Kestrel Group reports higher Program Services revenue in second quarter
Kestrel Group said its Program Services business posted steep second-quarter growth, while Legacy Reinsurance and higher expenses weighed on results.
Kestrel Group Ltd. reported second-quarter 2026 results on Aug. 7, saying revenue from its Program Services business rose sharply while losses in Legacy Reinsurance and higher operating expenses weighed on the quarter.
For the quarter ended June 30, 2026, Program Services fee revenues were $3.7 million, up 587.9% from a year earlier, the company said. Premium produced by client programs reached $109.6 million, up 479.8% year over year. For the first six months of 2026, Program Services fee income was $4.0 million, compared with $12,000 in the same period of 2025. Fee revenue for the half-year was $6.9 million, up from $1.4 million a year earlier, and premium produced totaled $203.8 million, up 382.5%.
Kestrel said its Program Services segment provides fronting services to general agents and insurance carriers through four insurance carriers rated A- (Excellent) by A.M. Best. The company said it issues policies through those carriers and that the carriers currently retain and reinsure the risk. Kestrel also said it is pursuing reinsurance mechanisms with existing partners to deploy underwriting capacity more selectively.
Legacy Reinsurance posted an underwriting loss of $1.3 million in the quarter. That included $0.6 million of losses related to AmTrust business and $0.7 million of losses related to the Diversified business, according to the release. Kestrel said AmTrust generated $1.7 million of underwriting income for the current accident year, offset by $2.3 million of adverse prior-period loss development, which it said was almost entirely tied to foreign currency fluctuations on loss reserves denominated in non-U.S. dollar currencies.
The Diversified business reported an underwriting loss of $1.3 million, including $0.7 million of severance-related costs, partially offset by $0.6 million of underwriting income from Genesis Legacy Solutions and other business, Kestrel said.
The company said it recorded a combined loss from investment activities of $0.5 million for the three months ended June 30, 2026. That included $2.5 million in net investment income and $3.0 million in net realized and unrealized investment losses. Kestrel also recognized $2.3 million in foreign exchange and other gains, including a $1.8 million gain from revaluing a contingent receivable in the insurance distribution industry and $0.4 million of net foreign exchange gains from U.S. dollar appreciation on non-U.S. dollar liabilities.
General and administrative expenses were $10.5 million in the quarter. Kestrel said $0.6 million of that related to fair value adjustments recognized at the time of its combination with Maiden. As of June 30, 2026, total assets were $919.6 million and shareholders’ equity was $114.0 million.
The company said it had $471.6 million of net operating loss carryforwards available for tax purposes at the end of the quarter. About $383.4 million expire in years beginning in 2029, while about $88.2 million, or 18.7%, have no expiration date under relevant U.S. tax law.
Kestrel said it posted an August 2026 investor presentation on its website. The release also included forward-looking statement and risk-factor language.
Sources
Editorial note: This article was prepared with AI assistance and includes source attribution for reader review.
Comments ()