Kinsale Capital Group, Inc. · NYSE:KNSL
Kinsale Capital — Investor Presentation (August 2022)
23 slides from Kinsale Capital's investor presentation, August 2022
Slide 1: August 2022
KINSALE —me CAPITAL GROUP August 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. Utilize our Focus on Maintain Leverage our Well-positioned underwriting smaller absolute proprietary to generate expertise to accou
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 June 30, 2022 Ticker KNSL Exchange New York Stock Exchange Stock Price $229.64 per share Market Capitalization $5.26 Billion Book Value $27.68 per share Debt to Total Capitalization Ratio 6.4% Full-time Employees 433 6
Slide 7: Our Approach
Our Approach • Exclusive focus on the small-account E&S market • Disciplined underwriting expertise across a broad spectrum of hard-to-place risks; no delegated underwriting authority • Technology is a core competency, driving best-in-class expense ratio • Entrepreneurial business culture with a clo
Slide 8: Kinsale is the only publicly-traded, pure-play E&S investment opportunity
Kinsale is the only publicly-traded, pure-play E&S investment opportunity Leading public E&S players Our differentiating factors 2021 Surplus lines DWP as % of total direct and assumed written premiums¹ 100% No delegated underwriting JRVR 59% GLBI 55% Low-cost business model RLI 35% ARGO 33% Contrar
Slide 9: E&S Market
E&S Market The E&S market has seen significant growth and generated better underwriting results than the broader P&C industry U.S. surplus lines direct written premiums ($bn) $66.1 $56.3 $49.9 $41.3 $42.4 $44.9 $38.7 $36.6 $37.7 $40.2 $32.8 $33.0 $33.3 $34.4 $33.0 $31.7 $31.1 $34.8 $25.6 $15.8 2001
Slide 10: Dislocation in the E&S market creates additional opportunities
Dislocation in the E&S market creates additional opportunities 2020 E&S market share by DPW1 US composite insurance pricing change2 20% Company DPW ($mm) Market Share 18% 18% Lloyd’s 12,821 19.4% 17% BRK 3,559 5.4% 15% AIG 3,550 5.4% 14% 14% 14% 14% MKL 2,791 4.2% 12% 12% WRB 2,261 3.4% 10% Nationwi
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 $764.4 Expand our presence in the E&S market, particularly $552.8 $522.5 with smaller accounts which we believe are subject to $275.5 $389.7 $362.9 $223.2 less competition Maintain a
Slide 16: Investment Portfolio
Investment Portfolio $1.6 Billion Investment Portfolio as of June 30, 2022 Credit Quality – Fixed-Maturity Portfolio Asset Allocation – Total Investment Portfolio Below BBB & unrated U.S. Treasuries/Short-term Equities 2.0% 4.3% 8.5% Municipals 13.1% BBB AAA CMBS 15.9% 27.6% 3.7% Corporates RMBS 34.
Slide 17: Financial Results
FINANCIAL RESULTS | | i, Wn E a a > L| ‘
Slide 18: Operating Return on Equity
Operating Return on Equity 24.6% 20.8% 18.2% 15.4% 15.9% 14.7% 11.9% 2017 2018 2019 2020 2021 1H 2021 1H 2022 Operating return on equity is net operating earnings expressed as a percentage of average beginning and ending stockholders’ equity during the period. Net operating earnings is a non-GAAP fi
Slide 19: Q2 2022 Financial Update
Q2 2022 Financial Update Three months ended June 30, 2022 Net income decreased by 24.0% from a decline in the fair value of ($mm) 2021 2022 equity investments during the quarter compared to an increase in the fair value of these investments during the same period last year Net operating earnings
Slide 20: Selected Financial Data
Selected Financial Data Year ended December 31, Six months ended June 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 $362,937 $522,514 Underwriting income (1) 28,227 31,222 43,201 54,656 133,564 53,341 81,658 Net
Slide 21: Appendix
APPENDIX 21
Slide 22: Non-GAAP reconciliation – Underwriting Income
Non-GAAP reconciliation – Underwriting Income Three months ended Six months ended Year ended December 31, June 30, June 30, ($000’s) 2017 2018 2019 2020 2021 2021 2022 2021 2022 Net income $24,901 $33,787 $63,316 $88,419 $152,659 $35,635 $27,090 $67,714 $58,881 Income tax expense 13,620 6,693 12,735
Slide 23: Non-GAAP reconciliation – Net Operating Earnings
Non-GAAP reconciliation – Net Operating Earnings Three months ended Six months ended Year ended December 31, June 30, June 30, ($000’s) 2017 2018 2019 2020 2021 2021 2022 2021 2022 Net income $24,901 $33,787 $63,316 $88,419 $152,659 $35,635 $27,090 $67,714 $58,881 Adjustments: Change in the fair val
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