Core Insights - Skyward Specialty Insurance Group, Inc. announced the appointment of Christopher Peirce to its Board of Directors effective February 1, 2026, as part of its strategic growth initiatives [1][3] Company Overview - Skyward Specialty is a rapidly growing specialty insurance company that provides commercial property and casualty products and solutions on both non-admitted and admitted bases [4] - The company operates through nine underwriting divisions, including Accident & Health, Agriculture and Credit (Re)insurance, Captives, Construction & Energy Solutions, Global Property, Professional Lines, Specialty Programs, Surety, and Transactional E&S [4] Leadership Changes - Christopher Peirce brings 30 years of experience from Liberty Mutual Insurance, where he held various leadership roles, including Chief Financial Officer and President of the Global Specialty and Commercial Markets division [2] - Peirce is expected to be appointed Chair of the Audit Committee after the close of the 2025 financial year, succeeding Robert Creager, who will not seek re-election [3] Company Ratings - Skyward Specialty's subsidiary insurance companies are rated A (Excellent) with a stable outlook by A.M. Best Company [5]

Financial Performance - Gross written premiums for Q3 2025 reached $606.5 million, a 51.6% increase from $400.0 million in Q3 2024[112] - Net written premiums for the nine months ended September 30, 2025, were $1.12 billion, up 32% from $852.6 million in the same period of 2024[112] - The company reported a net income of $45.9 million for Q3 2025, compared to $36.7 million in Q3 2024, reflecting a 25.5% year-over-year growth[112] - Adjusted operating income for Q3 2025 was $44.0 million, up from $29.4 million in Q3 2024, representing a 49.5% increase[113] - Net written premiums for Q3 2025 were $441.2 million, up 64.4% from $268.3 million in Q3 2024, with a year-to-date increase of 31.8% to $1,123.7 million compared to $852.6 million in the same period of 2024[120] - Net earned premiums for Q3 2025 increased by 30.5% to $351.8 million from $269.6 million in Q3 2024, with a year-to-date increase of 24.1% to $947.7 million compared to $763.5 million in the same period of 2024[121] Underwriting Performance - The loss and LAE ratio improved to 60.8% in Q3 2025 from 63.3% in Q3 2024, indicating better underwriting performance[112] - The combined ratio for the nine months ended September 30, 2025, was 89.6%, an improvement from 90.9% in the same period of 2024[112] - Total losses and LAE for Q3 2025 were $213.8 million, representing 60.8% of net earned premiums, an improvement from 63.3% in Q3 2024[123] - The expense ratio for Q3 2025 improved to 28.4% from 28.9% in Q3 2024, driven by earnings leverage despite higher acquisition costs[125] - Non-cat loss and LAE ratios improved by 0.4 points in Q3 2025 compared to Q3 2024, reflecting a favorable business mix shift[124] Investment Performance - Net investment income for Q3 2025 was $22.2 million, an increase of $2.6 million compared to $19.5 million in Q3 2024, attributed to higher income from the fixed income portfolio[127] - The investment portfolio's carrying value as of September 30, 2025, was $2.39 billion, up from $1.99 billion at the end of 2024, with fixed income representing 75.8% of the total portfolio[130] - As of September 30, 2025, the total fixed income portfolio was $1,815,216 thousand, an increase of 37.7% from $1,318,708 thousand at December 31, 2024[131] - The weighted average credit rating of the available-for-sale fixed income portfolio decreased from "AA-" in 2024 to "A+" in 2025[132] - The fair value of AAA-rated securities decreased from $483,099 thousand (37.3%) in 2024 to $311,740 thousand (17.3%) in 2025[132] Acquisition and Corporate Actions - The company announced an acquisition of Apollo Group Holdings Limited for $555.0 million, expected to close in Q1 2026[109] - The company recognized $3.1 million in acquisition-related expenses associated with the pending acquisition of Apollo[109] - The company approved a share repurchase program of up to $50.0 million in October 2024, with no shares repurchased as of September 30, 2025[150] Financial Strength and Ratings - The company has a financial strength rating of "A" (Excellent) with a stable outlook from A.M. Best Company[111] - A.M. Best affirmed the company's financial strength rating of A (Excellent) with a stable outlook on August 14, 2025[155] Cash Flow and Debt Management - Cash provided by operating activities increased to $356,308 thousand in the nine months ended September 30, 2025, compared to $283,216 thousand in the same period of 2024[139] - The ratio of total debt to total capitalization decreased from 13.1% at December 31, 2024, to 11.1% at September 30, 2025[149] - The company had $43.0 million outstanding under the Revolving Credit Facility as of September 30, 2025, with $107.0 million of undrawn capacity[144] Tax and Retention Metrics - The effective tax rate for the three months ended September 30, 2025, was 24.2%, up from 21.7% in the same period of 2024, primarily due to non-deductible acquisition expenses[136] - The net retention on a written basis for the three months ended September 30, 2025, was 72.7%, compared to 67.1% for the same period in 2024[153] Specialty Programs - Specialty programs saw a significant increase in gross written premiums, rising by 52.1% to $82.8 million in Q3 2025 compared to $54.4 million in Q3 2024[119] - Agriculture and credit (re)insurance gross written premiums surged by 886.3% to $168.1 million in Q3 2025 from $17.0 million in Q3 2024[119]

Financial Data and Key Metrics Changes - The company reported an operating income of $44 million and a net income of $45.9 million, translating to $1.05 and $1.10 per diluted share respectively [7][12] - Gross written premiums increased by 52% year-over-year, with net written premiums growing by 64% [7][9] - The combined ratio improved to 89.2%, with a non-catastrophe loss ratio of 60.2% [9][10] - The annualized return on equity reached 19.7%, and earnings grew by over 40% [4][12] Business Line Data and Key Metrics Changes - Five out of nine divisions experienced growth exceeding 25%, with the agriculture unit being the largest contributor [5][16] - The agriculture unit saw significant growth due to demand for reinsurance capacity in dairy and livestock revenue protection [16] - Accident & Health (A&H) grew by 45% year-to-date, focusing on the small employer market and medical cost management [16] - Surety resumed a stronger growth trajectory, increasing by 26% in the last quarter [21][17] Market Data and Key Metrics Changes - The P&C market is showing signs of increased competition, prompting the company to be selective in its underwriting [5][14] - Renewal pricing increased to mid-single digits, with submission growth in the mid-teens [19][65] - The company noted specific pockets of increased auto liability severity inflation, particularly in the construction unit [9][63] Company Strategy and Development Direction - The company continues to execute its Rule Earnings Strategy, focusing on a diversified portfolio that is less exposed to P&C cycles [4][12] - The upcoming Apollo acquisition is expected to close in early 2026, which will enhance specialty capabilities and underwriting talent [12][19] - The company is leveraging technology, including AI-driven analytics, to improve underwriting processes and efficiency [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the competitive P&C market, highlighting the importance of disciplined underwriting [5][14] - The company anticipates uneven quarterly growth due to concentrated renewal cycles in certain divisions [7][9] - Management remains optimistic about the growth outlook, emphasizing the capital-efficient nature of the organization [33][34] Other Important Information - The company completed the monetization of its equity portfolio, realizing gains of $16.3 million, and reinvested proceeds into fixed income securities [11][12] - The debt-to-capital ratio was reported at under 11%, with expectations to remain modest post-acquisition [11][68] Q&A Session Summary Question: Insights on top-line results excluding agriculture - Management noted strong growth in surety and A&H, emphasizing smart terms and conditions in traditional P&C markets [21][23] Question: 2026 guidance on Apollo - Management refrained from providing specifics due to regulatory approval pending but expressed confidence in Apollo's specialty focus [26][27] Question: Capital sources for continued growth - Management indicated that organic capital growth would support growth ambitions, with no immediate capital constraints [32][34] Question: Growth in specialty programs - Management highlighted growth in warranty indemnity and marine programs, with expectations for continued growth in the coming quarters [35][36] Question: Volatility in growth rates - Management explained that certain lines have specific renewal periods, leading to variability in quarterly growth [40][41] Question: Earnings patterns in AG premium - Management confirmed that AG premiums would be earned evenly over the next 12 months [45][46] Question: Retention levels in E&S business - Management clarified that retention levels are influenced by the mix of business, with specific drivers affecting gross to net ratios [53][55] Question: Loss inflation in construction - Management discussed the emergence of severity inflation in construction, paralleling trends seen in auto liability [61][63] Question: Reinsurance market competitiveness - Management acknowledged the favorable reinsurance market for cedents but did not expect significant year-over-year improvements [69][70] Question: Correlation between P&C pricing cycle and captive formation - Management noted that captive growth remains robust even in soft market conditions, providing stability [72][73]

Group 1 - Skyward Specialty Insurance Group Inc. (NASDAQ:SKWD) is considered one of the most undervalued small-cap stocks currently available for investment, with a Buy rating maintained by Citizens JMP analyst Matthew Carletti and a price target set at $70 [1] - Keefe Bruyette analyst Meyer Shields updated the price target for Skyward Specialty Insurance Group to $64 from $63 while maintaining an Outperform rating on October 6 [2] - Janney Montgomery Scott initiated coverage on Skyward Specialty Insurance Group with a Buy rating and a fair value estimate of $60, highlighting the company's pending acquisition of Apollo Group and its "Rule Our Niche" strategy as key factors for enhancing competitive position [3] Group 2 - Skyward Specialty Insurance Group Inc. operates as a specialty insurance company providing commercial property and casualty solutions predominantly in the US, with a focus on various industry solutions including healthcare professional liability and specialty property and liability [4]

Core Insights - Skyward Specialty Insurance (SKWD) reported a revenue of $382.53 million for the quarter ended September 2025, marking a year-over-year increase of 27.1% and exceeding the Zacks Consensus Estimate by 14.45% [1] - The earnings per share (EPS) for the same period was $1.05, compared to $0.71 a year ago, resulting in an EPS surprise of 23.53% over the consensus estimate of $0.85 [1] Financial Metrics - Loss ratio stood at 60.8%, better than the six-analyst average estimate of 63% [4] - Combined ratio was reported at 89.2%, compared to the estimated 91.6% by six analysts [4] - Expense ratio was 28.4%, slightly better than the average estimate of 28.6% [4] - Net earned premiums reached $351.8 million, surpassing the average estimate of $309.99 million, reflecting a year-over-year change of 30.5% [4] - Net investment income was $22.18 million, in line with the average estimate of $22.2 million, showing a year-over-year increase of 13.6% [4] - Commission and fee income was reported at $1.9 million, slightly below the estimated $2.04 million, but still representing a 4.7% increase compared to the year-ago quarter [4] Stock Performance - Skyward's shares have returned -5.1% over the past month, contrasting with the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Skyward Specialty Insurance (SKWD) reported quarterly earnings of $1.05 per share, exceeding the Zacks Consensus Estimate of $0.85 per share, and up from $0.71 per share a year ago [1] - The earnings surprise for the quarter was +23.53%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - The company generated revenues of $382.53 million for the quarter ended September 2025, which is 14.45% above the Zacks Consensus Estimate and an increase from $300.89 million year-over-year [3] Financial Performance - Skyward's earnings surprise of +23.53% indicates strong performance relative to expectations [2] - The company has consistently outperformed revenue estimates, achieving this in three of the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $0.89, with projected revenues of $343.57 million, and for the current fiscal year, the EPS estimate is $3.53 on revenues of $1.33 billion [8] Market Position - Skyward shares have underperformed the market, losing about 10.7% since the beginning of the year, while the S&P 500 has gained 17.2% [4] - The Zacks Industry Rank for Insurance - Property and Casualty is in the top 14% of over 250 Zacks industries, indicating a favorable industry outlook [9] - The company's current Zacks Rank is 3 (Hold), suggesting it is expected to perform in line with the market in the near future [7]

Financial Performance - Net income for Q3 2025 was $45.9 million, or $1.10 per diluted share, up from $36.7 million, or $0.89 per diluted share in Q3 2024, representing a 25.5% increase[1] - Adjusted operating income for Q3 2025 was $44.0 million, or $1.05 per diluted share, compared to $29.4 million, or $0.71 per diluted share in Q3 2024, a 49.5% increase[2] - Net income for the three months ended September 30, 2025, was $45,901 thousand, up 25.2% from $36,668 thousand in the prior year[21] - Basic earnings per share for the three months ended September 30, 2025, were $1.13, compared to $0.91 for the same period in 2024, reflecting a 24.2% increase[22] - Income before income taxes for Q3 2025 was $60,547,000, up 29.1% from $46,853,000 in Q3 2024[26] Premiums and Underwriting - Gross written premiums reached $606.5 million, a 51.6% increase compared to Q3 2024, with net written premiums increasing by 64.4% to $441.2 million[3] - Net earned premiums for the three months ended September 30, 2025, were $351,797 thousand, a 30.5% increase from $269,557 thousand in the same period of 2024[21] - Underwriting income for the nine months ended September 30, 2025, reached $97,971,000, a 40.8% increase compared to $69,620,000 for the same period in 2024[26] - The (Re)insurance division saw a dramatic increase in gross written premiums, rising 886.3% to $168,105,000 in Q3 2025 from $17,044,000 in Q3 2024[30] - The Agriculture and Credit (Re)insurance segment's gross written premiums increased by 237.8% to $327,525,000 for the nine months ended September 30, 2025, compared to $96,957,000 in 2024[30] - Specialty Programs gross written premiums grew by 39.2% to $231,401,000 for the nine months ended September 30, 2025, compared to $166,256,000 in 2024[30] - The Surety division reported a 15.3% increase in gross written premiums for the nine months ended September 30, 2025, totaling $122,272,000 compared to $106,076,000 in 2024[30] Investment and Equity - Net investment income for Q3 2025 was $22.2 million, an increase of $2.6 million compared to Q3 2024, driven by higher yields from fixed income investments[8] - Net investment income for the nine months ended September 30, 2025, was $60,107,000, slightly up from $59,866,000 in 2024[26] - Stockholders' equity rose to $961.4 million at September 30, 2025, a 6.8% increase from $899.9 million at June 30, 2025[10] - The company reported a total stockholders' equity of $961,423,000 as of September 30, 2025, compared to $797,507,000 a year earlier[29] - Tangible stockholders' equity increased to $873,006,000 as of September 30, 2025, up from $709,900,000 a year earlier[29] Growth and Strategic Initiatives - Five of the nine divisions experienced growth of over 25% in Q3 2025, led by the agriculture and credit (re)insurance division[2] - The company is preparing for the expected close of the Apollo acquisition early in the new year, indicating ongoing strategic expansion[2] - Total assets increased to $4,594,046 thousand as of September 30, 2025, up from $3,729,478 thousand on December 31, 2024, representing a growth of 23.2%[20] - Total liabilities increased to $3,632,623 thousand as of September 30, 2025, from $2,935,479 thousand on December 31, 2024, representing a growth of 23.7%[20] Performance Ratios - The combined ratio improved to 89.2% in Q3 2025 from 92.2% in Q3 2024, indicating enhanced underwriting performance[5] - Annualized return on equity for the nine months ended September 30, 2025, was 19.3%, reflecting strong profitability[3] - The company reported an annualized return on equity (ROE) of 19.7% for the three months ended September 30, 2025, compared to 19.3% in the same period of 2024[22] - Book value per share increased by 20% to $23.75 compared to December 31, 2024[3] - Book value per share increased to $23.75 as of September 30, 2025, up from $19.79 on December 31, 2024[22]

Core Insights - Skyward Specialty Insurance Group reported strong financial results for Q3 2025, with net income of $45.9 million, up from $36.7 million in Q3 2024, reflecting a growth of 25.5% [1][20] - The company achieved a gross written premium of $606.5 million, representing a 51.6% increase compared to the same period in 2024 [3][29] - The combined ratio improved to 89.2%, indicating enhanced underwriting performance [5][6] Financial Performance - Adjusted operating income for Q3 2025 was $44.0 million, or $1.05 per diluted share, compared to $29.4 million, or $0.71 per diluted share in Q3 2024, marking a 49.5% increase [2][20] - For the first nine months of 2025, net income reached $126.8 million, up from $104.4 million in the same period of 2024 [1][20] - The annualized return on equity for the nine months ended September 30, 2025, was 19.3% [5][22] Underwriting Results - The net written premiums for Q3 2025 were $441.2 million, a 64.4% increase from $268.3 million in Q3 2024 [3][29] - The net earned premiums for the first nine months of 2025 were $947.7 million, up 24.1% from $763.5 million in the same period of 2024 [20][29] - The loss ratio improved to 60.8% in Q3 2025 from 63.3% in Q3 2024, indicating better loss management [6][7] Investment Results - Net investment income for Q3 2025 was $22.2 million, an increase from $19.5 million in Q3 2024, driven by higher yields from the fixed income portfolio [8][9] - The company reported net realized gains of $15.9 million in Q3 2025, compared to $1.8 million in Q3 2024 [8][20] Equity and Assets - Stockholders' equity increased to $961.4 million as of September 30, 2025, up 6.8% from $899.9 million at June 30, 2025 [10][19] - Total assets reached $4.6 billion, reflecting growth from the previous year [18][19] Strategic Outlook - The company continues to execute its "Rule Our Niche" strategy, focusing on profitable growth and maintaining a diversified portfolio [2][5] - Skyward Specialty is preparing for the expected close of the Apollo acquisition early in the new year, which is anticipated to enhance its market position [2][5]

Core Viewpoint - Skyward Specialty Insurance Group, Inc. is set to release its third quarter 2025 earnings results on October 29, 2025, and will host an earnings call on October 30, 2025, to discuss the financial results [1][2]. Company Overview - Skyward Specialty is a rapidly growing specialty insurance company that provides commercial property and casualty products and solutions on both non-admitted and admitted bases [3]. - The company operates through nine underwriting divisions, which include Accident & Health, Agriculture and Credit (Re)insurance, Captives, Construction & Energy Solutions, Global Property, Professional Lines, Specialty Programs, Surety, and Transactional E&S [3]. - Skyward Specialty's subsidiary insurance companies include Great Midwest Insurance Company, Houston Specialty Insurance Company, Imperium Insurance Company, and Oklahoma Specialty Insurance Company, all rated A (Excellent) with a stable outlook by A.M. Best Company [4].

Core Insights - Skyward Specialty Insurance Group has launched an innovative well decommissioning solution called Skyward Specialty EndWell Protection, which is the first of its kind in the industry, utilizing an escrow-secured bond model [1][3] Industry Context - Recent disruptions in the energy sector have exposed weaknesses in traditional surety solutions, resulting in stricter collateral requirements and diminished market capacity [2] - Many surety providers are now focusing their support exclusively on investment-grade accounts, indicating a critical need for more transparent and reliable decommissioning bond solutions [2] Product Details - The EndWell Protection solution employs an innovative collateral strategy that simplifies the qualification process for surety credit, providing oil and gas companies with a quick and efficient method to secure their bonds [3] - The product is designed to address market demands for increased capacity while ensuring peace of mind for regulators and reinsurers [3] Company Strategy - Skyward Specialty's approach aligns with its "Rule Our Niche" strategy, which focuses on identifying underserved market segments and developing specialized solutions to meet customer needs [3] Company Overview - Skyward Specialty is a rapidly growing specialty insurance company that offers commercial property and casualty products through nine underwriting divisions, including Surety and Transactional E&S [4] - The company's subsidiary insurance companies are rated A (Excellent) with a stable outlook by A.M. Best Company [5]