Skyward Specialty reports rise in underwriting profit as CoR strengthens

Skyward Specialty Insurance Group, Inc. has reported a rise of 17.6% in gross written premiums (GWP) and an improved underwriting result of $23.9 million for Q2 2024, compared to last year’s $15.5 million.

The reported GWP is $496 million for Q2 2024, compared to $422 million for Q2 2023, and hit $955 million for H1 2024, representing a 22% increase compared to the $783 million reported for the first six months of 2023.

Skyward Specialty attributes the increase in GWP to double-digit premium growth, primarily from the firm’s captives, transactional E&S, and surety underwriting divisions.

Net written premiums (NWP) reported an increase of 39% to $297 million in Q2 2024 compared to $214 million for Q2 2023, and for H1 2024 rose 40.5% to $584 million from H1 2023’s $416 million.

At the same time, net premiums earned increased 33% for the quarter to $258 million from $194 million, and increased by 31% for H1 2024 to $494 million from last year’s $377 million.

During the second quarter, the carrier’s cat loss and loss adjustment expense (LAE) ratio came down from 3.5% to 1.2%, and for the half-year period decreased from 2.7% to 0.8%. In total, the loss ratios for the second quarter and first half of 2024 improved by 2.3 percentage points and 2.1 points, respectively, as a result of less severity of convective storms.

Somewhat offsetting the improved loss ratio, Skyward Specialty’s expense ratio increased by 1 point in the quarter and by 1.1 point in the half year period, leading to a combined ratio of 90.7% for Q2 2024, compared with 92% a year earlier, and a H1 2024 combined ratio of 90.1%, so down on last year’s 91.1%.

On the asset side of the balance sheet, Skyward has reported net investment income of $22 million for Q2 2024 and $40 million for H1 2024, up from $8.6 million and $13.2 million, respectively, in 2023.

The insurer’s Q2 2024 net income has risen to $31 million compared to $19.5 million in Q2 2023, while net income for H1 2024 rose to $67.8 million, compared with $35 million in H1 2023.

Andrew Robinson, Chairman and Chief Executive Officer of Skyward Specialty, commented: “Our second quarter results continue the consistently excellent performance we have produced in each of the seven quarters reporting as a public company and our adjusted operating income of $33.1 million was the best in Company history. Our 90.7% combined ratio, inclusive of 1.2% of catastrophe losses, was again excellent.”

He continued: “Our 18% gross written premiums growth reflects the power and sustainability of our “Rule our Niche” strategy. We are pleased with the sources of our growth which are increasingly coming from parts of our business that are less exposed to the P&C cycles, including our surety, accident & health and captives divisions and our agriculture business unit within our global property & agriculture division.”

“We continue to be confident that we are well positioned to deliver attractive returns for our shareholders and to profitably grow our Company.”

“Last week’s AM Best upgrade to A (Excellent) with stable outlook is a testament to the strength of our business model and the dedication of our team. This upgrade reflects our ongoing commitment to delivering exceptional value to our policyholders and shareholders,” Robinson concluded.

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