Bowhead Specialty Holdings Inc., a company focused on specialty lines insurance products, has reported its preliminary financial results for the third quarter of 2024. The company expects gross written premiums to increase by 27% to 34% year over year to a range of $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, while adjusted net income is expected to be between $12 million and $13 million, or $0.36 to $0.39 per diluted share.
The company’s return on equity is expected to be between 13.0% and 14.0%, with adjusted return on equity between 13.5% and 14.5%. Book value per share is projected to be between $11.00 and $11.25, with diluted book value per share expected to be between $10.80 and $11.00.
Bowhead Chief Executive Officer Stephen Sills expressed satisfaction with the preliminary third quarter results, highlighting that the company does not write any property risks, so they do not anticipate significant direct losses from recent hurricane activities. The company looks forward to providing more details about their third-quarter performance on November 5th.
The growth in gross written premiums was primarily driven by renewals, new business, and continued expansion across all divisions. The Casualty division led the growth with a 40% increase year over year, while Healthcare Liability and Professional Liability divisions also saw positive growth. A new division called Baleen Specialty, focusing on small, hard-to-place risks, was launched in the second quarter of 2024 and contributed to the company’s growth.
The loss ratio for the third quarter of 2024 is expected to be between 64.0% and 65.0%, primarily due to mix changes in the portfolio and the full earning of a large audit premium associated with older accident years. Meanwhile, the expense ratio is expected to decrease to between 29.5% and 30.5% from the previous quarter, driven by prudent expense management and the impact of the audit premium.
In terms of investment results, net investment income is projected to be between $11 million and $12 million for the quarter ended September 30, 2024. The company’s IPO proceeds were fully invested during the quarter, with no changes to the investment strategy from the previous quarter.
Overall, Bowhead Specialty Holdings Inc. remains focused on providing quality insurance products in specialty lines and classes of business. The company’s commitment to excellence and expertise sets them apart in the industry, ensuring a positive experience for all partners involved.
For those interested in learning more about the company’s results, a conference call will be held on November 5, 2024, at 8:30 a.m. Eastern Time. The call can be accessed through a live webcast or by dialing the provided numbers. Additionally, a replay of the webcast will be available on the company’s Investor Relations website for one year following the call.
It is important to note that forward-looking statements have been made in this press release, and actual results may differ due to various risks and uncertainties. The company does not undertake any obligation to update or revise forward-looking information unless required by law.