Bowhead Specialty (NYSE:BOW) Q4 2025 Earnings call February 24, 2026 08:30 AM ET Company ParticipantsBob Huang - Executive DirectorBrad Mulcahey - CFODerek Broaddus - Head of CasualtyPablo Singzon - Executive DirectorShirley Yap - Chief Accounting Officer and Head of Investor RelationsStephen Sills - CEOConference Call ParticipantsCameron Bianchi - Equity Research AnalystCave Montazeri - Research AnalystMeyer Shields - Managing Director and Equity Research AnalystRoland Mayer - Research AnalystOperatorHello ...

Bowhead Specialty (NYSE:BOW) Q4 2025 Earnings call February 24, 2026 08:30 AM ET Company ParticipantsBradley Mulcahy - CFOCameron Bianchi - Equity Research AssociateDerek Broaddus - Head of CasualtyMeyer Shields - Md and equity research analystPablo Singzon - Executive DirectorRoland Meier - Director of Equity ResearchShirley Yap - Chief Accounting Officer and Head of Investor RelationsStephen Sills - CEOConference Call ParticipantsBob Huang - Executive Director and Insurance Lead AnalystCave Montazeri - Re ...

Core Insights - Kinsale Capital Group reported a strong financial performance with net income and net operating earnings increasing by 27% and 25% year-over-year, respectively [1] - The company emphasized underwriting discipline and expense efficiency while navigating a competitive excess and surplus market [3] - The combined ratio for the quarter was reported at 71.7%, with a full-year operating return on equity (ROE) of 26% [2][6] Financial Performance - Diluted operating earnings per share rose by 26% year-over-year, while gross and net written premiums increased by 1.8% and 7.1%, respectively [2][6] - Book value per share increased by 33% since year-end 2024, and float grew by 23% [2][4] - The company reported a 20.8% expense ratio for the full year, slightly up from 20.6% in 2024 [12] Growth Areas and Challenges - The commercial property division was identified as a primary growth drag due to increased competition, particularly from new entrants in the market [5][6] - Excluding the commercial property division, Kinsale achieved gross written premium growth of 10.2% for the quarter [7] - The company anticipates stabilization in the commercial property segment over the next few quarters despite current competitive pressures [7] Market Conditions - Competitive intensity varies across underwriting groups, with soft pricing observed in Directors and Officers (D&O) insurance and heightened competition in large shared and layered commercial property [8][11] - Kinsale experienced growth in other property lines, including small business property and agribusiness property [8][9] Investment and Capital Management - Kinsale announced a $250 million share repurchase authorization and increased its quarterly dividend to $0.25 from $0.17 [4][14] - Net investment income increased by 24.9% in the fourth quarter, driven by strong operating cash flows [13] Technology and Innovation - The company is focusing on technology as a core competency, with a push for AI adoption across the organization [15][16] - Kinsale is methodically rolling out new products, with a notable example being the small business property division, which has grown significantly over the past five years [17][18]

Core Viewpoint - Central Bancompany, Inc. has established a new position with significant investment from Central Trust Co, indicating confidence in the company's long-term growth and stability in the regional banking sector [2][10]. Company Overview - Central Bancompany operates as a leading regional financial institution, providing a diversified portfolio of banking and financial services across nine states [6][8]. - The company reported a revenue of $897.71 million and a market capitalization of $5.50 billion as of February 3 [4]. Recent Developments - Central Trust Co acquired 7,338,237 shares of Central Bancompany during the fourth quarter, valued at approximately $177.00 million, which represents 3.47% of Central Trust Co's reportable U.S. equity assets under management as of December 31 [2][3]. - The stock price of Central Bancompany was $24.90 as of February 3, having started trading at $21 per share in November [3][4]. Financial Performance - In its latest quarterly release, Central Bancompany reported a net income of $107.6 million, leading to full-year earnings of $390.9 million, with a return on assets of 2.17%, an increase from 2.02% in the previous quarter [9]. Strategic Focus - The CEO emphasized record profitability and a strategy focused on prudent business growth, technology enhancement, and thoughtful capital deployment, indicating a long-term vision for stability and growth [11].

Core Viewpoint - SPDR S&P Insurance ETF (KIE) aims to provide diversified exposure to U.S. insurance companies, focusing on various sectors such as property-and-casualty, life, reinsurance, and brokers, while capturing unique dynamics in underwriting discipline and investment income [1] Group 1: Investment Proposition - KIE employs an equal-weighting strategy to mitigate single-issuer dominance and enhance exposure to different underwriting cycles [1] - Key return drivers for KIE include pricing power, catastrophe activity, reserve adequacy, capital strength, and reinvestment yields on insurer portfolios, creating a multi-factor blend that may favor value and quality with sensitivity to interest rates [1] - KIE can serve as a financials sub-sector tilt, a factor completion tool for defensive balance within cyclicals, or a diversifier compared to banks due to its distinct liability structures [1] Group 2: Market Conditions - The ETF may be particularly timely when underwriting conditions are improving and fixed-income reinvestment yields support margin resilience [1] - Severe catastrophe seasons or reserve adjustments pose challenges to the results of the ETF [1] Group 3: Risks - A specific risk to monitor is event concentration, where large losses from natural catastrophes or significant claims can impact capital and earnings across holdings, with equal-weighting potentially amplifying shocks beyond the largest carriers [1]

Core Thesis - W. R. Berkley Corporation (WRB) is recognized for its disciplined underwriting and decentralized structure, which allows it to operate effectively in niche markets and maintain profitability [2][3]. Company Overview - WRB operates through 58 distinct businesses both in the U.S. and internationally, focusing on commercial lines, excess and surplus (E&S) markets, admitted lines, specialty personal insurance, and reinsurance [2]. - The company's decentralized model grants subsidiaries the autonomy to underwrite risks that competitors may avoid, contributing to a stable combined ratio of 89–90% since 2022, indicating consistent underwriting profitability [3]. Financial Performance - WRB's E&S lines, which cover high-risk exposures, significantly enhance profit margins, while reinsurance and monoline excess operations account for approximately 12% of total revenue [4]. - The company's underwriting subsidiaries hold strong A+ ratings from A.M. Best, reflecting its financial strength and rigorous risk management [4]. - Despite a reasonable bond portfolio yield of 5%, there are concerns regarding the transparency of its investment portfolio, which has substantial exposure to SPACs and overvalued tech stocks [4][5]. Investment Outlook - WRB has outperformed the S&P 500 over the past decade, showcasing its underwriting expertise and leadership in specialty insurance markets [5]. - The company offers modest shareholder returns through buybacks and dividends, making it an attractive option for investors with expertise in specialty insurance, although understanding its complex underwriting edge is crucial before investing [5].

Financial Data and Key Metrics Changes - The company reported a net income of $50.4 million, significantly up from $8.2 million in the same quarter last year, reflecting a strong earnings trajectory [4][13] - For the nine months ended September 30, net income was $129 million, compared to $41 million for the same period in 2024, indicating substantial growth [13] - Gross premiums earned increased to $362 million, up 2.2% from $354.2 million in the prior year quarter, driven by rate actions and organic growth [14] - The net loss ratio improved by 27.1 percentage points to 38.3% compared to 65.4% in the same quarter last year, reflecting lower net losses [16][17] - The net combined ratio for the quarter was 72.9%, an improvement of 19.6 points from 100.6% in the prior year quarter [18] Business Line Data and Key Metrics Changes - The company re-underwrote its personal lines book, leading to an increase in in-force premium from approximately $1.1 billion to a record $1.44 billion [5] - New business premium written for the third quarter was $36 million, a 166% increase from $13.7 million in the same quarter last year [5] - The decline in policy count moderated, with a decrease of 6,800 policies in the third quarter compared to over 19,000 in the same quarter of 2024 [6] Market Data and Key Metrics Changes - The company has opened nearly all geographies to new business, increasing from only 30% a year ago, which is expected to drive policy growth [5] - The Northeast and Mid-Atlantic regions continue to be strong markets, with Narragansett Bay Insurance Company producing significant homeowners insurance business [7] Company Strategy and Development Direction - The company aims to achieve long-term shareholder value through strategic initiatives focused on rate adequacy, exposure management, and enhanced underwriting discipline [4][12] - There is a focus on expanding into new regions and delivering new products to existing markets, with a disciplined approach to underwriting [10][11] - The company restarted its share repurchase program, indicating confidence in its capital position and stock valuation [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the reinsurance pricing environment improving in 2026 due to favorable litigation conditions and increased capacity in the reinsurance market [12] - The company anticipates policy count growth in 2026, supported by strong agency relationships and improved new business momentum [6][20] Other Important Information - The company ended the quarter with total assets of $2.4 billion and shareholders' equity of $437.3 million, with a book value per share of $14.15 [18][19] - The increase in statutory surplus to $352.2 million provides additional growth capacity as new territories are opened [19] Q&A Session Summary Question: Growth prospects in Florida versus outside Florida - Management indicated that there is still significant opportunity in Florida, with strong agency relationships and new business momentum [25][30] Question: Pricing or competitive environment in Florida - Management confirmed that they are filing for low to mid-single-digit rate decreases in 2026, while commercial property remains under pressure [28][29] Question: Growth supported by surplus - Management stated that the increase in statutory surplus allows for over $225-$250 million of premium to be written based on the current surplus [39] Question: Capital priorities and buybacks - Management outlined capital priorities as growth, stock buybacks, and dividends, emphasizing that the stock is currently undervalued [40][41]

Financial Data and Key Metrics Changes - Bowhead reported a 17.5% year-over-year increase in gross written premiums (GWP), totaling approximately $232 million for Q3 2025 [5][17] - Adjusted net income rose by 25.5%, with diluted adjusted earnings per share increasing 23.7% to $0.47 [5][17] - The expense ratio improved to 29.5%, a decrease of 40 basis points year-over-year [19][13] - Net investment income increased by 31% year-over-year to $15 million, driven by a higher balance of investments and yields [20] Business Line Data and Key Metrics Changes - The casualty division grew by 20% to $145 million, primarily driven by the excess casualty business [5][9] - Healthcare liability premiums increased by 11% to $35 million, while professional liability premiums rose by 2% to $46 million [9][17] - Baleen generated $6.2 million in premiums during the quarter, marking an 83% growth from Q2 2025 [10] Market Data and Key Metrics Changes - The overall E&S market reported a 1% decline in premiums, primarily due to a decrease in property premiums, a segment Bowhead does not participate in [11] - E&S casualty premiums continued to grow, with expectations for this trend to persist as complex risks move into the E&S market [11] Company Strategy and Development Direction - Bowhead aims to leverage technology to enhance underwriting capabilities and improve operational efficiencies, focusing on sustainable profitability [16][19] - The company is exploring new opportunities in the casualty space and considering expanding its product offerings through Baleen [42][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the casualty market despite current challenges in the construction sector [30][12] - The company anticipates continued discipline in pricing and limit deployment within the casualty market, with no expectation of a price drop [11][12] Other Important Information - Bowhead plans to access capital through non-equity markets by the end of the year due to faster-than-anticipated growth [21] - The average credit quality of Bowhead's investment portfolio remained at AA, with an average duration of 2.9 years [21] Q&A Session Summary Question: Insights on D&O and cyber markets pricing evolution - Management indicated that pricing is flat to slightly up, but the market remains highly competitive, particularly in the financial institution space [25] Question: Opportunities in the construction market - Management acknowledged a softer construction market but noted potential growth in data centers and other projects once government funding resumes [30] Question: Future growth of Baleen and distribution partnerships - Management confirmed plans to add more wholesalers and expand into small casualty business leveraging technology [31][32] Question: Operating expense ratio improvements - Management stated that efficiency gains are driving the expense ratio down, with expectations for continued improvements as processes are optimized [36] Question: Capital needs and potential sources - Management clarified that they are not looking to raise equity and are exploring debt options instead [38] Question: Medium-term gross premium growth outlook - Management expressed confidence in continued growth in the casualty space without significant increases in headcount or expenses [42]

Core Insights - James River Group Holdings reported a net loss from continuing operations of $0.4 million, significantly improved from a loss of $40.7 million in the same quarter of 2024, indicating a recovery in financial performance [1][2] - Adjusted net operating income for Q3 2025 was $17.4 million, a notable turnaround from a loss of $28.2 million in Q3 2024, reflecting effective underwriting and operational strategies [1][2] Financial Performance - The combined ratio improved to 94.0% from 135.5% in the prior year quarter, demonstrating enhanced underwriting performance [4] - Underwriting income was reported at $8.9 million, compared to a loss of $56.8 million in the prior year quarter, indicating a strong recovery in underwriting results [4] - The expense ratio decreased to 28.3% from 31.4% in the prior year quarter, showcasing effective cost management [4] Segment Performance - The Excess and Surplus (E&S) segment reported a combined ratio of 88.3%, down from 136.1% in the prior year quarter, highlighting improved profitability in this segment [4][5] - Net earned premium for the E&S segment was $140.2 million, a slight increase of approximately 1% compared to the prior year quarter, while gross written premium declined by 8.9% [5][7] - The Specialty Admitted Insurance segment experienced a significant decline, with gross written premium down 72.6% year-over-year, reflecting the company's strategy to minimize risk exposure [6][32] Investment Results - Net investment income for Q3 2025 was $21.9 million, a 7% increase from the previous quarter, although it was down 7% compared to the same quarter last year [9][10] - The annualized gross investment yield remained stable at 4.6%, consistent with the previous quarter [10] Capital Management - The Board of Directors declared a cash dividend of $0.01 per common share, payable on December 31, 2025, indicating a commitment to returning value to shareholders [12] - Tangible common equity increased by 24.2% to $378.4 million compared to December 31, 2024, driven by net income and unrealized gains [13] Operational Efficiency - The company has achieved lasting expense reductions and is positioned to capitalize on market opportunities, as stated by the CEO [3] - The total full-time employee count decreased from 640 at the end of 2024 to 590, contributing to overall cost savings [8]

Financial Data and Key Metrics Changes - The company reported a record after-tax operating income of over $1 billion and net income exceeding $1.3 billion, both up 37% year over year [4] - After-tax operating earnings per share reached $2.77, representing an 18.5% annualized operating return on average common equity [4] - Year-to-date book value per share growth was 17.3%, with a quarterly consolidated combined ratio of 79.8% reflecting excellent underwriting performance [4][5] - The nine-month combined ratio stood at 83.6%, indicating strong underwriting performance despite the impact of California wildfires and severe convective storms [4] Business Line Data and Key Metrics Changes - Property and casualty insurance group reported underwriting income of $129 million, up 8% year over year, with a combined ratio of 93.4% [6] - Reinsurance segment achieved a record underwriting income of $482 million, with a combined ratio of 76.1%, showing significant improvement over the previous year [8] - Mortgage segment generated $260 million of underwriting income, remaining on track to deliver approximately $1 billion for the year [10] Market Data and Key Metrics Changes - Net return premium in North America for liability occurrence grew by 17%, while property and short-tail book increased by 15% [7] - International premium volume remained essentially flat, with the middle market business in North America significantly enhanced through recent acquisitions [7][8] - The reinsurance segment's net premium returns were $1.7 billion, down roughly 11% year over year, reflecting current pricing conditions [9] Company Strategy and Development Direction - The company aims to maximize returns for shareholders over the long term, focusing on deploying capital into attractive underwriting opportunities [5][11] - The strategy includes allocating capital to profitable growth while prioritizing renewals that meet return thresholds [6] - The company is actively looking to leverage its strong capital position to invest in the most attractive risk-adjusted opportunities [11] Management's Comments on Operating Environment and Future Outlook - Management noted increasing competition in the market but emphasized the strength of their brand and underwriting discipline [5] - The company remains bullish about the insurance business, particularly in casualty lines, and expects to grow better than the overall market [26] - Management expressed confidence in the mortgage segment's performance, citing strong home prices as a key driver [65] Other Important Information - The company repurchased $732 million of shares in the quarter, with plans for continued buybacks in the near term [19] - The delinquency rate of the U.S. mortgage insurance business increased to 2.04%, in line with seasonal expectations [17] - The company maintains a strong capital position, with a peak zone natural catastrophe probable maximum loss of $1.9 billion, well below internal limits [19] Q&A Session Summary Question: Future Buyback Levels - Management indicated that share buybacks will likely be the preferred method of capital return in the short term, given strong earnings and limited growth opportunities [22][24] Question: Insurance Premium Growth Outlook - Management remains optimistic about premium growth, particularly in casualty and middle market segments, despite some non-renewals [25][26] Question: Reinsurance Growth Normalization - The normalized growth in reinsurance, absent one-off items, might have been around a decrease of 3% to 4% instead of the reported 10% [32][33] Question: Impact of Hurricane Season on Buybacks - Management expressed confidence in continuing buybacks during hurricane season due to the company's diversified and strong capital position [40][41] Question: Importance of AA- Rating - While not critical, maintaining the AA- rating is seen as advantageous, particularly in Europe, and the company is focused on optimizing capital within rating agency constraints [45][46] Question: Casualty Rate Increases - Management noted that casualty lines are seeing rate increases that exceed loss costs, providing opportunities for growth [51][87]