Q1 2026 Skyward Specialty Insurance Group Inc Earnings Call

May 7, 2026

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Q1 2026 Skyward Specialty Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you would have to press star one one on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Natalie Schoolcraft, Senior Vice President. Please go ahead.

Speaker #1: ahead.

Natalie Schoolcraft: Thank you, Gina. Good morning, everyone, and welcome to our Q1 2026 earnings conference call. Today, I am joined by our Chairman and Chief Executive Officer, Andrew Robinson, and Chief Financial Officer, Mark Haushill. We will begin the call today with our prepared remarks, and then we will open the lines for questions. Our comments may include forward-looking statements, which by their nature involve a number of risk factors and uncertainties which may affect future financial performance. Such risk factors may cause actual results to differ materially from those contained in our projections or forward-looking statements. These types of factors are discussed in our press release as well as in our 10-K that was previously filed with the Securities and Exchange Commission.

Speaker #2: Gina. Good morning, everyone, and welcome to our First Quarter 2026 Earnings Conference Call. Today, I am joined by our Chairman and Chief Executive Officer, Andrew Robinson, and Chief Financial Officer, Mark Haushill.

Speaker #2: We will begin the call today with our prepared remarks and then we will open the lines for questions. Our comments may include forward-looking statements, which by their nature involve a number of risk factors and uncertainties which may affect future financial performance.

Speaker #2: Such risk factors may cause actual results to differ materially from those contained in our projections or forward-looking statements. These types of factors are discussed in our press release as well as in our 10-K that was previously filed with the Securities and Exchange Commission.

Speaker #2: Financial schedules containing reconciliations of certain non-GAAP measures along with other supplemental financial schedules are included as part of our press release and available on our website under the investor section.

Natalie Schoolcraft: Financial schedules containing reconciliations of certain non-GAAP measures, along with other supplemental financial schedules, are included as part of our press release and available on our website under the Investor section. With that, I will turn the call over to Andrew.

Speaker #2: With that, I will turn the call over to Andrew.

Speaker #3: Thank you, Natalie. Good morning and thank you for joining us. This quarter marks our first reporting as Skyward Group inclusive of both the Skyward Specialty and Apollo segments.

Andrew Robinson: Thank you, Natalie. Good morning, and thank you for joining us. This Q marks our first reporting at Skyward Group, inclusive of both the Skyward Specialty and Apollo segments. Our results reflect an excellent start as a combined company. Mark will cover the Q in detail in a moment, but I'll start our call today with a few highlights. Q1 diluted operating EPS improved to $1.25 from $0.90 a share in the same Q last year, an impressive increase of 39%, reflecting both the strong embedded earnings growth of Skyward Specialty and the realized accretion from the Apollo acquisition. Our annualized operating return on equity was an outstanding 20%. Our book value per share grew to $27.50, which is up 10% over the prior Q.

Speaker #3: Our results reflect an excellent start as a combined company. Mark will cover the quarter in detail in a moment, but I'll start our call today with a few highlights.

Speaker #3: First Quarter diluted operating EPS improved to $1.25 from 90 cents a share in the same quarter last year in impressive increase of 39%, reflecting both the strong embedded earnings growth of Skyward Specialty and the realized accretion from the Apollo acquisition.

Speaker #3: Our annualized operating return on equity was an outstanding 20%. Our book value per share grew to $27.50, which is up 10% over the prior quarter.

Speaker #3: Altogether, these results reflect strong underlying earnings momentum and disciplined capital deployment positioning us well to continue to deliver consistent top quartile returns for our shareholders.

Andrew Robinson: Altogether, these results reflect strong underlying earnings momentum and disciplined capital deployment, positioning us well to continue to deliver consistent top quartile returns for our shareholders. Our growth in gross written premiums on a pro forma basis was up 10% over the prior year. Managed premiums were up 20% on a pro forma basis to $968 million. As a reminder, managed premiums include a combination of group premiums and premiums supported by third-party capital providers. The underlying 49% growth in gross written premiums driving the fee aspect of Apollo's business will be an important and new earnings growth driver as we look out into the future. As is widely discussed, market conditions are increasingly challenging for significant parts of the P&C sector.

Speaker #3: Our growth in gross written premiums on a pro forma basis was up 10% over the prior year. Managed premiums were up 20% on a pro forma basis to $968 million.

Speaker #3: And as a reminder, managed premiums include a combination of group premiums and premium supported by third-party capital providers. The underlying 49% growth in gross written premiums driving the fee aspect of Apollo's business will be an important and new earnings growth driver as we look out into the future.

Speaker #3: As is widely discussed, market conditions are increasingly challenging for significant parts of the P&C sector. Our portfolio construction is genuinely unique amongst the P&C universe in that over 50% of the Skyward Group's business now inclusive of syndicate 1971 or IBOT, our digital economy syndicate, is in markets less exposed to the P&C cycles.

Andrew Robinson: Our portfolio construction is genuinely unique amongst the P&C universe in that over 50% of the Skyward Group's business, now inclusive of Syndicate 1971 or ibott, our digital economy syndicate, is in markets less exposed to the P&C cycles. Together, with our niche-focused strategy and outstanding execution, Skyward Group has never been better positioned to deliver sustained top quartile shareholder value and continued earnings growth. With that, I'll turn the call over to Mark to provide the financial details for the quarter. Mark?

Speaker #3: Together, with our niche-focused strategy and outstanding execution, Skyward Group has never been better positioned to deliver sustained top quartile shareholder value and continued earnings growth.

Speaker #3: With that, I'll turn the call over to Mark to provide the financial details for the quarter. Mark?

Speaker #4: Thank you, Andrew. And good morning, everyone. As Andrew outlined, our first quarter reflects a successful start as a combined company reporting net income of $50 million and operating income of $57 million.

Mark Haushill: Thank you, Andrew, and good morning, everyone. As Andrew outlined, our Q1 reflects a successful start as a combined company reporting net income of $50 million and operating income of $57 million. Diluted operating earnings per share was $1.25, up 39% year-over-year. Underwriting income totaled $52 million, and the combined ratio was 89.5, inclusive of 1.8 points of catastrophe losses. Ex cat, the combined ratio was 87.7, reflecting strong underlying loss performance and disciplined expense management. Annualized operating ROE was 20.3%, underscoring the earnings power of the combined group. Gross written premiums were $668 million, up approximately 10% on a pro forma basis, driven by 9% growth in Skyward Specialty and 9% growth in Apollo.

Speaker #4: Diluted operating earnings per share was $1.25, up 39% year over year. Underwriting income totaled $52 million, and the combined ratio was 89.5, inclusive of 1.8 points of catastrophe losses.

Speaker #4: XCAT, the combined ratio, was 87.7, reflecting strong underlying loss performance and disciplined expense management. Annualized operating ROE was 20.3%, underscoring the earnings power of the combined group.

Speaker #4: Gross written premiums were $668 million, up approximately 10% on a pro forma basis, driven by 9% growth in Skyward Specialty and 9% growth in Apollo.

Speaker #4: Overall growth was driven by Skyward Specialty's accident and health, credit and surety, global agriculture, and specialty programs divisions and Apollo syndicate 1969, our multi-class specialty syndicate.

Mark Haushill: Overall growth was driven by Skyward Specialty's Accident & Health, Credit and Surety, Global Agriculture, and Specialty Programs divisions, and Apollo Syndicate 1969, our multi-class specialty syndicate. As Andrew emphasized, managed premiums, which include gross written premiums from which we derive fees, are an important metric for our business going forward. Managed premiums totaled $968 million, up approximately 20% year over year on a pro forma basis, including fee-generating premiums of $300 million, which increased 49%. In this quarter, we generated $10 million in underwriting fees. This income stream is capital-light, recurring, and incremental to underwriting profit, and it represents a structurally important earnings growth lever as managed premium volume scales over time. With the addition of Apollo, we now report through two operating segments, Skyward Specialty and Apollo, and a discrete corporate unit.

Speaker #4: As Andrew emphasized, managed premiums, which include gross written premiums from which we derive fees, are an important metric for our business going forward. Managed premiums totaled $968 million, up approximately 20% year over year on a pro forma basis, including fee-generating premiums of $300 million, which increased 49%.

Speaker #4: In this quarter, we generated $10 million in underwriting fees, this income stream as capital light recurring, and incremental to underwriting profit and it represents a structurally important earnings growth lever as managed premium volume scales over time.

Speaker #4: With the addition of Apollo, we now report through two operating segments, Skyward Specialty and Apollo, and a discrete corporate unit. The corporate unit includes investment results, holding company costs, and enterprise-level functions that support both operating segments.

Mark Haushill: The corporate unit includes investment results, holding company costs, and enterprise-level functions that support both operating segments. The change improves transparency and provides clearer visibility into the true segment-level performance. Skyward Specialty reported a combined ratio of 88.9 or 86.8 ex-cat, reflecting another period of solid underwriting performance and an improvement from the prior year quarter. The loss ratio of 62.7 includes 2.1 points of catastrophe losses from winter and convective storms. The non-cat loss ratio of 60.6 was in line with 2025 and reflects business mix shift as A&H and global agriculture make up a larger portion of our portfolio. Loss emergence was in line with expectations and no development was recognized.

Speaker #4: The change improves transparency and provides clear visibility into the true segment-level performance. Skyward Specialty reported a combined ratio of 88.9 or 86.8 XCAT, reflecting another period of solid underwriting performance and an improvement from the prior year quarter.

Speaker #4: The loss ratio of 62.7 includes 2.1 points of catastrophe losses from winner and convective storms. The non-CAT loss ratio of 60.6 was in line with 2025 and reflects business makeshift as ANH and global agriculture make up a larger portion of our portfolio.

Speaker #4: Loss emergence was in line with expectations, and no development was recognized. The expense ratio was 26.2%, improving by over half a point year over year, driven by continued operating efficiencies and business mix.

Mark Haushill: The expense ratio was 26.2, improving by over half a point year over year, driven by continued operating efficiencies and business mix. Turning to Apollo, the segment produced a combined ratio of 85.3, a strong start for Q1 as part of Skyward Group. As Apollo has not historically reported quarterly results on a comparable U.S. GAAP basis, we are not providing year-over-year comparisons. Apollo reported a non-cat loss ratio of 52.8, lower than full year expectations as a result of Q1 business mix and seasonality. Loss emergence in the quarter was in line with expectations. Apollo did not incur any cat losses in the quarter, and our full year cat expectations remain unchanged. The expense ratio of 32.5 is broadly in line with expectations.

Speaker #4: Turning to Apollo, the segment produced a combined ratio of 85.3, a strong start to the first quarter as part of Skyward Group. As Apollo has not historically reported quarterly results, on a comparable US gap basis, we are not providing year-over-year comparisons.

Speaker #4: Apollo reported a non-CAT loss ratio of 52.8, lower than full-year expectations as a result of Q1 business mix and seasonality. Loss emergence in the quarter was in line with expectations.

Speaker #4: Apollo did not incur any CAT losses in the quarter and our full-year CAT expectations remain unchanged. The expense ratio of 32.5 is broadly in line with expectations; the $4 million of fee-based service expenses are excluded from the combined ratio but included in operating income and support the scalability of the fee-earning part of the business.

Mark Haushill: The $4 million of fee-based service expenses are excluded from the combined ratio, but included in operating income and support the scalability of the fee-earning part of the business. Turning to investments, the portfolio now approximates $2.7 billion, of which 90% of the portfolio consists of fixed income and short-term investments. Net investment income was $27 million, an increase of $7.5 million year-over-year, driven primarily by larger invested asset base as a result of the Apollo acquisition. Alternative and strategic investments continued to experience volatility, primarily due to marks on the underlying investments. These exposures represent a modest portion of total invested assets, and the overall portfolio remains conservatively positioned.

Speaker #4: Turning to investments, the portfolio now approximates $2.7 billion, of which 90% of the portfolio consists of fixed income and short-term investments. Net investment income was 27 million, an increase of 7.5 million year over year, driven primarily by larger invested asset base as a result of the Apollo acquisition.

Speaker #4: Alternative and strategic investments continue to experience volatility primarily due to marks on the underlying investments. These exposures represent a modest portion of total invested assets and the overall portfolio remains conservatively positioned.

Speaker #4: With the addition of Apollo, over $500 million of invested assets were added to the portfolio during the quarter, which contributed $5 million of net investment income primarily from fixed income securities and short-term investments.

Mark Haushill: With the addition of Apollo, over USD 500 million of invested assets were added to the portfolio during the quarter, which contributed USD 5 million of net investment income, primarily in fixed income securities and short-term investments. For the fixed income portfolio, we put USD 75 million to work at 5.5%. The embedded yield for the group portfolio was 5.3%. Turning to the balance sheet, stockholders' equity ended the quarter at USD 1.2 billion. Financial leverage was in line with expectations after the closing of the Apollo acquisition at 28%. As Andrew highlighted, book value per share was $27.50, representing a 31% increase over the prior 12 months. You will recall that on 3 December, we provided guidance for 2026, and that guidance is unchanged. Now, I'll turn the call back over to Andrew.

Speaker #4: For the fixed income portfolio, we put $75 million to work at 5.5%, the embedded yield for the group portfolio was 5.3%. Turning to the balance sheet, stockholders' equity ended the quarter at 1.2 billion, financial leverage was in line with expectations after the closing of the Apollo acquisition at 28%.

Speaker #4: As Andrew highlighted, book value per share was 27.50, representing a 31% increase over the prior 12 months. You will recall that on December 3rd, we provided guidance for 2026 and that guidance is unchanged.

Speaker #4: Now, I'll turn the call back over to Andrew.

Speaker #3: Thank you, Mark. As Mark shared, our financial results for the quarter were again excellent. Our portfolio diversification, particularly in categories less exposed to the P&C cycle, again served as a catalyst for strong top-line performance which in turn will continue to drive double-digit earnings growth.

Andrew Robinson: Thank you, Mark. As Mark shared, our financial results for the quarter were again excellent. Our portfolio diversification, particularly in categories less exposed to the P&C cycle, again served as a catalyst for strong top-line performance, which in turn will continue to drive double-digit earnings growth. Notably, our increase in gross written premiums of 25+% in A&H, credit and surety, and ag are all in areas that are removed from the pressures of the broader P&C market. Simultaneously, we are maintaining our disciplined bottom-line focus in other areas of our business that are currently experiencing softening market conditions or a challenging loss inflation backdrop. Among small or mid-cap carriers in the public or private markets, there is no other company that has constructed such a well-diversified and cycle-resistant business portfolio.

Speaker #3: Notably, our increase in gross written premiums of 25 plus percent in ANH, credit and surety, and AG are all in areas that are removed from the pressures of the broader P&C market.

Speaker #3: Simultaneously, we are maintaining our disciplined bottom-line focus in other areas of our business that are currently experiencing softening market conditions or challenging loss inflation backdrop.

Speaker #3: Amongst small or mid-cap carriers in the public or private markets, there is no other company that has constructed such a well-diversified and cycle-resistant business portfolio.

Speaker #3: While only months into operating as a combined company, a number of important growth initiatives have been launched. This includes our proprietary insurance partnership for Uber's autonomous vehicle insurance program, the launch of our life sciences product using Lloyd's paper to serve U.S.-domiciled companies with international exposure, and the one-on-one launch of Syndicate 1972, which is Apollo's internal reinsurance syndicate.

Andrew Robinson: While only months into operating as a combined company, a number of important growth initiatives have been launched. This includes our proprietary insurance partnership for Uber's autonomous vehicle insurance program, the launch of our life sciences product using Lloyd's paper to serve US-domiciled companies with international exposure, and the 1 January launch of Syndicate 1972, which is Apollo's internal reinsurance syndicate. I'll note that 1972 further provides strategic optionality for Skyward Specialty's outward reinsurance as we look to the future. John Burkart and James Slaughter and several of our leaders are actively advancing a number of future shared growth initiatives, including opportunities in Surety and the launch of ibott America. These highlight only a few of the exciting developments that we will discuss as we begin to scale these initiatives in the quarters ahead. Turning to our operational metrics.

Speaker #3: And I'll note that 1972 further provides strategic optionality for Skyward Specialty's outward reinsurance as we look to the future. John Burkhart and James Slaughter and several of our leaders are actively advancing a number of future shared growth initiatives, including opportunities in surety and the launch of iBot America.

Speaker #3: These highlight only a few of the exciting developments that we will discuss as we begin to scale these initiatives in operational metrics, for Skyward Specialty, pure rate moved up a bit to high single digits ex-global property and mid-single digits including global property.

Andrew Robinson: For Skyward Specialty, pure rate moved up a bit to high single digits ex Global Property and mid-single digits including Global Property. Excluding our intentional actions in construction auto, retention was in the 70s, driven by the effects of the competitive property market across our portfolio. We continue to see strong submission growth, which was solidly in the teens again this quarter. Apollo's risk-adjusted rate change ex property was in the low single digits. Apollo remains intently focused on rate adequacy to steer and maximize returns at the account and portfolio level. Like Skyward, excuse me, like Skyward Specialty, Apollo's diversified portfolio means that we are better positioned to capitalize on opportunities to defend our business in an evolving market. To wrap up, we had an outstanding quarter.

Speaker #3: Excluding our intentional actions and construction auto, retention was in the 70s driven by the effects of the competitive property market across our portfolio. We continue to see strong submission growth, which was solidly in the teens again this quarter.

Speaker #3: Apollo's risk-adjusted rate change ex-property was in the low single digits. Apollo remains intently focused on rate adequacy to steer and maximize returns at the account and portfolio level, and like Skyward, excuse me, like Skyward Specialty, Apollo's diversified portfolio means that we are better positioned to capitalize on opportunities to defend our business in an evolving market.

Speaker #3: To wrap up, we had an outstanding quarter. It's clear that our niche strategy, our excellent execution, our portfolio construction supplemented with a new fee engine is and will be a continued source of strong earnings growth and top quartile financial performance into the future.

Andrew Robinson: It's clear that our niche strategy, our excellent execution, our portfolio construction, supplemented with a new fee engine, is and will be a continued source of strong earnings growth and top quartile financial performance into the future. The combination of Skyward Specialty and Apollo brings together differentiated talent, technology, AI, and innovation capabilities, positioning us to build on the unique strengths of each company and to pursue attractive new opportunities together. With that, I'd now like to turn the call back over to the operator to open it up for Q&A. Operator?

Speaker #3: The combination of Skyward Specialty and Apollo brings together differentiated talent, technology, AI, and innovation capabilities positioning us to build on the unique strengths of each company and to pursue attractive new opportunities together.

Speaker #3: With that, I'd now like to turn the call back over to the operator to open it up for Q&A. Operator?

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We ask that you please limit to one question and one follow-up. For any additional questions, please return to the queue. The first question will come from Matt Carletti with Citizens. Your line is open.

Speaker #2: Thank you, as a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker #2: And we ask that you please limit to one question and one follow-up, and for any additional questions, please return to the queue. And the first question will come from Matt Carletti with Citizens.

Speaker #2: Your line is open.

Speaker #4: Hey, thanks. Good morning.

Matthew Carletti: Hey, thanks. Good morning.

Matt Carletti: Hey, thanks. Good morning.

Speaker #5: Hey, Matt. Hey, Andrew. I was hoping to spend some time talking about your differentiated platform, and I was hoping to dig a little deeper on that and really have two questions.

Andrew Robinson: Hey, Matt.

Matthew Carletti: Hey, Andrew. You spent some time talking about your differentiated platform, and I was hoping to dig a little deeper on that. I really have two questions. The first is, as you think about kind of how your business sits today, particularly with kind of Apollo on board now, and we think about where we are in the cycle, can you just give us of your view of kind of how you see the impact on growth and the impact on margins or how that unfolds for Skyward, you know, versus kind of your select peer group or the industry?

Matt Carletti: Hey, Andrew. You spent some time talking about your differentiated platform, and I was hoping to dig a little deeper on that. I really have two questions. The first is, as you think about kind of how your business sits today, particularly with kind of Apollo on board now, and we think about where we are in the cycle, can you just give us of your view of kind of how you see the impact on growth and the impact on margins or how that unfolds for Skyward, you know, versus kind of your select peer group or the industry?

Speaker #5: The first is, as you think about kind of how your business sits today, particularly with kind of Apollo on board now, and we think about where we are in the cycle, can you just give us your view of kind of how you see kind of the impact on growth and the impact on margins or how that unfolds for Skyward versus kind of your select peer group or the industry?

Speaker #5: And then the second part is just to go a bit deeper and appreciating kind of the half of your business that is not P&C, things like surety, like ANH, like agriculture.

Matthew Carletti: Then the second part is just to go a bit deeper and, you know, appreciating kind of the half of your business that is not P&C, things like Surety, like A&H, like Agriculture. You know, we hear those words at other carriers at times, usually not all three, but here and there. Can you talk a little bit about how your approach to those businesses might be a bit different than what we might think of as the average approach?

Matt Carletti: Then the second part is just to go a bit deeper and, you know, appreciating kind of the half of your business that is not P&C, things like Surety, like A&H, like Agriculture. You know, we hear those words at other carriers at times, usually not all three, but here and there. Can you talk a little bit about how your approach to those businesses might be a bit different than what we might think of as the average approach?

Speaker #5: We hear those words at other carriers at times—usually not all three, but here and there. Can you talk a little bit about how your approach to those businesses might be a bit different than what we might think of as the average approach?

Speaker #5: Yeah. Matt, good morning and thank you for the questions. And there's a lot there to unpack. So I'm going to start sort of on the question about sort of how we see the market, our portfolio, and margin outlook.

Andrew Robinson: Yeah. Matt, good morning, thank you for the questions. There's a lot there to unpack. I'm gonna start, you know, sort of on the question about sort of how we see the market, our portfolio and margin outlook. Look, I think that I talk certainly about the parts that are the uncorrelated and have seen the biggest growth, and for reasons that have to do with, like, we have great product market fit and we're not seeing kind of the cyclical factors, right? I'm gonna set those aside for a moment. I will just say to you that, you know, I view our portfolios, while very complementary and different, both Skyward Specialty and Apollo share one important sort of feature, which is the portfolios are quite niche-y.

Speaker #5: And look, I think that I talk certainly about the parts that are the uncorrelated and have seen the biggest growth. And for reasons that have to do with, like we have great product-market fit and we're not seeing kind of the cyclical factors, right?

Speaker #5: I'm going to set those aside. For a moment. I will just say to you that I view our portfolios while very complementary and different.

Speaker #5: Both Skyward Specialty and Apollo share one important sort of feature, which is the portfolios are quite niche. So I'll give you just a simple example because I was in London with a team just a couple of weeks back.

Andrew Robinson: I'll give you just a simple example, 'cause I was in London with a team just a couple weeks back, and you know, we're talking about the marine energy and transport division of Apollo. What became clear to me is that, for example, in that business, they have a leadership position in shipbuilders. They have a leadership position in ports and terminals. While those two, if you will, subclasses, aren't necessarily immune from macro conditions, they certainly aren't feeling the full effects of the marine energy and transportation division.

Speaker #5: And we were talking about the marine energy and transport division of Apollo and what became clear to me is that, for example, in that business, they have a leadership position in shipbuilders.

Speaker #5: They have a leadership position in ports and terminals. And while those two, if you will, subclasses aren't necessarily immune from macro conditions, they certainly aren't feeling the full effects of the marine energy and transportation division.

Speaker #5: And while it feels like a faraway comparison, if you look at our management liability book, which is made up of Web3 smart contract types of exposure and cannabis and distressed homeowners, we're away from the parts of the management liability market that have the pressures of 50 carriers competing and really no opportunity to create the kind of margin that separates from the rest of the industry.

Andrew Robinson: While it feels like a faraway comparison, if you look at our management liability book, which is made up of, you know, Web3, smart contract types of exposure, cannabis, and distressed homeowners, you know, we're away from the parts of the management liability market that has the pressures of 50 carriers competed and, you know, really no opportunity, you know, to create kind of margin that separates from the rest of the industry. I think if you worked across our portfolios, you would find example after example of that. I think what I would say to you is that the, those niches have a certain opportunity size. You know, listen, to write Web3 is hard. You have to build a specialized, you know, insurance contract around that and so forth.

Speaker #5: And I think if you work across our portfolios, you would find example after example of that. I think what I would say to you is that those niches have a certain opportunity size.

Speaker #5: And so listen to right Web3 is hard. You have to build a specialized insurance contract around that and so forth. And we've done that, but it's a limited opportunity.

Andrew Robinson: We've done that, but it's a limited opportunity, which basically means that in soft market conditions, as long as you're disciplined and you don't sort of go chase, you know, everything else that's out there, which we don't, your growth opportunities will be a little bit more limited. I don't necessarily believe at this moment in time I see an impact on our margin. You know, we're watching closely. I think both the leaders, you know, James and John are doing an excellent job around that. I don't see an impact on our margin because of where we're competing and how we're competing is sort of the thing I would highlight.

Speaker #5: Which basically means that in soft market conditions, as long as you're disciplined and you don't sort of go chase everything else that's out there, which we don't, your growth opportunities will be a little bit more limited.

Speaker #5: I don't necessarily believe at this moment in time, I see an impact on our margin. We're watching closely. I think both the leaders, James and John, are doing an excellent job around that.

Speaker #5: But I don't see an impact on our margin because of where we're competing and how we're competing. It's sort of the thing I would highlight.

Speaker #5: And then on the other side, other side being the parts that are and I would put 1971 in there because if you go just talk to anybody who was at Rims, I'd think that they will tell you that the IBOT team is one of one, not one of even two.

Andrew Robinson: On the other side, you know, other side being the parts that are, you know, I would put Syndicate 1971 in there because, you know, if you go just talk to anybody who was at RIMS, I think that they will tell you that the ibott team is one of one, not one of even two. There's one of one out there on what they do. I think that those are the opportunities for us to drive, you know, that's Ag and A&H and the other areas that we talk about, to continue to drive really outstanding growth and selectively to be able to expand our margins as well. So, you know, those are the things that at every opportunity we're gonna lean hard into.

Speaker #5: There's one of one out there. On what they do. And I think that those are the opportunities for us to drive and that's ag and ANH and the other areas that we talk about to continue to drive really outstanding growth and selectively to be able to expand our margins as well.

Speaker #5: And so those are the things that at every opportunity we're going to lean hard into.

Speaker #4: Great. Thank you. Appreciate the color.

Matthew Carletti: Great. Thank you. Appreciate the color.

Matt Carletti: Great. Thank you. Appreciate the color.

Speaker #5: Thanks, Matt.

Andrew Robinson: Thanks, Matt.

Operator: Thank you. The next question is gonna come from Gregory Peters with Raymond James. Your line's open.

Speaker #2: Thank you. And the next question is going to come from Gregory Peters with Raymond James. Your line's open.

Gregory Peters: Hey, good morning, everyone. I wanted to focus on the disclosure in your press release around the gross written premium by underwriting division. You know, you also included comments about this, the managed premium growth. There's a, there's a bunch of moving pieces, you know, where we see certain lines or certain divisions where there's some substantial growth, and we see other areas where there's shrinkage. Well, I'd like to get more perspective on the moving pieces in there.

Speaker #6: Hey, good morning, everyone. I wanted to focus on the disclosure in your press release around the gross written premium by underwriting division and you also and you included comments about this, the managed premium growth.

Speaker #6: And so there's a bunch of moving pieces where we see certain lines or certain divisions where there's some substantial growth and we see other areas where there's shrinkage.

Speaker #6: And I thought well, I'd like to get more perspective on the moving pieces in there and I know you just sort of answered some of it in the previous with the previous question, but when I see this substantial growth in the fee-generating gross written premium, and it begs the question, how are you avoiding getting caught up in just market-sensitive types of businesses and how are you able to avoid the stuff that's more cyclical and focus on the stuff that's less cyclical?

Gregory Peters: I know you just sort of answered some of it with the previous question but, you know, when I see this substantial growth in the fee-generating gross written premium, you know, it begs the question, you know, how are you avoiding getting caught up in just market sensitive types of businesses, and how are you able to avoid, you know, the stuff that's more cyclical and focus on the stuff that's less cyclical?

Andrew Robinson: Hey, Greg. Good morning, and thanks for the question. I'm gonna endeavor to answer it as best I can, but this may be something that we'd wanna follow up on and make sure that if I'm not answering it, you know, fully for you here that we are after the call. There's two things that drive that premium that is driving fees. The first part is that that's directly linked to 1969 and 1971, where obviously we have, you know, 25% of the capital deployed for those two syndicates. This is fees that correspond with the business that we're writing directly, you know, into our account.

Speaker #5: Hey, Greg, good morning and thanks for the question. I'm going to endeavor to answer it as best I can, but this may be something that we'd want to follow up on and make sure that if I'm not answering it fully for you here, that we are after the call.

Speaker #5: So there's two things that drive that premium that is driving fees. The first part is that that's directly linked to 1969 and 1971 where obviously we have 25% of the capital deployed for those two syndicates.

Speaker #5: And so this is fees that correspond with the business that we're writing directly into our account. And then in addition to that, as we have talked about in the past, that Apollo has a division focused on providing managing agency services to partner syndicates.

Andrew Robinson: In addition to that, as we have talked about in the past, Apollo has a division focused on providing managing agency services to partner syndicates. In each and every instance of those partner syndicates, I would characterize that there are 9 syndicates in total, that they are all really kind of away from the standard market. They include things like parametric. They include now a credit-related syndicate. They include a captive for a global technology company.

Speaker #5: And in each and every instance of those partner syndicates, I would characterize and there's nine in total. I would characterize that there's nine syndicates in total, that they are all really kind of away from the standard market.

Speaker #5: So they include things like parametric, they include now a credit-related syndicate, they include a captive for a global technology company, and so in each of those instances, they're rather unique and they fit with, I would say, principally the innovation mindset of our company in total, but more importantly, around Lloyd's ambition to bring new categories of risk into Lloyd's.

Andrew Robinson: In each of those instances, they're rather unique, and they fit with, I would say principally the innovation mindset of our company in total, but more importantly around Lloyd's ambition to bring new categories of risk into Lloyd's. In fact, I believe if you ask the Lloyd's management how they view Apollo as a partner in this regard, I think that you would hear words around innovation and the ability to support some of these new ideas and provide the appropriate oversight and capabilities that they believe are requisite for those syndicates to operate effectively in Lloyd's. I have little concern about the growth potential there based on what I know on the backlog of opportunities that are in front of us.

Speaker #5: And in fact, I believe if you asked the Lloyd's management how they view Apollo as a partner in this regard, I think that you would hear words around innovation and the ability to support some of these new ideas and provide the appropriate oversight and capabilities that they believe are requisite for those syndicates to operate effectively in Lloyd's.

Speaker #5: And I have little concern about the growth potential there, based on what I know about the backlog of opportunities that are in front of us.

Speaker #5: And that's good. And then can we go to the just at the beginning of the question I asked about the underwriting divisions? And I guess I think you previously commented on the growth in credit insurity.

Gregory Peters: That's good. Can we go to the just at the beginning of the question I asked about the underwriting divisions, you know. You know, I think you previously commented on the growth in credit and Surety. I think, you know, seeing the shrinkage in Global Property makes sense based on what we know what's going on in the pricing environment. Maybe you could just remind us the Specialty Programs posting great results in Q1, what's going on there, and anything else you wanna call out in the disclosure.

Speaker #5: I think seeing the shrinkage in global property makes sense based on what we know what's going on, the pricing environment. Maybe you could just remind us, the specialty programs hosting great results in the first quarter.

Speaker #5: What's going on there? And anything else you want to call out in the disclosure?

Andrew Robinson: Yeah. So yeah. Thanks, Greg. I mean, listen, on the growth side, you know, Surety's the driver in that credit and Surety and credit line item. Our team is just incredible, and they just keep moving from strength to strength. There's been a little bit of disruption. We were able to bring in some talent in a couple of geographies, and unsurprisingly, the books of business followed. I mean, like, just compare our financial results in the SFA, you know, published data, our growth and our loss performance. There's nobody who looks like us. I mean, it's just we are one of one in terms of that level of performance. The same thing on A&H, right? The results are out in the public domain.

Speaker #4: Yeah. So yeah, thanks, Greg. I mean, listen, on the growth side, surety is the driver in that credit insurity credit line item. And our team is just incredible.

Speaker #4: And they just keep moving from strength to strength. There's been a little bit of disruption. We were able to bring in some talent in a couple of geographies and unsurprisingly, the books of business followed.

Speaker #4: And we're just, I mean, just compare our financial results in the SFA published data, our growth and our loss performance. There's nobody who looks like us.

Speaker #4: I mean, it's just—we are one of one in terms of that level of performance. And the same thing on ANH, right? The results are out in the public domain.

Andrew Robinson: You know, we're top 5 performer in terms of loss results, simultaneously, the combination of our single company, you know, medical stop loss solution and our group captive solution, particularly the latter one has really found sort of product market fit. Again, well, you know, I would say we're one of one there. Ag, I've talked about this. We are one of one. While we have a diversified, you know, global reinsurance program, we also have a unique capability around the US dairy livestock program, where we're the only company out there providing a risk transfer solution, one of one. You'll see a theme here when I refer to, you know, 1971 in a similar way.

Speaker #4: We're top five performer in terms of loss results and simultaneously the combination of our single company medical stop-loss solution and our group captive solution particularly the latter one has really found sort of product-market fit.

Speaker #4: And again, I would say we're one of one there. Ag, I've talked about this. We are one of one. Well, we have a diversified global reinsurance program.

Speaker #4: We also have a unique capability around the US dairy livestock program where we're the only company out there providing a risk transfer solution. One of one.

Speaker #4: So, you'll see a theme here when I refer to 1971 in a similar way. On the flip side, I think our team's doing just an outstanding job defending our books and picking and choosing shots to win.

Andrew Robinson: On the flip side, I think our team's doing just an outstanding job, you know, defending our books and picking and choosing shots to win. I think if you take professional as an example, what started as, you know, soft market and public D&O bled into, you know, private D&O, which really was part of that niche focus I described that we pursued. It's present in the miscellaneous, you know, sort of E&O category. Where it's not present right now is in, you know, we're doing a good job seeing a strong opportunity and growth in healthcare professional. It just isn't visible to you in those numbers. I think on the E&S side, you know, all that shrinkage is being driven by property, straight up.

Speaker #4: And I think the if you take professional as an example, what started as a soft market and public DNO bled into private DNO, which really was part of that niche focus I described that we pursued.

Speaker #4: But it's present in the miscellaneous sort of E&O category where it's not present right now is in we're doing a good job seeing strong opportunity and growth in healthcare professional.

Speaker #4: It just isn't visible to you in those numbers. I think on the E&S side, all that shrinkage is being driven by property. Straight up.

Andrew Robinson: The excess market as I wouldn't say anything different than you probably heard from other CEOs. I think there's still good opportunity out there. You know, you have to be cautious in the loss inflation backdrop. I think our guys are doing it right. There's very little auto exposure in our excess book in E&S, and we're writing smaller limit stuff. GL is a bit of a mixed bag. You know, I'd be very cautious of any company who's reporting big casualty growth out there because that kind of market opportunity just doesn't exist the way it did one and two years ago. I would say it's a very uneven market. You know, I always like to provide examples, and I'm gonna give you an example here.

Speaker #4: The excess market, and I wouldn't say anything different than you've probably heard from other CEOs. I think they're still good opportunity out there. You have to be cautious in the loss inflation backdrop.

Speaker #4: I think our guys are doing it right. There's very little auto exposure in our excess book. In E&S. And we're writing smaller limit stuff.

Speaker #4: GL is a bit of a mixed bag. I'd be very cautious of any company who's reporting big casualty growth out there because that kind of market opportunity just doesn't exist the way it did one and two years ago.

Speaker #4: And I would say it's a very uneven market. And I always like to provide examples, and I'm going to give you an example here.

Andrew Robinson: You know, I oftentimes referred to during sort of the E&S growth period, one area that we capitalized on was migrant hotels. We were probably the largest writer of migrant hotels in the United States. We had a large book in New York City alone that I think over the sort of the three or four-year period we built that had maybe a 20% loss ratio. It's tough business to write. You know, on the other side is that business has gone away. The corresponding opportunity that's gone into the market is writing ICE detention centers. You know, that is a particularly difficult risk. We write that one way and one way only. We write it with comprehensive, you know, assault and battery exclusion, you know, no sexual abuse and molestation cover, et cetera, et cetera.

Speaker #4: I oftentimes refer to during sort of the E&S growth period, one area that we capitalized on was migrant hotels. We were probably the largest writer of migrant hotels in the United States.

Speaker #4: We had a large book in New York City alone that I think over the sort of the three or four-year period we built that had maybe a 20% loss ratio.

Speaker #4: And it's tough business to write. On the other side, is that business has gone away. The corresponding opportunity that's gone into the market is writing iced attention centers.

Speaker #4: That is a particularly difficult risk. We write that one way and one way only. We write it with comprehensive salt and battery exclusion, no sexual abuse in mall station cover, etc., etc.

Speaker #4: We're writing accounts, and you write those at really good rates. You can make good money. And within the last two or three months, I would say companies who I would hold in high regard come into the market writing without any coverage restrictions, which from our vantage point probably triples, quadruples the loss costs.

Andrew Robinson: We're writing accounts, and you write those at really good rates. You can make good money. You know, within like the last 2 or 3 months, I would say, companies who I would hold in high regard come into the market, you know, writing without any coverage restrictions, which from our vantage point, probably triples, quadruples the loss costs. You know, if you're gonna write a $5 million exposure, instead of expecting, you know, $400,000 or $500,000 of losses, you're gonna end up with $2 million of losses. Yet they're competing almost pari passu on pricing. I would use that as an example of, well, it was really good 3 months ago, it's not good anymore, and the people who are now trying to write that aren't doing it in a responsible way.

Speaker #4: So if you're going to write a $5 million exposure instead of expecting four or $500,000 of losses, you're going to end up with $2 million of losses.

Speaker #4: And yet they're competing almost peri pursue on pricing. And I would use that as an example of, well, it was really good three months ago.

Speaker #4: It's not good anymore. And the people are now trying to write that aren't doing it in a responsible way. So the market has gotten very uneven.

Andrew Robinson: The market has gotten very uneven. That unevenness means you just got to be really smart, pick and choose, be in the right place at the right time. Our business, as I remind, you know, I've told you a bunch of times, is it is severity driven. It's in the E&S market for the right reasons, and that's the stuff that we like to write. When you see, you know, when you see folks compromising things like terms and conditions, you have to just take pause and say, We're not gonna chase that. You see some of that coming through our growth numbers. Rest assured, if you're an investor in us, that, you know, we're bringing the kind of discipline that you'd want us to bring.

Speaker #4: And that unevenness means you just got to be really smart pick and choose. Be in the right place at the right time. Our businesses, I've told you a bunch of times, is it is severity-driven.

Speaker #4: It's in the E&S market for the right reasons. And that's the stuff that we like to write. But when you see when you see folks compromising things like terms and conditions, you have to just take pause and say, "We're not going to chase that." And so you see some of that coming through our growth numbers.

Speaker #4: And rest assured, if you're an investor in us, that we're bringing the kind of discipline that you'd want us to bring. And on the flip side, companies who are loading up on casualty right now for whatever set of reasons, there isn't the broad enough market opportunity to justify that kind of growth in the market right now.

Andrew Robinson: On the flip side, companies who are loading up on casualty right now, for whatever set of reasons, there isn't the broad enough market opportunity to justify that kind of growth in the market right now.

Speaker #5: That's excellent detail. Thank you.

Gregory Peters: That's excellent detail. Thank you.

Speaker #4: You're welcome, Greg. Thank you.

Andrew Robinson: You're welcome, Greg. Thank you.

Operator: The next question comes from Meyer Shields with KBW. Your line's open.

Speaker #6: And the next question comes from Meyer Shields with KBW. Your line's open.

Operator: The next question comes from Meyer Shields with KBW. Your line's open.

Meyer Shields: Great. Thanks so much. Obviously want to welcome Natalie back. Mark, you mentioned both seasonality and mix when you were talking about Apollo. I was hoping you could talk about that because I'm assuming the mix part might be more persistent, even if seasonality evolves over the course of the year.

Speaker #7: Great. Thanks so much. And obviously, I want to welcome Natalie back. Mark, you mentioned both seasonality and mix when you were talking about Apollo.

Speaker #7: And I was hoping you could talk about that because I'm assuming the mix part might be more persistent even if seasonality evolves over the course of the year.

Mark Haushill: Yeah. Hey, Meyer. I agree with your comment. It is more mix than it is seasonality. I don't know what else to tell you. Are you asking anything else? What else can I help you with?

Speaker #8: Yeah. Hey, Mayor. I agree with your comment. It is more mixed than it is seasonality. It is I don't know what else to tell you.

Mark Haushill: Yeah. Hey, Meyer. I agree with your comment. It is more mix than it is seasonality. I don't know what else to tell you. Are you asking anything else? What else can I help you with?

Speaker #8: Are you asking anything else? What else can I help you with?

Speaker #7: Well, I was hoping you'd sort of flesh out what the seasonality is just in terms of the evolution of the Apollo books commodity ratio over the course of the year.

Meyer Shields: Well, I was hoping you'd sort of like flesh out what the seasonality is just in terms of the evolution of the Apollo books combined ratio over the course of the year.

Speaker #8: Well, it varies, right? There are a number of classes and so I don't have all of the detail in front of you in front of me, but it varies by class.

Mark Haushill: Well, it varies, right? There are a number of classes and I don't have all of the detail in front of you, in front of me, but it varies by class. There's just a number of businesses that can impact the loss ratio.

Speaker #8: There's just a number of businesses that can impact the loss ratio.

Speaker #4: Yeah. Mayor, I think what I would point to is that you're going to see in the fourth quarter yeah, fourth quarter is heavily driven by 1971.

Andrew Robinson: Yeah. Meyer, I think what I would point to is that you're gonna see in Q4. Yeah, Q4 is heavily driven by Syndicate 1971. The Q3 is heavily driven by Syndicate 1969. It's a lot lighter in H1 of the year and not like in the United States where most of our business is earned in ratably over the course of the year, let's say. Or even if you're writing Surety, maybe it's in the duration of our Surety is like a 14-month average contract, maybe it's ratably over 14 months. There's business in there that earns in over a shorter period of time, which can have, you know, an effect on how the loss ratio earns in. I think the high level point is it is a great result.

Speaker #4: The third quarter is heavily driven by 1969. It's a lot lighter in the first half of the year. And not like in the United States where most of our business is earned in radically over the course of the year, let's say, or even if you're writing surety, maybe it's in the duration of our surety is like a 14-month average contract, maybe it's radically over 14 months.

Speaker #4: There's business in there that earns in over a shorter period of time, which can have an effect on how the loss ratio earns in.

Speaker #4: I think the high-level point is great result. We're very we're both pleased and proud of our Apollo colleagues. It's a great way to come out of the blocks.

Andrew Robinson: We're very, we're both pleased and proud of our Apollo colleagues. It's a great way to come out of the blocks. You know, I think that we just go back to what we said when we gave you guidance that, you should understand that Apollo will probably consistently on a loss ratio performance all-in be a bit better than us and in the United States at Skyward Specialty and on the expense ratio, you know, a bit higher. They're relatively comparable combined ratio businesses over the course of a full year.

Speaker #4: But I think that we just go back to what we said when we gave you guidance that you should understand that Apollo will probably consistently on a loss ratio performance all in be a bit better than us.

Speaker #4: And in the United States, it's Skyward Specialty. And on the expense ratio, it's a bit higher, but they're relatively comparable combined ratio businesses over the course of a full year.

Speaker #7: Okay. That's very helpful. The second question, I was going to I think this is predominantly Apollo or maybe global property. I was hoping you'd talk about Middle Eastern exposure, both in terms of loss potential and where rates are apparently evolving pretty quickly.

Meyer Shields: Okay. That's very helpful. The second question, I guess, I think this is predominantly Apollo or maybe global property. I was hoping you'd talk about Middle Eastern exposure, both in terms of loss potential, and where rates are apparently evolving pretty quickly.

Speaker #4: Yeah. Great question. And thank you. This is one of these ones I smile at whether I'm just dumb lucky, I think, as a CEO in this instance.

Andrew Robinson: Yeah. Great question, and thank you. This is like one of these ones I smile at, you know, whether I'm just dumb lucky, I think, as a CEO in this instance. We were with our board, it's nice to be able to have a real world event as the first test of like the great risk management and underwriting at Apollo. Short story is this. Apollo really sort of reduced their aggregate exposure in the Middle East just simply because, you know, post-Crimea, they concluded that there just wasn't the rate to support, you know, the kind of potential political risk, political violence and other sort of adjacent exposure. You know, their exposure runs through, you know, marine, war, aviation, you know, political risk, political violence.

Speaker #4: We're with our board, and it's nice to be able to have a real-world event as the first test of the great risk management and underwriting at Apollo.

Speaker #4: Short story is this. Apollo really sort of reduced their aggregate exposure in the Middle East just simply because post-Crimea, they concluded that they're just wasn't the rate to support the kind of potential political risk, political violence, and other sort of adjacent exposure.

Speaker #4: And their exposure runs through marine war, aviation, political risk, political violence. As a percentage of the market in Lloyd's, their exposure to the Middle East is far less than their share of each of those markets.

Andrew Robinson: As a percentage of the market in Lloyd's, their exposure to the Middle East is far less than their share of each of those markets. We have in our loss picks this quarter, some of that exposure. You know, we have one reported loss of really any size, and that's incorporated into our picks. If things develop, you know, beyond sort of the numbers that are being talked about over the course of Q2 and beyond, and we believe it reflects, you know, in our book, we're gonna sort of, you know, obviously, reflect that. I think what you should understand is that we're definitely undersized in the Middle East, and that's a direct byproduct of leadership's determination that the rates really didn't support the exposure there.

Speaker #4: We have in our loss picks this quarter, some of that exposure. We have one reported loss of really any size. And that's incorporated into our picks.

Speaker #4: And if things develop beyond the numbers that are being talked about over the course of the second quarter and beyond, and we believe it reflects in our book, we're going to obviously reflect that.

Speaker #4: But I think what you should understand is that we're definitely undersized in the Middle East. And that's a direct byproduct of leadership's determination that the rates really didn't support the exposure there.

Andrew Robinson: Post the event, we're trying to be picky. There are some instances like we have, we've written a, you know, handful of accounts, think things like, you know, parking garage structures in some of the other, you know, countries that, you know, are experiencing kind of the collateral effects, if you will. We've written some things that are sea bearing around, you know, like ships and so forth. I would describe what the team has done as being, you know, very thoughtful and kind of picking and choosing and kind of waiting to see, you know, a really sort of fulsome movement on the market environment that would have us lean in further than we are.

Speaker #4: Post the event, we're trying to be picky. There are some instances. We have written a handful of accounts—think things like parking garage structures in some of the other countries that are experiencing kind of the collateral effects, if you will.

Speaker #4: We've written some things that are seabaring around like service ships and so forth. But I would describe what the team has done as being very thoughtful and kind of picking and choosing and kind of waiting to see a really sort of fulsome movement on the market environment that would have us lean in further than we are.

Speaker #7: Oh, okay. Perfect. That's very helpful. Very thorough. Final question, if I can. If we look at the, I guess, the margin on the fee-based business for managing other capital providers' premium, is that margin pretty steady over the course of the year?

Meyer Shields: Okay. Perfect. That's very helpful, very thorough. Final question, if I can. If we look at the, I guess, the margin on the fee-based business for managing other capital providers premium, is that margin pretty steady over the course of the year?

Andrew Robinson: It is pretty steady over the course of the year. I mean, I would want to bring Taryn into the conversation to make sure that I fully understand it. You know, it is, I believe it would follow the actual writings of premium. If there's seasonality there, I think that that might influence it. I tell you what, let me make sure that we come back to you on that, so that I'm answering it accurately versus kind of my general understanding of how that part comes through the, you know, the true sort of partner syndicate, you know, fee in-fee income would come through.

Speaker #4: It is pretty steady over the course of the year. I mean, I would want to bring Terren into the conversation to make sure that I fully understand it.

Speaker #4: It is I believe it would follow the actual writings of premium. And so if there's seasonality there, I think that that might influence it.

Speaker #4: But I tell you what, let me make sure that we come back to you on that so that I'm answering it accurately versus kind of my general understanding of how that part comes through, the true sort of partner syndicate.

Speaker #4: Fee income would come through.

Speaker #7: All right. That's perfect. Thanks so much.

Meyer Shields: All right. That's perfect. Thanks so much.

Speaker #4: Thank you.

Andrew Robinson: Thank you.

Speaker #1: And our next question will come from Alex Scott with Barclays. Your line is open.

Operator: Our next question will come from Alex Scott with Barclays. Your line is open.

Alex Scott: Hi. Good morning. I was hoping you could talk a bit about the way Apollo participates in the cyber business. I just don't know much about it, so I'd be interested in, you know, sort of the overview of what they do in that market and then just, you know, your views on any risks from, you know, some of the developments in artificial intelligence and identifying, you know, vulnerabilities.

Speaker #6: Hey, good morning. I was hoping you could talk a bit about the way Apollo participates in the cyber business. I just don't know much about it, so I'd be interested in sort of the overview of what they do in that market.

Speaker #6: And then just your views on any risk from some of the developments in artificial intelligence and identifying vulnerabilities.

Andrew Robinson: Yeah. Alex, thanks for the question. I'm looking at a colleague to make sure that everything that's mentally in my mind. One of the partner syndicates I think in fact, actually it's not a partner syndicate. It's managed as like a special purpose syndicate. We participate, and it's a entity called Envelop that has what I would describe as very kind of unique IP in the cyber space, but also a bunch of that exposure is not what you would think about as sort of traditional US and even OECD exposure.

Speaker #4: Yeah. So Alex, thanks for the question. I was looking at a colleague to make sure that everything that's mentally in my mind. So one of the partner syndicates I think, in fact, actually, it's not a partner syndicate.

Speaker #4: It's managed as a special purpose syndicate. We participate and it's an entity called Envelop that has what I would describe as very kind of unique IP in the cyberspace.

Speaker #4: But also, a bunch of that exposure is not what you would think about as sort of traditional US and even OECD exposure. So I think that that's probably the most notable thing.

Andrew Robinson: I think that that's probably the most notable thing, and that comes through as a reinsurance participation. I think that beyond that, there probably is other exposure, but again, I think this is a case where, you know, first quarter trying to make sure that we're fully prepared. I would want to make sure that we're following up and checking that off with our colleagues there. That would be the one that I highlight that really does dominate what is the substantive exposure for Apollo. In the US, we have really de minimis exposure to cyber.

Speaker #4: And that comes through as a reinsurance participation. I think that beyond that, there probably is other exposure. But again, I think this is a case where first quarter trying to make sure that we're fully prepared I would want to make sure that we're following up and checking that off with our colleagues there.

Speaker #4: But that would be the one that I highlight that really does dominate what is the substantive exposure for Apollo. And in the US, we have really de minimis exposure to cyber.

Speaker #7: Got it. Yeah. Thanks for that. I know kind of the last question. All right. Is a follow-up maybe a broader one? I mean, we're hearing increasingly even just talking to some people that were at REMS, it sounds like the specialty markets have gotten pretty darn competitive.

Alex Scott: Got it. Yeah, thanks for that. I know kind of a nuanced question. All right. As a follow-up, maybe a broader one, I mean, we're hearing increasingly, you know, even, you know, just talking to some people in the rooms, it sounds like the specialty markets has gotten pretty, you know, pretty darn competitive. I know you all have done a great job of focusing on your niches, but any update on how you're feeling about growth and continuing to be able to find those spots, you know, net of where you've got to pull back here and there? Any update that you'd give us to some of that guidance laid out, you know, for the 2026 plan?

Speaker #7: And I know you all have done a great job of focusing on your niches. But any update on how you're feeling about growth and continuing to be able to find those spots net of where you got to pull back here and there?

Speaker #7: And any update that you'd give us to some of that guidance laid out for the 2026 plan?

Speaker #4: Yeah. Yeah. Thanks. Alex, I think that I will say the one interesting dimension of the market today and this is 35 years of personal experience and Mark Correspondently 35 years.

Andrew Robinson: Yeah. yeah. Thanks. I, Alex, I think that, you know, it's I will say the one interesting dimension of the market today, you know, and this is 35 years of personal experience and, you know, Mark correspondingly 35 years. It's the speed in which things have moved has been pretty extraordinary. I think, you know, probably the most notable change separating out everything that's been discussed about MGAs and fronts and so forth is, you know, now you're seeing obviously third-party capital sidecars and more recently, you know, we're talking to folks and the desire for runoff carriers to come in and probably writing at better terms than the seeding companies for those sidecars which is kind of like a frightening prospect. I think it makes things pretty hard to predict.

Speaker #4: The speed in which things have moved has been pretty extraordinary. I think probably the most notable change, separating out everything that's been discussed about MGAs and fronts and so forth, is now you're seeing, obviously, third-party capital sidecars.

Speaker #4: And more recently, we're talking to folks in the desire for runoff carriers to come in and probably writing at better terms than the seeding companies for those sidecars, which is kind of like a frightening prospect.

Speaker #4: I think it makes things pretty hard to predict. What I would say to you on the flip side and I just can't emphasize this enough.

Andrew Robinson: What I would say to you on the flip side, you know, I just can't emphasize this enough. We have this incredibly durable portfolio. As things get tougher in selective places, I know that our leadership is prepared to make sure that we're holding the line, we're writing the best accounts, we're doing it on terms and conditions that are going to generate the returns that we seek. Simultaneous to that, the growth opportunities that we have in, you know, A&H, Surety, AG, 1971, and even some niches that sit, you know, elsewhere in the Skyward Specialty US business and the Apollo 1969 business are going to continue to deliver growth well above our peers. We follow every one of the folks who reported before us.

Speaker #4: We have this incredibly durable portfolio. And so as things get tougher in selective places, I know that our leadership is prepared to make sure that we're holding the line.

Speaker #4: We're writing the best accounts. We're doing it on terms and conditions that seek. And then simultaneous to that, the growth opportunities that we have in A&H and Surety and Ag in 1971 and even some niches that sit elsewhere in the Skyward Specialty US business and the Apollo 1969 business are going to continue to deliver growth well above our peers.

Speaker #4: So we follow every one of the folks who reported before us. And if you take a cross-section of that cohort—and that would include the primary insurance operations of the Bermudians who we compete against—our growth looks outstanding against them.

Andrew Robinson: If you take a cross-section of that cohort, and that it would include, you know, the primary insurance operations of, you know, the Bermudians who we compete against, you know, our growth looks outstanding against them. Yet, you know, we feel as good about the margin content of that growth as we did a year ago and a year before that. In fact, in some cases, we feel better about the margin content. I think we're in a really unique and outstanding place. I think our investors, you know, want to make sure they understand that. I feel good about the year. We've never really gotten too specific about growth. I think otherwise our guidance stands. We're not changing our guidance. We've never missed consensus as a public company.

Speaker #4: And yet, we feel as good about the margin content of that growth as we did a year ago, and a year before that. In fact, in some cases, we feel better about the margin content.

Speaker #4: And so, I just—I think we're in a really unique and outstanding place. I think our investors want to make sure they understand that.

Speaker #4: And I feel good about the year. We've never really gotten too specific about growth, and I think otherwise our guidance stands. We're not changing our guidance.

Speaker #4: We've never misconsensus as a public company. Every quarter, we've exceeded consensus. We're committed to giving guidance that we believe is achievable. And if we can beat that guidance, we'll beat the guidance.

Andrew Robinson: Every quarter, we've exceeded consensus. We're committed to giving guidance that we believe is achievable, and if we can beat that guidance, we'll beat the guidance.

Speaker #7: Got it. Okay. Thank you.

Alex Scott: Got it. Okay. Thank you.

Speaker #4: Thanks, Alex.

Andrew Robinson: Thanks, Alex.

Speaker #1: And the next question comes from Paul Newsome with Piper Sandler. Your line's open.

Operator: The next question comes from Paul Newsome with Piper Sandler. Your line's open.

Paul Newsome: Good morning. Kind of more on the same topic, maybe the other way, looking a little differently. How do you think about the proportion of your business today that isn't part of the cyclical concerns that we're talking about? You know, where do you think you're most resistant?

Speaker #8: Good morning. Kind of more on the same topic. But maybe the other way looking a little differently. How do you think about the proportion of your business today that isn't part of the cyclical concerns that we're talking about?

Speaker #4: Well, say the last part again, Paul? I missed the last part.

Andrew Robinson: Where Say the last part again, Paul. I missed the last part.

Paul Newsome: Just where do you think the business is resistant and not dealing with the competitive issues that you're talking about today?

Speaker #8: Just where do you think the business is resistant and not dealing with the competitive issues that you're talking about today?

Paul Newsome: Just where do you think the business is resistant and not dealing with the competitive issues that you're talking about today?

Speaker #4: Well, I mean, I think that if we look at it on a full-year basis, it's going to be well in excess of 50%. And we just point to the categories we've talked about in the past.

Andrew Robinson: Well, I mean, I think that it, you know, if we look at it on a full year basis, it's going to be well in excess of 50%. You know, we just point to the categories we've talked about in the past. They're made up of, you know, of our Surety, A&H, Credit Ag, Captives. 1971 we put into that. I'll also say to you that, you know, there's no shortage of pieces, as I've talked about. Like, we have little niches. What we write in management liability, some of those categories we're one of only two or three companies who are writing that. I'll just say it again. I use my example of if you're going to write Web3, you actually have to have a product that defines a smart contract.

Speaker #4: They're made up of our Surety, A&H, Credit Ag, Captives, 1971. We put into that. But I'll also say to you that there's no shortage of pieces as I've talked about.

Speaker #4: We have little niches while we write in management liability. Some of those categories were one of only two or three companies who are writing that.

Speaker #4: And so I'll say it again. I use my example of if you're going to write if you're going to write Web3, you actually have to have a product that defines a smart contract.

Speaker #4: You can't just use a standard management liability product. So you have a bit of practical barriers to entry on even some of the niche-y stuff.

Andrew Robinson: You can't just use a standard management liability product. You know, you have a bit of practical barriers to entry on even some of the niche-y stuff. We don't put that into the cycle resistant 'cause it's just too hard and would require a lot of detail and disclosure. I think today, well in excess of 50% of our business, and, you know, I think that what Syndicate 1971, the guys that Apollo are doing, the focus on autonomy, you know, is, it's just like a, it is wide open in terms of what the potential is for our company, particularly given that we're starting from a leadership position.

Speaker #4: We don't put that into the cycle-resistant because it's just too hard. And would require a lot of detail and disclosure. But I think today, well in excess of 50% of our business.

Speaker #4: And I think that what 1971, the guys that I bought are doing, the focus on autonomy, that's just like a it's just like a it is wide open, in terms of what the potential is for our company.

Speaker #4: Particularly given that we're starting from a leadership position. And so again, I feel like it's more than 50% of our portfolio. And I believe that in a horizon until we start to see us transition from kind of into a softening market and transition back towards a hardening market, which might be quite a few quarters or even years out, we'll probably see a larger portion of our portfolio grow in these areas that I would characterize as more cycle-resistant.

Andrew Robinson: I, again, I just, I feel like it's more than 50% of our portfolio, and I believe that in a horizon until we start to see us transition into a softening market and transition back towards a hardening market, which might be quite a few quarters or even years out, we'll probably see a larger portion of our portfolio grow in these areas that I would characterize as more cycle-resistant.

Paul Newsome: Great. Different question. Reinsurance market also going through quite a bit of change. You're, I think, a fair user of reinsurance. How should we think about the impact of the reinsurance market affecting your business, given that there are definitely pockets there that are pretty soft?

Speaker #8: Great. Different question. Reinsurance market also going through quite a bit of change. I think fair user of reinsurance. How should we think about the impact of the reinsurance market affecting your business, given that there are definitely pockets there that are pretty soft?

Speaker #4: I think on both the Skyward Specialty and the Apollo part of the parts of the business, we've had good success through this part of the year.

Andrew Robinson: I think, you know, on both the Skyward Specialty and the Apollo, you know, parts of the business, we've had good success through, you know, this part of the year. I can tell you, like, we renewed our cat program on 1 April. Because obviously property's coming off. We right-sized our exposure. We stayed with a, you know, a range of kind of 1 in 10 to 1 in 250. You know, our sort of risk-adjusted rate came way off. Our second event cover dropped down lower. It was like at $7.5 million second event. It's down to $5 million. You know, we saw a lot of benefits in the States and similarly at Apollo.

Speaker #4: I can tell you we renewed our CAT program on 4/1. We because obviously, property's coming off. We rightsized our exposure. We stayed with a range of kind of 1 in 10 to 1 in 250.

Speaker #4: Our sort of risk-adjusted rate came way off. Our second event cover dropped down lower. It was like at 7.5 million second event. It's down to 5 million.

Speaker #4: So we saw a lot of benefits in the States. And similarly, at Apollo, on the flip side, we know still that there's margin in our reinsurance that we're placing into the reinsurance community.

Andrew Robinson: You know, on the flip side, you know, we know still that there's margin in our reinsurance that we're placing into the, you know, the reinsurance community. I mentioned in my prepared remarks the launch of 1972. It's a really powerful sort of innovation by the Apollo team. I think they're first to do such a structure. Like, it's a sidecar structure, but the way they did it. They basically have taken 20% of their outwards reinsurance and put it into 1972. It's managed. We keep a quarter of that, then, you know, third-party capital supports that, follows the market, so we're able to recapture fees on that. We're gonna be using that next year for Skyward Specialty as well.

Speaker #4: I mentioned in my prepared remarks the launch of 1972. It's a really powerful sort of innovation by the Apollo team. I think their first to do such a structure.

Speaker #4: It's a sidecar structure, but the way they did it. And so they basically have taken 20% of their outwards reinsurance and put it into 1972.

Speaker #4: It's managed we keep a quarter of that. And then third-party capital supports that, follows the market. So we're able to recapture fees on that.

Speaker #4: And we're going to be using that next year for Skyward Specialty as well. And we do that because we still believe that our reinsurance purchasing for all the right reasons, still has margin, good margin in there for the reinsurers.

Andrew Robinson: We do that because we still believe that our reinsurance purchasing, you know, for all the right reasons, still has, you know, margin, good margin in there for the reinsurers, and that's one way that we can recapture at least a portion of it.

Speaker #4: And that's one way that we can recapture at least a portion of it.

Paul Newsome: I appreciate the help. Thank you.

Speaker #8: I appreciate the help. Thank you.

Speaker #4: Thank you, Paul.

Andrew Robinson: Thank you, Paul.

Operator: The next question is gonna come from Tracy Benguigui with Wolfe Research. Your line's open.

Speaker #1: The next question is going to come from Tracy Bengigi with Wolf Research. Your line's open.

Speaker #9: Thank you. So you're clearly pulling back in global property within this Skyward Specialty segment. At the same time, we're hearing that Deloitte's market has become more aggressive on property.

Tracy Benguigui: Thank you. You're clearly pulling back in global property within this Skyward Specialty segment. At the same time, we're hearing that the Lloyd's market has become more aggressive on property, contributing to broader property softness. I understand that most of Apollo's growth shows up in fees, but you're still taking on some of that risk. Within the Apollo segment, how would you characterize the property growth in the quarter? And if you're participating on a whole account proportional basis, are you effectively assuming more property exposure to Apollo while reducing it at Skyward Specialty? How should we think about how you align those underwriting appetites across the two platforms?

Speaker #9: Contributing to broader property softness. So I understand that most of Apollo's growth shows up in fees. But you're still taking on some of that risk.

Speaker #9: So within the Apollo segment, how would you characterize the property growth in the quarter? And if your participating on a whole account proportional basis, are you effectively assuming more property exposure to Apollo while reducing it at Skyward Specialty?

Speaker #9: So how should we think about how you align those underwriting appetites across the two platforms?

Speaker #4: Yeah. So thanks, Tracy. And good morning, great quote. Really great question. So Doug Davies leads our global property business in the United States. Kate Foster leads the property business at Apollo those two.

Andrew Robinson: Yeah. Thank, thanks Tracy, and good morning. Really great question. You know, Doug Davies leads our global property business in the United States. Kate Foster leads the property business at Apollo. Those two, you know, are certainly in communication, you know, seeing their different views of the market. To be clear, we're not writing any pro rata in London. You know, that piece is, at least as it relates to the open market business, is a direct in fact business. There's no two people in our entire company that I feel better about their ability to find the way to make a buck in a tough market than those two people, and I say that with great sincerity.

Speaker #4: Our certainly in communication seeing their different views in the market. To be clear, we're not writing any pro rata in London that piece is at least as it relates to the open market business is a direct and fact business.

Speaker #4: There's no two people in our entire company that I feel better about their ability to find the way to make a buck in a tough market than those two people.

Speaker #4: And I say that with great sincerity. They are two of the strongest underwriting leaders who have a comprehensive view of the market. Know how to work with the brokers and these kind of markets.

Andrew Robinson: They are two of the strongest underwriting leaders, who have a comprehensive view of the market, know how to work with the brokers in these kind of markets and be able to sort of get their pound of flesh out. By the way, Apollo's sort of growth or lack of growth, it's following almost exactly what's happening in our published numbers that you see for Global Property Division in Skyward Specialty. I feel great about it. You know, I think that at a higher level, one thing that is really a standout capability of Apollo is something that James Slaughter has been leading around being able to ensure accounts are clearly understood in terms of risk quality.

Speaker #4: And be able to sort of get their pound of flesh out. And, by the way, Apollo's sort of growth or lack of growth is—it's following almost exactly what's happening in our published numbers that you see for Global Property division in Skyward Specialty.

Speaker #4: And so I feel great about it. I think that at a higher level, one thing that is really a standout capability of Apollo is something that James Slaughter has been leading around being able to ensure accounts are clearly understood in terms of risk quality.

Speaker #4: And so when you're softening your when you're in a softening market, particularly in places like property, you have a quantitative view of the highest risk quality which is really where you want to defend your portfolio.

Andrew Robinson: When you're softening, you know, when you're in a softening market, particularly in places like property, you have a quantitative view of the highest risk quality, which is really where you want to defend your portfolio, because quite honestly, your ultimately, your loss content for that part of the business can be paid for, even in the kind of rate environment we're in now. I feel great, to be honest. Oh, by the way, I think, you know, you see these negative growth numbers, and yet, as a company, we're still putting up really impressive overall growth. I think in that regard, we're showing up as, you know, quite sort of thoughtful and responsible about our portfolio construction.

Speaker #4: Because, quite honestly, your ultimate loss content for that part of the business can be paid for, even in the kind of rate environment we're in now.

Speaker #4: So, I feel great, to be honest. And, oh, by the way, I think you see these negative growth numbers, and yet, as a company, we're still putting out really impressive overall growth.

Speaker #4: And so I think in that regard, we're showing up as quite thoughtful and responsible about our portfolio construction. Neither of those two leaders are feeling any pressure to write business that they don't believe they can make an appropriate return on.

Andrew Robinson: Neither of those two leaders are feeling any pressure to write business that they don't believe they can make an appropriate return on.

Speaker #9: Got it. You mentioned James Slaughter. He's on the call. Hi. It's been a while. Also, I like seeing the segment details. Given Apollo has a different combined ratio profile like lower loss ratio, higher expense ratio.

Tracy Benguigui: Got it. You mentioned James Slaughter, if he's on the call, hi. It's been a while. Also I like seeing the segment details, given Apollo has a different combined ratio profile, like lower loss ratio, higher expense ratio. On an enterprise level, how should we think about your loss ratio and expense ratio outlook? Is Q1 a good representation of what we should expect?

Speaker #9: And then on an enterprise level, how should we think about your loss ratio and expense ratio outlook? Is the first quarter a good representation of what we should expect?

Speaker #4: I think our guidance is a good representation of what you should expect. And we're like that's our story. And we're sticking to it. I think we just we're sticking with our guidance.

Andrew Robinson: I think our guidance is a good representation of what you should expect. Like I, you know, that's our story and we're sticking to it. I think we're sticking with our guidance. It was a good quarter, I'm, as I said, I'm very proud of the Apollo team for, you know, what they achieved in Q1. I think on a full year basis, you got to think about cat and you got to think about mix earning in and we're still gonna see outstanding returns as a company. I'm pretty confident that we're gonna hit and hopefully, you know, meaningfully exceed the guidance that we provided late last year.

Speaker #4: We it was a good quarter. And as I said, I'm very proud of the Apollo team for what they achieved in the first quarter.

Speaker #4: But I think, fully, your basis—you got to think about cats. And you got to think about mixed earning in. And we're still going to see outstanding returns as a company.

Speaker #4: And I'm pretty confident that we're going to hit and hopefully meaningfully exceed the guidance that we provided late last year.

Speaker #9: Got it. No, my question was more just on the composition of the combined ratio. Just the profile. Yeah, like higher expense ratio. Yeah.

Tracy Benguigui: Got it. No, my question was more just on the composition of the combined ratio. Just the profile.

Andrew Robinson: You mean?

Tracy Benguigui: Yeah, like higher expense ratio.

Andrew Robinson: The expense.

Tracy Benguigui: Yeah.

Andrew Robinson: Oh. Oh, yeah, yeah.

Speaker #4: Oh, oh, yeah, yeah, yeah. I think, yeah. I think that Mark might want to give a bit more detail. But I think that the expense ratio you saw for the first quarter from Apollo is probably pretty good, within kind of the proximity of what we would expect on a full-year basis.

Tracy Benguigui: Yeah.

Andrew Robinson: I think, Yeah, I think that Mark might want to give a bit more detail, but I think that the expense ratio you saw for Q1 from Apollo is probably a pretty good, you know, within the, you know, kind of the proximity of what we'd expect on a full year basis.

Speaker #10: Yeah. I mean, Tracy, in the aggregate, we've said and this quarter as well, sub-30 is our watermark for the expense ratio. Do I still believe that?

Mark Haushill: Yeah, I mean, Tracy, in the aggregate, we target, we've said, and this quarter as well, sub-30 is our watermark for the expense ratio. Do I still believe that? I do. 28.5 for the quarter, I feel like that's right in line with what we guided. In the loss ratio, again, to Andrew's point, ex cat, I feel good about where it is. As we talked about already a couple of times, business mix can impact it a little bit quarter-over-quarter, but I feel pretty good about both the expense ratio and the loss ratio given business mix can move around just a little bit.

Speaker #10: I do. 28 and a half for the quarter. I don't—I feel like that's right in line with what we guided. In the loss ratio, again, to Andrew's point, XCAT, I feel good about where it is.

Speaker #10: But as we talked about already a couple of times, business mix can impact it a little bit quarter over quarter. But I feel pretty good about both the expense ratio and the loss ratio given business mix.

Speaker #10: Can move around just a little bit.

Tracy Benguigui: That corporate expense, that's included in your view of the expense ratio?

Speaker #9: In that corporate expense, that's included in your view of the expense ratio?

Tracy Benguigui: That corporate expense, that's included in your view of the expense ratio?

Speaker #10: It is.

Mark Haushill: It is.

Speaker #9: Okay. Thank you.

Tracy Benguigui: Okay. Thank you.

Andrew Robinson: Yeah. That, you know, that 30% Mendoza Line that we talked about, Tracy, you know, long ago, which preceded obviously the transaction with Apollo, you know, we revisited that with Apollo fully in mind, and we think it's the right thing to sort of keep that Mendoza Line for ourselves. I'd like to just say one other thing, Tracy. It hasn't been asked, it's tied to your question. You know, obviously, a lot's happening with AI and everybody's talking about it, right? You know, our experience so far, and we've got, you know, great results and so forth, is this stuff requires real investment. A lot of the investment happens in advance of, you know, being able to sort of see the benefits come through.

Speaker #4: Yeah. That 30% Mendoza line that we talked about, Tracy, long ago, which preceded obviously the transaction with Apollo we revisited that with Apollo fully in mind.

Speaker #4: And we think it's the right thing to sort of keep that Mendoza line for ourselves. I'd like to just say one other thing, Tracy.

Speaker #4: It hasn't been asked, but it's tied to your question. Obviously, a lot's happening with AI, and everybody's talking about it, right? But our experience so far—and we've got great results and so forth.

Speaker #4: Is this stuff requires real investment? And a lot of the investment happens in advance of being able to sort of see the benefits come through.

Speaker #4: It's pretty hard to imagine doing that and not backing up on your expense ratio if you don't have the growth to offset that. We're gaining efficiencies as a company overall.

Andrew Robinson: It's pretty hard to imagine, you know, doing that and not backing up on your expense ratio if you don't have the growth to offset that. You know, we're gaining efficiencies as a company overall, but we're also funding, you know, the next and the next and the next, you know, part of our technology development. You know, as I look at that, like growth is part of what makes that possible for us and not get too close to that 30% Mendoza Line. I think that as you look forward in other quarters and people are talking about, you know, AI and the investment there, you know, it's gonna start to become visible when growth isn't apparent.

Speaker #4: But we're also funding the next and the next and the next. Part of our technology development. And as I look at that, growth is part of what makes that possible for us and not get too close to that 30% Mendoza line.

Speaker #4: I think that as you look forward in other quarters, and people are talking about AI and the investment there, it's going to start to become visible when growth isn't apparent.

Andrew Robinson: You know, I think that that's a, you know, for us it's comforting to know that we're able to fund that, you know, entirely within, you know, our guidance on expense ratio.

Speaker #4: And I think that that's for us, it's comforting to know that we're able to fund that entirely within our guidance on expense ratio.

Tracy Benguigui: Understood. Thank you.

Speaker #9: Understood. Thank you.

Speaker #10: Thank you.

Mark Haushill: Thank you.

Speaker #11: And the next question will come from Mark Hughes with Truist, your line is open.

Operator: The next question will come from Mark Hughes with Truist. Your line is open.

Speaker #4: Yeah. Thank you. Good morning. Andrew in the property hey, Mark. In the property market, you've talked quite a bit about the pressure there, particularly in coastal, national accounts.

Mark Hughes: Yeah, thank you. Good morning.

Andrew Robinson: Hey, Mark.

Mark Hughes: Andrew, Hey, Mark. In the property market, you've talked quite a bit about the pressure there, particularly in coastal national accounts. Seems like if you look across the public space, property premiums on average are, you know, up a little bit, down a little bit. You know, you don't really see it in the published results of your competitors, again, the public companies. Is there really that much pressure or are you seeing a slower decline outside of those kind of higher volatility areas? It just seems like, if you didn't know the headlines that property was horrible, if you looked at the results, you wouldn't see as much pressure in the actual P&Ls.

Speaker #4: Seems like if you look across the public space, the property premiums on average, up a little bit, down a little bit. You don't really see it in the published results of your competitors again, the public companies.

Speaker #4: Is there really that much pressure? Or is the kind of the are you seeing a slower decline outside of those kind of higher volatility areas?

Speaker #4: It just seems like if you didn't know the headlines that property was horrible, if you looked at the results, you wouldn't see as much pressure in the actual P&Ls you may not agree with that point, but I'm just sort of curious what you make of that.

Mark Hughes: You may not agree with that point, but I'm just sort of curious, what you make of that.

Speaker #10: Well, I would thanks, Mark, and good morning, by the way. I think in the US, global property specifically is a more general property book.

Andrew Robinson: Well, I would, Thanks, Mark, and good morning, by the way. I think, you know, in the US, Global Property specifically is a more, you know, general property book, so we have cat exposure, but we have lots of technical, you know. At least in the, you know, the London market, you know, part of the book for Apollo, I think there's certainly more cat exposure there. You know, we're kind of entering the point where there's a lot of volume coming through, so we're probably better to be precise on your answer, you know, next quarter. I don't think that we're as well-positioned as some writers to really talk about cat, 'cause at least through Skyward Specialty, that definitely is not, you know, our focus.

Speaker #10: So we have CAT exposure, but we have lots of technical. So it's a and at least in the London market, part of the book for Apollo I think there's certainly more CAT exposure there.

Speaker #10: We're kind of entering the point where there's a lot of volume coming through. So we're probably better to be precise on your answer next quarter.

Speaker #10: But—and I don't think that we're as well positioned as some writers to really talk about CAT, because at least through Skyward Specialty, that definitely is not our focus.

Speaker #10: I just think the property market, by and large, has lost all its sense and sensibilities. And it's so fast that you might have looked back three, four, five months ago and say, "Wow, it's coming off fast." But it hasn't in our view slowed down.

Andrew Robinson: I just think the property market by and large has lost all its sense and sensibilities. It's so fast that, you know, you might have looked back three, four, five months ago and say, Wow, it's coming off fast, it hasn't, in our view, slowed down. You know, for those folks who are out there posting, you know, sort of results and giving whatever explanations they're giving, it just straight up wouldn't correspond with our view of the market. There are places, right? I mean, there's You know, definitely as you get to the true small end of the property market, you know, it never went up the way the property market went up, and it doesn't come down the way the property market comes down.

Speaker #10: So for those folks who are out there posting sort of results and giving whatever explanations they're giving, it just straight up went correspond with our view of the market.

Speaker #10: There are places, right? I mean, there's definitely as you get to the true small end of the property market, it never went up the way the property market went up.

Speaker #10: And it doesn't come down the way the property market comes down. But those are very small pockets. And they it's very hard to see companies say that that represents their book of business in total.

Andrew Robinson: You know, those are very small pockets, and It's very hard to see companies say that that represents their book of business in total. From our perspective, we're doing the things to hold our margin. If others are able to sort of do it without dropping volume, they're doing it in ways that we don't understand. How's that?

Speaker #10: So from our perspective, we're doing the things to hold our margin. And if others are able to sort of do it without dropping volume, they're doing it in ways that we don't understand.

Speaker #10: How's that?

Mark Hughes: Appreciate that. I also like your Jane Austen reference. You're quite the Renaissance man. If I might ask one other question. The Accident & Health growth there has been fabulous. Can you talk about the sustainability there perhaps? How much might be, you know, tied to initiatives you put in place, you had some very good experience, but you may lap those at some point? Does it feel like the opportunity there should be more durable?

Speaker #4: I appreciate that. I also like your Jane Austen reference—you're quite the Renaissance man. If I might ask one other question: the accident and health growth there has been fabulous.

Speaker #4: Can you talk about the sustainability there, perhaps? How much might be tied to initiatives you put in place? You had some very good experience, but you may lap those at some point.

Speaker #4: Or does it feel like the opportunity there should be more durable?

Speaker #10: Well, I have to say, if you use a McKinsey kind of view of different horizons, it feels really good about horizon one. The next year, I think we feel pretty good about horizon two, because we've been pleasantly surprised with sort of three things.

Andrew Robinson: Well, I have to say, like if you use a McKinsey kind of view of, you know, different horizons, feel really good about horizon one, like the next year. I think we feel pretty good about horizon two because we've been pleasantly surprised with sort of three things. One is, you know, there's been a lot of disruption of parts of the market that we don't really touch, but we get the second order benefits of that. We've had a great run on talent, really great run on having talent, come our way.

Speaker #10: One is there's been a lot of disruption at parts of the market that we don't really touch. But we get the second-order benefits of that.

Speaker #10: We've had a great run on talent really, really great run on having talent come our way. And I think the third part of it when I think of horizon two, in a couple of years and so forth, is that the group captives piece is clearly bringing it's growing.

Andrew Robinson: I think the third part of it when I think of like horizon two, you know, a couple of years and so forth, is that the group captives piece is clearly bringing what it's growing its share of the overall stop loss over the overall medical market. It's in some cases it's a halfway house to companies, you know, fully self-insuring. In others, it's just a great structure for homogeneous cohorts. We're surprised. You know, we would have thought the TAM was smaller, it keeps growing and growing and growing for us. Kind of in the horizon one, horizon two, I feel good.

Speaker #10: Its share of the overall stop-loss over the overall medical market. And so it's in some cases, it's a halfway house to companies fully self-insuring and others.

Speaker #10: It's just a great structure for homogeneous cohorts. And we're surprised. It's just been we would have thought that TAM was smaller and it keeps growing and growing and growing for us.

Speaker #10: And so kind of in the horizon one, horizon two, I feel good. It's hard to look out beyond that. But I also think that we have a team that probably will figure out what's the next product and the next product and the next product.

Andrew Robinson: It's hard to look out beyond that, but I also think that, you know, we have a team that probably will figure out what's the next product and the next product and the next product 'cause we've done that before.

Speaker #10: Because we've done that before.

Speaker #4: Excellent. Thank you very much.

Mark Hughes: Excellent. Thank you very much.

Speaker #12: Thanks, Mark.

Mark Haushill: Thanks, Mark.

Andrew Robinson: Thanks, Mark.

Speaker #10: Thanks, Mark.

Speaker #11: And our next question will come from Michael's Zarymsky with BMO. Your line's open.

Operator: Our next question will come from Michael Zarembski with BMO. Your line's open.

Michael Zarembski: Hey, thanks. A nice quarter. A couple numbers questions. The first, on the 30 to 35 million fee income guide, just the mechanics of that. Shall we be looking at the underwriting fee income line item of $10,000,078, and netting some of it against the fee-based service expense line item of $4.17 million? If not, if it was just the $10 million number, is it running, you know, just better than expected, early part of the year?

Michael Zaremski: Hey, thanks. A nice quarter. A couple numbers questions. The first, on the 30 to 35 million fee income guide, just the mechanics of that. Shall we be looking at the underwriting fee income line item of $10,000,078, and netting some of it against the fee-based service expense line item of $4.17 million? If not, if it was just the $10 million number, is it running, you know, just better than expected, early part of the year?

Speaker #12: Hey, thanks. A nice quarter. A couple numbers questions. The first on the 30 to 35 million fee income guide, just the mechanics of that, should we be looking at the underwriting fee income line item of 10 million, 78?

Speaker #12: And netting some of it against the fee-based service expense line item of 4.17 million? And if not, if it was just the 10 million number, is it running just better than expected early part of the year?

Speaker #12: Hey, Mike. It's Mark. Good question. So everybody, the fee income that we recognized for Apollo was circa $10 million I'm rounding. And there was about 5 million of expense, right?

Mark Haushill: Hey, Mike. It's Mark. Good question. Just so we're clear for everybody, there's the fee income that we recognized for Apollo was circa $10 million, I'm rounding, and there was about $5 million of expense, right? You're asking, how do I look at that relative to the guidance we gave you of 30 to 35? Clearly, that's what you're asking.

Speaker #12: And you're asking, how do I look at that relative to the guidance we gave you of 30 to 35? Clearly, that's what you're asking.

Speaker #10: Yes. Thanks, Mark.

Michael Zarembski: Yes. Thanks, Mark.

Michael Zaremski: Yes. Thanks, Mark.

Speaker #12: Yeah, so I mean, I still believe the guidance holds. And when we guided you to 30, 35, it was based on the 10.

Mark Haushill: Yeah. I mean, I still believe the guidance holds. When we guided you to 30, 35, it was based on the 10-K.

Michael Zarembski: Got it.

Michael Zaremski: Got it.

Speaker #10: Got it.

Andrew Robinson: Mike.

Speaker #12: Mike, one other Mike, just one other thing I'd like to say is that the 4 million-ish that you see in the service fee expense, that will not grow proportionally with our fees.

Michael Zarembski: Okay.

Andrew Robinson: Mike, just one other thing I'd like to say is that the $4 million-ish that you see in the service fee expense, that will not grow proportionally with our fees. This is about explicit investments that are being made to support that capability. That is a levered number over time. If you ask, "Well, can you tell me what the levering looks like?" The answer is we're probably not at a place where we can do that for you. I think it'll become clearer as we go quarter over quarter.

Michael Zaremski: Okay.

Speaker #12: This is about explicit investments that are being made to support that capability. And so that is a levered number over time. And if you ask, "Well, can you tell me what the levering looks like?" The answer is we're probably not at a place where we can do the separation, if you will, between the fee income and the service expense that offsets that.

Mark Haushill: Yeah

Andrew Robinson: the separation, if you will, between the fee income and the service expense that offsets that.

Speaker #10: Got it. That's helpful. And then lastly, unless I'm crazy, I don't see I've controlled that fit. I don't see any disclosure anymore on the prior accident year development.

Michael Zarembski: Got it. That's helpful. Lastly, unless I'm crazy, I don't see. I've controlled F it. I don't see any disclosure anymore on the prior action year development. I don't think I heard any commentary either. Is there, unless I'm wrong? Is there any

Michael Zaremski: Got it. That's helpful. Lastly, unless I'm crazy, I don't see. I've controlled F it. I don't see any disclosure anymore on the prior action year development. I don't think I heard any commentary either. Is there, unless I'm wrong? Is there any

Speaker #10: I don't think I heard any commentary either. So unless I'm wrong. So is there any? Any prior development we should think about?

Andrew Robinson: Mike

Michael Zarembski: Any prior development we should think about?

Michael Zaremski: Any prior development we should think about?

Andrew Robinson: Sorry, I did mention it. I may have gone over it very quickly. The answer is no, in terms of any prior year development. I can tell you, emergence in the quarter was in line with our expectations. Quite frankly, it was favorable. I feel, I, we're in a great position on our reserves, both, in the US and in London. We're in the best point in our reserves since we've been public.

Speaker #12: Sorry, I did mention it. I may have gone over it very quickly. The answer is no. In terms of any prior-year development, I can tell you emergence in the quarter was in line with our expectations.

Speaker #12: Quite frankly, it was favorable. I feel we're in a great position on our reserves, both in the US and in London. We're in the best point on our reserves since we've been public.

Speaker #10: Okay, got it. Sorry, I didn't have a live transcript open. So, it's not in the press release, but it was said on the call.

Michael Zarembski: Okay. Got it. Yeah, sorry. I didn't have a live transcript open, so it's not in the press release, but, you know, it was said on the call, so we'll just look out for that in the future.

Michael Zaremski: Okay. Got it. Yeah, sorry. I didn't have a live transcript open, so it's not in the press release, but, you know, it was said on the call, so we'll just look out for that in the future.

Speaker #10: So we'll look out for that in the future. Thank you.

Andrew Robinson: Yeah.

Michael Zarembski: Thank you, Mark.

Michael Zaremski: Thank you, Mark.

Speaker #12: Yeah. That's right. Okay. Got it.

Andrew Robinson: That's all right. Okay. Got it.

Speaker #11: And our next question will come from Andrew Kligerman with TD Cohen. Your line's open.

Operator: Our next question will come from Andrew Kligerman with TD Cowen. Your line's open.

Speaker #12: Hey, good morning. Little follow-up on the A&H business. Terrific growth there. And if I remember it right, you're more focused on employers with less than 2,500 employees.

Andrew Kligerman: Hey, good morning. A little follow-up on the A&H business. You know, terrific growth there. If I remember it right, you're more focused on employers with less than 2,500 employees. The question is, you know, what's currently driving the growth? Is it mostly rate? Could you give a little detail on the rate that you're seeing and, you know, maybe, you know, any expansion into larger employers? A little color overall on that.

Speaker #12: So the question is, what's currently driving the growth? Is it mostly rate? Could you give a little detail on the rate that you're seeing?

Speaker #12: And maybe any expansion into larger employers? Little color overall on that. All right. Good morning, Andrew and thank you for the question. So by the way, on A&H, really, the concentration of our accounts tend to be 500 employees and less.

Andrew Robinson: Good morning, Andrew Andersen, and thank you for the question. By the way, on A&H, really the concentration of our accounts tend to be 500 employees and less. You know, I couldn't tell you the exact sort of if Pareto holds, but it's not probably not far off from the 80/20 there. Just to answer the last part of your question, right now we really have no interest in going up market. You know, there's some dead bodies on the roadside there, probably for good reasons. It doesn't fit with our whole medical cost management kind of model. It just, it's really hard to get that enacted except in the unusual instances.

Speaker #12: I couldn't tell you the exact sort of if Pareto holds, but it's not probably not far off from the 80/20 there. And just to answer the last part of your question, right now, we really have no interest in going up market.

Speaker #12: There's some dead bodies on the roadside there. And probably for good reasons. And it doesn't fit with our whole medical cost management kind of model.

Speaker #12: It's really hard to get that enacted except in the unusual instances. So I think our sort of our focus is unchanged. For us, in our numbers, there's kind of rate and there's effective rate.

Andrew Robinson: I think our sort of our focus is unchanged. You know, for us, there's in our numbers, there's kind of rate and there's effective rate. What I mean by that are things that we'll do like laser out coverages and so forth that create effective rate. Pure rate is contributing, you know, not quite 10% in there, but it's not, you know, it's an important part. The really, the growth, I think, is just simply two factors. One is that, you know, we've really kind of hit it with our group captives capability. We've been growing both the number of members, and we've actually been growing the number of captives as well. That capability is really powerful.

Speaker #12: And what I mean by that, there are things that we'll do like laser out coverages and so forth that create effective rate. Pure rate is contributing not quite 10% in there, but it's not it's an important part.

Speaker #12: The really the growth, I think, is just simply two factors. One is that we've really kind of hit it with our group captives capability.

Speaker #12: We've been growing both the number of members and we've actually been growing the number of captives as well. That capability is really powerful. It fits incredibly well with our medical cost management.

Andrew Robinson: It fits incredibly well with our medical cost management, you know, IP and capabilities. On the just the single, you know, employer stop loss, you know, I think I've mentioned this on, like, maybe the last two or three calls. We've really seen a turn in the market, and a lot of that has to do with, in our view, some stumbles of some MGAs. I think part of it's probably the, you know, the larger company market, you know, the Voya Financial market, you know, kind of finally got, you know, realistic. Maybe there's some second-order effects that are dropping down to our market. It's really both areas.

Speaker #12: IP and capabilities. And then on the just the single employer stop-loss what we've I think I've mentioned this on maybe the last two or three calls.

Speaker #12: We've really seen a turn in the market. And a lot of that has to do with in our view, some stumbles of some MGAs.

Speaker #12: I think part of it's probably the larger company market. The Voya Serve market kind of finally got realistic and so maybe there's some second-order effects that are dropping down to our market.

Speaker #12: But it's really both areas. And certainly, our single employer stop-loss solution is still a larger part of our book. But we are seeing good growth there.

Andrew Robinson: Certainly our single employer, stop loss solution is still, you know, a larger part of our book, but we are seeing good growth there, and we're seeing it on the terms that we want, and it's fully utilizing all of our medical cost management IP that are important to us to be able to drive, you know, top five in the industry loss ratio that we've been driving.

Speaker #12: And we're seeing it on the terms that we want. And it's fully utilizing all of our medical cost management IP that are important to us to be able to drive top five in the industry loss ratio that we've been driving.

Andrew Kligerman: That was very helpful. Maybe shifting over to, you know, I guess somewhat related to captives, A&H Specialty segment. That one was down 13.5%. If I understand that business, you're kind of attaching at $350,000 and you write a broader mix of lines. It sounded like from your comments earlier, stop loss could even be in there, med stop loss. Where are you seeing the pressures in that segment?

Speaker #10: That was very helpful. And maybe shifting over to I guess somewhat related to captives. Specialty segment. So that one was down 13 and a half percent.

Speaker #10: And if I understand that business, you're kind of attaching at 350,000. And you write a broader mix of lines. And it sounded like from your comments earlier, stop-loss could even be in there.

Speaker #10: Met stop-loss. Where are you seeing the pressures in that segment? And what are the opportunities?

Andrew Robinson: Yeah.

Andrew Kligerman: What are the opportunities?

Speaker #12: Yeah. No, great question. Really great question. So I mean, just for the point of clarity, all of our medical stop-loss business is reported through the A&H division.

Andrew Robinson: No, great, great question. Really great question. I mean, just for point of clarity, all of our medical stop loss business is reported through the A&H Division. We have captives in the A&H Division. What you're seeing in the captives division is pure P&C. I think there's probably two parts to the answer for you. Part number one is the downward pressure. I'll be very direct. We had, in our view, a very irresponsible party come in and basically write a captive in a way that we believe will, you know, it will cause a lot of damage. We weren't going to compete on things that weren't sensible.

Speaker #12: So I just to so we have captives in the A&H division. We have single so what you're seeing, the captives division is pure P&C.

Speaker #12: And I think there's probably two parts to the answer for you. Part number one is the downward pressure. I'll be very direct. We had in our view a very irresponsible party come in and basically write a captive in a way that we believe will it will cause a lot of damage.

Speaker #12: And we weren't going to compete on things that weren't sensible. And maybe that tells you a little about the market, by the way. That happened at the end of last year.

Andrew Robinson: Maybe that tells you a little about the market, by the way. That happened at the end of last year. Somebody was basically trying to, you know, to close out their books. It hasn't happened before, and it hasn't happened since. That was a unique instance, and that's really what you're seeing run through the numbers. On the flip side, Andrew, you know, I point to our really interesting success stories. You know, for example, our captive that uses a technology company called Understory to do micro weather analysis for dealer open lot, which has been an unbelievably successful and quite unique solution because you don't see too many property captives out there. We're in our, whatever, our fifth year in that, in that captive.

Speaker #12: So somebody was basically trying to close out their books. It hasn't happened before. And it hasn't happened since. But that was a unique instance.

Speaker #12: And that's really what you're seeing run through the numbers. On the flip side, Andrew, I point to our really interesting success stories. For example, our captive that uses a technology company called Understory Weather to do microweather analysis for dealer open lot, which has been a unbelievably successful and quite unique solution because you don't see too many property captives out there.

Speaker #12: And we're in our, whatever, our fifth year in that captive. And I think our view is we're looking for more of those kinds of opportunities.

Andrew Robinson: I think our view is we're looking for more of those kinds of opportunities. Interestingly enough, our partners in London, in Syndicate 1971, given some of the things that are happening in autonomy, open up some really interesting opportunities. I'll also remind you that Apollo, as part of its partner syndicates, you know, has the only Lloyd's captive with a large technology company. We think about potential interesting collaborations and partnerships that way. I think that what we're not gonna be doing is just doing the run-of-the-mill stuff. It's gonna be about innovation in that area.

Speaker #12: Interestingly enough, our partners in London in 1971, given some of the things that are happening in autonomy open up some really interesting opportunities. I'll also remind you that Apollo as part of its partner syndicates has the only Lloyd's captive with a large technology company.

Speaker #12: So we think about potential interesting collaborations and partnerships that way. So I think that what we're not going to be doing is just doing the run-of-the-mill stuff.

Speaker #12: It's going to be about innovation in that area. And those things take time. But when they come across, they come across in a way that can really be highly additive to your earnings.

Andrew Robinson: You know, those things take time, but when they come across, they come across in a way that can, you know, that can really be highly additive to your earnings and growth as well.

Speaker #12: And growth as well.

Speaker #10: Awesome. Thank you. That was helpful.

Andrew Kligerman: Awesome. Thank you. That was helpful.

Operator: Our next question is going to come from Andrew Andersen with Jefferies. Your line is open.

Speaker #13: And our next question is going to come from Andrew Anderson with Jeffrey. Your line is open.

Operator: Our next question is going to come from Andrew Andersen with Jefferies. Your line is open.

Speaker #14: Hey, thanks for the extra time. Maybe just one for me. I think I heard the rate change on the Apollo business was low single-digit ex-property.

Andrew Andersen: Hey, thanks for the extra time. Maybe just one for me. I think I heard the rate change on the Apollo business was low single digit ex property, maybe a little bit lower than I would have thought, considering 45 percent-ish of that business is shared economy or liability. Maybe you could just talk about, you know, where you see that rate change in the Apollo business going. Is this maybe an intentional decision to be more competitive given the results here, or maybe the liability and shared economy pricing is a bit higher than that?

Speaker #14: Maybe a little bit lower than I would have thought considering 45%-ish of that business is shared economy or liability. Maybe you could just talk about where you see that rate change in the Apollo business going.

Speaker #14: Is this maybe an intentional decision to be more competitive given the results here? Or maybe the liability and shared economy pricing is a bit higher than that.

Andrew Robinson: Andrew, good morning. Thank you for the question. No, actually, it's neither of those things. Quite honestly, it's just mix. There is, on a written basis, you know, in the US as an example, the quarter-to-quarter numbers on property can influence the and it has, by the way, in the past, the rate reporting. It's even more extreme given the cyclicality or the seasonality of mix, through the Apollo segment. The way I would say back to you, Andrew, as we report it out, you know, the sort of the domain of the number. But that's as much sort of seasonality. And in fact, even like your reference to the within 1971, there's very little of that being autonomy at all as an example.

Speaker #12: Hey, Andrew. Good morning. Thank you for the question. No, actually, it's neither of those things. Quite honestly, it's just mixed. There is on a written basis, in the US, as an example, the quarter-to-quarter numbers on property can influence the and it has, by the way, in the past, the rate reporting.

Speaker #12: It's even more extreme given the cyclicality or the seasonality of mix through the Apollo segment. So the way I would say back to you, Andrew, is we report it out.

Speaker #12: The sort of the domain of the number. But that's as much sort of seasonality. And in fact, even your reference to the within 1971, there's very little of that being autonomy at all as an example.

Speaker #12: And so I just would say stay tuned because that number will move based on what division inside of 1969 and 1971 is really kind of the seasonally high gross written premium in any given quarter.

Andrew Robinson: I just would say stay tuned because that number will move based on, you know, what division inside of Syndicate 1969 and Syndicate 1971 is really kind of the seasonally high, you know, gross written premium in any given quarter. I just don't think I'd read too much into it.

Speaker #12: And I just don't think I'd read too much into it.

Speaker #14: Thanks. And just a quick one. That's a gross rate number, I imagine?

Andrew Andersen: Thanks. Just a quick one. That's a gross rate number, I imagine?

Andrew Robinson: It is. Everything we report out on is a gross rate number. That's important that you ask that because, for example, within some of our divisions, like Global Property, our gross versus our net rate is actually -mid-single digits where the gross rate is -mid-teens. That's, you know, in our case in Skyward Specialty in the US, that's because of the use of FAC and how that market's behaving. Some of that is similar, you know, in Apollo relative to the gross versus net. We always report on a gross rate, gross pure rate.

Speaker #12: It is. Everything we report out on is a gross rate number. And that’s important that you ask that, because, for example, within some of our divisions like Global Property, our growth versus our net rate—our net rate is actually negative mid-single digits, whereas the gross rate is negative mid-teens.

Speaker #12: And that's in our case in Skyward Specialty in the US, that's because of the use of FAC and how that market's behaving. And some of that is similar in Apollo relative to the gross versus net.

Speaker #12: But we always report on a gross rate. Gross pure rate.

Speaker #14: Thank you, I'll leave it there.

Andrew Andersen: Thank you. I'll leave it there.

Andrew Robinson: Thanks, Andrew.

Speaker #12: Thanks, Andrew.

Speaker #13: I am showing no further questions at this time. And I will now turn the call back over to Natalie for closing remarks.

Operator: I am showing no further questions at this time. I will now turn the call back over to Natalie for closing remarks.

Speaker #15: Thanks, everyone, for your questions. For participating in our conference call and for your continued interest in and support of Skyward Group. I am available after the call to answer any additional questions that you may have.

Natalie Schoolcraft: Thanks, everyone, for your questions, for participating in our conference call and for your continued interest in and support of Skyward Group. I am available after the call to answer any additional questions that you may have. We look forward to speaking with you again on our Q2 2026 earnings call. Thank you, and have a wonderful day.

Speaker #15: We look forward to speaking with you again on our second quarter 2026 earnings call. Thank you day.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.