Kinsale Capital Group, Inc. · NYSE:KNSL
Kinsale Capital — Investor Presentation (November 2023)
23 slides from Kinsale Capital's investor presentation, November 2023
Slide 1: November 2023
KINSALE —me CAPITAL GROUP November 2023
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 Experience Prior experience Michael Kehoe Founder, President and President and CEO at James River Insurance from 2002 to 30+ years CEO 2008 Brian Haney EVP, Chief Operating 30+ years Chief Actuary of James River Insurance from 2002 to 2009 Officer Bryan Petruc
Slide 6: Select Market Information
Select Market Information As of September 30, 2023 Ticker KNSL Exchange New York Stock Exchange Stock Price $414.13 Market Capitalization $9.6 billion Book Value $39.86 per share Debt to Total Capitalization Ratio 16.8% Full-time Employees 545 6
Slide 7: Our Approach
Our Approach Exclusive focus on the small-account E&S market Disciplined underwriting expertise across a broad spectrum of hard-to-place risks; no delegated underwriting authority Technology is a core competency, driving best-in-class expense ratio Use analytics to drive profitability and op
Slide 8: Kinsale is the only publicly-traded, pure-play E&S investment opportunity
Kinsale is the only publicly-traded, pure-play E&S investment opportunity Leading public E&S players Our differentiating factors 2022 Surplus lines DWP as % of total direct and assumed written premiums¹ No delegated underwriting 100% JRVR 66% Low-cost business model GLBI 53% RLI 39% Contrarian under
Slide 9: E&S Market
E&S Market The E&S market has seen significant growth and generated better underwriting results than the broader P&C industry U.S. surplus lines direct written premiums ($bn) $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 $25.6
Slide 10: Dislocation in the E&S market creates additional opportunities
Dislocation in the E&S market creates additional opportunities 2022 E&S market share by DPW1 US composite insurance pricing change2 20% Rank Company DPW ($mm) Market Share 18% 18% Lloyd’s 15,483 15.7% 17% 1 BRK 6,904 7.0% 15% 2 AIG 4,537 4.6% 14% 14% 14% 14% 3 MKL 3,836 3.9% 12% 12% 4 Fairfax 3,783
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 2.8% Commercial Property across the E&S market, including some difficult risks Other Commercial 1 16.8% where we believe pricing may be attractive 13.8%
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 premiums by division Year Ended December 31, 2020-2022 ('000's) 2022 2021 2020 CAGR Commercial: Commercial Property $ 184,766
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 2020-2022 NPW CAGR 40.0% (4.8%) 22.0% 18.0% 17.4% 17.6% 7.5% 3.9% 10.2% (1.9%) 1 2 108.8% Loss ratio Expense ratio 105.5% 2020 – 2022 103.8% Average peer 95.5% 93.5% 96.6% 97.4% com
Slide 15: We believe Kinsale is well-positioned for continued profitable growth
We believe Kinsale is well-positioned for continued profitable growth Growth drivers Gross written premiums ($mm) Expand our presence in the E&S market, particularly with smaller accounts which we believe are subject to less competition $1,173.6 $1,102.1 Maintain a contrarian risk appetite $806.
Slide 16: Investment Portfolio
Investment Portfolio $2.6 Billion Investment Portfolio1 as of September 30, 2023 Credit Quality – Fixed-Maturity Portfolio Asset Allocation – Total Investment Portfolio Below BBB & unrated U.S. Treasuries/Short-term 2.5% Equities 2.7% 8.0% Municipals BBB CMBS 6.1% 15.5% AAA 30.6% 2.4% RMBS 11.4% Cor
Slide 17: Financial Results
FINANCIAL RESULTS | | i, Wn E a a > L| ‘
Slide 18: Operating Return on Equity
Operating Return on Equity 32.1% 25.0% 24.3% 20.8% 15.4% 15.9% 14.7% 2018 2019 2020 2021 2022 YTD 9/30/22 YTD 9/30/23 Operating return on equity is net operating earnings expressed as a percentage of average beginning and ending stockholders’ equity during the period. Net operating earnings is a non
Slide 19: Q3 2023 Financial Update
Q3 2023 Financial Update Three months ended Net income increased by 130.8% compared to the third quarter of September 30, 2022 ($mm) 2022 2023 Net operating earnings(1) of $77.2 million increased by 103.6% Gross written premiums $ 284.1 $ 377.8 compared to the third quarter of 2022 Net earned pr
Slide 20: Selected Financial Data
Selected Financial Data Nine months ended Year ended December 31, September 30, ($000’s) 2018 2019 2020 2021 2022 2022 2023 Operating Results: Gross written premiums $275,538 $389,694 $552,814 $764,373 $1,102,092 $806,625 $1,173,599 Underwriting income (1) 31,222 43,201 54,656 133,564 175,488 115,98
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) 2018 2019 2020 2021 2022 2022 2023 2022 2023 Net income $33,787 $63,316 $88,419 $152,659 $159,114 $32,984 $76,115 $91,865 $204,706 Income tax expense 6,693 1
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) 2018 2019 2020 2021 2022 2022 2023 2022 2023 Net income $33,787 $63,316 $88,419 $152,659 $159,114 $32,984 $76,115 $91,865 $204,706 Adjustments: Change in
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