0001519449-26-000039
SEC filingImproved underwriting performance and Apollo acquisition drove revenue and income growth; combined ratio improved to 89.5%.
For the three months ended March 31, 2026, Skyward Group reported a 44.5% increase in net earned premiums to $434.0 million, driven by robust organic growth in the Skyward Specialty segment and the inclusion of Apollo from January 1, 2026. Gross written premiums rose 24.7% to $667.7 million. The combined ratio improved 100 basis points to 89.5%, reflecting a 130 bps decline in the loss and LAE ratio to 61.1% and a 30 bps increase in the net expense ratio to 28.4%. Underwriting income grew 81.2% to $51.6 million, and net investment income increased 39.3% to $27.1 million due to a larger asset base and higher book yield. Net income rose 18.2% to $49.7 million, impacted by higher interest expense and amortization from the acquisition.
The Skyward Specialty segment delivered net earned premiums of $363.9 million, up 21.2%, driven by growth in specialty programs (+51.2%), accident & health (+45.7%), credit & surety (+42.5%), and global agriculture (+27.0%). These gains were partially offset by declines in energy solutions (-35.4%), global property (-26.1%), captives (-13.5%), and professional lines (-9.9%). The segment's combined ratio improved to 88.9% from 89.2% in the prior year, as lower expense ratios (26.2% vs. 26.8%) offset a slight increase in the loss ratio (62.7% vs. 62.4%). The Apollo segment contributed $70.1 million in net earned premiums and $61.9 million in net written premiums, with a combined ratio of 85.3%. Apollo's underwriting fee income from managing agency services was $10.1 million, driven by growth in fee-generating gross written premiums of 48.8% to $300.0 million on a pro forma basis.
Management did not provide explicit numeric guidance for future periods. The MD&A notes that results for the first quarter are not indicative of full-year performance. The company continues to integrate Apollo, and the updated segment reporting structure enhances transparency. Strategic priorities include leveraging Apollo's Lloyd's platform for international diversification and maintaining disciplined underwriting. The company remains focused on niche markets and expects to generate attractive risk-adjusted returns. No changes to reinsurance strategy or capital allocation were highlighted, aside from the absence of share repurchases to date.
The Notes reveal a transformed balance sheet following the January 1, 2026 acquisition of Apollo Group Holdings. Total assets surged to $6.55B from $4.79B, driven by $1.3B in new investments, $286M in receivables, and $262M in intangible assets from the acquisition. Cash and equivalents rose to $256M from $169M, while restricted cash doubled to $60.5M. The investment portfolio grew to $2.74B, with fixed-income AFS securities increasing to $2.20B (amortized cost $2.21B). Notably, the allowance for credit losses on AFS securities decreased to $6.5M from $7.0M, reflecting recoveries.
No specific purchase commitments are disclosed in the Notes. The company reports indemnifications from past asset sales and litigation contingencies, but deems them immaterial. The primary contractual obligations are debt instruments: a $57M FHLB loan (4.00%, due 2029), a $114.5M revolving credit facility (SOFR +150-190 bps, maturing 2030), a $294.9M term loan facility (Tranche A due 2028, Tranche B due 2029), and $19.6M in subordinated notes (7.25% fixed, due 2039). All covenants were complied with as of March 31, 2026.
The company repurchased 185,022 shares for $8.7M during the quarter, but no new buyback authorization was announced. No dividends were declared. Debt increased dramatically: notes payable rose from $100.4M to $466.4M, reflecting $371.1M in cash consideration for Apollo and $5.1M in debt issuance costs. The term loan facility contributed $300M, and the revolver was drawn $114.5M. Capital expenditures were not separately disclosed.
The company now reports two segments: Skyward Specialty (legacy U.S. operations) and Apollo (new Lloyd's-based operations). Skyward Specialty generated $363.9M in net earned premiums (up 21% YoY) and $40.3M in underwriting income (11.0% margin). Apollo contributed $70.1M in net earned premiums and $16.2M in underwriting income (20.3% margin) for the stub quarter. Apollo's managed premiums totaled $300M across three syndicates. Gross written premiums by division show broad-based growth in Skyward Specialty (e.g., Accident & Health +46%, Credit & Surety +42%), while Apollo's Syndicate 1969 contributed $65M in GWP.