Insurance Rates Are Rising – This CEO Says That’s a Good Thing

Specialty and casualty insurance provider Bowhead Specialty is debuting today on the New York Stock Exchange offering seven and a half million shares that priced at $17.00 a piece. Well, joining me now on set here at the Stock Exchange is the founder and CEO, Stephen Stills. Steven, welcome and congratulations. Thank you, Kristen. Why was now the right time to take your company public? Well, we're a growing company. We've been growing for the last several years since we started, and we needed more capital to grow. This was all primary capital. The market was cooperative and so we did it. How will you use that capital to grow the business? Well, we're continuing to grow in the three areas that we specialize in, which is casualty insurance, healthcare insurance for healthcare institutions and professional liability. What does that mean for the consumer, someone who might invest in your company but also turn to it for services? Well, we write about 120, participate in about 120 D&O towers for Fortune 500 companies. We ensure major hospital systems, we do casualty insurance on major construction projects. So ever since we opened our doors, we've been very welcomed by the brokers, the place insurance with us and we're happy to say that we're we're growing nicely. Interesting. So there's some talk in the market right now that we're seeing economic data slow down, yet the Fed's still indicating that they want to stay pretty firm on interest rates. How does that impact your company and soon your stock? Sure. Well, I can't tell you how it's going to affect the stock, but I can say that the insurance companies have been pricing insurance probably too cheaply over the last several years. And as a result, claims have been increasing. There's been social inflation, and because claims are going higher than insurance companies expected, they need to raise rates now. So we think that in this current environment, there'll be a lot of rates going up simply to cover the mistakes of the past. Interesting. In terms of your financial outlook, what are your projections for the first fiscal year as a publicly traded company? Well, we see ourselves growing coming up. Obviously, I'm not supposed to say how much I expect us to grow, but I do expect us to grow. Interesting. And we're awaiting at the opening trade for the stock. You're joining me shortly after the opening bell. What does a successful first day of trade look like to you? We're looking to see the stock go up. We know that the stock was way oversubscribe. We know that we were the first company I believe in 13 years, the first insurance company in 13 years to price above the range. We the range was 14 to 16, we priced at 17. But there still seems to be very strong demand. We were way oversubscribed. Interesting. And so there's no market concern to you right now in terms of where shares could head? No, I'm not worried. I mean the main thing is, is the shares should follow the business that we're writing. We're writing good business. As long as we are continuing to build a quality company, I think the stock will do well. I'm in your different offerings as you mentioned there, which one is seeing the highest growth and why? The highest growth in terms of what in terms of the segment you mentioned you offer specialty casualty business. Casualty business was probably some of the biggest mistakes that the industry had with mispricing commercial auto insurance. Hospitals, too, we're seeing with a lot of really serious claims from abuse and sexual molestation claims have gone into the hundreds of millions of dollars and I don't think the insurance industry price their product to deal with that. Interesting. All right, Well, we appreciate you joining on the IPO. We'll be following the trade as it gets ready to debut here at the New York Stock Exchange. That's Stephen Sills, CEO of Bowhead Specialty. Thank you. Thank you for having me.

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