Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 288

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 8
Chunk 288
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 of Kestrel Group, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to the closing and any extensions of such businesses or related or ancillary businesses existing thereafter subsequent to completion of the transaction through May 31, 2028 ("Performance Period"). During the three and six months ended June 30, 2025, the earn out liability increased by $2.7 million based upon current estimates of the Kestrel business for the Performance Period, including the performance of the program services business through June 30, 2025.

Foreign Exchange and Other Losses

Foreign currency fluctuations are primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets in our Legacy Reinsurance segment. 

Net foreign exchange and other losses of $5.0 million were realized for the three and six months ended June 30, 2025 compared to net foreign exchange and other losses of $0.0 million for the same period in 2024. For the three and six months ended June 30, 2025, net foreign exchange losses of $5.1 million were attributable to significant weakening of the U.S. dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro.

  Our non-USD denominated liabilities at June 30, 2025 included net loss reserves of $341.3 million. Our foreign currency asset exposures at June 30, 2025 included $139.4 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy, $33.2 million of real estate investments denominated in Canadian dollars, as well as $12.1 million of funds withheld receivable. 

Underwriting Results by Reportable Segment

Program Services Segment

The segment results for our Program Services segment for the three and six months ended June 30, 2025 were as follows: 

For the Three Months Ended June 30,For the Six Months Ended June 30,($ in thousands)2025202420252024Fee revenue$544 $577 $1,351 $1,757 General and administrative expenses(768)(589)(1,339)(1,400)Segment (loss) income$(224)$(12)$12 $357 

Program Services segment results decreased by $0.2 million and $0.