Kinsale Capital Group's Q4 Earnings: Strong Performance in E&S Insurance

Kinsale Capital Group, Inc. (NYSE: KNSL) emphasized its commitment to stringent underwriting standards, efficient expense management, and selective growth strategies in the highly competitive excess and surplus (E&S) insurance market during its fourth-quarter earnings call for 2025. The company aims to optimize its operations in this dynamic industry through robust risk management practices.

Chairman and CEO Michael Kehoe reported a 26% increase in diluted operating earnings per share from the previous year. Additionally, Kinsale experienced a 1.8% boost in gross written premiums and a 7.1% rise in net written premiums compared to the fourth quarter of 2024. The company's combined ratio stood at an impressive 71.7%, with a full-year operating return on equity of 26%. Kinsale's book value per share rose by 33%, while float growth reached 23% year-over-year.

Chief Financial Officer Bryan Petrucelli highlighted a 27% increase in net income and a 25% boost in net operating earnings. The favorable reserve development and minimal catastrophe losses influenced the company's combined ratio, which included four points of positive prior-year loss reserve development. Surprisingly, catastrophe losses were less than one point, down from 2.2 points in the previous period.

The commercial property division, dealing with large and catastrophe-exposed accounts, demonstrated slower growth due to heightened competition. Excluding this unit, the company achieved a 10.2% increase in gross written premiums for the quarter and 13.3% growth for the year. Kehoe, during the Q&A session, noted increased competition from London and certain MGAs affecting the commercial property space, though he remained optimistic for stabilization in the near future.

Chief Underwriter Stuart Winston observed varying competition levels across underwriting groups. While professional lines and directors and officers (D&O) insurance faced soft pricing, growth persisted in smaller property lines and specific casualty areas, such as commercial auto and agribusiness. Submissions increased positively by 6% overall, with a 9% rise excluding the commercial property sector.

Kehoe highlighted Kinsale's focus on strategic cost management, with a year-end expense ratio at 20.8%, slightly up from 20.6% in 2024. Petrucelli emphasized efficient underwriting, with other expenses accounting for 10.5% of the year, showcasing improved cost management. Investment income surged by 24.9% year-over-year, with the float increasing to $3.1 billion, and new investments achieving an average yield of 5%.

Kinsale announced a $250 million share repurchase program alongside a dividend increase from $0.17 to $0.25, reflecting strong capital positions exceeding regulatory requirements. Technology and analytics are central to its operations, eliminating legacy software constraints and integrating AI-driven solutions for enhanced analytics and automation.

Kinsale continues its strategic expansion in homeowners and small business property insurance across various states while remaining cautious in data centers and certain markets. Founded in 2009 in Richmond, Virginia, Kinsale specializes in property and casualty insurance, focusing on complex and underserved risk categories with a network of wholesale brokers and independent agencies.

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