Skyward Specialty Commutes the LPT, Announces Preliminary Fourth Quarter 2024 Results and Provides Guidance for 2025
Skyward Specialty Insurance Group (SKWD) has announced several significant developments in its Q4 2024 operations and 2025 outlook. The company has commuted its Loss Portfolio Transfer agreement with R&Q Re, receiving $11.7 million in cash while strengthening LPT loss reserves by $25.3 million.
Q4 2024 preliminary results show strong performance with gross written premiums of $388.4 million, representing a 20.8% increase year-over-year. The company achieved an adjusted combined ratio of 91.6%, net investment income of $20.7 million, net income of $14.4 million, and adjusted operating income of $33.2 million.
For 2025, Skyward projects net income between $138.0-150.0 million and a combined ratio between 91.0-92.0%. The company expects its exposure to January California wildfires to result in losses less than $10.0 million, net of reinsurance. Growth in gross written premiums is anticipated in the low to mid-teens for 2025.
Skyward Specialty Insurance Group (SKWD) ha annunciato diversi sviluppi significativi nelle sue operazioni del Q4 2024 e nelle prospettive per il 2025. L'azienda ha chiuso il suo accordo di trasferimento del portafoglio perdite con R&Q Re, ricevendo $11,7 milioni in contanti e rafforzando le riserve per le perdite LPT di $25,3 milioni.
I risultati preliminari del Q4 2024 mostrano una forte performance con premi lordi scritti di $388,4 milioni, che rappresenta un aumento del 20,8% rispetto all'anno precedente. L'azienda ha raggiunto un rapporto combinato rettificato del 91,6%, un reddito da investimenti netto di $20,7 milioni, un utile netto di $14,4 milioni e un reddito operativo rettificato di $33,2 milioni.
Per il 2025, Skyward prevede un utile netto compreso tra $138,0-150,0 milioni e un rapporto combinato compreso tra 91,0-92,0%. L'azienda si aspetta che l'esposizione agli incendi in California di gennaio comporterà perdite inferiori a $10,0 milioni, al netto della riassicurazione. Si prevede una crescita dei premi lordi scritti nel intervallo basso e medio dei due cifre per il 2025.
Skyward Specialty Insurance Group (SKWD) ha anunciado varios desarrollos significativos en sus operaciones del Q4 2024 y en las perspectivas para 2025. La empresa ha conmutado su contrato de Transferencia de Cartera de Pérdidas con R&Q Re, recibiendo $11,7 millones en efectivo mientras refuerza las reservas de pérdidas de LPT en $25,3 millones.
Los resultados preliminares del Q4 2024 muestran un sólido desempeño con primas brutas escritas de $388,4 millones, lo que representa un aumento del 20,8% en comparación con el año anterior. La empresa logró un ratio combinado ajustado del 91,6%, ingresos por inversiones netos de $20,7 millones, ingresos netos de $14,4 millones y un ingreso operativo ajustado de $33,2 millones.
Para 2025, Skyward proyecta ingresos netos entre $138,0-150,0 millones y un ratio combinado entre 91,0-92,0%. La empresa espera que su exposición a los incendios en California de enero resulte en pérdidas inferiores a $10,0 millones, netas de reaseguro. Se anticipa un crecimiento en las primas brutas escritas en el rango de cifras bajas a medias para 2025.
스카이워드 전문 보험 그룹 (SKWD)는 2024년 4분기 운영 및 2025년 전망에 대한 여러 중요한 발전 사항을 발표했습니다. 회사는 R&Q Re와의 손실 포트폴리오 전송 계약을 종료하고 1,170만 달러의 현금을 받고 LPT 손실 준비금을 2,530만 달러 강화했습니다.
2024년 4분기 preliminary results는 3억 8,840만 달러의 원보험료로 연간 20.8% 증가한 강력한 실적을 보여줍니다. 이 회사는 91.6%의 조정된 결합 비율, 순 투자 수익 2,070만 달러, 순이익 1,440만 달러, 조정된 운영 수익 3,320만 달러를 달성했습니다.
2025년에 대해 스카이워드는 순이익이 1억 3,800만 달러에서 1억 5,000만 달러 사이이고 결합 비율은 91.0%에서 92.0% 사이일 것으로 예상하고 있습니다. 회사는 1월 캘리포니아 산불에 대한 노출이 재보험을 감안할 때 1,000만 달러 미만의 손실로 이어질 것이라고 예상하고 있습니다. 2025년에는 원보험료의 성장이 10%대 초중반으로 예상됩니다.
Skyward Specialty Insurance Group (SKWD) a annoncé plusieurs développements significatifs dans ses opérations du Q4 2024 et ses perspectives pour 2025. La société a compté son accord de transfert de portefeuille de pertes avec R&Q Re, recevant 11,7 millions de dollars en espèces tout en renforçant les réserves de pertes LPT de 25,3 millions de dollars.
Les résultats préliminaires du Q4 2024 montrent de solides performances avec des primes brutes souscrites de 388,4 millions de dollars, représentant une augmentation de 20,8 % par rapport à l'année précédente. L'entreprise a atteint un ratio combiné ajusté de 91,6 %, un revenu d'investissement net de 20,7 millions de dollars, un revenu net de 14,4 millions de dollars et un revenu opérationnel ajusté de 33,2 millions de dollars.
Pour 2025, Skyward prévoit un revenu net compris entre 138,0 et 150,0 millions de dollars et un ratio combiné compris entre 91,0 et 92,0 %. La société s'attend à ce que son exposition aux incendies de forêt en Californie en janvier entraîne des pertes inférieures à 10,0 millions de dollars, net de réassurance. Une croissance des primes brutes souscrites est anticipée dans les faibles à moyens niveaux de croissance pour 2025.
Skyward Specialty Insurance Group (SKWD) hat mehrere wesentliche Entwicklungen in seinen Q4 2024-Operationen und dem Ausblick für 2025 bekannt gegeben. Das Unternehmen hat seine Verlustportfoliotransfer-Vereinbarung mit R&Q Re wieder aufgeführt und 11,7 Millionen US-Dollar in bar erhalten, während es die LPT-Verlustreserven um 25,3 Millionen US-Dollar stärkt.
Die vorläufigen Ergebnisse für Q4 2024 zeigen eine starke Leistung mit bruttoeingenommenen Prämien von 388,4 Millionen US-Dollar, was einem Anstieg von 20,8 % im Jahresvergleich entspricht. Das Unternehmen erreichte einen angepassten kombinierten Quotienten von 91,6 %, einen Nettoanlageertrag von 20,7 Millionen US-Dollar, einen Nettogewinn von 14,4 Millionen US-Dollar und einen angepassten operativen Gewinn von 33,2 Millionen US-Dollar.
Für 2025 prognostiziert Skyward einen Nettogewinn zwischen 138,0 und 150,0 Millionen US-Dollar und einen kombinierten Quotienten zwischen 91,0 und 92,0 %. Das Unternehmen erwartet, dass die Auswirkungen der Waldbrände in Kalifornien im Januar zu Verlusten von weniger als 10,0 Millionen US-Dollar führen werden, netto der Rückversicherung. Für 2025 wird ein Wachstum der bruttoeingenommenen Prämien im niedrigen bis mittleren zweistelligen Bereich erwartet.
- 20.8% increase in gross written premiums to $388.4 million in Q4 2024
- Strong adjusted combined ratio of 91.6%
- Net investment income of $20.7 million
- Positive 2025 guidance with projected net income of $138-150 million
- exposure to California wildfires (less than $10 million net losses)
- $25.3 million strengthening of LPT loss reserves required
- $9.8 million net of tax uncollectible reinsurance recoverable from R&Q
Insights
The Q4 2024 results and 2025 guidance from Skyward Specialty reveal a company executing at an elite level in the specialty insurance market. The 20.8% premium growth to $388.4M stands out particularly in targeted high-margin segments like surety, global agriculture and transactional E&S, demonstrating successful strategic positioning in specialty niches.
The commutation of the Loss Portfolio Transfer agreement with R&Q represents a strategic cleanup of legacy exposures. While resulting in a net negative impact (combining the
The 91.6% adjusted combined ratio in Q4, including 2.2 points of catastrophe losses, demonstrates superior underwriting discipline. For context, top-quartile specialty insurers typically target combined ratios below 95%, making Skyward's performance exceptional. The 2025 guidance of 91-92% combined ratio suggests sustainable underwriting excellence.
The exposure (
HOUSTON, Feb. 05, 2025 (GLOBE NEWSWIRE) -- Skyward Specialty Insurance Group, Inc. (Nasdaq: SKWD) (“Skyward Specialty” or the “Company”) today announced that it commuted the Loss Portfolio Transfer and Adverse Development and Retrocession Agreement (“LPT”) with R&Q Re (Bermuda) Ltd. ("R&Q") related to accident years 2018 and prior. The Company received
Skyward Specialty also announced the following fourth quarter 2024 preliminary results and provided 2025 guidance:
Highlights for the fourth quarter included:
- Gross written premiums of
$388.4 million , an increase of$66.8 million , or20.8% , when compared to 2023; - Adjusted combined ratio(1) of
91.6% , including catastrophe losses of 2.2 points; - Net investment income of
$20.7 million ; - Net income of
$14.4 million ; and, - Adjusted operating income(1) of
$33.2 million .
Guidance for the year ending 2025:
- Net income between
$138.0 million and$150.0 million ; and, - Combined ratio between
91.0% and92.0% , inclusive of 2.0 to 2.5 points of catastrophe losses.
(1) See "Reconciliation of Non-GAAP Financial Measures"
Lastly, the Company has reviewed its exposure to the January California wildfires and expects total losses and loss adjustment expenses to be less than
Skyward Specialty Chairman and CEO Andrew Robinson commented, "We are pleased to have completed the commutation of the LPT and remove future reinsurance recoverable credit risk related to this portfolio. We believe our reserve charge represents a conservative view of the ultimate losses at December 31, 2024."
"With respect to our fourth quarter, our preliminary results are simply outstanding with growth over
Fourth Quarter Earnings Release and Conference Call
Skyward Specialty expects to issue its fourth quarter 2024 earnings results after the market closes on Tuesday, February 25, 2025. At 9:30 a.m. eastern time on February 26, 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 have chosen to exclude the net impact of the Loss Portfolio Transfer (“LPT”), all development on reserves fully or partially covered by the LPT and amortization of deferred gains associated with recoveries of prior LPT reserve strengthening in certain non-GAAP metrics, where noted, as the business subject to the LPT is not representative of our continuing business strategy. The business subject to the LPT is primarily related to policy years 2017 and prior, was generated and managed under prior leadership, and has either been exited or substantially repositioned during the reevaluation of our portfolio. 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 eight underwriting divisions - Accident & Health, Captives, Global Property & Agriculture, Industry Solutions, Professional Lines, 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 Houston Specialty Insurance Company, Imperium Insurance Company, Great Midwest 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.com
614-494-4988
or
Media contact:
Haley Doughty
hdoughty@skywardinsurance.com
713-935-4944
| 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 December 31, | ||||||
| (unaudited) | 2024 | ||||||
| Pre-tax | After-tax | ||||||
| Income | $ | 18,554 | $ | 14,406 | |||
| Less (add): | |||||||
| Net investment losses | (10,409 | ) | (8,223 | ) | |||
| Net impact of loss portfolio transfer | (12,398 | ) | (9,794 | ) | |||
| Other income | 35 | 28 | |||||
| Other expenses | (1,042 | ) | (823 | ) | |||
| Adjusted operating income | $ | 42,368 | $ | 33,218 | |||
Adjusted Loss Ratio / Adjusted Combined Ratio – We define adjusted loss ratio and adjusted combined ratio as the corresponding ratio (calculated in accordance with GAAP), excluding losses and LAE related to the LPT and all development on reserves fully or partially covered by the LPT and amortization of deferred gains associated with recoveries of prior LPT reserve strengthening. We use these adjusted ratios as internal performance measures in the management of our operations because we believe they give our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Our adjusted loss ratio and adjusted combined ratio should not be viewed as substitutes for our loss ratio and combined ratio, respectively.
| ($ in thousands) | Three months ended December 31, | ||||||
| (unaudited) | 2024 | ||||||
| $ | % of Net Earned Premiums | ||||||
| Net earned premiums | 293,240 | ||||||
| Losses and LAE | 196,320 | 66.9 | % | ||||
| Less: Pre-tax net impact of LPT | 12,398 | 4.2 | % | ||||
| Adjusted losses and LAE | 183,922 | 62.7 | % | ||||
| Net policy acquisition costs | 44,702 | 15.3 | % | ||||
| Other operating and general expenses | 40,785 | 13.9 | % | ||||
| Less: commission and fee income | (806 | ) | (0.3 | )% | |||
| Total net expenses | 84,681 | 28.9 | % | ||||
| Combined ratio | 95.8 | % | |||||
| Less: net impact of LPT | 4.2 | % | |||||
| Adjusted combined ratio | 91.6 | % | |||||
FAQ
What was SKWD's Q4 2024 premium growth rate?
What is Skyward Specialty's (SKWD) projected net income for 2025?
How much did SKWD strengthen its LPT loss reserves in Q4 2024?
What is SKWD's expected exposure to the January 2025 California wildfires?
What combined ratio is SKWD guiding for 2025?
