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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-Q

__________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ____________ to ____________

Commission file number 001-41591

SKYWARD SPECIALTY INSURANCE GROUP, INC.

(Exact name of registrant as specified in its charter)


Delaware			14-1957288
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

800 Gessner Road, Suite 600 Houston, Texas			77024-4284
(Address of Principal Executive Offices)			(Zip Code)

(713) 935-4800

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01	SKWD	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May 6, 2026, the registrant had 40,543,065 shares of common stock outstanding.

TABLE OF CONTENTS


Form 10-Q	Item and Description	Page
Part I
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 (unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three -Month Periods Ended March 31, 2026 and 2025 (unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three -Month Periods Ended March 31, 2026 and 2025 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Three -Month Periods Ended March 31, 2026 and 2025 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	47
Part II
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
Signatures		54

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	March 31, 2026		December 31, 2025


($ in thousands, except share and per share amounts)	(Unaudited)
Assets
Investments:
Fixed maturity securities, available-for-sale, at fair value (net of allowance for credit losses of $6,500 and $7,000, respectively) (amortized cost of $2,208,212 and $1,848,755, respectively)	$	2,195,107	$	1,856,303
Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of $301 and $468, respectively)	30,094		32,822
Equity securities, at fair value	1,140		1,174
Mortgage loans, at fair value	9,088		9,902
Equity method investments	72,101		77,365
Other long-term investments	50,297		58,650
Short-term investments, at fair value	386,514		264,299
Total investments	2,744,341		2,300,515
Cash and cash equivalents	255,910		168,544
Restricted cash	60,521		30,570
Funds at Lloyd’s	108,846		2,509
Options, at fair value	24,401		34,857
Premiums and commissions receivable, net	830,509		544,217
Reinsurance recoverables, net	1,336,937		1,119,880
Ceded unearned premium	314,850		238,948
Deferred policy acquisition costs and VOBA	193,703		136,100
Deferred tax assets	44,138		27,865
Goodwill and intangible assets, net	473,316		88,040
Other assets	160,005		99,807
Total assets	$	6,547,477	$	4,791,852
Liabilities and stockholders’ equity
Liabilities:
Reserves for losses and loss adjustment expenses	$	2,918,903	$	2,318,894
Unearned premiums	1,014,666		774,035
Deferred ceding commission	49,035		46,453
Reinsurance and premium payables	479,412		279,888
Funds held for others	157,380		128,003
Deferred tax liabilities	68,466		—
Accounts payable and accrued liabilities	148,737		115,034
Notes payable	466,418		100,411
Subordinated debt, net of debt issuance costs	19,577		19,569
Total liabilities	5,322,594		3,782,287
Stockholders’ equity

Common stock, $0.01 par value, 500,000,000 shares authorized, 44,728,087 shares issued and 44,543,065 shares outstanding at March 31, 2026; 40,511,222 shares issued and outstanding at December 31, 2025	484		405
Treasury stock, at cost, 185,022 and 0 shares, respectively	(8,665)		—
Additional paid-in capital	922,311		730,555

Accumulated other comprehensive (loss) income	(6,126)		11,457
Retained earnings	316,879		267,148
Total stockholders’ equity	1,224,883		1,009,565
Total liabilities and stockholders’ equity	$	6,547,477	$	4,791,852

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

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (UNAUDITED)


	Three months ended March 31,
($ in thousands, except share and per share amounts)		2026		2025
Revenues:
Net earned premiums		$	434,007	$	300,366
Underwriting fee income		10,078		—
Commission and fee income		1,527		1,976
Net investment income		27,055		19,422
Net investment gains		3,185		6,750

Other income		15		13
Total revenues		475,867		328,527
Expenses:
Losses and loss adjustment expenses		265,223		187,309
Underwriting, acquisition and insurance expenses		124,614		86,551
Fee‑based service expenses		4,170		—

Interest expense		7,719		1,834
Amortization expense		8,843		337
Other expenses		3,222		1,061
Total expenses		413,791		277,092
Income before income taxes		62,076		51,435
Income tax expense		12,345		9,377
Net income		$	49,731	$	42,058
Comprehensive income
Net income		$	49,731	$	42,058
Other comprehensive (loss) income:
Unrealized gains and losses on investments:
Net change in unrealized (losses) gains on investments, net of tax		(17,217)		12,255
Reclassification adjustment for gains (losses) on securities no longer held, net of tax		502		(182)
Foreign currency translation adjustment		(868)		—
Total other comprehensive (loss) income		(17,583)		12,073
Comprehensive income		$	32,148	$	54,131
Per share data:
Basic earnings per share		$	1.12	$	1.05
Diluted earnings per share		$	1.09	$	1.01
Weighted-average common shares outstanding
Basic		44,463,167		40,196,416
Diluted		45,443,960		41,680,595

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

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)


	Three months ended March 31,
($ in thousands, except share amounts)	2026		2025
Common shares:
Balance at beginning of year	40,511,222		40,127,908
Issuance of shares	4,031,843		274,971
Balance at March 31,	44,543,065		40,402,879
Treasury shares:
Balance at beginning of year	—		—
Shares acquired	185,022		—

Balance at March 31,	185,022		—




Common stock:
Balance at beginning of year	$	405	$	401
Issuance of common stock	79		3


Balance at March 31,	$	484	$	404
Treasury stock:
Balance at beginning of year	$	—	$	—
Treasury stock acquired	(8,665)		—
Balance at March 31,	$	(8,665)	$	—
Additional paid-in capital:
Balance at beginning of year	$	730,555	$	718,598
Issuance of common stock	191,756		2,588


Balance at March 31,	$	922,311	$	721,186




Accumulated other comprehensive loss:
Balance at beginning of year	$	11,457	$	(22,120)
Other comprehensive (loss) income, net of tax	(17,583)		12,073
Balance at March 31,	$	(6,126)	$	(10,047)
Retained earnings:
Balance at beginning of year	$	267,148	$	97,120

Net income	49,731		42,058
Balance at March 31,	$	316,879	$	139,178
Total stockholders’ equity	$	1,224,883	$	850,721

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

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three months ended March 31,
($ in thousands)	2026		2025
Cash flows from operating activities:
Net income	$	49,731	$	42,058




















Adjustments to reconcile net income to net cash provided by operating activities	66,806		54,702
Net cash provided by operating activities	116,537		96,760
Cash flows from investing activities:
Net cash paid in acquisition	(303,035)		—
Purchase of fixed maturity securities, available-for-sale	(269,921)		(126,827)

Purchase of equity securities	—		(8,422)
Purchase of equity method investments and other long-term investments	(283)		(200)

Investment in direct and indirect loans	442		13,829
Proceeds from the sales of (payments for the purchase of) property and equipment	1,654		(202)
Proceeds from the sales of fixed maturity securities, available-for-sale	84,032		8,195
Maturities, calls, transfers and paydowns of fixed maturity securities, available-for-sale	50,210		29,537

Maturities, calls and paydowns of fixed maturity securities held-to-maturity	1,536		2,129
Proceeds from the sales of equity securities	—		8,748
Sales of and distributions from equity method and other long-term investments	13,628		4,396
Change in short-term investments	64,961		(33,162)
Change in receivable/payable for securities	(9,525)		—
Cash provided by deposit accounting	4,457		1,200

Net cash used in investment activities	(361,844)		(100,779)
Cash flows from financing activities:
Proceeds from issuance of common stock	200		—

Proceeds from long term borrowings	371,089		—

Treasury stock acquired	(8,665)		—
Net cash provided by financing activities	362,624		—
Net increase in cash and cash equivalents and restricted cash	117,317		(4,019)
Cash and cash equivalents and restricted cash at beginning of period(1)	199,114		157,525
Cash and cash equivalents and restricted cash at end of period(1)	$	316,431	$	153,506
Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,246	$	1,805

(1) The sum of cash and cash equivalents and restricted cash from the consolidated balance sheets

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

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of Skyward Specialty Insurance Group, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the disclosures required by GAAP for complete consolidated financial statements. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair statement of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2025 was derived from the Company’s audited annual consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates.

Updates to Significant Accounting Policies

The following accounting policies have been updated following the Apollo Group Holdings Limited (“Apollo”) acquisition on January 1, 2026.

Description of Business

Skyward Specialty Insurance Group, Inc. (the “Company”), an insurance holding company, is a Delaware corporation that was organized in 2006. It is a specialty insurance company operating in two segments delivering commercial property and casualty products insurance coverages.

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.

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

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

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Summary of Significant Accounting Policies (continued)

On January 1, 2026, the Company completed its acquisition of Apollo Group Holdings Limited (“Apollo”), a Lloyd’s of London (“Lloyd’s”) specialist insurance and reinsurance group. Apollo includes a Lloyd’s of London Managing Agency, Apollo Syndicate Management Limited (“ASML”), which provides managing agency services to nine Lloyd’s syndicates. Syndicate 1969, underwrites a diversified specialty portfolio, Syndicate 1971 focuses on digital‑economy and technology‑enabled risks, and Syndicate 1972 provides reinsurance for Apollo managed syndicates and provides a quota share facility for Syndicates 1969 and 1971. Apollo participates in its wholly managed syndicates through its corporate member company, Apollo No. 16 Limited (“Apollo No. 16”) which has a quota share agreement in place with Apollo Bermuda Limited.

Commission and Fee Income and Underwriting Fee Income

Managing Agency Fees and Profit Commission

ASML earns a fee for providing managing agency services (such as underwriting oversight, operational administration and regulatory compliance) to the syndicates it manages. These managing agency fees are based on each syndicate’s annual capacity and are recognized over the period of services provided. ASML may also earn profit commission under contractual arrangements with the capital providers to each syndicate. Profit commission is contingent on syndicate profitability and is accrued in accordance with the contractual terms and the subsequent development of underwriting results at the balance sheet date. Amounts are generally not payable until the underlying underwriting results have substantially matured (typically around 36 months after inception), unless interim profit distributions permit earlier payments on account. Intra‑group managing agency fees and profit commission are eliminated on consolidation.

Other Revenue From Management Services

Apollo also earns other services revenue for other administrative and operational services performed for the syndicates it manages, including those supported primarily by third‑party capital providers. Such revenue is measured at the fair value of consideration received or receivable and includes service fees and consortium income. Consortium income represents fees charged to consortia members for whom ASML acts as consortium leader and is recognized at the point in time premiums are written; amounts related to underwriting services provided over multi‑year periods are deferred accordingly.

Foreign Currency

The Company transacts business in numerous currencies through business units located around the world. The functional currency for each business unit is determined by the local currency used for most economic activity in that area. Movements in exchange rates related to transactions in currencies other than a business unit’s functional currency for monetary assets and liabilities are remeasured through the consolidated statements of operations and comprehensive income (loss) in other income (expense), except for currency movements related to available for sale fixed maturities securities, which are excluded from net income (loss) and accumulated in stockholder’s equity, net of deferred taxes.

The business units’ functional currency financial statements are translated to the Company’s reporting currency, U.S. dollars, using the exchange rates at the end of period for the balance sheets and the average exchange rates in effect for the reporting period for the statements of operations and comprehensive income. Gains and losses resulting from translating the foreign currency financial statements, net of deferred income taxes, are excluded from net income and accumulated as a separate component of accumulated other comprehensive income in stockholder’s equity.

Reclassifications

During the current period, the Company reclassified amounts previously included in “Other assets” to separate line items on the balance sheet for “Funds at Lloyd’s” and “Options, at fair value” to better reflect the nature of these balances. Prior period amounts have been reclassified to conform to the current presentation.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2. Goodwill and Intangible Assets

The following tables set forth the carrying amount and changes in the balance of goodwill by reporting unit at March 31, 2026 and 2025:


($ in thousands)	Accident and Health		Credit & Surety		Energy Solutions		Apollo		Other		Total
Goodwill
Gross balance at December 31, 2025	$	91,577	$	6,781	$	10,204	$	—	$	3,879	$	112,441
Accumulated impairment at December 31, 2025	(44,821)		—		—		—		(1,886)		(46,707)
Additions	—		—		—		125,408		—		125,408


Net balance at March 31, 2026	$	46,756	$	6,781	$	10,204	$	125,408	$	1,993	$	191,142


($ in thousands)	Accident and Health		Credit & Surety		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 March 31, 2025	$	46,756	$	6,781	$	10,204	$	1,993	$	65,734

The following tables set forth the carrying amount and changes in the balance of other intangible assets at March 31, 2026 and 2025:


($ in thousands)	Agent Relationships		Non-competes		Trademarks		Syndicate Capacity		Licenses		Total
Other Intangible Assets
Gross balance at December 31, 2025	$	26,491	$	1,117	$	999	$	—	$	14,019	$	42,626
Accumulated amortization at December 31, 2025	(19,203)		(1,117)		—		—		—		(20,320)
Additions	27,000		—		35,000		200,000		—		262,000


Amortization	(1,257)		—		(875)		—		—		(2,132)
Net balance at March 31, 2026	$	33,031	$	—	$	35,124	$	200,000	$	14,019	$	282,174


($ 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)



Amortization	(259)		—		—		—		(259)
Net balance at March 31, 2025	$	6,337	$	—	$	999	$	14,019	$	21,355

The Company’s indefinite lived intangible assets relate to insurance licenses, trademarks and Lloyd’s syndicates capacity. Its finite lived intangible assets, which relate to policy renewals, agency relationships, within agent relationships, finite syndicates capacity relationships and non-compete/exclusivity agreements, within non-competes, have a weighted average useful life of approximately 9 years as of March 31, 2026.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2. Goodwill and Intangible Assets (continued)

The Company recognized approximately $2.1 million and $0.3 million in amortization expense for the three months ended March 31, 2026 and 2025, respectively. The following table sets forth the estimated future net amortization expense of intangible assets:


($ in thousands)
	Amount
Remainder of 2026	$	6,394
Year Ending December 31, 2027	8,525
Year Ending December 31, 2028	8,525
Year Ending December 31, 2029	8,233
Year Ending December 31, 2030	8,025

3. Investments

The following tables set forth the amortized cost and the fair value by investment category at March 31, 2026 and December 31, 2025:


($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
March 31, 2026
Fixed maturity securities, available-for-sale:
U.S. government securities	$	160,144	$	178	$	(774)	$	—	$	159,548
Non U.S government securities	2,696		—		(25)		—		2,671
Corporate securities and miscellaneous	807,859		8,007		(8,881)		(6,500)		800,485
Municipal securities	96,647		1,150		(2,168)		—		95,629
Residential mortgage-backed securities	475,069		6,260		(10,154)		—		471,175
Commercial mortgage-backed securities	79,618		669		(615)		—		79,672
Other asset-backed securities	586,179		3,239		(3,491)		—		585,927
Total fixed maturity securities, available-for-sale	$	2,208,212	$	19,503	$	(26,108)	$	(6,500)	$	2,195,107
Fixed maturity securities, held-to-maturity:
Other asset-backed securities	$	30,395	$	4,196	$	—	$	(301)	$	34,290
Total fixed maturity securities, held-to-maturity	$	30,395	$	4,196	$	—	$	(301)	$	34,290

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Investments (continued)


($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Loss		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

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturity securities by contractual maturity at March 31, 2026:



($ in thousands)	Amortized Cost		Fair Value
Due in less than one year	$	56,515	$	54,611
Due after one year through five years	636,682		630,559
Due after five years through ten years	304,483		305,672
Due after ten years	69,666		67,491
Mortgage-backed securities	554,687		550,847
Other asset-backed securities	586,179		585,927
Total	$	2,208,212	$	2,195,107

Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Also, changing interest rates, tax considerations or other factors may result in portfolio sales prior to maturity.

The Company’s fixed maturity securities, held-to-maturity, at March 31, 2026 consisted entirely of asset backed securities that were not due at a single maturity date.

At March 31, 2026, the Company had U.S. government agencies mortgage-backed fixed maturity securities, with a carrying value of approximately $71.3 million pledged as collateral for a loan (the “FHLB Loan”) from the Federal Home Loan Bank of Dallas (“FHLB”) pursuant to an Advances and Security Agreement between the Company and FHLB (the “Advances and Security Agreement”). In accordance with the terms of the FHLB Loan, the Company retains all rights regarding these pledged securities.

At March 31, 2026, the Company had assets with fair values of approximately $77.5 million pledged as collateral for performance obligations under reinsurance agreements. In accordance with the terms of the trust agreements, the Company retains all rights regarding these securities, of which $63.2 million are residential mortgage-backed securities, $12.1 million of cash and cash equivalents and other assets and $2.2 million of short-term investments.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Investments (continued)

The following tables set forth the gross unrealized losses and the corresponding fair values of investments, aggregated by length of time that individual securities had been in a continuous unrealized loss position as of March 31, 2026 and 2025:


	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
March 31, 2026
Fixed maturity securities, available-for-sale:
U.S. government securities	$	91,541	$	(769)	$	707	$	(5)	$	92,248	$	(774)
Non-U.S. government securities	2,671		(25)		—		—		2,671		(25)
Corporate securities and miscellaneous	341,776		(4,883)		57,293		(3,998)		399,069		(8,881)
Municipal securities	23,170		(296)		19,570		(1,872)		42,740		(2,168)
Residential mortgage-backed securities	130,908		(1,017)		69,744		(9,137)		200,652		(10,154)
Commercial mortgage-backed securities	11,391		(21)		8,276		(594)		19,667		(615)
Other asset-backed securities	328,244		(2,584)		7,783		(907)		336,027		(3,491)




Total	$	929,701	$	(9,595)	$	163,373	$	(16,513)	$	1,093,074	$	(26,108)


	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)

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Investments (continued)

The Company regularly monitors its available-for-sale fixed maturity securities that have fair values less than cost or amortized cost for signs of impairment, an assessment that requires significant management judgment regarding the evidence known. Such judgments could change in the future as more information becomes known, which could negatively impact the amounts reported. Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery.

As of March 31, 2026, the Company had 1,057 lots of fixed maturity securities in an unrealized loss position. The Company does not have an intent to sell these securities and it is not more likely than not that the Company will be required to sell these securities before maturity or recovery of its cost basis. The Company reviewed its investments at March 31, 2026 and determined that for two available-for-sale securities in the “corporate securities and miscellaneous” category, credit impairments existed, based on new recovery analysis that showed deteriorating conditions raising credit concerns. Other than the securities discussed previously, the Company determined that no other credit impairment existed in the gross unrealized holding losses, due to the reasons discussed below:

•U.S. government securities and municipal securities: These securities were issued by the U.S. Treasury Department, Federal government-sponsored entities or by state and local governments. The decline in fair values was attributable to changes in interest rates and not credit quality. The Company does not intend to sell these securities and it is likely that it will not do so before their anticipated recovery. Therefore, the Company does not consider these impaired securities.

•Corporate securities and miscellaneous: Corporations in various industries issued these securities. The decline in fair values was attributable to changes in interest rates and not credit quality. The Company reviewed the issuers of these securities to identify any significant adverse change in financial condition, a change in the quality of credit enhancement (if any), a ratings decrease, or negative outlook assignment from a major credit rating agency, and any failure to make interest or principal payments. After these reviews, the Company determined that the decline in fair values was attributable to changes in interest rates and not credit quality. The Company does not intend to sell these securities and it is likely that it will not do so before their anticipated recovery. Therefore, the Company does not consider these impaired securities.

•Residential mortgage-backed securities, commercial mortgage-backed securities, and other asset-backed securities: The decline in fair values was attributable to changes in interest rates and not credit quality. The Company does not intend to sell these securities and it is likely that it will not do so before their anticipated recovery. Therefore, the Company does not consider these impaired securities.

The following table sets forth the changes in the allowance for credit losses on available-for-sale securities and held-to-maturity securities during the three months ended March 31, 2026 and 2025:


($ in thousands)	Fixed Maturity Securities, Available-For-Sale		Fixed Maturity Securities, Held-to-Maturity
Balance at December 31, 2025	$	7,000	$	468


Recoveries of amounts previously written off	(500)		(167)
Balance at March 31, 2026	$	6,500	$	301


	Fixed Maturity Securities, Held-to-Maturity
Balance at December 31, 2024	$	243
Current period provision for credit losses	7


Balance at March 31, 2025	$	250

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Investments (continued)

The following table sets forth the components of net investment gains for the three months ended March 31, 2026 and 2025:



($ in thousands)	2026		2025
Gross realized gains
Fixed maturity securities, available-for-sale	$	1,632	$	453
Equity securities	—		1,745
Other	175		4
Total	1,807		2,202
Gross realized losses
Fixed maturity securities, available-for-sale	(258)		(120)
Equity securities	—		(678)
Other	(139)		(61)
Total	(397)		(859)
Net unrealized gains (losses) on investments
Equity securities	(33)		1,080
Mortgage loans	99		(66)
Other	1,709		4,393
Net investment gains	$	3,185	$	6,750

The following table sets forth the proceeds from sales of available-for-sale fixed maturity securities and equity securities for the three months ended March 31, 2026 and 2025:



($ in thousands)	2026		2025
Fixed maturity securities, available-for-sale	$	84,032	$	8,195
Equity securities	—		8,748

The following table sets forth the components of net investment income for the three months ended March 31, 2026 and 2025:



($ in thousands)	2026		2025
Income (loss):
Fixed maturity securities, available-for-sale	$	29,411	$	17,288
Fixed maturity securities, held-to-maturity	(1,077)		822
Equity securities	18		617
Equity method investments	(1,297)		(1,988)
Mortgage loans	(665)		661
Indirect loans	(1,793)		(741)
Short-term investments and cash	3,474		3,192
Other	686		1,061
Total investment income	28,757		20,912
Investment expenses	(1,702)		(1,490)
Net investment income	$	27,055	$	19,422

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Investments (continued)

The following table sets forth the change in net unrealized gains (losses) on the Company’s investment portfolio, net of deferred income taxes, included in other comprehensive loss for the three months ended March 31, 2026 and 2025:



($ in thousands)	2026		2025
Fixed maturity securities	$	(21,154)	$	15,284
Deferred income taxes	3,571		(3,211)
Total	$	(17,583)	$	12,073

4. Fair Value Measurements

The Company’s financial instruments include assets and liabilities carried at fair value, as well as assets and liabilities carried at cost or amortized cost but disclosed at fair value in its consolidated financial statements. In determining fair value, the market approach is generally applied, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities.

The Company uses data primarily provided by third-party investment managers or pricing vendors to determine the fair value of its investments. Periodic analyses are performed on prices received from third parties to determine whether the prices are reasonable estimates of fair value. The analyses include a review of month-to-month price fluctuations and, as needed, a comparison of pricing services’ valuations to other pricing services’ valuations for the identical security.

The Company classifies its financial instruments into the following 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 other than quoted prices included in Level 1 that are observable for the asset or liability through

corroboration with market data at the measurement date.

Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in

pricing the asset or liability at the measurement date.

The following methods and assumptions were used in estimating the fair value disclosures for financial instruments in the accompanying consolidated financial statements and in these notes:

U.S. government securities, mutual funds and common stock

The Company uses unadjusted quoted prices for identical instruments in an active exchange to measure fair value which represent Level 1 inputs.

Preferred stocks, municipal securities, corporate securities and miscellaneous

The Company uses a pricing model that utilizes market-based inputs such as trades in an illiquid market for a particular security or trades in active markets for securities with similar characteristics. The model considers other inputs such as benchmark yields, issuer spreads, security terms and conditions, and other market data. These represent Level 2 fair value inputs.

Commercial mortgage-backed securities, residential mortgage-backed securities and other asset-backed securities

The Company uses a pricing model that utilizes market-based inputs that may include dealer quotes, market spreads, and yield curves. It may evaluate individual tranches in a security by determining cash flows using the security’s terms and conditions, collateral performance, credit information benchmark yields and estimated prepayments. These represent Level 2 fair value inputs.

Fixed maturity securities, available for sale classified as Level 3

The Company has corporate securities and miscellaneous, other asset-backed securities that are managed by an independent asset manager and priced by an independent pricing provider. The provider estimates the value of the securities using the discount net present value of cash flows method using 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. This rate represents Level 3 fair value inputs.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. Fair Value Measurements (continued)

The following table sets forth the range of the discount rate as of March 31, 2026 and December 31, 2025:



	March 31, 2026		December 31, 2025
High	11.35	%	11.10	%
Low	4.66	%	4.25	%
Weighted average	6.73	%	6.40	%

Mortgage loans

Mortgage loans have variable interest rates and are collateralized by real property. The Company determines fair value of mortgage loans using the income approach utilizing inputs that are observable and unobservable (Level 3). The unobservable input consists of the spread applied to a prime rate used to discount cash flows. The spread represents the incremental cost of capital based on the borrower’s ability to make future payments and the value of the collateral relative to the loan balance and is subject to judgment and uncertainty.

The following table sets forth the range and weighted average, weighted by relative fair value, of the spread as of March 31, 2026 and December 31, 2025:



	March 31, 2026		December 31, 2025
High	8.09	%	8.34	%
Low	6.54	%	6.55	%
Weighted average	7.67	%	7.74	%

Derivatives

Included in other assets are derivatives which consist of certain exchange traded options contracts entered into by the Company. The fair values of these options are measured using quoted prices in active markets on the relevant exchange, specifically utilizing 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 within that period. This method represents Level 1 inputs.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. Fair Value Measurements (continued)

The following tables set forth the Company’s investments and derivatives within the fair value hierarchy at March 31, 2026 and December 31, 2025:


March 31, 2026
($ in thousands)	Level 1		Level 2		Level 3		Total
Fixed maturity securities, available-for-sale:
U.S. government securities	$	159,548	$	—	$	—	$	159,548
Non U.S government securities	—		2,671		—		2,671
Corporate securities and miscellaneous	—		658,638		141,847		800,485
Municipal securities	—		95,629		—		95,629
Residential mortgage-backed securities	—		471,175		—		471,175
Commercial mortgage-backed securities	—		79,672		—		79,672
Other asset-backed securities	—		568,324		17,603		585,927
Total fixed maturity securities, available-for-sale	159,548		1,876,109		159,450		2,195,107
Fixed maturity securities, held-to-maturity:
Other asset-backed securities	—		—		34,290		34,290
Total fixed maturity securities, held-to-maturity	—		—		34,290		34,290
Equity securities:















Preferred stocks	—		1,140		—		1,140





Total equity securities	—		1,140		—		1,140
Mortgage loans	—		—		9,088		9,088
Short-term investments	386,514		—		—		386,514
Derivatives	24,401		—		—		24,401
Total	$	570,463	$	1,877,249	$	202,828	$	2,650,540

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. Fair Value Measurements (continued)


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

The following tables set forth the changes in the fair value of instruments carried at fair value with a Level 3 measurement during the three months ended March 31, 2026 and 2025:


($ in thousands)	Fixed Maturity Securities, Available-For-Sale		Mortgage Loans
Balance at December 31, 2025	$	150,917	$	9,902
Total losses for the period recognized in net investment gains	(62)		(814)


Purchases	11,266		—
Sales/Disposals	(334)		—
Total unrealized losses for the period recognized in accumulated comprehensive (loss) income	(2,337)		—
Balance at March 31, 2026	$	159,450	$	9,088


($ in thousands)	Fixed Maturity Securities, Available-For-Sale		Mortgage Loans
Balance at December 31, 2024	$	77,920	$	26,490
Total losses for the period recognized in net investment gains	(110)		(66)
Issuances	—		5
Settlements	—		(10,417)
Purchases	5,164		—
Sales/Disposals	(199)		—
Total unrealized gains for the period recognized in accumulated comprehensive income (loss)	682		—
Balance at March 31, 2025	$	83,457	$	16,012
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	$	—	$	(84)

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. Fair Value Measurements (continued)

The transfers into Level 3 during the three months ended March 31, 2026 were the result of securities that began receiving valuations from asset managers that utilized unobservable inputs at the end of the period.

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 they are deemed to be impaired.

In addition to the preceding disclosures on assets and liabilities recorded at fair value in the consolidated balance sheets, the Company is also required to disclose the fair values of certain other financial instruments for which it is practicable to estimate fair value. Estimated fair value amounts, defined as the quoted market price of a financial instrument, have been determined using available market information and other appropriate valuation methodologies. However, considerable judgments are required in developing the estimates of fair value where quoted market prices are not available. Accordingly, these estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or estimating methodologies may have an effect on the estimated fair value amounts.

The following methods and assumptions were used in estimating the fair value disclosures of other financial instruments:

Fixed maturity securities, held-to-maturity: Fixed maturity securities, held-to-maturity consists of senior and junior notes with target rates of return. As of March 31, 2026, the Company determined the fair value of these instruments using the income approach utilizing inputs that are unobservable (Level 3).

Investment in RedBird Capital Partners: Included in other long-term investments is an investment in a limited partnership with RedBird Capital Partners, which invests in Bishop Street Underwriters, LLC (“Bishop Street”), a managing general agent (MGA). The investment had a fair value of $47.2 million at March 31, 2026, which was determined using the net asset value. The Company employs procedures to assess the reasonableness of the fair value of the investment including obtaining and reviewing the audited financial statements. The unfunded commitment related to the investment was $18.3 million at March 31, 2026. The Company may sell its interest in the investment with the appropriate prior written notice and approval by the general partner. In accordance with Accounting Standard Codification 820-10, this investment is measured at fair value using the net asset value per share practical expedient and has not been classified in the fair value hierarchy.

Notes payable: The carrying value approximates the estimated fair value for notes payable as the notes payable accrue interest at current market rates plus a spread. The Company determines fair value using the income approach utilizing inputs that are observable (Level 2).

Subordinated debt: Subordinated debt consists of the Unsecured Subordinated Notes, due May 24, 2039 and have a fixed interest rate. The Company determines the fair value of these instruments using the income approach utilizing inputs that are observable (Level 2).

The following table sets forth the Company’s carrying and fair values of notes payable and subordinated debt as of March 31, 2026 and December 31, 2025:


	March 31, 2026				December 31, 2025
($ in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes payable
FHLB Loan	$	57,000	$	57,112	$	57,000	$	57,458
Revolving Credit Facility	114,500		114,500		114,500		114,500
Term Loan Facility, net of debt issuance costs	294,918		294,207		300,000		300,000
Notes payable	$	466,418	$	465,819	$	471,500	$	471,958
Subordinated debt

Unsecured subordinated notes	$	19,577	$	20,395	$	19,569	$	21,020
Subordinated debt, net of debt issuance costs	$	19,577	$	20,395	$	19,569	$	21,020

Other financial instruments qualify as insurance-related products and are specifically exempted from fair value disclosure requirements.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5. Mortgage Loans

The Company has invested in Separately Managed Accounts (“SMA1” and “SMA2”). As of March 31, 2026 and December 31, 2025, 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. The loans earn interest at a fixed spread above a prime rate and mature in approximately 2 to 4 years from loan origination. The principal amounts of the loans are approximately 64% of the property’s appraised value at the time the loans were made.

The following table sets forth the carrying value of the Company’s mortgage loans as of March 31, 2026 and 2025:


($ in thousands)	March 31, 2026		December 31, 2025
Commercial	$	2,468	$	3,334

Hospitality	6,620		6,568



	$	9,088	$	9,902

The following table sets forth the Company’s gross investment income for mortgage loans for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)		2026		2025
Commercial		$	(824)	$	108
Retail		—		304
Hospitality		159		249




		$	(665)	$	661

The uncollectible amounts on loans, on an individual loan basis, are determined based upon consultations and advice from the Company’s specialized investment manager and consideration of any adverse situations that could affect the borrower’s ability to repay, the estimated value of underlying collateral, and other relevant factors. The Company writes off the uncollectible amount in the period it was determined to be uncollectible. There was no write-off for uncollectible amounts during the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026 and as of December 31, 2025, $2.5 million mortgage loans were in the process of foreclosure and there was 1 mortgage loan that was not producing income for the previous 12 months.

6. Equity Method Investments and Other

The following table sets forth the carrying value and ownership percentage of the Company’s equity method investments as of March 31, 2026 and 2025:


($ in thousands)	March 31, 2026				December 31, 2025
	Carrying Value		Ownership %		Carrying Value		Ownership %
Arena Special Opportunities Fund, LP units	$	24,011	13.4	%	$	26,936	14.0	%
JVM Funds LLC units	14,155		10.1	%	14,911		10.1	%
Hudson Ventures Fund 2 LP units	5,397		2.5	%	5,503		2.5	%
RISCOM	4,026		20.0	%	3,307		20.0	%
Brewer Lane Ventures Fund II LP units	2,522		2.3	%	2,251		2.4	%
Dowling Capital Partners LP units	292		5.0	%	590		5.0	%

Arena SOP LP units	—		11.3	%	—		11.2	%
	$	50,403			$	53,498

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6. Equity Method Investments and Other (continued)

The following table sets forth the components of net investment income (loss) from equity method investments for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)		2026		2025
RISCOM		$	719	$	(128)
Dowling Capital Partners LP units		175		13
Hudson Ventures Fund II LP units		(106)		(25)
Brewer Lane Ventures Fund II LP		(12)		170
JVM Funds LLC		(431)		(211)
Arena SOP LP units		—		(1,256)
Arena Special Opportunities Fund, LP units		(1,642)		(551)
		$	(1,297)	$	(1,988)

The following table sets forth the unfunded commitment of equity method investments as of March 31, 2026 and December 31, 2025:


($ in thousands)	March 31, 2026		December 31, 2025
Brewer Lane Ventures Fund II LP units	$	2,650	$	3,237
Dowling Capital Partners LP units	386		386
Hudson Ventures Fund 2 LP units	166		166
	$	3,202	$	3,789

The difference between the cost of an investment and its proportionate share of the underlying equity in net assets is allocated to the various assets and liabilities of the equity method investment. The Company amortizes the difference in net assets over the same useful life of a similar asset as the underlying equity method investment. For investment in RISCOM, a similar asset would be agent relationships. The Company amortizes this difference over a 15-year useful life.

The following table sets forth the Company’s recorded investment in RISCOM compared to its share of underlying equity as of March 31, 2026 and December 31, 2025:


($ in thousands)	March 31, 2026		December 31, 2025
Investment in RISCOM:
Underlying equity	$	3,073	$	2,292
Difference	953		1,015
Recorded investment balance	$	4,026	$	3,307

The following table sets forth the Company’s recorded investment in JVM Funds LLC compared to its share of underlying equity as of March 31, 2026 and December 31, 2025:


($ in thousands)	March 31, 2026		December 31, 2025
Investment in JVM Funds LLC:
Underlying equity	$	13,739	$	14,457
Difference	416		454
Recorded investment balance	$	14,155	$	14,911

Investment in Indirect Loans and Loan Collateral

As of March 31, 2026 and December 31, 2025, the Company held indirect investments in collateralized loans and loan collateral through SMA1 and SMA2.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6. Equity Method Investments and Other (continued)

The carrying value of the SMA1 and SMA2 as of March 31, 2026 and December 31, 2025 were as follows:


($ in thousands)	March 31, 2026		December 31, 2025

SMA1	$	13,823	$	15,418
SMA2	7,875		8,449
Investment in indirect loans and loan collateral	$	21,698	$	23,867

7. Variable Interest Entity

Pursuant to GAAP consolidation guidance, Skyward consolidates Separate Account HSIC-01 (“HSIC-01”), established by Mangrove Risk Solutions Bermuda Ltd. (“Mangrove”). HSIC-01 is a VIE for which the Company is the primary beneficiary. The purpose of the VIE is to hedge price volatility risks of certain insurance products by investing in dairy and livestock commodities. The Company directly manages the business; therefore, it considers itself the primary beneficiary. The Company does not provide performance guarantees and has no other financial obligation to provide funding to HSIC-01, other than its own capital commitments. The assets of consolidated variable interest entities may only be used to settle obligations of these entities. In addition, there is no recourse to the assets of HSIC-01 other than to satisfy associated liabilities.

The following table presents the assets of HSIC-01, included in the condensed consolidated balance sheet as of March 31, 2026. The assets presented below only include third-party net assets and exclude any intercompany balances, which were eliminated upon consolidation.


($ in thousands)	March 31, 2026
Assets
Cash and cash equivalents	20,196




Options, at fair value	24,401
Total assets	$	44,597

8. Derivatives

The Company uses derivatives as part of its financial risk management programs to mitigate price risk related to certain insurance contracts exposed to commodity price risk due to fluctuations in relevant market prices, including cattle and milk. To mitigate revenue volatility and support financial stability, the Company employs a hedging strategy that utilizes derivatives, specifically put options, as part of its risk management framework. The primary objective of holding these derivative instruments is to manage exposure to adverse price movements. The activity in these instruments generally reflects current market conditions and shifts in risk exposures throughout the year. The notional value of derivative contracts held and the degree of hedged exposure are actively managed and may vary depending on the prevailing pricing environment in cattle, hogs, and milk markets. The Company does not use derivatives for speculative or trading purposes. All derivative positions are intended to support the overall risk transfer objectives of the business. The Company has not elected hedge accounting for these derivatives.

The following table presents the notional amounts and fair value of derivative assets in the condensed consolidated balance sheets at March 31, 2026:



($ in thousands)	Derivative Assets
	Notional Amount		Fair Value
Economic hedges	$	188,191	$	24,401

The Company presents the net gain (loss) recognized on derivative instruments in economic hedging relationships in “losses and loss adjustment expenses” on the condensed consolidated statements of operations. For the three months ended March 31, 2026, the Company recognized $31.3 million, respectively, of pre-tax net losses in losses and loss adjustment expenses.

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

9. Notes Payable & Subordinated Debt

FHLB Loan

On August 30, 2024, the Company entered into the FHLB Loan pursuant to the Advances and Security Agreement. The FHLB Loan is a 4.5-year term loan in the principal amount of $57.0 million. The FHLB Loan provides for interest-only payments during its term, with principal due in full at maturity. The interest rate is fixed over the term of the loan at 4.00%. The FHLB Loan is fully secured by a pledge of specific investment securities of HSIC. The Company used the proceeds to fund redemptions of the draws on its prior credit facility.

Term Loan Facility

During the fourth quarter of 2025, the Company entered into a Term Loan Credit Agreement (the “Term Loan Facility”) with a syndicate of participating banks. The Term Loan Facility includes (a) an unsecured senior delayed draw term loan facility (“DDTL”) in the aggregate principal amount of $150.0 million (the “Tranche A DDTL”) and (b) an additional unsecured senior DDTL in the aggregate principal of $150.0 million (the “Tranche B DDTL” and together with the Tranche A DDTL, the “Term Loan Facility”).

The Term Loan Facility was used by the Company to fund a portion of the consideration of the Company’s acquisition of Apollo Group Holdings Limited (“Apollo”) and related transaction fees and expenses. Amounts drawn under the Term Loan Facility bear interest at either term SOFR plus a margin, which ranges from 150 basis points to 190 basis points, or the base rate plus a margin, which ranges from 50 basis points to 90 basis points, each depending on the Company’s debt to capitalization ratio. SOFR is calculated using a SOFR floor of 0.00% and a credit spread adjustment of 0.10%. The base rate is the highest of (i) the Agent’s then-current prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00% and (iv) zero percent (0%). In addition, the Company pays a fee ranging from 0.20% to 0.35% on average daily undrawn amounts under the Facility, depending on the Company’s 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 $150 million of the Tranche A DDTL and $150 million of the Tranche B DDTL for the acquisition of Apollo on January 1, 2026.

The Term Loan Facility includes customary covenants, including certain limitations on the incurrence by the Company of additional indebtedness exceeding $10.0 million and on the Company’s ability to make distributions to its stockholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events and certain financial covenants, including financial covenants relating to our minimum consolidated net worth, maximum total debt to capitalization, minimum A.M. Best rating and minimum liquidity, as well as customary events of default. As of March 31, 2026, the Company was in compliance with all covenants.

The Term Loan Facility is unsecured. In connection with the Revolving Credit Facility (defined below), during the fourth quarter of 2025, the Company and the subsidiary guarantors party thereto, entered into a guaranty agreement, pursuant to which 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 other exceptions.

The Company reports debt related to the Term Loan Facility in its March 31, 2026 Condensed Consolidated Balance Sheet, net of debt issuance costs of approximately $5.1 million. These deferred financing costs are presented as a direct deduction from the carrying amount of the debt.

Revolving Credit Facilities

During the fourth quarter of 2025, the Company, entered into a Credit Agreement (the “Revolving Credit Facility”) with a syndicate of participating banks. The Revolving Credit Facility is unsecured and provided the Company with up to a initial maximum principal amount of $150.0 million which was increased to $250.0 million on the closing date of the Company’s acquisition of Apollo.

The Company initially drew $43.0 million, which was used to redeem the Company’s prior revolving credit facility (described below). On December 30, 2025, the company drew an additional $71.5 million which was used for the consideration paid for the acquisition of Apollo. The proceeds were used for the acquisition of Apollo on January 1, 2026.

Interest on the Revolving Credit Facility is payable quarterly. Amounts drawn under the Facility bear interest at either term SOFR plus a margin, which ranges from 150 and 190 basis points, or the base rate plus a margin, which ranges from

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9. Notes Payable & Subordinated Debt (continued)

50 basis points to 90 basis points, each depending on the Company’s debt to capitalization ratio. SOFR is calculated using a SOFR floor of 0.00% and a credit spread adjustment of 0.10%. The base rate is the highest of (i) the Agent’s then current prime lending rate, (ii) the Federal Funds Rate plus 0.50%, (iii) SOFR plus 1.00% and (iv) zero percent (0%). In addition, the Company pays a fee ranging from 0.20% to 0.35% on average daily undrawn amounts under the Facility, depending on the Company’s debt to capitalization ratio. The availability period under the Facility will terminate 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 well as customary events of default. As of March 31, 2026, the Company was in compliance with all covenants.

Debentures

In May 2019, the Company entered into an agreement to issue unsecured subordinated notes (the “Notes”) with an aggregate principal amount of $20.0 million. Interest on the Notes is fixed at 7.25% for the first 8 years and fixed at 8.25% thereafter. Early retirement of the debt ahead of 8 year commitment requires all interest payments to be paid in full as well as 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. The Company reports debt related to the Notes in its March 31, 2026 Condensed Consolidated Balance Sheet and its December 31, 2025 Consolidated Balance Sheet, net of debt issuance costs of approximately $0.4 million. These deferred financing costs are presented as a direct deduction from the carrying amount of the subordinated debt.

10. Segments

The Company has two reportable segments, the Skyward Specialty segment and the Apollo segment, through which it offers a broad array of commercial property and casualty products and solutions on a non-admitted (or E&S) and admitted basis, predominantly in the United States. The Company defines its segment on the basis of the way in which internally reported financial information is regularly reviewed by the Chief Operating Decision Maker (“CODM”) to analyze financial performance, make decisions and allocate resources. The Company’s CODM is the chief executive officer. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.

The Skyward Specialty segment is made up of nine distinct underwriting divisions, or “continuing business,” and has dedicated underwriting leadership supported by high-quality technical staff with deep experience in their respective niches. The Apollo segment consists of the operations of Apollo, a Lloyd’s‑based specialty insurance platform acquired by the Company on January 1, 2026, structured around two core divisions that collectively support its underwriting, specialty‑risk, and managing‑agency activities. Apollo operates within the Lloyd’s of London market, leveraging Lloyd’s global licensing, centralized underwriting infrastructure, and long‑standing distribution networks to access niche and emerging specialty classes across international markets.

The accounting policies of the segments are the same as those described in Note 1 “Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The CODM assesses performance for the segments and allocates resources based primarily on gross written premiums, managed premiums and underwriting contribution. The Company does not manage assets by segment, with the exception of goodwill and intangible assets. Investment results, interest expense, amortization expense, corporate expenses and other income and expenses are not allocated to the underwriting segments.

Gross written premiums by underwriting division, managed premiums and underwriting contribution are used to monitor budget versus actual results. The CODM also uses underwriting contribution in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segments and in establishing management’s compensation.

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10. Segments (continued)

The following table presents gross written premiums by underwriting division for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)		2026		2025
Skyward Specialty Segment
Accident & Health		$	92,009	$	63,169
Captives		57,914		66,929
Credit & Surety		64,174		45,028
Energy Solutions		48,866		75,594
Global Agriculture		102,352		80,617
Global Property		34,517		46,686
Professional Lines		36,228		40,217
Specialty Programs		94,767		62,675
Transactional E&S		50,064		52,006
Total continuing business		580,891		532,921
Exited business		913		2,405
Total Skyward Specialty Segment gross written premiums		581,804		535,326
Apollo Segment
Syndicate 1969		65,008		—
Syndicate 1971		20,892		—
Total Apollo Segment gross written premiums		85,900		—
Total gross written premiums		$	667,704	$	535,326

The following table sets forth the Apollo segment’s managed premiums for the three months ended March 31, 2026:


	Three months ended March 31,
	2026


Aligned Syndicates	210,549
Partner Syndicates	89,456
Total managed premiums	$	300,005

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10. Segments (continued)

The following table presents information about reported segment net underwriting income, significant segment expenses and a reconciliation of net underwriting income to net income for the three months ended March 31, 2026 and 2025:


Three months ended March 31,	2026						2025
($ in thousands)	Skyward Specialty		Apollo		Total		Skyward Specialty		Total
Underwriting income
Revenues:
Net earned premiums	$	363,943	$	70,064	$	434,007	$	300,366	$	300,366
Underwriting fee income	—		10,078		10,078		—		—
Commission and fee income	1,527		—		1,527		1,976		1,976
Total underwriting revenues	365,470		80,142		445,612		302,342		302,342
Expenses:
Losses and LAE	228,231		36,992		265,223		187,309		187,309
Amortization of policy acquisition costs	51,059		8,557		59,616		44,490		44,490
Other operating and general expenses	45,904		14,185		60,089		38,148		38,148
Corporate expenses	—		—		4,909		—		3,913
Fee‑based service expenses	—		4,170		4,170		—		—
Total underwriting expenses	325,194		63,904		394,007		269,947		273,860
Underwriting income	$	40,276	$	16,238	$	51,605	$	32,395	$	28,482

Reconciliation of underwriting income to net income:
Underwriting income					$	51,605			$	28,482
Add:
Net investment income					27,055				19,422
Net investment gains					3,185				6,750
Other income					15				13
Less:
Interest expense					7,719				1,834
Amortization expense					8,843				337
Other expenses					3,222				1,061
Income before income taxes					62,076				51,435
Income tax expense					12,345				9,377
Net income					$	49,731			$	42,058

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

11. Income Taxes

The following table sets forth the Company’s income tax expense and effective tax rates for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)		2026			2025
Income tax expense		$	12,345		$	9,377
Effective tax rate		19.9		%	18.2		%

The effective tax rate will differ from the statutory rate of 21 percent due to tax charges associated with the effect of foreign operations, permanent differences for disallowed expenses for tax and beneficial adjustments for tax-exempt income, dividends-received deduction, and discrete items. The effect of foreign operations is primarily related to income of our foreign operations taxed at statutory tax rates of 15% in Bermuda and 25% in UK. The effective tax rate for three months ended March 31, 2026 was impacted by certain discrete tax items, primarily tax benefits from stock-based compensation, which reduced the effective tax rate by 3.1%.

The Company paid income taxes of $2.9 million during the three months ended March 31, 2026.

12. Losses and Loss Adjustment Expenses

The following table sets forth the reconciliation of unpaid losses and loss adjustment expenses (“LAE”) as reported in the condensed consolidated balance sheets as of and for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)	2026		2025
Reserves for losses and LAE, beginning of period	$	2,796,491	$	1,782,383
Less: reinsurance recoverable on unpaid claims, beginning of period	(1,067,551)		(670,846)
Reserves for losses and LAE, beginning of period, net of reinsurance	1,728,940		1,111,537
Incurred, net of reinsurance, related to:
Current period	233,969		187,309
Prior years	—		—
Total incurred, net of reinsurance	233,969		187,309
Paid, net of reinsurance, related to:
Current period	15,838		15,256
Prior years	138,077		118,900
Total paid	153,915		134,156
Net reserves for losses and LAE, end of period	1,808,994		1,164,690
Plus: reinsurance recoverable on unpaid claims, end of period	1,109,909		706,801
Reserves for losses and LAE, end of period	$	2,918,903	$	1,871,491

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SKYWARD SPECIALTY INSURANCE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

13. Commission and Fee Income and Underwriting Fee Income

Skyward Underwriters Agency, Inc. (“SUA”), a subsidiary of the Company, is a managing general insurance agent and reinsurance broker for property and casualty and accident and health risks in specialty niche markets. Commission and fee income is primarily generated from SUA for the placement of insurance policies on either a third-party insurance or reinsurance company.

The following table sets forth the Company’s disaggregated revenues from contracts with customers for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)		2026		2025
SUA commission revenue		$	2,281	$	1,837
SUA fee income		455		1,177
Other		593		10
Total commission and fee revenue		3,329		3,024
Commission and fee expenses		(1,802)		(1,048)
Net commission and fee income		$	1,527	$	1,976

The Company’s contract assets from commission and fee income as of March 31, 2026 and December 31, 2025 were $0.7 million and $1.0 million, respectively.

Through its Apollo subsidiary ASML, the Company earns revenue for services performed in its capacity as managing agent to both its wholly owned and third‑party capitalized Lloyd’s syndicates. These revenues primarily consist of managing agency fees, which compensate the Company for underwriting oversight, operational administration, and regulatory and compliance support, as well as profit commission, which is contingent upon the underwriting performance of certain syndicates. ASML receives managing agency fees from managed syndicates, including 1969, 1971 and 1972 (collectively the “Managed Syndicates”) at a rate of 0.9% of the managed stamp capacity and for SPA1925 at 1.0%, which is fully recognized over the period the services are rendered. ASML receives profit commission at a rate of 17.5% for Syndicate 1969 and 20.0% for Syndicate 1971, subject to a two-year deficit clause. No profit commission has been recognized for SPA1925 or Syndicate 1972. ASML also receives a share of the leader’s fee for managing consortium arrangements. Managing agency fees and services revenue are recognized over time as services are rendered, while profit commission is recognized only when it becomes probable that no significant reversal will occur. This revenue is disclosed in underwriting fee income.

The following table sets forth the Apollo’s revenues from contracts with customers for the three months ended March 31, 2026:


	Three months ended March 31,
($ in thousands)		2026
Managing agents fees		$	3,527
Profit commission & consortium overrider charged to Managed Syndicates		6,551
Underwriting fee income		$	10,078

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14. Underwriting, Acquisition and Insurance Expenses

The following table sets forth the components of underwriting, acquisition and insurance expenses for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)		2026		2025
Amortization of policy acquisition costs		$	59,616	$	44,490
Other operating and general expenses		60,089		38,148
Corporate expenses		4,909		3,913
Total underwriting, acquisition and insurance expenses		$	124,614	$	86,551

15. Reinsurance

Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The reinsurance agreements provide the Company with increased capacity to write larger risks and maintain its exposure to loss within its capital resources. The Company remains obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

The following tables set forth the effects of reinsurance on written and earned premiums and losses and loss adjustment expenses for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
	2026				2025
($ in thousands)	Written		Earned		Written		Earned
Direct premiums	$	507,134	$	515,489	$	408,310	$	385,438
Assumed premiums	160,570		149,556		127,016		78,727
Ceded premiums	(234,821)		(231,038)		(192,055)		(163,799)
Net premiums	$	432,883	$	434,007	$	343,271	$	300,366
Ceded losses and LAE incurred			$	152,573			$	135,467

The following table sets forth the components of reinsurance recoverables and ceded unearned premium as of March 31, 2026 and December 31, 2025:



($ in thousands)	March 31, 2026		December 31, 2025
Ceded unpaid losses and LAE	$	1,109,909	$	921,165
Ceded paid losses and LAE	229,323		201,010

Allowance for credit losses	(2,295)		(2,295)
Reinsurance recoverables	$	1,336,937	$	1,119,880
Ceded unearned premium	$	314,850	$	238,948

The Company entered into agreements with several of its reinsurers, whereby the reinsurer established funded trust accounts with the Company as the sole beneficiary. These trust accounts provide the Company additional security to collect claim recoverables under reinsurance contracts and the Company does not carry these on the balance sheet because the Company will only have custody over these accounts upon the failure of the reinsurer to pay amounts due. At March 31, 2026, the market value of these accounts was approximately $250.7 million. The trust amount will be adjusted periodically, by mutual agreement, based on claim payments and loss reserve recoverables.

Certain ceded reinsurance contracts that transfer only significant timing risk and do not transfer sufficient underwriting risk are accounted for using the deposit method of accounting. The Company’s deposit asset at March 31, 2026 and December 31, 2025 was $18.2 million and $22.7 million, respectively, and was included in other assets on the condensed consolidated balance sheets.

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16. Earnings Per Share

The following table sets forth the computation of basic and diluted net earnings per share for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands, except for share and per share amounts)		2026		2025
Numerator
Net income		$	49,731	$	42,058




Denominator
Basic weighted-average common shares		44,463,167		40,196,416



Dilutive effect of stock units		508,468		1,004,585
Dilutive effect of options		472,325		479,594
Diluted weighted-average common share equivalents		45,443,960		41,680,595
Basic earnings per share		$	1.12	$	1.05
Diluted earnings per share		$	1.09	$	1.01

The following table presents anti-dilutive instruments that were excluded from the calculation of diluted weighted-average common share equivalents during the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
		2026	2025


Stock units		385,108	56,155
Options		27	2,512

17. Related Party Transactions

RISCOM

RISCOM provides the Company with wholesale brokerage services. RISCOM and the Company also have a managing general agency agreement. The Company holds a 20% ownership interest in RISCOM.

Net earned premium and gross commission expense related to these agreements for the three months ended March 31, 2026 and 2025 were as follows:


	Three months ended March 31,
($ in thousands)		2026		2025
Net earned premium		$	30,924	$	28,960
Commissions		8,188		7,632

Premiums receivable as of March 31, 2026 and December 31, 2025 were $18.4 million and $13.9 million, respectively.

Other

Advisory and professional services fees and expense reimbursements paid to various affiliated stockholders and directors for the three months ended March 31, 2026 and 2025 were $0.2 million.

See Note 6 for investments involving affiliated companies and additional related party transactions.

18. Acquisitions

On January 1, 2026 (the “Acquisition Date”), the Company completed the acquisition of Apollo Group Holdings Limited (“Apollo”) pursuant to the Apollo share purchase agreements and acquired 100% of the issued and outstanding share capital of Apollo. Apollo is a U.K.-based specialty underwriting platform operating at Lloyd’s of London. Apollo underwrites a multi-class specialty insurance portfolio and offers products across Property, Casualty, Marine, Energy & Transportation, Specialty and Reinsurance, as well as digital and embedded risk programs. The Company acquired Apollo

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18. Acquisitions (continued)

to broaden its specialty insurance platform, expand into additional specialty niches, enhance its innovation and technology capabilities, and strengthen its market position.

The fair value of the consideration transferred, or the purchase price, is approximately $559.1 million. This amount is based on (i) the issuance of 3,679,332 shares of common stock of the Company, using the closing price of Skyward common stock of $51.11 per share on December 31, 2025, the last trading day prior to the Acquisition Date, and (ii) $371.1 million in cash (the “Cash Consideration”). The table below presents the components of the fair value of consideration transferred:


($ in thousands, except for share and per share amounts)
Share consideration
Skyward Specialty Insurance Group, Inc. common stock issued to existing Apollo common stockholders	3,679,332
Skyward Specialty Insurance Group, Inc. closing stock price on December 31, 2025	$	51.11
Consideration of Skyward Specialty Insurance Group, Inc. issued common stock	$	188,051
Cash consideration	371,089
Total consideration	$	559,140

The Company accounted for the transaction as a business combination under ASC 805, Business Combinations (“ASC 805”). The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date. The Company is considered the accounting acquirer in the transaction.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

18. Acquisitions (continued)

The following table summarizes the preliminary purchase price allocation as of the Acquisition Date:


($ in thousands)	January 1, 2026
Assets acquired, excluding goodwill
Fixed maturity securities, available-for-sale, at fair value	$	222,460
Short-term investments, at fair value	187,178
Cash and cash equivalents	68,054
Funds at Lloyd's	106,336
Premiums receivable, net	272,803
Reinsurance recoverables, net	165,540
Ceded unearned premium	69,097
Deferred policy acquisition costs and VOBA	56,128
Deferred income taxes	13,966
Intangible assets, excluding goodwill, net	262,000
Other assets	25,830
Total assets acquired, excluding goodwill	1,449,392
Liabilities assumed
Reserves for losses and loss adjustment expenses	477,596
Unearned premiums	233,501
Reinsurance and premium payables	144,536
Funds held for others	18,684
Accounts payable and accrued liabilities	71,506
Deferred income taxes	69,837
Total liabilities assumed	1,015,660
Fair value of net assets acquired, excluding goodwill	433,732
Total consideration	$	559,140
Preliminary allocation to goodwill	$	125,408

The Apollo acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805. The purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair values at the Acquisition Date. Goodwill recognized in the transaction represents the excess of consideration transferred over the fair value of identifiable net assets acquired and will not be deductible for tax purposes and is fully allocated to the U.K. segment. Goodwill primarily represents the expected future economic benefits arising from the acquisition, including anticipated synergies from the integration of operations, Apollo’s established specialty underwriting platform, and access to its distribution network and Lloyd’s market presence.

The identifiable intangible assets primarily relate to syndicate capacity, cover holder relationships, strategic partner syndicates and trade names. The amounts, based on preliminary valuations and subject to final adjustment, allocated to intangible assets are as follows:


($ in thousands)	Estimated fair value		Estimated average useful life (in years)	Estimated Annual Amortization Expense
Syndicate 1969 capacity - with fees	$	90,000	Indefinite	N/A, indefinite lived asset
Syndicate 1971 capacity - with fees	110,000		Indefinite	N/A, indefinite lived asset
Cover holder relationships	25,000		7	$	3,571
Strategic partner syndicates	2,000		5	400
Trade name	35,000		10	3,500
Total	$	262,000		$	7,471

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

18. Acquisitions (continued)

The Company also recognized value of business acquired (“VOBA”), which represents the estimated fair value of the deferred acquisition costs of acquired in‑force insurance contracts. VOBA is amortized over one year, reflecting the expected runoff of the acquired in‑force contracts. VOBA is aggregated with deferred policy acquisition costs and included within deferred policy acquisition costs and VOBA on the consolidated balance sheets. For the three months ended March 31, 2026 the Company recognized $7.3 million and $6.7 million in underwriting, acquisition and insurance expenses and amortization expense, respectively, on the consolidated statements of operations related to the amortization of VOBA .

Estimated fair values of assets acquired and liabilities assumed from Apollo are subject to change as additional information is obtained, and will be updated and finalized within the measurement period that will not extend beyond 12 months from the Acquisition Date. Any measurement period adjustments will be recorded in the period in which the adjustments are identified, as if they had been recognized as of the acquisition date.

The results of operations for Apollo of $80.1 million of revenue and $22.2 million of net income from the date of the acquisition to the period ended March 31, 2026, have been included within the accompanying consolidated statements of operations and comprehensive loss. All transaction expenses incurred by the Company were expensed as incurred and reflected in the Company’s results of operations for the period ended December 31, 2025 in accordance with ASC 805. No material transaction expenses were incurred for the period ended March 31, 2026. The Company has not presented the unaudited supplemental pro forma financial information required by ASC 805-10-50-2(h) as it is impractical to do so, as Apollo did not historically prepare quarterly financial statements and its historical financial information was prepared under U.K. GAAP rather than U.S. GAAP.

19. Commitments and Contingencies

Litigation

The Company is named as a party in various legal actions arising from claims made under insurance policies and contracts. Those actions are considered by the Company in estimating the losses and loss adjustment expense reserves. Also, from time to time, the Company is a defendant in various legal actions that relate to bad faith claims, disputes with third parties or that involve alleged errors and omissions. The Company records accruals for these items to the extent the losses are probable and reasonably estimable. Although the ultimate outcome of these matters cannot be determined at this time, based on present information, the availability of insurance coverage and advice received from outside legal counsel, the Company believes the resolution of any such matters will not, individually or in the aggregate, have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Indemnification

In conjunction with the sale of business assets and subsidiaries, the Company has provided indemnifications to certain buyers. Certain indemnifications cover typical representations and warranties related to the responsibilities to perform under the sales contracts. The amount of potential exposure covered by the indemnifications is difficult to determine because the indemnifications cover a variety of matters, operations and scenarios. Certain of these indemnifications have no time limit. At this time, the Company does not have reason to believe any such significant claims exist.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The term “Skyward Group” as used below refers to Skyward Specialty Insurance Group, Inc. and the terms “our Company,” “we,” “us,” and “our” as used below refer to Skyward Specialty Insurance Group and its consolidated subsidiaries. The term “first quarter” as used below refers to the three months ended March 31, for the time period then ended. We discuss certain key metrics which provide useful information about our business and the operational factors underlying our financial performance. Many of these metrics are generally standard among insurance companies and help to provide comparability with our peers. Select insurance, accounting, operating and financial terms for Skyward Group are defined in the sections entitled “Select Insurance and Financial Terms” and “Key Operating and Financial Metrics” included in our 2025 Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). Following the Apollo Acquisition, select insurance, accounting, operating and financial terms’ definitions have been updated in the “Updates to Key Operating and Financial Metrics” section below in this Form 10-Q.

The discussion and analysis below include certain forward-looking statements that are subject to risks, uncertainties and other factors described in “Risk Factors” in our 2025 Form 10-K. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2026, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in our 2025 Form 10-K.

The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”).

Overview

Founded in 2006, Skyward Group is the holding company brand for its U.S. and U.K. businesses, Skyward Specialty Insurance Group, Inc. and Apollo, respectively, delivering a comprehensive suite of specialized insurance solutions across global specialty property and casualty markets. We focus our business on markets that are underserved, dislocated and/or for which standard insurance coverages are insufficient or inadequate to meet the needs of businesses, including our customers and prospective customers operating in these markets. Our customers typically require highly specialized, customized underwriting solutions and claims capabilities. As such, we develop and deliver tailored insurance products and services to address each of the niche markets we serve.

As previously disclosed, on January 1, 2026, the acquisition with Apollo closed. We subsequently announced the introduction of Skyward Group as the unified holding company brand for Skyward Specialty and Apollo, following the successful completion of the transaction. The consideration for the entire issued share capital of Apollo under the Apollo SPAs was $559.1 million, which included (i) $371.1 million in cash (the “Cash Consideration”) and (ii) the issuance of 3,679,332 shares of the Company’s common stock.

Apollo is an integrated specialty insurance and reinsurance group operating within the Lloyd’s of London market, leveraging Lloyd’s global licensing, centralized underwriting infrastructure, and long‑standing distribution networks to access innovative specialty classes across international markets. Apollo’s model incorporates technology enabled underwriting, innovative risk assessment tools, and data driven portfolio management frameworks that are closely aligned with our strategic priorities. Apollo’s operations also include the management of a dedicated syndicate focused on emerging digital economy, autonomy, and platform‑based risks, reflecting a long standing emphasis on innovation and forward‑looking underwriting practices.

Skyward Specialty and Apollo continue to operate as distinct, market facing brands under the newly introduced Skyward Group holding structure. This brand architecture preserves the equity and reputational strength of both organizations while supporting a unified strategic direction and enhanced collaboration across the combined enterprise.

Skyward Specialty’s U.S. insurance companies are rated ‘A’ (Excellent) by AM Best, while Apollo’s underwriting operations continue within the highly rated Lloyd’s market, which carries an ‘A+' (Superior) rating by AM Best and 'AA-' (Very Strong) ratings by S&P Global and Fitch Ratings.

Updates to Key Operating and Financial Metrics

We discuss certain key metrics which provide useful information about our business and the operational factors underlying our financial performance. These metrics are generally standard among insurance companies and help to provide comparability with our peers. For a glossary of terms for Skyward Specialty Insurance Group, Inc. and its subsidiaries and affiliates and a glossary of selected insurance and accounting terms, see the section entitled “Key

Table of Contents

Operating and Financial Metrics” included in the 2025 Form 10-K. The following terms have been updated after the Apollo acquisition.

Underwriting income (loss) is a non-GAAP financial measure defined as income (loss) before income taxes excluding net investment income, net investment gains and losses, impairment charges, interest expense, amortization expense and other income and expenses. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of underwriting income (loss) to net income, which is the most directly comparable financial metric prepared in accordance with GAAP.

Operating income (loss) is a non-GAAP financial measure defined as net income excluding net investment gains and losses, amortization expense, goodwill impairment charges and other income and expenses. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of operating income (loss) to net income (loss), which is the most directly comparable financial metric prepared in accordance with GAAP.

Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity excluding goodwill and intangible assets and the related deferred tax impact. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of tangible stockholders’ equity to stockholders’ equity, which is the most directly comparable financial metric prepared in accordance with GAAP.

Consolidated Results of Operations

The following table summarizes our consolidated results for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
($ in thousands)		2026			2025
Gross written premiums		$	667,704		$	535,326
Ceded written premiums		(234,821)			(192,055)
Net written premiums		$	432,883		$	343,271
Net earned premiums		$	434,007		$	300,366
Underwriting fee income(1)		10,078			—
Commission and fee income		1,527			1,976
Losses and LAE		265,223			187,309
Underwriting, acquisition and insurance expenses		124,614			86,551
Fee‑based service expenses(1)		4,170			—
Underwriting income(2)		$	51,605		$	28,482

Net investment income		$	27,055		$	19,422
Net investment gains		$	3,185		$	6,750
Interest expense		$	7,719		$	1,834
Amortization expense		$	8,843		$	337
Income before income taxes		$	62,076		$	51,435
Net income		$	49,731		$	42,058
Operating income(2)		$	56,832		$	37,597

Loss and LAE ratio		61.1		%	62.4		%

Net expense ratio(3)		28.4		%	28.1		%
Combined ratio		89.5		%	90.5		%





Annualized return on equity		17.8		%

Skyward Specialty Insurance Group, Inc. 10-Q