Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Second Quarter 2025 Skyward Specialty Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Natalie Schoolcraft of Investor Relations. Ma'am, please begin.

Thank you, Howard. Good morning, everyone, and welcome to our second quarter 2025 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 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 schedules are included as part of our press release and available on our website under the Investors section. With that, I will turn the call over to Andrew. Andrew?

Thank you, Natalie. Good morning, and thank you for joining us. We're pleased to report another outstanding quarter with adjusted operating income of $37.1 million or $0.89 per diluted share, driven by $31.2 million of pretax underwriting income, our best in company history. Year-to-date annualized return on equity continues to be excellent at 19.1%. Gross written premiums grew 18% for the quarter, and our 89.4% combined ratio, also a company best are a direct result of our diversified business portfolio and the strong execution of our Rule Our Niche strategy. We continue to generate profitable growth in areas less exposed to the cycles impacting the broader P&C market. Our portfolio mix, risk selection and operational agility are allowing us to grow where conditions are attractive and moderate where they are not, all while delivering top quartile returns maintaining our low volatility and not extending our average liability duration. Our growth this quarter is particularly notable as we pulled back again in global and E&S property in response to increasingly softening conditions. And we elected to hold our current liability exposure base roughly flat, in spite of an overall positive rate environment simply due to our view that the loss inflation continues to be a serious headwind, and we want to be selective in the areas we seek to grow our casualty business. In contrast, our growth in areas, including ag, credit and A&H demonstrates, again, that we are exceptionally well positioned to adapt and reallocate capital elsewhere in our portfolio to continue to grow underwriting income. We are built not just for today's environment, but for all cycles to deliver long-term outperformance. With that, I'll turn the call over to Mark to discuss our financial results in greater detail. Mark?

Thank you, Andrew. We had another strong quarter, reporting adjusted operating income of $37.1 million or $0.89 per diluted share and net income of $38.8 million or $0.93 per diluted share. Gross written premiums grew by 18% for the quarter, agriculture and credit, accident and health, captives and specialty programs contributed meaningfully to the growth this quarter. Net written premiums grew by 14% and our net retention through 6 months of 60.9% was in line with the prior year of 61.2%. Turning to our underwriting results. our second quarter combined ratio was 89.4% and included 1.4 points of cat losses, principally from convective storms in the South and Midwest. The non-cat loss ratio of 59.9% for the quarter improved 0.7 points compared to 2024 and is the best in company history. While in pockets, we observe auto liability and to a lesser extent, general liability severity trends, we also have units where auto and GL continue to emerge favorably. If for this reason, we're being selective on growing exposure in occurrence liability lines, our shorter tail lines, including property and surety continue to emerge favorably as does our professional portfolio. There was no net reserve development this quarter. Our reserve position continues to be strong as IBNR makes up more than 70% of our net reserves while the duration of our liabilities continues to shorten. In line with our conservative reserving philosophy, we maintained our margin above actuarial indications. The expense ratio of 28.1% improved 0.9 points over the prior year quarter and was in line with our expectations of sub 30s. The business mix shift continued to impact acquisition costs for the quarter, but was offset by 2 points of improvement over the prior year and our other operating and general expense ratio, which benefited from the scale of…

Thank you, Mark. Our outstanding second quarter performance reflects the strength of our diversified portfolio, our underwriting discipline in light of softening conditions across several lines and our ability to adapt quickly to evolving market conditions. We continue to grow with precision, targeting segments where our expertise, data and technology and underwriting discipline give us a durable advantage. We are seeing sustained momentum across several key areas of our business, including agriculture, credit and A&H, where our specialized knowledge and capabilities are key differentiators. As a reminder, in agriculture, we serve markets that have government subsidized programs, and we have constructed a well- diversified global portfolio. In this quarter, we continue to see opportunities in the U.S. dairy and livestock program, and we were able to close several new accounts. As we have built this portfolio, we have accumulated a depth of knowledge and insight that we believe is distinct. Similarly, we provided a product to this market that we also believe is unique, and we have now achieved the size to selectively utilize a proprietary hedging strategy to mute the potential volatility. Moreover, we are currently booking this portfolio at the most conservative outcome we can reasonably expect and so we are bullish about the future contribution as we continue to earn in the growth from ag. In credit, increased economic uncertainty is reshaping risk profiles, and we continue to experience favorable pricing and conditions. We believe that both the credit and agriculture markets offer opportunities for profitable growth. Our accident and health division started the year strong and the second quarter was a continuation of that trend, principally driven by a group captive offering to the medical stop loss market. Just as a reminder, we are not competing against companies focused on large accounts. Our focus is on…

[Operator Instructions] Our first question or comment comes from the line of Greg Peters from Raymond James.

Good afternoon, everyone. So Andrew, in your comments, you spoke a lot about where you're seeing growth and where you're pulling back, effectively outlining your cycle management strategy. Maybe you could spend some additional time talking to us about these key lines of growth, the ag business, the credit, the captives and the programs I think you said that you're assuming some higher loss picks just on like the ag business for -- to take out volatility risk -- maybe you can you just talk to us about how you're approaching the reserving side as you grow these businesses?

Yes. I mean, I think, Greg, thank you for the question. And yes, saying Look, I think that what I'd point to you, Greg, is that if you step back over the arc of sort of the last 5 years and particularly during our time as a public company, we have been very consistent in building and launching new businesses scaling and seeing great outcomes. And I don't think that in any instance we have done anything different with the businesses you just mentioned in terms of our reserving philosophy. I think that we take a -- overall, of course, as you know, we take a conservative position. I think that our bias towards lines that we believe have volatility will take even a more conservative position in the range, in particular, as we're getting going. And I think in this case, I just highlight ag because it's a line that has a bit of volatility. And so our picks reflect sort of the conservative end of that. And that's in addition to some of the things that we're doing to take the volatility out. I would also say to you that while we highlighted the growth areas that you just mentioned, there is no shortage of growth inside of the divisions that maybe as a headline don't have growth. So my point to what we're seeing in health care solutions or inside of our energy division with renewables, there's plenty of pockets of growth that just aren't rising to what we're drawing out in these calls. And so I think -- to your point, cycle management, it's not just cycle management. It's also what we're seeing in terms of loss inflation, and we don't want to lean into exposure growth where we see a very heavy dose of loss inflation. I think all of those things contribute and some of that isn't expressly visible in our comments, but sort of below the division level reporting.

Yes. That's good detail. I appreciate that. Just for my follow-up question, I'm going to go to the investment side. And I know in your comments, you talked about the alternatives and strategics just representing 5%. That's been a runoff for now -- for a while now. I think that percentage of the mix investments that's come down pretty substantially. But as we think about going forward, maybe you could talk about how you're looking at those results. And when you frame out projections, what are you thinking about for that line and for the broader investment income piece?

Great question. So let me just say this. Obviously, we're not happy with results at top to bottom on the growth in underwriting are outstanding, and we have one item where we didn't meet our own internal expectations nor your expectations. I think that, that is a bit of a red herring in terms of the performance of our business, and we think it's just not something that people should get distracted by because we have had volatility. I think that at the point that we took the company public, our alts were north of 20% of our portfolio. We have done everything that we said that we were going to do, which included that every dollar of investing was going to go into our core fixed income. Obviously, we've grown our investment base at a faster pace than we thought. We've been helped by a decent yield environment. And we've taken the right steps in managing down this portfolio. Mark mentioned in his prepared remarks, $30 million of redemption in the first half of this year. I feel great about what we've done. Am I happy with the volatility in this quarter? No, I'm not happy with the volatility in this quarter, but that's the way business is sometimes. And I'm very confident that we have roughly 30 positions remaining in this portfolio. We're on top of it. And I do suspect that there will be quarters ahead where the volatility will work to our advantage coming the other way. And otherwise, I don't think there's really much that we want to say about the alts because it's not part of our investment strategy going forward.

Our next question or comment comes from the line of Michael Zaremski from BMO Capital Markets.

Thanks for the comments on the alignment with some of your MGAs that you have ownership stakes in. I guess, we can see that from the stat disclosure that there's a number of MGAs that are aligned with Skyward. So is that -- just curious like if you can kind of shed more light on how those relationships came to be? And is there just any further color just so we just understand the inner workings of how aligned you are with those MGAs?

Yes. Thanks, Mike. Well, one is our longest-standing relationship and what I would consider to be -- while they're not formally part of our company, they're virtually that way, where we own a 20% stake and we have refusal rights and so forth. And by the way, that one relationship is nearly 2/3 of our total premium in that division, and they're compensated effectively the same way we compensate our underwriters. So that's just sort of good news. The second is a partnership that we launched with an MGA that is growing and developing where we are a direct investor. We have an active role there. We have special rights that benefit us. And quite honestly, where we outlined our philosophy with them before we entered into that partnership. And they viewed the distinctiveness of having that formal commitment from us as being something that was distinctive for them in terms of building their business. And so that's turned out to be a win-win. And that's really the principal 2 sources. And nearly all of our new program adds, I think minus 1 has come through that partnership. And so you can describe that how you wish, but 15% of our premium falls into the delegated authority, program administrator MGA kind of market, but those relationships are deeply strategic. They're not transactional. And I think they're quite different because we're, I think, as appropriately as cynical of delegating authority as any excellent underwriting company should be. And I've listened to the comments of some of our peers around this, and I think we would share all those views. That said, I think we've struck the right tone here and relationship with the folks that we do business with.

Okay. That's great disclosure and color. I guess switching gears on the pricing commentary. I believe you gave us pricing excluding property for the first time, right? And so I think we all know property pricing was decelerated, right? So I just want to make sure when we -- apples-to-apples, if we look at your last quarter or previous quarters pricing commentary that didn't include global property. Am I understanding that correctly?

You are -- Mike, you're absolutely correct. Only global property, all other property lines. And I think you've probably heard enough, Mike, from others and that property across the board is feeling some effects, the larger account into the markets a greater effect. Our net rate -- when we report out rate, we report out gross generally because effectively, the growth rate for us versus net rate tends to be equivalent. In global property, it's a little different because of the way we structure and use reinsurance, particularly fact, but our net rate was a negative high single digits pure rate for the quarter. And I will tell you that our pricing right now for global property is sitting roughly equivalent to where it was in the second quarter of '23, and it's come down fast. I will tell you that we -- if you were to draw the line at this particular moment, Mike, we feel incredibly good about the technical rate of that book and how that would perform at that rating level. But the way that rates have moved, it's like we'll be 1 month -- 1 quarter forward, and we might be having a different conversation. It's been that intense of a drop-off. So I think it's a very dynamic situation.

Okay. Got it. And lastly, on just headcount. If we look at the 10-K came out a while ago, but 10-K, I think headcount was, I believe, plus 15%, a little higher than -- or no, maybe it was low double digits, sorry, a little below '23's level. Would you high level, would you kind of expect headcount to decel a bit, but still kind of be close to 10%, if the year goes as planned? Or just kind of -- and I'm assuming that headcount also doesn't include some of those MGA ownership and MGA relationships that you don't wholly own.

Yes. I mean, one thing I would say to you is that our -- I mean, just again, our -- the proportion of the premium that's coming from delegated authorities has been knocking around between like 13% and 15%. So that's been relatively consistent. So while it was a higher growth quarter, there that it didn't really move sort of the overall portfolio. Look, I think that the one thing I would just highlight first is that our OUE, our controllable expenses, as Mark noted in his prepared remarks, is down 2 points from last year. It was our best ever. I think it was 13.1%, which is pretty darn good. Of course, I believe that we're getting economies of scale. I mentioned our use of technology. We believe that, that's an important contributor. Our vision for the way that we believe, in particular, on underwriting and claims and I'll start with underwriting is that we have the ability to multiply the productivity of our underwriters over time because of the things that we're doing in AI, which I would describe as -- if you want to use a football analogy instead of starting with a touch back on your own 30-yard line, your first offensive play is on your competitors -- in your opponent's 20-yard line. So you're kind of getting far down the field. And so that really means that our underwriters have the ability to be very productive. And that's where one of the places that we want to see a lot of leverage because great underwriters are hard to come by. So if we can amplify the ones we have. And that -- some of that's coming through right now. You're seeing that in our numbers right now.

Our next question or comment comes from the line of Alex Scott from Barclays.

First one I had for you guys is on the captive piece of the premiums that I was expecting to slow a little bit more because I figured maybe there was a little more sensitivity there to softening market, capacity is a little easier to come by, maybe less demand for captives. The growth was very good actually. And so I'm just interested if you could provide a little more color around what's driving that, if there is sensitivity to sort of the cycle in the market or if there's something more idiosyncratic about it?

Well, look, I think the thing that's driving it to be very direct is we have one -- and I talked about this in the past, Alex, that we have one very innovative property-focused captive in the automotive dealers market that uses on-the-ground weather technology to fundamentally change the risk management and controls and that proposition is a winning proposition. And so to be honest, in a market that effectively hasn't changed, I believe within that market, there's also a decent amount of moral hazard with what happens when property is damaged at a dealership that we've really -- I think we've built a proposition that is pretty darn powerful that is attracting, I would characterize as the very best sort of operators in that market, and that's been the principal driver. And it's great because there aren't a lot of really great examples of property captives out there in general, and this is now in its fourth year. And I would almost say that at this particular moment, we're really starting to stretch our legs on that. And it's a partnership that we have with a technology company, a company called Understory Weather that it's really -- I think it's very distinct and unique.

Got it. Okay. And I also wanted to ask about the A&H growth, can you just talk a little bit about exposure to things like medical cost inflation. We all see the health insurers and what they're saying, and there's been a fair amount of pressure there. On the other hand, I know you guys have a pretty differentiated and unique way that you're going about it at the small end of the stop-loss market in particular. So maybe you could just help us think through that and how you're being thoughtful about the growth into this, I guess, business that's faced a little bit of headwind.

Yes. Thanks, Alex. So I think just backing up the growth, as I think I mentioned in my opening remarks, was driven by the group captive portion of that business, obviously, a theme general theme emerging here. But I think that with the group captives, it really accelerates our approach to medical cost management and because the captives are directly tied to the performance. I think that you find the participants engaged and wanting to lean in. And so we've talked a lot about our reference-based pricing, which uses Medicare-based pricing. We talked about working outside the major PBMs. We actually have specific programs in place for very expensive drugs where we can get access to those drugs through special relationships. And all that's very dynamic given obviously what's going on in the world right now, but we feel like we're in a pretty darn good position. The thing that's really stood out, though, is that -- and I've talked about this in the past, but we absolutely are a company that when we see these extraordinarily large bills coming from the providers on behalf of our clients instead of what is the traditional process generally in the market of pay and pursue, like if there's a bill that comes through that's $2 million, oftentimes that gets paid and then there's an effort to negotiate afterwards. We are not doing that. We are negotiating the payment before we actually pay. And the foundation of that is oftentimes a legal foundation. And we've had great success, and it has been an immense benefit to our customers and to the members and the group captives. And so we have that formula. We think we have distinct IP around that. That's in addition to all the other interesting things that we do. But that's been part of our formula, and you can see it in the results to be direct.

Our next question or comment comes from the line of Meyer Shields from KBW.

Andrew, you talked about the limited growth in surety because of, I guess, declining infrastructure spend. Is any of that impacting loss activity on the surety side?

No. No. Surety is -- it's been unbelievable to be honest. We have an extraordinarily good team, very responsible. We've equipped them with fantastic tools. our claims leader in surety, our new claims leader, so we just went through a succession is a lawyer who has actually recently won a landmark case that the surety industry took note of. And quite honestly, I love our mix, right, I mean all the things that we did, we brought in a fantastic team from a competitor around fiduciary and judicial bonds. We've been growing that at a fantastic rate. We are -- the oil and gas market is -- in commercial surety is incredibly stressed due to some major losses. Reinsurers are backed away. In this quarter that we're in now, we're going to be announcing probably the most innovative product to hit that market, which I'm excited about, very dislocated market, but a product where we believe we have a solution that will not add unusual growth for -- unusual risk for us, but really provide a solution to the market. So I think we are incredibly smart and measured about how we're playing things. And I'll also tell you, Meyer, I believe that the federal funding, given sort of our key trading partners there, which they are a very small handful of distributors that really trade in that sort of that federal part of the market is going to bounce back the second half of the year. So 8% growth could return to something higher. Not to say that 8% growth in surety is not incredibly respectable to begin with. So all this is to say, feel great about it, and there's nothing on the loss front at this time that would indicate there's any sort of change in our performance.

If I can touch briefly on commercial auto. I know, Mark, you made some comments about, I think, severity. I was hoping to get a better handle on whether there were any reserve movements in commercial auto and whether the current book loss picks are changing for 2025?

Meyer, a good question. No. So loss picks are not changing. And my comments were relative to emergence indicated to indicated. So we are booked higher than indicated. So there are no change in loss picks, no. But what I will say to add to my commentary, look, the -- in the quarter, the favorable emergence in our E&S and surety and professional lines, frankly, was quite a bit more than I would have expected, the favorable. The pockets that we saw on severity really wasn't that unexpected, but didn't change our picks at all. Does that make sense?

It does.

Our next question or comment comes from the line of Andrew Andersen from Jefferies.

Could you expand a bit on the sentence being added to the amended filing?

Sure. It was exciting. So what happened is there was clear sentence within the opinion -- within the E&Y's opinion that merely refers to their control opinion. Somehow it was dropped in the K. So it's just an administrative thing. And actually, I'm kind of glad you did ask. It changes nothing with respect to the unqualified opinion. It's just a requirement that we file, refile the 10-K. And the only part that will be refiled will be the opinion in the financial statements, not the entire K.

And Andrew, just to give you some context about how this emerged because we are recently we became an accelerated filer, EY, we were selected to basically have an internal audit on EY auditing us, and that audit came back very well, but this was the one item that emerged.

Okay. And has this been -- I think you're still working on resolving the weakness throughout the year '25, has that been completed?

So another good question. Look, we won't get formal sign off, if you will, until EY issues their opinion for '25. Internally, we are working on the remediation with respect to the material weakness. We believe it's been remediated, but until the end of the year, when the opinions are actually issued, that will be at the point in time where that would be lifted.

Okay. Maybe switching just to the session rate. It was up year-over-year and quarter-over-quarter. I would have thought it would have been a little bit lighter year-over-year given less property growth. Anything kind of one-off there? And how should we think about that in the back half of the year?

Well, the way I think about it is the way we referred to it earlier. We've guided to about a 60% ratio. It can move around quarter-over- quarter due to the way we book reinsurance treaties at inception. So when we renew treaties, we ceded upfront as opposed to over time. And the second quarter is typically when you see a dip in the retention ratio. It's pretty much in line with what we've done year- over-year, quarter-over-quarter. So I wouldn't read anything more into that other than Andrew has talked a lot about captives. You do know that our retention ratio on captives is lower than I would say the non-captive or the property business. So as the captives grow, our retention ratio could move a little bit. But I feel good about the 60%.

And Andrew, that includes within A&H, where there's been a lot of growth. So there's some mix going on here, but we've said it plenty of times, we're gross line underwriters. We want to take more risk and where we have an opportunity to do that, we will. And an example of that is that as we've grown and diversified our surety portfolio, we've upped our retention. We came through a renewal this year. We upped our retention again because we weren't -- we don't want to swap dollars at sort of the bottom $1 million there. So you'll find, as you see our annual sort of disclosures around this that in general, we try to eat more of our own cooking where we can, but some of these things are more structural. In this case, really, it is the captive piece working its way through.

Our next question or comment comes from the line of Matt Carletti from Citizens Capital Markets.

Just a quick one. Andrew, you guys have always done a great job of bringing on teams and building out new niches. Since we spoke last quarter, you started an aviation unit, could you just tell us a little bit about the focus there. I know it's -- I think you referenced kind of underserved markets. So I'm going to go out on a limb and say it's not major airlines or anything like that. But what sort of risks are you looking at there?

Yes. No, we're not, as you described. So the background on this matter is actually a little more straightforward. We had in place a relationship with a program administrator focused on what I would describe as really kind of the small part of the aviation market, a lot of personal aircraft and such. So you can really think about sort of truly the noncommercial end of things. And we really, really like that team. And we had an inside line to effectively bring the business in-house by buying it. It was not a marketed process. It was a convenient means to create a process for over time for succession. And we did that with a belief as well that we could invest and grow the business. So the book we acquired circa $20 million. We probably believe that, that's something that we can grow and not deteriorate margins at all by probably up to like $50 million. And it fits really well with the kind of things that we look for. It's quite niche, and there's just a small number of competitors there, and we think we have a great team, and we're going to bring the Skyward, sort of the chemistry that we can bring to catalyze these things around technology and hopefully build a really great little business for ourselves.

Our next question or comment comes from the line of Andrew Kligerman from TD Cowen.

Nice to talk to you. Going back on the retention item. So it looks like over the last few years, you've been around, I don't know, low 60s in terms of retention. Part A, I'd like to understand the dynamic of the impact of captives on the retention. Maybe you could, in that area, give us a sense of how much you retain on those premiums? And then secondly, it's a little bit on the low end. Where do you see that 62-ish percent annually going over time?

That's a great question, and thanks for that. So we've been asked this question enough that we probably need to provide a bridge as part of our standing materials. But on the P&C side, which is the larger part of the captives, the -- generally speaking, the captives retain the first anywhere between $350,000 and $500,000. And you can think of from an 80/20 perspective, 80% of the premiums in that layer and then 20% is above that. And then to the extent that the captives have excess, then that basically is gross to us less what goes into our excess treaty. So that's why it really does skew us down. The other, as we've mentioned in the past, Andrew, is global property. We have a very large line, 2/3 of that is quota shared. And in this market right now that we're in, where the brokers are moving lots of these accounts to far longer stretches instead of like a very layered program like people talk about shared and layered, they're becoming these very long stretches. So we not only bring a large quota share capacity to that, but we also then will offer a line where we have to use fact to get to our net line. So those are dynamics that one is due to business mix. The other is due to market dynamics. So it's hard to answer your question. If you unpack those items, our net retentions in our business are kind of in the low 80s-ish kind of number, which isn't all that different than kind of my experience of what maybe a company that doesn't have our business mix might ordinarily look like.

That was very helpful. And then maybe shifting over, Andrew, you were talking about the casualty business and pulling back in some areas, but you were seeking to grow in some areas of casualty as well. I was kind of curious, what you think looks somewhat attractive at this stage?

Yes. Look, I think that within our E&S business, we've had just -- I mean the results are just outstanding and they continue to emerge outstanding, right? So -- but I think that on the sort of the primary GL side, where we compete, average premium is $45,000. So you can classify that however you want. I'd say it's a good market but you see these individual instances of just like really stupid behavior. And I ask all of our underwriters to send to me every week like examples of like things that are being done in the market that are dumb. And so you find like that I think that the E&S market on the primary GL, it's a pretty good market with occasional just craziness going on. The excess market, as you've heard from everybody, is really strong pricing. What we're trying to do is we're trying to make sure that we are writing the kind of occupancies and classes where we're steering clear from where we see the inflation trends really like the teeth of that biting away from sort of the E&S business, our energy business inside of our industry solutions has a long history of delivering very comfortable 80s combined ratios on a fully loaded basis. And they have systematically sort of added new areas. We've gone into renewables very successfully. We're looking at power now. And I feel very good. And those tend to be -- we're not seeing the kind of inflation trends there. And what we're staying away from are the places where we see the inflation trends because even if you can get 12, 13, 15 or more, and we see a lot of other companies in our competitive set who are growing in those markets. I don't want to have exposure growth in an area where, yes, you think it might be 8%, 9% or 10% loss inflation, but 3 years from now, it's 12%, 13%, 14%. So we're trying to steer clear from those things. And that's why when I made my comments, Mark made his comments, this is what we mean about being really selective. So we have certain places where our exposure growth in occurrence liability is actually quite substantial. And then we have other places where it's shrinking.

Our next question or comment comes from the line of Mark Hughes from Truist Securities.

Mark, the cat loss assumption either for the third quarter or the full year, given kind of the mix change, the deceleration in property, how should we think about cat losses?

Mark, I don't see any change to the guidance that we've given.

And that's what, roughly 2 points for the full year. Is that right?

Yes. That's right.

How about current accident year loss picks? A little bit better this quarter? Is this the right level on a go forward? Or how should we think about it?

You know what, Mark, no, we're not moving loss picks. It's just business mix.

Yes, Mark, I would just refer back to the guidance that we gave at the beginning of the year. We like that guidance, we're pleased that we're overdelivering against that guidance. We think that that's a sensible approach. But we just -- we would refer folks back to guidance. I know that some companies want to see perpetual raise in estimates. We're just -- we give you our guidance, and we'll do that on an annual basis, and we'll stick to that. And if we're performing well, we'll overdeliver. And up to this point, we've been over delivering.

Yes, very good. How about the -- when we think about the mix, I think you had -- Andrew referred to some lumpiness in the programs, and maybe some seasonality here. I'm saying maybe some seasonality in other businesses. Is there anything -- when we think about 3Q, yes, you talked about adding programs recently that influences the trend on written. Anything about 3Q or 4Q, we should keep in mind either tough comps or easy comps from last year's second half that might be useful to understand as we're looking at it?

Well, we had a good second half last year. We had a good first half last year as well. And we had a good first half of this year as well. So we've had good first halves and second halves. I wouldn't overplay the programs piece. I think that it should be kind of in that 15% of our portfolio. Again, one relationship makes up a big chunk of that. I mentioned the lumpiness because we added two programs in the course of the last three quarters, and you're seeing some of that crystallized in this quarter. Beyond that, I wouldn't really overplay it. I think that as we stand here now, I think that -- look, it's a very different market. You're observing that. Some companies are doing less well and other companies are doing better. Where I see our performance right now as I look at the third quarter, I think that the third quarter is going to be a very good third quarter. Fourth quarter, it's always -- you never know, right? Because it's all about kind of this desperation breed bad behavior as people are trying to close out their financial years. We're just going to stick to our knitting and do the things that we do well. But I think, say to you, generally, I think the third quarter should be a good third quarter. And it's not going to be driven by programs. It's going to be driven by the fact that we have the right businesses across the board that should be taking advantage of the market, taking advantage of the market and us being sensible in the places that are more challenged.

And I just -- I'll say one other thing, Mark. Like it's hard to focus on one individual thing. I believe that we are distinct in this marketplace, particularly a company of our size, where we are blessed with the portfolio that we have with no business that's more than 16% of our premium, if I remember correctly, and no business less than 8% of our premium. They're all at scale and our ability to sort of press down in different places is unique and distinct to us. And so while others might put up big growth on things like casualty because the rate is there. Well, you have to acknowledge that the rate is there because the starting point is problematic. And because the loss inflation is problematic where we're like, yes, we want to put up growth when those opportunities present, but we want to also be confident in the starting point, the loss inflation and all the other things that go along with that. So we don't feel pressure to grow only where pricing is offered, we have this portfolio that allows us to put down our capital in a way that many others don't.

I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Natalie Schoolcraft for any 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 third quarter earnings call. Thank you, and have a wonderful day.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.