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

| language = English

| source_url = https://www.sec.gov/Archives/edgar/data/1519449/000151944926000015/0001519449-26-000015-index.htm

| intro_sentence = This article presents Skyward's FY 2025 annual report — the narrative Items (each summarized into a factsheet), primary financial statements, and note schedules from its SEC Form 10-K.

}}

== Business ==

 

 

* Skyward Specialty was formed as a Delaware corporation on January 3, 2006, as an insurance holding company ^{p. 1}.

* All insurance company subsidiaries are group rated and have financial strength ratings of "A" (Excellent) from A.M. Best Company, with a stable outlook ^{p. 1}.

 

 

* 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") ^{p. 2}.

* David Ibeson will continue as CEO of Apollo, leading Apollo's growth as a subsidiary of Skyward Specialty, along with Apollo’s management team ^{p. 2}.

 

 

* The company operates with one reportable segment, offering a broad range of insurance coverages across various market niches ^{p. 3}.

* The company strives for excellence in risk selection, pricing, and claims outcomes, amplified by advanced technology and analytics ^{p. 3}.

 

 

* The company focuses on profitable niches in the market that require technical underwriting and claims management, which act as barriers to entry ^{p. 4}.

* Executive leadership has additional long-term incentive targets directly tied to growth in book value per share ^{p. 4}.

 

 

* The company's "Rule Our Niche" strategy aims to generate best-in-class underwriting profitability within its niches and create superior long-term shareholder value through growth in book value per share ^{p. 5}.

* Loss reserves represent the company's best estimate of ultimate losses ^{p. 5}.

 

 

* The company's marketing and distribution approach mirrors its underwriting strategy and is central to its "Rule Our Niche" strategy ^{p. 6}.

* This distribution approach enables effective and efficient access to targeted business based on market niche needs and dynamics ^{p. 6}.

 

 

* The company's underwriting approach is central to its "Rule Our Niche" strategy and market success ^{p. 7}.

* Underwriting controls and procedures are regularly reviewed to ensure underwriters profitably underwrite in each market served ^{p. 7}.

 

 

* Skyward's claims department operates under six guiding principles: prompt and comprehensive investigations using advanced analytics and technology; quality claims handling and customer engagement; timely establishment of reserves based on best estimates; effective pursuit of contribution and subrogation; detection and prevention of fraud; and disciplined litigation management for superior legal defense and cost monitoring ^{p. 8}.

* Managers and adjusters collaborate closely with underwriting partners to inform them of legal trends and emerging claims issues, educating underwriters on loss experience for risk selection ^{p. 8}.

 

 

* Technology is central to Skyward Specialty Insurance Group's operations and decision-making, aiming for long-term competitive advantages ^{p. 9}.

* The company constantly reviews its security breach posture and regularly implements updated processes, best practices, and tools ^{p. 9}.

 

 

* The company strategically purchases reinsurance from third parties to protect capital from severity events (large single event losses or catastrophes) and reduce earnings volatility ^{p. 10}.

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* ''ERM'' is embedded in nearly every aspect of the company and guides day-to-day activities ^{p. 11}.

* ''ERM'' is a central component of the strategy to achieve market-leading risk-adjusted returns for shareholders and reinforce a culture of accountability, transparency, and sound judgment ^{p. 11}.

 

 

* Reserves are maintained for specific claims incurred and reported, IBNR reserves, and uncollectible reinsurance ^{p. 12}.

* 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” ^{p. 12}.

 

 

* The company aims to maintain a balanced investment portfolio primarily consisting of investments that provide predictable and stable returns ^{p. 13}.

* For further discussion on investments, including market risks, refer to Item 7 of Form 10-K, "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Investments" ^{p. 13}.

 

 

* The specialty lines property & casualty insurance market comprises numerous markets and sub-markets ^{p. 14}.

* 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. ^{p. 14}.

 

 

* Operations are conducted principally through four insurance companies: Great Midwest Insurance Company (GMIC), Houston Specialty Company (HSIC), Imperium Insurance Company (IIC), and Oklahoma Specialty Insurance Company (OSIC) ^{p. 15}.

[[File:Skyward-2025-FY-Annual report-skwd-20251231_g1.jpg|thumb|Our Structure]]

 

 

* ''Skyward Specialty Insurance Group, Inc.'' has an "A" (Excellent) rating with a stable outlook from A.M. Best ^{p. 16}.

* ''Ratings'' are based on factors relevant to policyholders, agents, insurance brokers, and intermediaries, and are not specifically related to securities issued by the company ^{p. 16}.

 

 

* The company is regulated by insurance regulatory authorities in the states where it conducts business ^{p. 17}.

* Insurance company regulation is constantly changing due to governmental agency and legislative reactions to issues ^{p. 17}.

* Some state legislatures have considered or enacted laws that increase state authority to regulate insurance companies and holding company systems, often as a protection against federal involvement ^{p. 17}.

* The company operates as an insurance holding company system ^{p. 17}.

* The company is subject to insurance holding company laws in Texas, where its primary insurance companies are domiciled, and Oklahoma ^{p. 17}.

* These statutes require each insurance company in the system to register with the insurance department of its state of domicile ^{p. 17}.

* All transactions among members of a holding company system must be fair and reasonable ^{p. 17}.

* Notice to or prior approval from the applicable state insurance regulator is generally required for any material or extraordinary transaction ^{p. 17}.

 

 

* The company has applied for various ''trademark registrations'' in the United States at both federal and state levels ^{p. 18}.

* The company monitors its ''trademarks and service marks'' and protects them from unauthorized use as necessary ^{p. 18}.

 

 

* As of ''December 31, 2025'', the company had approximately ''611 employees'' ^{p. 19}.

* Such events could lead to a decline in the common stock price, potentially resulting in a loss of part or all of an investment ^{p. 20}.

 

 

* ''Financial condition and results of operations'' could be materially adversely affected by inaccurate assessment of underwriting risk ^{p. 21}.

* ''Integration of Apollo'' may present unforeseen challenges, including difficulties with technology systems, business processes, and risk management frameworks, potentially causing operational disruptions, increased costs, or delays in realizing anticipated strategic benefits ^{p. 21}.

 

 

* ''Underwriting success'' depends on accurately assessing risks and establishing appropriate premium rates; misunderstanding risks or employee decisions exposing the company to risk could adversely affect financial results ^{p. 22}.

* ''These risks'' could prevent hedging strategies from effectively reducing volatility and materially adversely impact financial results ^{p. 22}.

 

 

* Adverse economic factors like recession, inflation, high unemployment, or lower economic activity can reduce policy sales, increase claim frequency, lead to premium defaults, or cause claim falsification, impacting growth and profitability ^{p. 23}.

* Sales could result in significant realized losses depending on general market conditions, interest rates, and credit issues with individual securities ^{p. 23}.

 

 

* The company is subject to extensive regulation, and non-compliance can lead to penalties like fines and suspensions, adversely affecting financial condition and results of operations ^{p. 24}.

* These requirements may discourage acquisition proposals and delay, deter, or prevent a change of control, even if desirable to some stockholders ^{p. 24}.

 

 

* ''Future capital requirements'' depend on factors such as the ability to write new business successfully and establish adequate premium rates and reserves to cover losses ^{p. 25}.

* The ''current credit market environment'' and macro-economic challenges may adversely impact the ability to borrow sufficient funds or sell assets/equity to repay existing debt ^{p. 25}.

 

 

* Loss of key personnel or inability to attract and retain qualified personnel could adversely affect the company ^{p. 26}.

* The pool of talent for recruitment is limited and fluctuates based on market dynamics, potentially leading to increased compensation expectations and difficulty in retaining/recruiting key personnel ^{p. 26}.

* Failure to retain or attract talented personnel could prevent the company from maintaining its competitive position in specialized markets, impacting results of operations ^{p. 26}.

* Events like natural catastrophes, terrorist attacks, industrial accidents, computer viruses, and cyber-attacks can cause system failures or inaccessibility ^{p. 26}.

* Future cybersecurity events could lead to operational disruptions, unauthorized access to proprietary or customer data, legal claims, regulatory scrutiny, reputational damage, and increased costs ^{p. 26}.

* Competitive position may be harmed if competitors leverage AI solutions more quickly or effectively ^{p. 26}.

* The company may not be able to manage its growth effectively ^{p. 26}.

* Future business growth may require additional capital, systems development, and skilled personnel ^{p. 26}.

* Anticipated benefits from acquisitions, such as revenue growth, operational efficiencies, or synergies, may not be realized ^{p. 26}.

* The company has experienced rapid growth in recent years, but these rates may not be indicative of future growth ^{p. 26}.

* Failure to accomplish these objectives makes forecasting future results difficult ^{p. 26}.

* Historical growth rate should not be considered indicative of future performance and may decline ^{p. 26}.

* The acquisition of Apollo was completed on January 1, 2026 ^{p. 26}.

* Litigation costs and settlement amounts can be inflated even when cases do not reach judgment ^{p. 26}.

* Failure to properly assess and understand risks and costs in third-party relationships could materially and adversely affect financial condition and results of operations ^{p. 26}.

* Efforts to enforce intellectual property rights may face defenses, counterclaims, and countersuits ^{p. 26}.

* Failure to secure, protect, and enforce intellectual property rights could adversely affect the brand and business ^{p. 26}.

 

 

* The company expects to incur increased costs as a public company and its management devotes substantial time to compliance initiatives ^{p. 27}.

* The number of holders of record does not represent the total number of stockholders due to shares being held by brokers and other institutions on behalf of stockholders ^{p. 31}.

 

 

* Information regarding equity compensation plans will be included in the definitive proxy statement filed with the SEC for the 2026 Annual Meeting of Stockholders ("2026 Proxy Statement") ^{p. 32}.

* Part III of the document contains information on securities authorized for issuance under equity compensation plans ^{p. 32}.

 

 

* ''Unregistered securities'' information is provided for the period covered by this Annual Report on Form 10-K ^{p. 33}.

* The payment also included the issuance of ''3,679,332 unregistered shares'' of the Company’s common stock ^{p. 33}.

 

 

* The performance graph compares the cumulative total shareholder return of an investment in Skyward Specialty Insurance Group common stock, the Nasdaq Composite Index, and the Nasdaq Insurance Index ^{p. 34}.

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

 

 

* The company is a specialty insurance provider of commercial P&C products and solutions, primarily in the United States, on both non-admitted (E&S) and admitted bases ^{p. 35}.

* As of ''December 31, 2025'', the company recognized ''$14.0 million'' in transaction expenses related to the acquisition ^{p. 35}.

 

 

* ''Net income'' was USD 100.0m for the year ended December 31, 2025, compared to USD 100.0m for the year ended December 31, 2024 ^{p. 36}.

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* The provided text indicates that tables are available for reconciliation of ''adjusted operating income'' to net income for the years ended December 31, 2025 and 2024 ^{p. 37}.

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* ''Gross written premiums'' increased by USD 423.1m YoY compared to 2024 ^{p. 38}.

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* ''Fixed income portfolio'' primarily consists of investment grade fixed income securities, predominantly highly-rated and liquid bonds, and commercial mortgage loans ^{p. 39}.

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* ''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 ^{p. 40}.

* For a reconciliation between actual federal income tax expense and the amount computed at the 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 ^{p. 40}.

 

 

* The company is organized as a holding company, with operations primarily conducted by wholly-owned insurance subsidiaries GMIC, HSIC, IIC (domiciled in Texas), and OSIC (domiciled in Oklahoma) ^{p. 41}.

* Management believes there is sufficient liquidity to meet operating cash needs, obligations, and committed capital expenditures for the next 12 months ^{p. 41}.

 

 

* The most significant source of cash is from premiums received from insureds, typically at the beginning of the coverage period, net of related commission ^{p. 42}.

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* ''FHLB Loan'' was entered into on August 30, 2024, with the Federal Home Loan Bank of Dallas (FHLB) ^{p. 43}.

* ''Deferred financing costs'' are presented as a direct deduction from the carrying amount of the subordinated debt ^{p. 43}.

 

 

* In ''October 2024'', the Board of Directors approved a share repurchase program. ^{p. 44}

* As of ''December 31, 2025'', no shares had been repurchased under this plan. ^{p. 44}

 

 

* ''Reserves for losses and LAE'' represent the best estimate of the ultimate cost of settling reported and unreported claims and related expenses ^{p. 45}.

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* Critical accounting estimates are those important to portraying financial condition and results of operations and require significant judgment ^{p. 46}.

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* In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures (Topic 740)" ^{p. 47}.

== Financial Statements ==

 

 

* ''Opinion'': The consolidated financial statements present fairly, in all material respects, the financial position of Skyward Specialty Insurance Group, Inc. and its subsidiaries as of December 31, 2023 and 2022, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles ^{p. 49}.

* ''Date'': February 28, 2024 ^{p. 49}.

 

 

* ''Internal control over financial reporting'' of Skyward Specialty Insurance Group, Inc. and subsidiaries was audited as of December 31, 2025 ^{p. 50}.

* The ''report dated March 2, 2026'' expressed an unqualified opinion on the consolidated financial statements and related notes and schedules ^{p. 50}.

 

 

* The Company's 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 ^{p. 51}.

* The auditor believes their audit provides a reasonable basis for their opinion ^{p. 51}.

 

 

* ''Internal control over financial reporting'' is a process designed to provide reasonable assurance about the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ^{p. 52}.

| March 2, 2026 |

 

 

* ''Opinion'': The consolidated financial statements present fairly, in all material respects, the financial position of Skyward Specialty Insurance Group, Inc. and its subsidiaries as of December 31, 2023 and 2022, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America ^{p. 53}.

* ''Report Date'': February 29, 2024 ^{p. 53}.

 

 

* The consolidated financial statements of Skyward Specialty Insurance Group, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, and for the three years ended December 31, 2025, have been audited ^{p. 54}.

* The report dated March 2, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting ^{p. 54}.

 

 

* The Company's management is responsible for the financial statements ^{p. 55}.

* The auditors believe their audits provide a reasonable basis for their opinion ^{p. 55}.

 

 

* The critical audit matter discussed arises from the current period audit of the financial statements ^{p. 56}.

* Communicating the critical audit matter does not provide a separate opinion on the matter or its related account/disclosure ^{p. 56}.

 

 

* ''Company’s reserves'' for unpaid losses and loss adjustment expenses (LAE) were USD 2.3bn at December 31, 2025 ^{p. 57}.

| March 2, 2026 |

 

 

* The accompanying notes are an integral part of the consolidated financial statements ^{p. 58}.

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* The accompanying notes are an integral part of the consolidated financial statements ^{p. 59}.

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* The accompanying notes are an integral part of the consolidated financial statements ^{p. 60}.

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* The accompanying notes are an integral part of the consolidated financial statements ^{p. 61}.

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* ''Skyward Specialty Insurance Group, Inc.'' (the "Company") is a Delaware corporation organized in 2006 ^{p. 62}.

* Additional information regarding the acquisition is provided in Note 24 ^{p. 62}.

 

 

* The Company's consolidated financial statements are prepared according to Generally Accepted Accounting Principles in the United States of America (GAAP) ^{p. 63}.

* The Company's actual results may vary from these estimates ^{p. 63}.

 

 

* The Company consolidates an entity if it meets the definition of a variable interest entity (VIE) for which the Company is the primary beneficiary, or if the Company controls the entity through a majority of voting interest or other arrangements ^{p. 64}.

* Further details and required disclosures regarding this VIE are provided in Note 7 ^{p. 64}.

 

 

* ''Cash and cash equivalents'' include cash on hand and fixed maturity securities with original maturities of three months or less ^{p. 65}.

* The carrying value of the Company’s cash and cash equivalents approximates fair value ^{p. 65}.

 

 

* ''Restricted cash'' is cash with a legal restriction on withdrawal or use by the consolidated group ^{p. 66}.

* ''Cash held'' in a depository account for others, or restricted by a state, is recorded as restricted cash ^{p. 66}.

 

 

* ''Available for Sale fixed maturities'' are carried at fair value ^{p. 67}.

* ''Net investment gains and losses'' are recognized in net income based upon the specific identification method ^{p. 67}.

 

 

* The Company uses ''commodity derivatives'' to assume risk and manage exposures in the insurance industry ^{p. 68}.

* Further details and required disclosures regarding derivatives can be found in ''Note 8'' ^{p. 68}.

 

 

* The Company purchases prospective reinsurance for certain lines of business on a proportional, excess of loss, and facultative basis ^{p. 69}.

* ''Everest Reinsurance Co.'s'' financial strength rating from A.M. Best was A+ at December 31, 2025, and 2024 ^{p. 69}.

 

 

* ''Financial instruments'' that could lead to concentrations of credit risk include cash and cash equivalents, restricted cash, investments, and premiums receivable, excluding reinsurance recoverables ^{p. 70}.

* ''Failure by distribution sources'' to remit premiums could lead to premium write-offs and a corresponding loss of income ^{p. 70}.

 

 

* ''Policy acquisition costs'' include commissions and premium taxes that are directly related to new or renewal business production ^{p. 71}.

* Management determined that no premium deficiency existed as of December 31, 2025, and 2024 ^{p. 71}.

 

 

* ''Goodwill and intangible assets'' are recorded following a business combination ^{p. 72}.

* The Company had ''no goodwill impairment'' for the years ended December 31, 2025, and 2024 ^{p. 72}.

 

 

* ''Property and equipment'' is included in other assets on the Consolidated Balance Sheets ^{p. 73}.

* Depreciation periods range from three to seven years ^{p. 73}.

 

 

* ''Reserves for unpaid losses and loss adjustment expenses (LAE)'' represent the Company's 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 ^{p. 74}.

* If recorded reserves are determined to be more than adequate, it would lead to a reduction in reserves ^{p. 74}.

 

 

* The Company recognizes property and casualty and surety premiums on a pro-rata basis over the policy terms ^{p. 75}.

* ''Unearned premiums'' (direct and ceded) are calculated on a pro-rata basis over the terms of the policies ^{p. 75}.

 

 

* ''SUA commission revenue'' is generated from placing insurance policies on reinsurance programs via a reinsurance broker ^{p. 76}.

* Changes in the estimate of variable consideration for SUA fee income are recognized in the month they occur ^{p. 76}.

 

 

* ''Income tax expense'' is accrued for the tax effects of transactions reported on the consolidated financial statements ^{p. 77}.

* ''Premium tax expense'' is recognized within underwriting, acquisition, and insurance expense on the Consolidated Statements of Operations ^{p. 77}.

 

 

* Fair value for each class of financial instrument is estimated based on the framework established in fair value accounting guidance ^{p. 78}.

* Further details regarding fair value disclosures are in Note 4 ^{p. 78}.

 

 

* The estimated fair value of employee stock options and similar awards is expensed ^{p. 79}.

* Compensation cost for the ESPP is recognized on a straight-line basis over the offering period ^{p. 79}.

 

 

* ''Basic earnings per share'' is calculated using the two-class method ^{p. 80}.

* When ''common share adjustments'' increase earnings per share or reduce loss per share, the effect is anti-dilutive, and diluted net earnings or net loss per share is computed excluding these common share equivalents ^{p. 80}.

 

 

* ''ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740)'' was issued by FASB in December 2023 ^{p. 81}.

* The Company is evaluating the effect of these amendments on its consolidated financial statements ^{p. 81}.

 

 

 

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* ''Fixed maturity securities, held-to-maturity'' at December 31, 2025, consisted entirely of asset-backed securities not due at a single maturity date ^{p. 83}.

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* The Company's financial instruments include assets and liabilities carried at fair value, and those carried at cost or amortized cost but disclosed at fair value ^{p. 84}.

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* The Company invests in ''Separately Managed Accounts'' (SMA1 and SMA2) ^{p. 85}.

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* 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 assets and liabilities ^{p. 86}.

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* Skyward consolidates ''Separate Account HSIC-01'' ("HSIC-01"), established by Mangrove Risk Solutions Bermuda Ltd. ("Mangrove"), pursuant to GAAP consolidation guidance ^{p. 87}.

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* The Company uses derivatives for financial risk management to mitigate price risk in insurance contracts exposed to commodity price fluctuations, specifically cattle and milk ^{p. 88}.

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* The Company analyzes the credit risk of its ''reinsurance recoverables'' by monitoring the financial strength rating of its reinsurers from A.M. Best ^{p. 89}.

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* ''Depreciation expense'' for property and equipment was USD 3.3m for the year ended December 31, 2025 ^{p. 90}.

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* On August 30, 2024, the Company entered into the ''FHLB Loan'' under the Advances and Security Agreement ^{p. 91}.

* These ''deferred financing costs'' are presented as a direct deduction from the carrying amount of the subordinated debt ^{p. 91}.

 

 

* The Company operates with one reportable segment, offering commercial property and casualty products and solutions primarily in the United States on both non-admitted (E&S) and admitted bases ^{p. 92}.

* The Company's CODM is the chief executive officer ^{p. 92}.

* The accounting policies for the segment align with those described in Note 1 "Summary of Significant Accounting Policies" of the Form 10-K ^{p. 92}.

* ''Gross written premiums'' by underwriting division, ''net underwriting income'', and ''consolidated net income'' are used to monitor budget versus actual results ^{p. 92}.

* This competitive analysis and the monitoring of budgeted versus actual results are used to assess segment performance and determine management's compensation ^{p. 92}.

 

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* The Company paid ''federal income taxes'' of USD 37.0m in 2024 and USD 15.8m in 2023 ^{p. 93}.

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* The One Big Beautiful Bill Act ("OBBB Act"), which includes a broad range of tax reform provisions, was signed into law in the United States on July 4, 2025 ^{p. 94}.

* No material impact from the OBBB Act is expected in 2026 ^{p. 94}.

 

 

* The Company evaluates net ultimate loss and LAE under three sub-categories: multi-line solutions, short-tail/monoline specialty lines, and exited lines ^{p. 95}.

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* ''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 ^{p. 96}.

* Claim counts include all claims reported, even if the Company does not establish a liability for the claim (i.e., reserve for loss and loss adjustment expenses) ^{p. 96}.

 

 

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* The provided table reconciles net incurred and paid loss development tables to balance sheet reserves for losses and loss adjustment expenses as of December 31, 2025 and 2024 ^{p. 97}.

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* ''Skyward Underwriters Agency, Inc. (SUA)'' is a subsidiary of the Company ^{p. 98}.

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* ''Underwriting, acquisition and insurance expenses'' were USD 390.0m in 2025, USD 330.0m in 2024, and USD 270.0m in 2023 ^{p. 99}.

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* ''Reinsurance agreements'' are used to assume and cede premiums and benefits with other insurance companies ^{p. 100}.

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* The ''2022 Long-Term Incentive Plan'' (2022 Plan) was approved by the Board of Directors on September 23, 2022, and became effective on January 12, 2023 ^{p. 101}.

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* The table sets forth the computation of ''basic and diluted net earnings per share'' for the years ended December 31, 2025, 2024, and 2023 ^{p. 102}.

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* The Company sponsors the ''401(k) Plan'' (the “Plan”), which is available to substantially all its employees ^{p. 103}.

** ''2023'': USD 2.9m ^{p. 103}

 

 

* ''RISCOM'' provides wholesale brokerage services to the Company ^{p. 104}.

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* ''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 ^{p. 105}.

* For investments involving affiliated companies and additional related party transactions, refer to Notes 5, 6, and 11 ^{p. 105}.

 

 

* The Company is involved in various legal actions stemming from claims under insurance policies and contracts ^{p. 106}.

* Based on current information, available insurance coverage, and advice from legal counsel, the Company believes the resolution of these matters will not individually or in aggregate have a material adverse effect on its consolidated financial position, results of operations, or cash flows ^{p. 106}.

 

 

* The Company has provided ''indemnifications'' to certain buyers in conjunction with the sale of business assets and subsidiaries ^{p. 107}.

* The Company currently ''does not believe'' any significant claims exist related to these indemnifications ^{p. 107}.

 

 

* ''Statutory net income'' was $159.1 million for 2025, $108.2 million for 2024, and $73.1 million for 2023 ^{p. 108}.

* As of December 31, 2025, and 2024, GMIC’s statutory capital and surplus substantially exceeded the regulatory RBC requirements ^{p. 108}.

 

 

* 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") ^{p. 109}.

== Controls and Procedures ==

 

 

* 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 this Annual Report on Form 10-K ^{p. 110}.

* Management acknowledges that any 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 ^{p. 110}.

 

 

* ''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 ^{p. 111}.

* ''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 ^{p. 111}.

 

 

* ''Material weakness'' in internal control over financial reporting was identified as of December 31, 2024, related to ineffective implementation of information technology general controls (ITGCs) in user access for systems supporting financial reporting processes ^{p. 112}.

* During the year ended December 31, 2025, management took actions to remediate control deficiencies ^{p. 112}.

* A training program addressing ITGCs and policies was developed, educating control owners on principles and requirements ^{p. 112}.

* Procedures were implemented to develop and maintain documentation of underlying ITGCs to promote knowledge transfer upon IT personnel and function changes ^{p. 112}.

* Based on this assessment, management concluded that ''internal control over financial reporting'' was effective as of December 31, 2025 ^{p. 112}.

* 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 ^{p. 112}.

 

 

* No change in internal control over financial reporting was identified during the year ended December 31, 2025, in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act, except for the remediation of the material weakness identified in 2024 ^{p. 113}.

* These changes have not materially affected, nor are they reasonably likely to materially affect, the company's internal control over financial reporting ^{p. 113}.

 

 

* Management acknowledges that disclosure controls and procedures, regardless of their design and operation, offer only reasonable assurance of achieving control objectives ^{p. 114}.

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* See accompanying notes to financial statements ^{p. 122}.

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* ''Cash provided by operating activities'' was USD 100,000 for the year ended December 31, 2023 ^{p. 123}.

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* ''Intercompany Loan Promissory Note'' was entered into by Skyward Specialty with Houston Specialty Insurance Company (HSIC) on September 30, 2024 ^{p. 124}.

* ''Skyward Specialty No. 1 Limited Company'' is a UK company authorized as a Lloyd’s corporate member to invest in Lloyd’s syndicates ^{p. 124}.

 

 

* The ''Promissory Note'' between Skyward Specialty and HSIC is included in notes payable ^{p. 125}.

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* This report was signed on behalf of the registrant pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 ^{p. 126}.