Kinsale Capital Q2 2024 Earnings Demonstrate Strong Growth

Kinsale Capital Group Inc. has reported a robust performance for the second quarter of 2024. The company experienced a 30.2% increase in operating earnings per share and a 20.9% growth in gross written premiums compared to the corresponding period last year.

The organization achieved a favorable combined ratio of 77.7% and a six-month operating return on equity of 28.8%. Kinsale’s success is attributed to its emphasis on smaller accounts within the Excess & Surplus (E&S) market, effective underwriting practices, and cost management facilitated by technology.

### Key Takeaways
– Operating earnings per share rose by 30.2% year over year.
– Gross written premiums increased by 20.9% compared to Q2 2023.
– The combined ratio was an impressive 77.7%.
– The six-month operating return on equity reached 28.8%.
– The company has adopted a conservative investment strategy, gradually increasing allocations to common stocks.
– The E&S market remains stable, characterized by strong growth in new business submissions and favorable rate changes.
– Kinsale has renewed its reinsurance program with minor adjustments.
– The firm is prudent in its reserving for future claims while maintaining a positive growth outlook.

### Company Outlook
– Kinsale aims to enhance earnings per share and book value while adhering to a minimum return on equity threshold.
– The company anticipates that the casualty rate environment will remain stable or improve.
– There is potential for distributing excess capital to shareholders through dividends or share buybacks.

### Bearish Highlights
– The property market is seeing heightened competition regarding larger placements.
– Loss trends are currently affected by inflation and the tort system, with estimates around 5-6%.
– The company remains cautious of potential large catastrophe events impacting the property market.

### Bullish Highlights
– Kinsale’s small property division is experiencing rapid growth.
– There are improvements in casualty rates for certain segments.
– The company is optimistic about continued growth in the E&S market, particularly within the commercial sector.

### Misses
– Catastrophe losses for the quarter were minimal, reflecting a missed opportunity for significant events.

### Q&A Highlights
– Kinsale’s growth strategy involves tailored pricing approaches specific to each division’s market conditions.
– The firm manages substantial catastrophe exposure through expert underwriting and a strong reinsurance strategy.
– Expense ratios are expected to remain stable in the short term, with potential long-term reductions driven by automation.
– Kinsale is focused on capital efficiency, aiming to optimize growth and book value by taking into account division growth rates, return on equity, and market conditions.

The earnings call showcased Kinsale Capital Group’s strong financial standing and strategic alignment to address market challenges and seize opportunities. With a conservative investment philosophy and focus on smaller accounts, Kinsale remains well-positioned to thrive in the E&S market. The company’s cautious yet optimistic outlook, coupled with its commitment to capital efficiency, bodes well for its future growth prospects.