Bowhead Specialty Holdings Inc. Announces Preliminary Third Quarter 2024 Results

Bowhead Specialty Holdings Inc., a growing specialty lines insurance group focused on providing casualty, professional liability, and healthcare liability insurance products, has released its preliminary financial results for the third quarter ended September 30, 2024.

Financial Highlights

Bowhead Specialty reported a significant increase in gross written premiums, expected to rise by 27% to 34% year over year, reaching between $193 million and $200 million. Net income is projected to be between $11.5 million and $12.5 million, translating to $0.34 to $0.37 per diluted share. Adjusted net income, a non-GAAP measure, is anticipated to be between $12 million and $13 million, or $0.36 to $0.39 per diluted share. The return on equity is expected to range from 13.0% to 14.0%, with an adjusted return on equity between 13.5% and 14.5%.

Business and Operational Highlights

The growth in gross written premiums was driven by renewals, new business, and continued platform expansion across all divisions. The Casualty division led the growth with an approximately 40% increase year over year, including a preliminary $4 million from an unusually large audit premium. Healthcare Liability premiums grew over 25%, and Professional Liability premiums increased by over 10% year over year. Additionally, the newly launched Baleen Specialty division, focusing on small, hard-to-place risks, generated a preliminary $0.4 million in gross written premiums for the quarter.

Strategic Initiatives and Corporate Developments

Bowhead Specialty's IPO proceeds were fully invested during the quarter, with no changes to the investment strategy. The company also reported a decrease in the loss ratio to between 64.0% and 65.0%, down from 65.5% in the second quarter of 2024, primarily due to portfolio mix changes and the large audit premium. The expense ratio is expected to decrease to between 29.5% and 30.5%, driven by prudent management of operating expenses and the impact of the large audit premium.

Management's Perspective

Stephen Sills, Bowhead's Chief Executive Officer, expressed satisfaction with the preliminary third quarter results, highlighting the company's resilience in the face of recent hurricane activities due to its focus on non-property risks. Sills emphasized the company's continued growth and operational efficiency.

Future Outlook

Bowhead Specialty looks forward to sharing more detailed third quarter results on November 5th. The company remains optimistic about its growth trajectory and operational performance, as indicated by the preliminary financial metrics.

SEC Filing: Bowhead Specialty Holdings Inc. [ BOW ] - 8-K - Oct. 21, 2024