Kinsale Capital Group, Inc. (KNSL) Earnings & Analysis

Latest quarter

Kinsale reported Q3 FY2026 revenue of $454.8 million, below the consensus of $478.8 million. Adjusted earnings per share, as the consensus counts them, were $5.70, above the $4.95 estimate. Diluted earnings per share were $4.36, down from $6.09 a year earlier.

The filing attributed the decline in quarterly net income to investment losses, compared with gains a year earlier, partly offset by higher investment and underwriting income. Underwriting income rose to $107.1 million from $105.7 million, as higher net earned premiums and favorable development of prior-year loss reserves outweighed some of the reduction in ceding commissions.

Gross written premiums fell to $462.9 million from $486.3 million. Kinsale attributed the decline primarily to competition in its property divisions, while casualty premiums grew as the number of bound accounts increased. The company’s combined ratio was 75.4%, compared with 74.9% a year earlier. Free cash flow was $261.8 million, down from $289.5 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Michael Kehoe said excess and surplus lines market conditions remained competitive and varied by segment. Commercial property competition weighed on growth, he said, although submissions, quotes and bind orders grew in the mid single digits during the quarter. Kehoe described the mix change this way: “our book shifted slightly from larger to smaller accounts.”

Chief underwriting officer Stuart Winston said new business submissions excluding commercial property rose 10% in the quarter. He also said the agribusiness, commercial auto, entertainment, ocean marine and environmental divisions each had double-digit growth. In the question-and-answer session, Winston pointed to increased homeowners competition in California and Florida.

Asked about pricing and returns, Kehoe said Kinsale manages its product lines to a 20% return or greater, translating that objective into loss-ratio targets for division managers. He said larger accounts faced more competition, with lower new-business hit ratios and renewal retention than smaller accounts. Kehoe also said Kinsale reviews claims activity against actuarial assumptions and maintains conservative reserves for long-tail business, which is exposed to inflation and uncertainty in the legal system.

Analysts also pressed Kehoe on whether lower average premiums and slower growth would affect expenses. He said automation across underwriting, claims and policy services had a positive effect, while the quarterly premium decline probably had a modest negative effect. Kehoe said the effects largely offset and that technology should help the expense ratio move down over time.

On investments, Christopher Tangard estimated that repositioning fixed-income assets would add to annual investment income. Kehoe said he hoped the shift away from larger accounts would run its course and that Kinsale would return to modest growth in the near term, but he could not give a date. Kehoe also said Tangard would become CFO in March 2027, following Bryan Petrucelli’s planned retirement.

Guidance

Tangard said Kinsale expects $100.0 million to be a good quarterly run rate for share repurchases and plans to be opportunistic otherwise. Winston said average premium would probably remain fairly steady, but could trend slightly lower as competition picks up. Kehoe said he hoped for modest premium growth in the near term, but could not give a date.