Bowhead Specialty Premium Growth Slows After Merger Announcement

The Tip Desk · November 10, 2026 · 3 min read

Gross written premiums rose 10.8% to $256.4 million in the third quarter as net income fell to $12.9 million, or $0.38 a share.

Bowhead Specialty Holdings (BOW), a specialty lines insurer focused on casualty, professional liability and healthcare liability products, reported gross written premiums of $256.4 million for the third quarter ended September 30, 2026, a 10.8% increase from a year earlier.

That pace slowed from 28.2% growth in the second quarter, when written premiums were $297.9 million, after 24.0% growth in the first quarter. The company said the third-quarter increase was driven by an increasing renewal book and continued growth across all divisions.

Net income was $12.9 million, or $0.38 a share, down from $16.1 million, or $0.48 a share, in the second quarter. Adjusted net income, a non-GAAP measure that excludes items including non-operating expenses, was $18.4 million, or $0.54 a share. Return on equity was 11.2%; adjusted return on equity was 15.9%.

Casualty, the largest division, wrote $153.4 million of premiums, up 6.0% from a year earlier. Professional Liability premiums were $49.5 million and Healthcare Liability $37.7 million. Baleen Specialty, the digital specialty book, wrote $15.8 million, a 155.4% increase from a year earlier. Digital underwriting models, including Baleen Specialty and Express, accounted for 8.5% of gross written premiums, or $21.9 million, compared with 2.9% a year earlier. Chief Executive Officer Stephen Sills said digital businesses grew to almost 9% of total gross written premiums.

The loss ratio was 67.3%, matching the second-quarter level. The company said the 1.4-point increase versus 65.9% a year earlier was due to a higher current accident year loss ratio, driven by lower ceded loss activity under excess of loss treaties and, to a lesser extent, portfolio mix. Prior accident year losses of $0.9 million, or 0.6% of net earned premiums, were driven by expected loss ratios applied to net additional premiums billed and fully earned in the quarter on policies from prior accident years, the company said, and did not represent an increase in estimated reserves on unresolved claims.

The expense ratio was 28.6%, also matching the second quarter. The company said the 0.9-point decline versus 29.5% a year earlier reflected a 2.2-point decrease in the operating expense ratio and a 0.2-point increase in other insurance-related income, partially offset by a 1.5-point increase in the net acquisition costs ratio. Net earned premiums were $150.2 million.

Net investment income increased 36.7% to $20.6 million, driven by a higher balance of investments. The investment portfolio had a book yield of 4.7% and a new money rate of 5.6% as of September 30, 2026, with a weighted average effective duration of 3.6 years and an average rating of AA-.

Non-operating expenses were $6.9 million in the third quarter, compared with $0.8 million a year earlier. Interest expense and financing fees were $3.2 million. Income before income taxes was $15.9 million.

The company said it will not host an earnings conference call or webcast for the third quarter because of the pending transaction with American Family announced August 3, 2026. Sills said the company remains focused on delivering for brokers and insureds as it moves forward with that transaction.