Kinsale Capital Group Q4 2025 Earnings Call - Expense and AI-driven productivity sustain high ROE as large commercial property softens

Carly, Conference Operator: Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kinsale Capital Group Q4 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Before we get started, let me remind everyone that through the course of the teleconference, Kinsale’s management may make comments that reflect their intentions, beliefs, and expectations for the future. As always, these forward-looking statements are subject to certain risk factors, which could cause actual results to differ materially.

These risk factors are listed in the company’s various SEC filings, including the 2023 annual report on Form 10-K, which should be reviewed carefully. The company has furnished a Form 8-K with the Securities and Exchange Commission that contained the press release announcing its fourth quarter results. Kinsale’s management may also reference certain non-GAAP financial measures in the call today. A reconciliation of GAAP to these measures can be found in the press release, which is available at the company’s website at www.kinsalecapitalgroup.com. I will now turn the conference over to Kinsale’s Chairman and CEO, Mr. Michael Kehoe. Please go ahead, sir.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Thank you, operator, and good morning, everyone. Bryan Petrucelli, our Chief Financial Officer, Brian Haney, our President and COO, and Stuart Winston, our Chief Underwriter, are joining me this morning for the call. In the fourth quarter, 2025, Kinsale’s diluted operating earnings per share increased by 26%, and gross and net written premium grew by 1.8% and 7.1%, respectively, over the fourth quarter, 2024. For the quarter, the company posted a combined ratio of 71.7% and a full-year operating ROE of 26%. Our book value per share increased by 33% since the year-end 2024, and our float increased by 23%. Overall, E&S market conditions in the fourth quarter continued to be competitive, with the level of competition and our growth rate varying from one market segment to another.

As we have noted for the last year or so, much of the recent headwind to Kinsale’s overall growth rate is due to the shrinking of our commercial property division, which writes larger catastrophe-exposed accounts and operates in one of the more competitive segments of the market. This decline in premium comes after several years of extraordinary growth. Excluding the commercial property division, Kinsale had growth in gross written premium of 10.2% for the quarter and 13.3% for the year. Given the success of Kinsale’s disciplined underwriting and low-cost business model over the last 17 years, we have confidence in our ability to generate best-in-class returns and growth while maintaining a strong balance sheet with conservative loss reserves. It’s always important to maintain underwriting discipline, but especially so when the market competition is intense.

Likewise, it’s in a more competitive moment in the insurance cycle that Kinsale’s enormous expense advantage is most impactful. Kinsale last year had an expense ratio under 21%, and many of our competitors tend to run in the mid-30s or higher, some even above 40%. Given the customer’s focus on low cost, it’s hard to overstate the significance and the durability of this advantage. Another competitive advantage that we speak about frequently is technology. We consider tech to be a core competent, competency of ours, alongside underwriting and claim handling. We own our one core operating system, which we custom-built for our operation, and we don’t have any legacy software going back 20, 30 years, or longer.

In addition, we have spent years developing our analytics capabilities with a growing team of actuaries and data scientists who use our data and data we acquire to discern insights and improve decision-making and profitability in our business. Further, over a year ago, we began a company-wide push to introduce and promote the use of AI in our operation. We are making consistent use of these tools in our technology and analytical teams. We are also using AI extensively in other areas of the company, particularly underwriting. Every employee in the company has access to an enterprise AI license, and we have dozens of bots and agents being used every day in our business process, yielding interesting productivity gains, even at this early stage.

Many of these AI innovations will be quickly integrated into our custom enterprise system, and the continued gains we expect for both productivity and improved segmenting and pricing of risk are material. Lastly, given our recent growth rate, we are returning more excess capital to shareholders, mostly through the $250 million buyback authorization that we announced in December. Subject to a variety of considerations, we generally expect to deploy this authorization over the next year or so. Likewise, we announced an increase in our quarterly dividend to $0.25, up from $0.17. Note that even with this activity, Kinsale still maintains a conservative level of capital well above that required by both regulators and rating agencies. And with that, I’ll turn the call over to Bryan Petrucelli.

Bryan Petrucelli, Chief Financial Officer, Kinsale Capital Group: Thanks, Mike. As Mike just noted, we continue to generate great bottom-line results with net income and net operating earnings increasing by 27% and 25%, respectively, quarter-over-quarter. 71.7% Combined Ratio for the quarter included four points from net favorable prior year loss reserve development, compared to 2.6 points last year, with less than a point in cat losses this year, compared to 2.2 points in the fourth quarter of last year. Gross written premiums grew by 1.8% for the quarter, while net written premiums grew by 7.1%. The growth in net written premiums was higher than gross due to an increase in the retention levels when we renewed our reinsurance program at June first of last year.

We produced a 20.8% expense ratio for the full year, compared to 20.6% last year. The other underwriting expense piece of the ratio, which is the best measure of the operational efficiency of the business, was 10.5% for the year and about a half point better than 2024. On the investment side, net investment income increased by 24.9% in the fourth quarter over last year, as a result of continued growth in the investment portfolio generated from strong operating cash flows. Kinsale’s float, mostly unpaid losses and unearned premiums, grew to $3.1 billion at the end of 2024, up from $2.5 billion at the end of 2024.

The gross return for 4.4% for the year and consistent with last year. New money yields are averaging around 5%, with an average duration of 4 years on the company’s fixed maturity investment portfolio. And lastly, diluted operating earnings per share continues to improve and was $5.81 per share for the quarter, compared to $4.62 per share for the fourth quarter of 2024. And with that, I’ll pass it over to Stuart Winston.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Thanks, Brian. The level of competition in the E&S market differs by underwriting group, with some areas experiencing more competitive pressure than others. We continue to see soft pricing around D&O and some other professional lines, and while large, shared, and layered commercial property lines experienced heightened competition during the quarter, we were able to realize growth in other property lines, like small business property, high-value homeowners, inland marine, personal insurance, and agribusiness property. Casualty remained a strong area of growth for the quarter. This growth was led by our commercial auto, agribusiness casualty, general casualty, entertainment, and excess casualty divisions. We will continue to explore new products and enhance our current offerings within these growing areas to capitalize on opportunities throughout the year. Overall, new business submission growth, excluding unsolicited submissions, was up 6% for the quarter.

We continue to see a decline in new business submissions in commercial property, in the commercial property division that handles large, shared, and layered deals. However, most divisions are still seeing submission growth, with about half of those seeing double-digit growth. Excluding commercial property, new business submissions were up 9% for the quarter. While our lines of business are experiencing varying levels of competition and pricing pressure, the combined pricing trend is in line with the Amwins Index, which showed a rate decrease of 2.7% compared to 0.4%, compared to a 0.4% decrease in Q3. Although large commercial property placements continue to experience strong rate pressure, other property lines like small business property and inland marine, and casualty lines like commercial auto, excess casualty, and general casualty, present opportunities for meaningful rate increases.

We remain confident about our position and opportunity in the E&S market. Our low-cost model provides a durable advantage that helps us remain competitive in both hard and soft market environments. This advantage, combined with our broad risk appetite, best-in-class service standards, fast turnaround times, and the ability to quote more than 70% of all new business submissions, will enable us to gain market share and deliver strong returns for our investors. And with that, I’ll hand it back over to Mike.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Thanks, Stuart. Operator, we’re ready for any questions in the queue now.

Carly, Conference Operator: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We’ll pause for just a moment to compile the Q&A roster. Your first question comes from Michael Phillips with Oppenheimer.

Bryan Petrucelli, Chief Financial Officer, Kinsale Capital Group: Thank you, and good morning. I guess I wanted to talk on the, on the commercial property, down pretty hard this quarter. Was that a change from what you were seeing last quarter? Or maybe did I misinterpret? I thought you were talking about an inflection there. Was there something else that happened that caused that to go down harder than what you said last quarter? Thanks.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yeah, it seemed, I think what we mentioned in, the last call in September, October, it seemed like it was stabilizing a little bit, and then, November, December, there was an influx from London, and some MGAs in that large layered and shared space that, caused the deceleration in growth.

Bryan Petrucelli, Chief Financial Officer, Kinsale Capital Group: Okay. And I guess any thoughts on how that might proceed, at least for the next, I don’t know, foreseeable future this year? Is that gonna stay where, where you saw in November, December?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: You know, this is Mike. It ebbs and flows, you know, month by month, but I would just say, in general, at some point after the next couple of quarters, it should stabilize.

Bryan Petrucelli, Chief Financial Officer, Kinsale Capital Group: Okay, thanks. Thanks, Mike. Stuart, last quarter, you said,

Speaker 7: ... The excess casualty rates were holding strong, and you mentioned it again this quarter. I don’t know how much of your commercial casualty is commercial auto. Can you say what percent that is? And maybe a little bit more on what you’re seeing. And you said commercial auto rates were moving up. What are you seeing there in terms of the loss trends, and again, just how much of that is commercial auto in your excess casualty?

Stuart Winston, Chief Underwriter, Kinsale Capital Group: It’s actually a pretty small percentage in our actual excess casualty book. Even with our commercial auto division, without getting into the details, it’s actually, there’s no primary auto, and it’s a small portion of excess wheels.

Speaker 7: Okay. Yeah, thank you. Yeah, that’s all I had. Thank you very much.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Thanks, Michael.

Carly, Conference Operator: Your next question comes from Andrew Anderson with Jefferies.

Andrew Anderson, Analyst, Jefferies: Hey, good morning. On the submission figure that you quoted of up 6%, I think you added, excluding unsolicited submissions. Is that like for, like for the 6% in 3Q, or is that a different methodology now?

Stuart Winston, Chief Underwriter, Kinsale Capital Group: That, that’s the same.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: That’s the same.

Andrew Anderson, Analyst, Jefferies: Okay, thanks. And then, you know, could you maybe just talk about what you’re seeing in business retention ratios? Not so much the retention for versus reinsurers, but, you know, just year-over-year business retention, and maybe just some color on how you’re thinking about any flow back to the admitted market that you may be seeing in either property or casualty.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, Andrew, it’s Mike. I think our renewal retention’s in the very low 70% range, and that’s been pretty steady. We don’t see a big movement there. And, in terms of move to it, standard lines, I would just say it’s a very dynamic marketplace overall. There’s always business moving back and forth, but we don’t see any uptick in movement away from the E&S market overall.

Andrew Anderson, Analyst, Jefferies: Thank you.

Carly, Conference Operator: Your next question comes from Mike Zaremski with BMO.

Mike Zaremski, Analyst, BMO: Hey, good morning. Thank you. Just wanted to make sure I’m teasing this out correctly. Is the most of the decel and the growth rate on premiums coming from property, kind of larger account, shared and layered? If that’s correct, maybe you can kind of help us with kind of what percentage of the portfolio at this point is made up of that k- type of business at this point? I know it’s been shrinking.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, Mike, this is Mike. We’re going to publish that next week in our 10-K. If you look at our investor slide deck on the internet, we break out all the divisions. I think it’s through the end of 2024, and that’ll be updated at the same time with the 2025 stats. But, yeah, it’s essentially the commercial property division, it was our largest division last year. And, you know, they’re larger accounts, and they’re just subject to a much more intense level of competition. I think Stuart mentioned the fact that all of our other five or six property divisions are experiencing, you know, pretty robust growth. They’re just off a smaller premium base at the moment.

Mike Zaremski, Analyst, BMO: Okay, yeah, got it. So I just want to, you know, just ’cause I think we’re probably focusing too much on this division’s kind of cyclicality, but I just, you know... So is it fair for us to, if we want to kind of get ahead of this trend, for 2026, I think, you know, the consensus in the market is that, you know, large account property stays, similarly soft to 2025. So, you know, I guess unless you think, I’m off, we should just kind of assume that, this, this portion of your business is still material, and we should kind of make sure we’re accounting for, further potential shrinkage in, in this part of your business for next year. Is that fair?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: I, yeah. I mean, it’s, it’s a, it’s a very competitive market, and so I think, what you saw in the fourth quarter, it’s... You know, again, the specific numbers are going to ebb and flow, but the fact that we’re in a hyper-competitive environment there, I think will continue over into 2026.

Mike Zaremski, Analyst, BMO: Okay. And then, pivoting to casualty, you know, looks, you know, you’re, we’re seeing kind of a stabilization of the trend line there, excellent, you know, what appears to be loss ratios. Are you specifically for casualty, you know, pricing and submission, is that kind of are we trough there on those KPIs? You know, I’m assuming pricing is still competitive, or is it, or is there still kind of incremental pricing competition on the casualty side? Thanks.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, I would say in general, we’re in a competitive moment in the insurance cycle, with the level of competition varying quite a bit from one, if you will, market segment to the next. The commercial property we’ve been talking about, the larger, southeastern wind accounts, that’s an example of one of the most competitive areas. And then Stuart, a few minutes ago, listed a number of areas where we’re still seeing very, you know, you know, reasonably strong premium growth and, upward movement in pricing. So, you know, we, we feel very positive about the business overall, given our underwriting and our, you know, cost advantages.

And one of the reasons we broke out that commercial property in our press release and in our, in our comments is just to reiterate that, that’s a little bit of a unique market segment and division for us, in that it grew tremendously over the prior several years, and now we’re kind of giving back a little bit of that outsized growth. But if you pull that out and look at the rest of the business, it’s still running, not just great margins, but, you know, 10% growth in this competitive environment, I think is quite positive.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: That’s helpful. Thank you, Mike.

Carly, Conference Operator: Your next question is from Christian Getzoff with Wells Fargo.

Christian Getzoff, Analyst, Wells Fargo: Hi, good morning. Thank you. Any quantification you could provide on how much better in terms of percentage points the underlying combined ratio is between commercial property and kind of the rest of your business? Because I’m trying to get a sense of how much deterioration we could see just from business mix shift. If I do, like, simple calcs, I think property is down to 20% versus the 24 at the start of 2025. So I’m just trying to get a sense of what that gap is.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, we’re not gonna be able to provide that on a conference call, but when our 10-K is published next week, there’s some accident year exhibits that break out occurrence, casualty, claims made, casualty, and property. And then when our statutory statement’s filed in a couple weeks, that gives you even more granular loss data on an accident year basis by statutory line of business. So you can really get into the weeds there. I think that’d be better. But I would just say, overall, I would remind all of our investors, certainly, that it is a, you know, it’s a strategy of ours over the 17 years we’ve been in business to post loss reserves in a conservative fashion.

If you look at our history, every year we’ve had favorable reserve development in our GAAP financials. So hopefully we’re building a lot of confidence among the investment community. We have also commented that over the last couple years, we’ve been quicker to release IBNR, so reserves for future claims, from the short tail lines of business like property, and we’re being a little more cautious on the long tail lines like casualty. But again, that’s a good thing. We’re still posting best-in-class financial results, but we’re doing it with a high level of conservatism in our reserving practices. So hopefully our investors take some comfort in that.

Christian Getzoff, Analyst, Wells Fargo: Got it. Thank you. And then for my follow-up, how big of an opportunity are data centers for Kinsale? Are you guys writing that business currently? And I guess any general market commentary on how the competition and the terms and conditions are developing in that area.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yeah, it’s not a... This is Stuart, by the way. It’s not a meaningful percentage of our book of business in property or casualty. The layer, the limits required on those placements, it’s just not where we’re competitive.

Christian Getzoff, Analyst, Wells Fargo: Thank you.

Carly, Conference Operator: Your next question comes from Mark Hughes with Truist.

Mark Hughes, Analyst, Truist: Yeah, thanks. Good morning.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Morning, Mark.

Mark Hughes, Analyst, Truist: I think, Stuart, you had mentioned that in November and December in property, you saw an influx from London and MGAs. Anything in casualty on that front? Did you see a little more competitive pressure across the board?

Stuart Winston, Chief Underwriter, Kinsale Capital Group: There’s always been competition from the MGAs and fronting companies on the casualty side, but no real increase in the quarter.

Mark Hughes, Analyst, Truist: Yeah. When you look across the industry as a whole, it seems like casualty has meaningfully decelerated from 3Q to 4Q. Is that pricing? Is that competition? Is it business going to other carriers or non-public carriers?

Stuart Winston, Chief Underwriter, Kinsale Capital Group: I think it’s just the normal variability in the market-

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Mark, between quarter to quarter.

Mark Hughes, Analyst, Truist: Very good. Very good. Brian, you talked about the expense ratio. How much impact this quarter just from the mix shift, maybe lower ceding commission from lower property?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, I think, we didn’t break out the components by quarter, Mark, but the portion of the expense ratio related to net commissions was relatively constant with the third quarter. I think we mentioned, and I’ve mentioned in the past, we’re looking at it quarter by quarter. There is a fair amount of variability, so we’re sort of guiding you to the annual metric. But again, I commented in my remarks that, hey, the other underwriting component of the expense ratio did improve by about a half point year-over-year.

Mark Hughes, Analyst, Truist: Okay. So one could assume mix might account for a little bit of an uptick in the expense ratio?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, exactly.

Mark Hughes, Analyst, Truist: Yeah. And then how about kind of new business trends, excess versus primary? Has there been any material shift in that? If, if excess is more attractive, is that- are you leaning into that, or is it still more balanced?

Stuart Winston, Chief Underwriter, Kinsale Capital Group: It’s still pretty balanced. The mix has stayed pretty similar since day one.

Mark Hughes, Analyst, Truist: Very good. Thank you.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Thanks, Mark. Thanks, Mark.

Carly, Conference Operator: Your next question comes from Joe Tamillo with Bank of America.

Joe Tamillo, Analyst, Bank of America: Hey, good morning, guys. Just a quick question. I know obviously social inflation and increased litigation, this has been much more prevalent in the larger accounts, but I wasn’t sure if that was starting to migrate at all, you know, more towards the area you guys typically play in. Do you have any comments there on how that environment’s kind of shaping up?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Joe, this is Mike. You know, there’s plenty of claims and litigation activity in the small account market like there is in, you know, larger accounts. So, small accounts definitely aren’t immune from that. I don’t know that there’s any pronounced change in recent months, but it’s, you know, the litigation industry in the United States is large and growing, and the plaintiff attorneys are entrepreneurial as hell, looking for, you know, new ways to, you know, drive claims and serve their clients. So, we’re vigilant for sure.

Joe Tamillo, Analyst, Bank of America: Okay, great. And then probably just to follow up a quick question. I know you guys talked about kind of, you know, leaning into a little bit more AI in your opening remarks. Just kind of wondering if you can expand a bit more on that, where you kind of see more of the opportunities or where you’re most excited for AI really to be deployed within the business, whether it’s on claims, underwriting or, you know, what have you, kind of for the next year or so?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Well, I think broadly speaking, AI in the business operation allows you to automate tasks that are, you know, repetitive and whatnot. So it’s a cost savings opportunity. It’s an opportunity to drive better customer service. It’s an opportunity to reduce errors in a business. You know, we had, give or take, 1 million submissions last year, so hundreds and hundreds of thousands of quotes and policies. So, you know, automation is something we’ve been working on for 10 years. AI is just a powerful new tool in that regard. But I would say, in our analytics and our IT area, it’s probably being used most effectively today in terms of writing code and testing code and, you know, converting unstructured data to structured data, et cetera.

I mean, it’s got a lot of use cases, but it’s. You know, I think the two things we’re focused on, one is driving automation in our business, and two is to get smarter about how we segment and price risk.

Joe Tamillo, Analyst, Bank of America: Great. Thank you.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: You bet.

Carly, Conference Operator: Your next question comes from Rowan Mayer with RBC Capital Markets.

Rowan Mayer, Analyst, RBC Capital Markets: Hey, good morning. At the Investor Day last month, you guys highlighted a bunch of new products that were launched in the last year. I was wondering if we could maybe talk about how much growth is new products versus existing, and any new plans for 2026.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Well, we’re going to publish in our K, the breakout of our written premium for 2025 by underwriting division, and, that’ll be out, I think it’s next week. So if you look at the agribusiness casualty, agribusiness property, personal insurance isn’t new, but we’ve expanded into the homeowner space there, so you could look at that.

Joe Tamillo, Analyst, Bank of America: Yeah, and a lot of the new products in 2025 were enhancements to existing products. So it’s not necessarily going to be split out within divisions, but there is an element of growth with those.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, but the generally new products, we roll them out. It’s kind of a methodical rollout, and so it’s really over a series of, you know, the first couple of years that they start to be meaningful. If you look at the small business property division, I think last year that was $100 million of premium, give or take, and, you know, five years ago, I think it was nothing.

Joe Tamillo, Analyst, Bank of America: Yeah.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Right? So, you know, it does take time, but it’s been a big part of our growth story, really, for 17 years.

Rowan Mayer, Analyst, RBC Capital Markets: That’s great. Man, thank you. And I wanted to just ask on the leverage and the capital return. You guys have highlighted you’re under-levered versus peers on a number of metrics, and I think it’s on your debt to cap, you’re below kind of the long-term target you’ve talked about. It’s a nice step up in the capital return in the last 18 months, but why not do more now with the competitive environment the way it is?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Well, with the capital allocation strategy, with the buyback in particular, we’re in effect shrinking the denominator and increasing the ratio. So we’re pursuing it through the denominator, I guess you could say.

Rowan Mayer, Analyst, RBC Capital Markets: Yeah, that makes sense. And then I guess just one more. Can we talk about the, the durability, the softness in the property markets, and what did it take to actually push this competition out?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Well, keep in mind, you know, we’re talking about intense competition in these larger Southeastern wind accounts in particular. But in our agribusiness property, inland marine, high-value homeowners, personal insurance, small business property, they may have all grown in the double digits in the quarter. So, you know, it’s just a reminder that the market does not move monolithically. It’s a whole series of individual segments that kind of, you know, ebb and flow independently.

Rowan Mayer, Analyst, RBC Capital Markets: That’s great. Thank you so much.

Carly, Conference Operator: Your next question comes from Pablo Singzon with JP Morgan.

Pablo Singzon, Analyst, JP Morgan: Hello, it’s Bob with JP Morgan. So, first question. Some other public insurers that have large or newer E&S businesses have been reporting premium growth or submission growth that’s running much higher than where you are now. So is there evidence in your minds that they might be taking some flow that used to go to you? And I know in the past you’ve identified MGA as a main source of competition, but I was just wondering if you’re seeing more competition from traditional markets as well. And as you know, small commercial E&S and technology is a focus for many of your peers.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: ... Yeah, Pablo, this is Mike. I would answer that question this way: A, we’re bullish on our opportunity. You know, we’re working hard to grow, but we’re in a much more competitive environment overall, and so you have to be careful in balancing the growth with the, you know, profitability of the business. I can’t really speak for other companies and what they’re doing, but I would say our investors should have a lot of confidence that Kinsale’s producing not only very strong margins, but that we’re continuing to grow and take market share, with the one caveat that we’ve got one, you know, large division that, if you will, is going through a little bit of a unique correction.

But overall, if you look at the disciplined underwriting model and the low-cost platform, we’re confident we’re going to continue to grow, take market share, and deliver very quality returns at the same time.

Pablo Singzon, Analyst, JP Morgan: All right. Thanks, Mike. And I guess just following up on the expense advantage, right? So I guess philosophically, how do you think Kinsale demonstrates or exercises that advantage in this market, right? So effectively, are you willing to write at ROEs below 26%, but still above your minimums? Or is your approach to sort of let the market do what it does and you’ll just, you know, keep on printing 26% ROEs for the foreseeable future?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Well, we manage our, you know, each product line to a, you know, I would call it a low 20s ROE or greater. And, you know, of course, there’s in an insurance company, you don’t know the cost of goods sold immediately, right? So there’s some assumptions there. Those assumptions, I think, lean into the conservative side. And so, you know, historically, we’ve outperformed our target. I don’t think that would change overnight for sure. But like every business, we balance growth and profitability. It’s just that we’re always going to prioritize generating that low 20s ROE or better. And then where the specific return goes quarter by quarter, you know, of course, is subject to claim activity and the weather and, you know, all sorts of things.

I think we’ve got a long-term track record of producing pretty attractive margins, and I would expect those to continue.

Pablo Singzon, Analyst, JP Morgan: All right. Thank you for your answers.

Carly, Conference Operator: Your next question comes from Andrew Kligerman with TD Cowen.

Andrew Kligerman, Analyst, TD Cowen: Hey, good morning. Could you provide a little more clarity on the casualty lines and the rates that you’re getting on the new business, and the degree to which those rates are ahead of loss costs or maybe even not ahead of loss costs?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Andrew, that’s a tough question to answer on a conference call like this, because, again, we’ve got 25 different underwriting divisions. They’re operating in very unique market segments in terms of the coverages they sell, the industries that we target. And, you know, as Stuart mentioned, right, our commercial auto is experiencing, you know, strong price increases. Management liability, I think those rates are probably down. Non-medical professional liability, they’re down. The commercial property division, clearly, those rates are down in the quarter. So, you know, we kind of directed in our comments to look at the Amwins Pricing Index. I think that’s a good composite of what... You know, Amwins is a very large wholesale broker.

They see a ton of business, and I think they’ve got a really interesting window into pricing trends across the industry. I think that’s probably the best point of reference we can, you know, guide you to.

Andrew Kligerman, Analyst, TD Cowen: That, that’s very fair. And I guess what I was trying to get at, even with that question, is you’ve got pressure on property. It sounds a little mixed in casualty on rate. And I mean, I get that the 75% combined ratio in part is due to your expense ratio, but your loss ratio is outstanding—it’s exceptional. So given what the mosaic is with pricing right now, should we expect the underlying combined of 75 to kind of drift up gradually over the course of the next year, two years, three years?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: We don’t really offer guidance going out like that. I would just say, you know, we’re in a competitive environment. Some of our results on an annual basis are driven by things we don’t directly control, like the weather or what have you.

Andrew Kligerman, Analyst, TD Cowen: Right.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: In general, we are managing to, you know, a low 20s ROE or better. We’re very conservative in setting aside loss reserves to pay claims that are reported in the future, right? So investors should have a lot of confidence in our balance sheet. We’ve got competitive advantages that are, in my opinion, quite significant. You know, if we have a 15 percentage point cost advantage, and we’re in a commodity business where the customers want and focus on, cost, you know, sometimes, over and above everything else in the transaction. So, I think that’s probably the best guidance we can offer. We’re bullish on our opportunity. It’s a competitive environment. We’re quite conservative in the reserving, and, you know, the actual results obviously are gonna ebb and flow quarter by quarter.

I think our investors should expect us to generate very high and attractive returns for the foreseeable future.

Pablo Singzon, Analyst, JP Morgan: Got it. Thank, thank you, Mike.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Okay.

Carly, Conference Operator: Your next question comes from Mike Zaremski with BMO.

Mike Zaremski, Analyst, BMO: Hey, thanks. Now switching gears a bit to home insurance, I thought one of the new items that came out at your recent Investor Day was the opportunity there, kind of, I think you talked about maybe it being up to 10% of your revenues even, over time. If as long as it’s not, you know, too competitive and you’re willing to share any color, any thoughts on kind of, how that’s shaping up in terms of, you know, nuances on the types of policies you’re offering in the States, and the trajectory of growth there? Thanks.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yeah, this is Stuart. The homes product is definitely a long-term project for us. We’re starting small, the crawl, walk, run mentality that Mike mentioned earlier. And where the opportunity to expand exists, we’re gonna take that opportunity to expand and do so profitably.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: We’re in probably four or five states.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: 4 or 5 states for homes.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: That continues to expand.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yeah.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: The manufactured homes are in-

Stuart Winston, Chief Underwriter, Kinsale Capital Group: It’s-

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Fifteen.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yeah.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Fifteen.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: About 15 states, and we’re expanding the geography within the state, diversifying away from coastal there.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: And then we write high-value homes in another-

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yes

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: ... bunch of states.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yep.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: So it’s an ongoing process, but, you know, we’re bullish. You know, there’s—you are seeing across the industry a little bit more premium being pushed from the standard to the non-standard side in the homeowner space. And, you know, obviously, we’re leaning into that in order to try to take advantage.

Mike Zaremski, Analyst, BMO: And just as a follow-up, you know, it sounds like this is both high value and not high value. Are these like atypical, like standard market policies in terms of just much higher deductibles or different, you know, exclusions? Just, is there any broad brush that you can paint? Thanks.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yeah, it’s a mix. I mean, it could be a pretty standard policy, but there’s also some in tough areas that might have non-standard exclusions in there.

Carly, Conference Operator: Your next question comes from Mark Hughes with Truist.

Mark Hughes, Analyst, Truist: Yeah. Thank you. What do you make of the idea that AI might take over some of the brokers’ roles? Do you think, do you think that’s likely? Is that a way to get efficiency? Is go more of a direct route, or is that, is that just a fantasy at this point?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Look, I mean, the short answer, Mark, is we don’t know. I’ve always been impressed with Pat Ryan’s commentary around the fact that the customer needs an advisor and an advocate, and I don’t think that changes with AI. But I do think AI is gonna drive... You know, it’s a new tool for the whole economy, and I think, you know, businesses in P&C, but really in every industry, are gonna have to lean in and, you know, use this tool to get better at what they do and serve their customers, so.

Mark Hughes, Analyst, Truist: Appreciate that. Thank you.

Carly, Conference Operator: Your final question comes from Bob Singhal with JP Morgan. Bob, your line is open.

Pablo Singzon, Analyst, JP Morgan: Hi. Yeah, sorry, it’s Pablo again from JP Morgan. So, I guess first question: With growth slowing, like, is there an opportunity on your end to take up a reinsurance retentions and therefore just retain more premium economics? Is that something you’re actively considering?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Yeah, Pablo, this is Mike. We’ve looked at retentions in our reinsurance program. We look at it every year, and we’re constantly making adjustments to, you know, settle on what we think makes the most sense for the company in managing volatility and that type of thing. So yeah, absolutely. Our program renews on 6/1, so we’ll be starting that process here, you know, in the next month or so.

Pablo Singzon, Analyst, JP Morgan: All right. Thanks, Mike. And then last question for me. So if we just focus on your book, X large account, right? Growth has been slowing there, too. It’s still a good level, but it’s been slowing. So I think it was 22% in 2024, and 2025 is 13%. So I, I realize this line of questioning might be too simplistic, but is that slowdown more, more a reflection of pricing or submission flow? And if both, how would you break down the attribution?

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: I would characterize it as mostly a function of just increased level of competition. And as the competition increases, if you’re a disciplined underwriting company, you just have to be a little more cautious. Maybe the submission flows down slightly, but X commercial property, I think it was 9%. I think maybe two years ago, maybe in mid-teens.

Stuart Winston, Chief Underwriter, Kinsale Capital Group: Yeah.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: So yeah, it’s, it’s down a little bit, but, you know, still pretty robust. And, you know, the 13% growth overall, X, commercial property, I, I think is pretty strong if you look at how all the public brokers that have reported, growth rates, I think tend to be kind of, you know, low to mid-single digits. So I think it speaks to the competitiveness of, of our model, even in a competitive moment in the cycle, and, hence, you know, that’s why we continue to be bullish on our opportunity.

Pablo Singzon, Analyst, JP Morgan: All right. Thank you, Mike.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: Okay, Pablo.

Carly, Conference Operator: There are no further questions at this time. I’ll now turn the call back over to Mr. Kehoe for any closing remarks.

Michael Kehoe, Chairman and CEO, Kinsale Capital Group: All right. Well, I just wanna thank everybody for participating, and we look forward to speaking with you again in the near future. Have a great day.

Carly, Conference Operator: Ladies and gentlemen, that concludes today’s conference call. Thank you for participating. You may now disconnect.