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AM Best Comments on Credit Ratings of Skyward Specialty Insurance Group Members Following Announced Acquisition of Apollo Group Holdings Inc.

1. Skyward plans to acquire Apollo Group for $555 million. 2. Transaction expected to close in Q1 2026, pending regulatory approval. 3. AM Best ratings for Skyward remain unchanged, reflecting strong financial health. 4. Acquisition increases financial leverage but aims to maintain strong interest coverage. 5. Apollo's inclusion may provide new unregulated earnings for Skyward.

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FAQ

Why Bullish?

The acquisition can enhance Skyward's market position and revenue streams, similar to past successful acquisitions in the sector that resulted in growth.

How important is it?

The news directly pertains to an acquisition that can reshape Skyward's business profile significantly.

Why Long Term?

The benefits from the acquisition will materialize over time, resembling cases like AIG's strategic acquisitions leading to long-term profitability improvements.

Related Companies

AM Best has commented that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a" (Excellent) of Great Midwest Insurance Company (GMIC), Houston Specialty Insurance Company (HSIC), Oklahoma Specialty Insurance Company (OSIC) and Imperium Insurance Company (IIC) are unchanged following the September 2, 2025, announcement that Skyward Specialty Insurance Group, Inc. (Skyward Group) has entered into a definitive agreement with the majority sellers to acquire 100% of Apollo Group Holdings Limited (Apollo) for a total consideration of $555 million from Alchemy, management, employees and other strategic investors.

GMIC, HSIC, OSIC and IIC are members of Skyward Specialty Insurance Group (Skyward), whose ultimate parent, Skyward Group, (NASDAQ:SKWD), has a Long-Term ICR of "bbb" (Good). All companies are headquartered in Houston, TX.

The Credit Ratings (ratings) reflect Skyward's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Skyward Specialty maintains a position as a leading writer in U.S. specialty markets. Apollo is a leading U.S. centric specialty underwriting platform operating at Lloyd's of London and is also the managing agent to both its own syndicates, as well as to other third-party syndicates, known as Platform Partners. Apollo's management team will join Skyward Specialty and continue to lead the Apollo business. The transaction is expected to close in first-quarter 2026, subject to regulatory approvals.

AM Best does not expect the transaction to have any material change to Skyward's current rating fundamentals. AM Best will continue to monitor the progress and the effects of this transaction over time, including the planned synergies and efficiencies gained from the transaction, as there could be future benefits to Skyward's business profile. Conversely, based on the indicated financing there is an immediate increase to financial leverage to slightly over 25%, which Skyward expects to manage over time, as well as execution risk as noted in any significant acquisition. Skyward plans to maintain strong interest coverage without taking dividends from the insurance subsidiaries in the near to medium term. Apollo will provide Skyward with a stream of unregulated earnings and cash flow, which reduces the organization's reliance on its statutory entities.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Raymond Thomson, CPCU, ARe

Associate Director

+1 908 882 2394

raymond.thomson@ambest.com



Doniella Pliss

Director

+1 908 882 2245

doniella.pliss@ambest.com



Christopher Sharkey

Associate Director, Public Relations

+1 908 882 2310

christopher.sharkey@ambest.com



Al Slavin

Senior Public Relations Specialist

+1 908 882 2318

al.slavin@ambest.com

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