Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 423

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 2
Chunk 423
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 capacity providers or general agents may be required to compensate the AmTrust Insurance Companies for any such liability, there are risks that any such failure could create regulatory or reputational issues for the AmTrust Insurance Companies, which could limit or restrict Kestrel Group’s ability to continue to write business on behalf of its capacity providers. Any such limitations or restrictions could materially and adversely affect the business, financial condition, results of operations and prospects of Kestrel Group.

Kestrel Group may not be successful in building more direct relationships with general agents and capacity providers.

Kestrel Group’s fronting capacity may be constrained by the size of its capital base, and it may rely on its relationship-driven channels to generate new fronting business. In addition, Kestrel Group may rely on brokers to identify general agents in need of fronting. Although Kestrel Group will build direct relationships with general agents and capacity providers and hire additional fully-dedicated sales staff, Kestrel Group may not be successful in its efforts to expand its fronting business.

Kestrel Group may face increased competition.

Kestrel Group competes primarily on the basis of price, customer service, geographic coverage, financial strength ratings, licenses, reputation, business model and experience. Its competitors include State National, MS Transverse, Obsidian, Palomar and Trisura. Unlike Kestrel Group, some of its competitors may offer policy administration or other services or be willing to take on significant underwriting risk. There is already active competition for business and any increase in competition could materially and adversely affect the business, financial condition, results of operations and prospects of Kestrel Group.

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Some of Kestrel Group’s fronting arrangements may contain limits on the reinsurer’s obligations.

While Kestrel Group will reinsure a substantial portion of the risks inherent in its fronting programs, Kestrel Group will, in certain cases, enter into programs that contain limits on its reinsurers’ obligations, including exclusion of certain coverages, loss ratio caps, per occurrence or aggregate reinsurance limits or exclusion of the credit risk of general agents. To the extent losses under these programs exceed the prescribed limits, Kestrel Group and/or the AmTrust Insurance Companies will be liable to pay the losses in excess of such limits, which could materially and adversely affect the business, financial condition, results of operations and prospects of Kestrel Group.

Catastrophic losses may exceed expectations.

Kestrel Group’s insurance business is subject to claims arising from catastroph