Skyward Specialty Insurance Group Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mark Hughes - Truist Securities - Analyst : Yeah, thank you. Just looking at some of this early company data, it seems like there's still a lot of inflation in casualty, particularly in access. How do you see the adequacy of the pricing in that market? Do you think that's going to be a grower for you this year?

Question: Mark Hughes - Truist Securities - Analyst : Yeah, I appreciate that. How about your pace of hiring? You've done well, growing the top line by adding new teams, new capabilities. How do you see 2025 shaping up?

Question: Mark Hughes - Truist Securities - Analyst : Thank you appreciate it.

Question: Matthew Carletti - Citizens JMP - Analyst : Hey, thanks. Good morning.

Question: Matthew Carletti - Citizens JMP - Analyst : Andrew, maybe following on Mark's question there. I mean you guys have obviously done a really good job, adding teams and growing organically. Can you talk a little bit about how you view M&A? Just if it is part of the discussion, if it is off the table if it's just something you look at. Just want to get inside your head and think a little bit about how you if there's a time and place for that? Or if that's just not for Skyward. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:30PM, SKWD.OQ - Q4 2024 Skyward Specialty Insurance Group Inc Earnings Call

Question: Matthew Carletti - Citizens JMP - Analyst : Yeah, that makes perfect sense. And I just follow up question, on capital, just, how should we think about, do you feel you're sort of excess capital currently? Do you feel your kind of about right given the growth and just maybe stepping back? is there a, I look at like premiums to equity. I know it's a very blunt instrument, is there a certain level that on the outside we kind of look at to help gauge that as time goes on that that feels like a right leverage ratio.

Question: Matthew Carletti - Citizens JMP - Analyst : Alright, thank you very much for the color. Very much appreciate it. Thanks.

Question: Andrew Andersen - Jefferies - Analyst : Hi guys, good morning, this is [Charlie] on for Andrew. I was wondering if you could provide some color in terms of what you're seeing on submission flows and what might be driving the slow down, to the mid 10s and maybe if that's, coming from mix or if there are other drivers and then to that end, have there been any changes in the quote to submission ratio or the binding to quote?

Question: Andrew Andersen - Jefferies - Analyst : Okay great, and then sorry, I just want to follow up on that the quote to submission ratio or the bind to quote any major changes there.?

Question: Andrew Andersen - Jefferies - Analyst : Okay. Understood and then last one if I could sneak one in, could you just provide an update on how much work is left to be done on the commercial auto portfolio?

Question: Andrew Andersen - Jefferies - Analyst : Okay, and just to confirm that was end of 1Q '25.

Question: Andrew Andersen - Jefferies - Analyst : Yes, cool. Well, thank you guys for the questions.

Question: Meyer Shields - KBW - Analyst : Hi, this is Dean for Meyer. I was curious, as your business makeshifts toward those lines of business that aren't, as correlated with the PNC market cycle, I was wondering what implications that has on the expense ratio? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:30PM, SKWD.OQ - Q4 2024 Skyward Specialty Insurance Group Inc Earnings Call

Question: Meyer Shields - KBW - Analyst : Got it. That makes sense. And then just, last one, are there any new units' you guys expect to launch in like '25 or 2026? I know there was a few years rolled out this year, so I was just curious about that.

Question: Meyer Shields - KBW - Analyst : Got it. Thank you, Andrew. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:30PM, SKWD.OQ - Q4 2024 Skyward Specialty Insurance Group Inc Earnings Call

Question: Michael Zaremski - BMO Capital Markets - Analyst : Hey, good morning, thanks for taking my question. It's down for Mike. Maybe first can you just walk us through the reserve change where you're going from the policy year to accident year and just, is this now the industry norm or maybe why Skyward wasn't conforming to that in the past?

Question: Michael Zaremski - BMO Capital Markets - Analyst : Okay, that's helpful, thanks. And then just sticking with reserves, maybe you mentioned that normally there's a ground up review at the conclusion of the year. Just wondering outside of, the LPT noise in this quarter if you know there are any puts and takes to that annual review.

Question: Alex Scott - Barclays - Analyst : Morning, yeah, I was hoping you could, kind of give us an update on the new strategy you all have. Where are you seeing good opportunities, as you look forward in the '25 and '26?

Question: Alex Scott - Barclays - Analyst : That's really helpful thank you. Just a follow up and apologies ahead of time. There were some overlapping calls. If I'm asking something repetitive, my apologies. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 2:30PM, SKWD.OQ - Q4 2024 Skyward Specialty Insurance Group Inc Earnings Call I wanted to ask you about stop loss. I know it's a small business; it's something you guys have grown a little bit in, seems like it's been fine for you all. I mean, it hasn't affected the consolidated result seemingly at least. Industries is facing some pressure there, I think even some of the better underwriters, disclosed a bit more pressure this quarter so interested in what your experience has been. And if it's been good, I mean it seems like 2025 is going to be a hard market for that business. Were you able to lean in anything around the new year?

Question: Alex Scott - Barclays - Analyst : Great. It's very interesting. Thanks so much.

Question: Mike Phillips - Oppenheimer & Co. Inc. - Analyst : Hi, good morning. It's Roland on for Mike. I wanted to quickly go back to commercial auto. Given the industry challenges and your own caution on that line? Is there any sort of lost trend detail you're able to give on your book, reserve stats, what sort of classes of business, et cetera?

Question: Mike Phillips - Oppenheimer & Co. Inc. - Analyst : Commercial auto since you are so cautious about the growth there.

Question: Mike Phillips - Oppenheimer & Co. Inc. - Analyst : That's super helpful. Thank you so much. Shifting a little bit, I was just curious how much your growth expectation is from the new hires or teams versus existing verticals? And then on that topic, how do you book new products? Is there a sort of extra layered caution that goes into the loss bit there and sort of what timeline does it take for you to be comfortable with your loss picks on new business?

Question: Andrew Kligerman - TD Cowen - Analyst : Hey, good morning, nice quarter. So, I was particularly interested, you saw some great growth, and I was particularly interested in the two growth areas programs where I know you've got, kind of a broad mix of proper products, property, GL, commercial auto, excess liability, workers' comp, kind of curious where you're seeing the growth within programs? And then, in that excess liability area, are you seeing a lot of growth there as well?

Question: Andrew Kligerman - TD Cowen - Analyst : That was very helpful. And maybe a similar question with regard to captives which were, gross written was up 43%. And again, I think you're in the same broad spectrum of lines and captives as you are in programs. Where do you -- I think if I remember correctly, you attached somewhere around $350,000 on average?

Question: Andrew Kligerman - TD Cowen - Analyst : Got it. Thank you very much.

Question: Mark Hughes - Truist Securities - Analyst : Mark, I don't know if you'll have this, but do you happen to have the cash from operations for the full year?

Question: Mark Hughes - Truist Securities - Analyst : Yes, okay, that was it. Thank you.

Question: Alex Scott - Barclays - Analyst : Oh, sorry about that. I didn't mean to be back in the queue. Thank you.