Skyward Specialty Insurance Group, Inc. (NASDAQ: SKWD) announced a remarkable performance in its second quarter of 2025, reporting adjusted operating income of $37.1 million or $0.89 per diluted share. This achievement marks a significant milestone for the company, driven by a record $31.2 million in pretax underwriting income, the highest in its history. The company’s year-to-date annualized return on equity stands at an impressive 19.1%.
During the earnings call on August 1, 2025, Chairman and Chief Executive Officer Andrew Robinson highlighted strong growth in gross written premiums, which surged by 18% for the quarter. The combined ratio also improved to 89.4%, reflecting the effectiveness of the company’s diversified business portfolio and its strategic “Rule Our Niche” approach. This strategy aims to generate profitable growth in areas less affected by the cyclical nature of the broader property and casualty (P&C) market.
Robinson emphasized that the quarter’s growth was particularly noteworthy as the company chose to limit its exposure in global and excess & surplus (E&S) property due to softening market conditions. Instead, it focused on profitable segments such as agriculture, credit, and accident & health (A&H), demonstrating its ability to adapt and reallocate capital effectively.
Financial Highlights and Operational Insights
Chief Financial Officer Mark Haushill provided further details on the financial results, noting that net income for the quarter reached $38.8 million, or $0.93 per diluted share. Net written premiums grew by 14%, with net retention holding steady at 60.9% for the first half of the year. The company’s underwriting results showcased a non-catastrophe loss ratio of 59.9%, which represents the best performance in company history.
The second quarter combined ratio included 1.4 points of catastrophe losses, primarily from convective storms affecting the southern and midwestern United States. Despite this, the company maintained a conservative reserving philosophy, with incurred but not reported (IBNR) reserves making up over 70% of its total net reserves.
Haushill also noted the impact of investment income on overall financial performance, which decreased to $18.6 million. This decline was attributed to the company’s alternative asset portfolio, which has faced challenges in recent quarters. Despite this setback, net investment income excluding alternative investments increased by 23.5% year-over-year, driven by a 30% increase in fixed income income, reflecting a higher portfolio yield.
Strategic Growth and Market Positioning
Robinson reiterated that Skyward is well-positioned to navigate various market cycles. He pointed out that the company is not only focused on current conditions but is also preparing for future opportunities. The agriculture sector, particularly in U.S. dairy and livestock programs, continues to offer growth potential. With a focus on smaller accounts, the A&H division has also seen robust performance, especially in group captive offerings.
In the surety market, growth has been moderate due to reduced federal funding. Nonetheless, Robinson expressed optimism about the company’s ability to adapt and innovate in this space, looking to capitalize on emerging opportunities.
Robinson concluded the call by emphasizing that Skyward’s disciplined underwriting and strategic approach to the evolving market landscape ensure the company remains on track for long-term outperformance. The firm’s ability to selectively grow in favorable segments while moderating exposure where necessary is a key component of its operational strategy.
As the call transitioned to a question-and-answer session, analysts probed deeper into specific areas of growth and the company’s approach to reserving and pricing strategies. The insights shared by Robinson and Haushill provided a comprehensive view of Skyward’s position within the insurance market and its plans for future growth.
Skyward Specialty’s strong financial results reflect not only its successful execution of strategic initiatives but also its commitment to maintaining a diversified portfolio that delivers consistent performance across market cycles.