Joe Coletti
Welcome to Innovators and Ideas, an interview series from RBC Capital Markets where we explore bold thinking and impactful leadership shaping the future of the financial sector today.
I'm your host, Joe Coletti. Today, we're on location at RBC’s Global Financial Institutions Conference here in Ne York, and joining us is Stephen Sills, CEO of Bowhead Specialty Holdings Inc., a specialty lines Insurance Group built on deep underwriting expertise and a clear vision for disciplined, sustainable growth.
Stephen, welcome to the podcast.
Stephen Sills
Thank you for having me.
Joe Coletti
So I want to start with your vision, which is where we start with most of our guests. When you set out to build Bowhead, how has your original vision then evolved and changed to where it is now?
Stephen Sills
Well, I think it's been a matter of executing on the vision. The vision hasn't really changed. In 2020 the market was pretty much in disarray. I think a lot of companies had been writing business for a lot of years at less than optimal price, and there was a large reshuffling of how business was placed. At that point in time large accounts that or accounts that bought large limits, had to go from maybe four carriers giving them 100 million in capacity to maybe 15 or 20 carriers giving them 100 million in capacity. We realized at that point in time that there was going to be an opportunity for a new company to come in there and fill in some of those holes. And we were extremely well received by the market.
So we had the vision originally that there was craft business, which is what I was talking about, that buys large limits, and what we call flow business, business that is generally small, technology enabled. So we waited a few years building our craft business like we set out to do, and then a couple of years ago, we started building, the first step was a product called Baleen, and Baleen was a company, a part of our organization, that enabled us to turn business around in minutes, be able to issue policies within minutes, restricted coverage, wholesale lines only, and that's been quite successful from a standing start, within a year, we did about $21 million in business.
We've now taken that technology and are applying it to smaller, standard type business. Started doing that with cyber business, and we're soon going to be doing it with small, primary casualty business, and that's what we've been planning to do, and we're very excited with the results.
Joe Coletti
So you mentioned the craft business, and we know you talked about your business being rooted in this craft underwriting, which we've seen before. How does that foundation continue to shape how you think about things like growth and risk and also differentiation in today's market.
Stephen Sills
Well, I think the important things to differentiate – exist today as they've existed for many years in the past. And I kind of view it as like my loose brick philosophy, whereas you're competing against somebody and their wall. How do you exploit the weaknesses in their wall? And that wall, the weaknesses can generally be in price, service, coverage, and when the marketplace is in transition, I think there's a lot of opportunities for larger, well established companies that that slip up, perhaps their service slips, perhaps their pricing overshoots the mark. Perhaps their coverage restrictions overshoot the mark.
So if you go out there and bring in high quality underwriters who have good broker relationships and design your products to make an underwriting profit in a moment of transition that we saw in 20, it's a good time to jump in and establish a beachhead. And we did that.
We originally partnered with American Family. We still have a great relationship with them, and also with Gallatin Point, that was a major capital provider to us. We thought it was very important we started out to establish ourselves with high quality paper. And there were two ways of going about it. Some people started out, raised a billion-plus of money, maybe got an A-minus rating, and started to write business. Well, we thought it was best to scale the business with just-in-time capital, but having a high quality partner in American Family, and they've been a phenomenal, fast moving partner for us, and enabled us to get into the business right away.
Joe Coletti
You touched on it a little bit, but I'm wondering, you know, when you're thinking about those kind of partnerships, what are you really looking for? How do you evaluate?
Stephen Sills
Well, you usually find it out in the first few minutes of talking, are the visions aligned? Is there a lot of trust? If I lay out I'd like to do X, they come back with meaningful questions on, have you thought about this? Have you thought about that? And if there's a real alignment on how we want to go forward, then I think it works well. If there's a combativeness at the beginning, it probably doesn't get any better later on.
Joe Coletti
Telltale sign it's not the right partner.
Stephen Sills
That's right.
Joe Coletti
So that's interesting. I want to pivot a little bit to the specialty markets, which, again, we know, you know, we're in an interesting world. There's a lot of macro forces at play. We have rates. It's very competitive in your space, as you've mentioned. Can we talk about some of the bigger tailwinds and headwinds that you're watching, over the next six to 12 months, and how sort of client needs, competition and kind of like the risk dynamics in particular, how they continue to evolve?
Stephen Sills
The marketplace is evolving. I think we've just come off of a year of no property losses or no major cats. We don't write property insurance, but I think there's a lot of competitors that are out there that that have banked a lot of money from a property premium, but they didn't have the catastrophe losses. I think they're looking to deploy that, and I'm not convinced that they're not going to use it to put it in the casualty world, perhaps to write business, which, by, you know, competitive nature may drive premiums down.
I think last year we were in a pretty hard market. I think we're in a hard market today, but I am cautious as to what could happen in the future, in terms of, will rates start to moderate. One of the major things that enabled us to get into the business was that people, as I mentioned earlier, had been reducing capacity.
What we haven't seen is people competing on capacity, where people who before did five and now want to put out 25 million in limits. We haven't seen that. So I think that will enable the marketplace to be stable. We have seen brokers create side car vehicles, which I think will create a bit of a downward pressure on the marketplace, but it remains to be seen how strong that pressure will be. But at the current time, I think we like what we see in the marketplace, and I think our relationship with brokers…we're overwhelmingly about, about 80% wholesale business that we do, and we think we have good support from the wholesale community because of how much we're dedicated to them, and so we're comfortable working with them going forward also.
Joe Coletti
When you think about the wholesale community, you talk about your dedication to them. What does that entail? How did you decide that that was, that was the way you were going to go with the business?
Stephen Sills
Well, I think the wholesale community understands the specialty business in a way that that aligns very much with the way we think about the business. There are certain lines like, for example, publicly traded D&O, where we do wholesale and retail in large publicly traded companies, fortune 100 companies for directors and officers liability, much of that business, particularly today, is in the retail community so that's not an issue. In the casualty space, we are 100% wholesale, and we don't write fortune 1000 type business, which is frequently in the retail domain. We also don't write primary auto. We're also not a writer of business that is overwhelmingly auto exposed, obviously, you know, considering we're very big in the construction business. Contractors own trucks, so we cover that on the excess basis, but we're not very much of a auto market. We think that's very difficult business. But the wholesale business, when you're very much wholesale-only business, particularly like we are in the casualty space, the wholesale brokers, we believe will support us more, because one thing we will not do is, if a retailer goes to a wholesaler, the wholesaler places the business with us, and the following year, the retailer says, Oh, so that's the market you used. I'll just go to them directly. There are some markets that will then recognize a broker of record letter and do business with the retailer. We will not do that. And because of that mutual support, we think it serves us and the wholesalers very well over time.
Joe Coletti
You know another thing I wanted to ask you about, post IPO Bowhead has obviously levers to grow. How do you balance that organic expansion with platform investment, and where does capital deployment create sort of the most long term advantage for your company?
Bettina Orlopp
Great question, because it goes back to the original vision question of, how are we going to build the business that’s sustainable, cross-market cycle. And we believe the answer is in the small, mid-size business. So the investment is in the platform that's going to leverage underwriting talent. So if you look at the large craft business we do, we do a major construction project, we've got underwriters, 20, 30 years of experience that spend days working on that kind of account. So we're not getting away from that.I don't think anybody's getting away from that anytime soon. So to leverage their talent, what we've done is invest in high quality technology that leverages that technology. So, for example, right now we have a system. This system happens to be called Kalepa and what it does is it prioritizes the pile for our craft underwriters. So the pile is, the top of the pile is from brokers who we have a history of doing business with, and types of risks that we have a history of success. So the underwriter doesn't waste their time working on things, looking at things from brokers that don't support us, or in lines of business that are not good for us.
Then when the underwriter opens up the file, all the third party data is all displayed there for them to make a decision. So we looked before we deployed that data that system. We said, all right, if we're going to spend the money on this, I turned to the lead underwriter in that space, I said, would you be able to do 20% more business if we deploy this? And his answer was, Yes. And we've continued to fine tune it, which has continued to help us grow the business.
Now, in the smaller business, if you're working on things that are five or $8,000 in premium, if the technology can help put it on the underwriters plate with everything of what they need right there, and suggested rates and things of what we can and can't do, and the underwriter can then do that risk in 15 minutes or less. That's a great point for us, and we don't need an underwriter who has 20 years of experience on doing that, we can do that with underwriters that have five years of experience doing that, which also helps us from a expense ratio standpoint.
Joe Coletti
You talked about digital underwriting platform. You embraced automation, obviously in some key areas. Are there more areas that you're looking at when it comes to transformation of the company?
Stephen Sills
We think last year, five years old, we did about, give or take, $800 million in business in a hundreds of billions of dollar world. We don't think we're running out of runway, just the beginning. And that small business, once again, between the technology in the specialty space, we think is a winner for the real long term.
Joe Coletti
So broker relationships, especially distribution platforms, we talked about how they're evolving quickly. How do you think about the ecosystem advantage when you think about Bowhead and kind of what defines future-proof partnership in your mind?
Stephen Sills
Well, it kind of goes back to the loose brick philosophy is, what are we delivering? Like, why does somebody need Bowhead when there's hundreds of other companies out there that they can approach to do business? That we need to be able to, answer the phone, to be able to give the kind of service that's better than anybody else's service. If we tell them we're going to give them a quote by nine o'clock tomorrow morning, the broker expects it, and we better deliver it, and that's what makes a difference. And when you have underwriters that have a lot of experience and who deliver that type of service, brokers want to continue to do business with them. That’s our competitive advantage.
Joe Coletti
But we also always talk about how this is a period of just general, immense change across the board. Thinking about your leadership for a minute, and the principles that have kind of driven you as a founder, as a CEO, what do you think is going to be required from leaders in this space to really navigate what's coming next?
Stephen Sills
Well, I think it's important that everybody in senior leadership, everybody throughout the company, doesn't look at their job as a task. They look at their job as how am I going to satisfy my brokers? How am I going to make an underwriting profit? And I've always liked the definition of culture as the thing that gets people to do what you'd like them to do when there's nobody around to tell them what to do. And so we have a very solid culture in our organization that drives people to fulfill what the vision is.
How do we help our brokers? How do we continue to write underwriting, continue to make an underwriting profit, and how do we all get along with one another and work really well together. I mean, we have, it's kind of a joke in the organization that we have, what's called a no jerk policy, is that when we go through the underwriting screens or bringing somebody in, and they all talk about, well, I've been told there's a no jerk policy and they like that. They like the idea that that for me to win, you don't have to lose. That I don't have to make you look bad, for me to look good. And I think when you continue that throughout the whole organization, from the top down, throughout the organization, everybody gets aligned on what we're trying to do, and works really well together, and therefore becomes a heck of a lot more competitive.
Joe Coletti
So I have a couple more questions. One, what drives you every day, personally? What gets you most excited about the business about the people that you work with.
Stephen Sills
I have a good time doing this. I really love it. We've got 300 people. We're a virtual organization. I mean, we have an office in New York and Chicago, and we ask people to come in, if you're in those metropolitan areas, to come in. We give you breakfast and lunch on those days, but we're a virtual organization, and we've got 300 people in 30 states and two countries. We just really work well together, and it's a lot of fun. It's a real joy.
Joe Coletti
I think that's a great philosophy. What keeps you up at night?
Stephen Sills
Well, I suppose that the marketplace could change far faster and, you know, that's a concern. People have a lot more capital, they just care about market share, and those sort of things, and lose sight of profitability. I'd be remiss if I didn't mention social inflation, the concern, could there be a misalignment at what's happening with rates versus what's happening with the tort system. But you know, it's things that we're on top of all the time, all the time with our, you know, our actuaries and our underwriters always talking about it. So, I think we've got that under control.
Joe Coletti
So I have one last question. So our global research team puts out this product called RBC Imagine, which is encouraging investors companies to think longer term, and they identify every couple of years five sort of transformational themes that are impacting everybody in every sector. As you think about the Insurance segment, what legacy norms do you see as potential bigger obstacles to future growth, but I think also, where do you see those bigger opportunities or forces emerging sort of faster in the space?
Stephen Sills
I think speed is a major competitive advantage that we have, and companies like us have. That to be able to react, to have actuaries that are looking over the horizon, not just looking at what's happened in the past, to have underwriters always thinking about what it takes to make an underwriting profit and, and I think that in some companies where you're not always thinking about that, you know that joke about the gazelle and the lion, and, you know, they're both being alert, and the lion’s chasing the gazelle, and the gazelle has got to keep moving. We got to keep moving and it's important for us to make mid-course adjustments when it's proper. If it means letting a piece of business go, because we can't get the premium we need. Sometimes, sometimes larger companies don't appreciate that, and they're more stuck in the process than they are the wisdom. And I think that when people are always aware that something bad can happen to them, if they don't make the right moves, you make better decisions, and so that's something we're always thinking about.
Joe Coletti
I think that's the perfect way to end, Stephen, thanks so much for being here. Thanks for being at the conference, and hopefully we'll have you back again next year.
Stephen Sills
Okay, thank you very much for having me.
Thanks for listening to Innovators and Ideas, an interview series from RBC Capital Markets. This episode was recorded on March 11, 2026. If you’d like to learn more about the topics discussed in this episode, or continue the conversation, please visit rbccm.com/insights or contact your RBC representative. See you all next time.
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