Good day, and thank you for standing by. Welcome to the first quarter 2024 Skyward Specialty Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. 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 now like to hand the conference over to Natalie Schoolcraft, Head of Investor Relations. Please go ahead. Thank you, Liz. Good morning, everyone, and welcome to our first quarter 2024 earnings conference call. Today, I am joined by our Chairman and Chief Executive Officer, Andrew Robinson, and Chief Financial Officer, Mark Haushill. We'll begin the call today with our prepared remarks, and then we will open the lines for questions. Our comments today 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. Financial schedules containing reconciliations of certain non-GAAP measures, along with other supplemental financial information, are included as part of our press release and available on our website, skywardinsurance.com, under the Investors section. With that, I will turn the call over to Andrew. Andrew? Thank you, Natalie. Good morning, everyone, and thank you for joining us. We started 2024 strong, reporting Q1 adjusted operating income of $0.75 per diluted share. Gross written premiums grew 27%. Our continued strong growth is a direct reflection of our strategy to have a well-diversified portfolio of underwriting divisions that allow us to allocate capital to those areas we believe offer the best opportunity for profitable growth and shareholder returns. I'll remind our analysts and investors that growth during 2023 was not the byproduct of writing new property cat. We see limited property cat opportunities that fit with our underwriting strategy, in which we aim to build defensible positions that allow us to deliver top-quartile underwriting profitability across all market cycles. Our combined ratio was 89.6%, and our annualized adjusted return on equity and tangible equity were 18.3% and 21.1%, respectively. Altogether, these metrics reflect the power of our Rule Our Niche strategy and our outstanding execution across all eight underwriting divisions and the functions that support our underwriters. Operationally, rate, retention, and submission flow in the quarter continued to be strong, and we continue to find opportunities to profitably grow our business. I'll talk more about these later in the call. With that, I'll turn the call over to Mark to discuss our financial results in greater detail. Mark? Thank you, Andrew. For the quarter, we reported net income of $36.8 million, or $0.90 per diluted share, compared to $15.6 million, or $0.42 per diluted share for the same period a year ago. On an adjusted operating basis, we reported income of $31 million, or $0.75 per diluted share, compared to $15.5 million, or $0.42 per diluted share for the same period a year ago. In the quarter, gross written premiums grew by approximately 27%. All of our underwriting divisions contributed to the growth and our Captives. Transactional E&S, Surety, Professional Lines, Global Property and Agriculture divisions were each up over 20%. Turning to our underwriting results, the first quarter combined ratio of 89.6% improved 0.6 points compared to the first quarter of 2023. The half point improvement in the current accident year non-cat loss ratio to 60.6% was principally driven by changing mix of business. During the quarter, catastrophe losses were minimal and accounted for less than a half point on the combined ratio compared to the first quarter of 2023, which was impacted by 1.8 points of cat losses. Excluding the deferred benefit of the LPT, there was no net impact from prior year development. In Q1, as has been the case in the quarters leading up to being a public company and since going public, we increased our conservatism to an already strong loss reserve position. The expense ratio increased 1.3 points compared to the first quarter of 2023 and was in line with the full year 2023. We've talked in prior quarters regarding our business mix shift and investing in the business, so this is in line with our expectations and target of a sub 30 expense ratio. Turning to our investment results, net investment income was $18.3 million in the quarter, an increase of $13.7 million compared to the same period of 2023. During the quarter, you will note we changed how we disclose our investment portfolio and the net investment income results. We will speak to the portfolio in four categories: short-term investments in cash and cash equivalents, fixed income, equities, and alternative and strategic investments. This change was driven by a couple of factors: our desire to simplify how we talk about the portfolio, more traditional presentation in line with the industry, and more reflective of our strategy and the underlying risk characteristics of the portfolio.... Consistent with our investment strategy to deploy all free cash flow to fixed income, in the first quarter, we put $98 million to work at 5.4%. The net investment income from our fixed income portfolio increased $5 million, from $7.4 million in the prior quarter, driven by improving portfolio yield and the significant increase in the invested asset base. Our embedded yield was 4.7% at March 31st, versus 4.0% a year ago, and 4.6% at December 31st. At March 31st, we had approximately $298 million in short-term investments, and our yield on short term investments continued to be north of 5%. Lastly, April 1st is when we renew our property reinsurance programs. All these renewals were orderly, and we are satisfied with the terms and structure of these programs. We increased our property cat treaty net retention from $12 million - $15 million, and the cover increased from $28 million - $36 million. We were able to improve the terms of the treaty while retaining the same model return period as the expiring treaty. With that, I will turn the call back over to Andrew for concluding remarks. Thank you, Mark. Operationally, we had another strong quarter. We continue to realize pure pricing increases in the high mid-single digits, which is above our estimated loss cost trends. Our new business pricing was up again over our in-force book, an indicator that new business profitability is attractive and should contribute to margin expansion. We also continue to see strong submission activity, which was up over 30% from the prior year quarter. Retention dipped into the 70s, driven by business mix shift towards lower retention divisions, such as Transactional E&S, as well as some continued trimming of our Commercial Auto portfolio, which in Q1 was 14.7% of our writings, compared to 18.3% in the prior year quarter. Let me turn to the competitive marketplace for a moment. From our vantage point, it is most certainly an increasingly nuanced market for capturing profitable growth. But we continue to identify and invest in market segments that are attractive and where execution of our strategy allows us to profitably grow and deliver attractive returns for our shareholders. In Q1, we launched a new Media Liability unit within Professional Lines, with a team of expert underwriting and claims professionals, each of whom has a distinctive standing and broker following in the marketplace. We remain confident in our ability to continue to attract the very best talent and arm those professionals with advanced technology and data analytics that has proven to be the winning formula for our success, as our results in Q1 further reinforce. It's visible in our results, whether it be the talent adds this past year in Surety or Transactional E&S, or the launch of Global Agriculture or Inland Marine, our investments are clearly paying off for our shareholders. Finally, we recently published our first ever Annual People Report. Our people are the lifeblood of our success, and it is what makes Skyward truly unique. The report provides a wonderful view into our company, and we encourage our investors to visit our website to access this, this report, or contact Natalie if you'd like to have a printed copy. I'd now like to now turn the call back over to the operator to open it up for Q&A. Operator? As a reminder, if you'd like to ask a question at this time, 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. Please stand by while we compile the Q&A roster. Our first question will come from the line of Mark Hughes with Truist Securities. Yeah, thank you. Good morning. Good morning, Mark. Good morning, Mark. Andrew, you mentioned 30% submission growth is very strong, Over 30%. Over 30%. Okay. Even stronger. Any way to break that out? You know, kind of, I assume there's underlying submission growth. Your expanded underwriting capacity presumably is contributing to that. Any way to kind of break that out, maybe compare it to what you had been seeing in earlier quarters? Yeah. If you're asking for a sort of a same store sales versus kind of like new capacity, we don't share that. But let me just say this. There's no question that you know, obviously us bringing on talent that has a marketplace following inevitably leads to business following those, in some cases, you know, the in-force books that those underwriters had in their prior roles. What I can tell you is that if you look across our businesses, by and large, same-store sales are up pretty materially. If you think about same-store sales, meaning our same underwriters, and then growth is also a contribution of the underwriters we've had. And I think they're in appropriate sort of balance. But we're not going to go further than disclosing just... You know, because what's important here is, are we investing in a way that's sensible for our business, that's driving profitable growth? And we're seeing that data correspond. Yeah. To expand, when you say nuance, I think you've touched on a lot of interesting points. What do you mean when you say nuance? So if you could expand on that, that'd be great. Well, you know, all of us obviously, you know, take in the sort of various things that are being discussed around the marketplace, this, particularly this time of year, right? You know, during earnings reviews and so forth. And, you know, I think there's, it's almost like sort of very general views put out there, you know, about what's happening in different parts of the market, what's happening in casualty versus what's happening in property. And, I have to tell you that, you know, it is, it is just very specific to, a circumstance, right? So, you know, we have, I would describe it at least three, if not four, quite discrete points of focus in property, right? We have Global Property, Inland Marine, and then our Transactional E&S. I would describe a portion of our book as sort of highly technical and a portion of it that's closer to sort of general property. And I can tell you that each of those four areas are behaving very differently, and so that's what we mean by nuance. You know, at the same time, you know, on the liability side, everybody's talking about like, well, casualty, could it be an attractive market because prices are moving? The prices are moving because, you know, people are recognizing that loss cost inflation and maybe the starting point in the loss cost relative to price may not be as favorable as people think. Meanwhile, like, when we think about our business, I'll take Transactional E&S as an example. Okay, in the last month, a carrier that was in lifeguard services pulled out of the market, right? Well, of course, we write lifeguards in our E&S business. Well, suddenly we're seeing this, like, dramatic flow of lifeguard services. And instead of the market that pulled out, that is a $7,500 minimum premium, we have a $30,000 minimum premium. Instead of the possibility of providing, you know, abuse and molestation and assault and battery, you know, we have absolute exclusions on those things. And so, you know, their pullout allows us to then go pick the business the way that we want, and we see those opportunities happening all the time. But it's not like that is an indicative sort of window into everything. It's a very specific, you know, underwriting category by category, and it's the kind of market that plays to great underwriters, which I believe we have. When I talk about nuance, that's what I mean. I think it's a market that's a hell of a lot more favorable to a company like us than many of the other guys that are out there. Yeah, very good. I'll ask you the blunt, simple question. There's talk about casualty accelerating, as a general matter. Do you see that in 2024? Yeah, so what I'd say is, when we look across our casualty occurrence ex workers comp, you know, sort of all the various touch points, again, I don't think there's one overriding theme. But what I can tell you is that we definitely see prices moving. In our case, we took some actions here over the last couple of quarters to start to price, to start to tighten terms in very specific areas and also to pull back limits, and we've been able to do that. You know, we're making sure that the retention is holding, but we think that we found the balance. So that, to me, feels like, at least amongst the competitors that we see, and the competitors in a lot of those cases, I consider to be very, very good competitors. They're amongst the better, the best seem to be operating in a similar way. So I think that's promising. You know, that said, look, you know, I think, you know, hard market casualty is all relative, right? I mean, you know, you have to, you have to believe that you're at a technically strong starting point and that your price is in excess of loss cost trend. And, you know, I don't think that's uniform, right? I think there are places, and there's certainly plenty of opportunities that we see. I just I gave you one earlier, but I don't believe it's a uniform market. And that is very much what I mean by nuance. And I think, again, I think it's a great market for the best underwriters. Appreciate the details. Thank you. Our next question comes from the line of Paul Newsome with Piper Sandler. Good morning. Good morning, Paul. Help me give me a little bit more detail about investment income and just trying to get to some sort of run rate thought. There's a lot of changes happening, obviously, with the new money moving around and moving a little bit out of that, opportunistic fixed income portfolio. So just any thoughts to kind of help us get a sense of where that maybe long-term, trend will be, run rate will be, once everything is done? Hey, Mark, let me see if I can translate that. You're looking for a run rate of investment income in the future, assuming that we've received the flows from opportunistic? I just wanna make sure I understand what you're asking. Yeah, that's right. I mean, assuming that you've got the flows out of the opportunistic plus kind of where, is it, you know, what's going on with your money rate and what you're putting into the traditional fund, it's, you know, it's always been a challenge to kind of figure out where exactly the right midpoint/runway is for investment income. Well, I mean, it's pretty simple. If you look at the invested asset base for core fixed income, you know what our embedded yield is. I think the yield, I don't know what interest rates are gonna do. We've been investing at over 5 for the better part of a year, and all of our cash flow will continue to go to fixed income. That's where it's going. Does that answer your question? A little bit, but we take it offline, too, as well. Maybe back to the sort of competitive environment question. I think the concerns have been primarily that E&S is where the softening is, and, but specialty is not necessarily E&S. Maybe you could talk a little bit further about sort of what is really kind of true E&S that might be of a concern, if at all, or what could be is really not even in that box at all? I don't know if I wanna probe around the entire industry. We've said it before, I'll say it again. What we write in the surplus lines market, I would consider to be true surplus lines. So I've heard some of the questions about, you know, what's happening with the admitted carriers as business, you know. You know, we don't write the stuff that's E&S light. That just isn't us. We're writing stuff that's in the E&S market for a reason. Now, certainly, if there's less flow coming into the E&S market, then our part of the market becomes more competitive, right? Because that's where the surplus lines writers would look. And I also, you know, get all the same data that you guys get about the early views on the major states and so forth. Look, here are the facts, Paul. We grew 43% in Transactional E&S in this quarter, and we grew 27% in Professional Lines. Those two areas are pure surplus lines areas. So, you know, I would say that that's a pretty good indicator that regardless of what's happening in the market, I'll just reinforce it. You know, our strategy is a very specific strategy, and we seem to be executing well, and it seems to be paying off. Do I believe that, you know, 27% growth is, you know, just like last year's 28% growth, is that, you know, is that a number you can sort of take to the bank? No, absolutely not. I mean, that's just it just speaks to the excellent execution of our organization and our ability to sort of pick off opportunities like the example I gave earlier. But I would just tell you, I feel, I feel like we're in a market where, where, you know, we can continue to win, we can continue to grow the profitability and the shareholder returns, and we can continue to grow at a level that is meaningfully enough different than sort of the cross-section of the competitors that, that we're competing with in the market. And I've highlighted for you in the past who those are, some of the pure play, specialty carriers, plus the primary insurance or specialty arms of, of, you know, the larger sort of multi-line Bermudians. And so I feel good about where we're at, and I think the market is still conducive for us. Okay. That's, that's great, color. So I appreciate the help, as always. Our next question comes from the line of C. Gregory Peters with Raymond James. Well, good morning, everyone. Good morning, Greg. Hey, Greg. Hey, so, a lot of comments from you on market conditions. Your gross written premium is quite strong in the quarter. I wanna go back to your comments about property, and sort of, integrate that with your discussion on reinsurance, the renewal, and the increased retention. As we go through 2024, should we—how should we think about your growth in your property book as it relates to, you know, frequency and severity of cat losses? Seems like you haven't had a lot of exposure to date, so I'm, I'm just curious if the profile is changing there. Yeah, no, it's a great question. Thanks, Greg. Well, let me just start and say something about the treaty, 'cause I think it's important. So, last year, we had an attachment point at 12, and we moved that to $15 million. On a model basis, that's a one in 10 year attachment point. So we effectively kept our same attachment point. Our exhaustion point, while we added $8 million of cover, is in excess the same sort of point. It's in excess of a one in 250 event. And so, well, that tells you that we've added some exposure from last year, which is no surprise, 'cause we grew property, right? You know, property's been, you know, +25% of our book pretty consistently, and so as our book grows, property's growing. And so, unsurprisingly, we're adding exposure, and we're all we're doing is we're keeping our, you know, our cat cover roughly in line on a return, period basis. And of course, that tower that we buy is relatively small to, you know, the, the size of our property portfolio. To your point, we, we write a well-diversified, book of property. So, you know, look, I don't think anything is gonna change in terms of, frequency or severity, of, of exposure to storms. I think you already saw that in the first quarter, you know, there was a lot of convective activity. Again, a relatively light quarter for us. There's still a lot of convective activity going on. We'll see how Q2 turns out. Then I think as we get into the hurricane season, look, you know, a lot of that is just what paths, you know, things take and so forth. But I can say pretty confidently right now in Q1, that if we were to have a material event or a set of material events to the industry, I think that what we'd see in terms of our results would be very favorable on a relative basis in general. And then, of course, since we buy an attachment point that's a relatively conservative attachment point, I think our net results would be very good as well. So I feel good about all that. You had asked some questions about market. So let me, before I say anything more, did I address your question on frequency and severity and growth and exposure? Yes, you did. ... do you want me to, do you want me to just comment on the property market? Yeah, please do. Okay, so, you know, it's an interesting market, right? You know, it. I don't think everything falls into the line of this narrative, well, you know, property pricing is attractive across the board and, you know, casualty maybe the new opportunity. I again, I think it's much more nuanced. I'll take our global property as an example. We lost a very large account in Q1. Actually, we chose not to write it. This is a large global company, and we had the largest line on the primary insurance above their retention. So think about the primary $100 million that sits above a retention that is measured in tens of millions of dollars. Great example, you know, the broker did a great job, which is split out the international exposure from the U.S. exposure. The international exposure made up about 40% of the insured values, yet that international exposure was primarily inside of their retentions. Well, a bunch of competitors came in and provided pricing at a 40% lower rate because theoretically, exposure went down. Well, that was just silly. That's just like a ridiculous approach. And so there's an example of hungry, hungry companies out there writing things in ways that I just don't think are sensible, and we just let that account go. And by the way, we had that account for a very long time. And so that's an example where you're like, okay, you know, people are basically putting out lines on big accounts to try to basically grow quickly. And that's okay. That's fine. You know, we expect a little bit of that. We've won a few in Global Property over the quarter as well to offset that for sure. And then I look at places like Marine, you know, we steer clear of things like, you know, the stock throughput stuff because it's just, it's a commodity area, and there's way too many MGAs in there. And so, you know, what we found in Marine is that we're competing against the same competitors who seem to be very sensible. You know, maybe a little bit of change in terms and conditions, which we're incredibly tight on, but by and large, the market feels pretty darn good. When I look at our property E&S, Transactional E&S in property, submissions were just absolutely booming, like booming still. And so, you know, we're still seeing plenty of opportunity. You know, for us, on the hard technical stuff, if you're, let's say, writing a risk related to something in the wood sector, which is a very low frequency but very high severity, like, we're not backing up a bit. And so we have our line, we haven't really seen a lot of companies who are, you know, sort of poaching into that line. So a lot of that stuff's sticking. And then in the general property part of our book, you know, I'd say pricing is pretty darn rich. And so if you get a little bit of competition there, you know, to be able to give up some price, you can do that and still feel great that, you know, you're able to drive a very attractive return from that portfolio. Those four examples are things that should give you a sense that not everything is behaving in kind of one uniform way. Again, we set up our business, Greg, as you know, to have an incredibly well-diversified portfolio, so that, so that we're not stuck in single market cycles and that we can push down where we see the opportunities. I think that their results talk to sort of the benefit of, of that strategy. That's great color. Just to clean up, as my follow-up question on your answers there, you mentioned limits, you know, what your company is writing out in the marketplace. Maybe you could just close the loop for us on limits and just sort of remind us what your net limits are, you know, broadly speaking, and then maybe by, you know, a couple of more important segments. Yeah. So, so in property, generally speaking, our max net limit is about $3.5 million. So, yeah, so that, that applies across the entire piece. The other segments, too? Yeah, that would, that would apply, that would apply everywhere. So that would apply when we write property in Industry Solutions, in Inland Marine, in certainly in E&S. And then, and then when in global property, I think I've explained in the past that what we've had is long-term quota share support that allows us to be one of the largest lines in the marketplace in writing the, the, you know, the, the primary of those programs. And those, that long-term support, you know, is obviously where we're keeping a very considerable portion of that aligned to sort of the $3.5 million net. That's great information. Thanks for the detail. Sure. Thanks, Greg. Our next question comes from the line of Matt Carletti with Citizens JMP. Thanks. Good morning. Good morning, Matt. Morning. You know, there's been a lot of focus, I'd say, industry-wide, right on reserves the past several quarters. You guys are in kind of a shrinking group of companies, a rare company that's showing a lot of stability there. And I think in your opening comments, I picked up a comment about even kind of, you know, increasing the conservatism. Could you just kind of go behind the scenes a little bit and update us on what you're seeing there, kind of what some of the indications are and how you might be reacting to those? Well, well, I'll start, and Mark, Mark, Mark can jump in. But look, just to be very specific, in this quarter, to Mark's comment in the prepared remarks, you know, our emergence in the quarter was favorable, yet we didn't recognize any of that. And I think probably the simplest way to describe how we think about things is, of course, we are looking at the level of reserve redundancy in our book, and we're also looking at the maturity of that redundancy, right? So you can have redundancy, but the question is: Is that redundancy showing up in greener years or more mature years? And so we're constantly watching those two things. And, you know, we've been asked, probably, you know, since we started engaging with you and the other analysts and our investors from pre-IPO to, you know, to today, when will you release reserves? And our answers are the same, which is, we're not gonna tell you. And quite honestly, we don't know, right? Because we have a bias, as we have said all along, to build a conservative position, and then to demonstrate to ourselves that conservative position is consistent and predictable along the lines of what we're expecting. I think we've done a really good job, but we also think that we're able to deliver attractive results for our shareholders, while not sort of stretching ourselves on the liability side of the balance sheet in any way. You know, I would just say to you, I feel like it's a good news story, and that you know our hope, as I've always said, and our belief based on everything that we're seeing, is that our actual results are better than our reported results, and at some point, that should inure to the benefit you know of our investors. That, that makes a lot of sense. Maybe a follow-up, just shifting gears. I wanna go back to the net investment income discussion. Yep. Kinda Paul's question. Sure. Maybe if I just take a different look at it. I mean, I look at this quarter, kind of, the new disclosures, right? And the alternatives, it didn't really have an impact, right? I think it was $100,000 guy. Right. So I look at that $18 million you reported, it looks pretty clean to me. I agree. I'm thinking about, like, that's a very sustainable number going forward, and that obviously the changes from there would be, you know, more cash flow coming in at higher yields and, and that works over time, but at least as a leaping off point, there's no reason to think that, that's not a good leaping off point. Matt, thank you. I agree. I think that's a good way to look at it. I would highlight the fact that short-term rates could change quickly, right? Mm-hmm short-term. So yeah, I look at that $17 million in the quarter as pretty consistent, but again, it depends on what happens with short-term rates. And look, we've been focused on deploying the cash in short term. We got a pretty good situation where we're generating more cash that we're putting to work. Our plan is to be fully deployed, you know, by the end of 2024. You know, Matt, I would just add one thing. Do you know that, Mm-hmm Our invested assets grew by $400 million year-over-year. So this point last year, $400 million. To Mark's point, like, I, I don't know how many times we said our plan is to fully deploy our cash by da, da, da, da, da. And, you know, we- Mm-hmm we're generating so much cash, we've not been able to put it to work. And in this case, Mark made the point, which is we've been blessed with, you know, with short-term rates that are really great. If that changes, that's one variable here that's uncertain. But the fact is that the invested assets are growing at a pretty attractive clip. And you know, that of course is something that we're trying to respond to, but you know, it's you can only deploy so quickly, you know, within sort of the bounds of how it is that we've set our near-term investment strategy. Yeah, yeah, very, very, very high-cost problem. So yeah, thank you for the color. Appreciate it. Thank you. Thanks, Matt. Our next question comes from the line of Meyer Shields with KBW. Chris, thanks. Good morning. One quick question- Hey, good morning, Meyer. I'm surprised you're awake, because you're cranking them out early into the morning. I saw, so well done to be here. Well, thank you. My bloodstream is 95% coffee right now. Are you seeing any change in the inflation rate for claims on short-tailed lines, like Property or Inland Marine? No. Okay. The second question, just on a comment you made earlier, Andrew, with regard to non-renewal in Commercial Auto. So we're definitely hearing a lot of talk of sustained or accelerating Commercial Auto rate increases, and I was hoping you could talk through, at least conceptually, why non-renewal made more sense than just jacking up rates? Okay. So, I, I know that, certainly at this exact same call last year, and maybe even, maybe even the call before that, I kept making the point that, as it relates to commercial auto, if we are seeing, you know, high single digits, 10-ish loss cost inflation, and now we kinda see that unabating. And I can, I can give you a granular kind of view as well, in a moment, Meyer. But, but, like, that, that feels unsustainable when you keep saying that over and over and over, right? So, okay, so what are you gonna get, 11% or 12% rate, but you're in a 10% loss cost inflation environment... That is not the kind of marketplace that we want to grow into. And I think that what has happened here with elements of the plaintiff bar and social inflation finding its ways into different things. I'll give you a simple example. This week, we received a first ever, first notice of loss with a Stowers demand, a time limit demand, attached to the first notice of loss, right? And by the way, it was a pretty heavily prepared document from a plaintiff lawyer. Like, that just feels like a different day. Now, whether there's, you know, validity to it or not, just the effort to respond to a first notice of loss like that, you know, is in itself a heavy lift. But it is an indication as to what's happening in this marketplace. We just, you know, on the personal injury part of the market, you know, if we can, if we can lean up on the accelerator and tap on the brake, we're going to do so. And then ultimately, it's up to the states as to whether they can reform, you know, the legal environment, the tort environment, to make it more reasonable. Because it is just it is, it's out of control. And, you know, everybody who's close to it understands it viscerally. And so, you know, we've been studying it and studying and studying it, and I think I indicated that we were going to ease up on exposure, and we have been easing up on exposure. That premium doesn't even fully reflect the lower exposure, because the rate that we've been getting for each unit that we write is higher than the average rate for the rest of our business. So, so that's the thinking behind it. Okay, perfect. That's very helpful. One last quick one, if I can. Just updated expectations, maybe for the net to gross written premium ratio for 2024. First quarter came in a little higher than expected? No, I mean, it's Meyer, it's Mark. It's in line with where we were in the first quarter. Low sixties is what we're looking for. So I think it's right where we thought it would be. Marin, I'd remind you that there was a little bit of noise for you and others as well. There was a little bit of noise last year. We had a quota share contract that ran through first and second quarter that we unwound in the third quarter, and so there's some geography issues that played through. But I also do think that when we set guidance for the full year, we were quite explicit, saying that our full year 2023 gross to net is a reasonable planning assumption for your models. Yeah, perfect. I just wanted to see the update. That's very helpful. Thank you so much. Thank you. Thanks, Meyer. Our next question comes from the line of Yaron Kinar with Jefferies. Thank you. Good morning. Good morning. Good morning, good morning. I just want to start with maybe a quick one, the Baltimore Bridge collapse. Do you have any exposure to that? Uh, no. None. Okay. Then maybe a broader conceptual question with regards to the mix shift. Obviously benefited the underlying loss ratio to an extent, but we also see that coming back a little bit through a higher expense ratio. So can you maybe talk through in a more holistic sense, like, what the benefit of the mix shift is, maybe beyond the underlying combined ratio? Is it a better capital efficiency? Is it a better long-term risk profile? What do you see about that mix that is attractive to you? Well, look, great question, by the way. The answer is, it's parts of all the things that you talked about. So, you know, if you really look at a lot of where the growth has been coming from, you know, we've driven a lot of growth from Surety. We've driven certainly a lot of growth from our Transactional E&S. You are correct, they are higher expense ratio business. Part of that is, they're, you know, in the case of E&S, it's wholesale, so your commissions are higher there. Surety is obviously the highest commissions. And yes, we're comfortable with that trade-off. We think that both our sort of belief that that sort of profile of risk exposure and then ultimately loss has less of some of the things that, for example, we were just talking about, which is, you know, kind of uncertainty around loss inflation on personal injury. And that's included, by the way, in our for what we write in our, in our general liability within Transactional E&S. I would characterize that same way. And then, by the way, in the case of Surety and others, they're incredibly good applications of our capital, very diversifying. And quite honestly, you know, one of the reasons that I believe that, you know, we're able to sort of achieve the kind of capital leverage that we've been able to achieve. So, so it is all those things. I think the other part of it is, we keep just coming back to it. We want to have a well-diversified portfolio, right? So, you know, for example, if we could, if we could press down faster and harder in A&H, because, for us, that's great diversification, we would. There's boundaries to our ability to grow profitably, you know, there at maybe the same speed we can in certain areas. That may change a year from now, but that's what we're seeing right now. Thanks. That's helpful. If I could also sneak in one comment, question, and forgive if I missed this, I did not see disclosures of premiums by division in the press release last night. And if you chose to remove those, I'm just curious as to why? Just considering that so much of the story, I think, at Skyward is about kind of exceptional premium growth and understanding the drivers for that growth is helpful for us in the investment community. Yaron, hey, it's Mark. A good question. We will be including in the press release going forward. The Q will be out tomorrow, so it's there. It was just a matter of, it will be in the Q. We'll have it in the press releases going forward, but you'll see in the Q tomorrow. Yaron, just, I mean, just for your benefit, not to sort of throw a bunch of numbers at you, but Industry Solutions grew 16%, Global Property and Ag 35%, Programs 7%, A&H 14%, Captives 49%, Professional Lines 27%, Surety 37%, and Transactional E&S 43%. Awesome. Thank you so much. Apologies for the oversight. We will, we will correct that. Thank you for that. You're, you're right in that observation. Our next question comes from the line of Bill Carcache with Wolfe Research. Thanks. Good morning, Andrew and Mark. Bill. As investors analyze the interplay between your growth and returns, how much of that is an outcome versus something that you're actively managing to? I appreciate your comments around the nuanced market with attractive opportunities for the best underwriters. And, you know, it seems like you're focused on identifying those areas, you know, where you're competing beyond just price. But it would be helpful if you could sort of address how important of a lever pricing is as you manage to your targets. Yeah, I mean, it's, it's, implicit in your question, thank you, by the way. It's a great question. I think implicit in your question, if I'm correct, is just the, "Hey, what happens if you got double the price, but you, you know, you got less growth? How does that look?" And, I think our general philosophy is as follows, which is that we've stated in unambiguous terms that, you know, we're targeting a +15% return on equity. And by the way, we've been consistently kind of, you know, showing up, you know, at or above that number. Our sense here is, as long as we can add units, and we believe the units kind of fit with our strategy, that our ability to sort of capture value in some of our businesses, keep that value for a long time, right? You know, Surety would be a great example of that. That's a good proposition for our shareholders, right? Areas like Transactional E&S are more transactional. They're, you know, sort of a lower retention business. You might write an account for a couple of years, you know, and then you might not write it again. And so, but I just will tell you that the watermark for us is, you know, trying to make sure that we're writing above a 15% return, and if we can add more units there, we generally will do so. And, you know, and then the good news is, if we do that well, you might get some expense leverage, you might get some capital leverage that ends up giving you, you know, a bit more juice in terms of your ROEs that kind of aren't formulaic. That's very helpful. Thank you. And then following up on your success onboarding underwriting talent and enjoying incremental business that's come with that, how concerned are you about competitors, you know, potentially poaching some of that talent, talent in the future? Have you seen evidence of that? Maybe speak to your success rate in retaining the talent that you have onboarded. It's a really excellent question. What I can tell you is that our voluntary attrition last year was 7%, and we share data with a consortium of other insurers, not just on retention, but on a range of people, HR matters. And by our measure, that's kind of close to the best, if not the best out there. So. And I think as you get into the specialty space, I think the war for talent is much greater than, for example, if you're in personal lines or small commercial. So, 'cause there's just, there's a dearth of talent and it is specialty, right? Which means that generally speaking, people are good, narrow technical, you know, focus areas and so forth, they're harder to come by. So I feel very good about our attrition. Yes, I think the war for talent continues, and yes, we are concerned. It is one of the reasons, and listen, we beat the drum on this all the time. It's one of the reasons that we are so focused on the people dimensions of our business. It is born from, like, a genuine interest, starting with me and the other members of our ELT, that this is the kind of company that we want to have, you know, a company that is very people-centric. But I also think there's just, like, a practical competitive consideration, which is, if we create a culture that people feel genuinely part of and connected to and personal owners in, that is probably the best defense that we possibly can have. And I will say there is always, I mean, the MGAs are just, it's crazy, right? There's just spot market, sort of pricing for talent that's not rational, when you look at the economics of our industry. But, you know, that's just the nature of the beast. If there's a dearth of talent, that's going to happen. And then ultimately, you know, we rely on the ecosystem that we've built. And I will say to you, and I really do encourage this, go look at our Annual People Report. It is... If you're not part of our organization, it's the best way to have a window into our organization. And I think that from that, you will understand why we're certainly not ignorant of it. It's not a topic that we're ignorant of, but we've done the things that we should be doing to put ourselves in a great position as it relates to that. Thank you. That's very helpful. And then if I could squeeze in one last one. How focused are you on downside risk to estimates from a lower rate environment? Is there a point, maybe if you could share your any thoughts with us, where you'd look to protect yourself from lower rates? Any actions that you'd take and potentially, you know, lock in relatively more attractive higher rates? So Bill, just for our clarification, you're talking about on the asset side, investments, correct? Yes, yes. Sorry about that. Yeah, that's correct. You know, Bill, look, we kept our duration right at about four. No real interest in extending it. We'll see how rates move during the year, but I think where we are in our duration, I like it, and I think the returns are fine. We're not going to react immediately. We'll just see how the interest rates play out. Bill, I'd add one thing. You know, we've been blessed with the interest rate environment that we're in. And so, you know, as Mark has commented, every time we put, you know, our free cash flow to work in our core fixed income, it's going to very, very, very high quality, you know, very high quality assets. So, you know, like, if the rates start to back up, you know, the first place that we would look is, can we start to blend in slightly, you know, lower credit? And that we're not talking about, you know, like, jumping in the junk, just, like, moving down, you know, the investment grade credit and having a bit more of the lower end of that. And then, you know, if we ever, God forbid, find ourselves in that, like, 0% interest rate environment, you know, where new money yields were, you know, 2%, you know, I think at that point, you both have to reconsider how you think about the way that you talk about, you know, your returns on capital. Because, you know, obviously, it's a different cost to capital environment. But also, you know, you kind of reevaluate investment strategy in a different context. But I feel like we have a long way to go before that, and we keep growing our embedded yield. And even if interest rates were 4%, you know, in the medium term, you know, that's still an attractive place for us to continue to have, you know, an allocation to, to the high quality core fixed income. That's very helpful, color. Thank you for taking my questions. Sure. Our next question comes from the line of Michael Zaremski with BMO. Hey, thanks. I think I can ask one more. A lot of good questions. So, you know, given the majority of our questions are on casualty inflation, you've given us some good color. Now, Andrew, you talked about kind of and I think in, it might have been your prepared remarks, about pulling back some limits and tightening some terms. I believe that I'm assuming, because you guys have had excellent margin experience and reserve experience, that's more on the commercial auto side. But maybe, maybe you could clarify that, or maybe it is just, you know, all casualty. Just also, maybe more broadly, from a macro standpoint, are there, you know, maybe certain states that you guys feel are more social inflationary, if that's a word, and you've looked to kind of pull back on? Or maybe, I don't know, any other gauges you guys kind of look at to try to keep, you know, social inflation in check? Yeah, no, great, great question. I think for us, my comments on the terms and limits actually were principally around the general liability and excess. And of course, excess, you know, you'll pick up both auto exposure as well as general liability, employer's liability as well, exposure. And so, you know, a lot of this is around, you know, things like additional insureds and where that comes into play. And so we've taken, you know, just we're, you know, obviously, like every good underwriter, right? You watch, you see, you look for early indicators, you try to turn the crank. If you see something that's popping, that you're like, "Well, I wanna make sure that, you know, we're moving on that before everything is fully baked." And so, that, it was really more of a reference to that. You know, I think, relative to auto, we've gone pretty far down the path of, you know, even down to things like, in one part of our business, if you're not, you know, using... Telematics is not turned on, and an accident occurs that, you know, you get knocked back to, the statutory minimum limit available. You know, we had things around, reporting times and the deductible to the insured. I mean, some, you know, because we write that on an E&S basis. So, so I think we've done pretty much what we can do on auto, you know, outside of risk selection and price. As it relates to venue, look, I think that, in theory, every venue could be a political, or could be a, a judicial hellhole, right? As opposed to, you know, the ones that are always publicized as judicial hellholes. Look, very few of our claims, end up in a, you know, in front of a jury. But, I think the truth is, is that there is-- there's certainly great exposure to juries not being representative of how a, a particular jurisdiction is viewed on its level of conservatism. That said, I mean, I saw a case yesterday where- not yesterday, it was, it was this week. I can't remember the specifics, but I'll pull it out for you, where a jury did, like, a crazy award, like a $30 million award, and the judge basically pulled it back to a million, to the, to the, you know, to the coverage level of $1 million, right? So the kind of jury went wild, and the judge kind of stepped in, and that was in Pennsylvania. And so, you know, the, there's certainly reasons to say that, kind of the conservatism of the jurisdiction, you know, can really make a difference, and that's an example. What I will say to you is that it's not a state by state, it's a county by county kind of thing, at this point. So, you know, it'd be hard to enumerate it, but this is something that we absolutely watch and we're trying to address in terms of where it is that we are taking on exposure. Okay. That's helpful, color. That's all I have. Thank you. Thank you. T hanks, Mike. That concludes today's question and answer session. I'd like to turn the call back to Natalie Schoolcraft for closing remarks. Thanks, everyone, for your questions, for participating in our conference call, and for your continued interest in and support of Skyward Specialty. I'm available after the call to answer any additional questions that you may have. We look forward to speaking with you again on our second quarter earnings call. Thank you, and have a wonderful day. This concludes today's conference call. Thank you for participating. You may now disconnect.