Skyward Specialty's Q1 2025: Navigating Contradictions in Growth, Hiring, and Underwriting Strategy

Growth opportunities and market uncertainty, hiring and talent acquisition, global agriculture exposure and reserves, commercial auto underwriting strategy, and underwriting capacity and submission growth are the key contradictions discussed in Skyward Specialty Insurance's latest 2025Q1 earnings call.



Record Financial Performance:
- Skyward Specialty Insurance Group reported net income of $42 million and adjusted operating income of $37.3 million for Q1 2025, with $28.5 million in underwriting income.
- The growth was driven by a diversified business portfolio and the execution of their "Rule Our Niche" strategy, with strong contributions from the A&AH division and the global Agriculture unit.

Adjusted Operating Income and Underwriting Results:
- Adjusted operating income for Q1 was $0.90 per diluted share, marking the best in company history.
- The improvement was supported by a first-quarter combined ratio of 90.5% and a non-cat loss ratio of 60.2%, reflecting strong underwriting discipline amidst a softening market.

Agriculture and Credit Insurance Expansion:
- The Agriculture and Credit Insurance division accounted for 16% of gross written premiums, driven by strategic hires and a diversified global portfolio.
- The growth is expected to continue, with significant treaty opportunities lined up for Q3, despite a cautious approach due to economic uncertainties.

Submission and Retention Trends:
- Transactional E&S business reported submission growth above 20%, while retention improved to approximately 80% for the quarter.
- The strong submission growth is attributed to Skyward's status as a true surplus lines writer, with focus on maintaining underwriting margins amid market softness.