By David Bull
May 6 - (The Insurer) - Bowhead Specialty CEO Stephen Sills has told analysts that he is confident the company can profitably grow premiums by around 20% on an annual basis, despite macroeconomic uncertainty relating to tariffs.
“In the context of the $95 billion commercial E&S market, there's ample runway for continued expansion. Our submission volume continues to grow across all our divisions,” said the Bowhead Specialty founder.
He added that the company is investing in technology and implementing process enhancements to driver greater operational efficiency.
“The strategic mix of our craft and flow underwriting operation, combined with our ability to leverage Baleen's technology to cost-effectively underwrite small and middle market accounts, enhances both our scalability and profitability,” said Sills.
In comments following the New York-based company reporting operating profits that were in line with Wall Street forecasts, the executive had commented on the potential impact of tariffs on the specialty insurance market.
“If the tariffs were to persist, we could see a slowdown in the U.S. E&S construction industry for a period of time.
“However, with the excess casualty market making up for legacy losses that are still plaguing the industry and tariffs likely to increase costs, we don't expect anytime soon to see a reversal of compressed limits being offered, nor do we expect to see a significant drop in pricing that would overturn the strong market we are seeing today,” he suggested.
Casualty was the biggest driver of growth at Bowhead in the first quarter and Sills said the business would continue to be the biggest contributor to growth in dollar terms.
But in percentage terms he said that “flow” underwriting business Baleen Specialty, which was launched a year ago, will be the fastest grower as it gains traction by providing streamlined tech-enabled low-touch underwriting focused on small niche and hard-to-place risks.
Bowhead on Tuesday reported 26.3% growth in gross premiums written to $174.8 million in Q1, with casualty GPW up 33.7% to $122.3 million.
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