Highlights

  • Bowhead shows 25.71% one-year basic EPS growth, a P/E of 18.39 and PEG of 0.00.
  • Second quarter gross written premiums were $297.9 million, up 28.2%.
  • Second quarter diluted EPS was $0.48, against $0.36 a year earlier.
  • Bowhead entered a merger agreement with AmFam in August 2026, subject to approvals.

One-year earnings growth of 25.71%, paired with a trailing twelve-month P/E of 18.39 and an expected-basis PEG of 0.00, puts Bowhead Specialty (NYSE:BOW) among undervalued growth stocks, with shares trading at USD 34.29 on October 28, 2026, unchanged. In its latest disclosures, the commercial specialty insurer joined the Federal Home Loan Bank of Chicago in March 2026, raised its quota share cession to 33.5% effective May 1, 2026, and reported second quarter 2026 net income of $16,138 thousand alongside a merger agreement with AmFam, Inc. in August 2026.

Based in New York, New York, and incorporated in Delaware, Bowhead Specialty was founded in September 2020 and offers commercial specialty property and casualty insurance, focusing on casualty, professional liability and healthcare liability risks. Its divisions are Casualty, Professional Liability, Healthcare Liability and Baleen Specialty. Policies are primarily written on a non-admitted, or E&S, basis, issued on AmFam paper through its managing general agency and reinsured 100% to its insurance subsidiary.

Growth: Second Quarter Net Income, Premiums and Combined Ratio

Net income was $16,138 thousand in the second quarter against $12,342 thousand a year earlier, and $32,148 thousand for the first six months against $23,767 thousand. Basic earnings per share were $0.49 against $0.38, and $0.98 against $0.73 for six months. Diluted earnings per share were $0.48 against $0.36, and $0.96 against $0.70 for six months. Total revenues were $163,857 thousand against $133,263 thousand.

Gross written premiums increased 28.2% to $297.9 million. Casualty premiums rose 32.5%, led by the Excess Casualty portfolio, and Baleen Specialty premiums rose 311.1%. Net written premiums increased 21.6% and net earned premiums increased 20.8%.

The combined ratio was 95.9% against 96.8%, with a loss ratio of 67.3% against 66.2% and an expense ratio of 28.6% against 30.6%. Underwriting income, a non-GAAP measure, was $4,804 thousand against $3,350 thousand.

Valuation: P/E of 18.39, PEG of 0.00 and Return on Equity

The P/E ratio of 18.39 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on an expected basis. Return on equity, with net income annualized, was 13.8% in the second quarter against 12.4%, and 13.9% for six months against 12.2%.

Total stockholders' equity was $472,361 thousand at June 30, 2026, against $448,266 thousand at December 31, 2025. Net cash provided by operating activities was $159,339 thousand for six months against $156,702 thousand.

Capital and Balance Sheet: Senior Notes, Credit Facility and Liquidity

The holding company had $65.3 million in cash and investments at June 30, 2026, and the company said it has sufficient liquidity for at least the next 12 months. Cash and cash equivalents were $141,748 thousand. The company reported no borrowings outstanding under its $35 million revolving facility with PNC Bank.

Debt was $146,573 thousand, reflecting $150 million of 7.75% Senior Notes issued in November 2025 and due December 1, 2030. Of the $300 million shelf registration filed in June 2025, $150 million remained available. Net cash used in financing activities was $2,142 thousand, mainly taxes paid on shares withheld for vested restricted stock units. Its insurance subsidiary, a Federal Home Loan Bank of Chicago member since March 2026, had no available borrowing capacity there at June 30, 2026.

Disclosed Risks and Outlook

The loss ratio rose from 66.2% to 67.3%, which the company tied to lower ceded loss activity under its excess of loss treaties and changes in portfolio mix. Net acquisition costs rose 43.3% and ceded written premiums rose 39.9%. Interest expense and financing fees were $3,266 thousand against $261 thousand. Bowhead said it is not party to legal proceedings it believes would have a material adverse effect.

The merger agreement carries disclosed risks. Closing requires approval by a majority of outstanding shares, including a vote excluding shares held by American Family or certain recused directors, plus Hart-Scott-Rodino clearance and approvals from Wisconsin and Texas insurance regulators. The company said uncertainty could disrupt relationships with insureds and distribution partners, that pre-closing covenants restrict certain actions, that lawsuits could be filed, and that a termination fee may be payable in specified circumstances.

The filing gives no earnings guidance. It states that the transaction has not been consummated, that no assurance can be given on timing or completion, and that its financial statements do not reflect the pending transaction.