Kinsale Capital Group Q2 Earnings Call Highlights

Key Points

• Kinsale delivered strong Q2 profitability, with diluted operating EPS up 15.9% year over year to $5.54 and an annualized operating ROE of 24.4%. The company also posted a solid 75.5% combined ratio, supported by favorable prior-year reserve development.
• Top-line premium growth softened as Kinsale prioritized underwriting discipline over expansion in a competitive E&S market. Gross written premium fell 5% year over year, with the sharpest pressure in Commercial Property, where rate declines and broader terms created a buyer’s market.
• Investment income, technology, and buybacks remain key supports for results and capital allocation. Net investment income rose 19.9%, the company highlighted increased use of analytics and AI, and it boosted its share-repurchase authorization by $250 million to $337 million total.

Kinsale Capital Group NYSE: KNSL reported higher second-quarter operating earnings and continued underwriting profitability despite what management described as a competitive and softening excess-and-surplus, or E&S, insurance market.

Chairman, President and Chief Executive Officer Michael Kehoe said diluted operating earnings per share rose 15.9% from the second quarter of 2025 to $5.54. The company generated an annualized operating return on equity of 24.4% and posted a combined ratio of 75.5% for the quarter.

Gross written premium declined 5% year over year, while net written premium fell 1.4%. Net earned premium increased 8.9%. Kehoe said the company is prioritizing underwriting profitability over top-line expansion as competition varies substantially by market segment.

Commercial property pressures weigh on premium

Kinsale said competition was most intense in its Commercial Property Division, which writes larger layered property accounts. Kehoe said the market has experienced material rate declines and broader coverage terms, describing the environment as a buyer's market.

As a result, Kinsale is writing a smaller volume of business in that division. Excluding Commercial Property, gross written premium grew 3.7% in the second quarter and 4.8% in the first half of 2026.

Chief Underwriting Officer Stuart Winston said the company will not pursue growth that compromises returns. He cited favorable underwriting conditions and meaningful growth in excess casualty, commercial auto, entertainment, environmental, agribusiness casualty and energy. Construction and certain professional lines, meanwhile, remained among the areas facing softer conditions.

New-business submissions increased 6% during the quarter. Excluding Commercial Property, submissions increased 8%, with more than half of Kinsale's divisions recording double-digit submission growth. Winston said the strongest activity came from small and medium-sized accounts, particularly those with premiums of $25,000 or less. Kinsale's average premium is approximately $12,000.

The company said its combined pricing trend was in line with the MS Amlin pricing index, which showed a 5.9% decrease in the second quarter, compared with a 3.3% decrease in the first quarter.

Underwriting results and reserve position

Chief Financial Officer Bryan Petrucelli said net income increased 31.1% year over year, while net operating earnings increased 13.3%. The 75.5% combined ratio included 4.5 percentage points of favorable prior-year loss reserve development, compared with 3.9 points a year earlier. Catastrophe losses accounted for 1.3 points, versus less than one point in the 2025 quarter.

The expense ratio rose to 21.7% from 20.7%, reflecting a higher net commission ratio associated with larger reinsurance retentions. Petrucelli said the increased retention represented a favorable economic trade because the higher commission ratio is more than offset by increased underwriting and investment income.

Other underwriting expenses, which Petrucelli characterized as a measure of operating efficiency, declined to 10.3% from 10.6%.

Chief Analytics and Technology Officer Salmaan Allibhai said losses came in below management's expectations during the quarter, consistent with recent quarters. He attributed the results to normal variability and business mix rather than a specific unusual factor, and said reserves remain as conservative as they have been in the company’s history.

On casualty trends, Allibhai said Kinsale estimates loss-cost trends in the mid-single digits, varying by line of business. He said the company’s concentration in smaller accounts and lower limits has limited its exposure to social inflation relative to some other insurers.

Investment income, technology and capital allocation

Net investment income rose 19.9% from the prior-year quarter, driven by growth in the investment portfolio from operating cash flow. Kinsale's float, largely consisting of unpaid losses and unearned premiums, reached $3.4 billion at June 30, up from $3.1 billion at the end of 2025.

The company reported an annualized gross investment return of 4.5% for the first half, compared with 4.3% a year earlier. New-money yields averaged about 5.25%, and the fixed-maturity portfolio had an average duration of roughly 4.25 years.

Management also highlighted investments in analytics, automation and artificial intelligence. Allibhai said Kinsale has consolidated its analytics and technology operations into one team, using its 17 years of company data, third-party data sources, statistical models and machine-learning tools to refine underwriting and pricing.

The company has deployed AI tools across analytics, technology, underwriting and claims functions, including functionality integrated into proprietary underwriting worksheets. Winston said workflow improvements and technology upgrades have helped Kinsale maintain or improve service levels while expanding its product and distribution capabilities.

• Kinsale introduced nine product offerings or enhancements so far in 2026.
• Five additional launches were described as imminent, with another 10 in the pipeline.
• The company appointed 24 new wholesale brokers and 176 new retail brokers to Aspera, its in-house broker for most personal lines products.

Kinsale expanded its stock-repurchase authorization by $250 million, bringing total current authorization to $337 million. Kehoe said repurchases are the company’s principal capital-allocation strategy while growth is more limited, though he said expanding growth would remain the first priority as market conditions improve.

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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