Financial Data and Key Metrics Changes - Kinsale's operating earnings per share increased by 27.5% and gross written premium grew by 4.9% compared to Q2 2024 [4] - The company posted a combined ratio of 75.8% and a six-month operating return on equity of 24.7% [4] - Book value per share increased by 16% since the end of 2024 [4] - Net income and net operating earnings increased by 44.9% and 27.4% respectively [10] - The expense ratio improved to 20.7% from 21.1% year-over-year [10] Business Line Data and Key Metrics Changes - The commercial property division saw premiums drop by 16.8% due to high competition and rate declines [6] - Excluding the commercial property division, Kinsale's premium grew by 14.3% in the second quarter [6] - Submission growth was 9% for the quarter, down from 10% in the first quarter [14] Market Data and Key Metrics Changes - The E and S market remains competitive, with robust premium growth in small business property, high-value homeowners, commercial auto, entertainment, and general casualty [12] - Pricing trends align with the AmWINS index, which reported a 2.4% overall decrease, with commercial property down 20% [15] Company Strategy and Development Direction - Kinsale focuses on small E and S accounts, maintaining control over underwriting and providing exceptional customer service [5] - The company is expanding its product suite, including broadening its agribusiness vertical and launching new homeowners products in multiple states [14] - Kinsale aims to capture market opportunities while remaining cautious around loss cost trends due to inflation [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges heightened competition, particularly in the commercial property division, but remains optimistic about growth prospects [22][23] - The company is cautious about long-tail casualty lines due to inflation and is conservative in its reserving practices [26][80] - Management believes that under-reserving in the industry could lead to significant issues for some players, but Kinsale's conservative approach positions it well [13][16] Other Important Information - Kinsale's reinsurance program was renewed with favorable terms, including increased retention on casualty treaties and a slight increase in ceding commissions [8] - The company reported a net investment income increase of 29.6% due to growth in its investment portfolio [11] Q&A Session Summary Question: Long-term growth target amidst competition - Management does not provide a specific growth prospect but believes a 10% to 20% growth over the cycle is a conservative estimate, acknowledging current headwinds in the commercial property division [22][23] Question: Underlying margin improvement - The underlying margin improvement is attributed to a mix of business, with a focus on cautious long-tail casualty reserving [25][26] Question: Commercial property pricing dynamics - The commercial property division is experiencing intense competition, with rates and terms dropping significantly [29][30] Question: New business growth contribution - While specific statistics on new versus renewal business growth are not available, management suggests that new business is likely driving most of the premium growth [42][44] Question: Reserve releases and trends - Management emphasizes a conservative approach to reserves, particularly for long-tail casualty lines, while short-tail business shows better results [80][81] Question: Cash flow and operational growth - Management indicates that as long as top-line growth continues, cash flow from operations should also increase, although it is influenced by loss experience [65][66]

Financial Data and Key Metrics Changes - The first quarter net premium earned was relatively flat compared to 2024, driven by higher renewal premium offset by lower new business and audit premium [7] - Gross premiums written were $212 million, an increase of 1%, while net premiums earned were $183 million, a decrease of 1% [11][12] - Net investment income increased by 20% to $32 million, the highest in the company's history as a publicly traded entity [9][14] - The current accident year loss and LAE ratio on voluntary business increased to 66% from 64% in 2024 [9][12] - The underwriting expense ratio improved to 23.4% from 25% a year ago [10][13] - Adjusted net income increased by 24% to $21.3 million from $17.2 million a year ago [15] Business Line Data and Key Metrics Changes - The increase in gross premiums was primarily due to higher renewal business, partially offset by lower new business and final audit premiums [11][12] - Commission expense decreased to $23 million from $25 million, and the commission expense ratio improved to 12.6% from 13.6% [13] - Underwriting expenses decreased to $43 million from $46 million, contributing to the improved underwriting expense ratio [13] Market Data and Key Metrics Changes - The company ended the period with a record number of policies in force, achieving a year-over-year growth rate of 4% [8] - The overall selection of the current accident year loss ratio of 66% is below the industry average, which has been in the range of 69% to 70% in recent years [25] Company Strategy and Development Direction - The company continues to prioritize profitability over growth and has identified refinements in underwriting and pricing to maintain discipline [17] - There is an ongoing appetite expansion effort to identify areas for profitable growth, with confidence to accelerate this effort [18] - The company is monitoring potential impacts from tariff discussions and the cost of prescription drugs and medical services [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the ability to maintain a strong customer base despite potential recessionary headwinds [18] - The company is focused on expense management and prudent capital management, with key operating metrics showing improvement [19] - The book value per share increased by 14% to $48.25, and adjusted book value per share increased by 9% to $50.75 over the last twelve months [19] Other Important Information - The Board of Directors authorized a new stock repurchase program for up to $125 million from May 6, 2025, through December 31, 2026 [15][16] - A 7% increase in the quarterly dividend to $0.32 per share was declared, payable on May 28 [15][16] Q&A Session Summary Question: Can you talk about specifics regarding loss trends and how broad they are geographically? - Management noted that the increase in the accident year GLOF and LAE ratio reflects ongoing competitive rate environments and pressure on accident years 2023 and 2024, with a rise in cumulative trauma claims in California [23][24] Question: How about underlying medical inflation and other drivers of medical expenses? - Management indicated that lost time claim frequencies have generally trended downward, although California saw an uptick due to cumulative trauma claims, with overall severity values holding steady [27][28] Question: Is there a macroeconomic contribution to cumulative trauma claims? - Management stated that there is no identifiable macroeconomic cause for the cumulative trauma claims arising from accident year 2024, noting it is a California-specific phenomenon [30][31] Question: What do you think will show up in the NCCI state of the line report regarding industry fundamentals? - Management anticipates that while there are still significant redundancies in the industry, carriers are reducing redundancies less, and internal rates have shown a slight increase [38][39]