SKWD filing — read by section

Item 1. Financial Statements

Item 1. Financial Statements 
 
 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) 
 
 March 31, 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 $ 6,500 and $ 7,000 , respectively) (amortized cost of $ 2,208,212 and $ 1,848,755 , respectively) 
 $ 2,195,107 $ 1,856,303 
 Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of $ 301 and $ 468 , respectively) 
 30,094 32,822 
 Equity securities, at fair value 1,140 1,174 
 Mortgage loans, at fair value 9,088 9,902 
 Equity method investments 72,101 77,365 
 Other long-term investments 50,297 58,650 
 Short-term investments, at fair value 386,514 264,299 
 Total investments 2,744,341 2,300,515 
 Cash and cash equivalents 255,910 168,544 
 Restricted cash 60,521 30,570 
 Funds at Lloyd’s 108,846 2,509 
 Options, at fair value 24,401 34,857 
 Premiums and commissions receivable, net 830,509 544,217 
 Reinsurance recoverables, net 1,336,937 1,119,880 
 Ceded unearned premium 314,850 238,948 
 Deferred policy acquisition costs and VOBA 193,703 136,100 
 Deferred tax assets 44,138 27,865 
 Goodwill and intangible assets, net 473,316 88,040 
 Other assets 160,005 99,807 
 Total assets $ 6,547,477 $ 4,791,852 
 Liabilities and stockholders’ equity 
 Liabilities: 
 Reserves for losses and loss adjustment expenses $ 2,918,903 $ 2,318,894 
 Unearned premiums 1,014,666 774,035 
 Deferred ceding commission 49,035 46,453 
 Reinsurance and premium payables 479,412 279,888 
 Funds held for others 157,380 128,003 
 Deferred tax liabilities 68,466 — 
 Accounts payable and accrued liabilities 148,737 115,034 
 Notes payable 466,418 100,411 
 Subordinated debt, net of debt issuance costs 19,577 19,569 
 Total liabilities 5,322,594 3,782,287 
 Stockholders’ equity 
 
 Common stock, $ 0.01 par value, 500,000,000 shares authorized, 44,728,087 shares issued and 44,543,065 shares outstanding at March 31, 2026; 40,511,222 shares issued and outstanding at December 31, 2025 
 484 405 
 Treasury stock, at cost, 185,022 and 0 shares, respectively 
 ( 8,665 ) — 
 Additional paid-in capital 922,311 730,555 
 
 Accumulated other comprehensive (loss) income ( 6,126 ) 11,457 
 Retained earnings 316,879 267,148 
 Total stockholders’ equity 1,224,883 1,009,565 
 Total liabilities and stockholders’ equity $ 6,547,477 $ 4,791,852 
 

 The accompanying notes are an integral part of the consolidated financial statements. 
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 Table of Contents 

 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
 AND COMPREHENSIVE INCOME (UNAUDITED) 
 
 Three months ended March 31, 
 ($ in thousands, except share and per share amounts) 2026 2025 
 Revenues: 
 Net earned premiums $ 434,007 $ 300,366 
 Underwriting fee income 10,078 — 
 Commission and fee income 1,527 1,976 
 Net investment income 27,055 19,422 
 Net investment gains 3,185 6,750 
 
 Other income 15 13 
 Total revenues 475,867 328,527 
 Expenses: 
 Losses and loss adjustment expenses 265,223 187,309 
 Underwriting, acquisition and insurance expenses 124,614 86,551 
 Fee‑based service expenses 4,170 — 
 
 Interest expense 7,719 1,834 
 Amortization expense 8,843 337 
 Other expenses 3,222 1,061 
 Total expenses 413,791 277,092 
 Income before income taxes 62,076 51,435 
 Income tax expense 12,345 9,377 
 Net income $ 49,731 $ 42,058 
 Comprehensive income 
 Net income $ 49,731 $ 42,058 
 Other comprehensive (loss) income: 
 Unrealized gains and losses on investments: 
 Net change in unrealized (losses) gains on investments, net of tax ( 17,217 ) 12,255 
 Reclassification adjustment for gains (losses) on securities no longer held, net of tax 502 ( 182 ) 
 Foreign currency translation adjustment ( 868 ) — 
 Total other comprehensive (loss) income ( 17,583 ) 12,073 
 Comprehensive income $ 32,148 $ 54,131 
 Per share data: 
 Basic earnings per share $ 1.12 $ 1.05 
 Diluted earnings per share $ 1.09 $ 1.01 
 Weighted-average common shares outstanding 
 Basic 44,463,167 40,196,416 
 Diluted 45,443,960 41,680,595 
 

 The accompanying notes are an integral part of the consolidated financial statements. 
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 Table of Contents 

 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) 
 
 
 Three months ended March 31, 
 ($ in thousands, except share amounts) 2026 2025 
 Common shares: 
 Balance at beginning of year 40,511,222 40,127,908 
 Issuance of shares 4,031,843 274,971 
 Balance at March 31, 44,543,065 40,402,879 
 Treasury shares: 
 Balance at beginning of year — — 
 Shares acquired 185,022 — 
 
 Balance at March 31, 185,022 — 
 
 
 
 
 Common stock: 
 Balance at beginning of year $ 405 $ 401 
 Issuance of common stock 79 3 
 
 
 Balance at March 31, $ 484 $ 404 
 Treasury stock: 
 Balance at beginning of year $ — $ — 
 Treasury stock acquired ( 8,665 ) — 
 Balance at March 31, $ ( 8,665 ) $ — 
 Additional paid-in capital: 
 Balance at beginning of year $ 730,555 $ 718,598 
 Issuance of common stock 191,756 2,588 
 
 
 Balance at March 31, $ 922,311 $ 721,186 
 
 
 
 
 Accumulated other comprehensive loss: 
 Balance at beginning of year $ 11,457 $ ( 22,120 ) 
 Other comprehensive (loss) income, net of tax ( 17,583 ) 12,073 
 Balance at March 31, $ ( 6,126 ) $ ( 10,047 ) 
 Retained earnings: 
 Balance at beginning of year $ 267,148 $ 97,120 
 
 Net income 49,731 42,058 
 Balance at March 31, $ 316,879 $ 139,178 
 Total stockholders’ equity $ 1,224,883 $ 850,721 
 

 The accompanying notes are an integral part of the consolidated financial statements. 
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 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 Cash flows from operating activities: 
 Net income $ 49,731 $ 42,058 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Adjustments to reconcile net income to net cash provided by operating activities 66,806 54,702 
 Net cash provided by operating activities 116,537 96,760 
 Cash flows from investing activities: 
 Net cash paid in acquisition ( 303,035 ) — 
 Purchase of fixed maturity securities, available-for-sale ( 269,921 ) ( 126,827 ) 
 
 Purchase of equity securities — ( 8,422 ) 
 Purchase of equity method investments and other long-term investments ( 283 ) ( 200 ) 
 
 Investment in direct and indirect loans 442 13,829 
 Proceeds from the sales of (payments for the purchase of) property and equipment 1,654 ( 202 ) 
 Proceeds from the sales of fixed maturity securities, available-for-sale 84,032 8,195 
 Maturities, calls, transfers and paydowns of fixed maturity securities, available-for-sale 50,210 29,537 
 
 Maturities, calls and paydowns of fixed maturity securities held-to-maturity 1,536 2,129 
 Proceeds from the sales of equity securities — 8,748 
 Sales of and distributions from equity method and other long-term investments 13,628 4,396 
 Change in short-term investments 64,961 ( 33,162 ) 
 Change in receivable/payable for securities ( 9,525 ) — 
 Cash provided by deposit accounting 4,457 1,200 
 
 Net cash used in investment activities ( 361,844 ) ( 100,779 ) 
 Cash flows from financing activities: 
 Proceeds from issuance of common stock 200 — 
 
 Proceeds from long term borrowings 371,089 — 
 
 Treasury stock acquired ( 8,665 ) — 
 Net cash provided by financing activities 362,624 — 
 Net increase in cash and cash equivalents and restricted cash 117,317 ( 4,019 ) 
 Cash and cash equivalents and restricted cash at beginning of period (1) 
 199,114 157,525 
 Cash and cash equivalents and restricted cash at end of period (1) 
 $ 316,431 $ 153,506 
 Supplemental disclosure of cash flow information: 
 Cash paid for interest $ 6,246 $ 1,805 
 
 (1) The sum of cash and cash equivalents and restricted cash from the consolidated balance sheets 
 
 

 The accompanying notes are an integral part of the consolidated financial statements. 
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 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. (the “Company”), 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 and assumed net reserves for certain divisions, related to a retroactive reinsurance contract, from the Company’s insurance companies and retroceded the net reserves to a third-party reinsurer. 
 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. 
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 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 1. Summary of Significant Accounting Policies (continued) 
 
 
 
 
 
 

 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 nine Lloyd’s syndicates. Syndicate 1969, underwrites a diversified specialty portfolio, Syndicate 1971 focuses on digital‑economy and technology‑enabled risks, and Syndicate 1972 provides reinsurance for Apollo managed syndicates and provides a quota share facility for Syndicates 1969 and 1971. 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. 
 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 commission is contingent on syndicate profitability and is 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 stockholder’s 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 stockholder’s 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 March 31, 2026 and 2025: 
 
 ($ in thousands) Accident
and Health Credit & Surety Energy Solutions Apollo Other Total 
 Goodwill 
 Gross balance at December 31, 2025 $ 91,577 $ 6,781 $ 10,204 $ — $ 3,879 $ 112,441 
 Accumulated impairment at December 31, 2025 ( 44,821 ) — — — ( 1,886 ) ( 46,707 ) 
 Additions — — — 125,408 — 125,408 
 
 
 Net balance at March 31, 2026 $ 46,756 $ 6,781 $ 10,204 $ 125,408 $ 1,993 $ 191,142 
 

 
 ($ in thousands) Accident
and Health Credit & Surety Energy Solutions Other Total 
 Goodwill 
 Gross balance at December 31, 2024 $ 91,577 $ 6,781 $ 10,204 $ 3,879 $ 112,441 
 Accumulated impairment at December 31, 2024 ( 44,821 ) — — ( 1,886 ) ( 46,707 ) 
 
 
 
 Net balance at March 31, 2025 $ 46,756 $ 6,781 $ 10,204 $ 1,993 $ 65,734 
 

 The following tables set forth the carrying amount and changes in the balance of other intangible assets at March 31, 2026 and 2025: 
 
 ($ in thousands) Agent
Relationships Non-competes Trademarks Syndicate Capacity Licenses Total 
 Other Intangible Assets 
 Gross balance at December 31, 2025 $ 26,491 $ 1,117 $ 999 $ — $ 14,019 $ 42,626 
 Accumulated amortization at December 31, 2025 ( 19,203 ) ( 1,117 ) — — — ( 20,320 ) 
 Additions 27,000 — 35,000 200,000 — 262,000 
 
 
 Amortization ( 1,257 ) — ( 875 ) — — ( 2,132 ) 
 Net balance at March 31, 2026 $ 33,031 $ — $ 35,124 $ 200,000 $ 14,019 $ 282,174 
 

 
 ($ in thousands) Agent
Relationships Non-competes Trademarks Licenses Total 
 Other Intangible Assets 
 Gross balance at December 31, 2024 $ 24,491 $ 1,117 $ 999 $ 14,019 $ 40,626 
 Accumulated amortization at December 31, 2024 ( 17,895 ) ( 1,117 ) — — ( 19,012 ) 
 
 
 
 Amortization ( 259 ) — — — ( 259 ) 
 Net balance at March 31, 2025 $ 6,337 $ — $ 999 $ 14,019 $ 21,355 
 

 The Company’s indefinite lived intangible assets relate to insurance licenses, trademarks and Lloyd’s syndicates capacity. Its finite lived intangible assets, which relate to policy renewals, agency relationships, within agent relationships, finite syndicates capacity relationships and non-compete/exclusivity agreements, within non-competes, have a weighted average useful life of approximately 9 years as of March 31, 2026. 
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 Table of Contents 
 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 2. Goodwill and Intangible Assets (continued) 

 The Company recognized approximately $ 2.1 million and $ 0.3 million in amortization expense for the three months ended March 31, 2026 and 2025, respectively. The following table sets forth the estimated future net amortization expense of intangible assets: 
 
 ($ in thousands) 
 
 
 Amount 
 Remainder of 2026 $ 6,394 
 Year Ending December 31, 2027 8,525 
 Year Ending December 31, 2028 8,525 
 Year Ending December 31, 2029 8,233 
 Year Ending December 31, 2030 8,025 
 

 
 3. Investments 
 The following tables set forth the amortized cost and the fair value by investment category at March 31, 2026 and December 31, 2025: 
 
 ($ in thousands) Amortized 
Cost Gross 
Unrealized 
Gains Gross 
Unrealized 
Losses Allowance for Credit Losses Fair Value 
 March 31, 2026 
 Fixed maturity securities, available-for-sale: 
 U.S. government securities $ 160,144 $ 178 $ ( 774 ) $ — $ 159,548 
 Non U.S government securities 2,696 — ( 25 ) — 2,671 
 Corporate securities and miscellaneous 807,859 8,007 ( 8,881 ) ( 6,500 ) 800,485 
 Municipal securities 96,647 1,150 ( 2,168 ) — 95,629 
 Residential mortgage-backed securities 475,069 6,260 ( 10,154 ) — 471,175 
 Commercial mortgage-backed securities 79,618 669 ( 615 ) — 79,672 
 Other asset-backed securities 586,179 3,239 ( 3,491 ) — 585,927 
 Total fixed maturity securities, available-for-sale $ 2,208,212 $ 19,503 $ ( 26,108 ) $ ( 6,500 ) $ 2,195,107 
 Fixed maturity securities, held-to-maturity: 
 Other asset-backed securities $ 30,395 $ 4,196 $ — $ ( 301 ) $ 34,290 
 Total fixed maturity securities, held-to-maturity $ 30,395 $ 4,196 $ — $ ( 301 ) $ 34,290 
 
 

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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 $ 44,190 $ 292 $ ( 14 ) $ — $ 44,468 
 Corporate securities and miscellaneous 632,244 14,223 ( 3,080 ) ( 7,000 ) 636,387 
 Municipal securities 102,691 1,725 ( 2,300 ) — 102,116 
 Residential mortgage-backed securities 487,145 8,928 ( 9,486 ) — 486,587 
 Commercial mortgage-backed securities 72,631 1,016 ( 597 ) — 73,050 
 Other asset-backed securities 509,854 5,194 ( 1,353 ) — 513,695 
 Total fixed maturity securities, available-for-sale $ 1,848,755 $ 31,378 $ ( 16,830 ) $ ( 7,000 ) $ 1,856,303 
 Fixed maturity securities, held-to-maturity: 
 Other asset-backed securities $ 33,290 $ 829 $ ( 48 ) $ ( 468 ) $ 33,603 
 Total fixed maturity securities, held-to-maturity $ 33,290 $ 829 $ ( 48 ) $ ( 468 ) $ 33,603 
 
 
 
 
 
 

 
 The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at March 31, 2026: 
 
 
 
 ($ in thousands) Amortized 
Cost Fair Value 
 Due in less than one year $ 56,515 $ 54,611 
 Due after one year through five years 636,682 630,559 
 Due after five years through ten years 304,483 305,672 
 Due after ten years 69,666 67,491 
 Mortgage-backed securities 554,687 550,847 
 Other asset-backed securities 586,179 585,927 
 Total $ 2,208,212 $ 2,195,107 
 

 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 March 31, 2026 consisted entirely of asset backed securities that were not due at a single maturity date. 
 At March 31, 2026, the Company had U.S. government agencies mortgage-backed fixed maturity securities, with a carrying value of approximately $ 71.3 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 March 31, 2026, the Company had assets with fair values of approximately $ 77.5 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 $ 63.2 million are residential mortgage-backed securities, $ 12.1 million of cash and cash equivalents and other assets and $ 2.2 million of short-term investments. 
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 Table of Contents 
 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 March 31, 2026 and 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 
 March 31, 2026 
 Fixed maturity securities, available-for-sale: 
 U.S. government securities $ 91,541 $ ( 769 ) $ 707 $ ( 5 ) $ 92,248 $ ( 774 ) 
 Non-U.S. government securities 2,671 ( 25 ) — — 2,671 ( 25 ) 
 Corporate securities and miscellaneous 341,776 ( 4,883 ) 57,293 ( 3,998 ) 399,069 ( 8,881 ) 
 Municipal securities 23,170 ( 296 ) 19,570 ( 1,872 ) 42,740 ( 2,168 ) 
 Residential mortgage-backed securities 130,908 ( 1,017 ) 69,744 ( 9,137 ) 200,652 ( 10,154 ) 
 Commercial mortgage-backed securities 11,391 ( 21 ) 8,276 ( 594 ) 19,667 ( 615 ) 
 Other asset-backed securities 328,244 ( 2,584 ) 7,783 ( 907 ) 336,027 ( 3,491 ) 
 
 
 
 
 Total $ 929,701 $ ( 9,595 ) $ 163,373 $ ( 16,513 ) $ 1,093,074 $ ( 26,108 ) 
 

 
 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 $ 349 $ ( 1 ) $ 1,565 $ ( 13 ) $ 1,914 $ ( 14 ) 
 Corporate securities and miscellaneous 67,644 ( 346 ) 63,575 ( 2,734 ) 131,219 ( 3,080 ) 
 Municipal securities 19,157 ( 400 ) 22,004 ( 1,900 ) 41,161 ( 2,300 ) 
 Residential mortgage-backed securities 56,147 ( 262 ) 74,075 ( 9,224 ) 130,222 ( 9,486 ) 
 Commercial mortgage-backed securities 4,646 ( 3 ) 8,363 ( 594 ) 13,009 ( 597 ) 
 Other asset-backed securities 85,098 ( 424 ) 16,081 ( 929 ) 101,179 ( 1,353 ) 
 Total fixed maturity securities, available-for-sale 233,041 ( 1,436 ) 185,663 ( 15,394 ) 418,704 ( 16,830 ) 
 Fixed maturity securities, held-to-maturity: 
 Other asset-backed securities 1,912 ( 48 ) — — 1,912 ( 48 ) 
 Total fixed maturity securities, held-to-maturity: 1,912 ( 48 ) — — 1,912 ( 48 ) 
 Total $ 234,953 $ ( 1,484 ) $ 185,663 $ ( 15,394 ) $ 420,616 $ ( 16,878 ) 
 

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 Table of Contents 
 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 3. Investments (continued) 

 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 March 31, 2026, the Company had 1,057 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 March 31, 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. 
 • 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 three months ended March 31, 2026 and 2025: 
 
 ($ in thousands) Fixed Maturity Securities, Available-For-Sale Fixed Maturity Securities, Held-to-Maturity 
 Balance at December 31, 2025 $ 7,000 $ 468 
 
 
 Recoveries of amounts previously written off ( 500 ) ( 167 ) 
 Balance at March 31, 2026 $ 6,500 $ 301 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Fixed Maturity Securities, Held-to-Maturity 
 Balance at December 31, 2024 $ 243 
 Current period provision for credit losses 7 
 
 
 Balance at March 31, 2025 $ 250 
 
 
 
 
 
 
 
 
 

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 Table of Contents 
 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 months ended March 31, 2026 and 2025: 
 
 
 ($ in thousands) 2026 2025 
 Gross realized gains 
 Fixed maturity securities, available-for-sale $ 1,632 $ 453 
 Equity securities — 1,745 
 Other 175 4 
 Total 1,807 2,202 
 Gross realized losses 
 Fixed maturity securities, available-for-sale ( 258 ) ( 120 ) 
 Equity securities — ( 678 ) 
 Other ( 139 ) ( 61 ) 
 Total ( 397 ) ( 859 ) 
 Net unrealized gains (losses) on investments 
 Equity securities ( 33 ) 1,080 
 Mortgage loans 99 ( 66 ) 
 Other 1,709 4,393 
 Net investment gains 
 $ 3,185 $ 6,750 
 

 The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the three months ended March 31, 2026 and 2025: 
 
 
 ($ in thousands) 2026 2025 
 Fixed maturity securities, available-for-sale $ 84,032 $ 8,195 
 Equity securities — 8,748 
 

 The following table sets forth the components of net investment income for the three months ended March 31, 2026 and 2025: 
 
 
 ($ in thousands) 2026 2025 
 Income (loss): 
 Fixed maturity securities, available-for-sale $ 29,411 $ 17,288 
 Fixed maturity securities, held-to-maturity ( 1,077 ) 822 
 Equity securities 18 617 
 Equity method investments ( 1,297 ) ( 1,988 ) 
 Mortgage loans ( 665 ) 661 
 Indirect loans ( 1,793 ) ( 741 ) 
 Short-term investments and cash 3,474 3,192 
 Other 686 1,061 
 Total investment income 28,757 20,912 
 Investment expenses ( 1,702 ) ( 1,490 ) 
 Net investment income $ 27,055 $ 19,422 
 

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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 months ended March 31, 2026 and 2025: 
 
 
 ($ in thousands) 2026 2025 
 Fixed maturity securities $ ( 21,154 ) $ 15,284 
 Deferred income taxes 3,571 ( 3,211 ) 
 Total $ ( 17,583 ) $ 12,073 
 

 
 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 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. 
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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 table sets forth the range of the discount rate as of March 31, 2026 and December 31, 2025: 
 
 
 March 31, 2026 December 31, 2025 
 High 11.35 % 11.10 % 
 Low 4.66 % 4.25 % 
 Weighted average 6.73 % 6.40 % 
 

 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 following table sets forth the range and weighted average, weighted by relative fair value, of the spread as of March 31, 2026 and December 31, 2025: 
 
 
 March 31, 2026 December 31, 2025 
 High 8.09 % 8.34 % 
 Low 6.54 % 6.55 % 
 Weighted average 7.67 % 7.74 % 
 

 Derivatives 
 Included in other assets 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 March 31, 2026 and December 31, 2025: 
 
 March 31, 2026 
 ($ in thousands) Level 1 Level 2 Level 3 Total 
 Fixed maturity securities, available-for-sale: 
 U.S. government securities $ 159,548 $ — $ — $ 159,548 
 Non U.S government securities — 2,671 — 2,671 
 Corporate securities and miscellaneous — 658,638 141,847 800,485 
 Municipal securities — 95,629 — 95,629 
 Residential mortgage-backed securities — 471,175 — 471,175 
 Commercial mortgage-backed securities — 79,672 — 79,672 
 Other asset-backed securities — 568,324 17,603 585,927 
 Total fixed maturity securities, available-for-sale 159,548 1,876,109 159,450 2,195,107 
 Fixed maturity securities, held-to-maturity: 
 Other asset-backed securities — — 34,290 34,290 
 Total fixed maturity securities, held-to-maturity — — 34,290 34,290 
 Equity securities: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Preferred stocks — 1,140 — 1,140 
 
 
 
 
 
 Total equity securities — 1,140 — 1,140 
 Mortgage loans — — 9,088 9,088 
 Short-term investments 386,514 — — 386,514 
 Derivatives 24,401 — — 24,401 
 Total $ 570,463 $ 1,877,249 $ 202,828 $ 2,650,540 
 

 
 
 
 
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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 $ 44,468 $ — $ — $ 44,468 
 Corporate securities and miscellaneous — 503,274 133,113 636,387 
 Municipal securities — 102,116 — 102,116 
 Residential mortgage-backed securities — 486,587 — 486,587 
 Commercial mortgage-backed securities — 73,050 — 73,050 
 Other asset-backed securities — 495,891 17,804 513,695 
 Total fixed maturity securities, available-for-sale 44,468 1,660,918 150,917 1,856,303 
 Fixed maturity securities, held-to-maturity: 
 Other asset-backed securities — — 33,603 33,603 
 Total fixed maturity securities, held-to-maturity: — — 33,603 33,603 
 Equity securities: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Preferred stocks — 1,174 — 1,174 
 
 
 
 
 
 Total equity securities — 1,174 — 1,174 
 Mortgage loans — — 9,902 9,902 
 Short-term investments 264,299 — — 264,299 
 Derivatives 34,857 — — 34,857 
 Total $ 343,624 $ 1,662,092 $ 194,422 $ 2,200,138 
 

 
 The following tables set forth the changes in the fair value of instruments carried at fair value with a Level 3 measurement during the three months ended March 31, 2026 and 2025: 
 
 ($ in thousands) Fixed Maturity Securities, Available-For-Sale Mortgage Loans 
 Balance at December 31, 2025 $ 150,917 $ 9,902 
 Total losses for the period recognized in net investment gains ( 62 ) ( 814 ) 
 
 
 Purchases 11,266 — 
 Sales/Disposals ( 334 ) — 
 Total unrealized losses for the period recognized in accumulated comprehensive (loss) income ( 2,337 ) — 
 Balance at March 31, 2026 $ 159,450 $ 9,088 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 ($ in thousands) Fixed Maturity Securities, Available-For-Sale Mortgage Loans 
 Balance at December 31, 2024 $ 77,920 $ 26,490 
 Total losses for the period recognized in net investment gains ( 110 ) ( 66 ) 
 Issuances — 5 
 Settlements — ( 10,417 ) 
 Purchases 5,164 — 
 Sales/Disposals ( 199 ) — 
 Total unrealized gains for the period recognized in accumulated comprehensive income (loss) 682 — 
 Balance at March 31, 2025 $ 83,457 $ 16,012 
 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 $ — $ ( 84 ) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 4. Fair Value Measurements (continued) 

 The transfers into Level 3 during the three months ended March 31, 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. 
 
 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 March 31, 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 $ 47.2 million at March 31, 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 $ 18.3 million at March 31, 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 Standard 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 March 31, 2026 and December 31, 2025: 
 
 March 31, 2026 December 31, 2025 
 ($ in thousands) Carrying 
Value Fair 
Value Carrying 
Value Fair 
Value 
 Notes payable 
 FHLB Loan $ 57,000 $ 57,112 $ 57,000 $ 57,458 
 Revolving Credit Facility 114,500 114,500 114,500 114,500 
 Term Loan Facility, net of debt issuance costs 294,918 294,207 300,000 300,000 
 Notes payable $ 466,418 $ 465,819 $ 471,500 $ 471,958 
 Subordinated debt 
 
 Unsecured subordinated notes $ 19,577 $ 20,395 $ 19,569 $ 21,020 
 Subordinated debt, net of debt issuance costs $ 19,577 $ 20,395 $ 19,569 $ 21,020 
 

 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 March 31, 2026 and December 31, 2025, the Company held direct investments in mortgage loans from various creditors through SMA1 and SMA2. 
 The Company’s mortgage loan portfolios are primarily senior loans on real estate across the U.S. The loans earn interest at a fixed spread above a prime rate and mature in approximately 2 to 4 years from loan origination. The principal amounts of the loans are approximately 64 % of the property’s appraised value at the time the loans were made. 
 The following table sets forth the carrying value of the Company’s mortgage loans as of March 31, 2026 and 2025: 
 
 ($ in thousands) March 31, 2026 December 31, 2025 
 Commercial $ 2,468 $ 3,334 
 
 Hospitality 6,620 6,568 
 
 
 
 $ 9,088 $ 9,902 
 

 The following table sets forth the Company’s gross investment income for mortgage loans for the three months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 Commercial $ ( 824 ) $ 108 
 Retail — 304 
 Hospitality 159 249 
 
 
 
 
 $ ( 665 ) $ 661 
 

 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 write-off for uncollectible amounts during the three months ended March 31, 2026 and 2025, respectively. 
 As of March 31, 2026 and as of December 31, 2025, $ 2.5 million mortgage loans were in the process of foreclosure and there was 1 mortgage loan that was not producing income for the previous 12 months. 
 
 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 March 31, 2026 and 2025: 
 
 ($ in thousands) March 31, 2026 December 31, 2025 
 Carrying Value Ownership % Carrying Value Ownership % 
 Arena Special Opportunities Fund, LP units $ 24,011 13.4 % $ 26,936 14.0 % 
 JVM Funds LLC units 14,155 10.1 % 14,911 10.1 % 
 Hudson Ventures Fund 2 LP units 5,397 2.5 % 5,503 2.5 % 
 RISCOM 4,026 20.0 % 3,307 20.0 % 
 Brewer Lane Ventures Fund II LP units 2,522 2.3 % 2,251 2.4 % 
 Dowling Capital Partners LP units 292 5.0 % 590 5.0 % 
 
 Arena SOP LP units — 11.3 % — 11.2 % 
 $ 50,403 $ 53,498 
 

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 Table of Contents 
 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 months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 RISCOM $ 719 $ ( 128 ) 
 Dowling Capital Partners LP units 175 13 
 Hudson Ventures Fund II LP units ( 106 ) ( 25 ) 
 Brewer Lane Ventures Fund II LP ( 12 ) 170 
 JVM Funds LLC ( 431 ) ( 211 ) 
 Arena SOP LP units — ( 1,256 ) 
 Arena Special Opportunities Fund, LP units ( 1,642 ) ( 551 ) 
 $ ( 1,297 ) $ ( 1,988 ) 
 

 The following table sets forth the unfunded commitment of equity method investments as of March 31, 2026 and December 31, 2025: 
 
 ($ in thousands) March 31, 2026 December 31, 2025 
 Brewer Lane Ventures Fund II LP units $ 2,650 $ 3,237 
 Dowling Capital Partners LP units 386 386 
 Hudson Ventures Fund 2 LP units 166 166 
 $ 3,202 $ 3,789 
 

 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 March 31, 2026 and December 31, 2025: 
 
 ($ in thousands) March 31, 2026 December 31, 2025 
 Investment in RISCOM: 
 Underlying equity $ 3,073 $ 2,292 
 Difference 953 1,015 
 Recorded investment balance $ 4,026 $ 3,307 
 

 The following table sets forth the Company’s recorded investment in JVM Funds LLC compared to its share of underlying equity as of March 31, 2026 and December 31, 2025: 
 
 ($ in thousands) March 31, 2026 December 31, 2025 
 Investment in JVM Funds LLC: 
 Underlying equity $ 13,739 $ 14,457 
 Difference 416 454 
 Recorded investment balance $ 14,155 $ 14,911 
 

 Investment in Indirect Loans and Loan Collateral 
 As of March 31, 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 March 31, 2026 and December 31, 2025 were as follows: 
 
 ($ in thousands) March 31, 2026 December 31, 2025 
 
 SMA1 $ 13,823 $ 15,418 
 SMA2 7,875 8,449 
 Investment in indirect loans and loan collateral $ 21,698 $ 23,867 
 
 

 
 7. Variable Interest Entity 
 Pursuant to GAAP consolidation guidance, Skyward consolidates Separate Account HSIC-01 (“HSIC-01”), established by Mangrove Risk Solutions Bermuda Ltd. (“Mangrove”). HSIC-01 is a 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 March 31, 2026. The assets presented below only include third-party net assets and exclude any intercompany balances, which were eliminated upon consolidation. 
 
 ($ in thousands) March 31, 2026 
 Assets 
 Cash and cash equivalents 20,196 
 
 
 
 
 Options, at fair value 24,401 
 Total assets $ 44,597 
 
 
 
 
 
 

 
 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 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 March 31, 2026: 
 
 
 ($ in thousands) Derivative Assets 
 Notional Amount Fair Value 
 Economic hedges $ 188,191 $ 24,401 
 

 The Company presents the net gain (loss) recognized on derivative instruments in economic hedging relationships in “losses and loss adjustment expenses” on the condensed consolidated statements of operations. For the three months ended March 31, 2026, the Company recognized $ 31.3 million, respectively, of pre-tax net losses in losses and loss adjustment expenses. 
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 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. 
 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 of $ 150.0 million (the “Tranche B DDTL” and together with the Tranche A DDTL, the “Term Loan Facility”). 
 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 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 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 March 31, 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 and its 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 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 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 a 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 (described below). 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. 
 Interest on the Revolving Credit Facility is payable quarterly. 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 
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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 9. Notes Payable & Subordinated Debt (continued) 

 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 availability period under the 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 March 31, 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 March 31, 2026 Condensed Consolidated Balance Sheet and its 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. 
 
 10. 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 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 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 contribution. 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. 
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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 10. Segments (continued) 

 The following table presents gross written premiums by underwriting division for the three months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 Skyward Specialty Segment 
 Accident & Health $ 92,009 $ 63,169 
 Captives 57,914 66,929 
 Credit & Surety 64,174 45,028 
 Energy Solutions 48,866 75,594 
 Global Agriculture 102,352 80,617 
 Global Property 34,517 46,686 
 Professional Lines 36,228 40,217 
 Specialty Programs 94,767 62,675 
 Transactional E&S 50,064 52,006 
 Total continuing business 580,891 532,921 
 Exited business 913 2,405 
 Total Skyward Specialty Segment gross written premiums 581,804 535,326 
 Apollo Segment 
 Syndicate 1969 65,008 — 
 Syndicate 1971 20,892 — 
 Total Apollo Segment gross written premiums 85,900 — 
 Total gross written premiums $ 667,704 $ 535,326 
 
 

 The following table sets forth the Apollo segment’s managed premiums for the three months ended March 31, 2026: 
 
 Three months ended March 31, 
 2026 
 
 
 Aligned Syndicates 210,549 
 Partner Syndicates 89,456 
 Total managed premiums $ 300,005 
 
 

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 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 10. Segments (continued) 

 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 months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 2026 2025 
 ($ in thousands) Skyward Specialty Apollo Total Skyward Specialty Total 
 Underwriting income 
 Revenues: 
 Net earned premiums $ 363,943 $ 70,064 $ 434,007 $ 300,366 $ 300,366 
 Underwriting fee income — 10,078 10,078 — — 
 Commission and fee income 1,527 — 1,527 1,976 1,976 
 Total underwriting revenues 365,470 80,142 445,612 302,342 302,342 
 Expenses: 
 Losses and LAE 228,231 36,992 265,223 187,309 187,309 
 Amortization of policy acquisition costs 51,059 8,557 59,616 44,490 44,490 
 Other operating and general expenses 45,904 14,185 60,089 38,148 38,148 
 Corporate expenses — — 4,909 — 3,913 
 Fee‑based service expenses — 4,170 4,170 — — 
 Total underwriting expenses 325,194 63,904 394,007 269,947 273,860 
 Underwriting income $ 40,276 $ 16,238 $ 51,605 $ 32,395 $ 28,482 
 
 Reconciliation of underwriting income to net income: 
 Underwriting income $ 51,605 $ 28,482 
 Add: 
 Net investment income 27,055 19,422 
 Net investment gains 3,185 6,750 
 Other income 15 13 
 Less: 
 Interest expense 7,719 1,834 
 Amortization expense 8,843 337 
 Other expenses 3,222 1,061 
 Income before income taxes 62,076 51,435 
 Income tax expense 12,345 9,377 
 Net income $ 49,731 $ 42,058 
 

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 SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 

 11. Income Taxes 
 
 The following table sets forth the Company’s income tax expense and effective tax rates for the three months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 Income tax expense $ 12,345 $ 9,377 
 Effective tax rate 19.9 % 18.2 % 
 

 The effective tax rate will differ from the statutory rate of 21 percent 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 effective tax rate for 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 %. 
 The Company paid income taxes of $ 2.9 million during the three months ended March 31, 2026. 
 
 12. 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 three months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 Reserves for losses and LAE, beginning of period $ 2,796,491 $ 1,782,383 
 Less: reinsurance recoverable on unpaid claims, beginning of period ( 1,067,551 ) ( 670,846 ) 
 Reserves for losses and LAE, beginning of period, net of reinsurance 1,728,940 1,111,537 
 Incurred, net of reinsurance, related to: 
 Current period 233,969 187,309 
 Prior years — — 
 Total incurred, net of reinsurance 233,969 187,309 
 Paid, net of reinsurance, related to: 
 Current period 15,838 15,256 
 Prior years 138,077 118,900 
 Total paid 153,915 134,156 
 Net reserves for losses and LAE, end of period 1,808,994 1,164,690 
 Plus: reinsurance recoverable on unpaid claims, end of period 1,109,909 706,801 
 Reserves for losses and LAE, end of period $ 2,918,903 $ 1,871,491 
 

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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 

 13. 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 months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 SUA commission revenue $ 2,281 $ 1,837 
 SUA fee income 455 1,177 
 Other 593 10 
 Total commission and fee revenue 3,329 3,024 
 Commission and fee expenses ( 1,802 ) ( 1,048 ) 
 Net commission and fee income $ 1,527 $ 1,976 
 

 
 The Company’s contract assets from commission and fee income as of March 31, 2026 and December 31, 2025 were $ 0.7 million and $ 1.0 million, respectively. 
 
 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 commission, which is contingent upon the underwriting performance of certain syndicates. ASML receives 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. ASML receives profit commission at a rate of 17.5 % for Syndicate 1969 and 20.0 % for Syndicate 1971, subject to a two-year deficit clause. No profit commission has been recognized for SPA1925 or Syndicate 1972. ASML also receives 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 the Apollo’s revenues from contracts with customers for the three months ended March 31, 2026: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 
 Managing agents fees $ 3,527 
 Profit commission & consortium overrider charged to Managed Syndicates 6,551 
 Underwriting fee income $ 10,078 
 
 
 

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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 

 14. Underwriting, Acquisition and Insurance Expenses 
 The following table sets forth the components of underwriting, acquisition and insurance expenses for the three months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 Amortization of policy acquisition costs $ 59,616 $ 44,490 
 Other operating and general expenses 60,089 38,148 
 Corporate expenses 4,909 3,913 
 Total underwriting, acquisition and insurance expenses $ 124,614 $ 86,551 
 

 
 15. 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 capital resources. 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 months ended March 31, 2026 and 2025: 
 
 
 Three months ended March 31, 
 2026 2025 
 ($ in thousands) Written Earned Written Earned 
 Direct premiums $ 507,134 $ 515,489 $ 408,310 $ 385,438 
 Assumed premiums 160,570 149,556 127,016 78,727 
 Ceded premiums ( 234,821 ) ( 231,038 ) ( 192,055 ) ( 163,799 ) 
 Net premiums $ 432,883 $ 434,007 $ 343,271 $ 300,366 
 Ceded losses and LAE incurred $ 152,573 $ 135,467 
 

 The following table sets forth the components of reinsurance recoverables and ceded unearned premium as of March 31, 2026 and December 31, 2025: 
 
 
 ($ in thousands) March 31, 2026 December 31, 2025 
 Ceded unpaid losses and LAE $ 1,109,909 $ 921,165 
 Ceded paid losses and LAE 229,323 201,010 
 
 Allowance for credit losses ( 2,295 ) ( 2,295 ) 
 Reinsurance recoverables $ 1,336,937 $ 1,119,880 
 Ceded unearned premium $ 314,850 $ 238,948 
 

 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 March 31, 2026, the market value of these accounts was approximately $ 250.7 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 March 31, 2026 and December 31, 2025 was $ 18.2 million and $ 22.7 million, respectively, and was included in other assets on the condensed consolidated balance sheets. 
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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 

 16. Earnings Per Share 
 The following table sets forth the computation of basic and diluted net earnings per share for the three months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 ($ in thousands, except for share and per share amounts) 2026 2025 
 Numerator 
 Net income $ 49,731 $ 42,058 
 
 
 
 
 Denominator 
 Basic weighted-average common shares 44,463,167 40,196,416 
 
 
 
 Dilutive effect of stock units 508,468 1,004,585 
 Dilutive effect of options 472,325 479,594 
 Diluted weighted-average common share equivalents 45,443,960 41,680,595 
 Basic earnings per share $ 1.12 $ 1.05 
 Diluted earnings per share $ 1.09 $ 1.01 
 

 The following table presents anti-dilutive instruments that were excluded from the calculation of diluted weighted-average common share equivalents during the three months ended March 31, 2026 and 2025: 
 
 Three months ended March 31, 
 2026 2025 
 
 
 Stock units 385,108 56,155 
 Options 27 2,512 
 

 
 17. 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 months ended March 31, 2026 and 2025 were as follows: 
 
 Three months ended March 31, 
 ($ in thousands) 2026 2025 
 Net earned premium $ 30,924 $ 28,960 
 Commissions 8,188 7,632 
 

 Premiums receivable as of March 31, 2026 and December 31, 2025 were $ 18.4 million and $ 13.9 million, respectively. 
 
 Other 
 Advisory and professional services fees and expense reimbursements paid to various affiliated stockholders and directors for the three months ended March 31, 2026 and 2025 were $ 0.2 million. 
 See Note 6 for investments involving affiliated companies and additional related party transactions. 
 
 18. 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 
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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 18. Acquisitions (continued) 

 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 3,679,332 
 Skyward Specialty Insurance Group, Inc. closing stock price on December 31, 2025 $ 51.11 
 Consideration of Skyward Specialty Insurance Group, Inc. issued common stock $ 188,051 
 Cash consideration 371,089 
 Total consideration $ 559,140 
 

 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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 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 18. 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 $ 222,460 
 Short-term investments, at fair value 187,178 
 Cash and cash equivalents 68,054 
 Funds at Lloyd's 106,336 
 Premiums receivable, net 272,803 
 Reinsurance recoverables, net 165,540 
 Ceded unearned premium 69,097 
 Deferred policy acquisition costs and VOBA 56,128 
 Deferred income taxes 13,966 
 Intangible assets, excluding goodwill, net 262,000 
 Other assets 25,830 
 Total assets acquired, excluding goodwill 1,449,392 
 Liabilities assumed 
 Reserves for losses and loss adjustment expenses 477,596 
 Unearned premiums 233,501 
 Reinsurance and premium payables 144,536 
 Funds held for others 18,684 
 Accounts payable and accrued liabilities 71,506 
 Deferred income taxes 69,837 
 Total liabilities assumed 1,015,660 
 Fair value of net assets acquired, excluding goodwill 433,732 
 Total consideration $ 559,140 
 Preliminary allocation to goodwill $ 125,408 
 

 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 and will not be deductible for tax purposes and is fully allocated to the U.K. 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 $ 90,000 Indefinite N/A, indefinite lived asset 
 Syndicate 1971 capacity - with fees 110,000 Indefinite N/A, indefinite lived asset 
 Cover holder relationships 25,000 7 $ 3,571 
 Strategic partner syndicates 2,000 5 400 
 Trade name 35,000 10 3,500 
 Total $ 262,000 $ 7,471 
 

 
 
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 18. 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 months ended March 31, 2026 the Company recognized $ 7.3 million and $ 6.7 million in underwriting, acquisition and insurance expenses and amortization expense, respectively, 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 $ 80.1 million of revenue and $ 22.2 million of net income from the date of the acquisition to the period ended March 31, 2026, have been included within the accompanying consolidated statements of operations and comprehensive loss. All transaction expenses incurred by the Company were expensed as incurred and reflected in the Company’s results of operations for the period ended December 31, 2025 in accordance with ASC 805. No material transaction expenses were incurred for the period ended March 31, 2026. The Company has not presented the unaudited supplemental pro forma financial information required by ASC 805-10-50-2(h) as it is impractical to do so, as Apollo did not historically prepare quarterly financial statements and its historical financial information was prepared under U.K. GAAP rather than U.S. GAAP. 
 
 19. 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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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Skyward Specialty Insurance Group, Inc. 10-Q

Item 1. Financial Statements
