Bowhead Specialty (BOW) Q3 2024 earnings summary

Executive summary

• Gross written premiums rose 32.3% year-over-year to $197 million in Q3 2024, led by the casualty division and supported by new business, renewals, and excess casualty lines.

• Net income increased 38.9% to $12.1 million, with adjusted net income at $12.5 million and adjusted ROAE of 14.2%.

• Healthcare liability and professional liability divisions posted double-digit premium growth, with healthcare up 29% and professional up 13%, driven by new business and cyber liability demand.

• Launched Baleen, a low-touch underwriting platform, and introduced new environmental liability products, with initial results meeting expectations.

• Completed an upsized IPO in May 2024, raising $131 million in net proceeds.

Financial highlights

• Q3 2024 gross written premiums: $197 million (+32.3%); net written premiums: $128.3 million (+29.2%).

• Net earned premiums for Q3: $105.2 million (+48.4%); net investment income: $11.5 million (+121.5%).

• Adjusted net income reached $12.5 million, or $0.38 per diluted share; book value per share increased to $10.97, up 37% from year-end.

• Combined ratio for Q3 was 94.4%, with a loss ratio of 64.5% and expense ratio of 29.9%.

• Pre-tax net investment income more than doubled to $11.5 million, with a portfolio yield of 4.7% and average duration of 2.2 years.

Outlook and guidance

• Management expects continued profitable growth, leveraging underwriting expertise, favorable market conditions, and expansion of Baleen and environmental initiatives.

• Healthcare liability outlook is mixed, with favorable hospital conditions but increased competition in medical facilities.

• Professional liability remains competitive, with most growth coming from cyber liability.

• Plans to maintain prudent capital management and renew reinsurance treaties on similar terms.