Skyward Specialty's Apollo Deal Lifts Fees, Assets Nearly Double
Skyward Specialty Insurance Group posted diluted operating earnings of $1.30 a share, up 46% from a year earlier, as fee income from its newly closed Apollo acquisition drove managed premiums past $1 billion.
Skyward Specialty Insurance Group (SKWD) reported net income of $49.0 million for the second quarter of 2026, up from $38.8 million a year earlier, as the specialty insurer's push into fee-generating underwriting business began showing up in results. Diluted operating earnings per share rose 46% to $1.30 from $0.89.
The quarter marked the first full period reflecting the closed acquisition of Apollo Syndicate Management, which became a newly reported operating segment after the deal closed in the first quarter of 2026. In the company's November and December 2025 releases, the transaction was described as pending regulatory and shareholder approval, with an expected close "early in Q1 2026." Apollo generated $12.6 million in managing agency fee income in the quarter, compared with none a year earlier.
Managed premiums climbed 17.5% to $1,058.7 million from $900.8 million on a pro forma basis, while gross written premiums rose 13.3% to $740.6 million from $653.9 million pro forma. The faster growth in managed premiums reflected the shift toward fee-generating business: fee-generating gross written premiums grew 28.8% to $318.1 million, powered by Partner Syndicates fees, which jumped 82.0% to $100.9 million, and Aligned Syndicates fees, up 13.4% to $217.2 million.
Beneath the topline, the company's segment mix continued to rotate. Global Agriculture gross written premium nearly doubled, up 95.8% to $111.9 million, and Accident & Health rose 57.8% to $95.5 million, while Global Property fell 15.3% to $71.1 million, Energy Solutions declined 16.2% to $62.7 million and Captives dropped 16.6% to $64.3 million. That mix shift pushed the Skyward Specialty segment's loss and LAE ratio up 1.3 points year over year, though a 2.7-point improvement in the segment expense ratio, attributed to operating efficiencies and scale, offset much of the pressure. The Skyward Specialty segment also now reports eight named underwriting divisions, down from nine in the November 2025 release, following post-Apollo segment restructuring.
The combined ratio came in at 89.5%, or 87.6% excluding 1.9 points of catastrophe losses. Net investment income rose $12.0 million to $30.7 million from $18.7 million, due to the addition of the Apollo investment portfolio, higher yields and a larger asset base.
Returns diverged by measure. Annualized return on equity fell to 15.7% from 17.7% a year earlier, even as annualized operating ROE improved to 19.0% from 17.1%, a widening gap between GAAP and operating profitability that traces to acquisition-related accounting. Total assets nearly doubled to $6.78 billion at June 30 from $4.79 billion at December 31, with goodwill and intangible assets jumping to $471.2 million from $88.0 million, reflecting the Apollo purchase. Stockholders' equity grew 3.5% sequentially to $1,267.5 million, and book value per share rose 14.6% to $28.55.
Skyward Specialty's FY2026 guidance, issued December 3, 2025 on a pro forma basis assuming the Apollo close, called for a combined ratio of 90.5% to 91.5% and net income of $207 million to $216 million. First-half 2026 results, a combined ratio of 90.0% and net income of $98.8 million, are tracking toward the favorable end of that range.
The company disclosed its first share repurchases since the buyback program's inception, buying back 223,000 shares for $9.7 million in the quarter, and its board expanded the repurchase authorization to $100 million from $50 million.