Bowhead Specialty Holdings Inc. Reports Second Quarter 2026 Results and Cancels Earnings Conference Call Following Announcement of Merger Agreement with American Family
NEW YORK--( 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
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 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 $18.8 million, driven by a higher balance of investments. Our investment portfolio had a book yield of 4.7% and a new money rate of 4.9% as of June 30, 2026.
The weighted average effective duration of our investment portfolio, which included cash equivalents, was 3.3 years and had an average rating of “AA-” as of June 30, 2026.
(1)
Comparisons in this release are made to June 30, 2025 financial results unless otherwise noted.
(2)
Non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP measures.
Summary of Operating Results
The following table summarizes the Company’s results of operations for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
% Change
2026
2025
% Change
($ 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
%
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
26.0
%
Baleen Specialty
25,279
4.9
%
6,130
1.5
%
19,149
312.4
%
Gross written premiums
$
514,635
100.0
%
$
407,209
100.0
%
$
107,426
26.4
%
The following tables present gross written premiums by underwriting model (1) 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)
Craft
$
279,190
93.7
%
$
228,875
98.5
%
$
50,315
22.0
%
Digital
Baleen Specialty
13,912
4.7
%
3,384
1.5
%
10,528
311.1
%
Express
4,792
1.6
%
102
—
%
4,690
4598.0
%
Digital
18,704
6.3
%
3,486
1.5
%
15,218
436.5
%
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)
Craft
$
481,106
93.5
%
$
400,977
98.5
%
$
80,129
20.0
%
Digital
Baleen Specialty
25,279
4.9
%
6,130
1.5
%
19,149
312.4
%
Express
8,250
1.6
%
102
—
%
8,148
7988.2
%
Digital
33,529
6.5
%
6,232
1.5
%
27,297
438.0
%
Gross written premiums
$
514,635
100.0
%
$
407,209
100.0
%
$
107,426
26.4
%
NM - Percentage change is not meaningful.
(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 six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
2026
2025
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
$
96,792
67.2
%
$
78,785
66.1
%
Prior accident year (1)
153
0.1
%
115
0.1
%
Total
$
96,945
67.3
%
$
78,900
66.2
%
Six Months Ended June 30,
2026
2025
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
$
187,672
66.8
%
$
151,768
66.3
%
Prior accident year (1)
755
0.3
%
559
0.2
%
Total
$
188,427
67.1
%
$
152,327
66.5
%
(1)
The existence of our prior accident year losses for the three and six months ended June 30, 2026 and 2025 were driven by expected loss ratios applied to net additional premiums billed and fully earned in the period, but associated with policies from prior accident years. 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.
Expense Ratio
The following tables summarize the components of our expense ratio for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
2026
2025
Expenses
% of Net Earned Premiums
Expenses
% of Net Earned Premiums
($ in thousands, except percentages)
Net acquisition costs
$
15,820
11.0
%
$
11,038
9.3
%
Operating expenses
26,384
18.3
%
25,849
21.7
%
Less: Other insurance related-income
(1,095
)
(0.7
)%
(460
)
(0.4
)%
Total
$
41,109
28.6
%
$
36,427
30.6
%
Six Months Ended June 30,
2026
2025
Expenses
% of Net Earned Premiums
Expenses
% of Net Earned Premiums
($ in thousands, except percentages)
Net acquisition costs
$
29,713
10.6
%
$
20,834
9.1
%
Operating expenses
52,187
18.6
%
49,785
21.7
%
Less: Other insurance-related income
(1,974
)
(0.7
)%
(805
)
(0.4
)%
Total
$
79,926
28.5
%
$
69,814
30.4
%
Net Investment Income
The following table summarizes the sources of net investment income for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
($ in thousands)
U.S. government and government agency
$
642
$
1,633
$
1,381
$
3,478
State and municipal
1,727
876
3,101
1,564
Commercial mortgage-backed securities
2,116
1,267
4,231
2,447
Residential mortgage-backed securities
4,326
3,129
8,581
5,668
Asset-backed securities
2,329
1,569
4,392
3,052
Corporate
6,825
4,244
12,965
7,496
Short-term investments
25
86
46
214
Cash and cash equivalents
1,206
1,154
2,890
2,859
Gross investment income
19,196
13,958
37,587
26,778
Investment expenses
(376
)
(281
)
(740
)
(542
)
Net investment income
$
18,820
$
13,677
$
36,847
$
26,236
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 six months ended June 30, 2026 and 2025 reconciles to net income as follows:
Three Months Ended June 30,
2026
2025
Before income taxes
After income taxes
Before income taxes
After income taxes
($ in thousands)
Income as reported
$
20,661
$
16,138
$
15,916
$
12,342
Adjustments:
Net realized investment losses
11
11
11
11
Non-operating expenses
—
—
437
437
Foreign exchange (gains) losses
(2
)
(2
)
79
79
Tax impact
—
(2
)
—
(111
)
Adjusted net income
$
20,670
$
16,145
$
16,443
$
12,758
Six Months Ended June 30,
2026
2025
Before income taxes
After income taxes
Before income taxes
After income taxes
($ in thousands)
Income as reported
$
41,231
$
32,148
$
30,387
$
23,767
Adjustments:
Net realized investment losses
32
32
15
15
Non-operating expenses
—
—
548
548
Foreign exchange losses
6
6
33
33
Tax impact
—
(8
)
—
(125
)
Adjusted net income
$
41,269
$
32,178
$
30,983
$
24,238
Adjusted return on equity
Adjusted return on equity for the three and six months ended June 30, 2026 and 2025 reconciles to return on equity as follows:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
($ in thousands, except percentages)
Numerator: Adjusted net income (1)
$
64,579
$
51,031
$
64,356
$
48,477
Denominator: Average mezzanine equity and stockholders' equity
466,550
399,588
461,607
389,127
Adjusted return on equity
13.8
%
12.8
%
13.9
%
12.5
%
(1)
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.
Diluted adjusted earnings per share
Diluted adjusted earnings per share for the three and six months ended June 30, 2026 and 2025 reconciles to diluted earnings per share as follows:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
($ in thousands, except share and per share data)
Numerator: Adjusted net income
$
16,145
$
12,758
$
32,178
$
24,238
Denominator: Diluted weighted average shares outstanding
33,557,875
34,045,961
33,456,675
33,885,414
Diluted adjusted earnings per share
$
0.48
$
0.37
$
0.96
$
0.72
Subsequent Event
On August 3, 2026, the Company and American Family announced that they have entered into a definitive agreement under which American Family has agreed to acquire all of the issued and outstanding shares of common stock of Bowhead that it does not currently own for $34.00 per share in cash, without interest, for a total transaction value of approximately $1.2 billion.
Conference Call Cancelled
As previously announced, given the transaction with American Family announced earlier today, the Company will not be hosting a conference call to discuss its results for the second quarter ended June 30, 2026, which was originally scheduled for 8:30 a.m. Eastern Time on Tuesday, August 4, 2026.
About Bowhead
Bowhead 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.
Forward-Looking Statements
Statements in this press release, and any related oral statements, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of terms such as “believes,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms or the converse of such terms. However, not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not related to present facts or current conditions or that are not historical facts. They appear in a number of places throughout this press release and include statements regarding intentions, beliefs or current expectations concerning, among other things, the transaction, regulatory approvals, and the timing of the transaction, the industries in which Bowhead operates, and other statements relating to Bowhead’s future performance.
The transaction is subject to risks and uncertainties, including: that Bowhead and American Family may be unable to complete the transaction because, among other reasons, conditions to the closing of the transaction may not be satisfied or waived; uncertainty as to the timing of completion of the transaction; the inability to complete the transaction due to the failure to obtain the Bowhead stockholder approvals for the transaction or the failure to satisfy other conditions to completion of the transaction, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; interloper risk; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; risks related to disruption of management’s attention from Bowhead’s ongoing business operations due to the transaction; the effect of the announcement of the transaction on Bowhead’s relationships with its insureds, operating results and business generally; and the outcome of any legal proceedings to the extent initiated against Bowhead, American Family or others following the announcement of the transaction, as well as Bowhead’s and American Family management’s response to any of the aforementioned factors.
A more fulsome discussion of the risks related to the transaction will be included in Bowhead’s proxy statement for the transaction. For a discussion of factors that could cause actual results to differ materially from those contemplated by forward-looking statements, see the section captioned “Risk Factors” in Bowhead’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. While the list of factors presented here is, and the list of factors presented in the proxy statement will be, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.
Forward-looking statements speak only as of the date on which they are made. Except as expressly required under federal securities laws or the rules and regulations of the SEC, Bowhead does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to Bowhead are expressly qualified by these cautionary statements.
The information contained on or connected to any websites referenced in this communication is not incorporated by reference into this communication.