First-quarter earnings from Kestrel Group and NI Holdings pointed to constrasting dynamics across the US property and casualty market, with one specialty platform investing in fronting and legacy run-off capabilities while a regional carrier leans on core lines to drive improved underwriting profitability.
Kestrel Group, a specialty insurance platform focused on fronting services, reported a net loss from continuing operations of $7.0 million for the three months ended March 31, 2026, or a loss of $0.90 per share. Total revenues were $10.2 million, and net premiums earned were $3.2 million. Book value per common share stood at $15.52 as of March 31, 2026.
Program Services net fee income was $1.6 million, with Kestrel’s Program Services clients producing $94.2 million in premium during the quarter.
“The first quarter demonstrated continued momentum in our Program Services segment, with fee revenue and premiums produced up materially year-over-year,” said Kestrel CEO Luke Ledbetter. “As we look across the broader fronting market, we continue to believe Kestrel is well-positioned, and our balance sheet light model allows us to focus on disciplined growth.”
The Program Services segment provides fronting services to program managers and carriers looking to access the US P&C market through A‑ (Excellent) A.M. Best‑rated paper with broad licensing. Kestrel issues policies through four exclusive insurance carriers, which currently retain and reinsure the risk. The company said it continues to pursue reinsurance mechanisms with existing partners that would selectively deploy its own underwriting capacity to support further fee and premium growth.
Total fee revenues from Program Services were $3.1 million in Q1 2026, up 286.6% versus the first quarter of 2025, driven by both expanded existing relationships and new client accounts. Premium produced by client programs grew 303.6% year‑over‑year to $94.2 million.
These gains were offset by losses in the Legacy Reinsurance segment, which houses the AmTrust Reinsurance and Diversified Reinsurance portfolios acquired via Maiden Holdings. The segment produced an underwriting loss of $3.3 million in the quarter, including $2.4 million of losses from AmTrust business and $0.9 million from Diversified business.
As of March 31, 2026, Kestrel reported total assets of $964.2 million and shareholders’ equity of $121.4 million. The company has $476.3 million of net operating loss carryforwards for tax purposes, of which $387.6 million begin to expire in 2029 and $88.7 million, or 18.6%, have no expiry date under US tax law.
Regional insurer NI Holdings reported stronger underwriting performance for the first quarter of 2026, even as top‑line premiums declined in line with its previously announced withdrawal from non‑standard auto.
Gross premiums written fell 15.1% to $57.5 million from $67.8 million in the prior‑year period, driven by a 99.8% decline in non‑standard auto following the company’s decision to cease writing that business in Illinois, Arizona and South Dakota. Private passenger auto premiums were down 7.0%, reflecting lower renewal premiums after past underwriting actions. These declines were partially offset by growth in home and farm (up 7.3%) due to rate increases, higher insured values and new business in North Dakota and South Dakota, and a 60.0% increase in the “all other” category, driven by higher assumed premiums from participation in catastrophe reinsurance programs of certain Farm Bureau insurers.
The combined ratio improved to 79.7% from 94.4% a year earlier, reflecting stronger underwriting across home and farm, private passenger auto and all other. The loss and loss adjustment expense ratios in these segments were 40.3%, 46.2% and 15.7%, respectively. Net premiums earned declined 18.3% to $55.1 million.
Net investment income was $2.7 million, down 6.4% from $2.8 million in the first quarter of 2025, which the company attributed to consistent yields on a smaller fixed income portfolio and lower returns on short‑term investments.
Net income nearly doubled to $12.5 million from $6.5 million, and basic earnings per share rose to $0.60 from $0.31. Return on average equity increased to 20.4% from 10.4%.
“2026 is off to a solid start, with disciplined underwriting performance across Private Passenger Auto, Home and Farm, and All Other,” said president and CEO Cindy Launer. “This quarter reflects early progress in refocusing the company on its core strengths, and we are confident this disciplined approach will continue to improve performance and drive long‑term shareholder value.”
