As filed with the Securities and Exchange Commission on June 30, 2025.

Registration No. 333-    

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

ACCELERANT HOLDINGS

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Cayman Islands		6411		98-1753044
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Accelerant Holdings

c/o Accelerant Re (Cayman) Ltd.

Unit 106, Windward 3, Regatta Office Park,

West Bay Road, Grand Cayman

+1 (345) 743-4611

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

 

The Corporation Trust Company

1209 Orange Street

Wilmington, Delaware 19801

(302) 658-7581

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Nancy Hasley Group General Counsel Accelerant Holdings P.O. Box 309 Ugland House, Grand Cayman, KY1-1104 Cayman Islands Telephone: +44 (0) 800-048-9809		Samir A. Gandhi Robert A. Ryan Sidley Austin LLP 787 Seventh Avenue New York, New York 10019 Telephone: (212) 839-5900		Suzanne Correy Maples and Calder (Cayman) LLP P.O. Box 309 Ugland House, Grand Cayman, KY1-1104 Cayman Islands Telephone: (345) 949-8066		Thomas Holden Rachel D. Phillips Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036 Telephone: (212) 596-9000

 

 

Approximate date of commencement of proposed sale to the public:

As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☐
				Emerging growth company		☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PROSPECTUS (Subject to Completion)

Issued June 30, 2025.

     Shares

 

Class A Common Shares

 

 

This is the initial public offering of Class A common shares of Accelerant Holdings (“Accelerant”), par value $0.0001 per share. We are offering     Class A common shares to be sold in this offering. An affiliate of our equity sponsor is offering    of our Class A common shares. We will not receive any proceeds from the sale of our Class A common shares being sold by the Selling Shareholder (as defined herein). All shares sold by the Selling Shareholder in this offering will be converted to Class A common shares upon sale.

Prior to this offering, there has been no public market for our Class A common shares. The initial public offering price is expected to be between $    and $    per Class A common share. We have applied to list our Class A common shares on the New York Stock Exchange (“NYSE”) under the symbol “ARX.”

Following this offering, we will have two classes of authorized common shares. The holders of our Class A common shares offered hereby will be entitled to one vote per Class A common share, and the holders of our Class B common shares will be entitled to ten votes per Class B common share. Certain of our existing equity holders (and their affiliates) will hold all of our issued and outstanding Class B common shares and will have the right pursuant to our amended and restated memorandum and articles of association to convert their Class B common shares into Class A common shares on a one-for-one basis at any time. Additionally, Class B common shares will automatically convert into Class A common shares on a one-for-one basis upon transfer (other than a permitted transfer) of Class B common shares; or upon the earlier of (i) the time Class B common shareholders cease to own 50% of the total number of Class B common shares owned by such holders, in aggregate, immediately upon the closing of this offering or (ii) three years, after which time (in each case) there will be a single class of common shares with one vote per share.

After giving effect to the sale of the Class A common shares offered hereby, investment funds controlled by our equity sponsor, Altamont Capital Partners (“Altamont Capital”), will own      Class B common shares, representing   % of the combined voting power of our common shares outstanding after this offering (or   % of the voting power if the underwriters’ option to purchase additional Class A common shares is exercised in full). As a result, we expect to be a “controlled company” within the meaning of the corporate governance standards of the NYSE. See “Management—Controlled Company Status.” Other than Altamont Capital and any of its affiliates, no holder of common shares or any of its affiliates shall be permitted to hold voting power greater than 9.9% of the aggregate combined voting power of Accelerant (the “Voting Power Threshold”), and any votes to which any such holder would otherwise be entitled in excess thereof shall be disregarded.

We are an “emerging growth company” as defined under the U.S. federal securities laws, and as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.

Investing in our Class A common shares involves a high degree of risk. See “Risk Factors” beginning on page 26.

 

 

 

Price to Public

Underwriting Discounts and Commissions(1)

Proceeds to Accelerant

Proceeds to Selling Shareholder

Per Share

$

$

$

Total

$

$

$

(1)	See the section titled “Underwriters” for a description of the compensation payable to the underwriters.

We and the Selling Shareholder have granted the underwriters the option for a period of 30 days to purchase up to an additional     Class A common shares on the same terms as set forth above.

 

 

Neither the Securities and Exchange Commission (“SEC”) nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Class A common shares to purchasers on    , 2025.

 

Morgan Stanley		Goldman Sachs & Co. LLC
BMO Capital Markets		RBC Capital Markets

Piper Sandler		Wells Fargo Securities		William Blair		Raymond James		TD Securities
		Citizens Capital Markets		FT Partners

The date of this prospectus is    , 2025.

Our mission To be the preeminent specialty insurance marketplace

 

A bird’s eye view of Accelerant $3.5B 96 Exchange Written Premium1 Risk Capital Partners2 232 Operating in 20+ Members 2 Countries 2 (1) For the trailing 12 months ended March 31, 2025 (2) As of March 31, 2025

Accelerant

TABLE OF CONTENTS

 

PROSPECTUS SUMMARY			1
RISK FACTORS			26
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			73
USE OF PROCEEDS			75
DIVIDEND POLICY			76
CAPITALIZATION			77
UNAUDITED PRO FORMA FINANCIAL INFORMATION			79
DILUTION			84
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			87
FOUNDERS’ LETTER			150
BUSINESS			152
REGULATION			173
PRINCIPAL AND SELLING SHAREHOLDERS			211
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS			214
MANAGEMENT			220
EXECUTIVE COMPENSATION			228
DESCRIPTION OF CERTAIN INDEBTEDNESS			237
DESCRIPTION OF SHARE CAPITAL			239
MATERIAL DIFFERENCES IN CORPORATE LAW			244
SHARES ELIGIBLE FOR FUTURE SALE			255
CERTAIN MATERIAL TAX CONSIDERATIONS			258
UNDERWRITERS			272
LEGAL MATTERS			281
EXPERTS			281
WHERE YOU CAN FIND MORE INFORMATION			281
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1

Through and including     , 2025 (the 25th day after the date of this prospectus), all dealers effecting transactions in our Class A common shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to its unsold allotment or subscription.

None of Accelerant, the Selling Shareholder, nor any of the underwriters has authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. None of Accelerant, the Selling Shareholder, nor any of the underwriters takes any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We, the Selling Shareholder, and the underwriters are offering to sell, and seeking offers to buy, our Class A common shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or of any sale of our Class A common shares. Our business, financial condition, results of operations, and future growth prospects may have changed since that date.

For investors outside the United States: none of Accelerant, the Selling Shareholder, nor any of the underwriters has done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our Class A common shares and the distribution of this prospectus outside the United States.

MARKET AND INDUSTRY DATA

This prospectus includes estimates derived from market and industry data. Unless otherwise indicated, information concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity and market size, are based on our management’s knowledge and experience in the markets in which we operate, together with currently available information obtained from various sources, including publicly available information, industry reports and publications, surveys, our customers, our Members, our capital partners, trade and business organizations, and other contacts in the markets in which we operate. Certain information is based on management estimates, which have been derived from third-party sources, as well as data from our internal research, and are based on certain assumptions that we believe to be reasonable.

In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. While we believe the estimated market and industry data included in this prospectus are generally reliable, such information, which is derived in part from management’s estimates and beliefs, is inherently uncertain and imprecise, and you are cautioned not to give undue weight to such estimates. Market and industry data are subject to change and may be limited by the availability of raw data, the voluntary nature of the data gathering process and other limitations inherent in any statistical survey of such data. In addition, projections, assumptions, and estimates of the future performance of the markets in which we operate are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us. Accordingly, you are cautioned not to place undue reliance on such market and industry data or any other such estimates. The content of, or accessibility through, the sources and websites identified herein, except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated herein and any websites are an inactive textual reference only.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

This prospectus includes trademarks and service marks owned by us. Solely for convenience, trademarks, trade names, and service marks referred to in this prospectus may appear without the ^®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, trade names, and service marks. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

BASIS OF PRESENTATION

Accelerant Holdings LP, a Cayman Islands exempted limited partnership formed in 2018 and our current controlling shareholder, is the ultimate parent company of the Accelerant group of companies. In December 2021, we initiated a series of reorganization transactions pursuant to which our company, Accelerant Holdings, was established and became the primary holding company of the Accelerant group of companies. This reorganization has been accounted for as a transaction between entities under common control and is expected to be completed upon the distribution by Accelerant Holdings LP of    of our existing common shares to holders of limited partnership interests of Accelerant Holdings LP in proportion to the economic interests represented by those limited partnership interests. This distribution will occur immediately prior to the consummation of this offering. The existing common shares will then be re-designated into      Class A common shares and      Class B common shares (as applicable) immediately following the effectiveness of our amended and restated memorandum and articles of association. We refer to this distribution as the Accelerant Holdings LP Distribution. After the consummation of this offering, Accelerant Holdings LP will be dissolved.

Prior to the completion of the Accelerant Holdings LP Distribution, Accelerant Holdings LP is considered to be our predecessor entity under applicable SEC rules and guidance. Accordingly, the consolidated annual

financial statements of each of Accelerant Holdings and Accelerant Holdings LP are included elsewhere in this prospectus. However, the assets and liabilities and operating results of Accelerant Holdings LP are insignificant in relation to the financial statements of Accelerant Holdings and as such, the financial information referenced within this prospectus, including that presented under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” is that of Accelerant Holdings unless otherwise specified.

SELECTED DEFINED TERMS

As used in this prospectus, unless the context indicates or otherwise requires, the following terms have the following meanings:

 

•

Accelerant Direct Written Premium: Expressed as a percentage of Exchange Written Premium, the GWP written directly by Accelerant Underwriting companies, the majority of which we cede to third-party risk capital partners through our reinsurance arrangements.

 

•

Accelerant GWP: The total GWP written by Accelerant Underwriting companies (both written by our insurance company and assumed as a reinsurer), the majority of which we cede to third-party risk capital partners through our reinsurance arrangements.

 

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Accelerant Holdings LP Distribution: Immediately prior to the consummation of this offering, our predecessor and parent entity, Accelerant Holdings LP, will distribute    of our existing common shares to holders of existing limited partnership interests of Accelerant Holdings LP in proportion to the economic interests represented by those limited partnership interests. The existing common shares will then be re-designated into     Class A common shares and     Class B common shares (as applicable) immediately following the effectiveness of our amended and restated memorandum and articles of association. After the consummation of this offering, Accelerant Holdings LP will be dissolved.

 

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Accelerant Re Cayman: Accelerant Re (Cayman) Ltd.

 

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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.

 

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Accelerant Underwriting: Accelerant’s owned insurance companies and reinsurance companies, and all revenue and expenses associated with them.

 

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ACP Accelerant Holdings LP: An entity controlled and beneficially owned by investment funds advised by an affiliate of Altamont Capital and the Selling Shareholder in this offering.

 

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Admitted Market: The insurance market comprising carriers licensed to write business on an “admitted” basis by the insurance commissioner of the state in which the risk is located. Insurance rates and policy forms in an Admitted Market are highly regulated by each state and coverages are largely uniform.

 

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AI: Artificial Intelligence.

 

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AIUK: Accelerant Insurance UK Limited.

 

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ANIC: Accelerant National Insurance Company.

 

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ASIC: Accelerant Specialty Insurance Company.

 

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AUM: Accelerant Underwriting Managers, the U.S. program management affiliate of Accelerant, which also acts as a “master” MGU that sub-delegates underwriting authority to Members.

 

•

Board Risk Appetite: The maximum amount and type of risk that we are willing to take in order to meet our strategic objectives within an approved framework.

 

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Carrier: An insurance company.

 

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Conversion: Any conversion of the Class B common shares described in this prospectus will take effect as a redemption of Class B common shares and issuance of Class A common shares as a matter of Cayman Islands law.

•

DAC: Deferred acquisition costs.

 

•

E&O: Errors and omissions.

 

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E&S: Excess and surplus lines. In this insurance market, carriers are not licensed, except in their state of domicile, and provide insurance coverage on a “non-admitted” basis. Insurance rates and forms in this market are subject to less-stringent regulation than in the Admitted Market and as such, E&S carriers offer greater flexibility in terms, conditions, and rates as compared to the Admitted Market.

 

•

Exchange Services Take Rate: Exchange Services direct commission income divided by Exchange Written Premium.

 

•

Exchange Written Premium: The total gross written premium written through the Risk Exchange, including both gross written premiums written on behalf of Accelerant Underwriting companies and written on behalf of Risk Exchange Insurers.

 

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FIO: Federal Insurance Office.

 

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Flywheel Re: Collectively, Flywheel Re Ltd. SPC and Flywheel Holdings Ltd. SPC, a Cayman Islands holding company that indirectly owns Flywheel Re Ltd. SPC, are an unconsolidated reinsurance sidecar entity, sponsored by Accelerant and through which institutional investors are offered specialty insurance risk and returns that are relatively uncorrelated with broader financial markets.

 

•

GAAP: Accounting Principles Generally Accepted in the U.S.

 

•

Gross Loss Ratio: Expressed as a percentage, gross incurred losses and loss adjustment expense divided by gross earned premium. 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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GWP: Gross written premium, representing the total amount of premium contracted for all policies issued in a given period.

 

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Independent Members: Members in which Accelerant does not own an interest.

 

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Independent Premium: The gross premium written by Independent Members and placed through our Risk Exchange.

 

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LAE: Loss adjustment expense.

 

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Members: Specialized underwriters, including MGAs, MGUs, and program managers (terms we use interchangeably) that underwrite insurance premiums on behalf of risk capital partners through our Risk Exchange.

 

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MGA: Managing general agent; a third-party agent that receives delegated underwriting authority from a Primary Insurance Company to write insurance risk on its behalf. As used in this prospectus, the term “MGA” refers generically to agents receiving this delegation of underwriting authority, including MGUs, MGAs, and/or program managers and any Member or other entity in relation to which the term “MGA” is used in this prospectus may not fall within the regulatory definition of a “managing general agent” in the jurisdictions in which it operates.

 

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MGU: Managing general underwriter; a third-party agent that receives delegated underwriting authority from a Primary Insurance Company to write insurance risk on its behalf.

 

•

Mission Europe: Mission Holdings Europe Ltd., one of our subsidiaries. On May 1, 2024, we exercised our call option to acquire, and subsequently contribute all the equity interests of Mission Holdings Europe Ltd. to Mission Worldwide Holdings.

 

•

Mission Members: Specialty underwriters that we incubate through Mission Underwriters and in which we have an equity ownership interest.

•

Mission Underwriters: Mission Underwriters provides specialty underwriters with the working capital, operational support, and balance sheet capacity necessary to operate their own MGAs, in which the specialty underwriters have a majority ownership interest. These MGAs are Members of the Risk Exchange. Mission Underwriters operates in the U.S., UK and EU through Mission US and Mission Europe.

 

•

Mission US: Mission Underwriting Holdings, LLC, which is a subsidiary that was initially funded by equity capital from our controlling shareholder and operated by our management team, and whose equity interests were acquired, by merger, by Accelerant Holdings on May 1, 2024. Prior to May 1, 2024, Mission Underwriting Holdings, LLC was a consolidated variable interest entity.

 

•

NAIC: National Association of Insurance Commissioners.

 

•

Net Revenue Retention: Expressed as a percentage, the current period’s Exchange Written Premium of Members that were actively writing Exchange Written Premium in the prior 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.

 

•

Owned Members: Members in which Accelerant either has a minority equity ownership interest or controlling equity interest.

 

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Owned Premium: The premium produced by Mission Members and Owned Members, who receive commissions for sourcing and underwriting business.

 

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P&C: Property and casualty insurance.

 

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Primary Insurance Company: Carriers who write business on their license and thus are responsible for insurance policy forms, rate filings, etc. Primary Insurance Companies will often then reinsure the risk they have written to third-party reinsurers.

 

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Reinsurer: An insurance company that insures risk written by another insurance company. Reinsurers generally are not required to be licensed directly in a given jurisdiction to provide such reinsurance coverage; however, absent any such license, reinsurers are limited only to writing such risk in a (secondary) reinsurance capacity and not in a (primary) direct capacity.

 

•

Risk capital partners: Third-party insurance companies, reinsurers or institutional investors that provide capacity through the Risk Exchange, directly or indirectly.

 

•

Risk Exchange: The Accelerant technology, data ingestion, and agency operations that serve the needs of our Members and risk capital partners.

 

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Risk Exchange Insurer: Third-party Primary Insurance Company deploying underwriting capacity directly through our Risk Exchange.

 

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Selling Shareholder: ACP Accelerant Holdings LP; the shareholder which, as part of this offering, is selling shares received following the re-designation of existing common shares following the Accelerant Holdings LP Distribution.

 

•

Third-Party Direct Written Premium: GWP written directly with Risk Exchange Insurers.

 

•

TPA: Third-party administrator, providing claims handling and other operational functions related to administration of insurance policies.

 

•

U.S.-UK Tax Treaty: The Convention Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Gains, signed July 24, 2001.

 

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RISK FACTORS

Investing in our Class A common shares involves a high degree of risk, including the potential loss of all or part of your investment. Before making an investment decision to purchase our Class A common shares, you should carefully consider the following risks, together with all of the other information contained in this prospectus, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included elsewhere in this prospectus. Our business, financial condition, results of operations or prospects could be materially and adversely affected by any of these risks or uncertainties, as well as by risks or uncertainties not currently known to us, or that we do not currently believe are material. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. See “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Business and Industry

Risks Related to Our Risk Exchange and Our Members

Our Risk Exchange has a limited operating history, which makes it difficult to evaluate its prospects, potential for expansion to new Members and product offerings, as well as the future prospects of our overall business. Any expansion efforts that are unsuccessful may materially adversely affect our business, results of operations, financial condition and prospects.

Our business strategy is focused on the expansion of our Risk Exchange, which has a limited operating history. Our Risk Exchange is a new idea in the specialty insurance market, has been built with reality-developed applications, and our portfolio is currently focused on low-volatility, low-severity SME risks. We have limited experience in many aspects of its operation. Any aspect of our Risk Exchange model that does not achieve expected results, including our ability to sustain and adapt the technology underlying it and to continue to attract Members and risk capital partners to it, may have a material and adverse impact on our financial condition and results of operations. It is therefore difficult to effectively assess our future prospects.

Our targeted market of users of our Risk Exchange may not be familiar with our platform and accordingly may have difficulty distinguishing the services and offerings available through our Risk Exchange from similar insurance services and offerings. Convincing current and future Members and risk capital partners of the value of using our Risk Exchange will be critical to increasing the number of Members, and therefore the premiums written through the Risk Exchange and, correspondingly, the continued success and expansion of our business.

Given the lack of operating history of the Risk Exchange and the evolving nature of the markets in which our business operates, our business is subject to risks and challenges including our ability to, among other things:

 

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increase awareness of the capabilities of our Risk Exchange;

 

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manage the increased volume of business on our Risk Exchange and its future growth;

 

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maintain and evaluate the robustness of our Risk Exchange;

 

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increase the revenues generated from use of the platform’s services by Members;

 

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maintain and enhance its relationships with our business partners;

 

•

compete with competitors who may develop alternatives for managing and marketing to risk capital partners;

 

•

improve the Risk Exchange’s operational efficiency; and

 

•

attract, retain, and motivate talented employees to support the growth of the Risk Exchange.

 

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We have generated net losses in the past and may incur losses in the future.

Although we generated net income of $7.8 million and $22.9 million for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively, we have incurred net losses in the past and may do so in the future. We incurred a net loss of $64.1 million for the year ended December 31, 2023, and we had an accumulated deficit of $176.3 million as of March 31, 2025. These results do not reflect the impact of non-cash expense related to our profits interest awards, of which $    million will be incurred in connection with the consummation of this offering and the AHLP Distribution. We expect to make significant investments to further develop and expand our business. In particular, we expect in the foreseeable future to continue to expend substantial financial and other resources on the development of our technology and data analytics capabilities, growing the reach and capabilities of our existing Members, adding new Members to our Risk Exchange, expanding our product portfolio and expanding into new geographies. As a public company, we will also incur significant legal, accounting and other expenses that we did not incur as a private company. Accordingly, we may not achieve or maintain profitability and we may incur significant losses in the future. Additionally, if we do not achieve or maintain profitability, we may need to raise additional capital to support new business and the aforementioned initiatives, and this may reduce our ability to grow as quickly, or to grow at all.

The addition of any products to our portfolio that may result in a higher loss ratio may be less attractive for our Members and risk capital partners, and may materially adversely affect our business, results of operations, financial condition and prospects.

While we have had success in the current offerings of our Risk Exchange, we may in the future prudently grow beyond the specialty insurance market, and any new products we offer may result in a higher loss ratio than our current specialty insurance market offerings. These new products may result in a higher loss ratio, which may be less attractive for our Members and risk capital partners, and may materially adversely affect our business, results of operations, financial condition and prospects.

A decline in our financial strength rating may adversely affect the volume of business we can write.

Participants in the insurance industry use ratings from independent ratings agencies, such as A.M. Best, as an important means of assessing the financial strength and quality of insurers. In setting its ratings, A.M. Best performs quantitative and qualitative analysis of a company’s balance sheet strength, operating performance and business profile. A.M. Best’s rating process also includes comparisons of an insurer to its peers and industry standards as well as assessments of operating plans, philosophy, and management. A.M. Best financial strength ratings range from “A++” (Superior) to “F” (the latter assigned to insurance companies that have been publicly placed in liquidation). As of the date of this filing, A.M. Best has assigned Accelerant a group financial strength rating of “A-” (Excellent) with a stable outlook as an insurance holding company system. A.M. Best expects us to maintain the strongest level of risk-adjusted capitalization over the longer term, as measured by Best’s Capital Adequacy Ratio (“BCAR”), with capital supporting business growth. A.M. Best assigns ratings that are intended to provide an independent opinion of an insurance company’s ability to meet its obligations to policyholders and are not evaluations directed to investors and are not recommendations to buy, sell, or hold our Class A common shares or any other securities we may issue. A.M. Best periodically reviews our financial strength rating and may revise our rating downward at their discretion based primarily on its analyses of our balance sheet strength, operating performance, and business profile. There are specific building blocks A.M. Best reviews, including capital adequacy, operating performance, operating profile and enterprise risk management, as well as other factors that could affect their analyses such as:

 

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if we change our business practices from our organizational business plan in a manner that no longer supports A.M. Best’s rating;

 

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if unfavorable financial, regulatory or market trends affect us, including excess market capacity;

 

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if we have adverse loss development that is materially in excess of our recorded loss reserves;

 

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if we have unresolved issues with government regulators;

 

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if we are unable to retain our senior management or other key personnel;

 

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if our investment portfolio incurs significant losses or our liquidity is limited;

 

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if A.M. Best alters its methodology for evaluating reinsurance recoverables; or

 

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if A.M. Best alters its capital adequacy assessment methodology in a manner that would adversely affect our rating.

These and other factors could result in a downgrade of our financial strength rating. A downgrade or withdrawal of our rating could result in any of the following consequences, among others:

 

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causing our current and future distribution partners, Members, and insureds to choose other, more highly rated competitors;

 

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increasing the cost or reducing the availability of reinsurance to us; or

 

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severely limiting or preventing us from writing new and renewal insurance contracts.

In addition, in view of the earnings and capital pressures experienced by many financial institutions, including insurance companies, it is possible that rating organizations will heighten the level of scrutiny that they apply to such institutions, increase the frequency and scope of their credit reviews, request additional information from the companies that they rate or increase the capital and other requirements employed in the rating organizations’ models for maintenance of certain ratings levels. We can offer no assurance that our rating will remain at its current level and future reviews may result in adverse ratings consequences, which could have a material adverse effect on our financial condition and results of operations.

Certain Members may choose to leave our Risk Exchange after their contractual commitments have expired, which would adversely affect our results of operations and our ability to offer attractive risk opportunities to our risk capital partners.

Members enter into exclusivity agreements on a five-year rolling basis to remain on our Risk Exchange, which we typically renew annually. Members may choose to leave our Risk Exchange after the exclusivity period has ended, although only one Member has elected to leave to date, based on mutual agreement that the higher policy limits they wanted to offer were not in line with our terms. While we have found that the terms of the exclusivity period are currently favorable to facilitate faster, more profitable growth, market or other forces, including the deterioration of the pricing and economic terms that are offered to our Members, may cause Members to choose not to renew their contracts, or cause us to reduce the duration of time for which we may contractually bind our Members. Our success is largely dependent on our relationships with Members and risk capital partners and on our reputation for providing high-quality services to both. Many of our Members and risk capital partners are businesses that interact in industry groups or trade associations and actively share information among themselves about the quality of service they receive from their vendors, including at the Member events we host and on our Risk Exchange. Therefore, if any Member or risk capital partner is not satisfied with our services or products, it may negatively affect our relationships with multiple other Members or potential Members, which in turn may adversely affect our results of operations.

If we are unable to continue enhancing our technology-based solutions at a pace that allows us to remain attractive to our Members, or continue to gain internal efficiencies and effective internal controls that promote the utility of the analytics we provide to Members, our operating results, relationships with our Members and growth could be adversely affected.

Our future success depends, in significant part, on our ability to anticipate and effectively respond to the threats and opportunities presented by digital disruption, “big data,” data analytics, AI and other developments in technology, particularly in the insurance industry. These may include new applications or insurance-related services based on AI, machine learning, robotics, blockchain or new approaches to data mining. We may be exposed to competitive risks related to the adoption and application of new technologies by established market participants, or new entrants such as technology and “insurtech” companies, data-mining companies and others.

 

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For example, we have invested significantly into our Risk Exchange. Other companies may be developing platforms that may compete with our Risk Exchange, and their success in this space may adversely impact our ability to differentiate our services to our Members. Innovations in software, cloud computing, or other technologies that alter how our services are delivered could significantly undermine our investment in this business if we are slow to innovate or unable to take advantage of these developments.

We must also develop, enhance, and implement technology solutions and technical expertise among our employees that anticipate and keep pace with rapid and continuing changes in technology, industry standards, Member preferences, and internal control standards. We may not be successful in anticipating or responding to these developments on a timely and cost-effective, basis and our ideas and innovations may not be accepted in the marketplace. Additionally, the effort to gain technological expertise and develop new technologies in our business requires us to incur significant expenses. Investments in technology systems may not deliver the benefits or perform as expected once completed, or may become obsolete more quickly than expected, which could result in operational difficulties or additional costs. If we cannot offer new technologies as quickly as our competitors, or if our competitors develop more effective or cost-efficient technologies or other product offerings, we could experience a material adverse effect on our operating results, Member relationships and growth.

In some cases, we depend on key third-party vendors and partners to provide technology and other support for our strategic initiatives. If these third parties fail to perform their obligations or cease to work with us, or fail to protect our data, confidential and propriety information, our ability to execute on our strategic initiatives could be adversely affected. See “Risk Factors—Risks Related to our Technology and Intellectual Property—Loss of key vendor relationships or failure of a vendor to protect our data, confidential and proprietary information could affect our operations.”

If our Members do not provide the data they are contractually obligated to provide or the data provided by our Members is inaccurate or incomplete, our Risk Exchange and participating risk capital partners may be unable to accurately price the risk transferred through our Risk Exchange.

Our Risk Exchange runs on data provided by our Members, which comes from disparate and complex data environments. Though we have developed technology to ingest and synthesize this data into a single, digestible data set, if the data our Risk Exchange captures is faulty or incomplete, the integrity of our Risk Exchange and its ability to analyze the data may be adversely affected. Additionally, although contractually obligated to do so, our Members may, in certain instances, be unable or unwilling to provide some or all of the data they are obligated to provide. Furthermore, as we gain new Members, there is no assurance that new Members will be able to provide data as accurately or promptly as those Members we have attracted to date. If the data we receive from our Members and risk capital partners is inaccurate, incomplete or not timely, our current Members may choose to leave our Risk Exchange, our risk capital partners may misprice risk leading to their dissatisfaction or departure, and our reputation may be harmed, which could materially and adversely affect our business, results of operations, financial condition, and prospects.

If our Members do not maintain consistency in the level of skill and expertise they demonstrate, or adhere to the underwriting guidelines of our Risk Exchange, our Members may experience higher loss ratios and our reputation and relationships with insurance carriers, reinsurers, other Members, other risk capital partners, and brokers could be harmed.

Our ability to attract risk capital partners to our Risk Exchange is substantially dependent on our Members’ ability to effectively evaluate risks within the guidelines of our Risk Exchange. Our business depends, in part, on the accuracy and success of our Members’ underwriting models and their skill in implementing them. We evaluate prospective Members through a rigorous due diligence process before onboarding them to our Risk Exchange. However, if our Members do not perform with the expected level of skill, if any of the models or tools that they use contain programming or other errors or are ineffective, or if the data that we expect to be provided by Members or third parties is incorrect or stale, our pricing and approval process could be negatively affected,

 

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resulting in higher loss ratios and other adverse outcomes for those Members. This could damage our reputation and relationships with risk capital partners, other Members, and potential future counterparties, which could harm our business, results of operations, financial condition, and prospects.

In addition, if any of our Members fail to comply with the underwriting guidelines of our Risk Exchange and the terms of their appointments, we and our risk capital partners could be bound to a particular risk or number of risks that we did not anticipate when the insurance products were developed, and may be subject to litigation or other claims arising from any failures in compliance. Such actions or failure to act by our Members and resulting losses could adversely affect our business, results of operations, financial condition, and prospects.

Our current market share may decrease as a result of disintermediation within the insurance industry, including increased competition from insurance companies, technology companies, and participants in the financial services industry, as well as the shift away from traditional insurance markets.

The insurance intermediary business is highly competitive, and we actively compete with numerous firms for new Members and risk capital partners, many of which have relationships with other insurance companies or have a significant presence in specialty insurance markets that may give them an advantage over us. Other competitive concerns include the quality of our products and services, our pricing, our ability to expand our offerings and the entrance of technology companies into the insurance intermediary business. In addition, the financial services industry may experience further consolidation, and we therefore may encounter increased competition from insurance companies and firms in the financial services industry, as a growing number of larger financial institutions offer a wider variety of financial services, including insurance intermediary services.

Furthermore, there has been an increase in alternative insurance markets, such as self-insurance, captives, risk retention groups, parametric insurance, and non-insurance capital markets. While we compete in these segments on a fee-for-service basis, we cannot be certain that such alternative markets will provide the same level of insurance coverage or profitability as traditional insurance markets.

Our MGA incubator, Mission Underwriters, depends on our ability to identify and partner with specialty underwriting talent, and if we do not identify the correct partners to participate in the Mission platform, or if our competitors attract this underwriting talent instead, it could affect the returns on our equity ownership interests in these Mission entities and accordingly our business, results of operations, financial condition, prospects and reputation.

Mission Underwriters is our MGA incubator that seeks out talented teams of Mission Members and supports them with the tools and resources needed to form their own MGAs that are then jointly owned by us and the underwriters. Mission Underwriters depends on our ability to identify and partner with specialty underwriting talent. By doing so, we are able to directly capitalize on the industry trend of specialized underwriting talent leaving traditional insurance carriers to start their own independent underwriters. Our primary means of identifying such underwriters is our reliance on the Accelerant management team’s knowledge of the specialty insurance markets in which we operate. Such knowledge includes an awareness of high-quality underwriters in these markets. We supplement this market awareness with arrangements with a number of specialist recruiters that seek out underwriters that match our desired profile. Our ongoing recruitment efforts will continue to be important as we grow; we do not currently expect any of the associated recruitment costs to increase materially in the future, although there may be unanticipated factors or circumstances beyond our control that result in increased costs in this area. Mission Underwriters attracts specialty underwriters with its independence, turnkey back office, and equity incentivization combined with the overall Accelerant value proposition. In addition, although we carefully vet potential Mission Members through a rigorous due diligence process before they are onboarded, we may fail to properly identify those who will be able to and successfully operate as Mission Members. Choosing ineffective Mission Members may cause our risk capital partners to reduce, or altogether cease, usage of our Risk Exchange and negatively impact the returns on our equity investments in our Mission Members.

 

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Additionally, our competitors that operate with different business models may have more robust financial, technical, and marketing resources than we do, which may allow them to attract potential Mission Members to their businesses. If we do not identify potential Mission Members, or our competitors are able to attract them instead, it could affect our business, results of operations, financial condition, prospects, and reputation.

Our ability to add new Members to our Risk Exchange may slow over time, which would limit our growth and materially adversely affect our business, results of operations, financial condition, and prospects.

A substantial amount of our growth has been due to successfully adding new Members to our Risk Exchange. We carefully vet existing MGAs through a rigorous diligence process when selecting new Members. As we continue to add new Members, it may become harder to find high-quality MGAs that meet the requirements of our diligence process. It may also be harder to convey the appeal of our Risk Exchange to potential new Members. Any failure on our part to recognize or respond to these challenges may adversely affect our ability to add new Members to our Risk Exchange and may materially adversely affect our business, results of operations, financial condition, and prospects.

On average, it takes 14 weeks to onboard a Member to our Risk Exchange. However, there have been, and in the future, may be, instances in which a Member has not been able to successfully integrate into our Risk Exchange. We believe there is demand in other specialty insurance markets that would support the continued expansion of our Risk Exchange, but to the extent these markets are not driven primarily by MGA business, it may be more difficult to add new Members to our Risk Exchange. Additionally, to the extent we encounter difficulties in the Member onboarding process, Members may not be able to perform at the level we expect, and this may impair our relationships with these Members and with our risk capital partners. If the ability for new Members to quickly join our Risk Exchange is impaired, they may no longer want to join, which may materially adversely affect our business, results of operations, financial condition and prospects.

Our holding of Member and risk capital partner funds exposes us to complex fiduciary regulations and the potential for losses.

Premium generated from Members is centrally managed by our agencies. Consequently, at any given time, we may hold certain funds of our Members and risk capital partners, which subjects us to various regulatory regimes governing the holding and management of these funds, including under the purview of the Financial Services Authority and the Federal Deposit Insurance Corporation (“FDIC”). These entities face the risk of loss if banks do not honor our escrow and trust deposits. The banks may hold a significant amount of these deposits in excess of the federal deposit insurance limit. If any of our depository banks were to become unable to honor any portion of our deposits, our Members and risk capital partners could seek to hold us responsible for such amounts and, if the Members or risk capital partners prevailed in their claims, we could be subject to significant losses.

If new regulations are enacted that affect the ability of our Members to operate, it could materially adversely affect our business, results of operations, financial condition and prospects.

Our operations, and our Members in particular, are subject to extensive laws and regulations in the jurisdictions in which we all operate, including in relation to changing capital requirements. Legislators, regulators, and self-regulatory organizations have in the past, and may in the future, consider various proposals that may affect the ability of our Members to underwrite claims, and new laws and regulations may affect or significantly limit their ability to do so. It is uncertain whether and how these and other such proposals or changes in legislation or regulation would apply to our Members, but to the extent they affect the ability of our Members to operate, this could materially adversely affect our business, results of operations, financial condition and prospects.

 

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Risks Related to Our Risk Capital Partners

We have expanded rapidly in recent years, and we may not be able to continue to attract risk capital partners at the same rate or of the same quality to facilitate similar growth in the future or continue maintaining a capital-efficient model.

Since 2020, we have grown the number of risk capital partners operating on our Risk Exchange from 28 to 96 as of March 31, 2025. Our risk capital partners generally each hold an “A-” or better A.M. Best rating or are acting on a fully collateralized basis. There is no assurance that we will continue to add risk capital partners to our Risk Exchange at the same rate we have historically, or that prospective risk capital partners will be of the same level of quality as those we have attracted to date. Lower quality risk capital partners may subject us to additional counterparty risk, such as through engaging in sub-standard, non-market or even fraudulent practices or through increased likelihood of default. This may translate to reduced underwriting capacity or quality and reliability of the capital available to our Members, which would result in a material adverse effect on our business, results of operations, financial condition and prospects.

Our business model contemplates adding additional risk capital partners to the Risk Exchange to reinsure the growing volume of premiums in the Risk Exchange portfolio, while also increasing the proportion of premiums written directly and retained by primary insurance companies on the Risk Exchange. If we are unable to grow the volume of premiums written directly and retained by primary insurance companies on our Risk Exchange and the proportion of premiums written by Accelerant-owned insurance companies does not decrease, we will need to rely more heavily on the risk capital partners currently on our Risk Exchange and potentially hold more regulatory capital at Accelerant Underwriting. Additionally, if we were to lose one of our existing risk capital partners, an increase in Accelerant GWP could lead to a concentration of counterparties that could materially adversely affect our business, results of operations, financial condition and prospects.

We may not be able to continue to attract institutional investors to Flywheel Re, or those investors may insist in the future on terms that are less economically attractive to us.

Flywheel Re is an unconsolidated reinsurance sidecar entity that we formed in 2022. Upsized capital was raised from institutional investors in June 2025 to support business assumed by Flywheel Re during a multi-year risk period, which covers the underwriting years from April 2025 to March 2028. While Accelerant holds no equity interest in Flywheel Re and does not exercise control over Flywheel Re, approximately 26% of our risk capital was sourced from Flywheel Re as of March 31, 2025, creating more predictability and stability in capacity availability, enabling institutional investors to access risk through our Risk Exchange. If we are unable to continue developing unique risk transfer solutions like Flywheel Re, our ability to retain existing and attract new institutional investors and reinsure risks to them could be adversely affected. To the extent we are unable to attract new risk capital partners in the form of institutional investors, we may not be able to find new capital commitments to provide necessary risk capital. In the future, we may be unable to continue to attract additional institutional investors to contribute capital to Flywheel Re or institutional investors who contribute capital to Flywheel Re may insist on terms that are less economically attractive to us. Our business may be harmed if additional institutional investors are not attracted to Flywheel Re or if there is a dependence upon a limited number of institutional investors.

Certain risk capital partners may look to directly interact with our Members outside of the arrangements dictated by our Risk Exchange or pursue other disintermediation strategies, including leaving our Risk Exchange entirely, which could materially adversely affect our business, results of operations, financial condition and prospects.

Historically, all of the insurance risk underwritten by Members was written by Accelerant-owned insurance companies licensed to insure business written by each Member, and was concurrently ceded through quota share arrangements to risk capital partners. Since 2023, we have expanded our third-party participation (including direct third-party participation) in our Risk Exchange to 19% of Exchange Written Premium for the three months ended

 

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March 31, 2025, which has increased interaction between our Members and risk capital partners. Our agreements with Members prohibit them from entering into similar contracts without our prior consent, require Members to cede all insurance business of a type that is permitted to be written, and requires our Members to allow us to quote competitive terms for any new proposed binding authority before inviting any other insurer to do so. However, if certain risk capital partners choose to interact directly with our Members outside our Risk Exchange or pursue other disintermediation strategies, it could materially adversely affect our business, results of operations, financial condition, and prospects.

Our business, and therefore our financial condition and results of operations, may be adversely affected by a reduction in insurer and reinsurer capacity.

Our results of operations depend on the continued capacity of insurance and reinsurance carriers to adequately and appropriately underwrite risk and provide coverage, which may depend, in turn, on those insurance and/or reinsurance companies’ ability to procure reinsurance. Capacity could also be reduced by insurance or reinsurance companies failing or withdrawing from writing certain coverages that are ultimately offered to policyholders. We have no control over these matters. To the extent that reinsurance becomes less widely available or significantly more expensive, we may not be able to procure the amount or types of reinsurance that we require and the coverage our Members underwrite for policyholders may be too expensive or more limited than is acceptable.

The failure of risk capital partners to pay claims in an accurate and timely fashion could materially and adversely affect our business, results of operations, financial condition and prospects.

Risk capital partners on our Risk Exchange must evaluate and pay claims that are made under bound policies in an accurate and timely fashion. Many factors affect their ability to pay claims in an accurate and timely fashion, including the training and experience of claims representatives, the effectiveness of their management, and their ability to develop or select and implement appropriate procedures and systems to support claims administration and other functions. Failure to pay claims in an accurate and timely fashion could lead to regulatory and administrative actions or material litigation, which could harm our Members and also undermine our reputation in the marketplace, and accordingly, materially and adversely affect our business, results of operations, financial condition, and prospects.

We may lose risk capital partners as a result of consolidation within the insurance and reinsurance industries.

We have historically relied on reinsurance arrangements for a significant amount of our risk capital. There has been considerable consolidation in the reinsurance industry in recent years, driven primarily by smaller reinsurers lacking the scale and diversification to succeed in the current market. We expect this trend to continue. As a result, we may lose some of our current counterparties that are ultimately acquired by other firms who have their own operations or established relationships with other platforms. To date, our business has not been materially affected by consolidation among insurers or reinsurers, however, we cannot assure you that we will not be affected by industry consolidation that may occur in the future. Such consolidation could materially adversely affect our business, results of operations or financial condition.

Changes in reinsurance regulation could limit the availability of risk capital in the future.

The reinsurance business in which many of our risk capital partners are engaged is highly regulated. The extent of regulation varies across the jurisdictions in which we and our Members operate, but generally is governed by laws that delegate regulatory, supervisory and administrative authority to insurance departments and similar regulatory agencies. Legislators, regulators and self-regulatory organizations have in the past, and may in the future, consider various proposals that may affect the ability of our risk capital partners to participate on our Risk Exchange and of our reinsurers, such as Flywheel Re, to access premium written or reinsured by us on the Risk Exchange platform. Any negative changes in these laws or regulations could materially adversely affect our business, results of operations or financial condition.

 

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U.S.-based activities of our Members or ceding companies on the Risk Exchange may be attributed to a non-U.S. risk capital partner for tax purposes in certain circumstances, and our ability to grow the Risk Exchange may be limited as a result.

U.S.-based activities of our Members or ceding companies on the Risk Exchange could, in certain circumstances, be attributed to a non-U.S. risk capital partner and cause it to be subject to U.S. federal income tax. This would not be the case, however, with respect to U.S.-based activities of a Member or ceding company that is considered an independent agent of a non-U.S. risk capital partner eligible for benefits under a U.S. income tax treaty. Therefore, prospective non-U.S., non-treaty eligible risk capital partners may be unwilling to participate in the Risk Exchange, may require U.S. ceding companies to retain some portion of the risk that is reinsured, or may otherwise seek assurances the activities of such ceding companies will not be attributed to them for these purposes. The foregoing tax considerations may limit the pool of prospective risk capital partners and our ability to grow the Risk Exchange may be limited as a result. In addition, risk retention by ceding companies on the Risk Exchange may be in tension with our capital-efficient business model.

Risks Related to Underwriting Activities

Our financial condition and results of operations could be materially adversely affected if we do not accurately assess the underwriting risk we retain.

Our underwriting performance in respect of the policies underwritten by our Members and retained by our own insurance and reinsurance companies, either directly or assumed from Risk Exchange Insurers, is dependent on our ability to accurately assess the risks associated with these policies. We rely on the experience of our Members’ underwriting personnel in assessing those risks. In addition, our Members’ employees make decisions and choices in the ordinary course of our underwriting activities that potentially expose us to underwriting risk. If our Members misunderstand the nature or extent of the risks that they underwrite, they may fail to establish appropriate premium rates or other pricing elements, which could adversely affect our business, results of operations and financial condition.

We may be unable to purchase third-party reinsurance in amounts we desire on commercially acceptable terms or on terms that adequately protect us, and may not have sufficient third-party reinsurance coverage provided by risk capital partners accessing our Risk Exchange, in each case, and this potential inability may cause us to retain more risk than we expect or have forecasted, which may materially and adversely affect our business, results of operations and financial condition.

We strategically secure reinsurance from third parties, which enhances our business by protecting our capital from severity events (either large single-event losses or catastrophes). Reinsurance involves transferring, or ceding, a portion of our risk exposure on policies that we write to another reinsurer, in exchange for a premium paid to the reinsurer. We reinsured 91.6% and 91.2% of Accelerant GWP for the trailing twelve months ended March 31, 2025 and the year ended December 31, 2024, respectively. Under our reinsurance arrangements, we hold $77.6 million in trust to support reinsurance recoverables as of March 31, 2025. The collateral is all in fixed income securities allowed under Section 114 trusts under the NAIC model laws. Relatedly, we have entered into reinsurance agreements with our Risk Exchange Insurers consisting of either stop-loss or quota share reinsurance. When we reinsure this business, we place the majority of it with third-party reinsurers or institutional investors. If we are unable to renew our expiring contracts, enter into new reinsurance arrangements on acceptable terms, or expand our existing reinsurance coverage where necessary, our loss exposure could increase, which would increase our potential losses related to loss events. If we are unwilling to bear an increase in loss exposure, we may need to reduce the level of our underwriting commitments, both of which could materially and adversely affect our business, results of operations and financial condition.

There may be situations in which reinsurers exclude certain coverages from, or alter terms in, the reinsurance contracts we enter with them. As a result, we, like other insurance companies, could write insurance policies which, to some extent, do not have the benefit of reinsurance protection. These gaps in reinsurance protection could expose us to greater risk and greater potential losses.

 

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Unexpected changes in the interpretation of the coverage or provisions of the policies we underwrite, including loss limitations and exclusions, could have a material adverse effect on our business, results of operations and financial condition.

There can be no assurances that loss limitations or exclusions in our policies will be enforceable in the manner we intend. As industry practices and legal, judicial, social, and other conditions change, unexpected and unintended issues related to claims and coverage may emerge. For example, many of our policies limit the period during which a policyholder may bring a claim, which may be shorter than the statutory period under which such claims can be brought against our policyholders, and other policies now contain a COVID-19 specific exclusion. While these limitations and exclusions help us assess and mitigate our loss exposure, it is possible that a court or regulatory authority could nullify or void a limitation or exclusion, or legislation could be enacted that modifies or bars the use of such limitations or exclusions. These types of governmental actions could result in higher than anticipated losses and loss adjustment expenses (“LAE”), which could have a material adverse effect on our financial condition or results of operations, or the results of operations of our risk capital partners. In addition, court decisions may read policy exclusions narrowly to expand coverage, thereby requiring insurers to create and write new exclusions.

These issues may adversely affect our business by either broadening coverage beyond our Members’ underwriting intent or by increasing the frequency or severity of claims. In some instances, these changes may not become apparent until after Accelerant-owned insurance companies or our risk capital partners have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under these insurance contracts may not be known for many years after a contract is issued.

The movement in our individual Member commission structures could materially affect the commissions retained on written premiums.

Our individual Member commission structures typically allow our Members to receive a higher commission if the quality of their business underwritten through our Risk Exchange is high and a lower commission if the quality is low. Additionally, our typical reinsurance contracts may have us owing commission back to our reinsurers if the actual loss ratio of the covered contracts is higher than our expected loss ratio or vice versa. The movements on these two variables could have a material adverse effect on our business, results of operations, and financial condition. There is a scenario in which we could owe more commission to Members and receive less from reinsurers.

The failure of any of the loss limitation methods we employ could have a material adverse effect on our financial condition and results of operations.

As part of our overall risk strategy, we purchase excess of loss protection from third-party reinsurers to mitigate the impact of a significant loss event(s) beyond those that we reasonably anticipate at the time of underwriting. Market conditions beyond our control, including the price and availability of capacity, may affect the amount of excess of loss protection we are able to purchase. While we maintain coverage with an excess of loss program, if the frequency and severity of global catastrophes and significant loss events increases, such coverage may be insufficient to cover our losses. If we are not able to effectively mitigate our loss limitation exposure, in the event of such losses, our business, results of operations and financial condition could be materially affected.

Our losses and loss expense reserves may be inadequate to cover our actual losses, which could have a material adverse effect on our business, results of operations and financial condition.

Our success depends on our ability to accurately assess the risks related to the businesses and people that our insurance carrier subsidiaries insure. We establish losses and LAE reserves for the best estimate of the ultimate payment of all claims that have been incurred, or could be incurred in the future, and the related costs of adjusting those claims, as of the date of our financial statements. As of March 31, 2025, our reserve for unpaid losses and

 

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LAE was $1.51 billion. Loss reserves are inherently uncertain as they represent management’s estimates of losses that will not become known until claims settlements in the future, and therefore do not represent an exact calculation of liability. Rather, reserves represent an estimate of what we expect the ultimate settlement and administration of claims will cost us, and our ultimate liability may be greater or less than our estimate.

As part of the reserving process, we review historical data and consider the impact of such factors as:

 

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claims inflation, which is the sustained increase in cost of materials, labor, medical services and other components of claims cost;

 

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claims development patterns by line of business, as well as frequency and severity trends;

 

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pricing for our products;

 

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legislative and regulatory activity;

 

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social and economic patterns; and

 

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litigation, judicial and regulatory trends.

These variables are affected by both internal and external events that could increase our exposure to losses, and we continually monitor our loss reserves using new information on reported claims and a variety of statistical techniques and modeling simulations. This process assumes that past experience (adjusted for the effects of current developments, anticipated trends, and current and anticipated market conditions) is an appropriate basis for predicting future events. There is, however, no precise method for evaluating the impact of any specific factor on the adequacy of loss reserves, and actual results may deviate, perhaps substantially, from our reserve estimates. For instance, the following uncertainties may have an impact on the adequacy of our reserves:

 

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When a claim is received, it may take considerable time to fully assess the extent of the covered loss suffered by the insured. Consequently, estimates of loss associated with specified claims can increase as new information emerges over time, which could cause the reserves for the claim to become inadequate.

 

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From time to time, courts enforce new theories of liability retroactively. The failure of any of the loss limitations or exclusions we employ, or changes in other claims or coverage issues, could have a material adverse effect on our business, results of operations, financial condition and prospects.

 

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Volatility in the financial markets, economic events and other external factors may result in an increase in the number of claims and/or severity of the claims reported.

 

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If claims were to become more frequent, even if we had no liability for those claims, the cost of evaluating such claims could escalate beyond the amount of the loss adjustment expense reserves we have established. As we enter new lines of business, or as a result of new theories of claims, we may encounter an increase in claims frequency and greater claims handling costs than we had anticipated.

Inflation has an adverse impact on the cost of insured losses and expected future insured losses. Though we attempt to increase premium rates to reflect the impact of inflation on expected losses, we may not be able to do so and there can be no assurances that any such premium rate increases will be adequate to offset the impact of inflation on our financial performance.

If any of our reserves should prove to be inadequate, we will be required to increase our reserves resulting in a reduction in our net income and shareholders’ equity in the period in which the deficiency is identified. Elevated inflationary conditions could, among other things, cause loss costs and thus reserves to increase in magnitude. Future loss experience substantially in excess of established reserves could also have a material adverse effect on our future earnings, liquidity, and/or our financial ratings.

 

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Our reinsurers may not reimburse us for claims on a timely basis, or at all, which may materially and adversely affect our business, results of operations and financial condition.

The reinsurance contracts that we enter into to help manage our risks require us to pay premiums to the reinsurance carriers who will in turn reimburse us for a portion of covered policy claims. In many cases, a reinsurer will be called upon to reimburse us for policy claims many years after we have paid reinsurance premiums to the reinsurer. Although reinsurance makes the reinsurer liable to us to the extent the risk is transferred or ceded to the reinsurer, it does not relieve us (the ceding insurer) of our primary liability to our policyholders. Our current reinsurance program is designed to limit our financial risk. However, our reinsurers may not pay claims we incur on a timely basis, or they may not pay some or any of these claims. For example, reinsurers may default in their financial obligations to us in the event of insolvency, insufficient liquidity, operational failure, political and/or regulatory prohibitions, fraud, asserted defenses based on agreement wordings or the principle of utmost good faith, asserted deficiencies in the documentation of agreements or other reasons. Any disputes with reinsurers regarding coverage under reinsurance contracts could be time-consuming, costly, and uncertain of success. These risks could cause us to incur increased net losses, and, therefore, adversely affect our business, results of operations, and financial condition. As of March 31, 2025, we had $1.64 billion of aggregate reinsurance recoverables.

In mid-July 2023, we became aware that one of our reinsurance partners may have been the victim of a fraudulent scheme related to falsified letters of credit (which were used as collateral in our reinsurance agreements with such reinsurance partner). Thereafter, we confirmed that the letters of credit provided on behalf of such reinsurance partner were fraudulent. As a result, we determined that approximately $23 million of reinsurance recoverables were not effectively collateralized. We immediately demanded that the affected reinsurance partner provide valid replacement collateral to support the impacted reinsurance coverage. During this time, we engaged with regulators of our impacted U.S. insurance companies, notably the Department of Insurance of Arkansas for ASIC, and then subsequently filed the relevant quarterly statutory financial statements and did not admit the reinsurance recoverables subject to the falsified letters of credit. Accordingly, the surplus of ASIC dropped below the minimum surplus requirements for certain states. On August 15, 2023, ASIC filed its third quarter financial statements, which reflected the reduction of ASIC’s statutory capital. ASIC members and brokers were notified of the fact that ASIC statutory capital had fallen below the $45 million statutory requirement mandated by the state of California. Surplus lines brokers were not able to place insurance coverage with ASIC as we worked to replace the reinsurer and the collateral, which we accomplished by September 30, 2023. While we do not believe these circumstances had a material adverse impact on our business, to the extent any of our reinsurance partners are subject to similar circumstances in the future, we may suffer a material adverse effect on our business, financial condition, results of operations and prospects.

While as of March 31, 2025 we believe we no longer carry any exposure to the fraudulent instruments, there can be no assurance that we would not experience a similar result in the future. We have evaluated our internal due diligence processes related to verification of the validity of all reinsurance letters of credit and made improvements to enable us to identify and prevent the use of such fraudulent instruments in our reinsurance transactions more effectively. However, if our due diligence process improvements are not adequate to identify and prevent possible future fraudulent schemes of this nature, we could become a victim of such fraud, thereby increasing our financial risk and negatively impacting our profitability or regulatory compliance. In addition, future incidents of this nature could have a negative impact on the reinsurance industry as a whole and possibly constrain the availability of reinsurance coverage.

Severe weather conditions, including the effects of climate change and catastrophes, as well as man-made events, such as terrorism, may adversely affect our business, results of operations and financial condition.

The ability to effectively underwrite, model and price risk becomes more challenging as exposure to the risk of severe weather conditions, earthquakes and man-made catastrophes becomes more prominent in the insurance industry. Catastrophes can be caused by natural events such as severe winter weather, tornadoes, windstorms,

 

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earthquakes, hailstorms, severe thunderstorms and fires, or man-made events such as terrorist attacks, explosions, war and riots.

Climate change has contributed to an increase in the frequency and severity of natural disasters and the creation of uncertainty as to future trends and exposures. Over the past several years, changing weather patterns and climatic conditions, such as global warming, have added to the unpredictability and frequency of natural disasters in certain parts of the world, including the markets in which we operate. This effect has led to conditions in the ocean and atmosphere, including warmer-than-average sea-surface temperatures and low wind shear that increase hurricane activity. As such, climate change presents significant financial implications for our Members in areas such as underwriting, claims and investments, as well as risk capacity, financial reserving and operations. We are also subject to losses occurring as a result of man-made events, including acts of terrorism, military actions, cyberterrorism, explosions, and biological, chemical or radiological events.

The occurrence of any severe weather event or man-made catastrophic event could materially adversely affect our business, results of operations, and financial condition. Additionally, any increased frequency and severity of any such event could have a material adverse effect on our ability to predict, quantify, reinsure and manage catastrophe risk and may materially increase our losses resulting from such catastrophe events. The concentrations of exposure that produce the largest modeled losses to our portfolio are hurricane and other weather events along the Atlantic seaboard, wildfire prone areas in California or other states, U.S. severe convective storms, UK wind and flood, and European wind and flood, among others. For the 2024 treaty year, our U.S. property catastrophe excess of loss retention for a modeled gross occurrence is expected to be $35 million with a 1-in-100 year return period. Our EEA/UK property catastrophe excess of loss retention is expected to be $44 million for a modeled gross occurrence at a 1-in-250 year return period.

In addition, lawmakers and regulators have imposed and may continue to impose new requirements or issue new guidance aimed at addressing or mitigating climate change-related risks and efforts undertaken in response thereto. Additional actions by governments, regulators and international standard setters could result in substantial additional regulation to which we and our Members may be subject. It is also possible that the laws and regulations adopted in these jurisdictions regarding climate change-related risks will differ from one another, and that they could be inconsistent with the laws and regulations of other jurisdictions in which we operate.

In addition, severe weather and other effects of climate change result in more frequent and more severe damages, leading to lawsuits, more aggressive attorney involvement in insurance claims, expanded theories of liability, higher jury awards, lawsuit abuse and third-party litigation finance, all of which create the potential for a large rise in the total number of claims brought against us. More severe damages and a rise in the type and severity of claims could adversely affect our business, results of operations, financial condition and prospects.

General Risks

We have experienced rapid growth in recent years, and our recent growth rates may not be indicative of our future growth. As our costs increase, we may not be able to generate sufficient revenue to achieve, and if achieved, maintain, profitability.

We have experienced significant revenue growth in recent years. Our total revenues grew 39% in the three months ended March 31, 2025 from $128 million for the three months ended March 31, 2024 to $178 million for the three months ended March 31, 2025, 75% in 2024 from $344 million in 2023 to $603 million in 2024 and 57% in 2023 from $219 million in 2022 to $344 million in 2023. As we continue to scale our business, our annual growth rate is likely to moderate. In future periods, we may not be able to sustain revenue growth consistent with recent history, or at all. We believe our revenue growth depends on a number of factors, including, but not limited to, our ability to:

 

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price our products effectively so that we are able to attract and retain Members without compromising our profitability;

 

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attract new Members and Mission Members, successfully deploy and implement our products, obtain Member renewals, and provide our Members with excellent support and tailored services;

 

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attract and retain talented Member managers, executives and other employees;

 

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attract and retain risk capital partners;

 

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enhance our information, training and communication systems to ensure that our employees are well coordinated and can effectively communicate with Members and each other;

 

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improve our internal control over financial reporting and disclosure controls and procedures to ensure timely and accurate reporting of our operational and financial results;

 

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successfully create new distribution channels;

 

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successfully introduce new products and enhance existing products;

 

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successfully introduce our products to new markets inside and outside the United States;

 

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successfully compete against larger companies and new market entrants; and

 

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increase awareness of our brand.

We may not successfully accomplish any of these objectives and as a result, it is difficult for us to forecast our future results of operations. Our historical growth rate should not be considered indicative of our future performance and may decline in the future. In future periods, our revenue could grow more slowly than in recent years or decline for any number of reasons, including those outlined above. We also expect our operating expenses to increase in future periods, particularly as we continue to operate as a public company, continue to invest in research, development and technology infrastructure and expand our operations internationally. If our revenue growth does not increase to offset these anticipated increases in our operating expenses, our business, results of operations and financial position will be harmed, and we may not be able to achieve or maintain profitability. In addition, the additional expenses we will incur may not lead to sufficient additional revenue to maintain historical revenue growth rates and profitability.

As we expand our business, it is important that we continue to maintain a high level of service to our Members and risk capital partners and maintain Member and risk capital partners satisfaction. If we are not able to continue to provide high levels of service to our Members and risk capital partners, our reputation, as well as our business, results of operations and financial condition could be adversely affected.

We are subject to economic and reputational harm if companies with which we do business (including our Members and our risk capital partners) engage in negligent, grossly negligent, misleading or fraudulent behavior and damage to our reputation could have a material adverse effect on our business.

In operating our Risk Exchange, we rely on our Members and risk capital partners to provide their contractually obligated services and accurate data. If one or more of these constituencies, whether negligently or intentionally, fails to provide the services it has offered, capital as agreed, mishandles or misappropriates funds, or otherwise fails to properly provide products and services as expected, we face potential liability for damages and reputational harm.

Our ability to attract and retain Members, risk capital partners, employees and investors is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition and other subjective qualities. Negative perceptions or publicity regarding these matters could erode trust and confidence and damage our reputation among existing and potential Members, capital providers and other constituencies, which, in turn, could make it difficult for us to maintain existing Members and attract new ones. Damage to our reputation due to a failure to proactively communicate to stakeholders on changes in strategy and business plans could further affect the confidence of our Members, risk capital partners, regulators, creditors, investors and other parties that are important to our business, having a material adverse effect on our business, ability to raise capital, financial condition, and results of operations.

Our business may face significant competitive pressures in the future.

MGA activity, binding authority, underwriting management and other intermediary and underwriting and claims administration specialties are highly competitive. We believe that our ability to compete is dependent on the quality of

 

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our people, service, product features, price, commission structure, financial strength and the ability to access certain specialty insurance markets. We compete with a large number of national, regional and local organizations in the insurance industry. New or increased competition from these organizations or other entities that emerge, or regulatory or other industry developments, could harm our business, results of operations, financial condition and prospects.

We rely on third parties to perform key functions of our business operations enabling our provision of services to our Members and risk capital partners. These third parties may act in ways that could harm our business.

We rely on third parties, including Pro Global and in some cases subcontractors, to provide services, data and information such as technology, information security, funds transfers, data processing, support functions and administration that are critical to the operations of our business. These third-party service providers include data providers, plan trustees, payroll service providers, benefits administrators, software and system vendors, health plan providers, and providers of human resources, among others. Some of these third parties help us collect, process, transmit and store large quantities of personal financial information and other confidential and sensitive data about our customers, which must be protected by our information technology systems. Pro Global provides basic operational support for pre-processing of bordereaux files as part of our core business processes. As we do not fully control the actions of these third parties, we are subject to the risk that their decisions, actions or inactions may adversely impact us, and replacing these service providers could create significant delay and expense. Additionally, information technology systems are potentially vulnerable to damage, breakdown or interruption from a variety of sources, including but not limited to: cyberattacks, ransomware, malware, security breaches, sophisticated social engineering, denial-of-service attacks, theft or misuse, unauthorized access or improper actions by insiders or employees, sophisticated nation-state and nation-state-supported actors, natural disasters, terrorism, war, telecommunication, and electrical failures or other compromise. A failure by third parties to comply with service-level agreements or regulatory or legal requirements in a high-quality and timely manner, particularly during periods of our peak demand for their services, could result in economic and reputational harm to us. In addition, we face risks as we transition from in-house functions to third-party support functions and providers that there may be disruptions in service or other unintended results that may adversely affect our business operations. These third parties face their own technology, operating, business and economic risks, and any significant failures by them, including the improper use or disclosure of our confidential Member, employee or company information, could cause harm to our business and reputation. An interruption in or the cessation of service by any service provider as a result of systems failures, cybersecurity incidents, capacity constraints, financial difficulties, or for any other reason could disrupt our operations, impact our ability to offer certain products and services, and result in contractual or regulatory penalties, liability claims from Members or employees, damage to our reputation, and harm to our business.

Additionally, while we select our Members and third-party vendors carefully, cyberattacks and security breaches at a Member or vendor could adversely affect our ability to deliver products and services to our Members and otherwise conduct our business put our systems at risk. The types of incidents affecting us, our Members or our third-party vendors could result in intellectual property or other confidential information being lost, stolen, or otherwise compromised, including Member, employee or company data and we may not be able to (timely) detect incidents in our information technology systems or assess the severity or impact of a breach in a timely manner. We may also have insufficient recourse against third parties and may be required to expend substantial resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring. Any significant system or network disruption due to a breach in the security of our information technology systems could have a negative impact on our reputation, regulatory compliance status, operations, sales and operating results, or result in additional legal liability including regulatory sanctions. We believe we are not reliant on any third-party vendors from owned or affiliated entities.

There is increased litigation relating to COVID-19 being brought against participants in the insurance industry, and it is possible COVID-19 business interruption claims may cause us to suffer material losses.

As uncertainty around the COVID-19 pandemic has slowed, litigation related to COVID-19 has increased, and may continue to increase as additional claimants come forth. Business interruption insurance has been and

 

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remains a loss covered by the products issued by our Members where requested by the policyholders. While we began to include COVID-19 specific exclusions in the business interruption policies written by Accelerant Underwriting after the onset of the pandemic, there remains uncertainty in our potential exposure for certain business interruption insurance policies written prior to the COVID-19 pandemic. One of our Members extended coverage on business interruption policies for a carry-over period prior to adding a COVID-19 specific exclusion. Such policies were reinsured by one of our risk capital partners. Currently, language similar to the language included in this Member’s policies is being considered by the UK courts. If the UK courts were to apply a broader or different interpretation to the language of the business interruption policies than we have previously applied, any liability we have under claims asserted with respect to this Member’s policies could result in significant losses, thereby materially and adversely affecting our business, results of operations, financial condition and prospects. During the period commencing in December 2018 to March 2020, the Company issued 35,683 policies with attaching business interruption coverage, which were generally limited to £50 thousand ($63 thousand) per policy. Total coverage limits for the underlying policies were £1.78 billion ($2.22 billion) as of March 31, 2025. As of March 31, 2025, the Company received 3,436 notifications of claims, and paid or reserved approximately €21.6 million ($23.4 million) in respect of such claims. Our policy and coverage limits and notifications of claims reserve are generally presented in British pound sterling or Euros, and our consolidated financial statements are presented in United States dollars. We translate our policy and coverage limits and notifications of claims reserve into United States dollars based on the exchange rate as of March 31, 2025. This amount represents a combination of claims paid, legal fees and the Company’s outstanding indemnity reserves for valid claims reported to date. Losses incurred would be subject to third-party (re)insurance, whereby our net exposure would be expected to be less than 10% of the total.

Pandemics or other outbreaks of contagious diseases and the measures to mitigate their spread could materially adversely affect our business, results of operation and financial condition and those of our Members and risk capital partners.

The global outbreak of the COVID-19 pandemic and measures to mitigate the spread of COVID-19 caused unprecedented disruptions to the global and U.S. economies and significantly impacted the global supply chain. Future pandemics and other outbreaks of contagious diseases could result in similar or worse impacts and significant business and operational disruptions, including business closures, supply chain disruptions, travel restrictions, stay-at-home orders and limitations on the availability of workforces. If significant portions of our workforce are unable to work effectively, including because of illness or quarantines or from the impacts of any potential future pandemics and other outbreaks of contagious diseases, our business could be materially adversely affected. It is possible that future pandemics and other outbreaks of contagious diseases could cause disruption in Members’ businesses; cause delay or limit the ability of Members to perform, including in making timely payments. Future pandemics and other outbreaks of contagious diseases could impact capital markets, which may impact our, our Members’ and/or our risk capital partners’ financial position. Future pandemics and other outbreaks of contagious diseases may also have the effect of exacerbating several of the other risks we face as discussed in this disclosure.

Our international operations expose us to various international risks, including exchange rate fluctuations, that could adversely affect our business.

Our operations are conducted in numerous geographies including the United States, United Kingdom, Europe, Canada and Australia. Accordingly, we are subject to regulatory, legal, economic and market risks associated with operating in foreign countries, including the potential for:

 

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adverse effects of currency fluctuations;

 

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disparate tax regimes;

 

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unexpected wage inflation or job turnover and legal and compliance costs and risks;

 

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extensive and conflicting regulations in the countries in which we do business;

 

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penalties resulting from noncompliance with sanctions, bribery and anti-money laundering regulations;

 

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imposition of investment requirements or other restrictions by foreign governments;

 

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longer payment cycles;

 

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greater difficulties in collecting accounts receivable;

 

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insufficient demand for our services in foreign jurisdictions;

 

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our ability to execute effective and efficient cross-border sourcing of services on behalf of our Members;

 

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actions effecting the flow of services and currency;

 

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the reliance on or use of third parties to perform services on our behalf;

 

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restrictions on the import and export of technologies and trade barriers.

Approximately 51% and 34% of our revenues for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively, were generated outside of North America. We are exposed to currency risk from the potential changes between the exchange rates of the U.S. Dollar, Canadian Dollar, British Pound, Euro, Swedish Krona, Danish Krone and other European currencies. Exchange rate movements may change over time, and they could have an adverse impact on our financial results and cash flows reported in U.S. dollars. Our U.S. operations earn revenue and incur expenses primarily in U.S. dollars. Due to fluctuations in foreign exchange rates, we are subject to economic exposure as well as currency translation exposure on the net operating results of our operations. Because our non-U.S. based revenue is exposed to foreign exchange fluctuations, exchange rate movement can have an impact on our business, results of operations, financial condition and cash flow.

Our performance can be affected by global economic conditions as well as geopolitical tensions and other conditions with global reach. In recent years, concerns about the global economic outlook have adversely affected economic markets and business conditions in general. Geopolitical tensions, such as Russia’s incursion into Ukraine, tension between the United States and China, enhanced conflict in the Middle East, economic sanctions, the volatility of oil prices, heightened concerns about cyber-attacks, inflation and hyper-inflation have resulted in market volatility and higher interest rates, increasing global tensions and growing uncertainty for global commerce and instability in the global capital markets. Sustained or worsening of these and other global economic conditions and increasing geopolitical tensions may negatively impact our business, results of operations, financial condition and prospects.

Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, and even the falsification of claims or a combination of these effects, which, in turn, could affect our growth and profitability.

Factors such as business revenue, economic conditions, the volatility and strength of the capital markets, trade disputes, including the imposition of new or increased tariffs, and inflation can affect our business and the economic environment. These same factors affect our ability to generate revenue and profits. In an economic downturn that is characterized by higher unemployment, declining spending and reduced corporate revenue, the demand for insurance products is generally adversely affected, which directly affects our premium levels and profitability. Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our policyholders and may adversely affect the number of policies we can write, and our opportunities to underwrite profitable business. In an economic downturn, our policyholders may have less need for insurance coverage, may cancel existing insurance policies, modify their coverage or not renew the policies they hold with us. Existing policyholders may exaggerate or even falsify claims to obtain higher claims payments. In addition, if certain segments of the economy, such as the construction or energy production and servicing segments (which would affect several of the industries we serve at one time) were to significantly decline, it could adversely affect our results. These outcomes may materially adversely affect our business, results of operations, financial condition, and prospects.

 

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We maintain cash, cash equivalents and investments at financial institutions and are exposed to credit risk in the event of default by such financial institutions.

We maintain cash, cash equivalents and investments, including funds held in a fiduciary capacity, with various global financial institutions. Following the U.S. regional banking volatility in March 2023, we transferred all deposits in excess of the FDIC limit from First Republic Bank to PNC Financial Services Group, Inc. We are exposed to credit risk in the event of default by financial institutions to the extent that cash balances with individual financial institutions are in excess of amounts that are insured. If such institutions were to fail, we could lose all or a portion of amounts held in excess of any such insurance limits. Any material loss that we may experience in the future as a result could additionally have an adverse effect on our ability to pay or could temporarily or permanently delay payments of our operational expenses and other payments, including in connection with any dividends we elect to pay, payments to our vendors and employees and cause other operational impacts.

Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.

Our results of operations depend, in part, on the performance of our investment portfolio, which includes investments in high-grade debt securities and investments in private equity funds focused on insurance technology ventures and in certain MGAs that form part of our distribution network. We seek to hold a diversified portfolio of high-quality investments that is managed by professional investment advisory management firms in accordance with the risk appetite of our Board of Directors (the “Board of Directors”), and with our investment guidelines, which is routinely reviewed by our Investment Committee. However, our investments are subject to general economic conditions and market risks as well as risks inherent to specific securities. Our primary market risk exposures are to changes in interest rates and pricing of equities and bonds.

In recent years, interest rates have been at or near historic lows, however, during the year ended December 31, 2023 and through June 2024, interest rates have risen or remained at elevated levels. In September, November and December 2024, the U.S. Federal Reserve cut interest rates. Should rates continue to decline, including in a reversal of monetary policy actions taken in recent years by the U.S. Federal Reserve to slow inflation, a low interest rate environment could place pressure on our net investment income, particularly as it relates to these securities and short-term investments, which, in turn, may adversely affect our operating results. Recent and future increases in interest rates could cause the values of our fixed maturity securities portfolios to decline, with the magnitude of the decline depending on the duration of securities included in our portfolio and the amount by which interest rates increase. Some fixed income securities have call or prepayment options, which create possible reinvestment risk in declining rate environments. Other fixed income securities, such as residential mortgage-backed, commercial mortgage-backed and other asset-backed securities in which we hold investments carry prepayment risk or, in a rising interest rate environment, may not prepay as quickly as expected.

All of our fixed maturity securities, including those held in separately managed accounts are subject to credit risk. Credit risk is the risk that certain investments may default or become impaired due to deterioration in the financial condition of one or more issuers of the securities we hold, or due to deterioration in the financial condition of an insurer that guarantees an issuer’s payments on such investments. Downgrades in the credit ratings of fixed maturity securities (where rated) could also have a significant negative effect on the market valuation of such securities.

The above market and credit risks could reduce our net investment income and result in realized investment losses. Our investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid, as is the case with our fixed maturity securities held to maturity and separately managed accounts. The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the securities we hold in our portfolio do not reflect prices at which actual transactions would occur.

 

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Risks for all types of securities are managed through the delegation of Board Risk Appetite and the application of our investment guidelines, which establishes investment parameters that include but are not limited to, maximum percentages of investments in certain types of securities and minimum levels of credit quality, which are within applicable guidelines established by the NAIC and applicable insurance regulatory authorities. In addition, on a quarterly basis our Investment Committee reviews our Enterprise Based Asset Allocation models to assist in overall risk management.

Although we seek to preserve our capital, we cannot be certain that our investment objectives will be achieved, and results may vary substantially over time. In addition, although we seek to employ investment strategies that are not correlated with our insurance and reinsurance exposures, losses in our investment portfolio may occur at the same time as underwriting losses and, therefore, exacerbate the adverse effect of the losses on us.

We could be forced to sell investments to meet our liquidity requirements.

We invest the premiums we receive from our insureds until they are needed to pay policyholder claims. Consequently, we seek to manage the duration of our investment portfolio based on the duration of our losses and LAE reserves to provide sufficient liquidity and avoid having to liquidate investments to fund claims. Risks such as inadequate losses and LAE reserves or unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. We may not be able to sell our investments at favorable prices or at all. Sales could result in significant realized losses depending on the conditions of the general market, interest rates and credit issues with individual securities, which could create losses that impact capital or otherwise reduce the effective yield on our investment.

Our inability to successfully recover from a disaster or other business continuity problem, should we suffer from such an event, could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.

Our operations are dependent upon our ability to protect our personnel and technology infrastructure against damage from business continuity events that could have a significant disruptive effect on our operations. Should we experience a local or regional disaster or other business continuity problem, such as a security incident or attack, a natural disaster, climate event, terrorist attack, civil unrest, pandemic, power loss, telecommunications failure, or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel and the proper functioning of computer systems, telecommunications, and other related systems and operations. In events like these, while our operational size and our existing backup systems provide us with some degree of flexibility, we still can experience near-term operational challenges in particular areas of our operations. We could potentially lose access to key executives, personnel or Members data or experience material adverse interruptions to our operations or delivery of services to our Members in a disaster recovery scenario. A disaster on a significant scale or affecting certain of our key employees, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged relationships with our Members, or legal liability. We have certain disaster recovery procedures in place and insurance to protect against such contingencies. However, such procedures may not be effective and any insurance or recovery procedures may not continue to be available at reasonable prices and may not address all such losses.

We depend on the ability of certain of our subsidiaries to transfer funds to us to meet our obligations, and the ability of our insurance company subsidiaries to pay dividends to us is restricted by law.

We are a holding company that transacts the majority of our business through operating subsidiaries. Our ability to meet our operating and financing cash needs depends on the surplus and earnings of our subsidiaries, and upon the ability of our insurance subsidiaries to pay dividends to us. Payments of dividends by our insurance company subsidiaries depends on their ability to meet applicable regulatory standards and receive regulatory

 

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approvals, and are restricted by state and other insurance laws, including laws establishing minimum solvency and liquidity thresholds. In addition, our insurance subsidiaries could be subject to contractual restrictions in the future, including those imposed by indebtedness we may incur in the future. Our insurance subsidiaries may also face competitive pressures in the future to maintain insurance financial stability or strength ratings. These restrictions and other regulatory requirements would affect the ability of our insurance subsidiaries to make dividend payments and we may not receive dividends in the amounts necessary to meet our obligations.

We will need to raise additional financing to fund our working capital needs and maintain regulatory compliance or consummate potential future acquisitions. Additional financing may not be available on acceptable terms, or at all. Failure to obtain additional capital may force us to limit or terminate our operations.

Even if we sell all    Class A common shares offered by us in this offering, the expected net proceeds of this offering may not be sufficient for us to fund the working capital and maintain the statutory capital requirements of our business. We may continue to seek funding through equity or debt financings, collaborative or other arrangements, or through other sources of financing. Additional funding may not be available to us on acceptable terms, or at all. Any failure to raise capital as and when needed would have a material adverse impact on our business, results of operations, financial condition and prospects and on our ability to pursue our business plans and strategies.

If we cannot maintain the valuable aspects of our culture as we grow, our business may be harmed.

We believe that our culture, including our management philosophy, has been a critical component to our success and that our culture creates an environment that drives and perpetuates our overall business strategy. We have invested substantial time and resources in building our team, and we expect to continue to hire aggressively as we expand in both the United States and internationally. As we grow and mature as a public company and grow internationally, we may find it difficult to maintain the valuable aspects of our culture.

Furthermore, our operations are conducted by a fully remote workforce that we believe is instrumental to maintaining our culture. However, failure to preserve our culture could harm our future success, including our ability to retain and recruit personnel, innovate and operate effectively and execute our business strategy. If we are unsuccessful in recruiting, hiring, training, managing and integrating new employees, or retaining our existing employees, or if we fail to preserve the valuable aspects of our culture, it could materially impair our ability to service and attract new Members and risk capital partners, all of which would materially and adversely affect our business, results of operations, financial condition and prospects.

Risks Related to Our Technology and Intellectual Property

If we are unable to leverage our information systems to enhance the information benefits available to our Members and risk capital partners through our Risk Exchange, our results may be adversely affected.

To leverage our underwriting knowledge in providing information services to our Members, we must continue to implement and enhance information systems that can analyze data to provide information useful to our Risk Exchange Members. This may require frequent upgrades to the Risk Exchange and updating other information systems that we rely upon in providing our services. Delays or other problems we might encounter in implementing these upgrades and updates could adversely affect our ability to deliver timely information to our Members, which may result in them reducing the amount of premium placed through our Risk Exchange, which would adversely affect our business, results of operations, financial condition, and prospects.

Our future success depends on our ability to continue to develop and implement technology, and to maintain the confidentiality of this technology.

Our future success depends on our ability to continue to develop, implement, and maintain the confidentiality of our proprietary technology. For example, we are continuing to develop our cloud-native, digital platform that

 

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offers Risk Exchange participants a single, secure place to operate. We expect that as AI-driven technology and services gain market acceptance in the insurance industry, new competitors will arise. Changes to existing laws, their interpretation or implementation, or the introduction of new laws could impede our use of this technology or require that we disclose our proprietary technology to our competitors, which could negatively impact our competitive position and result in a material adverse effect on our business, results of operations, financial condition and prospects. In most jurisdictions, government regulatory authorities have the power to interpret and amend laws and regulations applicable to the processing of data. Such authorities may require us to incur substantial costs to comply with such laws and regulations. Regulatory statutes are broad in scope and subject to differing interpretation. In some areas of our business, we act on the basis of our own or the industry’s interpretations of applicable laws or regulations, which may conflict from jurisdiction to jurisdiction. In the event those interpretations eventually prove different from the interpretations of regulatory authorities, we may be penalized or precluded from carrying on our previous activities. Our E&O insurance coverage covering certain security and privacy damages and claim expenses may not be sufficient to compensate for all liabilities we may incur.

Loss of key vendor relationships or failure of a vendor to protect our data, confidential and proprietary information could adversely affect our operations.

We rely on services and products provided by many vendors in the United States and abroad. These include, for example, vendors of computer hardware and software, and vendors and/or outsourcing of services such as claim adjustment services and investment management services. In the event that any vendor suffers a bankruptcy or otherwise becomes unable to continue to provide products or services, or fails to protect our confidential, proprietary, and other information, we may suffer operational impairments and financial losses. In addition, while we generally monitor vendor risk, including the security and stability of our critical vendors, we may fail to properly assess and understand the risks and costs involved in the third-party relationships, and our financial condition and results of operations could be materially and adversely affected.

We anticipate that we will continue to rely on third-party software in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of new third-party software may require significant work and require substantial investment of our time and resources. Use of additional or alternative third-party software would require us to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect our business.

Failure to obtain, maintain, protect, defend, or enforce our intellectual property rights, or allegations that we have infringed, misappropriated or otherwise violated the intellectual property rights of others, could harm our reputation, ability to compete effectively, business, and financial condition.

Our success and ability to compete depends in part on our ability to obtain, maintain, protect, defend, and enforce our intellectual property. To protect our intellectual property rights, we rely on a combination of trademark laws, copyright laws, trade secret protection, confidentiality agreements and other contractual arrangements with our affiliates, employees, Members, strategic partners and others, as well as internal policies and procedures regarding our management of intellectual property. However, the protective steps that we take may be inadequate to deter misappropriation of our proprietary information, and any infringement, misappropriation or dilution of our intellectual property could materially and adversely harm our business. In addition, we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. Further, we operate in many foreign jurisdictions and effective trademark, copyright, and trade secret protection may not be available in every country or jurisdiction in which we offer our services. Policing unauthorized use of our intellectual property is difficult, expensive, and time-consuming, and we may be required to spend significant resources to monitor and protect our intellectual property rights.

Failure to protect our intellectual property adequately could harm our reputation and affect our ability to compete effectively. Although our important brand names, including “Accelerant” and “Mission Underwriters”

 

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are registered or we intend to register for trademark protection, our competitors and other third parties may misappropriate our intellectual property. In addition, even if we initiate litigation against third parties, such as suits alleging infringement, misappropriation, or other violation of our intellectual property, we may not prevail. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management. Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. Additionally, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. An adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and could put our related intellectual property at risk of not issuing or being cancelled. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our Class A common shares. Any of the foregoing could adversely affect our business, results of operations, financial condition, and prospects.

We operate in many foreign jurisdictions and effective trademark, copyright, and trade secret protection may not be available in every country or jurisdiction in which we offer our services. Failure to protect our intellectual property adequately could harm our reputation and affect our ability to compete effectively.

Meanwhile, third parties may assert intellectual property-related claims against us, including claims of infringement, misappropriation, or other violation of their intellectual property, which may be costly to defend, could require the payment of damages, legal fees, settlement payments, royalty payments, and other costs or damages, including treble damages if we are found to have willfully infringed certain types of intellectual property, and could limit our ability to use or offer certain technologies, products, or other intellectual property. Any intellectual property claims, including a cease-and-desist letter we have received regarding the right to use the mark Risk Exchange, with or without merit, could be expensive, take significant time and divert management’s resources, time, and attention from other business concerns. Moreover, other companies, including our competitors, may have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Successful challenges against us could require us to modify or discontinue our use of technology or business processes where such use is found to infringe, misappropriate, or otherwise violate the rights of others, or require us to purchase costly licenses from third parties, which may not be available on commercially reasonable terms, or at all. Even if a license is available to us, it could be non-exclusive thereby giving our competitors and other third parties access to the same technologies licensed to us, and we may be required to pay significant upfront fees, milestone payments or royalties, which would increase our operating expenses. Any of the foregoing could adversely affect our business, results of operations, financial condition, and prospects.

We rely on the use of credit scoring in pricing and underwriting certain of our insurance policies by Accelerant’s owned insurance companies and reinsurance companies, and any legal or regulatory requirements that restrict our ability to access credit score information could decrease the accuracy of our pricing and underwriting process and thus decrease our profitability.

We use credit scoring as a factor in pricing and underwriting decisions where allowed by state law. Consumer groups and regulators have questioned whether the use of credit scoring unfairly discriminates against some groups of people and are calling for laws and regulations to prohibit or restrict the use of credit scoring in underwriting and pricing. Laws or regulations that significantly curtail or regulate the use of credit scoring, if enacted in a large number of states in which we operate, could impact the integrity of our pricing and underwriting processes, which could, in turn, materially and adversely affect our business, financial condition, results of operations and prospects, and our profitability over time.

 

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Our employees could take excessive risks, which could negatively affect our financial condition and business.

Our Underwriting segment is in the business of binding certain risks. The employees who conduct our business, including executive officers and other members of management, underwriters, product managers and other employees, do so in part by making decisions and choices that involve exposing us to risk. These include decisions such as setting underwriting guidelines and standards, product design and pricing, determining which business opportunities to pursue, and other decisions. We endeavor, in the design and implementation of our compensation programs and practices, to avoid giving our employees incentives to take excessive risks. Employees may, however, take such risks regardless of the structure of our compensation programs and practices. Similarly, although we employ controls and procedures designed to monitor employees’ business decisions and prevent them from taking excessive risks, these controls and procedures may not be effective. If our employees take excessive risks, the impact of those risks could have a material adverse effect on our financial condition and business operations.

Future acquisitions or investments contain inherent strategic, execution, and compliance risks that could disrupt our business and harm its financial condition.

We may pursue acquisitions or investments to grow our business or as part of the MGA Operations segment’s efforts to capture the economics of select Members. There is no guarantee that these acquisitions or investments will achieve the desired return sought. These acquisitions or investments could also cause additional risk due to the liabilities or unforeseen expenses that such acquisitions or investments may bring, such as higher-than-expected costs due to market competition for the acquisition/investment, regulatory approval requirements, delays in implementation, lost opportunities that could have been pursued with cash being used for other purposes, litigation or regulatory enforcement post-acquisition or investment, contingent liabilities, implementation cost, misalignment of culture, loss of technology through theft or trade secrets exchanged, loss of key partners/vendors, currency exchange rate for foreign investment, timing within overall economic environment, carrying costs, and tax liabilities. Additionally, the risks from future acquisitions or investments could result in impairment charges against goodwill or increases in the liabilities on our consolidated balance sheet, as well as missed earnings results.

Our business and operations could suffer in the event of a system or information security failure or in the event that we are the target of a cyberattack.

We utilize information technology systems and networks to process, transmit, and store electronic information in connection with our business activities. As use of digital technologies has increased, cyber incidents, including deliberate attacks and attempts to gain unauthorized access to computer systems and networks, have increased in frequency and sophistication. These threats pose a risk to the security of our systems and networks and the confidentiality, availability, and integrity of our data. The Company’s Chief Information Security Officer (“CISO”) has primary responsibility over the Company’s cybersecurity and cyber risk management, which includes implementing a company-wide information security strategy and program. The CISO provides reports of key metrics and related updates to our Board of Directors on a quarterly basis and more frequently as and when required. There can be no assurance that we will be successful in preventing cyber-attacks or successfully mitigating their effects.

Despite the implementation of security measures, our internal computer systems, and those of our vendors, are vulnerable to damage from cyber-attack, computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication and electrical failures. Furthermore, our personal or other sensitive information or systems could be exposed or subject to attack as a result of breaches of our security measures and computer systems or those of our vendors. Any such system failure, accident, or security breach could cause interruptions in our operations, including the availability of our Risk Exchange or result in a material disruption of our operations. Additionally, a data security incident could also lead to public exposure of personal information and result in harm to our reputation and business, compel us to comply with federal and state breach notification laws and foreign law equivalents including the EU GDPR and/or the UK GDPR, subject us to investigations and mandatory corrective action, or

 

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otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could disrupt our business, result in increased costs or loss of revenue, and/or result in significant financial exposure. Furthermore, the costs of maintaining or upgrading our cybersecurity systems (including the recruitment and retention of experienced information technology professionals, who are in high demand) at the level necessary to keep up with our expanding operations and prevent against potential attacks are increasing, and despite our best efforts, our network security and data recovery measures and those of our third-party service providers may still not be adequate to protect against such security breaches and disruptions, which could cause material harm to our business, financial condition and results of operations.

Risks Related to Legal and Regulatory Requirements

Our businesses are subject to significant governmental regulation, changes in which could reduce our profitability, limit our growth, or increase competition.

Our businesses are subject to legal and regulatory oversight throughout the world, including by U.S. state insurance regulators, Belgian insurance regulators, the National Bank of Belgium (the “NBB”), the Financial Services and Markets Authority, insurance regulators throughout the European Economic Area (the “EEA”), under the Belgian Code of Companies and Associations, the Belgian Act of March 13, 2016 on the Status and Supervision of Insurance and Reinsurance Undertakings, under the UK Companies Act and the rules and regulations promulgated by the Financial Conduct Authority (the “FCA”) and the Prudential Regulation Authority (the “PRA”), the Foreign Corrupt Practices Act of 1977 (the “FCPA”) in the U.S., the Bribery Act of 2010 in the UK, the Corruption of Foreign Public Officials Act of 1999 (as amended) in Canada and a variety of other laws, rules and regulations addressing, among other things, licensing, data privacy and protection, cybersecurity, AI, anti-corruption, wage and hour standards, employment and labor relations, sanctions, anti-competition, and anticorruption. Maintaining compliance with these legal and regulatory oversight schemes as they evolve could reduce our profitability or limit our growth by: increasing the costs of legal and regulatory compliance; limiting or restricting the products or services we sell, the markets we serve or enter, the methods by which we sell our products and services, the prices we can charge for our services, or the form of compensation we can accept from our risk capital partners; or by subjecting our businesses to the possibility of legal and regulatory actions or proceedings.

Certain of our businesses are subject to compliance with laws and regulations enacted by U.S. federal and state governments, the EEA/UK or other jurisdictions or enacted by various regulatory organizations or exchanges relating to the privacy and security of the personal information of employees or others (for example, the California Consumer Privacy Act, The New York State Department of Financial Services’ cybersecurity regulation, the EU General Data Protection Regulation, the UK Data Protection Act 2018 and the Personal Information Protection and Electronic Documents Act in Canada). See “Business—Regulation” for more information regarding applicable privacy regulations.

In addition, we established a subsidiary in Puerto Rico that owns and operates our Risk Exchange. Though it is not currently subject to specific regulatory oversight as a broker or insurer, it is possible that may change, in which case we would become subject to further regulations that could cause us to alter or curtail our activities, or require additional expenditures for compliance purposes.

The variety of applicable privacy and information security laws and regulations exposes us to heightened regulatory scrutiny, requires us to incur significant technical, legal and other expenses in an effort to ensure and maintain compliance and will continue to impact our business in the future by increasing legal, operational and compliance costs. While we have taken steps to comply with privacy and information security laws, we cannot guarantee that our efforts will meet the evolving standards imposed by data protection and other regulatory authorities. If we are found not to be in compliance with these privacy and security laws and regulations, we may be subject to additional potential private consumer, business partner or securities litigation, regulatory inquiries, and governmental investigations and proceedings, regulatory sanctions, and we may incur damage to our reputation. Any such developments may subject us to material fines and other regulatory penalties and/or civil

 

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and criminal liability, including in some jurisdictions, personal liability for individual members of management and other individuals in leadership roles, may divert management’s time and attention, and lead to enhanced regulatory oversight, any of which could have a material adverse effect on our business, results of operations, financial condition, reputation, and liquidity. Additionally, we expect that developments in privacy and cybersecurity worldwide will increase the financial and reputational implications in the event of a significant breach of our or our third-party suppliers’ information technology systems.

There has also been increased scrutiny, including from regulators, regarding the use of algorithms, AI, diligence of data sets, oversight of data vendors, and other “big data” techniques such as using “big data” to set product pricing. Our ability to procure and use data to gain insights into and manage our business may be limited in the future by regulatory scrutiny regarding “big data.” Moreover, regulators are increasing scrutiny and considering regulation of the use of AI technologies. We cannot predict what, if any, actions may be taken with regard to “big data,” but such developments could impact our operations, increase legal risk or reputational harm or have a material adverse effect on our business, results of operations and financial condition. Our acquisitions of, and investments in, new businesses and our continued operational changes and entry into new jurisdictions and new service offerings increase our legal and regulatory compliance complexity, as well as the type of governmental oversight to which we may be subject.

Our continuing ability to provide insurance and underwriting services in the jurisdictions in which we operate depends on our compliance with the rules and regulations promulgated from time to time by the regulatory authorities in each of these jurisdictions. Also, we can be affected indirectly by the governmental regulation and supervision of insurance companies. For instance, if we are providing managing general underwriting services for an insurer, we may have to contend with regulations affecting that insurer.

As we continue to grow our Member base, we anticipate expanding into new geographies that could give rise to additional regulatory, risk and other issues, which may materially affect our business, results of operations, financial condition and prospects.

As we continue to grow our Member base, we will have to devote resources to identifying and exploring these perceived opportunities. To the extent these new Members are in new geographies, we may also have to acquire any necessary operational licenses and governmental approvals to operate our Risk Exchange or otherwise engage with Members in those geographies. In addition, we will be required to comply with laws and regulations of jurisdictions that may differ from the ones in which we currently operate. We anticipate that further geographic expansion of our Members and our Risk Exchange will give rise to additional regulatory, risk and other issues. There also can be no assurance that we would be able to successfully expand our operations in any new geographic markets.

In particular, we have recently expanded into the Canadian market by the acquisition of a licensed insurance entity. We have set up the requisite infrastructure to begin Canadian operations. Expansion to include Members located and to operate our Risk Exchange in Canada requires oversight from the Office of the Superintendent of Financial Institutions and the federal Minster of Finance, as well as coordination with each of the ten provinces and three territories in Canada that each regulate market conduct within their own province and territory. Compliance with these additional laws and regulations, as well as Canadian oversight related to personal information protection and data privacy has resulted in a substantial investment of time from our senior management, capital and other resources. This, along with similar experiences in other jurisdictions in the future, may materially and adversely affect our business, results of operations, financial condition and prospects.

 

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Our insurance and reinsurance company subsidiaries and agency subsidiaries are subject to extensive regulation, which may adversely affect our ability to operate and achieve our business objectives. In addition, if we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, which may adversely affect our results of operations and financial condition.

We are subject to the insurance laws and regulations in a number of jurisdictions worldwide. Existing laws and regulations, among other things, limit the amount of dividends and capital that can be paid to us by our reinsurance subsidiaries, prescribe solvency and capital adequacy standards, impose restrictions on the amount and type of investments that can be held to meet solvency and capital adequacy requirements, require the maintenance of reserve liabilities, impact our corporate governance, restrict our market conduct practices, and require pre-approval of acquisitions, reinsurance transactions and certain affiliate transactions. Failure to comply with these laws and regulations, make any required notifications, or maintain appropriate authorizations, licenses, and/or exemptions under applicable laws and regulations may cause governmental authorities to preclude or suspend our insurance or reinsurance subsidiaries from carrying on some or all of their activities, place one or more of them into rehabilitation or liquidation proceedings, impose monetary penalties or other sanctions on them or our affiliates, or commence insurance company delinquency proceedings against our insurance or reinsurance subsidiaries. The application of these laws and regulations by various governmental authorities may affect our liquidity and restrict our ability to expand our business operations through acquisitions or to pay dividends on our common shares, including our Class A common shares. Furthermore, compliance with legal and regulatory requirements is likely to result in significant expenses, which could have a negative impact on our profitability. To further understand these regulatory requirements, see “Business—Regulation.” In some instances, where there is uncertainty as to applicability of laws and regulations, we follow practices based on our interpretations of regulations or practices that we believe generally to be followed by the industry. These practices may turn out to be different from the interpretations of regulatory authorities.

Our U.S. insurance subsidiaries are subject to risk-based capital (“RBC”) requirements, based upon the “risk-based capital model” adopted by the NAIC, and other minimum capital and surplus restrictions imposed under Arkansas, Delaware and Puerto Rico law. These requirements establish the minimum amount of RBC necessary for a company to support its overall business operations. It identifies P&C insurers that may be inadequately capitalized by looking at certain inherent risks of each insurer’s assets and liabilities and its mix of net written premium. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including supervision, rehabilitation or liquidation. Failure to maintain our RBC at the required levels could cause insurance regulators to intervene in the management of our business and, ultimately, adversely affect the ability of our insurance subsidiaries to maintain regulatory authority to conduct our business and our A.M. Best rating.

The applicable regulators in the UK and EEA expect firms to avoid actions that jeopardize compliance with their statutory objectives and applicable rules and regulations and have extensive powers to intervene in the affairs of a regulated firm. When a regulator in either the UK or the EEA is concerned that an insurer may present a risk, this may lead to negative consequences, including the requirement to maintain a higher level of regulatory capital (via capital “add-ons” under the Solvency II Directive (as defined below)) to match the higher perceived risks and enforcement action where the risks identified breach applicable rules and regulations. In the case of a breach of our license requirements or obligations arising from the applicable rules and regulations, we may be subject to regulatory sanctions, including (public) formal warnings, orders to adopt a certain course of conduct, incremental penalties and administrative fines, revocation of an undertaking license and, in the case of insurers, where the breach relates to material prudential shortcomings, emergency measures (including the appointment of an administrator or the imposition of measures aimed at winding-up the undertaking). Any such events could adversely affect our business, results of operations, or financial condition.

Our Canadian insurance subsidiary is regulated at both the federal and provincial/territorial level under regulation and supervisory requirements which, among other things, require it to maintain an adequate amount of capital (calculated in accordance with the minimum capital test). The Insurance Companies Act of Canada provides the Superintendent of Financial Institutions with a range of discretionary intervention powers which may be

 

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exercised over an insurance company subject to its jurisdiction, including the power to require enhanced supervision, increase capital, restrict select business operations, order the development of a contingency plan and ultimately assume control of an insurance company in circumstances the Superintendent deems warrant such action.

In the Cayman Islands, our reinsurance subsidiary is subject to minimum capital and surplus requirements and must adhere to a range of legislative and regulatory requirements. A failure to meet these requirements could subject the reinsurer to, among others, increased regulatory scrutiny, a requirement to take steps to rectify any area(s) of non-compliance, the removal of a director, a suspension of license and the appointment of a receiver or person to assume control of its affairs.

We believe it is likely there will continue to be regulatory intervention in our industry in the future, and these initiatives could adversely affect our business. Additional laws and regulations have been and may continue to be enacted that may have adverse effects on our operations, financial condition, statutory capital adequacy, and liquidity. We cannot predict the exact nature, timing or scope of these initiatives; however, we believe it is likely that there will continue to be increased regulatory intervention in our industry in the future, and these initiatives could adversely affect our ability to operate our business.

For additional information regarding insurance laws and regulations that we are subject to, see “Business—Regulation.”

Our business is subject to risks related to legal proceedings and governmental inquiries.

We are subject to litigation, regulatory, and other governmental investigations and claims arising in the ordinary course of our business operations. The risks associated with these matters often may be difficult to assess or quantify and the existence and magnitude of potential claims often remain unknown for substantial periods of time. While we have insurance coverage for some of these potential claims, others may not be covered by insurance, insurers may dispute coverage, or any ultimate liabilities may exceed our coverage. We may be subject to actions and claims relating to the sale of insurance or our other operations, including the suitability of such products and services. Actions and claims may result in the rescission of such sales; consequently, our Members and risk capital partners may seek to recoup commissions or other compensation paid to us, which may lead to legal action against us. The outcome of such actions cannot be predicted, and such claims or actions could have a material adverse effect on our business, results of operations, financial condition, and prospects.

We must comply with and are affected by various laws and regulations, as well as regulatory and other governmental investigations, that impact our operating costs, profit margins and our internal organization and operation of our business. The insurance industry has been subject to a significant level of scrutiny by various regulatory and governmental bodies, including state attorneys general offices and state departments of insurance, concerning certain practices within the insurance industry. These practices include, without limitation, the receipt of supplemental and contingent commissions by insurance brokers and agents from insurance companies and the extent to which such compensation has been disclosed, the collection of broker fees, which we define as fees separate from commissions charged directly to Members for efforts performed in the issuance of new insurance policies, bid rigging and related matters. From time to time, our subsidiaries receive informational requests from governmental authorities.

There have been a number of revisions to existing laws as well as or proposals to modify or enact new laws and regulations regarding insurance agents and brokers. These actions have imposed in the past, and may continue to impose, additional obligations on our ability to receive fees that are based on the volume, consistency, and profitability of business that we generate.

We cannot predict the impact that any new laws, rules, or regulations may have on our business, results of operations, financial condition, and prospects. Given the current regulatory environment and the number of our subsidiaries operating in local markets throughout the U.S. and abroad, it is possible that we will become subject to further governmental inquiries and subpoenas and have lawsuits filed against us. Regulators may raise issues

 

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during investigations, examinations or audits that could, if determined adversely, have a material impact on us. The interpretations of regulations by regulators may change and statutes may be enacted with retroactive impact. We could also be materially adversely affected by any new industrywide regulations or practices that may result from these proceedings.

Our involvement in any investigations and lawsuits would cause us to incur additional legal and other costs and, if we were found to have violated any laws, we could be required to pay fines, damages and other costs, perhaps in material amounts. Regardless of final costs, these matters could have a material adverse effect on us by exposing us to negative publicity, reputational damage, harm to relationships with our Members, or diversion of personnel and management resources.

We are subject to a number of, and may in the future be subject to, E&O claims as well as other contingencies and legal proceedings which, if resolved unfavorably to us, could have an adverse effect on our results of operations.

We assist our Members with various insurance-related matters, including providing access to capacity, overseeing claims arising under policies issued by that capacity, and facilitating reinsurance placements. E&O claims against us may result in potential liability for damages arising from these services. E&O claims could include, for example, the failure of our employees or sub-agents, whether negligently or intentionally, to properly exercise our delegated authority to underwrite or bind coverage, issue policies or other documents or provide proper notices to insureds, as well as properly exercise our delegated authority to handle claims. In addition, we are subject to other types of claims, litigation, and proceedings in the ordinary course of business, which along with E&O claimants may seek damages, including punitive damages, in amounts that could, if awarded, have a material adverse impact on our financial position, earnings and cash flows. In addition to potential liability for monetary damages, such claims or outcomes could harm our reputation or divert management resources away from operating our business.

We have historically purchased, and continue to purchase, insurance to cover E&O claims to provide protection against certain losses that arise in such matters. As of March 31, 2025, our group E&O insurance policy (also known as Professional Indemnity) tower has a $10 million limit in the aggregate, and we are responsible for paying a self-insured retention of up to $1 million per claim for claims brought in the U.S. and Canada, and $250 thousand per claim for claims brought in the rest of the world. We purchase a Technology E&O insurance policy for the group with an aggregate limit of $10 million per claim with a $50 thousand retention. In addition, due to regulatory requirements in specific countries, we purchase local E&O insurance policies in certain jurisdictions. This includes a policy for Accelerant Agency (Canada) Ltd., with a CAD $6 million limit in the aggregate with a self-insured retention of up to CAD $50 thousand per claim for claims brought in Canada. We purchase a local policy in Ireland for Accelerant Agency Limited, with a $2 million (£1.55 million) limit in the per claim and $5 million (£3.87 million) in the aggregate. We are responsible for paying a self-insured retention of up to $250 thousand (£193 thousand) per claim. We also purchase a local policy in the UK for Accelerant Agency Limited UK Branch with a $7 million (£5.4 million) limit in the aggregate with a $2 million (£1.55 million) limit per claim. We are responsible for paying a self-insured retention of up to $250 thousand (£193 thousand) per claim for claims brought in the United Kingdom. If we exhaust or materially deplete our coverage under our E&O policy, it could have a material adverse effect on our financial condition. Accruals for these exposures, when applicable, have been recorded to the extent that losses are deemed probable and are reasonably estimable. These accruals are adjusted from time to time as developments warrant and may also be adversely affected by disputes we may have with our insurers over coverage.

Proposed tort reform legislation, if enacted, could decrease demand for casualty insurance, thereby reducing our commission revenues.

Legislation concerning tort reform has been considered, from time to time, in the United States Congress and in several state legislatures. Among the provisions considered in such legislation have been limitations on damage awards, including punitive damages, and various restrictions applicable to class action lawsuits.

 

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Enactment of these or similar provisions by Congress, or by states in which we sell insurance, could reduce the demand for casualty insurance policies or lead to a decrease in policy limits of such policies sold, thereby reducing our commission revenues.

Because we are a holding company and some of our operations are conducted by our insurance subsidiaries, our ability to achieve liquidity at the holding company, including the ability to pay dividends and service our debt obligations, to a limited extent, depends, in part, on our ability to obtain cash dividends or other permitted payments from our insurance subsidiaries.

The continued operation and growth of our business will require substantial capital. Accordingly, we do not intend to declare and pay cash dividends on our common shares in the foreseeable future. Because we are a holding company with no business operations of our own, our ability to pay dividends to shareholders and meet our debt payment obligations is dependent upon dividends and other distributions from our subsidiaries. With respect to our insurance carrier subsidiaries, U.S. state insurance laws, including the laws of Arkansas and Delaware, restrict the ability of ASIC and ANIC to determine how we declare shareholder dividends. State insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus. Dividend payments are further limited to that part of available policyholder surplus that is derived from net profits on our business. State insurance regulators have broad powers to prevent the reduction of statutory surplus to levels that regulators consider to be inadequate, and there is no assurance that dividends up to the maximum amounts calculated under any applicable formula would be permitted. Moreover, state insurance regulators that have jurisdiction over the payment of dividends by our insurance subsidiaries may in the future adopt statutory provisions more restrictive than those currently in effect. In addition, dividends and other distributions from our subsidiaries may be subject to incremental income or withholding taxes, which may reduce the amount of cash available for distribution to our shareholders.

Our carriers located in jurisdictions outside the United States are similarly restricted under local law in their ability to pay dividends.

Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon results of operations, financial condition, contractual restrictions pursuant to our debt agreements, our indebtedness, restrictions imposed by applicable law, and other factors our Board of Directors deems relevant, and, as noted above will be subject to regulatory oversight. Consequently, investors may need to sell all or part of their holdings of our Class A common shares after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking immediate cash dividends should not purchase our Class A common shares.

Regulations affecting insurance carriers with which we place business impact how we conduct our operations.

Insurers are also heavily regulated by state insurance departments for solvency issues, reserve requirements and market conduct practices, among other things. We cannot guarantee that all insurance carriers with which we do business comply with regulations instituted by state insurance departments. We may need to expend resources to address questions or concerns regarding our relationships with these insurers, diverting management resources away from operating our business.

We may face increasing scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding environmental, social and governance matters.

There is increasing scrutiny and evolving expectations from investors, customers, regulators, and other stakeholders on environmental, social and governance (“ESG”) practices and disclosures, including those related to environmental stewardship, climate change, diversity, equity and inclusion, racial justice, workplace conduct, and other social and political mandates. Legislators and regulators have imposed and likely will continue to impose ESG-related legislation, rules and guidance, which may conflict with one another and impose additional

 

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costs on us, block or impede our business opportunities, or expose us to new or additional risks. Moreover, certain organizations that provide information to investors have developed ratings for evaluating companies on their approach to different ESG matters. A lack of ratings or unfavorable ratings of our company or our industry may lead to negative investor sentiment and the diversion of investment to other companies or industries. Further, our insureds include a wide variety of industries, including potentially controversial industries. Damage to our reputation as a result of our provision of policies to certain insureds could result in decreased demand for our insurance products.

Additionally, certain states have adopted laws or regulations that would restrict business dealings with, and investments in, entities determined to be boycotting companies involved in fossil fuel-based energy or other industries or to have taken public stances with regard to certain ESG issues. If we are unable to meet these standards, expectations, laws or regulations, some of which may be in contradiction with each other, it could result in adverse publicity, reputational harm, loss of business opportunities, or loss of customer and/or investor confidence, each of which individually or in the aggregate could adversely affect our business, results of operations, financial condition and prospects.

Economic substance legislation of the Cayman Islands and other recently-enacted legislation and regulations may adversely impact us or our operations.

The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities that attract profits without real economic activity. With effect from January 1, 2019, the International Tax Co-operation (Economic Substance) Act, (2020 Revision) (the “Substance Act”) came into force in the Cayman Islands introducing certain economic substance requirements for in-scope Cayman Islands entities which are engaged in certain “relevant activities,” which in the case of exempted companies incorporated before January 1, 2019 applied in respect of financial years commencing July 1, 2019 and thereafter. As we are a Cayman Islands company, compliance obligations include filing annual notifications, which need to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance tests to the extent required under the Substance Act. As the implementation of the Substance Act is still in its infancy, the impact of these economic substance requirements and how they may evolve is unclear, and it is difficult to predict the nature and effect of these requirements on the economy of the Cayman Islands. If the Cayman Islands Tax Information Authority determined that we or any of our Cayman Islands subsidiaries failed to meet the requirements imposed by the Substance Act, we or they may face significant financial penalties, restriction on the regulation of its business activities and/or may be struck off as a registered entity in the Cayman Islands. As it is a new regime, it is anticipated that the Substance Act will evolve and be subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in order to comply with all requirements under the Substance Act. Failure to satisfy these requirements may subject us to penalties under the Substance Act, which could materially adversely affect our business, results of operations, financial condition and prospects.

Anti-Money Laundering Matters

If any person in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering, or is involved with terrorism or terrorist financing and property, and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands (“FRA”), pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands, if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the FRA, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. The failure of us or any of our officers to comply could materially adversely affect our business, results of operations, financial condition and prospects.

 

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Risks Related to Taxation

In addition to the risk factors discussed below, we advise you to read “Certain Material Tax Considerations.” You should consult your own tax advisor regarding the tax consequences applicable to you of an investment in our Class A common shares.

We are subject to taxation in multiple jurisdictions. As a result, any adverse development in the tax laws of any of these jurisdictions or any disagreement with our tax positions could have a material adverse effect on our business, results of operations, financial condition, and prospects. In addition, there is tax risk associated with the reporting of cross-border arrangements among us and our subsidiaries.

We are subject to taxation in, and to the tax laws and regulations of, multiple jurisdictions as a result of the international scope of our operations and our corporate structure. Adverse developments in these laws or regulations, or any change in position regarding the application, administration or interpretation thereof, in any applicable jurisdiction, could have a material adverse effect on our business, results of operations, financial condition, and prospects. Moreover, the tax authorities in any applicable jurisdiction may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions. If any applicable tax authorities were to successfully challenge the tax treatment or characterization of any of our transactions, it could have a material adverse effect on our business, results of operations, financial condition, and prospects.

In addition, we conduct operations through our subsidiaries in various tax jurisdictions, and consider transfer pricing implications of such operations where applicable. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that transfer prices be the same as those between unrelated companies dealing at arms’ length and that appropriate documentation is maintained to support the transfer prices. While we believe that we operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricing procedures are not binding on applicable tax authorities. If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arms’ length transactions they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices. If the country from which the income is reallocated does not agree with the reallocation, both countries could tax the same income, resulting in double taxation. If tax authorities were to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it would increase our consolidated tax liability, which could adversely affect our financial condition, results of operations and cash flows. Prospective investors are also urged to review the risk factor below labeled “There is U.S. federal income tax risk associated with reinsurance transactions, intercompany transactions and distributions between U.S. companies and their non-U.S. affiliates.”

Accelerant and certain of our non-U.S. subsidiaries may be subject to U.S. federal income taxation which could have a material adverse effect on our business, results of operations, financial condition, and prospects.

Accelerant and our non-U.S. subsidiaries that are classified as foreign corporations for U.S. federal income tax purposes intend to operate in a manner that will not cause them to be treated as engaged in a trade or business within the United States or subject to current U.S. federal income taxation on their net income. However, because there is considerable uncertainty as to when a foreign corporation is engaged in a trade or business within the United States under the applicable law and the determination is highly factual and must be made annually, there can be no assurance that the U.S. Internal Revenue Service (“IRS”) will not contend successfully that Accelerant or any of such non-U.S. subsidiaries is engaged in a trade or business in the United States. If Accelerant or any of its non-U.S. subsidiaries that are classified as foreign corporations for U.S. federal income tax purposes are considered to be engaged in a trade or business in the United States, the applicable entity could be subject to U.S. federal income taxation on a net basis on its income that is effectively connected with such U.S. trade or business (including branch profits tax on the portion of its earnings and profits that is attributable to such income). Any such U.S. federal income taxation could result in substantial tax liabilities and consequently could have a material adverse effect on our financial condition and results of future operations. See “Certain Material Tax Considerations—U.S. Federal Income Tax Considerations—Taxation of Accelerant and Its Subsidiaries.”

 

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U.S. tax-exempt organizations that own our Class A common shares may recognize unrelated business taxable income (“UBTI”).

A U.S. tax-exempt organization that directly or indirectly owns our Class A common shares generally will recognize UBTI and be subject to additional U.S. tax filing obligations to the extent such tax-exempt organization is required to take into account any of our insurance income or related person insurance income (“RPII”) pursuant to the controlled foreign corporation (“CFC”) and RPII rules described below. See “Certain Material Tax Considerations—U.S. Federal Income Tax Considerations—Taxation of U.S. Holders—Tax-Exempt U.S. Holders.”

As of March 31, 2025, we had net deferred tax assets of $45.1 million, net of a valuation allowance of $44.5 million, which may become devalued if either Accelerant does not generate sufficient future taxable income or applicable corporate tax rates are reduced (or applicable tax laws otherwise change).

We had net deferred tax assets of $45.1 million as of March 31, 2025 and also apply valuation allowances to our deferred tax assets (principally consisting of unutilized net operating losses). These predominantly arise from new business challenges on our owned insurance companies where operating expenses exceeded the initial underwriting profits recognized in the period. Utilization of most deferred tax assets is dependent on generating sufficient future taxable income in the appropriate jurisdiction and/or entity and in the appropriate character (e.g., capital vs. ordinary). If it is determined that it is more likely than not that sufficient future taxable income will not be generated, we would be required to increase the applicable valuation allowance. Most of our deferred tax assets are determined by reference to applicable corporate income tax rates, in particular the U.S. corporate income tax rates. Accordingly, in the event of new legislation that reduces any such corporate income tax rates, the carrying value of certain deferred tax assets would decrease. A material devaluation in our deferred tax assets due to either insufficient taxable income or lower corporate tax rates would have an adverse effect on Accelerant’s results of operations and financial condition.

Changes in tax laws or policy or interpretations of such laws could materially reduce our earnings, affect our operations, increase our tax liability and adversely affect our cash flows.

Changes in tax laws or policy could have a material adverse effect on our profitability and financial condition, and could result in our subsidiaries incurring materially higher taxes.

The U.S. federal income tax laws and interpretations thereof are subject to change, which may have retroactive effect and could materially affect us.

The Inflation Reduction Act of 2022 was signed into law on August 16, 2022. The Inflation Reduction Act of 2022 contains tax provisions including a corporate alternative minimum tax on certain large corporations, a 1% excise tax on publicly traded corporate buybacks and modifications to clean energy investment tax credits. While we currently anticipate no immediate financial impact of this legislation, regulations or administrative guidance promulgated pursuant to the Inflation Reduction Act of 2022 may materially and adversely affect our financial condition and results of operations.

In addition, since 2017, the member countries of the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting have developed a two-pillar approach to address the tax challenges arising from the digitalization of the economy. “Pillar One” addresses nexus and profit allocation challenges, while “Pillar Two” addresses perceived base erosion. Pillar One provides for exclusions for “Regulated Financial Services”; therefore we do not anticipate a material impact on insurance and reinsurance groups. Regulated Financial Services are not, however, exempt from Pillar Two.

The OECD has published two sets of model rules implementing a 15% global minimum tax: first, an income inclusion rule (“IIR”), which imposes “top-up” tax on a parent entity in respect of the low-taxed income of a subsidiary, and second, an “undertaxed payments” rule (“UTPR”), which denies deductions or requires an

 

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equivalent adjustment to the extent the low-taxed income of an affiliate is not subject to tax under an IIR. There will also be a treaty-based “subject to tax” rule that allows source jurisdictions to impose limited source taxation on certain related party payments subject to tax below a minimum rate. Key aspects of Pillar Two (including IIR regimes) have already become effective in jurisdictions relevant to our business as of January 1, 2024, with other aspects (including UTPR regimes) expected to become effective in 2025. The UK, for example, enacted legislation in July 2023 implementing an IIR via a multinational top-up tax (alongside a UK domestic top-up tax) that applies to multinational enterprises for accounting periods beginning on or after December 31, 2023 and enacted further legislation in March 2025 implementing a UTPR that applies for accounting periods beginning on or after December 31, 2024.

The OECD has released administrative guidance which clarifies (and in some cases amends previously released guidance) on the application of the model Pillar Two rules, and jurisdictions enacting legislation in respect of Pillar Two have sought to implement these updates (either by way of legislative amendment or the release of further domestic guidance). We expect that the OECD will continue to release updates to its administrative guidance which may result in further amendments to the Pillar Two rules as they apply in relevant jurisdictions. As such, several aspects of the Pillar Two rules, including whether some or all of our business and the companies in which we invest fall within the scope of the exclusions therefrom, currently remain uncertain. The release of further updates to the model Pillar Two rules and adoption of Pillar Two legislation (including IIR or UTPR regimes) by additional jurisdictions may give rise to consequential amendments to tax laws (other than those which seek to enact or modify Pillar Two rules) in other jurisdictions.

The Pillar One and Pillar Two proposals form part of the OECD’s broader Base Erosion and Profit Shifting (“BEPS”) Project, which has been running since 2015. The implementation of the recommendations of the BEPS Project by OECD member countries has given rise to significant changes in domestic and international tax laws in recent years, including a number of Directives of the European Union (currently at various stages of implementation by Member States) which address matters such as anti-hybrid legislation and tax substance and a Multilateral Convention affecting the interpretation of many international tax treaties. The impact of the BEPS Project on our business will require ongoing assessment.

Our UK and non-UK operations may be affected by changes in UK tax law.

None of our entities should be treated as being resident in the UK for UK tax purposes, except for our subsidiaries that are incorporated in the UK, Accelerant Holdings, Accelerant Holdings (Cayman) Ltd and Mission Worldwide Holdings (together, the “UK Resident Entities”). Although Accelerant Holdings, Accelerant Holdings (Cayman) Ltd and Mission Worldwide Holdings are not incorporated in the UK, it is the intention that their affairs will be conducted so that their central management and control is exercised in the UK and, as a result, they are each treated as a resident in the UK for UK tax purposes.

Accordingly, the UK Resident Entities are expected to generally be subject to UK tax in respect of their worldwide income, profits and gains. Any change in the basis or rate of UK corporation tax or His Majesty’s Revenue and Customs’ (“HMRC”) practice and interpretation of UK tax law could materially adversely affect the business, prospects, financial condition and/or results of operations of the UK Resident Entities or their ability to provide returns to shareholders. The UK corporation tax rate is currently 25%.

There is U.S. federal income tax risk associated with reinsurance transactions, intercompany transactions and distributions between U.S. companies and their non-U.S. affiliates.

Certain U.S. companies that make deductible payments to related non-U.S. companies are subject to the Base Erosion and Anti-Abuse Tax (the “BEAT”). The BEAT is generally equal to the excess of a 10% tax on the taxpayer’s “modified taxable income” over the taxpayer’s regular tax liability (reduced by certain credits), with “modified taxable income” being computed without regard to certain deductions for “base erosion payments”.

 

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The tax on “modified taxable income” also increases from 10% to 12.5% for taxable years beginning after 2025. The BEAT applies to deductions arising out of “any premium or other consideration” paid or accrued to a related foreign reinsurer.

Both our U.S. and non-U.S. ceding companies reinsure business to Accelerant affiliates. We have structured our internal reinsurance in a manner intended to ensure that our non-U.S. reinsurers reinsure business only from other non-U.S. ceding companies for U.S. federal income tax purposes. There can be no assurances our structuring efforts will be successful. If we are not able to structure our internal reinsurance in this manner, or the IRS were to successfully assert that our non-U.S. reinsurers reinsure our U.S. ceding companies for U.S. federal income tax purposes, we could be required to pay additional tax, and our financial condition and results from operations could be materially adversely affected.

As summarized above under “Changes in tax laws or policy or interpretations of such laws could materially reduce our earnings, affect our operations, increase our tax liability and adversely affect our cash flows”, proposed changes to BEAT, if effective, would likely increase the amount of additional tax we would be required to pay, if we were subject to BEAT.

In addition, the Internal Revenue Code of 1986, as amended (the “Code”), permits the IRS to reallocate, recharacterize or adjust items of income, deduction or certain other items related to a reinsurance agreement between related parties to reflect the proper “amount, source or character” for each item. If the IRS were successfully to challenge our intercompany reinsurance arrangements between our subsidiaries, our financial condition and results of operations could be materially adversely affected.

Generally, distributions by our U.S. subsidiaries to our non-U.S. subsidiaries are subject to a 30% U.S. federal withholding tax on the gross amount of any distribution that is treated as a dividend or dividend-equivalent payment for U.S. federal income tax purposes. However, we believe that we and the entities through which we hold our U.S. subsidiaries are eligible for a 5% rate of withholding on dividends under the U.S.-UK Tax Treaty unless we have owned shares representing at least 80% of the voting power of a U.S. subsidiary paying a dividend for the 12-month period ending on the date the dividend was declared, in which case there would be no U.S. withholding on such dividend under the U.S.-UK Tax Treaty. We intend to manage our affairs in a manner that is intended to allow such entities to qualify for such reduction in or exemption from U.S. withholding tax under the U.S.-UK Tax Treaty. No assurances can be made, though, that (i) we will qualify for benefits under the U.S.-UK Tax Treaty, (ii) the U.S.-UK Tax Treaty will provide relief from this potential withholding tax or (iii) we would qualify for similar relief under another tax treaty if benefits under the U.S.-UK Tax Treaty were unavailable, in each case, for a taxable year that includes a distribution from our U.S. subsidiaries. Certain U.S. to non-U.S. reinsurance arrangements may also be subject to a 30% U.S. federal withholding tax. We may therefore be limited in our ability to move cash efficiently from our U.S. subsidiaries or to make distributions with respect to our Class A common shares.

Our annual effective income tax rate can change materially as a result of changes in our mix of U.S. and non-U.S. earnings and other factors, including changes in U.S. and foreign tax laws and changes made by regulatory authorities.

Our overall effective income tax rate is equal to our total tax expense as a percentage of total earnings before tax. However, income tax expense and benefits are not recognized on a global basis but rather on a jurisdictional or legal entity basis. Losses in one jurisdiction may not be used to offset profits in other jurisdictions and may cause an increase in our tax rate and give rise to a tax expense even though the Company has cumulative losses. Changes in the mix of earnings (or losses) between jurisdictions and assumptions used in the calculation of income taxes, among other factors, could have a significant effect on our overall effective income tax rate.

 

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U.S. persons who own our Class A common shares may be subject to U.S. federal income taxation at ordinary income rates on a disproportionate share of our undistributed earnings and profits attributable to RPII.

If Accelerant Re Cayman, Accelerant Insurance Europe SA, AIUK, Accelerant Insurance Company of Canada or Accelerant Re I.I. (each, a “Non-U.S. Carrier” and collectively, the “Non-U.S. Carriers”) is treated as recognizing RPII in a taxable year and such Non-U.S. Carrier is treated as a CFC for purposes of taking into account RPII (a “RPII CFC”) for such taxable year, each U.S. person that owns any of our Class A common shares directly or indirectly through certain entities as of the last day in such taxable year must generally include in gross income its pro rata share of the RPII (with certain adjustments), determined as if the RPII were distributed proportionately only to all RPII Shareholders (as defined below), regardless of whether that income is distributed. For this purpose, any of our subsidiaries that is a Non-U.S. Carrier generally will be treated as a RPII CFC if U.S. persons who own (or are treated as owning) any of our Class A common shares or Class B common shares (each such persons, a “RPII Shareholder”) in the aggregate own (or are treated as owning) 25% or more of the total voting power or value of such Non-U.S. Carrier’s stock on any day of its taxable year. Based on our expected ownership, we expect the Non-U.S. Carriers will be treated as RPII CFCs for the current and all future years.

RPII generally is any income of a non-U.S. corporation attributable to insuring or reinsuring risks of a U.S. person that owns (or is treated as owning) stock of such non-U.S. corporation, or risks of a person that is “related” to such a U.S. person. For this purpose, (1) a person is “related” to another person if such person “controls,” or is “controlled” by, such other person, or if both are “controlled” by the same persons, and (2) “control” of a corporation means ownership (or deemed ownership) of stock possessing more than 50% of the total voting power or value of such corporation’s stock and “control” of a partnership, trust or estate for U.S. federal income tax purposes means ownership (or deemed ownership) of more than 50% by value of the beneficial interests in such partnership, trust or estate.

The RPII rules will not apply with respect to a Non-U.S. Carrier for a taxable year if (1) at all times during its taxable year less than 20% of the total combined voting power of all classes of such Non-U.S. Carrier’s voting stock and less than 20% of the total value of all of its stock is owned (directly or indirectly) by persons who are

(directly or indirectly) insured under any policy of insurance or reinsurance issued by such Non-U.S. Carrier or who are related persons to any such person or (2) the Non-U.S. Carrier’s RPII (determined on a gross basis) is less than 20% of its insurance income (as so determined) for the taxable year, determined with certain adjustments.

Our Non-U.S. Carriers generally provide reinsurance to our other subsidiaries and affiliates. If such other subsidiaries or affiliates were treated as related (as defined above) to a RPII Shareholder, or our Non-U.S. Carriers reinsured risks of our RPII Shareholders or their related persons, earnings from such reinsurance would constitute RPII. However, we do not believe any of our subsidiaries or affiliates will be treated as “related” to a RPII Shareholder based on the expected ownership of our shares, nor do we anticipate that our Non-U.S. Carriers will reinsure the risks of our RPII Shareholders in any material amount.

Based on the foregoing, we do not expect U.S. Holders to have RPII inclusions. Nonetheless, we cannot provide assurances that our Non-U.S. Carriers will not recognize RPII due to uncertainty about the proportions of future ownership of our shares and the complexity of certain attribution rules that apply for purposes of determining whether a RPII Shareholder would be considered to have control of and, therefore, be related to our subsidiaries or affiliates for purposes of the RPII rules, or that we will qualify for either of the RPII exceptions above in the event that our Non-U.S. Carriers recognize RPII. Moreover, certain recently issued proposed regulations would expand the scope of RPII to include premium and investment income attributable to a reinsurance policy that directly or indirectly provides coverage to a “related insured”, which would be defined to include a person (other than a publicly traded company) that is more than 50% owned (or treated as more than 50% owned) in the aggregate by United States shareholders of the non-U.S. corporation providing the reinsurance. If finalized in their current form, such regulations may require U.S. persons that own any of our Class A common shares directly or indirectly to include in gross income their pro rata share of the RPII (with certain adjustments), determined as if the RPII were distributed proportionately only to all RPII Shareholders,

 

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regardless of whether that income is distributed. It is not certain whether such regulations will be adopted in their proposed form or what changes or clarifications might ultimately be made thereto or whether any such changes, as well as any interpretation or application of the RPII rules by the IRS, the courts, or otherwise, might have retroactive effect. For more information, please review the discussion under “Certain Material Tax Considerations — U.S. Federal Income Tax Considerations — Taxation of U.S. Holders — Related Person Insurance Income Considerations.”

U.S. persons who dispose of our Class A common shares may be required to treat any gain as ordinary income for U.S. federal income tax purposes and must comply with other specified reporting requirements.

If a U.S. person disposes of shares in a non-U.S. corporation that is a RPII CFC at any time when the U.S. person owned any shares in the corporation during the five-year period ending on the date of disposition, any gain from the disposition will generally be treated as a dividend to the extent of the U.S. person’s share of the corporation’s undistributed earnings and profits that were accumulated during the period that the U.S. person owned the disposed shares (possibly whether or not those earnings and profits are attributable to RPII). Such dividend may also be taxed at ordinary income rates to the extent it is not treated as “qualified dividend income.” In addition, the shareholder will be required to comply with specified reporting requirements, regardless of the amount of shares owned. Because Accelerant is not itself directly engaged in the insurance business, we do not believe that these rules apply to a disposition of our Class A common shares, although we cannot assure you that the IRS will not successfully assert that these rules apply to a disposition of our Class A common shares in light of the insurance and reinsurance activities of our Non-U.S. Carriers. See “Certain Material Tax Considerations—U.S. Federal Income Tax Considerations—Taxation of U.S. Holders—Disposition of Class A Common Shares.”

While we were not a PFIC in 2024 and do not expect to be a PFIC in 2025 or subsequent taxable years, U.S. persons who own our Class A common shares may be subject to adverse tax consequences if Accelerant is considered a PFIC for U.S. federal income tax purposes in any year in which they acquire or hold shares.

If Accelerant is considered a PFIC for U.S. federal income tax purposes, a U.S. person who directly or, in certain cases, indirectly owns our Class A common shares could be subject to adverse tax consequences, including a greater tax liability than might otherwise apply, an interest charge on certain taxes that are deemed deferred as a result of Accelerant’s non-U.S. status and additional information reporting obligations, regardless of the number of shares owned. In general, a non-U.S. corporation will be a PFIC during a taxable year if (i) 75% or more of its gross income constitutes passive income or (ii) 50% or more of its assets produce, or are held for the production of, passive income. For these purposes, passive income generally includes interest, dividends and other investment income. However, income derived in the active conduct of an insurance business by a “qualifying insurance corporation” is not treated as passive income (the “Insurance Exception”). In addition, passive income does not include income of a “qualifying domestic insurance corporation” (“QDIC”). The PFIC provisions also contain a look-through rule under which a non-U.S. corporation will be treated as if it received directly its proportionate share of the income, and held its proportionate share of the assets, of another corporation if it owns at least 25% of the value of the stock of such other corporation. Accelerant does not expect to be considered a PFIC for its current taxable year or any subsequent taxable year. However, because this determination is made annually at the end of each taxable year and is dependent on a number of factors, there can be no assurance that Accelerant will not be considered a PFIC in any taxable year. Moreover, our Non-U.S. Carriers will need to be considered engaged in the active conduct of an insurance business and have applicable insurance liabilities that exceed a certain percentage of their total assets to qualify for the Insurance Exception, among other requirements. It is possible that a Non-U.S. Carrier does not satisfy such requirements in a given taxable year, in which case such a Non-U.S. Carrier may be treated as a PFIC and the PFIC status of Accelerant could be adversely affected as a result. See “Certain Material Tax Considerations—U.S. Federal Income Tax Considerations—Taxation of U.S. Holders—Passive Foreign Investment Company Rules” for further discussion.

 

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U.S. persons who own 10% or more of our shares, by vote or by value, will be subject to U.S. federal income taxation at ordinary income rates on our undistributed earnings and profits.

In general, a “10% U.S. Shareholder” (as defined below) of a non-U.S. corporation that is a CFC at any time during a taxable year must include in its gross income for U.S. federal income tax purposes its pro rata share of the CFC’s “subpart F income” and “tested income” (with various adjustments) with respect to any shares that such 10% U.S. Shareholder owns in such non-U.S. corporation (directly or indirectly through certain entities) on the last day in the non-U.S. corporation’s taxable year on which it is a CFC, even if the subpart F income or tested income is not distributed. A “10% U.S. Shareholder” generally is a U.S. person that owns (directly, indirectly through non-U.S. entities or by attribution by application of the constructive ownership rules of section 958(b) of the Code (i.e., “constructively”)) at least 10% of the total combined voting power or value of all classes of stock of a non-U.S. corporation. “Subpart F income” of a CFC generally includes “foreign personal holding company income” (such as interest, dividends and other types of passive income), as well as insurance and reinsurance income (including underwriting and investment income), and tested income is generally any income of the CFC other than subpart F income and certain other categories of income. An entity treated as a foreign corporation for U.S. federal income tax purposes generally is considered a CFC if 10% U.S. Shareholders own (directly, indirectly through non-U.S. entities or constructively), in the aggregate, more than 50% of the total combined voting power of all classes of voting stock of that non-U.S. corporation or more than 50% of the total value of all stock of that non-U.S. corporation. However, for the purposes of taking into account insurance income, these 50% thresholds are generally reduced to 25%. Further, special rules apply for purposes of taking into account any RPII of a non-U.S. corporation, as described above.

Whether Accelerant is a CFC for a taxable year will depend upon facts regarding our direct and indirect shareholders, about which we have limited information. Accordingly, no assurance can be provided that Accelerant will not be a CFC. Further, regardless of whether Accelerant is a CFC, most or all of our non-U.S. subsidiaries (to the extent treated as corporations for U.S. federal income tax purposes) are generally treated as CFCs because our U.S. subsidiaries are expected to be treated as constructively owning the stock of our non-U.S. subsidiaries. Accordingly, any 10% U.S. Shareholders of Accelerant may be required to include in gross income for U.S. federal income tax purposes for each taxable year their pro rata shares of all or a portion of the subpart F income and tested income generated by our non-U.S. companies (with various adjustments), regardless of whether any distributions are made to them. Any such 10% U.S. Shareholders should consult their own tax advisors regarding the application of these rules to them. See “Certain Material Tax Considerations—U.S. Federal Income Tax Considerations—Taxation of U.S. Holders—Controlled Foreign Corporation Considerations” for further discussion.

Risks Related to this Offering and Ownership of Our Class A Common Shares

The dual class structure of our common shares has the effect of concentrating voting control with the shareholders affiliated with Altamont Capital, including control over decisions that require the approval of shareholders; this will limit your ability to influence corporate matters submitted to a shareholder vote.

Each of our Class B common shares is entitled to ten votes, and each of our Class A common shares, which are the shares we are selling in this offering, is entitled to one vote. After giving effect to the re-designation of existing common shares following the Accelerant Holdings LP Distribution and the sale of the Class A common shares offered hereby, affiliates of Altamont Capital will control approximately  % of the combined voting power of our outstanding common shares following this offering (or approximately  % of the combined voting power of our outstanding common shares if the underwriters’ option to purchase additional Class A common shares is exercised in full).

Pursuant to our amended and restated memorandum and articles of association, each holder of our Class B common shares shall have the right to convert each of its Class B common shares into one Class A common share, at any time, upon notice to us. Additionally, Class B common shares will automatically convert into Class A common shares, on a one-for-one basis, upon transfer (other than a permitted transfer) of Class B common

 

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shares; or upon the earlier of (i) the time Class B common shareholders cease to own 50% of the Class B common shares owned by such holders, in aggregate, immediately upon the closing of this offering or (ii) three years, after which time (in each case) there will be a single class of common shares with one vote per share.

Because of the ten-to-one voting ratio between our Class B common shares and our Class A common shares, Altamont Capital (which holds the majority of our outstanding Class B common shares) will control a majority of the combined voting power of our common shares and therefore exert substantial influence over matters submitted to our shareholders so long as Altamont Capital owns a requisite percentage of our total outstanding common shares (in the form of either Class B common shares or Class A common shares). Concentrated control may limit your ability to influence corporate matters for the foreseeable future.

We have a history of losses, which may limit our ability to develop our Risk Exchange and inhibit us from making investments in developing and expanding our business.

Although we generated net income of $7.8 million and $22.9 million for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively, we have a history of losses and may incur additional losses in the near term as we continue to make investments to grow our business. Despite these investments, we may not succeed in increasing our revenue on the timeline that we expect or in an amount sufficient to remain profitable. If we are unable to remain profitable, this may limit our ability to develop our Risk Exchange, sign up new Members and risk capital partners and grow our revenues. Future net losses may also lead to a reduction in premiums written through the Risk Exchange, which would inhibit us from making investments in developing and expanding our business, and may also lead to a change in our A.M. Best or credit ratings.

An active trading market for our Class A common shares may not develop and the trading price for our Class A common shares may fluctuate significantly.

We have applied to list our Class A common shares on the NYSE. Prior to the completion of this offering, there has been no public market for our Class A common shares, and we cannot assure you that a liquid public market for our Class A common shares will develop. If an active public market for our Class A common shares does not develop following the completion of this offering, the market price and liquidity of our Class A common shares may be materially and adversely affected. The initial public offering price for our Class A common shares will be determined by negotiation between us and the underwriters based upon several factors, and we can provide no assurance that the trading price of our Class A common shares after this offering will not decline below the initial public offering price. As a result, investors in our securities may experience a significant decrease in the value of their Class A common shares.

Applicable insurance laws could make it difficult to effect a change of control of our Company.

The insurance laws and regulations of the various jurisdictions in which our insurance subsidiaries are organized could delay or impede a business combination involving us. In the U.S., state insurance laws prohibit an entity from acquiring control of an insurance company without the prior approval of the domestic insurance regulator. Under most states’ statutes, an entity is presumed to have control of an insurance company if it owns, directly or indirectly, 10% or more of the voting stock of that insurance company or its parent company. These and other regulatory restrictions could delay, deter or prevent a potential merger or sale of our company, even if our Board of Directors decides that it is in the best interests of stockholders for us to merge or be sold. These restrictions could also delay sales by us or acquisitions by third parties of our insurance subsidiaries.

Our operating results and share price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment.

Our quarterly operating results could fluctuate in the future as a publicly traded company. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could

 

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subject the market price of our shares to wide price fluctuations regardless of our operating performance. You should consider an investment in our Class A common shares to be risky, and you should invest in our Class A common shares only if you can withstand a significant loss and wide fluctuation in the market value of your investment. The market price of our Class A common shares could be subject to significant fluctuations after this offering in response to the factors described in this “Risk Factors” section and other factors, many of which are beyond our control. Among the factors that could affect our share price are:

 

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market conditions in the broader stock market;

 

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actual or anticipated fluctuations in our quarterly financial and operating results;

 

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introduction of new products or services by us or our competitors;

 

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issuance of new or changed securities analysts’ reports or recommendations;

 

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results of operations that vary from expectations of securities analysts and investors;

 

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guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

 

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strategic actions by us or our competitors;

 

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announcement by us, our competitors or our acquisition targets;

 

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sales, or anticipated sales, of large blocks of our Class A common shares, including by our directors, executive officers, and principal shareholders;

 

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additions or departures in our Board of Directors, senior management or other key personnel;

 

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regulatory, legal, or political developments;

 

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public response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

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litigation and governmental investigations;

 

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changing economic conditions;

 

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changes in accounting principles;

 

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any indebtedness we may incur or securities we may issue in the future;

 

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default under agreements governing our indebtedness;

 

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Class A common shares sold in this offering will be freely tradable without restriction or further registration;

 

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exposure to capital and credit market risks that adversely affect our investment portfolio or our capital resources;

 

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changes in our A.M. Best or credit ratings; and

 

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other events or factors, including those from natural disasters, war, acts of terrorism, or responses to these events.

In addition, the stock markets, including the NYSE, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities. In times of stock price volatility, stockholders can often institute securities class action litigation against the issuer of such stock. If any of our shareholders bring a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation.

 

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If securities or industry analysts do not publish research or reports about our business, or if they publish unfavorable research or reports, or they adversely change their recommendations regarding our Class A common shares, or if our results of operations do not meet their expectations, the market price for our Class A common shares and trading volume could decline.

The trading market for our Class A common shares will be influenced by research or reports that industry or securities analysts publish about our business. We do not have any control over these analysts. As a newly public company, we may be slow to attract research coverage. If any of the analysts who may cover us provide inaccurate or unfavorable research, issue an adverse opinion regarding our share price or if our results of operations do not meet their expectations, our share price could decline. Moreover, if one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.

The sale or availability for sale of substantial amounts of our Class A common shares could adversely affect their market price.

Sales of substantial amounts of our Class A common shares in the public market after the completion of this offering, or the perception that these sales could occur, could adversely affect the market price of our Class A common shares and could materially impair our ability to raise capital through equity offerings in the future. The Class A common shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”), and shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements. There will be    Class A common shares and   Class B common shares outstanding immediately after this offering. Conversion of the Class B common shares would increase the number of Class A common shares available for sale and could have the effect of depressing the trading price of our Class A common shares. Following this offering, we and each of our directors and officers named in the section “Management,” and certain shareholders, including Altamont Capital, have agreed not to sell any Class A common shares for   days following the date of this prospectus without the prior written consent of Morgan Stanley & Co. LLC, on behalf of the underwriters, subject to certain exceptions. However, the underwriters may release these securities from these restrictions at any time, subject to applicable regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”). We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our Class A common shares. See “Underwriters” and “Shares Eligible for Future Sale” for a more detailed description of the restrictions on selling our securities after this offering.

In addition, an aggregate of approximately    million of our Class A common shares, representing    % of our outstanding Class A common shares, are pledged to secure obligations of certain of our executive officers, including all three of our Co-Founders, as well as other Company employees, under loan agreements with third-party lenders, including Goldman Sachs Bank Europe SE, an affiliate of Goldman Sachs & Co. LLC, one of the underwriters in this offering.    million Class A common shares, or    % of our outstanding Class A common shares are beneficially owned by Jeff Radke, our Co-Founder and Chief Executive Officer and a member of our Board of Directors, Christopher Lee-Smith, our Co-Founder and Head of Distribution and a member of our Board of Directors, and Frank O’Neill, our Co-Founder and Chief Underwriting Officer. All parties, including Messrs. Radke, Lee-Smith and O’Neill, are, as of the date of this prospectus, in compliance with all obligations under the terms of their loan agreements. All of the Class A common shares securing these loans are subject to lock-up agreements that, upon a foreclosure event, would require the respective lenders to execute a new lock-up agreement with the Underwriters in order to exercise any rights in respect of the shares.

If any of the borrowers defaults on obligations under these agreements, the third-party lenders may exercise their rights under the applicable loan agreement, and will hold such shares subject to a lock-up agreement on substantially similar terms as those executed by our existing shareholders. See “Underwriting” for a description of these terms.

 

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Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on price appreciation of our Class A common shares for return on your investment.

We currently intend to retain all of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A common shares as a source for any future dividend income.

Our Board of Directors has complete discretion regarding dividend distributions. Even if our Board of Directors decides to declare and pay dividends, the timing, amount and form of future dividends, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of we receive from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our Board of Directors, as well as regulatory restrictions on the ability of our insurance subsidiaries to issue dividends. Accordingly, the return on your investment in our Class A common shares will likely depend entirely upon any future price appreciation of our Class A common shares. There is no guarantee that our Class A common shares will appreciate in value after this offering or even maintain the price at which you purchased our Class A common shares. You may not realize a return on your investment in our Class A common shares and you may even lose your entire investment.

Our success depends on our ability to retain, attract and develop experienced and qualified personnel, including our senior management team and other personnel.

We depend upon our senior management team who possess extensive knowledge and a deep understanding of our business and strategy, and the insurance market as a whole. The unexpected loss of any of our senior management team could have a disruptive effect adversely impacting our ability to manage our business effectively. Competition for experienced professional personnel in the insurance industry is intense, and we are constantly working to retain and attract these professionals. If we cannot successfully do so, our business, results of operations, financial condition and prospects could be adversely affected.

You must rely on the judgment of our management as to the use of the net proceeds from this offering, and such use may not produce income or increase our share price.

Our management will have considerable discretion in the application of the net proceeds we receive. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not improve our efforts to achieve or maintain profitability or increase our share price. The net proceeds from this offering may be placed in investments that do not produce income or that lose value.

We may change our underwriting guidelines or strategy without shareholder approval.

Our management has the authority to change our underwriting guidelines or our strategy without notice to our shareholders and without shareholder approval. As a result, we may make fundamental changes to our operations without shareholder approval, which could result in our pursuing a strategy or implementing underwriting guidelines that may be materially different from the strategy described in the section entitled “Business” or elsewhere in this prospectus.

The amended and restated memorandum and articles of association that we intend to adopt contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A common shares.

We intend to adopt an amended and restated memorandum and articles of association immediately prior to the completion of this offering. Our proposed amended and restated memorandum and articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control

 

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transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. In addition, our Board of Directors has the authority, without further action by our shareholders, to issue preference shares in one or more classes and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our common shares. Preference shares could be issued quickly with terms having the effect of delaying or preventing a change in control of our company or making removal of management more difficult. Our Board of Directors also has the power, without shareholder approval, to set the terms of any such preference shares that may be issued, including voting rights, dividend rights, preferences over our common shares with respect to dividends or if we liquidate, dissolve or wind up our business and other terms. If we issue preference shares in the future that have preference over our common shares with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preference shares with voting rights that dilute the voting power of our common shares, the rights of holders of our common shares or the price of our Class A common shares could be adversely affected.

Our principal shareholders have substantial influence over our company. Their interests may not be aligned with the interests of our other shareholders, and they could prevent or cause a change of control or other transactions.

Following the re-designation of existing common shares following the Accelerant Holdings LP Distribution and the completion of this offering, affiliates of Altamont Capital will beneficially own an aggregate of    Class B common shares, representing   % of the combined voting power of our common shares outstanding after this offering (or approximately   % of the combined voting power of our common shares if the underwriters’ option to purchase additional Class A common shares is exercised in full). Altamont Capital will have a significant influence in determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions. Altamont Capital will also have the power to prevent or cause a change in control for so long as Altamont Capital beneficially owns a majority of our total outstanding common shares and will retain significant influence over such a decision after they cease to own a majority. Without the consent of Altamont Capital, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. The interests of our largest shareholders may differ from the interests of our other shareholders. The concentration in the ownership of our Class A common shares and Class B common shares following this offering may cause a material decline in the value of our Class A common shares.

Altamont Capital and its affiliates engage in a broad spectrum of activities, including investments in industries in which we operate. In the ordinary course of their business activities, Altamont Capital and its affiliates may engage in activities where their interests conflict with our interests or those of our other shareholders, such as investing in or advising businesses that directly or indirectly compete with certain portions of our business or are suppliers or partners of ours. Our amended and restated memorandum and articles of association to be effective in connection with the closing of this offering will provide that none of Altamont Capital, any of its affiliates or any director who is not employed by us will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Altamont Capital and its affiliates also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, Altamont Capital and its affiliates may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed by our memorandum and articles of association, the Cayman Islands Companies

 

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Act (As Revised) (the “Cayman Companies Act”) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law differ from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, some U.S. states, such as Delaware, have more prescriptive and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have the standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies. Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the U.S. Currently, we do not plan to rely on home country practice with respect to any corporate governance matter. However, if we choose to follow our home country practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the Board of Directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. For a discussion of significant differences between the provisions of the Cayman Companies Act and the laws applicable to companies incorporated in the United States and their shareholders, see “Description of Share Capital—Comparison of Cayman Islands Corporate Law and U.S. Corporate Law.”

We will incur significantly increased costs and devote substantial management time as a result of the listing of our Class A common shares.

We will incur additional legal, accounting and other expenses as a public reporting company. For example, we will be required to comply with the additional requirements of the rules and regulations of the SEC and the listing standards of the NYSE, including applicable corporate governance practices. We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements. We cannot predict or estimate the number of additional costs we may incur as a result of becoming a public company or the timing of such costs.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidelines are provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time

 

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and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may also initiate legal proceedings against us and our business may be adversely affected.

Changes in accounting practices and future pronouncements may materially affect our reported financial results.

Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements retroactively. The impact of changes in current accounting practices and future pronouncements cannot be predicted but may affect the calculation of net income, shareholder’s equity and other relevant financial statement line items.

Our U.S. insurance subsidiaries are required to comply with statutory accounting principles (“SAP”). SAP and various components of SAP are subject to constant review by the NAIC and its task forces and committees, as well as state insurance departments, in an effort to address emerging issues and otherwise improve financial reporting. Various proposals are pending before committees and task forces of the NAIC, some of which, if enacted and adopted on a state level, could have negative effects on insurance industry participants. The NAIC continuously examines existing laws and regulations. We cannot predict whether or in what form such reforms will be enacted and, if so, whether the enacted reforms will positively or negatively affect us.

As a result of becoming a public company, we will be obligated to develop and maintain proper and effective disclosure controls and procedures and internal control over financial reporting. Our controls and procedures may not be effective, which may adversely affect investor confidence in us and, as a result, the value of our Class A common shares.

Upon the completion of this offering, we will become subject to the periodic reporting requirements of the Exchange Act. We must design our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. We are in the early stages of the costly and intensive process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404 of the Sarbanes-Oxley Act. We may not be able to complete our evaluation, testing and any required remediation in the time required. If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the value of our Class A common shares to decline, and we may be subject to investigation or sanctions by the SEC.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of the fiscal year that coincides with the filing of our second annual report on Form 10-K. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. We will also be required to disclose changes made in our internal control and procedures on a quarterly basis. However, our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging

 

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growth company” as defined in the JOBS Act if we take advantage of the exemptions contained in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

Additionally, the existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations and cause shareholders to lose confidence in our reported financial information, all of which could materially and adversely affect our business and share price.

We are an “emerging growth company” and we expect to elect to comply with reduced public company reporting requirements, which could make our Class A common shares less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, among others, (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements, (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved and (4) the requirement to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus. We could be an emerging growth company for up to five years after the first sale of our Class A common shares pursuant to an effective registration statement under the Securities Act, which fifth anniversary will occur in 2030. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we would cease to be an emerging growth company prior to the end of such five-year period. We have made certain elections with regard to the reduced disclosure obligations regarding executive compensation in this prospectus and may elect to take advantage of other reduced disclosure obligations in future filings. As a result, the information that we provide to holders of our Class A common shares may be different than you might receive from other public reporting companies in which you hold equity interests. We cannot predict if investors will find our Class A common shares less attractive as a result of reliance on these exemptions. If some investors find our Class A common shares less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for our Class A common shares and the market price for our Class A common shares may be more volatile.

The JOBS Act also permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

We are a “controlled company” and, as a result, we are exempt from obligations to comply with certain corporate governance requirements.

Upon the completion of this offering, investment funds affiliated with Altamont Capital will own Class B common shares, representing   % of the combined voting power of our common shares outstanding after this offering (or approximately   % of the combined voting power of our common shares if the underwriters’ option to purchase additional Class A common shares is exercised in full). Accordingly, we will be a “controlled company” for purposes of the NYSE listing requirements. As such, we will be exempt from the

 

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obligation to comply with certain corporate governance requirements, including the requirements that a majority of our Board of Directors consists of independent directors, and that we have nominating and compensation committees that are each composed entirely of independent directors. These exemptions do not modify the requirement for a fully independent audit committee, which is permitted to be phased-in as follows: (1) one independent committee member at the time of our initial public offering; (2) a majority of independent committee members within 90 days of our initial public offering; and (3) all independent committee members within one year of our initial public offering. Similarly, once we are no longer a “controlled company,” we must comply with the independent board committee requirements as they relate to the nominating and compensation committees, on the same phase-in schedule as set forth above, with the trigger date being the date we are no longer a “controlled company” as opposed to our initial public offering date. Additionally, we will have 12 months from the date we cease to be a “controlled company” to have a majority of independent directors on our Board of Directors. Additionally, other than Altamont Capital and any of its affiliates, no holder of common shares or any of its affiliates shall be permitted to exceed the Voting Power Threshold, and any votes to which such holder would otherwise be entitled in excess thereof shall be disregarded.

Certain of our directors have relationships with Altamont Capital, which may cause conflicts of interest with respect to our business.

Following this offering, two of our directors will be affiliated with Altamont Capital, our equity sponsor and an affiliate of our controlling shareholder. Our Altamont Capital directors have fiduciary duties to us and, in addition, have duties to Altamont Capital. As a result, these directors may face real or apparent conflicts of interest with respect to matters affecting both us and Altamont Capital, whose interests may be adverse to ours in some circumstances.

You will incur immediate dilution as a result of this offering.

If you purchase Class A common shares in this offering, you will pay more for your shares than the pro forma net tangible book value of your shares. As a result, you will incur immediate dilution of $   per share, representing the difference between the initial public offering price of $   per share and our pro forma net tangible book deficit per share as of March 31, 2025 of $   . Accordingly, should we be liquidated at our book value, you would not receive the full amount of your investment. In addition, you may also experience additional dilution upon future equity issuances or the exercise of share options to purchase Class A common shares granted to our employees, consultants and directors under our equity compensation plans. See “Dilution.”

Certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands company and a portion of our assets are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us in the United States in the event that you believe that your rights have been infringed under U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands may render you unable to enforce a judgment against our assets. We have been advised by our Cayman Islands legal counsel, Maples and Calder (Cayman) LLP, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the securities laws of the United States or any State, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be

 

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final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “will” or “would,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, or future events or performance contained in this prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, or could affect our share price. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

 

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our Risk Exchange’s prospects, its potential for expansion to new Members and offerings beyond the specialty insurance market, as well as the future prospects of our overall business;

 

•

our ability to grow our business profitably;

 

•

our financial strength;

 

•

the number of Members that we expect to retain and our membership growth prospects;

 

•

our ability to continue enhancing our technology-based solutions and gain internal efficiencies and effective controls that promote the utility of the analytics we provide to Members;

 

•

our ability to leverage our information systems to enhance the benefits available to our Members through our Risk Exchange;

 

•

our ability to continue to attract risk capital partners;

 

•

the performance of our Members and risk capital partners;

 

•

our ability to accurately assess and manage the underwriting risk we retain;

 

•

the competitive environment in the specialty insurance industry;

 

•

changes in government laws and regulations, including insurance regulatory laws, and how the enforcement thereof may affect our business;

 

•

our expectations regarding our projected growth;

 

•

the increased expenses associated with being a public company;

 

•

whether we will be considered a passive foreign investment company for U.S. tax purposes;

 

•

the additional regulatory, legal and operational risks that may arise in connection with our expansion into new geographies and how such risks might materially affect our business, results of operations, financial condition, and prospects; and

 

•

other factors detailed under heading “Risk Factors” beginning on page 26.

 

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Given the risks and uncertainties set forth in this prospectus, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this prospectus are not guarantees of future performance and our actual results of operations, financial condition, and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this prospectus. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this prospectus, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this prospectus speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this prospectus.

 

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USE OF PROCEEDS

We estimate that the net proceeds to us from our sale of Class A common shares in this offering will be approximately $   million, based on the assumed initial public offering price of $   per share, which is the midpoint of the estimated initial offering price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise in full their option to purchase additional Class A common shares, we estimate that we will receive additional net proceeds of approximately $   million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We will not receive any of the proceeds from the sale of Class A common shares by the Selling Shareholder named in this prospectus. The Selling Shareholder will receive approximately $   million of proceeds from the offering, based on the assumed initial public offering price of $    per share, which is the midpoint of the estimated initial offering price range set forth on the cover page of this prospectus (or approximately $   million if the underwriters exercise in full their option to purchase additional Class A common shares).

Each $1.00 increase or decrease in the assumed initial public offering price of $   per share, which is the midpoint of the estimated initial offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the net proceeds that we receive from this offering by approximately $   million, assuming that the number of Class A common shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions payable by us. Similarly, each increase or decrease of 1.0 million in the number of Class A common shares offered by us would increase or decrease, as applicable, the net proceeds that we receive from this offering by approximately $   million, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions payable by us.

The principal purposes of this offering are to fund the redemption of our Class C convertible preference shares if the holders do not elect to convert such preference shares to common shares at the time of the offering, increase our capitalization and financial flexibility, create a public market for our Class A common shares, and enable access to the public equity markets for us and our shareholders. We intend to use $   of the net proceeds from this offering to fund the redemption of our Class C convertible preference shares if the holders do not elect to convert such preference shares to common shares at the time of the offering, $    million to fund the management fee payable to an affiliate of Altamont Capital, see “Certain Relationships and Related-Party Transactions—Altamont Capital” with the remainder for general corporate purposes and to support underwriting capital needs as the business continues to grow and expand. Additionally, we may use a portion of the net proceeds to purchase products, services, or technologies, or acquire or invest in businesses. These businesses may include, but are not limited to, MGAs, insurance intermediaries, insurance companies, technology companies, and service providers in our ecosystem. We have not specifically identified any such businesses, including the seven Owned Members in which we own a call option to purchase some portion of their outstanding equity.

We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering or the amounts we actually spend on the uses set forth above. Pending the use of proceeds from this offering as described above, we plan to invest the net proceeds that we receive in this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit or direct or guaranteed obligations of the U.S. government. Our management will have broad discretion in the application of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds.

 

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DIVIDEND POLICY

We do not currently pay dividends on any of our common shares and we currently intend to retain all available funds and any future earnings for use in the operation of our business. We may, however, pay cash dividends on our common shares, including our Class A common shares, in the future. Any future determination to pay dividends will be made at the discretion of our Board of Directors and will depend upon many factors, including our financial condition, earnings, legal and regulatory requirements, restrictions in our debt agreements and other factors our Board of Directors deems relevant.

Additionally, we are a holding company that transacts the majority of our business through operating subsidiaries. Consequently, our ability to pay dividends to shareholders is largely dependent on receipt of dividends and other distributions from our subsidiaries. Applicable insurance laws restrict the ability of our insurance and reinsurance company subsidiaries to declare shareholder dividends and require insurance companies to maintain specified levels of statutory capital and surplus. Insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that dividends of the maximum amounts calculated under any applicable formula would be permitted. State insurance regulatory authorities that have jurisdiction over the payment of dividends by our insurance and reinsurance company subsidiaries may in the future adopt statutory provisions more restrictive than those currently in effect. See “Regulation—Insurance Regulation—Restrictions on Paying Dividends.”

Our ability to pay dividends may also be restricted by the terms of the Credit Agreement (as defined in “Certain Indebtedness”), or any future credit agreement or any future debt or preferred equity securities of us or our subsidiaries. See “Risk Factors—Risks Related to this Offering and Ownership of Our Class A Common Shares—Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on price appreciation of our Class A common shares for return on your investment.”

 

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CAPITALIZATION

The following table sets forth our cash, cash equivalents and restricted cash and total capitalization as of March 31, 2025:

 

•

on an actual basis, derived from our financial statements included elsewhere in this prospectus;

 

•

on an as adjusted basis, giving effect to the conversion of all of our outstanding Class A convertible preference shares and Class B convertible preference shares into Class A common shares and Class B common shares (as applicable), and the Accelerant Holdings LP Distribution as if it had occurred on March 31, 2025; and

 

•

on an as further adjusted basis, giving effect to the adjustments set forth above and the receipt of the estimated net proceeds from our sale and issuance by us of    of our Class A common shares in this offering, at the assumed initial public offering price of $   per share, which is the midpoint of the estimated initial offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions, and estimated offering expenses payable by us.

The as further adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with our consolidated financial statements and related notes, and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

 

		As of March 31, 2025
		Actual				Adjusted				As further Adjusted(1)
		($ in millions)
Cash, cash equivalents and restricted cash		$	1,290.7
Debt			121.5
Redeemable preference shares
Class C convertible preference shares (issued and outstanding 2024: 66,411)			104.4
Shareholders’ equity:
Convertible preference shares
Class A (issued and outstanding 2024: 250,457 and 2023: 249,582)			236.7
Class B (issued and outstanding 2024: 150,231 and 2023: 149,707)			145.1
Class A and Class B common shares			—
Additional paid-in capital			127.2
Accumulated deficit			(176.3)
Accumulated other comprehensive loss			(11.2)
Non-controlling interests			28.5
Total equity			454.4
Total capitalization		$	575.9

(1)

Each $1.00 increase (decrease) in the assumed initial public offering price of $   per Class A common share, which is the midpoint of the estimated initial offering price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in-capital, total equity and total capitalization on a pro forma as adjusted basis by approximately $   million, assuming that the number of Class A common shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1.0 million shares in the number of Class A common shares sold in this offering, as set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in-capital, total equity, and total capitalization on a pro forma as adjusted basis by approximately $   million, assuming an initial public offering price of $   per share, which is the midpoint of the estimated initial offering price range set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions, and estimated offering expenses payable by us.

 

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If the underwriters’ option to purchase additional Class A common shares from us were exercised in full, as further adjusted cash and cash equivalents, additional paid-in capital, total equity, total capitalization, and shares outstanding as of March 31, 2025 would be $   , $   , $   , $   and   , respectively.

The as adjusted and as further adjusted columns in the table above are based on   Class A common shares (after giving effect to the conversion of all our outstanding Class A convertible preference shares and Class B convertible preference shares and the Accelerant Holdings LP Distribution) outstanding as of March 31, 2025, and excludes the following:

 

•

Class A common shares issuable upon the exercise of options outstanding under our 2023 Plan as of   , 2025, at a weighted average exercise price of $   per share;

 

•

Class A common shares reserved for future issuance under our 2023 Plan;

 

•

Class A common shares reserved for future issuance under the ESPP, which will become effective in connection with this offering;

 

•

Class A common shares issuable upon the vesting of restricted share units granted in connection with the consummation of this offering; and

 

•

Any potential redemptions of Class C convertible preference shares that were issued in December 2024 if the holders do not elect to convert such preference shares to common shares at the time of this offering.

 

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

We have derived the unaudited pro forma financial data of Accelerant Holdings LP, our predecessor, from its financial statements for the year ended December 31, 2024 and three months ended March 31, 2025 to give effect to the pro forma adjustments related to the Accelerant Holdings LP Distribution and the conversion of all of our outstanding classes of convertible preference shares as if all such transactions had been completed as of March 31, 2025 for the balance sheet and as of January 1, 2024 for the results of operations.

We based the pro forma adjustments on available information and on assumptions that we believe are reasonable under the circumstances to reflect, on a pro forma basis, the impact of the relevant transactions on the historical financial information of Accelerant Holdings LP and Accelerant Holdings, which is a consolidated subsidiary of Accelerant Holdings LP. See the notes to unaudited pro forma financial information below for a discussion of pro forma adjustments made. The unaudited pro forma financial information does not purport to be indicative of our results of operations or financial position had the relevant transactions occurred on the dates assumed and does not project our results of operations or financial position for any future period or date.

The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of the operating results that would have occurred if this offering, the Accelerant Holdings LP Distribution and the conversion of all of our outstanding classes of convertible preference shares had been completed as of the dates set forth above, nor is it indicative of our future results. Additionally, the unaudited pro forma financial information does not give effect to the potential impact of any anticipated synergies, operating efficiencies, or cost savings that may result.

The unaudited pro forma financial information should be read together with “Capitalization” and our historical financial statements and related notes incorporated by reference in this prospectus, as well as accompanying notes to the unaudited consolidated pro forma financial statements.

Compensation-Based Expense Upon Completion of this Offering

Immediately prior to the consummation of this offering, we intend to effect the Accelerant Holdings LP Distribution, pursuant to which Accelerant Holdings LP will distribute all existing common shares in the Company that it owns to the holders of existing limited partnership interests of Accelerant Holdings LP in proportion to the economic interest represented by those limited partnership interests. This distribution will include      existing common shares of the Company to holders of vested limited partnership interests related to profits interest awards of Accelerant Holdings LP issued to executives and employees of Accelerant Holdings and existing common shares of the Company to holders of unvested limited partnership interests related to profits interest awards of Accelerant Holdings LP issued to executives and employees of Accelerant Holdings (although such shares do not represent an increase in shares as they would have otherwise been held by Altamont Capital). The existing common shares will then be re-designated into      Class A common shares and      Class B common shares (as applicable) immediately following the effectiveness of our amended and restated memorandum and articles of association. In connection with this, we expect to recognize compensation expense between $   and $   at the time of the Accelerant Holdings LP Distribution for the value of the new Class A common shares and Class B common shares of the Company, assuming an offering price of $   per Class A common share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus. In each reporting period subsequent to the Accelerant Holdings LP Distribution, we expect to recognize a compensation expense equal to the value of the restricted common shares of the Company that vested and became unrestricted during each such reporting period. This compensation expense will be material to the Company’s income in future periods.

Such transactions will result in compensation expenses and are not reflected in the pro forma financial information. The pro forma adjustments similarly do not include any adjustments for Class A common shares reserved for future issuance under our ESPP, which will become effective in connection with this offering.

 

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Accelerant Holdings LP (predecessor) to Accelerant Holdings (registrant)

Unaudited Pro Forma Condensed Consolidated Balance Sheet

 

		March 31, 2025
(expressed in millions of U.S. dollars, except share data)		Accelerant Holdings LP (predecessor)				AHLP Distribution				Elimination of AHLP specific balances				Conversion of convertible preference shares				Accelerant Holdings (registrant)
Assets
Investments
Short-term investments available for sale, at fair value		$	64.2			$	—			$	—			$	—			$	64.2
Fixed maturity securities available for sale, at fair value			582.7				—				—				—				582.7
Equity method investments			8.9				—				—				—				8.9
Other investments			47.0				—				—				—				47.0
Total investments			702.8				—				—				—				702.8
Cash, cash equivalents and restricted cash			1,290.9				(51.8	) (a)			(0.2	) (c)			—				1,238.9
Premiums receivable, (net of $2.7 allowance)			863.3				—				—				—				863.3
Ceded unearned premiums			1,708.7				—				—				—				1,708.7
Reinsurance recoverables on unpaid losses and LAE			1,266.5				—				—				—				1,266.5
Other reinsurance recoverables			370.2				—				—				—				370.2
Deferred acquisition costs			56.3				—				—				—				56.3
Goodwill and other intangible assets, net			114.9				—				—				—				114.9
Capitalized technology development costs			86.9				—				—				—				86.9
Other assets			253.4				—				2.2	(c)			—				255.6
Total assets		$	6,713.9			$	(51.8	)		$	2.0			$	—			$	6,664.1
Liabilities and equity
Unpaid losses and loss adjustment expenses			1,513.1				—				—				—				1,513.1
Unearned premiums			1,986.4				—				—				—				1,986.4
Payables to reinsurers			1,186.4				—				—				—				1,186.4
Deferred ceding commissions			194.6				—				—				—				194.6
Funds held under reinsurance			854.8				—				—				—				854.8
Insurance balances payable			195.1				—				—				—				195.1
Debt			121.5				—				—				—				121.5
Accounts payable and other liabilities			210.7				—				(1.1	) (c)			—				209.6
Total liabilities		$	6,262.6			$	—			$	(1.1	)		$	—			$	6,261.5
Equity
Partners’ redeemable preference shares
Class D par value $301,248 per share, issued and outstanding of 100; amounts are recorded at liquidation preference		$	51.8			$	(51.8	) (a)		$	—			$	—			$	—
Partners’ equity
Accelerant Holdings LP partners’ common shares:
Class A1 par value $0.01 per share (issued and outstanding of 8,491,134,079)		$	110.6			$	(110.6	) (b)		$	—			$	—			$	—
Class A2 par value $0.02 per share (issued and outstanding of 693,970,910)			12.1				(12.1	) (b)			—				—				—
Accelerant Holdings Class A, B and C common shares (par value $0.0001 per share, 2,453,320 shares issued and outstanding)			—				—				—				—				—
Additional paid-in capital			—				122.7	(b)			(57.4	) (c)			496.3	(d)			561.6
Accumulated other comprehensive loss			(12.9	)			—				1.7	(c)			—				(11.2	)
Accumulated deficit			(206.7	)			—				30.4	(c)			—				(176.3	)
Total partners’ equity			(96.9	)			—				(25.3	)			496.3				374.1
Non-controlling interests
Non-controlling interests: convertible preference shares of Accelerant Holdings			486.2				—				—				(486.2	) (d)			—
Non-controlling interests: other interests			10.2				—				28.4	(c)			(10.1	) (d)			28.5
Total non-controlling interests			496.4				—				28.4				(496.3	)			28.5
Total equity			451.3				(51.8	)			3.1				—				402.6
Total liabilities and equity		$	6,713.9			$	(51.8	)		$	2.0			$	—			$	6,664.1

 

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