Kinsale Capital Group, Inc. · NYSE:KNSL
Kinsale Capital — Investor Presentation (November 2022)
23 slides from Kinsale Capital's investor presentation, November 2022
Slide 1: November 2022
KINSALE —me CAPITAL GROUP November 2022
Slide 2: Disclaimer
Disclaimer This presentation contains or incorporates by reference forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include any statement that does not directly relate to historical or current facts. These statements
Slide 3: Introduction to Kinsale
INTRODUCTION TO KINSALE | | i, Wn E a a > L| ‘
Slide 4: Overview
Overview Kinsale Capital Group, Inc., founded in 2009, is a specialty insurance company focused exclusively on the excess and surplus lines market in the United States. Disciplined Maintain Leverage our Employ a Well-positioned underwriting absolute control proprietary quantitative to generate focus
Slide 5: Highly Experienced Management Team
Highly Experienced Management Team Name Exp. Prior experience Michael Kehoe Founder, President and President and CEO at James River Insurance from 30+ years CEO 2002 to 2008 Brian Haney EVP, Chief Operating Chief Actuary of James River Insurance from 2002 30+ years Officer to 2009 Bryan Petrucelli E
Slide 6: Select Market Information
Select Market Information As of September 30, 2022 Ticker KNSL Exchange New York Stock Exchange Stock Price 255.42 Market Capitalization $5.9 billion Book Value $27.02 per share Debt to Total Capitalization Ratio 16.8% Full-time Employees 447 6
Slide 7: Our Approach
Our Approach • Exclusive focus on the small-account E&S market • Disciplined underwriting expertise across a broad spectrum of hard-to-place risks; no delegated underwriting authority • Technology is a core competency, driving best-in-class expense ratio • Use analytics to drive profitability and op
Slide 8: Kinsale is the only publicly-traded, pure-play E&S investment opportunity
Kinsale is the only publicly-traded, pure-play E&S investment opportunity Leading public E&S players Our differentiating factors 2021 Surplus lines DWP as % of total direct and assumed written premiums¹ No delegated underwriting 100% JRVR 59% Low-cost business model GLBI 55% RLI 35% Contrarian under
Slide 9: E&S Market
E&S Market The E&S market has seen significant growth and generated better underwriting results than the broader P&C industry U.S. surplus lines direct written premiums ($bn) $82.7 $66.1 $56.3 $44.9 $49.9 $38.7 $37.7 $40.2 $41.3 $42.4 $32.8 $33.0 $33.3 $36.6 $34.4 $33.0 $31.7 $34.8 $31.1 $25.6 $15.8
Slide 10: Dislocation in the E&S market creates additional opportunities
Dislocation in the E&S market creates additional opportunities 2021 E&S market share by DPW1 US composite insurance pricing change2 20% Company DPW ($mm) Market Share 18% 18% Lloyd’s 13,872 16.8% 17% BRK 4,212 5.1% 15% AIG 4,178 5.1% 14% 14% 14% 14% MKL 3,530 4.3% 12% Fairfax 2,997 3.6% 12% WRB 2,82
Slide 11: Our underwriting expertise across a broad spectrum of hard-to-place risks
Our underwriting expertise across a broad spectrum of hard-to-place risks Personal Insurance Broad appetite to underwrite a diverse set of risks 3.5% Small Business across the E&S market, including some difficult risks Other Commercial 1 14.7% where we believe pricing may be attractive 14.2% Hig
Slide 12: Product Portfolio
Product Portfolio We target classes of business where our underwriters have extensive experience allowing us to compete effectively and earn attractive returns Gross written premium by Year ended December 31, 2019-2021 division ($000’s) 2019 2020 2021 CAGR Commercial: Small Business $63,181 $83,289
Slide 13: Technology is a core competency
Technology is a core competency Key highlights Proprietary technology Proprietary platform design reflects the best practices our management platform team has learned from extensive prior experience Integrated digital platform enables scale, reliability and performance throughout the organizatio
Slide 14: Our combined ratio is one of the lowest amongst our specialty insurer peers
Our combined ratio is one of the lowest amongst our specialty insurer peers while achieving leading growth among peers 2019-2021 NPW CAGR 38.9% (9.1%) 22.2% 10.9% 13.6% 14.7% (8.9%) 11.5% (16.8)% 6.2% 1 Loss ratio Expense ratio 2 114.6% 2019 – 2021 Average peer 106.8% 106.7% combined ratio: 23.1% 99
Slide 15: We believe Kinsale is well-positioned for continued profitable growth
We believe Kinsale is well-positioned for continued profitable growth Gross written premiums ($mm) Growth drivers $806.6 $764.4 Expand our presence in the E&S market, particularly $560.6 $552.8 with smaller accounts which we believe are subject to $389.7 less competition $223.2 $275.5 Maintain a
Slide 16: Investment Portfolio
Investment Portfolio $1.8 Billion Investment Portfolio as of September 30, 2022 Credit Quality – Fixed-Maturity Portfolio Asset Allocation – Total Investment Portfolio Below BBB & unrated U.S. Treasuries/Short-term Equities 3.8% 5.7% 7.3% Municipals BBB AAA CMBS 11.1% 16.4% 26.0% 3.3% RMBS 16.4% Cor
Slide 17: Financial Results
FINANCIAL RESULTS | | i, Wn E a a > L| ‘
Slide 18: Operating Return on Equity
Operating Return on Equity 24.3% 20.8% 19.8% 15.4% 15.9% 14.7% 11.9% 2017 2018 2019 2020 2021 YTD YTD 9/30/2021 9/30/2022 Operating return on equity is net operating earnings expressed as a percentage of average beginning and ending stockholders’ equity during the period. Net operating earnings is a
Slide 19: Q3 2022 Financial Update
Q3 2022 Financial Update Three months ended September 30, 2022 Net income decreased by 9.9% due principally to higher catastrophe ($mm) 2021 2022 activity and a decline in the fair value of equity investments during the quarter Net operating earnings(1) of $37.9 million increased by 3.3% compare
Slide 20: Selected Financial Data
Selected Financial Data Nine months ended Year ended December 31, September 30, ($000’s) 2017 2018 2019 2020 2021 2021 2022 Operating Results: Gross written premiums $223,191 $275,538 $389,694 $552,814 $764,373 $ 560,553 $806,625 Underwriting income (1) 28,227 31,222 43,201 54,656 133,564 91,395 115
Slide 21: Appendix
APPENDIX 21
Slide 22: Non-GAAP reconciliation – Underwriting Income
Non-GAAP reconciliation – Underwriting Income Three months ended Nine months ended Year ended December 31, September 30, September 30, ($000’s) 2017 2018 2019 2020 2021 2021 2022 2021 2022 Net income $ 24,901 $ 33,787 $ 63,316 $ 88,419 $ 152,659 $ 36,625 $ 32,984 $ 104,339 $ 91,865 Income tax expens
Slide 23: Non-GAAP reconciliation – Net Operating Earnings
Non-GAAP reconciliation – Net Operating Earnings Three months ended Nine months ended Year ended December 31, September 30, September 30, ($000’s) 2017 2018 2019 2020 2021 2021 2022 2021 2022 Net income $24,901 $33,787 $63,316 $88,419 $152,659 $36,625 $32,984 $104,339 $91,865 Adjustments: Change in
Kinsale Capital Group — Investor Presentation (November 2022) on 6ix