SKWD Q1 2026 Earnings Transcript

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Date

Thursday, May 7, 2026 at 10:00 a.m. ET

Call participants

• Chief Executive Officer — Andrew Robinson
• Chief Financial Officer — Mark Hochul
• Head of Investor Relations — Natalie Schoolcraft

Takeaways

• Diluted Operating EPS -- $1.25, representing a 39% increase, directly attributed to core earnings growth and Apollo acquisition accretion.
• Annualized Operating ROE -- 20.3%, indicating strong group earnings power post-Apollo combination.
• Book Value Per Share -- $27.50, up 10% sequentially and 31% year over year, highlighting balance sheet expansion.
• Net Income -- $50 million, with operating income of $57 million, confirming core profitability.
• Combined Ratio (Total) -- 89.5 (87.7 ex-cat), including 1.8 points from catastrophe losses, evidencing underwriting discipline.
• Gross Written Premiums -- $668 million, up 10% on a pro forma basis, with both Skyward Specialty Insurance Group and Apollo segments growing 9%.
• Managed Premiums -- $968 million, rising 20% year over year on a pro forma basis, led by a 49% increase in fee-generating premiums to $300 million.
• Underwriting Fee Income -- $10 million recognized, supported by $5 million in related expenses; this capital-light, recurring stream is a key new earnings lever.
• Skyward Specialty Insurance Group Combined Ratio -- 88.9 (86.8 ex-cat); loss ratio 62.7 with 2.1 cat points, and non-cat loss ratio 60.6, reflecting business mix shifts and efficiency gains.
• Expense Ratio (Total Company) -- 28.5%, with corporate expenses included, remaining below the 30% target as reiterated by management.
• Apollo Combined Ratio -- 85.3; expense ratio 32.5, non-cat loss ratio 52.8, no catastrophe losses reported in the quarter.
• Investment Portfolio -- $2.7 billion, 90% fixed income and short-term, generating $27 million net investment income, up $7.5 million year over year due to Apollo acquisition.
• Financial Leverage -- 28%, consistent with post-acquisition expectations.
• Catastrophe Program Renewal -- U.S. program renewed on 04/01; second-event cover reduced from $7.5 million to $5 million, with risk-adjusted rate down meaningfully.
• No Prior Accident Year Reserve Development -- "Emergence in the quarter was in line with expectations and, quite frankly, favorable."
• 2026 Guidance Unchanged -- Management confirmed all prior financial guidance for 2026 remains in effect.

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Risks

• Apollo’s Middle East exposure was intentionally reduced post-Crimea due to unsatisfactory rates for political risk and violence, and management is waiting for broader market adjustment before increasing regional participation.
• Soft market pressure in public D&O bled into other areas, in professional lines, limiting growth while prompting selective account management.
• Property market conditions have “lost its sense and sensibilities,” with rapid softening noted by management, potentially pressuring underwriting margins if not carefully managed.
• Competitive pressure in captives, with "an irresponsible party" writing terms that management believes will cause sectoral losses, contributing to a temporary division decline of 13.5%.

Summary

Skyward Specialty Insurance Group (NASDAQ:SKWD) delivered its first quarter as a combined entity with Apollo, explicitly reporting material improvement in both earnings and book value alongside disciplined underwriting metrics. Segment reporting clarity has increased, with discrete financials for Skyward Specialty Insurance Group, Apollo, and corporate, facilitating enhanced transparency of segment-level profitability. Management spotlighted the capital-light, scalable fee income model as a structurally important earnings growth lever, underpinned by managed premium expansion and diversification into less cycle-sensitive specialty markets. The enterprise continues to claim leadership within specialized lines such as surety, accident and health, and global agriculture, which are contributing meaningfully to pro forma premium growth and are explicitly less exposed to the P&C cycle’s volatility. Execution of new initiatives—including proprietary partnerships in autonomous vehicles, life sciences product launches via Lloyd’s, and the introduction of an internal reinsurance syndicate—signals continued innovation and portfolio optionality, while cost discipline enables ongoing technology investments within expense guidance.

• Management affirmed, "no other company that has constructed such a well-diversified and cycle-resistant business portfolio," positioning the firm to sustain above-peer growth and margins in challenging markets.
• In A&H, growth is concentrated among small employers—about 80% under 500 employees—and is partly attributable to group captives and medical management capabilities, with little intention to pursue large-group opportunities.
• Underwriting exposure to higher-risk segments, particularly global property and auto, is deliberately reduced or tightly controlled, as "We are not going to chase compromised terms and conditions." where market discipline is lacking.
• Reinsurance structure innovation is advancing: Apollo Syndicate 1972 now takes "20% of outward reinsurance," allowing the group to recapture a portion of ceded margin and enhance overall fee economics in future periods.
• Rate movements are primarily influenced by business mix and seasonality, not competitive pricing actions, particularly within Apollo and specialty lines.

Industry glossary

• Managed Premiums: Total premiums underwritten on behalf of both the group and third-party capital, inclusive of all premiums from which the company derives fee income, not limited to its own statutory writings.
• Syndicate 1971/iBot: The in-house digital economy syndicate at Lloyd’s, with a focus on insuring technology-driven and autonomous risk classes.
• Syndicate 1972: Internal Apollo-managed syndicate structured for reinsurance, designed as a sidecar to capture margin from group outward reinsurance placements and facilitate capital leverage.
• Expense Ratio Mendoza Line: Internal threshold (sub-30%) for the group expense ratio, used as a financial discipline marker to manage operating efficiency and growth investment.
• FAC (Facultative Reinsurance): Transactional reinsurance placement for specific exposures, used to manage volatility in property and casualty writings.
• iBot America: Forthcoming U.S.-based counterpart to Syndicate 1971, intended to expand digital and technology-led insurance offerings domestically.

Full Conference Call Transcript

Andrew Robinson: Good morning, and thank you for joining us. This quarter marks our first reporting at Skyward Specialty Insurance Group, Inc. inclusive of both the Skyward Specialty Insurance Group, Inc. and Apollo segments. Our results reflect an excellent start as a combined company. Mark will cover the quarter in detail in a moment, but I will start with a few highlights. First quarter diluted operating EPS improved to $1.25 from $0.90 in the same quarter last year, an impressive increase of 39% reflecting both the strong embedded earnings growth of Skyward Specialty Insurance Group, Inc. and the realized accretion from the Apollo acquisition. Our annualized operating return on equity was an outstanding 20%.

Our book value per share grew to $27.50, up 10% over the prior quarter. Altogether, these results reflect strong underlying earnings momentum and disciplined capital deployment, positioning us well to continue to deliver consistent top quartile returns for our shareholders. Our growth in gross written premiums on a pro forma basis was up 10% over the prior year. Managed premiums were up 20% on a pro forma basis to $968 million. As a reminder, managed premiums include a combination of group premiums and premiums supported by third-party capital providers. The underlying 49% growth in gross written premiums driving the fee aspect of Apollo's business will be an important and new earnings growth driver as we look out into the future.

As is widely discussed, market conditions are increasingly challenging for significant parts of the P&C sector. Our portfolio construction is genuinely unique amongst the P&C universe in that over 50% of the Skyward Specialty Insurance Group, Inc. business, now inclusive of Syndicate 1971 or iBot, our digital economy syndicate, is in markets less exposed to the P&C cycles. Together with our niche-focused strategy and outstanding execution, Skyward Specialty Insurance Group, Inc. has never been better positioned to deliver sustained top quartile shareholder value and continued earnings growth. With that, I will turn the call over to Mark to provide the financial details for the quarter. Mark?

Mark Hochul: Thank you, Andrew, and good morning, everyone. As Andrew outlined, our first quarter reflects a successful start as a combined company, reporting net income of $50 million and operating income of $57 million. Diluted operating earnings per share was $1.25, up 39% year over year. Underwriting income totaled $52 million, and the combined ratio was 89.5, inclusive of 1.8 points of catastrophe losses. Ex-cat, the combined ratio was 87.7, reflecting strong underlying loss performance and disciplined expense management. Annualized operating ROE was 20.3%, underscoring the earnings power of the combined group. Gross written premiums were $668 million, up approximately 10% on a pro forma basis driven by 9% growth in Skyward Specialty Insurance Group, Inc. and 9% growth in Apollo.

Overall growth was driven by Skyward Specialty Insurance Group, Inc.'s accident and health, credit and surety, global agriculture, and specialty programs divisions, and Apollo Syndicate 1969, our multiclass specialty syndicate. As Andrew emphasized, managed premiums, which include gross written premiums from which we derive fees, are an important metric for our business going forward. Managed premiums totaled $968 million, up approximately 20% year over year on a pro forma basis, including fee-generating premiums of $300 million which increased 49%. In this quarter, we generated $10 million in underwriting fees. This income stream is capital-light, recurring, and incremental to underwriting profit, and it represents a structurally important earnings growth lever as managed premium volume scales over time.

With the addition of Apollo, we now report through two operating segments, Skyward Specialty Insurance Group, Inc. and Apollo, and a discrete corporate unit. The corporate unit includes investment results, holding company costs, and enterprise-level functions that support both operating segments. This improves transparency and provides clear visibility into the true segment-level performance. Skyward Specialty Insurance Group, Inc. reported a combined ratio of 88.9, or 86.8 ex-cat, reflecting another period of solid underwriting performance and an improvement from the prior year quarter. The loss ratio of 62.7 includes 2.1 points of catastrophe losses from winter and convective storms.

The non-cat loss ratio of 60.6 was in line with 2025 and reflects business mix shift as A&H and global agriculture make up a larger portion of our portfolio. Loss emergence was in line with expectations, and no development was recognized. The expense ratio was 26.2, improving by over half a point year over year, driven by continued operating efficiencies and business mix. Turning to Apollo. The segment produced a combined ratio of 85.3, a strong start to the first quarter as part of Skyward Specialty Insurance Group, Inc. As Apollo has not historically reported quarterly results on a comparable U.S. GAAP basis, we are not providing year-over-year comparisons.

Apollo reported a non-cat loss ratio of 52.8, lower than full-year expectations as a result of Q1 business mix and seasonality. Loss emergence in the quarter was in line with expectations. Apollo did not incur any cat losses in the quarter, and our full-year cat expectations remain unchanged. The expense ratio of 32.5 is broadly in line with expectations. The $4 million of fee-based service expenses are excluded from the combined ratio but included in operating income and support the scalability of the fee-earning part of the business. Turning to investments. The portfolio now approximates $2.7 billion, of which 90% consists of fixed income and short-term investments.

Net investment income was $27 million, an increase of $7.5 million year over year driven primarily by a larger invested asset base as a result of the Apollo acquisition. Alternative and strategic investments continued to experience volatility primarily due to marks on the underlying investments. These exposures represent a modest portion of total invested assets and the overall portfolio remains conservatively positioned. With the addition of Apollo, over $100 million of invested assets were added to the portfolio during the quarter, which contributed $5 million of net investment income primarily in fixed income securities and short-term investments. For the fixed income portfolio, we put $75 million to work at 5.5%. The embedded yield for the group portfolio was 5.3%.

Turning to the balance sheet, stockholders' equity ended the quarter at $1.2 billion. Financial leverage was in line with expectations after the closing of the Apollo acquisition at 28%. As Andrew highlighted, book value per share was $27.50, representing a 31% increase over the prior twelve months. You will recall that on December 3, we provided guidance for 2026 and that guidance is unchanged. Now I will turn the call back over to Andrew.

Andrew Robinson: Thank you, Mark. As Mark shared, our financial results for the quarter were again excellent. Our portfolio diversification, particularly in categories less exposed to the P&C cycle, again served as a catalyst for strong top line performance which in turn will continue to drive double-digit earnings growth. Notably, our increase in gross written premiums of 25% plus in A&H, credit and surety, and ag are all in areas that are removed from the pressures of the broader P&C market. Simultaneously, we are maintaining our disciplined bottom line focus in other areas of our business that are currently experiencing softening market conditions or a challenging loss inflation backdrop.

Among small or mid-cap carriers in the public or private markets, there is no other company that has constructed such a well-diversified and cycle-resistant business portfolio. While only months into operating as a combined company, a number of important growth initiatives have been launched. This includes our proprietary insurance partnership for Uber's autonomous vehicle insurance program, the launch of our life sciences product using Lloyd's paper to serve U.S.-domiciled companies with international exposure, and the 1/1 launch of Syndicate 1972, which is Apollo's internal reinsurance syndicate. I will note that 1972 further provides strategic optionality for Skyward Specialty Insurance Group, Inc.'s outward reinsurance as we look to the future.

John Burkhart and James Slaughter and several of our leaders are actively advancing a number of future shared growth initiatives, including opportunities in surety and the launch of iBot America. These highlight only a few of the exciting developments that we will discuss as we begin to scale these initiatives in the quarters ahead. Turning to our operational metrics. For Skyward Specialty Insurance Group, Inc., pure rate moved up a bit to high single digits ex global property and mid single digits including global property. Excluding our intentional actions in construction auto, retention was in the 70s driven by the effects of the competitive property market across our portfolio.

We continue to see strong submission growth, which was solidly in the teens again this quarter. Apollo's risk-adjusted rate change ex property was in the low single digits. Apollo remains intently focused on rate adequacy to steer and maximize the returns at the account and portfolio level. And like Skyward Specialty Insurance Group, Inc., Apollo's diversified portfolio means that we are better positioned to capitalize on opportunities to defend our business in an evolving market. To wrap up, we had an outstanding quarter.

It is clear that our niche strategy, our excellent execution, our portfolio construction, supplemented with a new fee engine, is and will be a continued source of strong earnings growth and top quartile financial performance into the future. The combination of Skyward Specialty Insurance Group, Inc. and Apollo brings together differentiated talent, technology, AI, and innovation capabilities, positioning us to build on the unique strengths of each company and to pursue attractive new opportunities together. With that, I would now like to turn the call back over to the operator to open it up for Q&A. Operator?

Operator: Thank you. Please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit to one question and one follow-up. For any additional questions, please return to the queue. The first question will come from Matthew John Carletti with Citizens. Your line is open.

Matthew John Carletti: Hey, thanks. Good morning.

Andrew Robinson: Hey, Matt.

Matthew John Carletti: Hey, Andrew. I was hoping to dig a little deeper on your differentiated platform and really have two questions. First, as you think about how your business sits today, particularly with Apollo onboard now, and where we are in the cycle, can you give us your view of the impact on growth and the impact on margins, how that unfolds for Skyward Specialty Insurance Group, Inc. versus your select peer group or the industry? And second, appreciating that half of your business is not P&C—things like surety, A&H, agriculture—we hear those words at other carriers at times, usually not all three.

Can you talk a little bit about how your approach to those businesses might be a bit different than the average approach?

Andrew Robinson: Matt, good morning, and thank you for the questions. There is a lot there to unpack. On the first question about the market, our portfolio, and margin outlook: setting aside the uncorrelated parts that have seen the biggest growth—where we have great product-market fit and are not seeing cyclical factors—both Skyward Specialty Insurance Group, Inc. and Apollo share one important feature: the portfolios are quite niche-y. A simple example: in London, in the marine, energy, and transport division at Apollo, they have leadership positions in shipbuilders and in ports and terminals. While those subclasses are not necessarily immune from macro conditions, they are not feeling the full effects of the broader marine, energy, and transportation market.

Similarly, in our management liability book in the U.S., which is made up of web3, smart contract exposures, cannabis, and distressed homeowners, we are away from the parts of the management liability market with the pressures of 50 carriers competing and little opportunity to create margin that separates from the rest of the industry. Across our portfolios, you would find example after example of that. These niches have a certain opportunity size. Writing web3 is hard; you must build a specialized insurance contract. We have done that, but it is a limited opportunity, which means that in soft market conditions, as long as you are disciplined and do not chase everything else, growth opportunities may be a bit more limited.

I do not see an impact on our margin because of where and how we are competing. On the other side—the uncorrelated parts: iBot/1971, ag, and A&H—those are opportunities for us to drive outstanding growth and selectively expand margins. We will lean hard into those.

Operator: Thank you. The next question will come from Analyst with Raymond James. Your line is open.

Analyst: Good morning, everyone. I wanted to focus on the disclosure in your press release around gross written premium by underwriting division. You also included comments about managed premium growth. There are moving pieces with substantial growth in fee-generating GWP and shrinkage in other areas. How are you avoiding getting caught up in market sensitive businesses, and how are you able to focus on less cyclical areas?

Andrew Robinson: Hey, and thanks for the question. Two things drive the premium that is driving fees. First, that is directly linked to 1969 and 1971 where we have approximately 25% of the capital deployed for those two syndicates. These are fees corresponding with business we are writing directly into our account. Second, as we have discussed, Apollo has a division focused on providing managing agency services to partner syndicates—there are nine in total. They are all away from the standard market, including parametric, a credit-related syndicate, and a captive for a global technology company. These are unique and fit with the innovation mindset of our company and Lloyd's ambition to bring new categories of risk into Lloyd's.

If you asked Lloyd's management how they view Apollo as a partner, you would hear "innovation" and "ability to support new ideas with appropriate oversight." We feel good about the growth potential based on the backlog of opportunities. Regarding underwriting divisions: on the growth side, surety is the driver in credit and surety. Our team is incredible; books of business have followed new talent in a couple of geographies. Compare our results with SFAA data—our growth and loss performance are standout. Same in A&H—we are a top five performer in loss results, and our single-company medical stop loss plus group captive solutions—particularly the latter—have strong product-market fit.

In ag, we are one of one, with a diversified global reinsurance program and a unique U.S. dairy livestock program risk transfer solution. On the flip side, our teams are doing an outstanding job defending our books and picking spots to win. In professional lines, soft market pressure in public D&O bled into other areas, though we see strong opportunity and growth in healthcare professional. On E&S, shrinkage is driven by property. Excess casualty still has opportunity, but you must be cautious given loss inflation. Very little auto exposure in our E&S excess book; we are writing smaller limits. GL is a mixed bag; be cautious of companies reporting big casualty growth—market opportunity is uneven.

Example: we capitalized on migrant hotels, building a large New York City book with about a 20% loss ratio over three to four years; that business has gone away. The corresponding market shift to ICE detention centers is difficult risk; we write it only with comprehensive exclusions and at strong rates. Recently, we have seen respected companies enter without coverage restrictions, which likely triples or quadruples loss costs while competing nearly pari passu on pricing. The market has gotten very uneven—you have to be smart, pick and choose, be in the right place at the right time. We are not going to chase compromised terms and conditions.

If you are an investor, rest assured we are bringing the discipline you would want.

Operator: The next question comes from Meyer Shields with KBW. Your line is open.

Meyer Shields: Thanks, and welcome back, Natalie. Mark, you mentioned both seasonality and mix when you were talking about Apollo. Can you talk about that? I am assuming the mix might be more persistent even if seasonality evolves over the year.

Mark Hochul: Hey, Meyer. I agree with your comment. It is more mix than seasonality. It varies by class, and several businesses can impact the loss ratio quarter to quarter.

Andrew Robinson: What I would point to is that you will see the fourth quarter heavily driven by 1971 and the third quarter by 1969. It is a lot lighter in the first half of the year. Unlike in the U.S. where most of our business earns more ratably over the year—or in surety over about a 14-month duration—some London business earns over a shorter period, which can affect how the loss ratio earns in. High level: Q1 was a great result, and we are proud of our Apollo colleagues.

Over a full year, Apollo’s loss ratio will probably be a bit better than the U.S. at Skyward Specialty Insurance Group, Inc., with a somewhat higher expense ratio—resulting in relatively comparable combined ratios over a full year.

Meyer Shields: Thanks. Second, can you talk about Middle Eastern exposure, both in terms of loss potential and where rates are evolving?

Andrew Robinson: Great question. Apollo reduced aggregate exposure in the Middle East post-Crimea, having concluded rates did not support the potential political risk/political violence and adjacent exposures. Their exposure runs through marine, war, aviation, political risk, and political violence. As a percentage of Lloyd’s market share, their Middle East exposure is far less than their share in each of those markets. We have one reported loss of any size incorporated into our Q1 picks. If developments change in Q2 and beyond, we will reflect that. We are undersized in the Middle East by design. Post-event, we are being picky, writing a handful of accounts and sea-bearing risks where appropriate, but waiting to see a fulsome market movement before leaning in.

Meyer Shields: Final question: is the margin on fee-based business for managing other capital providers’ premium pretty steady over the year?

Andrew Robinson: It is generally steady and follows the writings of premium, so any seasonality there could influence it. We will follow up to ensure we provide precise detail.

Operator: Our next question will come from Alex Scott with Barclays. Your line is open.

Alex Scott: Hi. Good morning. Could you talk about the way Apollo participates in cyber? An overview of what they do in that market, and any risks from developments in AI and identifying vulnerabilities?

Andrew Robinson: Thanks, Alex. One special purpose syndicate we manage participates in an entity called Envelop that has very unique IP in cyber, and much of that exposure is not traditional U.S. or even OECD exposure. That comes through as a reinsurance participation and is the most notable item; there may be other exposures. In the U.S., we have de minimis exposure to cyber.

Alex Scott: As a follow-up, specialty markets have gotten pretty competitive. Any update on how you feel about growth and finding spots net of where you pull back, and any update to the 2026 plan?

Andrew Robinson: The speed at which things have moved is extraordinary. Beyond MGAs and fronts, you now see third-party capital sidecars and even runoff carriers coming in, sometimes writing at better terms than ceding companies for sidecars, which is a bit frightening. It makes things hard to predict. On the flip side, our portfolio is incredibly durable. As things get tougher in selective places, our leadership is holding the line, writing the best accounts on terms and conditions that meet our return thresholds. Simultaneously, growth opportunities in A&H, surety, ag, and 1971—and niches elsewhere in the U.S. and in Apollo 1969—will continue to deliver growth well above peers.

Against a cross-section of public peers, including the primary operations of Bermudians we compete against, our growth looks outstanding, and we feel as good or better about the margin content of that growth versus a year ago. We feel good about the year. Our guidance stands; we are not changing it. We have never missed consensus as a public company and have exceeded it every quarter. We give guidance we believe is achievable, and if we can beat it, we will.

Operator: The next question comes from Jon Paul Newsome with Piper Sandler. Your line is open.

Jon Paul Newsome: Good morning. How do you think about the proportion of your business today that is not part of the cyclical concerns we are talking about? Where is the business resistant?

Andrew Robinson: On a full-year basis, well in excess of 50%. Categories include surety, A&H, credit, ag, captives, and 1971. There are also niches in management liability—e.g., web3—where few carriers participate because you need bespoke products (e.g., defining a smart contract). We do not include all of these in “cycle resistant” for disclosure simplicity, but practically they are. With iBot/1971 and autonomy, the potential is wide open given our leadership position. As we remain in a softening market that could persist for several quarters or years, we expect a larger portion of our portfolio to grow in these cycle-resistant areas.

Jon Paul Newsome: Different question: the reinsurance market is changing, with some pockets pretty soft. You are a fair user of reinsurance. How should we think about the impact?

Andrew Robinson: In both Skyward Specialty Insurance Group, Inc. and Apollo, we have had good success so far this year. We renewed our CAT program on 04/01; with property coming off, we right-sized our exposure and stayed with a range of roughly 1-in-10 to 1-in-250. Our risk-adjusted rate came down meaningfully. Our second-event cover dropped from about $7.5 million to $5 million. We saw many benefits in the U.S. and similarly in Apollo. We know there is still margin in our reinsurance purchases for reinsurers. We launched Syndicate 1972, a sidecar-like structure led by Apollo, taking 20% of outward reinsurance into 1972; we keep a quarter of that, and third-party capital supports the remainder, following the market.

We recapture fees on that and will use it next year for Skyward Specialty Insurance Group, Inc. as well—allowing us to recapture a portion of the margin we believe exists in our reinsurance placement.

Operator: The next question comes from Tracy Benguigui with Wolfe Research. Your line is open.

Tracy Benguigui: Thank you. You are clearly pulling back in global property within the Skyward Specialty Insurance Group, Inc. segment. At the same time, we hear that the Lloyd's market has become more aggressive on property. Most of Apollo's growth shows up in fees, but you are still taking some of that risk. Within the Apollo segment, how would you characterize property growth in the quarter? If you are participating on a whole-account proportional basis, are you effectively assuming more property exposure at Apollo while reducing it at Skyward Specialty Insurance Group, Inc.? How should we think about aligning those underwriting appetites across the two platforms?

Andrew Robinson: Thanks, Tracy, and good morning. Doug Davies leads global property in the U.S.; Kate Foster leads property at Apollo. They are in communication and comparing views. To be clear, we are not writing pro rata in London on the open market book; that is direct and facultative. There are no two people we feel better about to make a buck in a tough market than those two leaders. Apollo’s growth or lack thereof is following almost exactly what you see in our published U.S. global property numbers—both are being very disciplined. A standout Apollo capability led by James Slaughter is ensuring accounts are clearly understood in terms of risk quality.

In a softening market, particularly in property, you want a quantitative view of the highest risk quality to defend your portfolio. We feel great. Even with negative growth in property, we are still putting up impressive overall growth as a company, reflecting thoughtful and responsible portfolio construction. Neither leader is under any pressure to write business that does not meet return thresholds.

Tracy Benguigui: I like seeing the segment details, given Apollo has a different combined ratio profile—lower loss ratio, higher expense ratio. At the enterprise level, how should we think about the loss ratio and expense ratio outlook? Is the first quarter a good representation of what to expect?

Andrew Robinson: Our guidance is a good representation of what you should expect, and we are sticking to it. It was a good quarter, and we are proud of the Apollo team. On a full-year basis, think about cats and mix earning in; we still expect outstanding returns and are confident we will hit—and hopefully meaningfully exceed—the guidance we provided late last year.

Tracy Benguigui: My question was about the composition of the combined ratio—just the profile.

Andrew Robinson: I think Mark can provide a bit more detail, but Apollo’s expense ratio in Q1 is within proximity of what we would expect on a full-year basis.

Mark Hochul: In the aggregate, our watermark for the expense ratio remains sub-30%. For the quarter, it was 28.5%. That is in line with what we guided. On the loss ratio, ex-cat, we feel good. Business mix can move it a little quarter over quarter, but we feel pretty good about both the expense and loss ratios, acknowledging mix can move around a bit.

Tracy Benguigui: Is corporate expense included in your view of the expense ratio?

Mark Hochul: It is.

Andrew Robinson: That 30% Mendoza line we talked about long ago—preceding Apollo—still holds after revisiting it with Apollo fully in mind. One additional point: AI requires real investment, often ahead of visible benefits. It is hard to do that without backing up on the expense ratio if you do not have growth to offset it. We are gaining efficiencies overall while also funding the next phases of technology development. Growth enables us to do that and remain comfortably within the 30% Mendoza line. For others, as AI investment ramps without growth, expense ratios may start to reveal that. We are funding our investments entirely within our expense ratio guidance.

Operator: The next question will come from Mark Douglas Hughes with Truist. Your line is open.

Mark Douglas Hughes: Thank you. Good morning. In the property market, you have talked about pressure, particularly in coastal national accounts. Looking across the public space, property premiums on average are up a little or down a little; you do not really see pressure in the published P&Ls of competitors. Is there really that much pressure, or is there a slower decline outside higher volatility areas?

Andrew Robinson: Thanks, Mark, and good morning. In the U.S., our global property book is more general property with cat exposure and many technical risks; in London at Apollo, there is certainly more cat exposure. We are entering the point where volume is coming through, so we will be more precise next quarter. Broadly, we think the property market has lost its sense and sensibilities—and it has done so very fast. You might have looked three to five months ago and said it was coming off fast; it has not, in our view, slowed down. For those posting results and explanations that suggest otherwise, that does not correspond with our view.

There are small pockets—true small-end property did not go up as much and does not come down as much—but those are small. It is hard to see companies say that represents their whole book. We are doing what we need to hold margin. If others do so without dropping volume, they are doing it in ways we do not understand.

Mark Douglas Hughes: The accident and health growth has been fabulous. Talk about sustainability—how much is tied to initiatives you put in place versus lapping good experience? Does the opportunity feel durable?

Andrew Robinson: Using a McKinsey horizon view: we feel really good about Horizon 1 (next year). For Horizon 2 (next couple of years), we have been pleasantly surprised by three things: disruption in parts of the market we do not touch but benefit from second-order effects; a great run on talent coming our way; and group captives growing share of the overall medical market, sometimes as a halfway house to fully self-insuring and sometimes as a great structure for homogeneous cohorts. The TAM keeps growing for us. Beyond that, it is harder to see, but we have a team that finds the next products—we have done that before.

Operator: The next question will come from Michael David Zaremski with BMO. Your line is open.

Michael David Zaremski: Hey. Thanks. Nice quarter. A couple numbers questions. On the $30 million to $35 million fee income guide, should we look at the underwriting fee income line of about $10 million and net some of it against the fee-based service expense of about $4 million to $5 million? Or is it just the $10 million number, and is it running better than expected early in the year?

Mark Hochul: Good question. Fee income recognized for Apollo was circa $10 million, and there was about $5 million of related expense. Relative to the $30 million to $35 million guidance, I still believe the guidance holds, and when we guided to $30 million to $35 million, it was based on the $10 million run rate you see here.

Andrew Robinson: One other point: the roughly $4 million you see in service fee expense will not grow proportionally with our fees. Those are explicit investments to support the capability. That expense should be levered over time relative to fee growth. We are not yet at a place to quantify the levering, but it should become clearer quarter over quarter as you see separation between fee income and the service expense that supports it.

Michael David Zaremski: Lastly, I do not see any disclosure on prior accident year development. Was there any?

Mark Hochul: I did mention it briefly. There was no prior year development. Emergence in the quarter was in line with expectations and, quite frankly, favorable. We are in a great position on our reserves both in the U.S. and in London—the best point since we have been public.

Operator: The next question will come from Andrew Scott Kligerman with TD Cowen. Your line is open.

Andrew Scott Kligerman: Good morning. Following up on the A&H business—terrific growth. If I remember right, you focus more on employers with fewer than 2,500 employees. What is driving the growth? Is it mostly rate? Can you give detail on the rate you are seeing? Any expansion into larger employers?

Andrew Robinson: Good morning, Andrew, and thank you. In A&H, our concentration tends to be 500 employees and under; the mix is not far from an 80/20. We have no interest in going up market; there are some dead bodies on the roadside there and for good reasons, and it does not fit our medical cost management model. On growth: we think about pure rate and effective rate (e.g., lasering coverages). Pure rate is contributing—call it not quite 10%—and is an important part.

Growth is really two factors: we have really hit it with our group captives capability (growing both members and number of captives), which fits incredibly well with our medical cost management capabilities; and in single-employer stop loss, we have seen a market turn, in our view tied to stumbles at some MGAs and the larger-company market getting more realistic, with second-order effects into our space. We are seeing growth on the terms we want and fully utilizing our medical cost management IP to drive top-five industry loss ratios.

Andrew Scott Kligerman: Shifting to the captives and risk specialty segment, it was down 13.5%. If I understand, you attach at $350,000 and write a broader mix, and stop loss could even be in there. Where are you seeing pressures and opportunities?

Andrew Robinson: For clarity, all medical stop loss is reported in A&H. Captives in A&H and single-employer stop loss are both in that division. The captives and risk specialty division is pure P&C. Two parts to your question. First, the downward pressure: we had, in our view, an irresponsible party come in and write a captive in a way we believe will cause a lot of damage. We were not going to compete on terms that were not sensible. That happened at the end of last year—a unique instance that is running through the numbers.

Second, opportunities: we have very interesting successes, e.g., a captive using Understory Weather for micro-weather analytics on dealer open lot—an unbelievably successful and unique solution, now in its fifth year. We are looking for more of those innovation-driven opportunities. Our partners in 1971, given autonomy developments, open interesting possibilities. Apollo also manages the only Lloyd’s captive with a large technology company. We will not do run-of-the-mill captives; it will be about innovation that can be highly additive to earnings and growth.

Operator: The next question will come from Andrew E. Andersen with Jefferies. Your line is open.

Andrew E. Andersen: Thanks for the extra time. I think I heard rate change on the Apollo business was low single digit ex-property, maybe lower than I expected considering about 45% of that business is shared economy or liability. Where do you see that rate change going? Was it an intentional decision to be more competitive, or is liability/shared economy pricing higher than that?

Andrew Robinson: Good morning. It is neither. It is mix. On a written basis in the U.S., quarter-to-quarter property can influence reported rate; it is even more extreme with seasonality and mix in Apollo. Within 1971, there is very little autonomy exposure written in Q1, for example. That number will move based on which divisions inside 1969 and 1971 have seasonally higher GWP in a given quarter. I would not read too much into it.

Andrew E. Andersen: Quick one: that is a gross rate number, I imagine?

Andrew Robinson: It is. Everything we report is gross rate. For example, in global property, our net rate is negative mid single digits while gross rate is negative mid teens, influenced by FAC usage. Some of that is similar in Apollo relative to gross versus net, but we always report gross pure rate.

Operator: I am showing no further questions at this time, and I will now turn the call back over to Natalie for closing remarks.

Natalie Schoolcraft: Thanks, everyone, for your questions, for participating in our conference call, and for your continued interest in and support of Skyward Specialty Insurance Group, Inc. I am available after the call to answer any additional questions that you may have. We look forward to speaking with you again on our second quarter 2026 earnings call. Thank you, and have a wonderful day.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

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