Skyward Specialty Q3 2026 profit rises to $49.8M
Apollo contributed $87.9 million in quarterly revenue and $13.9 million in net income after its January acquisition.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Skyward Specialty Insurance Group, Inc. (SKWD) reported third-quarter 2026 revenue of $455.3 million, versus $382.5 million a year earlier, and net income of $49.8 million, versus $45.9 million. For the first nine months, revenue was $1,420.7 million and net income was $148.6 million, compared with $1,031.0 million and $126.8 million.
The company completed its acquisition of Apollo Group Holdings Limited on January 1, 2026, for approximately $559.1 million in consideration: 3,679,332 shares valued at $188.1 million and $371.1 million in cash. Apollo contributed $87.9 million in third-quarter revenue and $13.9 million in net income. Nine-month operating cash flow was $389.3 million, compared with $356.3 million.
Comprehensive income was $2.7 million for the quarter versus $58.1 million a year earlier, alongside $47.1 million of other comprehensive loss, including $47.7 million of net unrealized investment losses.
3 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue: $455.3 million, versus $382.5 million.
- Moderate pointThird-quarter net income: $49.8 million, versus $45.9 million.
- Moderate pointNine-month operating cash flow: $389.3 million, versus $356.3 million.
Negative
- None.
Filing Explained
The buyback is not a
Key Figures
Third-quarter revenue: $455.3 million
Third-quarter net income: $49.8 million
Nine-month revenue: $1,420.7 million
+4 more
7 metrics
Third-quarter revenue
$455.3 million
Three months ended September 30, 2026; $382.5 million in 2025
Third-quarter net income
$49.8 million
Three months ended September 30, 2026; $45.9 million in 2025
Nine-month revenue
$1,420.7 million
Nine months ended September 30, 2026; $1,031.0 million in 2025
Nine-month net income
$148.6 million
Nine months ended September 30, 2026; $126.8 million in 2025
Operating cash flow
$389.3 million
Nine months ended September 30, 2026; $356.3 million in 2025
Apollo acquisition consideration
Approximately $559.1 million
Acquisition completed January 1, 2026
Shares repurchased
222,635 shares
Nine months ended September 30, 2026; approximately $9.7 million
Key Terms
Net earned premiums, Losses and loss adjustment expenses, Quota share agreement, Delayed draw term loan facility, +1 more
5 terms
Net earned premiums financial
"Net earned premiums"
Net earned premiums are the portion of insurance premium income that an insurer recognizes as revenue for the period after subtracting amounts passed to other insurers (reinsurance) and adjusting for premiums that cover future periods. For investors it shows the actual insurance revenue available to cover claims and expenses—think of it like the money a subscription business can count on this month after refunds and partner fees—so it helps assess growth and underwriting health.
Losses and loss adjustment expenses financial
"Reserves for losses and loss adjustment expenses"
Quota share agreement technical
"has a quota share agreement in place with Apollo Bermuda Limited"
Delayed draw term loan facility financial
"unsecured senior delayed draw term loan facility"
A delayed draw term loan facility is a committed loan that a borrower can tap in one or more installments at specified future times after meeting agreed conditions, rather than receiving the full amount upfront. For investors it matters because it provides a ready source of cash that can change a company’s financial strength, leverage and interest costs when drawn—similar to having a reserved credit line you can use later, which affects liquidity and the risk profile of the business.
Value of business acquired financial
"value of business acquired (“VOBA”)"
The value of business acquired is the total price paid to buy another company, measured as the combined worth of what the buyer gives up (cash, stock, debt taken on) compared with the fair worth of the assets and obligations received. For investors it reveals whether the buyer paid a premium or got a bargain, and whether part of the price is for tangible assets or for intangible items like customer relationships and reputation—similar to paying extra for a well‑known brand when buying a shop.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did SKWD perform in the third quarter of 2026?
SKWD reported third-quarter 2026 revenue of $455.3 million and net income of $49.8 million, compared with $382.5 million and $45.9 million, respectively, in the third quarter of 2025. Diluted earnings per share were $1.09, versus $1.10.
How much did SKWD pay to acquire Apollo?
SKWD completed the Apollo acquisition on January 1, 2026, for approximately $559.1 million. Consideration included 3,679,332 shares valued at $188.1 million and $371.1 million in cash.
How many shares did SKWD repurchase in the first nine months of 2026?
SKWD repurchased 222,635 shares for approximately $9.7 million during the nine months ended September 30, 2026. The total authorization under the program was $100.0 million; the program does not require repurchases of a specific number of shares and may be modified, suspended or terminated.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
FORM 10-Q
__________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from ____________ to ____________ | |||||
Commission file number 001-41591
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||
(713 ) 935-4800
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of October 30, 2026, the registrant had 44,413,449 shares of common stock outstanding.
TABLE OF CONTENTS
| Form 10-Q | Item and Description | Page | ||||||
Part I | ||||||||
Item 1. | Financial Statements | 3 | ||||||
Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 (unaudited) | 3 | |||||||
Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine-Month Periods Ended September 30, 2026 and 2025 (unaudited) | 4 | |||||||
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine-Month Periods Ended September 30, 2026 and 2025 (unaudited) | 5 | |||||||
Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2026 and 2025 (unaudited) | 7 | |||||||
Notes to Condensed Consolidated Financial Statements (unaudited) | 8 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 39 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 56 | ||||||
Item 4. | Controls and Procedures | 56 | ||||||
Part II | ||||||||
Item 1. | Legal Proceedings | 57 | ||||||
Item 1A. | Risk Factors | 57 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 57 | ||||||
Item 3. | Defaults Upon Senior Securities | 57 | ||||||
Item 4. | Mine Safety Disclosures | 57 | ||||||
Item 5. | Other Information | 57 | ||||||
Item 6. | Exhibits | 58 | ||||||
Signatures | 59 | |||||||
2
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| September 30, 2026 | December 31, 2025 | ||||||||||||||||
| ($ in thousands, except share and per share amounts) | (Unaudited) | ||||||||||||||||
| Assets | |||||||||||||||||
| Investments: | |||||||||||||||||
Fixed maturity securities, available-for-sale, at fair value (net of allowance for credit losses of $ | $ | $ | |||||||||||||||
Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of $ | |||||||||||||||||
| Equity securities, at fair value | |||||||||||||||||
| Mortgage loans, at fair value | |||||||||||||||||
| Equity method investments | |||||||||||||||||
| Other long-term investments | |||||||||||||||||
| Short-term investments, at fair value | |||||||||||||||||
| Total investments | |||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||
| Restricted cash | |||||||||||||||||
| Funds at Lloyd’s | |||||||||||||||||
| Options, at fair value | |||||||||||||||||
| Premiums and commissions receivable, net | |||||||||||||||||
| Reinsurance recoverables, net | |||||||||||||||||
| Ceded unearned premium | |||||||||||||||||
| Deferred policy acquisition costs and VOBA | |||||||||||||||||
| Deferred tax assets | |||||||||||||||||
| Goodwill and intangible assets, net | |||||||||||||||||
| Other assets | |||||||||||||||||
| Total assets | $ | $ | |||||||||||||||
| Liabilities and stockholders’ equity | |||||||||||||||||
| Liabilities: | |||||||||||||||||
| Reserves for losses and loss adjustment expenses | $ | $ | |||||||||||||||
| Unearned premiums | |||||||||||||||||
| Deferred ceding commission | |||||||||||||||||
| Reinsurance and premium payables | |||||||||||||||||
| Funds held for others | |||||||||||||||||
| Deferred tax liabilities | |||||||||||||||||
| Accounts payable and accrued liabilities | |||||||||||||||||
| Notes payable | |||||||||||||||||
| Subordinated debt, net of debt issuance costs | |||||||||||||||||
| Total liabilities | |||||||||||||||||
| Stockholders’ equity | |||||||||||||||||
Common stock, $ | |||||||||||||||||
Treasury stock, at cost, | ( | ||||||||||||||||
| Additional paid-in capital | |||||||||||||||||
| Accumulated other comprehensive (loss) income | ( | ||||||||||||||||
| Retained earnings | |||||||||||||||||
| Total stockholders’ equity | |||||||||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
3
Table of Contents
SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (UNAUDITED)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
| ($ in thousands, except share and per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||
| Net earned premiums | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Underwriting fee income | |||||||||||||||||||||||||||||||||||
| Commission and fee income | |||||||||||||||||||||||||||||||||||
| Net investment income | |||||||||||||||||||||||||||||||||||
| Net investment gains | |||||||||||||||||||||||||||||||||||
| Other income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | |||||||||||||||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | |||||||||||||||||||||||||||||||||||
| Fee‑based service expenses | |||||||||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||||||||
| Amortization expense | |||||||||||||||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||||||||||||||
| Unrealized gains and losses on investments: | |||||||||||||||||||||||||||||||||||
| Net change in unrealized (losses) gains on investments, net of tax | ( | ( | |||||||||||||||||||||||||||||||||
| Reclassification adjustment for gains on securities no longer held, net of tax | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||||||||
| Total other comprehensive (loss) income | ( | ( | |||||||||||||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Per share data: | |||||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Weighted-average common shares outstanding | |||||||||||||||||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
4
Table of Contents
SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
| Three months ended September 30, | |||||||||||||||||
| ($ in thousands, except share amounts) | 2026 | 2025 | |||||||||||||||
| Common shares: | |||||||||||||||||
| Balance at beginning of period | |||||||||||||||||
| Issuance of shares | |||||||||||||||||
| Balance at September 30, | |||||||||||||||||
| Treasury shares: | |||||||||||||||||
| Balance at beginning of period | ( | ||||||||||||||||
| Shares acquired | ( | — | |||||||||||||||
| Balance at September 30, | ( | ||||||||||||||||
| Common stock: | |||||||||||||||||
| Balance at beginning of period | $ | $ | |||||||||||||||
| Balance at September 30, | $ | $ | |||||||||||||||
| Treasury stock: | |||||||||||||||||
| Balance at beginning of period | $ | ( | $ | ||||||||||||||
| Treasury stock acquired | ( | — | |||||||||||||||
| Balance at September 30, | $ | ( | $ | ||||||||||||||
| Additional paid-in capital: | |||||||||||||||||
| Balance at beginning of period | $ | $ | |||||||||||||||
| Share-based compensation | |||||||||||||||||
| Balance at September 30, | $ | $ | |||||||||||||||
| Accumulated other comprehensive loss: | |||||||||||||||||
| Balance at beginning of period | $ | ( | $ | ( | |||||||||||||
| Other comprehensive (loss) income, net of tax | ( | ||||||||||||||||
| Balance at September 30, | $ | ( | $ | ||||||||||||||
| Retained earnings: | |||||||||||||||||
| Balance at beginning of period | $ | $ | |||||||||||||||
| Net income | |||||||||||||||||
| Balance at September 30, | $ | $ | |||||||||||||||
| Total stockholders’ equity | $ | $ | |||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
5
Table of Contents
SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
| Nine months ended September 30, | ||||||||||||||||||||
| ($ in thousands, except share amounts) | 2026 | 2025 | ||||||||||||||||||
| Common shares: | ||||||||||||||||||||
| Balance at beginning of year | ||||||||||||||||||||
| Issuance of shares | ||||||||||||||||||||
| Balance at September 30, | ||||||||||||||||||||
| Treasury shares: | ||||||||||||||||||||
| Balance at beginning of year | ||||||||||||||||||||
| Shares acquired | ( | — | ||||||||||||||||||
| Balance at September 30, | ( | |||||||||||||||||||
| Common stock: | ||||||||||||||||||||
| Balance at beginning of year | $ | $ | ||||||||||||||||||
| Issuance of common stock | ||||||||||||||||||||
| Balance at September 30, | $ | $ | ||||||||||||||||||
| Treasury stock: | ||||||||||||||||||||
| Balance at beginning of year | $ | $ | ||||||||||||||||||
| Treasury stock acquired | ( | — | ||||||||||||||||||
| Balance at September 30, | $ | ( | $ | |||||||||||||||||
| Additional paid-in capital: | ||||||||||||||||||||
| Balance at beginning of year | $ | $ | ||||||||||||||||||
| Issuance of common stock | ||||||||||||||||||||
| Balance at September 30, | $ | $ | ||||||||||||||||||
| Accumulated other comprehensive loss: | ||||||||||||||||||||
| Balance at beginning of year | $ | $ | ( | |||||||||||||||||
| Other comprehensive (loss) income, net of tax | ( | |||||||||||||||||||
| Balance at September 30, | $ | ( | $ | |||||||||||||||||
| Retained earnings: | ||||||||||||||||||||
| Balance at beginning of year | $ | $ | ||||||||||||||||||
| Net income | ||||||||||||||||||||
| Balance at September 30, | $ | $ | ||||||||||||||||||
| Total stockholders’ equity | $ | $ | ||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
6
Table of Contents
SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine months ended September 30, | |||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||
| Acquisitions, net of cash acquired | ( | ( | |||||||||||||||||||||
| Purchase of fixed maturity securities, available-for-sale | ( | ( | |||||||||||||||||||||
| Purchase of equity securities | ( | ||||||||||||||||||||||
| Purchase of equity method investments and other long-term investments | ( | ( | |||||||||||||||||||||
| Investment in direct and indirect loans | |||||||||||||||||||||||
| Purchases (sales) of property and equipment | ( | ||||||||||||||||||||||
| Proceeds from the sales of fixed maturity securities, available-for-sale | |||||||||||||||||||||||
| Maturities, calls, transfers and paydowns of fixed maturity securities, available-for-sale | |||||||||||||||||||||||
| Maturities, calls and paydowns of fixed maturity securities held-to-maturity | |||||||||||||||||||||||
| Proceeds from the sales of equity securities | |||||||||||||||||||||||
| Sales of and distributions from equity method and other long-term investments | |||||||||||||||||||||||
| Change in short-term investments | ( | ||||||||||||||||||||||
| Change in receivable/payable for securities | |||||||||||||||||||||||
| Cash (used in) provided by deposit accounting | ( | ||||||||||||||||||||||
| Net cash used in investing activities | ( | ( | |||||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||
| Proceeds from issuance of common stock | |||||||||||||||||||||||
| Proceeds from long term borrowings | |||||||||||||||||||||||
| Payments on long term borrowings | ( | ||||||||||||||||||||||
| Treasury stock acquired | ( | ||||||||||||||||||||||
| Net cash provided by financing activities | |||||||||||||||||||||||
| Net increase in cash and cash equivalents, restricted cash and funds at Lloyd's | |||||||||||||||||||||||
Cash and cash equivalents, restricted cash and funds at Lloyd's at beginning of period(1) | |||||||||||||||||||||||
Cash and cash equivalents, restricted cash and funds at Lloyd's at end of period(1) | $ | $ | |||||||||||||||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||||||||||
| Cash paid for interest | $ | $ | |||||||||||||||||||||
(1) The sum of cash and cash equivalents, restricted cash and funds at Lloyd’s from the consolidated balance sheets | |||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
7
Table of Contents
SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements of Skyward Specialty Insurance Group, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the disclosures required by GAAP for complete consolidated financial statements. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair statement of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2025 was derived from the Company’s audited annual consolidated financial statements.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates.
Updates to Significant Accounting Policies
The following accounting policies have been updated following the Apollo Group Holdings Limited (“Apollo”) acquisition on January 1, 2026.
Description of Business
Skyward Specialty Insurance Group, Inc., an insurance holding company, is a Delaware corporation that was organized in 2006. It is a specialty insurance company operating in two segments delivering commercial property and casualty products insurance coverages.
The Company has four wholly owned insurance company subsidiaries based in the United States:
•Great Midwest Insurance Company (“GMIC”) underwrites insurance on an admitted basis and is a certified surety bond company listed with the U.S. Department of the Treasury.
•Houston Specialty Insurance Company (“HSIC”), a subsidiary of GMIC, underwrites insurance on a non-admitted basis.
•Imperium Insurance Company (“IIC”), a subsidiary of HSIC, underwrites insurance on an admitted basis.
•Oklahoma Specialty Insurance Company (“OSIC”), a subsidiary of IIC, underwrites insurance on a non-admitted basis.
The Company has a wholly owned captive reinsurance company subsidiary, Skyward Re, that is domiciled in the Cayman Islands.
The Company has three non-risk bearing wholly owned subsidiaries, (i) Skyward Underwriters Agency, Inc. (“SUA”), a managing general insurance agent and reinsurance broker for property and casualty risks in specialty niche markets, (ii) Skyward Service Company, an entity which provides various administrative services to the Company’s subsidiaries, and (iii) Skyward Specialty No. 1 Limited, a Lloyd’s corporate member authorized to invest in Lloyd’s syndicates.
On January 1, 2026, the Company completed its acquisition of Apollo Group Holdings Limited (“Apollo”), a Lloyd’s of London (“Lloyd’s”) specialist insurance and reinsurance group. Apollo includes a Lloyd’s of London Managing Agency, Apollo Syndicate Management Limited (“ASML”), which provides managing agency services to ten Lloyd’s syndicates.
Apollo participates in its wholly managed syndicates through its corporate member company, Apollo No. 16 Limited (“Apollo No. 16”) which has a quota share agreement in place with Apollo Bermuda Limited. Apollo’s wholly managed
8
Table of Contents
SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Summary of Significant Accounting Policies (continued)
syndicates include Syndicate 1969, which underwrites a diversified specialty portfolio; Syndicate 1971, which focuses on digital-economy and technology-enabled risks; and Syndicate 1972, which serves as a quota share reinsurance vehicle for Syndicates 1969 and 1971, assuming a proportional share of their underwriting risks and results.
Commission and Fee Income and Underwriting Fee Income
Managing Agency Fees and Profit Commission
ASML earns a fee for providing managing agency services (such as underwriting oversight, operational administration and regulatory compliance) to the syndicates it manages. These managing agency fees are based on each syndicate’s annual capacity and are recognized over the period of services provided. ASML may also earn profit commission under contractual arrangements with the capital providers to each syndicate. Profit commissions are contingent on syndicate profitability and are accrued in accordance with the contractual terms and the subsequent development of underwriting results at the balance sheet date. Amounts are generally not payable until the underlying underwriting results have substantially matured (typically around 36 months after inception), unless interim profit distributions permit earlier payments on account. Intra‑group managing agency fees and profit commission are eliminated on consolidation.
Other Revenue From Management Services
Apollo also earns other services revenue for other administrative and operational services performed for the syndicates it manages, including those supported primarily by third‑party capital providers. Such revenue is measured at the fair value of consideration received or receivable and includes service fees and consortium income. Consortium income represents fees charged to consortia members for whom ASML acts as consortium leader and is recognized at the point in time premiums are written; amounts related to underwriting services provided over multi‑year periods are deferred accordingly.
Foreign Currency
The Company transacts business in numerous currencies through business units located around the world. The functional currency for each business unit is determined by the local currency used for most economic activity in that area. Movements in exchange rates related to transactions in currencies other than a business unit’s functional currency for monetary assets and liabilities are remeasured through the consolidated statements of operations and comprehensive income (loss) in other income (expense), except for currency movements related to available for sale fixed maturities securities, which are excluded from net income (loss) and accumulated in stockholders’ equity, net of deferred taxes.
The business units’ functional currency financial statements are translated to the Company’s reporting currency, U.S. dollars, using the exchange rates at the end of period for the balance sheets and the average exchange rates in effect for the reporting period for the statements of operations and comprehensive income. Gains and losses resulting from translating the foreign currency financial statements, net of deferred income taxes, are excluded from net income and accumulated as a separate component of accumulated other comprehensive income in stockholders’ equity.
Reclassifications
During the current period, the Company reclassified amounts previously included in “Other assets” to separate line items on the balance sheet for “Funds at Lloyd’s” and “Options, at fair value” to better reflect the nature of these balances. Prior period amounts have been reclassified to conform to the current presentation.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2. Goodwill and Intangible Assets
The following tables set forth the carrying amount and changes in the balance of goodwill by reporting unit at September 30, 2026 and 2025:
| ($ in thousands) | Accident and Health | Credit & Surety | Energy Solutions | Apollo | Other | Total | |||||||||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||||||||||||||
| Gross balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Accumulated impairment at December 31, 2025 | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Additions | |||||||||||||||||||||||||||||||||||
| Net balance at September 30, 2026 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| ($ in thousands) | Accident and Health | Credit & Surety | Energy Solutions | Other | Total | |||||||||||||||||||||||||||
| Goodwill | ||||||||||||||||||||||||||||||||
| Gross balance at December 31, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Accumulated impairment at December 31, 2024 | ( | ( | ( | |||||||||||||||||||||||||||||
| Net balance at September 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
The following tables set forth the carrying amount and changes in the balance of other intangible assets at September 30, 2026 and 2025:
| ($ in thousands) | Agent Relationships | Non-competes | Trademarks | Syndicate Capacity | Licenses | Total | |||||||||||||||||||||||||||||
| Other Intangible Assets | |||||||||||||||||||||||||||||||||||
| Gross balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Accumulated amortization at December 31, 2025 | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Additions | |||||||||||||||||||||||||||||||||||
| Amortization | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Net balance at September 30, 2026 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| ($ in thousands) | Agent Relationships | Non-competes | Trademarks | Licenses | Total | |||||||||||||||||||||||||||
| Other Intangible Assets | ||||||||||||||||||||||||||||||||
| Gross balance at December 31, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Accumulated amortization at December 31, 2024 | ( | ( | — | ( | ||||||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||||||||||
| Amortization | ( | — | ( | |||||||||||||||||||||||||||||
| Net balance at September 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
The Company’s indefinite lived intangible assets relate to insurance licenses, certain trademarks and Lloyd’s syndicates capacity. Its finite lived intangible assets, which relate to policy renewals, agency relationships, certain trademarks acquired in connection with the Apollo acquisition, syndicates capacity relationships and non-compete and exclusivity agreements, have a weighted average useful life of approximately 9 years as of September 30, 2026.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2. Goodwill and Intangible Assets (continued)
During the three and nine months ended September 30, 2026, the Company recognized approximately $2.1 million and $6.4 million, respectively, of amortization expense, compared to $0.3 million and $0.9 million, respectively, for the same 2025 periods. The following table sets forth the estimated future net amortization expense of intangible assets:
| ($ in thousands) | ||||||||
| Amount | ||||||||
| Remainder of 2026 | $ | |||||||
| Year Ending December 31, 2027 | ||||||||
| Year Ending December 31, 2028 | ||||||||
| Year Ending December 31, 2029 | ||||||||
| Year Ending December 31, 2030 | ||||||||
3. Investments
The following tables set forth the amortized cost and the fair value by investment category at September 30, 2026 and December 31, 2025:
| ($ in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Fair Value | |||||||||||||||||||||||||||
| September 30, 2026 | ||||||||||||||||||||||||||||||||
| Fixed maturity securities, available-for-sale: | ||||||||||||||||||||||||||||||||
| U.S. government securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| Non U.S government securities | ( | |||||||||||||||||||||||||||||||
| Corporate securities and miscellaneous | ( | ( | ||||||||||||||||||||||||||||||
| Municipal securities | ( | |||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Other asset-backed securities | ( | |||||||||||||||||||||||||||||||
| Total fixed maturity securities, available-for-sale | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
| Fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||||||||
| Other asset-backed securities | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
| Total fixed maturity securities, held-to-maturity | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. Investments (continued)
| ($ in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Loss | Allowance for Credit Losses | Fair Value | |||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Fixed maturity securities, available-for-sale: | ||||||||||||||||||||||||||||||||
| U.S. government securities | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| Corporate securities and miscellaneous | ( | ( | ||||||||||||||||||||||||||||||
| Municipal securities | ( | |||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Other asset-backed securities | ( | |||||||||||||||||||||||||||||||
| Total fixed maturity securities, available-for-sale | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
| Fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||||||||
| Other asset-backed securities | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
| Total fixed maturity securities, held-to-maturity | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at September 30, 2026:
| ($ in thousands) | Amortized Cost | Fair Value | ||||||||||||
| Due in less than one year | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
| Mortgage-backed securities | ||||||||||||||
| Other asset-backed securities | ||||||||||||||
| Total | $ | $ | ||||||||||||
Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Also, changing interest rates, tax considerations or other factors may result in portfolio sales prior to maturity.
The Company’s fixed maturity securities, held-to-maturity, at September 30, 2026 consisted entirely of asset-backed securities that were not due at a single maturity date.
At September 30, 2026, the Company had U.S. government agencies mortgage-backed fixed maturity securities, with a carrying value of approximately $164.0 million pledged as collateral for a loan (the “FHLB Loan”) from the Federal Home Loan Bank of Dallas (“FHLB”) pursuant to an Advances and Security Agreement between the Company and FHLB (the “Advances and Security Agreement”). In accordance with the terms of the FHLB Loan, the Company retains all rights regarding these pledged securities.
At September 30, 2026, the Company had assets with fair values of approximately $91.8 million pledged as collateral for performance obligations under reinsurance agreements. In accordance with the terms of the trust agreements, the Company retains all rights regarding these securities, of which $71.1 million are residential mortgage-backed securities, $18.5 million of cash and cash equivalents and other assets and $2.2 million of short-term investments.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. Investments (continued)
The following tables set forth the gross unrealized losses and the corresponding fair values of investments, aggregated by length of time that individual securities had been in a continuous unrealized loss position as of September 30, 2026 and December 31, 2025:
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||
| September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| Fixed maturity securities, available-for-sale: | ||||||||||||||||||||||||||||||||||||||
| U.S. government securities | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
| Non-U.S. government securities | ( | ( | ||||||||||||||||||||||||||||||||||||
| Corporate securities and miscellaneous | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Other asset-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total fixed maturity securities, available-for-sale | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||||||||||||||
| Other asset-backed securities | ||||||||||||||||||||||||||||||||||||||
| Total fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. Investments (continued)
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Fixed maturity securities, available-for-sale: | ||||||||||||||||||||||||||||||||||||||
| U.S. government securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Corporate securities and miscellaneous | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Municipal securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Other asset-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total fixed maturity securities, available-for-sale | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||||||||||||||
| Other asset-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total fixed maturity securities, held-to-maturity: | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
The Company regularly monitors its available-for-sale fixed maturity securities that have fair values less than cost or amortized cost for signs of impairment, an assessment that requires significant management judgment regarding the evidence known. Such judgments could change in the future as more information becomes known, which could negatively impact the amounts reported. Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery.
As of September 30, 2026, the Company had 1,671 lots of fixed maturity securities in an unrealized loss position. The Company does not have an intent to sell these securities and it is not more likely than not that the Company will be required to sell these securities before maturity or recovery of its cost basis. The Company reviewed its investments at September 30, 2026 and determined that for two available-for-sale securities in the “corporate securities and miscellaneous” category, credit impairments existed, based on new recovery analysis that showed deteriorating conditions raising credit concerns. Other than the securities discussed previously, the Company determined that no other credit impairment existed in the gross unrealized holding losses, due to the reasons discussed below:
•U.S. government securities and municipal securities: These securities were issued by the U.S. Treasury Department, Federal government-sponsored entities or by state and local governments. The decline in fair values was attributable to changes in interest rates and not credit quality. The Company does not intend to sell these securities and it is likely that it will not do so before their anticipated recovery. Therefore, the Company does not consider these impaired securities.
•Corporate securities and miscellaneous: Corporations in various industries issued these securities. The decline in fair values was attributable to changes in interest rates and not credit quality. The Company reviewed the issuers of these securities to identify any significant adverse change in financial condition, a change in the quality of credit enhancement (if any), a ratings decrease, or negative outlook assignment from a major credit rating agency, and any failure to make interest or principal payments. After these reviews, the Company determined that the decline in fair values was attributable to changes in interest rates and not credit quality. The Company does not intend to sell these securities and it is likely that it will not do so before their anticipated recovery. Therefore, the Company does not consider these impaired securities.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. Investments (continued)
•Residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities: The decline in fair values was attributable to changes in interest rates and not credit quality. The Company does not intend to sell these securities and it is likely that it will not do so before their anticipated recovery. Therefore, the Company does not consider these impaired securities.
The following table sets forth the changes in the allowance for credit losses on available-for-sale securities and held-to-maturity securities during the nine months ended September 30, 2026 and 2025:
| ($ in thousands) | Fixed Maturity Securities, Available-For-Sale | Fixed Maturity Securities, Held-to-Maturity | ||||||||||||
| Balance at December 31, 2025 | $ | $ | ||||||||||||
| Recoveries of amounts previously written off | ( | ( | ||||||||||||
| Balance at March 31, 2026 | $ | $ | ||||||||||||
| Write-offs | ||||||||||||||
| Recoveries of amounts previously written off | ( | |||||||||||||
| Balance at June 30, 2026 | $ | $ | ||||||||||||
| Current period provision for credit losses | ||||||||||||||
| Write-offs | ||||||||||||||
| Recoveries of amounts previously written off | ( | |||||||||||||
| Balance at September 30, 2026 | $ | $ | ||||||||||||
| Fixed Maturity Securities, Available-For-Sale | Fixed Maturity Securities, Held-to-Maturity | |||||||||||||
| Balance at December 31, 2024 | $ | $ | ||||||||||||
| Current period provision for credit losses | ||||||||||||||
| Balance at March 31, 2025 | $ | $ | ||||||||||||
| Current period provision for credit losses | ||||||||||||||
| Balance at June 30, 2025 | $ | $ | ||||||||||||
| Current period provision for credit losses | ||||||||||||||
| Recoveries of amounts previously written off | ( | |||||||||||||
| Balance at September 30, 2025 | $ | $ | ||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. Investments (continued)
The following table sets forth the components of net investment gains for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Gross realized gains | ||||||||||||||||||||||||||||||||
| Fixed maturity securities, available-for-sale | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||||||||
| Other | ( | ( | ||||||||||||||||||||||||||||||
| Total | ( | |||||||||||||||||||||||||||||||
| Gross realized losses | ||||||||||||||||||||||||||||||||
| Fixed maturity securities, available-for-sale | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Equity securities | ( | ( | ||||||||||||||||||||||||||||||
| Other | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Total | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Net unrealized gains (losses) on investments | ||||||||||||||||||||||||||||||||
| Equity securities | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Mortgage loans | ( | |||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||
Net investment gains | $ | $ | $ | $ | ||||||||||||||||||||||||||||
The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the nine months ended September 30, 2026 and 2025:
| Nine months ended September 30, | ||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | ||||||||||||||||||
| Fixed maturity securities, available-for-sale | $ | $ | ||||||||||||||||||
| Equity securities | ||||||||||||||||||||
The following table sets forth the components of net investment income for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Income (loss): | ||||||||||||||||||||||||||||||||
| Fixed maturity securities, available-for-sale | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Fixed maturity securities, held-to-maturity | ( | ( | ( | |||||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||||||||
| Equity method investments | ( | ( | ( | |||||||||||||||||||||||||||||
| Mortgage loans | ( | |||||||||||||||||||||||||||||||
| Indirect loans | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Short-term investments and cash | ||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||
| Total investment income | ||||||||||||||||||||||||||||||||
| Investment expenses | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Net investment income | $ | $ | $ | $ | ||||||||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. Investments (continued)
The following table sets forth the change in net unrealized gains (losses) on the Company’s investment portfolio, net of deferred income taxes, included in other comprehensive loss for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Fixed maturity securities | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||
| Deferred income taxes | ( | ( | ||||||||||||||||||||||||||||||
| Total | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||
4. Fair Value Measurements
The Company’s financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in its consolidated financial statements. In determining fair value, the market approach is generally applied, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities.
The Company uses data primarily provided by third-party investment managers or pricing vendors to determine the fair value of its investments. Periodic analyses are performed on prices received from third parties to determine whether the prices are reasonable estimates of fair value. The analyses include a review of month-to-month price fluctuations and, as needed, a comparison of pricing services’ valuations to other pricing services’ valuations for the identical security.
The Company classifies its financial instruments into the following three-level hierarchy:
Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement
date.
Level 2 - Inputs are other than quoted prices included in Level 1 that are observable for the asset or liability through
corroboration with market data at the measurement date.
Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in
pricing the asset or liability at the measurement date.
The following methods and assumptions were used in estimating the fair value disclosures for financial instruments in the accompanying consolidated financial statements and in these notes:
U.S. government securities, mutual funds and common stock
The Company uses unadjusted quoted prices for identical instruments in an active exchange to measure fair value which represent Level 1 inputs.
Preferred stocks, municipal securities, corporate securities and miscellaneous
The Company uses a pricing model that utilizes market-based inputs such as trades in an illiquid market for a particular security or trades in active markets for securities with similar characteristics. The model considers other inputs such as benchmark yields, issuer spreads, security terms and conditions, and other market data. These represent Level 2 fair value inputs.
Commercial mortgage-backed securities, residential mortgage-backed securities and other asset-backed securities
The Company uses a pricing model that utilizes market-based inputs that may include dealer quotes, market spreads, and yield curves. It may evaluate individual tranches in a security by determining cash flows using the security’s terms and conditions, collateral performance, credit information benchmark yields and estimated prepayments. These represent Level 2 fair value inputs.
Fixed maturity securities, available for sale classified as Level 3
The Company has corporate securities and miscellaneous, other asset-backed securities that are managed by an independent asset manager and priced by an independent pricing provider. The provider estimates the value of the securities using the discount net present value of cash flows method using an unobservable discount rate. The discount rate
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. Fair Value Measurements (continued)
spread represents the risk associated with future cash flows, including inflation, opportunity cost and the time value of money. This rate represents Level 3 fair value inputs.
The following table sets forth the range of the discount rate as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| High | % | % | ||||||||||||
| Low | % | % | ||||||||||||
| Weighted average | % | % | ||||||||||||
Mortgage loans
Mortgage loans have variable interest rates and are collateralized by real property. The Company determines fair value of mortgage loans using the income approach utilizing inputs that are observable and unobservable (Level 3). The unobservable input consists of the spread applied to a prime rate used to discount cash flows. The spread represents the incremental cost of capital based on the borrower’s ability to make future payments and the value of the collateral relative to the loan balance and is subject to judgment and uncertainty.
The Mortgage loan portfolio now holds a single loan, following a foreclosure and the transfer out of another loan. The spread factor on this remaining loan was 8.09 % as of September 30, 2026. The portfolio carried a weighted average spread of 7.74 %, with a high of 8.09 % and low of 6.54 % as of December 31, 2025.
Derivatives
Options, at fair value on the Company’s condensed consolidated balance sheets are derivatives which consist of certain exchange-traded options contracts entered into by the Company. The fair values of these options are measured using quoted prices in active markets on the relevant exchange, specifically utilizing either the volume-weighted average price of trades in similar contracts during a specified time window, or the last trade settlement price when no trades occur within that period. This method represents Level 1 inputs.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. Fair Value Measurements (continued)
The following tables set forth the Company’s investments and derivatives within the fair value hierarchy at September 30, 2026 and December 31, 2025:
| September 30, 2026 | ||||||||||||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| Fixed maturity securities, available-for-sale: | ||||||||||||||||||||||||||
| U.S. government securities | $ | $ | $ | $ | ||||||||||||||||||||||
| Non U.S government securities | ||||||||||||||||||||||||||
| Corporate securities and miscellaneous | ||||||||||||||||||||||||||
| Municipal securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Other asset-backed securities | ||||||||||||||||||||||||||
| Total fixed maturity securities, available-for-sale | ||||||||||||||||||||||||||
| Fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||
| Other asset-backed securities | ||||||||||||||||||||||||||
| Total fixed maturity securities, held-to-maturity | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
| Preferred stocks | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
| Mortgage loans | ||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||
| Derivatives | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. Fair Value Measurements (continued)
| December 31, 2025 | ||||||||||||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| Fixed maturity securities, available-for-sale: | ||||||||||||||||||||||||||
| U.S. government securities | $ | $ | $ | $ | ||||||||||||||||||||||
| Corporate securities and miscellaneous | ||||||||||||||||||||||||||
| Municipal securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Other asset-backed securities | ||||||||||||||||||||||||||
| Total fixed maturity securities, available-for-sale | ||||||||||||||||||||||||||
| Fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||
| Other asset-backed securities | ||||||||||||||||||||||||||
| Total fixed maturity securities, held-to-maturity: | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
| Preferred stocks | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
| Mortgage loans | ||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||
| Derivatives | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. Fair Value Measurements (continued)
The following tables set forth the changes in the fair value of instruments carried at fair value with a Level 3 measurement during the nine months ended September 30, 2026 and 2025:
| ($ in thousands) | Fixed Maturity Securities, Available-For-Sale | Mortgage Loans | ||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ||||||||||||||||||||||||
| Total losses for the period recognized in net investment gains | ( | ( | ||||||||||||||||||||||||
| Issuances | ||||||||||||||||||||||||||
| Settlements | ||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||
| Sales/Disposals | ( | |||||||||||||||||||||||||
| Total unrealized losses for the period recognized in accumulated comprehensive (loss) income | ( | |||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ||||||||||||||||||||||||
| Total gains for the period recognized in net investment gains attributable to the change in unrealized gains or losses relating to assets held as of period end | $ | $ | ||||||||||||||||||||||||
| Total (losses) gains for the period recognized in net investment gains | ( | |||||||||||||||||||||||||
| Issuances | ||||||||||||||||||||||||||
| Settlements | ||||||||||||||||||||||||||
| Transfers into Level 3 | ||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||
| Sales/Disposals | ( | |||||||||||||||||||||||||
| Total unrealized gains for the period recognized in accumulated comprehensive income (loss) | ( | |||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ||||||||||||||||||||||||
| Total gains for the period recognized in net investment gains attributable to the change in unrealized gains or losses relating to assets held as of period end | $ | $ | ||||||||||||||||||||||||
| Total losses for the period recognized in net investment gains | ||||||||||||||||||||||||||
| Total losses for the period recognized in losses and loss adjustment expenses | ||||||||||||||||||||||||||
| Issuances | ||||||||||||||||||||||||||
| Settlements | ( | |||||||||||||||||||||||||
| Transfers into Level 3 | ||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||
| Sales/Disposals | ( | |||||||||||||||||||||||||
| Total unrealized gains for the period recognized in accumulated comprehensive income (loss) | ( | |||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | ||||||||||||||||||||||||
| Total gains for the period recognized in net investment gains attributable to the change in unrealized gains or losses relating to assets held as of period end | $ | $ | ||||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. Fair Value Measurements (continued)
| ($ in thousands) | Fixed Maturity Securities, Available-For-Sale | Mortgage Loans | |||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | |||||||||||||||||||||
| Total losses for the period recognized in net investment gains | ( | ( | |||||||||||||||||||||
| Issuances | |||||||||||||||||||||||
| Settlements | ( | ||||||||||||||||||||||
| Purchases | |||||||||||||||||||||||
| Sales/Disposals | ( | ||||||||||||||||||||||
| Total unrealized gains for the period recognized in accumulated comprehensive income (loss) | |||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | |||||||||||||||||||||
| Total losses for the period recognized in net investment gains attributable to the change in unrealized gains or losses relating to assets held as of period end | $ | $ | ( | ||||||||||||||||||||
| Total (losses) gains for the period recognized in net investment gains | ( | ||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||
| Settlements | ( | ||||||||||||||||||||||
| Transfers into Level 3 | |||||||||||||||||||||||
| Purchases | |||||||||||||||||||||||
| Sales/Disposals | ( | ||||||||||||||||||||||
| Total unrealized gains for the period recognized in accumulated comprehensive income (loss) | |||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | |||||||||||||||||||||
| Total gains for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end | $ | $ | |||||||||||||||||||||
| Total losses for the period recognized in net investment gains | ( | ( | |||||||||||||||||||||
| Settlements | ( | ||||||||||||||||||||||
| Purchases | |||||||||||||||||||||||
| Sales/Disposals | ( | ||||||||||||||||||||||
| Total unrealized gains for the period recognized in accumulated comprehensive income (loss) | |||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | |||||||||||||||||||||
| Total losses for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end | $ | $ | ( | ||||||||||||||||||||
The transfers into Level 3 during the three and nine months ended September 30, 2026 were the result of securities that began receiving valuations from asset managers that utilized unobservable inputs at the end of the period.
The Company measures certain assets, including investments in indirect loans and loan collateral, equity method investments and other invested assets, at fair value on a nonrecurring basis only when they are deemed to be impaired.
In addition to the preceding disclosures on assets and liabilities recorded at fair value in the consolidated balance sheets, the Company is also required to disclose the fair values of certain other financial instruments for which it is practicable to estimate fair value. Estimated fair value amounts, defined as the quoted market price of a financial instrument, have been determined using available market information and other appropriate valuation methodologies. However, considerable judgments are required in developing the estimates of fair value where quoted market prices are not available. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or estimating methodologies may have an effect on the estimated fair value amounts.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. Fair Value Measurements (continued)
The following methods and assumptions were used in estimating the fair value disclosures of other financial instruments:
Fixed maturity securities, held-to-maturity: Fixed maturity securities, held-to-maturity consists of senior and junior notes with target rates of return. As of September 30, 2026, the Company determined the fair value of these instruments using the income approach utilizing inputs that are unobservable (Level 3).
Investment in RedBird Capital Partners: Included in other long-term investments is an investment in a limited partnership with RedBird Capital Partners, which invests in Bishop Street Underwriters, LLC (“Bishop Street”), a managing general agent (MGA). The investment had a fair value of $56.1 million at September 30, 2026, which was determined using the net asset value. The Company employs procedures to assess the reasonableness of the fair value of the investment including obtaining and reviewing the audited financial statements. The unfunded commitment related to the investment was $6.8 million at September 30, 2026. The Company may sell its interest in the investment with the appropriate prior written notice and approval by the general partner. In accordance with Accounting Standards Codification 820-10, this investment is measured at fair value using the net asset value per share practical expedient and has not been classified in the fair value hierarchy.
Notes payable: The carrying value approximates the estimated fair value for notes payable as the notes payable accrue interest at current market rates plus a spread. The Company determines fair value using the income approach utilizing inputs that are observable (Level 2).
Subordinated debt: Subordinated debt consists of the Unsecured Subordinated Notes, due May 24, 2039 and have a fixed interest rate. The Company determines the fair value of these instruments using the income approach utilizing inputs that are observable (Level 2).
The following table sets forth the Company’s carrying and fair values of notes payable and subordinated debt as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| ($ in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||
| Notes payable | ||||||||||||||||||||||||||
| FHLB Loan | $ | $ | $ | $ | ||||||||||||||||||||||
| Revolving Credit Facility | ||||||||||||||||||||||||||
| Term Loan Facility, net of debt issuance costs | ||||||||||||||||||||||||||
| Notes payable | $ | $ | $ | $ | ||||||||||||||||||||||
| Subordinated debt | ||||||||||||||||||||||||||
| Unsecured subordinated notes | $ | $ | $ | $ | ||||||||||||||||||||||
| Subordinated debt, net of debt issuance costs | $ | $ | $ | $ | ||||||||||||||||||||||
Other financial instruments qualify as insurance-related products and are specifically exempted from fair value disclosure requirements.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
5. Mortgage Loans
The Company has invested in Separately Managed Accounts (“SMA1” and “SMA2”). As of September 30, 2026 and December 31, 2025, the Company held direct investments in mortgage loans from various creditors through SMA1 and SMA2.
As of September 30, 2026, the Company’s mortgage loan portfolio consisted of a senior loan on real estate in the U.S. The loan earns interest at a fixed spread above a prime rate and matures approximately 2 years from loan origination. The principal amount of the loan is approximately 54 % of the property’s appraised value at the time the loan was made.
The following table sets forth the carrying value of the Company’s mortgage loans as of September 30, 2026 and December 31, 2025:
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Commercial | $ | $ | ||||||||||||
| Hospitality | ||||||||||||||
| $ | $ | |||||||||||||
The following table sets forth the Company’s gross investment income for mortgage loans for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Commercial | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Retail | ||||||||||||||||||||||||||||||||
| Hospitality | ||||||||||||||||||||||||||||||||
| $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
The uncollectible amounts on loans, on an individual loan basis, are determined based upon consultations and advice from the Company’s specialized investment manager and consideration of any adverse situations that could affect the borrower’s ability to repay, the estimated value of underlying collateral, and other relevant factors. The Company writes off the uncollectible amount in the period it was determined to be uncollectible. There was no
As of September 30, 2026 and as of December 31, 2025, no 1
6. Equity Method Investments and Other
The following table sets forth the carrying value and ownership percentage of the Company’s equity method investments as of September 30, 2026 and December 31, 2025:
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||
| Carrying Value | Ownership % | Carrying Value | Ownership % | |||||||||||||||||||||||
| Arena Special Opportunities Fund, LP units | $ | % | $ | % | ||||||||||||||||||||||
| JVM Funds LLC units | % | % | ||||||||||||||||||||||||
| Hudson Ventures Fund 2 LP units | % | % | ||||||||||||||||||||||||
| RISCOM | % | % | ||||||||||||||||||||||||
| Brewer Lane Ventures Fund II LP units | % | % | ||||||||||||||||||||||||
| Dowling Capital Partners LP units | % | % | ||||||||||||||||||||||||
| Arena SOP LP units | % | % | ||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
6. Equity Method Investments and Other (continued)
The following table sets forth the components of net investment income (loss) from equity method investments for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| RISCOM | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Dowling Capital Partners LP units | ||||||||||||||||||||||||||||||||
| Hudson Ventures Fund II LP units | ( | ( | ||||||||||||||||||||||||||||||
| Brewer Lane Ventures Fund II LP | ( | ( | ( | |||||||||||||||||||||||||||||
| JVM Funds LLC | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Arena SOP LP units | ( | |||||||||||||||||||||||||||||||
| Arena Special Opportunities Fund, LP units | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||
The following table sets forth the unfunded commitment of equity method investments as of September 30, 2026 and December 31, 2025:
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Brewer Lane Ventures Fund II LP units | $ | $ | ||||||||||||
| Dowling Capital Partners LP units | ||||||||||||||
| Hudson Ventures Fund 2 LP units | ||||||||||||||
| $ | $ | |||||||||||||
The difference between the cost of an investment and its proportionate share of the underlying equity in net assets is allocated to the various assets and liabilities of the equity method investment. The Company amortizes the difference in net assets over the same useful life of a similar asset as the underlying equity method investment. For investment in RISCOM, a similar asset would be agent relationships. The Company amortizes this difference over a 15 -year useful life.
The following table sets forth the Company’s recorded investment in RISCOM compared to its share of underlying equity as of September 30, 2026 and December 31, 2025:
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Investment in RISCOM: | ||||||||||||||
| Underlying equity | $ | $ | ||||||||||||
| Difference | ||||||||||||||
| Recorded investment balance | $ | $ | ||||||||||||
The following table sets forth the Company’s recorded investment in JVM Funds LLC compared to its share of underlying equity as of September 30, 2026 and December 31, 2025:
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Investment in JVM Funds LLC: | ||||||||||||||
| Underlying equity | $ | $ | ||||||||||||
| Difference | ||||||||||||||
| Recorded investment balance | $ | $ | ||||||||||||
Investment in Indirect Loans and Loan Collateral
As of September 30, 2026 and December 31, 2025, the Company held indirect investments in collateralized loans and loan collateral through SMA1 and SMA2.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
6. Equity Method Investments and Other (continued)
The carrying value of the SMA1 and SMA2 as of September 30, 2026 and December 31, 2025 were as follows:
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||
| SMA1 | $ | $ | ||||||||||||||||||||||||
| SMA2 | ||||||||||||||||||||||||||
| Investment in indirect loans and loan collateral | $ | $ | ||||||||||||||||||||||||
7. Variable Interest Entity
Pursuant to GAAP consolidation guidance, the Company consolidates Separate Account HSIC-01 (“HSIC-01”), established by Mangrove Risk Solutions Bermuda Ltd. (“Mangrove”). HSIC-01 is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The purpose of the VIE is to hedge price volatility risks of certain insurance products by investing in dairy and livestock commodities. The Company directly manages the business; therefore, it considers itself the primary beneficiary. The Company does not provide performance guarantees and has no other financial obligation to provide funding to HSIC-01, other than its own capital commitments. The assets of consolidated variable interest entities may only be used to settle obligations of these entities. In addition, there is no recourse to the assets of HSIC-01 other than to satisfy associated liabilities.
The following table presents the assets of HSIC-01, included in the condensed consolidated balance sheet as of September 30, 2026 and December 31, 2025. The assets presented below only include third-party net assets and exclude any intercompany balances, which were eliminated in consolidation.
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Options, at fair value | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
8. Derivatives
The Company uses derivatives as part of its financial risk management programs to mitigate price risk related to certain insurance contracts exposed to commodity price risk due to fluctuations in relevant market prices, including cattle and milk. To mitigate revenue volatility and support financial stability, the Company employs a hedging strategy that utilizes derivatives, specifically purchased and sold put options, as part of its risk management framework. The primary objective of holding these derivative instruments is to manage exposure to adverse price movements. The activity in these instruments generally reflects current market conditions and shifts in risk exposures throughout the year. The notional value of derivative contracts held and the degree of hedged exposure are actively managed and may vary depending on the prevailing pricing environment in cattle, hogs, and milk markets. The Company does not use derivatives for speculative or trading purposes. All derivative positions are intended to support the overall risk transfer objectives of the business. The Company has not elected hedge accounting for these derivatives.
The following table presents the notional amounts and fair value of derivative assets in the condensed consolidated balance sheets at September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| ($ in thousands) | Derivative Assets | Derivative Assets | |||||||||||||||||||||||||||||||||
| Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||||||||||||||
| Economic hedges | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
9. Notes Payable & Subordinated Debt
FHLB Loan
On August 30, 2024, the Company entered into the FHLB Loan pursuant to the Advances and Security Agreement. The FHLB Loan is a 4.5 -year term loan in the principal amount of $57.0 million. The FHLB Loan provides for interest-only payments during its term, with principal due in full at maturity. The interest rate is fixed over the term of the loan at 4.00 %. The FHLB Loan is fully secured by a pledge of specific investment securities of HSIC. The Company used the proceeds to fund redemptions of the draws on its prior credit facility. On July 21, 2026, the Company repaid $1.0 million of outstanding principal.
Term Loan Facility
During the fourth quarter of 2025, the Company entered into a Term Loan Credit Agreement (the “Term Loan Facility”) with a syndicate of participating banks. The Term Loan Facility includes (a) an unsecured senior delayed draw term loan facility (“DDTL”) in the aggregate principal amount of $150.0 million (the “Tranche A DDTL”) and (b) an additional unsecured senior DDTL in the aggregate principal amount of $150.0 million (the “Tranche B DDTL”).
The Term Loan Facility was used by the Company to fund a portion of the consideration of the Company’s acquisition of Apollo Group Holdings Limited (“Apollo”) and related transaction fees and expenses. Amounts drawn under the Term Loan Facility bear interest at either term SOFR plus a margin, which ranges from 150 basis points to 190 basis points, or the base rate plus a margin, which ranges from 50 basis points to 90 basis points, each depending on the Company’s debt to capitalization ratio. SOFR is calculated using a SOFR floor of 0.00 % and a credit spread adjustment of 0.10 %. The base rate is the highest of (i) the Agent’s then-current prime lending rate, (ii) the Federal Funds Rate plus 0.50 %, (iii) SOFR plus 1.00 % and (iv) zero percent (0%). In addition, the Company pays a fee ranging from 0.20 % to 0.35 % on average daily undrawn amounts under the Facility, depending on the Company’s debt to capitalization ratio. The Tranche A DDTL matures on January 1, 2028 and the Tranche B DDTL matures on July 2, 2029. On December 30, 2025, the Company drew $150.0 million of the Tranche A DDTL and $150.0 million of the Tranche B DDTL for the acquisition of Apollo on January 1, 2026. On June 26, 2026, the Company repaid $50.0 million of outstanding principal under the Tranche A DDTL.
The Term Loan Facility includes customary covenants, including certain limitations on the incurrence by the Company of additional indebtedness exceeding $10.0 million and on the Company’s ability to make distributions to its stockholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events and certain financial covenants, including financial covenants relating to our minimum consolidated net worth, maximum total debt to capitalization, minimum A.M. Best rating and minimum liquidity, as well as customary events of default. As of September 30, 2026, the Company was in compliance with all covenants.
The Term Loan Facility is unsecured. In connection with the Revolving Credit Facility (defined below), during the fourth quarter of 2025, the Company and the subsidiary guarantors party thereto, entered into a guaranty agreement, pursuant to which the Company’s obligations under the Term Loan Facility are guaranteed by the Company’s existing wholly-owned subsidiaries and subsequently acquired or organized subsidiaries, excluding insurance company subsidiaries and subject to certain other exceptions.
The Company reports debt related to the Term Loan Facility in its September 30, 2026 condensed consolidated balance sheet, net of debt issuance costs of approximately $3.5 million. These deferred financing costs are presented as a direct deduction from the carrying amount of the debt.
Revolving Credit Facilities
During the fourth quarter of 2025, the Company entered into a Credit Agreement (the “Revolving Credit Facility”) with a syndicate of participating banks. The Revolving Credit Facility is unsecured and provided the Company with up to an initial maximum principal amount of $150.0 million which was increased to $250.0 million on the closing date of the Company’s acquisition of Apollo.
The Company initially drew $43.0 million, which was used to redeem the Company’s prior revolving credit facility. On December 30, 2025, the company drew an additional $71.5 million which was used for the consideration paid for the acquisition of Apollo. The proceeds were used for the acquisition of Apollo on January 1, 2026.
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
9. Notes Payable & Subordinated Debt (continued)
Interest on the Revolving Credit Facility is payable quarterly. Amounts drawn under the Revolving Credit Facility bear interest at either term SOFR plus a margin, which ranges from 150 to 190 basis points, or the base rate plus a margin, which ranges from 50 basis points to 90 basis points, each depending on the Company’s debt to capitalization ratio. SOFR is calculated using a SOFR floor of 0.00 % and a credit spread adjustment of 0.10 %. The base rate is the highest of (i) the Agent’s then current prime lending rate, (ii) the Federal Funds Rate plus 0.50 %, (iii) SOFR plus 1.00 % and (iv) zero percent (0%). In addition, the Company pays a fee ranging from 0.20 % to 0.35 % on average daily undrawn amounts under the Revolving Credit Facility, depending on the Company’s debt to capitalization ratio. The availability period under the Revolving Credit Facility will terminate on November 12, 2030.
The Company is subject to covenants on the Revolving Credit Facility based on minimum net worth, maximum debt to capital ratio, minimum A.M. Best Rating and minimum liquidity, as well as customary events of default. As of September 30, 2026, the Company was in compliance with all covenants.
Debentures
In May 2019, the Company entered into an agreement to issue unsecured subordinated notes (the “Notes”) with an aggregate principal amount of $20.0 million. Interest on the Notes is fixed at 7.25 % for the first 8 years and fixed at 8.25 % thereafter. Early retirement of the debt ahead of 8 year commitment requires all interest payments to be paid in full as well as the return of outstanding principal. Principal is due at maturity on May 24, 2039 and interest is payable quarterly. The Notes have junior priority to all previously issued debt. The Company reports debt related to the Notes in its September 30, 2026 Condensed Consolidated Balance Sheet and its December 31, 2025 Consolidated Balance Sheet, net of debt issuance costs of approximately $0.4
10. Stockholders' Equity
Share Repurchase Program
11. Segments
The Company has two reportable segments, the Skyward Specialty segment and the Apollo segment, through which it offers a broad array of commercial property and casualty products and reinsurance solutions on a non-admitted (or E&S) and admitted basis, predominantly in the United States. The Company defines its segment on the basis of the way in which internally reported financial information is regularly reviewed by the Chief Operating Decision Maker (“CODM”) to analyze financial performance, make decisions and allocate resources. The Company’s CODM is the chief executive officer. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.
The Skyward Specialty segment is made up of nine distinct underwriting divisions, or “continuing business,” and has dedicated underwriting leadership supported by high-quality technical staff with deep experience in their respective niches. The Apollo segment consists of the operations of Apollo, a Lloyd’s‑based specialty insurance platform acquired by the Company on January 1, 2026, structured around two core divisions that collectively support its underwriting, specialty‑risk, and managing‑agency activities. Apollo operates within the Lloyd’s of London market, leveraging Lloyd’s
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
11. Segments (continued)
global licensing, centralized underwriting infrastructure, and long‑standing distribution networks to access niche and emerging specialty classes across international markets.
The accounting policies of the segments are the same as those described in Note 1 “Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The CODM assesses performance for the segments and allocates resources based primarily on gross written premiums, managed premiums and underwriting income. The Company does not manage assets by segment, with the exception of goodwill and intangible assets. Investment results, interest expense, amortization expense, corporate expenses and other income and expenses are not allocated to the underwriting segments.
Gross written premiums by underwriting division, managed premiums and underwriting contribution are used to monitor budget versus actual results. The CODM also uses underwriting contribution in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segments and in establishing management’s compensation. Because managed premiums are a key management operating metric intended to reflect the scale of business managed by Apollo, inter-syndicate reinsurance transactions, including those involving Syndicate 1972 and other Apollo-managed syndicates, are not eliminated in the calculation of managed premiums.
The following table presents gross written premiums by underwriting division for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Skyward Specialty Segment | ||||||||||||||||||||||||||||||||
| Accident & Health | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Captives | ||||||||||||||||||||||||||||||||
| Credit & Surety | ||||||||||||||||||||||||||||||||
| Energy Solutions | ||||||||||||||||||||||||||||||||
| Global Agriculture | ||||||||||||||||||||||||||||||||
| Global Property | ||||||||||||||||||||||||||||||||
| Professional Lines | ||||||||||||||||||||||||||||||||
| Strategic Distribution Partners | ||||||||||||||||||||||||||||||||
| Transactional E&S | ||||||||||||||||||||||||||||||||
| Total continuing business | ||||||||||||||||||||||||||||||||
| Exited business | ( | |||||||||||||||||||||||||||||||
| Total Skyward Specialty Segment gross written premiums | ||||||||||||||||||||||||||||||||
| Apollo Segment | ||||||||||||||||||||||||||||||||
| Syndicate 1969 | — | — | ||||||||||||||||||||||||||||||
| Syndicate 1971 | — | — | ||||||||||||||||||||||||||||||
| Total Apollo Segment gross written premiums | — | — | ||||||||||||||||||||||||||||||
| Total gross written premiums | $ | $ | $ | $ | ||||||||||||||||||||||||||||
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11. Segments (continued)
The following table sets forth the Apollo segment’s managed premiums for the three and nine months ended September 30, 2026:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | |||||||||||||||||||||||||||||||||||||
Aligned Syndicates(1) | $ | $ | ||||||||||||||||||||||||||||||||||||
Partner Syndicates(1) | ||||||||||||||||||||||||||||||||||||||
| Total managed premiums | $ | $ | ||||||||||||||||||||||||||||||||||||
(1) During the third quarter of 2026, the Company reclassified fee generating gross written premiums attributable to Syndicate 1972 from Partner Syndicates to Aligned Syndicates. Year to date 2026 amounts have been reclassified to conform to the current period presentation. | ||||||||||||||||||||||||||||||||||||||
The following table presents information about reported segment net underwriting income, significant segment expenses and a reconciliation of net underwriting income to net income for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | 2026 | 2025 | |||||||||||||||||||||||||||||||||
| ($ in thousands) | Skyward Specialty | Apollo | Total | Skyward Specialty | Total | ||||||||||||||||||||||||||||||
| Underwriting income | |||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||
| Net earned premiums | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Underwriting fee income | |||||||||||||||||||||||||||||||||||
| Commission and fee income | |||||||||||||||||||||||||||||||||||
| Total underwriting revenues | |||||||||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||||||||
| Losses and LAE | |||||||||||||||||||||||||||||||||||
| Amortization of policy acquisition costs | |||||||||||||||||||||||||||||||||||
| Other operating and general expenses | |||||||||||||||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||||||||||||||
| Fee‑based service expenses | |||||||||||||||||||||||||||||||||||
| Total underwriting expenses | |||||||||||||||||||||||||||||||||||
| Underwriting income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Reconciliation of underwriting income to net income: | |||||||||||||||||||||||||||||||||||
| Underwriting income | $ | $ | |||||||||||||||||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||||||||
| Net investment income | |||||||||||||||||||||||||||||||||||
| Net investment gains | |||||||||||||||||||||||||||||||||||
| Other income | ( | ||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||||||||
| Amortization expense | |||||||||||||||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||||||||||||||
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11. Segments (continued)
| Nine months ended September 30, | 2026 | 2025 | |||||||||||||||||||||||||||||||||
| ($ in thousands) | Skyward Specialty | Apollo | Total | Skyward Specialty | Total | ||||||||||||||||||||||||||||||
| Underwriting income | |||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||
| Net earned premiums | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Underwriting fee income | |||||||||||||||||||||||||||||||||||
| Commission and fee income | |||||||||||||||||||||||||||||||||||
| Total underwriting revenues | |||||||||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||||||||
| Losses and LAE | |||||||||||||||||||||||||||||||||||
| Amortization of policy acquisition costs | |||||||||||||||||||||||||||||||||||
| Other operating and general expenses | |||||||||||||||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||||||||||||||
| Fee‑based service expenses | |||||||||||||||||||||||||||||||||||
| Total underwriting expenses | |||||||||||||||||||||||||||||||||||
| Underwriting income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Reconciliation of underwriting income to net income: | |||||||||||||||||||||||||||||||||||
| Underwriting income | $ | $ | |||||||||||||||||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||||||||
| Net investment income | |||||||||||||||||||||||||||||||||||
| Net investment gains | |||||||||||||||||||||||||||||||||||
| Other income | ( | ||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||||||||
| Amortization expense | |||||||||||||||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||||||||||||||
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12. Income Taxes
The following table sets forth the Company’s income tax expense and effective tax rates for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Income tax expense | $ | $ | $ | $ | ||||||||||||||||||||||
| Effective tax rate | % | % | % | % | ||||||||||||||||||||||
The effective tax rate will differ from the statutory rate of 21 % due to tax charges associated with the effect of foreign operations, permanent differences for disallowed expenses for tax and beneficial adjustments for tax-exempt income, dividends-received deduction, and discrete items. The effect of foreign operations is primarily related to income of our foreign operations taxed at statutory tax rates of 15 % in Bermuda and 25 % in UK. The decrease in the effective tax rate for the three months ended September 30, 2026 when compared to the same 2025 period, was primarily attributable to a return-to-provision adjustment related to a research and development tax credit identified following the filing of the Apollo U.K. 2025 tax return, as well as the impact of Apollo transaction costs recognized in the third quarter of 2025 that increased the prior-year effective tax rate. The effective tax rate for the nine months ended September 30, 2026 was impacted by certain discrete tax items, primarily tax benefits from stock-based compensation, which reduced the effective tax rate by 1 %, partially offset by the impact of differing tax rates applicable to our Bermuda and U.K. operations, which increased the effective tax rate by 1.5 %.
The Company paid income taxes of $19.1 million and $49.4 million during the three and nine months ended September 30, 2026, respectively, and paid $11.0 million and $31.8 million during the three and nine months ended September 30, 2025, respectively.
13. Losses and Loss Adjustment Expenses
The following table sets forth the reconciliation of unpaid losses and loss adjustment expenses (“LAE”) as reported in the condensed consolidated balance sheets as of and for the nine months ended September 30, 2026 and 2025:
| Nine months ended September 30, | ||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | ||||||||||||||||||
| Reserves for losses and LAE, beginning of period | $ | $ | ||||||||||||||||||
| Less: reinsurance recoverable on unpaid claims, beginning of period | ( | ( | ||||||||||||||||||
| Reserves for losses and LAE, beginning of period, net of reinsurance | ||||||||||||||||||||
| Incurred, net of reinsurance, related to: | ||||||||||||||||||||
| Current period | ||||||||||||||||||||
| Prior years | ||||||||||||||||||||
| Total incurred, net of reinsurance | ||||||||||||||||||||
| Paid, net of reinsurance, related to: | ||||||||||||||||||||
| Current period | ||||||||||||||||||||
| Prior years | ||||||||||||||||||||
| Total paid | ||||||||||||||||||||
| Net reserves for losses and LAE, end of period | ||||||||||||||||||||
| Plus: reinsurance recoverable on unpaid claims, end of period | ||||||||||||||||||||
| Reserves for losses and LAE, end of period | $ | $ | ||||||||||||||||||
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14. Commission and Fee Income and Underwriting Fee Income
Skyward Underwriters Agency, Inc. (“SUA”), a subsidiary of the Company, is a managing general insurance agent and reinsurance broker for property and casualty and accident and health risks in specialty niche markets. Commission and fee income is primarily generated from SUA for the placement of insurance policies on either a third-party insurance or reinsurance company.
The following table sets forth the Company’s disaggregated revenues from contracts with customers for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| SUA commission revenue | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| SUA fee income | ||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||
| Total commission and fee revenue | ||||||||||||||||||||||||||||||||
| Commission and fee expenses | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Net commission and fee income | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Through its Apollo subsidiary ASML, the Company earns revenue for services performed in its capacity as managing agent to both its wholly owned and third‑party capitalized Lloyd’s syndicates. These revenues primarily consist of managing agency fees, which compensate the Company for underwriting oversight, operational administration, and regulatory and compliance support, as well as profit commissions, which is contingent upon the underwriting and investment performance of certain syndicates. ASML receives (i) managing agency fees from managed syndicates, including 1969, 1971 and 1972 (collectively the “Managed Syndicates”) at a rate of 0.9 % of the managed stamp capacity and for SPA1925 at 1.0 %, which is fully recognized over the period the services are rendered, (ii) profit commissions from certain syndicates, subject to a two-year deficit clause, and (iii) a share of the leader’s fee for managing consortium arrangements. Managing agency fees and services revenue are recognized over time as services are rendered, while profit commission is recognized only when it becomes probable that no significant reversal will occur. This revenue is disclosed in underwriting fee income.
The following table sets forth Apollo’s revenues from contracts with customers for the three and nine months ended September 30, 2026:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2026 | ||||||||||||||||||||||||||||||
| Managing agency fees | $ | $ | ||||||||||||||||||||||||||||||
| Profit commission & consortium overrider charged to Managed Syndicates | ||||||||||||||||||||||||||||||||
| Miscellaneous fee income | ||||||||||||||||||||||||||||||||
| Underwriting fee income | $ | $ | ||||||||||||||||||||||||||||||
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15. Underwriting, Acquisition and Insurance Expenses
The following table sets forth the components of underwriting, acquisition and insurance expenses for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Amortization of policy acquisition costs | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Other operating and general expenses | ||||||||||||||||||||||||||||||||
| Corporate expenses | ||||||||||||||||||||||||||||||||
| Total underwriting, acquisition and insurance expenses | $ | $ | $ | $ | ||||||||||||||||||||||||||||
16. Reinsurance
Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The reinsurance agreements provide the Company with increased capacity to write larger risks and maintain its exposure to loss within its risk tolerance. The Company remains obligated for amounts ceded in the event that the reinsurers do not meet their obligations.
The following tables set forth the effects of reinsurance on written and earned premiums and losses and loss adjustment expenses for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| ($ in thousands) | Written | Earned | Written | Earned | ||||||||||||||||||||||
| Direct premiums | $ | $ | $ | $ | ||||||||||||||||||||||
| Assumed premiums | ||||||||||||||||||||||||||
| Ceded premiums | ( | ( | ( | ( | ||||||||||||||||||||||
| Net premiums | $ | $ | $ | $ | ||||||||||||||||||||||
| Ceded losses and LAE incurred | $ | $ | ||||||||||||||||||||||||
| Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Written | Earned | Written | Earned | ||||||||||||||||||||||||||||||||||
| Direct premiums | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Assumed premiums | ||||||||||||||||||||||||||||||||||||||
| Ceded premiums | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Net premiums | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Ceded losses and LAE incurred | $ | $ | ||||||||||||||||||||||||||||||||||||
The following table sets forth the components of reinsurance recoverables and ceded unearned premium as of September 30, 2026 and December 31, 2025:
| ($ in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Ceded unpaid losses and LAE | $ | $ | ||||||||||||
| Ceded paid losses and LAE | ||||||||||||||
| Allowance for credit losses | ( | ( | ||||||||||||
| Reinsurance recoverables | $ | $ | ||||||||||||
| Ceded unearned premium | $ | $ | ||||||||||||
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16. Reinsurance (continued)
The Company entered into agreements with several of its reinsurers, whereby the reinsurer established funded trust accounts with the Company as the sole beneficiary. These trust accounts provide the Company additional security to collect claim recoverables under reinsurance contracts and the Company does not carry these on the balance sheet because the Company will only have custody over these accounts upon the failure of the reinsurer to pay amounts due. At September 30, 2026, the market value of these accounts was approximately $205.3 million. The trust amount will be adjusted periodically, by mutual agreement, based on claim payments and loss reserve recoverables.
Certain ceded reinsurance contracts that transfer only significant timing risk and do not transfer sufficient underwriting risk are accounted for using the deposit method of accounting. The Company’s deposit asset at September 30, 2026 and December 31, 2025 was $49.1 million and $22.7 million, respectively, and was included in other assets on the condensed consolidated balance sheets.
17. Earnings Per Share
The following table sets forth the computation of basic and diluted net earnings per share for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands, except for share and per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Denominator | ||||||||||||||||||||||||||||||||
| Basic weighted-average common shares | ||||||||||||||||||||||||||||||||
| Dilutive effect of stock units | ||||||||||||||||||||||||||||||||
| Dilutive effect of options | ||||||||||||||||||||||||||||||||
| Diluted weighted-average common share equivalents | ||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||||||||
The following table presents anti-dilutive instruments that were excluded from the calculation of diluted weighted-average common share equivalents during the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Stock units | ||||||||||||||||||||||||||||||||
| Options | ||||||||||||||||||||||||||||||||
18. Related Party Transactions
RISCOM
RISCOM provides the Company with wholesale brokerage services. RISCOM and the Company also have a managing general agency agreement. The Company holds a 20 % ownership interest in RISCOM.
Net earned premium and gross commission expense related to these agreements for the three and nine months ended September 30, 2026 and 2025 were as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Net earned premium | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Commissions | ||||||||||||||||||||||||||||||||
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18. Related Party Transactions (continued)
Premiums receivable as of September 30, 2026 and December 31, 2025 were $15.9 million and $13.9 million, respectively.
19. Acquisitions
On January 1, 2026 (the “Acquisition Date”), the Company completed the acquisition of Apollo Group Holdings Limited (“Apollo”) pursuant to the Apollo share purchase agreements and acquired 100 % of the issued and outstanding share capital of Apollo. Apollo is a U.K.-based specialty underwriting platform operating at Lloyd’s of London. Apollo underwrites a multi-class specialty insurance portfolio and offers products across Property, Casualty, Marine, Energy & Transportation, Specialty and Reinsurance, as well as digital and embedded risk programs. The Company acquired Apollo to broaden its specialty insurance platform, expand into additional specialty niches, enhance its innovation and technology capabilities, and strengthen its market position.
The fair value of the consideration transferred, or the purchase price, is approximately $559.1 million. This amount is based on (i) the issuance of 3,679,332 shares of common stock of the Company, using the closing price of Skyward common stock of $51.11 per share on December 31, 2025, the last trading day prior to the Acquisition Date, and (ii) $371.1 million in cash (the “Cash Consideration”). The table below presents the components of the fair value of consideration transferred:
| ($ in thousands, except for share and per share amounts) | ||||||||
| Share consideration | ||||||||
| Skyward Specialty Insurance Group, Inc. common stock issued to existing Apollo common stockholders | ||||||||
| Skyward Specialty Insurance Group, Inc. closing stock price on December 31, 2025 | $ | |||||||
| Consideration of Skyward Specialty Insurance Group, Inc. issued common stock | $ | |||||||
| Cash consideration | ||||||||
| Total consideration | $ | |||||||
The Company accounted for the transaction as a business combination under ASC 805, Business Combinations (“ASC 805”). The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date. The Company is considered the accounting acquirer in the transaction.
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19. Acquisitions (continued)
The following table summarizes the preliminary purchase price allocation as of the Acquisition Date:
| ($ in thousands) | January 1, 2026 | |||||||
| Assets acquired, excluding goodwill | ||||||||
| Fixed maturity securities, available-for-sale, at fair value | $ | |||||||
| Short-term investments, at fair value | ||||||||
| Cash and cash equivalents | ||||||||
| Funds at Lloyd's | ||||||||
| Premiums receivable, net | ||||||||
| Reinsurance recoverables, net | ||||||||
| Ceded unearned premium | ||||||||
| Deferred policy acquisition costs and VOBA | ||||||||
| Deferred income taxes | ||||||||
| Intangible assets, excluding goodwill, net | ||||||||
| Other assets | ||||||||
| Total assets acquired, excluding goodwill | ||||||||
| Liabilities assumed | ||||||||
| Reserves for losses and loss adjustment expenses | ||||||||
| Unearned premiums | ||||||||
| Reinsurance and premium payables | ||||||||
| Funds held for others | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Deferred income taxes | ||||||||
| Total liabilities assumed | ||||||||
| Fair value of net assets acquired, excluding goodwill | $ | |||||||
| Total consideration | $ | |||||||
| Preliminary allocation to goodwill | $ | |||||||
The Apollo acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805. The purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair values at the Acquisition Date. Goodwill recognized in the transaction represents the excess of consideration transferred over the fair value of identifiable net assets acquired, will not be deductible for tax purposes and is fully allocated to the Apollo segment. Goodwill primarily represents the expected future economic benefits arising from the acquisition, including anticipated synergies from the integration of operations, Apollo’s established specialty underwriting platform, and access to its distribution network and Lloyd’s market presence.
The identifiable intangible assets primarily relate to syndicate capacity, cover holder relationships, strategic partner syndicates and trade names. The amounts, based on preliminary valuations and subject to final adjustment, allocated to intangible assets are as follows:
| ($ in thousands) | Estimated fair value | Estimated average useful life (in years) | Estimated Annual Amortization Expense | ||||||||||||||
| Syndicate 1969 capacity - with fees | $ | Indefinite | N/A, indefinite lived asset | ||||||||||||||
| Syndicate 1971 capacity - with fees | Indefinite | N/A, indefinite lived asset | |||||||||||||||
| Cover holder relationships | $ | ||||||||||||||||
| Strategic partner syndicates | |||||||||||||||||
| Trade name | |||||||||||||||||
| Total | $ | $ | |||||||||||||||
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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
19. Acquisitions (continued)
The Company also recognized value of business acquired (“VOBA”), which represents the estimated fair value of the deferred acquisition costs of acquired in‑force insurance contracts. VOBA is amortized over one year, reflecting the expected runoff of the acquired in‑force contracts. VOBA is aggregated with deferred policy acquisition costs and included within deferred policy acquisition costs and VOBA on the consolidated balance sheets. For the three and nine months ended September 30, 2026 the Company recognized $7.4 million and $22.0 million, respectively, in underwriting, acquisition and insurance expenses, and $6.7 million and $20.1 million, respectively, in amortization expense on the consolidated statements of operations related to the amortization of VOBA.
Estimated fair values of assets acquired and liabilities assumed from Apollo are subject to change as additional information is obtained, and will be updated and finalized within the measurement period that will not extend beyond 12 months from the Acquisition Date. Any measurement period adjustments will be recorded in the period in which the adjustments are identified, as if they had been recognized as of the acquisition date.
The results of operations for Apollo of $87.9 million and $246.8 million of revenue for the three and nine months ended September 30, 2026, respectively, and $13.9 million and $36.9 million of net income for the three and nine months ended September 30, 2026, respectively, have been included within the accompanying consolidated statements of operations and comprehensive income. All transaction expenses incurred by the Company were expensed as incurred and reflected in the Company’s results of operations for the year ended December 31, 2025 in accordance with ASC 805. No
20. Commitments and Contingencies
Litigation
The Company is named as a party in various legal actions arising from claims made under insurance policies and contracts. Those actions are considered by the Company in estimating the losses and loss adjustment expense reserves. Also, from time to time, the Company is a defendant in various legal actions that relate to bad faith claims, disputes with third parties or that involve alleged errors and omissions. The Company records accruals for these items to the extent the losses are probable and reasonably estimable. Although the ultimate outcome of these matters cannot be determined at this time, based on present information, the availability of insurance coverage and advice received from outside legal counsel, the Company believes the resolution of any such matters will not, individually or in the aggregate, have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
Indemnification
In conjunction with the sale of business assets and subsidiaries, the Company has provided indemnifications to certain buyers. Certain indemnifications cover typical representations and warranties related to the responsibilities to perform under the sales contracts. The amount of potential exposure covered by the indemnifications is difficult to determine because the indemnifications cover a variety of matters, operations and scenarios. Certain of these indemnifications have no time limit. At this time, the Company does not have reason to believe any such significant claims exist.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The term “Skyward Group” as used below refers to the unified holding company brand for Skyward Specialty and Apollo and the terms “our Company,” “we,” “us,” and “our” as used below refer to Skyward Specialty Insurance Group, Inc. and its consolidated subsidiaries. The term “third quarter” as used below refers to the three and nine months ended September 30, for the time period then ended. We discuss certain key metrics which provide useful information about our business and the operational factors underlying our financial performance. Many of these metrics are generally standard among insurance companies and help to provide comparability with our peers. Select insurance, accounting, operating and financial terms for Skyward Group are defined in the sections entitled “Select Insurance and Financial Terms” and “Key Operating and Financial Metrics” included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). Following our acquisition of Apollo on January 1, 2026 (“Apollo Acquisition”), the definitions of select insurance, accounting, operating and financial terms have been updated in the “Updates to Key Operating and Financial Metrics” section below in this Form 10-Q.
The discussion and analysis below include certain forward-looking statements that are subject to risks, uncertainties and other factors described in “Risk Factors” in our 2025 Form 10-K. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including our ability to successfully integrate Apollo and realize the anticipated benefits of the acquisition, risks related to our Lloyd’s operations, including changes in syndicate participations and Lloyd’s regulatory requirements, changes in interest rates, credit markets and the value of our investment portfolio, and fluctuations in foreign currency exchange rate.
The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2026, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in our 2025 Form 10-K.
The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”).
Overview
Founded in 2006, Skyward Group is the holding company brand for its U.S. and U.K. businesses, Skyward Specialty Insurance Group, Inc. and Apollo, respectively, delivering a comprehensive suite of specialized insurance and reinsurance solutions across global specialty property and casualty markets. We focus our business on markets that are underserved, dislocated and/or for which standard insurance coverages are insufficient or inadequate to meet the needs of businesses, including our customers and prospective customers operating in these markets. Our customers typically require highly specialized, customized underwriting solutions and claims capabilities. As such, we develop and deliver tailored insurance products and services to address each of the niche markets we serve.
As previously disclosed, on January 1, 2026, the acquisition with Apollo closed. We subsequently announced the introduction of Skyward Group as the unified holding company brand for Skyward Specialty and Apollo, following the successful completion of the transaction. The consideration for the entire issued share capital of Apollo under the Apollo SPAs was $559.1 million, which included (i) $371.1 million in cash (the “Cash Consideration”) and (ii) the issuance of 3,679,332 shares of the Company’s common stock.
Apollo is an integrated specialty insurance and reinsurance group operating within the Lloyd’s of London market, leveraging Lloyd’s global licensing, centralized underwriting infrastructure, and long‑standing distribution networks to access innovative specialty classes across international markets. Apollo’s model incorporates technology enabled underwriting, innovative risk assessment tools, and data driven portfolio management frameworks that are closely aligned with our strategic priorities. Apollo’s operations also include the management of a dedicated syndicate focused on emerging digital economy, autonomy, and platform‑based risks, reflecting a long standing emphasis on innovation and forward‑looking underwriting practices.
Skyward Specialty and Apollo continue to operate as distinct, market facing brands under the newly introduced Skyward Group brand. This brand architecture preserves the equity and reputational strength of both organizations while supporting a unified strategic direction and enhanced collaboration across the combined enterprise.
Skyward Specialty’s U.S. insurance companies are rated ‘A’ (Excellent) by AM Best, while Apollo’s underwriting operations continue within the highly rated Lloyd’s market, which carries an ‘A+' (Superior) rating by AM Best and 'AA-' (Very Strong) ratings by S&P Global and Fitch Ratings.
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Updates to Key Operating and Financial Metrics
We discuss certain key metrics which provide useful information about our business and the operational factors underlying our financial performance. These metrics are generally standard among insurance companies and help to provide comparability with our peers. For a glossary of terms for Skyward Specialty Insurance Group, Inc. and its subsidiaries and affiliates and a glossary of selected insurance and accounting terms, see the section entitled “Key Operating and Financial Metrics” included in the 2025 Form 10-K. The following terms have been updated after the Apollo acquisition.
Operating income (loss) is a non-GAAP financial measure defined as net income excluding net investment gains and losses, amortization expense, goodwill impairment charges and other income and expenses. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of operating income (loss) to net income (loss), which is the most directly comparable financial metric prepared in accordance with GAAP.
Underwriting income (loss) is a non-GAAP financial measure defined as income (loss) before income taxes excluding net investment income, net investment gains and losses, impairment charges, interest expense, amortization expense and other income and expenses. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of underwriting income (loss) to net income, which is the most directly comparable financial metric prepared in accordance with GAAP.
Adjusted pro forma gross written premiums is a non-GAAP financial measure defined as pro forma gross written premiums adjusted for the impact of changes in Apollo syndicate participation to evaluate premium growth trends on a consistent participation basis across periods.
Adjusted pro forma fee generating gross written premiums is a non-GAAP financial measure defined as pro forma fee generating gross written premiums adjusted for the impact of changes in Apollo syndicate participation percentages that provide a more meaningful comparison of fee generating business on a consistent participation basis across periods.
Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity excluding goodwill and intangible assets and the related deferred tax impact. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of tangible stockholders’ equity to stockholders’ equity, which is the most directly comparable financial metric prepared in accordance with GAAP.
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Consolidated Results of Operations
The following table summarizes our consolidated results for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Gross written premiums | $ | 803,485 | $ | 606,509 | $ | 2,211,743 | $ | 1,726,749 | ||||||||||||||||||||||||
| Ceded written premiums | (301,707) | (165,342) | (791,466) | (603,098) | ||||||||||||||||||||||||||||
| Net written premiums | $ | 501,778 | $ | 441,167 | $ | 1,420,277 | $ | 1,123,651 | ||||||||||||||||||||||||
| Net earned premiums | $ | 406,864 | $ | 351,797 | $ | 1,285,343 | $ | 947,705 | ||||||||||||||||||||||||
Underwriting fee income(1) | 11,000 | — | 33,666 | — | ||||||||||||||||||||||||||||
| Commission and fee income | 3,118 | 1,904 | 6,979 | 6,440 | ||||||||||||||||||||||||||||
Non-cat loss and LAE | 243,876 | 211,760 | 769,455 | 569,831 | ||||||||||||||||||||||||||||
Cat loss and LAE(2) | 7,160 | 2,020 | 23,545 | 12,520 | ||||||||||||||||||||||||||||
| Losses and LAE | 251,036 | 213,780 | 793,000 | 582,351 | ||||||||||||||||||||||||||||
Net policy acquisition costs | 61,622 | 49,243 | 192,392 | 138,369 | ||||||||||||||||||||||||||||
Other operating and general expenses | 51,415 | 48,836 | 159,259 | 124,714 | ||||||||||||||||||||||||||||
Corporate expense | 4,965 | 3,597 | 14,246 | 10,740 | ||||||||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 118,002 | 101,676 | 365,897 | 273,823 | ||||||||||||||||||||||||||||
Fee‑based service expenses(1) | 4,075 | — | 12,807 | — | ||||||||||||||||||||||||||||
Underwriting income(3) | $ | 47,869 | $ | 38,245 | $ | 154,284 | $ | 97,971 | ||||||||||||||||||||||||
| Net investment income | $ | 33,879 | $ | 22,014 | $ | 91,661 | $ | 60,140 | ||||||||||||||||||||||||
| Net investment gains | $ | 466 | $ | 7,047 | $ | 3,050 | $ | 16,887 | ||||||||||||||||||||||||
| Interest expense | $ | 6,997 | $ | 1,919 | $ | 23,528 | $ | 5,629 | ||||||||||||||||||||||||
| Amortization expense | $ | 8,843 | $ | 455 | $ | 26,529 | $ | 1,164 | ||||||||||||||||||||||||
| Income before income taxes | $ | 63,644 | $ | 60,547 | $ | 189,277 | $ | 161,777 | ||||||||||||||||||||||||
| Net income | $ | 49,796 | $ | 45,901 | $ | 148,565 | $ | 126,798 | ||||||||||||||||||||||||
Operating income(3) | $ | 58,486 | $ | 44,228 | $ | 174,577 | $ | 119,512 | ||||||||||||||||||||||||
Non-cat loss and LAE | 59.9 | % | 60.2 | % | 59.9 | % | 60.1 | % | ||||||||||||||||||||||||
Cat loss and LAE(2) | 1.8 | % | 0.6 | % | 1.8 | % | 1.3 | % | ||||||||||||||||||||||||
| Net loss and LAE ratio | 61.7 | % | 60.8 | % | 61.7 | % | 61.4 | % | ||||||||||||||||||||||||
Net policy acquisition costs | 15.2 | % | 14.0 | % | 14.9 | % | 14.6 | % | ||||||||||||||||||||||||
Other operating and general expenses | 12.6 | % | 13.9 | % | 12.4 | % | 13.2 | % | ||||||||||||||||||||||||
Commission and fee income | (0.8) | % | (0.5) | % | (0.5) | % | (0.7) | % | ||||||||||||||||||||||||
Corporate expense | 1.2 | % | 1.0 | % | 1.1 | % | 1.1 | % | ||||||||||||||||||||||||
| Net expense ratio | 28.2 | % | 28.4 | % | 27.9 | % | 28.2 | % | ||||||||||||||||||||||||
| Combined ratio | 89.9 | % | 89.2 | % | 89.6 | % | 89.6 | % | ||||||||||||||||||||||||
| Annualized return on equity | 15.7 | % | 19.7 | % | 17.3 | % | 19.3 | % | ||||||||||||||||||||||||
Annualized return on tangible equity(3) | 23.0 | % | 21.8 | % | 22.1 | % | 21.4 | % | ||||||||||||||||||||||||
Annualized operating return on equity(3) | 18.4 | % | 19.0 | % | 20.4 | % | 18.2 | % | ||||||||||||||||||||||||
Annualized operating return on tangible equity(3) | 27.0 | % | 21.0 | % | 25.9 | % | 20.2 | % | ||||||||||||||||||||||||
(1) Not included in the combined ratio | ||||||||||||||||||||||||||||||||
(2) Current accident year | ||||||||||||||||||||||||||||||||
(3) See “Reconciliation of Non-GAAP Financial Measures” in this Item 2 | ||||||||||||||||||||||||||||||||
(4) The underwriting, acquisition and insurance expense ratio includes corporate expenses not allocated to underwriting segments. | ||||||||||||||||||||||||||||||||
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Reconciliation of Non-GAAP Financial Measures
Operating Income
The following table provides a reconciliation of operating income to net income for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||||||||||||||||||||||||||||||||
| Income as reported | $ | 63,644 | $ | 49,796 | $ | 60,547 | $ | 45,901 | $ | 189,277 | $ | 148,565 | $ | 161,777 | $ | 126,798 | ||||||||||||||||||||||||||||||||||
| Less (add): | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment gains | 466 | 365 | 7,047 | 5,342 | 3,050 | 2,394 | 16,887 | 13,236 | ||||||||||||||||||||||||||||||||||||||||||
| Amortization expense | (8,843) | (6,919) | (455) | (345) | (26,529) | (20,823) | (1,164) | (912) | ||||||||||||||||||||||||||||||||||||||||||
| Other income (loss) | 14 | 11 | (236) | (179) | 42 | 33 | (216) | (169) | ||||||||||||||||||||||||||||||||||||||||||
| Other expenses | (2,744) | (2,147) | (4,149) | (3,145) | (9,703) | (7,616) | (6,212) | (4,869) | ||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 74,751 | $ | 58,486 | $ | 58,340 | $ | 44,228 | $ | 222,417 | $ | 174,577 | $ | 152,482 | $ | 119,512 | ||||||||||||||||||||||||||||||||||
Underwriting Income
The following table provides a reconciliation of underwriting income to income before income taxes for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Income before income taxes | $ | 63,644 | $ | 60,547 | $ | 189,277 | $ | 161,777 | ||||||||||||||||||||||||
| Add: | ||||||||||||||||||||||||||||||||
| Interest expense | 6,997 | 1,919 | 23,528 | 5,629 | ||||||||||||||||||||||||||||
| Amortization expense | 8,843 | 455 | 26,529 | 1,164 | ||||||||||||||||||||||||||||
| Other expenses | 2,744 | 4,149 | 9,703 | 6,212 | ||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| Net investment income | 33,879 | 22,014 | 91,661 | 60,140 | ||||||||||||||||||||||||||||
| Net investment gains | 466 | 7,047 | 3,050 | 16,887 | ||||||||||||||||||||||||||||
| Other income | 14 | (236) | 42 | (216) | ||||||||||||||||||||||||||||
| Underwriting income | $ | 47,869 | $ | 38,245 | $ | 154,284 | $ | 97,971 | ||||||||||||||||||||||||
Adjusted pro forma gross written premiums
The following tables represent pro forma gross written premiums adjusted for the impact of changes in Apollo syndicate participation for the three and nine months ended September 30, 2025:
| $ in thousands | Three months ended September 30, | |||||||||||||||||||||||||
| Syndicate 1969 | Syndicate 1971 | Total Apollo Segment | Total Skyward Group | |||||||||||||||||||||||
| Pro forma gross written premiums | $ | 73,525 | $ | 57,449 | $ | 130,974 | $ | 737,483 | ||||||||||||||||||
| Impact of the change in participation(s) | (12,420) | 12,225 | (195) | (195) | ||||||||||||||||||||||
Adjusted pro forma gross written premiums | $ | 61,105 | $ | 69,674 | $ | 130,779 | $ | 737,288 | ||||||||||||||||||
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| $ in thousands | Nine months ended September 30, | |||||||||||||||||||||||||
| Syndicate 1969 | Syndicate 1971 | Total Apollo Segment | Total Skyward Group | |||||||||||||||||||||||
| Pro forma gross written premiums | $ | 192,828 | $ | 86,727 | $ | 279,555 | $ | 2,006,304 | ||||||||||||||||||
| Impact of the change in participation(s) | (32,664) | 12,079 | (20,585) | (20,585) | ||||||||||||||||||||||
Adjusted pro forma gross written premiums | $ | 160,164 | $ | 98,806 | $ | 258,970 | $ | 1,985,719 | ||||||||||||||||||
Adjusted pro forma fee generating gross written premiums
The following tables represent pro forma fee generating gross written premiums adjusted for the impact of changes in Apollo syndicate participation for the three and nine months ended September 30, 2025:
| $ in thousands | Three months ended September 30, | |||||||||||||||||||
| Aligned Syndicates | Partner Syndicates | Total | ||||||||||||||||||
| Pro forma fee generating gross written premiums | $ | 369,353 | $ | 67,355 | $ | 436,708 | ||||||||||||||
| Impact of the change in participation(s) | 195 | N/A | 195 | |||||||||||||||||
Adjusted pro forma fee generating gross written premiums | $ | 369,548 | $ | 67,355 | $ | 436,903 | ||||||||||||||
| $ in thousands | Nine months ended September 30, | |||||||||||||||||||
| Aligned Syndicates | Partner Syndicates | Total | ||||||||||||||||||
| Pro forma fee generating gross written premiums | $ | 696,593 | $ | 181,528 | $ | 878,121 | ||||||||||||||
| Impact of the change in participation(s) | 20,585 | N/A | 20,585 | |||||||||||||||||
Adjusted pro forma fee generating gross written premiums | $ | 717,178 | $ | 181,528 | $ | 898,706 | ||||||||||||||
Tangible Stockholders’ Equity
The following table provides a reconciliation of tangible stockholders’ equity to stockholders’ equity for the periods ended September 30, 2026 and 2025:
| September 30, | December 31, | |||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2025 | |||||||||||||||||
| Stockholders’ equity | $ | 1,276,268 | $ | 961,423 | $ | 1,009,565 | ||||||||||||||
| Less: Goodwill and intangible assets | 469,054 | 88,417 | 88,040 | |||||||||||||||||
| Add: Deferred tax impact | 65,500 | — | — | |||||||||||||||||
| Tangible stockholders’ equity | $ | 872,714 | $ | 873,006 | $ | 921,525 | ||||||||||||||
Annualized Operating Return on Equity
The following table provides a reconciliation of annualized operating return on equity to annualized return on equity for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Numerator: annualized operating income | $ | 233,944 | $ | 176,912 | $ | 232,769 | $ | 159,349 | ||||||||||||||||||||||||
| Denominator: average stockholders’ equity | $ | 1,271,903 | $ | 930,669 | $ | 1,142,917 | $ | 877,711 | ||||||||||||||||||||||||
Annualized operating return on equity | 18.4 | % | 19.0 | % | 20.4 | % | 18.2 | % | ||||||||||||||||||||||||
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Annualized Return on Tangible Equity
Annualized return on tangible equity for the three and nine months ended September 30, 2026 and 2025 reconciles to annualized return on equity as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Numerator: annualized net income | $ | 199,184 | $ | 183,604 | $ | 198,087 | $ | 169,064 | ||||||||||||||||||||||||
| Denominator: average tangible stockholders’ equity | $ | 867,283 | $ | 842,063 | $ | 897,120 | $ | 789,829 | ||||||||||||||||||||||||
Annualized return on tangible equity | 23.0 | % | 21.8 | % | 22.1 | % | 21.4 | % | ||||||||||||||||||||||||
Annualized Operating Return on Tangible Equity
Annualized operating return on tangible equity for the three and nine months ended September 30, 2026 and 2025 reconciles to annualized return on equity as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Numerator: annualized operating income | $ | 233,944 | $ | 176,912 | $ | 232,769 | $ | 159,349 | ||||||||||||||||||||||||
| Denominator: average tangible stockholders’ equity | $ | 867,283 | $ | 842,063 | $ | 897,120 | $ | 789,829 | ||||||||||||||||||||||||
Annualized operating return on tangible equity | 27.0 | % | 21.0 | % | 25.9 | % | 20.2 | % | ||||||||||||||||||||||||
Segment Information
Beginning in the first quarter of 2026, we reported our results under two reportable segments: the Skyward Specialty segment and the Apollo segment. The Skyward Specialty segment represents our U.S. based specialty insurance operations conducted under the Skyward Specialty brand and the Apollo segment represents Apollo’s U.K. based operations, including its managed Lloyd’s syndicates and managing agency activities.
This revised segment structure reflects the Company’s organizational alignment under Skyward Group, and enhances the transparency of the distinct operating environments, regulatory frameworks, and market dynamics in which the Company operates. Our segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to our chief operating decision makers. The Chief Executive Officer is the Company’s chief operating decision maker. They do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for our two underwriting segments based on underwriting income or loss. We do not manage our assets by segment, with the exception of goodwill and intangible assets, and investment income and corporate expenses are not allocated to each underwriting segment.
We determined our reportable segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of our consolidated financial statements.
Skyward Specialty Segment
Our Skyward Specialty segment is organized into nine distinct underwriting divisions each of which has dedicated underwriting leadership supported by high-quality technical staff with deep experience in their respective niches. We believe this structure and expertise allow us to serve the needs of our customers effectively and be a value-add partner to our distributors, while earning attractive risk-adjusted returns. During the first quarter of 2026, we updated our underwriting divisions to align with how management currently oversees the business, allocates resources and evaluates operating performance. Our Credit unit is now included in the Surety unit and has been renamed Credit & Surety and Agriculture and Credit (Re)insurance has been renamed Global Agriculture. The Construction & Energy Solutions division is now the Energy Solutions division. Business that we are no longer writing is reported in exited business. Effective in the third quarter of 2026, the Company renamed the Specialty Programs division to Strategic Distribution Partners (or “Strategic “Distribution”) to better reflect the breadth of this division’s distribution model, the Company’s ownership position in many of these distributors, and the addition of the U.S. distribution of ibott which will be captured in this division. Prior reporting periods have been conformed to reflect the new presentation.
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Underwriting Results
Premiums
The following tables present the Skyward Specialty segment’s gross written premiums by underwriting division, net written premiums and net earned premiums for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Accident & Health | $ | 99,131 | $ | 63,147 | $ | 35,984 | 57.0 | % | ||||||||||||||||||
| Captives | 50,185 | 67,956 | (17,771) | (26.2 | %) | |||||||||||||||||||||
| Credit & Surety | 67,210 | 52,785 | 14,425 | 27.3 | % | |||||||||||||||||||||
| Energy Solutions | 55,646 | 66,576 | (10,930) | (16.4 | %) | |||||||||||||||||||||
| Global Agriculture | 192,161 | 159,057 | 33,104 | 20.8 | % | |||||||||||||||||||||
| Global Property | 22,318 | 27,649 | (5,331) | (19.3 | %) | |||||||||||||||||||||
| Professional Lines | 31,323 | 34,637 | (3,314) | (9.6 | %) | |||||||||||||||||||||
| Strategic Distribution Partners | 109,565 | 82,771 | 26,794 | 32.4 | % | |||||||||||||||||||||
| Transactional E&S | 40,745 | 50,950 | (10,205) | (20.0 | %) | |||||||||||||||||||||
| Total continuing business | 668,284 | 605,528 | 62,756 | 10.4 | % | |||||||||||||||||||||
| Exited business | (2) | 981 | (983) | NM(1) | ||||||||||||||||||||||
| Total Skyward Specialty segment gross written premiums | $ | 668,282 | $ | 606,509 | $ | 61,773 | 10.2 | % | ||||||||||||||||||
| Net written premiums | $ | 403,897 | $ | 441,167 | $ | (37,270) | (8.4 | %) | ||||||||||||||||||
| Net earned premiums | $ | 329,958 | $ | 351,797 | $ | (21,839) | (6.2 | %) | ||||||||||||||||||
(1) Not meaningful. | ||||||||||||||||||||||||||
| Nine months ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Accident & Health | $ | 286,596 | $ | 186,805 | $ | 99,791 | 53.4 | % | ||||||||||||||||||
| Captives | 172,350 | 211,879 | (39,529) | (18.7 | %) | |||||||||||||||||||||
| Credit & Surety | 195,143 | 152,944 | 42,199 | 27.6 | % | |||||||||||||||||||||
| Energy Solutions | 167,202 | 216,992 | (49,790) | (22.9 | %) | |||||||||||||||||||||
| Global Agriculture | 406,452 | 296,853 | 109,599 | 36.9 | % | |||||||||||||||||||||
| Global Property | 127,944 | 158,327 | (30,383) | (19.2 | %) | |||||||||||||||||||||
| Professional Lines | 102,529 | 112,409 | (9,880) | (8.8 | %) | |||||||||||||||||||||
| Strategic Distribution Partners | 315,773 | 231,401 | 84,372 | 36.5 | % | |||||||||||||||||||||
| Transactional E&S | 143,105 | 156,417 | (13,312) | (8.5 | %) | |||||||||||||||||||||
| Total continuing business | 1,917,094 | 1,724,027 | 193,067 | 11.2 | % | |||||||||||||||||||||
| Exited business | 765 | 2,722 | (1,957) | NM(1) | ||||||||||||||||||||||
| Total Skyward Specialty segment gross written premiums | $ | 1,917,859 | $ | 1,726,749 | $ | 191,110 | 11.1 | % | ||||||||||||||||||
| Net written premiums | $ | 1,201,893 | $ | 1,123,651 | $ | 78,242 | 7.0 | % | ||||||||||||||||||
| Net earned premiums | $ | 1,072,247 | $ | 947,705 | $ | 124,542 | 13.1 | % | ||||||||||||||||||
(1) Not meaningful. | ||||||||||||||||||||||||||
For the third quarter and first nine months of 2026, the 10.4% and 11.2% increases in gross written premiums for continuing business, when compared to the same 2025 periods. Growth was primarily driven by new business in our accident & health, global agriculture, strategic distribution partners and credit & surety divisions, although growth in global agriculture was tempered by lower-than-expected demand in our dairy and livestock business as higher input costs continued to pressure farmer cash flows and margins. Premiums were lower in energy solutions and captives, primarily due to non-renewing business, and in global property, where increased competition and lower rates continued to pressure premium growth, while transactional E&S also experienced lower premiums in the third quarter, reflecting lower rates, renewals and new business.
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Net written premiums for the third quarter of 2026 were $403.9 million compared to $441.2 million for the same 2025 period, a decrease of $37.3 million or 8.4%. Net earned premiums for the third quarter of 2026 were $330.0 million compared to $351.8 million for the same 2025 period, a decrease of $21.8 million or 6.2%. During the third quarter of 2026, net written and earned premiums were impacted by (i) lower-than-expected demand in our dairy and livestock business, reported in the global agriculture division, as higher input costs continued to pressure farmer cash flows and margins, and (ii) the new dairy and livestock reinsurance placement.
Net written premiums for the first nine months of 2026 were $1,201.9 million compared to $1,123.7 million for the same 2025 period, an increase of $78.2 million or 7.0%. Net earned premiums for the first nine months of 2026 were $1,072.2 million compared to $947.7 million for the same 2025 period, an increase of $124.5 million or 13.1%. The increases in net written and earned premiums for the first nine months of 2026 were primarily driven by the same factors that drove the increase in gross written premiums discussed above, partially offset by the impacts of lower-than-expected demand in our dairy and livestock business and the new dairy and livestock reinsurance placement.
For additional information regarding our reinsurance programs, see the “Reinsurance” discussion included in this Item 2.
Combined Ratio
The following tables set forth the components of the Skyward Specialty segment’s combined ratios for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| ($ in thousands) | $ Amount | % of Net Earned Premiums | $ Amount | % of Net Earned Premiums | ||||||||||||||||||||||
Losses and LAE: | ||||||||||||||||||||||||||
Non-cat loss and LAE | $ | 201,413 | 61.1 | % | $ | 211,760 | 60.2 | % | ||||||||||||||||||
Cat loss and LAE(1) | 5,000 | 1.5 | % | 2,020 | 0.6 | % | ||||||||||||||||||||
| Total losses and LAE | 206,413 | 62.6 | % | 213,780 | 60.8 | % | ||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Net policy acquisition expenses | 47,033 | 14.2 | % | 49,243 | 13.9 | % | ||||||||||||||||||||
| Other operating and general expenses | 41,018 | 12.4 | % | 48,836 | 13.9 | % | ||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 88,051 | 26.6 | % | 98,079 | 27.8 | % | ||||||||||||||||||||
| Less: commission and fee income | (3,118) | (0.9 | %) | (1,904) | (0.5 | %) | ||||||||||||||||||||
| Total net expenses | $ | 84,933 | 25.7 | % | $ | 96,175 | 27.3 | % | ||||||||||||||||||
| Combined ratio | 88.3 | % | 88.1 | % | ||||||||||||||||||||||
(1) Current accident year | ||||||||||||||||||||||||||
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| Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | $ Amount | % of Net Earned Premiums | $ Amount | % of Net Earned Premiums | ||||||||||||||||||||||||||||||||||
Losses and LAE: | ||||||||||||||||||||||||||||||||||||||
Non-cat loss and LAE | $ | 653,823 | 60.9 | % | $ | 569,831 | 60.1 | % | ||||||||||||||||||||||||||||||
Cat loss and LAE(1) | 17,788 | 1.7 | % | 12,520 | 1.3 | % | ||||||||||||||||||||||||||||||||
| Total losses and LAE | 671,611 | 62.6 | % | 582,351 | 61.4 | % | ||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||
| Net policy acquisition expenses | 151,019 | 14.2 | % | 138,369 | 14.6 | % | ||||||||||||||||||||||||||||||||
| Other operating and general expenses | 128,126 | 11.9 | % | 124,714 | 13.2 | % | ||||||||||||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 279,145 | 26.1 | % | 263,083 | 27.8 | % | ||||||||||||||||||||||||||||||||
| Less: commission and fee income | (6,979) | (0.7 | %) | (6,440) | (0.7 | %) | ||||||||||||||||||||||||||||||||
| Total net expenses | $ | 272,166 | 25.4 | % | $ | 256,643 | 27.1 | % | ||||||||||||||||||||||||||||||
| Combined ratio | 88.0 | % | 88.5 | % | ||||||||||||||||||||||||||||||||||
(1) Current accident year | ||||||||||||||||||||||||||||||||||||||
The loss ratios for the third quarter and first nine months of 2026 increased 1.8 points and 1.2 points, respectively, when compared to the same 2025 periods. Catastrophe losses in the third quarter and first nine months of 2026 were primarily due to convective storms, while catastrophe losses in the same 2025 periods were driven by convective storms in the South and Midwest and the California wildfires. The loss ratio for the first nine months of 2026 was also impacted by winter storms. The increases in the non-cat loss and LAE ratios, when compared to the same 2025 periods, were due to shifts in business mix driven by growth in the accident & health and global agriculture divisions, both of which generally have higher loss ratios.
The expense ratios for the third quarter and first nine months of 2026 improved 1.6 points and 1.7 points, respectively, when compared to the same 2025 periods, primarily driven by business mix shift and enhanced operating efficiencies. The expense ratio for the first nine months of 2026 also benefited from scale benefits as net earned premiums outpaced expense growth.
The expense ratios for all periods presented exclude the impact of corporate expenses which are presented separately in the combined group’s expense ratio. It also excludes IPO and management incentive plan related stock compensation, which are reported in other expenses in our condensed consolidated statements of operations and comprehensive income.
Apollo Segment
Our Apollo segment operates within the Lloyd’s of London market, leveraging Lloyd’s global licensing, centralized underwriting infrastructure, and long‑standing distribution networks to access innovative specialty classes across international markets.
Syndicate 1969 – Lloyd’s Specialist Syndicate (“Syndicate 1969”): Syndicate 1969 is a diversified, multi‑class specialty underwriting syndicate. Apollo underwrites a broad portfolio of traditional specialty lines, including property, casualty, marine, energy & transport, and a variety of other specialty classes. The syndicate’s business mix is designed around disciplined risk selection, class‑specific underwriting teams, and a balanced mix of short‑ and medium‑tail exposures.
Syndicate 1971 – Digital Economy Syndicate (“Syndicate 1971”): Syndicate 1971 is a digital‑economy and innovation‑focused underwriting syndicate designed to support clients operating in the new economy, including technology‑enabled platforms, autonomous mobility enterprises, human logistics operators, and other emerging, data‑driven business models. Underwriting emphasizes data rich partnerships, bespoke coverage structures, and advanced analytical tools that inform pricing and risk assessment. The product suite includes liability coverages tailored for platform‑based models, autonomous vehicle ecosystems, electrification transitions, and related next‑generation exposures. The syndicate also partners with clients on ongoing data sharing, enabling enhanced portfolio insights and continuous refinement of underwriting models.
Syndicate 1972 – Reshare (“Syndicate 1972”): Syndicate 1972 commenced underwriting in 2026 and operates as a dedicated quota‑share reinsurance vehicle supporting Apollo’s broader underwriting platform. The syndicate provides
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proportional reinsurance capacity primarily to Syndicates 1969 and 1971, enabling efficient capital deployment, portfolio optimization, and risk diversification across the Apollo segment.
Managed Premiums: In addition to its own underwriting syndicates, Apollo operates a managing‑agency platform, administering several third‑party syndicates on behalf of external capital providers. Through this structure, Apollo delivers managing agency services, including oversight, compliance, performance monitoring, and operational support. These arrangements allow Apollo to expand its access to innovative and emerging specialty products while generating fee based income.
U.K. and Lloyd’s of London
In the U.K., under the Financial Services and Markets Act 2000 (“FSMA”), no person may carry on a regulated activity unless authorized or exempt. Effecting or intermediating contracts of insurance or reinsurance are regulated activities requiring authorization. Effecting contracts of insurance requires authorization by the Prudential Regulation Authority (“PRA”) and is regulated by the Financial Conduct Authority (“FCA”). Intermediating contracts of insurance requires authorization by the FCA.
Under the Financial Services Act 2012, the FCA is a conduct regulator for all U.K. firms carrying on regulated activity in the U.K. while the PRA is the prudential regulator for U.K. banks, building societies, credit unions, insurers and major investment firms. As a prudential regulator, the PRA’s general objective is to promote the safety and soundness of the firms it regulates. The PRA rules require financial firms to hold sufficient capital and have adequate risk controls in place.
The FCA’s statutory strategic objective is to ensure that relevant markets function well and have operational objectives to protect consumers and protect financial markets and to promote competition. It makes rules covering how the firm must be managed and requirements relating to the firm’s systems and controls, how business must be conducted and the firm’s arrangements to manage financial crime risk. The PRA and the FCA require regular and ad hoc reporting and monitor compliance with their respective rule books through a variety of means including the collection of data, industry reviews and site visits.
Lloyd’s is a society of corporate and individual members that underwrite insurance and reinsurance as members of syndicates. A syndicate is made up of one or more members that form a group to accept insurance and reinsurance risks. Each syndicate is managed by a managing agent that writes insurance business on behalf of the members of the syndicate. Syndicate members receive profits or bear losses in proportion to their respective shares in the syndicate for each underwriting year of account.
Lloyd’s is subject to U.K. law and is authorized under the FSMA. The Lloyd’s Act 1982 defines the governance structure and rules under which the society operates. Under the Lloyd’s Act 1982, the Council of Lloyd’s is responsible for managing, supervising and supporting the Lloyd’s market. Lloyd’s agrees to syndicates’ business plans and evaluates performance against those plans. Syndicates are required to underwrite only in accordance with their agreed business plans. If they fail to do so, Lloyd’s can take a range of actions including, as a last resort, prohibiting a syndicate from underwriting.
Lloyd’s has a global network of licenses and authorizations, and underwriters at Lloyd’s may write business in countries where Lloyd’s has authorized status or exemptions available to non-admitted insurers or reinsurers. Lloyd’s licenses can only be used if the Syndicate Business Forecast, agreed annually with Lloyd’s, names those countries. Lloyd’s also manages and protects the Lloyd’s network of international licenses, monitors syndicates’ compliance with Lloyd’s Principles for doing business and is responsible for setting both member and central capital levels.
Apollo Group Holdings Limited
Apollo, through its subsidiary ASML, is authorized and regulated by the PRA and regulated by the FCA to conduct insurance and reinsurance business. ASML is a Lloyd’s managing agent authorized by Lloyd’s to manage approved Lloyd’s syndicates.
Bermuda
Apollo Bermuda Limited (“ABL”) is licensed in Bermuda as a Class 3A commercial insurer with the provisions of the Bermuda Insurance Act 1978 (the “Insurance Act”). ABL is a wholly owned subsidiary of Apollo. The principal activity of ABL is underwriting an affiliated quota share of Apollo 16 Limited, a corporate member supporting the underwriting capital for Syndicate 1969 and Syndicate 1971.
The Insurance Act provides that no person shall carry on any insurance or reinsurance business in or from within Bermuda unless registered as an insurer by the Bermuda Monetary Authority (“BMA”) under the Insurance Act. The Insurance Act imposes upon Bermuda insurance companies, among other things, solvency and liquidity standards, auditing
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and reporting requirements, and grants the BMA powers to supervise, investigate, require information and demand the production of documents and intervene in the affairs of insurance companies.
In addition, ABL must comply with all requirements pertaining to Class 3A insurers, which includes, among other things: the appointment of a loss reserve specialist and an independent auditor, maintaining a principal office in Bermuda and the appointment of a principal representative in Bermuda, the filing of annual Statutory Financial Returns together with annual GAAP financial statements and an annual Capital and Solvency Return, compliance with minimum and enhanced capital requirements, together with certain restrictions on reductions of capital and the payment of dividends and distributions as well as group solvency and supervision rules, if applicable, and compliance with the Insurance Code of Conduct.
Underwriting Results
Select Apollo metrics for the third quarter and first nine months of 2025 are presented on a pro forma basis for comparative purposes only and are not necessarily indicative of the operating results that Skyward Group would have recognized had the acquisition actually been completed on January 1, 2025. Pro forma information is unaudited.
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Premiums
The following tables set forth gross written premiums by underwriting division for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025(1) | Change | % Change | ||||||||||||||||||||||
| Syndicate 1969 | $ | 67,520 | $ | 61,105 | $ | 6,415 | 10.5 | % | ||||||||||||||||||
| Syndicate 1971 | 67,683 | 69,674 | (1,991) | (2.9 | %) | |||||||||||||||||||||
| Total gross written premiums | $ | 135,203 | $ | 130,779 | $ | 4,424 | 3.4 | % | ||||||||||||||||||
| Net written premiums | $ | 97,881 | $ | — | $ | — | — | % | ||||||||||||||||||
| Net earned premiums | $ | 76,906 | $ | — | $ | — | — | % | ||||||||||||||||||
(1) Prior year information is pro forma and is adjusted for the impact of the change in participations. See Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||
| Nine months ended September 30, | ||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025(1) | Change | % Change | ||||||||||||||||||||||
| Syndicate 1969 | $ | 191,959 | $ | 160,164 | $ | 31,795 | 19.9 | % | ||||||||||||||||||
| Syndicate 1971 | 101,925 | 98,806 | 3,119 | 3.2 | % | |||||||||||||||||||||
| Total gross written premiums | $ | 293,884 | $ | 258,970 | $ | 34,914 | 13.5 | % | ||||||||||||||||||
| Net written premiums | $ | 218,384 | $ | — | $ | — | — | % | ||||||||||||||||||
| Net earned premiums | $ | 213,096 | $ | — | $ | — | — | % | ||||||||||||||||||
(1) Prior year information is pro forma and is adjusted for the impact of the change in participations. See Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||
Gross written premiums for the third quarter and first nine months of 2026 increased $4.4 million and $34.9 million, or 3.4% and 13.5%, respectively, compared to the same adjusted pro forma 2025 periods, primarily driven by growth in Syndicate 1969, which benefited from new business and expansion across select specialty lines. Growth was partially offset by a modest decrease in our digital economy focused ibott Syndicate 1971, reflecting the timing of a renewal as well as seasonally lower new business opportunities.
Combined Ratio
The Apollo segment’s combined ratio for the three and nine months ended September 30, 2026 was 90.5% and 91.0%, respectively. Total non-cat losses and LAE for the three and nine months ended September 30, 2026 were $42.5 million and $115.6 million, or 55.2% and 54.3%, respectively. Cat losses and LAE for the three and nine months ended September 30, 2026 were $2.2 million and $5.8 million, or 2.8% and 2.7%, respectively, primarily due to convective storms during the third quarter and, for the first nine months of 2026, catastrophe losses associated with the conflict in the Middle East during the second quarter. Total underwriting, acquisition and insurance expenses for the three and nine months ended September 30, 2026 were $25.0 million and $72.5 million, or 32.5% and 34.0%, respectively. Net policy acquisition expenses were $14.6 million and $41.4 million, or 19.0% and 19.4%, respectively, and other operating and general expenses were $10.4 million and $31.1 million, or 13.5% and 14.6%, respectively.
Managed Premiums and Underwriting Fee Income
Apollo provides managing agency services to ten syndicates within its Lloyd’s managing agency platform. The capital aligned syndicates, Syndicate 1969, Syndicate 1971 and Syndicate 1972, are wholly managed by ASML and partly capitalized by Apollo’s Lloyd’s capital member Apollo No. 16. Platform Partner syndicates are managed by Apollo on behalf of third‑party partners and Apollo does not currently provide capital for underwriting of these syndicates. Because managed premiums are a key management operating metric intended to reflect the scale of business managed by Apollo, inter-syndicate reinsurance transactions, including those involving Syndicate 1972 and other Apollo-managed syndicates, are not eliminated in the calculation of managed premiums. Apollo receives managing agency fees and performance‑based income for their managing agency services from all syndicates on its Lloyd's platform. For the three and nine months ended September 30, 2026, underwriting fee income was $11.0 million and $33.7 million, respectively, and fee-based service expenses were $4.1 million and $12.8 million, respectively.
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The following table sets forth the fee generating gross written premiums for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025(1) | 2026 | 2025(1) | ||||||||||||||||||||||
| Aligned Syndicates | $ | 401,468 | $ | 369,548 | $ | 855,183 | $ | 717,178 | ||||||||||||||||||
| Partner Syndicates | 115,647 | 67,355 | 280,058 | 181,528 | ||||||||||||||||||||||
| Total fee generating gross written premiums | $ | 517,115 | $ | 436,903 | $ | 1,135,241 | $ | 898,706 | ||||||||||||||||||
(1) Prior year information is pro forma and is adjusted for the impact of the change in participations. See Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||
Total fee generating gross written premiums for the three and nine months ended September 30, 2026 increased 18.4% and 26.3%, respectively, compared to the same pro forma 2025 periods, primarily driven by the addition of a new partner syndicate and organic growth across both aligned and partner syndicates.
Investments
Composition of Investment Portfolio
In the first quarter of 2026, we revised the presentation of our investment portfolio to (i) report short-term investments separately from cash and cash equivalents following the closing of the Apollo acquisition, and (ii) include equities in alternative & strategic investments after the sale of the majority of the equity portfolio in 2025. The prior year period has been recast to reflect this change. Cash and cash equivalents includes funds at Lloyd’s.
The following table sets forth the components of our investment portfolio at carrying value at September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| ($ in thousands) | Carrying Value | % of Total | Carrying Value | % of Total | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 309,245 | 9.7 | % | $ | 171,053 | 6.9 | % | ||||||||||||||||||
| Short-term investments | 531,449 | 16.6 | % | 264,299 | 10.7 | % | ||||||||||||||||||||
| Fixed income | 2,198,288 | 68.8 | % | 1,866,205 | 75.5 | % | ||||||||||||||||||||
| Alternative and strategic investments | 157,067 | 4.9 | % | 168,837 | 6.8 | % | ||||||||||||||||||||
| Total portfolio | $ | 3,196,049 | 100.0 | % | $ | 2,471,568 | 100.0 | % | ||||||||||||||||||
Investment Results
The following table sets forth the components of net investment income and net investment gains (losses) for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| $ in thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Short-term investments | $ | 2,381 | $ | 3,268 | $ | 7,338 | $ | 10,182 | ||||||||||||||||||
| Cash and cash equivalents | 2,690 | 695 | 6,932 | 2,595 | ||||||||||||||||||||||
| Fixed income | 30,338 | 20,806 | 87,013 | 55,358 | ||||||||||||||||||||||
| Alternative and strategic investments | (1,530) | (2,755) | (9,622) | (7,995) | ||||||||||||||||||||||
| Net investment income | $ | 33,879 | $ | 22,014 | $ | 91,661 | $ | 60,140 | ||||||||||||||||||
Net unrealized gains (losses) on securities still held | $ | 2,444 | $ | (8,987) | $ | 6,146 | $ | (6,677) | ||||||||||||||||||
| Net realized (losses) gains | (1,978) | 16,034 | (3,096) | 23,564 | ||||||||||||||||||||||
| Net investment (losses) gains | $ | 466 | $ | 7,047 | $ | 3,050 | $ | 16,887 | ||||||||||||||||||
Net investment income for the third quarter and first nine months of 2026 increased $11.9 million and $31.5 million, respectively when compared to the same 2025 periods, driven by increased income from our fixed income portfolio as a result of the Apollo acquisition, a higher yield and a larger asset base. The increase in income from cash and cash equivalents was due to an overall increase in the invested asset base from the addition of Apollo when compared to the same 2025 periods.
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The alternative and strategic investments portfolio continued to be impacted by the decline in the fair value of limited partnership investments.
When a fixed maturity has been determined to have an impairment, the impairment charge is separated into an amount representing the credit loss, which is recognized in earnings as a realized loss and on the balance sheet as an allowance for credit losses netted with the amortized cost of fixed maturities. Future increases in fair value, if related to credit factors, are recognized through earnings limited to the amount previously recognized as an allowance for credit losses. The amount related to non-credit factors is recognized in accumulated other comprehensive income and future increases or decreases in fair value, if not credit losses, are included in accumulated other comprehensive (loss) income. During the third quarter 2026, we wrote off $2.0 million on a held-to-maturity security and recognized a recovery of $0.3 million of amounts previously written off for credit losses on an available-for-sale “corporate securities and miscellaneous” security. This brings our total allowance to $10.1 million on four securities, an increase of $1.6 million for the third quarter and $2.6 million for the first nine months of 2026. Other than the securities discussed previously, we determined that no other credit impairment existed at September 30, 2026. See Note 3, “Investments” to our condensed consolidated financial statements included in Item 1 of this Form 10-Q for additional information.
Fixed income
Our fixed income portfolio primarily consists of investment grade fixed income securities, which are predominantly highly-rated and liquid bonds, and commercial mortgage loans.
The following table sets forth the components of our fixed income securities at September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| ($ in thousands) | Carrying Value | % of Total | Carrying Value | % of Total | ||||||||||||||||||||||
| U.S. government securities | $ | 136,282 | 6.2 | % | $ | 44,468 | 2.4 | % | ||||||||||||||||||
| Non-U.S. government securities | 2,595 | 0.1 | % | — | — | % | ||||||||||||||||||||
| Corporate securities and miscellaneous | 807,837 | 36.7 | % | 636,387 | 34.1 | % | ||||||||||||||||||||
| Municipal securities | 102,124 | 4.6 | % | 102,116 | 5.5 | % | ||||||||||||||||||||
| Residential mortgage-backed securities | 428,565 | 19.5 | % | 486,587 | 26.1 | % | ||||||||||||||||||||
| Commercial mortgage-backed securities | 81,441 | 3.7 | % | 73,050 | 3.9 | % | ||||||||||||||||||||
| Other asset-backed securities | 632,732 | 28.8 | % | 513,695 | 27.5 | % | ||||||||||||||||||||
| Total fixed income portfolio, available-for-sale | 2,191,576 | 99.6 | % | 1,856,303 | 99.5 | % | ||||||||||||||||||||
| Commercial mortgage loans | 6,712 | 0.4 | % | 9,902 | 0.5 | % | ||||||||||||||||||||
| Total fixed income portfolio | $ | 2,198,288 | 100.0 | % | $ | 1,866,205 | 100.0 | % | ||||||||||||||||||
The weighted average credit rating of our available-for-sale fixed income portfolio was “A+” at September 30, 2026 and December 31, 2025. The following table sets forth the credit quality of our available-for-sale fixed income portfolio at September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| ($ in thousands) | Fair Value | % of Total | Fair Value | % of Total | ||||||||||||||||||||||
| AAA | $ | 296,229 | 13.5 | % | $ | 286,563 | 15.4 | % | ||||||||||||||||||
| AA | 617,761 | 28.2 | % | 548,030 | 29.6 | % | ||||||||||||||||||||
| A | 725,683 | 33.1 | % | 620,813 | 33.5 | % | ||||||||||||||||||||
| BBB | 530,113 | 24.2 | % | 379,586 | 20.4 | % | ||||||||||||||||||||
| BB and Lower | 21,790 | 1.0 | % | 21,311 | 1.1 | % | ||||||||||||||||||||
| Total fixed income portfolio, available-for-sale | $ | 2,191,576 | 100.0 | % | $ | 1,856,303 | 100.0 | % | ||||||||||||||||||
Our commercial mortgage loans are primarily senior loans on real estate across the U.S.
The average duration of our fixed income portfolio was approximately 3.34 years and 3.60 years, respectively, as of September 30, 2026 and December 31, 2025.
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Alternative and strategic investments
Alternative investments consists of promissory notes, limited partnerships, joint ventures and equity interests. The underlying investments are primarily floating rate senior secured loans, comprised of short duration, collateralized, asset-oriented credit investments. The limited partnerships and joint ventures are subject to future increases or decreases in asset value as asset values are monetized and the income is distributed. Strategic investments consists of equity interests in private entities within the insurance industry.
Other Items
Interest expense
Interest expense for the three and nine months ended September 30, 2026 was $7.0 million and $23.5 million, respectively, compared to $1.9 million and $5.6 million, respectively, for the same 2025 periods. The increases were due to additional interest expense related to the Term Loan Facility and Revolving Credit Facility (both are defined in the “Credit Agreements” section below).
Amortization expense
Amortization expense for the three and nine months ended September 30, 2026 was $8.8 million and $26.5 million, respectively, compared to $0.5 million and $1.2 million, respectively, for the same 2025 periods. The increases were due to the amortization of the value of business acquired (“VOBA”) asset and additional definite-lived intangible assets recognized as a result of the acquisition of Apollo.
Income Taxes
Income tax expense for the three and nine months ended September 30, 2026 was $13.8 million and $40.7 million, respectively, compared to $14.6 million and $35.0 million, respectively, for the same 2025 periods. Our effective tax rates for the three and nine months ended September 30, 2026 were 21.8% and 21.5%, respectively, compared to 24.2% and 21.6%, respectively, for the same 2025 periods. The decrease in the effective tax rate for the three months ended September 30, 2026 compared to the corresponding 2025 period was primarily attributable to a return-to-provision adjustment related to a research and development tax credit identified following the filing of the Apollo U.K. 2025 tax return, as well as the impact of Apollo transaction costs recognized in the third quarter of 2025 that increased the prior-year effective tax rate. For the nine months ended September 30, 2026, the effective tax rate was generally consistent with the corresponding 2025 period. The 2026 effective tax rate included discrete tax benefits from stock-based compensation, which reduced the rate by approximately 1%, partially offset by the impact of differing tax rates applicable to our Bermuda and U.K. operations, which increased the rate by approximately 1.5%.
Liquidity and Capital Resources
Sources and Uses of Funds
Our most significant source of cash is from premiums received from our insureds, which, for most policies, we receive at the beginning of the coverage period, net of the related commission for the policies. Our most significant cash outflow is for claims that arise when a policyholder incurs an insured loss. Because the payment of claims occurs after the receipt of the premium, often years later, we invest the cash in various investment securities that generally earn interest and dividends. We also use cash to pay for operating expenses such as salaries, rent and taxes and capital expenditures such as technology systems. We use reinsurance to reduce volatility and as part of our capital management strategy. We cede, or pay out, part of the premiums we receive to our reinsurers and collect cash back when losses subject to our reinsurance coverage are paid.
The timing of our cash flows from operating activities can vary among periods due to the timing by which payments are made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can be significant, and as a result their timing can influence cash flows from operating activities in any given period. Management believes that cash receipts from premiums and proceeds from investment income are sufficient to cover cash outflows in the foreseeable future.
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Our cash flows for the nine months ended September 30, 2026 and 2025:
| ($ in thousands) | 2026 | 2025 | ||||||||||||||||||
| Cash and cash equivalents, restricted cash and funds at Lloyd’s provided by (used in): | ||||||||||||||||||||
| Operating activities | $ | 389,303 | $ | 356,308 | ||||||||||||||||
| Investing activities | (485,943) | (315,568) | ||||||||||||||||||
| Financing activities | 300,937 | — | ||||||||||||||||||
| Change in cash and cash equivalents, restricted cash and funds at Lloyd’s | $ | 204,297 | $ | 40,740 | ||||||||||||||||
Cash provided by operating activities in 2026 was consistent when compared to 2025 and continued to reflect positive cash flow from our insurance operations. Cash from operations can vary from period to period due to the timing of premium receipts, claim payments and reinsurance activity. Cash flows from operations in each of the periods presented were used primarily to fund investing activities.
The increase in net cash used in investing activities in 2026 when compared to 2025 was primarily driven by the acquisition of Apollo.
The increase in net cash provided by financing activities in 2026 when compared to 2025 was due to proceeds from the Term Loan Facility and the draw on the Revolving Credit Facility used to fund the Apollo acquisition, partially offset by the repayment of long-term debt.
Credit Agreements
FHLB Loan
On August 30, 2024, we entered into the FHLB Loan pursuant to the Advances and Security Agreement. The FHLB Loan is a 4.5-year term loan in the principal amount of $57.0 million. The FHLB Loan provides for interest-only payments during its term, with principal due in full at maturity. The interest rate is fixed over the term of the loan at 4.00%. The FHLB Loan is fully secured by a pledge of specific investment securities of HSIC. We used the proceeds to fund redemptions of the draws on the prior credit facility. On July 21, 2026, we repaid $1.0 million of outstanding principal.
Term Loan Facility
During the fourth quarter of 2025, we entered into a Term Loan Credit Agreement (the “Term Loan Facility”) with a syndicate of participating banks. The Term Loan Facility includes (a) an unsecured senior delayed draw term loan facility (“DDTL”) in the aggregate principal amount of $150.0 million (the “Tranche A DDTL”) and (b) an additional unsecured senior DDTL in the aggregate principal amount of $150.0 million (the “Tranche B DDTL”).
We used the Term Loan Facility to fund a portion of the consideration of the acquisition of Apollo and related transaction fees and expenses. Amounts drawn under the Term Loan Facility will bear interest at either term SOFR plus a margin, which will range from 150 basis points to 190 basis points, or the base rate plus a margin, which will range from 50 basis points to 90 basis points, each depending on our debt to capitalization ratio. SOFR is calculated using a SOFR floor of 0.00% and a credit spread adjustment of 0.10%. The base rate is the highest of (i) the Agent’s then-current prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00% and (iv) zero percent (0%). In addition, we will also pay a fee ranging from 0.20% to 0.35% on average daily undrawn amounts under the Facility, depending on our debt to capitalization ratio. The Tranche A DDTL matures on January 1, 2028 and the Tranche B DDTL matures on July 2, 2029. On December 30, 2025, we drew $150.0 million of the Tranche A DDTL and $150.0 million of the Tranche B DDTL for the acquisition of Apollo on January 1, 2026. On June 26, 2026, we repaid $50.0 million of outstanding principal related to the Tranche A DDTL.
The Term Loan Facility includes customary covenants, including certain limitations on the incurrence by us of additional indebtedness exceeding $10.0 million and on our ability to make distributions to our stockholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events and certain financial covenants, including financial covenants relating to our minimum consolidated net worth, maximum total debt to capitalization, minimum A.M. Best rating and minimum liquidity, as well as customary events of default. As of September 30, 2026, we were in compliance with all covenants.
The Term Loan Facility is unsecured. In connection with the Revolving Credit Facility, during the fourth quarter of 2025, we and the subsidiary guarantors party thereto, entered into a guaranty agreement, pursuant to which our obligations under the Term Loan Facility are guaranteed and our existing wholly-owned subsidiaries and subsequently acquired or organized subsidiaries, excluding insurance company subsidiaries and subject to certain other exceptions.
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We report debt related to the Term Loan Facility as of September 30, 2026 Condensed Consolidated Balance Sheet, net of debt issuance costs of approximately $3.5 million. These deferred financing costs are presented as a direct deduction from the carrying amount of the debt.
Revolving Credit Facility
During the fourth quarter of 2025, we entered into a Credit Agreement (the “Revolving Credit Facility”) with a syndicate of participating banks. The Revolving Credit Facility is unsecured and provided us with up to an initial maximum principal amount of $150.0 million, which was increased to $250.0 million on the closing date of our acquisition of Apollo.
We initially drew $43.0 million, which was used to redeem our prior revolving credit facility (described below). On December 30, 2025, we drew an additional $71.5 million which was used to fund a portion of the consideration paid for the acquisition of Apollo on January 1, 2026.
Interest on the Revolving Credit Facility is payable quarterly. Amounts drawn under the Revolving Credit Facility bear interest at either term SOFR plus a margin, which ranges from 150 to 190 basis points, or the base rate plus a margin, which ranges from 50 basis points to 90 basis points, each depending on our debt to capitalization ratio. SOFR will be calculated using a SOFR floor of 0.00% and a credit spread adjustment of 0.10%. The base rate will be the highest of (i) the Agent’s then current prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00% and (iv) zero percent (0%). In addition, we also pay a fee ranging from 0.20% to 0.35% on average daily undrawn amounts under the Revolving Credit Facility, depending on our debt to capitalization ratio. The availability period under the Revolving Credit Facility will terminate on November 12, 2030.
We are subject to covenants on the Revolving Credit Facility based on minimum net worth, maximum debt to capital ratio, minimum A.M. Best Rating and minimum liquidity, as well as customary events of default. As of September 30, 2026, we were in compliance with all covenants.
Debentures
In May 2019, we entered into an agreement to issue unsecured subordinated notes (the “Notes”) with an aggregate principal amount of $20.0 million. Interest on the Notes is fixed at 7.25% for the first 8 years and fixed at 8.25% thereafter. Early retirement of the debt ahead of the 8-year commitment requires all interest payments to be paid in full as well as the return of outstanding principal. Principal is due at maturity on May 24, 2039 and interest is payable quarterly. The Notes have junior priority to all previously issued debt. We report debt related to the Notes as of September 30, 2026 Condensed Consolidated Balance Sheet and December 31, 2025 Consolidated Balance Sheet, net of debt issuance costs of approximately $0.4 million. These deferred financing costs are presented as a direct deduction from the carrying amount of the subordinated debt.
Share Repurchase Program
In October 2024, the Board approved a share repurchase program authorizing the repurchase of up to $50.0 million of our common stock. On July 15, 2026, the Board authorized an increase to the share repurchase program authorizing the repurchase of up to an additional $50.0 million of our common stock. As a result, the total amount authorized under the share repurchase program increased to $100.0 million. The shares may be repurchased from time to time in open market purchases, privately-negotiated transactions, block purchases, accelerated share repurchase agreements or a combination of methods, including through Rule 10b5-1 trading plans. The timing, manner, price and amount of any repurchases under the share repurchase program will be determined by us in our discretion. The share repurchase program does not require us to repurchase any specific number of shares, and may be modified, suspended or terminated at any time. During the nine months ended September 30, 2026, we repurchased 222,635 shares for approximately $9.7 million under this plan. These shares represent the total repurchased under the plan as of September 30, 2026.
Reinsurance
We strategically purchase reinsurance from third parties which enhances our business by protecting capital from severity events (either large single event losses or catastrophes) and reducing volatility in our earnings. Our reinsurance contracts are predominantly one year in length and renew annually throughout the year, primarily in January and April. At each annual renewal, we consider several factors that influence any changes to our reinsurance purchases, including any plans to change the underlying insurance coverage we offer, updated loss activity, the level of our capital and surplus, changes in our risk appetite and the cost and availability of reinsurance treaties.
We purchase quota share reinsurance, excess of loss reinsurance, and facultative reinsurance coverage to limit our exposure from losses on any one occurrence. The mix of reinsurance purchased considers efficiency, cost, our risk appetite and specific factors of the underlying risks we underwrite.
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•Quota share reinsurance refers to a reinsurance contract whereby the reinsurer agrees to assume a specified percentage of the ceding company’s losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission.
•Excess of loss reinsurance refers to a reinsurance contract whereby the reinsurer agrees to assume all or a portion of the ceding company’s losses for an individual claim or an event in excess of a specified amount in exchange for a premium payable amount negotiated between the parties, which includes our catastrophe reinsurance program.
•Facultative coverage refers to a reinsurance contract on individual risks as opposed to a group or class of business. It is used for a variety of reasons, including supplementing the limits provided by the treaty coverage or covering risks or perils excluded from treaty reinsurance.
For the three and nine months ended September 30, 2026 our net retention on a written basis (calculated as net written premiums as a percentage of gross written premiums) was 62.5% and 64.2%, respectively, compared to 72.7% and 65.1%, respectively, for the same 2025 periods.
Credit and Financial Strength Ratings
On August 28, 2026, A.M. Best affirmed the A (Excellent) Financial Strength Rating of the members of Skyward Specialty Insurance Group, with a Stable outlook, and affirmed the “a” (Excellent) Long-Term Issuer Credit Ratings, while revising the outlook on the Long-Term Issuer Credit Ratings to positive from stable.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk from the information provided in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required financial disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our management, including the CEO and CFO, as of September 30, 2026, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
In connection with the evaluation of our disclosure controls and procedures as of September 30, 2026, the scope of such evaluation excluded Apollo, which was acquired on January 1, 2026. The Company excluded Apollo from the evaluation because the entity and its related systems, processes and controls are in the process of being integrated into the Company’s overall financial reporting and disclosure control framework. Management plans to complete the integration and related evaluation of Apollo’s disclosure controls and procedures during 2026.
Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fiscal quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The evaluation of internal control over financial reporting as of September 30, 2026 excluded Apollo, which was acquired on January 1, 2026, as the integration of Apollo’s systems and controls into the Company’s control environment is ongoing.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are party to legal proceedings which arise in the ordinary course of business. We believe that the outcome of such matters, individually and in the aggregate, will not have a material adverse effect on our consolidated financial position.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risks and uncertainties described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (our “2025 Form 10-K”), as supplemented by the risk factor updates set forth in our Quarterly Report on Form 10-Q for the period ended March 31, 2026 (our “Q1 10-Q”). There have been no other material changes in our risk factors in the nine months ended September 30, 2026 from those disclosed in our 2025 Form 10-K and our Q1 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table represents share purchases made by the Company during the three months ended September 30, 2026, and the approximate dollar value of shares remaining that are authorized for purchase by the Company under its publicly announced share repurchase program.
| ($ in thousands, except share and per share amounts) | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs | ||||||||||||||||||||||
| July 2026 | — | $ | — | — | $ | 90,269 | ||||||||||||||||||||
| August 2026 | 2,077 | 59.95 | — | 90,269 | ||||||||||||||||||||||
| September 2026 | — | — | — | $ | 90,269 | |||||||||||||||||||||
| Total | 2,077 | $ | 59.95 | — | ||||||||||||||||||||||
(1) Includes shares withheld from participants in the Company’s long-term incentive program for personal income taxes | ||||||||||||||||||||||||||
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During the quarter ended September 30, 2026, certain of our executives (as defined in Rule 16a-1(f) of the Exchange Act) entered into Rule 10b5-1 trading arrangements
On August 26, 2026, John Burkhart, President, US Property & Casualty, entered into a new Rule 10b5-1 Trading Arrangement. On August 28, 2026, Mark Haushill, Chief Financial Officer, entered into a new Rule 10b5-1 Trading Arrangement. On August 31, 2026, Sandip Kapadia, President, Reinsurance and Head of Actuarial, entered into a new Rule 10b5-1 Trading Arrangement. On September 14, 2026, Shakoor Khan, Chief Strategy & Corporate Development Officer, and Andrew Robinson, Chief Executive Officer, entered into new Rule 10b5-1 Trading Arrangements. The material terms of these trading plans are set forth in the table below.
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| Disclosure Events | Name (Title) | Date of Adoption | Nature of Trading Arrangement | Duration of Trading Arrangement | Aggregate Number of Securities | ||||||||||||
| 1 | ( | 11/27/2026 – | Up to | ||||||||||||||
| 2 | ( | 11/27/2026 – | Up to | ||||||||||||||
| 3 | ( | 11/30/2026 – | Up to | ||||||||||||||
| 4 | ( | 1/4/2027 – | Up to shares | ||||||||||||||
| 5 | ( | 1/4/2027 – | Up to | ||||||||||||||
Item 6. Exhibits
(a)Exhibits.
| Exhibit Number | Exhibit Description | |||||||
| 3.1 | Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 18, 2023). | |||||||
| 3.2 | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on January 18, 2023). | |||||||
| 4.1 | Amended and Restated Stockholders’ Agreement, by and among the Company and the stockholders listed therein (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on November 14, 2022). | |||||||
| 10.1+* | Form of Apollo Executive Employment Agreement. | |||||||
| 10.2+* | Form of Senior Advisor Letter Agreement. | |||||||
| 31.1* | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1* | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
+ Management contract or compensatory plan or arrangement.
* Filed herewith.
(b)Financial Statement Schedules. All financial statement schedules are omitted because the information called for is not required or is shown either in the consolidated financial statements or in the notes thereto.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Skyward Specialty Insurance Group, Inc. | ||||||||||||||
Date: November 6, 2026 | By: | /s/ Andrew Robinson | ||||||||||||
| Andrew Robinson | ||||||||||||||
| Chairman and Chief Executive Officer | ||||||||||||||
| (Principal Executive Officer) | ||||||||||||||
Date: November 6, 2026 | By: | /s/ Mark Haushill | ||||||||||||
| Mark Haushill | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
| (Principal Financial and Accounting Officer) | ||||||||||||||
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