Skyward Specialty Insurance Group, Inc. Common Stock KBW Insurance Conference 2026

Well, first off, thank you, by the way. I really enjoy doing this every year with you. Look, I think from a Skyward perspective, for those of you who follow us, you know that we undertook a transaction in buying Apollo that closed at the beginning of the year. I do think that is a relatively significant move for our company that opens up the possibilities in lots of ways that were not really available to us previously. Obviously, a market with a Lloyd's platform, a fee-generating business which we aim to grow and develop, a really unique set of capabilities in the digital economy with ibott, specialty classes that we can access today with Apollo Syndicate 1969, a syndicate dedicated towards that.

I think that our perspective would be it is an increasingly challenging market backdrop, but we have a far broader platform to work with by adding Apollo to what was a really great U.S. specialty business at Skyward. So, all things are not dark, despite the fact that those of you who went to Monte Carlo might have walked away thinking that capital is rushing into the business way too fast. I think that we have a lot of things that we are excited about that are really not rushing into the face of that competition. So good. It is all good.

Yeah. Yeah. Unfortunately, the reinsurance insurance markets are connected in a way that it might start out as a benefit to the buyers of reinsurance, but ultimately, too much capital is not good for anybody.

We get asked this question a lot. I'm just going to declare not to be too opaque on this. I think it is really hard to isolate on one single dimension. What can AI affect, right? I have openly spoken about, and in our investor materials, there's data out there that we provide, about examples that clearly should improve efficiency, should improve underwriting acuity, meaning that you should actually be able to affect loss ratio. There's things that I talked about yesterday on the panel that have to do with new product domains that are much more AI-native thinking that fundamentally reimagine how insurance is conducted that should be growth oriented.

But to isolate and say, "Hey, I'm going to see this dimension of your underwriting income actually move specifically related to AI," I think that's like asking the question of how much of your combined ratio is moving relative to rate versus portfolio versus other things that are going on, all that are happening simultaneously in the business. We certainly as an organization have a good deal of tracking that is our assessment of the things that we're doing. But not all of that is easily traceable into our P&L. That said, I think if you look at our financials, clearly we're outgrowing the industry, and clearly our loss ratios are quite consistent, and our expense ratio are getting better. I would like to think that AI is obviously contributing to those good things.

Yeah. So, fortunately or unfortunately, depending on your perspective, having been around the industry for 35 years, I just have way too much scar tissue related to what effectively is a cyclical industry. There's been a lot of talk that data, information, post Spitzer, everything else would suggest that the amplitudes of the cycle should be less great. I don't think there's really any evidence of that. We just came out of a monumental hard market that ran far longer than anybody ever thought it should. And I believe we should revisit it in the next couple of quarters. I think the speed in which certain areas of the market are softening are as fast as anything I've seen in the course of my 35-year career. So, I think from our perspective, probably I'll start with what we didn't do, right?

Back in 2022, 2023, we had hit a kind of once in a lifetime hard market in property, particularly in cat property. And we effectively elected not really to participate in that. And it was really quite straightforward because our whole strategy is really found in this idea of rule your niche, building positions that are defensible. For us, that tends to involve areas of the market that are quite small, where you can target them with product that's very specific to that particular need. It has a lot to do with talent and technology. And quite honestly, writing cat property is like swapping capacity. There's not a lot that we can bring to it that others can't. And while you can write up and capture margin, we're not going to be able to defend that.

I look at some of our public competitors who now have to explain to their investors why it is that their property books are shrinking at rates that are really quite significant. We avoided that, and through that process, we also had to explain that to investors. A big part of that was really about where it is that we are putting our capital. I guess probably going back now 2 and a half, 3 years ago, long before the soft market really came into focus or started to come into focus, we started to specifically talk about building a portion of our portfolio in categories that are less cycle exposed. For us, that included surety, ag, A&H, credit, captives.

With the addition of Apollo, that includes ibott, which is focused on digital economy because we're doing things quite different than what the market is doing. Today, of our roughly $4.5 billion of controlled premium or $3 billion of reported gross written premium, about half of our portfolio is in those categories that aren't cycle exposed. I do think that amongst anybody in the public universe that you'd characterize a small to mid-cap company, I'd describe it as maybe less than $20 billion market cap, you can't find a company that has as well-diversified a portfolio as we do, which I believe will serve us incredibly well in terms of how our financial performance compares over the coming few years as compared to the market.