HOUSTON, Oct. 29, 2024 (GLOBE NEWSWIRE) -- Skyward Specialty Insurance Group, Inc. (Nasdaq: SKWD) ("Skyward Specialty” or the "Company”) today reported third quarter 2024 net income of $36.7 million, or $0.89 per diluted share, compared to $21.7 million, or $0.57 per diluted share, for the same 2023 period. Net income for the first nine months of 2024 was $104.4 million, or $2.53 per diluted share, compared to $56.7 million, or $1.50 per diluted share, for the same 2023 period.

Adjusted operating income(1) for the third quarter of 2024 was $29.4 million, or $0.71 per diluted share, compared to $25.0 million, or $0.65 per diluted share, for the same 2023 period. Adjusted operating income(1) for the first nine months of 2024 was $93.4 million, or $2.26 per diluted share, compared to $56.5 million, or $1.49 per diluted share, for the same 2023 period.

Highlights for the third quarter included:

  • Gross written premiums of $400.0 million an increase of 12.4% compared to the third quarter of 2023.
  • Combined ratio of 92.2% and ex-Cat combined ratio of 89.4% compared to 90.2% and 89.8%, respectively, for the third quarter of 2023.
  • Annualized return on equity of 19.1% through the first nine months of 2024 compared to 15.8% for the same 2023 period.
  • Book value per share of $19.89, an increase of 19% compared to December 31, 2023.
(1) See "Reconciliation of Non-GAAP Financial Measures"
Skyward Specialty Chairman and CEO Andrew Robinson commented, "These past weeks have proven to be a very difficult time and our thoughts continue to be with those impacted by Hurricanes Helene and Milton; I am proud of the extraordinary efforts of our claims team and partners who continue to deliver exceptional service to our customers affected by these catastrophes."

"As for our third quarter, our results reflect our continued excellent execution of our "Rule our Niche" strategy, and our disciplined underwriting and our strategic risk management. Our adjusted operating income was up nearly 18% over the prior year quarter, continuing the trend of strong earnings growth we have delivered every quarter as a public company, and our 19.1% annualized return on equity year to date is outstanding. We delivered gross written premiums growth of 12.4% over the prior year quarter while continuing to increase our mix of business to areas that are less exposed to the P&C cycles. Given investments into our business, the momentum building in certain divisions, and with full consideration for the market backdrop, I am confident that we are well positioned to deliver strong growth as we look forward to the coming quarters."

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Results of Operations

Underwriting Results

Premiums            
($ in thousands) Three months ended September 30, Nine months ended September 30,
unaudited  2024   2023  % Change  2024   2023  % Change
Gross written premiums $400,014  $355,732  12.4% $1,354,877  $1,138,224  19.0%
Ceded written premiums $(131,692) $(75,036) 75.5% $(502,326) $(441,650) 13.7%
Net retention  67.1%  78.9% NM (1)   62.9%  61.2% NM (1) 
Net written premiums $268,322  $280,696  (4.4)% $852,551  $696,574  22.4%
Net earned premiums $269,557  $227,033  18.7% $763,482  $604,211  26.4%
(1) Not meaningful            
             

The increase in gross written premiums for the third quarter and first nine months of 2024, when compared to the same 2023 periods, was driven by double-digit premium growth primarily from our transactional E&S, programs, captives, surety and global property & agriculture underwriting divisions.

During the third quarter and first nine months of 2023, the Company cancelled a quota share reinsurance contract. Excluding the impact of the cancellation, net written premiums for the third quarter and first nine months of 2024 increased 16.5%(2) and 32.0%(2), respectively, when compared to the same 2023 periods.

Combined Ratio Three months ended September 30, Nine months ended September 30,
(unaudited) 2024 2023 2024 2023
Non-cat loss and LAE(1) 60.6% 60.7% 60.6% 60.9%
Cat loss and LAE(1) 2.8% 0.4% 1.5% 1.8%
Prior accident year development - LPT(2) (0.1)% (0.1)% (0.1)% (0.2)%
Loss Ratio 63.3% 61.0% 62.0% 62.5%
Net policy acquisition costs 13.9% 15.0% 13.9% 13.0%
Other operating and general expenses 15.7% 15.1% 15.8% 16.3%
Commission and fee income (0.7)% (0.9)% (0.8)% (1.0)%
Expense ratio 28.9% 29.2% 28.9% 28.3%
Combined ratio 92.2% 90.2% 90.9% 90.8%
Ex-Cat Combined Ratio(3) 89.4% 89.8% 89.4% 89.0%
         
Adjusted Underwriting Ratios        
Adjusted loss ratio(2) 63.4% 61.1% 62.1% 62.7%
Expense ratio 28.9% 29.2% 28.9% 28.3%
Adjusted combined ratio(2) 92.3% 90.3% 91.0% 91.0%
(1) Current accident year
(2) See "Reconciliation of Non-GAAP Financial Measures"
(3) Defined as the combined ratio excluding cat loss and LAE(1)      
         

The loss ratios for the third quarter and first nine months of 2024 increased 2.3 points and improved 0.5 points, respectively, when compared to the same 2023 periods. The third quarter of 2024 was impacted by higher catastrophe losses, primarily from Hurricanes Helene and Beryl.

The expense ratios for the third quarter and first nine months of 2024 were comparable to the same 2023 periods.

The expense ratios for all periods presented exclude the impact of IPO related stock compensation and secondary offering expenses, which are reported in other expenses in our condensed consolidated statements of operations and comprehensive income.

Investment Results

Net Investment Income        
$ in thousands Three months ended September 30, Nine months ended September 30,
(unaudited)  2024   2023   2024  2023 
Short-term investments & cash and cash equivalents $4,537  $3,022  $13,645 $8,007 
Fixed income  15,458   9,488   41,722  24,867 
Equities  596   650   1,974  1,332 
Alternative & strategic investments  (1,070)  (71)  2,615  (7,888)
Net investment income $19,521  $13,089  $59,956 $26,318 
Net unrealized gains (losses) on securities still held $8,378  $(6,391) $15,609 $2,394 
Net realized gains  1,809   3,407 Advertisement

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