Kestrel Group Reports First Quarter 2026 Financial Results

AUSTIN, Texas, May 8, 2026 /PRNewswire/ -- Kestrel Group Ltd (NASDAQ: KG) ("Kestrel" or the "Company") a leading specialty insurance platform that provides fronting services to program managers, reinsurers, and reinsurance brokers, today reported its financial results for the first quarter ended March 31, 2026.

Key Highlights – First Quarter 2026 Financials

Commenting on the results, Kestrel's Chief Executive Officer, Luke Ledbetter, stated, "The first quarter demonstrated continued momentum in our Program Services segment, with fee revenue and premiums produced up materially year-over-year. As we look across the broader fronting market, we continue to believe Kestrel is well-positioned, and our balance sheet light model allows us to focus on disciplined growth."

Program Services Segment

The Program Services segment provides fronting services to general agents and insurance carriers to leverage Kestrel's trusted reputation to provide access to the U.S. property and casualty insurance market and insurance paper rated "A-" (Excellent) A.M. Best rating and expansive licenses in exchange for fees. Kestrel issues the policy through exclusive use of four insurance carriers, and those carriers presently retain and reinsure the risk. The Company continues to actively pursue reinsurance mechanisms with its existing partners that would selectively deploy the Company's underwriting capacity that it believes could facilitate and accelerate both its fee and premium revenue growth.

In the first quarter of 2026, total fee revenues from the Program Services segment were $3.1 million, which increased 286.6% over the first quarter of 2025, a combination of expanding existing and new client accounts. Premium produced⁽¹⁾ by client programs during the first quarter of 2026 totaled $94.2 million, a 303.6% increase over the first quarter of 2025.

Legacy Reinsurance Segment

The Legacy Reinsurance segment consists of the AmTrust Reinsurance and Diversified Reinsurance segments previously reported by Maiden Holdings, Ltd. ("Maiden") prior to the Combination with Kestrel. The AmTrust portion of this segment includes all business ceded to Maiden Reinsurance by AmTrust. The Diversified portion of this segment consists of a run-off portfolio of predominantly third-party property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe, as well as business produced by Maiden LF and Maiden GF along with transactions entered into by Genesis Legacy Solutions.

During the first quarter of 2026, the Legacy Reinsurance segment produced an underwriting loss of $3.3 million. The underwriting loss in the first quarter of 2026 included $2.4 million of losses related to the segment's AmTrust business and $0.9 million of losses related to the Diversified business.

The AmTrust business reported an underwriting loss of $1.9 million for the current accident year in the first quarter of 2026 as the run-off of certain remaining multiple year policies continues. In addition, there was approximately $0.6 million in adverse prior period loss development ("PPD") during the first quarter of 2026. Net adverse PPD was due to an adjustment for greater than expected amount of earned exposure in 2025 that was reported in the three months ended March 31, 2026 on Specialty Risk and Extended Warranty business in the AmTrust Quota Share, and a modest reduction in recoveries anticipated under the Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Cavello Bay Reinsurance Limited.

The results for the segment's Diversified business largely reflect the ongoing run-off of the Company's international operations.

Investment Activities and Other Gains

The Company reported combined income from investment activities totaling $3.9 million for the three months ended March 31, 2026, resulting from net investment income of $2.6 million and net realized and unrealized investment gains of $1.3 million, the latter of which was substantially from Maiden's legacy alternative asset portfolio.

Also, during the first quarter, the Company recognized foreign exchange and other gains of $2.2 million. This included $2.0 million of net foreign exchange gains due to appreciation of the U.S. dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro; and a $0.2 million gain from the revaluation of a contingent receivable in the insurance distribution industry.

General and Administrative Expenses

Total general and administrative expenses were $11.7 million for the three months ended March 31, 2026.  First quarter 2026 expenses include approximately $3.0 million in expenses that are annual in nature or are adjustments to previously accrued amounts that are not expected to recur during the remainder of 2026.

In addition, during the first quarter of 2026, the Company recorded $0.8 million in expenses related to fair value adjustments recognized at the time of its combination with Maiden.

Balance Sheet

Total assets were $964.2 million at March 31, 2026, and shareholders' equity was $121.4 million.

As of March 31, 2026, the Company has available net operating loss ("NOL") carryforwards of $476.3 million for income tax purposes. Approximately $387.6 million of NOL carryforwards expire in various years beginning in 2029. As of March 31, 2026, approximately $88.7 million or 18.6% of the Company's NOL carryforwards have no expiry date under the relevant U.S. tax law.

Investor Presentation

The Company has posted an investor presentation on its website in connection with this earnings release. The presentation, dated May 2026, can be found at https://kestrelgroup.gcs-web.com/events-and-presentations/presentations.

Non-GAAP Reconciliations

Please see "Non-GAAP Financial Measures" at the end of this earnings release for additional information on non-GAAP financial measures and reconciliations of these measures to their most directly comparable financial measures calculated and presented in accordance with GAAP.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company's current expectations and are subject to risks and uncertainties that may cause actual results to differ materially. Factors that could cause differences are discussed in the Company's SEC filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent quarterly reports on Form 10-Q.

Various statements contained in this press release are forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include projections, assumptions, and estimates concerning the anticipated benefits of the business combination and integration of Maiden and Kestrel, our future results of operations and financial position, business strategy, and plans and objectives of management for future operations, the timing and success of specific projects and strategies for growth, and our future production, revenues, income, expenses, capital spending, and reserves. Our forward-looking statements are generally, but not always, accompanied by words such as "estimate," "believe," "expect," "will," "plan," "target," "could" or other words that convey the uncertainty of future events or outcomes.

There can be no assurance that actual developments will be those anticipated by us. Actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to, our ability to recover from our capacity providers, the cost and availability of reinsurance coverage, challenges to our use of issuing carrier or fronting arrangements by regulators or changes in state or federal insurance or other statutes or regulations, our dependence on a limited number of business partners, our ability to compete effectively, a downgrade in the financial strength ratings of insurance carriers utilized for fronting arrangements, our ability to accurately underwrite and price our products and to maintain and establish accurate loss reserves, opportunities to expand our ability and capacity to write fee-based business, our ability to implement reinsurance mechanisms to selectively deploy underwriting capacity, our ability to manage our legacy business and ongoing run-off of our international operations, changes in interest or foreign exchange rates or other changes in the financial markets, availability and sources of liquidity, timing and amount of expenditures, measures to contain or reduce operating expenses, the effects of emerging claim and coverage issues, changes in the demand for our products, outcomes of ongoing litigation or other legal matters, our competitive position in the industry and markets in which we operate, the effect of general economic conditions, breaches in data security or other disruptions with our technology, changes in pricing or other competitive environments, and the development and success of strategies or other initiatives.

Forward-looking statements involve inherent risks and uncertainties that are difficult to predict, many of which are beyond our control. Additional information about these risks and uncertainties is contained in our filings with the Securities and Exchange Commission. The forward-looking statements in this press release speak only as of the date of this release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Kestrel Group

Kestrel Group Ltd specializes in providing fronting services to insurance program managers, managing general agents (MGAs), reinsurers, and reinsurance brokers. Kestrel Group facilitates insurance transactions utilizing its exclusive management contracts with four insurance carriers, all of which are rated A- "Excellent" by A.M. Best. These contracts enable Kestrel Group to offer both admitted and surplus lines in all U.S. states. Kestrel Group generally does not assume significant underwriting risk and produces lines of business such as casualty, workers' compensation, catastrophe-exposed property, and non-catastrophe-exposed property, with diverse risk durations, sizes, and product types. To learn more about Kestrel Group, please visit https://kestrelgroup.com.

Contact:
Kestrel Group Investor Relations
Rick Black / Ken Dennard
KG@dennardlascar.com

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SOURCE Kestrel Group Ltd