialty lines insurance group focused on providing casualty, professional liability and healthcare liability insurance products, delivered through complementary “craft” and “digital” underwriting models, today announced financial results for the fourth quarter and year ended December 31, 2025 (1).
Fourth Quarter 2025 Highlights
Full Year 2025 Highlights
Bowhead Chief Executive Officer, Stephen Sills, commented, “Bowhead had a great year in 2025. Gross written premiums grew more than 21% in the fourth quarter, and 24% for the full year. At the start of the year, we expected a low 30s expense ratio for the full year of 2025 but achieved an expense ratio below 30% starting in the third quarter and for the full year of 2025. With these accomplishments, Bowhead’s adjusted net income for the year grew over 30%, adjusted return on equity was 13.6%, and diluted adjusted earnings per share was $1.65.”
“With a strong year behind us, I’m even more excited about Bowhead’s future. Over the past five years, we’ve built a highly effective “craft” underwriting model driven by experienced underwriters who excel at writing large and complex risks. In the second half of 2024, we supplemented this foundation by launching our complementary “digital” underwriting model, starting with Baleen, targeting small, harder-to-place risks with more restrictive coverage. In Baleen’s first full year, we generated over $21 million in premiums — an important milestone that validates our digital strategy. Since then, we’ve leveraged technology to streamline the submission, underwriting, and servicing of our existing Bowhead products, a capability we call “express”, to address small and mid-sized accounts, beginning with our small cyber liability products.”
“While we continue to expect a GWP growth of around 20% in 2026 driven by our Casualty division, our digital expansion marks a major step forward for Bowhead, positioning us well to deliver sustainable and profitable growth across market cycles.”
Underwriting Results
The 21.3% increase in gross written premiums to $224.1 million in the fourth quarter of 2025 was driven by our increasing renewal book, new business and the continued growth in our platform across all divisions:
Due to the timing of our independent actuarial review in fourth quarter of each year, we consider our full-year loss ratio a more meaningful metric. Our loss ratio for the year of 66.7% increased 2.3 points compared to 64.4% in 2024.
Our current accident year loss ratio increased 1.8 points due in part to higher expected loss ratios on certain reserves within Professional Liability and Healthcare Liability to align more closely with industry expected loss ratios and our own limited loss experience. The increase was also due to mix changes in our portfolio, where Casualty, which had comparatively higher expected loss ratios, comprised a larger proportion of our net earned premiums compared to the prior year.
Similar to previous quarters in 2025, the 0.5 point increase in our prior accident year loss ratio was due to expected loss ratios applied to audit premiums fully earned in the year, but associated with prior accident years. This increase was not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims. We are simply putting loss reserves into the appropriate accident year regardless of when the premiums are billed and earned. As part of our annual independent actuarial reserve review, we also reallocated prior accident year loss reserves between accident years and by division, primarily from Casualty to Professional Liability, resulting in no prior accident year development on an aggregate basis.
Due to Bowhead’s limited loss experience, we continue to hold expected loss ratios that rely on development patterns and other inputs primarily based on industry data.
Our expense ratio decreased 1.0 point to 29.1% in the fourth quarter of 2025 and 1.6 points to 29.8% in for the year ended December 31, 2025. The full year decrease from 31.4% in 2024 was primarily driven by a reduction in our operating expense ratio, which was partially offset by the increase in our net acquisition ratio. The decrease in our operating expenses 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. 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, to a lesser extent, the increase in the ceding fee we pay to American Family.
Investment Results
Net investment income increased 35.8% in the fourth quarter of 2025 to $16.6 million and 44.1% to $57.8 million for the year ended December 31, 2025, driven by a higher balance of investments and, to a lesser extent, higher yields on invested assets. Our investment portfolio, which included cash equivalents, had a book yield of 4.6% and a new money rate of 4.5% at the end of the year.
The weighted average effective duration of our investment portfolio, which included cash equivalents, was 3.0 years and had an average rating of “AA” at December 31, 2025.
(1)
Comparisons in this release are made to December 31, 2024 financial results unless otherwise noted.
(2)
Non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP measures.
Summary of Operating Results
The following table summarizes the Company’s results of operations for the three and twelve months ended December 31, 2025 and 2024:
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
2024
% Change
2025
2024
% Change
($ in thousands, except percentages and per share data)
Gross written premiums
$
224,081
$
184,769
21.3
%
$
862,806
$
695,717
24.0
%
Ceded written premiums
(80,540
)
(64,585
)
24.7
%
(304,619
)
(244,295
)
24.7
%
Net written premiums
$
143,541
$
120,184
19.4
%
$
558,187
$
451,422
23.7
%
Revenues
Net earned premiums
$
134,317
$
106,864
25.7
%
$
491,677
$
385,111
27.7
%
Net investment income
16,553
12,193
35.8
%
57,827
40,121
44.1
%
Net realized investment gains (losses)
73
—
NM
43
(16
)
368.8
%
Other insurance-related income
735
274
168.2
%
2,042
444
359.9
%
Total revenues
151,678
119,331
27.1
%
551,589
425,660
29.6
%
Expenses
Net losses and loss adjustment expenses
91,087
66,937
36.1
%
328,022
248,099
32.2
%
Net acquisition costs
13,166
9,130
44.2
%
46,513
32,397
43.6
%
Operating expenses
26,640
23,352
14.1
%
102,264
89,112
14.8
%
Non-operating expenses
95
622
(84.7
)%
1,425
2,807
(49.2
)%
Warrant expense
792
792
NM
3,142
1,917
63.9
%
Interest expense and financing fees
1,243
248
401.2
%
2,012
725
177.5
%
Loss on extinguishment of credit facility
862
—
NM
862
—
NM
Foreign exchange (gains) losses
(14
)
1
NM
50
68
(26.5
)%
Total expenses
133,871
101,082
32.4
%
484,290
375,125
29.1
%
Income before income taxes
17,807
18,249
(2.4
)%
67,299
50,535
33.2
%
Income tax expense
(2,963
)
(4,642
)
(36.2
)%
(13,513
)
(12,292
)
9.9
%
Net income
$
14,844
$
13,607
9.1
%
$
53,786
$
38,243
40.6
%
Key Operating and Financial Metrics:
Adjusted net income (1)
$
15,531
$
14,099
10.2
%
$
55,598
$
42,686
30.2
%
Loss ratio
67.8
%
62.6
%
66.7
%
64.4
%
Expense ratio
29.1
%
30.1
%
29.8
%
31.4
%
Combined ratio
96.9
%
92.7
%
96.5
%
95.8
%
Return on equity (2)
13.5
%
14.8
%
13.1
%
13.6
%
Adjusted return on equity (1)(2)
14.1
%
15.3
%
13.6
%
15.2
%
Diluted earnings per share
$
0.44
$
0.41
7.3
%
$
1.59
$
1.29
23.3
%
Diluted adjusted earnings per share (1)
$
0.47
$
0.42
11.9
%
$
1.65
$
1.44
14.6
%
(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 months ended December 31, 2025 and 2024, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.
Condensed Consolidated Balance Sheets
December 31,
2025
December 31,
2024
($ in thousands, except share data)
Assets
Investments
Fixed maturity securities, available for sale, at fair value (amortized cost of $1,364,228 and $894,145, respectively)
$
1,371,006
$
879,989
Short-term investments, at amortized cost, which approximates fair value
—
9,997
Total investments
1,371,006
889,986
Cash and cash equivalents
193,545
97,476
Restricted cash and cash equivalents
40,225
124,582
Accrued investment income
10,958
7,520
Premium balances receivable
84,415
63,672
Reinsurance recoverable, net
399,676
255,072
Prepaid reinsurance premiums
191,821
152,567
Deferred policy acquisition costs
35,284
27,625
Property and equipment, net
10,636
6,845
Income taxes receivable
3,073
586
Deferred tax assets, net
22,476
20,340
Other assets
8,261
7,971
Total assets
$
2,371,376
$
1,654,242
Liabilities
Reserve for losses and loss adjustment expenses
$
1,129,936
$
756,859
Unearned premiums
552,594
446,850
Reinsurance balances payable
65,778
51,856
Debt
146,447
—
Income taxes payable
314
1,571
Accrued expenses
19,047
18,010
Other liabilities
7,986
8,654
Total liabilities
1,922,102
1,283,800
Commitments and contingencies (Note 14)
Mezzanine equity
Performance stock units
1,008
265
Stockholders' equity
Common stock
328
327
($0.01 par value; 400,000,000 shares authorized, 32,783,451 and 32,662,683 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively)
Additional paid-in capital
325,889
318,095
Accumulated other comprehensive income (loss)
5,354
(11,154
)
Retained earnings
116,695
62,909
Total stockholders' equity
448,266
370,177
Total mezzanine equity and stockholders' equity
449,274
370,442
Total liabilities, mezzanine equity and stockholders' equity
$
2,371,376
$
1,654,242
Gross Written Premiums
The following tables present gross written premiums by underwriting division for the three and twelve months ended December 31, 2025 and 2024:
Three Months Ended December 31,
2025
% of Total
2024
% of Total
$ Change
% Change
($ in thousands, except percentages)
Casualty
$
132,905
59.3
%
$
105,872
57.3
%
$
27,033
25.5
%
Professional Liability
47,928
21.4
%
46,010
24.9
%
1,918
4.2
%
Healthcare Liability
34,153
15.2
%
31,699
17.2
%
2,454
7.7
%
Baleen Specialty
9,095
4.1
%
1,188
0.6
%
7,907
665.6
%
Gross written premiums
$
224,081
100.0
%
$
184,769
100.0
%
$
39,312
21.3
%
Twelve Months Ended December 31,
2025
% of Total
2024
% of Total
$ Change
% Change
($ in thousands, except percentages)
Casualty
$
550,666
63.8
%
$
431,817
62.1
%
$
118,849
27.5
%
Professional Liability
174,419
20.2
%
160,651
23.1
%
13,768
8.6
%
Healthcare Liability
116,290
13.5
%
101,619
14.6
%
14,671
14.4
%
Baleen Specialty
21,431
2.5
%
1,630
0.2
%
19,801
1214.8
%
Gross written premiums
$
862,806
100.0
%
$
695,717
100.0
%
$
167,089
24.0
%
The following tables present gross written premiums by underwriting model (1) for the three and twelve months ended December 31, 2025 and 2024:
Three Months Ended December 31,
2025
% of Total
2024
% of Total
$ Change
% Change
($ in thousands, except percentages)
Craft
$
213,313
95.2
%
$
183,581
99.4
%
$
29,732
16.2
%
Digital
Baleen Specialty
9,095
4.1
%
1,188
0.6
%
7,907
665.6
%
Express
1,673
0.7
%
—
—
%
1,673
NM
Digital
10,768
4.8
%
1,188
0.6
%
9,580
806.4
%
Gross written premiums
$
224,081
100.0
%
$
184,769
100.0
%
$
39,312
21.3
%
Twelve Months Ended December 31,
2025
% of Total
2024
% of Total
$ Change
% Change
($ in thousands, except percentages)
Craft
$
839,005
97.2
%
$
694,087
99.8
%
$
144,918
20.9
%
Digital
Baleen Specialty
21,431
2.5
%
1,630
0.2
%
19,801
1214.8
%
Express
2,370
0.3
%
—
—
%
2,370
NM
Digital
23,801
2.8
%
1,630
0.2
%
22,171
1360.2
%
Gross written premiums
$
862,806
100.0
%
$
695,717
100.0
%
$
167,089
24.0
%
(1)
Our products are delivered through two complementary underwriting models designed to support sustainable and profitable growth across market cycles: a “craft” model for large, complex, higher-severity risks, and a “digital” model, which includes Baleen Specialty and other small-business offerings (“express”), for smaller, simpler, scalable business.
Loss Ratio
The following tables summarize current and prior accident year loss ratios for the three and twelve months ended December 31, 2025 and 2024:
Three Months Ended December 31,
2025
2024
Net Losses and
Loss Adjustment
Expenses
% of Net Earned
Premiums
Net Losses and
Loss Adjustment
Expenses
% of Net Earned
Premiums
($ in thousands, except percentages)
Current accident year
$
90,726
67.5
%
$
66,937
62.6
%
Prior accident year (1)
361
0.3
%
—
—
%
Total
$
91,087
67.8
%
$
66,937
62.6
%
Twelve Months Ended December 31,
2025
2024
Net Losses and
Loss Adjustment
Expenses
% of Net Earned
Premiums
Net Losses and
Loss Adjustment
Expenses
% of Net Earned
Premiums
($ in thousands, except percentages)
Current accident year
$
325,653
66.2
%
$
248,099
64.4
%
Prior accident year (1)
2,369
0.5
%
—
—
%
Total
$
328,022
66.7
%
$
248,099
64.4
%
(1)
Prior accident year loss ratios for the three and twelve months ended December 31, 2025 were driven by expected loss ratios applied to audit premiums fully earned in the period, but associated with prior accident years. This increase was not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims.
Expense Ratio
The following tables summarize the components of our expense ratios for the three and twelve months ended December 31, 2025 and 2024:
Three Months Ended December 31,
2025
2024
Expenses
% of Net Earned
Premiums
Expenses
% of Net Earned
Premiums
($ in thousands, except percentages)
Net acquisition costs
$
13,166
9.8
%
$
9,130
8.5
%
Operating expenses
26,640
19.8
%
23,352
21.9
%
Less: Other insurance-related income
(735
)
(0.5
)%
(274
)
(0.3
)%
Total
$
39,071
29.1
%
$
32,208
30.1
%
Twelve Months Ended December 31,
2025
2024
Expenses
% of Net Earned
Premiums
Expenses
% of Net Earned
Premiums
($ in thousands, except percentages)
Net acquisition costs
$
46,513
9.5
%
$
32,397
8.4
%
Operating expenses
102,264
20.8
%
89,112
23.1
%
Less: Other insurance-related income
(2,042
)
(0.4
)%
(444
)
(0.1
)%
Total
$
146,735
29.8
%
$
121,065
31.4
%
Net Investment Income
The following table summarizes the sources of net investment income for the three and twelve months ended December 31, 2025 and 2024:
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
2024
2025
2024
($ in thousands)
U.S. government and government agency
$
886
$
3,198
$
5,926
$
14,514
State and municipal
1,283
591
3,904
1,832
Commercial mortgage-backed securities
1,944
981
5,808
2,584
Residential mortgage-backed securities
3,903
2,399
13,060
6,517
Asset-backed securities
1,650
1,283
6,375
3,043
Corporate
5,247
2,154
17,459
5,768
Short-term investments
—
130
214
480
Cash and cash equivalents
1,964
1,700
6,244
6,193
Gross investment income
16,877
12,436
58,990
40,931
Investment expenses
(324
)
(243
)
(1,163
)
(810
)
Net investment income
$
16,553
$
12,193
$
57,827
$
40,121
Reconciliation of Non-GAAP Financial Measures
This earnings release contains certain financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). We use these non-GAAP financial measures when planning, monitoring and evaluating our performance. Management believes that each of the non-GAAP financial measures described below provides useful insight into our underlying business performance.
You should not rely on these non-GAAP financial measures as a substitute for any U.S. GAAP financial measure. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered supplemental in nature and not as a replacement for or superior to the comparable U.S. GAAP measures. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures.
Adjusted net income
Adjusted net income for the three and twelve months ended December 31, 2025 and 2024 reconciles to net income as follows:
Three Months Ended December 31,
2025
2024
Before Income
Taxes
After Income
Taxes
Before Income
Taxes
After Income
Taxes
($ in thousands)
Income as reported
$
17,807
$
14,844
$
18,249
$
13,607
Adjustments:
Net realized investment (gains)
(73
)
(73
)
—
—
Non-operating expenses
95
95
622
622
Loss on extinguishment of credit facility
862
862
—
—
Foreign exchange (gains) losses
(14
)
(14
)
1
1
Tax impact
—
(183
)
—
(131
)
Adjusted net income
$
18,677
$
15,531
$
18,872
$
14,099
Twelve Months Ended December 31,
2025
2024
Before Income
Taxes
After Income
Taxes
Before Income
Taxes
After Income
Taxes
($ in thousands)
Income as reported
$
67,299
$
53,786
$
50,535
$
38,243
Adjustments:
Net realized investment (gains) losses
(43
)
(43
)
16
16
Non-operating expenses
1,425
1,425
2,807
2,807
Loss on extinguishment of credit facility
862
862
—
—
Foreign exchange losses
50
50
68
68
Strategic initiatives (1)
—
—
2,733
2,733
Tax impact
—
(482
)
—
(1,181
)
Adjusted net income
$
69,593
$
55,598
$
56,159
$
42,686
(1)
Strategic initiatives for the twelve months ended December 31, 2024 represents costs incurred to set up our Baleen Specialty division, which is recorded in operating expenses within the Consolidated Statements of Income and Comprehensive Income. The costs incurred primarily represent expenses to implement the new platform and processes supporting the Baleen Specialty division.
Adjusted return on equity
Adjusted return on equity for the three and twelve months ended December 31, 2025 and 2024 reconciles to return on equity as follows:
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
2024
2025
2024
($ in thousands, except percentages)
Numerator: Adjusted net income (1)
$
62,124
$
56,395
$
55,598
$
42,686
Denominator: Average mezzanine equity and stockholders' equity
440,156
367,467
409,858
281,259
Adjusted return on equity
14.1
%
15.3
%
13.6
%
15.2
%
(1)
For the three months ended December 31, 2025 and 2024, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.
Diluted adjusted earnings per share
Diluted adjusted earnings per share for the three and twelve months ended December 31, 2025 and 2024 reconciles to diluted earnings per share as follows:
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
2024
2025
2024
($ in thousands, except share and per share data)
Numerator: Adjusted net income
$
15,531
$
14,099
$
55,598
$
42,686
Denominator: Diluted weighted average shares outstanding
33,395,657
33,571,535
33,735,944
29,677,196
Diluted adjusted earnings per share
$
0.47
$
0.42
$
1.65
$
1.44
About Bowhead Specialty Holdings Inc.
Bowhead Specialty is a growing specialty insurance business providing casualty, professional liability and healthcare liability insurance products. We were founded and are led by industry veteran Stephen Sills. The team is composed of highly experienced and respected industry veterans with decades of individual, successful underwriting and management experience. Our products are delivered through two complementary underwriting models designed to support sustainable and profitable growth across market cycles: a “craft” model for large, complex, higher-severity risks, and a “digital” model, which includes Baleen Specialty and other small-business offerings (“express”), for smaller, simpler, and scalable business.
We pride ourselves on the quality and experience of our people, who are committed to exceeding our partners’ expectations through excellent service and expertise. Our collaborative culture spans all functions of our business and allows us to provide a consistent, positive experience for all of our partners.
Conference Call
The Company will host a conference call to discuss its results on the same day, Tuesday, February 24, 2026, beginning at 8:30 a.m. Eastern Time. Interested parties may access the conference call through a live webcast, which can be accessed by going to https://bowhead-4q25-earnings-call.open-exchange.net/registration, or by visiting the Company’s Investor Relations website. A dial-in option for listen-only participants will be available after registering for the call. Please join the live webcast or dial in at least 10 minutes before the start of the call.
A replay of the event webcast will be available on the Company’s Investor Relations website for one year following the call.
Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in press release are forward-looking statements. In some cases, forward-looking statements can be identified by terms such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "seeks," "future," "outlook," "prospects" "will," "would," "should," "could," "may," "can have" or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. These risks include those described in the Company’s filings made with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events or otherwise.