Bowhead Specialty Holdings Inc. Reports First Quarter 2026 Results
NEW YORK--( BUSINESS WIRE)--Bowhead Specialty Holdings Inc. (NYSE: BOW), today announced financial results for the first quarter ended March 31, 2026. (1)
First Quarter 2026 Highlights
Bowhead Chief Executive Officer, Stephen Sills, commented, “We are very pleased with our strong start to 2026, delivering a 24% growth in gross written premiums in the first quarter. This performance was driven by the disciplined premium growth achieved in our Casualty portfolio and the strong execution in Baleen within our digital underwriting platform. As we look ahead, we remain focused on our strategy of building a balanced portfolio of craft and digital solutions to deliver sustainable and profitable growth across market cycles. Brandon Mezick, our Head of Digital, will join today’s earnings call to share how our digital underwriting platform supports this strategy and strengthens our competitive position.”
Underwriting Results
The 24.0% increase in gross written premiums to $216.7 million in the first quarter of 2026 was driven by our increasing renewal book and continued growth in our platform across all divisions:
Our loss ratio of 66.9% in the first quarter of 2026 remained unchanged compared to the same period in 2025.
Our current accident year loss ratio remained unchanged due to offsetting impacts from our updated expected loss ratios in the fourth quarter of 2025 and changes in our portfolio mix.
As communicated in the past, the existence of our prior accident year reserves were driven by expected loss ratios applied to additional premiums that were billed and fully earned in the first 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 28.4% for the three months ended March 31, 2026, reflecting a decrease of 2.0 points compared to 30.4% for the same period in 2025. This decrease in our expense ratio was primarily driven by the 2.9 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 1.2 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 new 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 an increase in the ceding fee we pay to American Family, partially offset by an increase in earned ceding commissions from our ceded reinsurance treaties.
Investment Results
Net investment income increased 43.5% in the quarter to $18.0 million, driven by a higher balance of investments. Our investment portfolio had a book yield of 4.6% and a new money rate of 4.7% as of March 31, 2026.
The weighted average effective duration of our investment portfolio, which included cash equivalents, was 3.2 years and had an average rating of “AA-” as of March 31, 2026.
(1)
(2)
Summary of Operating Results
The following table summarizes the Company’s results of operations for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026
2025
$ Change
% Change
($ in thousands, except percentages and per share data)
Gross written premiums
$
216,741
$
174,848
$
41,893
24.0
%
Ceded written premiums
(76,399
)
(58,079
)
(18,320
)
31.5
%
Net written premiums
$
140,342
$
116,769
$
23,573
20.2
%
Revenues
Net earned premiums
$
136,808
$
109,816
$
26,992
24.6
%
Net investment income
18,027
12,559
5,468
43.5
%
Net realized investment losses
(21
)
(4
)
(17
)
425.0
%
Other insurance-related income
880
345
535
155.1
%
Total revenues
155,694
122,716
32,978
26.9
%
Expenses
Net losses and loss adjustment expenses
91,481
73,427
18,054
24.6
%
Net acquisition costs
13,893
9,796
4,097
41.8
%
Operating expenses
25,804
23,937
1,867
7.8
%
Non-operating expenses
—
110
(110
)
(100.0
)%
Warrant expense
775
775
—
—
%
Interest expense and financing fees
3,162
247
2,915
1180.2
%
Foreign exchange losses (gains)
8
(46
)
54
(117.4
)%
Total expenses
135,123
108,246
26,877
24.8
%
Income before income taxes
20,571
14,470
6,101
42.2
%
Income tax expense
(4,561
)
(3,045
)
(1,516
)
49.8
%
Net income
$
16,010
$
11,425
$
4,585
40.1
%
Key Operating and Financial Metrics:
Adjusted net income (1)
$
16,033
$
11,479
$
4,554
39.7
%
Loss ratio
66.9
%
66.9
%
Expense ratio
28.4
%
30.4
%
Combined ratio
95.3
%
97.3
%
Return on equity (2)
14.1
%
12.0
%
Adjusted return on equity (1)(2)
14.1
%
12.1
%
Diluted earnings per share
$
0.48
$
0.34
$
0.14
41.2
%
Diluted adjusted earnings per share (1)
$
0.48
$
0.34
$
0.14
41.2
%
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NM -
(1)
(2)
Condensed Consolidated Balance Sheets
March 31,
2026
December 31,
2025
($ in thousands, except share data)
Assets
Investments
Fixed maturity securities, available for sale, at fair value (amortized cost of $1,524,297 and $1,364,228, respectively)
$
1,520,350
$
1,371,006
Short-term investments, at amortized cost, which approximates fair value
4,976
—
Total investments
1,525,326
1,371,006
Cash and cash equivalents
97,185
193,545
Restricted cash and cash equivalents
44,343
40,225
Accrued investment income
11,327
10,958
Premium balances receivable
84,631
84,415
Reinsurance recoverable, net
433,265
399,676
Prepaid reinsurance premiums
192,110
191,821
Deferred policy acquisition costs
40,044
35,284
Property and equipment, net
11,307
10,636
Income taxes receivable
1,426
3,073
Deferred tax assets, net
27,742
22,476
Other assets
10,587
8,261
Total assets
$
2,479,293
$
2,371,376
Liabilities
Reserve for losses and loss adjustment expenses
$
1,220,800
1,129,936
Unearned premiums
556,416
552,594
Reinsurance balances payable
59,085
65,778
Debt
146,515
146,447
Income taxes payable
6,213
314
Accrued expenses
11,088
19,047
Other liabilities
20,016
7,986
Total liabilities
2,020,133
1,922,102
Commitments and contingencies (Note 13)
Mezzanine equity
Performance stock units
1,258
1,008
Stockholders' equity
Common stock
328
328
($0.01 par value; 400,000,000 shares authorized, 32,838,035 and 32,783,451 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively)
Additional paid-in capital
327,987
325,889
Accumulated other comprehensive gain (loss)
(3,118
)
5,354
Retained earnings
132,705
116,695
Total stockholders' equity
457,902
448,266
Total mezzanine equity and stockholders' equity
459,160
449,274
Total liabilities, mezzanine equity and stockholders' equity
$
2,479,293
$
2,371,376
Gross Written Premiums
The following table presents gross written premiums by underwriting division for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026
% of Total
2025
% of Total
$ Change
% Change
($ in thousands, except percentages)
Casualty
$
147,269
68.0
%
$
122,314
70.0
%
$
24,955
20.4
%
Professional Liability
27,660
12.8
%
26,000
14.8
%
1,660
6.4
%
Healthcare Liability
30,445
14.0
%
23,788
13.6
%
6,657
28.0
%
Baleen Specialty
11,367
5.2
%
2,746
1.6
%
8,621
313.9
%
Gross written premiums
$
216,741
100.0
%
$
174,848
100.0
%
$
41,893
24.0
%
The following tables present gross written premiums by underwriting model (1) for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026
% of Total
2025
% of Total
$ Change
% Change
($ in thousands, except percentages)
Craft
$
201,916
93.2
%
$
172,102
98.4
%
$
29,814
17.3
%
Digital
Baleen Specialty
11,367
5.2
%
2,746
1.6
%
8,621
313.9
%
Express
3,458
1.6
%
—
—
%
3,458
N
M
Digital
14,825
6.8
%
2,746
1.6
%
12,079
439.9
%
Gross written premiums
$
216,741
100.0
%
$
174,848
100.0
%
$
41,893
24.0
%
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NM -
(1)
Loss Ratio
The following table summarizes current and prior accident year loss ratios for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
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
$
90,879
66.5
%
$
72,983
66.5
%
Prior accident year (1)
602
0.4
%
444
0.4
%
Total
$
91,481
66.9
%
$
73,427
66.9
%
__________________
(1)
Expense Ratio
The following table summarizes the components of our expense ratio for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026
2025
Expenses
% of Net Earned
Premium
Expenses
% of Net Earned
Premium
($ in thousands, except percentages)
Net acquisition costs
$
13,893
10.1
%
$
9,796
8.9
%
Operating expenses
25,804
18.9
%
23,937
21.8
%
Less: Other insurance-related income
(880
)
(0.6
)%
(345
)
(0.3
)%
Total expense ratio
$
38,817
28.4
%
$
33,388
30.4
%
Net Investment Income
The following table summarizes the sources of net investment income for the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
2026
2025
($ in thousands)
U.S. government and government agency
$
739
$
1,844
State and municipal
1,374
687
Commercial mortgage-backed securities
2,115
1,180
Residential mortgage-backed securities
4,256
2,539
Asset-backed securities
2,063
1,484
Corporate
6,139
3,253
Short-term investments
21
128
Cash and cash equivalents
1,684
1,704
Gross investment income
18,391
12,819
Investment expenses
(364
)
(260
)
Net investment income
$
18,027
$
12,559
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 months ended March 31, 2026 and 2025 reconciles to net income as follows:
Three Months Ended March 31,
2026
2025
Before income
taxes
After income
taxes
Before income
taxes
After income
taxes
($ in thousands)
Income as reported
$
20,571
$
16,010
$
14,470
$
11,425
Adjustments:
Net realized investment gains
21
21
4
4
Non-operating expenses
—
—
110
110
Foreign exchange losses (gains)
8
8
(46
)
(46
)
Tax impact
—
(6
)
—
(14
)
Adjusted net income
$
20,600
$
16,033
$
14,538
$
11,479
Adjusted return on equity
Adjusted return on equity for the three months ended March 31, 2026 and 2025 reconciles to return on equity as follows:
Three Months Ended March 31,
2026
2025
($ in thousands, except percentages)
Numerator: Adjusted net income (1)
$
64,135
$
45,916
Denominator: Average mezzanine equity and stockholders' equity
454,218
380,903
Adjusted return on equity
14.1
%
12.1
%
________________
(1)
Diluted adjusted earnings per share
Diluted adjusted earnings per share for the three months ended March 31, 2026 and 2025 reconciles to diluted earnings per share as follows:
Three Months Ended March 31,
2026
2025
($ in thousands, except share and per share data)
Numerator: Adjusted net income
$
16,033
$
11,479
Denominator: Diluted weighted average shares outstanding
33,283,727
33,711,924
Diluted adjusted earnings per share
$
0.48
$
0.34
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 today, Tuesday, May 5, 2026, beginning at 8:30 a.m. Eastern Time.
The conference call will include Brandon Mezick, Bowhead’s Head of Digital Underwriting, as a guest speaker who will discuss the Company’s growing “digital” underwriting model.
Interested parties may access the conference call through a live webcast, which can be accessed by going to https://bowhead-1q26-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.