Bowhead Specialty Holdings Inc.

Greetings and welcome to the Bowhead Specialty Holdings Third Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Shirley Yap, Chief Accounting Officer and Head of Investor Relations, for Bowhead Specialty Holdings. Thank you. You may begin.

Thanks, Melissa. Good morning, and welcome to Bowhead's third quarter 2024 earnings conference call. I'm Shirley Yap, Bowhead's chief accounting officer and head of investor relations. Joining me today are Stephen Sills, our chief executive officer, and Brad Mulcahy, our chief financial officer. Earlier this morning, we released our financial results for the third quarter of 2024. This follows the preliminary release of our third quarter results and secondary offering we announced on October 21st. You can find these announcements in the investor relations section of our website. Before we begin, I'd like to remind everyone that this call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors should not place undue reliance on any forward-looking statement. These statements are made only as of the date of this call and are based on management's current expectations and beliefs. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. You should review these risks and uncertainties fully described in our SEC filings. We expressly disclaim any duty to update any forward-looking statement except as required by law. Additionally, we will be referencing certain non-GAAP financial measures on this call. Reconciliations of these non-GAAP financial measures to their respective most directly comparable GAAP measure can be found in the earnings release we issued this morning and in the investor relations section of our website. With that, I'll turn the call over to Stephen. Stephen?

Thank you, Shirley, and good morning to everyone joining us on the call today. To organize my remarks, I'll begin with a brief overview of the strong premium growth we experienced during the third quarter. I'll provide our views on the broader specialty insurance industry, identifying where BOHIT sees the greatest opportunities for profitable growth, then conclude with an update on our most recent growth initiatives. To begin, BOHIT had another strong quarter of premium growth across each of our divisions in the third quarter. Gross written premiums grew by 48 million or 32% to 197 million compared to a year ago. Our casualty division had a standout quarter. Premiums grew 42% compared to a year ago to over $120 million. This was primarily driven by our excess casualty book, where we continue to see favorable underwriting and pricing conditions. While the conditions that our healthcare liability and professional liability divisions were more nuanced in casualty, we experienced double-digit premium growth in both divisions. while maintaining underwriting discipline. Our healthcare liability division grew 29% to 31 million in the quarter, primarily driven by new business and rate increases in certain lines. Our professional liability division increased 13% to 45 million, driven by our cyber liability portfolio, where we saw new and increased limits being purchased in the market. Overall, we're pleased with our third quarter production and the continual execution of our market cycle strategy. Turning to our views on the broader specialty insurance industry, we see mixed conditions by division, strong in casualty, mixed in healthcare, and competitive in professional. The casualty market remained resilient in terms of pricing and terms and conditions. We see the strongest rates coming through in excess casualty where the industry is continuing to drive rate on previous rate increases. As the market continues to react to older accident year losses, we're seeing limits continuing to decrease in large limit towers and opportunities coming from increased movement into the specialty and ENS market. We believe these are favorable tailwinds for BowHead, and it remains our view that these market conditions will continue for the foreseeable future. In healthcare, it's a mixed story. We're seeing favorable conditions in the hospital space, but increased competition in medical facilities and the continued softening of market conditions in healthcare management liability. In professional, excluding cyber liability, market conditions remain competitive as we're seeing what we believe is undisciplined behavior in the market. New entrants and increased capacity from legacy markets that are trying to grow market share. While we don't expect these conditions to change in the near future, our team is maintaining underwriting discipline and finding opportunities to optimize our portfolio. Finally, before I turn the call over to Brad to review the details of our financials, I wanted to provide an update on our recent growth initiatives. I'll start with Bailin, the streamlined, low touch flow underwriting division we launched late in Q2 focusing on small, hard to place risks written 100% on a non-admitted basis. We're pleased with our initial results as we achieved what we initially set out to accomplish. Bayleen can ingest the submission and issue a quote within minutes. Once a quote is accepted, policies are bound and issued within minutes. We started with 29 eligible contractor classes at the end of Q2, and by the end of Q3, we offered 89 eligible class codes in our contractors and owners, landlord and tenants, or OL&T product lines. As of today, we continued our expansion and now offer over 150 eligible contractor and OL&T class codes. While this represents just under half of the addressable market, Our expansion covers the most frequently requested class codes by our broker partners. Pivoting back to our craft business, we announced in our last earnings call that we were in the process of expanding our casualty division to include environmental capabilities. To date, we've hired a team of three underwriters with over 60 years of combined experience writing complex environmental risk. On October 1st, we released the first of our three initial environmental liability products, excess contractors, pollution, and professional liability. We plan to release the next two products, primary contractors pollution liability and site pollution liability next year. But we don't expect 2024 premiums to be material from Baleen or environmental with our disciplined approach to underwriting, and our expanding craft and flow platforms, we believe we're well positioned for sustainable and profitable growth across market cycles. With that, I'll turn the call over to Brad to discuss our third quarter results.