Bowhead Specialty Net Income Rises as American Family Agrees Acquisition
The specialty insurer reported adjusted net income of $16.1 million for the second quarter.
Bowhead Specialty Holdings (BOW) reported second-quarter adjusted net income of $16.1 million, a 26.5% increase from the prior year.
The results coincided with a definitive merger agreement in which American Family will acquire the specialty insurer for $34.00 per share in cash, valuing the company at approximately $1.2 billion.
Gross written premiums grew 28.2% year-over-year to $297.9 million. This growth rate accelerated from the 24.0% increase reported in the first quarter. Diluted adjusted earnings per share rose 29.7% year-over-year to $0.48, though the figure remained flat sequentially compared to the first quarter.
Growth was led by the Casualty division, where gross written premiums grew 32.5% year-over-year to $199.8 million, accelerating from 20.4% growth in the prior quarter. Baleen Specialty saw gross written premiums surge 311.1% year-over-year to $13.9 million, though this represented a deceleration from the 313.9% growth seen in the first quarter.
Other segments showed slowing momentum. Healthcare Liability gross written premiums grew 23.9% year-over-year, down from 28.0% growth in the first quarter. Professional Liability growth slowed to 0.6% year-over-year, compared to 6.4% growth in the prior quarter.
The company's loss ratio increased 1.1 points year-over-year to 67.3% from 66.2%. These losses were partially offset by a decrease in the expense ratio, which fell 2.0 points year-over-year to 28.6%. A 3.4 point decrease in the operating expense ratio was offset by a 1.7 point increase in the net acquisition costs ratio.
Net investment income increased 37.6% to $18.8 million, a deceleration from the 43.5% growth reported in the first quarter. Meanwhile, interest expense and financing fees rose 1,151.3% year-over-year to $3.3 million from $261 thousand.