Bowhead Specialty Holdings Inc. Reports Third Quarter 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, today announced financial results for the third quarter ended September 30, 2025. (1)
Third Quarter 2025 Highlights
Bowhead Chief Executive Officer, Stephen Sills, commented, “Bowhead delivered another excellent quarter highlighted by consistent strong top and bottom line growth. Gross written premiums in the third quarter grew 17.5% year-over-year and adjusted net income grew 25.5%. We achieved adjusted return on equity of 15.1% and diluted adjusted earnings per share of $0.47. These results are a testament to our disciplined approach to underwriting, the continued expansion of our “craft” and “flow” underwriting operations, and our commitment to operational excellence. Collectively, these results reinforce what I’ve said in the past: Bowhead is a franchise built for enduring success and cross-cycle profitability.”
Underwriting Results
The 17.5% increase in gross written premiums to $231.5 million in the third quarter of 2025 was driven by our increasing renewal book and continued growth in our platform across all divisions:
Our loss ratio of 65.9% in the third quarter of 2025 increased 1.4 points compared to 64.5% in the third quarter of 2024.
The 0.3 point increase in our current accident year loss ratio was driven by changes in our portfolio mix. During the three months ended September 30, 2025, our Casualty division, which has comparatively higher current accident year industry loss ratios, comprised a larger proportion of our net earned premiums compared to the prior period.
The remaining 1.1 point increase in our prior accident year loss ratio was due to expected loss ratios applied to audit premiums fully earned in the quarter 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.
Our expense ratio was 29.5% for the three months ended September 30, 2025, reflecting a decrease of 0.4 points compared to 29.9% for the same period in 2024. This decrease in our expense ratio was primarily driven by the 1.2 point decrease in our operating expenses 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 1.1 point increase in our net acquisition costs 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 an increase in the ceding fee we pay to American Family and, to a lesser extent, earned broker commissions due to changes in our portfolio mix.
Investment Results
Net investment income increased 30.9% in the quarter to $15.0 million, driven by a higher balance of investments and higher yields on invested assets. Our investment portfolio had a book yield of 4.8% and a new money rate of 4.6% as of September 30, 2025.
The weighted average effective duration of our investment portfolio, which included cash equivalents, was 2.9 years and had an average rating of “AA” as of September 30, 2025.
____________________
(1) Comparisons in this release are made to September 30, 2024 financial results unless otherwise noted.
Summary of Operating Results
The following table summarizes the Company’s results of operations for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
% Change
2025
2024
% Change
($ in thousands, except percentages and per share data)
Gross written premiums
$
231,515
$
196,976
17.5
%
$
638,724
$
510,948
25.0
%
Ceded written premiums
(82,492
)
(68,643
)
20.2
%
(224,079
)
(179,710
)
24.7
%
Net written premiums
$
149,023
$
128,333
16.1
%
$
414,645
$
331,238
25.2
%
Revenues
Net earned premiums
$
128,407
$
105,180
22.1
%
$
357,360
$
278,247
28.4
%
Net investment income
15,038
11,491
30.9
%
41,274
27,928
47.8
%
Net realized investment losses
(15
)
(18
)
(16.7
)%
(30
)
(16
)
87.5
%
Other insurance-related income
502
108
364.8
%
1,307
171
664.3
%
Total revenues
143,932
116,761
23.3
%
399,911
306,330
30.5
%
Expenses
Net losses and loss adjustment expenses
84,608
67,824
24.7
%
236,935
181,162
30.8
%
Net acquisition costs
12,512
9,163
36.5
%
33,346
23,267
43.3
%
Operating expenses
25,837
22,386
15.4
%
75,623
65,761
15.0
%
Non-operating expenses
783
487
60.8
%
1,330
2,185
(39.1
)%
Warrant expense
792
792
—
%
2,350
1,125
108.9
%
Credit facility interest expenses and fees
262
252
4.0
%
770
477
61.4
%
Foreign exchange losses
32
37
(13.5
)%
64
67
(4.5
)%
Total expenses
124,826
100,941
23.7
%
350,418
274,044
27.9
%
Income before income taxes
19,106
15,820
20.8
%
49,493
32,286
53.3
%
Income tax expense
(3,930
)
(3,728
)
5.4
%
(10,550
)
(7,649
)
37.9
%
Net income
$
15,176
$
12,092
25.5
%
$
38,943
$
24,637
58.1
%
Key Operating and Financial Metrics:
Adjusted net income (1)
$
15,832
$
12,520
26.5
%
$
40,068
$
28,588
40.2
%
Loss ratio
65.9
%
64.5
%
66.3
%
65.1
%
Expense ratio
29.5
%
29.9
%
30.1
%
31.9
%
Combined ratio
95.4
%
94.4
%
96.4
%
97.0
%
Return on equity (2)
14.5
%
13.7
%
13.0
%
11.8
%
Adjusted return on equity (1)(2)
15.1
%
14.2
%
13.3
%
13.7
%
Diluted earnings per share
$
0.45
$
0.36
25.0
%
$
1.15
$
0.87
32.2
%
Diluted adjusted earnings per share (1)
$
0.47
$
0.38
23.7
%
$
1.19
$
1.01
17.8
%
____________________
NM - Percentage change is not meaningful.
Condensed Consolidated Balance Sheets
September 30,
2025
December 31,
2024
($ in thousands, except share data)
Assets
Investments
Fixed maturity securities, available for sale, at fair value (amortized cost of $1,143,594 and $894,145, respectively)
$
1,149,598
$
879,989
Short-term investments, at amortized cost, which approximates fair value
—
9,997
Total investments
1,149,598
889,986
Cash and cash equivalents
197,855
97,476
Restricted cash and cash equivalents
52,921
124,582
Accrued investment income
8,893
7,520
Premium balances receivable
66,104
63,672
Reinsurance recoverable, net
360,877
255,072
Prepaid reinsurance premiums
184,560
152,567
Deferred policy acquisition costs
33,470
27,625
Property and equipment, net
9,683
6,845
Income taxes receivable
3,345
586
Deferred tax assets, net
19,093
20,340
Other assets
8,150
7,971
Total assets
$
2,094,549
$
1,654,242
Liabilities
Reserve for losses and loss adjustment expenses
$
1,035,171
$
756,859
Unearned premiums
536,108
446,850
Reinsurance balances payable
67,879
51,856
Income taxes payable
136
1,571
Accrued expenses
14,384
18,010
Other liabilities
9,834
8,654
Total liabilities
1,663,512
1,283,800
Commitments and contingencies (Note 12)
Mezzanine equity
Performance stock units
808
265
Stockholders' equity
Common stock
328
327
($0.01 par value; 400,000,000 shares authorized, 32,782,974 and 32,662,683 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively)
Additional paid-in capital
323,306
318,095
Accumulated other comprehensive gain (loss)
4,743
(11,154
)
Retained earnings
101,852
62,909
Total stockholders' equity
430,229
370,177
Total mezzanine equity and stockholders' equity
431,037
370,442
Total liabilities, mezzanine equity and stockholders' equity
$
2,094,549
$
1,654,242
Gross Written Premiums
The following tables present gross written premiums by underwriting division for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
2025
% of Total
2024
% of Total
$ Change
% Change
($ in thousands, except percentages)
Casualty
$
144,727
62.5
%
$
120,223
61.0
%
$
24,504
20.4
%
Professional Liability
45,739
19.7
%
44,962
22.9
%
777
1.7
%
Healthcare Liability
34,844
15.1
%
31,358
15.9
%
3,486
11.1
%
Baleen Specialty
6,205
2.7
%
433
0.2
%
5,772
1333.0
%
Gross written premiums
$
231,515
100.0
%
$
196,976
100.0
%
$
34,539
17.5
%
Nine Months Ended September 30,
2025
% of Total
2024
% of Total
$ Change
% Change
($ in thousands, except percentages)
Casualty
$
417,762
65.4
%
$
325,945
63.8
%
$
91,817
28.2
%
Professional Liability
126,491
19.8
%
114,641
22.4
%
11,850
10.3
%
Healthcare Liability
82,136
12.9
%
69,920
13.7
%
12,216
17.5
%
Baleen Specialty
12,335
1.9
%
442
0.1
%
11,893
2690.7
%
Gross written premiums
$
638,724
100.0
%
$
510,948
100.0
%
$
127,776
25.0
%
Loss Ratio
The following tables summarize current and prior accident year loss ratios for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
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
$
83,158
64.8
%
$
67,824
64.5
%
Prior accident year
1,450
1.1
%
—
—
%
Total
$
84,608
65.9
%
$
67,824
64.5
%
Nine Months Ended September 30,
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
$
234,926
65.7
%
$
181,162
65.1
%
Prior accident year
2,009
0.6
%
—
—
%
Total
$
236,935
66.3
%
$
181,162
65.1
%
Expense Ratio
The following tables summarize the components of our expense ratio for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
2025
2024
Expenses
% of Net Earned
Premiums
Expenses
% of Net Earned
Premiums
($ in thousands, except percentages)
Net acquisition costs
$
12,512
9.8
%
$
9,163
8.7
%
Operating expenses
25,837
20.1
%
22,386
21.3
%
Less: Other insurance related-income
(502
)
(0.4
)%
(108
)
(0.1
)%
Total
$
37,847
29.5
%
$
31,441
29.9
%
Nine Months Ended September 30,
2025
2024
Expenses
% of Net Earned
Premiums
Expenses
% of Net Earned
Premiums
($ in thousands, except percentages)
Net acquisition costs
$
33,346
9.3
%
$
23,267
8.4
%
Operating expenses
75,623
21.2
%
65,761
23.6
%
Less: Other insurance-related income
(1,307
)
(0.4
)%
(171
)
(0.1
)%
Total
$
107,662
30.1
%
$
88,857
31.9
%
Net Investment Income
The following table summarizes the sources of net investment income for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
($ in thousands)
U.S. government and government agency
$
1,562
$
3,793
$
5,040
$
11,316
State and municipal
1,058
467
2,621
1,241
Commercial mortgage-backed securities
1,417
761
3,864
1,603
Residential mortgage-backed securities
3,489
1,955
9,157
4,118
Asset-backed securities
1,673
719
4,725
1,760
Corporate
4,716
1,611
12,212
3,614
Short-term investments
—
134
214
350
Cash and cash equivalents
1,421
2,273
4,280
4,493
Gross investment income
15,336
11,713
42,113
28,495
Investment expenses
(298
)
(222
)
(839
)
(567
)
Net investment income
$
15,038
$
11,491
$
41,274
$
27,928
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 nine months ended September 30, 2025 and 2024 reconciles to net income as follows:
Three Months Ended September 30,
2025
2024
Before income
taxes
After income
taxes
Before income
taxes
After income
taxes
($ in thousands)
Income as reported
$
19,106
$
15,176
$
15,820
$
12,092
Adjustments:
Net realized investment losses
15
15
18
18
Non-operating expenses
783
783
487
487
Foreign exchange losses
32
32
37
37
Tax impact
—
(174
)
—
(114
)
Adjusted net income
$
19,936
$
15,832
$
16,362
$
12,520
Nine Months Ended September 30,
2025
2024
Before income taxes
After income taxes
Before income taxes
After income taxes
($ in thousands)
Income as reported
$
49,493
$
38,943
$
32,286
$
24,637
Adjustments:
Net realized investment losses
30
30
16
16
Non-operating expenses
1,330
1,330
2,185
2,185
Foreign exchange losses
64
64
67
67
Strategic initiatives (1)
—
—
2,733
2,733
Tax impact
—
(299
)
—
(1,050
)
Adjusted net income
$
50,917
$
40,068
$
37,287
$
28,588
____________________
Adjusted return on equity
Adjusted return on equity for the three and nine months ended September 30, 2025 and 2024 reconciles to return on equity as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
($ in thousands, except percentages)
Numerator: Adjusted net income (1)
$
63,328
$
50,081
$
53,424
$
38,117
Denominator: Average mezzanine equity and stockholders' equity
419,424
352,368
400,739
278,451
Adjusted return on equity
15.1
%
14.2
%
13.3
%
13.7
%
____________________
Diluted adjusted earnings per share
Diluted adjusted earnings per share for the three and nine months ended September 30, 2025 and 2024 reconciles to diluted earnings per share as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
($ in thousands, except share and per share data)
Numerator: Adjusted net income
$
15,832
$
12,520
$
40,068
$
28,588
Denominator: Diluted weighted average shares outstanding
33,650,923
33,263,958
33,807,105
28,352,420
Diluted adjusted earnings per share
$
0.47
$
0.38
$
1.19
$
1.01
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. We focus on providing “craft” solutions in our specialty lines and classes of business that we believe require deep underwriting and claims expertise in order to produce attractive financial results.
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, November 4, 2025, 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-3q25-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.