Bowhead Specialty Holdings Inc.
For the period ended Sep 30, 2026. Filed Nov 3, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 3, 2026
BOW$34.06-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-03.
0001628280-26-051847
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-03.
0001628280-26-069442
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 252 previous paragraphs and 253 current paragraphs.
193 unchanged; 53 reworded; 7 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 28 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Pending merger
Current report
On August 2, 2026, we entered into the Merger Agreement with AFMIC and Merger Sub, pursuant to which, subject to the satisfaction or waiver of specified conditions, the Company will become a wholly-owned subsidiary of AFMIC upon completion of the Merger. For additional information regarding the Merger and the Merger Agreement, see Note 1, “Nature of Operations and Significant Accounting Policies,” in our condensed consolidated financial statements.
Current report
During the three and nine months ended September 30, 2026, the Company incurred $6.9 million of transaction-related expenses associated with the pending Merger. These amounts are included in non-operating expenses in the Consolidated Statements of Income and Comprehensive (Loss) Income.
Current report
Foreign exchange losses
Current report
Nine Months Ended September 30, 2026 compared to Nine Months Ended September 30, 2025
Current report
(2)For the nine months ended September 30, 2026 and 2025, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.
Current report
(1)For the three and nine months ended September 30, 2026 and 2025, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.
Removed paragraphs (6)
Previous report
Foreign exchange (gains) losses
Previous report
NM - Percentage change is not meaningful.
Previous report
Six Months Ended June 30, 2026 compared to Six Months Ended June 30, 2025
Previous report
NM - Percentage change is not meaningful.
Previous report
(2)For the six months ended June 30, 2026 and 2025, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.
Previous report
(1)For the three and six months ended June 30, 2026 and 2025, net income and adjusted net income are annualized to arrive at return on equity and adjusted return on equity.
Reworded paragraphs (53)
Previous wording
Non-operating expenses represent expenses related to various transactions that we consider to be unique and non-recurring in nature, such as expenses related to our IPO, secondary offerings, and other such offerings or registrations.
Current wording
Non-operating expenses represent expenses related to various transactions that we consider to be unique and non-recurring in nature, such as expenses related to our IPO, secondary offerings, the pending Merger, and other similar transactions.
Previous wording
Foreign exchange (gains) losses represent the remeasurement of a non-U.S. dollar operating expense to U.S. dollars due to the fluctuations in the exchange rate. The change in the liability due to the fluctuations in the exchange rate are included within the Condensed Consolidated Statements of Income and Comprehensive Income at the end of each period.
Current wording
Foreign exchange losses represent the remeasurement of a non-U.S. dollar operating expense to U.S. dollars due to the fluctuations in the exchange rate. The change in the liability due to the fluctuations in the exchange rate are included within the Condensed Consolidated Statements of Income and Comprehensive (Loss) Income at the end of each period.
Previous wording
Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding the impact of net investment income, net realized investment losses, other insurance-related income, non-operating expenses, warrant expense, interest expenses and financing fees, loss on extinguishment of credit facility, foreign exchange (gains) losses, and certain strategic initiatives. See “—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of underwriting income to income before income taxes, which is the most directly comparable financial metric prepared in accordance with U.S. GAAP.
Current wording
Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding the impact of net investment income, net realized investment losses, other insurance-related income, non-operating expenses, warrant expense, interest expenses and financing fees, loss on extinguishment of credit facility, foreign exchange losses, and certain strategic initiatives. See “—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of underwriting income to income before income taxes, which is the most directly comparable financial metric prepared in accordance with U.S. GAAP.
Previous wording
Adjusted net incomeis a non-GAAP financial measure defined as net income excluding the impact of net realized investment losses, non-operating expenses, loss on extinguishment of credit facility, foreign exchange (gains) losses, and certain strategic initiatives. See “—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of adjusted net income to net income, which is the most directly comparable financial metric prepared in accordance with U.S. GAAP.
Current wording
Adjusted net incomeis a non-GAAP financial measure defined as net income excluding the impact of net realized investment losses, non-operating expenses, loss on extinguishment of credit facility, foreign exchange losses, and certain strategic initiatives. See “—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of adjusted net income to net income, which is the most directly comparable financial metric prepared in accordance with U.S. GAAP.
Previous wording
Gross written premiums increased $65.5 million, or 28.2%, to $297.9 million for the three months ended June 30, 2026 from $232.4 million for the three months ended June 30, 2025. The increase in gross written premiums was driven by our increasing renewal book, new business and the continued growth in our platform across all four divisions. Our Casualty division led the growth with a $49.0 million increase, primarily from our Excess Casualty portfolio, followed by the growth in our Baleen Specialty division with a $10.5 million increase.
Current wording
Gross written premiums increased $24.9 million, or 10.8%, to $256.4 million for the three months ended September 30, 2026 from $231.5 million for the three months ended September 30, 2025. The increase in gross written premiums was driven by our increasing renewal book and the continued growth in our platform across all four divisions. Our Baleen Specialty division led the growth with a $9.6 million increase, followed by the growth in our Casualty division with a $8.7 million increase, primarily from our Excess Casualty portfolio.
Previous wording
For the three months ended June 30, 2026 and 2025, E&S(1) business made up 79.9% and 76.9% of gross written premiums, respectively, while admitted business made up 20.1% and 23.1%, respectively. The 3.0 point increase in the proportion of E&S premiums was primarily attributable to an increase in proportion of Baleen Specialty division premiums, where policies are exclusively written on an E&S basis.
Current wording
For the three months ended September 30, 2026 and 2025, E&S(1) business made up 82.0% and 81.5% of gross written premiums, respectively, while admitted business made up 18.0% and 18.5%, respectively. The 0.5 point increase in the proportion of E&S premiums was primarily attributable to an increase in proportion of Baleen Specialty division premiums, where policies are exclusively written on an E&S basis.
Previous wording
Net written premiums increased $32.1 million, or 21.6%, to $181.0 million for the three months ended June 30, 2026 from $148.9 million for the three months ended June 30, 2025. The increase in net written premiums was primarily due to the growth in gross written premiums for the three months ended June 30, 2026. This growth was partially offset by the increase in ceded written premiums driven by the increase in our quota share treaty from 26% to 33.5% effective May 1, 2026.
Current wording
Net written premiums increased $0.9 million, or 0.6%, to $149.9 million for the three months ended September 30, 2026 from $149.0 million for the three months ended September 30, 2025. The increase in net written premiums was primarily due to the growth in gross written premiums for the three months ended September 30, 2026. This growth was partially offset by the increase in ceded written premiums driven by the increase in our quota share treaty from 26% to 33.5% effective May 1, 2026.
Previous wording
Net earned premiums increased $24.8 million, or 20.8%, to $144.0 million for the three months ended June 30, 2026 from $119.1 million for the three months ended June 30, 2025. The increase in net earned premiums was primarily due to the earning of increased gross written premiums offset by the earning of increased ceded written premiums under our ceded reinsurance treaties.
Current wording
Net earned premiums increased $21.8 million, or 17.0%, to $150.2 million for the three months ended September 30, 2026 from $128.4 million for the three months ended September 30, 2025. The increase in net earned premiums was primarily due to the earning of increased gross written premiums offset by the earning of increased ceded written premiums under our ceded reinsurance treaties.
Previous wording
Our loss ratio of 67.3% for the three months ended June 30, 2026 increased 1.1 points compared to 66.2% for the three months ended June 30, 2025 due to an increase in our current accident year loss ratio. The higher current accident year loss ratio was driven by lower ceded loss activity under our excess of loss treaties, and to a lesser extent, changes in our portfolio mix.
Current wording
Our loss ratio of 67.3% for the three months ended September 30, 2026 increased 1.4 points compared to 65.9% for the three months ended September 30, 2025 due to an increase in our current accident year loss ratio. The higher current accident year loss ratio was driven by lower ceded loss activity under our excess of loss treaties, and to a lesser extent, changes in our portfolio mix.
Previous wording
As communicated in the past, the development in our prior accident year losses were driven by expected loss ratios applied to net additional premiums that were billed and fully earned in the quarter, but associated with policies from prior accident years. Once again, these amounts were not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims.
Current wording
Once again, the development in our prior accident year losses were driven by expected loss ratios applied to net additional premiums that were billed and fully earned in the quarter, but associated with policies from prior accident years. Once again, these amounts were not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims.
Previous wording
Our expense ratio of 28.6% for the three months ended June 30, 2026 decreased 2.0 points compared to 30.6% for the three months ended June 30, 2025.
Current wording
Our expense ratio of 28.6% for the three months ended September 30, 2026 decreased 0.9 points compared to 29.5% for the three months ended September 30, 2025.
Previous wording
The decrease in our expense ratio was primarily driven by the 3.4 point decrease in our operating expenses ratio and a 0.3 point increase in other insurance-related income, which contributed to the lowering of our expense ratio. These improvements were partially offset by the 1.7 point increase in our net acquisition costs ratio.
Current wording
The decrease in our expense ratio was primarily driven by the 2.2 point decrease in our operating expenses ratio and a 0.2 point increase in other insurance-related income, which contributed to the lowering of our expense ratio. These improvements were partially offset by the 1.5 point increase in our net acquisition costs ratio.
Previous wording
The increase in our net acquisition costs ratio was driven by an increase in earned broker commissions due to changes in our portfolio mix and higher commission rates, an increase in the Ceding Fee, and deferred employment related underwriting costs, partially offset by an increase in earned ceding commissions from our ceded reinsurance treaties. Gross acquisition costs earned as a percentage of gross earned premiums was 17.7% for the three months ended June 30, 2026 compared to 16.1% for the three months ended June 30, 2025, and ceded earned commissions as a percentage of ceded earned premium was 29.3% for the three months ended June 30, 2026 compared to 29.0% for the three months ended 2025.
Current wording
The increase in our net acquisition costs ratio was driven by an increase in earned broker commissions due to changes in our portfolio mix and higher commission rates, an increase in the Ceding Fee, and deferred employment related underwriting costs, partially offset by an increase in earned ceding commissions from our ceded reinsurance treaties. Gross acquisition costs earned as a percentage of gross earned premiums was 18.3% for the three months ended September 30, 2026 compared to 16.5% for the three months ended September 30, 2025, and ceded earned commissions as a percentage of ceded earned premium was 29.7% for the three months ended September 30, 2026 compared to 29.1% for the three months ended 2025.
Previous wording
The combined ratio was 95.9% for the three months ended June 30, 2026, compared to 96.8% for the three months ended June 30, 2025. The 0.9 point decrease was driven by the 2.0 point decrease in our expense ratio, partially offset by the 1.1 point increase in our loss ratio.
Current wording
The combined ratio was 95.9% for the three months ended September 30, 2026, compared to 95.4% for the three months ended September 30, 2025. The 0.5 point increase was driven by the 1.4 point increase in our loss ratio, partially offset by the 0.9 point decrease in our expense ratio.
Previous wording
Return on equity was 13.8% for the three months ended June 30, 2026, compared to 12.4% for the three months ended June 30, 2025. The 1.4 point increase was primarily driven by the 30.8% increase in net income during the three months ended June 30, 2026, compared to the three months ended June 30, 2025, partially offset by the increase in average mezzanine equity and stockholders’ equity driven by the increase in retained earnings and additional paid-in capital for stock-based compensation.
Current wording
Return on equity was 11.2% for the three months ended September 30, 2026, compared to 14.5% for the three months ended September 30, 2025. The 3.3 point decrease was primarily driven by the 14.7% decrease in net income during the three months ended September 30, 2026, compared to the three months ended September 30, 2025, driven by transaction-related expenses associated with the pending Merger. The decrease in return on equity was also driven by the increase in average mezzanine equity and stockholders’ equity, primarily due to the increase in retained earnings and additional paid-in capital for stock-based compensation, partially offset by higher average net unrealized losses on fixed maturity securities during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.
Previous wording
Net investment income increased $5.1 million to $18.8 million for the three months ended June 30, 2026 from $13.7 million for the three months ended June 30, 2025. The increase in net investment income is primarily due to a higher average balance of investments during the three months ended June 30, 2026.
Current wording
Net investment income increased $5.5 million to $20.6 million for the three months ended September 30, 2026 from $15.0 million for the three months ended September 30, 2025. The increase in net investment income is primarily due to a higher average balance of investments during the three months ended September 30, 2026.
Previous wording
Income tax expense was $4.5 million for the three months ended June 30, 2026, compared to $3.6 million for the three months ended June 30, 2025. Our effective tax rate was 21.9% for the three months ended June 30, 2026, compared to 22.5% for the three months ended June 30, 2025. The effective tax rate differs from the statutory tax rate of 21.0% primarily due to estimated non-deductible excess officer compensation and non-deductible expenses, partially offset by excess tax benefits on the vesting of stock-based compensation.
Current wording
Income tax expense was $3.0 million for the three months ended September 30, 2026, compared to $3.9 million for the three months ended September 30, 2025. Our effective tax rate was 18.7% for the three months ended September 30, 2026, compared to 20.6% for the three months ended September 30, 2025. The effective tax rate differs from the statutory tax rate of 21.0% primarily due to research and development credits net of related uncertain tax positions and expected excess tax benefits on the vesting of stock-based compensation, partially offset by estimated non-deductible excess officer compensation and non-deductible expenses.
Previous wording
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes our results of operations for the nine months ended September 30, 2026 and 2025:
Previous wording
The following table presents gross written premiums by underwriting division for the six months ended June 30, 2026 and 2025:
Current wording
The following table presents gross written premiums by underwriting division for the nine months ended September 30, 2026 and 2025:
Previous wording
Gross written premiums increased $107.4 million, or 26.4%, to $514.6 million for the six months ended June 30, 2026 from $407.2 million for the six months ended June 30, 2025. The increase in gross written premiums was driven by our increasing renewal book, new business and the continued growth in our platform across all four divisions. Our Casualty division led the growth with a $74.0 million increase, primarily from our Excess Casualty portfolio, followed by the growth in our Baleen Specialty division with a $19.1 million increase.
Current wording
Gross written premiums increased $132.3 million, or 20.7%, to $771.1 million for the nine months ended September 30, 2026 from $638.7 million for the nine months ended September 30, 2025. The increase in gross written premiums was driven by our increasing renewal book, new business and the continued growth in our platform across all four divisions. Our Casualty division led the growth with a $82.7 million increase, primarily from our Excess Casualty portfolio, followed by the growth in our Baleen Specialty division with a $28.8 million increase.
Previous wording
For the six months ended June 30, 2026 and 2025, E&S(1) business made up 81.2% and 79.2% of gross written premiums, respectively, while admitted business made up 18.8% and 20.8%, respectively. The 2.0 point increase in the proportion of E&S premiums was primarily attributable to an increase in proportion of Baleen Specialty division premiums, where policies are exclusively written on an E&S basis.
Current wording
For the nine months ended September 30, 2026 and 2025, E&S(1) business made up 81.5% and 80.0% of gross written premiums, respectively, while admitted business made up 18.5% and 20.0%, respectively. The 1.5 point increase in the proportion of E&S premiums was primarily attributable to an increase in proportion of Baleen Specialty division premiums, where policies are exclusively written on an E&S basis, followed by an increase in E&S premiums written in our Casualty division stemming from our Excess Casualty portfolio.
Previous wording
Net written premiums increased $55.7 million, or 21.0%, to $321.4 million for the six months ended June 30, 2026 from $265.6 million for the six months ended June 30, 2025. The increase in net written premiums was primarily due to the growth in gross written premiums for the six months ended June 30, 2026. This growth was partially offset by the increase in ceded written premiums driven by the increase in our quota share treaty from 26% to 33.5% effective May 1, 2026.
Current wording
Net written premiums increased $56.6 million, or 13.6%, to $471.2 million for the nine months ended September 30, 2026 from $414.6 million for the nine months ended September 30, 2025. The increase in net written premiums was primarily due to the growth in gross written premiums for the nine months ended September 30, 2026. This growth was partially offset by the increase in ceded written premiums driven by the increase in our quota share treaty from 26% to 33.5% effective May 1, 2026.
Previous wording
Net earned premiums increased $51.8 million, or 22.6%, to $280.8 million for the six months ended June 30, 2026 from $229.0 million for the six months ended June 30, 2025. The increase in net earned premiums was primarily due to the earning of increased gross written premiums offset by the earning of increased ceded written premiums under our ceded reinsurance treaties.
Current wording
Net earned premiums increased $73.6 million, or 20.6%, to $431.0 million for the nine months ended September 30, 2026 from $357.4 million for the nine months ended September 30, 2025. The increase in net earned premiums was primarily due to the earning of increased gross written premiums offset by the earning of increased ceded written premiums under our ceded reinsurance treaties.
Previous wording
The following table summarizes the components of our loss ratio for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes the components of our loss ratio for the nine months ended September 30, 2026 and 2025:
Previous wording
Our loss ratio of 67.1% for the six months ended June 30, 2026 increased 0.6 points compared to 66.5% for the six months ended June 30, 2025 driven by an increase in our current accident year loss ratio. The higher current accident year loss ratio was driven by changes in our portfolio mix, and to a lesser extent, lower ceded loss activity under our excess of loss treaties.
Current wording
Our loss ratio of 67.2% for the nine months ended September 30, 2026 increased 0.9 points compared to 66.3% for the nine months ended September 30, 2025 driven by an increase in our current accident year loss ratio. The higher current accident year loss ratio was driven by changes in our portfolio mix, in addition to lower ceded loss activity under our excess of loss treaties.
Previous wording
As communicated in the past, the development in our prior accident year losses were driven by expected loss ratios applied to net additional premiums that were billed and fully earned in the first quarter, but associated with policies from prior accident years. Once again, these amounts were not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims.
Current wording
Once again, the development in our prior accident year losses were driven by expected loss ratios applied to net additional premiums that were billed and fully earned in the current period, but associated with policies from prior accident years. Once again, these amounts were not based on actual losses settling for more than reserved, and did not represent an increase in estimated reserves on unresolved claims.
Previous wording
The following table summarizes the components of the expense ratio for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes the components of the expense ratio for the nine months ended September 30, 2026 and 2025:
Previous wording
Our expense ratio of 28.5% for the six months ended June 30, 2026 decreased 1.9 points compared to 30.4% for the six months ended June 30, 2025.
Current wording
Our expense ratio of 28.5% for the nine months ended September 30, 2026 decreased 1.6 points compared to 30.1% for the nine months ended September 30, 2025.
Previous wording
The decrease in our expense ratio for the six months ended June 30, 2026 was primarily driven by the 3.1 point decrease in our operating expenses ratio, and a 0.3 point increase in other insurance-related income, which contributed to the lowering of our expense ratio. These improvements were partially offset by the 1.5 point increase in our net acquisition costs ratio.
Current wording
The decrease in our expense ratio for the nine months ended September 30, 2026 was primarily driven by the 2.8 point decrease in our operating expenses ratio, and a 0.3 point increase in other insurance-related income, which contributed to the lowering of our expense ratio. These improvements were partially offset by the 1.5 point increase in our net acquisition costs ratio.
Previous wording
The increase in our net acquisition costs ratio was driven by an increase in earned broker commissions due to changes in our portfolio mix and higher commission rates, an increase in the Ceding Fee, and deferred employment related underwriting costs, partially offset by an increase in earned ceding commissions from our ceded reinsurance treaties. Gross acquisition costs as a percentage of gross earned premiums was 17.3% for the six months ended June 30, 2026 compared to 16.0% for the six months ended June 30, 2025, and ceded earned commissions as a percentage of ceded earned premium was 29.3% for the six months ended June 30, 2026 compared to 29.0% for the six months ended June 30, 2025.
Current wording
The increase in our net acquisition costs ratio was driven by an increase in earned broker commissions due to changes in our portfolio mix and higher commission rates, an increase in the Ceding Fee, and deferred employment related underwriting costs, partially offset by an increase in earned ceding commissions from our ceded reinsurance treaties. Gross acquisition costs as a percentage of gross earned premiums was 17.7% for the nine months ended September 30, 2026 compared to 16.2% for the nine months ended September 30, 2025, and ceded earned commissions as a percentage of ceded earned premium was 29.4% for the nine months ended September 30, 2026 compared to 29.0% for the nine months ended September 30, 2025.
Previous wording
The combined ratio was 95.6% for the six months ended June 30, 2026, compared to 96.9% for the six months ended June 30, 2025. The 1.3 point decrease was due to the 1.9 point decrease inthe expense ratio, partially offset by the 0.6 point increase in the loss ratio.
Current wording
The combined ratio was 95.7% for the nine months ended September 30, 2026, compared to 96.4% for the nine months ended September 30, 2025. The 0.7 point decrease was due to the 1.6 point decrease inthe expense ratio, partially offset by the 0.9 point increase in the loss ratio.
Previous wording
Return on equity was 13.9% for the six months ended June 30, 2026, compared to 12.2% for the six months ended June 30, 2025. The 1.7 point increase was mainly due to a 35.3% increase in net income in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was partially offset by the increase in average mezzanine equity and stockholders’ equity driven by the increase in retained earnings and additional paid-in capital for stock-based compensation.
Current wording
Return on equity was 13.3% for the nine months ended September 30, 2026, compared to 13.0% for the nine months ended September 30, 2025. The 0.3 point increase was mainly due to a 15.8% increase in net income in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, partially tempered by transaction-related expensed associated with the pending Merger. This increase was partially offset by the increase in average mezzanine equity and stockholders’ equity driven by the increase in retained earnings and additional paid-in capital for stock-based compensation, which was moderated by higher average net unrealized losses on fixed maturity securities during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.
Previous wording
Net investment income increased $10.6 million to $36.8 million for the six months ended June 30, 2026 from $26.2 million for the six months ended June 30, 2025. The increase in net investment income is primarily due to a higher average balance of investments during the six months ended June 30, 2026.
Current wording
Net investment income increased $16.1 million to $57.4 million for the nine months ended September 30, 2026 from $41.3 million for the nine months ended September 30, 2025. The increase in net investment income is primarily due to a higher average balance of investments during the nine months ended September 30, 2026.
Previous wording
Income tax expense was $9.1 million for the six months ended June 30, 2026, compared to $6.6 million for the six months ended June 30, 2025. Our effective tax rate was 22.0% for the six months ended June 30, 2026, compared to 21.8% for the six months ended June 30, 2025. The effective tax rate differs from the statutory tax rate of 21.0% primarily due to estimated non-deductible excess officer compensation and non-deductible expenses, partially offset by excess tax benefits on the vesting of stock-based compensation.
Current wording
Income tax expense was $12.1 million for the nine months ended September 30, 2026, compared to $10.5 million for the nine months ended September 30, 2025. Our effective tax rate was 21.1% for the nine months ended September 30, 2026, compared to 21.3% for the nine months ended September 30, 2025. The effective tax rate differs from the statutory tax rate of 21.0% primarily due to estimated non-deductible excess officer compensation and non-deductible expenses, partially offset by research and development credits net of related uncertain tax positions and expected excess tax benefits on the vesting of stock-based compensation.
Previous wording
(2) For the six months ended June 30, 2026 and 2025, net income is annualized to arrive at return on equity.
Current wording
(2) For the nine months ended September 30, 2026 and 2025, net income is annualized to arrive at return on equity.
Previous wording
We define underwriting income as income before income taxes excluding the impact of net investment income, net realized investment losses, other insurance-related income, non-operating expenses, warrant expense, interest expenses and financing fees, loss on extinguishment of credit facility, foreign exchange (gains) losses, and certain strategic initiatives. Underwriting income represents the pre-tax profitability of the Company's underwriting operations and allows us to evaluate our underwriting performance without regard to net investment income. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting income should not be viewed as a substitute for income before income taxes calculated in accordance with U.S. GAAP, and other companies may define underwriting income differently.
Current wording
We define underwriting income as income before income taxes excluding the impact of net investment income, net realized investment losses, other insurance-related income, non-operating expenses, warrant expense, interest expenses and financing fees, loss on extinguishment of credit facility, foreign exchange losses, and certain strategic initiatives. Underwriting income represents the pre-tax profitability of the Company's underwriting operations and allows us to evaluate our underwriting performance without regard to net investment income. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting income should not be viewed as a substitute for income before income taxes calculated in accordance with U.S. GAAP, and other companies may define underwriting income differently.
Previous wording
Underwriting income for the three and six months ended June 30, 2026 and 2025 reconciles to income before income taxes as follows:
Current wording
Underwriting income for the three and nine months ended September 30, 2026 and 2025 reconciles to income before income taxes as follows:
Previous wording
We define adjusted net income as net income excluding the impact of net realized investment losses, non-operating expenses, foreign exchange (gains) losses, and certain strategic initiatives. Adjusted net income excludes the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We calculate the tax impact only on adjustments that would be included in calculating our income tax expense using the estimated tax rate at which we received a deduction for these adjustments. We use adjusted net income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net income should not be viewed as a substitute for net income calculated in accordance with U.S. GAAP, and other companies may define adjusted net income differently.
Current wording
We define adjusted net income as net income excluding the impact of net realized investment losses, non-operating expenses, foreign exchange losses, and certain strategic initiatives. Adjusted net income excludes the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We calculate the tax impact only on adjustments that would be included in calculating our income tax expense using the estimated tax rate at which we received a deduction for these adjustments. We use adjusted net income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net income should not be viewed as a substitute for net income calculated in accordance with U.S. GAAP, and other companies may define adjusted net income differently.
Previous wording
Adjusted net income for the three and six months ended June 30, 2026 and 2025 reconciles to net income as follows:
Current wording
Adjusted net income for the three and nine months ended September 30, 2026 and 2025 reconciles to net income as follows:
Previous wording
Adjusted return on equity for the three and six months ended June 30, 2026 and 2025 reconciles to return on equity as follows:
Current wording
Adjusted return on equity for the three and nine months ended September 30, 2026 and 2025 reconciles to return on equity as follows:
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