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Investor Presentaiton

SKYWARD SPECIALTY - SUMMARY STATEMENTS OF OPERATIONS (1) Three months ended Year ended December 31 December 31 (Currency amounts in millions of US$) 2021 2020 2021 2020 Gross written premium (GWP) Net written premium (NWP) $224.2 141.0 $196.4 114.8 $939.9 529.1 $873.6 461.5 Net earned premium $133.8 $116.5 Commission and fee income 1.3 0.9 $499.8 3.9 $431.9 5.7 Less: Losses and LAE excluding LPT(2) (88.5) (78.4) (338.3) (302.4) Less: Policy acquisition costs (16.4) (12.8) (47.1) (37.0) Less: Other operating expenses (2) (23.1) (21.9) (91.4) (84.5) Underwriting result excluding LPT(2) $7.1 $4.3 $26.9 $13.7 Net investment income Net realized and unrealized gains Investment income 4.0 4.1 24.6 7.1 9.1 17.1 14.3 0.1 $11.1 $13.2 $41.7 $14.4 Interest expense (1.2) (1.2) (4.6) (5.5) Amortization expense (0.4) (0.2) (1.5) Income before taxes excluding unusual items $16.6 $16.1 $62.5 (1.4) $21.2 Income tax expense 3.4 3.5 13.0 Net income excluding unusual items $13.2 $12.6 $49.5 Impact of LPT, net of tax (12.7) (3.6) (12.7) Other net recovery of expenses, net of tax 0.8 3.6 3.7 1.3 Goodwill and other intangible impairment, net of tax (45.5) (2.2) Net income (loss) $1.3 ($32.9) $38.3 (45.5) ($74.6) Total other comprehensive (loss) income (2.1) 0.4 (7.6) 7.2 Comprehensive (loss) income ($0.8) ($32.5) $30.7 ($67.4) Other Select Financial Information Loss ratio excluding LPT(2) Expense ratio Combined ratio excluding LPT(2) Combined ratio excluding LPT and CAT(2) 4.4 $16.8 (47.2) 66.2% 67.3% 67.7% 28.5% 29.0% 26.9% 70.0% 26.8% 94.7% 92.8% 96.3% 95.6% 94.6% 92.2% 96.8% 95.8% Written Premium Growth Skyward Specialty is focused on being a disciplined gross line underwriter, earning an underwriting income on a gross and net basis GWP increased 14.2% in Q4 2021 vs. Q4 2020 and NWP increased 22.8% in Q4 2021 vs. Q4 2020; GWP increased 7.6% in FY 2021 vs. FY 2020 and NWP increased 14.6% in FY 2021 vs. FY 2020 GWP increase for the continuing business, which excludes business exited by the company as its portfolio was repositioned over the past two years, was 37.7% in Q4 vs Q4 2020 and 33.9% in FY 2021 vs FY 2020 We believe the growth of the continuing business, which is now 96.9% of the Q4 2021 and 92.3% of the FY 2021 GWP, are leading indicators of future margin expansion given the earnings profile of continuing business compared to those discontinued Underwriting Profitability Underwriting result excluding LPT was $7.1 million in Q4 2021 vs. $4.3 million in Q4 2020; $26.9 million in FY 2021 vs. $13.7 million in FY 2020 The combined ratio of 94.7% in Q4 2021 improved vs. to 96.3% in Q4 2020 despite higher catastrophe losses; 94.6% in FY 2021 compared to 96.8% in FY 2020 Strategic actions taken over the past year are reflected in the combined ratio excluding catastrophes of 92.8% in Q4 2021 compared to 95.6% in Q4 2020; 92.2% in FY 2021 compared to 95.8% in FY 2020 Investment Performance For Q4 2021 the investment portfolio performed solidly, generating $11.1 million of investment income in Q4 2021 and $41.7 in FY 2021 as the investment portfolio strategy has been enhanced Other Items Other comprehensive loss of $2.1 million ($7.6 million FY) relates to the after-tax change in the carrying value of the fixed income portfolio (1) FY2020 adjusted to conform to the presentation of the current period financial statements including restatement of comprehensive loss of $32.5 million and $67.4 million for the three months and year ended December 31, 2020, respectively, compared to the previously reported comprehensive loss of $30.4 million and $64.7 million for the three months and year ended December 31, 2020, respectively. For further details refer to the Skyward Specialty's consolidated financial statements with independent auditor's report as of and for the years ended December 31, 2021 and 2020 filed on SEDAR by the The Westaim Corporation. 15 (2) Does not include charges related to the Loss Portfolio Transfer ("LPT") transaction completed in Q1 2020, development subject to LPT or other unusual items. See Westaim's Q4 2021 MD&A for details.
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