Skyward Specialty Insurance (SKWD) 7 Nov 232023 Q3 Earnings call transcript

Company Profile

Participants

Natalie Schoolcraft	executive
Andrew Robinson	executive
Mark Haushill	executive
Mark Hughes	analyst
Charles Peters	analyst
Meyer Shields	analyst
Tracy Dolin-Benguigui	analyst
Matthew Carletti	analyst
Michael Zaremski	analyst

Call transcript

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Operator

Thank you for standing by, and welcome to Skyward Specialty Insurance's Third Quarter 2023 Earnings Conference Call. [Operator Instructions]I would now like to hand the call over to Head of Investor Relations, Natalie Schoolcraft. Please, go ahead.

Natalie Schoolcraft

Thank you, Latif. Good morning, everyone, and welcome to our third quarter 2023 earnings conference call. by Officer, Executive Mark joined and Andrew am Financial Chief Haushill. I our Officer, Chief Robinson; Today,

our affect types uncertainties, projections from Such those We will for in financial website, begin are as non-GAAP turn our on filed risk certain their and of remarks may discussed that schedules and in of with the forward-looking financial Skyward's press our to over release nature, skywardinsurance.com the will factors call today risk I factors we future our include previously of results of information, open with press involve reconciliations will Andrew a our the which measures, lines materially are the and section.Now release statements, call may along questions.Our number Commission.Financial today forward-looking differ as was These then CEO, comments Exchange statements. by Investors our to containing or in well factors with which available as may the Andrew? other performance. and cause actual contained under Securities XX-K included prepared Robinson. supplemental part

Andrew Robinson

Good Natalie. combined end than be which of XX.X% the peer is to the our over losses, at lines us. had adjusted company's tail and we and to written XX% and even Gross conditions though our of exceptional in quarter writings thank morning, and our you XX% the We of adjusted non-amended $X.XX were diluted of benefit for continues of the as market our business operating continue equity XX% for in best-ever short excess quarter, less joining reporting lines share cat X group, outstanding low per favorable XX.X%. of everyone, surplus included another income from and you, property. on in were Thank execution. return of business.Our quarter XX% premiums point broadly grew quarter in ratio

in-force income are strong simultaneously strength.With conservative Altogether, is we the the asset in of strategy new underwriting and cost a indications our in Both book. be inflation profitability, call balance already continue and execution maintaining to and to reserve continued excellent need into to turn rate our our continue.Lastly, out above over underwriting our core Mark? an margins while financial returns estimates and deliver in aim deploying that, our posture rotating generating financial fixed further loss strengthen detail. sheet, all to and I'll our our quartile greater that classes. higher-risk remains our strong ruler top will is pricing shareholder with business pure sheet to balance Our the Mark visible growth, investable strong our are assets our results returns we attractive line of discuss

Mark Haushill

Thank you, Andrew.

per quarter XXXX. XX%. quarter period diluted reported income reported per Solutions were period grew $XXX Every approximately to we share adjusted net or we $X.XX grew $XXX or quarter, Industry of $X.X share double-digit same up million year loss an diluted the $XX by net and same Net million per of E&S, or $X.XX $XX.X a million to operating or of million million premiums third XX% XX%. underwriting share the for ago.In $X.XX Captives per premiums diluted written quarter On income $X.XX and the basis, to Lines, of the division in For approximately gross to for written Professional share year in ago. by the $XX.X growth a a experienced the compared compared Surety, in the million each diluted compared quarter, over Transactional

principally Hurricane ratio accident ratio the point from year quarter impacted had X we cat impact from recognized contract less included $XX.X a under minimal to which been was driven point premiums Overall, the net both non-cat net to to reserves.During strong on on the loss written development quarter, by Third of the third combined to The that income. XX% that ratio respect net third higher improvement the expense XX.X% $XX.X by quarter, loss current for rescinded XXXX.During and of immaterial contract net contract quarter catastrophe premiums mix previously XXXX. portfolio increased the Ian. third ratio our were compared the earned combined in a we XXXX. the premiums XXXX.The in year of in quarter quota business. compared conservative continue changing that were reserve quarter we maintain position the X.X the in versus to approximately transaction, accident for XX% ceded X.X million our the the year. slightly the and written of retention had compared through to of earned Recall this will XX.X% losses transfer Adjusting than and quarter an and net premium the combined net X the XXXX million first XXXX, third of We year, of quarter losses with X.X to the full of prior improved the share net retention compared and ratio of impact be no X.X points had points was strengthening.The of points accounted the reinsurance slightly net anticipate for XXXX, months quarter was loss third and

all a business mix canceling our We in the the run sub-XX target business line improvement core portfolio investment change fixed the investment to expense to and our the in X.X%. fixed flow same acquisition invest period in the doubled to reinsurance $X.X free core income, This to higher of third was $XX.X contract. cash at investment quarter, from in income ratio.Higher expense to to million ratio $XXX we XXXX. Net higher offset an the of income driven income put strategy the almost million a Consistent the with by quarter, due in the improving was The XX continue in to were increase deploy our share was our and our work in from by quota the net driven expect portfolio operating September X.X% million principally invested year rate year significant embedded ago. premium.Turning prior million X.X% yield to increase investment results. earned at costs by impact a asset of quarter, yield versus of in $X.X the and base.Our million a with $X.X compared

the ago. in the XXXX from million up equity Our adjustments were mark-to-market and core fixed impacted our notice third million volatility investment million, is $XXX the last the at by XX opportunistic opportunistic $XXX for a in a on and Net now XXXX fixed income this have portfolio fixed quarter of year experienced portfolio quarter, year, we the north income over inception-to-date return $XXX income income a $XX provided from of portfolio. redemption June X%.During slightly million is negative portfolio. Despite we increase the

we in portfolio.At be $XXX XX. million. that taken in part of the of the investments of core from already market that have operating September this short-term resulting strong million will portfolio from and approximately actions at effective income and We income $XXX XX, redemption over proceeds XX, notice of inclusive fixed money our cash we opportunistic XX% had the into flow anticipate December the September portfolio in reinvesting the Given fixed $XXX million

his yield for the to over continue investments into call During of to core portfolio.With continue concluding the our quarter, and deploy X% turn liquidity on Andrew fixed to we north short-term I'll income be this will our that, remarks.

Andrew Robinson

as a you, Thank It's again, already hard Mark. fourth we company. quarter public And once believe had truly that quarter. a we're to in outstanding reporting our

growth of returns this investors by quarter. And lines property should top our aggregate our metrics has of regard, cycle. prior the meaningfully mid-teens, to rate focus understand As been the had another well-diversified higher building with consistent of a driven quality is In all notable. the that in with defensible quarters, we bear our in quartile parts underwriting aim out.Operationally, diversity we deliver Pricing on of in a their great this prior with discussed the positions portfolio and in the all our quarter. in was market continue

cost We from continue with to our in-force has remains which above is line our strong, new finally, and submission pricing business continue in year. loss many increasing we for see the too case Retention to realize activity, mid-XX%s.And quarters, book. pure XX% trend been to over into pricing strong up the low the is prior

continue division on or we is each to capitalize target on our at and capital. portfolio top grow opportunities that and risk-adjusted ensure offer we line the capital, the both areas on those best to shape to minimum While our margins returns returns above delivering

and diversification new in new investments working. As teams such, course, is we areas, allocation have and, adjacencies, of technology.Our products, new strategy ongoing capital

make Professional For as divisions public E&S, we've through in portfolio XX% off. X now our made these versus company We've year. Transactional and continue pay XX% months to example, X last divisions for reported of up a Through our quarters. X investments the Surety months,

some delivered increased upper-teens prior lead our Every ROE, In expectations XXs company, we've premiums quarters for quarter. a Skyward, IPO, out we have and to mid- the single of out a our XX.X% reduced During sub to investment ROEs. and we public we each our ownership delivered that we core also single double-digit Westin written [ portfolio low quarter since, set position ]. XX% by shareholder, combined quarter, and low position metrics gross our ratio derisked grown mid-teens to the including every up combined growth.We ratio.In the has quarter, -- as X growth over set largest we've

recognized company, delivering our history. now through our of families our created period is during investors this My winning talk time team. reflection metrics the the what our the up and have and further to terrific.I'd incredible They company the XX% the a from by across Mark the strongest testament to we and opportunistic reporting a compassionate take we to call loss thrive.I'm employee set greater our in been team. XXXX, earlier.Equally, all to to organization. known simply CEO wants XX%, investors industry's fixed for special. recognized to our public up best us our providing ownership as to Recently, portfolio September to like will is but core is sets best Moreover, places has along, our our and we it that us engagement were It outstanding and constitutes the every key of believe culture, blessed and portfolio queue our to all XX% XX% the fixed magazine, I live comments direct an quarters for the X where XX% position the derisk work the work XXX over of truly about we for reduced of talent the to to a a culture. honor and portfolio, not ago.Lastly, as I'm by our communities. Q&A. XX% Insurance get XX, from have people was be organization operator from is year now Westin that liquidity genuinely just up which been publicly for what company reserve for out to on a colleagues are it Our company moment one and performance at income It they be back values, our the asked about objectives such same a we we'll Business per I'd in Skyward has exceeding continue as income apart and open like to a what their is and an day, is stock. focus turn it our from portfolio down Operator? makes for our

Operator

comes [Operator question. from Piper Instructions]We'll Instructions] next go [Operator of first Newsome line to Paul Our question Sandler. our of the

of Our Securities. Mark Hughes line Truist next question comes of from the

Mark Hughes

in about business up Congratulations I'm divisions, might quarter. might Could you of they fastest the talk have unusual, saw given that not by all there sure of recur? Andrew, on but that growth? you And where big pieces you anything the double-digits. a any there's was X were growth if not the you breakout if say certainly or

Andrew Robinson

I Well, that this latter isn't outsized the sort I the question, question. latter that question, the quarter say or there way, for occurred would the think that's to probably notable -- I anything by feels of quarter. thank to in unique this for you

single the we notable a had Solutions, time, that can that As over showed one grew opportunities. Within driven accelerator very we've where places.But this every that's we're division, where looking not we that there's specific for this we There mentioned, a of so that's just number we being don't of in example, up think feel double-digit up in we quarter, others there's big -- jumping divisions were or E&S out. portfolio some that certain roll being for. like we have we are have the construction those units we press anything as been our Surety.And kind highlight underwriting at unusual every Industry not Mark But some strong unit quarter. see backdrop reason by the divisions.And wouldn't But have in into have I anything in overall, of some market that favorable and particularly consistent the XX%. grew that and for are growing good as Transactional those the outstanding that's that where such strong rates this quarter. And I growth had underwriting

Mark Hughes

How that. you How do auto? that about see commercial Appreciate now?

Andrew Robinson

for going in quarter of Commercial portion be here. this Well, again, auto, statistics continued look a commercial, our I'm to the smaller to portfolio.

or reported it of writings. I XX% around Mark, believe I'm of think wrong, last our XX% writings. it's our XX% I And quarter was if believe correct quarter and I -- me this I

not with the take and risk pronounced. better claim area to in inflation from said to largely, manage do a continue able and I've exposure commercial as better is a feel is conservative vantage pricer But our risk our the past, better because bodily isn't most ability to than a competition. on selector to it there be injury We our of it a be point confident position in auto.Again, where clearly the be should social we

capital, say for for time we that we've at thing up would inflation, that make probably returns been no that of to range something structural attractive -- have -- level, we suggest long if into. feels let's that keeping with lean loss up we're and how the consistently to us on cost so even a count And can matter we've time, in some hard said, double-digit-ish probably look, we with you want don't we like a sort much it believe there.We're it's rate,

Operator

Raymond comes C. Peters question from Gregory of line the next James. Our of

Charles Peters

over us book has Global how Maybe because I focus the just the perspective Property the think guess on I there. back too when about [Technical like seeing year you step And course this think what's could it my in volatility guess We're and for we book much catastrophe has you for potential others of the should to not on I'd kind been to in to model clearly, your Difficulty] how third that book least second. forward, we then having of going there right a about experience. at exposure a seeing some up give some growth cat we're that shaped the into put load because quarter?

Andrew Robinson

Yes.

this quarter, question. Great up you're Property, So XX% year, up the for thanks, XX%. Greg. And first right Global right, off, around

We over not about terms, some are convective just of Tier general in the in seeing talked said cat been writer. that so storm have practical forth.We and market prior book. That we've an property includes unmodeled intentional X cat that we of Look, we even I our think absolutely disposition. sort severe generally. sort it cat more in our this opportunity in the obviously, So of over and the calls and

But aggregations book, things paying do that component. that a Global but risk that that ignore to we X is company exposure I of is are attention can't so in for well more have book.If really kind a quake our really maybe Tier Property, than we of something across a so exposure. us that of is spread our hurricane You think Atlantic be that it X North a particular, we our anywhere aggregates materiality really have in as maybe anything, don't we to relative would

down average But to largely avoided our a generally terms underwriting in believe loss. lot So think, points, providing, our just shows generally a the think, aggregation that we'll think that I that in of -- honestly, I had is through has a we're that's our our due instance, looking approach one ensuring top exposure. management.In we done features leader attachment example, all was the large had be combination here dropping the roof one.And terrific our of do quite about there forth, look next for thing coverages and that's I on results otherwise, quarter into on about talked It point. And things, property kind to reference is if that book rerunning of and with, losses, of at for and year second was large at the a And we to what deductibles, forth, But I underwriting grown so I where of taking back underlying a the portfolio. our think, that as tornado full-year -- to the any we it premiums last of reflects expectations, XX-year tends we speaking, again AALs and just deal in job we've that that so fact is consistently number don't good suggest growth performance X% so XXXX. changed well.And suggest to guidance general, you our getting into tie like we've it of the despite of had that Property. a and kind in premiums. was before that's greatly for book run sort a coming some And I'd historical that really on we've a been and it look then where of the you see Global in that the our adjust great that, that you it about would X%

Charles Peters

Excellent.

business area. another in just Another question

sort Healthcare rebranding guess X I earlier Solutions And think have that. you in I I of quarter, the questions your on business. a announced of third

been it there's of market like the & Health sort attention Accident in business, inside other seeing all, of announcements around feels medical stop-loss, increased the industry. First

I if stop-loss into developing is I in of that how could the guess were medical going medical like you wondering start to you actually in competitive on business So Healthcare was an getting kind too. announcement, your it then sounded secondly, Solutions update provide malpractice forces?And

could see Healthcare strategic the Solutions So maybe the business direction you you comment on where going? of

Andrew Robinson

for sure. Yes,

this you But sort is framework, liability just clarity, of business. for me our Solutions Healthcare our just and in the professional of have let may Greg. your component -- So your

address we that division.And a formalize you of things rolls into are of to is did quarter last that just that in that fact, we that the So yes, our first, are one Professional practitioners. sub-segment correct writing

in to Now E&S think probably I true are so writing the very your and used you, we mutuals. it we of So -- specific, tell will mainline writing are terms, guess, no a what docs would market, anymore, not are for that bedpan a right? uncertain -- nonstandard do the as we appropriately not are against be kind to, competing moment situations. forth.We referred I We're not I describe not

of in also to in We very serving ancillary where statute in the areas tend And are up those of we facilities and to will, category. make of short exposure. the lot at over-earn exposure discovery markets, fits sort a also features they picking tend well be made that they're can it's which limitations the our thinking short. claims where, rather we loss limits, our very of the where like.And of if with professional you Oftentimes

are an just look, Lines.To really And So that a question that we our direct of on that I E&S, agree. Professional we that. E&S a think your writer stop-loss, true certainly about we good of byproduct medical feel is kind in very

that that attractive of growing And management. think is employers very Smaller us smaller well. serves employers. is think our be principal very a more remind is that I'll market focus you in on cost I tend it I sort on rate. to medical a focused far that big that

not is capturing we just underwriting is of risks good that large writing Sometimes say area we're those catching that out the these we're these to and employers which coming very cost we those into what are at opportunities I'll do guaranteed very as market self-insured not are doing they're particular groups. you market, that.But when they a a

attractive byproduct that, distinctive market. medical a organization we've say ability is stay loss serve of smaller to our of capabilities, the our that that our inflation to done things intellectual our make that that that I property, we in as the ability that sort And believe things and like employer are of front in And of an distributors so results cost relative us. very particularly for really terms we the all would so to certainly of as that focus cost of management, forth think their have towards market.And business

Charles Peters

the just and strategy straight the last geography set I -- helping canceled. walk on of you me. thinking? final for contract for question. you're through that just you question those you guess Thanks think mentioned That's behind I is for Can I businesses share what that had us the my you quota the

Andrew Robinson

a up I'll of And as was net And that point quarter back go really would for quarter. first contract share Yes. the And a was noted Well, fourth be it we in the noted simple. bit I'll to for it just a back. quarters couple foreshadow taken I liability. thinking, go sorry, I'll this that -- was had I the our back. little that lower. about next auto directly well I had retentions our I'm earnings actually, quota call actually talked we March. that

it we are about a last what percentage to definitely remixing thoughtful reinsurance there's up terms the through this was, we was don't actively talked hey, to to early. spoke portfolio, have that -- quick we're a portfolio.And about that claim which, of if a just in multifaceted the taken of We year. of quarter.I in bodily response injury company.And then done is here up. claims inflation on spoke a control material through our is towards really think And our SkyDrive, the fact, have earlier feature what about that much writings -- a we've injury if more meaning was there's as reducing reversed we of fact, evaluating reversed we our is our in we'll have of where of a here of that contract income and offer for and we've get an have then that in any commission auto in part quarter. which public Mark we that key trade the commission out of we And is -- approach what underwriting we the took a able we taking about take fair well, we did on IPO. that platforms, But -- that we during a of volatility where that talking in about in course, have that been and we also our been always our the auto way, purchase strike kind not believe ceding we since And bodily that's in underwriting exposure. make in portion out it this talked out opportunity smaller what that, I've did of instance.

Operator

from next Our Meyer comes line of question KBW. the Shields of

Meyer Shields

So of a sort of questions. basic couple

written in the all of the adequacy, to the both just premium that ability in you're contract growth should decision, we gross the given about terms terms of growth First, and phenomenal capital capture think that seeing? how

Mark Haushill

capital. the the growing And the had some by capacity that way there did that we Look, flexibility before Mark. look capital But granted we've way this have. the and we the equity imply the capital, what's got do we planned revolver, look about It's IPO, versus we've capital. revolver equity we are, with we in we would Under of terms at back alternative on talked when would shareholders, is we the rate the growing. at at we'll need that right

you, comfortable flexibility right really are our we to So frankly capital would where the we're due say got. position with we've to I now that

Andrew Robinson

would Meyer. -- a things Yes, of I I you. just for couple highlight would

an a we is a supporting we most is our capital a on statement do what said, AM that months in available capital only that. by put out we of that we capital, come believe to we in feel But position probably we're That's in we think do the and that our low.But would we meet some right ago. a outlook positive leverage us now use under equity to need for that Mark we it for pretty if is growth. as have, want to couple levers that position with clear opportunity And I are ourselves, think criteria I those be do aware, capital. they see we good appropriate good Best set our all as a if circumstances to that our raise financial would have market

Meyer Shields

rate have A seeing and I sort about insurers increases if specialty you a was talked number what guess, lines? could basis. of, casualty I in broadly accelerating casualty wondering that's on of sequential about your talk you're

Andrew Robinson

industry team to we up, has creating is is funny kind the the sent an rather have By sort it for backing asked The second out it industry.What And chamber saying. chamber our by from a IPCA is articles orderly coming very that's for and few great questions, way. Meyer, rate place. There's this taken stuff. Like way of days, in of in Thank in you I'd you way, the you just say what question leadership the that. to I've maelstrom senior of last that through time. everybody a echo our you called of like basic. our echo Both the are seen this, some book share

to sort trend, don't of overall to say soft market cost out with here.One some bodily structural we've diverse with that things of aside consistently. great on our years shared be true, is of business, structural sort injured, front of about we've will sort been And exposed saw, there's place everything regard, of the setting verdicts driver. nuclear view our a sometimes to a who this we in apparent And going X hands it get I I that you What by stuff," think is. who feel Greenberg sort and of realization be a very we've quick how good you not a the of get people starting when a we've what in unlike which, a part very the time. big get has never our older in Evan of good oftentimes kind it. about, a over we is that the change which numbers there financing. it. along point it it about of in course, -- or is And done fostered than quick that job think MedMal example, or given so to of this is above believe years has hard as about is ticking front tort I property, We be. behind of it of our on a and person a moment the on the is the to it, right? have our up. of see big that are what stuff, this like along book.But you as us those long happening mistake of see top headline of attorney, quickly -- get that then or worse happens want consistently "You to feel rate, And really of like inflation. I we're what resets there's loss seen behind I is that best, in is else play make early good think that social I XXXXs, period to things The that which state-by-state should for So widespread which on in plaintiff it's injury. layer of is, this stay that very being developing ticking is I what's talked which is so that situation, a referred says caught staying cascading this no in In which basis to down that I reform believe is going to sort to develops.And change.I don't well-served litigation think convergence thought, what industry that like

through it And of and fallen that will fell companies yes, pretty continue of I'd so you with to are companies like have the one loss one it to protected if you you hurt behind. ahead the we keep ourselves 'XX wise set loss policy portfolio up be out transfer transaction And if not the catch those think certainly year rate I those behind, we of trend. that better badly we were who would because joined. to time around

Meyer Shields

yield currently? this I for promise was basic one new may I it. have I missed just money And is looking the if

Andrew Robinson

Is at We put And work work to the what you're put to at -- X.X%, that we money X.X%. money X.X%. asking?

Meyer Shields

Yes.

Andrew Robinson

as we our our good. Yes. And portfolio investment about our quarter yield at Mark making embedded We're in X.X%, good progress end the of Yes, was I Shields. feel I commented both and Meyer think prepared about the there feel remarks. and

Operator

line Our Sandler. comes next of Piper to question. the will Paul from Newsome of question next the move Instructions]We [Operator

Barclays. of of the from line Benguigui next Our Tracy comes question

Tracy Dolin-Benguigui

you Or auto. incepted fourth were account on clarification one? the about? another quick I rescinded. a in. share commercial that you reinsurance about that a months the that at call, Just contract whole talked talking share We're contract for it earnings thought quota XX is you not X.X. quarter I it remember Was quota

Andrew Robinson

in what I That's March rescinded the one. -- were was we earnings Those what referenced the call.

Tracy Dolin-Benguigui

XX months in. not were But Okay.

policy? shorter a tenure, that it was So

Andrew Robinson

the sorry, sure unwound question. understand make the No, happened to we want I effectively is your we and -- quarter contract quarters. first this we had in What rescinded X

us back retained ceded we was net. came that premium the that So and to as

Tracy Dolin-Benguigui

the Also how maybe was the opportunistic redemptions fixed had on at you think X%, would it million said that a new XX% the When question the compare a would few routine I yields $XXX year-end, how redeploying income that those to of X.X%, -- you're yields. I money assets? of

Mark Haushill

the inception to-date has So sorry, yield north -- income on yield the been slightly of opportunistic X%. the fixed

money going core income, which be put doing years. fixed the X.X% little but know, last where and income, you are putting has take to our we're X.X rather we've where it we fixed been has fine, I'd What the bounced for to opportunistic done As current into there. we a recently. say that's just bit our you The would we will the is money around in the

Andrew Robinson

the yield sort we of back now. income, just to I there rather Tracy, that be income. time we'd be go opportunistic the than at straight talked fixed in just talked we're core entered of just we was into fixed honest, To different Yes. up course, in range. mean, of just a return that environment that in that about terms X% in trade-off, the risk -- the of the were we I when And sort about target returns

investment are with to We be yield.And think more little have taking end that's NII that that item the the that we consistent something and which of plus, more course of derisking might has last our bit the there here core portfolio bottom the with high-quality at of assets few volatility can showing quarters. do a the out I a sort importantly, do been line up things some our over are of of opportunity

Tracy Dolin-Benguigui

when XX% remaining you be And think the do will redeemed?

Andrew Robinson

we XX%, left. like actually remaining The what's

particular that a portfolio it's so And we like.

That And on that. lower our and as to our mix. it of it will to part overall volatility, in more view, we a so intent hold yield has be like our bit to

Mark Haushill

it's Yes, that the is we loan And that. the continue will Andrew about. with Tracy, of hey, opportunistic Mark. commercial piece talking It's mortgage

Andrew Robinson

disposed that in tends reminder, that portfolio in areas not is of we real the we And and It what to tend characterize estate. more economically be as would to as industrial parts like. a nature

Tracy Dolin-Benguigui

maintain... just or it grow you Will

Andrew Robinson

Just maintain it.

core our our portfolio our of in it environment and portion of flow this free because a committed will put sort shrink overall kinds to as core-plus of we're cash So certainly strategies. towards

Operator

Securities. Matt next the of comes JMP Carletti from Our question of line

Matthew Carletti

your on expected unfolding? could be you kind are are your opening helpful? any kind about you history. of just versus there in would actuals give your if expanding? Or you believe Or -- see little of kind position midpoint a comment made expand how that's you hoping bit? if your I -- just the it's in company you a that If reserves remarks was Andrew, strongest actual can go color if as you you of along,

Andrew Robinson

Yes.

a things. of So number well, I'd say

LPT So from the history, to a view. reference get we 'XX we first, case, right? and in after history, better just The talk better policy the LPT, I further away so the years, mean, this year 'XX, about get

more that's one So feature. right? have we confidence, So

is right, believe so And the as have informs that we a would it, maintained, call just our that pace, same I you let's measure. second our margin We thinking.The point towards throughout.

So the reserve say, year our before every cycle last further one and that Yet, our legacy margin before, year back maintained and years we've back, we look and same position the we get year when we've going that this time away gone same. margin.So of some is the on through, the from further at let's those hand.

base same, The And remains things. the those is here a numbers So law there's combination of out. our second of yet that playing that reserve kind right? position is just large of it's growing, margin

at actuarial us the and If emergence that you larger from margin that at years, distance around position at you elements of look consistent just the with does that look then very our those our all things confidence. that that really we've X larger.And you sort patterns, base reserve I look and the gets been paid that give think along

Matthew Carletti

can. And then other, I one just if

of hoping my little during -- you for looking on like example. of space expand and little about in the do eye caught bit, Surety teams, you talked I just to a also what kind you're was the quarter. ad categorized what could it in you strategic the ongoing kind making as the And looks bigger a the a there? You move, that business, adding a investments bit

Andrew Robinson

keeps you up for us. Thank showing that. for Yes. Surety

think leaders Surety I of head or amazing an Commercial, our division, head we of our of have and head of contract. group that that

brought to effectively recently field You saw our Scott Bailey we run organization. in

want It's go where what's place simple. happened, that to. the think Surety the Matt, have just that is in I become guys specifically we to best surety

I -- out geographic market not had right? any would around Surety, recruiting we extreme disciplined the announcement. you the build-out a of us. people discipline.What we're not of It's part in spectrum lot, make. great They're outbound sort say hire is that to regions.Recent But senior of adding from surety And have that our folks. inbounds place only a that decisions out of, of like being to equally the example are in a They're that Texas where of And our had fill there There on so we for now we've added. in I'd pretty active move say, that people we've the personnel talent. of X big is it's kind was a they

continue to many our get quarters. perspective. be type think the it can quarter. well, that we to our mention are grow all to ability returns few capital, good after are You to diversification, just after -- intentional so up having go that's quarter us We we different one business And that of really show the very love have sensible you that It to terms just are great if it run to we're and just be of back not quarter be for of the our for excellent. in just last places. that shareholders, that leverage in seems out able happens things over And that the success business.We from

Operator

of from comes Zaremski of line Mike the question next Our BMO.

Michael Zaremski

general the line. other cost operating -- acquisition I the ratio. expense the also First Is question and this on guess,

year-over-year the mix or offset picking operating the like partially is terms up which being the the expense, shifts. at costs that want move decreases, So you higher to by momentum like Is out? these should business looks as it kind call of acquisition is of levels other into anything this in dynamic continue you

Mark Haushill

let we expense as moved The slightly ticked a we've up has the talked have business Mike, So I see unpack if while can it acquisition ratio now me for as mix. about for you.

is the getting share we're expense. expense from did question? of unexpected. the not reducing respect operating quarter. reversal that the your The premium So is operating quota is the to ratio in impact what acquisition other you upward bit that earned tell a Does leverage little the trend I'd the With answer expenses,

Michael Zaremski

Yes.

a negative quota or impact had the it so that share, this on quarter? And positive

Mark Haushill

premium it -- would you're because looking part but it the ratio but depends expense ratio, the It increase would lower of which benefit. on acquisition operating at, the expense earned

Michael Zaremski

results your And a obviously, loss nitpick earlier just not were in the call. at the from trying excellent, lastly, on commentary guess, all. follow-up I to catastrophe quick

above -- losses? see we I can trying you're uniquely industry-wide have look it that a catastrophe very we in expected your when guess, lot more color Because like catastrophe was -- it's loss historical just at any much Just on some average.But loss we've companies, shown seen if benign, results camp. higher and companies been than catastrophe the on it to get some feels XQ been data, have benign low the of the

were hurricane? kind where any So think of ex earthquake a for in -- about XQ the a they catastrophes when there isn't kind quarter U.S. this unique concentrated? guys of really or you just Or -- anything normal this you a geographically was is more

Andrew Robinson

and that storms then primary Yes. their we I the it's you have are heavy business, the been how insurance -- pretty editorial the concentrations business to just cat occasions, results specialty really numbers -- of I'd Upper we're in of last sort particularly think we of and that say severe were only put quarter. Bermudians what against just a this, I'll of Mike, then is heavy than to tell that leading compete And storm consistently I you quarter. very in convective we terms that up the pretty in commentary I concentrations describe -- -- because the on out. companies that, because against you, low. And just good where the our high playing of of said, others will pointed not good sort my where in all true Look, specialties, cat aggregation are amongst pure-play during quarter.That see quarter peer just I go certainly our back to and understand peers, which our elevated showed companies, even we're been severe Mike. even question, group. I in data that some where just peers retentions really companies insurance And terms our has include out the we think but particularly our the primary last and larger don't IPO, and No, this companies a up losses as companies at you think dose had our forth, that were better most picking there's forth, to group, obviously we we I you've good when of Midwest, effects IPO, quarter, multiple to so seen of the even convective this an follow exceptionally And divisions is a minimum, our so Midwest, beared we've their within a been that of of the directly considerably management.And still

of it's is often that a ruin the that it's volatility our feature outperform sure, others us have feel we their always kind XX%, should quarter. will see of have in so the quarterly some out where that cat results. for a see -- not about And We'll property we'll results but I believe portfolio. you be this yet of a part should take our and material cat

Operator

from Peters Our of of line James. comes C. Gregory next question Raymond the

Charles Peters

November. reinsurance might for guess you in it's year, can your how know Have any pricing remind various reinsurance little your reinsurance of peeks a the early, us context of sneak in I commissions it's the this ceding results trend? waterfall for I you renewal place? programs had on but And next year your of and

Andrew Robinson

renewals, different of Global or bulk Andrew. And which per thanks that is risk, Well, is are our thing Property our believe, I'd our remind per quota I question. this for share the all you cat, X/X. our X includes Greg, risk, the that first property

renewal.But reinsurance don't -- enough time, on one.The have but at far to really actually the handful to too everyone includes quota related there's enough know know with X/X, that anything but this is report. I most if treaties, the earnings say been being other is probably material and most next be call. we'll on And sort at early. time a material and don't reinsurers. update team that significant. meeting share which don't this of out probably excess probably most of early second, the well, worth And our commenting to have the I share to it's is our comment really So PCI We've excess say at with I happy I quota that's to our today

Charles Peters

one that business. of you in the slide agricultural And then businesses Properties in also your Global inside deck highlight

Andrew Robinson

Yes.

Charles Peters

couple to up seems that And reports. of in other come earnings a have

could and I'm performing just if year-to-date comment so And on your curious it's how business you for...

Andrew Robinson

Yes.

say -- participants the program. So well, let in particularly me X well, let government just I've following as large very been that. me that large

off, first only XX% our the MPCI book of And has about exposure. so

quite well we that business slightly been just that we'll reference that But it of million for -- portion than and some view. loss I is shares the that a probably for had generate a has things. side-by-side probably return that.And than of average.We return the up a our us. it's probably for generate enough that in portion. better circa better generally industry of in honestly to that about with is nice small end material I year $XX actually not portfolio, of there XX% today a exposed of scheme being -- this That worse us because excess of is, simply that But our give to in the performing And average with quota result. the book don't think that's will on as disagree is point shaping up to think it's as -- that towards XX%, grand

Operator

line the from comes of Tracy question next Barclays. Our of Benguigui

Tracy Dolin-Benguigui

the question operating expense that forward, rescinded. you -- acquisition will and looks revert ratio Do with quarter. a prior But contract there share in what I should similar. There ratio. think a mix going how get the we change this mean, on the I to that maybe quarters? I also that quarter this of seen had proportion about quota you had the of business do ratio? think we've was been to it pretty some back has expense

Mark Haushill

quarter look I the Tracy, QX reversal, it. this at the more et should is it, cetera. with at Yes, is look think you should think how way I you

Tracy Dolin-Benguigui

Okay.

So ratio like run policy higher a acquisition rate?

Mark Haushill

you. Yes. Yes. Thank

Tracy Dolin-Benguigui

opening premium OpEx? And leverage

Andrew Robinson

or a is wholesale you take highest and our see the Surety a right? businesses, that have wholesale-driven you our Tracy, parts of the distributors, mean, expense. like higher in one I as is been I line of through things happened that you in forth, it's at growth acquisition and commission intuitive, what's Surety so if Transactional the of you kind of so commission Transactional know, have, many look our certainly business is E&S, So have Yes. the growing would kind disproportionately rate. And highest of business comment E&S, is running industry

Tracy Dolin-Benguigui

Appreciate the color on mix. the business

Operator

call I would now like over Schoolcraft closing to turn remarks. Natalie the back to for Madam?

Natalie Schoolcraft

for and questions, I have. your you Skyward on of conference fourth the and our in you to available for Specialty. you your after wonderful forward day. for everyone, to Thank call look additional have again quarter continued answer We call. in any earnings Thanks, and may questions our speaking participating am support call interest with a

Operator

today's you concludes Thank call. conference This participating. for

You may now disconnect.

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