Strong ROE, Lower Costs, Bigger Apollo: What Comes Next for SKWD?

Skyward Specialty is pairing strong underwriting returns with lower costs, while Apollo is emerging as a key growth driver.

Kaibalya Pravo Dey

2 min read

Skyward Specialty Insurance Group, Inc. SKWD has given investors plenty to like, but the next phase of the story is less about proving growth and more about proving durability. The company produced a 20.4% operating ROE for the first half of 2026 (up from 17.8% a year ago), while its combined ratio came in at 89.5% (down from 90% a year ago). Excluding catastrophe losses, that ratio improved to 87.6%. Those numbers show SKWD is still generating strong returns without giving up underwriting discipline.

There is some pressure beneath the headline. Skyward Specialty’s non-cat loss ratio rose 1.4 points to 61.3%, largely because Accident & Health and Global Agriculture carry higher loss ratios. Still, the segment’s expense ratio fell 2.7 points to 24.3%, helping offset that mix shift. So far, operating efficiency is protecting profitability.

Apollo is the second major piece. Fee-generating gross written premiums reached $318 million in Q2, up 28.8%, while underwriting fee income was $13 million. Partner Syndicate premiums jumped 82%. Management also said Apollo’s quarterly cost base is around $4-$5 million, suggesting fee growth can create meaningful operating leverage.

The softening market may be SKWD’s clearest test. Yet management is already choosing margin over volume. Second quarter Global Property premiums fell 15.3%, Professional Lines declined 6.9%, and Energy Solutions dropped 16.2%. Even so, total gross written premiums grew 13.3%, supported by 57.8% growth in Accident & Health and 95.8% growth in Global Agriculture. The real question is whether that discipline holds as competition intensifies.

How Are SKWD’s Peers Placed?

Among SKWD’s peers, Kinsale Capital Group, Inc. KNSL looks strong on underwriting durability. In the second quarter of 2026, its combined ratio was 75.5% and first-half operating ROE was 24.4%, even as gross written premiums fell 5% amid softer pricing. Financially, Kinsale is absorbing that slowdown extremely well. Meanwhile, RLI Corp. RLI remained profitable, with an 85.6% combined ratio and 24.5% trailing ROE, but growth was modest at about 3%, and its casualty combined ratio weakened to 99.3%. However, strength in the Property business is supporting its underwriting income. Apollo gives SKWD a more meaningful capital-light fee-income engine than KNSL or RLI currently have.

SKWD’s Price Performance, Valuation and Estimates

Shares of Skyward have gained 10.3% year to date, outperforming the broader industry.

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From a valuation standpoint, Skyward trades at a forward price-to-earnings ratio of 10.62X, down from the industry average of 26.83X. SKWD currently carries a Value Score of A.

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The Zacks Consensus Estimate for Skyward’s 2026 earnings implies a 24.5% rise year over year, followed by 10.5% growth next year.

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The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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