Bowhead Specialty Holdings Inc. (NYSE:BOW), a specialty lines insurance group focused on providing casualty, professional liability and healthcare liability insurance products, today announced financial results for the second quarter ended June 30, 2025.⁽¹⁾

Second Quarter 2025 Highlights

Gross written premiums increased 32.4% to $232.4 million.
Net income of $12.3 million, or $0.36 per diluted share.
Adjusted net income⁽²⁾ of $12.8 million, or $0.37 per diluted share⁽²⁾.
Return on equity of 12.4% and adjusted return on equity⁽²⁾ of 12.8%.
Book value per share $12.44 and diluted book value per share of $12.04.

Bowhead Chief Executive Officer, Stephen Sills, commented, "We are thrilled with our second quarter 2025 results. Our strategic execution and underwriting discipline have led to a strong 32% year-over-year growth in premiums, with impressive double-digit expansion across all our craft underwriting divisions. More importantly, net income for the quarter soared by 123% compared to the same period last year. These achievements underscore our steadfast dedication to sustainable and profitable growth, demonstrating that Bowhead is a franchise built for enduring success and cross-cycle profitability, not just a hard market play."

Underwriting Results

The 32.4% increase in gross written premiums to $232.4 million in the second quarter of 2025 was driven by our increasing renewal book and continued growth in our platform across all divisions:

Our Casualty division led the growth with a 31.9% increase to $150.7 million;
Professional Liability increased 23.3% to $54.8 million;
Healthcare Liability increased 39.0% to $23.5 million;
Baleen Specialty increased 23.2% from the previous quarter to $3.4 million.

Our loss ratio of 66.2% in the second quarter of 2025 increased 0.7 points compared to 65.5% in the second quarter of 2024, due to a 0.6 point increase in our current accident year and a 0.1 point increase in our prior accident year loss ratio.

The 0.6 point increase in our current accident year loss ratio was driven by changes in our portfolio mix. During the three months ended June 30, 2025, our Casualty division, which has comparatively higher current accident year industry loss ratios, comprised a larger proportion of our net earned premium compared to the prior period.

The 0.1 point increase in our prior accident year loss ratio was driven by expected loss ratios applied to audit premiums being fully earned in the quarter but associated with prior accident years. This development was not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims.

Our expense ratio was 30.6% for the three months ended June 30, 2025, reflecting a decrease of 3.2 points compared to 33.8% for the same period in 2024. This decrease in our expense ratio was primarily driven by the 3.7 point decrease in our operating expenses ratio and a 0.4 point increase in other insurance-related income, which contributed to the lowering of our expense ratio. These improvements were partially offset by the 0.9 point increase in our net acquisition costs ratio.

The decrease in our operating expenses ratio was due to the continued scaling of our business, where net earned premiums grew at a higher rate than our expenses, as well as the prudent management of our expenses.

The increase in our net acquisition costs ratio was driven by the increase in earned broker commissions due to changes in our portfolio mix, and to a lesser extent, the reduction in earned ceding commissions from our ceded reinsurance treaties.

Investment Results

Net investment income increased 55.8% in the quarter to $13.7 million, driven by a higher balance of investments and higher yields on invested assets. Our investment portfolio had a had a book yield of 4.7% and a new money rate of 4.8% as of June 30, 2025.

The weighted average effective duration of our investment portfolio, which included cash equivalents, was 2.8 years and had an average rating of "AA" as of June 30, 2025.

__________________
⁽¹⁾		Comparisons in this release are made to June 30, 2024 financial results unless otherwise noted.
⁽²⁾		Non-GAAP financial measure. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP measures.

Summary of Operating Results

The following table summarizes the Company's results of operations for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended June 30,								Six Months Ended June 30,
		2025			2024		% Change			2025			2024		% Change
	($ in thousands, except percentages and per share data)
Gross written premiums	$	232,361		$	175,539		32.4	%	$	407,209		$	313,971		29.7	%
Ceded written premiums		(83,508	)		(63,486	)	31.5	%		(141,587	)		(111,066	)	27.5	%
Net written premiums	$	148,853		$	112,053		32.8	%	$	265,622		$	202,905		30.9	%

Revenues
Net earned premiums	$	119,137		$	90,087		32.2	%	$	228,954		$	173,067		32.3	%
Net investment income		13,677			8,777		55.8	%		26,236			16,437		59.6	%
Net realized investment (losses) gains		(11	)		2		(650.0	)%		(15	)		2		NM
Other insurance-related income		460			32		1337.5	%		805			63		1177.8	%
Total revenues		133,263			98,898		34.7	%		255,980			189,569		35.0	%

Expenses
Net losses and loss adjustment expenses		78,900			59,018		33.7	%		152,327			113,338		34.4	%
Net acquisition costs		11,038			7,582		45.6	%		20,834			14,104		47.7	%
Operating expenses		25,849			22,855		13.1	%		49,785			43,377		14.8	%
Non-operating expenses		437			1,481		(70.5	)%		548			1,698		(67.8	)%
Warrant expense		783			332		135.8	%		1,558			332		369.3	%
Credit facility interest expenses and fees		261			224		16.5	%		508			224		126.8	%
Foreign exchange losses (gains)		79			(4	)	(2075.0	)%		33			30		10.0	%
Total expenses		117,347			91,488		28.3	%		225,593			173,103		30.3	%

Income before income taxes		15,916			7,410		114.8	%		30,387			16,466		84.5	%
Income tax expense		(3,574	)		(1,877	)	90.4	%		(6,620	)		(3,921	)	68.8	%
Net income	$	12,342		$	5,533		123.1	%	$	23,767		$	12,545		89.5	%

Key Operating and Financial Metrics:
Adjusted net income⁽¹⁾	$	12,758		$	7,880		61.9	%	$	24,238		$	16,068		50.8	%
Loss ratio		66.2	%		65.5	%				66.5	%		65.5	%
Expense ratio		30.6	%		33.8	%				30.4	%		33.2	%
Combined ratio		96.8	%		99.3	%				96.9	%		98.7	%
Return on equity⁽²⁾		12.4	%		8.2	%				12.2	%		9.4	%
Adjusted return on equity⁽¹⁾⁽²⁾		12.8	%		11.7	%				12.5	%		12.1	%
Diluted earnings per share	$	0.36		$	0.20				$	0.70		$	0.48
Diluted adjusted earnings per share⁽¹⁾	$	0.37		$	0.28				$	0.72		$	0.62

__________________
NM - Percentage change is not meaningful.
⁽¹⁾		Non-GAAP financial measure. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP measures.
⁽²⁾		For the three and six months ended June 30, 2025 and 2024, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.

Condensed Consolidated Balance Sheets

	June 30, 2025			December 31, 2024
	($ in thousands, except share data)
Assets
Investments
Fixed maturity securities, available for sale, at fair value (amortized cost of $1,113,787 and $894,145, respectively)	$	1,113,093		$	879,989
Short-term investments, at amortized cost, which approximates fair value		—			9,997
Total investments		1,113,093			889,986

Cash and cash equivalents		114,816			97,476
Restricted cash and cash equivalents		51,447			124,582
Accrued investment income		9,744			7,520
Premium balances receivable		88,849			63,672
Reinsurance recoverable, net		319,423			255,072
Prepaid reinsurance premiums		171,447			152,567
Deferred policy acquisition costs		32,178			27,625
Property and equipment, net		8,883			6,845
Income taxes receivable		1,877			586
Deferred tax assets, net		19,558			20,340
Other assets		10,836			7,971
Total assets	$	1,942,151		$	1,654,242

Liabilities
Reserve for losses and loss adjustment expenses	$	950,719		$	756,859
Unearned premiums		502,378			446,850
Reinsurance balances payable		62,613			51,856
Income taxes payable		137			1,571
Accrued expenses		10,481			18,010
Other liabilities		8,011			8,654
Total liabilities		1,534,339			1,283,800

Commitments and contingencies (Note 12)

Mezzanine equity
Performance stock units		607			265

Stockholders' equity
Common stock		328			327
($0.01 par value; 400,000,000 shares authorized, 32,781,565 and 32,662,683 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively)
Additional paid-in capital		320,749			318,095
Accumulated other comprehensive loss		(548	)		(11,154	)
Retained earnings		86,676			62,909
Total stockholders' equity		407,205			370,177
Total mezzanine equity and stockholders' equity		407,812			370,442

Total liabilities, mezzanine equity and stockholders' equity	$	1,942,151		$	1,654,242

Gross Written Premiums

The following tables present gross written premiums by underwriting division for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended June 30,
	2025		% of Total		2024		% of Total		$ Change		% Change
	($ in thousands, except percentages)
Casualty	$	150,720	64.9	%	$	114,233	65.1	%	$	36,487	31.9	%
Professional Liability		54,752	23.5	%		44,397	25.3	%		10,355	23.3	%
Healthcare Liability		23,505	10.1	%		16,909	9.6	%		6,596	39.0	%
Baleen Specialty		3,384	1.5	%		—	—	%		3,384	NM
Gross written premiums	$	232,361	100.0	%	$	175,539	100.0	%	$	56,822	32.4	%

	Six Months Ended June 30,
	2025		% of Total		2024		% of Total		$ Change		% Change
	($ in thousands, except percentages)
Casualty	$	273,034	67.1	%	$	205,730	65.5	%	$	67,304	32.7	%
Professional Liability		80,752	19.8	%		69,679	22.2	%		11,073	15.9	%
Healthcare Liability		47,293	11.6	%		38,562	12.3	%		8,731	22.6	%
Baleen Specialty		6,130	1.5	%		—	—	%		6,130	NM
Gross written premiums	$	407,209	100.0	%	$	313,971	100.0	%	$	93,238	29.7	%

Loss Ratio

The following tables summarize current and prior accident year loss ratios for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended June 30,
	2025				2024
	Net Losses and Loss Adjustment Expenses		% of Net Earned Premiums		Net Losses and Loss Adjustment Expenses		% of Net Earned Premiums
	($ in thousands, except percentages)
Current accident year	$	78,785	66.1	%	$	59,018	65.5	%
Prior accident year reserve development		115	0.1	%		—	—	%
Total	$	78,900	66.2	%	$	59,018	65.5	%

	Six Months Ended June 30,
	2025				2024
	Net Losses and Loss Adjustment Expenses		% of Net Earned Premiums		Net Losses and Loss Adjustment Expenses		% of Net Earned Premiums
	($ in thousands, except percentages)
Current accident year	$	151,768	66.3	%	$	113,338	65.5	%
Prior accident year reserve development		559	0.2	%		—	—	%
Total	$	152,327	66.5	%	$	113,338	65.5	%

Expense Ratio

The following tables summarize the components of our expense ratio for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended June 30,
	2025					2024
	Expenses			% of Net Earned Premiums		Expenses			% of Net Earned Premiums
	($ in thousands, except percentages)
Net acquisition costs	$	11,038		9.3	%	$	7,582		8.4	%
Operating expenses		25,849		21.7	%		22,855		25.4	%
Less: Other insurance related-income		(460	)	(0.4	)%		(32	)	—	%
Total	$	36,427		30.6	%	$	30,405		33.8	%

	Six Months Ended June 30,
	2025					2024
	Expenses			% of Net Earned Premiums		Expenses			% of Net Earned Premiums
	($ in thousands, except percentages)
Net acquisition costs	$	20,834		9.1	%	$	14,104		8.1	%
Operating expenses		49,785		21.7	%		43,377		25.1	%
Less: Other insurance-related income		(805	)	(0.4	)%		(63	)	—	%
Total	$	69,814		30.4	%	$	57,418		33.2	%

Net Investment Income

The following table summarizes the sources of net investment income for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended June 30,						Six Months Ended June 30,
		2025			2024			2025			2024
	($ in thousands)
U.S. government and government agency	$	1,633		$	3,836		$	3,478		$	7,523
State and municipal		876			388			1,564			775
Commercial mortgage-backed securities		1,267			468			2,447			842
Residential mortgage-backed securities		3,129			1,920			5,668			2,164
Asset-backed securities		1,569			(33	)		3,052			1,040
Corporate		4,244			1,071			7,496			2,003
Short-term investments		86			103			214			215
Cash and cash equivalents		1,154			1,204			2,859			2,219
Gross investment income		13,958			8,957			26,778			16,781
Investment expenses		(281	)		(180	)		(542	)		(344	)
Net investment income	$	13,677		$	8,777		$	26,236		$	16,437

Reconciliation of Non-GAAP Financial Measures

This earnings release contains certain financial measures that are not presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). We use these non-GAAP financial measures when planning, monitoring and evaluating our performance. Management believes that each of the non-GAAP financial measures described below provides useful insight into our underlying business performance.

Adjusted net income is defined as net income excluding the impact of net realized investment (losses) gains, non-operating expenses, foreign exchange losses (gains), and certain strategic initiatives. Adjusted net income excludes the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We calculate the tax impact only on adjustments that would be included in calculating our income tax expense using the estimated tax rate at which we received a deduction for these adjustments.
Adjusted return on equity is defined as adjusted net income as a percentage of average beginning and ending mezzanine equity and stockholders' equity.
Diluted adjusted earnings per share is defined as adjusted net income divided by the weighted average common shares outstanding for the period, reflecting the dilution that may occur if equity based awards are converted into common stock equivalents as calculated using the treasury stock method.

You should not rely on these non-GAAP financial measures as a substitute for any U.S. GAAP financial measure. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered supplemental in nature and not as a replacement for or superior to the comparable U.S. GAAP measures. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures.

Adjusted net income

Adjusted net income for the three and six months ended June 30, 2025 and 2024 reconciles to net income as follows:

	Three Months Ended June 30,
	2025					2024
	Before income taxes		After income taxes			Before income taxes			After income taxes
	($ in thousands)
Income as reported	$	15,916	$	12,342		$	7,410		$	5,533
Adjustments:
Net realized investment losses (gains)		11		11			(2	)		(2	)
Non-operating expenses		437		437			1,481			1,481
Foreign exchange losses (gains)		79		79			(4	)		(4	)
Strategic initiatives⁽¹⁾		—		—			1,496			1,496
Tax impact		—		(111	)		—			(624	)
Adjusted net income	$	16,443	$	12,758		$	10,381		$	7,880

	Six Months Ended June 30,
	2025					2024
	Before income taxes		After income taxes			Before income taxes			After income taxes
	($ in thousands)
Income as reported	$	30,387	$	23,767		$	16,466		$	12,545
Adjustments:
Net realized investment losses (gains)		15		15			(2	)		(2	)
Non-operating expenses		548		548			1,698			1,698
Foreign exchange losses		33		33			30			30
Strategic initiatives⁽¹⁾		—		—			2,733			2,733
Tax impact		—		(125	)		—			(936	)
Adjusted net income	$	30,983	$	24,238		$	20,925		$	16,068

_______________
⁽¹⁾		Strategic initiatives for the three and six months ended June 30, 2024 represents costs incurred to set up our Baleen Specialty division, which is recorded in operating expenses within the Consolidated Statements of Income and Comprehensive Income. The costs incurred primarily represent expenses to implement the new platform and processes supporting the Baleen Specialty division. See "Business— Our Business"

Adjusted return on equity

Adjusted return on equity for the three and six months ended June 30, 2025 and 2024 reconciles to return on equity as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
		2025			2024			2025			2024
	($ in thousands, except percentages)
Numerator: Adjusted net income⁽¹⁾	$	51,031		$	31,519		$	48,477		$	32,135
Denominator: Average mezzanine equity and stockholders' equity		399,588			270,551			389,127			265,971
Adjusted return on equity		12.8	%		11.7	%		12.5	%		12.1	%

_______________
⁽¹⁾		For the three and six months ended June 30, 2025 and 2024, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.

Diluted adjusted earnings per share

Diluted adjusted earnings per share for the three and six months ended June 30, 2025 and 2024 reconciles to diluted earnings per share as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	($ in thousands, except share and per share data)
Numerator: Adjusted net income	$	12,758	$	7,880	$	24,238	$	16,068
Denominator: Diluted weighted average shares outstanding		34,045,961		27,771,108		33,885,414		25,885,554
Diluted adjusted earnings per share	$	0.37	$	0.28	$	0.72	$	0.62

About Bowhead Specialty Holdings Inc.

Bowhead Specialty is a growing specialty insurance business providing casualty, professional liability and healthcare liability insurance products. We were founded and are led by industry veteran Stephen Sills. The team is composed of highly experienced and respected industry veterans with decades of individual, successful underwriting and management experience. We focus on providing "craft" solutions in our specialty lines and classes of business that we believe require deep underwriting and claims expertise in order to produce attractive financial results.

We pride ourselves on the quality and experience of our people, who are committed to exceeding our partners' expectations through excellent service and expertise. Our collaborative culture spans all functions of our business and allows us to provide a consistent, positive experience for all of our partners.

Conference Call

The Company will host a conference call to discuss its results on the same day, Tuesday, August 5, 2025, beginning at 8:30 a.m. Eastern Time. Interested parties may access the conference call through a live webcast, which can be accessed by going to https://bowhead-2q25-earnings-call.open-exchange.net/, or by visiting the Company's Investor Relations website. A dial-in option for listen-only participants will be available after registering for the call. Please join the live webcast or dial in at least 10 minutes before the start of the call.

A replay of the event webcast will be available on the Company's Investor Relations website for one year following the call.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in press release are forward-looking statements. In some cases, forward-looking statements can be identified by terms such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "seeks," "future," "outlook," "prospects" "will," "would," "should," "could," "may," "can have" or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. These risks include those described in the Company's filings made with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250805895247/en/

Investor Relations Contact:

Shirley Yap, Head of Investor Relations

investorrelations@bowheadspecialty.com

Bowhead Specialty Holdings Inc. Reports Second Quarter 2025 Results