Bowhead Specialty Holdings Inc. grew gross written premiums 10.8% to $256.4 million in the third quarter, as the specialty insurer awaits the close of its $1.2 billion sale to American Family Mutual Insurance Company, S.I.
The company reported the figures in its third-quarter results on Tuesday. Net income was $12.9 million, or $0.38 per diluted share, down 14.7% from $15.2 million a year earlier. Adjusted net income rose 16% to $18.4 million, or $0.54 per diluted share. Return on equity was 11.2%, and adjusted return on equity was 15.9%.
Bowhead said the premium growth came from its growing renewal book and expansion across all divisions. Casualty premiums increased 6% to $153.4 million. Professional liability rose 8.2% to $49.5 million, and healthcare liability grew 8.1% to $37.7 million.
Baleen Specialty, the company’s digital small-business platform, grew 155.4% to $15.8 million. Express, its other small-business offering, rose to $6 million from $595,000. Digital business made up 8.5% of total gross written premiums, up from 2.9% a year earlier. Bowhead’s “craft” model, which covers large, complex, higher-severity risks, still accounted for 91.5%.
The combined ratio was 95.9%, compared with 95.4% a year earlier. The loss ratio rose to 67.3% from 65.9%. Bowhead attributed the increase to a higher current accident year loss ratio, driven by lower ceded loss activity under its excess of loss treaties and, to a lesser extent, changes in portfolio mix. The expense ratio improved to 28.6% from 29.5%.
Ceded written premiums, the portion passed to reinsurers, rose 29.2% to $106.6 million. As a result, net written premiums grew only 0.6% to $149.9 million. Net earned premiums increased 17% to $150.2 million.
Net investment income climbed 36.7% to $20.6 million, which Bowhead said reflected a higher balance of investments. The portfolio had a book yield of 4.7% as of Sept. 30. Over nine months, gross written premiums rose 20.7% to $771.1 million.
Bowhead’s expenses also shifted. Non-operating expenses were $6.9 million, up from $783,000, while interest expense and financing fees reached $3.2 million, up from $262,000. The release did not itemize the non-operating costs.
American Family announced on Aug. 3 that it had agreed to buy the Bowhead shares it does not already own. Stockholders will receive $34 per share in cash, an 11% premium to Bowhead’s July 31 closing price. American Family has been a Bowhead investor since the company’s 2020 founding, and reported held about 14.3% of the stock at the end of 2025.
“We’re pleased to welcome Bowhead’s talented team and commercial specialty capabilities to American Family,” said Bill Westrate, chair and chief executive officer of American Family.
Bowhead will operate as a standalone business within American Family. Stephen Sills will stay on as president and CEO, and the company will keep its name and brand.
Sills stated this week that Bowhead was staying focused on its distribution partners during the process.
“As we move forward with our pending transaction with American Family, we remain focused on delivering for our brokers and insureds,” Sills said.
Because of the pending deal, Bowhead said it would not host an earnings call or webcast for the quarter. It also cancelled its second-quarter call. That quarter, premiums grew 28.2% to $297.9 million, according to a summary of the company’s filing.
The same summary said the deal still needs a Bowhead stockholder vote and clearances under the Hart-Scott-Rodino Act and from Wisconsin and Texas insurance regulators. It said either side may terminate if the deal has not closed by April 2, 2027, a date that can be extended to June 2, 2027. The companies are targeting a close before the end of 2026. A preliminary proxy statement on Bowhead’s investor site left the meeting date blank.
