Skyward/2025/FY/Annual report: Difference between revisions

Document info
Document info
Document ID	3z7a4yrxkn
Organization	Skyward
Year	2025
Period	FY
Period label	FY25
Document category	Annual report
Document type	Form 10-K
Document name	Skyward Specialty Insurance Group 2025 Form 10-K
Publication date	2026-03-02
Language	English
Pages	24
Source	original URL
Transcript	wiki page
Data	data page

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Revision as of 00:30, 25 July 2026

This article summarizes Skyward's Annual report published on 2026-03-02 (24 pages).

Cover

[c. 1; p. 1]

Entity Public Float by 12 Months Ended
USD ($)	12 Months Ended
	Dec. 31, 2025	Feb. 26, 2026	Jun. 30, 2025
Cover [Abstract]	—	—	—
Document Type	10-K	—	—
Document Annual Report	true	—	—
Document Period End Date	Dec. 31, 2025	—	—
Current Fiscal Year End Date	--12-31	—	—
Document Transition Report	false	—	—
Entity File Number	001-41591	—	—
Entity Registrant Name	SKYWARD SPECIALTY INSURANCE GROUP, INC.	—	—
Entity Incorporation, State or Country Code	DE	—	—
Entity Tax Identification Number	14-1957288	—	—
Entity Address, Address Line One	800 Gessner Road	—	—
Entity Address, Address Line Two	Suite 600	—	—
Entity Address, City or Town	Houston	—	—
Entity Address, State or Province	TX	—	—
Entity Address, Postal Zip Code	77024-4284	—	—
City Area Code	713	—	—
Local Phone Number	935-4800	—	—
Title of 12(b) Security	Common stock, par value $0.01	—	—
Trading Symbol	SKWD	—	—
Security Exchange Name	NASDAQ	—	—
Entity Well-known Seasoned Issuer	No	—	—
Entity Voluntary Filers	No	—	—
Entity Current Reporting Status	No	—	—
Entity Interactive Data Current	Yes	—	—
Entity Filer Category	Large Accelerated Filer	—	—
Entity Small Business	false	—	—
Entity Emerging Growth Company	false	—	—
ICFR Auditor Attestation Flag	true	—	—
Document Financial Statement Error Correction [Flag]	false	—	—
Entity Shell Company	false	—	—
Entity Public Float	—	—	2,165,161,643
Entity Common Stock, Shares Outstanding	—	44,467,084	—
Documents Incorporated by Reference	Portions of the Registrant’s Proxy Statement relating to the 2026 annual meeting of stockholders (the “2026 Proxy Statement”), which will be filed within 120 days of December 31, 2025, are incorporated by reference into Part III of this Form 10-K.	—	—
Entity Central Index Key	0001519449	—	—
Amendment Flag	false	—	—
Document Fiscal Year Focus	2025	—	—
Document Fiscal Period Focus	FY	—	—

Audit Information

[c. 2; p. 2]

Audit Information by Auditor Name, Auditor Location, Auditor Firm ID
	12 Months Ended
	Dec. 31, 2025
Audit Information [Abstract]	—
Auditor Name	Ernst & Young LLP
Auditor Location	Houston, Texas
Auditor Firm ID	42

Business

Who We Are

[c. 3; p. 8] Company formation and overview

Skyward Specialty was formed as a Delaware corporation on January 3, 2006, as an insurance holding company.
The company operated under the name Houston International Insurance Group, Ltd. until re-branding as Skyward Specialty in November 2020.

[c. 4; p. 8] Business model and market focus

Skyward Specialty is a growing specialty insurance company delivering commercial insurance products and solutions on a non-admitted (E&S) and admitted basis, predominantly in the United States.
The business focuses on underserved, dislocated markets, or markets where standard insurance coverages are insufficient.
Customers typically require highly specialized, customized underwriting solutions and claims capabilities.
The company develops and delivers tailored insurance products and services for niche markets.
The portfolio of insured risks is highly diversified, covering a wide variety of industries and distributed through multiple channels.
Lines of business include general liability, excess liability, professional liability (including cyber and media liability insurance), commercial auto, group accident and health, property, agriculture, credit, surety, and workers’ compensation.
The company insures both short and medium duration liabilities.
The business mix is principally primary insurance and balanced between E&S and admitted markets.
A portion of the business is specialty reinsurance (principally property, agriculture, and credit), focused on attractive specialty classes where reinsurance is more efficient due to factors like cost of entry and geographic expansion.
This diversification, including businesses not typically aligned with traditional P&C pricing cycles, combined with underwriting and claims expertise, is expected to consistently produce strong growth and profitability across all insurance pricing cycles.

[c. 5; p. 8] Leadership and strategic positioning

The company is led by an entrepreneurial executive management team with decades of insurance leadership experience in the global P&C industry.
Leadership is supported by an experienced team aligned with the company's strategy.
High-quality leadership, underwriting and claims teams, technology DNA, advanced analytics capabilities, diversified book of business, and strong competitive position are expected to enable profitable business growth.
The aim is to deliver long-term value for shareholders by generating best-in-class underwriting profitability and book value per share growth across P&C market cycles.
All insurance company subsidiaries are group rated and have financial strength ratings of "A" (Excellent) from A.M. Best Company with a stable outlook.

Apollo Acquisition

[c. 6; p. 8] Apollo acquisition details

On September 2, 2025, the company entered into two share purchase agreements (Apollo Majority SPAs) with institutional and management shareholders (Majority Sellers) of Apollo Group Holdings Limited (Apollo).
The company agreed to acquire all issued shares of Apollo held by the Majority Sellers, representing approximately 87% of Apollo's issued share capital.
Closing of the transaction (Closing) was conditioned upon acquiring 100% of Apollo's issued share capital at Closing via additional short-form share purchase agreements (Apollo Minority SPAs) with remaining minority shareholders (Minority Sellers).
The Acquisition closed on January 1, 2026.
Consideration for the transaction was satisfied by issuing common stock of the Company to certain sellers and the remainder in cash.
Apollo is a U.S.-centric specialty underwriting platform operating at Lloyd's of London, characterized by low volatility, high growth, and a capital-light business model.
Apollo has consistently grown gross written premium since its formation in 2010.
Through Syndicate 1969, Apollo underwrites a multi-class specialty insurance portfolio.
Through Syndicate 1971, Apollo provides a unique, innovative platform liability product for the digital and sharing economy.
Apollo provides capital to syndicates 1969 and 1971 in exchange for a pro-rata share of underwriting income, with third parties providing the remaining capital.
Apollo earns managing agency fees and profit commissions as the managing agent for its own syndicates and for third-party syndicates (platform partners).
The acquisition aligns with Skyward Specialty's strategy by bringing new specialty niches, a distinctive new economy offering, accelerating innovation, and adding Apollo's advanced technology capabilities.
David Ibeson will continue as CEO of Apollo, leading Apollo's growth as a subsidiary of Skyward Specialty, along with Apollo's management team.

Our Business and Our Strategy

[c. 7; p. 8] Reportable segment and premium basis

The company has one reportable segment offering a broad array of insurance coverages to various market niches.
Each of the nine underwriting divisions has dedicated underwriting leadership and technical staff with deep experience in their niches.
This structure and expertise aim to serve customer needs, be a value-add partner to distributors, and earn attractive risk-adjusted returns.
For the year ended December 31, 2025, 41% of gross written premiums were written on an admitted basis and 59% were non-admitted.

[c. 8; p. 8] Underwriting divisions

Accident & Health (A&H): Provides medical stop loss to self-insured employers and covers group and single-employer captives.
- A&H captives program offers tailored medical stop-loss and reinsurance solutions with dedicated underwriting and proactive claims oversight.
- Targets small and medium-sized enterprises seeking to control healthcare costs by self-insuring a portion of their healthcare insurance.
- Products are written on an admitted basis and distributed primarily through retail and wholesale broker partners.
Agriculture and Credit (Re)insurance: Provides specialty risk-transfer solutions across a diversified global portfolio.
- Covers agriculture, dairy and livestock revenue protection, and mortgage and credit product lines.
- Supports insurers, MGAs, and other risk originators with tailored treaty protection using proportional and excess of loss structures.
- Global agriculture book covers weather and natural peril-driven volatility and other production and yield risks.
- Mortgage portfolio supports government-sponsored entities and private mortgage insurers against default and loss severity volatility.
- Credit portfolio protects against losses from default risk for single obligors and multi-buyer trade credit across diverse regions and industries.
- Dairy and livestock business provides revenue protection against price volatility in milk, cattle, and hog markets.
- Uses derivative instruments (primarily put options and futures) to mitigate commodity price risk, solely for managing exposure to adverse price movements.
- Positions are adjusted throughout the year based on market conditions and risk profile.
- Additional information on derivatives is in Note 8, "Derivatives" to consolidated financial statements in Item 8 of Form 10-K.
Captives: Provides group captive solutions by leveraging underwriting and claims expertise from other divisions.
- Creates group captives for companies seeking to self-insure.
- Writes property, general liability, commercial auto, excess liability, and workers’ compensation lines on an E&S and admitted basis.
- Business is often administered through partnerships with third-party captive managers.
Construction & Energy Solutions: Focuses on high-severity exposures with tailored, often multi-line solutions.
- Includes general liability, excess liability, commercial auto, and workers’ compensation.
- Distributed through retail agents, brokers, and a select network of wholesalers.
Global Property: Provides comprehensive property insurance and reinsurance solutions for commercial clients worldwide.
- Offerings protect against physical loss or damage to assets from natural catastrophes and other insured perils.
Professional Lines: Includes three underwriting units: management liability, professional liability (including cyber), and allied health (including life sciences).
- Provides primary and excess claims-made liability products on an E&S and admitted basis.
- Distributed through wholesale and retail brokers, depending on the product.
Specialty Programs: Partners with program administrators focused on specific markets.
- Believes partnering with program administrators is optimal for profitable participation or market reach.
- Program administrators often have competitive advantages in scale or proprietary technology.
- Writes property, general liability, commercial auto liability, excess liability, and workers’ compensation lines on an E&S and admitted basis.
Surety: Provides contract, commercial, and transactional surety solutions to trade and services organizations.
- Focuses on small to medium-sized enterprises with aggregate bond programs up to approximately USD 100.0m for contract and USD 125.0m for commercial and transactional.
- Written on an admitted basis and distributed through retail agents and brokers.
Transactional E&S: Provides primary and excess non-catastrophe prone property and general liability solutions.
- Emphasizes risks considered hard to place due to complexity, loss history, or limited operating history (e.g., start-ups).
- Success is determined by technical underwriting, thoughtful coverage, pricing, and high-quality broker service.
- Accesses the market exclusively through wholesale brokers.

[c. 9; p. 8] Exited business

Business units and lines previously exited and placed into run-off are referred to as "exited business".

[c. 10; p. 8] Strategy

The company seeks to lead in chosen market niches and establish sustainable, competitive positions.
Key elements of the strategy include:
- Providing differentiated products, services, and solutions for target markets.
- Attracting and retaining exceptional underwriting and claims talent, incentivizing professionals aligned with organizational goals.
- Amplifying expertise with advanced technology and analytics for superior risk selection, pricing, and claims management.
- Empowering underwriting and claims teams with significant decision-making authority.
- Fostering a culture that promotes nimbleness and responsiveness to market opportunities and dislocation.
This strategy is referred to as "Rule Our Niche".
It forms the basis for building a strong defensible market position, creating a competitive moat, and winning in chosen markets.
The principles of this strategy are believed to be key to achieving and sustaining best-in-class underwriting results through P&C insurance pricing cycles.
The company strives for excellence in risk selection, pricing, and claims outcomes, amplified by advanced technology and analytics.

Our Competitive Strengths

[c. 11; p. 8] Our Competitive Strengths

Focus on profitable market niches requiring technical underwriting and claims management as barriers to entry.
Niche areas of commercial lines P&C markets are an attractive subset of the P&C insurance market, offering opportunities for attractive risk-adjusted returns.
Actively target underserved, dislocated markets or those where standard products are insufficient.
Risks in core markets require efficient, individual underwriting to generate sustainable underwriting profit.
Underwriting divisions are built around deeply experienced underwriters empowered with authority to make decisions.
This structure allows for innovative products and solutions for distribution partners and customers, regardless of risk complexity.
Underwriters' experience is augmented with data and predictive analytics to differentiate risk selection and pricing while enhancing efficiency.
Focus on hiring and retaining underwriting and technical staff to differentiate the company through expertise and experience.
Underwriting teams are knowledgeable, experienced, and empowered, which is critical for success in markets with difficult-to-automate risks.
Underwriters have freedom to use expertise and judgment in evaluating and pricing risks, rather than strict underwriting rules.
Cultivated a best-in-class, highly specialized team of claims professionals knowledgeable about niches and lines of business.
Claims professionals address first-party claims with fair solutions and third-party claims with holistic responses, ensuring consistent and early loss recognition of indemnity and loss adjustment expenses (LAE).
Respond quickly to claims with specialized adjusters using expertise, advanced technology, and analytics.
Technology is deeply embedded in the claims process, leveraging a technology-enabled platform from first notice of loss to settlement.
Analytics capabilities provide real-time, detailed information on open claims and benchmarks against closed claims for senior leadership and claims teams.
Industry expertise, nimble culture, and technology-embedded claims processes enable fair and appropriate claims outcomes.
SkyBI, the business intelligence platform, provides real-time intelligence to senior leadership and technical teams for superior decision-making.
SkyBI reflects best practices learned from management's experience in P&C insurance and technology sectors.
SkyBI is a single, comprehensive enterprise-wide data repository for reporting, business intelligence, analytics, and advanced data capabilities.
SkyBI provides information and performance metrics across the company in an easy-to-consume visualized format.
Data in SkyBI can be filtered by categories including distributor, customer segment, line of business, industry, underwriter, and risk feature.
SkyBI aids in establishing clear line of sight to objectives and facilitating decision-making processes.
Underwriting and claims decisions are augmented with new types of risk data and advanced technology.
Underwriting decisions are backed by historical data and in-depth risk evaluation from intentional data collection and processing.
Underwriting and claims prowess is amplified by combining historical data with new forms of risk data and predictive analytics.
Generative artificial intelligence is utilized in underwriting and claims handling to aid effectiveness and efficiency, while still relying on employee expertise.
Built a diversified group of underwriting divisions across multiple product lines, industries, geographies, and distribution channels.
Business includes areas not typically aligned with traditional P&C cycles.
Aims to evolve with and adapt to the market, growing certain lines in favorable conditions and limiting exposure in less favorable conditions.
Diversity of the book allows response to and capitalization on market opportunities and dislocations across insurance market and pricing cycles, resulting in a durable insurance franchise.
Built a distinctive winning culture, evidenced by internal surveys, public information (Glassdoor, LinkedIn), and selection as a "Best Places to Work in Insurance".
Key to culture and operating approach is a flat communication and decision-making structure.
Staff are trusted to make decisions that produce or exceed desired financial results and are supported by a clear system of performance measurement.
Adopted a hybrid work schedule providing flexibility for remote working.
Maintains an entrepreneurial environment that encourages and rewards a proactive approach to capitalize on market disruption.
This environment is consistent with identity as a specialty insurer and a foundation for attracting talent and delivering best-in-class results.
High-quality, experienced leadership team is aligned with shareholders.
Executive leadership team, led by Chairman and CEO Andrew Robinson, is experienced, innovative, and entrepreneurial.
Leadership team has a track record of success in senior management roles at industry-leading P&C companies and in starting new businesses.
Senior leadership's compensation is structured to ensure alignment with shareholders.
A material portion of leaders' compensation is in long-term and short-term incentives tied to delivering sustainable, best-in-class underwriting returns.
Executive leadership team has additional long-term incentive targets tied directly to growth in book value per share.

Our Strategy in Action

[c. 12; p. 8] "Rule Our Niche" strategy tenets

The "Rule Our Niche" strategy aims to generate best-in-class underwriting profitability for niches and create superior long-term shareholder value through growth in book value per share.
Core tenets of the "Rule Our Niche" strategy include attracting and retaining blue-chip underwriting and claims talent to expand and enhance market position.
The company seeks to hire and retain talented technical underwriting professionals with long-standing industry relationships with distribution partners and claims professionals with expertise in specific niches.
These relationships are key to steady access to preferred business.
The company aims to grow its market position by bringing on world-class talent in chosen markets.

[c. 13; p. 8] Technology leverage

The company leverages its technology DNA to differentiate itself from competition.
It has demonstrated a differentiated ability to utilize new forms of risk data and advanced technology within complex, higher severity risk categories of the specialty P&C insurance market.
SkyBI provides the ability to promptly sense and quickly respond to market changes.
Core operating platforms allow efficient entry into new markets without burdensome systems.
Technological advantage positions the company for profitable growth and expansion into additional specialty market niches to establish a strong and defensible market position.

[c. 14; p. 8] Business growth and market trends

The company aims to profitably grow existing lines of business and expand with new underwriting divisions.
It is positioned to take advantage of trends impacting customers in the United States and globally.
One trend is the continued rise in demand for specialized insurance solutions due to increasing risks and complexity from climate change/severe weather events, supply chain uncertainty, financial inflation risk, cyber risk, novel health risks, increased litigation, attorney involvement, jury awards, and healthcare delivery and cost.
Another market trend is the emergence of "micro cycles and micro dislocations" where different pockets of the P&C insurance market experience hardening and softening at different times.
The company has reacted quickly to these trends by launching new underwriting units (many not aligned with P&C cycles), entering underserved markets, partnering with advanced technology providers, and launching new captive solutions.
Gross written premium growth and profitability indicate momentum and provide a reference for the company's positioning to expand and grow in target markets.

[c. 15; p. 8] Underwriting performance and operational excellence

The company differentiates on daily excellence to drive best-in-class underwriting performance.
Meeting long-term goals, including best-in-class underwriting returns and book value per share growth, relies on day-to-day operational execution across all functional departments (underwriting, product management, claims management).
SkyBI provides the foundation for senior management to monitor performance, including renewal rates, new business pricing, portfolio performance for individual underwriters, and claims aging, reserving practices, and outcomes by claims adjusters.
Focus on fundamentals driving underwriting excellence is central to the strategy.
Cross-functional collaboration ensures underwriting, claims, actuarial, and product management teams regularly review performance and trends for quick implementation of portfolio, pricing, and coverage changes.

[c. 16; p. 8] Balance sheet utilization and strength

The company uses its balance sheet to capture a larger part of the market it serves.
It is committed to establishing and maintaining a strong balance sheet, starting with conservative loss reserves and strong capitalization ratios.
This is imperative to maintain confidence of customers, distribution partners, reinsurers, regulators, rating agencies, and shareholders.
Claims case reserves practices aim to reserve to the expected ultimate loss within 90 days of the first notice of loss.
The practice is to maintain incurred but not reported reserves ("IBNR") that, combined with case reserves, are above the actuarial central estimate.
Loss reserves represent the best estimate of ultimate losses.

Marketing and Distribution

[c. 17; p. 8] Marketing and distribution strategy

The company's marketing and distribution approach mirrors its underwriting approach and is a key facet of its "Rule Our Niche" strategy.
Underwriting teams and the company have strong relationships with distribution partners and reputations that facilitate new affiliations.
The company wins with distribution partners due to deep expertise in niche markets, high-caliber underwriters, culture of innovation, thoughtful product line-up and design, and speed/quality of responsiveness.
All underwriting divisions invest time and effort into sustaining and expanding distribution partner loyalty and long-term relationships.
The company tailors its choice of distribution partners to access specific business it seeks to write.
Products are distributed through retail agents, wholesale brokers, select program administrators, and captive managers.
This distribution approach allows effective and efficient access to targeted business based on market niche needs and dynamics.

Underwriting

[c. 18; p. 8] Underwriting Strategy and Approach

Underwriting approach is deeply embedded in the "Rule Our Niche" strategy.
Underwriting teams are specialized within nine divisions, focusing on specific niches.
The underwriting approach is underpinned by hiring experienced, best-in-class, and diverse teams of technical underwriters with established track records in specific specialty niche markets.
Underwriters' skill sets are amplified with advanced technology and data analytics.
Underwriters are empowered with appropriate authority to make decisions.
This approach is believed to be key to superior risk selection, pricing, and producing sustainable best-in-class underwriting results across market cycles.
Capabilities and experience of underwriting professionals are augmented using new forms of data and analytics for risk selection and pricing.
Underwriting data is captured in the business intelligence platform, SkyBI.
SkyBI forms the foundation of reporting, analytics, and other data capabilities, and is a key tool for senior management and business leaders.
The company is highly selective in the policies chosen to bind.
Underwriters are encouraged to move on quickly if coverage cannot reasonably be bound at a premium and coverage terms meeting company standards.
When accepting risks, terms and price are carefully established to suit the underlying exposure.
In the admitted market, the company ensures approved forms and filed rates are appropriate and adequate for risks, while allowing flexibility for specific/unique exposures.
In the E&S market, freedom of rate and form is used to ensure risk and coverage are appropriate for unique needs and exposures.
Policies are crafted to offer affordable and appropriate protection for insureds' exposures, and to construct coverage for more predictable potential losses and better managed claims costs.
Underwriting teams are supported by active engagement and collaboration with Claims, Actuarial, Product Management, Legal and Compliance, and Finance departments.
Collaboration ensures trends in business, legal and tort developments, and competitor and regulatory actions are analyzed, shared, and acted upon timely.
Underwriters are viewed as the center of the company, with all support functions incentivized and measured to support underwriting profitability targets.
This structure helps surface opportunities and issues early, contributing to nimbleness and ability to take advantage of market disruptions.
Underwriting controls and procedures are regularly reviewed to ensure underwriters act with clear line of sight to profitably underwrite each market.

Claims Management

[c. 19; p. 8] Claims management principles and operations

Skyward's claims department is guided by principles including prompt and comprehensive claim investigations using advanced analytics and technology.
Other principles include providing quality claims handling service, promptly establishing reserves, pursuing contribution and subrogation, detecting and preventing fraud, and disciplined litigation management.
Continuous training is provided to claim staff on evaluation, strategy, litigation management, good-faith handling, and best practices to achieve timely and optimal claim outcomes.
The majority of claims are handled in-house.
Third Party Administrators (TPAs) are utilized for certain instances, such as programs, captives, occupational accident, workers compensation, and runoff claims.
TPAs are actively managed, overseen, and regularly audited to ensure compliance with claims handling and reserving guidelines and best practices.
Independent legal counsel is retained for liability claims against insureds, selected based on geographical location and expertise.
Carefully crafted litigation guidelines are provided for claims professionals and outside counsel.
A legal spend management solution is employed to analyze legal invoices for adherence to case handling and billing practice standards, ensuring reasonable legal costs.

[c. 20; p. 8] Claims technology and efficiency initiatives

Technology is leveraged to gain efficiencies in the claims-handling process.
A Claims Development Severity Predictor has been created and implemented, which trains on key phrases to identify claims likely to lead to large loss development.
This predictive model allows for early identification, proactive claims management, and summarization of development causes, and is integrated into claims review and management workflow.
A "quick strike" program has been implemented for commercial auto claims to respond to claim reports.
This program deploys experienced investigators and vendors to accident scenes, ideally within two hours, regardless of location.
The quick response assists in evaluating facts and circumstances for investigation and, if appropriate, aids in resolving third-party claims quickly.

[c. 21; p. 8] Claims team structure and collaboration

Claims handlers and managers are organized by line of business to ensure appropriate expertise in handling claims.
Managers and adjusters collaborate closely with underwriting partners to inform them of legal trends and emerging claims issues.
The goal is to educate underwriters on emerging areas of loss experience to assist in their risk selection processes.

Technology

[c. 22; p. 8] Technology strategy and platforms

Technology is central to Skyward's operations and decision-making, driving long-term competitive advantages.
Skyward deploys technology in three primary functional ways: Superior Business Intelligence Platform, Predictive Analytics Technology, and Core Transactional Platforms.
Superior Business Intelligence Platform: SkyBI provides senior leadership and technical teams with real-time intelligence for decision-making.
SkyBI incorporates best practices from management's experience in P&C insurance and technology sectors.
SkyBI is a single, comprehensive enterprise-wide data repository for reporting, business intelligence, analytics, and advanced data capabilities.
SkyBI provides information and performance metrics across the Company in an easy-to-consume visualized format.
Data in SkyBI can be filtered by categories including distributor, customer segment, line of business, specific industry, individual underwriter, and specific risk feature.
SkyBI helps establish clear line of sight to objectives and facilitates decision-making.
Predictive Analytics Technology: Skyward augments employee capabilities using new risk data and predictive analytics, including AI, for risk selection, pricing, and claims handling.
Skyward's actions within every underwriting division are intentional to "Rule Our Niche".
Skyward aims for constant innovation, with actions specific to each division/market served.
Core Transactional Platforms: Core operating platforms (policy administration, underwriting workbench, billing, claims systems) are designed for nimble scaling and business expansion.
Skyward generally uses customized third-party vendor core operating applications.
The core platform organization is used for all business except accident & health, global property, agriculture, credit (re)insurance, and surety, which require dedicated core processing components due to unique features.
Data from all divisions' core operating platforms flows to SkyBI with comparable data quality and granularity.
The use of advanced technology for underwriting and claims, SkyBI, and core operating platforms creates a flywheel effect.
This flywheel effect allows underwriters to better select risk, claims professionals to better adjudicate claims, unit leaders to better communicate with reinsurance and third-party partners, and senior leadership to better evaluate business trends.
These tools also enable more accurate, effective, and efficient communication with distribution partners, reinsurers, and other third-party partners.

[c. 23; p. 8] Cybersecurity and data protection

Skyward faces external threats to IT systems, including system failure, customer data theft attempts, and ransomware attacks.
Technology infrastructure is designed to function through major disruptions.
Data is replicated in real time to a third-party cloud disaster recovery site for use during major system failures.
Data is backed up daily for system restoration.
Actions to prevent system and data disruptions include: actively monitoring Cybersecurity and Infrastructure Security Agency’s (“CISA”) cybersecurity directives.
Immediate action is taken on any vulnerability identified in a CISA directive.
Monthly vulnerability scans are conducted on all network-attached devices at all locations, with patching applied as needed.
Two-factor authentication is required for access to any Skyward system.
Monthly security training is conducted for all employees.
Endpoint detection agents are implemented for threat detection and response.
Desktop scenarios are performed to practice responses to breaches with cybersecurity insurance partners and retained security consultants.
Annual penetration testing is performed.
Skyward constantly reviews its security breach posture and regularly implements updated processes, best practices, and tools.

Reinsurance

[c. 24; p. 8] Reinsurance strategy and types

Reinsurance is strategically purchased from third parties to protect capital from severity events (large single event losses or catastrophes) and reduce earnings volatility.
Reinsurance contracts are predominantly one year in length and renew annually, primarily in January and June.
Factors influencing reinsurance purchases at annual renewal include changes to underlying insurance coverage, updated loss activity, capital and surplus levels, risk appetite changes, and the cost and availability of reinsurance treaties.
Quota share reinsurance, excess of loss reinsurance, and facultative reinsurance coverage are purchased to limit exposure from losses on any one occurrence.
The mix of reinsurance purchased considers efficiency, cost, risk appetite, and specific factors of underlying risks.
Quota share reinsurance involves the reinsurer assuming a specified percentage of the ceding company’s losses from a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission.
Excess of loss reinsurance involves the reinsurer assuming all or a portion of the ceding company’s losses for an individual claim or event above a specified amount, in exchange for a negotiated premium, and includes the catastrophe reinsurance program.
Facultative coverage is a reinsurance contract on individual risks, used to supplement treaty limits or cover risks/perils excluded from treaty reinsurance.

[c. 25; p. 8] Property catastrophe reinsurance program

As of December 31, 2025, property insurance represented 34% of gross written premiums.
Aggregation of property writings by geographic area is actively managed and continuously monitored to limit potential loss from severe events like hurricanes, convective storms, and earthquakes.
Catastrophe reinsurance is purchased to further mitigate aggregation of property losses due to a single event or series of events.
Third-party stochastic and internal deterministic models are used to analyze the risk of aggregation of losses from such events to inform catastrophe reinsurance purchases.
These models provide a quantitative view of Probable Maximum Loss (PML) events, which estimate the expected loss level for a given return period.
Based on modeling, an event beyond a 1 in 250-year PML would be required to exhaust the USD 36.0m property catastrophe coverage.
The company aims to expose no more than 3.0% of stockholders’ equity to a catastrophic loss that is less than a 1 in 250-year event.
The current reinsurance program is believed to provide coverage well in excess of theoretical losses from any recorded historical event.

[c. 26; p. 8] Reinsurer credit quality and recoverables

Reinsurance is sought from reinsurers rated at least “A-” (“Excellent”) or better by A.M. Best.
As of December 31, 2025, 98% of reinsurance recoverables were from reinsurers rated “A-” (Excellent) or better by A.M. Best, or were collateralized by the reinsurer.
Primary liability to policyholders is retained if reinsurers are unable to pay claims, potentially resulting in losses to the company.
Allowances for uncollectible reinsurance are established due to the risk of reinsurer failure.
The allowance for uncollectible reinsurance was USD 2.3m at December 31, 2025 and 2024.
A table sets forth the most significant reinsurers by amount of reinsurance recoverables and their A.M. Best rating as of December 31, 2025.

[c. 27; p. 8]

Maximum Company Retention by Line of Business
Line of Business	Maximum Company Retention
Accident & Health	$0.90 million per occurrence
Commercial Auto (1)	$1.00 million per occurrence
Excess Casualty (1)(2)	$2.25 million per occurrence
General Liability (1)	$1.50 million per occurrence
Ocean Marine (2)	$3.00 million per occurrence
Professional Lines (2)	$5.25 million per occurrence
Property (3)	$3.50 million per occurrence
Representation and Warranty	$3.25 million per occurrence
Surety (2)	$5.00 million per occurrence
Workers’ Compensation (2)	$2.33 million per occurrence

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

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

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

($ in thousands)
Reinsurer	Reinsurance Recoverables	AM Best Rating
eMaxx Capitves (1)	197,989	n/r
Everest Reinsurance Co.	123,925	A+
General Reinsurance Corp	70,355	A++
Partner Reinsurance Co. of the US	65,446	A+
ACE (Chubb Property & Casulty Ins Company)	48,344	A+
RGA Reinsurance Company	43,043	A+
Lloyds Syndicate 4711	35,860	A+
Swiss Reinsurance America Corp	26,152	A+
Lloyds Syndicate 2987	25,301	A+
Aspen Insurance UK Limited	24,715	A
Top 10 Total	661,130	—
All Others	458,750	—
Total	1,119,880	—

(1) This reinsurer facilitates our eMaxx captive. At December 31, 2025, we held collateral in a statutory trust of $235.2 million on our net reinsurance recoverables.

Enterprise Risk Management

[c. 28; p. 8] Enterprise Risk Management overview and governance

Enterprise Risk Management (ERM) is embedded in company operations and guides day-to-day activities.
The ERM approach aims to achieve an acceptable risk-adjusted return for shareholders and maintain trust and reliability for those served.
Underwriting and asset portfolio construction are intentional, balancing liability duration and market cyclicality of the underwriting portfolio.
Reinsurance is used to manage volatility outside of risk tolerances.
The investment strategy targets a diversified portfolio balancing yield, liquidity, volatility, and potential for principal loss.
The Senior Vice President (SVP), Chief Financial Officer (CFO) & Head of ERM - US Operations, oversees critical ERM processes and chairs the cross-functional corporate ERM Committee.
The company formalizes its view of risk and solvency using an Economic Capital Model (ECM) to measure potential economic loss.
ECM output measures potential earnings and capital loss for various scenarios against risk tolerances.
Risk tolerances are set and updated annually by the ERM Committee and discussed with the Board of Directors' Risk Committee.
The ECM provides a probabilistic modeled view of earnings and capital loss, integrating potential loss from catastrophes, reserving, underwriting, market, credit risk, strategic, and operational risks.
The SVP, CFO & Head of ERM, with the ERM Committee, reviews and maintains a comprehensive risk register with accountabilities for mitigations and monitoring.
The top 10 risks are identified and quantified by the SVP, CFO & Head of ERM and the ERM Committee, and reviewed quarterly.
Reports on these risks are submitted regularly to the Risk Committee by the SVP, CFO & Head of ERM and the ERM Committee.

[c. 29; p. 8] Operational risk management processes

Operational processes and controls are designed to identify, assess, and manage key risks continuously.
The Underwriting Committee oversees changes in risk appetite, product line, and division expansion.
Claims handling practices are monitored against guidelines through regular internal audits.
Monthly large loss reviews are conducted within Claims.
A watchlist of potential high-severity claims is maintained and monitored within Claims.
Quarterly reserve studies are performed by Actuarial.
The Reserve Committee meets quarterly to review and respond to trends in loss emergence.
Key observations from reserve studies are discussed with the CEO.
Underwriting divisions assess rate change and retention on existing business, new business quality, pricing adequacy, and loss emergence versus expectations on a monthly and quarterly basis.
The SkyBI platform provides real-time portfolio, underwriting, claims, and actuarial analytics to support these processes.
ERM is central to decision-making and day-to-day activities.
ERM is a core component of the strategy to achieve market-leading risk-adjusted returns for shareholders and foster a culture of accountability, transparency, and sound judgment.

Reserves

[c. 30; p. 8] Reserve management and methodology

Reserves are maintained for specific claims incurred and reported, IBNR reserves, and reserves for uncollectible reinsurance.
Ultimate liability may differ from current reserves, and there is a risk of inadequate reserves in the insurance industry.
Reserves are continually monitored using new information on reported claims and statistical analyses.
Anticipated inflation is implicitly reflected in the reserving process through cost trend analysis and historical development review.
Reserves for losses and LAE are not discounted to reflect estimated present value.
Case reserves are established when a claim is reported, based on estimated ultimate payment after assessing coverage, damages, and investigation.
Estimates for case reserves are based on reserving practices and the claims adjuster's experience and knowledge.
Case reserves are revised periodically based on subsequent developments.
IBNR reserves are established for estimated future loss payments on incurred but not yet reported claims and potential development on reported claims.
IBNR reserves are estimated using generally accepted actuarial reserving techniques, considering quantitative loss experience data and qualitative factors.
Loss reserves are regularly reviewed using various actuarial techniques.
Reserve estimates are updated as historical loss experience develops, additional claims are reported/settled, and new information becomes available.
Reserves can be increased or decreased over time as claims move towards settlement, impacting earnings through adverse development or reserve releases.
Additional information on loss reserves is available in Item 7 of Form 10-K, "Management’s Discussion and Analysis of Financial Condition and Results of Operations - “Results of Operations - Losses and LAE” and “Critical Accounting Policies”.

Investments

[c. 31; p. 8] Investment portfolio strategy and oversight

The company aims to maintain a balanced investment portfolio with predictable and stable returns, augmented by strategic investments for attractive risk-adjusted returns.
An Enterprise Based Asset Allocation model is used for investment allocation strategy, embedded in the Economic Capital Model, to understand the impact of decisions on capital, liquidity, and risk profile across market scenarios.
Investment risk is actively managed and monitored to balance stable growth and liquidity with compliance to insurance regulatory and rating agency frameworks.
The portfolio primarily consists of cash and cash equivalents and investment-grade fixed-maturity securities, supplemented by additional investments within risk appetite.
The Investment Committee of the Board of Directors reviews and approves the investment policy and strategy.
The Investment Committee meets quarterly to review investment activities, tactics, and new investment opportunities.
The portfolio is directed internally and includes both self-managed investments and portfolios managed by select third-party investment management firms.

[c. 32; p. 8] Investment discussion reference

Additional discussion on investments, including market risks, is available in Item 7 of Form 10-K, "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Investments".

Competition

[c. 33; p. 8] Competition factors and competitors

The specialty lines property & casualty insurance market has many markets and sub-markets, each with distinct customer needs, products/services, and economic/structural features.
Competition in underwriting divisions comes from other specialty and standard insurers, and program administrators.
Competition is based on pricing, general reputation, perceived financial strength, broker relationships, product terms and conditions, independent rating agency ratings, speed and reputation of claims payment, and experience/reputation of underwriting and claims teams.
Due to the diversity of underwriting divisions, competition is broad, with some competitors specific to only a subset of divisions.
Notable competitors include: Markel Corporation; W.R. Berkley Corporation; American Financial Group Inc.; Tokio Marine Holdings, Inc.; CNA Financial Corporation; Hiscox, Ltd.; RLI Corp.; Intact Finance Corporation; Kinsale Capital Group, Inc; Arch Capital Group; and AXIS Capital Holdings, Ltd..

Our Structure

[c. 34; p. 8] Our Structure

Operations are conducted principally through four insurance companies.
Great Midwest Insurance Company (GMIC) is the largest insurance subsidiary, underwriting multiple lines on an admitted basis in all 50 states and the District of Columbia, and is a certified surety bond company listed with the Department of the Treasury.
Houston Specialty Company (HSIC), a GMIC subsidiary, underwrites multiple lines on a surplus lines basis in 50 states, the District of Columbia, and select foreign countries.
Imperium Insurance Company (IIC), an HSIC subsidiary, underwrites on an admitted basis in all 50 states and the District of Columbia.
Oklahoma Specialty Insurance Company (OSIC), an IIC subsidiary, is an approved surplus lines company in 49 states and the District of Columbia.
Effective December 31, 2024, the insurance company subsidiaries were restacked into this organizational structure to provide capital for the growing surety business to operate more effectively within the surety T-listing market.
Skyward Re is a wholly-owned captive reinsurance company domiciled in the Cayman Islands, incorporated on January 7, 2020.
Skyward Re was established to facilitate the LPT, which was commuted effective January 31, 2025.
Three non-insurance companies are operated: Skyward Underwriters Agency, Inc. (a licensed agent, managing general agent, and reinsurance broker), Skyward Service Company (provides administrative services to subsidiaries), and Skyward Specialty No. 1 Limited Company (a UK company and authorized Lloyd's corporate member).
The organizational structure at December 31, 2025, shows each entity is wholly-owned by its immediate parent.

[c. 35; p. 8]

Our Structure
	2025
Texas	10.7%
Pennsylvania	7.6
Florida	7.2
California	7.1
New York	6.3
Louisiana	6.1
Illinois	4.1
New Jersey	4.1
Georgia	3.8
Delaware	3.1
All other states and countries	39.9
Total	100.0%

[c. 36; p. 8] Our Structure

[Chart/image description:] This is an organizational chart showing the corporate structure of Skyward Specialty Insurance Group, Inc. The top entity is SKYWARD SPECIALTY INSURANCE GROUP, INC. (Delaware corporation). SKYWARD SPECIALTY INSURANCE GROUP, INC. (Delaware corporation) has the following direct subsidiaries: - SKYWARD SERVICE COMPANY (Delaware corporation) - GREAT MIDWEST INSURANCE COMPANY (Texas stock insurance company) - SKYWARD UNDERWRITERS AGENCY, INC. (Texas corporation) - SKYWARD SPECIALTY NO. 1 LIMITED (United Kingdom company) - SKYWARD RE (Cayman Islands corporation) GREAT MIDWEST INSURANCE COMPANY (Texas stock insurance company) has the following direct subsidiary: - HOUSTON SPECIALTY INSURANCE COMPANY (Texas stock insurance company) HOUSTON SPECIALTY INSURANCE COMPANY (Texas stock insurance company) has the following direct subsidiary: - IMPERIUM INSURANCE COMPANY (Texas stock insurance company) IMPERIUM INSURANCE COMPANY (Texas stock insurance company) has the following direct subsidiary: - OKLAHOMA SPECIALTY INSURANCE COMPANY (Oklahoma insurance corporation)

Ratings

[c. 37; p. 8] A.M. Best rating

Skyward Specialty Insurance Group, Inc. has an "A" (Excellent) rating with a stable outlook from A.M. Best.
The "A" (Excellent) rating is the third highest among the 13 ratings assigned by A.M. Best, which range from "A++" (Superior) to "D" (Poor).
A.M. Best evaluates insurance companies based on profitability, leverage, liquidity, book of business, reinsurance adequacy, asset quality and market value, loss and loss expense reserves adequacy, surplus adequacy, capital structure, management experience and competence, and market presence.
A.M. Best ratings reflect its opinion on an insurance company’s financial strength, operating performance, and ability to meet policyholder obligations.
These ratings are relevant to policyholders, agents, insurance brokers, and intermediaries, and are not specifically related to securities issued by the company.

Regulation

[c. 38; p. 8] Regulation

The company is regulated by insurance regulatory authorities in the states where it conducts business.
State insurance laws and regulations primarily protect policyholders, consumers, and claimants, not stockholders or investors.
State regulation varies by jurisdiction, with regulators having broad administrative power over capital and surplus requirements, licensing, product form and rate review/approval, reserve adequacy standards, statutory accounting methods, financial reporting, affiliate transactions, and investment types/amounts.
Insurance company regulation is constantly changing due to governmental agencies and legislatures reacting to issues.
Some state legislatures have considered or enacted laws that alter and often increase state authority to regulate insurance companies and holding company systems, partly to prevent federal involvement.
The National Association of Insurance Commissioners (NAIC) and some state insurance regulators are re-examining existing laws and regulations, focusing on insurer solvency, interpretations of current laws, and development of new laws.
The federal government does not directly regulate insurance but federal initiatives can affect the industry through treatment of federal subsidiaries, regulation of quasi-governmental entities, and regulations from federal departments.
The company operates as an insurance holding company system and is subject to insurance holding company laws in Texas (where primary insurance companies are domiciled) and Oklahoma.
These statutes require each insurance company in the system to register with its state of domicile's insurance department and provide information on operations within the holding company system that could materially affect the operations, management, or financial condition of domiciled insurers.
All transactions among holding company system members must be fair and reasonable.
Transactions between insurance subsidiaries and their parents/affiliates generally require disclosure to state regulators, and material or extraordinary transactions typically need notice to or prior approval from the applicable state insurance regulator.

Intellectual Property

[c. 39; p. 8] Trademark registrations and protection

The company has applied for various trademark registrations in the United States at both federal and state levels.
The company will pursue additional trademark registrations and other intellectual property protection if deemed beneficial and cost-effective.
The company monitors its trademarks and service marks and protects them from unauthorized use as necessary.

Employees and Human Capital

[c. 40; p. 8] Employee overview and culture

The company had approximately 611 employees as of December 31, 2025.
Employees are not subject to any collective bargaining agreement, and no current efforts to implement one are known.
The company believes it has good working relations with its employees.
The company aims to be an employer of choice, including outside of insurance.
The company strives to create a culture fostering diversity of thought, background, and perspective.
The company cultivates an exceptional workforce to perpetuate its ownership culture and achieve superior business results.
The goal is to attract, develop, and retain diverse talent, promoting a culture where different viewpoints are valued, and individuals feel respected, treated fairly, and have opportunities to excel.

[c. 41; p. 8] Employee compensation and benefits

The company offers and maintains a competitive benefits package to support employee well-being.
Benefits include medical, dental, and vision insurance, a 401(k) plan, paid time off, family leave, and employee assistance programs.
An employee stock purchase plan is available to all employees.
The company emphasizes employee training and development, providing opportunities for further education and professional development.

Risk Factors

[c. 42; p. 9] investment risk disclosure

Investing in the common stock involves a high degree of risk.
Investors should carefully consider the risks and uncertainties described in the report, consolidated financial statements, related notes, and other SEC filings before investing.
The described risks are not exhaustive; additional unstated, unknown, or currently immaterial risks may also affect the company.
If any identified risk occurs, the business, operating results, financial condition, and prospects could be materially harmed, potentially leading to a decline in common stock price and loss of investment.

Summary of Material Risk Factors

[c. 43; p. 9] General business risks

The business is subject to numerous risks and uncertainties.
Financial condition and results of operations could be materially adversely affected by inaccurate assessment of underwriting risk.
Competition in the industry is intense.
Reliance on insurance retail agents and brokers, wholesalers, and program administrators exposes the business to certain risks that could adversely affect results.

[c. 44; p. 9] Reinsurance and claims risks

Inability to purchase third-party reinsurance on desired or commercially acceptable terms, or terms that adequately protect the company, may materially adversely affect business, financial condition, and results of operations.
Losses and loss expense reserves may be inadequate to cover actual losses, which could materially adversely affect financial condition, results of operations, and cash flows.

[c. 45; p. 9] Financial strength and policy interpretation risks

A decline in financial strength rating may adversely affect the amount of business written.
Unexpected changes in the interpretation of coverage or provisions, including loss limitations and exclusions, in policies could materially adversely affect financial condition and results of operations.

[c. 46; p. 9] Reinsurer and claims payment risks

Reinsurers may not reimburse claims on a timely basis or at all, which may materially adversely affect business, financial condition, and results of operations.
Failure to accurately and timely pay claims could materially and adversely affect business, financial condition, results of operations, and prospects.

[c. 47; p. 9] Economic and cyclical risks

Adverse economic factors, including recession, inflation, high unemployment, or lower economic activity, could lead to fewer policy sales, increased claim frequency, premium defaults, or falsification of claims, affecting growth and profitability.
The insurance business is historically cyclical, which may affect financial performance, cause quarterly operating results to vary, and may not be indicative of future performance.

[c. 48; p. 9] Regulatory and personnel risks

Extensive regulation may adversely affect the ability to achieve business objectives; non-compliance could result in penalties, including fines and suspensions, adversely affecting financial condition and results of operations.
The loss of key personnel or inability to attract and retain qualified personnel could adversely affect the company.

[c. 49; p. 9] Internal controls and public company risks

Failure to achieve and maintain effective internal controls could impact operating results and financial condition, and negatively affect the market price of common stock.
Costs will increase significantly as a public company, requiring management to devote substantial time to complying with public company regulations.

[c. 50; p. 9] Derivative and acquisition integration risks

Use of derivatives to mitigate market price volatility exposure may subject the company to risks such as hedge ineffectiveness, basis risk, collateral and margin call liquidity pressures, and valuation uncertainty, any of which could adversely affect financial condition.
The integration of Apollo may present unforeseen challenges, including difficulties in integrating technology systems, business processes, and risk management frameworks, potentially leading to operational disruptions, increased costs, or delays in realizing anticipated strategic benefits from the acquisition.

Risks Related to Our Business and Industry

[c. 51; p. 9] Underwriting risk assessment

Financial condition and results of operations could be materially adversely affected if underwriting risk is not accurately assessed.
Underwriting success depends on accurately assessing risks and establishing appropriate premium rates.
Misunderstanding the nature or extent of risks can lead to inappropriate premium rates, adversely affecting financial results.
Decisions by employees, including management and underwriters, expose the company to risk.

[c. 52; p. 9] Industry competition

Competition in the industry is intense.
Competition comes from specialty insurance companies, standard insurance companies, and underwriting agencies.
Competition factors include price, reputation, financial strength, distribution relationships, product terms, rating agency ratings, claims payment speed, and underwriting team experience.
Increasing consolidation in the insurance industry may further increase competition.
New industry or legislative developments could also increase competition.
Inability to compete successfully could change supply and demand for insurance, affect pricing at risk-adequate rates, and impact retention or new business acquisition on favorable terms.
Increased competition limiting business transactions could adversely affect operating results.

[c. 53; p. 9] Distribution channel reliance

Business depends on insurance retail agents, brokers, wholesalers, and program administrators, exposing it to risks from these distribution channels.
Most products are distributed through independent retail agents and brokers who own "renewal rights".
Business model relies on relationships with and success of retail agents and brokers.
Dependence also extends to relationships wholesalers and program administrators maintain with agents and brokers.
Relationships with distributors can be discontinued or become unprofitable.
Consolidation of insurance distribution firms may increase their influence on commission rates and concentrate business with particular brokers.
Premiums collected by brokers for payment to the company carry credit risk, as payment to the broker may be considered payment to the company in certain jurisdictions.
Instances where brokers collect but do not remit premiums have not been material to date, but could require the company to provide coverage despite non-payment.
Limitations on canceling policies for non-payment could reduce underwriting profits and adversely affect financial condition and results.
The company reviews financial condition of new brokers and periodically reviews existing distributors to identify those not meeting profitability standards or business objectives.
Measures like restricting access to products or terminating relationships may not achieve desired results due to contractual and regulatory limitations.
Deterioration in distributor relationships or uncompetitive compensation could lead distributors to place more premium with other carriers.
Distributors exceeding authority, failing to transfer collected premiums, or breaching obligations could expose the company to liability.
Continued consolidation of insurance distribution firms could materially affect sales channels, including loss of market access or share.
Negative impacts could arise from loss of talent following acquisitions or increased commission costs due to larger distributors gaining negotiating leverage.
Digitization acceleration poses risks if distributors cannot keep pace with customer demand for digital experiences.

[c. 54; p. 9] Reinsurance availability and terms

Inability to purchase third-party reinsurance on desired or commercially acceptable terms could materially adversely affect business, financial condition, and results.
Reinsurance is strategically purchased to protect capital from severity events and reduce earnings volatility.
Failure to renew expiring contracts, enter new arrangements, or expand coverage could increase loss exposure and potential losses.
Increased loss exposure could necessitate reducing underwriting commitments, adversely affecting business, financial condition, and results.
Reinsurers may exclude certain coverages or alter terms, leading to gaps in reinsurance protection and greater risk exposure.

[c. 55; p. 9] Loss and loss expense reserves adequacy

Losses and loss expense (LAE) reserves may be inadequate, materially adversely affecting financial condition, results, and cash flows.
Success depends on accurately assessing risks for insured businesses and people.
Reserves are established as the best estimate for ultimate payment of incurred claims and related adjustment costs.
Reserves are estimates, and ultimate liability may differ from the estimate.
Reserving process reviews historical data and considers factors such as claims inflation, claims development patterns, pricing, legislative activity, social/economic patterns, and litigation/judicial/regulatory trends.
Variables are affected by internal and external events that could increase loss exposure.
Loss reserves are continually monitored using new information, statistical techniques, and modeling simulations.
The process assumes past experience, adjusted for current developments and trends, is an appropriate basis for predicting future events.
No precise method exists for evaluating the impact of specific factors on reserve adequacy, and actual results may deviate substantially.
Uncertainties impacting reserve adequacy include:
- Time required to fully appreciate covered loss extent, leading to increasing loss estimates over time.
- New theories of liability enforced retroactively by courts.
- Volatility in financial markets, economic events, and external factors increasing claim frequency/severity.
- Elevated inflationary conditions increasing loss costs.
- Adverse economic factors (recession, inflation, unemployment) leading to fewer policy sales, increased claim frequency/severity, or premium defaults.
- Increased cost due to "social inflation" (medical/material costs, technology in vehicles, supply chain disruptions, attorney involvement, litigation financing, lawsuit abuse).
- Increased claim frequency, even without liability, could escalate evaluation and handling costs beyond established reserves.
- Entering new lines or new claim theories could increase claim frequency and handling costs.
Inadequate reserves require increases, reducing net income and stockholders' equity in the period of identification.
Future loss experience substantially exceeding established reserves could materially adversely affect future earnings, liquidity, and financial rating.

[c. 56; p. 9] Financial strength rating decline

A decline in financial strength rating may adversely affect the amount of business written.
Independent rating agencies like A.M. Best assess financial strength and quality of insurers.
A.M. Best ratings are based on quantitative and qualitative analysis of balance sheet strength, operating performance, and business profile.
A.M. Best financial strength ratings range from "A++" (Superior) to "F" (liquidation).
As of the filing date, A.M. Best assigned an "A" (Excellent) financial strength rating with a stable outlook.
A.M. Best ratings provide an independent opinion of an insurer's ability to meet policyholder obligations, not an evaluation for investors.
A.M. Best's analysis includes peer comparisons, industry standards, operating plans, philosophy, and management.
A.M. Best periodically reviews and may revise ratings downward based on balance sheet strength, operating performance, and business profile.
Factors that could affect A.M. Best's analysis include:
- Changes in business practices from the organizational plan that no longer support the rating.
- Unfavorable financial, regulatory, or market trends, including excess market capacity.
- Losses exceeding loss reserves.
- Unresolved issues with government regulators.
- Inability to retain senior management or key personnel.
- Significant investment portfolio losses or limited liquidity.
- Alterations to A.M. Best's capital adequacy assessment methodology that adversely affect the rating.
A downgrade or withdrawal of rating could lead to:
- Current and future distribution partners and insureds choosing higher-rated competitors.
- Increased cost or reduced availability of reinsurance.
- Severely limiting or preventing writing new and renewal insurance contracts.
Rating organizations may heighten scrutiny, increase review frequency/scope, request more information, or increase capital requirements due to earnings and capital pressures on financial institutions.
No assurance that the rating will remain at its current level.
Adverse ratings consequences could materially adversely affect financial condition and results of operations.

[c. 57; p. 9] Policy coverage interpretation changes

Unexpected changes in coverage interpretation or provisions, including loss limitations and exclusions, could materially adversely affect financial condition and results.
No assurance that loss limitations or exclusions will be enforceable as intended.
Unexpected issues related to claims and coverage may emerge due to changes in industry practices, legal, judicial, social, and other conditions.
Policy limitations on claim periods may be shorter than statutory periods.
Courts or regulatory authorities could nullify or void limitations/exclusions, or legislation could modify/bar their use.
Governmental actions could result in higher than anticipated losses and LAE.
Court decisions, like the 1995 Montrose decision in California, could narrowly read exclusions, expanding coverage and requiring new exclusions.
These issues may adversely affect business by broadening coverage or increasing claim frequency/severity.
Changes may not become apparent until years after affected insurance contracts are issued, making the full extent of liability unknown for a long time.

[c. 58; p. 9] Reinsurer reimbursement risk

Reinsurers may not reimburse claims timely or at all, materially adversely affecting business, financial condition, and results.
Reinsurance contracts require premium payments to reinsurers who reimburse a portion of covered claims.
Reinsurers may be called upon to reimburse claims many years after premiums are paid.
Reinsurance makes the reinsurer liable but does not relieve the ceding insurer of primary liability to policyholders.
The current reinsurance program aims to limit financial risk.
Reinsurers may default due to insolvency, lack of liquidity, operational failure, political/regulatory prohibitions, fraud, asserted defenses, or documentation deficiencies.
Disputes with reinsurers can be time-consuming, costly, and uncertain.
These risks could lead to increased net losses and adversely affect financial condition.
As of December 31, 2025, reinsurance recoverables were USD 1,119.9m.

[c. 59; p. 9] Claims payment accuracy and timeliness

Failure to accurately and timely pay claims could materially and adversely affect business, financial condition, results, and prospects.
Factors affecting claims payment ability include training/experience of claims representatives (including TPAs), management effectiveness, and appropriate procedures/systems.
Inaccurate or untimely claims payment could lead to regulatory/administrative actions, litigation, reputational damage, and adverse effects on business, financial condition, results, and prospects.
Ineffective TPA management or internal staff/TPA inability to handle claim volume could adversely affect workload capacity.
This could require slowing growth in affected markets and lead to decreased claims work quality, adversely affecting operating margins.

[c. 60; p. 9] Catastrophic events and climate change

Severe weather, climate change effects, catastrophes, pandemics, and man-made events may adversely affect business, results, and financial condition.
Business is exposed to severe weather, earthquakes, and man-made catastrophes (explosions, war, terrorist attacks, riots).
Changing weather patterns and climatic conditions (global warming) increase unpredictability and frequency of natural disasters, including in new areas.
Climate change may increase frequency and severity of extreme weather events, leading to conditions that increase hurricane activity and wildfire risks.
A natural disaster or catastrophe loss could materially adversely affect business, financial condition, and results.
Catastrophes, even those not insured against (e.g., 2025 California wildfires), can lead to policy cancellations.
Increased frequency and severity of weather events (hurricanes, convective storms) could materially increase losses and affect ability to predict, quantify, reinsure, and manage catastrophe risk.
Extent of losses depends on frequency/severity of insured events and total insured exposure in affected areas.
Incidence and severity of catastrophes and severe weather are inherently unpredictable.
Exposure to losses is managed by analyzing probability/severity of events and their impact on underwriting/investment portfolio.
Indirect impact can occur if insured businesses are affected by catastrophes not directly covered, leading to inability or unwillingness to pay premiums on other products.
Inability to obtain reinsurance coverage at reasonable rates and adequate amounts for severe weather/catastrophes could materially adversely affect business and results.
Business is exposed to risks from pandemics, outbreaks, public health crises, and geopolitical/social events.
While policy terms typically exclude virus-related claims, court decisions and governmental actions may challenge exclusions or interpretations.
Changes in domestic and international climate policy programs and initiatives, and related legislation/regulation, are unpredictable but could materially adversely affect business, operational results, and financial results.

[c. 61; p. 9] Program administrator compliance

Failure of program administrators to comply with pre-established guidelines could adversely affect results of operations.
Certain insurance products are marketed and distributed through program administrators with limited quoting and binding authority.
Program administrators sell products to insureds via retail agents and brokers and can bind certain risks without initial approval.
Non-compliance with underwriting guidelines or appointment terms could bind the company to unanticipated risks, adversely affecting results.

[c. 62; p. 9] Contract renewals and new business

Failure of actual renewals or new business from repeat insureds to meet expectations could materially adversely affect future written premium and results.
Most contracts are one-year term and renewable.
Some insurance contracts do not renew, but insureds are repeat customers with regular new contracts.
Financial forecasting includes assumptions about renewal rates and repeat business.
Insurance and reinsurance industries are cyclical with intense, price-based competition.
If actual renewals/repeat business do not meet expectations, or if renewals/repeat business are declined due to pricing, future written premium and operations would be materially adversely affected.

[c. 63; p. 9] ESG matters and reputation

Increased public attention to environmental, social, and governance (ESG) matters may expose the company to negative public perception, reputational harm, additional costs, or stock price impact.
Failure or perceived failure to meet investor/customer ESG expectations could harm business and reputation.
Backlash from investors or customers regarding ESG topics could also harm business and reputation.
Reputational damage from providing policies to certain insureds could decrease demand for products, materially adversely affect business, operational results, and financial results, and require resources to rebuild reputation, competitive position, and brand strength.

[c. 64; p. 9] Accounting practices and pronouncements

Changes in accounting practices and future pronouncements may materially affect reported financial results.
Developments in accounting practices may require considerable additional expenses for compliance, especially if retroactive application or prior period information is needed.
The impact of changes in current accounting practices and future pronouncements is unpredictable but may affect net income, shareholder's equity, and other financial statement line items.
Insurance subsidiaries must comply with statutory accounting principles (SAP).
SAP is subject to constant review by the NAIC, its task forces/committees, and state insurance departments.
Various proposals before NAIC committees could negatively affect insurance industry participants if enacted and adopted at the state level.
The NAIC continuously examines existing laws and regulations.
It is unpredictable whether reforms will be enacted, in what form, or their positive/negative effect.

[c. 65; p. 9] Derivative use risks

Use of derivatives to mitigate market price volatility exposes the company to risks that could adversely affect financial condition.
Risks include hedge ineffectiveness due to imperfect correlation between derivatives and underlying exposures.
Basis risk, where futures prices do not move in line with cash market prices, is another risk.
Liquidity pressures can arise from margin call or collateral requirements during adverse market movements.
Valuation uncertainty inherent in futures and options markets, stemming from reliance on market-based models, may cause hedges to perform differently than expected.
These factors may prevent hedging strategies from effectively reducing volatility and could materially adversely impact financial results.

Risks Related to the Market and Economic Conditions

[c. 66; p. 9] Economic and market conditions impact on insurance business

Adverse economic factors like recession, inflation, high unemployment, or lower economic activity could lead to fewer policy sales, increased claim frequency, premium defaults, or claim falsification, affecting growth and profitability.
Business revenue, economic conditions, capital market volatility, and inflation affect the business and economic environment, impacting revenue and profit generation.
An economic downturn with higher unemployment, declining spending, and reduced corporate revenue generally adversely affects demand for insurance products, impacting premium levels and profitability.
Negative economic factors may affect the ability to charge appropriate rates for risk and reduce the number of policies written or opportunities for profitable underwriting.
During an economic downturn, customers may reduce insurance needs, cancel policies, modify coverage, or not renew policies.
Existing policyholders may exaggerate or falsify claims to obtain higher payments.
A significant collapse in economic segments like construction, credit markets, or energy production/servicing could adversely affect results by reducing underwriting profit if not reflected in rates.
The insurance business is historically cyclical, which can affect financial performance and cause operating results to vary quarterly, not indicative of future performance.
Insurance carriers have historically experienced significant fluctuations in operating results due to competition, catastrophic events, capacity levels, litigation trends, regulatory constraints, and general economic conditions.
The supply of insurance is related to prevailing prices, insured losses, and available capital, which fluctuate with investment returns in the industry.
The insurance business is a cyclical industry with periods of intense price competition due to excessive underwriting capacity (soft market) and periods of capacity shortages increasing premium levels (hard market).
Demand for insurance depends on factors like frequency/severity of catastrophic events, capacity levels, new capital providers, and general economic conditions, all of which fluctuate and can contribute to price declines.
The profitability of most P&C insurance companies tends to follow cyclical market patterns, with higher gross written premium growth and improved profitability during hard market cycles.
This cyclical market pattern is more pronounced in the E&S market than in the standard insurance market.
When the standard insurance market hardens, the E&S market typically hardens, and growth in the E&S market can be significantly more rapid.
When conditions soften, customers previously in the E&S market may return to the admitted market, exacerbating the effects of rate decreases on financial results.
The market may experience "micro cycles" where certain areas harden or soften independently and more drastically than the overall market.
Operating results are subject to fluctuation and have historically varied quarter-to-quarter.
Quarterly results are expected to continue fluctuating due to general economic conditions, frequency/severity of catastrophes, fluctuating interest rates, claims exceeding loss reserves, competition, deviations from expected premium retention, adverse investment performance, and reinsurance coverage costs.

[c. 67; p. 9] Investment portfolio performance and risks

Performance of the investment portfolio is subject to various investment risks that may adversely affect financial results.
Results of operations depend partly on investment portfolio performance.
The company aims to hold a diversified investment portfolio managed by professional advisory firms according to its investment policy and reviewed by its Investment Committee.
Investments are subject to general economic conditions, market risks, and risks inherent to specific securities.
Primary market risk exposures are to changes in interest rates and equity prices.
A significant portion of the investment portfolio is in fixed maturity securities, or separately managed accounts and limited partnerships primarily invested in fixed maturity securities.
Interest rates rose materially during 2022 and 2023.
Declining interest rates, potentially due to federal government actions to slow inflation (e.g., recent rate cuts, Inflation Reduction Act of 2022), would pressure net investment income, especially from fixed maturity and short-term investments, adversely affecting operating results.
Recent and future interest rate increases could cause values of fixed income securities portfolios to decline, with magnitude depending on security duration and rate increase amount.
Some fixed income securities have call or prepayment options, creating reinvestment risk in declining rate environments.
Other fixed income securities, like mortgage-backed and asset-backed securities, carry prepayment risk or may not prepay as quickly as expected in a rising interest rate environment.
All fixed maturity securities, including those in separately managed accounts and limited partnerships, are subject to credit risk.
Credit risk is the risk of investment default or impairment due to deterioration in the financial condition of issuers or guarantors.
Downgrades in credit ratings of fixed maturity securities could significantly negatively affect their market valuation.
The company also invests in marketable preferred and common equity securities and exchange-traded funds.
These equity securities are carried at fair market value on the balance sheet and are subject to potential losses and market value declines.
Market and credit risks could reduce net investment income and result in realized investment losses.
The investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid, as with fixed maturity securities held to maturity, separately managed accounts, and limited partnership investments.
Valuation of investments is more subjective in illiquid markets, increasing the risk that estimated fair value does not reflect actual transaction prices.
Risks for all security types are managed through an investment policy that sets parameters including maximum investment percentages in certain securities and minimum credit quality levels.
These investment parameters are believed to be within applicable guidelines established by the NAIC, the Texas Department of Insurance, and the Oklahoma Department of Insurance.
The Investment Committee periodically reviews Enterprise Based Asset Allocation models for overall risk management.
While capital preservation is sought, investment objectives may not be achieved, and results may vary substantially over time.
Investment strategies are employed to not correlate with insurance and reinsurance exposures, but investment portfolio losses may coincide with underwriting losses, exacerbating adverse effects.

[c. 68; p. 9] Investment liquidity and forced sales

The company could be forced to sell investments to meet liquidity requirements.
Premiums are invested until needed to pay policyholder claims.
The duration of the investment portfolio is managed based on the duration of losses and LAE reserves to ensure sufficient liquidity and avoid liquidating investments to fund claims.
Risks such as inadequate losses and LAE reserves or unfavorable litigation trends could necessitate selling investments to fund liabilities.
Investments may not be sold at favorable prices or at all.
Sales could result in significant realized losses depending on general market conditions, interest rates, and credit issues with individual securities.

Risks Related to the Regulatory Environment

[c. 69; p. 9] Regulatory environment and compliance risks

Extensive regulation may adversely affect the company's ability to achieve business objectives.
Failure to comply with regulations may result in penalties, including fines and suspensions, adversely affecting financial condition and results of operations.
Primary insurance subsidiaries (GMIC, HSIC, IIC) are subject to extensive regulation in Texas (state of domicile) and other operating states.
Insurance regulations are primarily designed to protect policyholders, not investors or stockholders.
Regulations are administered by state departments of insurance and cover capital and surplus requirements, investment and underwriting limitations, affiliate transactions, dividend limitations, changes in control, solvency, and other financial/non-financial aspects.
Significant changes in laws and regulations could limit discretion or increase business costs.
State insurance regulators conduct periodic examinations and require annual/other reports on financial condition and holding company issues.
Regulatory requirements may impose timing and expense constraints, adversely affecting business objectives.
Insurance subsidiaries are part of an "insurance holding company system" in Texas, requiring notice to the Texas Department of Insurance for certain affiliate transactions.
Prior notification requirements may cause business delays and additional expenses.
Failure to file required notifications or comply with Texas insurance regulations may lead to significant fines, penalties, and impaired working relationships with the Texas Department of Insurance.
State insurance regulators have broad discretion to deny or revoke licenses for regulation violations.
The company's interpretations of regulations or industry practices may differ from regulatory authorities' interpretations.
Lack of requisite licenses/approvals or non-compliance could lead to suspension of activities or other penalties, adversely affecting business operations.
Changes in insurance industry regulation, laws, or interpretations could interfere with operations and increase compliance costs.

[c. 70; p. 9] Capital requirements and potential adverse impacts

Insurance subsidiaries are subject to risk-based capital requirements based on the NAIC model and minimum capital/surplus restrictions under Texas law.
These requirements establish minimum risk-based capital for business operations and identify inadequately capitalized property and casualty insurers based on asset/liability risks and net written premium mix.
Insurers below a calculated threshold may face regulatory action, including supervision, rehabilitation, or liquidation.
Failure to maintain required risk-based capital levels could adversely affect the ability of insurance subsidiaries to maintain regulatory authority and their A.M. Best Rating.
The company may become subject to additional government or market regulation, which could have a material adverse impact on its business.
Changes in laws related to asset/reserve valuation, surplus requirements, investment/dividend limitations, enterprise risk, and risk-based capital could adversely affect the business.
The U.S. federal government generally has not directly regulated the insurance industry, except for flood, nuclear, and terrorism risks.
Potential federal legislation could affect the insurance industry in areas like privatization of government entities (e.g., Freddie Mac, Fannie Mae), reduction in federal subsidies for certain businesses (e.g., agriculture), tort reform, corporate governance, and taxation of reinsurance companies.

[c. 71; p. 9] Tax law changes and net operating losses

Changes to U.S. tax laws and new tax policies could significantly negatively impact the overall economy and the company's business.
Legislative or other actions related to taxes could negatively affect the company, its investments, or stockholders.
U.S. federal income tax rules are constantly under review by legislators, the IRS, and the U.S. Department of the Treasury.
The company cannot predict with certainty how tax law changes might affect it, its stockholders, or portfolio investments.
New legislation, U.S. Treasury regulations, administrative interpretations, or court decisions could have adverse consequences.
On July 4, 2025, H.R. 1, the "One Big Beautiful Bill Act" (OBBBA), was signed into law in the United States.
The OBBBA modifies key business tax provisions, including restoring 100% bonus depreciation under IRC Section 168(k), restoring immediate deduction of U.S. domestic research and experimental expenditures under IRC Section 174A, restoring the EBITDA-based business interest expense limitation under IRC Section 163(j), and changing international operations tax computations.
Based on current analysis, the company does not believe OBBBA provisions will materially impact its business or results of operations.
Regulations and IRS guidance implementing the OBBBA may create unforeseen issues, and further tax law changes may occur.
There is no assurance that the company's business will not be adversely affected by the OBBBA or other tax law changes.
The company's ability to utilize net operating loss carryforwards (NOLs) and other tax attributes may be limited.
As of December 31, 2025, the company had gross federal income tax NOLs of approximately USD 40.3m available to offset future taxable income, prior to annual limitations under IRC Section 382.
These NOLs are set to expire beginning in 2032.
Under IRC Section 382, an "ownership change" (greater than 50% change in equity ownership by certain stockholders over a three-year period) can limit the use of pre-ownership change NOLs to offset post-ownership change income.
The company may experience future ownership changes from stock ownership shifts, some outside its control.
Future regulatory changes could also limit the ability to utilize NOLs.
Inability to offset future taxable income with NOLs could adversely affect net income and cash flows.

[c. 72; p. 9] Holding company liquidity and dividend restrictions

As a holding company, with substantially all operations conducted by insurance subsidiaries, liquidity at the holding company level (including ability to pay dividends and service debt) depends on obtaining cash dividends or other permitted payments from insurance subsidiaries.
Continued operation and growth require substantial capital, so the company does not intend to declare and pay cash dividends on common stock in the foreseeable future.
The ability to pay dividends to stockholders and meet debt obligations largely depends on dividends and distributions from primary insurance subsidiaries (GMIC, HSIC, IIC).
State insurance laws, including Texas laws, restrict the ability of GMIC, HSIC, and IIC to determine stockholder dividends.
State insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus.
Dividend payments are limited to the portion of available policyholder surplus derived from net profits.
State insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that maximum calculated dividends would be permitted.
State insurance regulators with jurisdiction over subsidiary dividends may adopt more restrictive statutory provisions in the future.
Any future dividend determination will be at the discretion of the Board of Directors, depending on results of operations, financial condition, contractual debt restrictions, indebtedness, applicable law, and other relevant factors.
Investors may need to sell common stock after price appreciation (which may not occur) to realize gains, as the only way to do so.
Investors seeking immediate cash dividends should not purchase the company's common stock.

[c. 73; p. 9] Change of control regulations

Applicable insurance laws may make it difficult to effect a change of control.
Under Texas insurance laws and regulations, acquiring control of a domestic insurer requires written approval from the state insurance commissioner.
Approval is contingent on factors including the acquirer's financial strength, plans for the insurer's future operations, and potential anti-competitive results.
Texas insurance laws apply to direct and indirect acquisition of 10% or more of the voting stock of a Texas-domiciled insurer.
Acquisition of 10% or more of the company's common stock would be considered an indirect change of control of Skyward Specialty, triggering applicable filing requirements under Texas insurance laws, unless a disclaimer of control filing is accepted by the Texas Insurance Department.
These requirements may discourage potential acquisition proposals and may delay, deter, or prevent a change of control, even for transactions desirable to stockholders.

Risks Related to Our Liquidity and Access to Capital

[c. 74; p. 9] Future capital requirements

We may require additional capital in the future, which may not be available or may only be available on unfavorable terms.
Future capital requirements depend on factors including our ability to write new business successfully and to establish premium rates and reserves sufficient to cover losses.
If operational cash flows are insufficient to fund future operating requirements and cover claim losses, or if capital is adversely impacted by investment portfolio fair value decline, catastrophe losses, or adverse reserve development, we may need to raise additional funds or curtail growth.
Factors affecting capital needs include growth rate, profitability, claims experience, reinsurance availability, market disruptions, and other unforeseeable developments.
If additional capital is needed, equity or debt financing may not be available or may be on unfavorable terms.
Equity financings could result in dilution to stockholders.
Debt financings may impose covenants restricting business operations.
Such securities may have rights, preferences, and privileges senior to common stock.
Inability to obtain adequate capital on favorable terms could materially adversely affect business, financial condition, or results of operations.

[c. 75; p. 9] Revolving Credit Facility access and covenants

The availability of credit under the Revolving Credit Facility is subject to conditions that may limit access.
Inability to satisfy conditions for credit under the Revolving Credit Facility would prevent borrowing and may adversely affect liquidity, financial position, and results of operations.
Failure to meet certain financial covenants required by credit agreements may materially and adversely affect assets, financial position, and cash flows.
A breach of covenants under the Term Loan Facility and Revolving Credit Facility could result in an event of default.
Upon an event of default, all outstanding amounts and accrued interest could be declared immediately due and payable by lenders.
Our assets may not be sufficient to repay in full the payments due under credit agreements if an event of default occurs.
The current credit market environment and other macro-economic challenges may adversely impact our ability to borrow sufficient funds or sell assets or equity to pay existing debt.

Risks Related to Our Operations

[c. 76; p. 9] personnel attraction and retention

The company could be adversely affected by the loss of key personnel or inability to attract and retain qualified personnel.
The company depends on attracting and retaining experienced personnel knowledgeable about its business.
The talent pool for recruitment is limited and fluctuates based on market dynamics.
Higher demand for skilled employees could increase compensation expectations, making it difficult to retain and recruit key personnel and maintain labor costs.
Inability to retain or attract talented personnel could prevent the company from maintaining its competitive position, adversely affecting results of operations.

[c. 77; p. 9] IT and cybersecurity risks

Security breaches, data loss, cyberattacks, and IT failures could disrupt operations, damage reputation, and adversely affect business, operations, and financial results.
The business is highly dependent on IT and telecommunications systems for underwriting, claims, actuarial functions, and financial reporting.
Some systems may rely on third-party systems not under the company's control.
Events like natural catastrophes, terrorist attacks, industrial accidents, computer viruses, and cyberattacks can cause system failures or inaccessibility.
Sustained or repeated system failures could limit the ability to write business, provide customer service, pay claims, or operate normally.
Computer viruses, hackers, employee misconduct, and external hazards can expose systems to security breaches.
The company has experienced a data incident where attackers acquired certain data, which was determined to be immaterial.
There is no evidence of nation-state actor involvement or misuse of information from the data incident.
Future cybersecurity events may result in operational disruptions, unauthorized access, disclosure or loss of proprietary or customer data, leading to legal claims, regulatory scrutiny, reputational damage, and costs.
SEC and state law requirements for public notification of incidents could exacerbate harm to the business.
Harm to business and reputation could occur even if technology infrastructure is protected, if attempted security breaches are publicized.
Advances in criminal capabilities, new vulnerabilities, or exploitation attempts could compromise security measures.
Third parties to whom functions are outsourced are also subject to these risks.
Increased use of third-party services (e.g., cloud technology) can make it harder to identify and respond to cyberattacks.
Risks could increase as vendors adopt more cloud-based software services.

[c. 78; p. 9] artificial intelligence impact

Artificial intelligence (AI) is an evolving technology that may impact the company's business and operations.
The rapid growth of AI and machine learning may alter the competitive landscape.
Employees use AI for risk selection, pricing, and claims handling to improve effectiveness and efficiency.
The company's competitive position may be harmed if competitors leverage AI solutions more quickly or effectively.
If AI applications produce deficient, inaccurate, or biased content, analyses, or recommendations, the business, financial condition, results of operations, and reputation may be adversely affected.
Costs may be incurred to adopt and deploy AI technologies that could become obsolete earlier than expected.
There is no assurance that desired benefits from AI will be realized.
There is uncertainty in the legal and regulatory landscape for AI at federal and state levels.
Future laws, regulations, or industry standards for AI may be burdensome, costly, and restrict the ability to develop, adopt, and deploy AI technologies.

[c. 79; p. 9] growth management and sustainability

The company may not be able to manage its growth effectively.
Future business growth could require additional capital, systems development, and skilled personnel.
The company must meet capital needs, expand systems and internal controls, allocate human resources, hire and train qualified employees, and integrate acquired businesses effectively.
Failure to manage growth effectively could materially adversely affect business, financial condition, and results of operations.
Success of inorganic growth through acquisitions depends on identifying targets, negotiating favorable terms, completing transactions, and integrating targets.
Anticipated benefits from acquisitions, such as revenue growth, operational efficiencies, or synergies, may not be realized.
The company has experienced rapid growth in recent years, but these rates may not be indicative of future growth.
Sustaining revenue growth consistent with recent history is not assured.
Revenue growth depends on factors including effective product pricing, successful product deployment and renewals, attracting and retaining qualified underwriters and claims professionals, enhancing infrastructure and data systems, creating new distribution channels, introducing new products, competing effectively, and increasing brand awareness.
Failure to accomplish these objectives makes forecasting future results difficult.
Historical growth rate should not be considered indicative of future performance and may decline.
Revenue could grow more slowly or decline for various reasons.
Operating expenses are expected to increase, and if revenue growth does not offset these increases, business, financial position, and results of operations could be harmed, and profitability may not be achieved or maintained.

[c. 80; p. 9] Apollo acquisition risks

The acquisition and integration of Apollo may adversely affect the company's business, financial condition, and results of operations.
The acquisition of Apollo was completed on January 1, 2026.
The acquisition is expected to provide strategic benefits, expand specialty insurance capabilities, and enhance presence in the Lloyd’s market.
Integration of Apollo involves risks and uncertainties, including challenges in integrating operations, systems, technology platforms, and personnel.
Integration difficulties may divert management attention, disrupt business, and incur unexpected costs or delays.
There is no assurance that growth opportunities or other benefits from the acquisition will be realized within the expected timeframe or at all.
Failure to achieve anticipated benefits could adversely affect results of operations and financial condition.
Success of the acquisition depends on retaining key Apollo employees, partners, and customers.
Loss of key personnel or business relationships could negatively impact the value of the acquired business and overall operations.
Apollo operates in the Lloyd’s market with a distinct business culture and regulatory environment.
Differences in business practices, risk appetite, and compliance requirements may challenge harmonization of policies and procedures.
The acquisition may result in significant changes to financial statements, including recognition of goodwill and other intangible assets subject to impairment.
The acquired business may have undisclosed liabilities or risks.
Apollo's financial statements, currently prepared under U.K. GAAP, will need to be converted to U.S. GAAP, requiring adjustments to accounting policies, estimates, and disclosures.
Expansion into new jurisdictions and markets, including Lloyd’s, increases exposure to regulatory scrutiny and compliance requirements.
Failure to comply with applicable laws and regulations could result in fines, penalties, or other adverse consequences.
Additional indebtedness was incurred in connection with the acquisition.
The ability to service debt and comply with covenants may be affected by external events, limiting financial flexibility or increasing cost of capital.
The integration process may divert management’s attention from existing business, negatively impacting ongoing operations and financial performance.
Inability to successfully integrate Apollo, realize anticipated benefits, or manage risks could materially and adversely affect business, financial condition, and results of operations.

[c. 81; p. 9] litigation risks

The effects of litigation are uncertain and could adversely affect the business.
The company faces risks from various types of litigation, including disputes related to insurance claims and general commercial/corporate litigation.
While not currently involved in out-of-the-ordinary litigation, other industry members face class action lawsuits and other litigation with unpredictable outcomes and substantial amounts.
Social inflation, particularly in third-party claims, can lead to oversized judgments.
Litigation costs and settlement amounts can be inflated beyond historical reasonable levels, even if cases do not reach judgment.
Litigation is based on issues including insurance and claim settlement practices.
The company cannot predict future involvement in such litigation or its impact.

[c. 82; p. 9] vendor and third-party risks

Loss of key vendor relationships or failure of a vendor to protect data could affect operations.
The company relies on services and products from many vendors in the U.S. and abroad, including computer hardware/software, claim adjustment, HR benefits management, and investment management.
Vendor bankruptcy, inability to provide services, system breaches, or failure to protect confidential information could lead to operational impairments and financial losses.
Failure to properly assess and understand risks and costs in third-party relationships could materially and adversely affect financial condition and results of operations.
The company anticipates continued reliance on third-party software.
While commercially reasonable alternatives to current licensed third-party software are believed to exist, this may not always be the case, or replacement could be difficult/costly.
Integration of new third-party software may require significant work and investment.
Use of additional or alternative third-party software would require license agreements, which may not be available on commercially reasonable terms or at all.
Many risks associated with third-party software cannot be eliminated and could negatively affect the business.

[c. 83; p. 9] intellectual property risks

The company may fail to protect its intellectual property rights for its proprietary technology platform and brand, or may be sued for infringement.
Success and ability to compete depend partly on intellectual property, including brand rights and proprietary technology.
The company primarily relies on copyright and trade secret laws, and confidentiality agreements to protect intellectual property.
Steps taken to protect intellectual property may be inadequate.
Efforts to enforce intellectual property rights may face defenses, counterclaims, and countersuits challenging validity, enforceability, and scope.
Failure to secure, protect, and enforce intellectual property rights could adversely affect the brand and business.
Success also depends on not infringing on others' intellectual property rights.
Competitors and other entities may own or claim intellectual property related to the industry or company.
Third parties may claim infringement, and the company may be found to be infringing.
Claims or litigation could incur significant expenses, require substantial damages or royalty payments, prevent service offerings, or impose unfavorable terms.
Even if successful in a dispute, litigation could be costly, time-consuming, and divert management attention.

Risks Related to Ownership of Our Common Stock

[c. 84; p. 9] Public company compliance costs and risks

Operating as a public company incurs increased costs and requires substantial management time for compliance initiatives.
Financial reporting and other requirements may exceed the preparedness of accounting and management systems and resources.
As a public company and large accelerated filer, significant legal, accounting, and other expenses are incurred that would not be present as a private company.
Federal securities laws, including Sarbanes-Oxley Act, Dodd-Frank Act, and SEC/Nasdaq rules, impose requirements on public companies, such as filing annual, quarterly, and event-driven reports, and maintaining effective disclosure, financial controls, and corporate governance practices.
These rules increase legal and financial compliance costs, make activities more time-consuming and costly, and require significant management and personnel time for compliance.
There is a risk of not producing reliable financial statements or filing them timely with the SEC, or complying with Nasdaq listing requirements.
Section 404 of the Sarbanes-Oxley Act requires system and process evaluation and testing of internal control over financial reporting, leading to substantial accounting expense and significant management effort.
Compliance with Section 404 necessitates maintaining accounting and finance staff and consultants with public company reporting, technical accounting, and internal control knowledge, and providing internal audit services.
Achieving Section 404 compliance involves a costly and challenging process to document and evaluate internal control over financial reporting.
This process requires dedicating internal resources, engaging outside consultants, adopting a detailed work plan, improving control processes, validating controls through testing, and implementing continuous reporting and improvement.
There is a risk that neither the company nor its independent registered public accounting firm will conclude that internal control over financial reporting is effective within the prescribed timeframe, potentially leading to adverse financial market reactions due to loss of confidence in financial statement reliability.
Non-compliance could also lead to investigations by the SEC or other regulatory authorities, requiring additional financial and management resources.
Disclosure controls and procedures are required to ensure information for SEC reports is recorded, processed, summarized, and reported within specified time periods.
Disclosure controls and procedures or internal control over financial reporting are not expected to prevent or detect all errors and fraud.
A control system provides only reasonable, not absolute, assurance that objectives will be met due to inherent limitations.
No evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud have been detected.
Control system design is based on assumptions about future events, and may not succeed under all potential future conditions.
Controls may become inadequate over time due to changing conditions or deterioration in compliance with policies or procedures.
Misstatements due to error or fraud may occur and not be detected because of inherent limitations in the control system.
Failure to achieve and maintain effective internal controls, as required by Section 404 of the Sarbanes-Oxley Act, could harm operating results and financial condition, and negatively affect the market price of common stock.
Section 404(b) of the Sarbanes-Oxley Act requires annual assessments by management of the effectiveness of internal control over financial reporting.
Substantial internal control systems and procedures must be implemented and maintained to satisfy Exchange Act reporting requirements.
Deficiencies may be identified during assessments that cannot be remediated timely.
Testing and maintaining internal control over financial reporting may divert management's attention from other important business matters.
There is a risk of not being able to conclude on an ongoing basis that internal control over financial reporting is effective under Section 404(b) of Sarbanes-Oxley.
If internal control over financial reporting is deemed ineffective, remediation actions could be costly and significantly impact operations.
Material weaknesses or other deficiencies in internal control over financial reporting may impede the ability to file timely and accurate reports with the SEC.
Any of these issues could cause investors to lose confidence in reported financial information or lead to suspension or termination of common stock listing on Nasdaq, negatively affecting the trading price.
A material weakness in internal control over information technology general controls ("ITGCs") was identified as of December 31, 2024, and remediated as of December 31, 2025.
Failure to maintain an effective system of internal controls could adversely affect the market price of common stock.
The effectiveness of controls and procedures is subject to inherent limitations, meaning there is no assurance they will prevent or detect misstatements.
Even an effective ITGC system provides only reasonable, not absolute, assurance regarding ITGCs.
Control deficiencies over ITGCs, constituting a material weakness, were identified during the fiscal year ended December 31, 2024, as described in "ITEM 9A. CONTROLS & PROCEDURES" of the Annual Report on Form 10-K for that period.
Measures have been taken to remediate the identified material weakness, and it is believed to be remediated.
If additional material weaknesses or significant deficiencies are identified, required financial information may not be provided timely and reliably, or financial information may be incorrectly reported.
Untimely filing of financial statements could lead to adverse action by shareholders, Nasdaq, the SEC, or other regulatory authorities.
Material weaknesses or significant deficiencies in internal controls could adversely affect reputation or investor perceptions, negatively impacting the trading price of common shares.
Additional costs may be incurred to remediate material weaknesses or significant deficiencies in internal controls.
There is no assurance that additional material weaknesses or restatements of financial results will not arise in the future due to inadequate internal controls.
Current controls and procedures may not be adequate in the future to prevent or identify irregularities or errors, or to facilitate fair presentation of financial statements.

[c. 85; p. 9] Stock price volatility and investment risk

Operating results and stock price may be volatile or decline regardless of operating performance, leading to potential loss of investment.
The market price of common stock has been and is likely to remain highly volatile, fluctuating substantially due to many factors beyond the company's control.
Securities markets worldwide have experienced and are expected to continue experiencing significant price and volume fluctuations.
Market volatility, general economic, market, or political conditions could cause wide price fluctuations in shares regardless of operating performance.
Investment in common stock is considered risky and should only be undertaken if significant loss and wide market value fluctuation can be withstood.
Factors that could affect the stock price include: market conditions in the broader stock market; actual or anticipated fluctuations in quarterly financial and operating results; introduction of new products or services by the company or competitors; issuance of new or changed securities analysts’ reports or recommendations; operating results varying from expectations of securities analysts and investors; short sales, hedging, and other derivative transactions in common stock; guidance provided to the public, changes in guidance, or failure to meet guidance; strategic actions by the company or competitors; announcements by the company, competitors, or acquisition targets; sales, or anticipated sales, of large blocks of stock by directors, executive officers, and principal stockholders; additions or departures in the Board of Directors, senior management, or other key personnel; regulatory, legal, or political developments; public response to press releases or other public announcements by the company or third parties, including SEC filings; litigation and governmental investigations; changing economic conditions, including social inflation; changes in accounting principles; any future indebtedness or securities issued; default under agreements governing indebtedness; exposure to capital and credit market risks adversely affecting the investment portfolio or capital resources; changes in credit ratings; and other events or factors, including natural disasters, war, acts of terrorism, or responses to these events.
Securities markets have experienced extreme price and volume fluctuations unrelated or disproportionate to company operating performance.
Investors in common stock may not be able to resell shares at or above their purchase price due to these factors.
Broad market fluctuations, general market, economic, and political conditions (e.g., recessions, loss of investor confidence, interest rate changes) may negatively affect the market price of common stock.
Stock markets, including Nasdaq, have experienced extreme price and volume fluctuations affecting equity securities of many companies.
Such occurrences could cause the stock price to fall and expose the company to securities class action litigation, which could be costly to defend, divert management's attention and resources, or harm the business.

[c. 86; p. 9] Underwriting guidelines and strategy changes

Management can change underwriting guidelines or strategy without stockholder approval or notice.
This authority allows fundamental changes to operations without stockholder approval, potentially leading to a strategy or underwriting guidelines materially different from those described in the "Business" section or other filings.

[c. 87; p. 9] Anti-takeover provisions and corporate governance

Anti-takeover provisions in organizational documents could prevent or delay a change of control beneficial to shareholders and limit share price.
Provisions in the certificate of incorporation and by-laws, Delaware law, and federal/state/insurance regulations may discourage, delay, or prevent mergers, tender offers, or other changes of control that security holders might consider favorable.
These provisions impose procedural and other requirements that could make it more difficult for shareholders to effect certain corporate actions, potentially adversely affecting the common stock price.
Charter documents permit the Board of Directors to establish the number of directors and fill vacancies and newly created directorships.
The Board of Directors is classified into three classes with staggered, three-year terms, and directors may only be removed for cause.
Super-majority voting is required to amend provisions in the certificate of incorporation and bylaws.
Blank-check preferred stock is included, with preference rights and terms set by the Board of Directors, which could delay or prevent a transaction or change in control that might involve a premium price for common stock or otherwise benefit stockholders.
The ability of stockholders to call special meetings is eliminated.
Special meetings of stockholders can only be called by the Board of Directors, the chairman of the Board of Directors, or the chief executive officer.
Stockholder consent action is prohibited unless by unanimous written consent.
Vacancies on the Board of Directors may be filled only by a majority of directors then in office, even if less than a quorum.
Cumulative voting in the election of directors is prohibited.
Advance notice requirements are established for nominations for election to the Board of Directors or for proposing matters at annual stockholder meetings.
As a Delaware corporation, the company is subject to Section 203 of the Delaware General Corporation Law, which may prohibit large stockholders (owning 15% or more of voting stock) from merging or combining for a period of time.

[c. 88; p. 9] Exclusive forum provisions

The certificate of incorporation and bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for substantially all disputes between the company and its stockholders.
This could limit stockholders' ability to obtain a favorable judicial forum for disputes with the company or its directors, officers, or employees.
The exclusive forum applies to: any derivative action or proceeding on the company's behalf; any action asserting a claim of breach of fiduciary duty by directors, officers, employees, or agents, or stockholders; any action asserting a claim under DGCL or the certificate of incorporation/bylaws, or where DGCL confers jurisdiction on the Court of Chancery; any action to interpret, apply, enforce, or determine the validity of the certificate of incorporation or bylaws; or any action asserting a claim governed by the internal affairs doctrine.
The certificate of incorporation and bylaws also state that federal district courts of the United States of America are the sole and exclusive forum for resolutions of any complaint arising under the Securities Act, unless written consent for an alternative forum is given.
This application to Securities Act claims and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over suits to enforce duties or liabilities created by the Securities Act or its rules.
There is uncertainty whether a court would enforce such a provision, and stockholders will not be deemed to have waived compliance with federal securities laws.
This exclusive forum provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which federal courts have exclusive jurisdiction.
If enforced, this choice of forum provision may limit a stockholder’s ability to bring a claim in a preferred judicial forum, potentially discouraging lawsuits against the company and its personnel, though stockholders are not deemed to waive federal securities law compliance.
If a court finds the choice of forum provision inapplicable or unenforceable, additional costs may be incurred to resolve actions in other jurisdictions, which could materially adversely affect the business, financial condition, or results of operations.

Cybersecurity

[c. 89; p. 10] Cybersecurity risk management strategy

IT Systems are central to nearly all business operations, including internal/external communications, document/record management, and shared work environments.
Responding to cybersecurity incidents and threats is a key component of the overall ERM strategy.
A Crisis Response Plan (CRP) has been implemented to address cybersecurity incidents and threats.
Management and IT personnel have implemented processes for assessing, identifying, managing, and escalating material cybersecurity risks, integrated into overall risk management.
Cybersecurity risks are included in the risk universe evaluated annually by the enterprise risk management committee.
Risk owners are assigned to develop and track mitigation plans for heightened cybersecurity risks identified by the ERM process.
Security events and data incidents are evaluated, ranked by severity, prioritized for response/remediation, and reviewed for materiality, operational/business impact, and privacy impact.
The cybersecurity risk management program uses the National Institute of Standards and Technology framework, which categorizes risks into identify, protect, detect, respond, recover, and govern.
Company-wide policies and procedures cover cybersecurity matters, including encryption standards, antivirus protection, remote access, multifactor authentication, confidential information, and internet/social media/email use.
A detailed crisis response playbook is followed in the event of an incident.
Investments in IT security have expanded, including end-user training, layered defenses, critical asset identification/protection, strengthened monitoring/alerting, and expert engagement.
Defenses are regularly tested through technical simulations (e.g., penetration tests) and reviews of operational policies/procedures with third-party experts.
The IT security team monitors alerts, discusses threat levels/trends/remediation, prepares a quarterly cyber scorecard, collects data on cybersecurity threats/risk areas, and conducts an annual risk assessment.
Periodic external penetration tests, red team testing, and maturity testing are conducted to assess processes, procedures, and the threat landscape.
In the event of an incident, outside cybersecurity legal counsel consults and coordinates with other third parties (e.g., communication/notification, cybersecurity vendors for investigation/recovery, cybersecurity experts for validation/ransomware assistance, cybersecurity insurance providers).
Processes are implemented to oversee and identify risks from cybersecurity threats associated with key third-party service providers.
Third-party service providers are required to provide SOC-1 or SOC-2 reports and their cybersecurity/disaster recovery plans.

[c. 90; p. 10] Cybersecurity governance and oversight

Cybersecurity risk management and strategy processes are overseen by leaders from the Information Security Team, with assistance from Compliance and Legal teams.
These individuals have decades of experience in IT roles, including security, auditing, compliance, systems, and programming.
They monitor prevention, mitigation, detection, and remediation of cybersecurity incidents through management and participation in risk management processes and report to the Risk Committee.
The Risk Committee of the Board of Directors oversees cybersecurity strategy, reviews cybersecurity and other IT risks/controls/procedures, and receives periodic updates from management on cybersecurity measures.
This review includes discussion of cybersecurity threat risks and their potential operational impact.
A separate process exists for communicating with the Risk Committee during a specific cybersecurity incident.
In an incident, the Crisis Management Team provides an initial awareness communication to the CEO/Chair of the Board.
The CEO/Chair of the Board then informs the Chair of the Risk Committee.
Following an initial assessment by senior management and IT Systems personnel, a follow-up communication is provided to the CEO and Risk Committee Chair to determine if full Board escalation is warranted.

[c. 91; p. 10] Cybersecurity risk impact

Cybersecurity threats have not materially affected business strategy, results of operations, or financial condition.
A cybersecurity incident resulting in a serious compromise of IT Systems or a demand for payment to restore IT Systems could have a material adverse effect.
Such an incident could negatively impact the ability to operate effectively and divert management/financial resources.

Properties

[c. 92; p. 11] Office facilities

The company leases its primary executive offices and insurance operations in Houston, Texas.
The Houston office occupies approximately 20,400 square feet of space.
The lease for the Houston office space expires in 2029.
Additional office space is leased where appropriate.
Management considers the office facilities suitable and adequate for current operations.

Legal Proceedings

[c. 93; p. 12] Legal proceedings

The company is party to legal proceedings arising in the ordinary course of business.
The company believes the outcome of these matters, individually and in aggregate, will not have a material adverse effect on its consolidated financial position.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

[c. 94; p. 13] Common stock trading and holders

Common shares began trading on the NASDAQ Global Select Market under the symbol “SKWD” on January 13, 2023.
Prior to January 13, 2023, there was no public market for the company's common shares.
As of February 26, 2026, there were approximately 117 holders of record of common stock.
The number of record holders does not represent the total number of stockholders due to shares being held by brokers and other institutions.

Securities Authorized for Issuance Under Equity Compensation Plans

[c. 95; p. 13] Equity compensation plan information

Information regarding equity compensation plans will be included in the definitive proxy statement to be filed with the SEC for the 2026 Annual Meeting of Stockholders ("2026 Proxy Statement").
This information is incorporated by reference into the current document.
Part III contains details on securities authorized for issuance under equity compensation plans.

Recent Sales of Unregistered Equity Securities

[c. 96; p. 13] Unregistered equity securities issuance

Information is provided regarding securities issued or granted by the company during the period covered by this Annual Report on Form 10-K that were not registered under the Securities Act.
On January 1, 2026, the company paid approximately USD 555.0m in connection with the Apollo acquisition, pursuant to the Apollo SPAs.
The payment for the Apollo acquisition included USD 371.0m in cash and the issuance of 3,679,332 unregistered shares of the Company’s common stock.

Performance Graph

[c. 97; p. 13] Shareholder return comparison

The performance graph compares the cumulative total shareholder return of an investment in (1) the company's common stock, (2) the Nasdaq Composite Index, and (3) the Nasdaq Insurance Index.
The comparison period is from January 13, 2023 (the date common stock began trading on Nasdaq) through December 31, 2025.
The graph assumes an initial investment of USD 100.
Such returns are based on historical results and are not indicative of future performance.
This graph is not considered "soliciting material" or "filed" for purposes of Section 18 of the Exchange Act, nor is it subject to liabilities under that Section.
The graph is not deemed to be incorporated by reference into any company filings under the Securities Act.

[c. 98; p. 13]

Performance Graph
	January 13, 2023	December 31, 2023	December 31, 2024	December 31, 2025
Skyward Specialty Insurance Group, Inc.	100.00	177.38	264.61	267.59
Nasdaq Composite Index	100.00	135.49	174.30	209.78
Nasdaq Insurance Index	100.00	103.37	128.30	127.60

[c. 99; p. 13] Performance Graph

[Chart/image description:] This is a line chart showing the performance of three different entities over time. The Y-axis represents values in dollars, ranging from $100.00 to $300.00, with increments of $50.00. The X-axis represents time, with labels: January 13, 2023, December 31, 2023, December 31, 2024, and December 31, 2025. The legend identifies three lines: - Blue line with circular markers: Skyward Specialty Insurance Group, Inc. - Magenta line with circular markers: Nasdaq Composite Index - Cyan line with circular markers: Nasdaq Insurance Index Data points for each entity are as follows:

- Skyward Specialty Insurance Group, Inc. (Blue Line):**

- January 13, 2023: $100.00 - December 31, 2023: Approximately $177.00 - December 31, 2024: Approximately $265.00 - December 31, 2025: Approximately $268.00

- Nasdaq Composite Index (Magenta Line):**

- January 13, 2023: $100.00 - December 31, 2023: Approximately $138.00 - December 31, 2024: Approximately $174.00 - December 31, 2025: Approximately $210.00

- Nasdaq Insurance Index (Cyan Line):**

- January 13, 2023: $100.00 - December 31, 2023: Approximately $105.00 - December 31, 2024: Approximately $128.00 - December 31, 2025: Approximately $128.00

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

Overview

[c. 100; p. 14] Business overview and strategy

The company is a growing specialty insurance company providing commercial P&C products and solutions on a non-admitted (E&S) and admitted basis, primarily in the United States.
Business focuses on underserved, dislocated, or inadequately covered markets, requiring highly specialized, customized underwriting solutions and claims capabilities.
The portfolio of insured risks is highly diversified across industries, distribution channels, and lines of business.
Lines of business include general liability, excess liability, professional liability (cyber and media liability), commercial auto, group accident and health, property, agriculture, credit, surety, and workers’ compensation.
The company insures both short and medium duration liabilities.
Business mix is principally primary insurance, balanced between E&S and admitted markets.
A portion of the business is specialty reinsurance (principally agriculture and credit), focused on attractive specialty classes where reinsurance is more efficient due to factors like cost of entry and geographic expansion.
Diversification, including businesses not typically aligned with traditional P&C pricing cycles, combined with underwriting and claims expertise, aims to produce consistent growth and profitability across all insurance pricing cycles.
The company's strategy, "Rule Our Niche," focuses on leading in chosen market niches and establishing sustainable competitive positions.
This strategy aims to build a strong defensible market position, create a competitive moat, and win chosen markets.
Principles underlying the strategy are key to achieving and sustaining best-in-class underwriting results through P&C insurance pricing cycles.
The company strives for excellence in risk selection, pricing, and claims outcomes, amplified by advanced technology and analytics.

[c. 101; p. 14] Underwriting division updates

In Q1 2025, underwriting divisions were updated to align with management oversight, resource allocation, and operating performance evaluation.
A ninth division, Agriculture and Credit (Re)insurance, was added.
The new Agriculture and Credit (Re)insurance division includes the Global Agriculture unit (previously with Global Property) and the Mortgage and Credit units.
This new division focuses on specialty classes where reinsurance offers a more attractive market entry.
The Industry Solutions division was renamed Construction & Energy Solutions division.
The Inland Marine unit is now part of the Transactional E&S division.
Programs division is now Specialty Programs.
Prior reporting periods have been conformed to reflect the new presentation.

[c. 102; p. 14] Apollo acquisition

On September 2, 2025, the company entered into two share purchase agreements (the "Apollo Majority SPAs") with institutional and management shareholders (the "Majority Sellers") of Apollo Group Holdings Limited ("Apollo").
Pursuant to the Apollo Majority SPAs, the company agreed to acquire approximately 87% of the issued share capital of Apollo held by the Majority Sellers.
Closing of the transaction ("Closing") was conditioned upon acquiring 100% of Apollo's issued share capital (the “Acquisition”) via additional short-form share purchase agreements (the "Apollo Minority SPAs") with the remaining minority shareholders (the "Minority Sellers").
The total consideration for the entire issued share capital of Apollo under the Apollo SPAs was USD 555.0m.
The consideration included USD 371.0m in cash (the “Cash Consideration”).
The consideration also included the issuance of 3,679,332 shares of the Company’s common stock.
In connection with the Apollo SPAs, on December 30, 2025, the company entered into a Term Loan Credit Agreement (the “Facility”).
The Facility was arranged with Barclays Bank PLC as Administrative Agent, and Agent, Truist Securities, Inc., Citizens Bank, N.A. and Texas Capital Bank as joint lead arrangers, joint book runners and co-syndication agents for the Tranche B Term Facility.
The Facility includes an unsecured senior delayed draw term loan facility (the “Tranche A Term Facility”) in the aggregate principal amount of USD 150.0m.
The Facility also includes an additional unsecured senior delayed draw term loan facility in the aggregate principal of USD 150.0m.
The acquisition closed on January 1, 2026.
The consideration for the transaction was satisfied by the issuance of common stock to certain sellers and the remainder in cash.
As of December 31, 2025, the company recognized USD 14.0m in transaction expenses associated with the transaction.

Results of Operations

[c. 103; p. 14] Financial results summary

The table summarizes results for the years ended December 31, 2025 and 2024.

[c. 104; p. 14]

Results of Operations
	Years Ended December 31,
($ in thousands)	2025	2024
Gross written premiums	2,166,236	1,743,232
Ceded written premiums	(760,004)	(619,654)
Net written premiums	1,406,232	1,123,578
Net earned premiums	1,304,505	1,056,722
Commission and fee income	6,855	6,703
Losses and LAE	795,022	669,809
Underwriting, acquisition and insurance expenses	377,359	311,757
Underwriting income (1)	138,979	81,859
Net investment income	83,619	80,600
Net investment gains	22,149	6,342
Income before income taxes	216,424	152,739
Net income	170,028	118,828
Adjusted operating income (1)	167,372	126,582
Loss and LAE ratio	60.9%	63.4%
Expense ratio	28.4%	28.9%
Combined ratio	89.3%	92.3%
Adjusted loss and LAE ratio (1)	NM (2)	62.3%
Expense ratio	NM (2)	28.9%
Adjusted combined ratio (1)	NM (2)	91.2%
Return on equity	18.9%	16.3%
Return on tangible equity (1)	20.9%	18.6%
Adjusted return on equity (1)	18.6%	17.4%
Adjusted return on tangible equity (1)	20.6%	19.8%

(1) See “Reconciliation of Non-GAAP Financial Measures” in this Item 7.

(2) Not meaningful.

Reconciliation of Non-GAAP Financial Measures

[c. 105; p. 14] Adjusted Operating Income reconciliation

The table provides a reconciliation of adjusted operating income to net income for the years ended December 31, 2025 and 2024.

[c. 106; p. 14] Underwriting Income reconciliation

The table provides a reconciliation of underwriting income to income before federal income tax expense for the years ended December 31, 2025 and 2024.

[c. 107; p. 14] Adjusted Loss Ratio and Combined Ratio reconciliation

The table provides a reconciliation of the adjusted loss and LAE ratio and adjusted combined ratio to the loss and LAE ratio and combined ratio for the year ended December 31, 2024.

[c. 108; p. 14] Tangible Stockholders’ Equity reconciliation

The table provides a reconciliation of tangible stockholders’ equity to stockholders’ equity for the years ended December 31, 2025 and 2024.

[c. 109; p. 14] Adjusted Return on Equity reconciliation

The table provides a reconciliation of adjusted return on equity to return on equity for the years ended December 31, 2025 and 2024.

[c. 110; p. 14] Return on Tangible Equity reconciliation

Return on tangible equity for the years ended December 31, 2025 and 2024 reconciles to return on equity.

[c. 111; p. 14] Adjusted Return on Tangible Equity reconciliation

Adjusted return on tangible equity for the years ended December 31, 2025 and 2024 reconciles to return on equity.

[c. 112; p. 14]

Adjusted operating income by Pre-tax and After-tax
	2024
($ in thousands)	Pre-tax	After-tax	Pre-tax	After-tax
Income as reported	216,424	170,028	152,739	118,828
Less (add):	—	—	—	—
Net investment gains	22,149	17,401	6,342	5,010
Net impact of LPT	—	—	(11,598)	(9,162)
Transaction costs	(14,019)	(11,014)	—	—
Other loss	(587)	(461)	(167)	(132)
Other expenses	(4,162)	(3,270)	(4,392)	(3,470)
Adjusted operating income	213,043	167,372	162,554	126,582

($ in thousands)	2025	2024
Income before income taxes	216,424	152,739
Add:	—	—
Interest expense	7,919	9,496
Amortization expense	1,636	2,007
Transaction costs	14,019	—
Other expenses	4,162	4,392
Less (add):	—	—
Net investment income	83,619	80,600
Net investment gains	22,149	6,342
Other loss	(587)	(167)
Underwriting income	138,979	81,859

($ in thousands)	2024
Net earned premiums	1,056,722
Losses and LAE	669,809
Pre-tax net impact of loss portfolio transfer	(11,598)
Adjusted losses and LAE	658,211
Loss ratio	63.4%
Less: Net impact of LPT	1.1%
Adjusted loss ratio	62.3%
Combined ratio	92.3%
Less: Net impact of LPT	1.1%
Adjusted combined ratio	91.2%

($ in thousands)	2025	2024
Stockholders’ equity	1,009,565	793,999
Less: Goodwill and intangible assets	88,040	87,348
Tangible stockholders’ equity	921,525	706,651

($ in thousands)	2025	2024
Numerator: adjusted operating income	167,372	126,582
Denominator: average stockholders’ equity	901,782	727,515
Adjusted return on equity	18.6%	17.4%

($ in thousands)	2025	2024
Numerator: net income	170,028	118,828
Denominator: average tangible stockholders’ equity	814,088	639,624
Return on tangible equity	20.9%	18.6%

($ in thousands)	2025	2024
Numerator: adjusted operating income	167,372	126,582
Denominator: average tangible stockholders’ equity	814,088	639,624
Adjusted return on tangible equity	20.6%	19.8%

Underwriting Results

[c. 113; p. 14] Premiums

Gross written premiums increased by USD 423.1m in 2025 compared to 2024.
The increase in gross written premiums was primarily driven by growth from the agriculture and credit (re)insurance division due to new opportunities in dairy, livestock, and crop, and growth in the credit portfolio started in Q4 2024.
Specialty programs, accident & health, surety, and captives also contributed significantly to gross written premium growth in 2025.
Growth in specialty programs was primarily due to the addition of two new programs in 2025.
Growth in accident and health was primarily driven by the acquisition of more high deductible accident and health captives in 2025 compared to 2024.
The increase in surety was primarily due to market expansion in both commercial and contract bonds.
Growth in the captives division was primarily due to rate increases and new business.
Decreases in global property, construction and energy solutions, and professional lines divisions partially offset gross written premium growth.
Offsetting decreases were due to continued downward pricing pressure in the global property market (retention remained steady) and the exit of unprofitable lines in construction and energy solutions and professional lines during 2025.
Net written premiums were USD 1,406.2m in 2025 compared to USD 1,123.6m in 2024, an increase of USD 282.7m (+25.2%).
The increase in net written premiums was primarily driven by the same reasons as gross written premiums.
Net earned premiums for 2025 were USD 1,304.5m compared to USD 1,056.7m for 2024, an increase of USD 247.8m (+23.4%).
The increase in net earned premiums was primarily driven by the same reasons as gross written premiums.

[c. 114; p. 14] Losses and LAE

The 2025 loss ratio improved by 2.5 points compared to 2024, primarily due to favorable prior accident year development versus adverse development from the net impact of the LPT in 2024.
The non-cat loss and LAE ratio for 2025 improved by 0.3 points compared to 2024, primarily driven by a shift in the mix of business.
The 2025 cat loss and LAE ratio improved by 0.5 points compared to 2024, which was impacted by Hurricanes Helene and Beryl in Q3 2024 and Hurricane Milton in Q4 2024.
For the year ended December 31, 2025, favorable development related to prior years’ loss and loss expense reserves of USD 7.5m was recognized.
This favorable development included USD 24.6m in short-tail/monoline specialty lines and USD 5.3m in multi-line solutions.
This was partially offset by USD 22.4m of adverse development in exited lines, primarily attributable to commercial auto and excess over auto in divisions that have been non-renewed or significantly reduced exposure over the past three years.
Favorable development in surety and property offset the adverse development.
For the year ended December 31, 2024, adverse development related to prior years’ loss and loss expense reserves of USD 25.7m was recognized.
This adverse development included USD 10.1m in multi-line solutions and USD 15.2m in exited lines, related to losses previously subject to the LPT from accident years 2018 and prior.

[c. 115; p. 14] Expense ratio

The expense ratio for 2025 improved by 0.5 points compared to 2024.
This improvement was primarily due to earnings leverage, partially offset by higher acquisition costs due to the business mix shift.

[c. 116; p. 14] Investment results

Net investment income for 2025 increased by USD 3.0m compared to 2024.
The increase in income from the fixed income portfolio in 2025 was due to a larger asset base from increased allocation and a higher book yield of 5.4% at December 31, 2025 (prior: 5.2% at December 31, 2024).
The decrease in income from short-term investments & cash and cash equivalents in 2025 was due to an overall decrease in yields.
The decrease in income from the alternative and strategic investments portfolio in 2025 was due to a decline in the fair value of limited partnership investments.
The decrease in income from equities was due to the sale of the equity portfolio in Q3 2025.

[c. 117; p. 14]

Gross written premiums by line of business
($ in thousands)	2025	2024	Change	% Change
Accident & Health	254,102	173,073	81,029	46.8%
Agriculture and Credit (Re)insurance	346,212	118,070	228,142	193.2%
Captives	275,694	241,902	33,792	14.0%
Construction & Energy Solutions	274,318	296,582	(22,264)	(7.5%)
Global Property	178,128	201,796	(23,668)	(11.7%)
Professional Lines	149,231	159,785	(10,554)	(6.6%)
Specialty Programs	322,705	218,407	104,298	47.8%
Surety	168,148	143,965	24,183	16.8%
Transactional E&S	197,779	189,669	8,110	4.3%
Total gross written premiums (1)	2,166,317	1,743,249	423,068	24.3%

(1) Excludes exited business.

	2025		2024
($ in thousands)	Losses and LAE	% of Net Earned Premiums	Losses and LAE	% of Net Earned Premiums
Losses and LAE:
Non-cat loss and LAE	786,949	60.3%	640,257	60.6%
Cat loss and LAE (1)	15,548	1.2%	17,954	1.7%
Prior accident year development	(7,475)	(0.6)%	11,598	1.1%
Total losses and LAE	795,022	60.9%	669,809	63.4%

(1) Current accident year.

($ in thousands)	Development
	(Favorable) Adverse
Accident Year	2025	2024
Prior	2,808	24,929
2021	9,590	978
2022	2,300	(1,479)
2023	(16,515)	1,300
2024	(5,658)	—
Total	(7,475)	25,728
Reserve development on losses subject to LPT	—	25,300
Reserve development on losses excluding losses subject to LPT	(7,475)	428

	2025		2024
($ in thousands)	Expenses	% of Net Earned Premiums	Expenses	% of Net Earned Premiums
Net policy acquisition expenses	195,422	15.0%	149,975	14.2%
Other operating and general expenses	181,937	13.9%	161,782	15.3%
Underwriting, acquisition and insurance expenses	377,359	28.9%	311,757	29.5%
Less: commission and fee income	(6,855)	(0.5%)	(6,703)	(0.6%)
Total net expenses	370,504	28.4%	305,054	28.9%

$ in thousands	2025	2024
Short-term investments & cash and cash equivalents	15,877	17,643
Fixed income	77,888	57,631
Equities	1,380	2,745
Alternative and strategic investments	(11,526)	2,581
Net investment income	83,619	80,600
Net unrealized (losses) gains on securities still held	(1,555)	7,921
Net realized gains (losses)	23,704	(1,579)
Net investment gains	22,149	6,342

Investments

[c. 118; p. 14] Investment portfolio composition

The investment portfolio primarily consists of investment grade fixed income securities, which are predominantly highly-rated and liquid bonds, and commercial mortgage loans.

[c. 119; p. 14] Fixed income portfolio credit quality and duration

The weighted average credit rating of the available-for-sale fixed income portfolio was "A+" at December 31, 2025, and "AA-" at December 31, 2024.
Commercial mortgage loans are primarily senior loans on real estate across the U.S..
The average duration of the fixed income portfolio was approximately 3.60 years as of December 31, 2025, and 4.34 years as of December 31, 2024.

[c. 120; p. 14] Equities portfolio composition and divestment

The equities portfolio primarily consisted of domestic preferred stocks, common equities, exchange traded funds, limited partnerships, limited liability corporations, and other equity interests, 100.0% of which were publicly traded.
During Q3 2025, almost all of the equities portfolio was sold, retaining only preferred stocks.

[c. 121; p. 14] Alternative and strategic investments

Alternative investments consist of promissory notes, limited partnerships, joint ventures, and equity interests.
Underlying alternative investments are primarily floating rate senior secured loans, comprising short duration, collateralized, asset-oriented credit investments.
Limited partnerships and joint ventures are subject to future increases or decreases in asset value as assets are monetized and income distributed.
Strategic investments consist of equity interests in private entities within the insurance industry.

[c. 122; p. 14] Market risk overview

Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial instrument from changes in interest rates, equity prices, foreign currency exchange rates, and commodity prices.
The primary components of market risk affecting the company are credit risk and interest rate risk.
The company does not have significant exposure to foreign currency exchange rate risk or commodity risk.

[c. 123; p. 14] Credit risk management

Credit risk is the potential loss from adverse changes in an issuer’s ability to repay debt obligations.
Exposure to credit risk exists as a holder of debt instruments in core fixed income and opportunistic fixed income portfolios.
The risk management strategy and investment policy is to invest primarily in debt instruments of high credit quality issuers and limit credit exposure by ratings categories and per issuer.
At December 31, 2025, the fixed income portfolio had an average rating of "A+".
Approximately 78.5% of securities in the fixed income portfolio were rated "A" or better by at least one nationally recognized rating organization at December 31, 2025.
The policy is to invest in investment grade fixed income securities for stable income, supplemented by opportunistic fixed income and equity securities for diversification and risk-adjusted returns.
Approximately 1.1% of the fixed income portfolio was unrated or rated below investment-grade at December 31, 2025.
The company monitors the financial condition of all issuers in its portfolio through investment managers.
The company is subject to credit risk from third-party reinsurers, as it remains ultimately liable to policyholders for ceded risks.
This credit risk is addressed by purchasing reinsurance from reinsurers rated at least "A-" (Excellent) or better by A.M. Best.
Periodic credit reviews of reinsurers are performed with the reinsurance broker.
At December 31, 2025, 98% of reinsurance recoverables were from reinsurers rated "A-" (Excellent) or better by A.M. Best, or were collateralized through funds held, trusts, and letters of credit.
If a reinsurer suffers a credit downgrade, options to lessen asset impairment risk include commutation, novation, and letters of credit.

[c. 124; p. 14] Interest rate risk management

Interest rate risk is the risk of economic losses due to adverse changes in interest rates.
The primary market risk to the investment portfolio is interest rate risk associated with fixed income securities.
Fluctuations in interest rates directly affect the market valuation of these securities; rising rates decrease fair value, falling rates increase fair value.
Interest rate risk is managed by investing in securities with varied maturity dates and by managing the duration of the investment portfolio in relation to the duration of reserves.
Duration is the weighted average payment period of cash flows, weighted by the present value of cash flows.
Duration targets for the core fixed income investment portfolio are set after considering the estimated duration of liabilities and other factors.
Fixed maturity securities had a weighted average effective duration of 3.6 years as of December 31, 2025.
Fixed income securities subject to interest rate risk had a fair value of USD 1,856.3m at December 31, 2025.
Opportunistic fixed income securities are excluded from interest rate sensitivity analysis as they are primarily floating rate and treated as held-to-maturity.
Changes in interest rates will have an immediate effect on comprehensive income and stockholders’ equity but not ordinarily on net income.
Actual results may differ from hypothetical changes in market rates, and the sensitivity analysis does not reflect actions to mitigate hypothetical fair value losses.

[c. 125; p. 14] Equity price risk

Equity price risk represents potential economic losses due to adverse changes in equity security prices.
At December 31, 2025, approximately 0.1% of the fair value of the investment portfolio (excluding cash and cash equivalents and short-term investments) was invested in equity securities.
Almost all of the equities portfolio was sold during Q3 2025, retaining only preferred stocks.

[c. 126; p. 14]

Investments
	2025		2024
($ in thousands)	Carrying Value	% of Total	Carrying Value	% of Total
Cash and cash equivalents	168,544	6.8%	121,603	6.1%
Short-term investments	264,299	10.7%	274,929	13.8%
Fixed income	1,866,205	75.6%	1,318,708	66.2%
Equities	1,174	0.1%	106,254	5.3%
Alternative and strategic investments	168,837	6.8%	170,929	8.6%
Total portfolio	2,469,059	100.0%	1,992,423	100.0%

	2025		2024
($ in thousands)	Carrying Value	% of Total	Carrying Value	% of Total
U.S. government securities	44,468	2.4%	26,486	2.0%
Corporate securities and miscellaneous	636,387	34.1%	425,628	32.3%
Municipal securities	102,116	5.5%	84,716	6.4%
Residential mortgage-backed securities	486,587	26.1%	393,833	29.9%
Commercial mortgage-backed securities	73,050	3.9%	69,364	5.2%
Other asset-backed securities	513,695	27.5%	292,191	22.2%
Total fixed income portfolio, available-for-sale	1,856,303	99.5%	1,292,218	98.0%
Commercial mortgage loans	9,902	0.5%	26,490	2.0%
Total fixed income portfolio	1,866,205	100.0%	1,318,708	100.0%

	2025		2024
($ in thousands)	Fair Value	% of Total	Fair Value	% of Total
AAA	286,563	15.4%	483,099	37.3%
AA	548,030	29.6%	141,177	10.9%
A	620,813	33.5%	429,703	33.3%
BBB	379,586	20.4%	216,602	16.8%
BB and Lower	21,311	1.1%	21,637	1.7%
Total fixed income portfolio, available-for-sale	1,856,303	100.0%	1,292,218	100.0%

	2025		2024
($ in thousands)	Fair Value	% of Total Fair Value	Fair Value	% of Total Fair Value
Domestic common equities	—	—%	70,665	66.5%
International common equities	—	—%	34,425	32.4%
Preferred stock	1,174	100.0%	1,164	1.1%
Equities	1,174	100.0%	106,254	100.0%

($ in thousands)	Estimated Fair Value	Estimated Change in Fair Value	Estimated % Increase (Decrease) in Fair Value
300 basis point increase	1,654,474	(201,829)	(10.9)%
200 basis point increase	1,721,816	(134,487)	(7.2)%
100 basis point increase	1,789,092	(67,211)	(3.6)%
No change	1,856,303	—	0.0%
100 basis point decrease	1,923,448	67,145	3.6%
200 basis point decrease	1,990,528	134,225	7.2%
300 basis point decrease	2,057,542	201,239	10.8%

Other Items

[c. 127; p. 14] Income tax expense and effective tax rate

Income tax expense for the year ended December 31, 2025 was USD 46.4m, compared to USD 33.9m for the year ended December 31, 2024.
The effective tax rate for the year ended December 31, 2025 was 21.4%, compared to 22.2% for the year ended December 31, 2024.

[c. 128; p. 14] Income tax reconciliation reference

For a reconciliation between actual federal income tax expense and the amount computed at the indicated statutory rate for the years ended December 31, 2025 and 2024, refer to Note 13, "Income Taxes" in the consolidated financial statements included in Item 8 of this Form 10-K.

Liquidity and Capital Resources

[c. 129; p. 14] Liquidity and Capital Resources

The company is organized as a holding company, with operations primarily conducted by wholly-owned insurance subsidiaries: GMIC, HSIC, and IIC (domiciled in Texas), and OSIC (domiciled in Oklahoma).
The holding company receives cash through: corporate service fees from operating subsidiaries, payments from a consolidated tax allocation agreement, dividends from subsidiaries (subject to limitations), bank loans, draws on a revolving loan agreement, and issuance of equity and debt securities.
Proceeds from these sources are used to contribute funds to insurance subsidiaries for premium growth support, dividend payments, taxes, and other business purposes.
Skyward Service Company receives corporate service fees from operating subsidiaries to reimburse most incurred operating expenses.
Reimbursement of expenses via corporate service fees is based on expected actual costs, with no mark-up.
The company files a consolidated U.S. federal income tax return with its subsidiaries.
Under the corporate tax allocation agreement, each participant is charged or refunded taxes based on what they would have paid or received if filing on a separate return basis with the IRS.
State insurance laws restrict insurance subsidiaries' ability to declare stockholder dividends without prior regulatory approval.
State insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus.
Dividend payments are limited to the portion of available policyholder surplus derived from net profits on an insurer’s business.
Insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that maximum calculated dividends would be permitted.
State insurance regulatory authorities may adopt more restrictive statutory provisions regarding dividend payments by insurance subsidiaries in the future.
Insurance subsidiaries did not pay dividends to the holding company for the years ended December 31, 2025, and 2024.
Additional information on insurance companies is available in Note 23, “Statutory Accounting Principles and Regulatory Matters,” to the consolidated financial statements in Item 8 of Form 10-K.
The holding company had USD 3.5m in cash and investments at December 31, 2025, compared to USD 2.9m at December 31, 2024.
The company believes it has sufficient liquidity to meet operating cash needs, obligations, and committed capital expenditures for the next 12 months.

Cash Flows

[c. 130; p. 14] Cash flow overview and operating activities

The most significant source of cash is premiums received from insureds, typically at the beginning of the coverage period, net of related commission amounts.
The most significant cash outflow is for claims incurred by policyholders.
Cash is invested in various investment securities to earn interest and dividends because claim payments occur after premium receipt, often years later.
Cash is also used for operating expenses (salaries, rent, taxes) and capital expenditures (technology systems).
Reinsurance is used to manage risk, involving ceding premiums to reinsurers and collecting cash back when covered losses are paid.
The timing of cash flows from operating activities can vary between periods due to the timing of payments and receipts.
Significant payments and receipts, such as loss settlements and subsequent reinsurance receipts, can influence operating cash flows in any given period.
Management believes cash receipts from premiums and investment income proceeds are sufficient to cover foreseeable cash outflows.
Cash provided by operating activities increased in 2025 compared to 2024, primarily due to increased cash inflows from insurance operations.
Cash from operations can vary period-to-period due to the timing of premium receipts, claim payments, and reinsurance activity.
Cash flows from operations in both 2024 and 2025 were primarily used to fund investing activities.

[c. 131; p. 14] Investing activities

Net cash used in investing activities in 2025 was primarily driven by purchases of fixed maturity securities, partially offset by sales and maturities of investment securities.
Net cash used in investing activities in 2024 was driven by purchases of fixed maturity securities, partially offset by sales and maturities of investment securities and sales of short-term investments.

[c. 132; p. 14]

Cash and cash equivalents provided by (used in) by activities
($ in thousands)	2025	2024
Cash and cash equivalents provided by (used in):
Operating activities	408,076	305,115
Investing activities	(366,898)	(243,694)
Financing activities	411	(4,232)
Change in cash and cash equivalents and restricted cash	41,589	57,189

Credit Agreements

[c. 133; p. 14] FHLB loan

On August 30, 2024, the company entered into a 4.5-year FHLB Loan with the Federal Home Loan Bank of Dallas (FHLB) for a principal amount of USD 57.0m.
The FHLB Loan has a fixed interest rate of 4.00% and requires interest-only payments during its term, with principal due at maturity.
The loan is fully secured by a pledge of specific investment securities of HSIC.
Proceeds from the FHLB Loan were used to fund redemptions of draws on the 2023 Revolving Credit Facility.

[c. 134; p. 14] Term Loan Facility

During Q4 2025, the company entered into a Term Loan Credit Agreement (Term Loan Facility) with a syndicate of banks.
The Term Loan Facility includes an unsecured senior delayed draw term loan facility (DDTL) of USD 150.0m (Tranche A DDTL) and an additional unsecured senior DDTL of USD 150.0m (Tranche B DDTL).
The Term Loan Facility was used to fund a portion of the consideration for the acquisition of Apollo Group Holdings Limited (Apollo) and related transaction fees and expenses.
Interest on amounts drawn under the Term Loan Facility will be either term SOFR plus a margin of 150 bps to 190 bps, or the base rate plus a margin of 50 bps to 90 bps, depending on the debt to capitalization ratio.
SOFR will be calculated using a SOFR floor of 0.00% and a credit spread adjustment of 0.10%.
The base rate will be the highest of (i) the Agent’s prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00%, and (iv) zero percent (0%).
The company will also pay a fee ranging from 0.20% to 0.35% on average daily undrawn amounts under the Facility, depending on the 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 USD 150m from the Tranche A DDTL and USD 150m from the Tranche B DDTL for the acquisition of Apollo on January 1, 2026.
The Term Loan Facility includes customary covenants, such as limitations on additional indebtedness exceeding USD 10.0m, restrictions on distributions to stockholders, and financial covenants related to minimum consolidated net worth, maximum total debt to capitalization, minimum A.M. Best rating, and minimum liquidity.
As of December 31, 2025, the company was in compliance with all covenants.
The Term Loan Facility is unsecured.
In Q4 2025, the company and subsidiary guarantors entered into a guaranty agreement, making obligations under the Term Loan Facility guaranteed by the company and its existing wholly-owned subsidiaries and subsequently acquired or organized subsidiaries (excluding insurance company subsidiaries and subject to certain exceptions).

[c. 135; p. 14] Revolving Credit Facilities

During Q4 2025, the company entered into an unsecured Revolving Credit Facility with a syndicate of banks, initially providing up to USD 150.0m.
The maximum principal amount of the Revolving Credit Facility was increased to USD 250.0m on the closing date of the Apollo acquisition.
The Revolving Credit Facility was amended in Q4 2025 to permit funding of certain revolving loans for the Apollo acquisition.
The company initially drew USD 43.0m, used to redeem its prior revolving credit facility.
On December 30, 2025, an additional USD 71.5m was drawn from the Revolving Credit Facility for the consideration paid for the Apollo acquisition on January 1, 2026.
Interest on the Revolving Credit Facility is payable quarterly.
Amounts drawn bear interest at either term SOFR plus a margin of 150 bps to 190 bps, or the base rate plus a margin of 50 bps to 90 bps, depending on the debt to capitalization ratio.
SOFR will be calculated using a SOFR floor of 0.00% and a credit spread adjustment of 0.10%.
The base rate will be the highest of (i) the Agent’s prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00%, and (iv) zero percent (0%).
The company will also pay a fee ranging from 0.20% to 0.35% on average daily undrawn amounts, depending on the debt to capitalization ratio.
The availability period under the Facility terminates 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 of December 31, 2025, the company was in compliance with all covenants.
In Q1 2023, the company entered into an agreement for an unsecured revolving credit facility (2023 Revolving Credit Facility) of up to USD 150.0m and a letter of credit sub-facility of up to USD 30.0m.
On November 13, 2025, the 2023 Revolving Credit Facility was redeemed, with USD 0.3m of accrued interest paid and USD 0.6m of expense recognized for remaining unamortized deferred financing costs.

[c. 136; p. 14] Debentures

In May 2019, the company agreed to issue unsecured subordinated notes (Notes) with an aggregate principal amount of USD 20.0m.
Interest on the Notes is fixed at 7.25% for the first 8 years and 8.25% thereafter.
Early retirement of the debt before the 8-year commitment requires all interest payments to be paid in full, plus 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.
Debt related to the Notes is reported on the December 31, 2025 and 2024 Consolidated Balance Sheets, net of debt issuance costs of approximately USD 0.4m and USD 0.5m, respectively.
These deferred financing costs are presented as a direct deduction from the carrying amount of the subordinated debt.

Share Repurchase Program

[c. 137; p. 14] Share repurchase program

In October 2024, the Board of Directors approved a share repurchase program authorizing the repurchase of up to USD 50.0m of common stock.
Shares may be repurchased via open market purchases, privately-negotiated transactions, block purchases, accelerated share repurchase agreements, or a combination of methods, including Rule 10b5-1 trading plans.
The timing, manner, price, and amount of repurchases are at the company's discretion.
The program does not require the repurchase of any specific number of shares and may be modified, suspended, or terminated at any time.
As of December 31, 2025, no shares had been repurchased under this plan.

Contractual Obligations and Commitments

[c. 138; p. 14] Contractual Obligations and Commitments

The table sets forth contractual obligations and commercial commitments by due date as of December 31, 2025.
Reserves for losses and LAE represent the best estimate of the ultimate cost of settling reported and unreported claims and related expenses.
Estimating reserves for losses and LAE involves complex and subjective judgments.
Actual losses and settlement expenses paid may deviate substantially from reserve estimates.
The timing for payment of estimated losses is not fixed or determinable on an individual or aggregate basis.
Assumptions for estimating payments due by period are based on the company's own, industry, and peer group claims payment experience.
There is a risk that amounts paid in any period will differ significantly from disclosed amounts due to uncertainty in timing estimation.
Disclosed amounts are gross of anticipated amounts recoverable from reinsurers.
Reinsurance balances recoverable on reserves for losses and LAE are reported separately as assets, not netted with liabilities, because reinsurance does not discharge liability to policyholders.
Reinsurance balances recoverable on reserves for paid and unpaid losses and LAE totaled USD 1,119.9m at December 31, 2025.
Reinsurance balances recoverable on reserves for paid and unpaid losses and LAE totaled USD 857.9m at December 31, 2024.

[c. 139; p. 14]

Payments due by period by contractual obligations and commitments
	Payments due by period
($ in thousands)	Total	Less Than One Year	One Year or More
Reserves for losses and LAE	2,318,894	524,329	1,794,565
Long-term debt	548,500	—	548,500
Interest on debt obligations	107,070	26,828	80,242
Total	2,974,464	551,157	2,423,307

Critical Accounting Policies

[c. 140; p. 14] critical accounting estimates overview

Critical accounting estimates are important for portraying financial condition and results of operations and require significant judgment.
Significant judgment is used concerning future results and developments in applying these estimates and preparing consolidated financial statements.
Judgments and estimates affect reported amounts of assets, liabilities, revenues, expenses, and disclosure of material contingent assets and liabilities.
Actual results may differ materially from estimates and assumptions.
Estimates are evaluated regularly using relevant information.
For a detailed discussion of accounting policies, refer to Note 1, “Summary of Significant Accounting Policies” in Item 8 of Form 10-K.

[c. 141; p. 14] reserves for unpaid losses and LAE

Reserves for unpaid losses and LAE are the largest and most complex estimate in the Consolidated Balance Sheets.
These reserves represent the estimated ultimate cost of all unreported and reported but unpaid insured claims and the cost to adjust these losses as of or before the balance sheet date.
Reserves for losses and LAE are not discounted to reflect estimated present value.
Estimates are made using individual case-basis valuations of reported claims, statistical analyses, and various actuarial procedures.
Estimates are based on historical information, industry and peer group information, and estimates of future trends in variable factors like loss severity, loss frequency, and inflation.
Estimates are regularly reviewed and adjusted as experience develops or new information becomes known.
During the loss settlement period, estimates of liability on a claim are often refined and adjusted upward or downward.
The ultimate liability may exceed or be less than revised estimates.
The ultimate settlement of losses and related LAE may vary significantly from the estimate in financial statements.
Reserves for unpaid losses and LAE are categorized into two types: case reserves and IBNR.
A table sets forth gross and net reserves for unpaid losses and LAE at December 31, 2025 and 2024.

[c. 142; p. 14] case reserves and IBNR

Case reserves are established for individual claims reported to the company.
Losses are reported by insureds, their agents, or brokers.
Case reserves are established by estimating ultimate losses, including defense costs, based on provided information.
Claims department personnel use their knowledge of specific claims and advice from internal and external experts (underwriters, legal counsel) to estimate expected ultimate losses.
Third-Party Administrators (TPAs) are used in limited circumstances to assist in claim adjustment.
Internal claims managers oversee TPA activities and monitor their claim handling to prescribed standards.
The incurred but not reported (IBNR) reserve is derived by estimating the ultimate unpaid reserve liability and subtracting case reserves.
Management’s best estimate of the ultimate unpaid liability is set by the Reserve Committee.
The Reserve Committee considers actuarial indications and other factors such as underwriting, claims handling, economic, legal, and environmental changes.
The Reserve Committee includes the Chief Actuary, Chief Reserving Actuary, Chief Financial Officer, and Chief Claims Officer.
The Reserve Committee meets quarterly to review actuarial reserving recommendations from the Chief Actuary and determines the best estimate for losses and LAE reserves.
In establishing quarterly actuarial recommendations, the actuary estimates an initial expected ultimate loss ratio for each underwriting division.
Input from underwriting and claims departments, including premium pricing assumptions and historical experience, is considered in setting reserves.

[c. 143; p. 14] reserve drivers and actuarial methods

Reserves are driven by factors including litigation and regulatory trends, legislative activity, climate change, social and economic patterns, and claims inflation assumptions.
Reserve estimates reflect current inflation in legal claims’ settlements.
Reserve estimates assume no losses from significant new legal liability theories.
Reserve estimates assume no significant changes in the regulatory and legislative environment.
The impact of potential changes in regulatory or legislative environment is difficult to quantify without specific new regulation or legislation.
In the event of significant new regulation or legislation, the company will attempt to quantify its impact, but accuracy or success is not assured.
The actuarial review considers multiple actuarial methods to estimate reserves for losses and LAE.
Methods include paid and incurred loss development methods, paid and incurred Bornhuetter-Ferguson methods, paid and incurred loss ratio cape cod methods, and frequency and severity methods.
If one actuarial method is more credible, it is used to set the point estimate.
For new lines of business or significant changes in claim practices, paid and incurred loss development methods are less credible due to insufficient historical data.
The actuarial point estimate may be based on a judgmental weighting of estimates from each method.
These methods utilize the initial expected loss ratio, statistical analysis of past claims reporting and payment patterns, claims frequency and severity, paid loss experience, industry loss experience, and changes in market conditions, policy forms, exclusions, and exposures.
Reserve estimates are believed to be reasonable, but actual loss experience may not conform to assumptions.
Actual ultimate loss ratio or reporting and payment patterns could differ from expected, which are based on company and industry data.
The ultimate settlement of losses and related LAE may vary significantly from financial statement estimates.
Estimates are regularly reviewed and adjusted as experience develops or new information becomes known.
Such adjustments are included in the results of current operations.

[c. 144; p. 14] reserve development and sensitivity

"Development" is the amount by which estimated losses differ from those originally reported for a period.
Development is unfavorable when losses settle for more than reserved or subsequent estimates indicate reserve increases.
Development is favorable when losses settle for less than reserved or subsequent estimates indicate reserve reductions.
Favorable or unfavorable development of loss reserves is reflected in the results of operations in the period estimates are changed.
A 5% change in net IBNR would result in a USD 51.8m change in reserves for losses and LAE.
A 5% change in net IBNR would result in a USD 40.9m change in net income and stockholders’ equity.

[c. 145; p. 14]

Gross and Net by Case reserves and IBNR
	2025				2024
($ in thousands)	Gross	% of Total	Net	% of Total	Gross	% of Total	Net	% of Total
Case reserves	625,710	27.0%	362,291	25.9%	567,192	31.8%	342,612	30.8%
IBNR	1,693,184	73.0%	1,035,438	74.1%	1,215,191	68.2%	768,925	69.2%
Total	2,318,894	100.0%	1,397,729	100.0%	1,782,383	100.0%	1,111,537	100.0%

Recent Accounting Pronouncements

[c. 146; p. 14] FASB Accounting Standards Updates

In December 2023, FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures (Topic 740)", requiring public companies to provide enhanced annual rate reconciliation disclosures, including specific categories and additional information meeting a quantitative threshold.
ASU 2023-09 also requires public companies to disaggregate income taxes paid by federal, state, and foreign taxes.
The guidance for ASU 2023-09 became effective for fiscal years beginning after December 15, 2024, and is applied prospectively.
Additional disclosures have been added as required by ASU 2023-09, with no impact to the consolidated financial statements.
In November 2024, FASB issued ASU 2024-03, requiring disaggregated disclosure of income statement expenses for public business entities (PBEs) in footnotes to the financial statements.
ASU 2024-03 requires a tabular footnote disclosure for relevant income statement expense captions that include natural expenses such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other depletion expenses.
In January 2025, FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 as the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.
The company is evaluating the effect of the amendments from ASU 2024-03 on its consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

[c. 147; p. 15] Market Risk Disclosures

Qualitative and Quantitative Disclosures about Market Risk are included in Item 7 of this Form 10-K under "Investments—Market Risk".

Financial Statements

Report of Independent Registered Public Accounting Firm

[c. 148; p. 16] Independent auditor's report

This report is addressed to the Stockholders and the Board of Directors of Skyward Specialty Insurance Group, Inc.

Opinion on Internal Control Over Financial Reporting

[c. 149; p. 16] Internal control over financial reporting opinion

Skyward Specialty Insurance Group, Inc. and subsidiaries' internal control over financial reporting as of December 31, 2025, was audited based on criteria established in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
The Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
The consolidated balance sheets of the Company as of December 31, 2025 and 2024, and related consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, were audited in accordance with PCAOB standards.
The report dated March 2, 2026, expressed an unqualified opinion on the consolidated financial statements and related notes and financial statement schedules listed in the Index at Item 15(a).

Basis for Opinion

[c. 150; p. 16] Auditor's opinion on internal control over financial reporting

Company management is responsible for maintaining effective internal control over financial reporting and for its assessment included in the accompanying Management’s Report on Internal Control over Financial Reporting.
The auditor's responsibility is to express an opinion on the Company’s internal control over financial reporting based on their audit.
The auditor is a public accounting firm registered with the PCAOB and is required to be independent with respect to the Company in accordance with U.S. federal securities laws and applicable rules and regulations of the SEC and the PCAOB.
The audit was conducted in accordance with PCAOB standards, which require planning and performing the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
The audit included understanding internal control over financial reporting, assessing the risk of material weakness, testing and evaluating the design and operating effectiveness of internal control based on assessed risk, and performing other necessary procedures.
The auditor believes their audit provides a reasonable basis for their opinion.

Definition and Limitations of Internal Control Over Financial Reporting

[c. 151; p. 16] Internal control over financial reporting definition

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Internal control over financial reporting includes policies and procedures that pertain to maintaining records that accurately and fairly reflect transactions and asset dispositions.
Internal control over financial reporting includes policies and procedures that provide reasonable assurance that transactions are recorded as necessary for financial statement preparation in accordance with generally accepted accounting principles.
Internal control over financial reporting includes policies and procedures that provide reasonable assurance that company receipts and expenditures are made only in accordance with management and director authorizations.
Internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of company assets that could materially affect financial statements.

[c. 152; p. 16] Limitations of internal control over financial reporting

Due to inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of effectiveness evaluations to future periods are subject to the risk that controls may become inadequate due to changing conditions.
Projections of effectiveness evaluations to future periods are subject to the risk that compliance with policies or procedures may deteriorate.

[c. 153; p. 16]

/s/ Ernst & Young LLP by Houston, Texas
/s/ Ernst & Young LLP
Houston, Texas
March 2, 2026

Report of Independent Registered Public Accounting Firm

[c. 154; p. 16] Independent Auditor's Report

This report is addressed to the Stockholders and the Board of Directors of Skyward Specialty Insurance Group, Inc.

Opinion on the Financial Statements

[c. 155; p. 16] Audit opinion on financial statements

The consolidated balance sheets of Skyward Specialty Insurance Group, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) have been audited.
The consolidated financial statements fairly present, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
The Company's internal control over financial reporting as of December 31, 2025, has been audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB).
The audit of internal control over financial reporting was based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
The report dated March 2, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

[c. 156; p. 16] Auditor's responsibility and opinion basis

The Company's management is responsible for the financial statements.
The auditor's responsibility is to express an opinion on the financial statements based on audits.
The auditor is a public accounting firm registered with the PCAOB and is required to be independent in accordance with U.S. federal securities laws and applicable SEC and PCAOB rules and regulations.
Audits were conducted in accordance with PCAOB standards.
PCAOB standards require planning and performing audits to obtain reasonable assurance that financial statements are free of material misstatement, whether due to error or fraud.
Audits included procedures to assess and respond to risks of material misstatement.
Procedures included examining, on a test basis, evidence regarding amounts and disclosures in the financial statements.
Audits also included evaluating accounting principles used, significant estimates made by management, and the overall presentation of the financial statements.
The audits provide a reasonable basis for the auditor's opinion.

Critical Audit Matter

[c. 157; p. 16] Critical audit matter definition

The critical audit matter communicated is a matter from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee.
This matter relates to accounts or disclosures material to the financial statements and involved especially challenging, subjective, or complex judgments.
The communication of the critical audit matter does not alter the opinion on the consolidated financial statements, taken as a whole.
Communicating the critical audit matter does not provide a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Valuation of Reserves for Unpaid Losses and Loss Adjustment Expenses

[c. 158; p. 16] Valuation of Reserves for Unpaid Losses and Loss Adjustment Expenses

The Company's reserves for unpaid losses and loss adjustment expenses (LAE) were USD 2.3bn at December 31, 2025, with a significant portion representing incurred but not reported reserves (IBNR).
Reserves for unpaid losses and LAE represent the estimated ultimate cost of all unreported and reported but unpaid insured claims and the cost to adjust losses incurred as of the balance sheet date.
The Company estimates these reserves using individual case-basis valuations of reported claims, statistical analyses, and various actuarial procedures.
Estimates are based on historical information, industry and peer group information, and trends in factors like loss severity, loss frequency, and inflation.
Auditing management's estimate of reserves for unpaid losses and LAE, including IBNR, was complex and involved actuarial specialists due to significant estimation uncertainty.
This complexity arose from evaluating management's methods and assumptions, including loss development factors, expected loss ratios, and trends applied to the Company’s historical experience.
These assumptions significantly affect the valuation of IBNR reserves.
The audit obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over management’s process for estimating losses and loss adjustment expense reserves.
This included reviewing and approving processes for methods and assumptions used in estimating reserves.
Audit procedures, with actuarial specialist assistance, included evaluating the selection of actuarial methods used by management, comparing them to prior periods and industry practices.
The audit evaluated assumptions used in actuarial methods by comparing significant assumptions (loss development factors, expected loss ratios, trends) to the Company’s historical experience and current industry benchmarks and trends.
An independent range of reserve estimates was developed and compared to management’s best estimate for unpaid losses and LAE.
A review of the development of prior year reserve estimates was also performed.

[c. 159; p. 16]

Auditor since by Company
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2021.
Houston, Texas
March 2, 2026

Consolidated balance sheets

[c. 160; p. 16] Financial statement notes

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

[c. 161; p. 16]

Assets, liabilities and stockholders’ equity by December 31
	December 31,
	2025	2024
($ in thousands, except share and per share amounts)
Assets
Investments:
Fixed maturity securities, available-for-sale, at fair value (net of allowance for credit losses of $ 7,000 and $ 0 , respectively) (amortized cost of $ 1,848,755 and $ 1,320,266 , respectively)	1,856,303	1,292,218
Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of $ 468 and $ 243 , respectively)	32,822	39,153
Equity securities, at fair value	1,174	106,254
Mortgage loans, at fair value	9,902	26,490
Equity method investments	77,365	98,594
Other long-term investments	58,650	33,182
Short-term investments, at fair value	264,299	274,929
Total investments	2,300,515	1,870,820
Cash and cash equivalents	168,544	121,603
Restricted cash	30,570	35,922
Premiums receivable, net	544,217	321,641
Reinsurance recoverables, net	1,119,880	857,876
Ceded unearned premium	238,948	203,901
Deferred policy acquisition costs	136,100	113,183
Deferred income taxes	27,865	30,486
Goodwill and intangible assets, net	88,040	87,348
Other assets	137,173	86,698
Total assets	4,791,852	3,729,478
Liabilities and stockholders’ equity	—	—
Liabilities:	—	—
Reserves for losses and loss adjustment expenses	2,318,894	1,782,383
Unearned premiums	774,035	637,185
Deferred ceding commission	46,453	40,434
Reinsurance and premium payables	279,888	177,070
Funds held for others	128,003	102,665
Accounts payable and accrued liabilities	115,034	76,206
Notes payable	100,411	100,000
Subordinated debt, net of debt issuance costs	19,569	19,536
Total liabilities	3,782,287	2,935,479
Stockholders’ equity	—	—
Common stock, $ 0.01 par value, 500,000,000 shares authorized, 40,511,222 and 40,127,908 shares issued and outstanding, respectively	405	401
Additional paid-in capital	730,555	718,598
Accumulated other comprehensive income (loss)	11,457	( 22,120 )
Retained earnings	267,148	97,120
Total stockholders’ equity	1,009,565	793,999
Total liabilities and stockholders’ equity	4,791,852	3,729,478

Consolidated statements of operations and comprehensive income

[c. 162; p. 16] Financial statement notes

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

[c. 163; p. 16]

Revenues, expenses, and income by year
	Years Ended December 31,
($ in thousands, except share and per share amounts)	2025	2024	2023
Revenues:
Net earned premiums	1,304,505	1,056,722	829,143
Commission and fee income	6,855	6,703	6,064
Net investment income	83,619	80,600	40,340
Net investment gains	22,149	6,342	11,054
Other loss	( 587 )	( 167 )	( 632 )
Total revenues	1,416,541	1,150,200	885,969
Expenses:	—	—	—
Losses and loss adjustment expenses	795,022	669,809	515,237
Underwriting, acquisition and insurance expenses	377,359	311,757	243,444
Transaction costs	14,019	—	—
Interest expense	7,919	9,496	10,024
Amortization expense	1,636	2,007	1,798
Other expenses	4,162	4,392	5,364
Total expenses	1,200,117	997,461	775,867
Income before income taxes	216,424	152,739	110,102
Income tax expense	46,396	33,911	24,118
Net income	170,028	118,828	85,984
Net income attributable to participating securities	—	—	1,677
Net income attributable to common stockholders	170,028	118,828	84,307
Comprehensive income	—	—	—
Net income	170,028	118,828	85,984
Other comprehensive income:	—	—	—
Unrealized gains and losses on investments:	—	—	—
Net change in unrealized gains on investments, net of tax	33,092	9,792	25,516
Reclassification adjustment for gains (losses) on securities no longer held, net of tax	485	( 8,959 )	( 4,984 )
Total other comprehensive income	33,577	833	20,532
Comprehensive income	203,605	119,661	106,516
Per share data:	—	—	—
Basic earnings per share	4.21	2.97	2.34
Diluted earnings per share	4.07	2.87	2.24
Weighted-average common shares outstanding	—	—	—
Basic	40,407,310	40,056,475	36,031,907
Diluted	41,808,046	41,377,460	38,317,534

Consolidated statements of stockholders’ equity

[c. 164; p. 16] Financial statement notes

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

[c. 165; p. 16]

Consolidated statements of stockholders’ equity
	Years Ended December 31,
($ in thousands, except share amounts)	2025	2024	2023
Preferred shares:
Balance at beginning of year	—	—	1,969,660
Preferred stock conversion to common shares	—	—	( 1,969,660 )
Balance at December 31	—	—	—
Common shares:	—	—	—
Balance at beginning of year	40,127,908	39,863,756	16,599,666
Issuance of shares	383,314	264,152	6,958,977
Preferred stock conversion to common shares	—	—	16,305,113
Balance at December 31	40,511,222	40,127,908	39,863,756
Preferred stock:	—	—	—
Balance at beginning of year	—	—	20
Preferred stock conversion to common shares	—	—	( 20 )
Balance at December 31	—	—	—
Common stock:	—	—	—
Balance at beginning of year	401	399	168
Issuance of common stock	4	2	22
Preferred stock conversion to common shares	—	—	161
Proceeds from equity offerings, net	—	—	48
Balance at December 31	405	401	399
Treasury stock:	—	—	—
Balance at beginning of year	—	—	( 2 )
Preferred stock conversion to common shares	—	—	2
Balance at December 31	—	—	—
Additional paid-in capital:	—	—	—
Balance at beginning of year	718,598	710,855	577,289
Issuance of common stock	11,957	7,743	9,213
Preferred stock conversion to common shares	—	—	( 143 )
Proceeds from equity offerings, net	—	—	124,496
Balance at December 31	730,555	718,598	710,855
Stock notes receivable:	—	—	—
Balance at beginning of year	—	( 5,562 )	( 6,911 )
Employee equity transactions	—	5,562	1,349
Balance at December 31	—	—	( 5,562 )
Accumulated other comprehensive income (loss):	—	—	—
Balance at beginning of year	( 22,120 )	( 22,953 )	( 43,485 )
Other comprehensive income, net of tax	33,577	833	20,532
Balance at December 31	11,457	( 22,120 )	( 22,953 )
Retained earnings (accumulated deficit):	—	—	—
Balance at beginning of year	97,120	( 21,708 )	( 105,417 )
Cumulative effect on adoption of ASU No. 2016-13	—	—	( 2,275 )
Net income	170,028	118,828	85,984
Balance at December 31	267,148	97,120	( 21,708 )
Total stockholders’ equity	1,009,565	793,999	661,031

Consolidated statements of cash flows

[c. 166; p. 16] Financial statement notes

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

[c. 167; p. 16]

Cash flows from operating, investing, and financing activities by Years Ended December 31
	Years Ended December 31,
($ in thousands)	2025	2024	2023
Cash flows from operating activities:
Net income	170,028	118,828	85,984
Adjustments to reconcile net income to net cash provided by (used in) operating activities:	—	—	—
Net investment (gains) losses	( 22,149 )	( 6,342 )	( 11,054 )
Depreciation and amortization expense	3,535	3,358	3,891
Stock-based compensation expense	11,960	9,395	8,525
Undistributed earnings (loss) from long-term investments	10,122	( 6,252 )	6,730
Net change in fair value of derivatives	( 34,857 )	—	—
Deferred income tax, net	( 6,397 )	( 8,708 )	9,383
Changes in operating assets and liabilities:	—	—	—
Premiums receivable, net	( 222,576 )	( 142,406 )	( 40,020 )
Reinsurance recoverables, net	( 262,004 )	( 261,542 )	( 17,270 )
Ceded unearned premium	( 35,047 )	( 17,780 )	( 28,476 )
Deferred policy acquisition costs	( 22,917 )	( 21,228 )	( 23,017 )
Federal income taxes	1,797	4,500	( 1,892 )
Losses and loss adjustment expenses	536,511	467,882	172,744
Unearned premiums	136,850	84,653	110,023
Deferred ceding commission	6,019	3,377	7,208
Reinsurance and premium payables	102,818	26,914	36,460
Funds held for others	25,338	44,077	21,730
Accounts payable and accrued liabilities	37,032	19,177	2,285
Other, net	( 27,987 )	( 12,788 )	( 5,047 )
Net cash provided by operating activities	408,076	305,115	338,187
Cash flows from investing activities:	—	—	—
Purchase of fixed maturity securities, available-for-sale	( 910,039 )	( 617,606 )	( 459,672 )
Purchase of illiquid investments	—	( 75 )	( 1,675 )
Purchase of equity securities	( 13,213 )	( 14,077 )	( 26,009 )
Purchase of equity method investments and other long-term investments	( 6,814 )	( 32,173 )	—
Purchase of intangible assets and goodwill	( 2,000 )	—	( 50 )
Investment in direct and indirect loans	19,674	27,480	2,984
Purchase of property and equipment	( 5,454 )	( 4,224 )	( 3,108 )
Proceeds from the sales of fixed maturity securities, available-for-sale	198,195	217,468	26,626
Maturities, calls, transfers and paydowns of fixed maturity securities, available-for-sale	183,951	122,694	48,957
Maturities, calls and paydowns of fixed maturity securities held-to-maturity	4,357	6,015	11,444
Proceeds from the sales of equity securities	126,738	37,534	40,201
Sales of and distributions from equity method and other long-term investments	11,902	14,073	3,572
Change in short-term investments	10,626	( 4,799 )	( 149,068 )
Change in receivable/payable for securities	11,928	34	76
Cash provided by deposit accounting	3,251	3,962	11,913
Net cash used in investment activities	( 366,898 )	( 243,694 )	( 493,809 )
Cash flows from financing activities:	—	—	—
Employee share purchases	—	—	1,350
Repayment of stock notes receivable	—	5,562	—
Proceeds from long term borrowings	43,411	107,000	50,000
Payments on long term borrowings and trust preferred	( 43,000 )	( 116,794 )	( 50,000 )
Proceeds from initial public offering	—	—	129,597
Net cash provided by (used in) financing activities	411	( 4,232 )	130,947
Net increase (decrease) in cash and cash equivalents and restricted cash	41,589	57,189	( 24,675 )
Cash and cash equivalents and restricted cash at beginning of period (1)	157,525	100,336	125,011
Cash and cash equivalents and restricted cash at end of period (1)	199,114	157,525	100,336
Supplemental disclosure of cash flow information:	—	—	—
Cash paid for interest	6,149	8,573	10,667

(1) The sum of cash and cash equivalents and restricted cash from the Consolidated Balance Sheets.

A. Description of Business

[c. 168; p. 16] Company overview

Skyward Specialty Insurance Group, Inc. (the "Company") is a Delaware corporation organized in 2006.
The Company is an insurance holding company operating in one segment, delivering commercial property and casualty products insurance coverages through its underwriting divisions.

[c. 169; p. 16] Wholly owned insurance subsidiaries

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.

[c. 170; p. 16] Wholly owned reinsurance subsidiary

The Company has a wholly owned captive reinsurance company subsidiary, Skyward Re, domiciled in the Cayman Islands.
Skyward Re 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.

[c. 171; p. 16] Wholly owned non-risk bearing subsidiaries

The Company has three non-risk bearing wholly owned subsidiaries.
Skyward Underwriters Agency, Inc. ("SUA") is a managing general insurance agent and reinsurance broker for property and casualty risks in specialty niche markets.
Skyward Service Company provides various administrative services to the Company’s subsidiaries.
Skyward Specialty No. 1 Limited is a Lloyd’s corporate member authorized to invest in Lloyd’s syndicates.

[c. 172; p. 16] Apollo Group Holdings Limited acquisition

On January 1, 2026, the Company completed the acquisition of Apollo Group Holdings Limited for an aggregate consideration of approximately USD 555.0m.
Additional information regarding the acquisition can be found in Note 24.

B. Basis of Presentation

[c. 173; p. 16] Basis of financial statement preparation

The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP").
GAAP differs in some respects from the principles followed in reports to insurance regulatory authorities.
The consolidated financial statements include the accounts of the holding company and its subsidiaries.
All intercompany transactions and balances have been eliminated in consolidation.
The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes.
The Company’s actual results could differ from those estimates.

C. Consolidation

[c. 174; p. 16] Variable interest entity consolidation

The Company consolidates an entity if it has a controlling financial interest, determined by assessing if the entity is a variable interest entity (VIE) for which the Company is the primary beneficiary, or if the Company controls the entity through a majority voting interest or other arrangements.
A VIE is defined as an entity that either lacks sufficient equity to finance its activities without additional subordinated financial support, whose equity holders lack the characteristics of a controlling financial interest, and/or is established with non-substantive voting rights.
The Company's assessment of VIE status involves subjectivity in determining which activities most significantly affect the VIE’s performance and estimates about current and future fair value of assets and financial performance of the VIE.
In related party analysis, the Company considers qualitative and quantitative factors including the characteristics and size of its investment relative to the related party, the ability of the Company and related party to control or significantly influence key decisions of the VIE (including de facto agents), the obligation or likelihood to fund operating losses of the VIE, and the similarity and significance of the VIE’s business activities to those of the Company and the related party.
The determination of whether an entity is a VIE and whether the Company is the primary beneficiary involves significant judgment and depends on specific facts and circumstances at the time of assessment.

[c. 175; p. 16] Consolidation reassessment and impact

At each reporting period, the Company reassesses changes in facts and circumstances that could alter an entity's VIE status or the Company's consolidation assessment.
Changes in consolidation status are applied prospectively.
If an entity is consolidated due to reassessment, its assets, liabilities, and noncontrolling interest are recorded at fair value upon initial consolidation.
Any existing equity interest held by the Company in the entity prior to obtaining control is remeasured at fair value, potentially resulting in a recognized gain or loss upon initial consolidation.
Deconsolidation of a subsidiary due to reassessment may result in a recognized gain or loss, depending on the carrying values of deconsolidated assets and liabilities compared to the fair value of any retained interests.
The Company has determined one entity meets the definition of a VIE for which it is the primary beneficiary.
Further details and required disclosures are provided in Note 7.

D. Cash and Cash Equivalents

[c. 176; p. 16] Cash and cash equivalents definition

Cash and cash equivalents include cash on hand and fixed maturity securities with original maturities of three months or less.
The carrying value of the Company’s cash and cash equivalents approximates fair value.

E. Restricted Cash

[c. 177; p. 16] Restricted cash definition and uses

Cash with a legal restriction on withdrawal or use by the consolidated group is recorded as restricted cash.
The carrying value of the Company’s restricted cash approximates fair value.
SUA holds unremitted insurance premiums in a fiduciary capacity to third-party insurance companies as restricted cash, after deducting commissions and applicable fees from premiums collected from clients.
The Company is required by state regulations to maintain assets on deposit with certain states and hold cash as collateral for certain reinsurance balances.
Cash held in a depository account for others, or restricted by a state, is recorded as restricted cash.

F. Investments

[c. 178; p. 16] Available-for-sale fixed maturities accounting

Investments in fixed maturities classified as available-for-sale are carried at fair value.
For available-for-sale fixed maturities in an unrealized loss position, the Company first determines intent to sell or likelihood of being required to sell before maturity or recovery of cost basis.
If intent or likelihood of sale criteria are met, the amortized cost is written down to fair value, with losses recognized in net investment gains on the Consolidated Statements of Operations.
If neither criterion is met, the Company determines if unrealized losses are due to credit-related factors.
If unrealized losses are credit-related, an allowance for credit losses is determined using a present value of cash flows compared to the amortized cost.
Prior to 2025, changes in the allowance for credit losses were recognized in net investment income on the Consolidated Statements of Operations.
As of 2025, changes in the allowance for credit losses are recognized in net investment gains.
Prior periods have been updated to conform to the current period presentation.
Credit losses limited by the fair value of the security are recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive income (loss).
Unrealized losses that are not credit-related continue to be recognized in stockholders’ equity, net of taxes, as a component of accumulated other comprehensive income (loss).

[c. 179; p. 16] Held-to-maturity fixed maturities accounting

Investments in fixed maturity securities held-to-maturity are carried at amortized cost net of an allowance for credit losses.
The allowance for credit losses represents the current estimate of expected credit losses.
The Company develops a historical loss rate from Moody’s multi-year cumulative loss rates for asset-backed securities.
The historical loss rate is adjusted for current conditions and reasonable and supportable forecasts.
Prior to 2025, changes in the allowance for credit losses were recognized in net investment income on the Consolidated Statements of Operations.
As of 2025, changes in the allowance for credit losses are recognized in net investment gains.
Prior periods have been updated to conform to the current period presentation.

[c. 180; p. 16] Equity securities accounting

Equity securities consist of common stock or preferred stock.
Mutual funds, including those primarily investing in debt securities, are classified as equity securities.
Investments in equity securities with a readily determinable fair value are carried on the balance sheet at fair value using quoted market prices.
Changes in the carrying value of equity securities are included in net investment gains (losses) within the Consolidated Statements of Operations.

[c. 181; p. 16] Mortgage loans accounting

Investments in mortgage loans are classified as held for investment and carried at cost adjusted for unamortized premiums, discounts, and loan fees.
Uncollectible amounts are written off in the period they are determined to be uncollectible.
Interest on loans is recognized as interest receivable and included in other assets on the Consolidated Balance Sheets.
The Company elected the fair value option for mortgage loans effective January 1, 2023, as targeted transition relief from ASU 2016-13 adoption.
Under the fair value option, mortgage loans are measured at fair value.
Changes in unrealized gains and losses on mortgage loans are reported in net investment gains (losses) on the Consolidated Statements of Operations.
Interest income and amortization continue to be recognized in net investment income on the Consolidated Statements of Operations.

[c. 182; p. 16] Equity method investments accounting

Equity method investments include investments in equity and equity securities of non-public entities and indirect investments in loans and loan collateral.
The Company has equity investments in certain limited partnerships and corporations where it has significant influence but not control.
Analysis of variable interest entities indicated the Company is not the primary beneficiary and would not consolidate these entities.
The equity method is used to account for investments in unconsolidated subsidiaries.
Under the equity method, initial investment is recorded at cost and adjusted based on proportionate share of distributions and net income or loss of the investee.
The difference between investment cost and proportionate share of underlying equity in net assets is a component of investment income.
The Company amortizes this difference as an adjustment to its pro-rata share of equity method income over the useful life of the underlying asset.
For equity securities of non-public entities where the Company does not have significant influence and no readily determinable fair value, investments are carried at cost, minus impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.
Investments in indirect collateralized loans and loan collateral are held through and accounted for as an ownership interest in an unconsolidated subsidiary.
The Company’s ownership interests in unconsolidated subsidiaries include investments in partnerships, joint ventures, and special purpose investment vehicles.
The Company has significant influence but not control of these unconsolidated subsidiaries and uses the equity method for these investments.

[c. 183; p. 16] Other long-term investments accounting

Other long-term investments consist of an investment in a limited partnership held at net asset value (“NAV”) and other long-term investment securities.

[c. 184; p. 16] Short-term investments accounting

Short-term investments primarily consist of money market funds.
Short-term investments are carried at cost, which approximates fair value.

[c. 185; p. 16] Net investment income and gains/losses recognition

Net investment income consists of interest, dividends, and equity in earnings (losses) of unconsolidated subsidiaries, net of investment expenses such as investment management expenses.
Interest income is recognized on the accrual basis.
Dividends are recognized as earned at the ex-dividend date.
Interest income on mortgage-backed and other asset-backed securities is recognized using the effective-yield method based on estimated principal repayments.
Amortization of premium and accretion of discounts on debt securities are included in interest income.
Net investment gains and losses are recognized in net income based upon the specific identification method.

G. Derivatives

[c. 186; p. 16] Commodity derivatives accounting and valuation

The Company uses commodity derivatives to assume risk and manage exposures in the insurance industry.
Commodity derivatives expose the Company to potentially unfavorable price changes to underlying commodities.
Derivatives are accounted for in accordance with FASB ASC Topic 815, Derivatives and Hedging.
All derivatives are recorded at fair value on the Company’s balance sheet as assets or liabilities.
Changes in fair value of derivatives are reflected in current earnings.
The Company nets assets and liabilities of derivatives, including them in "other assets" on the Consolidated Balance Sheets.
The Company considers exchange-traded futures and forward purchase and sale contracts to be effective economic hedges.
The Company has not elected hedge accounting treatment for these derivatives.
Fair value of derivatives is estimated by reference to quoted prices or broker quotes, or through industry or internal valuation models when quotes are unavailable.
Further details and required disclosures are in Note 8.

H. Reinsurance

[c. 187; p. 16] Reinsurance accounting principles

The Company purchases prospective reinsurance for certain lines of business on a proportional, excess of loss, and facultative basis.
Proportional reinsurance involves sharing losses and expenses with the reinsurer in exchange for a share of premiums.
Excess of loss reinsurance shares losses, either proportionally or entirely, above a certain dollar threshold, for a negotiated cost.
Facultative reinsurance covers specific risks and/or policies on either a proportional or excess of loss basis.
Ceded unearned premium and reinsurance balances recoverable (on paid and unpaid losses and settlement expenses) are reported separately as assets, not netted with related liabilities, because reinsurance does not relieve the Company of its legal liability to policyholders.
Reinsurance on unpaid losses and settlement expenses represents estimates of the portion of liabilities recoverable from reinsurers.
On the Consolidated Statements of Operations, net earned premiums, losses and loss adjustment expenses, net, and underwriting, acquisition, and insurance expenses are presented net of reinsurance ceded.

[c. 188; p. 16] Retroactive reinsurance accounting

The Company has purchased retroactive reinsurance on certain lines of business in prior years, including loss portfolio transfers (LPT) and adverse development covers.
These contracts indemnify losses related to past loss events, with the reinsurer sharing losses based on dollar thresholds.
Income from retroactive reinsurance contracts is deferred and amortized into net income over the settlement period.
Losses from retroactive reinsurance contracts are charged to net income immediately.
Subsequent changes in the measurement of retroactive reinsurance contracts are accounted for under a full retrospective method.

[c. 189; p. 16] Deposit accounting for reinsurance

Certain ceded reinsurance contracts that management determines do not transfer significant insurance risk are accounted for using the deposit method.
The evaluation of significant insurance risk transfer assesses both timing risk and underwriting risk.
A reinsurance contract may not transfer significant insurance risk if either underwriting risk or timing risk, or both, are not deemed transferred.
For contracts transferring only significant timing risk but not sufficient underwriting risk, a deposit asset is recorded equal to the initial cash outflow, offset by cash inflows from reinsurers.
If cash outflows are expected to differ from expected cash inflows, an accretion rate is established at inception based on actuarial estimates, increasing/decreasing the deposit accounting asset to the estimated receivable amount over the contract term.
The accretion of the deposit is based on the expected rate of return implied from estimated cash inflows and outflows under the contract.
The Company periodically reassesses the estimated ultimate receivable and related expected rate of return on the deposit asset.
Accretion of the deposit asset, including changes from estimated cash flow changes, is reflected as part of investment income in the Company’s results of operations.
Several reinsurance contracts require deposit accounting due to not transferring sufficient underwriting risk.
There were no reinsurance contracts requiring deposit accounting due to not transferring sufficient timing risk.

[c. 190; p. 16] Reinsurance recoverables and credit risk

Reinsurance recoverables are carried net of an allowance for credit losses, which represents the current estimate of expected credit losses.
The Company develops a historical loss rate using the A.M. Best impairment rate and rating transition study, which provides historical loss data for similarly rated reinsurance companies based on receivable duration.
The historical loss rate is adjusted for current conditions, reasonable and supportable forecasts, and current economic conditions.
Changes in the allowance for credit losses are recognized in underwriting, acquisition, and insurance expenses on the Consolidated Statements of Operations.
Reinsurance does not relieve the Company of its legal liability to its policyholders.
The Company continuously monitors the financial condition of its reinsurers by reviewing annual financial statements and industry developments.
Credit risk associated with reinsurance recoverables is analyzed by monitoring reinsurers' A.M. Best financial strength ratings and assessing collateral adequacy.
If reinsurers fail to fulfill obligations, the Company has access to collateral from various reinsurers.
Reinsurance collateral from reinsurers was USD 344.1m as of December 31, 2025, and USD 337.0m as of December 31, 2024.
eMaxx Captives and Everest Reinsurance Co. were the only reinsurers representing 10% or more of the Company’s reinsurance recoverable balances.
eMaxx Captives represented 17.7% of reinsurance recoverable balances at December 31, 2025, and 16.8% at December 31, 2024.
Everest Reinsurance Co. represented 11.1% of reinsurance recoverable balances at December 31, 2025, and 18.0% at December 31, 2024.
eMaxx Captives was not rated by A.M. Best at December 31, 2025, and 2024.
Everest Reinsurance Co.'s financial strength rating from A.M. Best was A+ at December 31, 2025, and 2024.

I. Concentration of Credit Risk

[c. 191; p. 16] Credit risk concentration

Financial instruments potentially subject to concentrations of credit risk include cash and cash equivalents, restricted cash, investments, and premiums receivable, in addition to reinsurance recoverables.
Cash equivalents and short-term investments include U.S. government securities and money market funds.
Investments are diversified across many industries and geographic regions.
The Company limits credit exposure with any single financial institution or issuer.
No significant concentration of credit risk is believed to exist with respect to cash and investments.
As of December 31, 2025 and 2024, outstanding premiums receivable are generally diversified due to the large number of entities in the customer base and their dispersion across various lines of business and geographic regions.
Failure by distribution sources to remit premiums could lead to premium write-offs and a corresponding loss of income.

J. Deferred Policy Acquisition Costs

[c. 192; p. 16] Deferred Policy Acquisition Costs

Policy acquisition costs include commissions and premium taxes that vary with and are directly related to the successful production of new or renewal business.
The Company defers policy acquisition costs and related ceding commissions.
Deferred policy acquisition costs and related ceding commissions are charged or credited to earnings in proportion to the premium earned over the life of the policy.
A premium deficiency is recognized if the sum of expected losses, loss adjustment expenses, and unamortized acquisition costs exceeds related unearned premiums.
The Company first recognizes a premium deficiency by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency.
If the premium deficiency exceeds unamortized acquisition costs, a liability is accrued for the excess deficiency.
Anticipated investment income is considered in the determination of premium deficiencies.
Management determined no premium deficiency existed as of December 31, 2025 and 2024.

K. Goodwill and Intangible Assets

[c. 193; p. 16] Goodwill and intangible assets accounting policy

Goodwill and intangible assets are recorded as a result of a business combination.
Goodwill represents the excess of the purchase price over the fair value of acquired assets and assumed liabilities.
The Company reviews its purchase price allocation for up to one year post-acquisition and may make adjustments within that period.
Identifiable intangible assets with a finite useful life are amortized over the period they are expected to contribute to future cash flows.
Indefinite-lived intangible assets are not amortized.
The Company reviews goodwill and identifiable intangible assets for recoverability annually in the fourth quarter, or on an interim basis if events or changes indicate a carrying amount may not be recoverable.
No goodwill impairment was recorded for the years ended December 31, 2025 and 2024.

L. Property and Equipment

[c. 194; p. 16] Property and equipment accounting

Property and equipment, included in other assets on the Consolidated Balance Sheets, is recorded at cost less accumulated depreciation.
Depreciation expense is recognized on a straight-line basis for financial statement purposes over periods ranging from three to seven years.

M. Reserves for Losses and Loss Adjustment Expenses

[c. 195; p. 16] Reserves for unpaid losses and LAE

Reserves for unpaid losses and loss adjustment expenses (LAE) represent the estimated ultimate cost of all unreported and reported but unpaid insured claims and the cost to adjust losses incurred as of the balance sheet date.
Estimates for these reserves are made using individual case-basis valuations of reported claims, statistical analyses, and various actuarial procedures.
These estimates are based on historical information, industry and peer group information, and estimates of future trends in variable factors such as loss severity, loss frequency, and inflation.
Estimates are regularly reviewed and adjusted as experience develops or new information becomes known.
During the loss settlement period, estimates of liability on a claim may be refined and adjusted upward or downward.
The ultimate settlement of losses and related LAE may vary significantly from the estimate included in financial statements.
If actual liabilities exceed recorded amounts, there will be an adverse effect.
Recorded reserves may be determined to be more than adequate, leading to a reduction in reserves.

N. Premiums

[c. 196; p. 16] Premium recognition and receivables

The Company earns and recognizes property and casualty and surety premiums on a pro-rata basis over the terms of policies.
Accident and health premiums are earned as billed, based on census data.
Gross premiums written are reduced by ceded premiums from proportional, facultative, and excess of loss reinsurance costs for prospective reinsurance.
Premiums receivable include deferred premiums, which are installment payments due from insureds under their policy payment terms.
Premiums receivable are carried net of an allowance for credit losses, which represents the current estimate of expected credit losses.
The Company develops a historical loss rate for credit losses using historical write-offs and aging of receivables.
This historical loss rate is adjusted for current conditions, reasonable and supportable forecasts, and the ability to cancel coverage after a premium is past due.
Changes in the allowance for credit losses are recognized in underwriting, acquisition, and insurance expenses on the Consolidated Statements of Operations.

[c. 197; p. 16] Unearned premiums

Unearned premiums represent the portion of gross premiums written applicable to the unexpired terms of in-force insurance policies or reinsurance contracts.
Ceded unearned premiums represent the portion of ceded premiums written applicable to the unexpired terms of in-force insurance policies or reinsurance contracts.
These unearned premiums are calculated on a pro-rata basis over the terms of the policies for both direct and ceded amounts.

O. Commission and Fee Income

[c. 198; p. 16] SUA commission revenue

SUA commission revenue is generated from placing insurance policies on reinsurance programs via a reinsurance broker.
The Company's single performance obligation for SUA commission revenue is the placement of insurance policies.
The transaction price for SUA commission revenue is fixed at contract inception and based on a percentage of premiums placed.
The Company recognizes 100% of the transaction price for SUA commission revenue when the performance obligation is satisfied at the point a policy is placed, as there are no constraints on revenue.

[c. 199; p. 16] SUA fee income

SUA fee income is generated from placing insurance policies with a third-party insurance company.
The Company's single performance obligation for SUA fee income is the placement of the policy.
The transaction price for SUA fee income is variable at contract inception and based on a percentage of premium, which is determined by risk factors that vary monthly (e.g., employee census data, worker roles).
The Company estimates its transaction price for SUA fee income over the life of the policy using the expected value method.
Revenue from SUA fee income is recognized at the point the policy is placed.
Changes in the estimate of variable consideration for SUA fee income are recognized in the month they occur.

P. Income Taxes

[c. 200; p. 16] Income tax accounting principles

Income tax expense is accrued for tax effects of transactions reported on consolidated financial statements.
Provision for income taxes consists of currently due taxes plus deferred taxes from temporary differences between financial statement and income tax reporting.
A valuation allowance is established for any deferred tax asset not expected to be realized.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years temporary differences are recovered or settled.
The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period of enactment.
A liability for uncertain tax positions is recorded if it is more likely-than-not that the tax position will not be sustained upon examination by the appropriate tax authority.
Changes in the liability for uncertain tax positions are reflected in income tax expense when a new uncertain tax position arises, judgment changes about uncertainty likelihood, the tax issue is settled, or the statute of limitation expires.
Potential net interest income or expense and penalties related to uncertain tax positions are recorded on the Consolidated Statements of Operations.

[c. 201; p. 16] Tax filings and premium taxes

The Company files a consolidated federal income tax return in the United States and certain other state tax returns.
Admitted insurance subsidiaries pay premium taxes on gross written premiums in lieu of most state income or franchise taxes.
Premium tax expense is recognized within underwriting, acquisition and insurance expense on the Consolidated Statements of Operations.

Q. Fair Value of Financial Instruments

[c. 202; p. 16] Fair value measurement framework

Fair value for each class of financial instrument is estimated based on the framework established in fair value accounting guidance.
This guidance requires maximizing observable inputs and minimizing unobservable inputs when measuring fair value.
Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value.
The hierarchy prioritizes unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements).
The hierarchy gives the lowest priority to unobservable inputs (Level 3 measurements).
The Company uses widely recognized, third-party pricing sources to determine fair values of financial instruments.
The Company understands the valuation methodologies and inputs of these third-party pricing sources.
Further details regarding fair value disclosures are in Note 4.

R. Stock-Based Compensation

[c. 203; p. 16] Stock-based compensation accounting

The estimated fair value of employee stock options and similar awards is expensed.
Compensation cost for equity instrument awards to employees is measured based on the grant-date fair value and recognized over the service period until vesting.
Tax effects related to share-based payments are made through net earnings.
Further discussion and related disclosures regarding stock-based compensation are in note 18.
The Company's employee stock purchase plan (ESPP) allows all employees to purchase common stock at a discount.
Compensation cost for the ESPP is recognized on a straight-line basis over the offering period.

S. Earnings Per Share

[c. 204; p. 16] Basic EPS calculation

Basic earnings per share is calculated using the two-class method.
Undistributed earnings are allocated to participating securities based on their share in earnings as if all earnings for the period were distributed.
Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period.
Common shares with unsatisfied contingencies, such as vesting requirements, are excluded from basic earnings per share.
The Company’s preferred shares participate in dividends and distributions with common stock on an as-converted basis and are considered a participating security.
Instruments awarded to employees that provide the right to purchase common stock at a fixed price were included as potential common shares, weighted for the portion of the period they were granted, if dilutive.
The Company’s common and preferred shares financed by stock notes are contingently issuable instruments where the holder must return shares if stock notes are not paid off.
These contingently issuable instruments are excluded from basic and diluted earnings per share when specified conditions are not met, presuming the end of the period is the end of the contingency period.
The impact of contingently issuable instruments on diluted earnings per share was calculated using the treasury stock method and included in the reconciliation of the denominator of basic and diluted EPS computations for the year ended December 31, 2024.
All outstanding stock notes were settled during 2024, resulting in no impact to the Company’s basic and diluted earnings per share computations for the year ended December 31, 2024.

[c. 205; p. 16] Diluted EPS calculation

Instruments convertible into common shares are included in diluted weighted-average common shares outstanding on an if-converted basis, based on the legal conversion rate for the respective period, if dilutive.
Share-based awards to employees with only service conditions are included as potential common shares, weighted for the portion of the period they are unvested, if dilutive.
Share-based awards to employees with performance and service or market conditions are included as potential common shares, presuming the end of the period is the end of the contingency period, if dilutive.
If the inclusion of common share adjustments increases earnings per share or reduces loss per share, the effect is anti-dilutive.
In anti-dilutive cases, the diluted net earnings or net loss per share is computed excluding these common share equivalents.

T. Recent Accounting Pronouncements

[c. 206; p. 16] Recent accounting standards adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740).
ASU 2023-09 requires public companies to provide enhanced rate reconciliation disclosures annually, including specific categories and additional information meeting a quantitative threshold.
This update also requires public companies to disaggregate income taxes paid by federal, state, and foreign taxes.
The guidance became effective for fiscal years beginning after December 15, 2024, and is applied prospectively.
The Company has added additional disclosures as required by ASU 2023-09, with no impact to the consolidated financial statements.
Additional disclosures required by this ASU are detailed in Note 13.

[c. 207; p. 16] Recent accounting standards not yet adopted

In November 2024, the FASB issued ASU 2024-03, requiring disaggregated disclosure of income statement expenses for public business entities (PBEs).
ASU 2024-03 does not change the expense captions presented on the face of the income statement but requires disaggregation of certain expense captions into specified categories in footnotes.
PBEs must provide a tabular footnote disclosure about specific expenses, disaggregating each relevant income statement expense caption that includes any of the following natural expenses: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other types of depletion expenses.
The tabular disclosure will also include certain other expenses, when applicable.
In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.
The effective date for ASU 2024-03 is the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.
The Company is evaluating the effect of these amendments on its consolidated financial statements.

2. Goodwill and Intangible Assets

[c. 208; p. 16] Goodwill and intangible assets overview

Tables present the carrying amount and changes in goodwill by reporting unit at December 31, 2025 and 2024.
Tables present the carrying amount and changes in other intangible assets at December 31, 2025 and 2024.

[c. 209; p. 16] Intangible assets useful life and amortization

Indefinite-lived intangible assets relate to insurance licenses and trademarks.
Finite-lived intangible assets relate to policy renewals, agency relationships, and non-compete/exclusivity agreements.
Finite-lived intangible assets had a weighted average useful life of approximately 12 years as of December 31, 2025.
Amortization expense recognized: USD 1.3m for 2025, USD 1.1m for 2024, and USD 1.5m for 2023.
A table sets forth the estimated future net amortization expense of intangible assets.

[c. 210; p. 16]

Net balance of goodwill by line of business
($ in thousands)	Accident and Health	Surety	Construction and 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 December 31, 2025	46,756	6,781	10,204	1,993	65,734

($ in thousands)	Accident and Health	Surety	Construction and Energy Solutions	Other	Total
Goodwill
Gross balance at December 31, 2023	91,577	6,781	10,204	3,879	112,441
Accumulated impairment at December 31, 2023	( 44,821 )	—	—	( 1,886 )	( 46,707 )
Net balance at December 31, 2024	46,756	6,781	10,204	1,993	65,734

($ 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 )
Additions	2,000	—	—	—	2,000
Amortization	( 1,308 )	—	—	—	( 1,308 )
Net balance at December 31, 2025	7,288	—	999	14,019	22,306

($ in thousands)	Agent Relationships	Non-competes	Trademarks	Licenses	Total
Other Intangible Assets
Gross balance at December 31, 2023	24,491	1,117	999	14,019	40,626
Accumulated amortization at December 31, 2023	( 16,808 )	( 1,117 )	—	—	( 17,925 )
Amortization	( 1,087 )	—	—	—	( 1,087 )
Net balance at December 31, 2024	6,596	—	999	14,019	21,614

($ in thousands)
Years Ending December 31,	Amount
2026	1,053
2027	1,053
2028	1,053
2029	762
2030	553

3. Investments

[c. 211; p. 16] Investment portfolio fair value and amortized cost

Tables present the amortized cost and fair value by investment category at December 31, 2025 and 2024.
The amortized cost and estimated fair value of fixed maturity securities available for sale at December 31, 2025 are shown by contractual maturity.
Expected maturities may differ from contractual maturities due to borrower rights to call or prepay obligations, and portfolio sales may occur prior to maturity due to changing interest rates, tax considerations, or other factors.
The Company's held-to-maturity fixed maturity securities at December 31, 2025 consisted entirely of asset-backed securities not due at a single maturity date.

[c. 212; p. 16] Pledged assets

At December 31, 2025, the Company had U.S. government agencies mortgage-backed fixed maturity securities with a carrying value of approximately USD 68.5m pledged as collateral for a loan from the Federal Home Loan Bank of Dallas (FHLB).
The Company retains all rights regarding these pledged securities in accordance with the terms of the FHLB Loan.
At December 31, 2025, the Company had assets with fair values of approximately USD 69.5m pledged as collateral for performance obligations under reinsurance agreements.
Pledged assets for reinsurance agreements included USD 57.8m in residential mortgage-backed securities, USD 9.5m in cash and cash equivalents and other assets, and USD 2.2m in short-term investments.
The Company retains all rights regarding these securities in accordance with the terms of the trust agreements.

[c. 213; p. 16] Unrealized losses and impairment assessment

Tables set forth gross unrealized losses and corresponding fair values of investments, aggregated by length of time in a continuous unrealized loss position as of December 31, 2025 and 2024.
The Company monitors available-for-sale fixed maturity securities with fair values less than cost or amortized cost for impairment, which requires significant management judgment.
Management considers factors such as the financial condition of the issuer, receipt of scheduled principal and interest cash flows, and intent to sell (including likelihood of being required to sell before recovery) for fixed maturity securities.
As of December 31, 2025, the Company had 450 lots of fixed maturity securities in an unrealized loss position.
The Company does not intend to sell these securities and is not likely to be required to sell them before maturity or recovery of cost basis.
At December 31, 2025, the Company determined that credit impairments existed for two available-for-sale securities in the "corporate securities and miscellaneous" category, based on new recovery analysis showing deteriorating conditions.
For U.S. government and municipal securities, the decline in fair values was due to changes in interest rates, not credit quality.
The Company does not intend to sell U.S. government and municipal securities and expects recovery, thus not considering them impaired.
For corporate securities and miscellaneous, the decline in fair values was due to changes in interest rates, not credit quality.
The Company reviewed issuers of corporate securities for significant adverse changes in financial condition, credit enhancement quality, ratings decreases, negative outlooks, or payment failures, and determined declines were interest rate-driven.
The Company does not intend to sell corporate securities and expects recovery, thus not considering them impaired.
For residential mortgage-backed, commercial mortgage-backed, and other asset-backed securities, the decline in fair values was due to changes in interest rates, not credit quality.
The Company does not intend to sell these mortgage-backed and asset-backed securities and expects recovery, thus not considering them impaired.

[c. 214; p. 16] Allowance for credit losses

A table sets forth changes in the allowance for credit losses on available-for-sale and held-to-maturity securities for the years ended December 31, 2025 and 2024.

[c. 215; p. 16] Net investment gains

A table sets forth the components of net investment gains for the years ended December 31, 2025, 2024, and 2023.

[c. 216; p. 16] Proceeds from sales of securities

A table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the years ended December 31, 2025, 2024, and 2023.

[c. 217; p. 16] Net investment income

A table sets forth the components of net investment income for the years ended December 31, 2025, 2024, and 2023.

[c. 218; p. 16] Net unrealized gains

A table sets forth the change in net unrealized gains on the Company’s investment portfolio, net of deferred income taxes, included in other comprehensive loss for the years ended December 31, 2025, 2024, and 2023.

[c. 219; p. 16] Regulatory deposits

Various state regulations require the Company to maintain cash, investment securities, or letters of credit on deposit with the states in a depository account.
At December 31, 2025, cash and investment securities on deposit had carrying values of approximately USD 70.0m.
At December 31, 2024, cash and investment securities on deposit had carrying values of approximately USD 66.8m.

[c. 220; p. 16]

3. Investments
($ in thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	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

($ in thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Loss	Allowance for Credit Losses	Fair Value
December 31, 2024
Fixed maturity securities, available-for-sale:
U.S. government securities	26,577	35	( 126 )	—	26,486
Corporate securities and miscellaneous	433,298	5,618	( 13,288 )	—	425,628
Municipal securities	89,966	116	( 5,366 )	—	84,716
Residential mortgage-backed securities	408,585	1,875	( 16,627 )	—	393,833
Commercial mortgage-backed securities	70,262	545	( 1,443 )	—	69,364
Other asset-backed securities	291,578	2,447	( 1,834 )	—	292,191
Total fixed maturity securities, available-for-sale	1,320,266	10,636	( 38,684 )	—	1,292,218
Fixed maturity securities, held-to-maturity:	—	—	—	—	—
Other asset-backed securities	39,396	—	( 436 )	( 243 )	38,717
Total fixed maturity securities, held-to-maturity	39,396	—	( 436 )	( 243 )	38,717

($ in thousands)	Amortized Cost	Fair Value
Due in less than one year	45,682	45,478
Due after one year through five years	449,790	449,145
Due after five years through ten years	219,293	224,696
Due after ten years	64,360	63,652
Mortgage-backed securities	559,776	559,637
Other asset-backed securities	509,854	513,695
Total	1,848,755	1,856,303

	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 )

	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, 2024
Fixed maturity securities, available-for-sale:
U.S. government securities	15,938	( 34 )	2,297	( 92 )	18,235	( 126 )
Corporate securities and miscellaneous	136,888	( 2,060 )	81,232	( 11,228 )	218,120	( 13,288 )
Municipal securities	41,930	( 1,046 )	27,687	( 4,320 )	69,617	( 5,366 )
Residential mortgage-backed securities	201,407	( 3,366 )	82,496	( 13,261 )	283,903	( 16,627 )
Commercial mortgage-backed securities	9,411	( 126 )	13,178	( 1,317 )	22,589	( 1,443 )
Other asset-backed securities	75,119	( 721 )	29,851	( 1,113 )	104,970	( 1,834 )
Total fixed maturity securities, available-for-sale	480,693	( 7,353 )	236,741	( 31,331 )	717,434	( 38,684 )
Fixed maturity securities, held-to-maturity:	—	—	—	—	—	—
Other asset-backed securities	2,144	( 2 )	36,573	( 434 )	38,717	( 436 )
Total fixed maturity securities, held-to-maturity:	2,144	( 2 )	36,573	( 434 )	38,717	( 436 )
Total	482,837	( 7,355 )	273,314	( 31,765 )	756,151	( 39,120 )

($ in thousands)	Fixed Maturity Securities, Available-For-Sale	Fixed Maturity Securities, Held-to-Maturity
Balance at December 31, 2024	—	243
Current period provision for credit losses	7,000	257
Recoveries of amounts previously written off	—	( 32 )
Balance at December 31, 2025	7,000	468

	Fixed Maturity Securities, Held-to-Maturity
Balance at December 31, 2023	329
Current period provision for credit losses	18
Recoveries of amounts previously written off	( 104 )
Balance at December 31, 2024	243

($ in thousands)	2025	2024	2023
Gross realized gains
Fixed maturity securities, available-for-sale	3,002	2,662	1,042
Equity securities	34,262	8,062	6,035
Other	685	213	2
Total	37,949	10,937	7,079
Gross realized losses	—	—	—
Fixed maturity securities, available-for-sale	( 10,832 )	( 8,161 )	( 1,879 )
Equity securities	( 3,000 )	( 4,132 )	( 5,256 )
Other	( 413 )	( 223 )	( 20 )
Total	( 14,245 )	( 12,516 )	( 7,155 )
Net unrealized gains (losses) on investments	—	—	—
Equity securities	( 22,908 )	7,500	11,516
Mortgage loans	( 7 )	421	( 386 )
Other	21,360	—	—
Net investment gains	22,149	6,342	11,054

($ in thousands)	2025	2024	2023
Fixed maturity securities, available-for-sale	198,195	217,468	26,626
Equity securities	126,738	37,534	40,201

($ in thousands)	2025	2024	2023
Income (loss):
Fixed maturity securities, available-for-sale	80,302	57,574	34,703
Fixed maturity securities, held-to-maturity	( 804 )	4,091	4,181
Equity securities	1,223	2,720	3,418
Equity method investments	( 2,683 )	2,524	( 9,434 )
Mortgage loans	1,622	5,153	5,474
Indirect loans	( 8,129 )	( 2,400 )	( 4,155 )
Short-term investments and cash	12,828	14,851	11,392
Other	3,307	3,000	318
Total investment income	87,666	87,513	45,897
Investment expenses	( 4,047 )	( 6,913 )	( 5,557 )
Net investment income	83,619	80,600	40,340

($ in thousands)	2025	2024	2023
Fixed maturity securities	42,594	1,046	25,952
Deferred income taxes	( 9,017 )	( 213 )	( 5,420 )
Total	33,577	833	20,532

4. Fair Value Measurements

[c. 221; p. 16] 4. Fair Value Measurements

The Company's financial instruments include assets and liabilities carried at fair value, and assets and liabilities carried at cost or amortized cost but disclosed at fair value.
The market approach is generally applied to determine fair value, using prices and data from market transactions involving identical or comparable assets and liabilities.
Fair value of investments is determined using data primarily from third-party investment managers or pricing vendors.
Periodic analyses are performed on third-party prices to ensure they are reasonable estimates of fair value, including reviewing month-to-month fluctuations and comparing valuations from different pricing services for identical securities.
Financial instruments are classified into a 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 observable for the asset or liability through corroboration with market data at the measurement date, other than Level 1 quoted prices.
Level 3 inputs are unobservable inputs reflecting management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.
Methods and assumptions used for fair value disclosures are detailed in the consolidated financial statements and notes.
U.S. government securities, mutual funds, and common stock: fair value is measured using unadjusted quoted prices for identical instruments in an active exchange, representing Level 1 inputs.
Preferred stocks, municipal securities, corporate securities, and miscellaneous: fair value is measured using a pricing model with market-based inputs such as trades in illiquid markets for specific securities or active markets for similar securities.
The pricing model for preferred, municipal, corporate, and miscellaneous securities considers benchmark yields, issuer spreads, security terms and conditions, and other market data, representing Level 2 fair value inputs.
Commercial mortgage-backed securities, residential mortgage-backed securities, and other asset-backed securities: fair value is measured using a pricing model with market-based inputs including dealer quotes, market spreads, and yield curves.
The model for mortgage-backed and other asset-backed securities may evaluate individual tranches by determining cash flows using security terms, collateral performance, credit information, benchmark yields, and estimated prepayments, representing Level 2 fair value inputs.
Fixed maturity securities, available for sale classified as Level 3: includes corporate securities and other asset-backed securities managed by an independent asset manager and priced by an independent provider.
The provider estimates the value of these securities using the discount net present value of cash flows method with 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, representing Level 3 fair value inputs.
Mortgage loans have variable interest rates and are collateralized by real property.
Fair value of mortgage loans is determined using the income approach with observable and unobservable (Level 3) inputs.
The unobservable input is the spread applied to a prime rate used to discount cash flows.
This spread represents the incremental cost of capital based on the borrower’s ability to make future payments and the value of collateral relative to the loan balance, and is subject to judgment and uncertainty.
Derivatives, included in other assets, consist of certain exchange-traded options contracts.
Fair values of these options are measured using quoted prices in active markets on the relevant exchange.
The measurement specifically utilizes 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, representing Level 1 inputs.
Tables set forth the Company’s investments and derivatives within the fair value hierarchy as of December 31, 2025 and 2024.
Tables also set forth changes in the fair value of instruments carried at fair value with a Level 3 measurement for the years ended December 31, 2025 and 2024.
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 deemed impaired.
The Company is required to disclose fair values of other financial instruments where practicable to estimate fair value, in addition to those recorded at fair value in the Consolidated Balance Sheets.
Estimated fair value amounts, defined as the quoted market price, are determined using available market information and appropriate valuation methodologies.
Considerable judgment is required for fair value estimates when quoted market prices are unavailable, meaning estimates may not indicate amounts realizable in a current market exchange.
Different market assumptions or estimation methodologies can affect estimated fair value amounts.
Methods and assumptions used for estimating fair value disclosures of other financial instruments are provided.
Fixed maturity securities, held-to-maturity: consists of senior and junior notes with target rates of return.
As of December 31, 2025, fair value for these instruments was determined using the income approach with unobservable (Level 3) inputs.
Investment in RedBird Capital Partners: included in other long-term investments, this is a limited partnership investment in Bishop Street Underwriters, LLC (MGA).
The investment had a fair value of USD 55.6m at December 31, 2025, and USD 28.2m at December 31, 2024, determined using net asset value.
Procedures to assess reasonableness of fair value include obtaining and reviewing audited financial statements.
The unfunded commitment related to the investment was USD 18.3m at December 31, 2025, and USD 24.4m at December 31, 2024.
The Company may sell its interest with appropriate prior written notice and general partner approval.
This investment is measured at fair value using the net asset value per share practical expedient per Accounting Standard Codification 820-10 and is not classified in the fair value hierarchy.
Net earned premiums related to this agreement were USD 41.5m for the year ended December 31, 2025, and USD 2.5m for the year ended December 31, 2024.
Notes payable: carrying value approximates estimated fair value because notes accrue interest at current market rates plus a spread.
Fair value is determined using the income approach with observable (Level 2) inputs.
Subordinated debt: consists of Unsecured Subordinated Notes, due May 24, 2039, with a fixed interest rate.
Fair value is determined using the income approach with observable (Level 2) inputs.
A table sets forth the Company’s carrying and fair values of notes payable and subordinated debt as of December 31, 2025 and 2024.
Other financial instruments qualify as insurance-related products and are specifically exempted from fair value disclosure requirements.

[c. 222; p. 16]

4. Fair Value Measurements
	2025	2024
High	11.10%	8.00%
Low	4.25%	5.70%
Weighted average	6.40%	6.60%

	2025	2024
High	8.34%	10.00%
Low	6.55%	7.00%
Weighted average	7.74%	7.93%

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

December 31, 2024
($ in thousands)	Level 1	Level 2	Level 3	Total
Fixed maturity securities, available-for-sale:
U.S. government securities	26,486	—	—	26,486
Corporate securities and miscellaneous	—	354,815	70,813	425,628
Municipal securities	—	84,716	—	84,716
Residential mortgage-backed securities	—	393,833	—	393,833
Commercial mortgage-backed securities	—	69,364	—	69,364
Other asset-backed securities	—	285,084	7,107	292,191
Total fixed maturity securities, available-for-sale	26,486	1,187,812	77,920	1,292,218
Fixed maturity securities, held-to-maturity:	—	—	—	—
Other asset-backed securities	—	—	38,717	38,717
Total fixed maturity securities, held-to-maturity:	—	—	38,717	38,717
Equity securities:	—	—	—	—
Common stocks	64,251	—	—	64,251
Preferred stocks	—	1,164	—	1,164
Mutual funds	40,839	—	—	40,839
Total equity securities	105,090	1,164	—	106,254
Mortgage loans	—	—	26,490	26,490
Short-term investments	274,929	—	—	274,929
Total	406,505	1,188,976	143,127	1,738,608

($ in thousands)	Fixed Maturity Securities, Available-For-Sale	Mortgage Loans
Balance at December 31, 2024	77,920	26,490
Total gains (losses) for the period recognized in net investment gains (losses)	( 5,180 )	( 7 )
Issuances	—	151
Settlements	—	( 16,732 )
Transfers into Level 3	6,143	—
Purchases	70,730	—
Sales/Disposals	( 1,493 )	—
Total unrealized gains for the period recognized in accumulated comprehensive income (loss)	2,797	—
Balance at December 31, 2025	150,917	9,902
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	—	( 201 )

($ in thousands)	Fixed Maturity Securities, Available-For-Sale	Mortgage Loans
Balance at December 31, 2023	—	50,070
Total gains (losses) for the period recognized in net investment gains (losses)	( 195 )	420
Issuances	—	649
Settlements	—	( 24,649 )
Purchases	77,979	—
Sales/Disposals	( 374 )	—
Total unrealized gains for the period recognized in accumulated comprehensive income (loss)	510	—
Balance at December 31, 2024	77,920	26,490
Total gains for the period recognized in net investment gains (losses) attributable to the change in unrealized gains or losses relating to assets held as of period end	—	411

	2025		2024
($ in thousands)	Carrying Value	Fair Value	Carrying Value	Fair Value
Notes payable
FHLB Loan	57,000	57,458	57,000	56,200
Revolving Credit Facility	114,500	114,500	43,000	43,000
Term Loan Facility	300,000	300,000	—	—
Notes payable	471,500	471,958	100,000	99,200
Subordinated debt	—	—	—	—
Unsecured subordinated notes	19,569	21,020	19,536	20,541
Subordinated debt, net of debt issuance costs	19,569	21,020	19,536	20,541

5. Mortgage Loans

[c. 223; p. 16] Mortgage loan portfolio overview

The Company has invested in Separately Managed Accounts ("SMA1" and "SMA2").
As of December 31, 2025 and 2024, 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..
Loans earn interest at a fixed spread above a prime rate.
Loans mature in approximately 2 to 4 years from loan origination.
Principal amounts of the loans are approximately 64% of the property's appraised value at the time the loans were made.

[c. 224; p. 16] Mortgage loan carrying value and income

The carrying value of the Company's mortgage loans as of December 31, 2025 and 2024 is presented in a table.
The Company's gross investment income for mortgage loans for the years ended December 31, 2025, 2024, and 2023 is presented in a table.

[c. 225; p. 16] Mortgage loan collectibility and foreclosure status

Uncollectible amounts on loans are determined on an individual loan basis through consultations with the Company's specialized investment manager and consideration of adverse situations, estimated collateral value, and other relevant factors.
The Company writes off uncollectible amounts in the period they are determined to be uncollectible.
There was no write-off for uncollectible amounts during the years ended December 31, 2025 and 2024.
As of December 31, 2025 and 2024, no mortgage loans were in the process of foreclosure.
As of December 31, 2025 and 2024, there were no mortgage loans that were not producing income for the previous 12 months.

[c. 226; p. 16]

Mortgage loans by segment
($ in thousands)	2025	2024
Commercial	3,334	8,474
Retail	—	10,032
Hospitality	6,568	7,984
—	9,902	26,490

($ in thousands)	2025	2024	2023
Commercial	432	2,025	2,340
Retail	304	1,853	1,853
Hospitality	886	1,277	1,034
Office	—	—	203
Multi-family	—	—	44
—	1,622	5,155	5,474

6. Equity Method Investments and Other

[c. 227; p. 16] Equity method investments overview

The table presents the carrying value and ownership percentage of the Company’s equity method investments as of December 31, 2025 and 2024.
The table details the components of net investment income (loss) from equity method investments for the years ended December 31, 2025, 2024, and 2023.
The table outlines the unfunded commitment of equity method investments as of December 31, 2025 and 2024.

[c. 228; p. 16] Equity method investment accounting

The difference between an investment's cost and its proportionate share of underlying equity in net assets is allocated to the equity method investment's various assets and liabilities.
The Company amortizes the difference in net assets over the useful life of a similar asset as the underlying equity method investment.
For the investment in RISCOM, a similar asset is agent relationships, and the Company amortizes this difference over a 15-year useful life.
The table compares the Company’s recorded investment in RISCOM to its share of underlying equity as of December 31, 2025 and 2024.
The table compares the Company’s recorded investment in JVM Funds LLC to its share of underlying equity as of December 31, 2025 and 2024.

[c. 229; p. 16] Indirect loans and loan collateral

As of December 31, 2025 and 2024, the Company held indirect investments in collateralized loans and loan collateral through SMA1 and SMA2.
The carrying value of SMA1 and SMA2 as of December 31, 2025 and 2024 is presented in a table.

[c. 230; p. 16]

Carrying Value and Ownership % by Equity Method Investments
($ in thousands)	2025		2024
	Carrying Value	Ownership %	Carrying Value	Ownership %
Arena Special Opportunities Fund, LP units	26,936	14.0%	34,936	15.3%
Arena SOP LP units	—	11.2%	1,474	10.9%
Brewer Lane Ventures Fund II LP units	2,251	2.4%	1,040	2.4%
Dowling Capital Partners LP units	590	5.0%	666	5.0%
Hudson Ventures Fund 2 LP units	5,503	2.5%	4,967	2.5%
JVM Funds LLC units	14,911	10.1%	17,229	10.1%
RISCOM	3,307	20.0%	5,013	20.0%
—	53,498	—	65,325	—

($ in thousands)	2025	2024	2023
Arena SOP LP units	( 1,474 )	( 989 )	( 6,271 )
Arena Special Opportunities Fund, LP units	( 3,163 )	2,375	( 2,880 )
Brewer Lane Ventures Fund II LP	91	( 110 )	( 78 )
Dowling Capital Partners LP units	431	1,463	927
Hudson Ventures Fund II LP units	480	( 153 )	170
JVM Funds LLC	( 541 )	( 1,554 )	( 1,198 )
RISCOM	1,493	1,492	884
Universa Black Swan LP units	—	—	( 988 )
—	( 2,683 )	2,524	( 9,434 )

($ in thousands)	2025	2024
Brewer Lane Ventures Fund II LP units	3,237	4,077
Dowling Capital Partners LP units	386	386
Hudson Ventures Fund 2 LP units	166	397
Red Bird Capital Partners LP units	18,305	24,400
—	22,094	29,260

($ in thousands)	2025	2024
Investment in RISCOM:
Underlying equity	2,292	3,756
Difference	1,015	1,258
Recorded investment balance	3,307	5,013

($ in thousands)	2025	2024
Investment in JVM Funds LLC:
Underlying equity	14,457	16,624
Difference	454	605
Recorded investment balance	14,911	17,229

($ in thousands)	2025	2024
SMA1	15,418	20,296
SMA2	8,449	12,973
Investment in indirect loans and loan collateral	23,867	33,269

7. Variable Interest Entity

[c. 231; p. 16] HSIC-01 Variable Interest Entity

Skyward consolidates Separate Account HSIC-01 ("HSIC-01"), established by Mangrove Risk Solutions Bermuda Ltd. ("Mangrove"), pursuant to GAAP consolidation guidance.
HSIC-01 is a Variable Interest Entity (VIE) for which Skyward is the primary beneficiary.
The VIE's purpose is to hedge price volatility risks of certain insurance products by investing in dairy and livestock commodities.
Skyward directly manages the business, leading it to consider itself the primary beneficiary.
Skyward does not provide performance guarantees and has no other financial obligation to provide funding to HSIC-01, beyond its own capital commitments.
Assets of consolidated variable interest entities, such as HSIC-01, may only be used to settle obligations of those entities.
There is no recourse to the assets of HSIC-01 other than to satisfy associated liabilities.
The table presents the assets of HSIC-01 included in the Consolidated Balance Sheets as of December 31, 2025.
The presented assets only include third-party net assets and exclude intercompany balances, which were eliminated upon consolidation.

[c. 232; p. 16]

7. Variable Interest Entity
($ in thousands)	2025
Assets
Cash and cash equivalents	15,816
Other assets	34,856
Total assets	50,672

8 . Derivatives

[c. 233; p. 16] Derivative use and accounting

The Company uses derivatives in its financial risk management programs to mitigate price risk in certain insurance contracts exposed to commodity price fluctuations (cattle, milk).
A hedging strategy using derivatives (put options, futures) is employed to mitigate revenue volatility and support financial stability.
The primary objective of derivative instruments is to manage exposure to adverse price movements.
Activity in these instruments reflects current market conditions and shifts in risk exposures throughout the year.
The notional value of derivative contracts and the degree of hedged exposure are actively managed and vary based on prevailing pricing in cattle, hogs, and milk markets.
Derivatives are not used for speculative or trading purposes.
All derivative positions support the overall risk transfer objectives of the business.
The Company has not elected hedge accounting for these derivatives.
The net gain (loss) recognized on derivative instruments in economic hedging relationships is presented in "losses and loss adjustment expenses" on the Consolidated Statements of Operations.
For the year ended December 31, 2025, the Company recognized USD 7.9m of pre-tax net gains in losses and loss adjustment expenses.

[c. 234; p. 16]

Derivative assets by notional amount and fair value
($ in thousands)	Derivative Assets
	Notional Amount	Fair Value
Economic hedges	136,800	34,857

9. Allowance for Credit Losses

[c. 235; p. 16] Premiums receivable allowance for credit losses

Tables detailing changes in the allowance for expected credit losses on premiums receivable are provided for the years ended December 31, 2025 and 2024.

[c. 236; p. 16] Reinsurance recoverables credit risk analysis

The Company analyzes credit risk for reinsurance recoverables by monitoring the financial strength rating of its reinsurers from A.M. Best.
The financial strength rating is assessed annually and throughout the year as A.M. Best provides updates.
The Company assesses the adequacy of credit enhancements such as reinsurance payables, letters of credit, and funds held.
A table sets forth the Company’s reinsurance recoverables net of credit enhancements by A.M. Best as of December 31, 2025.

[c. 237; p. 16] Reinsurance recoverables past due and uncollectible allowance

Reinsurance balances are considered past due when they are 90 days past due.
Tables detailing changes in the allowance for estimated uncollectible reinsurance are provided for the years ended December 31, 2025 and 2024.
On January 31, 2025, the Company commuted the LPT with R&Q Re (Bermuda) Ltd. ("R&Q") related to accident years 2018 and prior.
During the year ended December 31, 2024, the Company recognized an uncollectible reinsurance recoverable balance related to the LPT as a net increase of USD 13.6m to the allowance for estimated uncollectible reinsurance, which was subsequently written-off.

[c. 238; p. 16]

Allowance for Estimated Uncollectible Premiums by current period change
($ in thousands)	Premiums Receivable, Net	Allowance for Estimated Uncollectible Premiums
Balance at December 31, 2024	321,641	2,432
Current period change for estimated uncollectible premiums	—	2,351
Write-offs of uncollectible premiums receivable	—	( 2,141 )
Recoveries of amounts previously written off	—	498
Balance at December 31, 2025	544,217	3,140

($ in thousands)	Premiums Receivable, Net	Allowance for Estimated Uncollectible Premiums
Balance at December 31, 2023	179,235	964
Current period change for estimated uncollectible premiums	—	3,235
Write-offs of uncollectible premiums receivable	—	( 1,895 )
Recoveries of amounts previously written off	—	128
Balance at December 31, 2024	321,641	2,432

	2025
A.M. Best Rating	Reinsurance Recoverables, Gross, Amortized Cost	Percent of Total
A- and above	652,178	98.2%
B++ to B+	5,077	0.8
B to B -	28	—
Not rated	6,919	1.0

($ in thousands)	Reinsurance Recoverables, Net	Allowance for Estimated Uncollectible Reinsurance
Balance at December 31, 2024	857,876	2,295
Balance at December 31, 2025	1,119,880	2,295

($ in thousands)	Reinsurance Recoverables, Net	Allowance for Estimated Uncollectible Reinsurance
Balance at December 31, 2023	596,334	2,295
Current period change for estimated uncollectible reinsurance	—	13,585
Write-offs of uncollectible reinsurance recoverables	—	( 13,585 )
Balance at December 31, 2024	857,876	2,295

10. Property and Equipment

[c. 239; p. 16] Property and Equipment Depreciation

Property and equipment components are included within other assets on the Consolidated Balance Sheets.
Depreciation expense related to property and equipment was USD 3.3m for the year ended December 31, 2025.
Depreciation expense related to property and equipment was USD 2.9m for the year ended December 31, 2024.
Depreciation expense related to property and equipment was USD 3.2m for the year ended December 31, 2023.
Depreciation expense is presented in underwriting, acquisition, and insurance expenses on the Consolidated Statements of Operations.

[c. 240; p. 16]

10. Property and Equipment
(in thousands)	2025	2024
Leasehold improvements	3,434	3,056
Equipment	4,750	4,506
Software	39,263	33,972
—	47,447	41,534
Accumulated depreciation	( 32,307 )	( 29,355 )
Total	15,140	12,179

11. Notes Payable & Subordinated Debt

[c. 241; p. 16] FHLB Loan

On August 30, 2024, the Company entered into the FHLB Loan, a 4.5-year term loan with a principal amount of USD 57.0m.
The FHLB Loan requires interest-only payments during its term, with principal due in full at maturity.
The interest rate for the FHLB Loan is fixed at 4.00% over the term.
The FHLB Loan is fully secured by a pledge of specific investment securities of HSIC.
Proceeds from the FHLB Loan were used to fund redemptions of draws on the 2023 Revolving Credit Facility.

[c. 242; p. 16] Term Loan Facility

During Q4 2025, the Company entered into a Term Loan Credit Agreement (the "Term Loan Facility") with a syndicate of banks.
The Term Loan Facility includes a Tranche A DDTL of USD 150.0m and a Tranche B DDTL of USD 150.0m.
The Term Loan Facility was used to fund a portion of the consideration for the acquisition of Apollo Group Holdings Limited ("Apollo") and related transaction fees and expenses.
Amounts drawn bear interest at either term SOFR plus a margin (150 bps to 190 bps) or the base rate plus a margin (50 bps to 90 bps), depending on the Company's debt to capitalization ratio.
SOFR is calculated with a floor of 0.00% and a credit spread adjustment of 0.10%.
The base rate is the highest of (i) the Agent’s prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00%, and (iv) 0%.
The Company pays a fee ranging from 0.20% to 0.35% on average daily undrawn amounts, depending on the 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 USD 150.0m from Tranche A DDTL and USD 150.0m from Tranche B DDTL for the Apollo acquisition on January 1, 2026.
The Term Loan Facility includes customary covenants, such as limitations on additional indebtedness exceeding USD 10.0m and on distributions to stockholders, stock redemptions, repurchases, or retirements upon certain events.
Financial covenants include minimum consolidated net worth, maximum total debt to capitalization, minimum A.M. Best rating, and minimum liquidity.
As of December 31, 2025, the Company was in compliance with all covenants.
The Term Loan Facility is unsecured.
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 exceptions).

[c. 243; p. 16] Revolving Credit Facilities

During Q4 2025, the Company entered into a Credit Agreement (the "Revolving Credit Facility") with a syndicate of banks.
The Revolving Credit Facility is unsecured and initially provided a maximum principal amount of USD 150.0m, which increased to USD 250.0m on the closing date of the Apollo acquisition.
The Company initially drew USD 43.0m to redeem its prior revolving credit facility.
On December 30, 2025, an additional USD 71.5m was drawn for the consideration paid for the Apollo acquisition.
Proceeds from the Term Loan Facility and the Revolving Credit Facility draws are presented net with liabilities on the Consolidated Balance Sheets for the year ended December 31, 2025.
Interest on the Revolving Credit Facility is payable quarterly.
Amounts drawn bear interest at either term SOFR plus a margin (150 bps to 190 bps) or the base rate plus a margin (50 bps to 90 bps), depending on the Company’s debt to capitalization ratio.
SOFR is calculated with a floor of 0.00% and a credit spread adjustment of 0.10%.
The base rate is the highest of (i) the Agent’s prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00%, and (iv) 0%.
The Company pays a fee ranging from 0.20% to 0.35% on average daily undrawn amounts, depending on the debt to capitalization ratio.
The availability period under the Facility terminates 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 of December 31, 2025, the Company was in compliance with all covenants.
In Q1 2023, the Company entered into an agreement for an unsecured revolving credit facility (the "2023 Revolving Credit Facility") of up to USD 150.0m and a letter of credit sub-facility of up to USD 30.0m.
On November 13, 2025, the Company redeemed the 2023 Revolving Credit Facility, paid USD 0.3m of accrued interest, and recognized USD 0.6m of expense for remaining unamortized deferred financing costs.

[c. 244; p. 16] Debentures

In May 2019, the Company issued unsecured subordinated notes (the "Notes") with an aggregate principal amount of USD 20.0m.
Interest on the Notes is fixed at 7.25% for the first 8 years and 8.25% thereafter.
Early retirement of the debt before the 8-year commitment requires all interest payments to be paid in full, plus 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.
Debt related to the Notes is reported on the Consolidated Balance Sheets for December 31, 2025, and 2024, net of debt issuance costs of approximately USD 0.4m and USD 0.5m, respectively.
These deferred financing costs are presented as a direct deduction from the carrying amount of the subordinated debt.

12. Segment

[c. 245; p. 16] Reportable segment overview and CODM

The Company has one reportable segment offering commercial property and casualty products and solutions on a non-admitted (E&S) and admitted basis, predominantly in the United States.
The segment consists of nine distinct underwriting divisions, referred to as "continuing business," with dedicated underwriting leadership and technical staff.
The segment definition is based on how internally reported financial information is reviewed by the Chief Operating Decision Maker (CODM) to analyze performance, make decisions, and allocate resources.
The Company's CODM is the chief executive officer.
The accounting policies of the segment align with those described in Note 1 "Summary of Significant Accounting Policies" of Form 10-K.
The CODM assesses segment performance and allocates resources based on gross written premiums by net underwriting division, underwriting income, and income before income taxes (reported on Consolidated Statements of Operations).
Segment assets are reported on the Consolidated Balance Sheets as total consolidated assets.
Gross written premiums by underwriting division, net underwriting income, and consolidated net income are used to monitor budget versus actual results.
The CODM uses net underwriting income, annualized return on equity, and growth in book value per share for competitive analysis by benchmarking against competitors.
Competitive analysis and monitoring of budgeted versus actual results are used to assess segment performance and establish management's compensation.

[c. 246; p. 16] Segment financial data tables

A table presents gross written premiums by underwriting division for the years ended December 31, 2025, 2024, and 2023.
A table presents reported segment net underwriting income, significant segment expenses, and a reconciliation of net underwriting income to net income for the years ended December 31, 2025, 2024, and 2023.
A table presents return on equity and book value per share for the years ended December 31, 2025, 2024, and 2023.

[c. 247; p. 16]

Gross written premiums by segment
($ in thousands)	2025	2024	2023
Accident & Health	254,102	173,073	151,701
Agriculture and Credit (Re)insurance	346,212	118,070	30,598
Captives	275,694	241,902	167,624
Construction & Energy Solutions	274,318	296,582	299,748
Global Property	178,128	201,796	242,593
Professional Lines	149,231	159,785	154,565
Specialty Programs	322,705	218,407	178,726
Surety	168,148	143,965	106,056
Transactional E&S	197,779	189,669	128,236
Total continuing business	2,166,317	1,743,249	1,459,847
Exited business	( 81 )	( 17 )	( 18 )
Total gross written premiums	2,166,236	1,743,232	1,459,829

($ in thousands)	2025	2024	2023
Underwriting income
Revenues:
Net earned premiums	1,304,505	1,056,722	829,143
Commission and fee income	6,855	6,703	6,064
Total underwriting revenues	1,311,360	1,063,425	835,207
Expenses:	—	—	—
Losses and LAE	795,022	669,809	515,237
Amortization of policy acquisition costs	195,422	149,975	108,514
Other operating and general expenses	181,937	161,782	134,930
Total underwriting expenses	1,172,381	981,566	758,681
Net underwriting income	138,979	81,859	76,526
Reconciliation of net underwriting income to net income:	—	—	—
Net underwriting income	138,979	81,859	76,526
Add:	—	—	—
Net investment income	83,619	80,600	40,340
Net investment gains	22,149	6,342	11,054
Other loss	( 587 )	( 167 )	( 632 )
Less:	—	—	—
Transaction costs	14,019	—	—
Interest expense	7,919	9,496	10,024
Amortization expense	1,636	2,007	1,798
Other expenses	4,162	4,392	5,364
Income before income taxes	216,424	152,739	110,102
Income tax expense	46,396	33,911	24,118
Net income	170,028	118,828	85,984

	2025	2024	2023
Return on equity	18.9%	16.3%	15.9%
Book value per share	24.92	19.79	16.72

13. Income Taxes

[c. 248; p. 16] Income tax expense components

Table sets forth components of the Company’s income tax expense for the year ended December 31, 2025 after adoption of ASU 2023-09.
Table sets forth components of the Company's income tax expense for the years ended December 31, 2024 and 2023 prior to adoption of ASU 2023-09.

[c. 249; p. 16] Effective tax rate reconciliation

Table reconciles the Company's annual effective tax rate to the U.S. Federal statutory tax rate for the year ended December 31, 2025 after adoption of ASU 2023-09.
Table presents required disclosures prior to adoption of ASU 2023-09 and reconciles the statutory U.S. federal income tax rate to the Company’s effective tax rate for continuing operations for the years ended December 31, 2024 and 2023.

[c. 250; p. 16] Income taxes paid

Table presents income taxes paid (net of refunds received) for the year ended December 31, 2025.
The Company paid USD 37.0m and USD 15.8m in federal income taxes during the years ended December 31, 2024 and 2023, respectively.

[c. 251; p. 16] Deferred tax assets and liabilities

Table sets forth the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024.

[c. 252; p. 16] Net operating loss carryforwards and limitations

The Company has federal net operating loss carryforwards of approximately USD 40.3m.
These net operating losses are set to expire beginning in 2032.
The Company is limited on the utilization of USD 40.3m of net operating losses under Internal Revenue Code Section 382 due to an ownership change in 2014.
The 382 limitation is expected to result in an expiration of USD 2.8m (USD 0.6m tax effected) of net operating losses.
In 2025, a valuation allowance was established against the balance expected to expire without utilization.
Out of the total USD 40.3m federal NOL, USD 0.3m (USD 0.1m tax effected) is related to dual consolidated loss that Skyward is not expected to be able to utilize.
The Company also has net operating losses in various state and local jurisdictions of USD 0.9m, which are set to expire between 5 and 20 years or carryforward indefinitely, depending on the jurisdiction.
The Company expects to fully utilize these state and local net operating losses.

[c. 253; p. 16] Valuation allowance changes

Table presents the change in the Company's valuation allowance for the years ended December 31, 2025 and 2024.

[c. 254; p. 16] Tax examinations and uncertain tax positions

The Company’s federal income tax returns for tax years 2022-2024 are subject to examination by the Internal Revenue Service.
As of December 31, 2025, the Company had no provision for uncertain tax positions and no provision for penalties or interest.
Management does not believe there are any uncertain tax benefits that could be recognized within the next twelve months that would impact the Company’s effective tax rate.

[c. 255; p. 16]

Income tax expense (benefit) from continuing operations by United States and Foreign
($ in thousands)	2025
Income from continuing operations before income tax expense
United States	208,763
Foreign	7,661
Total	216,424
Income tax expense (benefit) from continuing operations	—
Current tax expense	—
United States	51,758
U.S. state and local	1,107
Deferred tax benefit related to:	—
United States	( 5,584 )
U.S. state and local	( 885 )
Total income tax expense	46,396

($ in thousands)	2024	2023
Current income tax expense	42,626	14,736
Deferred tax (benefit) expense related to temporary differences	( 8,715 )	9,382
Total income tax expense	33,911	24,118

	2025
($ in thousands)	Amount	Percentage
U.S. federal statutory income tax rate	45,449	21.0%
State income taxes, net of federal benefit (1)	( 508 )	( 0.3 )%
Foreign tax effects	—	—
Bermuda statutory rate differential	( 1,609 )	( 0.7 )%
Effects of other cross-border tax laws	717	0.3%
Change of Valuation Allowance	68	—%
Nondeductible and Nontaxable items	—	—
Nondeductible transaction costs	1,689	0.8%
Other nondeductible and nontaxable items	590	0.3%
Effective tax rate	46,396	21.4%

(1) The following state(s) and/or local jurisdictions make up more than 50% of the state income taxes: Florida.

	2024		2023
($ in thousands)	Amount	Percentage	Amount	Percentage
Income tax expense at federal statutory rate	32,075	21.0%	23,121	21.0%
Tax advantaged investments	( 239 )	( 0.2 )	( 295 )	( 0.3 )
Other	2,075	1.4	1,292	1.2
Total income tax expense	33,911	22.2%	24,118	21.9%

($ in thousands)	2025
United States	49,830
U.S. state and local (1)	1,164
Total income taxes paid	50,994

(1) No single state or jurisdiction accounts for greater than 5% of total taxes paid.

($ in thousands)	2025	2024
Deferred tax assets:
Net operating losses	9,409	9,389
Losses and loss adjustment expenses	21,401	16,967
Unearned premiums	22,775	18,178
Unrealized losses on fixed maturity securities, available-for-sale	—	5,893
Stock options/awards	2,446	2,453
Other	8,933	6,067
Total deferred tax assets before valuation allowance	64,964	58,947
Valuation allowance	( 654 )	( 586 )
Total deferred tax assets	64,310	58,361
Deferred tax liabilities:	—	—
Deferred policy acquisition costs	19,132	15,277
Other long-term investments	2,888	2,625
Section 481(a) adjustment	87	1,391
Unrealized gains on equity securities	7	4,818
Unrealized gains on fixed maturity securities, available-for-sale	3,101	—
Unrealized gains on other investments	5,465	—
Depreciation	2,152	1,426
Other	3,613	2,338
Total deferred tax liabilities	36,445	27,875
Net deferred tax asset	27,865	30,486

($ in thousands)	2025	2024
Balance at beginning of the period	586	586
Increase related to net operating loss	68	—
Balance at the end of the period	654	586

Tax Legislative Update

[c. 256; p. 16] US tax reform impact

The One Big Beautiful Bill Act ("OBBB Act"), which includes broad tax reform provisions, was signed into law in the United States on July 4, 2025.
The OBBB Act did not materially impact the Company's annual effective tax rate in 2025.
No material impact from the OBBB Act is expected on the Company's annual effective tax rate in 2026.

14. Reserves for Losses and Loss Adjustment Expenses

[c. 257; p. 16] Loss and LAE sub-categories

The Company presents its loss development on a consolidated basis.
Net ultimate loss and LAE are evaluated under three sub-categories: multi-line solutions, short-tail/monoline specialty lines, and exited lines.
These disaggregated groupings have more homogeneous risk characteristics with similar development patterns and are generally subject to similar trends.
Short-tail/Monoline Specialty Lines include global property & agriculture, accident & health, surety, and professional lines underwriting divisions.
These are market niches served with monoline solutions that generally have shorter durations for losses to fully develop.
Losses for short-tail/monoline specialty lines are generally reported within a short period from the date of loss, and claims are typically settled and paid within a relatively short timeframe.
Short-tail/monoline specialty lines can be impacted by larger, more complex losses due to factors like difficulty determining actual damages, and legal and regulatory impediments that can extend settlement and payment periods.
Multi-line Solutions include industry solutions, programs, captives, and transactional E&S underwriting divisions.
These are market niches where the Company provides multiple products, most frequently as an integrated solution.
The multi-line solution subcategory is predominantly made up of occurrence liability, including general liability, excess liability, and commercial auto.
Multi-line solutions have a longer duration for losses to fully develop compared to short-tail/monoline specialty lines.
The unique claim characteristics and longer-tail nature of multi-line solutions introduce more uncertainty, as claims can be impacted by changes in regulation, inflation, and other unforeseen factors over time.
Exited lines include all underwriting units that the Company placed in run-off and are presented separately from ongoing lines of business.

[c. 258; p. 16] Reconciliation of unpaid losses and LAE

The following table sets forth the reconciliation of unpaid losses and loss adjustment expenses (“LAE”) as reported in the Consolidated Balance Sheets as of and for the years ended December 31, 2025 and 2024.
For the year ended December 31, 2025, the Company recognized favorable development related to prior years’ loss and loss expense reserves of USD 7.5m.
This favorable development was driven by USD 24.6m in short-tail/monoline specialty lines and USD 5.3m in multi-line solutions.
This was partially offset by USD 22.4m of adverse development in exited lines.
The adverse development in exited lines was primarily attributable to commercial auto and excess over auto in divisions that have been non-renewed or had significantly reduced exposure over the past three years.
This was offset by favorable development in surety and property.
For the year ended December 31, 2024, the Company recognized adverse development related to prior years’ loss and loss expense reserves of USD 25.7m.
This adverse development was primarily related to losses previously subject to the LPT from accident years 2018 and prior.
This included USD 10.1m in multi-line solutions and USD 15.2m in exited lines.
During the year ended December 31, 2023, the Company recognized adverse development related to prior years’ loss and loss expense reserves of USD 10.8m.
Adverse development of USD 11.7m in multi-line solutions was driven by greater than expected severity in auto, general, and excess liability lines of business, primarily from accident years 2020 to 2022.
This adverse development was partially offset by favorable development in short-tail/monoline specialty lines.
The favorable development in short-tail/monoline specialty lines was in the property line of business, primarily from accident years 2021 and 2022.

[c. 259; p. 16]

14. Reserves for Losses and Loss Adjustment Expenses
($ in thousands)	2025	2024	2023
Reserves for losses and LAE, beginning of period	1,782,383	1,314,501	1,141,757
Less: reinsurance recoverable on unpaid claims, beginning of period	( 670,846 )	( 455,484 )	( 435,986 )
Reserves for losses and LAE, beginning of period, net of reinsurance	1,111,537	859,017	705,771
Incurred, net of reinsurance, related to:	—	—	—
Current period	810,375	657,783	505,894
Prior years	( 7,471 )	25,728	10,770
Total incurred, net of reinsurance	802,904	683,511	516,664
Paid, net of reinsurance, related to:	—	—	—
Current period	144,799	136,731	109,937
Prior years	371,913	294,260	253,481
Total paid	516,712	430,991	363,418
Net reserves for losses and LAE, end of period	1,397,729	1,111,537	859,017
Plus: reinsurance recoverable on unpaid claims, end of period	921,165	670,846	455,484
Reserves for losses and LAE, end of period	2,318,894	1,782,383	1,314,501

Short Duration Contract Disclosures

[c. 260; p. 16] Losses and LAE reserves

Losses and LAE reserves represent the Company's best estimate of the ultimate net cost of all reported and unreported losses that are unpaid as of the balance sheet dates.
Estimated reserves for losses and LAE include:
- Accumulation of estimates for claims reported and unpaid prior to the balance sheet dates.
- Estimates (based on projections of relevant historical data) of increases in claims costs for claims already reported.
- Estimates of claims incurred but not reported.
- Estimates of expenses for investigating and adjusting all incurred and unpaid claims.
The Company measures claim counts by incident when determining the cumulative number of reported claims.
Claim counts include all reported claims, even if the Company does not establish a liability for the claim (i.e., reserve for loss and loss adjustment expenses).

Short-tail/Monoline Specialty Lines

[c. 261; p. 16]

Incurred Losses and ALAE, Net of Reinsurance by Accident Year
($ in thousands except number of claims)
Incurred Losses and ALAE, Net of Reinsurance						As of December 31, 2025
	Years Ended December 31,						Reported Claims
Accident Year	2021*	2022*	2023*	2024*	2025	IBNR	Reported Claims
2021	92,780	93,429	92,143	92,134	99,783	1,774	1,656
2022	—	108,299	105,394	104,095	96,874	6,266	2,414
2023	—	—	190,565	191,865	161,222	28,997	5,015
2024	—	—	—	280,147	292,220	99,302	5,819
2025	—	—	—	—	422,528	275,190	5,495
Total	—	—	—	—	1,072,627	—	—
Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	( 528,255 )	—	—
Net reserves for loss and ALAE before 2021	Net reserves for loss and ALAE before 2021	Net reserves for loss and ALAE before 2021	Net reserves for loss and ALAE before 2021	Net reserves for loss and ALAE before 2021	1,570	—	—
Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	545,942	—	—
*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited

($ in thousands)
Cumulative Paid Losses and ALAE, Net of Reinsurance ($ in thousands)
	Years Ended December 31,
Accident Year	2021*	2022*	2023*	2024*	2025
2021	18,447	56,803	67,912	78,439	93,560
2022	—	27,773	64,594	77,150	85,696
2023	—	—	33,795	100,705	114,247
2024	—	—	—	53,691	154,896
2025	—	—	—	—	79,856
Total	—	—	—	—	528,255
*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited

Multi-line Solutions

[c. 262; p. 16]

Incurred losses and ALAE, net of reinsurance by accident year
($ in thousands except number of claims)
Incurred Losses and ALAE, Net of Reinsurance ($ in thousands)											As of December 31, 2025
Accident Year	Years Ended December 31,											Reported Claims
Accident Year	2016*	2017*	2018*	2019*	2020*	2021*	2022*	2023*	2024*	2025	IBNR	Reported Claims
2016	63,223	62,843	62,843	62,643	84,579	84,579	84,829	84,829	85,434	85,098	828	4,744
2017	—	65,332	65,332	64,260	78,166	78,166	78,766	78,766	80,493	79,819	837	5,592
2018	—	—	74,476	74,476	69,319	71,719	73,019	73,019	75,686	72,963	673	5,103
2019	—	—	—	107,432	109,226	112,378	115,530	116,230	116,206	110,564	1,384	6,113
2020	—	—	—	—	113,030	124,076	128,111	132,495	132,125	134,281	4,174	5,542
2021	—	—	—	—	—	156,067	158,891	160,331	160,546	157,006	7,932	6,727
2022	—	—	—	—	—	—	236,909	242,097	242,358	249,317	19,315	8,679
2023	—	—	—	—	—	—	—	306,511	306,511	320,637	96,700	8,468
2024	—	—	—	—	—	—	—	—	353,933	336,197	155,878	7,700
2025	—	—	—	—	—	—	—	—	—	356,590	257,468	6,139
Total	—	—	—	—	—	—	—	—	—	1,902,472	—	—
Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	( 1,162,853 )	—	—
Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	Net reserves for loss and ALAE before 2016	( 189 )	—	—
Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	739,430	—	—
*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited

($ in thousands)
Cumulative Paid Losses and ALAE, Net of Reinsurance ($ in thousands)
	Years Ended December 31,
Accident Year	2016*	2017*	2018*	2019*	2020*	2021*	2022*	2023*	2024*	2025
2016	23,239	42,528	53,352	58,895	69,691	72,544	75,855	77,160	77,760	77,825
2017	—	23,770	41,945	53,093	61,354	67,926	71,109	73,770	75,714	77,177
2018	—	—	26,201	42,568	47,226	58,655	65,635	69,893	70,128	72,429
2019	—	—	—	33,019	50,933	71,053	87,816	99,451	106,765	106,826
2020	—	—	—	—	29,499	60,680	82,236	105,283	121,097	126,965
2021	—	—	—	—	—	37,118	73,293	102,772	125,749	141,539
2022	—	—	—	—	—	—	50,148	114,794	165,854	205,410
2023	—	—	—	—	—	—	—	63,079	122,186	181,636
2024	—	—	—	—	—	—	—	—	58,281	123,488
2025	—	—	—	—	—	—	—	—	—	49,558
Total	—	—	—	—	—	—	—	—	—	1,162,853
*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited

Exited Lines — all lines in runoff

[c. 263; p. 16] Reconciliation of loss development tables

The table below presents the reconciliation of the net incurred and paid loss development tables to the balance sheet reserves for losses and loss adjustment expenses at December 31, 2025 and 2024.
The following table sets forth the historical average annual payout of incurred losses and allocated loss adjustment expenses (claims duration) for short-duration contracts, based on the disaggregated information in the paid loss development tables, net of reinsurance.

[c. 264; p. 16]

Incurred losses and ALAE, net of reinsurance by accident year
($ in thousands except number of claims)
Incurred Losses and ALAE, Net of Reinsurance ($ in thousands)											As of December 31, 2025
	Years Ended December 31,											Reported Claims
Accident Year	2016*	2017*	2018*	2019*	2020*	2021*	2022*	2023*	2024*	2025	IBNR	Reported Claims
2016	93,019	92,996	91,372	93,577	97,301	98,301	100,651	100,651	102,801	104,246	1,851	4,911
2017	—	75,159	79,581	81,785	65,735	68,346	68,646	68,646	70,885	72,682	1,819	4,370
2018	—	—	74,357	68,990	76,506	79,006	84,165	84,165	92,082	91,897	4,093	4,941
2019	—	—	—	87,115	73,635	77,770	79,414	79,572	79,823	86,131	9,773	5,660
2020	—	—	—	—	132,248	136,469	137,835	137,907	137,671	138,320	10,644	4,867
2021	—	—	—	—	—	83,322	91,188	91,323	92,095	97,577	10,676	2,446
2022	—	—	—	—	—	—	12,717	12,240	11,800	14,362	2,025	246
2023	—	—	—	—	—	—	—	—	—	2	1	1
2024	—	—	—	—	—	—	—	—	—	5	5	—
2025	—	—	—	—	—	—	—	—	—	11	11	—
Total	—	—	—	—	—	—	—	—	—	605,233	—	—
Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	Cumulative net paid loss and ALAE from the table below	( 538,304 )	—	—
Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	Net reserves for loss and ALAE before 2015	14,737	—	—
Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	Total net reserves for loss and ALAE	81,666	—	—
*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited

($ in thousands)
Cumulative Paid Losses and ALAE, Net of Reinsurance ($ in thousands)
	Years Ended December 31,
Accident Year	2016*	2017*	2018*	2019*	2020*	2021*	2022*	2023*	2024*	2025
2016	36,592	57,638	70,253	78,070	81,181	87,482	91,556	95,114	97,462	98,831
2017	—	34,176	52,103	51,985	50,545	57,457	62,924	66,498	68,480	69,798
2018	—	—	25,553	60,149	39,870	54,339	67,001	74,604	79,860	82,244
2019	—	—	—	28,636	28,954	30,948	45,696	57,341	65,847	70,367
2020	—	—	—	—	102,725	98,202	102,132	114,543	120,831	124,139
2021	—	—	—	—	—	41,540	57,820	66,012	72,923	81,600
2022	—	—	—	—	—	—	2,155	4,077	9,211	11,325
2023	—	—	—	—	—	—	—	—	—	—
2024	—	—	—	—	—	—	—	—	—	—
2025	—	—	—	—	—	—	—	—	—	—
Total	—	—	—	—	—	—	—	—	—	538,304
*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited

($ in thousands)	2025	2024
Net reserves for losses and ALAE:
Short-tail/Monoline Specialty Lines	545,942	367,226
Multi-line Solutions	739,430	631,065
Exited Lines	81,666	86,689
Reserves for losses and ALAE, net of reinsurance	1,367,038	1,084,980
Reinsurance recoverable on unpaid claims:	—	—
Short-tail/Monoline Specialty Lines	388,276	275,204
Multi-line Solutions	514,393	380,344
Exited Lines	18,496	15,298
Total reinsurance recoverable on unpaid claims	921,165	670,846
Unallocated LAE	30,691	26,557
Reserves for losses and LAE at end of year	2,318,894	1,782,383

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
	Years
	1*	2*	3*	4*	5*	6*	7*	8*	9*	10*
Short-Tail/Monoline Specialty Lines	21.1%	38.1%	10.8%	9.7%	15.2%	N/A	N/A	N/A	N/A	N/A
Multi-line Solutions	23.9%	21.6%	15.6%	13.6%	10.5%	4.8%	1.9%	2.4%	1.3%	0.1%
Exited Lines	27.5%	12.2%	4.9%	9.9%	8.9%	6.8%	4.9%	2.9%	2.0%	1.3%
*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	*Supplementary information and unaudited	—	—	—	—	—	—

15. Commission and Fee Income

[c. 265; p. 16] Skyward Underwriters Agency business

Skyward Underwriters Agency, Inc. ("SUA") is a subsidiary of the Company.
SUA acts as a managing general insurance agent and reinsurance broker.
SUA specializes in property and casualty and accident and health risks in specialty niche markets.
Commission and fee income is primarily generated from SUA for placing insurance policies with third-party insurance or reinsurance companies.

[c. 266; p. 16] Commission and fee income tables

The document presents a table of disaggregated revenues from customer contracts for the years ended December 31, 2025, 2024, and 2023.
The document presents a table of opening and closing balances of contract assets from commission and fee income for the years ended December 31, 2025, 2024, and 2023.

[c. 267; p. 16]

15. Commission and Fee Income
($ in thousands)	2025	2024	2023
SUA commission revenue	8,323	7,967	7,222
SUA fee revenue	2,333	2,443	2,732
Other commission and fee revenue (loss)	1,725	266	( 135 )
Total commission and fee revenue	12,381	10,676	9,819
Commission and fee expenses	( 5,526 )	( 3,973 )	( 3,755 )
Net commission and fee income	6,855	6,703	6,064

($ in thousands)	Contract Assets
Balance at December 31, 2023	976
Balance at December 31, 2024	1,416
Balance at December 31, 2025	953

16. Underwriting, Acquisition and Insurance Expenses

[c. 268; p. 16] Underwriting, acquisition, and insurance expenses components

The table below details the components of underwriting, acquisition, and insurance expenses for the years ended December 31, 2025, 2024, and 2023.

[c. 269; p. 16]

16. Underwriting, Acquisition and Insurance Expenses
($ in thousands)	2025	2024	2023
Amortization of policy acquisition costs	195,422	149,975	108,514
Other operating and general expenses	181,937	161,782	134,930
Total underwriting, acquisition and insurance expenses	377,359	311,757	243,444

17. Reinsurance

[c. 270; p. 16] Reinsurance agreements and recoverables

The Company uses various reinsurance agreements to assume and cede premiums and benefits with other insurance companies.
Reinsurance agreements increase the Company's capacity to write larger risks and maintain loss exposure within its capital resources.
The Company remains obligated for ceded amounts if reinsurers fail to meet their obligations.
Tables detail the effects of reinsurance on written and earned premiums and losses and loss adjustment expenses for the years ended December 31, 2025, 2024, and 2023.
A table outlines the components of reinsurance recoverables and ceded unearned premium as of December 31, 2025 and 2024.

[c. 271; p. 16] Reinsurance security and LPT agreement

The Company has agreements with several reinsurers where funded trust accounts are established with the Company as the sole beneficiary.
These trust accounts provide additional security for collecting claim recoverables under reinsurance contracts.
The Company does not carry these trust accounts on its balance sheet, as it only gains custody upon the reinsurer's failure to pay.
As of December 31, 2025, the market value of these trust accounts was approximately USD 233.5 million.
The trust amount is adjusted periodically by mutual agreement based on claim payments and loss reserve recoverables.
In the first quarter of 2020, the Company entered into an LPT retroactive reinsurance agreement with R&Q.
As of December 31, 2024, the reinsurance recoverable from R&Q was USD 22.7 million.
The LPT was commuted effective January 31, 2025, and the Company received the full reinsurance recoverable balance.

[c. 272; p. 16] Deposit method accounting for reinsurance

Certain ceded reinsurance contracts that transfer only significant timing risk and insufficient underwriting risk are accounted for using the deposit method.
The Company's deposit asset was USD 22.7 million at December 31, 2025, and USD 25.9 million at December 31, 2024.
This deposit asset was included in other assets on the Consolidated Balance Sheets.

[c. 273; p. 16]

17. Reinsurance
	2025		2024		2023
($ in thousands)	Written	Earned	Written	Earned	Written	Earned
Direct premiums	1,684,411	1,622,594	1,458,637	1,375,917	1,241,180	1,155,835
Assumed premiums	481,825	406,792	284,595	282,662	218,649	193,971
Ceded premiums	( 760,004 )	( 724,881 )	( 619,654 )	( 601,857 )	( 549,138 )	( 520,663 )
Net premiums	1,406,232	1,304,505	1,123,578	1,056,722	910,691	829,143
Ceded losses and LAE incurred	—	697,978	—	534,295	—	337,011

($ in thousands)	2025	2024
Ceded unpaid losses and LAE	921,165	670,846
Ceded paid losses and LAE	201,010	166,663
Loss portfolio transfer	—	22,662
Allowance for credit losses	( 2,295 )	( 2,295 )
Reinsurance recoverables	1,119,880	857,876
Ceded unearned premium	238,948	203,901

18. Stock Based Compensation

[c. 274; p. 16] 2022 Long-Term Incentive Plan

On September 23, 2022, the Board of Directors approved the Company’s 2022 Long-Term Incentive Plan (the “2022 Plan”), effective January 12, 2023, replacing the 2020 Plan.
The 2022 Plan allows for granting restricted stock, restricted stock units, performance stock units, stock options, and cash-based performance awards to select employees and non-employee directors.
The 2022 Plan made 3,200,656 shares of common stock available for issuance.
In November 2024, the Compensation Committee approved a program for independent directors to defer settlement of annual restricted stock units (“RSU”) awards to the fifth anniversary of the grant date, the tenth anniversary of the grant date, or separation of service.
This deferral program was available for Directors who elected in 2024 to defer settlement of their 2025 RSU awards, which vest in 2026.

[c. 275; p. 16] Stock options

The grant date fair value of options under the 2022 Plan was determined using the Black-Scholes model, with a contractual term of 10 years less the weighted average service period.
Volatility for the Black-Scholes model was based on historical volatility of comparable publicly traded insurance companies.
Stock options granted to employees during the year ended December 31, 2023, were valued at approximately USD 4.4m based on grant date fair value.
The aggregate intrinsic value of options outstanding was USD 27.4m at December 31, 2025, and USD 27.0m at December 31, 2024.
The weighted-average remaining contractual life of options outstanding at December 31, 2025, was 7.0 years.

[c. 276; p. 16] Restricted stock awards and units

The fair value of restricted stock and restricted stock units under the 2022 Plan for awards granted at the Company’s IPO was the IPO price of USD 15.00 per share.
The fair value of subsequent grants was equal to the closing stock price on the grant date.
Expense for equity-based incentives is based on fair value at grant date and amortized over the vesting period.
Restricted stock and restricted stock units granted to employees and the Board of Directors were valued at approximately USD 12.2m in 2025, USD 8.5m in 2024, and USD 17.7m in 2023, based on grant date fair value.
Board of Directors members were granted 12,579 shares in 2025, 19,453 shares in 2024, and 23,482 shares in 2023, with a service period of one year.
The total fair value of shares vested for employees and Board members was USD 6.0m at December 31, 2025, USD 3.8m at December 31, 2024, and USD 0.5m at December 31, 2023.
As of December 31, 2025, total unrecognized compensation cost for non-vested, stock-based awards was USD 17.4m.
The weighted average period for recognizing this cost is 1.6 years.
The Company recognized stock-based compensation expense of USD 12.0m in 2025, USD 9.4m in 2024, and USD 8.5m in 2023.

[c. 277; p. 16] Employee Stock Purchase Plan (ESPP)

On September 23, 2022, the Board of Directors approved the Company’s 2022 Employee Stock Purchase Plan (the “ESPP”), effective May 15, 2023, and administered by the Compensation Committee.
Under the ESPP, employees can elect to have a percentage of their annual base earnings withheld to purchase common stock at two specified intervals each year.
The purchase price is 85% of the lower of the beginning-of-interval or end-of-interval market price.
The Company has reserved 376,548 common shares under the ESPP.
The grant date fair value of options under the ESPP was determined using the Black-Scholes model, with a term of 6 months (length of time between grant date and exercisable date).
Volatility for the ESPP Black-Scholes model was based on historical volatility of comparable publicly traded insurance companies.
As of December 31, 2025, 141,845 shares had been purchased under the ESPP.
The Company recognized ESPP expense of USD 0.7m in 2025 and USD 0.5m in 2024.
As of December 31, 2025, the fair value of unrecognized ESPP expense was USD 0.3m.

[c. 278; p. 16]

Target Stock and Stock Units by Award Payout Range, Requisite Service Period
	Award Payout Range	Requisite Service Period	Target Stock and Stock Units
Year ended December 31, 2025
Market condition awards	0 %– 150 %	3 years	22,495
Performance condition awards	0 %– 150 %	3 years	59,769
Service condition awards	N/A	1 – 4 years	144,921
—	—	—	227,185
Year ended December 31, 2024	—	—	—
Market condition awards	0 %– 150 %	3 years	32,058
Performance condition awards	0 %– 150 %	3 years	76,881
Service condition awards	N/A	1 – 4 years	124,025
—	—	—	232,964
Year ended December 31, 2023	—	—	—
Market condition awards	0 %– 150 %	3 years	37,622
Performance condition awards	0 %– 150 %	3 years	95,456
Service condition awards	N/A	1 – 4 years	968,778
Stock options	N/A	3 – 4 years	759,990
—	—	—	1,861,846

	Weighted-Average Exercise Price	Stock
Outstanding at January 1, 2025	—	759,990
Forfeited	15.00	( 219 )
Outstanding at December 31, 2025	—	759,771

	Stock
Outstanding at January 1, 2024	759,990
Outstanding at December 31, 2024	759,990

	Weighted-Average Grant-Date Fair Value	Stock and Stock Units
Non-vested at January 1, 2025	19.06	1,325,483
Granted (1)	47.77	254,978
Vested	15.33	( 391,746 )
Forfeited (2)	25.74	( 53,247 )
Non-vested at December 31, 2025	27.06	1,135,468
Non-vested at January 1, 2024	15.13	1,445,449
Granted (1)	31.72	268,631
Vested	13.16	( 285,957 )
Forfeited (2)	18.27	( 102,640 )
Non-vested at December 31, 2024	19.06	1,325,483
Non-vested at January 1, 2023	12.55	419,896
Granted (1)	16.07	1,101,856
Vested	13.39	( 40,645 )
Forfeited (2)	15.29	( 35,658 )
Non-vested at December 31, 2023	15.13	1,445,449

(1) Increases above the 100% target level are reflected as granted in the period after which performance-based stock unit goals are achieved.

(2) Decreases below the 100% target level are reflected as forfeited.

19. Earnings Per Share

[c. 279; p. 16] Earnings per share computation

The computation of basic and diluted net earnings per share is set forth for the years ended December 31, 2025, 2024, and 2023.
Anti-dilutive instruments excluded from the calculation of diluted weighted-average common share equivalents are presented for the years ended December 31, 2025, 2024, and 2023.
Common share equivalents of contingently issuable instruments excluded from basic earnings per share are presented for the years ended December 31, 2025, 2024, and 2023.

[c. 280; p. 16]

Net income by earnings per share
($ in thousands, except for share and per share amounts)	2025	2024	2023
Numerator
Net income	170,028	118,828	85,984
Less: Undistributed income allocated to participating securities	—	—	( 1,677 )
Net income attributable to common stockholders (numerator for basic earnings per share)	170,028	118,828	84,307
Add back: Undistributed income allocated to participating securities	—	—	1,677
Net income (numerator for diluted earnings per share under the two-class method)	170,028	118,828	85,984
Denominator	—	—	—
Basic weighted-average common shares	40,407,310	40,056,475	36,031,907
Dilutive effect of preferred shares	—	—	716,708
Dilutive effect of stock notes	—	—	696,110
Dilutive effect of stock units	897,426	917,510	736,837
Dilutive effect of options	503,310	403,475	135,972
Diluted weighted-average common share equivalents	41,808,046	41,377,460	38,317,534
Basic earnings per share	4.21	2.97	2.34
Diluted earnings per share	4.07	2.87	2.24

	2025	2024	2023
Stock units	104,531	20,346	3,931
Options	242	859	914

	2025	2024	2023
Common shares	—	—	920,864
Total	—	—	920,864

20. Employee Benefit Plan

[c. 281; p. 16] 401(k) Plan contributions

The Company sponsors the 401(k) Plan ("the Plan"), available to substantially all employees.
The Plan is subject to the Employee Retirement Income Security Act of 1974.
The Company matches employee contributions on a discretionary basis.
Company matching contributions to the Plan were USD 3.9m in 2025, USD 3.2m in 2024, and USD 2.9m in 2023.

RISCOM

[c. 282; p. 16] RISCOM agreements and financial impact

RISCOM provides wholesale brokerage services to the Company.
The Company and RISCOM have a managing general agency agreement.
The Company holds a 20% ownership interest in RISCOM.
Net earned premiums and gross commission expense related to these agreements for the years ended December 31, 2025, 2024, and 2023 were as follows:
- Net Earned Premiums:
  - 2025: USD 102.3m
  - 2024: USD 98.7m
  - 2023: USD 95.1m
- Gross Commission Expense:
  - 2025: USD 15.4m
  - 2024: USD 14.8m
  - 2023: USD 14.3m
Premiums receivable as of December 31, 2025, were USD 13.9m.
Premiums receivable as of December 31, 2024, were USD 12.6m.

[c. 283; p. 16]

RISCOM
($ in thousands)	2025	2024	2023
Net earned premium	120,067	108,130	99,736
Commissions	28,728	25,372	24,177

Other

[c. 284; p. 16] Related party transactions

Advisory and professional services fees and expense reimbursements paid to affiliated stockholders and directors were USD 0.6m for the years ended December 31, 2025 and 2024.
Advisory and professional services fees and expense reimbursements paid to affiliated stockholders and directors were USD 3.6m for the year ended December 31, 2023.
Investments involving affiliated companies and additional related party transactions are detailed in Notes 5, 6, and 11.

Litigation

[c. 285; p. 16] Litigation and legal actions

The Company is a party in various legal actions related to claims under insurance policies and contracts.
These actions are considered when estimating losses and loss adjustment expense reserves.
The Company is also a defendant in legal actions concerning bad faith claims, disputes with third parties, or alleged errors and omissions.
Accruals for these items are recorded when losses are probable and reasonably estimable.
Based on current information, insurance coverage, and advice from outside legal counsel, the Company believes the resolution of these matters will not have a material adverse effect on its consolidated financial position, results of operations, or cash flows, individually or in the aggregate.

Indemnification

[c. 286; p. 16] Indemnification for asset sales

The Company has provided indemnifications to certain buyers in conjunction with the sale of business assets and subsidiaries.
These indemnifications cover typical representations and warranties related to performance under sales contracts.
The potential exposure from these indemnifications is difficult to determine due to the variety of matters, operations, and scenarios covered.
Some indemnifications have no time limit.
The Company currently does not believe any significant claims exist related to these indemnifications.

23. Statutory Accounting Principles and Regulatory Matters

[c. 287; p. 16] Statutory financial performance

The Company’s statutory net income was USD 159.1m for 2025, USD 108.2m for 2024, and USD 73.1m for 2023.
The Company’s statutory capital and surplus was USD 872.0m as of December 31, 2025, and USD 710.6m as of December 31, 2024.

[c. 288; p. 16] Insurance company subsidiary restacking

Effective December 31, 2024, the Company restacked its insurance company subsidiaries, making GMIC the lead insurance company.
HSIC became a wholly owned subsidiary of GMIC.
IIC became a wholly owned subsidiary of HSIC.
OSIC became a wholly owned subsidiary of IIC.

[c. 289; p. 16] Dividend restrictions

Dividend payments to the Company from GMIC are restricted by Texas state law, requiring regulatory approval for amounts exceeding certain limits.
The maximum amount of dividends payable by GMIC without prior approval is subject to restrictions related to policyholder surplus, net income, and dividends declared or distributed in the preceding 12 months.
As of December 31, 2025, GMIC, domiciled in Texas, is restricted to paying dividends of the greater of 10% of prior year-end capital and surplus or prior year net income.
GMIC did not declare or pay any dividend during the year ended December 31, 2025.
HSIC did not declare or pay any dividends during the year ended December 31, 2024.

[c. 290; p. 16] Risk Based Capital requirements

Property and casualty insurance companies are subject to Risk Based Capital ("RBC") requirements specified by the National Association of Insurance Commissioners ("NAIC").
RBC requirements determine the amount of capital and surplus based on various risk factors.
As of December 31, 2025 and 2024, GMIC’s statutory capital and surplus substantially exceeded the regulatory requirements.

24. Subsequent Events

[c. 291; p. 16] Apollo Group Holdings Limited acquisition

On September 2, 2025, the Company entered into two share purchase agreements (the "Apollo Majority SPAs") with institutional and management shareholders of Apollo Group Holdings Limited ("Apollo") (the "Majority Sellers").
Pursuant to the Apollo Majority SPAs, the Company agreed to acquire all issued shares of Apollo held by the Majority Sellers, representing approximately 87% of Apollo's issued share capital.
Closing of the transaction ("Closing") was conditioned upon the Company acquiring 100% of Apollo's issued share capital (the “Acquisition”) at Closing through additional short-form share purchase agreements with remaining minority shareholders.
On January 1, 2026, the Company completed the acquisition for aggregate consideration of approximately USD 555.0m, payable in a combination of cash and newly issued shares of the Company’s common stock.
The acquisition closed shortly before the issuance of these consolidated financial statements, so initial accounting under ASC 805 is not yet complete.
The Company is obtaining and evaluating information to determine identifiable assets acquired, liabilities assumed, and any resulting goodwill or intangible assets.
Required purchase accounting disclosures will be provided in future filings once available.

[c. 292; p. 16] Subsequent events evaluation

The Company evaluated subsequent events from December 31, 2025, through the date these consolidated financial statements were issued.
No additional subsequent events requiring disclosure were identified.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

[c. 293; p. 17] Disclosure Controls and Procedures Evaluation

Management, including the principal executive officer and principal financial officer, evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by the Annual Report on Form 10-K.
Disclosure controls and procedures are defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act).
Based on the evaluation, the principal executive officer and principal financial officer concluded that as of December 31, 2025, the disclosure controls and procedures were effective at the reasonable assurance level.
Management acknowledges that controls and procedures can only provide reasonable assurance of achieving their objectives, and judgment is applied in evaluating the cost-benefit relationship of controls and procedures.

Management’s Report on Internal Control over Financial Reporting

[c. 294; p. 17] Management responsibility for internal control over financial reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.
Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.
Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets.
Internal control over financial reporting includes policies and procedures that provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors.
Internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

Remediation of Material Weakness in Internal Control Over Financial Reporting

[c. 295; p. 17] Material weakness in internal control over financial reporting

Management concluded that internal control over financial reporting was not effective as of December 31, 2024, due to material weaknesses.
A material weakness existed related to the ineffective implementation of information technology general controls (ITGCs) in user access for systems supporting financial reporting processes.
Related process-level IT dependent manual and automated controls relying on affected ITGCs or information from IT systems with affected ITGCs were also deemed ineffective.

[c. 296; p. 17] Remediation actions for internal control deficiencies

During the year ended December 31, 2025, management took actions to remediate internal control deficiencies.
Actions included enhancing IT compliance oversight and expanding the team with ITGC design and implementation experience.
A training program addressing ITGCs and policies was developed, educating control owners on principles and requirements.
Procedures were implemented to develop and maintain documentation of underlying ITGCs for knowledge transfer during IT personnel and function changes.
An IT management review and testing procedures were implemented to monitor ITGCs.
Quarterly reporting on remediation measures was provided to the Audit Committee of the board of directors.

[c. 297; p. 17] Conclusion on internal control effectiveness

Management believes the described measures remediated the previously identified material weakness.
Internal control over financial reporting was concluded to be effective at a reasonable assurance level as of December 31, 2025.
The assessment of internal control effectiveness as of December 31, 2025, was conducted under the supervision and participation of senior management, including the CEO and CFO.
The assessment used criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the Internal Control — Integrated Framework (2013 Framework).
Based on this assessment, management concluded internal control over financial reporting was effective as of December 31, 2025.
The effectiveness of internal control over financial reporting as of December 31, 2025, was audited by Ernst & Young, LLP, the Company’s independent registered public accounting firm.

Changes in Internal Control over Financial Reporting

[c. 298; p. 17] Internal control over financial reporting

No change in internal control over financial reporting was identified during the year ended December 31, 2025, except for remediation of a material weakness identified in 2024.
This evaluation was required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act.
The identified changes have not materially affected, nor are they reasonably likely to materially affect, internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

[c. 299; p. 17] Limitations of internal controls

Management acknowledges that disclosure controls and procedures, regardless of design and operation, offer only reasonable assurance of achieving control objectives.
The design of disclosure controls and procedures must consider resource constraints, requiring management to use judgment in assessing benefits against costs.

Other Information

[c. 300; p. 18] Director and officer trading arrangements

During Q4 2025, none of the company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

Directors, Executive Officers and Corporate Governance

[c. 301; p. 19] Proxy statement incorporation

Information required by Item 10 of Form 10-K will be included in the 2026 Proxy Statement and is incorporated by reference.

Executive Compensation

[c. 302; p. 20] Executive compensation disclosure

The information required by Item 11 of Form 10-K will be included in the 2026 Proxy Statement and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters

[c. 303; p. 21] Proxy statement incorporation

Information required by Item 12 of Form 10-K will be included in the 2026 Proxy Statement and is incorporated by reference.

Certain Relationships and Related Transactions, and Director Independence

[c. 304; p. 22] Proxy statement incorporation

Information required by Item 13 of Form 10-K will be included in the 2026 Proxy Statement and is incorporated by reference.

Principal Accounting Fees and Services

[c. 305; p. 23] Independent Registered Public Accounting Firm

Our independent registered public accounting firm is Ernst & Young LLP, Houston, Texas.
Auditor Firm ID: 42.
The information required by Item 14 of Form 10-K will be included in our 2026 Proxy Statement and is incorporated herein by reference.

Exhibits, Financial Statement Schedules.

[c. 306; p. 24] Financial statements included in Form 10-K

The following consolidated financial statements of the Company are filed as part of this Form 10-K and are included in Item 8:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2025 and 2024
Consolidated Statements of Operations and Comprehensive Income (loss) for the three years in the periods ended December 31, 2025, 2024 and 2023
Consolidated Statements of Stockholders’ Equity for the three years in the period ended December 31, 2025, 2024 and 2023
Consolidated Statements of Cash Flows for the three years in the period ended December 31, 2025, 2024 and 2023

[c. 307; p. 24] Listing of exhibits

(a)(2)
(a)(3) LISTING OF EXHIBITS
Items marked with an asterisk (*) are filed herewith.
Management contract or compensatory plan or arrangement.

[c. 308; p. 24]

Schedule description by schedule number
Schedule Number	Schedule Description	Page
I.	Summary of Investments — Other Than in Related Parties at December 31, 2025	113
II.	Financial Information of Registrant (Parent Company) for the years ended December 31, 2025, 2024 and 2023	114
IV.	Supplementary Reinsurance Information for the years ended December 31, 2025, 2024, and 2023	118
V.	Valuation and Qualifying Accounts for the years ended December 31, 2025, 2024, and 2023	119
VI.	Supplementary Information Concerning Property — Casualty Insurance Operations for the years ended December 31, 2025, 2024, and 2023	120

Exhibit Number	Exhibit Description
3.1	Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on January 18, 2023).
3.2	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the Commission on January 18, 2023).
4.1	Amended and Restated Stockholders’ Agreement, dated March 12, 2014, by and among the Company and the stockholders listed therein (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
4.2	Description of Capital Stock (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 28, 2023).
10.1+	Share Purchase and Award Agreement and form of agreements thereunder in use before 2016 (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
10.2+	2016 Equity Incentive Program and form of award agreements thereunder (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
10.3+	2020 Long Term Incentive Plan and form of award agreements thereunder (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
10.4+	Skyward Specialty Insurance Group, Inc. 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
10.5+	Skyward Specialty Insurance Group, Inc. 2022 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
10.6+	Form of Restricted Stock Units Agreement and form of notice under the Company's 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.6 to the Company's Registration Statement on Form S-8, filed with the SEC on January 12, 2023).

Exhibit Number	Exhibit Description
10.7+	Form of Restricted Stock Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.7 to the Company's Registration Statement on Form S-8, filed with the SEC on January 12, 2023).
10.8+	Form of Nonstatutory Stock Option Agreement and form of notice under the Company's 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.8 to the Company's Registration Statement on Form S-8, filed with the SEC on January 12, 2023).
10.9+	Form of Incentive Stock Option Agreement and form of notice under the Company's 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.9 to the Company's Registration Statement on Form S-8, filed with the SEC on January 12, 2023).
10.10+	Form of Performance-Based Restricted Stock Units Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 28, 2023).
10.11+	Performance-Based Restricted Stock Units Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 28, 2023).
10.12+	Performance Unit Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 28, 2023).
10.13+	Amended Form of Performance Share (GBVPS) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
10.14+	Amended Form of Performance Share (Executives) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
10.15+	Amended Form of Performance Share (Others) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
10.16+	Amended Form of Performance Cash Units Agreement under the Company’s Long-Term Incentive Plan. (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
10.17+	Amended Form of the Restricted Stock Unit (Executives) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
10.18+	Amended Form of Restricted Stock Unit (Others) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
10.19+	Amended Form of Long-Term Performance Cash Plan and Award Letter under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
10.20+	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
10.21+	Employment Agreement, dated May 22, 2020, by and between the Registrant and Andrew Robinson, with Amendment No. 1 dated January 1, 2022 (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form S-1, filed with the SEC on November 14, 2022).
10.22+	Form of Non-Employee Director Deferred Restricted Stock Unit Agreement and Form of Notice Under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 3, 2025).
10.23	Commutation and Release Agreement by and among R&Q Re (Bermuda) Ltd., Skyward Re, Houston Specialty Insurance Company, Imperium Insurance Company, and Great Midwest Insurance Company, dated January 31, 2025 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on February 5, 2025).
10.24	Credit Agreement, dated March 29, 2023, by and among Skyward Specialty Insurance Group, Inc., the lenders from time to time party thereto and Truist Bank, as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on April 3, 2023).
10.25	First Amendment dated as of February 26, 2024, to that certain Credit Agreement, dated March 29, 2023, by and among Skyward Specialty Inc., the lenders from time to time party thereto and Truist Bank, as administrative agent (incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).

Exhibit Number	Exhibit Description
10.26	Guaranty Agreement, dated March 29, 2023, by and among Skyward Service Company, Skyward Underwriters Agency, Inc., the loan parties identified on the signature pages thereto and Truist Bank. (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on April 3, 2023).
10.27	Advances and Security Agreement, dated August 1, 2024, by and between Houston Specialty Insurance Company, a wholly owned insurance company subsidiary of the Company and the Federal Home Loan Bank of Dallas (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 6, 2024).
10.28+	Form of Severance Agreement between the Company and executive officers (other than the CEO) (incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 3, 2025).
10.29+	Amendment No. 2 to Employment Agreement between the Registrant and Andrew Robinson dated March 1, 2025 (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 3, 2025).
10.30+	Amended Form of Restricted Stock Unit (Executives) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.21 to the Company’s Registration Statement on Form S-8, filed with the SEC on March 5, 2025).
10.31+	Amended Form of the Restricted Stock Unit (Others) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.22 to the Company’s Registration Statement on Form S-8, filed with the SEC on March 5, 2025).
10.32+	Amended Form of Performance Share (Executives) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.23 to the Company’s Registration Statement on Form S-8, filed with the SEC on March 5, 2025).
10.33+	Amended Form of Performance Share (Others) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.24 to the Company’s Registration Statement on Form S-8, filed with the SEC on March 5, 2025).
10.34+	Amended Form of Performance Share (GBVPS) (Executives) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.25 to the Company’s Registration Statement on Form S-8, filed with the SEC on March 5, 2025).
10.35+	Amended Form of Performance Share (GBVPS) (Others) Agreement under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.26 to the Company’s Registration Statement on Form S-8, filed with the SEC on March 5, 2025).
10.36+	Amended Form of Long-Term Performance Cash Plan and Award Letter under the Company’s 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.27 to the Company’s Registration Statement on Form S-8, filed with the SEC on March 5, 2025).
10.37	Share Purchase Agreement, dated September 2, 2025, by and between Skyward Specialty Insurance Group, Inc. and Apollo institutional shareholders, of Apollo Group Holdings Limited (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 8, 2025).
10.38	Share Purchase Agreement, dated September 2, 2025, by and between Skyward Specialty Insurance Group, Inc. and Apollo management shareholders, of Apollo Group Holdings Limited (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the Commission on September 8, 2025).
10.39	Credit Agreement, dated November 13, 2025, by and between Skyward Specialty Insurance Group, Inc. and Barclays Bank PLC, as Administrative Agent, Truist Securities, Inc., Citizens Bank, N.A. and Texas Capital Bank (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on November 18, 2025).
10.40	Guaranty Agreement, dated November 13, 2025, by and among Skyward Specialty Insurance Group, Inc., Skyward Service Company, Skyward Underwriters Agency, Inc., the loan parties identified on the signature pages thereto and Barclays Bank PLC. Barclays Bank PLC (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on November 18, 2025).
10.41	Term Loan Credit Agreement, dated December 30, 2025, by and among Skyward Specialty Insurance Group, Inc., and Barclays Bank PLC, as Administrative Agent, Truist Securities, Inc., Citizens Bank, N.A. and Texas Capital Bank (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on January 6, 2026).
10.42	Guaranty Agreement, dated December 30, 2025, by and among Skyward Specialty Insurance Group, Inc., Skyward Service Company, Skyward Underwriters Agency, Inc., the loan parties identified on the signature pages and Barclays Bank PLC (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on January 6, 2026).

Exhibit Number	Exhibit Description
10.43	First Amendment, dated December 30, 2025, by and among Skyward Specialty Insurance Group, Inc., Skyward Service Company, Skyward Underwriters Agency, Inc., the loan parties identified on the signature pages and Barclays Bank PLC (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on January 6, 2026).
19	Skyward Specialty Insurance Securities Trading Policy (incorporated by reference to Exhibit 19 to the Company ’ s Annual Report on Form 10-K, filed with the SEC on March 3, 2025).
19.1*	Skyward Specialty Insurance Securities Trading Policy amended November 5, 2025.
21.1*	List of Subsidiaries of the Company
23.1*	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
31.1*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial and Accounting Officer pursuant to Rule 13a 14(a) or Rule 15d 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97	Policy for Recovery of Erroneously Awarded Incentive Compensation (“Clawback Policy”) (incorporated by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024).
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104	Cover Page Interactive Date File (embedded within the Inline XBRL document)

Schedule I — summary of investments — other than in related parties

[c. 309; p. 24]

Schedule I — summary of investments — other than in related parties
($ in thousands)	Cost	Fair Value (if applicable)	Amount on Balance Sheet
December 31, 2025
Fixed maturity securities, available for sale:
U.S. government securities	44,190	44,468	44,468
Corporate securities and miscellaneous	632,244	636,387	636,387
Municipal securities	102,691	102,116	102,116
Residential mortgage-backed securities	487,145	486,587	486,587
Commercial mortgage-backed securities	72,631	73,050	73,050
Other asset-backed securities	509,854	513,695	513,695
Total fixed maturity securities, available for sale	1,848,755	1,856,303	1,856,303
Fixed maturity securities, held to maturity:	—	—	—
Other asset-backed securities	33,290	33,603	32,822
Total fixed maturity securities, held to maturity	33,290	33,603	32,822
Equity securities:	—	—	—
Preferred stocks	1,138	1,174	1,174
Total equity securities	1,138	1,174	1,174
Mortgage loans	10,093	9,902	9,902
Other long-term investments	37,290	58,650	58,650
Short-term investments	264,299	264,299	264,299
Total	2,194,865	2,223,931	2,223,150

Balance sheets (parent company)

[c. 310; p. 24]

Assets and liabilities by December 31
	December 31,
($ in thousands)	2025	2024
Assets
Investments:
Investment in subsidiaries	1,076,288	853,670
Short-term investments, at fair value	14,513	14,000
Total investments	1,090,801	867,670
Cash and cash equivalents	3,500	2,943
Deferred income taxes	27,865	30,486
Goodwill and intangible assets, net	14,349	12,641
Other assets	10,709	2,905
Total assets	1,147,224	916,645
Liabilities and Stockholders’ Equity	—	—
Liabilities:	—	—
Accounts payable and accrued liabilities	17,680	3,110
Notes payable	100,410	100,000
Subordinated debt, net of debt issuance costs	19,569	19,536
Total liabilities	137,659	122,646
Stockholders’ Equity:	—	—
Stockholders’ equity	1,009,565	793,999
Total liabilities and stockholders’ equity	1,147,224	916,645

(parent company)

[c. 311; p. 24] Financial statement notes

See accompanying notes to financial statements.

[c. 312; p. 24]

Net income by Years Ended December 31
	Years Ended December 31,
($ in thousands)	2025	2024	2023
Revenues:
Net investment income	3,371	3,212	3,822
Net investment gains (losses)	—	963	( 963 )
Other loss	—	( 2 )	( 27 )
Total revenues	3,371	4,173	2,832
Expenses	—	—	—
Operating expenses	7,899	10,632	—
Interest expense	6,762	8,140	9,815
Amortization expense	620	920	313
Other expenses	17,962	9,646	451
Total expenses	33,243	29,338	10,579
Loss before income tax expense	( 29,872 )	( 25,165 )	( 7,747 )
Income tax expense	45,860	33,578	6,808
Loss before equity in earnings of subsidiaries	( 75,732 )	( 58,743 )	( 14,555 )
Equity in undistributed earnings of subsidiaries	245,760	177,571	100,539
Net income	170,028	118,828	85,984

Schedule ii — statements of cash flows (parent company)

[c. 313; p. 24] Financial statement notes

See accompanying notes to financial statements.

[c. 314; p. 24]

Net cash used in operating activities by cash flows from operating activities
	Years Ended December 31,
($ in thousands)	2025	2024	2023
Cash flows from operating activities:
Net income	170,028	118,828	85,984
Adjustments to reconcile net income to net cash used in operating activities	( 175,769 )	( 121,563 )	( 95,947 )
Net cash used in operating activities	( 5,741 )	( 2,735 )	( 9,963 )
Cash flows from investing activities:	—	—	—
Purchase of intangible assets and goodwill	( 2,000 )	—	—
Capital contributions to subsidiaries	( 100 )	—	( 122,800 )
Distributions from investment in subsidiaries	8,500	8,500	6,500
Change in short-term investments	( 513 )	( 3,407 )	( 10,569 )
Net cash provided by (used in) investing activities	5,887	5,093	( 126,869 )
Cash flows from financing activities:	—	—	—
Repayment of stock notes receivable	—	5,561	1,350
Proceeds from long term borrowings	43,411	107,000	50,000
Payments on long term borrowings and trust preferred	( 43,000 )	( 115,000 )	( 50,000 )
Proceeds from equity offerings	—	—	128,887
Proceeds from employee stock purchase plan	—	—	710
Net cash provided by (used in) financing activities	411	( 2,439 )	130,947
Net increase (decrease) in cash and cash equivalents and restricted cash	557	( 81 )	( 5,885 )
Cash and cash equivalents and restricted cash at beginning of year	2,943	3,024	8,909
Cash and cash equivalents and restricted cash at end of year	3,500	2,943	3,024
Supplemental disclosure of cash flow information:	—	—	—
Cash paid for interest	6,149	8,573	10,667

Notes to Financial Statements

[c. 315; p. 24] Intercompany Loan Promissory Note

On September 30, 2024, Skyward Specialty entered into an Intercompany Loan Promissory Note ("the Promissory Note") with Houston Specialty Insurance Company ("HSIC").
Under the Promissory Note, Skyward Specialty borrowed USD 57.0m from HSIC.
Interest on the Promissory Note is payable monthly at a fixed annual interest rate of 4.00%.
The principal of the Promissory Note is due at the maturity date.
There are no prepayment penalties for the Promissory Note.
No collateral was given as security for the payment of the Promissory Note.

[c. 316; p. 24] New subsidiary and Lloyd's corporate membership

During the year ended December 31, 2024, Skyward Specialty provided funds for a new subsidiary, Skyward Specialty No. 1 Limited Company.
Skyward Specialty No. 1 Limited Company is a UK company.
Skyward Specialty No. 1 Limited Company is authorized as a Lloyd’s corporate member to invest in Lloyd’s syndicates.

Financial Instruments Disclosed, But Not Carried, At Fair Value

[c. 317; p. 24] Promissory Note fair value

Notes Payable includes the Promissory Note between Skyward Specialty and HSIC.
Skyward Specialty determined the fair value of the Promissory Note using the income approach with observable inputs.
The Promissory Note is classified as Level 2 in the fair value hierarchy.
The table provides the Company's carrying and fair values of the Promissory Note as of December 31, 2025 and 2024.

[c. 318; p. 24] Insurance-related products fair value exemption

Other financial instruments are exempt from fair value disclosure requirements as they qualify as insurance-related products.

[c. 319; p. 24]

Carrying value and fair value by notes payable
	2025		2024
($ in thousands)	Carrying Value	Fair Value	Carrying Value	Fair Value
Notes payable
Promissory Note	57,000	57,401	57,000	56,300

Schedule iv — reinsurance

[c. 320; p. 24]

Gross amount, Ceded to other companies, Assumed from other companies by Accident & Health, Property & Casualty
	Years Ended December 31,
	2025		2024		2023
($ in thousands)	Accident & Health	Property & Casualty	Accident & Health	Property & Casualty	Accident & Health	Property & Casualty
Gross amount	254,102	1,430,309	173,073	1,285,564	151,702	1,089,478
Ceded to other companies	( 143,811 )	( 616,193 )	( 86,503 )	( 533,151 )	( 79,091 )	( 470,047 )
Assumed from other companies	—	481,825	—	284,595	—	218,649
Net amount	110,291	1,295,941	86,570	1,037,008	72,611	838,080
Percentage of amount assumed to net	—%	37.2%	—%	27.4%	—%	26.1%

Schedule V — valuation and qualifying accounts

[c. 321; p. 24]

Schedule V — valuation and qualifying accounts
($ in thousands)	Valuation Allowance For Deferred Tax Assets	Allowance for Uncollectible Reinsurance Recoverable	Allowance for Uncollectible Premiums Receivable
Balance at January 1, 2023	586	—	629
Cumulative effect of adoption of ASU 2016-13 at January 1, 2023	—	2,295	—
Charged to costs and expenses	—	—	748
Amounts written off	—	—	( 513 )
Recoveries of amounts previously written off	—	—	100
Balance at December 31, 2023	586	2,295	964
Charged to costs and expenses	—	13,585	3,235
Amounts written off	—	( 13,585 )	( 1,895 )
Recoveries of amounts previously written off	—	—	128
Balance at December 31, 2024	586	2,295	2,432
Charged to costs and expenses	68	—	2,351
Amounts written off	—	—	( 2,141 )
Recoveries of amounts previously written off	—	—	498
Balance at December 31, 2025	654	2,295	3,140

Insurance operations

[c. 322; p. 24]

Deferred policy acquisition costs, Reserve for losses and loss adjustment expenses, Unearned premiums by year
	As of and Years Ended December 31,
($ in thousands)	2025	2024	2023
Deferred policy acquisition costs	136,100	113,183	91,955
Reserve for losses and loss adjustment expenses	2,318,894	1,782,383	1,314,501
Unearned premiums	774,035	637,185	552,532
Net earned premium (1)	1,304,505	1,056,722	829,143
Net investment income	83,619	80,686	40,322
Losses and loss adjustment expenses (current year) (1)	810,375	657,783	516,664
Losses and loss adjustment expenses (prior years) (1)(2)	( 7,471 )	25,728	—
Amortization of policy acquisition costs (1)	195,422	149,975	108,514
Paid claims and claim adjustment expenses (1)	516,712	430,991	363,418
Net premiums written (1)	1,406,232	1,123,578	910,691
Ceded unearned premium	238,948	203,901	186,121
Deferred ceding commission	46,453	40,434	37,057

(1) Amount is presented net of reinsurance.

(2) Amount does not include gain on retroactive reinsurance which is included in losses and loss adjustment expenses presented on the Consolidated Statements of Operations.

SIGNATURES

[c. 323; p. 24] Securities Exchange Act of 1934 compliance

The registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934.
This report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated, pursuant to the requirements of the Securities Exchange Act of 1934.

[c. 324; p. 24]

SIGNATURES
	Skyward Specialty Insurance Group, Inc.
Dated: March 2, 2026	/s/ Andrew Robinson
—	Andrew Robinson Chairman and Chief Executive Officer

Signature	Title	Date
/s/ Andrew Robinson	Chairman and Chief Executive Officer	March 2, 2026
Andrew Robinson	(Principal Executive Officer)	March 2, 2026
/s/ Mark Haushill	Chief Financial Officer	March 2, 2026
Mark Haushill	(Principal Financial and Accounting Officer)	March 2, 2026
/s/ Gena Ashe	Director	March 2, 2026
Gena Ashe	Director	March 2, 2026
/s/ Robert Creager	Director	March 2, 2026
Robert Creager	Director	March 2, 2026
/s/ Marcia Dall	Director	March 2, 2026
Marcia Dall	Director	March 2, 2026
/s/ James Hays	Director	March 2, 2026
James Hays	Director	March 2, 2026
/s/ Anthony J. Kuczinski	Director	March 2, 2026
Anthony J. Kuczinski	Director	March 2, 2026
/s/ Michael Morrissey	Director	March 2, 2026
Michael Morrissey	Director	March 2, 2026
/s/ Christopher L. Peirce	Director	March 2, 2026
Christopher L. Peirce	Director	March 2, 2026
/s/ Katharine Terry	Director	March 2, 2026
Katharine Terry	Director	March 2, 2026

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   | pages                = 24
   | source_url           = https://www.sec.gov/Archives/edgar/data/1519449/000151944926000015/0001519449-26-000015-index.htm
-  | summary_md           = <!-- ARCHIVE_MD_LINK_HERE -->
+  | summary_md           = File:Skyward-2025-FY-Annual_report.md
   | intro_sentence       = This article summarizes Skyward's Annual report published on 2026-03-02 (24 pages).
   | wide                 = yes