Kinsale Profit Climbs as Underwriting Margin Improves
Gross written premiums fell 5.0% to $527.6 million as property business contracted.
Specialty insurer Kinsale Capital Group (KNSL) posted a 31.1% increase in second-quarter net income as a lower loss ratio lifted underwriting results.
The quarter extended a divergence between profitability and premium growth. Gross written premiums declined after four consecutive quarters of deceleration, while underwriting income rose and the combined ratio improved.
Net income reached $175.9 million, or $7.72 a diluted share, compared with $112.6 million, or $4.88 a share, in the first quarter. Net operating earnings rose 13.3% from a year earlier to $126.2 million, while diluted operating earnings increased 15.9% to $5.54 a share.
Net earned premiums increased 8.9% to $417.6 million, slowing from growth of about 11.2% in the first quarter. Net written premiums declined 1.4% to $452.5 million, reversing the prior quarter's 5.6% increase.
The Commercial Property Division remained the main drag, with premiums falling 32.7%, compared with declines of 28.3% in each of the previous two quarters. Excluding that division, gross written-premium growth slowed to 3.7% from 6.0% in the first quarter as lower average premium per policy partly offset strong submissions and more bound accounts.
Underwriting income rose 10.5% to $105.4 million as the combined ratio improved to 75.5% from 75.8% a year earlier and 77.4% in the first quarter. The loss ratio declined to 53.8%, helped by 4.5 percentage points of favorable prior-year reserve development, even as catastrophe losses increased sequentially.
The expense ratio increased to 21.7% from 20.7% a year earlier, primarily because greater reinsurance retention reduced ceding commissions. Incremental underwriting margin and investment income more than offset that effect; net investment income rose 19.9% to $55.7 million.
Kinsale repurchased 321,055 shares for $100.0 million during the quarter and authorized an additional $250 million, leaving $337.5 million of remaining capacity. Book value increased to $89.34 a share at June 30 from $84.66 at the end of 2024.