Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and our results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This management's discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and "Risk Factors" in this Annual Report on Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Overview
Accelerant Holdings, together with its subsidiary companies, connects Members with Risk Capital Partners through its Risk Exchange. We, together with our Risk Capital Partners, provide property and casualty insurance to policyholders via our network of Members, which are typically MGAs. We focus on small-to-medium sized commercial clients primarily in the US, EU, Canada and the UK.
Significant Events and Transactions
Initial Public Offering
We completed our IPO in July 2025. For additional information regarding the IPO, including related net proceeds, equity impact, use of proceeds and expenses associated with the Accelerant Holdings LP distribution and our equity award plans, refer to Note 16 and Note 21 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
Upsizing of Flywheel Re
The Flywheel Re reinsurance treaty has been extended and upsized through additional capital from new and existing institutional investors, with the most recent upsizing in March 2026 to support business assumed by Flywheel Re over a multi-year risk period scheduled to end in 2028. Flywheel Re is a Cayman Islands special purpose reinsurance company that provides committed multi-year collateralized quota share capacity, capitalized by long-term institutional investors, and it is not consolidated in our financial statements.
Overview of Accelerant
We operate a data-driven risk exchange that connects selected specialty insurance underwriters (the “supply side” of our platform) with Risk Capital Partners (the “demand side” on our platform). Our Risk Exchange reduces information asymmetries and operational barriers present in the traditional insurance value chain by leveraging proprietary technology to share actionable high-fidelity data and insights with platform participants.
The Accelerant Risk Exchange simplifies the traditional insurance value chain which is fragmented, costly, and inflexible. Legacy technology, excessive intermediation, and misaligned incentives cause data leakage, high costs, and wasted resources for participants. Our technology-powered platform addresses these issues by connecting our Members, and Risk Capital Partners, including insurers, reinsurers, and institutional investors. On the supply side of our Risk Exchange, we deliver a full service offering to our Members that includes insights and analytics, distribution management, operational resources, and the commitment of stable underwriting capacity. Our offerings free our Members to focus on growing their businesses through their core expertise of profitable underwriting. On the demand side of our Risk Exchange, we offer Risk Capital Partners an attractive, validated, and diversified portfolio of specialty insurance premium that may otherwise be difficult to access elsewhere. Risk Capital Partners who provide capacity through our Risk Exchange pay us fees to source, manage, and monitor risks on their behalf that recur when the underlying policies renew.
By harnessing our proprietary technology, access to data, and industry experience, we believe we have created the preeminent marketplace of the specialty insurance industry. As of December 31, 2025, we had 280 Members (an increase of 15 Members since September 30, 2025) and 95 Risk Capital Partners on our platform. We have grown Exchange Written Premium at a 187% compounded annual growth rate since our inception. As we mature and continue to scale our business, we expect our annual growth rate to moderate.
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Our Members (“Supply Side” of the Risk Exchange)
The vast majority of our Members are independent third parties in which Accelerant has no ownership stake. We refer to these Members as “Independent Members.” Each Independent Member enters into a long-term contract with Accelerant where it agrees to underwrite certain types of policies through the Risk Exchange. Generally, these contracts are five years in duration and subject to annual renewal, with Accelerant retaining a right to terminate early for performance reasons. For a large majority of the gross written premium produced by Independent Members, Accelerant has an exclusive arrangement to write such policy types with the Independent Member. Additionally, Accelerant has the right of first refusal to offer on the Risk Exchange any new products an Independent Member may launch.
The remaining Members consist of “Mission Members” and “Owned Members.” Mission Members are Members started within Mission Underwriters, our MGA incubation platform. With Mission Underwriters, we support entrepreneurial specialty underwriters with start-up capital and operational tools and resources to form their own MGAs that are then jointly owned by Mission Underwriters and the specialty underwriters. Our primary means of identifying such underwriters is our reliance on the Accelerant management team’s knowledge of the specialty insurance markets, which includes reliance on certain historical metrics (such as loss ratios) from their underwriting track records at reputable incumbent institutions and, generally, prospective underwriters’ reputations among the industry, leveraging our experience and tenure in the space. Such knowledge includes an awareness of high-quality underwriters in these markets. Mission Underwriters attracts specialty underwriters with its independence, turnkey back office, and equity incentivization combined with the overall Accelerant value proposition. We supplement this market awareness with arrangements with a number of specialist recruiters that seek out underwriters that match our desired profile. While our ongoing recruitment efforts will continue to be important as we grow, we do not currently expect any associated recruitment costs to increase materially over time. Mission Underwriters owns the majority of the MGAs that it helped to create, with meaningful equity shared with management teams based on the performance of their MGA. Owned Members are Members in which we either have a minority ownership interest or controlling equity interest. Typically, our investments in Owned Members take the form of an initial minority ownership interest and a contractual call option for a controlling equity ownership interest over time.
The gross premium written by Independent Members and placed through the Risk Exchange is referred to as “Independent Premium.” The gross premium written by Mission Members and Owned Members and placed through the Risk Exchange is referred to as “Owned Premium.” Historically, Independent Premium has comprised the large majority of Exchange Written Premium and we expect this trend to continue over time.
Members and Exchange Written Premium Detail
Years Ended December 31,
($ in millions)
# of Members
Exchange Written Premium
# of Members
Exchange Written Premium
# of Members
Exchange Written Premium
Independent Members
Mission Members
Owned Members
Total
Exchange Premium Growth Rate
Our Risk Capital Partners (“Demand Side” of the Risk Exchange)
Currently, our Risk Capital Partners include third-party insurance companies, reinsurance companies, and institutional investors. As of December 31, 2025, 18 Risk Exchange Insurers (an increase of three and five Risk Exchange Insurers since September 30, 2025 and December 31, 2024, respectively) accessed gross premium written directly from the Risk Exchange (on a primary insurance basis) rather than via reinsurance from Accelerant Underwriting, accounting for 30% of the premium written on the Risk Exchange for the year ended December 31, 2025, as compared to 16% for the year ended December 31, 2024.
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We refer to gross written premium written directly on behalf of Risk Exchange Insurers as “Third-Party Direct Written Premium.” All premiums written by Accelerant Underwriting, including that which is ultimately reinsured to institutional investors and third-party reinsurers, is referred to as “Accelerant GWP.” We expect the premium placed with Risk Exchange Insurers will increase in coming years, and as a result, the contribution from Third-Party Direct Written Premium will continue to increase. This is expected to lead to less overall revenue growth in our Underwriting segment, but more direct commission income within our Exchange Services segment.
For Accelerant Underwriting, we have historically targeted reinsuring approximately 90% of our gross premium written to institutional investors and third-party reinsurers, with Accelerant retaining approximately 10% of these gross premiums written. For the year ended December 31, 2025, Accelerant-Retained Exchange Premium represented 9% of Exchange Written Premium.
Our Business Model
We operate our business across three reportable segments – Exchange Services, which is the core of Accelerant, as well as MGA Operations and Underwriting. Exchange Services and MGA Operations are both fee-based businesses. Underwriting captures the net ceding commission income from reinsurers and Flywheel Re and net underwriting profit from retained business that is written or assumed by Accelerant Underwriting.
• Exchange Services: The Exchange Services segment includes the revenue and expenses associated with our Risk Exchange. The Risk Exchange is our operating platform that incorporates all of our technology, data ingestion, and agency operations that serve the needs of our Members and Risk Capital Partners. Risk Capital Partners writing premiums directly through the Risk Exchange pay us a fixed-percentage, volume-based fee for sourcing, managing and monitoring the business they write, which is netted by the amount the Risk Exchange pays in performance-based commissions to Members.
• MGA Operations: This segment reports all revenue and expenses from Mission Members and Owned Members in which we have majority ownership positions. Equity method accounting is used for Owned Members in which we have a minority equity ownership interest. The largest component of the segment is our investment in the 31 Mission Members as of December 31, 2025. There are 15 Owned Members as of December 31, 2025, of which nine are majority-owned and controlled by us and therefore consolidated in our financial statements.
• Underwriting: Our Underwriting segment includes all revenue and expenses associated with our Accelerant Underwriting companies (each of which solely operates through the Risk Exchange) and reinsurance companies. We view the Underwriting segment as a strategic capability and source of operational flexibility and alignment with current and prospective Risk Capital Partners. Accelerant Underwriting earns premiums and pays losses from business sourced and retained through the Risk Exchange. Accelerant Underwriting pays commissions to the Risk Exchange as consideration to access this business on market-consistent terms with Risk Exchange Insurers. This is offset by the ceding commission we receive from several third-party reinsurers including Flywheel Re, a reinsurance sidecar, for ceding premium and losses to them. The performance of our Underwriting segment will vary with the performance of the portfolio reinsured to Risk Capital Partners. We expect the portion of Risk Exchange premium underwritten by Accelerant Underwriting to decrease over time, relative to other segments, as Risk Exchange Insurers increase in number and grow their premium written through our Risk Exchange.
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A high-level view of our business model is included below (based on activity for the year ended December 31, 2025 disclosed in Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K):
Notes :
(all amounts exclude general and administrative expenses)
(1) Calculated as Exchange Services direct commission income divided by Exchange Written Premium (rounded from 7.9%).
(2) Calculated as MGA Operations direct commission income, net investment income, net realized gains on investments, and net unrealized losses on investments (after excluding unrealized gains of $32.5 million attributable to investments accounted for under the measurement alternative) divided by Exchange Written Premium attributable to Mission Members and Owned Members (rounded from 17.8%).
(3) Calculated as net earned premium and ceding commission income, reduced by losses and loss adjustment expenses and the amortization of DAC, plus net investment income and net realized gains on investments expressed as a percentage of total Underwriting gross earned premium (rounded from 3.7%).
Key Factors that Could Affect Our Performance
Ability to Maintain and Grow Our Member Base
We believe there is a significant opportunity to attract new Members to the Risk Exchange and grow our existing Members. This is impacted by our ability to continue to deliver a holistic and compelling value proposition. We believe that existing and prospective Members will continue to be drawn to the Risk Exchange, and the growth of Members facilitated by our strong Member-centric service model, high value-add data and analytics capabilities, and ability to provide stable multi-year capacity.
Access to Third-Party Capital Providers to Support Members
Our future revenue growth also depends, in part, on our ability to expand our relationships with new and existing third-party capital providers to meet the growth of gross premiums sourced by our Members. We believe that the low-hazard, low-limit specialty business that we source from our Members will continue to attract these Risk Capital Partners. Since 2019, we have grown our Risk Capital Partners from two to 95 as of December 31, 2025. As of December 31, 2025, we had 18 Risk Exchange Insurers.
Sourcing a Portfolio with Sustainable Loss Ratios
Our ability to maintain the support of Risk Capital Partners depends, in part, on maintaining an attractive ratio of gross premiums to gross losses and gross commissions that Risk Capital Partners pay to the Risk Exchange. We believe the historic quality of the portfolio written by our Members is reflected by the gross loss ratios of 51.3%, 54.3% and 51.3% for the years ended December 31, 2025, 2024 and 2023, respectively. We intend to leverage our data and analytics capability and our team of expert underwriters to continue to produce a portfolio with increasing diversification and attractive risk/return characteristics for our Risk Capital Partners.
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Investing in Technology Platform Capabilities
We continue to invest in our Risk Exchange to add capabilities and enhance the overall user experience of Risk Exchange participants and deepen our analytical and underwriting insights. Our ability to successfully attract high-quality specialty underwriters and risk capital depends on our ability to continue to develop value from our technology platform. We may choose to increase our level of investment in technology from past levels to enhance the platform capabilities and our competitive position. We believe that our ability to deliver platform capabilities that our Risk Exchange participants perceive as unique will continue in the future.
Costs of Being a Public Company
As we continue to operate as a public company, we will be required to continue to implement changes in certain aspects of our business and develop, manage, and train employees to comply with ongoing public company requirements. We have and will also continue to incur new expenses, including public reporting obligations, proxy statements, shareholder meetings, stock exchange fees, transfer agent fees, SEC and Financial Industry Regulatory Authority ("FINRA") filing fees.
Key Components of Our Results of Operations
Revenue
Ceding commission income
We cede a significant portion of the premiums written on behalf of Accelerant Underwriting to third-party reinsurance companies or institutional investors through Flywheel Re. This generates positive ceding commissions which are recorded as a reimbursement for (and reduction of) the acquisition costs related to the reinsurance portion of the ceded insurance business. Ceding commissions that are in excess of the proportionate share of the DAC of the business ceded are deferred and amortized over the same period in which the related premium is earned. The amortization of this excess ceding commission income is recorded as “Ceding commission income” in the consolidated statements of operations within revenue. Certain ceding commissions are subject to sliding scale adjustments based on the actual loss experience of covered insurance contracts, which can result in the need for us to refund previous commissions received, resulting in a reduction of income in the determined period, or conversely, result in incremental commissions and related income. These adjustments often occur well after the ceding commissions are earned based on the development of insurance liabilities. In such instances, commission adjustments are not subject to deferral and are instead recorded directly as income or loss when determined. Accordingly, in all cases, we adjust ceding commissions as of the reporting date for our best estimate of experience for reinsured insurance policies.
Direct commission income
Accounting treatment of direct commissions received in the Exchange Services and the MGA Operations segments depends on whether the direct commission is being paid on an intercompany basis or by a third party.
Direct commissions paid by one Accelerant entity to another (referred to as “intercompany basis”) are required to be eliminated in consolidation pursuant to generally accepted accounting principles. These include fees paid by Accelerant Underwriting to the Risk Exchange, commissions paid by the Risk Exchange to Mission Members and/or to Owned Members, and fees paid by third party Risk Exchange Insurers to the Risk Exchange on premiums which are assumed by Accelerant Underwriting. These intercompany direct commissions are recognized under “Direct commission income” in our consolidated statements of operations under the segment to which they relate and are fully recognized by the segment when the services and related performance obligations are completed.
While these intercompany basis commissions are all eliminated on a consolidated basis, we nevertheless derive a significant economic benefit from these commissions. Unlike third parties, which bear the costs of the services performed by the Risk Exchange in the form of cash payments, we do not bear the cost of such services once fully eliminated, resulting in less commission amortization expense over the insurance policy term. This has the practical effect of increasing consolidated earnings as the corresponding premiums are earned. Direct commission income paid by third parties in the Exchange Services or MGA Operations segments on premiums that are otherwise not assumed by Accelerant Underwriting are fully recognized in the current period under “Direct commission income” in the statement of operations, to the extent that the underlying services and performance obligations to which they relate have been performed. As more business is written by Risk Exchange Insurers, we expect a higher proportion of direct commission income to be recognized on a consolidated basis (instead of being subject to elimination on an intercompany business basis, as discussed above).
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Net earned premiums
Net earned premiums represent the earned portion of GWP placed with Accelerant Underwriting companies, less the portion of our GWP that is ceded to third-party reinsurers under our quota share and excess of loss reinsurance agreements. Premiums are earned in proportion to the amount of insurance protection provided over the term of the insurance contract. Unearned premiums represent the portion of premiums written applicable to the unexpired term of the related policy.
Net investment income
Net investment income represents interest earned from fixed maturity securities, short-term securities and other investments. Dividends from equity securities and other investments are also included in net investment income. Interest, dividend income and amortization of fixed maturity market premiums and discounts related to these securities are recorded in net investment income, net of investment management and custody fees. The principal factors that influence net investment income are the size of our investment portfolio and the yield on that portfolio.
We have certain unconsolidated investments within our MGA Operations segment and we account for these investments under the equity method, whereby we record our proportionate share of income or loss from such investments within net investment income (or the measurement alternative accounted for at fair value based on observable price changes or impairment whereby such amount is included in net unrealized gains or losses on investments). Any decline in value of equity method investments considered by management to be other than temporary is charged to income in the period in which it is determined.
Net realized and unrealized gains (losses) on investments
Our equity securities primarily consist of interests in investment funds that primarily invest in debt securities. The equity securities are measured at fair value with changes in fair value recognized in net realized and unrealized gains (losses) on investments. Realized gains and losses on disposition of investments are based on specific identification of investments sold.
We hold other investments such as limited partnership and private equity investments in operating entities whereby we elected the measurement alternative to carry such investments at cost, less any impairment and to mark to fair value when observable prices in identical or similar investments from the same issuer occur with changes in fair value recognized in net unrealized gains on investments.
Expenses
Losses and LAE
The reserves for losses and LAE include estimates for unpaid claims and claim expenses on reported losses as well as estimates of losses incurred but not reported (“IBNR”), net of reinsurance. These reserves represent our best estimates of the unpaid portion of ultimate costs of all reported and unreported losses incurred through the balance sheet date, and these estimates are based upon the assumption that past developments are an appropriate indicator of future events, among other factors. The reserves are based on individual claims, case reserves and other estimates reported, as well as actuarial estimates of ultimate losses.
Inherent in the estimates of ultimate losses are expected trends in claim severity and frequency and other factors which could vary significantly as claims are settled. Ultimate losses are estimates and may vary materially from the amounts provided in the consolidated financial statements. These estimates are reviewed regularly. As experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are reflected in our consolidated statements of operations in the period in which they become known and are accounted for as changes in estimates. The unpaid losses and LAE are presented on an undiscounted basis.
Amortization of deferred acquisition costs
Policy acquisition costs represent the costs directly related to the successful acquisition of new and renewal insurance contracts. The costs are deferred and amortized over the same period in which the related premiums are earned. These costs principally consist of commissions, fees, brokerage, premium tax expenses, and direct agency costs. The amounts presented within the consolidated balance sheets pertain to the DAC associated with the retained portion of insurance policies we issue, as the acquisition costs associated with the ceded portion of the insurance policies are offset by ceding commissions received from our reinsurance providers. Deferred policy acquisition costs are reviewed to determine if they are recoverable from future income, including investment income. Unrecoverable deferred policy acquisition costs, if any, are expensed in the period identified.
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General and administrative expenses
General and administrative expenses primarily consist of salaries, employee benefits and other general operating expenses that are expensed as incurred, and share-based compensation expenses. Generally, we expect our distribution, underwriting, and claims operating expenses to be most closely tied to growth of our membership and Risk Exchange premium volume. However, these and other functions within the Risk Exchange (including costs of supporting the development of the Risk Exchange), and our other segments have large, fixed-cost components that we believe will increase operating leverage as gross premiums continue to grow. Share-based compensation expenses represent amortization of the grant date fair value of equity awards granted to employees and directors, including restricted stock units, stock options, and other awards that can settle in cash or the common shares, over the requisite service period using the straight-line method. Forfeitures are recognized as they occur. The portion of the awards that settle in our common shares are non-cash in nature. We expect share-based compensation expenses to fluctuate over time in connection with new equity grants, changes in our workforce, and the overall structure of our long-term incentive programs.
Interest expenses
Interest expenses primarily relate to amounts paid on our debt financing obligations, including amortized debt issuance costs.
Depreciation and amortization
Depreciation and amortization expenses primarily relate to amortization of capitalized technology development costs, as well as amortization of intangible assets associated with acquisitions of businesses (including our investments in Owned Members).
Profits interest distribution expenses
Projects interest distribution expenses consist of non-cash profits interest distribution expenses related to the settlement of all outstanding profits interest awards through the distribution of 65,270,453 of our Class A common shares held by Accelerant Holdings LP to certain of our officers and employees that fully vested upon the July 2025 IPO. The ultimate settlement of the profit interest awards was equity neutral as the contribution of the shares to officers and employees was reflected as a capital contribution to us by Accelerant Holdings LP in an equal and offsetting amount to the associated non-cash expense.
Other expenses
Other expenses represent costs related to our non-core business operations, primarily related to our global enterprise resource planning system and integrated financial reporting systems, and legal and advisory costs in connection with corporate development activities including mergers and acquisitions, capital raising activities and entity formations that support our growing business, as well as Mission profit sharing expenses. For the year ended December 31, 2025, other expenses included a termination fee payable to Altamont Capital of $25.0 million related to the then-existing management services agreement.
Income tax expense and deferred tax assets and liabilities
The provision for income tax consists of current and deferred tax expense. The calculation of current and deferred tax expense is based on tax rates and tax laws which have been enacted in the reporting period. Deferred tax assets and liabilities, result from temporary differences between the amounts recorded in the consolidated financial statements and the tax basis of assets and liabilities used in the various jurisdictional tax returns.
As of December 31, 2025, we had net deferred tax assets of $77.8 million and also apply valuation allowances to certain of our deferred tax assets of unutilized net operating losses (“NOLs”) and other basis differences in jurisdictions that have generated cumulative losses.
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Key Operating and Financial Metrics
We regularly review key operating and financial metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. Our key operating and financial metrics include operational, GAAP and non-GAAP financial measures which are useful in evaluating our performance and our GAAP financial results discussed below.
As further discussed in “Segment Information — Consolidation and Elimination Adjustments” our consolidated results are subject to consolidation and elimination adjustments with respect to transactions among the businesses within our segments, notably between the Risk Exchange and Accelerant-owned insurance companies. We view the Adjusted EBITDA generated by our segments as representative of the economics that each would generate if they were independent companies and if the intersegment transactions were with third parties.
Years Ended December 31,
(in millions, unless indicated)
Number of members
Net revenue retention
Exchange written premium (2)
Accelerant direct written premium (2)
Third-party direct written premium (2)
Accelerant-retained exchange premium (2)
Exchange written premium growth rate (2)
Total revenues
Gross loss ratio
(Loss) income before income taxes
Net (loss) income
Non-GAAP financial measures (1)
Adjusted net income (loss) (1)
Adjusted EBITDA (1)
Adjusted EBITDA margin (1)
(1) Refer to “—Reconciliation of Non-GAAP financial measures” section for details on how non-GAAP measures are defined and reconciled to GAAP measures.
(2) See the definitions of Exchange Written Premium, Accelerant Direct Written Premium, Third-Party Direct Written Premium, Accelerant-Retained Exchange Premium, and Exchange Written Premium Growth Rate below for explanation of calculations and metrics.
Number of Members
We define the number of Members as those under contract with our Risk Exchange as of the period end date. We view the number of Members as an important metric to assess our financial performance because Member growth drives our revenue from fees, commissions, and net retained premiums; expands brand awareness and our market penetration; and generates additional data to continue to attract more risk capital and accelerate the compounding momentum of our platform.
As of December 31, 2025, we had 280 Members. Our Members wrote $4.19 billion of Exchange Written Premium for the year ended December 31, 2025. This compares to Exchange Written Premium of $3.11 billion for the year ended December 31, 2024, representing a 35% increase. Of our 280 Members, 31 are Mission Members, 15 are Owned Members, and 234 are Independent Members. Of the $4.19 billion in Exchange Written Premium for the year ended December 31, 2025, 70% was written by Accelerant Underwriting as Accelerant Direct Written Premium and 30% was written by our 18 Risk Exchange Insurers as Third-Party Direct Written Premium.
Number of MGA Operations Members
We define the number of MGA Operations members as the number of Mission Members and Owned Members under contract with the Risk Exchange as of the period end date.
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Net Revenue Retention
We define Net Revenue Retention, expressed as a percentage, as the current period’s Exchange Written Premium for Members that were actively writing Exchange Written Premium in the comparable period divided by these same Members’ prior-period Exchange Written Premium. This measure demonstrates an aggregate measure of the net growth of Exchange Written Premium from previously onboarded Members.
Exchange Written Premium
We define Exchange Written Premium as the total GWP written through the Accelerant Risk Exchange, including both gross premiums written on behalf of Accelerant Underwriting and written directly on behalf of Risk Exchange Insurers.
Accelerant Direct Written Premium
We define Accelerant Direct Written Premium, expressed as a percentage of Exchange Written Premium, as the GWP written directly by Accelerant Underwriting, the majority of which we cede directly to Risk Capital Partners through our reinsurance arrangements.
Third-Party Direct Written Premium
We define Third-Party Direct Written Premium, expressed as a percentage of Exchange Written Premium, as the GWP written directly with our Risk Exchange Insurers.
Accelerant-Retained Exchange Premium
We define Accelerant-Retained Exchange Premium, expressed as a percentage, as Accelerant GWP net of ceded written premium for the trailing twelve-month period, divided by total Exchange Written Premium for the trailing twelve-month period. This represents the percentage of total Exchange Written Premium that Accelerant-owned insurance companies retain relative to total written premiums. We expect this retained portion of Exchange Written Premium in the aggregate to decrease over time as Exchange Written Premium is increasingly written with existing and new Risk Exchange Insurers.
For the year ended December 31, 2025, Accelerant Underwriting reinsured 89% of Accelerant GWP to third-party reinsurers. Of this amount, 31% of our Accelerant GWP was ceded to Flywheel Re during the year ended December 31, 2025.
Exchange Written Premium Growth Rate
We define Exchange Written Premium Growth Rate, expressed as a percentage, as the increase in Exchange Written Premium in the current period compared to Exchange Written Premium from the comparable period in the prior year period. It is calculated as the difference between the current period's Exchange Written Premium and the comparable prior period's Exchange Written Premium, divided by the Exchange Written Premium of the prior period. This metric provides insight into the growth trajectory of our premium volumes generated through our Risk Exchange and serves as a key indicator of business expansion, Member acquisition, and existing Member growth.
Total Revenues
Total revenues consist of the following items: Ceding commission income; Direct commission income; Net earned premiums; Net investment income; Net realized gains on investments and Net unrealized (losses) gains on investments.
Gross Loss Ratio
Gross loss ratio is calculated as gross incurred losses and loss adjustment expense divided by gross earned premium, expressed as a percentage. Gross loss ratio excludes the impact of premium and loss and loss adjustment expense ceded to reinsurers. Gross loss ratio represents the percentage of gross premium earned during the period that will be required to pay current and future claims, based on management’s best estimates.
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Reconciliation of Non-GAAP financial measures
Adjusted EBITDA and Adjusted Net Income (Loss)
Adjusted EBITDA and Adjusted Net Income (Loss) are non-GAAP measures, which we believe should be used to evaluate our financial performance by excluding certain items that are related to our non-core business operations and therefore are not considered to be directly attributable to our underlying operating performance. Adjusted EBITDA and Adjusted Net Income (Loss) are internal performance measures used in the management of our operations. We believe that disclosing Adjusted EBITDA and Adjusted Net Income (Loss) enables investors, analysts, rating agencies and other users of our financial information to more easily analyze our underlying business performance. Adjusted EBITDA and Adjusted Net Income (Loss) should not be used as substitutes for net income (loss), and other companies may define Adjusted EBITDA and Adjusted Net Income (Loss) differently than we do.
We define Adjusted EBITDA as GAAP net income (loss) less the impact of depreciation and amortization, interest expenses, income tax expenses and the following items:
• Other expenses : Represents costs related to our non-core business operations, primarily related to our global enterprise resource planning system and integrated financial reporting systems, and legal and advisory costs in connection with corporate development activities including mergers and acquisitions, capital raising activities, entity formations that support our growing business, and Mission profit sharing expenses.
• Non-recurring profits interest distribution expenses resulting from the IPO : Represents non-cash profits interest distribution expenses related to the settlement of all outstanding profits interest awards through the distribution of 65,270,453 of our Class A common shares held by Accelerant Holdings LP to certain of our officers and employees that fully vested upon the IPO. These expenses were entirely offset by a corresponding capital contribution from Accelerant Holdings LP for that distribution of shares. These expenses only could occur at the date of the IPO and will not recur.
• Share-based compensation expenses included within general and administrative expenses : Represents non-cash expense related to the fair value of share-based awards granted to employees and directors, including restricted stock units and stock options and other awards that can settle in cash, recognized over the requisite service period for the awards.
• Net foreign currency exchange gains (losses) : The functional currency for each of our operating subsidiaries is generally the currency of the local operating environment. Transactions in currencies other than the local operation’s functional currency are remeasured into the functional currency, and the resulting foreign exchange gains or losses are reflected in net foreign currency exchange gains (losses). Such gains and losses are generally offset by the translation of our subsidiaries who have the corresponding reinsurance-related balances within their own functional currencies, whereby such effects are translated to other comprehensive income, yielding a much lower net impact on total comprehensive income and equity (such measure differs from Adjusted EBITDA as it includes the effect of interest, taxes, depreciation and amortization, as well as foreign currency exchange gains (losses)).
We define Adjusted Net Income (Loss) as GAAP net income (loss) less the impact of other expenses, non-recurring profits interest distribution expenses, share-based compensation expenses, and the related tax effects.
Adjusted EBITDA Margin
We define Adjusted EBITDA Margin, a non-GAAP financial measure, as Adjusted EBITDA divided by total revenue. Adjusted EBITDA margin is an internal performance measure used in the management of our operations.
Adjusted EBITDA and Adjusted EBITDA margin should not be considered substitutes for the reported results prepared in accordance with GAAP and should not be considered in isolation or as alternatives to GAAP net income or net (loss) as indicators of our financial performance. Although we use Adjusted EBITDA and Adjusted EBITDA margin as financial measures to assess the performance of our business, such use is limited because it does not include certain material costs necessary to operate our business. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as indications that our future results will be unaffected by unusual or non-recurring items. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of our most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.
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The following table provides a reconciliation of net (loss) income to Adjusted net income (loss), Adjusted EBITDA and Adjusted EBITDA margin for the years ended December 31, 2025, 2024 and 2023:
Years Ended December 31,
(in millions)
Net (loss) income
Adjustments:
Profits interest distribution expenses
Share-based compensation expenses (1)
Other expenses (2)
Tax effect of adjustments to net (loss) income (3)
Adjusted net income (loss)
Adjustments:
Add back tax effect of adjustments to net income (loss)
Income tax expense
Interest expenses
Depreciation and amortization
Net foreign exchange losses (gains)
Adjusted EBITDA
Total revenues
Adjusted EBITDA margin
(1) Share-based compensation expenses are included in "General and administrative" expenses in our consolidated Statement of Operations.
(2) Other expenses for the years ended December 31, 2025, 2024 and 2023 consisted of the following:
Years Ended December 31,
(in millions)
System development non-operating costs
Professional costs related to corporate development and capital raise activities
Mission profit sharing expenses (including terminations)
Managed services agreement termination fee payable to Altamont
Individually insignificant costs
Total other expenses
(3) The tax effect of other expenses adjustments to net income (loss) for each period presented were calculated using the statutory tax rates for each of our legal entities where the expenses were incurred, including certain non-taxing jurisdictions. The statutory tax rates used in the calculations were adjusted in instances where our legal entities have applied full valuation allowances to their respective deferred tax assets of unutilized NOLs. As such, the tax effect for the respective years varies based on the jurisdictional mix of where the expenses were incurred in each year.
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Condensed Consolidated Results of Operations
The following tables reflect our consolidated results of operations for the years ended December 31, 2025, 2024 and 2023 in the format that we use to analyze our financial performance. This information is derived from our consolidated financial statements prepared in accordance with GAAP and included elsewhere in this Annual Report on Form 10-K.
Comparison of the Years Ended December 31, 2025 and 2024
Accelerant Holdings
Consolidated Statements of Operations Summary
Years Ended December 31,
(in millions)
Revenues
Ceding commission income
Direct commission income
Net earned premiums
Net investment income
Net realized gains on investments
Net unrealized gains on investments
Total revenues
Expenses
Losses and loss adjustment expenses
Amortization of deferred acquisition costs
General and administrative expenses (1)
Interest expenses
Depreciation and amortization
Profits interest distribution expenses (2)
Net foreign exchange losses (gains)
Other expenses
Total expenses
(Loss) income before income taxes
Income tax expense
Net (loss) income
Adjustment for net (income) loss attributable to non-controlling interests
Deemed dividend upon redemption of Class C preference shares
Net (loss) income attributable to Accelerant common shareholders
(1) General and administrative expenses include share-based compensation expenses of $53.6 million and $8.4 million for the years ended December 31, 2025 and 2024 , respectively.
(2) Non-cash profits interest distribution expenses related to the settlement of all outstanding profits interest awards through the distribution of 65,270,453 of our Class A common shares held by Accelerant Holdings LP to certain of our officers and employees that fully vested upon our July 2025 IPO. The ultimate settlement of the profit interest awards was equity neutral because the contribution of the shares to officers and employees was reflected as a capital contribution to us by Accelerant Holdings LP, which represented an equal and offsetting amount to the associated non-cash expense. For further information, refer to Note 21 in our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
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Comparison of the Years Ended December 31, 2025 and 2024
Ceding Commission Income
Ceding commission income of $356.8 million for the year ended December 31, 2025 increased $107.3 million (or 43.0%) from the prior year of $249.5 million due to the continued growth in our gross written premium base and the amount ceded to reinsurers. Ceding commission income for the years ended December 31, 2025 and 2024 included an increase of $21.6 million and a reduction of $15.5 million, respectively, due to net sliding scale commission adjustments resulting from the loss experience of covered insurance contracts.
The following table presents the amounts of ceding commissions deferred and amortized for the years ended December 31, 2025 and 2024:
Years Ended December 31,
(in millions)
Balance as of January 1,
Deferral of excess ceding commission income over deferred acquisition costs
Amortization of deferred excess ceding commissions to income
Foreign currency translation
Balance as of December 31,
The amortization of the excess deferred ceding commissions is recorded as “Ceding commission income” in our consolidated statements of operations.
Direct Commission Income
Direct commission income of $162.0 million for the year ended December 31, 2025 increased $95.3 million (or 142.9%) from the prior year of $66.7 million, primarily driven by commissions from third-party insurers and increased volume in our Exchange Services and MGA Operations segments on business written with unaffiliated entities.
Additionally, the amount of our business between Accelerant-affiliated entities (including from Underwriting to Exchange Services and Exchange Services to MGA Operations) increased year-over-year. However, all transactions between affiliated entities are fully eliminated in our consolidated results of operations. A discussion of the impact of consolidation and elimination adjustments is further discussed below under “— Segment Information — Consolidation and Elimination Adjustments.”
Net Earned Premium
Accelerant direct and assumed GWP of $3.38 billion for the year ended December 31, 2025 increased $471.1 million (or 16.2%) from the prior year of $2.91 billion. The increase was driven primarily by new and existing Member growth. Since December 31, 2024, we have added 63 new Members, bringing the total number of Members to 280 as of December 31, 2025. This Member growth was driven b y our continued expansion across all of our markets.
Net written premium of $358.5 million for the year ended December 31, 2025 increased $103.9 million (or 40.8%) from $254.6 million in the prior year as a result of GWP growth. We expect this retained portion of Exchange Written Premium in the aggregate to decrease over time as third-party insurance companies, writing directly on the Risk Exchange on a primary basis, continue to increase in number and grow their retention.
Net earned premium of $298.1 million for the year ended December 31, 2025 increased $71.5 million (or 31.6%) from $226.6 million in the prior year as a result of the increased net written premium described above.
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The table below shows the amount of premium written on a gross and net basis, as well as net earned premium for the years ended December 31, 2025 and 2024:
Years Ended December 31,
(in millions)
Gross written premiums
Ceded written premiums
Net written premiums
Net earned premiums
Net Investment Income
Net investment income of $48.7 million for the year ended December 31, 2025 increased $9.8 million (or 25.2%) from $38.9 million in the prior year. The increase was driven primarily by the increase in total average investments year-over-year. Refer to Note 4 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Net Realized Gains on Investments
Net realized gains on investments of $7.9 million for the year ended December 31, 2025 increased $6.0 million (or 315.8%) from $1.9 million in the prior year. The 2025 net realized gains on investments includes a gain of $2.7 million related to the sale of a portion of our interest in one of our owned MGA investments. Refer to Note 4 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Net Unrealized Gains on Investments
Net unrealized gains on investments of $39.4 million for the year ended December 31, 2025 increased $20.4 million (or 107.4%) compared to $19.0 million in the prior year. The 2025 amounts were primarily related to a gain of $29.9 million related to an observable price increase on one of our owned MGA investments accounted for under the measurement alternative and a gain of $8.4 million relating to an investment in a TPA . The 2024 amounts were also primarily related to observable price increases related to similar investments accounted for under the measurement alternative. Refer to Note 4 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
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Loss and Loss Adjustment Expenses
Net losses and LAE of $204.0 million for the year ended December 31, 2025 increased $36.7 million (or 21.9%) compared to $167.3 million in the prior year. This increase was driven primarily by growth in our net earned premium base.
Gross incurred losses and LAE of $1.58 billion for the year ended December 31, 2025 increased by $372.2 million (or 30.7%) compared to the prior year of $1.21 billion, while ceded losses and LAE of $1.38 billion for the year ended December 31, 2025 increased $335.5 million (or 32.1%) compared to the prior year of $1.04 billion under our external reinsurance program.
Our net loss ratios of 68.4% and 73.8% differ from the gross loss ratios of 51.3% and 54.3% for the years ended December 31, 2025 and 2024, respectively, primarily due to decisions that we make regarding the amount of excess of loss reinsurance secured (since this will reduce the amount of retained premiums we have). The decision to engage such reinsurance, which, in most cases, inures to the benefit of our Risk Capital Partners, supports our management of downside risk to large losses within our financial statements.
See “Segment Information—Comparison of the years ended December 31, 2025 and 2024—Underwriting” below for further information regarding our loss and loss adjustment expenses.
The table below reflects our net loss ratio for the years ended December 31, 2025 and 2024:
Years Ended December 31,
(in millions)
Gross incurred loss and LAE
Ceded incurred loss and LAE
Net incurred loss and LAE
Net loss ratio
Amortization of Deferred Acquisition Costs
Amortization of DAC of $80.3 million for the year ended December 31, 2025 decreased by $1.1 million (or 1.4%) compared to $81.4 million in the prior year due to a decrease in our retention rate of net earned premium, partially offset by growth in our business.
The following table presents the amounts of acquisition costs deferred and amortized for insurance business retained by us for the years ended December 31, 2025 and 2024:
Years Ended December 31,
(in millions)
Balance as of January 1,
Direct commissions and other acquisition costs on retained business
Amortization of deferred acquisition costs
Foreign currency translation losses
Balance as of December 31,
General and Administrative Expenses
General and administrative expenses of $400.4 million for the year ended December 31, 2025 increased $151.1 million (or 60.6%) compared to $249.3 million in the prior year, although as noted below, when excluding the share-based compensation expenses, the increase was 44.0% which was lower than the 51.5% increase in total revenues.
The increase in general and administrative expenses was primarily attributable to increases in employee compensation and benefits, driven by growth in headcount to support our growth across all markets, share-based compensation expenses, consisting of equity grants awarded prior to, in conjunction with, and subsequent to the IPO, consulting and professional fees, and other administrative expenses.
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The following table presents the components of general and administrative expenses for the years ended December 31, 2025 and 2024:
Years Ended December 31,
(in millions)
Employee compensation and benefits
Consulting and professional fees
Share-based compensation expenses
Other administrative expenses, net
Total general and administrative expenses
Interest Expenses
Interest expenses of $10.9 million for the year ended December 31, 2025 decreased $1.2 million (or 9.9%) compared to $12.1 million in the prior year. The decline was driven primarily by lower interest rates year-over-year.
Depreciation & Amortization
Depreciation and amortization expenses of $35.2 million for the year ended December 31, 2025 increased $8.6 million (or 32.3%) compared to $26.6 million in the prior year driven primarily by increased amortization of a larger balance of capitalized information technology development costs.
Profits Interest Distribution Expenses
Profits interest distribution expenses consisted of non-cash profits interest distribution expenses related to the settlement of all outstanding profits interest awards through the distribution of 65,270,453 of our Class A common shares held by Accelerant Holdings LP to certain of our officers and employees that fully vested upon the IPO. The ultimate settlement of the profits interest awards was equity neutral as the contribution of the shares to officers and employees was reflected as a capital contribution to us for those shares contributed by Accelerant Holdings LP in an equal and offsetting amount to the associated non-cash expense. For further information, refer to Note 21 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
Net Foreign Exchange (Gains) Losses
For the years ended December 31, 2025 and 2024, we recognized net foreign exchange losses of $20.2 million and net foreign exchange gains of $5.1 million, respectively. As noted above, transactions in currencies other than the functional currency of our various international-based subsidiary companies are remeasured into their functional currency, and the resulting foreign exchange gains or losses are reflected in net foreign currency exchange gains (losses). Such gains and losses are generally offset by the translation of our subsidiary companies who have the corresponding reinsurance-related balances within their own functional currencies, whereby such effects are translated to other comprehensive income, yielding a much lower net impact on total comprehensive income and equity.
For the years ended December 31, 2025 and 2024, offsetting foreign exchange gains of $12.4 million and losses of $4.9 million were recognized in other comprehensive income related to foreign currency translation adjustments, respectively. Also included were $4.5 million of gains and $3.5 million of losses for the years ended December 31, 2025 and 2024, respectively, related to foreign exchange impacts related to unrealized gains (losses) on fixed maturity securities.
See "Foreign Exchange Currency Risk" below for further information regarding how we mitigate risks resulting from foreign exchange currency fluctuations.
Other Expenses
Other expenses of $104.1 million for the year ended December 31, 2025 increased $65.1 million (or 166.9%) compared to $39.0 million in the prior year. The increase was driven primarily by a $25.0 million termination fee payable to Altamont related to a then-existing management services agreement and a $20.6 million increase in Mission profit sharing expenses, most of which was attributed to a $15.8 million charge for permanent settlement of certain of our Mission Member series profit sharing arrangements. Mission's profit sharing and award programs are a central part of our strategy to create long-term alignment with both Member series heads and key members of Mission's management team through performance-based incentives. Mission's business continues to perform well beyond our expectations and we view the issuance of such awards to represent significant long-term value for Accelerant.
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We also experienced increases in professional costs related to corporate development activities of $14.6 million, which included $5.0 million of expenses specifically related to our recently completed IPO that were not eligible for offset within equity, and a $5.3 million increase in system development non-operating expenses driven by costs associated with supporting the development and implementation of our integrated reinsurance and accounting systems.
Years Ended December 31,
(in millions)
System development non-operating costs
Professional costs related to corporate development and capital raise activities
Mission profit sharing expenses (including terminations)
Managed services agreement termination fee payable to Altamont
Individually insignificant costs
Total other expenses
Income Tax Expense
Income tax expense was $23.3 million for the year ended December 31, 2025, representing an increase of $14.2 million (or 156.0%) compared to the prior year. Our consolidated effective tax rates (“ETRs”) were (1.8)% and 28.4%, respectively for the years ended December 31, 2025 and 2024. The ETR for the year ended December 31, 2025 was impacted by certain discrete items related to non-deductible profits interest distribution expense and termination fee costs incurred in connection with our recent IPO and gains from the revaluation of other investments under the measurement alternative.
The comparability of our income tax expense and corresponding ETR to prior years was significantly impacted by our March 2025 change in the Accelerant Holdings and certain intermediary holding companies (together, the "Holding Companies") tax residency from the Cayman Islands to the UK, following approval of our Board of Directors. Upon becoming UK tax residents, the Holding Companies benefitted from operational efficiencies including, but not limited to, lower withholding tax rates applicable to dividend distributions from certain US subsidiaries under the US-UK tax treaty. In addition, the aggregate income (loss) of the Holding Companies became subject to UK income tax effective as of the March 2025 date of change to UK tax residency. The Holding Companies income or losses generate UK tax expense or tax benefits (to the extent that there is current or projected taxable income available in our UK operations).
In addition, and notably in periods prior to March 2025, the comparability of our tax expense and ETRs was challenged due to the mix of taxable income subject to tax in certain jurisdictions, losses incurred in zero tax rate jurisdictions and valuation allowances offsetting available carry-forward losses in certain jurisdictions. The relationship of our income tax expense to pre-tax income (loss) is atypical because our taxable income has predominately been generated in the US, UK, Ireland, and Puerto Rico resulting in income tax expense in those jurisdictions (entities in such jurisdictions are referred to as “tax-paying entities”).
Meanwhile, we have incurred operating losses in zero tax rate jurisdictions (such as in our corporate and reinsurance entities in the Cayman Islands resulting in no income tax benefit. We have also incurred pre-tax operating losses in Belgium and other jurisdictions where we have generated cumulative operating losses; however, in each of those cases, a valuation allowance has been recorded against the corresponding deferred tax assets (entities in these two types of jurisdictions are referred to as “non-tax paying entities”).
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Taxable losses in one jurisdiction generally cannot be applied to offset earnings in another. In certain other jurisdictions, losses in one entity may not be used to offset taxable income generated by another entity in that same jurisdiction.
The composition of our ETRs among our tax-paying and non-tax paying entities, which demonstrates the non-tax paying entities' effect on the total ETR, for the years ended December 31, 2025 and 2024 were as follows:
Year Ended
December 31, 2025
Year Ended
December 31, 2024
(in millions)
Tax-paying entities
Nondeductible profits interests and termination fee expenses
Non-tax paying entities
Total
Tax-paying entities
Non-tax paying entities
Total
Income (loss) before income taxes
Income tax expense
Effective tax rate
The ETR for the year ended December 31, 2024 benefitted from a net release in our valuation allowance of $9.7 million as further described in Note 10 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
Enactment of new US tax legislation
On July 4, 2025, the US enacted the budget reconciliation package H.R.1, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), which includes a number of income tax provisions, among others. We are still analyzing any potential impact of the tax provisions in the OBBBA, but we do not expect these provisions to have a material impact on our results from operations.
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Comparison of the Years Ended December 31, 2024 and 2023
Accelerant Holdings
Consolidated Statements of Operations Summary
Years Ended December 31,
(in millions)
Revenues
Ceding commission income
Direct commission income
Net earned premiums
Net investment income
Net realized gains on investments
Net unrealized gains on investments
Total revenues
Expenses
Losses and loss adjustment expenses
Amortization of deferred acquisition costs
General and administrative expenses (1)
Interest expenses
Depreciation and amortization
Net foreign exchange (gains) losses
Other expenses
Total expenses
Income (loss) before income taxes
Income tax expense
Net income (loss)
Adjustment for net loss attributable to non-controlling interests
Net income (loss) attributable to Accelerant common shareholders
(1) General and administrative expenses include share-based compensation expenses of $8.4 million and $4.8 million for the years ended December 31, 2024 and 2023, respectively.
Comparison of the Years Ended December 31, 2024 and 2023
Ceding Commission Income
Ceding commission income of $249.5 million for the year ended December 31, 2024 increased $85.3 million (or 51.9%) from the prior year as we continued to grow our premium base and the amount ceded to reinsurers. Ceding commission income for the years ended December 31, 2024 and 2023 included reductions of $15.5 million and $19.1 million, respectively, due to net sliding scale commission adjustments resulting from the loss experience of covered insurance contracts.
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The following table presents the amounts of ceding commissions deferred and amortized for the years ended December 31, 2024 and 2023:
Years Ended December 31,
(in millions)
Balance as of January 1,
Deferral of excess ceding commission income over deferred acquisition costs
Amortization of deferred excess ceding commissions to income
Foreign currency translation
Balance as of December 31,
The amortization of the excess deferred ceding commissions is recorded as ceding commission income in our consolidated statements of operations.
Direct Commission Income
Direct commission income of $66.7 million for the year ended December 31, 2024 increased by $29.1 million (or 77.4%) compared to the prior year primarily due to commissions from third-party Risk Exchange business and increased volume in our Exchange Services and MGA Operations segments on business written with unaffiliated entities during the year ended December 31, 2024.
Additionally, the portion of our business between Accelerant-affiliated entities (including from Underwriting to Exchange Services and Exchange Services to MGA Operations) increased year-over-year. However, all transactions between affiliated entities are fully eliminated in our consolidated results of operations. A discussion of the impact of consolidation and elimination adjustments is further discussed below under “— Segment Information — Consolidation and Elimination Adjustments.”
Net Earned Premium
Accelerant direct and assumed GWP of $2.91 billion for the year ended December 31, 2024 increased by $1.21 billion (or 71.2%) from the prior year primarily due to new and existing Member growth. Since December 31, 2023, 62 new Members were added, resulting in 217 Members as of December 31, 2024. This Member growth was driven by our continued expansion within the U.S. market, maintenance of our Member growth in Europe, and our recent expansion into Canada.
Net written premium of $254.6 million for the year ended December 31, 2024 increased by $63.7 million (or 33.4%) from the prior year as a result of GWP growth.
Net earned premium of $226.6 million for the year ended December 31, 2024 increased by $121.5 million (or 115.6%) from the prior year as a result of the increased net written premium described above.
The table below shows the amount of premium written on a gross and net basis, as well as earned premium for the years ended December 31, 2024 and 2023:
Years Ended December 31,
(in millions)
Gross written premiums
Ceded written premiums
Net written premiums
Net earned premiums
Net Investment Income
Net investment income of $38.9 million for the year ended December 31, 2024 increased $19.6 million (or 101.6%) compared to the prior year primarily due to the significant increase in investments. Refer to Note 4 to our annual consolidated financial statements for additional information.
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Net Realized Gains on Investments
Net realized gains on investments of $1.9 million for the year ended December 31, 2024 increased $1.4 million (or 280.0%) as compared to 2023. Refer to Note 4 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Net Unrealized Gains on Investments
Net unrealized gains on investments of $19.0 million increased $1.7 million (or 9.8%) compared to the year ended December 31, 2024 as compared to 2023. Refer to Note 4 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Loss and Loss Adjustment Expenses
Net losses and LAE of $167.3 million increased $87.0 million (or 108.3%) for the year ended December 31, 2024 as compared to the prior year due to the increase in our net earned premium of $226.6 million and $105.1 million for the years ended December 31, 2024 and 2023, respectively.
Gross incurred losses and LAE increased $534.9 million (or 79.0%), while ceded losses and LAE increased $447.9 million (or 75.0%) under our external reinsurance program.
Our net loss ratios of 73.8% and 76.4% differ from the gross loss ratios of 54.3% and 51.3% for the years ended December 31, 2024 and 2023, respectively, due to decisions that we make regarding the amount of excess of loss reinsurance secured (since this will reduce the amount of retained premiums we have). The decision to engage such reinsurance, which inures to the benefit of our risk capital partners, supports our management of downside risk to large losses within our financial statements.
See “Segment Information—Comparison of the Year Ended December 31, 2024 and 2023—Underwriting” below for further information regarding our loss and loss adjustment expenses.
The table below reflects our net loss ratio for the years ended December 31, 2024 and 2023:
Years Ended December 31,
(in millions)
Gross incurred loss and LAE
Ceded incurred loss and LAE
Net incurred loss and LAE
Net loss ratio
Amortization of Deferred Acquisition Costs
Amortization of deferred acquisition costs of $81.4 million for the year ended December 31, 2024 increased by $31.5 million (or 63.1%) compared to the prior year due to the amortization of DAC from the increase in net earned premium.
The following table presents the amounts of acquisition costs deferred and amortized for insurance business retained by us for the years ended December 31, 2024 and 2023:
Years Ended December 31,
(in millions)
Balance as of January 1,
Direct commissions and other acquisition costs on retained business
Amortization of deferred acquisition costs
Foreign currency translation losses
Balance as of December 31,
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General and Administrative Expenses
General and administrative expenses of $249.3 million increased by $66.8 million (or 36.6%) for the year ended December 31, 2024 as compared to the prior year due to our continued expansion and overall growth. The year-over-year increase primarily related to employee compensation and benefit costs driven by growth in headcount to support our growth across all markets, while consulting, professional and other expenses also increased at a rate notably less than our overall increase in premium and revenue growth.
The following table presents the components of general and administrative expenses for the years ended December 31, 2024 and 2023:
Years Ended December 31,
(in millions)
Employee compensation and benefits
Consulting and professional fees
Share-based compensation expenses
Other administrative expenses, net
Total general and administrative expenses
Interest Expenses
Interest expenses of $12.1 million increased $1.2 million (or 11.0%) for the year ended December 31, 2024 as a result of higher interest rates compared to the prior year.
Depreciation & Amortization
Depreciation and amortization expenses of $26.6 million increased $12.1 million (or 83.4%) for the year ended December 31, 2024 as compared to the prior year primarily due to increased amortization of capitalized information technology development costs.
Other Expenses
Other expenses of $39.0 million decreased $7.3 million (or 15.8%) for the year ended December 31, 2024 as compared to the prior year, primarily related to a decrease of $8.2 million in system development non-operating expenses, including certain costs associated with supporting the development and implementation of accounting and financial reporting systems, a decrease of $3.1 million in professional costs related to corporate development activities, and a decrease of $3.0 million in individually insignificant costs, partially offset by an increase of $7.0 million of Mission profit sharing expenses.
Years Ended December 31,
(in millions)
System development non-operating costs
Professional costs related to corporate development and capital raise activities
Mission profit sharing expenses
Individually insignificant costs
Total other expenses
Income Tax Expense
Income tax expense of $9.1 million decreased $11.1 million (or 55.0%) for the year ended December 31, 2024 as compared to the prior year, while the consolidated ETR were 28.4% and (46.0)%, respectively. However, as noted above the comparability of our tax expense and ETRs is often challenged due to the mix of taxable income subject to tax in certain jurisdictions, losses incurred in zero tax rate jurisdictions and valuation allowances offsetting available carry-forward losses in certain jurisdictions. In addition, tax expense and ETRs in 2024 and 2023 were impacted by valuation allowance adjustments during the respective years as disclosed in Note 10 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
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The relationship of our income tax expense to our pre-tax income (loss) is atypical because our taxable income has predominately been generated in the U.S., UK and Ireland resulting in income tax expense in those jurisdictions (which we refer to as “tax-paying entities”).
Meanwhile, we have incurred operating losses in zero tax rate jurisdictions (such as in our corporate and reinsurance entities in the Cayman Islands) resulting in no income tax benefit. We have also incurred pre-tax operating losses in Belgium and other countries with cumulative operating losses, however, in each case a valuation allowance has been recorded against the corresponding deferred tax assets in those jurisdictions (we refer to entities in these two types of jurisdictions as “non-tax paying entities”).
Taxable losses in one jurisdiction generally cannot be applied to offset earnings in another. In certain other jurisdictions, losses in one entity may not be used to offset taxable income generated by another entity in that same jurisdiction.
As noted in the table below, and especially for the year ended December 31, 2023, the ETR for the tax paying entities generally appears normal, while the aggregate or total tax ETR appears unusual because of the losses that do not receive offsetting tax benefits. The taxes in 2024 for the tax paying entities were also impacted by a tax benefit of $14.6 million that was recorded to reflect the adjustment of certain valuation allowances in the UK related to the integration of the UK Branch of Accelerant Insurance Europe Limited, which is domiciled in Belgium, within our UK tax group as well as underlying improvement in the UK Branch's operations. The UK Branch had previously been reported as a component of our overall Belgian operations, which record full valuation allowances due to recurring operating losses attributable to its underwriting operations. There were several other items impacting the ETRs in both periods (refer to the ETR reconciliation included in Note 10 to our annual consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
The following tables represent the composition of our ETRs among our tax-paying and non-tax paying entities, which demonstrates the non-tax paying entities' effect on the total ETR, for the years ended December 31, 2024 and 2023:
Year Ended December 31, 2024
Year Ended December 31, 2023
(in millions)
Tax-paying entities
Non-tax paying entities
Total
Tax-paying entities
Non-tax paying entities
Total
Income (loss) before income taxes
Income tax expense
Effective tax rate
Segment Information
We have three reportable segments, which align to the nature of the services we offer:
• Exchange Services – Our Exchange Services segment includes the fees paid by Risk Exchange Insurers and Accelerant Underwriting for sourcing, managing and monitoring the portfolio of business written by Members reduced by the expenses associated with providing these services.
• MGA Operations – Our MGA Operations segment includes the fees earned by Mission Members and Owned Members, predominantly for originating and underwriting a portfolio of insurance policies, reduced by the expenses associated with providing those services.
• Underwriting – Our Underwriting segment includes the revenue from net earned premium, investment income and the ceding commission paid to us by our third-party reinsurers and institutional investors, reduced by net incurred losses, the amortization of DAC and the general and administrative costs of operating our insurance and reinsurance companies.
Corporate functions, including holding company expenses, are included in Corporate and Other and our consolidation and eliminations adjustments for intersegment activity are shown separately from our reportable segments.
We consider the segment presentations of our Exchange Services, MGA Operations and Underwriting segments prior to elimination to be the best way to evaluate our business and how these business components would be presented if they were standalone operations. Such presentation is also representative of the results that would be generated from third parties as we build additional third-party insurance relationships through our Risk Exchange.
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The following includes the financial results of our three reportable segments for the years ended December 31, 2025 and 2024. Corporate functions and certain other businesses and operations are included in Corporate and Other.
Year Ended December 31, 2025
(in millions)
Exchange Services
MGA Operations
Underwriting
Total Segments
Corporate and Other (1)
Consolidation and elimination adjustments
Total
Revenues
Ceding commission income (2)
Direct commission income
Affiliated entities
Unaffiliated entities
Net earned premiums
Net investment income
Net realized gains on investments
Net unrealized gains on investments
Segment revenues
Losses and loss adjustment expenses
Amortization of deferred acquisition costs
General and administrative expenses (3) (4) (5)
Adjusted EBITDA
Interest expenses
Depreciation and amortization
Profits interest distribution expenses
Share-based compensation expenses (5)
Net foreign exchange losses
Other expenses (6)
Loss before income taxes
(1) Corporate and Other includes shared services and other activities, which represent business activities that do not meet the definition of a reportable segment.
(2) Ceding commission income of our Underwriting segment includes the effect of sliding scale adjustments based on actual loss experience. For further information on sliding scale commission adjustments, refer to Note 9 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
(3) General and administrative expenses is comprised of employee compensation and benefits, consulting and professional fees and all other administrative expenses. The composition of such amounts by each reportable segment was as follows:
(in millions)
Exchange Services
MGA Operations
Underwriting
Total
Employee compensation and benefits
Consulting and professional fees
Other administrative expenses
Total general and administrative expenses
(4) The consolidation and elimination adjustments for general and administrative expenses consist of expenses attributable to Exchange Services and MGA Operations that form components of acquisition costs of insurance policies that would be capitalized in consolidation, which are offset by adjustments as components of the other consolidation and elimination adjustments.
(5) Share-based compensation expenses are included in "General and administrative expenses" within the consolidated statements of operations (and excluded from the segment presentation above) .
(6) Other expenses for the year ended December 31, 2025 consist of a $25.0 million termination fee for our former management services agreement contract with Altamont Capital, $20.0 million of system development non-operating expenses, $27.7 million of professional costs related to corporate development and capital raise activities (including $5.0 million specifically related to our IPO that were not eligible for capitalization as issuance costs), $27.6 million of
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Mission profits sharing expense (including $15.8 million related to the agreement to settle and terminate a portion of the outstanding profit sharing arrangements) and $3.8 million of individually insignificant costs.
Year Ended December 31, 2024
(in millions)
Exchange Services
MGA Operations
Underwriting
Total Segments
Corporate and Other (1)
Consolidation and elimination adjustments
Total
Revenues
Ceding commission income (2)
Direct commission income
Affiliated entities
Unaffiliated entities
Net earned premiums
Net investment income
Net realized gains on investments
Net unrealized (losses) gains on investments
Segment revenues
Losses and loss adjustment expenses
Amortization of deferred acquisition costs
General and administrative expenses (3) (4) (5)
Adjusted EBITDA
Interest expenses
Depreciation and amortization
Share-based compensation expenses (5)
Net foreign exchange gains
Other expenses (6)
Income before income taxes
(1) Corporate and Other includes shared services and other activities, which represent business activities that do not meet the definition of a reportable segment.
(2) Ceding commission income of our Underwriting segment includes the effect of sliding scale adjustments based on actual loss experience. For further information on sliding scale commission adjustments, refer to Note 9 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
(3) General and administrative expenses is comprised of employee compensation and benefits, consulting and professional fees and all other administrative expenses. The composition of such amounts by each reportable segment was as follows:
(in millions)
Exchange Services
MGA Operations
Underwriting
Total
Employee compensation and benefits
Consulting and professional fees
Other administrative expenses
Total general and administrative expenses
(4) The consolidation and elimination adjustments for general and administrative expenses consist of expenses attributable to Exchange Services and MGA Operations that form components of acquisition costs of insurance policies that would be capitalized in consolidation, which are offset by adjustments as components of the other consolidation and elimination adjustments.
(5) Share-based compensation expenses are included in "General and administrative expenses" within the consolidated statements of operations (and excluded from the segment presentation above) .
(6) Other expenses for the year ended December 31, 2024 consists of $14.7 million of system development non-operating costs, $13.1 million of professional costs related to corporate development and capital raise activities, $7.0 million of Mission profits sharing expense, and $4.2 million of individually insignificant costs.
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Year Ended December 31, 2023
(in millions)
Exchange Services
MGA Operations
Underwriting
Total Segments
Corporate and Other (1)
Consolidation and elimination adjustments
Total
Revenues
Ceding commission income (2)
Net earned premiums
Direct commission income
Affiliated entities
Unaffiliated entities
Net investment income
Net realized gains on investments
Net unrealized gains on investments
Segment revenues
Losses and loss adjustment expenses
Amortization of deferred acquisition costs
General and administrative expenses (3) (4) (5)
Adjusted EBITDA
Interest expenses
Depreciation and amortization
Share-based compensation expenses (5)
Net foreign exchange losses
Other expenses (6)
Loss before income taxes
(1) Corporate and Other includes shared services and other activities, which represent business activities that do not meet the definition of a reportable segment.
(2) Ceding commission income of our Underwriting segment includes the effect of sliding scale adjustments based on actual loss experience. For further information on sliding scale commission adjustments, refer to Note 9 our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
(3) General and administrative expenses are comprised of employee compensation and benefits, consulting and professional fees and all other expenses. The composition of such amounts by each reportable segment was as follows:
Exchange Services
MGA Operations
Underwriting
Total
Employee compensation and benefits
Consulting and professional fees
Other expenses
Total general and administrative expenses
(4) The consolidation and elimination adjustments for general and administrative expenses consist of expenses attributable to Exchange Services and MGA Operations that form components of acquisition costs of insurance policies that would be capitalized in consolidation, which are offset by adjustments as components of the other consolidation and elimination adjustments.
(5) Share-based compensation expenses are included in "General and administrative expenses" within the consolidated statements of operations (and excluded from the segment presentation above).
(6) Other expenses for the year ended December 31, 2023 consists of $22.9 million of system development non-operating costs, $16.2 million of professional costs related to corporate development activities, and $7.2 million of individually insignificant costs.
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Comparison of the Years Ended December 31, 2025 and 2024
Exchange Services
As noted above, our segment results are presented prior to elimination and, as such, a portion of Exchange Services direct commission income revenue was generated from transactions with Accelerant Underwriting, which is eliminated upon consolidation. Additionally, a portion of Exchange Services revenue is generated by activity with MGA Operations that is also eliminated upon consolidation, as further described below. The percentage of direct commission revenue from unaffiliated third parties continues to grow and was 24% for the year ended December 31, 2025, an increase from 10% for the year ended December 31, 2024.
Exchange Services revenue grew by $112.2 million (or 50%) to $334.9 million for the year ended December 31, 2025, as compared to 2024. This growth is driven primarily by increases in direct commission income, supported by an increase in Members from 217 at December 31, 2024 to 280 at December 31, 2025 and Net Revenue Retention of 126% among continuing Members. As a result, Exchange Written Premium increased to $4.19 billion for the year ended December 31, 2025 (from $3.11 billion in 2024).
Third-Party Direct Written Premium from our 18 Risk Exchange Insurers comprised 30% of total direct written premium for the year ended December 31, 2025, an increase from 16% in 2024. The year-over-year acceleration in Third-Party Direct Written Premium was driven primarily by the increased volume from Risk Exchange Insurers onboarded during 2024. Commission income is recognized in accordance with written premium when the performance obligations underlying the services have been satisfied. The increase in direct commission income from affiliated entities accounted for $51.8 million of the year-over-year growth in revenue for the year ended December 31, 2025 compared to 2024.
Hadron, one of our Risk Exchange Insurers which is primarily owned by Altamont Capital Partners, accounted for $677.2 million and $215.6 million of Exchange Written Premium during the years ended December 31, 2025 and 2024, respectively. As other third-party insurers increase their participation on the Risk Exchange, Hadron's share of Third-Party Direct Written Premium has declined throughout 2025 from 67% at March 31, 2025, to 58% at June 30, 2025, 54% at September 30, 2025, and 47% at December 31, 2025.
General and administrative expenses for the segment increased to $110.4 million for the year ended December 31, 2025, over the prior year of $65.0 million, representing a 70% increase . These increases were largely driven by the expansion and scaling to support the growth of the Risk Exchange, whereby revenues grew 50% in 2025 compared to 2024.
We added to the talent and headcount of our data science, product and technology teams to expand our platform offering. We expect that these expenses will not vary directly with the size of the Exchange Written Premium once we have built the desired capabilities. We also added to our distribution, underwriting and claims teams, which are expected to grow more in line with the overall number of Members or size of the portfolio.
Adjusted EBITDA of $224.5 million for year ended December 31, 2025 increased $66.8 million, or 42%, compared to 2024. This growth was driven by increased Exchange Written Premium volumes which grew by $1.08 billion, or 35%, for the year ended December 31, 2025, driven by stable underlying margins and the aforementioned ramping of Risk Exchange Insurers onboarded during 2024, partially offset by higher year-over-year Member profit commission accruals, along with the increase in expenses noted above.
The year-over-year growth rate for the year ended December 31, 2025 reflects the impact of certain Member movements that adversely impacted the comparison of the 2025 Exchange Written Premium Growth Rate of 35% to the preceding periods. Specifically, at the end of the second quarter of 2025, we put a Member with below-average unit economics that had historically written $50 million to $55 million of premium per quarter on the Risk Exchange into runoff. Excluding that Member, Exchange Written Premium grew by $1.18 billion (or 41%) for the year ended December 31, 2025 as compared to 2024.
The Adjusted EBITDA margin was 67% for the year ended December 31, 2025, down from 71% from 2024 . This decline was driven primarily by increased expenses related to investments we are making in our Risk Exchange capabilities.
MGA Operations
As noted above, our segment results are presented prior to elimination and, as such, a portion of MGA Operations direct commission income revenue was generated from transactions between Accelerant-affiliated entities, which are eliminated upon consolidation. MGA Operations direct commission income from third parties has been increasing and accounted for 39% of the segment's direct commission income for the year ended December 31, 2025 compared to 31% in 2024.
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MGA Operations revenue grew by $99.4 million to $249.1 million for the year ended December 31, 2025, primarily by growth in direct commission income (an increase of $66.8 million from the year ended December 31, 2024). As of December 31, 2025, we had 46 total Members in MGA Operations consisting of 15 Owned Members and 31 Mission Members. Direct commission income is recognized in accordance with written premium when the performance obligations underlying the services have been satisfied.
Revenue for the year ended December 31, 2025 includes $32.5 million of investment unrealized gains following observable price changes related to an owned MGA held as an investment that we account for under the measurement alternative. Refer to Note 4 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
MGA Operations Adjusted EBITDA of $112.6 million for the year ended December 31, 2025 increased $68.5 million compared to 2024, driven primarily by an increase in direct commission income of $66.8 million, which included a $43.7 million increase from Mission Underwriters, as well as an increase from our Owned Members of $23.1 million primarily due to organic growth, and an increase in unrealized gains of $29.4 million, primarily driven by the aforementioned investment gains, partially offset by a $30.9 million increase in general and administrative expenses.
For the year ended December 31, 2025, general and administrative expenses increased by $30.9 million to $136.5 million compared to the prior year, which was driven by the continued investment in Mission Underwriters. Specifically, Mission contributed $20.7 million of the year-over-year increase from the year ended December 31, 2024, primarily due to investments in newly acquired owned MGAs. The 29% increase in general and administrative expenses compared to a 45% increase in revenues for the year ended December 31, 2025 compared to 2024, excluding the effects of the aforementioned gain on our MGA investment.
Adjusted EBITDA margin for the segment increased to 45% for the year ended December 31, 2025, up from 29% in 2024, driven by higher direct commission income and unrealized gains, partially offset by increased general and administrative expenses as the segment continues to scale its operations.
Underwriting
The Underwriting segment generated revenues of $430.9 million for the year ended December 31, 2025, representing growth of 26%, compared to revenues of $341.1 million in 2024.
For the year ended December 31, 2025, net earned premium increased by $71.5 million to $298.1 million due to our retained written premium growth over the preceding periods. Revenues for the year ended December 31, 2025 also benefited from an increase of $12.9 million in ceding commission income as well as an aggregate increase in investment returns of $5.4 million compared to 2024.
The gross loss ratio on the gross premiums earned was 51.3% for the year ended December 31, 2025 compared to 54.3% in 2024. The corresponding net loss ratios (after impacts of our reinsurance programs) were 68.4% for the year ended December 31, 2025, compared to 73.8% in 2024. Our net loss ratio differs from the gross loss ratio due to decisions that we make regarding the amount of excess of loss reinsurance secured (since this will reduce the amount of retained premiums we have). The decision to engage such reinsurance, which, in most cases, inures to the benefit of our Risk Capital Partners, supports our management of downside risk to large losses within our financial statements. While the cost of the excess of loss reinsurance that we incur is reflected in our earned premiums, any reimbursements for such excess of loss reinsurance in the form of the ceding commissions we receive from Risk Capital Partners are not reflected in either our gross or net loss ratio.
The components of our Underwriting segment gross and net loss ratios are set forth in the tables below for the years ended December 31, 2025 and 2024:
Year Ended December 31, 2025
(in millions)
Gross
Ceded - Quota Share
Ceded - Excess of Loss & Other
Net
Earned premium
Losses and loss adjustment expenses
Loss ratio
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Year Ended December 31, 2024
(in millions)
Gross
Ceded - Quota Share
Ceded - Excess of Loss & Other
Net
Earned premium
Losses and loss adjustment expenses
Loss ratio
Adjusted EBITDA for the Underwriting segment was $57.4 million for the year ended December 31, 2025, representing a relative increase of $78.3 million compared to the Adjusted EBITDA loss of $20.9 million in 2024. This improvement was driven by the aforementioned increase in revenue and decrease in operating expenses due to improved operating leverage as the segment continues to reach operational maturity.
Corporate and Other
Corporate and Other includes the general and administrative expenses and investment results of our holding companies.
Adjusted EBITDA loss from Corporate and Other was $65.2 million for the year ended December 31, 2025, representing an increase of $49.4 million as compared to 2024. This increase was driven primarily by increased costs to support the growth of the business and an aggregate decrease in investment returns of $5.1 million for the year ended December 31, 2025. The decrease in investment returns was driven primarily by lower unrealized gains on our investment in TPAs. For the year ended December 31, 2025, the realized gain was $8.4 million compared to $19.8 million in the prior year.
Consolidation and Elimination Adjustments
As noted above, our business includes transactions that occur among our various segments. Our Accelerant-owned insurance companies within our Underwriting segment accounted for the majority of our Exchange Written Premium during the years ended December 31, 2025 and 2024 as we built out our business model and proved the value proposition for the connection of our Members and the Risk Exchange. We expect the amount of premium written with Risk Exchange Insurers to grow significantly over time. Similarly, Mission Members and Owned Members transact with our Risk Exchange in the sourcing of business. Our equity ownership interests in Mission Members and Owned Members allow us to participate in those commissions earned that otherwise would be paid to third parties or our Independent Members. The transactions among these entities must be eliminated in consolidation as they represent transactions among entities under common control. However, there are considerable benefits to these intercompany transactions, as we retain associated economics rather than incurring costs otherwise paid to third parties, thereby lowering our expense base.
The impacts to our financial statements can be observed in the consolidation and elimination adjustments column within our presentation of segments above. The following represents an explanation of the various components of activity for the years ended December 31, 2025 and 2024.
Impacts to direct commission income for Exchange Services and MGA Operations
Revenue generated from transactions between Accelerant-affiliated entities (including from Underwriting to Exchange Services and Exchange Services to MGA Operations) was $379.5 million for the year ended December 31, 2025, compared to $299.1 million in 2024. These amounts were eliminated, reflected by a corresponding offsetting entry in the consolidation and elimination adjustments column above. We present the segment results on a standalone basis, as if they were transactions with third parties, to assess their individual performance as well as to derive insight on the results we expect in the future as more business is sourced from Risk Exchange Insurers.
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Impacts to ceding commission income and amortization of deferred acquisition costs
The operating results of our Underwriting segment presented above include the full commissions paid to Exchange Services in the form of deferred acquisition costs. These costs are required to be capitalized and then amortized over the related policy term. Ceding commissions received from third-party reinsurers are first offset against the deferred acquisition costs for the business ceded, with any resulting excess ceding commissions amortized over the corresponding policy term as ceding commission income. These two factors result in the Underwriting segment incurring higher amortization of DAC expense and lower ceding commission income due to the presentation of the segment’s operating results on a standalone basis. Commissions paid to affiliates are eliminated, resulting in lower consolidated deferred acquisition costs. These eliminations increased the amount of ceding commission income (adjustments to increase ceding commission income by $261.9 million for the year ended December 31, 2025, compared to $167.5 million in 2024, while the amortization of deferred acquisition costs were decreased by $33.6 million for the year ended December 31, 2025, compared to $22.8 million in 2024.
Impacts to general and administrative expenses
There are costs eliminated in consolidation which consist of expenses attributable to Exchange Services and MGA Operations that form components of acquisition costs of insurance policies that would be capitalized in consolidation, which are offset by adjustments as components of the other consolidation and elimination adjustments. These eliminations were $36.5 million for the year ended December 31, 2025, compared to $56.7 million in 2024.
Comparison of the Years Ended December 31, 2024 and 2023
Exchange Services
As noted above, our segment results are presented prior to elimination and, as such, a portion of Exchange Services direct commission income revenue was generated from transactions with Accelerant Underwriting, which is eliminated upon consolidation. Additionally, a portion of Exchange Services revenue is generated by activity with MGA Operations that is also eliminated upon consolidation, as further described below. In total, Exchange Services direct commission income from third parties were stable during the two years ended December 31, 2024 and 2023 as we continued to attract third party insurers. Third party commission income accounted for 10% and 12% of the segment’s direct commission income for the years ended December 31, 2024 and 2023, respectively.
Exchange Services revenue grew by $99.4 million to $222.7 million or 81% for the year ended December 31, 2024 as compared to 2023. This growth is attributable to direct commission income and was driven by an increase in Members from 155 to 217 and Net Revenue Retention of 153% by continuing Members that drove Exchange Written Premium to $3.11 billion for the year ended December 31, 2024 from $1.79 billion for the year ended December 31, 2023. Third-Party Direct Written Premium from our 13 third-party Risk Exchange Insurers comprised 16% of the total Exchange Written Premium for the year ended December 31, 2024. Revenues are recognized in accordance with written premium when the performance obligations underlying the services have been satisfied. The increase in direct commission income from affiliated entities accounted for $92.0 million of the year-over-year growth in revenue.
Expenses for the segment increased to $65.0 million the year ended December 31, 2024 from $36.2 million for the year ended December 31, 2023, largely driven by the expansion and year-over-year scaling to support the growth of the Risk Exchange.
We added to the talent and headcount of our data science, product and technology teams to expand our platform offering. We expect the expenses associated with these areas will not vary directly with the size of the Exchange Written Premium once we have built the desired capabilities. We also added to our distribution, underwriting and claims teams, which are expected to grow more in line with the overall number of Members or size of the portfolio.
Adjusted EBITDA of $157.7 million grew $70.6 million for the year ended December 31, 2024 as compared to 2023, as higher Exchange Written Premium volumes (an increase of 1.32 billion or 74%) at improved underlying margins primarily due to our increased Third-Party Direct Written Premium were partially offset by higher year-over-year Member profit commission accruals, along with the increase in general and administrative expenses noted above.
The Adjusted EBITDA margin for the segment for the year ended December 31, 2024 of 71% was flat compared to prior year as a result of the increased revenues being offset by the cost of investments we are making in our Risk Exchange capabilities.
MGA Operations
As noted above, our segment results are presented prior to elimination and, as such, a portion of MGA Operations direct commission income revenue was generated from transactions between Accelerant-affiliated entities, which are eliminated upon consolidation. MGA Operations direct commission income from third parties increased year-over-year and represented 31% and 23% of the segment’s direct commission income for the years ended December 31, 2024 and 2023, respectively.
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MGA Operations revenue grew by $37.6 million to $149.7 million for the year ended December 31, 2024, resulting from a $44.2 million increase relating to direct commission income, offset by a decrease in investment returns, which is net investment income and net realized and unrealized gains on investments, of $6.6 million primarily related to a net realized gain recognized in the prior year. The increase in direct commission income was driven primarily by strong Net Revenue Retention of 130% during the period for Mission Members and Owned Members. As of December 31, 2024, we had 47 total Members in MGA Operations consisting of 17 Owned Members and 30 Mission Members. This was an increase of 6 Members from December 31, 2023. Revenues are recognized in accordance with written premium when the performance obligations underlying the services have been satisfied.
The Adjusted EBITDA margin for the segment increased to 29% for the year ended December 31, 2024 (from 28% in the prior period) due to an increase in direct commission income, partially offset by an increase in general and administrative expenses as the segment continues to scale its operations. On average, we expect our Mission Members to be profitable in 18 months from the date of becoming a Member.
MGA Operations Adjusted EBITDA of $44.1 million increased by $12.6 million for the year ended December 31, 2024, due to a $44.2 million increase in direct commission income, which included a $10.9 million increase from our Owned Members due to organic growth, as well as growth in Mission Underwriters, which contributed $33.3 million to the increase in direct commission income, partially offset by a $25.0 million increase in general and administrative expenses as well as a decrease in investment returns of $6.6 million. The increase in general and administrative expenses was driven by the continued investment in Mission Underwriters which contributed $20.2 million of the year-over-year increase, primarily due to investments in newly acquired owned MGAs.
Underwriting
The Underwriting segment revenues of $341.1 million for the year ended December 31, 2024 grew by 69%, from $201.3 million for 2023. Net earned premium of $226.6 million for the year ended December 31, 2024 increased by $121.5 million from $105.1 million for 2023 due to our gross written premium growth during the year ended December 31, 2024. This overall premium growth had an associated positive impact on ceding commission income which increased $3.6 million over the comparative period. The remaining increase in revenue related to a $20.5 million increase in net investment income due to year-over-year improvements in market conditions and larger portfolio size, partially offset by a $5.9 million negative variance in net unrealized gains on investments.
The gross loss ratio on the gross premiums earned was 54.3% and 51.3% for the years ended December 31, 2024 and 2023, respectively, with our net loss ratio (after impacts of our reinsurance programs) of 73.8% and 76.4%, for the years ended December 31, 2024 and 2023, respectively. Our net loss ratio differs from the gross loss ratio due to decisions that we make regarding the amount of excess of loss reinsurance secured (since this will reduce the amount of retained premiums we have). The decision to engage such reinsurance, which inures to the benefit of our risk capital partners, supports our management of downside risk to large losses. While the cost of the excess of loss reinsurance that we incur is reflected in our earned premiums, any reimbursements for such excess of loss reinsurance in the form of the ceding commissions we receive from risk capital partners are not reflected in either our gross or net loss ratio.
The components of our Underwriting segment gross and net loss ratios are set forth in the tables below for the years ended December 31, 2024 and 2023:
Year Ended December 31, 2024
(in millions)
Gross
Ceded - Quota Share
Ceded - Excess of Loss & Other
Net
Earned premium
Losses and loss adjustment expenses
Loss ratio
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Year Ended December 31, 2023
(in millions)
Gross
Ceded - Quota Share
Ceded - Excess of Loss & Other
Net
Earned premium
Losses and loss adjustment expenses
Loss ratio
Adjusted EBITDA loss for the Underwriting segment of $20.9 million for the year ended December 31, 2024 increased $17.5 million as compared to an Adjusted EBITDA loss of $3.4 million for 2023. The increase was driven by updated loss estimates and development and the related negative impact to sliding scale commissions primarily relating to EU and UK liability risks for the 2022 underwriting year for members that were discontinued or subject to significant responsive underwriting actions, as well as increased general and administrative expenses due to scaling of operations to support growth across our business model. Partially offsetting this decline was a $14.7 million improvement in investment returns driven by year-over-year market outperformance.
Corporate and Other
Corporate and Other includes the general and administrative expenses and investment results of our holding companies.
Adjusted EBITDA loss from Corporate and Other of $15.8 million for the year ended December 31, 2024 decreased by $9.8 million as compared to 2023 primarily due to investment gains related to our combined investments in the equity and warrants of an emerging technology enabled third-party administrator (that also provides services to certain of our Members).
Consolidation and Elimination Adjustments
As noted above, our business includes transactions that occur among our various segments. Our Accelerant-owned insurance companies within our Underwriting segment accounted for the majority of our Exchange Written Premium during the years ended December 31, 2024 and 2023 as we built out our business model and proved the value proposition for the connection of our Members and the Risk Exchange. We expect the amount of premium written with third-party Risk Exchange Insurers to grow significantly over time. Similarly, Mission Members and Owned Members transact with our Risk Exchange in the sourcing of business. Our equity ownership interests in Mission Members and Owned Members allow us to participate in those commissions earned that otherwise would be paid to third parties or our Independent Members. The transactions among these entities must be eliminated in consolidation as they represent transactions among entities under common control. However, there are considerable benefits to these intercompany transactions, as we retain associated economics rather than incurring costs otherwise paid to third parties, thereby lowering our expense base.
The impacts to our financial statements can be observed in the consolidation and elimination adjustments column within our presentation of segments above. The following represents an explanation of the various components of activity for the years ended December 31, 2024 and 2023.
Impacts to direct commission income for Exchange Services and MGA Operations
Revenue generated from transactions between Accelerant-affiliated entities (including from Underwriting to Exchange Services and Exchange Services to MGA Operations) of $299.1 million and $184.6 million for the years ended December 31, 2024 and 2023, respectively, were eliminated, reflected by a corresponding offsetting entry in the consolidation and elimination adjustments column above. We present the segment results on a standalone basis, as if they were transactions with third parties, to assess their individual performance as well as to derive insight on the results we expect in the future as more business is sourced from third-party Risk Exchange Insurers.
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Impacts to ceding commission income and amortization of direct acquisition costs
The operating results of our Underwriting segment presented above include the full commissions paid to Exchange Services in the form of deferred acquisition costs. These costs are required to be capitalized and then amortized over the related policy term. Ceding commissions received from third-party reinsurers are first offset against the deferred acquisition costs for the business ceded, with any resulting excess ceding commissions amortized over the corresponding policy term as ceding commission income. These two factors result in the Underwriting segment incurring higher amortization of DAC expense and lower ceding commission income due to the presentation of the segment’s operating results on a standalone basis. Commissions paid to affiliates are eliminated, resulting in lower consolidated deferred acquisition costs. This elimination increased the amount of ceding commission income (adjustments to increase ceding commission income by $167.5 and $85.8 million for the years ended December 31, 2024 and 2023, respectively) and lowered amortization of deferred acquisition costs (adjustments to decrease amortization expense by $22.8 million and $18.5 million for the years ended December 31, 2024 and 2023, respectively).
Impacts to general and administrative expenses
There are various allocations of costs between the operating segments which are similarly eliminated in consolidation. These eliminations were $56.7 million and $26.8 million for the years ended December 31, 2024 and 2023, respectively.
Liquidity and Capital Resources
General
Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet short-term and long-term cash requirements of its business operations. Accelerant Holdings’ insurance and reinsurance operations are subject to regulation and supervision in each of the jurisdictions where they are domiciled and licensed to conduct business. See “Regulation.” Generally, regulatory authorities have broad supervisory and administrative powers over such matters as licenses, standards of solvency, premium rates, policy forms, investments, security deposits, methods of accounting, form and content of financial statements, reserves for unpaid loss and LAE, reinsurance, minimum capital and surplus requirements, dividends and other distributions to shareholders, periodic examinations, and annual and other report filings. In general, such regulation is for the protection of policyholders rather than shareholders. Accelerant Holdings supports its liquidity needs with available liquid cash resources and short duration, high quality fixed income portfolios.
Sources and uses of funds
Accelerant Holdings is a holding company with no substantial operations of its own and its assets consist primarily of its investments in subsidiaries. Its cash needs primarily consist of the payment of corporate expenses, interest payments on senior notes and strategic investment opportunities (i.e., into MGA Operations). We may receive cash through (1) issuance of mezzanine equity, permanent equity or debt securities, (2) loans from banks, (3) corporate service fees from our Exchange Services, MGA Operations and Underwriting segments, (4) payments from subsidiaries pursuant to our consolidated tax allocation agreements, and (5) dividends from subsidiaries within the Exchange Services, MGA Operations and Underwriting segments. We may use the proceeds from these sources to support business growth, invest in Member MGAs and Mission Underwriters, pay taxes, and for other business purposes.
The Exchange Services and MGA Operations segments generate cash from net commission income from the services provided to both affiliates and third parties.
Cash generated by our insurance and reinsurance operating subsidiaries is used primarily to settle loss and LAE, reinsurance premiums, acquisition costs, interest expense, taxes, and general and administrative expenses. The underwriting segment generates liquidity, as premiums are received in advance of the time that losses are paid.
We file a consolidated federal income tax return for our US subsidiaries, and under our corporate tax allocation agreement, each participant is charged or refunded taxes according to the amount that the participant would have paid or received had it filed on a separate return basis with the Internal Revenue Service.
As of December 31, 2025, we had $2.61 billion in investments, cash, cash equivalents and restricted cash, compared to $1.88 billion as of December 31, 2024. As of December 31, 2025 we had $523.8 million within current accounts and money-market accounts of non-regulated entities, primarily our agencies servicing the Risk Exchange and holding companies, included within the total cash and investments, compared to $266.7 million as of December 31, 2024.
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Financial Condition
Equity
As of December 31, 2025 and 2024 total equity was $726.4 million and $427.0 million, respectively. The change as of December 31, 2025 compared to 2024 was primarily due to $376.0 million related to the issuance of Class A common shares and net income excluding the profits interest expenses, as partially offset by $175.3 million related to the redemption of Class C convertible preference shares. As referenced previously, the profits interest charge of $1.38 billion that created an overall net loss was fully offset by a corresponding capital contribution, and therefore had no impact to net equity.
Cash, Cash Equivalents and Restricted Cash
As of December 31, 2025 and 2024, we had cash and cash equivalents balances of $1.80 billion and $1.27 billion, respectively. We have historically held a significant portion of our invested assets in cash equivalents (money market funds) to maintain adequate liquidity to fund ongoing large reinsurance disbursements, as money market yields have approximated those available on fixed maturity investments.
As of December 31, 2025, we had restricted cash and cash equivalents balances of $83.1 million. Cash and cash equivalents are comprised of amounts in interest-bearing deposit accounts with financial institutions insured by the FDIC up to $250 thousand per account. Restricted cash and cash equivalents are comprised of cash and money market funds that have been contributed toward trusts. Generally, our cash and cash equivalents in interest-bearing deposit accounts may exceed FDIC insurance limits exposing us to credit risk in the event of default by the financial institutions. We believe the risk of loss from such an event of default is minimal, however, we periodically review the financial stability of these institutions.
Investment Portfolio
Our invested assets consist of fixed maturity securities, short-term investments, equity method investments, equity securities, and other investments. As of December 31, 2025, 83% of our investments were comprised of $670.4 million of available for sale fixed maturity securities. Also included in our investments were $41.6 million of short-term investments available for sale, at fair value, $84.0 million of other investments, and $10.4 million of equity method investments.
Our investment portfolio has consistently maintained high credit quality and short duration investments that are positioned for capital preservation. We primarily invest in liquid, short- and medium-term securities, and investment-grade fixed income, bond fund investment vehicles with low duration and volatility with the primary objectives of matching assets with liabilities and covering near-term obligations. We limit our exposure to alternative investments. As of December 31, 2025, our cash and fixed income and short-term investments portfolio represented 96% of our total portfolio. 89% of our fixed income and short-term investments carried an S&P fixed income rating of A or higher, the balance of which was rated BBB or higher, and maintained a duration of 2.8 years.
The following table summarizes the components of our total investments and cash, cash equivalents and restricted cash as of December 31, 2025 and 2024:
December 31, 2025
December 31, 2024
(in millions)
Fair value
% of total
Fair value
% of total
Fixed maturity securities
Short-term investments
Equity method investments
Other investments
Cash, cash equivalents and restricted cash
Total investments and cash, cash equivalents and restricted cash
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Fixed maturity securities and Short-term investments
At December 31, 2025 and 2024, the fair values of fixed maturity and short-term investments were as follows:
December 31, 2025
December 31, 2024
(in millions)
Fair value
% of total
Fair value
% of total
Corporate
US government and agency
Non-US government and agency
Residential mortgage-backed
Commercial mortgage-backed
Other asset-backed securities
Total fixed maturity and short-term investments
The following table summarizes the credit quality of fixed maturity and short-term investments as of December 31, 2025 and 2024:
(in millions)
December 31, 2025
December 31, 2024
Rating
Fair value
% of total
Fair value
% of total
AAA
BBB
Total fixed maturity and short-term investments
The amortized cost and fair values of fixed maturity and short-term investments by contractual maturity were as follows :
December 31, 2025
December 31, 2024
(in millions)
Amortized cost
Fair value
% of total
Amortized cost
Fair value
% of total
Due in one year or less
Due after one year through five years
Due after five years through ten years
Due after ten years
Residential mortgage-backed
Commercial mortgage-backed
Other asset-backed securities
Total
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Cash Flows
Our most significant source of cash inflow is from premiums received from our insureds, which, for most policies, we receive at the beginning of the coverage period. Our most significant cash outflow is for claims that arise when a policyholder incurs an insured loss. Because the payment of claims occurs after the receipt of the premium, with the potential for a multi-year timeline, we invest the cash in various investment securities that earn interest and dividends. We also use cash to pay commissions to brokers, as well as to pay for ongoing operating expenses such as salaries, consulting services and taxes. As described under “Reinsurance” below, we use reinsurance to manage the risk that we take on our policies. We cede, or pay out, part of the premiums we receive to our reinsurers and collect cash back when losses subject to our reinsurance coverage are paid.
Our cash flows for the years ended December 31, 2025, 2024 and 2023 were:
Years Ended December 31,
(in millions)
Cash, cash equivalents and restricted cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of foreign currency rate change on cash, cash equivalents and restricted cash
Net change in cash, cash equivalents, and restricted cash
Operating Activities
We believe that claim payments will be sufficiently supported by annual positive cash flows from operating activities. However, should operating cash flows be insufficient to fund claim payment obligations, we would use alternative internal funding sources from cash and cash equivalent balances, liquidation of portfolio investments and potential external sources, such as credit facilities. Our fixed maturities portfolio is weighted towards conservative, high-quality securities. Management expects that, if necessary, the full value of cash, cash equivalents, short-term and fixed income investments could be available in two to three business days under normal market conditions.
Net cash proceeds from operating activities for the years ended December 31, 2025, 2024 and 2023 were $445.1 million, $785.7 million and $290.0 million, respectively. The year-over-year changes were driven primarily by timing differences in our insurance and reinsurance programs.
Investing Activities
Our portfolio is weighted towards conservative, high-quality securities as well as cash and cash equivalent investments, such as money market funds. We also hold investments in alternative securities that typically report on a consistent lag basis whereby their valuation may change in response to future financial performance of the investees.
For the year ended December 31, 2025, net cash used in investing activities was $173.6 million, which is primarily related to purchases of high-quality fixed maturity securities, partially offset by sales and maturities of fixed maturity securities.
For the year ended December 31, 2024, net cash used in investing activities was $380.1 million, which is primarily related to the repositioning of the portfolio by divestment of mutual funds and subsequent purchase of separately managed portfolios mainly investing in high quality fixed maturity securities during the period, as we repositioned our investment mix.
For the year ended December 31, 2023, net cash used in investing activities was $12.6 million, which is primarily related to the aforementioned divestment of mutual funds into separately managed portfolios mainly investing in high quality fixed maturity securities during the period.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2025 was $205.8 million and primarily related to the $392.0 million from the issuance of common shares, partially offset by $175.3 million related to the redemption of Class C preference shares, and $8.0 million of dividends paid to non-controlling interests.
Net cash provided by financing activities for the year ended December 31, 2024 of $110.3 million was primarily due to the issuance of $114.5 million of convertible preference shares and contingently issuable warrants. Additionally, we issued debt of $49.7 million as partially offset by the repayment of debt of $50.4 million.
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Net cash provided by financing activities during the year ended December 31, 2023 of $10.3 million was primarily due to $20.0 million related to the issuance of debt, as partially offset by $5.5 million of an acquisition of non-controlling interests and $2.9 million related to dividends paid to non-controlling interests.
Supplemental Non-Cash Activity Information
For the years ended December 31, 2025, 2024 and 2023, refer to the notes to the cash flow statement presented in our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K for information related to significant non-cash investing and financing activities.
Reinsurance
As part of our strategy to engage with Risk Capital Partners, we offer quota share reinsurance contracts to these partners. We also purchase excess of loss reinsurance contracts for the business that we retain to further limit our exposure to potential large losses. Our reinsurance is primarily contracted under quota-share reinsurance treaties and excess of loss treaties. In quota-share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission. In excess of loss reinsurance, the reinsurer agrees to assume all or a portion of the ceding company’s losses, in excess of a specified amount. In excess of loss reinsurance, the premium payable to the reinsurer is negotiated by the parties based on their assessment of the amount of risk being ceded to the reinsurer because the reinsurer does not share proportionately in the ceding company’s losses.
We employ disciplined and principles-based reserving practices with effective controls and oversight. We actively manage risk through reinsurance, partnering primarily with reinsurers that maintain “A-” or better A.M. Best financial strength ratings, possess a history of strong credit quality or that fully collateralize their recoverables, all of which ensures high-quality recoverable assets and minimizes counterparty risk. We believe our high-quality balance sheet provides the foundation for consistently delivering financial performance and returns.
Credit risk exists with reinsurance ceded to the extent that any reinsurer is unable to meet the obligation assumed under the reinsurance agreements. An allowance is established for amounts deemed uncollectible. We evaluate the financial condition of our reinsurers and monitor concentration of credit risk arising from our exposure to individual reinsurers. To further reduce credit exposure to reinsurance recoverables balances, we have received letters of credit from certain reinsurers that are not authorized as reinsurers under US state insurance regulations.
Of the total reinsurance recoverables on paid and unpaid losses and LAE outstanding as of December 31, 2025, 57% were with reinsurers having an A.M. Best rating of "A-" (excellent) or better, and we require reinsurance recoverables with reinsurers that have an A.M. Best rating below "A-" or are not rated by A.M. Best to be subject to collateral arrangements through a combination of letters of credit, funds withheld arrangements or trust agreements. We consider such collateral arrangements, credit ratings assigned to reinsurers by A.M. Best and other historical default rate information in estimating the credit valuation allowance for reinsurance recoverables. The credit valuation allowance was $0.6 million and $0.4 million as of December 31, 2025 and 2024, respectively.
We cede a significant portion of our insurance business to our unconsolidated collateralized reinsurance sidecar vehicle, Flywheel Re. Flywheel Re is a Cayman Islands special purpose reinsurance company that provides committed multi-year collateralized quota share capacity, capitalized by long-term institutional investors.
Contractual Obligations and Commitments
As of December 31, 2025
Payment Due by Period ($ millions)
Total
Less than one year
1-3 years
3-5 years
After 5 years
Senior unsecured debt due 2029 (1)
Long-term unfunded investment commitments (2)
Estimated claims and claim-related commitments (3)
Total
(1) Amounts presented include estimated interest payments.
(2) We have invested in limited partnership agreements and can be called to fulfill the obligations at any time.
(3) Estimated timing of claim payments are based on historical payment patterns and exclude reinsurance recoveries. Claims payments do not have a contractual maturity and, as such, the amount and timing of associated cash flows may vary significantly from the amounts presented.
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Regulated deposits and restricted assets
Certain companies in the Group are required to maintain assets on deposit with various regulatory authorities to support our insurance and reinsurance operations. Securities on deposit for regulatory and other purposes were $5.2 million and $4.9 million as of December 31, 2025 and 2024, respectively, which are included in "Fixed maturity securities available for sale, at fair value" in the consolidated balance sheets.
In addition, we have pledged cash and cash equivalents of $83.1 million, short-term investments of $0.9 million and fixed maturity securities of $25.8 million as of December 31, 2025 in favor of certain ceding companies to collateralize obligations. As of December 31, 2024, we had pledged cash and cash equivalents of $47.3 million, short-term investments of $17.2 million and fixed maturity securities of $33.0 million in favor of certain ceding companies to collateralize obligations.
Reserves for losses and loss adjustment expenses
Reserves for losses and LAE represent our estimated indemnity cost and related adjustment expenses necessary to administer and settle claims. Our estimates are based upon individual case estimates for reported claims set by our claims specialists, adjusted with actuarial estimates for any further expected development on reported claims and for losses that have been incurred, but not yet reported. Actual losses and settlement expenses paid may deviate, perhaps substantially, from the reserve estimates reflected in our consolidated financial statements. Similarly, the timing for payment of our estimated losses is not fixed and is not determinable on an individual or aggregate basis due to the uncertainty inherent in the process of estimating such payments.
Reinsurance recoverables
Reinsurance recoverables on reserves for losses and LAE are reported separately as assets, instead of being netted with the related liabilities, since reinsurance does not discharge us of our liability to policyholders. The method for determining reinsurance recoverables for unpaid losses and LAE involves reviewing actuarial estimates of gross unpaid losses and LAE to determine our ability to cede unpaid losses and loss adjustment expenses under our existing reinsurance contracts.
Debt
We have a credit agreement that consists of senior unsecured syndicated US dollar denominated loan facility with a September 2029 maturity date with an aggregate outstanding principal balance of $124.2 million, as well as a $50 million revolving credit facility (all of which was unutilized and available as of December 31, 2025). Each borrowing under the revolving credit facility may have a maturity of one, three or six months, at our election, but may not extend beyond the credit agreement’s maturity date. Such borrowings may be repaid early.
The senior unsecured debt represents an unsecured obligation and includes a delayed draw term loan ("DDTL") feature that allows us to withdraw predefined amounts. We may draw down up to an additional $75 million upon request, subject to the agreement of the lenders.
Partial quarterly repayments of the aggregate principal amount are required until the maturity date as reflected in the table above. Interest payments on the senior notes are due at the end of each period, being a certain month or quarter during which the applicable interest rate has been reset. The interest rate is subject to a sliding scale based on our consolidated senior debt to capitalization ratio and varies between a 3.4% and 4.0% spread in addition to the Secured Overnight Financing Rate ("SOFR"). Interest is calculated based on a 360-day year of twelve 30-day months. Interest expense for the years ended December 31, 2025, 2024 and 2023 was $10.9 million, $12.1 million and $10.9 million, respectively.
Subject to conditions of optional prepayment, we may voluntarily prepay the senior unsecured debt at any time and from time to time, prior to the maturity date without penalty. Any prepayment, in whole or in part, shall include any accrued and unpaid interest thereon to, but excluding, the prepayment date. Any amounts we prepay may not be reborrowed.
The senior notes contain certain restrictive and maintenance covenants customary for facilities of this type, including restrictions on minimum consolidated net worth, maximum leverage levels and a minimum interest coverage ratio. As of December 31, 2025, we were in compliance with all such covenants.
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Capital maintenance agreements
We have capital maintenance agreements with our insurance subsidiaries that obligate us to make capital contributions to our rated insurance and reinsurance subsidiaries to maintain surplus above our minimum regulatory and rating agency capital targets. These requirements are set by our Board of Directors. During the year ended December 31, 2025, we made capital contributions of $57.5 million to Accelerant Insurance UK Limited, $32.0 million to Accelerant Re. I.I. (Puerto Rico), $15.0 million to Accelerant National Insurance Company, $15.0 million to Accelerant Specialty Insurance Company, $10.0 million to Accelerant Re (Cayman) Ltd, and $2.2 million to Accelerant Insurance Company of Canada (such amounts include $15.0 million in capital movements between our Underwriting Segment insurance subsidiaries).
Ratings
Ratings by independent agencies are an important factor in establishing the competitive position of insurance companies and reinsurance companies and are important to our ability attract Members and third-party capital providers. Rating organizations continually review the financial positions of insurers and reinsurers. These ratings reflect the rating agency’s views regarding balance sheet strength, operating performance, business profile and enterprise risk management. It is not an evaluation directed toward the protection of investors or a recommendation to buy, sell or hold our shares. Our insurance and reinsurance operating subsidiaries are assigned financial strength ratings by A.M. Best as follows:
Rating
Outlook
Accelerant Insurance Europe SA
"A-" (Excellent)
Stable
Accelerant Specialty Insurance Company
"A-" (Excellent)
Stable
Accelerant National Insurance Company
"A-" (Excellent)
Stable
Accelerant Re (Cayman) Ltd.
"A-" (Excellent)
Stable
Accelerant Insurance UK Limited
"A-" (Excellent)
Stable
Accelerant Insurance Company of Canada
"A-" (Excellent)
Stable
Accelerant Re. I.I. (Puerto Rico)
"A-" (Excellent)
Stable
These ratings reflect A.M. Best’s opinion of the ability of Accelerant Holdings and respective subsidiaries to pay claims and are not evaluations directed to security holders. A.M. Best maintains a letter-scale rating system ranging from “A++” (Superior) to “F” (in liquidation). “A–” is the fourth highest of 16 financial strength ratings assigned by A.M. Best, as last updated in June 2025. These ratings are subject to periodic review and may be revised downward or revoked at the sole discretion of A.M. Best.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, which are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in conformity with US GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on our historical experience and on various other assumptions that we believe are reasonable after weighing up all relevant information. Actual results may differ from those estimates.
The accounting policies listed below involve significant estimates, and therefore are critical in understanding our financial performance and operational results. For additional information, refer to Note 2 to our consolidated annual financial statements included elsewhere in this Annual Report on Form 10-K.
Unpaid Loss and Loss Adjustment Expenses
We record loss reserves for our unpaid loss and LAE, which involves significant judgment and complex estimation processes. It represents management’s best estimate of the unpaid portion of ultimate costs, of all reported and unreported loss incurred through the balance sheet date and is based upon the assumption that past developments are an appropriate indicator of future events among other factors. The reserves are based on individual claims, case reserves and other reserves estimates reported, as well as actuarial estimates of ultimate losses.
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Inherent in the estimates of ultimate losses are expected trends in claim severity and frequency and other factors which could vary significantly as claims are settled. Ultimate losses may vary materially from the amounts provided in the consolidated financial statements. These estimates are reviewed regularly and as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are reflected in the consolidated statements of operations in the period in which they become known and are accounted for as changes in estimates. The unpaid losses and LAE are presented on an undiscounted basis.
The process of establishing unpaid losses and LAE can be complex and is subject to considerable uncertainty, as it requires the use of informed estimates and judgments based on circumstances known at the date of accrual. These estimates and judgments are based on numerous factors and may be revised as additional experience and other data become available and are reviewed and as new or improved methodologies are developed. The adequacy of the reserves may be impacted by future trends in claims severity, frequency, payment patterns and other factors. These variables are affected by both external and internal events, including but not limited to, changes in the economic cycle, inflation, natural or human-made catastrophes and legislative changes.
The main risks and uncertainties are associated with limited historical data and new and evolving estimation processes. As such, we supplement our analysis using a combination of third-party data provided by Members and industry benchmark data as the basis for the selection of expected reporting patterns. We expect to continuously increase the use of our own data and experience as we accumulate such information over time. In addition, we incorporate our estimates of future trends in various factors such as loss frequency and severity in the evaluation process.
We review loss reserves in-depth every six months or more frequently depending on the facts and circumstances, with a high-level actual versus expected (“AvE”) analysis done in between the in-depth reviews. During in-depth reviews, all estimates are reviewed and adjusted as our own experience develops and market conditions change. During the high level AvE analysis we make changes for any material developments over the period (e.g., large losses, catastrophic events or significant market changes).
Total IBNR reserves are determined by subtracting payments and case reserves implied from the ultimate loss and LAE estimates. Ultimate loss and LAE are estimated utilizing generally accepted actuarial loss reserving methods. Our reserving methods include the Chain Ladder, Bornheutter-Ferguson and Initial Expected Loss Ratio methods. Reportable catastrophe losses are analyzed and reserved separately using a frequency and severity approach. The underlying premise of the Chain Ladder method is that future claims are best estimated using past development pattern, whereas the Bornheutter-Ferguson method employs a combination of past claims development and prior estimates of ultimate losses based on expected loss ratio. The methods all involve aggregating paid and case-incurred loss data by underwriting year and development month, segmented into Members and products or lines of business as deemed appropriate and material. The ultimate selections for each year tend to be based upon the Chain Ladder results for the older years and the Bornheutter-Ferguson method for the most recent years.
Because we have limited data to assess our own claims experience given the recently formed nature of the business, we use industry and peer-group data, in addition to our own data, as a basis for selecting our expected paid and reporting patterns.
Inflation rates in all major economic regions and the imposition (or threatened imposition) of tariffs add to the uncertainty of the future claim cost. Actuarial models base future emergence on historic experience, with adjustments for current trends, and the appropriateness of these assumptions has therefore involved more uncertainty in recent periods. We expect there will be impacts to the timing of loss emergence and ultimate loss ratios for certain underwritten coverages. The industry is experiencing new issues, including a backlog of civil court cases in most states, the extension of certain statutes of limitations and the impact on insureds from a significant reduction in economic activity. Our recorded reserves include consideration of these factors, but legislative, regulatory, or judicial actions could result in loss reserve deficiencies and reduce earnings in future periods.
The two categories of our loss reserves include case reserves and IBNR reserves. Our gross reserves for losses and LAE at December 31, 2025 and 2024 were $2.01 billion and $1.29 billion, 62% and 60% of which relates to IBNR, respectively. Our reserves for losses and loss adjustment expenses, net of reinsurance, at December 31, 2025 and 2024 were $323.1 million and $224.9 million, 54% and 52% of which relates to IBNR, respectively.
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The following table summarizes our reserves for unpaid losses and loss adjustment expenses, on a gross basis and net of reinsurance, as of December 31, 2025 and 2024:
December 31, 2025
December 31, 2024
(in millions)
Gross
% of Total
Net
% of Total
Gross
% of Total
Net
% of Total
Case reserves
IBNR
Total
Case reserves are established for the individual claims that have been reported to us. Based on the information available and the status of the claims, case reserves are established by TPAs, who have the authority of handling smaller claims (typically up to $250 thousand per claim) or our claims teams, for large losses, through standard claim handling practices and professional judgment. As mentioned above, the estimates may be refined, and the ultimate value of claims liability may be adjusted either upward or downward as more information becomes available.
In case of catastrophes or other large losses, the additional IBNR in relation to those claims is estimated by the joint work of the claims, portfolio management, and actuarial teams, and those estimates are used in the final estimates provided to the finance team for recognition within our financial statements. Our internal threshold for catastrophe losses is $10 million of gross losses. We have had nine such events since inception: European flooding (July 2021), Storm Arwen (2021), Storm Eunice (February 2022), Hurricane Ian (September 2022), US winter storms (January 2024), Hurricane Helene (September 2024), California wildfires (January 2025), Storm Éowyn (January 2025) and Missouri Tornados (May 2025). In aggregate, these events led to $14 million of net incurred losses. Specifically, while we write insurance products in each of these potentially impacted areas, we also maintain significant reinsurance coverage such that our net exposure is limited. Our gross claims for these aggregate events are expected to be $154 million, which after application of actual and expected reinsurance, resulted in our net retained incurred amount of $14 million. In addition to our quota share cover, for the 2025 and prior treaty years, our US property excess of retention for a modeled gross occurrence is expected to significantly reduce our net exposure to insignificant levels as part of our business model to limit our exposure to insurance risk.
In addition to the assumptions used in our data and reserves methodology, we used the following estimates to determine our unpaid loss and LAE: development patterns where we use Members’ experience and/or applicable industry information; inflation assumptions for each class of business and territory; rate changes as provided by Members and underwriting changes as evidence leading to the rate changes; business mix changes for various Members; large loss load calculated from historic average performance or similar class of business; and selected loss ratio that is representative.
The tables below represent the aggregated impact from potential deviations from our recorded net loss and LAE reserves as of December 31, 2025 and 2024:
Sensitivity factors are applied to our most recent underwriting year, and we believe these potential changes will not have a material impact on our liquidity. An increase in the gross loss of 3% in the most recent underwriting year would equate to an increase in the net loss and LAE reserve of $7.6 million.
December 31, 2025
Sensitivity (in millions)
Sensitivity for Ultimate Loss and LAE Sensitivity Factor
Net Loss and LAE Reserve
Increase/(Decrease) in Net Loss and LAE Reserve
Increase
Increase
Increase
Actual (Base Case)
Decrease
Decrease
Decrease
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December 31, 2024
Sensitivity (in millions)
Sensitivity for Ultimate Loss and LAE Sensitivity Factor
Net Loss and LAE Reserve
Increase/(Decrease) in Net Loss and LAE Reserve
Increase
Increase
Increase
Actual (Base Case)
Decrease
Decrease
Decrease
Reinsurance Recoverable on Unpaid Losses
In our Underwriting segment, we cede a large proportion of our GWP under various reinsurance contracts. These reinsurance agreements transfer portions of the underlying risk of the business that we underwrite and a share of premium to reinsurers, but they do not release or diminish our obligation to pay claims covered by the insurance policies. We are still primarily liable to the insured whether or not the reinsurer is able to meet its contractual obligations.
The quantum of ceded loss recoveries from our reinsurers are subject to uncertainty as our calculation of such amounts rely on similar estimates and methodologies as are used in estimating our gross loss reserves.
Additionally, there is a risk that one or more of our reinsurers may be unwilling or unable to pay their share of reinsurance recoverables. This risk is mitigated by placing our reinsurance with a diverse panel of reinsurers that are all either rated “A-” or better by A.M. Best or provide collateral to us to maximize the probability that reinsurance recoverables will be realized. We regularly monitor the financial condition of our reinsurers and we generally have special termination rights in our reinsurance treaties in the event of deterioration in the reinsurers’ credit worthiness, generally if the A.M. Best rating falls below “A-” or there is a reduction in the capital and surplus of the reinsurer of more than 20% of their prior year end capital and surplus. Despite these arrangements, there is a risk that a reduction in one or more reinsurers’ ability or willingness to pay our reinsurance recoverables could have a materially negative impact on our liquidity.
Impacts of Loss Ratio Estimates and Actual Loss Experience on Sliding Scale Commissions Impacting our Ceding Commission Income
We cede a significant portion of our premiums written to reinsurance companies. The ceding commissions are offset against DAC related to the insurance contracts subject to such reinsurance. Any excess ceding commissions over the related DAC are subject to deferral over the insurance premiums earning period. Certain of our reinsurance arrangements are subject to sliding scale commission amounts pursuant to the agreements with various reinsurers based on the actual loss experience of covered insurance contracts.
The contractual ceding commission amounts are expressed as a percentage of the underlying premiums by type of insurance policy. Further, the amount of ceding commissions may vary based on the volume of ceded premium and the loss ratio. As that loss ratio changes from the original expected contractual amount, the amount of ceding commission inversely changes (such that adverse experience in the subject loss ratio will result in a reduction in ceding commissions and conversely, any favorable experience in the subject loss ratio will result in an increase in ceding commissions).
The change in ceding commissions will result in a change to the deferred ceding commission liability to the extent that the underlying premiums are unearned and, conversely, will result in a direct change to income to the extent that the underlying premium has been earned. As such, the sliding scale commissions act as a substantive participation in the underlying loss experience of the underlying insurance contracts.
Our typical reinsurance treaties’ commissions vary based on the volume of ceded premium and the ratio of ceded loss to ceded premium. As that ratio decreases, the amount of commission increases. As of December 31, 2025, the average commission we receive is 50% of ceded premium at a 40% gross loss ratio and a minimum of 34% of ceded premium at gross loss ratios of 67% and above. The adjustment between the points is largely linear. We expect commissions of 43% of ceded premium at a gross loss ratio of 50%. There were no significant adverse adjustments to reinsurance commissions due to prior year claims experience during the year ended December 31, 2025.
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Our process for calculating changes in ceding commissions from our reinsurers is linked to the results of our actuarial reserving process for loss and loss adjustment expense reserves, which is updated each reporting period. On a quarterly basis, our actuaries produce an actuarial central estimate of the gross and net loss reserves for all contracts bound as of the evaluation date. The calculations also include estimates of loss-sensitive contingent terms such as sliding scale ceding commissions. Calculations are done on a contract-by-contract basis and reflect the most recent premium and loss information available at the evaluation date.
Valuation Allowance on Deferred Income Taxes
Deferred tax assets and liabilities result from temporary differences between the amounts recorded in the consolidated financial statements and the tax basis of assets and liabilities used in the various jurisdictional tax returns. We recognize deferred tax assets to the extent we believe it is probable that future profits will be available to utilize these tax benefits. As of December 31, 2025, we had net deferred tax assets of $77.8 million.
A valuation allowance is set up for the portion of the asset that is more likely than not unrealizable, which reduces the total deferred tax asset to only the amount that we expect to realize. This allowance is assessed at each balance sheet date and is based on all available information including significant judgments related to the likely timing and level of forecasted taxable profits based on assumptions about future macroeconomic and Company-specific conditions and the associated future tax planning strategies. We subject the forecasts to stresses of key assumptions and evaluate the effect on tax attribute utilization. In performing our assessment of recoverability, we consider tax laws governing the utilization of net operating losses, capital losses and tax credit carryforwards in each applicable jurisdiction. The tax laws are subject to change, resulting in incremental uncertainty in our assessment of recoverability, along with the future tax planning strategies. If the actual taxable income in future periods differ from our forecast, it could impact our financial position in either a materially positive or negative way. As of December 31, 2025, our valuation allowance was $45.9 million. We intend to evaluate the realizability of our deferred tax asset quarterly through the assessment of the need for such a valuation allowance.
