Kinsale Capital Group, Inc. Q3 FY2025 earnings call

Management Changes - Brian Haney elected to the Board of Directors and announced retirement, becoming Senior Adviser; Stuart Winston promoted to Executive Vice President and Chief Underwriting Officer. ### Financial Results - Q3 2025 operating earnings per share up 24%, gross written premium up 8.4%, combined ratio 74.9%, 9-month operating ROE 25.4%, book value per share up 25.8%, float up 20%. ### Market Conditions - E&S market steady and competitive, growth varying by segment; Commercial Property saw premium drop, but excluding it, growth was 12.3%. ### Underwriting Model - Disciplined underwriting and low-cost business model is a competitive advantage. ### Investment - Net investment income up 25.1% in Q3 2025, investment portfolio grew from strong operating cash flows.

In the third quarter of 2025, Kinsale's operating earnings per share increased by 24% and gross written premium grew by 8.4% compared to the third quarter of 2024. The company posted a combined ratio of 74.9% for the quarter and a 9-month operating return on equity of 25.4%. Book value per share has increased by 25.8% since year-end 2024, and float has increased by 20%. The Commercial Property division saw premium drop by 8% in the third quarter, while excluding this division, the overall growth rate was 12.3%. Revenue contribution details: Commercial Property had a specific performance, and excluding it, other segments contributed differently to the overall growth.

Kinsale is confident in continued growth prospects. Expect Commercial Property rate declines to stabilize. Overall optimistic about future results with opportunities across various segments despite market competition.

Market Competition - Increased competition from new MGAs and other insurance companies, which could impact market share. ### Alternative Capital - Concerns about alternative capital entering the property market, potentially leading to irrational price structures.

Q: Comment on future opportunities outside of the Commercial Property segment?

A: Brian Haney stated there are opportunities across the whole book, including in Transportation, Agribusiness, Casualty, Personal Lines, etc.

Q: Can you give color on new tech innovation and implementation into the business?

A: Mike Kehoe mentioned Kinsale built its own enterprise system, started a target state architecture project (rewrite of the enterprise system), and is using new AI tools in IT, underwriting, and claims to drive automation.

Q: Were there any changes in assumptions in the construction liability segment that affected current year loss pick?

A: Michael Kehoe said there were normal variability, losses continue to come in below expectations, and they are cautious with reserving.

Q: Talk about the Excess Casualty segment, growth opportunities and loss trends?

A: Stuart Winston said there are good opportunities in Excess Casualty, rates are holding strong, and they focus on lead or first $10 million placements, with some pressure at high excess attachment points but not where they play.

Q: Comment on Casualty market pricing?

A: Michael Kehoe said it varies by division, some segments like Excess Casualty, Social Services, Allied Health Group are strong, while there is moderate competition in long-tail Casualty lines.

Q: Is there a consideration to rethink profit commissions to broker partners in more competitive times?

A: Michael Kehoe said they are not considering a change, as their business model focuses on controlling underwriting and providing best customer service.

Q: Breakdown of net reserve release?

A: Michael Kehoe said most releases have been disproportionately from first-party short-tail business like property.

Q: Comment on competitors in micro and small business?

A: Michael Kehoe said there are more competitors now, including hundreds of MGAs that have started in the last several years.

Q: Thoughts on property rate environment?

A: Brian Haney characterized it as rates going down so fast that they are starting to normalize, with the second order derivative turning positive, not based on seasonal mix.

Q: Submission rate excluding Commercial Property?

A: Brian Haney said it's closer to around 9% excluding the Commercial Property division.

Q: Reason for increased share repurchases?

A: Michael Kehoe said it's due to generating excess capital from mid-teens ROEs and high single-digit growth, with first goal being to grow the business and secondarily considering share repurchases.

Q: Concern about alternative capital entering the property market?

A: Brian Haney said there is a concern, but referred to Q3 dynamics, with uncertainty remaining.