Bowhead Specialty Holdings (BOW) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01Our financial condition and results of operations could be materially adversely affected if we do not accurately assess our underwriting risk43% rewritten
2. 02Competition for business in our industry is intense
3. 03Inability to maintain our strategic relationship with AmFam would materially adversely affect our business
4. 04A decline in AmFam’s financial strength rating or financial size category may adversely affect our financial condition and results of operations
5. 05Because our business depends on insurance retail agents, brokers and wholesalers, we are exposed to certain risks arising out of our reliance on these distribution channels that could adversely affect our results91% rewritten
6. 06requirements that limit our ability to terminate agents or require us to renew policies. Even through the utilization of these measures, we may not achieve the desired resultsNew
7. 07We distribute the majority of our products through a select group of brokers. For the twelve months ended December 31, 2025, 70.3%, or $606.6 million, of our gross written premiums were distributed through four of our approximately 67 brokers34% rewritten
8. 08We may be unable to continue purchasing third-party reinsurance in amounts we desire on commercially acceptable terms or on terms that adequately protect us, and this inability may materially adversely affect our business, financial condition and results of operations
9. 09Our losses and loss expense reserves may be inadequate to cover our actual losses, which could have a material adverse effect on our financial condition, results of operations and cash flows
10. 10We rely on third-party data, and inaccuracies in such data could adversely impact our ability to estimate losses and manage risks
11. 11Unexpected changes in the interpretation of our coverage or provisions, including loss limitations and exclusions, in our policies could have a material adverse effect on our financial condition and results of operations
12. 12Outward reinsurance is a key part of our strategy, subjecting us to the credit risk of our reinsurers and may not be available, affordable or adequate to protect against losses58% rewritten
13. 13commercially reasonable terms, or at all. We are unable to predict how reinsurer’s risk appetite may fluctuate in the futureNew
14. 14Our reinsurers may not reimburse us for claims on a timely basis, or at all, which may materially adversely affect our business, financial condition and results of operations
15. 15We may act based on inaccurate or incomplete information regarding the accounts we underwrite
16. 16Our failure to accurately and timely pay claims could materially and adversely affect our business, financial condition, results of operations and prospects
17. 17Excessive risk taking could negatively affect our financial condition and business
18. 18If actual renewals of our existing contracts do not meet expectations, our gross written premiums in future years and our future results of operations could be materially adversely affected
19. 19Cyber threats are an evolving risk area affecting not only the specific cyber insurance market but also the liability coverage we provide which may adversely affect us
20. 20Changes in accounting practices and future pronouncements may materially affect our reported financial results and business
21. 21We may not be able to effectively start up or integrate new product opportunities
22. 22While the P&C industry is generally currently experiencing a hard market, the insurance business is historically cyclical in nature, which may affect our financial performance and cause our operating results to vary from quarter to quarter and may not be indicative of future performance
23. 23Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results
24. 24Pandemics, geopolitical and social events, severe weather conditions, including the effects of climate change and catastrophes, as well as man-made event events may adversely affect our business, results of operations and financial condition
25. 25Trade relations between the United States and other countries, including the imposition of new or increased tariffs, could have an adverse effect on our insureds, business and financial resultsNew

Risks Related to Laws and Regulation

1. 26We may become subject to additional government or market regulation, which may have a material adverse impact on our business
2. 27Changes in law, including relating to certain perils, could adversely affect our business41% rewritten
3. 28Applicable insurance laws may make it difficult to effect a change of control

Risks Related to Our Operations

1. 29We could be adversely affected by the loss of one or more key personnel or by an inability to attract and retain qualified personnel, including failure to develop a succession plan for Stephen Sills, our founder and Chief Executive Officer, or other members of our senior management team
2. 30We could be adversely affected if we fail to adequately plan for the succession of our senior leaders and key executives. Our current succession plans and employment arrangements with certain key executives do not guarantee their services will continue to be available to us26% rewritten
3. 31Operational risk exposures, such as human or systems failures (including from third-party vendor arrangements), are inherent in our business and may result in losses
4. 32Artificial intelligence is an evolving and rapidly growing technologyNew
5. 33We may change our underwriting guidelines or our strategy without your approval
6. 34We may not be able to manage our growth effectively38% rewritten
7. 35Any future acquisitions, strategic investments or new platforms could expose us to further risks or turn out to be unsuccessful
8. 36The effects of litigation on our business are uncertain and could have an adverse effect on our business
9. 37Loss of key vendor relationships or failure of a vendor to protect our data or confidential and proprietary information could affect our operations61% rewritten
10. 38We may fail or be unable to protect our intellectual property rights, which could adversely affect our brand and business
11. 39Our limited operating history may make it difficult to evaluate our current business and future prospects

Risks Related to Liquidity and Access to Capital

1. 40We could be forced to sell investments to meet our liquidity requirements
2. 41We may require additional capital in the future, which may not be available or may only be available on unfavorable terms
3. 42Our failure to comply with the terms of our credit facility or senior notes indenture, including as a result of events beyond our control, could result in an event of default that could affect our business, financial condition, and results of operations64% rewritten
4. 43As of December 31, 2025, we had $150 million in aggregate outstanding principal balance under the Indenture. As of December 31, 2025, we did not have any borrowings outstanding under the 2025 FacilityNew
5. 44The 2025 Facility and Indenture contain restrictions on our ability to operate our business and to pursue our business strategies

Risks Related to Ownership of Our Common Stock

1. 45Our costs have increased significantly as a result of operating as a public company, and our management is required to devote substantial time to complying with public company regulations
2. 46We qualify as an emerging growth company, and any decision on our part to comply with reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors
3. 47You cannot be certain that an active trading market for our common stock will continue
4. 48Our operating results and stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment
5. 49Substantial future sales of shares of our common stock by existing stockholders, or the perception that those sales may occur, could cause the market price of our common stock to decline
6. 50Because we have no current plans to pay cash dividends on our common stock, you may not receive any return on investment unless you sell your shares of common stock for a price greater than that which you paid for it
7. 51If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
8. 52Anti-takeover provisions in our organizational documents could delay a change in management and limit our share price68% rewritten
9. 53stockholder is prohibited, subject to certain exceptions (except with respect to GPC Fund and AmFam and any of their respective affiliates and any of their respective direct or indirect transferees of our common stock)New
10. 54GPC Fund and AFMIC exercise substantial influence over us, may engage in businesses that compete with us, and your ability to influence matters requiring stockholder approval may be limited
11. 55GPC Fund and AmFam are not restricted from, and may, engage in, invest in or operate businesses that directly compete with ours