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Skyward Specialty Insurance Group, Inc. (SKWD)·Q3 2025 Earnings Summary

Executive Summary

  • Strong quarter with broad-based growth and underwriting outperformance: diluted adjusted operating EPS of $1.05 versus S&P Global consensus of $0.885 (beat), total revenues of $382.5M versus $334.5M consensus (beat), and a record-low combined ratio of 89.2% . Consensus values marked with an asterisk are from S&P Global data.*
  • Growth was led by Agriculture & Credit (Re)insurance and multiple divisions posting 25%+ growth; gross written premiums rose 51.6% year over year to $606.5M, and underwriting income reached $38.2M .
  • Mix, lower cats, and expense leverage improved profitability: loss ratio fell to 60.8% (from 63.3% last year) and expense ratio improved to 28.4% (from 28.9%) .
  • Outlook and catalysts: expected close of Apollo acquisition in early Q1’26 with post-close leverage ~28%; management to provide Apollo 2026 metrics in early December and Skyward guidance on the February Q4 call . Ongoing Q4 reserve deep-dive and AI/automation deployment remain additional narrative drivers .

What Went Well and What Went Wrong

What Went Well

  • Record underwriting results and profitability: combined ratio 89.2% and underwriting income $38.2M; adjusted operating income $44.0M ($1.05 per diluted share) . CEO: “We achieved a number of company bests… an 89.2% combined ratio” .
  • Balanced growth across diversified niches: five of nine divisions grew >25%, led by Agriculture & Credit (Re)insurance; A&H, captives, surety, and specialty programs each grew >25% ex-AG .
  • Investment portfolio repositioning improved income stability: completed monetization of equities with $16.3M realized gains and redeployed into fixed income; embedded yield 5.3% at 9/30 (up from 5.0% YoY) .

What Went Wrong

  • Alternative/strategic investments were a headwind: Q3 losses of $(2.9)M in alternatives partially offset higher fixed income NII .
  • Competitive pressure in property; disciplined pullback in selected lines: management reduced writings in Global Property and parts of Construction and Professional Lines amid “silly” competition in property; stepping back where returns don’t meet thresholds .
  • Auto liability severity remains a watch item (especially in construction-related auto): pockets of increased severity inflation continue; management remains selective on occurrence liability lines .

Financial Results

Quarterly trend (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total revenues ($USD Thousands)300,888 328,527 319,903 382,526
Net earned premiums ($USD Thousands)269,557 300,366 295,542 351,797
Diluted EPS ($)0.89 1.01 0.93 1.10
Diluted adjusted operating EPS ($)0.71 0.90 0.89 1.05
Combined ratio (%)92.2% 90.5% 89.4% 89.2%
Ex-Cat combined ratio (%)89.4% 88.3% 88.0% 88.6%
Loss ratio (%)63.3% 62.4% 61.3% 60.8%
Expense ratio (%)28.9% 28.1% 28.1% 28.4%
Gross written premiums ($USD Thousands)400,014 535,326 584,914 606,509

Q3 2025 vs S&P Global consensus (estimates)

MetricActualConsensusResult
Total revenues ($)382,526,000 334,542,860*Beat
Primary EPS (aligned to adjusted operating EPS basis) ($)1.05 0.885*Beat
Primary EPS – # of Estimates—12.0*—
Revenue – # of Estimates—7.0*—

*Values retrieved from S&P Global.

Segment breakdown – Gross Written Premiums (Q3)

DivisionQ3 2024 ($000)Q3 2025 ($000)YoY %
Accident & Health43,490 63,147 45.2%
Agriculture & Credit (Re)insurance17,044 168,105 886.3%
Captives53,630 67,956 26.7%
Construction & Energy Solutions70,309 66,576 (5.3%)
Global Property37,540 27,649 (26.3%)
Professional Lines40,310 35,598 (11.7%)
Specialty Programs54,434 82,771 52.1%
Surety34,592 43,737 26.4%
Transactional E&S48,665 50,950 4.7%
Total400,014 606,489 51.6%

Note: Total GWP above reflects the division schedule; the “Premiums” table reports $606,509K for Q3’25 (a small rounding difference) .

KPIs and balance sheet/returns (trend)

KPIQ1 2025Q2 2025Q3 2025
Annualized ROE (%)20.5% 17.7% 19.7%
Book value per share ($)21.06 22.23 23.75
Net retention (%)64.1% 58.0% 72.7%
Underwriting income ($000)28,482 31,244 38,245
Net investment income ($000)19,331 18,589 22,180
Stockholders’ equity ($000)850,721 899,915 961,423

Non-GAAP: Adjusted operating income excludes items such as net investment gains and certain other items (see reconciliation) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Apollo acquisition timingClose windowNot prior to Jan 1, 2026; long-stop to June 2, 2026 “Early first quarter of 2026” expected close Clarified timing
Post-close leveragePost close—~28% debt-to-cap post close New metric disclosed
Guidance cadence2026 Apollo; Skyward—Apollo 2026 metrics in early Dec; Skyward guidance on Feb Q4 call New timing
Expense ratio outlookOngoing—“Sub-thirties” expense ratio reiterated Maintained
Pricing/exposure commentaryCurrent—Mid-single-digit rate (ex-Global Property) and mid-single-digit exposure growth Maintained commentary

No explicit numerical full-year revenue/EPS/margin guidance was provided in the Q3 press release or call; management reiterated confidence into year-end and discussed cadence for future guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 and Q1)Current Period (Q3)Trend
AI/technology enablement—Detailed update on Skyview workstation, bots for submission ingestion, GPTs for underwriting/claims analytics; “first-mover and learning curve advantage” Improving adoption/impact
Property market competitionQ2: global property GWP down; mix helped non-cat losses Excess capacity creating “silly” competition; disciplined pullback in Global Property Deteriorating pricing environment
Casualty/auto severity—Pockets of increased auto severity, especially construction-related auto; selective in occurrence liability Ongoing headwind
Agriculture growth/earnings cadenceQ1/Q2 highlighted strong AG growth AG led growth; earnings recognition ratable over next 12 months Accelerating growth; smooth earnings
Specialty Programs growthQ2: +44% YoY; adds of W&I and marine programs +52.1% YoY; lumpy due to program renewals Strong but lumpy
Reserves posture—Strong reserve position; IBNR 73% of net reserves; full ground-up review in Q4 Conservative; review pending
Pricing/exposure—Mid-single-digit plus pure rate (ex-Global Property) and mid-single-digit exposure growth Stable to modestly positive
Capital/leverage—Modest ~11% debt-to-cap; post-Apollo ~28% expected Rising post-close

Management Commentary

  • “Our third quarter results were exceptional, extending our outstanding and consistent track record of profitable growth and double-digit returns… $44 million in operating income… an 89.2% combined ratio, and 52% growth in gross written premiums.”
  • “One significant driver of our growth was our agricultural unit… U.S. dairy and livestock industry… Setting aside agriculture, gross written premiums grew at a strong mid-teens rate… A&H, captives, surety, and specialty programs… all… grew by over 25%.”
  • “We reduced our writings again in global property and in the construction unit… opportunities to write business at price and terms that meet our high return thresholds were simply challenged.”
  • On technology: “Skyview… allows us to… deploy new capabilities… using bots to automate submission ingestion… using GPTs… first-mover and learning curve advantage.”
  • On Apollo: “We expect to close in the early first quarter of 2026… Post-close, we expect our leverage to be approximately 28%.”

Q&A Highlights

  • Growth cadence and capital: Growth will be uneven given concentrated renewals (AG Q3, A&H Q1, property 1H); capital remains adequate with capital-efficient business mix; Apollo adds capital-light fee opportunities longer-term .
  • Specialty Programs detail: Recent growth driven by W&I and marine programs; growth will normalize as comps lap into 2Q next year; programs can be chunky .
  • Expense baseline: Management to follow up on quarter-to-quarter details; reiterated operating leverage and sub-30% expense ratio target .
  • Retention and reinsurance: Gross-to-net influenced by quota shares in Global Property, captives, and A&H; year-to-date net retention ~65% a good proxy; reinsurance pricing more favorable but not a major YoY swing for SKWD .
  • Auto severity and construction: Ongoing severity inflation including in smaller-vehicle incidents; selective stance on occurrence liability persists .

Estimates Context

  • SKWD delivered a clear beat versus S&P Global consensus on both revenue and EPS: $382.5M vs $334.5M, and $1.05 vs $0.885, respectively . Consensus values marked with an asterisk are from S&P Global data.*
  • Forward consensus trends (S&P Global): Q4’25 EPS 1.001*, Q1’26 EPS 1.1067*, Q2’26 EPS 1.1544*; revenue estimates: Q4’25 $380.9M*, Q1’26 $412.2M*, Q2’26 $437.5M*.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • High-quality beat: adjusted operating EPS $1.05 vs $0.885 consensus and revenues $382.5M vs $334.5M, driven by outsized AG growth, lower cats, and expense leverage . Consensus values from S&P Global.*
  • Underwriting momentum intact: combined ratio improved to 89.2% with loss ratio down 250 bps YoY; underwriting income rose to $38.2M .
  • Diversified growth engines: five of nine divisions grew >25%, led by AG; A&H, captives, surety, and programs provide resilience against P&C cycles .
  • Tactical discipline in tougher markets: pullback in Global Property and certain casualty-exposed areas amid competitive pressure and auto severity inflation .
  • Balance sheet and investment income tailwind: equity portfolio monetization with $16.3M gains and redeployment into fixed income lifted NII; embedded yield now 5.3% .
  • Near-term catalysts: Apollo close “early Q1’26” and post-close leverage ~28%; Apollo 2026 metrics in early December; Skyward guidance on the February Q4 call; Q4 reserve deep-dive .
  • Trading lens: Narrative skew remains positive on beat quality, durable underwriting, and tech enablement, with watch items in property competition and auto severity; execution on Apollo updates and Q4 reserve review likely to drive near-term sentiment .

Appendix: Additional Data Points

  • Q3 highlights: GWP $606.5M (+51.6% YoY), combined ratio 89.2%, ex-cat combined ratio 88.6%, annualized ROE 19.7%, BVPS $23.75 (+20% YTD) .
  • Investment results: NII $22.2M (+$2.6M YoY), alt/strategic loss $(2.9)M; realized gains $15.9M; stockholders’ equity $961.4M (+6.8% vs 6/30/25) .

No other Q3 2025 press releases beyond the earnings 8-K were identified in the company’s filings window reviewed .

Notes: All company-reported figures are GAAP unless noted; adjusted operating measures are non-GAAP reconciled in the press release . Consensus figures marked with an asterisk are from S&P Global.