Skyward Specialty Insurance (SKWD) 2 May 242024 Q1 Earnings call transcript

Company Profile

Participants

Natalie Schoolcraft	executive
Andrew Robinson	executive
Mark Haushill	executive
Mark Hughes	analyst
Jon Paul Newsome	analyst
Charles Gregory Peters	analyst
Matthew Carletti	analyst
Meyer Shields	analyst
Yaron Kinar	analyst
Bill Carcache	analyst
Michael Zaremski	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the First Quarter 2024 Skyward Specialty Earnings Conference Call on mode. [Operator Instructions] I would now like to hand the conference over to Natalie Schoolcraft, Head of Investor Relations. Please go ahead.

Natalie Schoolcraft

Thank you, Liz. welcome first and conference XXXX everyone, call. morning, to quarter our earnings Good by Chief Chairman Robinson I'm our Today, joined and Financial Mark and Officer, Executive Haushill. Chief Andrew Officer, and for questions. call our today We'll will begin line prepared the remarks the open then with we

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

Andrew Robinson

$X.XX reporting Thank adjusted joining us. strong, Good you operating thank for grew you, started Gross XXXX income morning, Nathalie. We written share. everyone, and per of premiums diluted QX XX%.

market our allow deliver build cat we offer analysts cat. a byproduct Our opportunities allocate new opportunity and defensible to strategy best us I'll in strategy to areas to all property which We cycles. continued top capital portfolio profitability our limited was positions returns. Rule and of the reflection divisions XXXX growth growth to is strong allow Niche believe not property investors that have the already across we of underwriting growth to remind that of our direct during that for a quartile underwriting us fit shareholder with low aim those that see of profitable diversified

the equity rate the to continue Niche detail. Rule quarter business. XX.X%, all underwriting more Mark Altogether, opportunities support call about and return I'll and to Operationally, outstanding reflect our and we across to our flow strong, our divisions and in tangible equity and our grow annualized metrics ratio XX.X% on the be our in to XX.X%, submission respectively. retention greater continued strategy over find that, these With the adjusted underwriters. the financial results in or our our and turn I'll of functions that these and profitably combined to discuss was in execution Our talk call. power the Mark? later

Mark Haushill

Andrew. you, Thank

we million the quarter, the the per income diluted For written reported grew $XX.X ago. per $XX.X On for net period or or share per period million $XX.X compared [indiscernible] In a diluted for diluted million by or reported operating compared a or to per same to same year $X.XX XX%. share of we an adjusted quarter, year gross premiums approximately income $X.XX basis, ago. diluted share $X.XX $X.XX the share

property captives, the and contributed each All E&S, of XX%. growth professional divisions our global lines, were in agriculture divisions surety, our to over up underwriting transactional

underwriting our to Turning results.

to combined quarter of year points mix business. first X.X changing X.X by in the improvement The a of ratio first The loss of current quarter XX.X% compared XXXX. to non-cat the point ratio driven was improved accident principally XX.X%

combined was accounted cat for which XXXX, to less During first losses. on quarter the X.X compared losses by X.X catastrophe quarter, ratio the than the were point points and minimal impacted of of

and leading public, and an was with in conservatism a compared was the our the the points of benefit since no to public up being in we already We've net year investing going In impact Excluding business ratio LPT, from of the XXXX development. company the and prior case been year expense talked shift QX, quarters in business. The full to as quarters our first there position. deferred in has mix prior the strong to X.X regarding line increased reserve quarter loss increased XXXX. the

our in of and ratio. expense with a this So target expectations sub-XX is line

Turning to was million an results. in our income to $XX.X investment same $XX.X Net of compared million of XXXX. increase investment quarter, the the period

During portfolio the you net will note how investment the income we our quarter, results. we disclose changed and investment

strategic and the to driven a change was in speak equivalents, categories: and factors. cash will alternative We X income, cash of investments by in couple and short-term investments. equities fixed portfolio This

and in income and prior $XX fixed base. line in the from portfolio $X.X flow how portfolio Our significant yield portfolio. in reflective investment to about net put underlying simplify to at with X.X%. income we all increase strategy the Consistent and of first to fixed driven characteristics traditional industry improving in more the our deploy cash asset and quarter, the quarter, investment income our risk presentation strategy with million the desire work we free million talk The more to $X invested the the the portfolio million increased by our from of

XX year was we north At Our ago approximately continue to of million $XXX and had at X.X% our at a XX, X.X% March versus X%. March short-term in yield embedded investments be X.X% short-term XX. and on yield investments December

With the able million We terms property will orderly, to remarks. with from were these treaty expiring model back the $XX of we to terms call that, programs. Lastly, to turn and increased renew these and retention of $XX We the net cover our April while for cat improve reinsurance were I All concluding structure when Andrew we period from and X over programs. treaty increased are million same million. the million $XX retaining the the property the treaty. $XX is satisfied renewals to return our as

Andrew Robinson

you, another quarter. Thank Mark. had Operationally, strong we

in cost above We is loss continue to estimated pure the high digits, increases mid-single pricing our realize trends. which

contribute attractive margin business up book, an over to should was profitability expansion. new indicator and pricing new business Our again in-force our that is

as prior dipped portfolio, into to was Retention which continued in submission XX.X% writings continue as of also the over compared from activity, the by trending driven XX.X% QX quarter. our lower of retention some quarter. XXs year towards to as transactional XX% mix commercial shift which our auto well see We strong in business year such the E&S up divisions prior was

in And clearly Inland it's proven whether investments data reinforced. advanced talent marketplace. competitive execution underwriting surety further professionals the confident formula a turn the analytics continue grow Marine, that the year our broker allows of in professionals, for attract has to and capturing segments for in be our nuanced moment. and has add agriculture, in returns team we of with point, past technology QX each in We claims are invest the an winning a our market me standing marketplace our ability talent to continue within vantage it growth. and From our most special that our our for to But results, whom Let attractive with strategy to distinctive market us the is it we where of media very are our paying shareholders. increasingly certainly to our or and global off following or unit this visible the and a AMS, expert in In to launch liability remain arm transactional with QX, identify profitable those and deliver for for best and new be results shareholders. launched lines a attractive as success profitably of

Finally, we published first annual our report. recently ever people

encourage for to a and the Operator? are if it to view access this up printed we over call a have operator now provides report open the into like of like to visit contact and or website Skyward people company, wonderful to to makes it I'd copy. lifeblood you'd Natalie success, unique. our the back Our Q&A. our our turn to our truly what is The report investors

Operator

Truist [Operator the Instructions] will our Mark with Hughes question come of first Securities. line from

Mark Hughes

strong. very XX% you commission Andrew, mentioned growth is

Andrew Robinson

Over XX%.

Mark Hughes

that kind ice have XX%. that. stronger. submission presumably underwriting break of Maybe out [ break Over we to contributing way there's that is seeing expanded the been growth, Any kind earlier to underlying to the capacity compare and you of maybe could it and in out what your quarters? ] Even

Andrew Robinson

Yes.

we no following obviously, In say If me can I some marketplace roles.What the you're business cases, same-store of you and that prior large, tell up books for their in to new had kind that, the sales you talent leads inevitably those. let underwriters look in-force are sort same-store us share if bringing has on There's pretty But that just businesses, following of is capacity, don't by those like materially. sales that asking our this. question a versus that. across

underwriters that's correspond. for of what's because important they're and we're sales, and of way same going disclosing we our you an profitable But meaning had. contribution driving further also about to in If sort sensible is we've is, then a not -- business growth think balance. investing the that's I a think And same-store than seeing appropriate we're just go that data here are growth, our underwriters,

Mark Hughes

expand I great. you when though, touched Yes. say interesting you you nuanced when To say mean that you've on that, What a be you lot points. think would on do expand, of if nuanced, could

Andrew Robinson

X, at earnings X, and We in quite property, what's And happening reviews have discussed in we casualty I inland Well, And around property. highly would least of book happening put about just there's differently. right?So technical global have that of just right, all general circumstance, sort the tell our sort E&S, a tell sort that transactional then our forth. general happening I sort property, of marketplace of very are can during particularly behaving what's very like of areas it a the property. of almost it's to that's you as portion us in obviously views and the of are not it would to marine, this out what's there think each discrete various market, And a things if of have that I take of I in very at -- parts describe closer specific is points those -- of in right? X time you portion describe I to focus and versus being year, different so

that relative market cost that's nuanced. and moving and pick At when is like right? we what was Well, the side, time, business. as E&S E&S an price flow we we suddenly, moving are course, the loss last market, of okay, in everybody a dramatic in out services. liability favorable month, on pulled exclusions about are to a inflation out $X,XXX like, providing an are seeing minimum the things. pulled attractive in minimum as point so write about premium. Instead have that the we're think. business, we and assault carrier LifeGuard market price transactional cost example, the premium, the of loss is on talking by possibility that prices because the of Meanwhile, people same like our people and our be ours those abuse casualty, services recognizing And think of as mean not may Well, that of of starting $XX,XXX the it And because battery, well, absolute Lifeguard a be like have I'll instead emulsification this on could we the maybe

everything. sort the to by category kind that great and is And market pick the of see opportunities go I But so a plays it's It's underwriting underwriters, category, into window all the pull specific their which And the those we want. that an we that out like indicative happening it's allows of have. believe not way we very to time. then us business

I that And there. And company the talk of I us are a so hell market more I think than what it's that guys nuanced, like many a to mean. favorable out the other that's about when at

Mark Hughes

blunt the question. in casualty as ask you see a matter? general talking simple I'll They're that accelerating Do about XXXX?

Andrew Robinson

Yes.

the say we again, when we've making is pull last the of couple think that.We're to tell points, occurrence, tighten case, sure I'd ex-workers' start terms don't and back one overriding we there's to moving. over you able I and took our we specific balance. the definitely across all sort that to various of some is theme. But think do what our found that look to what been that holding, very limits, actions we So casualty the prices in areas retention quarters can but In comp, also we I touch is see here

competitors at the like amongst a to that the be a those cases, competitors we good consider very, better, operating and in in similar competitors feels amongst be that the of seem way. I best the lot see very to that So they're least

-- you're I think relative, mean casualty then a loss So is there in are I I one think uniform that's best that's And uniform, places it's plenty And cost and very I that promising. believe I point right? I see. for think don't what great opportunities and And gave you again, of your said, trends. we by all excess a I of you believe nuanced. right? that to I in just think I don't hard mean think there's much underwriters. price I a certainly market. market that That it's have starting technically look, is marking but is strong the earlier, I think,

Operator

next comes Piper line from Our with the question Paul Newsome of Sandler.

Jon Paul Newsome

income little more rate with options was of to get thought. a There's of and the new just detail portfolio. Good hoping bit to morning. about and investment fixed run a trying changes I moving money moving in lot income a obviously, happening, to around sort bit get little some of

give of is long-term be that will be a will -- rate us you run some kind help sense of once everything that trend where get could So thoughts maybe done.

Andrew Robinson

translate me if I Mark, let see can that.

going opportunistic asking.Yes, for of been right. future, traditional challenge You're income the the what make I kind on, where right plus want out in that kind of it's what's for investment is into assuming rate to run is fund, the the you're mean figure of understand midpoint/run I the always you're what may that's income. sure assuming and a flows -- looking out investment wait it putting exactly where rate of you just to we've got you've opportunistic. the from a flows I received that

Mark Haushill

it's way the Well, about I I think pretty simple. is it -- mean,

core If at base is. for yield look you asset our you embedded income, invested know fixed the what

go investing I the for all rates cash that our Does part know over answer going. been to think will where flow the what question? are do. don't That's yield income. -- the X% I fixed year. interest better continue at We've going of your of to to it's And

Jon Paul Newsome

well. little of to bit, take I A Maybe sort can back too, question. it as environment the offline, competitive

Maybe the think is really is what where is primarily not true further specialty what be sort be of concerns kind but E&S could E&S even concern a of that have talk that if of Or you I all? might yes. box could softening necessarily the been is is at bit really a the in little about not all? at

Andrew Robinson

to We've before. it surplus said to want we I'll around I the I consider write don't What market, be know prop lines. entire if I the industry. lines true say it again. surplus in would

business I've that's here get in quarter, just with are into Paul. get We stuff market some less this forth. grew grew for because coming certainly, that's market, right, becomes transactional E&S and market in writing of But writers what's of would a So Those guys X we that's where team XX% more so the our part heard the the the all We're are the the about isn't questions major competitive, surplus then look. flow also ]. write happening light. surplus states the That the in if [ reason.Now E&S we there's you And E&S lines. us. admitted the care that in stuff same lines areas. about XX% professional early I areas pure views on lines data the and the facts, don't

of would market, that the so pretty say I'll just what's reinforce good And that's indicator regardless that happening it. in I a

organization feel take to sort year's and is XX% I seem be a Do growth, is like mean past the seems can we and be it grow can example paying the cross-section of different of I pick to competing tell excellent -- multiline growth the the some continue continue last the But or to I off. you, strategy, specific Bermudans. And earlier. and we very our profitability where sort that are, market. I We we number in those larger you a like just the that with and can to of to primary is in let's level No, market like the is ability enough sort insurance grow I can would opportunities than absolutely XX% specialty of win. in strategy we're returns, I've that that highlighted a for of and the our arms carriers of speaks to who competitors we're to a sort specialty of plus meaningfully off Our continue pure-play executing you just of shareholder to gave execution just the well the bank? at just the the believe not. it

And about is so us. good for at, think the feel still where and we're I conducive I market

Operator

the of Raymond Our next comes line Greg Peters from with James. question

Charles Gregory Peters

from of you conditions. lot a comments market on So

quite is the back reinsurance, comments retention. want premium about property integrate that I of the quarter. go and on in written discussion your gross and increased strong to your sort Your the to renewal with

about as -- frequency your As cat you we and should of in how had It we exposure it should through your to a like to we 'XX, go think losses? book growth lot property haven't seems date. severity of relates

if curious So changing now. is profile I'm the just

Andrew Robinson

It's a Thanks, great question. Greg.

say start I think just and it's tree the me important. Let because something about

we of So XX and basis, attachment point. an that's attachment moved year, a XX-year modeled we point million. that when to a had On last $XX X-

a point.Our exhaustion it's of X we is $X sort So the event. million of in in XXX same kept we our excess of point, same added cover while in effectively attachment excess point, of

which has book added because And been so surprise you well, we Property from consistently. percent property, no pretty XX-plus last some of tells grew year, our that exposure that is right? we've

book our so And grows, as growing. property is

we that properties. of [ point, our to we're we're buy And basis. small a doing the relatively on return tower To we're portfolio. write cat is size your book of is a we line well-diversified property in ] roughly And that course, all -- unsurprisingly, so we're exposure. keeping cover our And period of adding

don't I change look, exposure going terms anything think frequency or of severity storms. of So to in to is

a then saw hurricane lot was pretty can I the a just There's going into the and on in still out. activity that season, But you right or to convective material would that of think in And QX what an we to events we I attachment see We'll a of favorable results course, turns that again, relative since think attachment in conservative relatively how point, of our our of that's already basis terms quarter were in a so of very we a there I think And light industry, is see relatively have activity paths say general. be of get QX, good well. was as now very forth. as buy I take a for what conductive we then, on. would us. net look, lot I if be results material event first a a things lot confidently that think point quarter set the

I all feel good So about that.

some You had questions asked about market.

let that severity anything So I question did and address on more, me and say before your and growth frequency exposure.

Charles Gregory Peters

you did. Yes,

Andrew Robinson

me to market? on property comment just Do the you want

Charles Gregory Peters

do. Please

Andrew Robinson

Okay.

an is think Actually, very above an more write we We our think falls This don't of large their it's the into across attractive I interesting retention. the this a be global may insurance the largest it's narrative, market, line lost in and on property not had pricing as chose we example. So and is company, it. primary to much global a large well, QX. line account nuanced.I'll new property take opportunity. the right? Again, everything casualty I the board

in International their So exposure is like Well, at rate out which job, came the ridiculous the $XXX the that international was of just insured approach. retentions. a theoretically, made exposure values. of broker pricing did was dollars. because split measured international That's Well, provided down. of Yet that primarily a is in just lower a a XX% went XX% sits exposure. inside up great the exposure bunch million the and example, of primary U.S. Great retention competitors that exposure think silly. above a from of about millions tens about that

expect and by hungry, of example think the don't hungry things out let an that just commodity MGAs there's companies writing are ways okay. We as the little That's of that so account very way, many I we then sensible to you're for basically at And quarter we way just steer And a of I clear And just go. putting in And there marine. that there. grow well area to sure. okay, a had long won to to an because a where And stuff in a throughput try for places example time. we that's We've look basically things stock offset there's bit accounts like the big it's like account people quickly. global are on like, -- in over that. out few and it's that's fine. lines too And property

And the is competitors tight very But were so property, on. E&S I a same look submissions Marine change bit sensible. good. of E&S conditions, booming market just what terms little at to seem we by the absolutely pretty and our still. who incredibly which When with we're found be in property in darn large, feels Maybe that competing transactional we're and

still And of seeing opportunity. we're so plenty

For up stuff, sector, writing not us, is bit. technical backing like related a a severity, the the frequency which very wood a very we're say, hard to high let's but low you're, risk if in something on

line. our And have we so

of really seen sort are companies into haven't of who a We line. pushing lot that

the sticking. So our part darn is stuff book, I'd is a lot property rich. then And general of the say pricing pretty of in

some be able you price, a very if that feel that you so get attractive there, little still you're bit to a can return And that up to and of able give to from do portfolio. competition great drive

we we cycles can again, of up are results opportunities. things know, so a give And the strategy. think their stuck that as that X market you we're that an business, not well-diversified push we benefit And and portfolio behaving incredibly see where down that of to set that I you single in talk the so to have in everything sort Greg, sense uniform way. not should of those is kind one our examples And that

Charles Gregory Peters

color. great That's

on clean my answers follow-up your there. question to up Just

you and your what company remind could of is by the limits, out just important a speaking, of mentioned in segments. Maybe then marketplace. are, sort writing for loop us limits limits couple broadly You maybe the net and just close on more your us what

Andrew Robinson

Yes.

our limit $X.X about So in net speaking, max is property, generally million.

so entire applies that So across yes, piece. the

Charles Gregory Peters

And the other segments too?

Andrew Robinson

Yes, that everywhere. apply would

when in write in property certainly inland E&S. then marine, Global we Industry apply would Solutions, in we're And in that So Property.

think lines what those the explained of very is one is of support obviously those past us quota to $X.X in I've net. aligns keeping largest that where And a marketplace in of that I we've the portion support the in long-term had be share allows writing considerable the to long-term of the programs. million the -- sort we're that primary

Operator

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

Matthew Carletti

been past the lot say, in quarters. of on several right a focus, I'd industry-wide There's reserves

company in how kind kind increasing think update about you a to behind of a shrinking on opening the what even group of comments, you're of comment of conservatism. up little of there. might are picked some indications kind lot seeing the kind and of that's be and showing go I of stability guys are what a just us rare bit reacting Could in those? you You scenes a a companies, the And there, I your

Andrew Robinson

So of in to greener But our And are that. course, the probably mature the to be how reserve up Well, looking this start in looking book.And showing level that we at was is, simplest we Mark recognize things redundancy, right? maturity in at about quarter in. very question any way think is, remarks, just years in commented is describe redundancy our more we're Mark's you the and redundancy, of can of I that emergence also look, have years. favorable, of jump the but prepared yet we or think I'll quarter, can redundancy the specific didn't the in to

a going constantly the have And probably is And so since to quite analysts don't other you.And then lines not and liability same, said ourselves started expecting. position consistent any build good engaging and because with and to really the release watching answers we and of conservative along job. what to the also today, we investors, along tell things. as not that when the pre-IPO bias, But we're which predictable right, done that honestly, results have been a of will we've side and demonstrate think attractive our is to stretching all X we've are we while And our you position deliver -- to conservative from to balance we're reserves we you we're sort way. able our of in we are the on know, we shareholders ourselves for sheet think those a that we're I asked

belief And at would point, story so of should news our that reported to better on investors. said I in our everything inert you, some results benefit always results good we're based it's and the hope, are is like I've just a say actual and feel I our to that that than our as seeing that our

Matthew Carletti

of new net mean, I question. right, I at kind the I different quarter didn't Maybe back a a this investment a it. just income to have look impact. an few That years. if Paul's of disclosures, really the I makes take lot at sense. the look to want follow-up go of alternatives just a discussion and Maybe

very it was changes also I off there's least there leaping that at leaping that reason as would But and think thinking number that's be off from over And not at I sustainable XXX,XXX.So in at think a a look looks and it forward a point, million that's like good to going me. the obviously, $XX that, yields cash works about you no clear pretty that reported, I'm to time. coming more higher flow point.

Mark Haushill

Matt, thank you. I agree.

I would to over good rates short-term quickly, right, short look it. at could I that way that's change think a the highlight term. a fact

yes, happens look we're in to what as I generating that more been focused $XX cash We've million pretty But the with deploying putting the we've we're on at on pretty again, where that good short-term short in it quarter look, cash work. depends situation rates.And a So term. consistent. got

'XX. fully is plan by deployed of to end Our be the

Andrew Robinson

thing. one add just would I Matt,

our know million that by invested You $XXX year-over-year. assets grew

uncertain.But To deploy with point which last -- generate $XXX If put trying sort really growing been how attractive the know set that we like at that that able that's we've Mark's we're that's not is is are fully And bounds invested the blessed you near-term don't our are of been deploy much within it And how you point, so that, the it's great. our to to so million. times course, is Mark only short-term quickly can it rates this assets and plan this that a I investment is one something strategy. case, we we've to clip. point, respond many is, changes, So said of variable cash, the cash that is year, here but of to work. pretty made in to, fact our

Operator

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

Meyer Shields

any tail seeing you on claims for short the Are like or lines change in property inland rate marine? inflation

Andrew Robinson

No.

Meyer Shields

Okay.

made The Andrew, second with regard on question, you and comments earlier, non-res auto. just to commercial

talk you nonrenewal rate? to or So was And lot we're more sense definitely could why hoping auto just hearing commercial backing at I up of made least accelerating sustained increases. rate talk a of conceptually than

Andrew Robinson

Okay.

view that kind kind feels in digits, we But in XX% point over and going is XX-ish there. a not over, now that, I XX% inflation keep are unabating call And the same right? are to you're rate, cost a so what it inflation. the environment.That single saying year the can like we grow call if So I So into. that loss give commercial over I to to its this loss example. you when XX% you of relates last get see way or exact making okay, has unsustainable that of certainly, high and things. a well you happened and before that [indiscernible] And of as know that even that social into what want you moment here auto, of I maybe simple finding the at with inflation, we a as elements cost that seeing different kept granular kind give I'll marketplace but think

just And the by prepared week, with the of a notice first different a styles like way, [indiscernible]. loss of demand day. first pretty heavily this right? from was high it a we Sorry, Like received a attached a to notice that moment feels a loss, document first ever demand,

the torte accelerator we're notice states not, if to viscerally. indication the work. But break, it reasonable. up Now or efforts there's to a understands -- personal up is in in they we marketplace. then And Because so. the close can it's and the we out going more first what's make to just market, validity it's the tap whether it do as the legal to just, to to it move loss like on it is on who's happening to to it that itself of part it whether environment a And control. this an as the lean injury reform of heavy And just can to on environment, ultimately, on the everybody of is

up we And on And think average reflect lower that so we've write getting indicated the the that been it. exposure, studying and the exposure. it have even fully easing each is up than studying were our to studying for that been ease rest been and rate we've that and rate I And exposure on the we of premium for I business. we because going higher unit doesn't

it. behind thinking the that's So

Meyer Shields

And one for net gross can. one maybe I written last premium expectations for quick the Updated to XXXX. ratio if

came than I expected. in quarter First higher a little

Mark Haushill

where in is were the first in quarter, we're what It's low line with Mark. it's we XXs for. looking Meyer,

where So it's I think thought it we be. would

Andrew Robinson

There through there that a little was in we well. of that noise is that bit bit a quarter last of as and for quota-share unwound you quarter. second We remind third the first I'd little you ran and had year. contract noise a others

through. And guidance think we assumption play planning saying when explicit year, that full gross for also quite that is I we were do your that to set there's But net models. reasonable the year issues for geography so a full some our 'XX

Operator

next the with line comes from Kinar of Jefferies. Our question Yaron

Yaron Kinar

just Baltimore a closer to collapse, want to any start maybe I one. that? with you The have bridge quick do

Andrew Robinson

No.

Yaron Kinar

None.

coming regard to Obviously, the expense back bit through to a with Okay. the shift. extent but underlying a Then that little mix conceptual an benefited see ratio loss maybe broader we also question higher ratio. a

What capital attractive profile? can the you? about is ratio? it through is combined better what beyond So to better of mix a risk Is Is a maybe that, the more the holistic see debt efficiency? a mix that in you sense do underlying long-term it talk benefit shift you maybe the

Andrew Robinson

look, the things talked the of answer question, Well, it's by about. the all And great you is way. part that

from lot So driven look We've a a lot at transactional if growth really you growth a been coming certainly E&S. from from, of of of where our has the growth we've lot Surety. driven

part are obviously your the wholesale, highest that's others, is business commissions.And in by way. included, E&S, And comfortable with of liability correct, within injury. so that We incredibly quite been surety that yes, higher -- of general personal the of able good then our on sort our that has honestly, -- inflation capital, And both kind I example, that that from and sort capital same expense way, and then, we're in our would it's ratio the Air of the think And to of that high. of reasons our for were of in leverage the write You the the things to trade-off. talking case way, by ultimately Surety that of what characterize E&S. profile our case we're commissions in are achieve loss we've that, of less belief of loss the achieve. diversifying. is very we applications the I able which transactional just believe of one that kind sort uncertainty of around about, we risk of exposure is some that they're

is So all it those things.

example, would. speed it's to we but profitably seeing There's A&H to boundaries to at us, the So in now, think coming we're faster for our what there it. to have other maybe and We want for change diversification, we same down is portfolio, now. from a may ability that's well-diversified the right because could harder press certain just keep great grow year I a right? part it if we That back areas. we in of can

Yaron Kinar

the forget press investment. not why night. in been the see remove in about growth. And story is understanding also one the for to of And comment/question. that chose of I those, of just if squeeze I'm release so And for disclosures drivers I you could sort by to that think as curious premiums helpful If last just if premium growth did I much missed division that, exceptional us the has in considering I

Mark Haushill

It's Mark. Good question.

We will be including forward. in out Q be the going press will The tomorrow. release

So but in tomorrow. in you'll press matter the Q see releases We'll there. going just it's of it a was -- it have Q. the forward, in the will It be

Andrew Robinson

benefit, lines, And XX% sort of not X%; of XX%; and professional to throw grew but the XX%;global a XX%. bunch your for captives, for solutions ag, surety, XX%, programs, E&S, transactional industry you, XX%; at And apologies just numbers property XX%; oversight. and A&H,

that. that. for correct Thank will We you

that in You're right observation.

Operator

Our next Wolfe with Research. line the question from Bill Carcache of comes

Bill Carcache

sort it a manage if could And of it as As interplay the those where that targets? on investors But seems that to? underwriters. is growth how you price. attractive address competing an versus outcome you I be comments you're around managing lever you're you're for identifying helpful analyze returns, your the appreciate with market important much nuanced the of between areas of something your just how pricing would and your focused actively best like beyond opportunities

Andrew Robinson

way. Thank It's great question. a you, by the

years just as what that above general get That's great a a our couple think of and lower you sort by we're is XX-plus here long capture our that philosophy your right? of price, above terms is we're that been with aren't giving up our ends tell the return that showing you at of expense example the a that that add business. We ROEs follows, a good of fit to like does businesses and transactional think of some then -- equity. there, kind I sort look? in some And that we writing I'm implicit Surety trying growth, way, will hey, are some would unambiguous sense targeting leverage, leverage we is we to it a if stated value watermark correct, XX% is and the but long or more can transactional. the, you if ability the got I double do might Areas And we've for up just for which more add of of well, that proposition percent units as terms the And generally make we write us think if not time, in right? a you a return. our how we've I sure might more I That's But less news might that in of shareholders, good that bit on keep for units our number.And again. believe E&S might can is will capital got write a kind in be kind juice units if question, so. your you is then you for happens consistently do account get that. of as value that we our that an formulaic. we strategy, And retention

Bill Carcache

you in retaining have in that's concerned that? enjoying Have out of you evidence And Maybe that competitors How seen poaching then the some and on to are rate that. business you talent following on come success underwriting that up your incremental speak talent boarding. boarding about success with your talent potentially of the future?

Andrew Robinson

lines greater last on you're our insurers, but It's I a attrition the war range question. other excellent consortium by measure, if people as was into you than, a best voluntary really not for the close And that's example, best, get X%. you can kind if specialty is space, I we the think with think talent HR the I to share just commercial. matters. year our in a there.And or for small What tell And personal that of not on is much data retention, out of of

means by. of generally are people dearth a they're forth, there's so focus areas So it their that which in and is talent right, speaking, specialty, come to good harder and technical

the ecosystem will not for happen. is if built. And that on It And culture then there's so beast. -- and we ultimately, you're the like have of is a not that like organization, so our If window there's the people-centric. it way our our part that Yes, kind And spot I you also organization. I I of sort to that nature mean, But industry. company not focused annual look defense report, that talent There's our that, if this, it's the people do really I on just we tell you always a is is And ELT reasons encourage people the a into a a -- And of of good that understand the market at think to of rational and our best the create -- reasons of born we that look competitive that will talent from economics we of just to in, talent interest, just that's and MGAs owners so, have, It's the it's of the say of, -- on at think I the other that but are crazy, I our consideration, personal should you, we we want we a we've -- connected is a right? as great put things not of a that. of pricing for the of the we very to possibly to think when certainly the going the members our that's in dimensions done go it this be ignorant we've and But we're rely concerned. with which position feel is it's company can I that ourselves just relates that people are there war I practical this are why from topic we're have. is continues. that's dearth all me doing the about genuine time. starting probably genuinely best feel is will one and And to part It beat business. drum look, very specials. the one yes,

Bill Carcache

potentially I if look rates in from you maybe us where higher lock actions share thoughts you one then more take the there a And squeeze protect focused could to you in downside lower Is rate you to attractive if estimates are lower a and risk rates? any relatively one. How on environment? that could point, last from with yourself

Mark Haushill

So on clarification, asset Bill, for just investments you're about side, the correct? talking our

Bill Carcache

Yes. That's correct.

Mark Haushill

it. interest in extending we fine. move We'll during returns I we kept the X, We're I and not duration right our are real about our rates think how see look, where I like are the immediately. in Bill, But year. no duration, to think at it, going react

rates see just will the out. play We interest how

Andrew Robinson

we've been blessed Bill, add we're with thing. I'll had one interest environment -- We've in. the rate that

very And time work high-quality, free core so to our as very very, in our Mark cash to high-quality we going has assets. every put fixed flow very, commented, income, it's

way the in And jumping if have reconsider of we're term, and down to investment think think so like we X% environment rate just feel bit investment-grade that a in fixed medium would go kind can the were not And still and attractive like credit. lower the back I that in And the X% capital if cost lower that look the but on high-quality returns us of talking to end slightly the the god credit new were that for before in strategy that's way it's up, of point, you an start at jump, environment, to interest continue an capital start ourselves yield. how a income. first where of blend But the reevaluate embedded to ever, core moving rates about more X%, if we obviously, talk about place keep growing also is to that I allocation rates about different have your you money yields we place context. you find to having interest because have a like like even to forbid, our that.And different you a we then both long we

Operator

question next BMO. Michael of Zaremski with comes the from Our line

Michael Zaremski

can ask of questions. one a think lot I I good more,

to more you've us of good macro pulling -- Andrew, in of that that think there And more all our casualty majority you from maybe to also it and kind inflation inflationary, a could are have certain I some states are limits are remarks kind back clarify had more I you've standpoint, social terms, the auto maybe some kind excellent word, maybe maybe try and pull talked check? that given is on feel side. and that's or guys some guys reserve look keep inflation, So color. given casualty. on just you that's about social experience experience maybe broadly you just if guys about in believe assuming the margin questions you to of your you other back But of the prepared any gauges on commercial looked or I'm at tightening

Andrew Robinson

Great question.

and, I of lot the of comments as us, [indiscernible] as this you'll both limits my as course, that actually and were think general excess, the liability and pick terms well around is and auto on liability exposure a for play. additional up where and general comes around excess into well exposure.And insureds liability like principally so things

we've you watch, obviously, you you so every for indicators, underwriter, you see, taken look early the try turn good -- And like crank. right, to

something moving before popping that see baked. I you're make everything we're well, that's sure fully is on If to you that like, want that

to And a more that reference really so that. was of

of not you're we had auto, to on that our has on to the pretty one gone write E&S in reporting the minimum using to things the path knocked basis. on an relative times things insured. the we've telematics that occurs accident of back turned think statutory around available. far get you an We part limit and deductible Because business, I down the and even not like if

we've can selection outside risk of on So pretty I do think auto we done much price. what and

how claims up million, viewed to I there's our a certainly its particular juries is of As venue, judicial could -- yesterday the was judicial award. I it and always I Look, you great political to And not be very end representative that hellholes. that like kind pulled to I think it opposed or kind the million can't pull said, venue to the every could of relates went $X level remember think $X conservatism. I'll the of specifics, exposure where stepped jury jury crazy as So of was did back I in But to this $XX but case as ones few in. judge That the -- I of where look, million, a publicized wild basically out right? mean say a judge on a a like are and a jury. that truth saw theory, award, in jurisdiction Pennsylvania. a of front it being week, be the right, the a level hellhole of in is That for it coverage

And of that can a jurisdiction conservatism a is the will a an certainly kind the that this so really by you to thing state, make I not to example. And say What kind reasons of state there's difference. say of it's that's county-by-county at point. it's

taking we're absolutely to on that And address it, terms exposure. but so in this that to watch we're and enumerate be trying where it something is would of hard is it we

Operator

I'd session. question-and-answer the today's turn concludes for Schoolcraft remarks. closing That back you. like to Thank Natalie call to

Natalie Schoolcraft

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

Operator

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

may disconnect. now You

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