Kinsale Capital Group NYSE: KNSL reported strong profitability in the first quarter of 2026 despite a slight decline in gross written premium, as management pointed to competitive conditions in parts of the excess and surplus (E&S) market—particularly large commercial property—alongside continued momentum in small to mid-sized risks.
Quarterly results: earnings growth and a 77.4% combined ratio
Chairman, President, and CEO Michael Kehoe said diluted operating earnings per share increased 37.7% versus the first quarter of 2025, producing an annualized operating return on equity (ROE) of 24%. Kinsale’s combined ratio for the quarter was 77.4%.
Chief Financial Officer Bryan Petrucelli added that net income and net operating earnings increased 26.1% and 36.3%, respectively, year over year. He said the combined ratio included 4.5 points of net favorable prior-year loss reserve development, compared with 3.9 points a year ago. Catastrophe losses were “less than 1 point” in the quarter, compared with 6 points in the first quarter of last year.
Petrucelli also highlighted expense trends. The expense ratio was 21.1% versus 20% in the prior-year quarter, which he attributed to a higher net commission ratio tied to higher reinsurance retentions. He said the “other underwriting expense” ratio—a measure he described as the best indicator of operational efficiency—was 10.3%, compared with 10.5% in the first quarter of 2024.
Premium trends reflect reinsurance mix and property headwinds
Kinsale reported gross written premium down 0.5% year over year, while net written premium increased 5.6%. Kehoe said net written premium grew faster than gross written premium because lines with less reinsurance participation continued to grow. Petrucelli similarly said the higher retentions represented a favorable economic trade-off, with the higher net commission ratio “more than offset by greater underwriting and investment income.”
Kehoe said Kinsale expanded quarterly disclosure in its 10-Q to show gross written premium by underwriting division, complementing its annual 10-K disclosures. He described the largest headwind as coming from the large commercial property division, which focuses on “larger layered property accounts” and is facing “an abundance of competition and falling rates.” Excluding the commercial property division, Kehoe said gross written premium grew 6% in the quarter.
Management also emphasized a shift toward smaller accounts. Kehoe said the company is seeing its “largest headwind to growth among larger accounts,” and reiterated a focus on smaller transactions where margins remain “robust.” Average policy premium was $12,200 in the quarter, down from $14,200 in the first quarter of 2025.
Market conditions: competitive large property, opportunities elsewhere
Chief Underwriting Officer Stuart Winston said competition remains elevated in several areas, including “large, shared, and layered placements in commercial property,” as well as certain professional lines, management liability, and public entity. Winston also noted that over the last quarter the company has seen “more aggressive competition in some long-tail lines like Construction.”
At the same time, Winston outlined areas where Kinsale saw favorable conditions and growth during the quarter. He cited opportunity in property lines such as small business property, ocean marine, agribusiness property, and personal insurance. On the casualty side, he pointed to favorable markets and growth in agribusiness casualty, allied health, general casualty, health care, entertainment, and products liability.
On pricing, Winston said Kinsale’s combined pricing trend aligned with the Amwins Pricing Index, which showed a 3.3% rate decrease versus a 2.7% decrease in the fourth quarter of 2025. While he said large commercial property continues to face strong rate pressure, he added that other areas—including small business property, ocean marine, and certain casualty lines such as commercial auto, excess casualty, and general casualty—present “opportunities for meaningful rate increases.”
Operating momentum: submissions, quotes, and bind orders increase
Kehoe said the company saw continued new business activity gains in the quarter, with new business submissions up 6%, new business quotes up 8%, and new business bind orders up 9%.
Winston added that submission growth was similar to the fourth quarter of 2025, but that the commercial property division—which handles large shared and layered deals—has seen declining submissions. Excluding that division, Winston said new business submissions increased 9% in the quarter.
When asked about how to interpret the new disclosure around quotes and bind orders, Kehoe said investors have sought more granular metrics for years, but cautioned that the more detailed the data, “the more volatile those numbers are.” He said he would not “overthink” short-term changes in a 90-day period and encouraged investors to focus on how conditions vary across Kinsale’s 25 divisions.
On retention, Winston said new business and renewal hit ratios have been consistent “quarter to quarter for a long time,” with no major change.
Reserving and reinsurance: no one-off loss ratio items; treaty renewal ahead
Chief Actuary and head of data and analytics Salmaan Allibhai said there was “nothing out of the ordinary” affecting the accident year loss ratio and “no one-time adjustments.” He noted a degree of seasonality, saying the first quarter is “typically” a bit higher than other quarters.
In personal lines, Winston addressed a question about a decline in E&S homeowners premium, saying the high-value market is seeing increased competition. He said the limits Kinsale is offering are lower, which is reducing average premium, while he added the company is still showing what he described as good growth in its personal insurance division.
On reinsurance, Kehoe said the company reviews retentions and limits annually and has raised retention multiple times over its 17-year history. However, he said management could not commit to how treaties would be placed this year and noted the renewal date is June 1.
Investments and technology: rising investment income and AI initiatives
Petrucelli said net investment income increased 26.5% year over year in the first quarter, driven by growth in the investment portfolio from strong operating cash flows. He said Kinsale’s float—primarily unpaid losses and unearned premium—grew to $3.3 billion at March 31 from $3.1 billion at the end of 2025.
He reported an annual gross return of 4.5% for the quarter compared to 4.3% last year, and said new money yields are averaging about 5% with an average duration “slightly above four years” on the fixed maturity portfolio.
Kehoe also emphasized technology as a competitive differentiator, describing Kinsale’s long-running focus on technology and analytics as a “core competency” and pointing to “extensive use of AI models” to drive automation in underwriting and claims handling. He said the company has begun incorporating “various AI agents” into its enterprise system and believes the lack of legacy software positions it to adopt innovations more quickly.
In the Q&A, Kehoe reiterated that the company manages lines to a “low 20s return on equity or greater,” and said he would not expect a “meaningful deterioration” from the quarter’s 24% ROE. He added that Kinsale aims to grow but will subordinate growth to profitability if necessary.
About Kinsale Capital Group NYSE: KNSL
Kinsale Capital Group, Inc NYSE: KNSL is a specialty property and casualty insurance company headquartered in Richmond, Virginia. Established in 2009, the company focuses on underwriting complex and underserved risks across the United States. Kinsale operates through a network of wholesale brokers and independent agencies, offering tailored coverage solutions for a range of niche industries.
The company's product portfolio includes general liability, business auto, professional liability, environmental liability, inland marine, cyber liability, and other specialty lines.
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