Skyward Specialty Insurance Group, Inc. has commuted the Loss Portfolio Transfer and Adverse Development and Retrocession Agreement (LPT) with R&Q Re (Bermuda) Ltd. (R&Q) relating to accident years 2018 and prior, receiving $11.7 million in cash.
Additionally, on December 31st, 2024, Skyward strengthened LPT loss reserves by $25.3 million and recognised approximately $9.8 million, net of tax, of uncollectible reinsurance recoverable from R&Q.
Alongside the LPT announcement, the insurer has provided some preliminary fourth quarter 2024 results, including a rise in gross written premiums (GWP) by $66.8 million to $388.4 million, or 20.8%, compared to 2023.
The adjusted combined ratio is expected to be reported at 91.6%, including catastrophe losses of 2.2 points.
For the quarter, the firm has reported net investment income of $20.7 million, and net income of $14.4 million. The adjusted operating income for Q4 2024 is projected to be $33.2 million.
Additionally, the firm released its “guidance for the year ending 2025,” forecasting net income between $138 million and $150 million, with a combined ratio of 91% to 92%, including 2 to 2.5 points of catastrophe losses.
Skyward has also reviewed its exposure to the January California wildfires and anticipates total losses and loss adjustment expenses to be less than $10 million, net of reinsurance.
Andrew Robinson, Chief Executive Officer and Chairman, Skyward Specialty, commented, “We are pleased to have completed the commutation of the LPT and remove future reinsurance recoverable credit risk related to this portfolio. We believe our reserve charge represents a conservative view of the ultimate losses at December 31, 2024.
“With respect to our fourth quarter, our preliminary results are simply outstanding with growth over 20% driven by the intentional investments we have been making in our surety, global agriculture, accident & health, transactional E&S, and mortgage and credit divisions and lines of business.
“Our adjusted combined ratio for the fourth quarter is a continuation of the excellent underwriting results that we have delivered every quarter since our IPO. With respect to our outlook for 2025, we believe we are positioned to produce another strong year of financial results. While competitive dynamics can change our outlook as we progress through the year, we would expect growth in gross written premiums to be in the low to mid-teens.
“Our guidance of a combined ratio between 91% and 92% and net income between $138.0 million and $150.0 million reinforces our strong conviction in the outlook of our business, and our sustained delivery of top quartile results while continuing to strategically invest in our business.”
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