Skyward Specialty Insurance Group Reports Second Quarter 2025 Results

HOUSTON, July 30, 2025 (GLOBE NEWSWIRE) -- Skyward Specialty Insurance Group, Inc. (Nasdaq: SKWD) (“Skyward Specialty” or the “Company”) today reported second quarter 2025 net income of $38.8 million, or $0.93 per diluted share, compared to $31.0 million, or $0.75 per diluted share, for the same 2024 period. Net income for the first half of 2025 was $80.9 million, or $1.94 per diluted share, compared to $67.8 million, or $1.65 per diluted share, for the same 2024 period. Adjusted operating income(1) for the second quarter of 2025 was $37.1 million, or $0.89 per diluted share, compared to $33.0 million, or $0.80 per diluted share, for the same 2024 period. Adjusted operating income(1) for the first half of 2025 was $74.5 million, or $1.78 per diluted share, compared to $63.9 million, or $1.56 per diluted share, for the same 2024 period. Highlights for the second quarter included: Gross written premiums of $584.9 million, an increase of 17.9% compared to 2024;Combined ratio of 89.4%;Ex-Cat combined ratio of 88.0%;Annualized return on equity of 19.1% for the six months ended June 30, 2025; and,Book value per share of $22.23, an increase of 12% compared to December 31, 2024. (1) See "Reconciliation of Non-GAAP Financial Measures" Skyward Specialty Chairman and CEO Andrew Robinson commented, "Our results for the second quarter and for the first half of the year have been outstanding and reflect the strength of our specialized underwriting and claims capabilities, and our execution excellence. In an increasingly challenging market environment, our 18% growth for the second quarter and best ever 89.4% combined ratio are again a demonstration of the power of our portfolio diversity and our ability to deploy capital to attractive markets that enable us to grow underwriting profitability while managing our volatility. As market conditions continue to evolve, we are confident that the disciplined execution of our "Rule Our Niche" strategy will enable us to continue to deliver top quartile returns to our shareholders." Results of Operations Underwriting Results Premiums ($ in thousands)Three months ended June 30, Six months ended June 30,unaudited2025 2024 %Change 2025 2024 %ChangeGross written premiums$ 584,914 $496,243 17.9% $ 1,120,240 $954,863 17.3%Ceded written premiums$ (245,701) $(199,114) 23.4% $ (437,756) $(370,634) 18.1%Net retention 58.0 % 59.9% NM(1) 60.9 % 61.2% NM(1)Net written premiums$ 339,213 $297,129 14.2% $ 682,484 $584,229 16.8%Net earned premiums$ 295,542 $257,583 14.7% $ 595,908 $493,925 20.6%(1) Not meaningful The increases in gross written premiums for the second quarter and first half of 2025, when compared to the same 2024 periods, were driven by double-digit premium growth from the agriculture and credit (re)insurance, specialty programs, accident & health and captives divisions. The increases in gross written premiums were partially offset by decreases in the global property and construction & energy solutions divisions. Combined RatioThree months ended June 30, Six months ended June 30,(unaudited)2025 2024 2025 2024Non-cat loss and LAE 59.9 % 60.6% 60.1 % 60.6%Cat loss and LAE(1) 1.4 % 1.2% 1.8 % 0.8%Prior accident year development - LPT 0.0 % (0.1)% 0.0 % (0.1)%Loss Ratio 61.3 % 61.7% 61.9 % 61.3%Net policy acquisition costs 15.1 % 14.0% 15.0 % 13.7%Other operating and general expenses 13.9 % 15.8% 13.9 % 15.9%Commission and fee income (0.9 )% (0.8)% (0.8 )% (0.8)%Expense ratio 28.1 % 29.0% 28.1 % 28.8%Combined ratio 89.4 % 90.7% 90.0 % 90.1%Ex-Cat Combined Ratio(2) 88.0 % 89.5% 88.2 % 89.3% (1) Current accident year(2) Defined as the combined ratio excluding cat loss and LAE(1) The loss ratio for the second quarter improved 0.4 points and it increased 0.6 points for the first half of 2025, when compared to the same 2024 periods, respectively. Catastrophe losses in the second quarter increased marginally when compared to the same 2024 period, driven by convective storms in the South and Midwest. The first half of 2025 was also impacted by convective storms in the Midwest and the California wildfires. The non-cat loss and LAE ratios for the second quarter and first half of 2025 improved 0.7 points and 0.5 points, respectively, when compared to the same 2024 periods, primarily driven by the business mix shift. The expense ratios for the second quarter and first half of 2025 improved 0.9 points and 0.7 points, respectively, when compared to the same 2024 periods due to earnings leverage partially offset by higher acquisition costs due to the business mix shift. 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 thousandsThree months ended June 30, Six months ended June 30,(unaudited)2025 2024 2025 2024Short-term investments & cash and cash equivalents$ 4,574 $4,021 $ 8,615 $9,108 Fixed income 17,822 13,786 34,552 26,264 Equities 531 751 1,188 1,378 Alternative & strategic investments (4,338) 3,476 (6,428) 3,581 Net investment income$ 18,589 $22,034 $ 37,927 $40,331 Net unrealized (losses) gains on securities still held$ (3,181) $(1,760) $ 2,310 $7,231 Net realized gains (losses) 6,386 (39) 7,729 (649)Net investment gains (losses)$ 3,205 $(1,721) $ 10,039 $6,582 Net investment income for the second quarter and first half of 2025 decreased $3.4 million and $2.4 million, respectively when compared to the same 2024 periods. The decreases were primarily driven by losses from our alternative & strategic investments portfolio due to the decline in the fair value of limited partnership investments. Partially offsetting the decreases were increases in income from our fixed income portfolio due to a higher yield and larger asset base. Stockholders’ Equity Stockholders’ equity was $899.9 million at June 30, 2025 which represented an increase of 5.8% when compared to stockholders' equity of $850.7 million at March 31, 2025. The increase in stockholders’ equity was primarily due to an increase in the market value of our investment portfolio and net income. Conference Call At 12:00 p.m. eastern time tomorrow, July 31, 2025, Skyward Specialty management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion at investors.skywardinsurance.com under Events & Presentations. Additionally, investors can access the earnings call via conference call by registering via the conference link. Users will receive dial-in information and a unique PIN to join the call upon registering. Non-GAAP Financial Measures This release contains certain financial measures and ratios that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). We refer to these measures as “non-GAAP financial measures.” We use these non-GAAP financial measures when planning, monitoring, and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for our management and investors to facilitate operating performance comparisons from period to period. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered supplemental in nature and is not meant to be a substitute for revenue or net income, in each case as recognized in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. For more information regarding these non-GAAP financial measures and a reconciliation of such measures to comparable GAAP financial measures, see the section entitled “Reconciliation of Non-GAAP Financial Measures.” About Skyward Specialty Insurance Group, Inc. Skyward Specialty is a rapidly growing and innovative specialty insurance company, delivering commercial property and casualty products and solutions on a non-admitted and admitted basis. The Company operates through nine underwriting divisions - Accident & Health, Agriculture and Credit (Re)insurance, Captives, Construction & Energy Solutions, Global Property, Professional Lines, Specialty Programs, Surety and Transactional E&S. SKWD stock is traded on the Nasdaq Global Select Market, which represents the top fourth of all Nasdaq listed companies. Skyward Specialty's subsidiary insurance companies consist of Great Midwest Insurance Company, Houston Specialty Insurance Company, Imperium Insurance Company, and Oklahoma Specialty Insurance Company. These insurance companies are rated A (Excellent) with stable outlook by A.M. Best Company. Additional information about Skyward Specialty can be found on our website at www.skywardinsurance.com. Forward-Looking Statements Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are typically, but not always, identified through use of the words "believe," "expect," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in Skyward Specialty's Form 10-K, and include (but are not limited to) legislative changes at both the state and federal level, state and federal regulatory rule making promulgations and adjudications, class action litigation involving the insurance industry and judicial decisions affecting claims, policy coverages and the general costs of doing business, the potential loss of key members of our management team or key employees and our ability to attract and retain personnel, the impact of competition on products and pricing, inflation in the costs of the products and services insurance pays for, product development, geographic spread of risk, weather and weather-related events, other types of catastrophic events, our ability to obtain reinsurance coverage at prices and on terms that allow us to transfer risk and adequately protect our company against financial loss, and losses resulting from reinsurance counterparties failing to pay us on reinsurance claims. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise. Skyward Specialty Insurance Group, Inc. Investor contact:Natalie Schoolcraft, nschoolcraft@skywardinsurance.com614-494-4988 or Media contact:Haley Doughtyhdoughty@skywardinsurance.com713-935-4944 Consolidated Balance Sheets($ in thousands, except share and per share amounts)(unaudited)June 30, 2025 December 31, 2024Assets Investments: Fixed maturity securities, available-for-sale, at fair value (net of allowance for credit losses of $6,150 and $0, respectively) (amortized cost of $1,638,973 and $1,320,266, respectively)$ 1,629,464 $1,292,218 Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of $268 and $243, respectively) 35,253 39,153 Equity securities, at fair value 58,001 106,254 Mortgage loans, at fair value 10,168 26,490 Equity method investments 88,804 98,594 Other long-term investments 44,479 33,182 Short-term investments, at fair value 214,338 274,929 Total investments 2,080,507 1,870,820 Cash and cash equivalents 136,617 121,603 Restricted cash 36,547 35,922 Premiums receivable, net 518,441 321,641 Reinsurance recoverables, net 925,291 857,876 Ceded unearned premium 294,124 203,901 Deferred policy acquisition costs 140,903 113,183 Deferred income taxes 28,727 30,486 Goodwill and intangible assets, net 88,795 87,348 Other assets 86,440 86,698 Total assets$ 4,336,392 $3,729,478 Liabilities and stockholders’ equity Liabilities: Reserves for losses and loss adjustment expenses$ 1,918,753 $1,782,383 Unearned premiums 814,063 637,185 Deferred ceding commission 54,952 40,434 Reinsurance and premium payables 299,481 177,070 Funds held for others 127,377 102,665 Accounts payable and accrued liabilities 102,298 76,206 Notes payable 100,000 100,000 Subordinated debt, net of debt issuance costs 19,553 19,536 Total liabilities 3,436,477 2,935,479 Stockholders’ equity Common stock, $0.01 par value, 500,000,000 shares authorized, 40,486,656 and 40,127,908 shares issued and outstanding, respectively 405 401 Additional paid-in capital 724,159 718,598 Accumulated other comprehensive loss (2,666) (22,120)Retained earnings 178,017 97,120 Total stockholders’ equity 899,915 793,999 Total liabilities and stockholders’ equity$ 4,336,392 $3,729,478 Condensed Consolidated Statements of Operations and Comprehensive Income($ in thousands)Three months ended June 30, Six months ended June 30,(unaudited)2025 2024 2025 2024 Revenues: Net earned premiums$ 295,542 $257,583 $ 595,908 $493,925 Commission and fee income 2,560 2,053 4,536 4,079 Net investment income 18,589 22,034 37,927 40,331 Net investment gains (losses) 3,205 (1,721) 10,039 6,582 Other income (loss) 7 (7) 20 (7)Total revenues 319,903 279,942 648,430 544,910 Expenses: Losses and loss adjustment expenses 181,262 159,054 368,571 302,968 Underwriting, acquisition and insurance expenses 85,596 76,679 172,147 146,453 Interest expense 1,876 2,449 3,710 5,176 Amortization expense 372 360 709 748 Other expenses 1,002 1,045 2,063 2,233 Total expenses 270,108 239,587 547,200 457,578 Income before income taxes 49,795 40,355 101,230 87,332 Income tax expense 10,956 9,385 20,333 19,578 Net income$ 38,839 $30,970 $ 80,897 $67,754 Comprehensive income: Net income$ 38,839 $30,970 $ 80,897 $67,754 Other comprehensive income: Unrealized gains and losses on investments: Net change in unrealized gains (losses) on investments, net of tax 11,005 (1,451) 23,260 (6,869)Reclassification adjustment for losses on securities no longer held, net of tax (3,624) (406) (3,806) (1,314)Total other comprehensive income (loss) 7,381 (1,857) 19,454 (8,183)Comprehensive income$ 46,220 $29,113 $ 100,351 $59,571 Share and Per Share Data ($ in thousands, except share and per share amounts)Three months ended June 30, Six months ended June 30,(unaudited)2025 2024 2025 2024 Weighted average basic shares40,445,391 39,177,457 40,322,051 39,142,825 Weighted average diluted shares41,871,496 41,168,082 41,771,215 41,110,384 Basic earnings per share$ 0.96 $0.79 $ 2.01 $1.73 Diluted earnings per share$ 0.93 $0.75 $ 1.94 $1.65 Basic adjusted operating earnings per share$ 0.92 $0.84 $ 1.85 $1.64 Diluted adjusted operating earnings per share$ 0.89 $0.80 $ 1.78 $1.56 Annualized ROE (1) 17.7 % 17.5% 19.1 % 19.6%Annualized adjusted ROE (2) 17.0 % 18.7% 17.6 % 18.5%Annualized ROTE (3) 19.7 % 20.0% 21.3 % 22.4%Annualized adjusted ROTE (4) 18.9 % 21.3% 19.6 % 21.2% June 30 December 31 2025 2024 Shares outstanding 40,486,656 40,127,908 Fully diluted shares outstanding 42,339,395 42,059,182 Book value per share $ 22.23 $19.79 Fully diluted book value per share $ 21.25 $18.88 Fully diluted tangible book value per share $ 19.16 $16.80 (1) Annualized ROE is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period(2) Annualized adjusted ROE is adjusted operating income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period(3) Annualized ROTE is net income expressed on an annualized basis as a percentage of average beginning and ending tangible stockholders' equity during the period(4) Annualized adjusted ROTE is adjusted operating income expressed on an annualized basis as a percentage of average beginning and ending tangible stockholders' equity during the period Skyward Specialty Insurance Group, Inc. Reconciliation of Non-GAAP Financial Measures Adjusted operating income – We define adjusted operating income as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We use adjusted operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define adjusted operating income differently. ($ in thousands)Three months ended June 30, Six months ended June 30,(unaudited)2025 2024 2025 2024 Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Pre-tax After-taxIncome as reported$ 49,795 $ 38,839 $40,355 $30,970 $ 101,230 $ 80,897 $87,332 $67,754 Less (add): Net investment gains (losses) 3,205 2,500 (1,721) (1,360) 10,039 8,023 6,582 5,200 Net impact of loss portfolio transfer — — 241 190 — — 482 381 Other income (loss)7 5 (7) (6) 20 16 (7) (6)Other expenses (1,002) (782) (1,045) (826) (2,063) (1,649) (2,233) (1,764)Adjusted operating income$ 47,585 $ 37,116 $42,887 $32,972 $ 93,234 $ 74,507 $82,508 $63,943 Underwriting income – We define underwriting income as net income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, impairment charges, interest expense, amortization expense and other income and expenses. Underwriting income represents the pre-tax profitability of our underwriting operations and allows us to evaluate our underwriting performance without regard to investment income. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting income should not be viewed as a substitute for pre-tax income calculated in accordance with GAAP, and other companies may define underwriting income differently. ($ in thousands)Three months ended June 30, Six months ended June 30,(unaudited)2025 2024 2025 2024Income before income taxes$ 49,795 $40,355 $ 101,230 $87,332 Add: Interest expense 1,876 2,449 3,710 5,176 Amortization expense 372 360 709 748 Other expenses 1,002 1,045 2,063 2,233 Less (Add): Net investment income 18,589 22,034 37,927 40,331 Net investment gains (losses) 3,205 (1,721) 10,039 6,582 Other income (loss) 7 (7) 20 (7)Underwriting income$ 31,244 $23,903 $ 59,726 $48,583 Tangible Stockholders’ Equity – We define tangible stockholders’ equity as stockholders’ equity less goodwill and intangible assets. Our definition of tangible stockholders’ equity may not be comparable to that of other companies and should not be viewed as a substitute for stockholders’ equity calculated in accordance with GAAP. We use tangible stockholders’ equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. ($ in thousands)June 30, December 31,(unaudited)2025 2024 2024Stockholders’ equity$899,915 $723,620 $793,999 Less: Goodwill and intangible assets88,795 87,868 87,348 Tangible stockholders’ equity$811,120 $635,752 $706,651 Skyward Specialty Insurance Group, Inc. Gross Written Premiums by Underwriting Division (Unaudited) Three months ended June 30, Six months ended June 30,($ in thousands)2025 2024 %Change 2025 2024 % ChangeAccident & Health$ 60,489 $44,088 37.2% $ 123,658 $84,989 45.5%Agriculture and Credit (Re)insurance 71,573 36,592 95.6% 159,420 79,913 99.5%Captives 76,961 62,099 23.9% 145,362 130,507 11.4%Construction & Energy Solutions 73,613 78,214 (5.9)% 149,184 152,436 (2.1)%Global Property 83,992 88,231 (4.8)% 130,678 145,543 (10.2)%Professional Lines 38,147 38,106 0.1% 79,313 80,345 (1.3)%Specialty Programs 85,955 59,644 44.1% 148,630 111,822 32.9%Surety 40,737 37,642 8.2% 78,535 71,484 9.9%Transactional E&S 53,461 51,609 3.6% 105,467 97,841 7.8%Total gross written premiums(1)$ 584,928 $496,225 17.9% $ 1,120,247 $954,880 17.3%(1) Excludes exited business Twelve months ended June 30,($ in thousands)2025 % of TotalAccident & Health$211,742 11.1%Agriculture and Credit (Re)insurance197,578 10.4%Captives256,757 13.5%Construction & Energy Solutions293,329 15.4%Global Property186,930 9.8%Professional Lines158,753 8.3%Specialty Programs255,215 13.4%Surety151,016 7.9%Transactional E&S197,296 10.3%Total gross written premiums(1)$1,908,616 100.0%(1) Excludes exited business

Skyward Specialty Insurance Group Reports Second Quarter 2025 Results

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