Kinsale Capital Group, Inc. · NYSE:KNSL
Kinsale Capital — Investor Presentation (May 2024)
24 slides from Kinsale Capital's investor presentation, May 2024
Slide 1: May 2024
—me CAPITAL GROUP ” Avy KINSALE YQ Jf May 2024
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 m
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 Experience Prior experience Michael Kehoe 30+ years President and Chief Executive Officer at James River Insurance from 2002 to 2008 Founder, Chairman and Chief Executive Officer Brian Haney 30+ years Chief Actuary of James River Insurance from 2002 to 2009 Pr
Slide 6: Select Market Information
Select Market Information As of March 31, 2024 Ticker KNSL Exchange New York Stock Exchange Stock Price $524.74 Market Capitalization $12.2 billion Book Value $50.31 per share Debt to Total Capitalization Ratio 13.7% Full-time Employees 596 6
Slide 7: Kinsale's Stock Performance vs. the S&P 500
Kinsale’s Stock Performance vs. the S&P 500 Annual Percentage Change (1) Year Kinsale (2) S&P 500 2016 113.5% 4.2% 2017 33.2 21.8 2018 24.1 (4.4) 2019 83.7 31.5 2020 97.3 18.4 2021 19.2 28.7 2022 10.2 (18.1) 2023 28.3 26.3 Compounded Annual Gain ─ 2016-2023 51.2% 13.2% Overall Gain ─ 2016-2023 2,052
Slide 8: Our Approach
Our Approach Exclusive focus on the small-account E&S market Disciplined underwriting expertise across a broad spectrum of hard-to-place risks; no delegated underwriting authority Technology is a core competency, driving best-in-class expense ratio Use analytics to drive profitability and op
Slide 9: Kinsale is the only publicly-traded, pure-play E&S investment opportunity
Kinsale is the only publicly-traded, pure-play E&S investment opportunity Leading public E&S players Our differentiating factors 2023 Surplus lines DWP as % of total direct and assumed written premiums¹ No delegated underwriting 100% GLBI 76% Low-cost business model JRVR 72% RLI 44% Contrarian under
Slide 10: E&S Market
E&S Market The E&S market has seen significant growth and generated better underwriting results than the broader P&C industry U.S. surplus lines direct written premiums ($bn) $98.5 $82.7 $66.1 $56.3 $44.9 $49.9 $38.7 $36.6 $37.7 $40.2 $41.3 $42.4 $32.8 $33.0 $33.3 $34.4 $33.0 $31.7 $31.1 $34.8 $25.6
Slide 11: Dislocation in the E&S market creates additional opportunities
Dislocation in the E&S market creates additional opportunities 2022 E&S market share by direct premiums written (DPW)1 US composite insurance pricing change2 Rank Company DPW ($mm) Market Share 20% 18% 18% Lloyd’s 15,483 15.7% 17% 1 BRK 6,904 7.0% 2 AIG 4,537 4.6% 15% 14% 14% 14% 14% 3 MKL 3,836 3.9
Slide 12: 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 2 Broad appetite to underwrite a diverse set of risks across the 2.5% E&S market, including some difficult risks where we believe Other Commercial 1 15.3% Commercial Property pricing may be attractive 26.3% Highly
Slide 13: 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 premiums by division Year Ended December 31, 2021-2023 (000's) 2023 2022 2021 CAGR Commercial: Commercial Property $ 411,956 $
Slide 14: Technology is a core competency
Technology is a core competency Key highlights Proprietary platform design reflects the best practices our management team has learned from extensive prior experience Integrated digital platform enables scale, reliability and performance throughout the organization, promoting clear communication
Slide 15: 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 2021-2023 38.4% 0.2% 22.2% 16.2% 11.2% 8.6% (3.5%) (17.0%) 1.8% NPW CAGR 1 2 Loss ratio Expense ratio 108.2% 2021 – 2023 100.2% Average peer 97.8% combined ratio: 89.5% 93.5% 24.4%
Slide 16: We believe Kinsale is well-positioned for continued profitable growth
We believe Kinsale is well-positioned for continued profitable growth Growth Drivers Expand our presence in the E&S market Develop new product offerings where we have underwriting expertise Focus on smaller accounts which we believe are subject to less competition Leverage technology to driv
Slide 17: Investment Portfolio
Investment Portfolio $3.1 Billion Investment Portfolio1 as of March 31, 2024 Credit Quality – Fixed-Maturity Portfolio Asset Allocation – Total Investment Portfolio Below BBB & unrated Equities U.S. Treasuries/Short-term 2.4% 9.1% 0.7% Municipals CMBS BBB 5.0% AAA 2.4% 17.4% 28.9% RMBS Corporates 14
Slide 18: Financial Results
FINANCIAL RESULTS | | i, Wn E a a > L| ‘
Slide 19: Operating Return on Equity
Operating Return on Equity 31.8% 29.1% 28.9% 25.0% 20.8% 15.9% 14.7% 2019 2020 2021 2022 2023 Q1 2023 Q1 2024 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 20: Q1 2024 Financial Update
Q1 2024 Financial Update Diluted earnings per share increased by 76.7% to $4.24 compared to the first Three months ended March 31 quarter of 2023 (in $ millions) 2023 2024 Diluted operating earnings(1) per share increased by 43.4% to $3.50 compared to Gross written premiums $ 357.6 $ 448.6 the f
Slide 21: Selected Financial Data
Selected Financial Data Three months ended Year ended December 31, March 31, ($000’s) 2019 2020 2021 2022 2023 2023 2024 Operating Results: Gross written premiums $389,694 $552,814 $764,373 $1,102,092 $1,568,815 $357,588 $448,644 Underwriting income (1) 43,201 54,656 133,564 175,488 270,374 51,579 6
Slide 22: Appendix
APPENDIX 22
Slide 23: Non-GAAP Reconciliation – Underwriting Income
Non-GAAP Reconciliation – Underwriting Income Three months ended Year ended December 31, March 31, ($000’s) 2019 2020 2021 2022 2023 2023 2024 Net income $63,316 $88,419 $152,659 $159,114 $308,093 $ 55,800 $ 98,941 Income tax expense 12,735 11,994 36,142 36,450 75,924 12,593 16,926 Income before inc
Slide 24: Non-GAAP Reconciliation – Net Operating Earnings
Non-GAAP Reconciliation – Net Operating Earnings Year ended December 31, Three months ended March 31, ($000’s) 2019 2020 2021 2022 2023 2023 2024 Net income $ 63,316 $ 88,419 $ 152,659 $ 159,114 $ 308,093 $ 55,800 $ 98,941 Adjustments: Change in the fair value of equity securities, before taxes (12,
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