Kinsale Capital Group ((KNSL)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Kinsale Capital Group’s latest earnings call reflected a generally positive sentiment, highlighting robust growth in earnings per share and book value. The company showcased significant advancements in technology and management structure, although challenges persist in the Commercial Property segment with declining premiums and a higher expense ratio. Despite these hurdles, Kinsale appears well-equipped to navigate the landscape with a strong financial foundation and strategic leadership changes.
Strong Financial Metrics
Kinsale Capital Group reported impressive financial metrics, with operating earnings per share increasing by 24% and gross written premium growing by 8.4% over the third quarter of 2024. The company achieved a combined ratio of 74.9% and a nine-month operating return on equity of 25.4%, underscoring its financial strength.
Book Value Growth
The company experienced a notable increase in book value per share, which rose by 25.8% since the end of 2024. This growth signifies Kinsale’s ability to enhance shareholder value consistently.
Investment Income Surge
Kinsale’s net investment income surged by 25.1% in the third quarter compared to the previous year, fueled by the expansion of its investment portfolio. This growth in investment income contributes positively to the company’s overall financial performance.
Technological Advancements
Kinsale is making strides in technological advancements, including a complete rewrite of their enterprise system and the integration of AI for automation in business processes. These initiatives are expected to enhance operational efficiency and drive future growth.
Management Changes
Significant management changes were announced, with Brian Haney elected to the Board of Directors and assuming a new role as Senior Adviser. Additionally, Stuart Winston was promoted to Executive Vice President and Chief Underwriting Officer, indicating a strategic shift in leadership.
Commercial Property Premium Decline
The Commercial Property division faced challenges, with premiums dropping by 8% in the third quarter. However, this was an improvement from a 17% decline in the second quarter, suggesting a potential stabilization in this segment.
Expense Ratio Increase
The expense ratio rose to 21% in the third quarter from 19.6% last year, attributed to lower ceding commissions and higher reinsurance retention levels. This increase highlights the need for careful cost management.
Submission Growth Deceleration
Submission growth decelerated to 6% for the quarter, down from 9% in the first quarter, primarily driven by the Commercial Property division. This slowdown indicates a need for strategic adjustments in this area.
Forward-Looking Guidance
Looking ahead, Kinsale Capital Group remains optimistic about its growth prospects. The company reported a 24% increase in operating earnings per share and an 8.4% growth in gross written premium for the third quarter of 2025. Excluding the Commercial Property division, the overall growth rate was 12.3%. Kinsale’s disciplined underwriting and efficient business model continue to be competitive advantages, with net investment income rising by 25.1% in the quarter. The company’s float grew to $3 billion by the end of September 2025, up from $2.5 billion at the end of 2024. Kinsale aims to leverage its low-cost model to gain market share and deliver strong returns to investors.
In conclusion, Kinsale Capital Group’s earnings call painted a picture of a company with strong financial health and strategic initiatives aimed at future growth. While challenges in the Commercial Property segment persist, the company’s robust financial metrics and strategic leadership changes position it well for continued success.