What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-11 compared with 2025-11-06 · 290 added, 194 removed, 172 unchanged (74% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The term “Skyward Specialty” as used below refers only to Skyward Specialty Insurance Group, Inc.

The term “Skyward Group” as used below refers to Skyward Specialty Insurance Group, Inc.

and the terms “our Company,” “we,” “us,” and “our” as used below refer to Skyward Specialty Insurance Group 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.

The term “first quarter” as used below refers to the three months ended March 31, 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 Specialty are defined in the sections entitled “Select Insurance and Financial Terms” and “Key Operating and Financial Metrics” included in our 2024 Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

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 2025 Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”).

Following the Apollo Acquisition, select insurance, accounting, operating and financial terms’ definitions 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.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2025, or for any other future period.

The results of operations for the three months ended March 31, 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”).

Founded in 2006, Skyward Specialty is a specialty insurance holding company incorporated in Delaware.

We have one reportable segment through which we offer a broad array of commercial property and casualty products and solutions on a non-admitted (or E&S) and admitted basis, predominantly in the United States.

Founded in 2006, Skyward Group is the holding company brand for its U.S.

businesses, Skyward Specialty Insurance Group, Inc.

and Apollo, respectively, delivering a comprehensive suite of specialized insurance 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.

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As such, we develop and deliver tailored insurance products and services to address each of the niche markets we serve.

On September 2, 2025, we entered into two share purchase agreements (the "Apollo Majority SPAs") with institutional and management shareholders, respectively, of Apollo Group Holdings Limited ("Apollo") (the "Majority Sellers").

Pursuant to the Apollo Majority SPAs, in accordance with the terms and subject to the conditions therein, we have agreed to acquire all of the issued shares of Apollo held by the Majority Sellers, representing approximately 87% of the issued share capital of Apollo.

In addition, the closing of the transaction ("completion") is conditioned upon the Company acquiring 100% of the issued share capital of Apollo at completion pursuant to additional short-form share purchase agreements (the "Apollo Minority SPAs" and together with the Apollo Majority SPAs, the "Apollo SPAs") to be entered into either prior to or at completion with the remaining minority shareholders of Apollo (the "Minority Sellers" and together with the Majority Sellers, the "Sellers").

The consideration for the entire issued share capital of Apollo under the Apollo SPAs is $555.0 million, approximately 33% of which will be satisfied by the issue of common stock of the Company to certain Sellers and the remainder in cash.

The acquisition is expected to close in the first quarter of 2026, subject to the satisfaction of closing conditions, including regulatory approvals.

In connection with the Apollo SPAs, on September 2, 2025, we entered into debt commitment letters (the "Apollo Commitment Letters") pursuant to which Barclays Bank PLC (the "Lender") has committed to provide us with debt financing in the form of (i) up to two senior unsecured delayed draw term loan credit facilities of up to $300.0 million in total, and (ii) in case the borrower is not able to obtain consent from lenders under its existing revolving credit agreement to the transactions under the Apollo SPAs, a senior unsecured bridge facility of up to $150.0 million, in each case, on the terms and subject to the conditions set forth in the Apollo Commitment Letters.

As of September 30, 2025, we have recognized $3.1 million in acquisition-related expenses associated with this pending transaction.

During the first quarter of 2025, we updated our underwriting divisions to align with how management currently oversees the business, allocates resources and evaluates operating performance.

We added a ninth division, Agriculture and Credit (Re)insurance, which includes the Global Agriculture unit, previously reported with Global Property, and the Mortgage and Credit units, and focuses on specialty classes for which reinsurance provides a more attractive market entry.

The Industry Solutions division is now the Construction & Energy Solutions division and the Inland Marine unit is now

included in the Transactional E&S division.

Programs is now Specialty Programs.

Prior reporting periods have been conformed to reflect the new presentation.

All of our insurance company subsidiaries are group rated and have financial strength ratings of “A” (Excellent) with stable outlook from the A.M.

Best Company.

Results of Operations

The following table summarizes our results for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30, Nine months ended September 30,

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 holding structure.

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.

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.

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.

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.

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.

Consolidated Results of Operations

The following table summarizes our consolidated results for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) 2026 2025

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Net earned premiums $ 434,007 $ 300,366

Underwriting fee income (1)

Commission and fee income 1,527 1,976

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Underwriting, acquisition and insurance expenses 124,614 86,551

Fee‑based service expenses (1)

Underwriting income (2)

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Net investment gains $ 3,185 $ 6,750

Interest expense $ 7,719 $ 1,834

Amortization expense $ 8,843 $ 337

Income before income taxes $ 62,076 $ 51,435

Net income $ 49,731 $ 42,058

Adjusted operating income (1)

Operating income (2)

$ 56,832 $ 37,597

Loss and LAE ratio 61.1 % 62.4 %

Expense ratio 28.4 % 28.9 % 28.2 % 28.9 %

Net expense ratio (3)

28.4 % 28.1 %

Combined ratio 89.5 % 90.5 %

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22.9 % 22.9 %

Annualized adjusted return on equity (1)

Annualized operating return on equity (2)

20.3 % 18.3 %

Annualized adjusted return on tangible equity (1)

Annualized operating return on tangible equity (2)

26.2 % 20.5 %

(1) Not included in the combined ratio

(2) See “Reconciliation of Non-GAAP Financial Measures” in this Item 2

(3) The underwriting, acquisition and insurance expense ratio includes corporate expenses not allocated to underwriting segments.

Reconciliation of Non-GAAP Financial Measures

Adjusted Operating Income

The following table provides a reconciliation of adjusted operating income to net income for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

($ in thousands) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax

Operating Income

The following table provides a reconciliation of operating income to net income for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) Pre-tax After-tax Pre-tax After-tax

Income as reported $ 62,076 $ 49,731 $ 51,435 $ 42,058

Net investment gains 3,185 2,552 6,841 5,594

Net impact of LPT — — 318 251 — — 800 632

Other loss (236) (179) (195) (154) (216) (169) (202) (160)

Amortization expense (8,843) (7,084) (337) (276)

Other income 15 12 13 11

Other expenses (3,222) (2,581) (1,061) (868)

Adjusted operating income $ 58,051 $ 44,008 $ 37,674 $ 29,416 $ 151,285 $ 118,574 $ 120,182 $ 93,361

Operating income $ 70,941 $ 56,832 $ 45,979 $ 37,597

Underwriting Income

The following table provides a reconciliation of underwriting income to income before federal income tax expense for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30, Nine months ended September 30,

The following table provides a reconciliation of underwriting income to income before federal income tax expense for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) 2026 2025

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Net investment gains 3,185 6,750

Other loss (236) (195) (216) (202)

Other income 15 13

Underwriting income $ 51,605 $ 28,482

Tangible Stockholders’ Equity

The following table provides a reconciliation of tangible stockholders’ equity to stockholders’ equity for the periods ended September 30, 2025 and 2024:

The following table provides a reconciliation of tangible stockholders’ equity to stockholders’ equity for the periods ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) 2026 2025

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Goodwill and intangible assets 473,316 88,040

Deferred tax impact 65,500 —

Tangible stockholders’ equity $ 817,067 $ 763,632

Annualized Adjusted Return on Equity

The following table provides a reconciliation of annualized adjusted return on equity to annualized return on equity for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30, Nine months ended September 30,

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 months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) 2026 2025

annualized adjusted operating income $ 176,032 $ 117,664 $ 158,099 $ 124,481

annualized operating income $ 227,328 $ 150,388

average stockholders’ equity $ 1,117,224 $ 822,360

Annualized adjusted return on equity

Annualized operating return on equity

20.3 % 18.3 %

Annualized Return on Tangible Equity

Annualized return on tangible equity for the three and nine months ended September 30, 2025 and 2024 reconciles to annualized return on equity as follows:

Three months ended September 30, Nine months ended September 30,

Annualized return on tangible equity for the three months ended March 31, 2026 and 2025 reconciles to annualized return on equity as follows:

Three months ended March 31,

($ in thousands) 2026 2025

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22.9 % 22.9 %

Annualized Adjusted Return on Tangible Equity

Annualized adjusted return on tangible equity for the three and nine months ended September 30, 2025 and 2024 reconciles to annualized return on equity as follows:

Three months ended September 30, Nine months ended September 30,

Annualized Operating Return on Tangible Equity

Annualized operating return on tangible equity for the three months ended March 31, 2026 and 2025 reconciles to annualized return on equity as follows:

Three months ended March 31,

($ in thousands) 2026 2025

annualized adjusted operating income $ 176,032 $ 117,664 $ 158,099 $ 124,481

annualized operating income $ 227,328 $ 150,388

average tangible stockholders’ equity $ 869,296 $ 735,142

Annualized adjusted return on tangible equity

Annualized operating return on tangible equity

26.2 % 20.5 %

Segment Information

Beginning in the first quarter of 2026, we reported our results under two operating 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.

Certain lines of business have been discontinued and are now presented in exited business.

Prior reporting periods have been conformed to reflect the new presentation.

Underwriting Results

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

Three months ended September 30,

($ in thousands) 2025 2024 Change % Change

Accident & Health $ 63,147 $ 43,490 $ 19,657 45.2 %

Agriculture and Credit (Re)insurance 168,105 17,044 151,061 886.3 %

Captives 67,956 53,630 14,326 26.7 %

Construction & Energy Solutions 66,576 70,309 (3,733) (5.3 %)

Global Property 27,649 37,540 (9,891) (26.3 %)

Professional Lines 35,598 40,310 (4,712) (11.7 %)

Specialty Programs 82,771 54,434 28,337 52.1 %

Surety 43,737 34,592 9,145 26.4 %

Transactional E&S 50,950 48,665 2,285 4.7 %

Total gross written premiums (1)

$ 606,489 $ 400,014 $ 206,475 51.6 %

(1) Excludes exited business

Nine months ended September 30,

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 months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) 2026 2025 Change % Change

Accident & Health $ 92,009 $ 63,169 $ 28,840 45.7 %

Agriculture and Credit (Re)insurance 327,525 96,957 230,568 237.8 %

Captives 57,914 66,929 (9,015) (13.5 %)

Construction & Energy Solutions 215,760 222,745 (6,985) (3.1 %)

Credit & Surety 64,174 45,028 19,146 42.5 %

Energy Solutions 48,866 75,594 (26,728) (35.4 %)

Global Agriculture 102,352 80,617 21,735 27.0 %

Global Property 34,517 46,686 (12,169) (26.1 %)

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Specialty Programs 94,767 62,675 32,092 51.2 %

Surety 122,272 106,076 16,196 15.3 %

Transactional E&S 50,064 52,006 (1,942) (3.7 %)

Total gross written premiums (1)

$ 1,726,736 $ 1,354,894 $ 371,842 27.4 %

(1) Excludes exited business

The increases in gross written premiums for the third quarter and first nine months of 2025, when compared to the same 2024 periods, were primarily driven by growth from the agriculture and credit (re)insurance division.

Specialty programs, accident & health, captives and surety also contributed meaningfully to the growth, partially offset by decreases in gross written premiums in the global property, professional lines and construction and energy solutions divisions.

Net written premiums for the third quarter of 2025 were $441.2 million compared to $268.3 million for the same 2024 period, an increase of $172.8 million or 64.4%.

Net written premiums for the first nine months of 2025 were $1,123.7 million compared to $852.6 million for the same 2024 period, an increase of $271.1 million or 31.8%.

Total continuing business 580,891 532,921 47,970 9.0 %

Exited business 913 2,405 (1,492) (62.0 %)

Total Skyward Specialty segment gross written premiums $ 581,804 $ 535,326 $ 46,478 8.7 %

Net written premiums $ 371,029 $ 343,271 $ 27,758 8.1 %

Net earned premiums $ 363,943 $ 300,366 $ 63,577 21.2 %

The 9.0% growth in gross written premiums for continuing business, when compared to the same 2025 period, was primarily driven by new business in our specialty programs, accident & health, global agriculture and credit & surety divisions.

Partially offsetting the growth were decreases in the (i) energy solutions and captives divisions due to non-renewing business, and (ii) global property division due to increased competition in the property market and decreases in rates.

Net written premiums for the first quarter of 2026 were $371.0 million compared to $343.3 million for the same 2025 period, an increase of $27.7 million or 8.1%.

The increases in net written premiums was primarily driven by the same reasons that drove the increases in gross written premiums discussed above.

Net earned premiums for the third quarter of 2025 were $351.8 million compared to $269.6 million for the same 2024 period, an increase of $82.2 million or 30.5%.

Net earned premiums for the first nine months of 2025 were $947.7 million compared to $763.5 million for the same 2024 period, an increase of $184.2 million or 24.1%.

Net earned premiums for the first quarter of 2026 were $363.9 million compared to $300.4 million for the same 2025 period, an increase of $63.6 million or 21.2%.

The increases in net earned premiums was primarily driven by the same reasons that drove the increases in gross written premiums discussed above.

For additional information regarding our reinsurance programs, see the “Reinsurance” discussion included in this Item 2 .

Losses and LAE

The following tables set forth the components of the loss and LAE ratios and adjusted loss and LAE ratios for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30,

($ in thousands) Losses

Losses and LAE:

Non-cat loss and LAE

$ 211,760 60.2 % $ 163,385 60.6 %

Cat loss and LAE (1)

2,020 0.6 % 7,454 2.8 %

Prior accident year development - LPT

— — % (318) (0.1)%

Total losses and LAE $ 213,780 60.8 % $ 170,521 63.3 %

(1) Current accident year

Nine months ended September 30,

($ in thousands) Losses

Combined Ratio

The following table sets forth the components of the Skyward Specialty segment’s combined ratios for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) $ Amount

Losses and LAE:

3 unchanged sentences

7,785 2.1 % 6,500 2.2 %

Prior accident year development - LPT

— — % (800) (0.1)%

Total losses and LAE 228,231 62.7 % 187,309 62.4 %

(1) Current accident year

The loss ratios for the third quarter and first nine months of 2025 improved 2.5 points and 0.6 points when compared to the same 2024 periods, respectively, primarily driven by the business mix shift.

Catastrophe losses in the third quarter of 2025 decreased when compared to the same 2024 period, which was impacted by higher catastrophe losses, primarily from Hurricanes Helene and Beryl.

The first nine months of 2025 were impacted by convective storms in the Midwest and the California wildfires.

The non-cat loss and LAE ratios for the third quarter and first nine months of 2025 improved 0.4 points and 0.5 points, respectively, when compared to the same 2024 periods, primarily driven by the business mix shift.

Expense Ratio

The following tables set forth the components of the expense ratios for the three and nine months ended September 30, 2025 and 2024:

Three months ended September 30,

($ in thousands) Expenses % of

Net Earned Premiums Expenses % of

Net Earned Premiums

Net policy acquisition expenses 51,059 14.0 % 44,490 14.8 %

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Total net expenses $ 95,436 26.2 % $ 84,575 26.8 %

Nine months ended September 30,

($ in thousands) Expenses % of

Net Earned Premiums Expenses % of

Combined ratio 88.9 % 89.2 %

(1) Current accident year

The loss ratio for the first quarter of 2026 increased slightly when compared to the same 2025 period.

Catastrophe losses in the first quarter decreased slightly when compared to the same 2025 period, which was impacted by convective storms in the Midwest and the California wildfires.

The first quarter of 2026 was impacted by winter and convective storms.

The non-cat loss and LAE ratio was impacted by business mix shift when compared to the same 2025 period.

The expense ratios for the first quarter of 2026 improved 0.6 points when compared to the same 2025 period due to earnings leverage partially offset by higher acquisition costs due to the business mix shift.

The expense ratios for all periods presented exclude the impact of corporate expenses which is 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

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.

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 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.

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 quote 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

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 first quarter 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.

The following table sets forth gross written premiums by underwriting division for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) 2026 2025 (1)

Change % Change

Syndicate 1969 $ 65,008 $ 53,449 $ 11,559 21.6 %

Syndicate 1971 20,892 18,941 1,951 10.3 %

Total gross written premiums $ 85,900 $ 72,390 $ 13,510 18.7 %

Net written premiums $ 61,854 $ — $ — — %

Net earned premiums $ 70,064 $ — $ — — %

Net policy acquisition expenses $ 138,369 14.6 % $ 105,273 13.9 %

Other operating and general expenses 135,454 14.3 % 120,997 15.8 %

Underwriting, acquisition and insurance expenses 273,823 28.9 % 226,270 29.7 %

commission and fee income (6,440) (0.7 %) (5,897) (0.8 %)

Total net expenses $ 267,383 28.2 % $ 220,373 28.9 %

The expense ratios for the third quarter and first nine months of 2025 improved 0.5 points and 0.7 points, respectively, when compared to the same 2024 periods due to earnings leverage partially offset by higher acquisition costs due to the business mix shift.

The expense ratios for all periods presented exclude the impact of IPO related stock compensation, Apollo acquisition-related expenses and secondary offering expenses, which are reported in other expenses in our condensed consolidated statements of operations and comprehensive income.

(1) Prior year information is pro forma

Gross written premiums for the quarter increased $13.5 million, or 18.7%, compared to the pro forma 2025 period.

The increase was primarily driven by growth in Syndicate 1969, which benefited from continued growth and expansion across select specialty lines.

Combined Ratio

The Apollo segment’s combined ratio for the three months ended March 31, 2026 was 85.3%.

Total non-cat losses and LAE for the three months ended March 31, 2026 were $37.0 million, or 52.8%.

Total underwriting, acquisition and insurance expenses for the three months ended March 31, 2026 were $22.7 million, or 32.5%.

Net policy acquisition expenses were $8.6 million, or 12.2%, and other operating and general expenses were $14.2 million, or 20.3% points.

Managed Premiums and Underwriting Fee Income

Apollo provides managing agency services to nine syndicates within its Lloyd’s managing agency platform.

The capital aligned syndicates, Syndicate 1969, Syndicate 1971 and Syndicate 1972, are wholly managed and partly capitalized by Apollo’s Lloyd’s capital member Apollo No.

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.

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 months ended March 31, 2026, underwriting fee income was $10.1 million.

The following table sets forth the fee generating gross written premiums for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

($ in thousands) 2026 2025 (1)

Aligned Syndicates 210,549 142,957

Partner Syndicates 89,456 58,712

Total fee generating gross written premiums $ 300,005 $ 201,669

(1) Prior year information is pro forma

Total fee generating gross written premiums for the three months ended March 31, 2026 increased 48.8% compared to the same pro forma 2025 period, primarily driven by an additional partner syndicate and organic growth across both aligned and partner syndicates.

Composition of Investment Portfolio

In the first quarter of 2026, the Company revised its 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.

The following table sets forth the components of our investment portfolio at carrying value at March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

($ in thousands) Carrying Value

% of Total Carrying Value

Cash and cash equivalents $ 364,756 11.7 % $ 171,053 6.9 %

Short-term investments 386,514 12.4 % 264,299 10.7 %

Fixed income 2,204,195 70.9 % 1,866,205 75.5 %

Alternative and strategic investments 153,632 5.0 % 168,837 6.8 %

Total portfolio $ 3,109,097 100.0 % $ 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, 2025 and 2024:

Three months ended September 30, Nine months ended September 30,

The following table sets forth the components of net investment income and net investment gains (losses) for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

$ in thousands 2026 2025

Short-term investments & cash and cash equivalents $ 4,130 $ 4,537 $ 12,745 $ 13,645

Short-term investments $ 2,488 $ 3,201

Cash and cash equivalents 1,659 924

Fixed income 27,365 16,730

Equities 133 596 1,321 1,974

Alternative and strategic investments (4,457) (1,433)

Net investment income $ 27,055 $ 19,422

Net unrealized (losses) gains on securities still held

Net unrealized gains on securities still held

$ 1,775 $ 5,492

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Net investment gains $ 3,185 $ 6,750

Net investment income for the third quarter and first nine months of 2025 increased $2.6 million and $0.2 million, respectively when compared to the same 2024 periods, driven by increased income from our fixed income portfolio due to a higher book yield of 5.3% at September 30, 2025 compared to 5.0% at September 30, 2024 and larger asset base.

Net investment income for the first quarter of 2026 increased $7.6 million when compared to the same 2025 period, driven by increased income from our fixed income portfolio due to a larger asset base as a result of the Apollo acquisition and a higher book yield of 5.3% at March 31, 2026 compared to 5.2% at March 31, 2025.

The alternative and strategic investments portfolio continued to be impacted by the decline in the fair value of limited partnership investments.

The decreases in income from the short-term investments and cash and cash equivalents was due to an overall decrease in yields when compared to the same 2024 periods.

The decrease in income from equities was due to the sale of almost all of the equity portfolio in the third quarter of 2025.

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.

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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.

We reviewed our available-for-sale fixed maturities at June 30, 2025 and recognized a provision for credit losses of $6.2 million for two available-for-sale “corporate securities and miscellaneous” securities.

At September 30, 2025, we recognized an additional provision for credit losses of $0.8 million for one available-for-sale “corporate securities and miscellaneous” security.

Other than the securities discussed previously, we determined that no other credit impairment existed at September 30, 2025.

We reviewed our available-for-sale fixed maturities at March 31, 2026, we recognized a recovery of amounts previously written off for credit losses of $0.5 million for one available-for-sale “corporate securities and miscellaneous” security, bringing our total allowance down to $6.5 million on two securities.

Other than the securities discussed previously, we determined that no other credit impairment existed at March 31, 2026.

See Note 3, “Investments” to our condensed consolidated financial statements included in Item 1 of this Form 10-Q for additional information.

Composition of Investment Portfolio

The following table sets forth the components of our investment portfolio at carrying value at September 30, 2025 and December 31, 2024:

($ in thousands) Carrying Value

% of Total Carrying Value

Cash and cash equivalents $ 160,068 6.7 % $ 121,603 6.1 %

Short-term investments 247,376 10.3 % 274,929 13.8 %

Fixed income 1,815,216 75.8 % 1,318,708 66.2 %

Equities 1,182 0.1 % 106,254 5.3 %

Alternative and strategic investments 170,014 7.1 % 170,929 8.6 %

Total portfolio $ 2,393,856 100.0 % $ 1,992,423 100.0 %

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, 2025 and December 31, 2024:

The following table sets forth the components of our fixed income securities at March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

($ in thousands) Carrying Value % of Total

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government securities $ 159,548 7.2 % $ 44,468 2.4 %

government securities 2,671 0.1 % — — %

Corporate securities and miscellaneous 800,485 36.3 % 636,387 34.1 %

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Total fixed income portfolio $ 2,204,195 100.0 % $ 1,866,205 100.0 %

The weighted average credit rating of our available-for-sale fixed income portfolio was “A+” at September 30, 2025 and “AA-” at December 31, 2024.

The following table sets forth the credit quality of our available-for-sale fixed income portfolio at September 30, 2025 and December 31, 2024:

The weighted average credit rating of our available-for-sale fixed income portfolio was “A+” at March 31, 2026 and December 31, 2025.

The following table sets forth the credit quality of our available-for-sale fixed income portfolio at March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

($ in thousands) Fair Value % of Total Fair Value % of Total

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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 4.07 years and 4.34 years, respectively, as of September 30, 2025 and December 31, 2024.

The equities portfolio primarily consisted of domestic preferred stocks, common equities, exchange traded funds, limited partnerships, limited liability corporations and other types of equity interests, 100.0% of which were publicly traded.

During the third quarter of 2025, we sold almost all of our equities portfolio, retaining only our preferred stocks.

The average duration of our fixed income portfolio was approximately 3.54 years and 3.60 years, respectively, as of March 31, 2026 and December 31, 2025.

Alternative and strategic investments

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Strategic investments consists of equity interests in private entities within the insurance industry.

Income tax expense for the three and nine months ended September 30, 2025 was $14.6 million and $35.0 million, respectively, compared to $10.2 million and $29.8 million, respectively, for the same 2024 periods.

Our effective tax rates for the three and nine months ended September 30, 2025 were 24.2% and 21.6%, respectively, compared to 21.7% and 22.2% for the same 2024 periods, respectively.

The effective tax rate for the three months ended September 30, 2025 was primarily impacted by a permanent tax item related to non-deductible acquisition expenses, which increased the effective tax rate by 1.1%.

Interest expense

Interest expense for the three months ended March 31, 2026 was $7.7 million compared to $1.8 million for the same 2025 period, 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 months ended March 31, 2026 was $8.8 million compared to $0.3 million for the same 2025 period.

The increase was due to the amortization of the value of business acquired (“VOBA”) asset and additional definite-lived intangible assets recognized in the Apollo acquisition.

Income tax expense for the three months ended March 31, 2026 was $12.3 million compared to $9.4 million for the same 2025 period.

Our effective tax rate for the three months ended March 31, 2026 was 19.9% compared to 18.2% for the same 2025 period.

The effective tax rate for the three months ended March 31, 2026 was impacted by certain discrete tax items, primarily tax benefits from stock-based compensation, which reduced the effective tax rate by 3.1%.

For additional information, see Note 11 of our condensed consolidated financial statements included in Item 1 of this Form 10-Q.

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Management believes that cash receipts from premiums and proceeds from investment income are sufficient to cover cash outflows in the foreseeable future.

Our cash flows for the nine months ended September 30, 2025 and 2024:

Our cash flows for the three months ended March 31, 2026 and 2025:

($ in thousands) 2026 2025

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Cash flows from operations in each of the past two years were used primarily to fund investing activities.

Net cash used in investing activities in 2025 and 2024 was primarily driven by purchases of fixed maturity securities.

The increase in net cash used in investing activities in 2026 when compared to 2025 was primarily driven by the cash paid for the acquisition of Apollo and the purchase of fixed maturity securities, partially offset by proceeds from the sales of investment securities.

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.

Credit Agreements

On August 30, 2024, we entered into a loan (the “FHLB Loan”) with the Federal Home Loan Bank of Dallas (the “FHLB”) pursuant to its Advances and Security Agreement.

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.

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The FHLB Loan is fully secured by a pledge of specific investment securities of HSIC.

We used the proceeds to fund the redemption of the March 15, 2024 draw on the Revolving Credit Facility and redeemed $7.0 million of the March 29, 2023 draw on the Revolving Credit Facility (see “Revolving Credit Facility” below for additional information regarding the redemption).

We used the proceeds to fund redemptions of the draws on the prior credit facility.

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”) and together with the Tranche A DDTL, the “Term Loan Facility”).

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 million of the Tranche A DDTL and $150 million of the Tranche B DDTL for the acquisition of Apollo on January 1, 2026.

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 March 31, 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 by us and our existing wholly-owned subsidiaries and subsequently acquired or organized subsidiaries, excluding insurance company subsidiaries and subject to certain other exceptions.

We report debt related to the Term Loan Facility as of March 31, 2026 Condensed Consolidated Balance Sheet, net of debt issuance costs of approximately $5.1 million.

These deferred financing costs are presented as a direct deduction from the carrying amount of the debt.

Revolving Credit Facility

On March 29, 2023, we entered into an unsecured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of participating banks.

The Revolving Credit Facility provides us with up to a $150.0 million revolving credit facility and a letter of credit sub-facility of up to $30.0 million.

On March 14, 2024, we drew $50.0 million on the Revolving Credit Facility and used the proceeds and existing cash to fund the redemption of the Debentures (see “Debentures” below for additional information regarding the redemption).

On August 30, 2024, we fully redeemed the March 15, 2024 draw on the Revolving Credit Facility and redeemed $7.0 million of the March 29, 2023 draw on the Revolving Credit Facility.

As of September 30, 2025, we had $43.0 million outstanding under the Revolving Credit Facility with another $107.0 million of undrawn capacity.

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 for the consideration paid for the acquisition of Apollo on January 1, 2026.

Interest on the Revolving Credit Facility is payable quarterly.

The interest rate on the Revolving Credit Facility is the SOFR plus a margin of between 150 and 190 basis points based on the ratio of debt to total capital and a credit spread adjustment of 10 basis points.

At September 30, 2025, the six-month SOFR on the Revolving Credit Facility was 3.87%, plus a margin of 1.60%.

Amounts drawn under the Facility bear interest at either term SOFR plus a margin, which ranges from 150 and 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 Facility, depending on our debt to capitalization ratio.

The availability period under the 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 of September 30, 2025, we are in compliance with all covenants.

In August 2006, we received $58.0 million of proceeds from a debenture offering through a statutory trust, Delos Capital Trust (the “Trust”).

The sole asset of the Trust consists of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Trust Preferred”) with a principal amount of $59.8 million issued by us and cash of $1.8 million from the issuance of Trust common shares purchased by us equal to 3% of the Trust capitalization.

On March 15, 2024, the Company redeemed the Debentures and paid $1.4 million of accrued interest.

Subordinated Debt

In May 2019, we issued unsecured subordinated notes (the “Notes”) with an aggregate principal amount of $20.0 million.

Interest on the subordinated notes is 7.25% fixed for the first eight years and 8.25% fixed thereafter.

Early retirement of the debt ahead of the eight-year commitment requires all interest payments to be paid in full, as well as the return of all capital.

Principal payment is due at maturity on May 24, 2039 and interest is payable quarterly.

At September 30, 2025 the ratio of total debt outstanding, including the FHLB Loan, the Revolving Credit Facility and the Notes, to total capitalization (defined as total debt plus stockholders’ equity) was 11.1% and at December 31, 2024, the ratio of total debt outstanding, including the Term Loan, the Revolver, the Trust Preferred and the Notes, to total capitalization was 13.1%.

Best Rating and minimum liquidity, as well as customary events of default.

As of March 31, 2026, we were in compliance with all covenants.

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 March 31, 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 of Directors approved a share repurchase program authorizing the repurchase of up to $50.0 million of our common stock.

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 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.

As of September 30, 2025, no shares had been repurchased under this plan.

As of March 31, 2026, no shares have been repurchased under this plan.

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.

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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, 2025 our net retention on a written basis (calculated as net written premiums as a percentage of gross written premiums) was 72.7% and 65.1%, respectively, compared to 67.1% and 62.9% for the same 2024 periods, respectively.

The following is a summary of our reinsurance programs as of September 30, 2025:

Line of Business Maximum Company Retention

Accident & Health $0.90 million per occurrence

Commercial Auto (1)

$1.00 million per occurrence

Excess Casualty (1)(2)

$1.25 million per occurrence

General Liability (1)

$1.50 million per occurrence

Ocean Marine (2)

$3.00 million per occurrence

Professional Lines (2)

$5.21 million per occurrence

$3.50 million per occurrence

Representation and Warranty $3.25 million per occurrence

$5.00 million per occurrence

Workers’ Compensation (2)

$2.33 million per occurrence

(1) Legal defense expenses can force exposure above the maximum company retention for Excess Casualty, Commercial Auto and General Liability.

(2) Reinsurance is subject to a loss ratio cap or aggregate level of loss cover that exceeds a modeled 1:250-year PML event.

(3) Catastrophe loss protection is purchased up to $36.0 million in excess of $12.0 million retention, which provides cover for a 1:250-year PML event.

For the three months ended March 31, 2026 our net retention on a written basis (calculated as net written premiums as a percentage of gross written premiums) was 64.8% compared to 64.1% for the same 2025 period.

Credit and Financial Strength Ratings

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis