Skyward Specialty Insurance Group Reports Fourth Quarter 2024 Results
Skyward Specialty Insurance Group (SKWD) reported strong Q4 2024 results with net income of $14.4 million ($0.35 per diluted share), though lower than Q4 2023's $29.3 million. Full-year 2024 net income reached $118.8 million ($2.87 per share), up from $86.0 million in 2023.
Q4 highlights include gross written premiums of $388.4 million, a 20.8% increase year-over-year, and an adjusted combined ratio of 91.6%. The company achieved a return on equity of 16.3% for 2024 and book value per share grew 18% to $19.79.
Throughout 2024, Skyward expanded its portfolio by launching new units in Media Liability, Life Sciences, Mortgage and Credit, and Renewable Energy. Six out of eight divisions reported double-digit growth. The results were impacted by catastrophe losses, primarily from Hurricane Milton in Q4 and Hurricanes Helene and Beryl in Q3 2024.
Skyward Specialty Insurance Group (SKWD) ha riportato risultati solidi per il quarto trimestre del 2024 con un utile netto di $14,4 milioni ($0,35 per azione diluita), sebbene inferiore ai $29,3 milioni del quarto trimestre del 2023. L'utile netto per l'intero anno 2024 ha raggiunto i $118,8 milioni ($2,87 per azione), in aumento rispetto agli $86,0 milioni del 2023.
I punti salienti del quarto trimestre includono premi lordi scritti di $388,4 milioni, un aumento del 20,8% rispetto all'anno precedente, e un rapporto combinato rettificato del 91,6%. L'azienda ha raggiunto un ritorno sul capitale proprio del 16,3% per il 2024 e il valore contabile per azione è cresciuto del 18% a $19,79.
Nel corso del 2024, Skyward ha ampliato il proprio portafoglio lanciando nuove unità in Responsabilità Media, Scienze della Vita, Mutui e Crediti, e Energie Rinnovabili. Sei delle otto divisioni hanno riportato una crescita a due cifre. I risultati sono stati influenzati da perdite catastrofiche, principalmente a causa dell'uragano Milton nel quarto trimestre e degli uragani Helene e Beryl nel terzo trimestre del 2024.
Skyward Specialty Insurance Group (SKWD) reportó resultados sólidos para el cuarto trimestre de 2024 con un ingreso neto de $14.4 millones ($0.35 por acción diluida), aunque inferior a los $29.3 millones del cuarto trimestre de 2023. El ingreso neto del año completo 2024 alcanzó los $118.8 millones ($2.87 por acción), un aumento desde los $86.0 millones en 2023.
Los aspectos destacados del cuarto trimestre incluyen primas brutas suscritas de $388.4 millones, un aumento del 20.8% interanual, y una razón combinada ajustada del 91.6%. La compañía logró un retorno sobre el capital del 16.3% para 2024 y el valor contable por acción creció un 18% a $19.79.
A lo largo de 2024, Skyward amplió su cartera lanzando nuevas unidades en Responsabilidad de Medios, Ciencias de la Vida, Hipotecas y Créditos, y Energía Renovable. Seis de las ocho divisiones reportaron un crecimiento de dos dígitos. Los resultados se vieron afectados por pérdidas catastróficas, principalmente del huracán Milton en el cuarto trimestre y de los huracanes Helene y Beryl en el tercer trimestre de 2024.
Skyward Specialty Insurance Group (SKWD)는 2024년 4분기 강력한 실적을 보고했으며, 순이익은 $14.4백만 ($0.35 희석 주당)으로, 2023년 4분기의 $29.3백만보다 낮습니다. 2024년 전체 순이익은 $118.8백만 ($2.87 주당)으로, 2023년의 $86.0백만에서 증가했습니다.
4분기 주요 내용으로는 $388.4백만의 총 서면 보험료가 있으며, 이는 전년 대비 20.8% 증가한 수치입니다. 조정된 결합 비율은 91.6%로 나타났습니다. 이 회사는 2024년 동안 자기자본 수익률 16.3%을 달성했으며, 주당 장부 가치는 18% 증가하여 $19.79에 도달했습니다.
2024년 동안 Skyward는 미디어 책임, 생명 과학, 모기지 및 신용, 재생 가능 에너지 분야에서 새로운 유닛을 출시하여 포트폴리오를 확장했습니다. 8개 부서 중 6개가 두 자릿수 성장을 기록했습니다. 결과는 4분기 허리케인 밀턴과 3분기 허리케인 헬렌 및 베릴로 인한 재해 손실의 영향을 받았습니다.
Skyward Specialty Insurance Group (SKWD) a rapporté de solides résultats pour le quatrième trimestre 2024 avec un bénéfice net de 14,4 millions de dollars (0,35 $ par action diluée), bien que cela soit inférieur aux 29,3 millions de dollars du quatrième trimestre 2023. Le bénéfice net pour l'année entière 2024 a atteint 118,8 millions de dollars (2,87 $ par action), en hausse par rapport aux 86,0 millions de dollars en 2023.
Les faits saillants du quatrième trimestre incluent des primes brutes souscrites de 388,4 millions de dollars, soit une augmentation de 20,8 % d'une année sur l'autre, et un ratio combiné ajusté de 91,6 %. L'entreprise a atteint un retour sur capitaux propres de 16,3 % pour 2024 et la valeur comptable par action a augmenté de 18 % pour atteindre 19,79 $.
Tout au long de 2024, Skyward a élargi son portefeuille en lançant de nouvelles unités dans la responsabilité médiatique, les sciences de la vie, les prêts hypothécaires et le crédit, et les énergies renouvelables. Six des huit divisions ont signalé une croissance à deux chiffres. Les résultats ont été affectés par des pertes dues à des catastrophes, principalement causées par l'ouragan Milton au quatrième trimestre et les ouragans Helene et Beryl au troisième trimestre 2024.
Skyward Specialty Insurance Group (SKWD) hat starke Ergebnisse für das vierte Quartal 2024 gemeldet, mit einem Nettogewinn von 14,4 Millionen USD (0,35 USD pro verwässerter Aktie), obwohl dies niedriger ist als die 29,3 Millionen USD im vierten Quartal 2023. Der Nettogewinn für das Gesamtjahr 2024 erreichte 118,8 Millionen USD (2,87 USD pro Aktie), ein Anstieg von 86,0 Millionen USD im Jahr 2023.
Zu den Höhepunkten des vierten Quartals gehören brutto geschriebene Prämien in Höhe von 388,4 Millionen USD, ein Anstieg von 20,8 % im Jahresvergleich, und eine angepasste kombinierte Quote von 91,6 %. Das Unternehmen erzielte eine Eigenkapitalrendite von 16,3 % für 2024, und der Buchwert pro Aktie stieg um 18 % auf 19,79 USD.
Im Jahr 2024 erweiterte Skyward sein Portfolio durch die Einführung neuer Einheiten in Medienverantwortung, Lebenswissenschaften, Hypotheken und Kredite sowie erneuerbare Energien. Sechs von acht Abteilungen berichteten von zweistelligen Wachstumsraten. Die Ergebnisse wurden durch Katastrophenschäden beeinflusst, insbesondere durch den Hurrikan Milton im vierten Quartal und die Hurrikane Helene und Beryl im dritten Quartal 2024.
- 20.8% increase in Q4 gross written premiums to $388.4 million
- Full-year net income up 38% to $118.8 million
- Strong 91.6% adjusted combined ratio
- 16.3% return on equity for 2024
- 18% increase in book value per share
- Six out of eight divisions achieved double-digit growth
- Q4 net income declined 51% to $14.4 million vs Q4 2023
- Higher catastrophe losses from multiple hurricanes
- Increased loss ratios in Q4 (up 5.8 points) and full-year (up 1.3 points)
Insights
Skyward Specialty Insurance Group (SKWD) delivered strong Q4 and full-year 2024 results that demonstrate the company's successful execution in the specialty insurance market. While Q4 net income decreased to
The divergence between net income and adjusted operating income metrics primarily stems from the Loss Portfolio Transfer (LPT) effects, which the company appropriately excludes from adjusted metrics as they relate to legacy business from 2017 and prior that isn't representative of their current strategy. Notably, the LPT was commuted effective January 31, 2025, which should simplify financial reporting going forward and potentially reduce earnings volatility.
The company's premium growth remains impressive at
The company's strategic business mix shift is yielding tangible benefits, with improved non-catastrophe loss ratios for both the quarter and full year. This improvement in underlying underwriting performance is particularly encouraging as it suggests the company's specialty focus is delivering superior risk selection. The expense ratio improvement in Q4 demonstrates the operating leverage inherent in their business model as they scale premium volume.
SKWD's return metrics are exceptional for the insurance sector, with full-year return on equity of
The company's investment portfolio realignment and performance improvement is contributing meaningfully to results, with significant increases in investment income driven by both higher yields and improved returns from alternative investments. This dual contribution from both underwriting and investments demonstrates a well-balanced approach to insurance operations.
Strategically, SKWD continues to execute its "Rule Our Niche" approach with the launch of four new specialty units: Media Liability, Life Sciences, Mortgage and Credit, and Renewable Energy. This disciplined diversification into specialized segments should support sustainable growth while potentially reducing volatility through decreased concentration risk.
For investors, these results validate SKWD's specialty insurance model and suggest continued outperformance potential. The company's ability to grow at over
Skyward Specialty Insurance Group's Q4 and full-year 2024 results showcase a company executing at a high level within the competitive specialty insurance marketplace. The divergence between reported net income and adjusted operating income highlights the importance of looking beyond headline numbers when evaluating insurance company performance.
The
The commutation of the LPT effective January 31, 2025 is particularly significant for investors. This transaction essentially brings previously ceded liabilities back onto SKWD's balance sheet, eliminating future potential volatility from LPT reserve adjustments and simplifying financial reporting. While this creates a cleaner financial structure going forward, it also means SKWD reassumes full responsibility for these legacy liabilities, though management clearly believes these reserves are now appropriately established.
SKWD's premium growth of
The adjusted combined ratio of
The expense ratio improvement in Q4 demonstrates the operating leverage inherent in their model - as premium volume grows, fixed expenses are spread across a larger revenue base. This dynamic creates a virtuous cycle where growth can drive margin expansion if underwriting discipline is maintained.
SKWD's full-year ROE of
The company's strategic expansion into new specialty niches (Media Liability, Life Sciences, Mortgage and Credit, and Renewable Energy) aligns perfectly with their "Rule Our Niche" strategy. These segments typically feature complex risks requiring specialized underwriting expertise, creating barriers to entry and reducing competition from generalist insurers. This focused approach has historically enabled specialty insurers to generate superior returns through market cycles.
The investment portfolio realignment mentioned in the report appears to be yielding benefits, with net investment income increasing significantly. The improved performance from alternative investments compared to 2023 suggests a more balanced approach to investment management that complements their underwriting operations.
For investors, these results validate SKWD's business model and suggest continued outperformance potential. Their focus on specialty lines positions them in market segments that typically experience less commoditization and price competition than standard commercial lines. The company's ability to grow at over
HOUSTON, Feb. 25, 2025 (GLOBE NEWSWIRE) -- Skyward Specialty Insurance Group, Inc. (Nasdaq: SKWD) (“Skyward Specialty” or the “Company”) today reported fourth quarter 2024 net income of
Adjusted operating income(1) for the fourth quarter of 2024 was
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; - Return on equity of
16.3% for the year ended 2024 compared to15.9% for the same 2023 period; - Adjusted return on equity(1) of
17.4% for the year ended 2024 compared to14.9% for the same 2023 period; and, - Book value per share of
$19.79 , an increase of18% compared to December 31, 2023.
| (1) See "Reconciliation of Non-GAAP Financial Measures" |
Skyward Specialty Chairman and CEO Andrew Robinson commented, "We wrapped up another remarkable year for Skyward Specialty, delivering both outstanding underwriting results while growing gross written premiums at over
Results of Operations
Underwriting Results
| Premiums | ||||||||||||||||||||||
| ($ in thousands) | Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||||||||
| unaudited | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||
| Gross written premiums | $ | 388,355 | $ | 321,605 | 20.8 | % | $ | 1,743,232 | $ | 1,459,829 | 19.4 | % | ||||||||||
| Ceded written premiums | $ | (117,328 | ) | $ | (107,488 | ) | 9.2 | % | $ | (619,654 | ) | $ | (549,138 | ) | 12.8 | % | ||||||
| Net retention | 69.8 | % | 66.6 | % | NM(1) | 64.5 | % | 62.4 | % | NM(1) | ||||||||||||
| Net written premiums | $ | 271,027 | $ | 214,117 | 26.6 | % | $ | 1,123,578 | $ | 910,691 | 23.4 | % | ||||||||||
| Net earned premiums | $ | 293,240 | $ | 224,932 | 30.4 | % | $ | 1,056,722 | $ | 829,143 | 27.4 | % | ||||||||||
| (1) Not meaningful | ||||||||||||||||||||||
The increase in gross written premiums for the fourth quarter and year ended 2024, when compared to the same 2023 periods, was driven by double-digit premium growth primarily from our surety, programs, captives, global property & agriculture and transactional E&S underwriting divisions.
| Combined Ratio | Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Non-cat loss and LAE | 60.5 | % | 60.9 | % | 60.6 | % | 60.9 | % | ||||
| Cat loss and LAE(1) | 2.2 | % | 0.4 | % | 1.7 | % | 1.4 | % | ||||
| Prior accident year development - LPT(2) | 4.2 | % | (0.2 | )% | 1.1 | % | (0.2 | )% | ||||
| Loss Ratio | 66.9 | % | 61.1 | % | 63.4 | % | 62.1 | % | ||||
| Net policy acquisition costs | 15.3 | % | 13.4 | % | 14.2 | % | 13.0 | % | ||||
| Other operating and general expenses | 13.9 | % | 16.3 | % | 15.3 | % | 16.3 | % | ||||
| Commission and fee income | (0.3 | )% | (0.1 | )% | (0.6 | )% | (0.7 | )% | ||||
| Expense ratio | 28.9 | % | 29.6 | % | 28.9 | % | 28.6 | % | ||||
| Combined ratio | 95.8 | % | 90.7 | % | 92.3 | % | 90.7 | % | ||||
| Ex-Cat Combined Ratio(3) | 93.6 | % | 90.3 | % | 90.6 | % | 89.3 | % | ||||
| Adjusted Underwriting Ratios | ||||||||||||
| Adjusted loss ratio(2) | 62.7 | % | 61.3 | % | 62.3 | % | 62.3 | % | ||||
| Expense ratio | 28.9 | % | 29.6 | % | 28.9 | % | 28.6 | % | ||||
| Adjusted combined ratio(2) | 91.6 | % | 90.9 | % | 91.2 | % | 90.9 | % | ||||
| (1) Current accident year | ||||||||||||
| (2) See "Reconciliation of Non-GAAP Financial Measures" | ||||||||||||
| (3) Defined as the combined ratio excluding cat loss and LAE(1) | ||||||||||||
The loss ratios for the fourth quarter and year ended 2024 increased 5.8 points and 1.3 points, respectively, when compared to the same 2023 periods, primarily due to the net impact of prior accident year development related to the LPT. The fourth quarter and year ended 2024 were also impacted by higher catastrophe losses, primarily from Hurricane Milton in the fourth quarter of 2024 and Hurricanes Helene and Beryl in the third quarter of 2024. The improvement in the non-cat loss and LAE ratios for the fourth quarter and year ended 2024, when compared to the same 2023 periods, was driven by the business mix shift.
The expense ratio for the fourth quarter improved when compared to the same 2023 period primarily due to earnings leverage partially offset by the business mix shift. The expense ratio for the year ended 2024 increased slightly when compared to the same 2023 period, driven by 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 thousands | Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Short-term investments & cash and cash equivalents | $ | 3,998 | $ | 3,670 | $ | 17,643 | $ | 11,677 | ||||||||
| Fixed income | 15,909 | 11,680 | 57,631 | 36,547 | ||||||||||||
| Equities | 771 | 880 | 2,745 | 2,212 | ||||||||||||
| Alternative & strategic investments | 52 | (2,226 | ) | 2,667 | (10,114 | ) | ||||||||||
| Net investment income | $ | 20,730 | $ | 14,004 | $ | 80,686 | $ | 40,322 | ||||||||
| Net unrealized (losses) gains on securities still held | $ | (7,688 | ) | $ | 8,736 | $ | 7,921 | $ | 11,130 | |||||||
| Net realized losses | (2,721 | ) | (992 | ) | (1,665 | ) | (58 | ) | ||||||||
| Net investment (losses) gains | $ | (10,409 | ) | $ | 7,744 | $ | 6,256 | $ | 11,072 | |||||||
Beginning January 1, 2024 we simplified the investment portfolio classifications to align with our strategy and the underlying risk characteristics of the portfolio. The prior period has been reclassified to conform to the current period presentation.
Net investment income for the fourth quarter and year ended 2024 increased
Stockholders’ Equity
Stockholders’ equity was
Conference Call
At 9:30 a.m. eastern time tomorrow, February 26, 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 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. The LPT was commuted effective January 31, 2025. 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
| Consolidated Balance Sheets | ||||||||
| ($ in thousands, except share and per share amounts) | ||||||||
| (unaudited) | December 31, 2024 | December 31, 2023 | ||||||
| Assets | ||||||||
| Investments: | ||||||||
| Fixed maturity securities, available-for-sale, at fair value (amortized cost of | $ | 1,292,218 | $ | 1,017,651 | ||||
| Fixed maturity securities, held-to-maturity, at amortized cost (net of allowance for credit losses of | 39,153 | 42,986 | ||||||
| Equity securities, at fair value | 106,254 | 118,249 | ||||||
| Mortgage loans, at fair value | 26,490 | 50,070 | ||||||
| Equity method investments | 98,594 | 110,653 | ||||||
| Other long-term investments | 33,182 | 3,852 | ||||||
| Short-term investments, at fair value | 274,929 | 270,226 | ||||||
| Total investments | 1,870,820 | 1,613,687 | ||||||
| Cash and cash equivalents | 121,603 | 65,891 | ||||||
| Restricted cash | 35,922 | 34,445 | ||||||
| Premiums receivable, net | 321,641 | 179,235 | ||||||
| Reinsurance recoverables, net | 857,876 | 596,334 | ||||||
| Ceded unearned premium | 203,901 | 186,121 | ||||||
| Deferred policy acquisition costs | 113,183 | 91,955 | ||||||
| Deferred income taxes | 30,486 | 21,991 | ||||||
| Goodwill and intangible assets, net | 87,348 | 88,435 | ||||||
| Other assets | 86,698 | 75,341 | ||||||
| Total assets | $ | 3,729,478 | $ | 2,953,435 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Liabilities: | ||||||||
| Reserves for losses and loss adjustment expenses | $ | 1,782,383 | $ | 1,314,501 | ||||
| Unearned premiums | 637,185 | 552,532 | ||||||
| Deferred ceding commission | 40,434 | 37,057 | ||||||
| Reinsurance and premium payables | 177,070 | 150,156 | ||||||
| Funds held for others | 102,665 | 58,588 | ||||||
| Accounts payable and accrued liabilities | 76,206 | 50,880 | ||||||
| Notes payable | 100,000 | 50,000 | ||||||
| Subordinated debt, net of debt issuance costs | 19,536 | 78,690 | ||||||
| Total liabilities | 2,935,479 | 2,292,404 | ||||||
| Stockholders’ equity | ||||||||
| Common stock, | 401 | 399 | ||||||
| Additional paid-in capital | 718,598 | 710,855 | ||||||
| Stock notes receivable | — | (5,562 | ) | |||||
| Accumulated other comprehensive loss | (22,120 | ) | (22,953 | ) | ||||
| Retained earnings (accumulated deficit) | 97,120 | (21,708 | ) | |||||
| Total stockholders’ equity | 793,999 | 661,031 | ||||||
| Total liabilities and stockholders’ equity | $ | 3,729,478 | $ | 2,953,435 | ||||
| Condensed Consolidated Statements of Operations and Comprehensive Income | ||||||||||||||||
| ($ in thousands) | Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues: | ||||||||||||||||
| Net earned premiums | $ | 293,240 | $ | 224,932 | $ | 1,056,722 | $ | 829,143 | ||||||||
| Commission and fee income | 806 | 247 | 6,703 | 6,064 | ||||||||||||
| Net investment income | 20,730 | 14,004 | 80,686 | 40,322 | ||||||||||||
| Net investment (losses) gains | (10,409 | ) | 7,744 | 6,256 | 11,072 | |||||||||||
| Other income (loss) | 35 | (632 | ) | (167 | ) | (632 | ) | |||||||||
| Total revenues | 304,402 | 246,295 | 1,150,200 | 885,969 | ||||||||||||
| Expenses: | ||||||||||||||||
| Losses and loss adjustment expenses | 196,320 | 137,396 | 669,809 | 515,237 | ||||||||||||
| Underwriting, acquisition and insurance expenses | 85,487 | 66,791 | 311,757 | 243,444 | ||||||||||||
| Interest expense | 2,091 | 2,774 | 9,496 | 10,024 | ||||||||||||
| Amortization expense | 908 | 462 | 2,007 | 1,798 | ||||||||||||
| Other expenses | 1,042 | 1,303 | 4,392 | 5,364 | ||||||||||||
| Total expenses | 285,848 | 208,726 | 997,461 | 775,867 | ||||||||||||
| Income before income taxes | 18,554 | 37,569 | 152,739 | 110,102 | ||||||||||||
| Income tax expense | 4,148 | 8,304 | 33,911 | 24,118 | ||||||||||||
| Net income | 14,406 | 29,265 | 118,828 | 85,984 | ||||||||||||
| Net income attributable to participating securities | — | — | — | 1,677 | ||||||||||||
| Net income attributable to common stockholders | $ | 14,406 | $ | 29,265 | $ | 118,828 | $ | 84,307 | ||||||||
| Comprehensive income: | ||||||||||||||||
| Net income | $ | 14,406 | $ | 29,265 | $ | 118,828 | $ | 85,984 | ||||||||
| Other comprehensive income: | ||||||||||||||||
| Unrealized gains and losses on investments: | ||||||||||||||||
| Net change in unrealized (losses) gains on investments, net of tax | (14,735 | ) | 30,825 | 9,792 | 25,516 | |||||||||||
| Reclassification adjustment for losses on securities no longer held, net of tax | (5,682 | ) | (105 | ) | (8,959 | ) | (4,984 | ) | ||||||||
| Total other comprehensive (loss) income | (20,417 | ) | 30,720 | 833 | 20,532 | |||||||||||
| Comprehensive (loss) income | $ | (6,011 | ) | $ | 59,985 | $ | 119,661 | $ | 106,516 | |||||||
| Share and Per Share Data | ||||||||||||||||
| ($ in thousands, except share and per share amounts) | Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Weighted average basic shares | 40,107,617 | 37,570,274 | 40,056,475 | 36,031,907 | ||||||||||||
| Weighted average diluted shares | 41,622,397 | 39,582,352 | 41,377,460 | 38,317,534 | ||||||||||||
| Basic earnings per share | $ | 0.36 | $ | 0.78 | $ | 2.97 | $ | 2.34 | ||||||||
| Diluted earnings per share | $ | 0.35 | $ | 0.74 | $ | 2.87 | $ | 2.24 | ||||||||
| Basic adjusted operating earnings per share | $ | 0.83 | $ | 0.65 | $ | 3.16 | $ | 2.20 | ||||||||
| Diluted adjusted operating earnings per share | $ | 0.80 | $ | 0.61 | $ | 3.06 | $ | 2.11 | ||||||||
| Annualized ROE (1) | 7.2 | % | 19.6 | % | 16.3 | % | 15.9 | % | ||||||||
| Annualized adjusted ROE (2) | 16.7 | % | 16.3 | % | 17.4 | % | 14.9 | % | ||||||||
| Annualized ROTE (3) | 8.1 | % | 23.0 | % | 18.6 | % | 19.0 | % | ||||||||
| Annualized adjusted ROTE (4) | 18.8 | % | 19.1 | % | 19.8 | % | 17.9 | % | ||||||||
| December 31 | December 31 | |||||||||||||||
| 2024 | 2023 | |||||||||||||||
| Shares outstanding | 40,127,908 | 39,863,756 | ||||||||||||||
| Fully diluted shares outstanding | 42,059,182 | 41,771,854 | ||||||||||||||
| Book value per share | $ | 19.79 | $ | 16.72 | ||||||||||||
| Fully diluted book value per share | $ | 18.88 | $ | 15.96 | ||||||||||||
| Fully diluted tangible book value per share | $ | 16.80 | $ | 13.84 | ||||||||||||
| (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 | ||||||||||||||||
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, | Twelve months ended December 31, | |||||||||||||||||||||||||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||
| Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||||||||||||||
| Income as reported | $ | 18,554 | $ | 14,406 | $ | 37,569 | $ | 29,265 | $ | 152,739 | $ | 118,828 | $ | 110,102 | $ | 85,984 | |||||||||||||||
| Less (add): | |||||||||||||||||||||||||||||||
| Net investment (losses) gains | (10,409 | ) | (8,223 | ) | 7,744 | 6,118 | 6,256 | 4,942 | 11,072 | 8,747 | |||||||||||||||||||||
| Net impact of loss portfolio transfer | (12,398 | ) | (9,794 | ) | 457 | 361 | (11,598 | ) | (9,162 | ) | 1,427 | 1,127 | |||||||||||||||||||
| Other loss | 35 | 28 | (632 | ) | (499 | ) | (167 | ) | (132 | ) | (632 | ) | (499 | ) | |||||||||||||||||
| Other expenses | (1,042 | ) | (823 | ) | (1,303 | ) | (1,029 | ) | (4,392 | ) | (3,470 | ) | (5,364 | ) | (4,238 | ) | |||||||||||||||
| Adjusted operating income | $ | 42,368 | $ | 33,218 | $ | 31,303 | $ | 24,314 | $ | 162,640 | $ | 126,650 | $ | 103,599 | $ | 80,847 | |||||||||||||||
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 December 31, | Twelve months ended December 31, | ||||||||||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Income before income taxes | $ | 18,554 | $ | 37,569 | $ | 152,739 | $ | 110,102 | ||||||||
| Add: | ||||||||||||||||
| Interest expense | 2,091 | 2,774 | 9,496 | 10,024 | ||||||||||||
| Amortization expense | 908 | 462 | 2,007 | 1,798 | ||||||||||||
| Other expenses | 1,042 | 1,303 | 4,392 | 5,364 | ||||||||||||
| Less (add): | ||||||||||||||||
| Net investment income | 20,730 | 14,004 | 80,686 | 40,322 | ||||||||||||
| Net investment (losses) gains | (10,409 | ) | 7,744 | 6,256 | 11,072 | |||||||||||
| Other income (loss) | 35 | (632 | ) | (167 | ) | (632 | ) | |||||||||
| Underwriting income | $ | 12,239 | $ | 20,992 | $ | 81,859 | $ | 76,526 | ||||||||
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, | Twelve months ended December 31, | ||||||||||||||
| (unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net earned premiums | $ | 293,240 | $ | 224,932 | $ | 1,056,722 | $ | 829,143 | ||||||||
| Losses and LAE | 196,320 | 137,396 | 669,809 | 515,237 | ||||||||||||
| Less: Pre-tax net impact of LPT | 12,398 | (457 | ) | 11,598 | (1,427 | ) | ||||||||||
| Adjusted losses and LAE | $ | 183,922 | $ | 137,853 | $ | 658,211 | $ | 516,664 | ||||||||
| Loss ratio | 66.9 | % | 61.1 | % | 63.4 | % | 62.1 | % | ||||||||
| Less: net impact of LPT | 4.2 | % | (0.2 | )% | 1.1 | % | (0.2 | )% | ||||||||
| Adjusted loss ratio | 62.7 | % | 61.3 | % | 62.3 | % | 62.3 | % | ||||||||
| Combined ratio | 95.8 | % | 90.7 | % | 92.3 | % | 90.7 | % | ||||||||
| Less: net impact of LPT | 4.2 | % | (0.2 | )% | 1.1 | % | (0.2 | )% | ||||||||
| Adjusted combined ratio | 91.6 | % | 90.9 | % | 91.2 | % | 90.9 | % | ||||||||
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) | December 31, | |||||
| (unaudited) | 2024 | 2023 | ||||
| Stockholders' equity | $ | 793,999 | $ | 661,031 | ||
| Less: Goodwill and intangible assets | 87,348 | 88,435 | ||||
| Tangible stockholders' equity | $ | 706,651 | $ | 572,596 | ||
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||
| ($ in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||
| Industry Solutions | 80,738 | 78,796 | 2.5 | % | 317,198 | 305,476 | 3.8 | % | ||||||||||
| Global Property & Agriculture | $ | 31,681 | $ | 25,996 | 21.9 | % | $ | 311,402 | $ | 273,191 | 14.0 | % | ||||||
| Captives | 57,765 | 40,375 | 43.1 | % | 241,902 | 167,624 | 44.3 | % | ||||||||||
| Programs | 52,151 | 35,694 | 46.1 | % | 218,407 | 178,726 | 22.2 | % | ||||||||||
| Accident & Health | 44,594 | 38,882 | 14.7 | % | 173,073 | 151,701 | 14.1 | % | ||||||||||
| Transactional E&S | 36,262 | 31,560 | 14.9 | % | 169,053 | 122,508 | 38.0 | % | ||||||||||
| Professional Lines | 39,130 | 40,145 | (2.5 | )% | 159,785 | 154,565 | 3.4 | % | ||||||||||
| Surety | 46,034 | 30,157 | 52.6 | % | 152,429 | 106,056 | 43.7 | % | ||||||||||
| Total gross written premiums(1) | $ | 388,355 | $ | 321,605 | 20.8 | % | $ | 1,743,249 | $ | 1,459,847 | 19.4 | % | ||||||
| (1) Excludes exited business | ||||||||||||||||||
FAQ
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