Kinsale Capital Group (KNSL) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $89.2 million ($3.83/diluted share), down 9.8% year-over-year, mainly due to higher catastrophe losses and lower unrealized equity gains, despite strong premium and investment income growth.

• Operating earnings per share rose 6% to $3.71, with gross written premium up 7.9% to $484.3 million; excluding Commercial Property, premiums grew 16.7%.

• The Palisades wildfire loss estimate was $41 million gross and $22 million net of reinsurance, pre-tax, with $17.8 million after-tax impact.

• Premium growth was below expectations due to an 18.4% decline in the commercial property division, offset by double-digit growth in personal lines and small commercial property.

• The E&S market remained steady but more competitive, especially in large property accounts.

Financial highlights

• Combined ratio for the quarter was 82.1%, up from 79.5% last year, including 3.9 points of net favorable prior-year reserve development and 6 points in catastrophe losses.

• Net investment income increased 33.1% year-over-year to $43.8 million, with an annualized gross return of 4.3%.

• Underwriting income was $67.5 million, up 3.7% year-over-year.

• Expense ratio improved to 20.0% from 20.7% last year.

• Book value per share rose to $67.92 at March 31, 2025.

Outlook and guidance

• Premium growth is expected to face headwinds in Q2 due to commercial property seasonality, but should ease in the second half of 2025.

• Management remains confident in sustaining strong underwriting performance and prioritizes profitability over growth.

• Sufficient liquidity and capital resources are expected for the next 12 months.

• The company expects to continue modest share repurchases each quarter, with opportunistic increases possible if market volatility intensifies.

• Focus remains on profitable growth in the E&S market and ongoing investment in underwriting and risk management.