Bowhead Specialty Holdings Inc. Announces Preliminary Third Quarter 2024 Results
Preliminary Third Quarter 2024 Highlights
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Gross written premiums are expected to increase 27% to 34% year over year to
$193 million to$200 million . -
Net income is expected to be between
$11.5 million and$12.5 million , or$0.34 to$0.37 per diluted share. -
Adjusted net income(1) is expected to be between
$12 million and$13 million or$0.36 to$0.39 per diluted share(1). - Return on equity is expected to be between 13.0% and 14.0% and adjusted return on equity(1) is expected to be between 13.5% and 14.5%.
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Book value per share is expected to be between
$11.00 and$11.25 and diluted book value per share is expected to be between$10.80 and$11.00 .
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(1) |
Non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measure to the most comparable |
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Bowhead Chief Executive Officer
Preliminary Underwriting Results
The expected increase in gross written premiums of 27% to 34% year over year to
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Our Casualty division led the gross written premium growth with an approximately 40% increase year over year, which included a preliminary
$4 million of additional gross written premium (a preliminary$3 million from a net earned premium basis) from an unusually large audit premium from one insured; - Healthcare Liability gross written premiums grew over 25% year over year;
- Professional Liability gross written premiums grew over 10% year over year;
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Late in the second quarter of 2024, we launched a new division called Baleen Specialty, which focuses on small, hard-to-place risks written 100% on a non-admitted basis. Baleen is a streamlined, low touch “flow” underwriting operation that supplements the “craft” solutions we offer. In line with our deliberate, measured and limited roll out, Baleen Specialty generated a preliminary
$0.4 million of gross written premiums for the third quarter of 2024.
Our loss ratio is expected to be between 64.0% and 65.0% in the third quarter of 2024, which utilized the same industry loss ratios used since the fourth quarter of 2023. The expected decrease from 65.5% in the second quarter of 2024 was primarily driven by mix changes in the portfolio, as well as the large audit premium being fully earned and associated with older accident years with lower loss pick assumptions. There were no changes to loss picks or prior year reserves during the quarter. As of
Our expense ratio is expected to be between 29.5% and 30.5% in the third quarter of 2024, which represents an expected decrease from 33.8% in the second quarter of 2024, or 32.3% excluding the one-time stock-based compensation acceleration expense of
Preliminary Investment Results
Net investment income is expected to be between
Summary of Selected Preliminary Financial Results
The following table summarizes selected preliminary financial results for the three months ended
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Three Months Ended |
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2024 |
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($ in millions, except percentages and per share data) |
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Gross written premiums |
$ |
193 - 200 |
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Net earned premiums |
|
104 - 107 |
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Net investment income |
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11 - 12 |
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Total revenues |
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114 - 119 |
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Net income |
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11.5 - 12.5 |
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Key Operating and Financial Metrics: |
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Adjusted net income(1) |
$ |
12 - 13 |
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Loss ratio |
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64.0% - 65.0% |
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Expense ratio |
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29.5% - 30.5% |
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Combined ratio |
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93.5% - 95.5% |
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Return on equity(2) |
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13.0% - 14.0% |
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Adjusted return on equity(1)(2) |
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13.5% - 14.5% |
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Diluted earnings per share |
$ |
0.34 - 0.37 |
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Diluted adjusted earnings per share(1) |
$ |
0.36 - 0.39 |
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(1) |
Non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measure to the most comparable |
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(2) |
For the three months ended |
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Reconciliation of Non-GAAP Financial Measures
This earnings release contains certain financial measures that are not presented in accordance with generally accepted accounting principles in
- Adjusted net income is defined as net income excluding the impact of net realized investment gains (losses), non-operating expenses, foreign exchange (gains) losses, and certain strategic initiatives. Adjusted net income excludes the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We calculate the tax impact only on adjustments which would be included in calculating our income tax expense using the estimated tax rate at which we received a deduction for these adjustments.
- Adjusted return on equity is defined as adjusted net income as a percentage of average beginning and ending mezzanine equity and stockholders’ equity.
- Diluted adjusted earnings per share is defined as adjusted net income divided by the weighted average common shares outstanding for the period, reflecting the dilution that may occur if equity base awards are converted into common stock equivalents as calculated using the treasury stock method.
You should not rely on these non-GAAP financial measures as a substitute for any
Adjusted net income
Preliminary adjusted net income for the three months ended
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Three Months Ended |
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2024 |
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Before income taxes |
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After income taxes |
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($ in millions) |
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Income as reported |
$ |
15 - 16 |
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$ |
11.5 - 12.5 |
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Adjustments(1) |
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0 - 1 |
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0 - 1 |
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Adjusted net income |
$ |
16 - 17 |
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$ |
12 - 13 |
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(1) |
Adjustments include expected net realized investment gains (losses) of less than |
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Adjusted return on equity
Preliminary adjusted return on equity for the three months ended
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Three Months Ended |
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2024 |
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($ in millions, except percentages) |
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Numerator: Adjusted net income(1) |
$ |
47 - 51 |
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Denominator: Average mezzanine equity and stockholders' equity |
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351 - 352 |
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Adjusted return on equity |
13.5% - 14.5% |
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| (1) |
For the three months ended |
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Diluted adjusted earnings per share
Preliminary diluted adjusted earnings per share for the three months ended
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Three Months Ended |
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2024 |
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($ in millions, except per share data) |
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Numerator: Adjusted net income |
$ |
12 - 13 |
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Denominator: Diluted weighted average shares outstanding |
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33 |
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Diluted adjusted earnings per share |
$ |
0.36 - 0.39 |
About
Bowhead Specialty is a growing specialty insurance business providing casualty, professional liability and healthcare liability insurance products. We were founded and are led by industry veteran
We pride ourselves on the quality and experience of our people, who are committed to exceeding our partners’ expectations through excellent service and expertise. Our collaborative culture spans all functions of our business and allows us to provide a consistent, positive experience for all of our partners.
Conference Call
The Company will host a conference call to discuss its results on
A replay of the event webcast will be available on the company’s Investor Relations website for one year following the call.
Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in press release are forward-looking statements. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “seeks,” “future,” “outlook,” “prospects” “will,” “would,” “should,” “could,” “may,” “can have” or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
View source version on businesswire.com: https://www.businesswire.com/news/home/20241021342620/en/
Investor Relations:
investorrelations@bowheadspecialty.com
Source:
