Key Highlights - Fourth Quarter 2025 Financials
Program Services net fee income was $1.9 million, up 94.5% over the third quarter 2025
Premium produced(1) by Program Services clients was $93.8 million, up 79.2% over the third quarter 2025
Total revenues were $10.2 million
Net premiums earned were $3.4 million
As of December 31, 2025, the Company's book value per common share was $16.57
Net loss was $17.8 million, driven by significant non-recurring charges totaling $3.5 million and a downward adjustment to the bargain purchase gain of $5.3 million recorded in the combination with Maiden Holdings, Ltd. ("Maiden") in 2025; and
Net income for 2025 was $46.7 million, or $8.08 per diluted share(2).
Commenting on the results, Kestrel's Chief Executive Officer, Luke Ledbetter, stated, "The fourth quarter saw positive progress in our Program Services segment. Since completing the merger with Maiden in May of 2025, and after working through a complicated integration, which remains ongoing, we have gained momentum in our Program Services segment while simultaneously managing the legacy Maiden business. This quarter we took a meaningful step forward. I'm encouraged by the progress we've made, and I'm thankful for the hard work and dedication of our team.
"As we progress through 2026, we continue to work with our valued capacity providers to match our market opportunities with their allocated underwriting capacity and are diligently exploring opportunities to expand our ability to write attractive fee-based business in a highly competitive marketplace. We remain committed to developing the strategic framework to facilitate future growth that will drive value for Kestrel shareholders. Our goal is innovation, client service and long-term relationships as we strive to generate a balance sheet light, fee revenue model while selectively deploying underwriting capacity to optimize returns for shareholders," concluded Ledbetter.
Total revenues in the fourth quarter of 2025 were $10.2 million. Total revenues for 2025 were $34.0 million(2). Net loss from continuing operations in the fourth quarter of 2025 was $16.4 million, or a loss of $2.12 per diluted share, compared to net loss of $4.1 million, or a loss of $0.53 per diluted share, for the third quarter of 2025. The net loss for the fourth quarter of 2025 was negatively impacted by a series of significant non-recurring or one-time items including:
An adjustment of $5.3 million to reduce the bargain purchase gain recorded as a result of the Combination with Maiden based on revised information that impacted the fair value of an asset;
Legal and other professional fees associated with the Company's previously disclosed arbitration totaling $2.0 million; and
Restructuring and related severance costs associated with various headcount reductions in the fourth quarter of 2025 totaling $0.8 million.
Non-GAAP operating loss was $8.2 million for the fourth quarter of 2025, including the impact of non-recurring items above. Please see "Non-GAAP Financial Measures" for further details. In addition to the non-GAAP operating loss the fourth quarter 2025 included certain one-time charges of $0.5 million associated with the commutation of a reinsurance contract in the Company's International Insurance Services business, and expenses for certain legal matters of $0.2 million.
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 fourth quarter of 2025, total fee revenues from the Program Services segment were $3.1 million, which represents a 91.5% sequential increase compared to the third quarter of 2025. These revenues are derived from fees from both new and existing client programs. Premium produced by client programs during the fourth quarter 2025 totaled $93.8 million, a 79.2% increase over the third quarter 2025.
Year to date 2025 premium produced by client programs totaled $188.3 million, an 81.4% increase over the $103.8 million in premium produced by client programs in 2024. This resulted in $6.1 million of fee revenue for the year ended December 31, 2025, a 67.2% increase compared with $3.6 million for 2024.
Legacy Reinsurance Segment
The Legacy Reinsurance segment consists of the AmTrust Reinsurance and Diversified Reinsurance segments previously reported by 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 GLS.
During the fourth quarter of 2025, the Legacy Reinsurance segment produced an underwriting loss of $7.6 million, compared to an underwriting loss of $9.0 million in the third quarter of 2025. The underwriting loss in the fourth quarter included $3.2 million of losses related to the segment's AmTrust business and $4.3 million of losses related to the Diversified business, which included $3.3 million in non-recurring charges.
The AmTrust business reported an underwriting loss of $2.9 million for the current accident year in the fourth quarter of 2025 as the run-off of certain multiple year policies continues. In addition, there was approximately $0.4 million in adverse prior period loss development ("PPD") during the fourth quarter of 2025. Net adverse PPD consisted of $4.8 million from the AmTrust Quota Share, which was largely offset by an increase of $4.2 million in the amount recoverable under the Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Cavello Bay Reinsurance Limited. AmTrust's Hospital Liability business experienced modestly favorable development of approximately $0.3 million which was offset by adverse development on older excess of loss coverages. PPD in the Master Quota Share largely emanated from AmTrust's international structural defect and warranty business. More modest adverse development in U.S. small commercial and program business was substantially offset by continuing favorable development in Workers' Compensation and other lines of business.
The results for the segment's Diversified business include $2.8 million in non-recurring expenses related to aforementioned arbitration and employee separation matters, as well as an additional non-recurring net charge of $0.5 million related to final accounting and commutation of an IIS-related reinsurance contract. Excluding these non-recurring charges, the adjusted underwriting loss for the fourth quarter was $1.0 million, which reflects the ongoing run-off of the Company's international operations.
Investment Activities and Other Gains
The Company reported combined income from investment activities totaling $3.7 million for the three months ended December 31, 2025, resulting from net investment income of $3.3 million and realized and unrealized investment gains of $0.4 million, the latter of which was from Maiden's legacy alternative asset portfolio.
Also, during the fourth quarter, the Company recognized foreign exchange and other gains of $0.4 million. This included a gain of $0.9 million in the revaluation of a contingent receivable in the insurance distribution industry partly offset by net foreign exchange losses due to depreciation of the U.S dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.
General and Administrative Expenses
Excluding general and administrative expenses allocated to segments, and non-recurring expenses for certain legal matters that were $0.2 million in the fourth quarter of 2025, corporate general and administrative expenses were $5.2 million, reflecting elevated levels of certain costs such as legal and professional fees related to ongoing litigation and other legal matters.
Balance Sheet
Total assets were $1.0 billion at December 31, 2025, and shareholders' equity was $128.3 million.
As of December 31, 2025, the Company has available net operating loss ("NOL") carryforwards of $473.1 million for income tax purposes. Approximately $388.7 million of NOL carryforwards expire in various years beginning in 2029. As of December 31, 2025, approximately $84.4 million or 17.8% 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 March 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.
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 and estimates concerning the anticipated benefits of the business combination and integration of Maiden Holdings and Kestrel, 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 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, the effects of emerging claim and coverage issues, changes in the demand for our products, outcomes of ongoing litigation or other legal matters, 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 RelationsRick Black / Ken Dennard[email protected]
KESTREL GROUP LTD
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share and per share data)
December 31,2025
December 31, 2024
(Audited)
(Audited)
ASSETS
Investments:
Fixed maturities, available-for-sale, at fair value (Amortized cost 2025 - $162,472)
$ 163,167
$ ,
Equity securities, at fair value (Cost: 2025 - $11,145)
11,748
—
Equity method investments
33,532
—
Other investments
173,358
—
Total investments
381,805
—
Cash and cash equivalents
7,801
4,286
Restricted cash and cash equivalents
9,146
—
Accrued investment income
4,970
—
Reinsurance balances receivable, net
724
—
Reinsurance recoverable on unpaid losses
461,197
—
Net loan receivable from related party
86,883
—
Intangible assets
9,347
—
Funds withheld receivable
10,956
—
Other assets
17,631
1,224
Assets held for sale
19,495
—
Total assets
$ 1,009,955
$ 5,510
LIABILITIES
Reserve for loss and loss adjustment expenses
$ 637,169
$ ,
Unearned premiums
17,406
—
Accrued expenses and other liabilities
51,572
904
Senior notes - principal amount
262,361
—
Less: unamortized fair value adjustment
87,959
—
Senior notes, net
174,402
—
Liabilities held for sale
1,122
—
Total liabilities
881,671
904
Commitments and Contingencies
EQUITY
Common shares
100
27
Additional paid-in capital
177,534
10,107
Accumulated other comprehensive income
916
—
Retained earnings (accumulated deficit)
1,197
(5,528)
Treasury shares, at cost
(51,463)
—
Total Equity
128,284
4,606
Total Liabilities and Equity
$ 1,009,955
$ 5,510
Book value per common share(3)
$ 16.57
$ 1.67
Common shares outstanding
7,741,943
2,749,996
KESTREL GROUP LTD
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands of U.S. dollars, except share and per share data)
For the Three Months Ended December 31,
For the Year Ended December 31,
2025
2024
2025
2024
Revenues:
Gross premiums written
