Skyward Specialty Insurance Group (SKWD) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $36.7 million ($0.89 per diluted share), up from $21.7 million ($0.57 per share) in Q3 2023; nine-month net income reached $104.4 million ($2.53 per share), up from $56.7 million ($1.50) year-over-year.

• Adjusted operating income for Q3 2024 was $29.4 million ($0.71 per share), up from $25.0 million ($0.65 per share) year-over-year; nine-month adjusted operating income was $93.4 million ($2.26 per share), up from $56.5 million ($1.49).

• Gross written premiums for Q3 2024 increased 12.4% year-over-year to $400.0 million; nine-month gross written premiums rose 19.0% to $1.35 billion.

• Book value per share increased 19% year-to-date to $19.89; annualized ROE was 19.1%.

• A.M. Best upgraded the financial strength rating to A (Excellent) with a stable outlook in August 2024.

Financial highlights

• Net earned premiums for Q3 2024 were $269.6 million, up 18.7% year-over-year; nine-month net earned premiums were $763.5 million, up 26.4%.

• Combined ratio for Q3 2024 was 92.2% (ex-CAT 89.4%), compared to 90.2% (ex-CAT 89.8%) in Q3 2023; nine-month combined ratio was 90.9%.

• Net investment income for Q3 2024 was $19.5 million, up from $13.1 million; nine-month net investment income was $60.0 million, up from $26.3 million.

• Stockholders' equity rose to $797.5 million at September 30, 2024, up from $661.0 million at year-end 2023.

• Annualized return on tangible equity for the nine months ended September 30, 2024 was 21.7%.

Outlook and guidance

• Management expects continued premium growth driven by strong performance in Transactional E&S, Programs, Captives, Surety, and Global Property & Agriculture divisions.

• The company remains focused on underwriting discipline and capital strength, supported by recent rating upgrades.

• Maintains full-year catastrophe loss guidance of 2-2.5 points, barring further major events.

• Submission activity up over 25% year-over-year, supporting continued growth.

• Global Property expected to shrink as the company holds the line on pricing amid increased competition.