AM Best Upgrades Credit Ratings of Skyward Specialty Insurance Group's Members
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to "a" (Excellent) from "a-" (Excellent) of Great Midwest Insurance Company (GMIC), Houston Specialty Insurance Company, Oklahoma Specialty Insurance Company and Imperium Insurance Company (IIC). All companies are members of Skyward Specialty Insurance Group (Skyward), whose ultimate parent is Skyward Specialty Insurance Group, Inc. (Skyward Group), (NASDAQ:SKWD), and are headquartered in Houston, TX. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. In addition, AM Best has assigned a Long-Term ICR of "bbb" (Good) to Skyward Group. Also, AM Best assigned a Long-Term Issue Credit Rating of "bbb-" (Good) to the $20,000, 7.25% subordinated notes, due 2039, issued by Skyward Group. The outlook assigned to this rating is stable.
The ratings reflect Skyward's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating upgrades are driven by the group's operating performance, which is reflective of a sustained trend of improving underwriting results since 2020 following a change in executive leadership, as well as consistent investment income. Several years ago, following a past period of underwriting volatility, management began to institute numerous initiatives to refine its underwriting focus and risk selections and capitalize on their expertise in many segments as a specialty lines writer. Positive trends in underwriting profitability have been noted since that time in its targeted niches. AM Best will continue to monitor trends in premium growth, underwriting performance and overall operating results.
Skyward's management has also instituted numerous capital initiatives in recent years, which included a loss portfolio transfer intended to minimize the impact of discontinued lines. The group has also benefited from numerous parental capital contributions to support its operations.
The assignment of the Long-Term ICR to Skyward Group follows its successful IPO. Financial leverage and interest coverage ratios at this holding company remain within AM Best's expectations, with additional capacity to access the capital markets if needed.
This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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