Core Viewpoint - Kinsale Capital (KNSL) reported strong fourth-quarter 2024 net operating earnings of $4.62 per share, exceeding estimates and reflecting a 19.4% year-over-year increase [1][2]. Operational Update - Operating revenues rose 17.4% year over year to $412 million, although this figure fell short of consensus estimates by 1.5% [3]. - Gross written premiums increased by 12.2% year over year to $443.3 million, driven by strong broker submissions and a competitive pricing environment, but missed the estimate of $487 million [3]. - Net written premiums climbed 13% year over year to $346.1 million, below the estimate of $375.8 million [4]. - Net investment income surged 37.8% year over year to $41.9 million, surpassing the estimate of $41.5 million, attributed to a growing investment portfolio and higher interest rates [4]. - Total expenses increased 23.7% year over year to $273.5 million, primarily due to rising losses and other expenses, which was below the estimate of $288.9 million [5]. - Underwriting income grew 15.4% year over year to $97.9 million, significantly exceeding the estimate of $64.6 million, despite higher catastrophe losses [6]. - The combined ratio deteriorated by 130 basis points to 73.4, better than the Zacks Consensus Estimate of 76 [6]. - The loss ratio slightly deteriorated by 10 basis points to 52.3, compared to estimates of 55.8 [7]. Financial Update - Kinsale Capital ended 2024 with cash and cash equivalents of $113.2 million, a decrease of 10.6% from the end of 2023 [8]. - Stockholders' equity increased by 36.5% to $1.5 billion, with book value per share rising 36% to $63.75 [8]. - Net operating cash flows were $976.3 million in 2024, reflecting a 13.5% year-over-year increase [8]. - Annualized operating return on equity contracted by 260 basis points year over year to 29.2% [8]. Share Repurchase - In October 2024, the board authorized a share repurchase of up to $100 million, with $10 million repurchased in the fourth quarter [9].

Financial Data and Key Metrics Changes - In Q4 2024, the company's operating earnings per share increased by 19.4% and gross written premium grew by 12.2% compared to Q4 2023 [7] - The combined ratio for the quarter was 73.4%, with a full year 2024 operating return on equity of 29% [7][11] - Net investment income rose by 37.8% in Q4 compared to the previous year, driven by growth in the investment portfolio and higher interest rates [13] - The expense ratio for Q4 was 21.1%, up from 19.9% the previous year, while the full year expense ratio was 20.6%, slightly better than 20.8% last year [12] Business Line Data and Key Metrics Changes - Gross written premium growth was 12.2%, with casualty underwriting divisions growing at 15% and property divisions at 6% [16] - Catastrophe losses in Q4 were modest at $8 million pretax, with a significant impact from California wildfires estimated at $25 million pretax [17][19] Market Data and Key Metrics Changes - The overall E&S market in Q4 was steady but faced increased competition [10] - New business submissions growth was 17% for the quarter, down from 23% in the previous quarter [20] Company Strategy and Development Direction - The company focuses on small E&S accounts, maintaining control over underwriting and claims processes, and investing in technology and analytics to improve efficiency and profitability [8] - A new agribusiness underwriting unit was created to expand product offerings into adjacent markets [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth prospects, maintaining a guidance of 10% to 20% growth moving forward despite recent competitive pressures [39] - The company aims to balance profitability and growth, with expectations of continued strong returns and stock price appreciation [101] Other Important Information - The company repurchased $10 million in shares during Q4, with plans for modest repurchases each quarter [15] - The company is gradually increasing its allocation to common stock from 8% to 10% of cash and invested assets, with a target of 12% over the next year [14] Q&A Session Summary Question: Impact of larger shared account property on growth - Management confirmed that larger layered deals are under competitive pressure, affecting growth, but small property divisions are still growing rapidly with positive rate increases [28] Question: Sustainability of growth rates - Management believes that a growth rate of 10% to 20% is sustainable, driven by their low-cost operating model and strong customer service [37][40] Question: Capital buybacks and growth dynamics - Management indicated that the current buyback strategy is modest, with a focus on maintaining sufficient capital for operations while addressing excess capital through dividends and buybacks [46][48] Question: January results and expense ratio - Management refrained from commenting on January results but reiterated confidence in growth guidance, attributing the higher expense ratio to increased variable compensation [51][52] Question: California wildfire losses - The gross loss from the California wildfires was approximately $45 million, with a net pretax loss of $25 million expected [62] Question: Trends in loss ratios and reserves - Management stated that loss trend assumptions are in the high single digits, with a conservative approach to estimating future losses [113]

Core Insights - Kinsale Capital Group, Inc. reported a revenue of $412.12 million for the quarter ended December 2024, reflecting a year-over-year increase of 17.4% [1] - The earnings per share (EPS) for the quarter was $4.62, up from $3.87 in the same quarter last year, resulting in an EPS surprise of +6.45% against the consensus estimate of $4.34 [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $418.32 million, showing a surprise of -1.48% [1] Financial Metrics - Expense Ratio was reported at 21.1%, higher than the estimated 20.4% by six analysts [4] - Combined Ratio stood at 73.4%, better than the estimated 76.3% by six analysts [4] - Loss Ratio was 52.3%, outperforming the average estimate of 55.9% from six analysts [4] - Net investment income was $41.86 million, slightly below the average estimate of $42.79 million, but showed a significant year-over-year increase of +37.8% [4] - Net Earned Premiums were reported at $359.74 million, compared to the average estimate of $362.66 million, marking a year-over-year increase of +21.2% [4] - Fee Income reached $8.55 million, exceeding the estimated $8.33 million, with a year-over-year change of +22.1% [4] - Other income was reported at $0.35 million, surpassing the average estimate of $0.15 million, reflecting a year-over-year change of +2.7% [4] Stock Performance - Kinsale Capital Group's shares have returned +9.3% over the past month, outperforming the Zacks S&P 500 composite's +3.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Kinsale Capital Group, Inc. reported quarterly earnings of $4.62 per share, exceeding the Zacks Consensus Estimate of $4.34 per share, and showing an increase from $3.87 per share a year ago, indicating a strong performance in the latest quarter [1][2]. Financial Performance - The company achieved revenues of $412.12 million for the quarter ended December 2024, which was 1.48% below the Zacks Consensus Estimate, but up from $351.17 million in the same quarter last year [2]. - Over the last four quarters, Kinsale Capital has surpassed consensus EPS estimates four times and topped revenue estimates three times [2]. Stock Performance - Kinsale Capital shares have increased approximately 2.5% since the beginning of the year, compared to a 2.9% gain in the S&P 500 [3]. - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.97, with expected revenues of $428.67 million, and for the current fiscal year, the EPS estimate is $18.15 on revenues of $1.83 billion [7]. - The trend of estimate revisions for Kinsale Capital is mixed, which may change following the recent earnings report [6]. Industry Context - The Insurance - Property and Casualty industry, to which Kinsale Capital belongs, is currently ranked in the bottom 48% of over 250 Zacks industries, suggesting potential challenges ahead [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Kinsale Capital's stock performance [5].

Core Insights - Kinsale Capital Group reported strong fourth-quarter 2024 earnings, surpassing both EPS and revenue estimates, driven by strategic focus and technology investments [2][6] Financial Performance - Adjusted EPS for Q4 2024 was $4.62, exceeding the expected $4.34, and showing a year-over-year increase of 19.4% from $3.87 [3] - Net earned premiums reached $359.7 million, above projections of $355 million, reflecting a 21.2% increase from $296.8 million in Q4 2023 [3] - Net investment income grew to $41.9 million, a 38% increase from $30.4 million in the previous year [3] - Gross written premiums rose to $443.3 million, marking a 12.2% increase from $395.2 million [3] Strategic Focus - Kinsale operates in the excess and surplus (E&S) lines insurance market, which offers higher margins and fewer regulatory constraints, allowing the company to address underserved areas with tailored solutions [4] - The company emphasizes technological enhancements to improve operational efficiency and maintain competitive expense ratios [4][11] - Kinsale's disciplined underwriting and investment in innovative technology contribute to a robust combined ratio of 73.4% for Q4, indicating strong underwriting efficiency [5][7] Growth Drivers - The company's gross written premiums increased by 19.2% year-over-year to $1.9 billion, driven by its exclusive focus on the E&S market [5] - Kinsale's effective claims management practices have helped mitigate the impacts of natural disasters, maintaining reserve accuracy and enhancing risk management [7][9] Capital Management - During the quarter, Kinsale repurchased $100 million of its stock, reflecting confidence in its financial stability and part of a broader capital management strategy [8] Future Outlook - Management remains optimistic about leveraging strengths in underwriting and technology investments, although no specific forward guidance was provided [10][11] - The company will continue to focus on technological advancements to enhance efficiency and underwriting precision while controlling operational costs [11]

Core Insights - Kinsale Capital Group's fourth-quarter results showed mixed performance, with earnings per share exceeding expectations while revenue fell short [3][6]. - The company's gross written premiums increased by 12% year over year, indicating growth in its insurance business [3][4]. Financial Metrics - Revenue for Q4 2023 was $351.17 million, compared to $412.12 million in Q4 2024, reflecting a 17% increase but missing analyst expectations [2]. - Earnings per share rose to $4.43 in Q4 2023, a 6% increase from the previous year, beating expectations [2]. - Gross written premiums were $395.2 million in Q4 2023, up from $443.3 million in Q4 2024, marking a 12% increase [2]. - The combined ratio for Kinsale was 73.4% in Q4 2024, slightly worse than the 72.1% in the previous year, attributed to higher catastrophe losses [2][4]. Investment Performance - Kinsale's net investment income saw a significant increase of about 38% year over year, driven by more capital available for investment and higher yields [5]. Market Reaction - Following the earnings report, Kinsale's stock experienced a mild decline of approximately 3.5% [6]. - The trading volume post-earnings was low, with only about 5,000 shares changing hands shortly after the report [7]. Future Considerations - Underwriting profitability will be crucial to monitor throughout 2025, especially with uncertainties surrounding hurricane season [8]. - The growth rate of gross written premiums and investment income will also be key areas to watch, particularly if interest rates decline [8].

Financial Performance - Net income for Q4 2024 was $109.1 million, or $4.68 per diluted share, up from $103.4 million, or $4.43 per diluted share in Q4 2023, representing a 5.6% increase[1] - Full year net income for 2024 reached $414.8 million, or $17.78 per diluted share, compared to $308.1 million, or $13.22 per diluted share in 2023, marking a 34.5% increase[1] - Net operating earnings for the year ended December 31, 2024, were $374.8 million, compared to $291.4 million in 2023, reflecting a year-over-year increase of 28.5%[15] - Diluted operating earnings per share for the year ended December 31, 2024, were $16.06, up from $12.50 in 2023, representing a 28.5% increase[15] - Total revenues for Q4 2024 were $412,123,000, a 17.3% increase compared to $351,171,000 in Q4 2023[23] - The company reported a total comprehensive income of $412,254,000 for the year ended December 31, 2024, compared to $348,394,000 in 2023, reflecting a 18.3% increase[23] Premiums and Underwriting - Gross written premiums for Q4 2024 were $443.3 million, a 12.2% increase from $395.2 million in Q4 2023; for the full year, gross written premiums were $1.9 billion, up 19.2% from $1.6 billion in 2023[4] - Net earned premiums for the year ended December 31, 2024, were $1,350,470,000, up 25.9% from $1,072,537,000 in 2023[23] - Underwriting income for the year ended December 31, 2024, was $325.9 million, compared to $270.4 million in 2023, indicating a 20.5% increase[17] Investment Performance - Net investment income increased by 37.8% to $41.9 million in Q4 2024, and by 46.9% to $150.3 million for the full year 2024 compared to 2023[8] - The company's investment portfolio had a gross investment return of 4.4% for the year ended December 31, 2024, compared to 4.0% in 2023[8] - Net investment income for Q4 2024 was $41,863,000, a 37.8% increase from $30,382,000 in Q4 2023[23] Cash Flow and Assets - Net operating cash flows for 2024 were $976.3 million, an increase of 13.5% from $859.8 million in 2023[8] - Cash and invested assets totaled $4.1 billion at December 31, 2024, up from $3.1 billion at December 31, 2023[8] - Total assets increased to $4,886,704,000 in 2024, up 29.5% from $3,772,974,000 in 2023[25] Equity and Reserves - Stockholders' equity increased to $1.5 billion as of December 31, 2024, up from $1.1 billion a year earlier, with book value per share rising to $63.75 from $46.88[12] - Stockholders' equity increased to $1,483,561,000 in 2024, up 36.5% from $1,086,832,000 in 2023[25] - Reserves for unpaid losses and loss adjustment expenses rose to $2,285,668,000, a 35% increase from $1,692,875,000 in 2023[25] Ratios and Tax - The combined ratio for Q4 2024 was 73.4%, slightly up from 72.1% in Q4 2023; for the full year, the combined ratio was 76.4%, compared to 75.4% in 2023[5] - Operating return on equity was 29.2% for the year ended December 31, 2024, compared to 33.6% for the previous year[6] - The operating return on equity for the full year of 2024 was 29.2%, down from 31.8% in 2023, primarily due to higher average stockholders' equity[12] - The effective tax rate for the year ended December 31, 2024 was 19.4%, lower than the federal statutory rate due to tax benefits from stock-based compensation and tax-exempt investment income[10] - The effective tax rate used for adjustments to reconcile net income to net operating earnings was 21%[15] Future Outlook - The company estimates pre-tax catastrophe losses of approximately $25 million due to wildfires in Southern California, expected to impact Q1 2025 results[11] - Forward-looking statements indicate potential risks including inadequate loss reserves and adverse market conditions that could impact future performance[19] - The company plans to hold a conference call on February 14, 2025, to discuss the financial results and outlook[18] Share Repurchase - The company repurchased 22,626 shares at an average price of $441.95 per share for a total cost of $10 million during Q4 2024[13]

Kinsale Capital (KNSL) is expected to register an improvement in its top and bottom lines when it reports fourth-quarter 2024 results on Feb. 13, after the closing bell.See the Zacks Earnings Calendar to stay ahead of market-making news.The Zacks Consensus Estimate for KNSL’s fourth-quarter revenues is pegged at $418.3 billion, indicating 19.1% growth from the year-ago reported figure.The consensus estimate for earnings is pegged at $4.34 per share. The Zacks Consensus Estimate for KNSL’s fourth-quarter ear ...

Labutes IR is a Fund Manager/Analyst specialized in the financial sector, with more than 18 years of experience in the financial markets. I have worked at several type of institutions in the industry, always at the buy side and related to portfolio management. Associated with the existing author The Outsider.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the pur ...

The market expects Kinsale Capital Group, Inc. (KNSL) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expec ...