Bowhead Specialty (BOW) KBW Insurance Conference 2025 summary

Market cycle and capacity trends

• Casualty market capacity has shrunk significantly since 2020, with line sizes dropping from $25 million to $5 million, creating opportunities for new entrants.

• Unlike the 1980s, current capacity shrinkage has persisted for nearly five years, with little sign of expansion.

• MGAs and broker facilities have filled some gaps, but $5 million is now the common line size.

Construction and sector-specific dynamics

• Construction insurance demand has slowed due to interest rate uncertainty, supply chain issues, and labor concerns.

• Shifted focus from large construction projects to steadier practice policies for trades like plumbers and electricians.

• Construction defect claims and social inflation continue to drive up rates, especially for excess lines.

E&S market focus and regulatory environment

• Emphasis on E&S (excess & surplus) paper provides flexibility in pricing and policy language, avoiding lengthy state approvals.

• Regulatory risk is minimal as states are motivated to maintain insurance availability.

• About 75% of business is surplus lines, leveraging responsive regulatory environments like Wisconsin.