NASDAQ$SKWD

Skyward Specialty Insurance Group Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Reported a strong finish to 2022 with double-digit premium growth and a low 90's combined ratio.

Skyward Specialty reported a strong fourth quarter with double-digit premium growth and a combined ratio in the low 90s. The company's disciplined underwriting and diversified business portfolio enabled consistent results despite market volatility. Skyward is well-positioned for continued growth and margin expansion in 2023.

  • Gross written premiums increased 18.1%, with continuing business growing 21.4% compared to Q4 2021.
  • The combined ratio was 92.4% compared to 106.8% for Q4 2021.
  • Adjusted combined ratio was 92.8% compared to 94.8% for Q4 2021.
  • Net investment income increased 30.6% to $5.3 million compared to Q4 2021.

Headline financials

Total Revenue

$170M

Previous: $550M-69.1%
EPS (adj)

$0.36

Previous: $4.84-92.6%
Capital Expenditures

$2.33M

Previous: $2.15M+7.9%
Free Cash Flow

$81.7M

Previous: $173M-52.8%
Net Income

$20.4M

Previous: $1.32M+1452.8%
Operating Income

$26M

No prior period
Gross Profit

$187M

Previous: $145M+29.1%
Cash & Equivalents

$45.4M

Previous: $42.1M+7.9%
Total Assets

$2.37B

Previous: $2.12B+11.8%
Stock-Based Comp

$2.29M

Previous: $522K+338.1%

Revenue & EPS history

Skyward Specialty · Revenue · Quarterly

$170M

Q4 2022-69.1%vs Q4 2021
Beat estimate in 4 of 13 quarters(31%)
ActualEstimate

Forward guidance

Skyward Specialty is positioned for continued growth and margin expansion in 2023, building on the momentum from 2022.

Tailwinds

  • Strong pure rate in excess of expected loss cost trends.
  • Double-digit growth in each of the eight underwriting divisions during 2022.
  • Successful completion of the IPO on the Nasdaq stock exchange.
  • Disciplined underwriting and the diversity and strength of the business portfolio.
  • Continued investment in new underwriters and underwriting teams.

Headwinds

  • Potential legislative changes at both the state and federal level.
  • State and federal regulatory rule making promulgations and adjudications.
  • Class action litigation involving the insurance industry and judicial decisions affecting claims, policy coverages and the general costs of doing business.
  • The potential loss of key members of management team or key employees and our ability to attract and retain personnel.
  • Inflation in the costs of the products and services insurance pays for.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 16 quarterly earnings reports · overlaid with Q4 2022

Historical avgQ4 2022

+1.8%

Avg return

Earnings day

+3.7%

Avg return

5 days after

+7.1%

Avg return

30 days after

65%

11 / 17 earnings

Positive

+9.5%

Q1 2023

Best reaction

-4.5%

Q4 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.8%-1.5%
Q4 2025-4.5%-1.5%-8.3%
Q3 2025+1.5%+1.9%+8.8%
Q1 2025+9.2%+9.9%+18.3%
Q4 2024-0.8%+5.3%+2.3%
Q3 2024-3.0%-4.7%+17.1%
Q2 2024-3.6%-8.5%+2.0%
Q1 2024+2.4%+7.7%+6.9%
Q4 2023+0.0%+3.5%+7.8%
Q3 2022-1.5%+3.8%+6.4%
Q3 2023+9.3%+9.3%+17.4%
Q2 2023+2.1%+3.8%-0.9%
Q1 2022+2.5%+1.2%+0.0%
Q1 2023+9.5%+12.2%+10.9%
Q2 2022+4.1%+8.1%+6.6%
Q4 2021+4.1%+8.1%+6.6%
Q4 2022+1.2%+4.9%+11.5%
Q3 2021
Q2 2021
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Q1 2020

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