Skyward Specialty Insurance Group Reports Second Quarter 2025 Results

Core Insights - Skyward Specialty Insurance Group reported a strong financial performance for Q2 2025, with net income of $38.8 million, up from $31.0 million in Q2 2024, reflecting a 25.8% increase in earnings per diluted share from $0.75 to $0.93 [1][2] - The company achieved an 18% growth in gross written premiums for Q2 2025, totaling $584.9 million, compared to $496.2 million in Q2 2024, driven by strong performance in agriculture, credit (re)insurance, and specialty programs [3][5] - The combined ratio improved to 89.4% in Q2 2025 from 90.7% in Q2 2024, indicating enhanced underwriting profitability [4][5] Financial Performance - Net income for the first half of 2025 reached $80.9 million, compared to $67.8 million in the same period of 2024, marking a 19.5% increase [1][2] - Adjusted operating income for Q2 2025 was $37.1 million, up from $33.0 million in Q2 2024, representing a 12.4% increase [2] - The annualized return on equity for the first half of 2025 was 19.1%, slightly down from 19.6% in the same period of 2024 [5][21] Underwriting Results - Gross written premiums for the first half of 2025 totaled $1.12 billion, a 17.3% increase from $954.9 million in the first half of 2024 [3][5] - The net retention rate decreased slightly to 58.0% in Q2 2025 from 59.9% in Q2 2024 [3] - The loss ratio for Q2 2025 improved to 61.3% from 61.7% in Q2 2024, while the non-catastrophe loss and loss adjustment expense (LAE) ratio improved to 59.9% from 60.6% [4][6][7] Investment Results - Net investment income for Q2 2025 was $18.6 million, down from $22.0 million in Q2 2024, primarily due to losses in the alternative and strategic investments portfolio [8] - The company reported net unrealized losses on securities still held of $3.2 million for Q2 2025, compared to losses of $1.8 million in Q2 2024 [8] Stockholders' Equity - Stockholders' equity increased to $899.9 million as of June 30, 2025, up 5.8% from $850.7 million at March 31, 2025 [9] - Book value per share rose to $22.23, a 12% increase compared to $19.79 at the end of 2024 [5][21] Premiums by Division - The agriculture and credit (re)insurance division saw a significant increase in gross written premiums, with a 95.6% growth in Q2 2025 compared to Q2 2024 [27] - The accident and health division also performed well, with a 37.2% increase in gross written premiums for Q2 2025 [27] - Conversely, the global property and construction & energy solutions divisions experienced declines in gross written premiums [3][27]