Kinsale Capital Group Delivers Strong Q4 2024 Results Amid Challenging Market Conditions
Kinsale Capital Group, a leading provider of excess and surplus (E&S) insurance solutions, has reported impressive financial results for the fourth quarter of 2024. The company's operating earnings per share increased by 19.4% compared to the same period in 2023, while gross written premium grew by 12.2%. These achievements demonstrate Kinsale's ability to navigate challenging market conditions and deliver value to its stakeholders.
According to Michael Kehoe, Chairman and CEO of Kinsale Capital Group, the company's success is driven by its strategic focus on small E&S accounts, absolute control over underwriting and claim handling processes, best-in-class service levels, and a risk appetite that it provides to its brokers. Additionally, the company's technology-driven approach allows for low costs and continuous improvement in areas such as expense ratio, customer service, and underwriting accuracy.
In contrast to some of Kinsale's peers, the Southern California wildfires did not have a significant impact on the company's financials, with estimated pretax losses net of reinsurance expected to be approximately $25 million. This demonstrates the company's ability to manage risk effectively and minimize the impact of catastrophic events.
Bryan Petrucelli, CFO of Kinsale Capital Group, highlighted the company's solid performance in Q4 2024, with a combined ratio of 73.4% and net operating earnings increasing by 19.4%. The 21.1% expense ratio for the quarter was largely driven by higher variable compensation and ceding commissions, offsetting lower investment income. However, the full-year expense ratio remains competitive at 20.6%, a slight improvement from 2023.
Petrucelli also highlighted the company's strong investment performance, with net investment income increasing by 37.8% in Q4 2024 compared to last year. The annualized gross return was 4.4% for the year so far, outperforming the previous year's rate of 4%. New money yields are averaging in the low 5% range, while book yields are around 4.5%, indicating continued investment income benefit from higher rates.
Notably, Kinsale Capital Group continues to invest heavily in technology and data analytics to drive further gains in the years ahead. This strategic approach is expected to improve the company's expense ratio, customer service, and underwriting accuracy, ultimately benefiting its profitability and growth.
The company's capital management strategy also remains strong, with $10 million repurchased in shares during Q4 2024. Similar modest levels of repurchases are expected each quarter, with larger purchases made opportunistically as needed.
Kinsale Capital Group's impressive Q4 2024 results demonstrate the company's resilience and ability to navigate challenging market conditions. The company's strategic approach, combined with its strong investment performance and capital management strategy, positions it for continued growth and success in the years ahead."
