AM Best Revises Outlook to Positive for Texas’ Skyward Specialty

AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of a- (Excellent) of Great Midwest Insurance Company, Houston Specialty Insurance Company, Oklahoma Specialty Insurance Company and Imperium Insurance Company (IIC). All companies are members of Skyward Specialty Insurance Company (Skyward), whose ultimate parent is Skyward Specialty Insurance Group, Inc., [NASDAQ: SKWD], and are headquartered in Houston, Texas.

The Credit Ratings reflect Skyward’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.

The positive outlooks are driven by the group’s operating performance, which is reflective of a sustained trend of improving underwriting results since 2020 following a change in executive leadership, as well as consistent investment income, AM Best said.

Following a period of underwriting volatility, management instituted several correcting initiatives to refine its underwriting focus and risk selections as a specialty lines writer, and improved underwriting profitability has been noted since that time in its targeted niches. Going forward, AM Best will continue to monitor trends in underwriting performance and overall operating results.

Skyward’s management has also instituted numerous capital initiatives in recent years, which included a loss portfolio transfer intended to minimize the impact of discontinued lines. The group has also benefited from numerous parental capital contributions to support its operations. Financial leverage and interest coverage ratios remain within AM Best’s expectations with additional capacity to access the capital markets if needed, AM Best said.

Texas went public earlier this year under CEO Andrew Robinson.