0001669162false00016691622024-07-252024-07-25

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 25, 2024
KINSALE CAPITAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
001-3784898-0664337
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
2035 Maywill Street
Suite 100
Richmond, Virginia 23230
(Address of principal executive offices, including zip code)
(804) 289-1300
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareKNSLNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02     Results of Operations and Financial Condition.
On July 25, 2024, Kinsale Capital Group, Inc. (the “Company”) issued a press release announcing its financial results for the three and six months ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01    Financial Statements and Exhibits.
    (d) Exhibits.
Exhibit No.Description
99.1
104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Kinsale Capital Group, Inc.
Dated: July 25, 2024
By:/s/ Bryan P. Petrucelli
Bryan P. Petrucelli
Executive Vice President, Chief Financial Officer and Treasurer


Exhibit 99.1
kinsalecapitalgrouplogo.jpg
Kinsale Capital Group Reports Second Quarter 2024 Results
Richmond, VA, July 25, 2024 - Kinsale Capital Group, Inc. (NYSE: KNSL) reported net income of $92.6 million, $3.97 per diluted share, for the second quarter of 2024 compared to $72.8 million, $3.12 per diluted share, for the second quarter of 2023. Net income was $191.5 million, $8.21 per diluted share, for the first half of 2024 compared to $128.6 million, $5.52 per diluted share, for the first half of 2023.
Net operating earnings(1) were $87.4 million, $3.75 per diluted share, for the second quarter of 2024 compared to $67.2 million, $2.88 per diluted share, for the second quarter of 2023. Net operating earnings(1) were $169.1 million, $7.25 per diluted share, for the first half of 2024 compared to $123.9 million, $5.32 per diluted share, for the first half of 2023.
Highlights for the quarter included:
•Diluted earnings per share increased by 27.2% to $3.97 compared to the second quarter of 2023
•Diluted operating earnings(1) per share increased by 30.2% to $3.75 compared to the second quarter of 2023
•Gross written premiums increased by 20.9% to $529.8 million compared to the second quarter of 2023
•Net investment income increased by 48.3% to $35.8 million compared to the second quarter of 2023
•Underwriting income(2) was $76.1 million in the second quarter of 2024, resulting in a combined ratio(5) of 77.7%
•Annualized operating return on equity(7) was 28.8% for the six months ended June 30, 2024

“We are pleased with our second quarter results highlighted by continued growth and strong margins. Delivering long-term value for stockholders remains our focus as we leverage underwriting and technological competitive advantages and our low-cost model to profitably grow market share,” said Chairman and Chief Executive Officer, Michael P. Kehoe.
Results of Operations
Underwriting Results
Gross written premiums were $529.8 million for the second quarter of 2024 compared to $438.2 million for the second quarter of 2023, an increase of 20.9%. Gross written premiums were $978.4 million for the first half of 2024 compared to $795.8 million for the first half of 2023, an increase of 22.9%. The increase in gross written premiums during the second quarter and first half of 2024 over the same periods last year reflected strong submission flow from brokers and a favorable pricing environment.
Underwriting income(2) was $76.1 million, resulting in a combined ratio(5) of 77.7% for the second quarter of 2024, compared to $61.5 million and a combined ratio(5) of 76.7% for the same period last year. The increase in underwriting income(2) quarter over quarter was largely due to combination of premium growth and lower relative net commissions. Loss(3) and expense(4) ratios were 56.6% and 21.1%, respectively, for the second quarter of 2024 compared to 55.7% and 21.0% for the second quarter of 2023. Results for the second quarters of 2024 and 2023 included net favorable development of loss reserves from prior accident years of $9.5 million, or 2.8 points, and $10.4 million, or 3.9 points, respectively.
Underwriting income(2) was $141.1 million, resulting in a combined ratio(5) of 78.6% for the first half of 2024 compared to $113.1 million and a combined ratio(5) of 77.7% for the first half of 2023. The increase in underwriting income(2) was primarily due to a combination of premium growth and lower relative net commissions. Loss(3) and expense(4) ratios were 57.7% and 20.9%, respectively, for the first half of 2024 compared to 56.4% and 21.3% for the first half of 2023. Results for the first half of 2024 and 2023 included






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net favorable development of loss reserves from prior accident years of $17.9 million, or 2.7 points, and $19.5 million, or 3.8 points, respectively.
Summary of Operating Results
The Company’s operating results for the three and six months ended June 30, 2024 and 2023 are summarized as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
($ in thousands)
Gross written premiums$529,770 $438,222 $978,414 $795,810 
Ceded written premiums(99,534)(73,181)(197,124)(131,739)
Net written premiums$430,236 $365,041 $781,290 $664,071 
Net earned premiums $332,461 $257,046 $641,979 $494,204 
Fee income 8,991 6,986 17,083 13,187 
Losses and loss adjustment expenses193,325 147,042 380,111 286,076 
Underwriting, acquisition and insurance expenses
72,068 55,473 137,821 108,219 
Underwriting income(2)
$76,059 $61,517 $141,130 $113,096 
Loss ratio(3)
56.6 %55.7 %57.7 %56.4 %
Expense ratio(4)
21.1 %21.0 %20.9 %21.3 %
Combined ratio(5)
77.7 %76.7 %78.6 %77.7 %
Annualized return on equity(6)
30.5 %34.5 %32.7 %31.8 %
Annualized operating return on equity(7)
28.8 %31.8 %28.8 %30.6 %
(1)     Net operating earnings is a non-GAAP financial measure. See discussion of "Non-GAAP Financial Measures" below.
(2)    Underwriting income is a non-GAAP financial measure. See discussion of "Non-GAAP Financial Measures" below.
(3)    Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses to the sum of net earned premiums and fee income.
(4)    Expense ratio, expressed as a percentage, is the ratio of underwriting, acquisition and insurance expenses to the sum of net earned premiums and fee income.
(5)    The combined ratio is the sum of the loss ratio and expense ratio as presented. Calculations of each component may not add due to rounding.
(6)    Annualized return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.
(7)    Annualized operating return on equity is net operating earnings expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.







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The following tables summarize losses incurred for the current accident year and the development of prior accident years for the three and six months ended June 30, 2024 and 2023:

Three Months Ended
June 30, 2024		Three Months Ended
June 30, 2023
Losses and Loss Adjustment Expenses% of Sum of Earned Premiums and Fee IncomeLosses and Loss Adjustment Expenses% of Sum of Earned Premiums and Fee Income
Loss ratio:($ in thousands)
Current accident year$199,406 58.4 %$156,008 59.1 %
Current accident year - catastrophe losses
3,420 1.0 %1,451 0.5 %
Effect of prior accident year development(9,501)(2.8)%(10,417)(3.9)%
Total$193,325 56.6 %$147,042 55.7 %

Six Months Ended
June 30, 2024		Six Months Ended
June 30, 2023
Losses and Loss Adjustment Expenses% of Sum of Earned Premiums and Fee IncomeLosses and Loss Adjustment Expenses% of Sum of Earned Premiums and Fee Income
Loss ratio:($ in thousands)
Current accident year$394,060 59.8 %$302,511 59.6 %
Current accident year - catastrophe losses
3,998 0.6 %3,025 0.6 %
Effect of prior accident year development(17,947)(2.7)%(19,460)(3.8)%
Total$380,111 57.7 %$286,076 56.4 %

Investment Results
Net investment income was $35.8 million in the second quarter of 2024 compared to $24.2 million in the second quarter of 2023, an increase of 48.3%. Net investment income was $68.8 million in the first half of 2024 compared to $44.9 million in the first half of 2023, an increase of 53.3%. These increases were driven by growth in the Company's investment portfolio generated largely from the investment of strong operating cash flows and higher interest rates relative to the prior year period. Net operating cash flows were $489.3 million in the first half of 2024 compared to $423.6 million in the first half of 2023, an increase of 15.5%. The Company’s investment portfolio had an annualized gross investment return(8) of 4.3% for the first half of 2024 compared to 3.8% for the same period last year. Funds are generally invested conservatively in high quality securities with an average credit quality of "AA-" and the weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 3.0 years and 2.8 years at June 30, 2024 and December 31, 2023, respectively. Cash and invested assets totaled $3.6 billion at June 30, 2024 and $3.1 billion at December 31, 2023.
(8)    Gross investment return is investment income from fixed-maturity and equity securities (and short-term investments, if any), before any deductions for fees and expenses, expressed as a percentage of average beginning and ending book values of those investments during the period.
Other
The effective tax rates for the six months ended June 30, 2024 and 2023 were 17.3% and 18.9%, respectively. In the first half of 2024 and 2023, the effective tax rates were lower than the federal statutory rate of 21% primarily due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income.
Stockholders' equity was $1.3 billion at June 30, 2024 compared to $1.1 billion at December 31, 2023. Book value per share was $53.99 at June 30, 2024 compared to $46.88 at December 31, 2023. Annualized operating






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return on equity(7) was 28.8% for the first half of 2024, a decrease from 30.6% for the first half of 2023. The decrease was due primarily to higher average stockholders' equity as a result of profitable growth offset in part by higher net operating earnings.
Non-GAAP Financial Measures
Net Operating Earnings
Net operating earnings is defined as net income excluding the effects of the change in the fair value of equity securities, after taxes, net realized investment gains and losses, after taxes, and change in allowance for credit losses on investments, after taxes. Management believes the exclusion of these items provides a useful comparison of the Company's underlying business performance from period to period. Net operating earnings and percentages or calculations using net operating earnings (e.g., diluted operating earnings per share and annualized operating return on equity) are non-GAAP financial measures. Net operating earnings should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define net operating earnings differently.






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For the three and six months ended June 30, 2024 and 2023, net income and diluted earnings per share reconcile to net operating earnings and diluted operating earnings per share as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
($ in thousands, except per share data)
Net operating earnings:
Net income$92,579 $72,791 $191,520 $128,591 
Adjustments:
Change in the fair value of equity securities, before taxes(3,159)(5,811)(21,212)(9,329)
Income tax expense (1)
663 1,220 4,455 1,959 
Change in fair value of equity securities, after taxes(2,496)(4,591)(16,757)(7,370)
Net realized investment (gains) losses, before taxes(2,879)(1,291)(6,745)3,361 
Income tax expense (benefit) (1)
605 271 1,416 (706)
Net realized investment (gains) losses, after taxes(2,274)(1,020)(5,329)2,655 
Change in allowance for credit losses on investments, before taxes(476)(25)(486)56 
Income tax expense (benefit) (1)
100 5 102 (12)
Change in allowance for credit losses on investments, after taxes(376)(20)(384)44 
Net operating earnings$87,433 $67,160 $169,050 $123,920 
Diluted operating earnings per share:
Diluted earnings per share$3.97 $3.12 $8.21 $5.52 
Change in the fair value of equity securities, after taxes, per share(0.11)(0.20)(0.72)(0.32)
Net realized investment (gains) losses, after taxes, per share(0.10)(0.04)(0.23)0.11 
Change in allowance for credit losses on investments, after taxes, per share(0.02)— (0.02)— 
Diluted operating earnings per share(2)
$3.75 $2.88 $7.25 $5.32 
Operating return on equity:
Average equity(3)
$1,214,086 $843,773 $1,172,018 $808,632 
Annualized return on equity(4)
30.5 %34.5 %32.7 %31.8 %
Annualized operating return on equity(5)
28.8 %31.8 %28.8 %30.6 %
(1)     Income taxes on adjustments to reconcile net income to net operating earnings use a 21% effective tax rate.
(2)     Diluted operating earnings per share may not add due to rounding.
(3)    Average equity is computed by adding the total stockholders' equity as of the date indicated to the prior quarter-end or year-end total, as applicable, and dividing by two.
(4)    Annualized return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.






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(5)    Annualized operating return on equity is net operating earnings expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.
Underwriting Income
Underwriting income is defined as net income excluding net investment income, the change in the fair value of equity securities, net realized investment gains and losses, change in allowance for credit losses on investments, interest expense, other expenses, other income and income tax expense. The Company uses underwriting income as an internal performance measure in the management of its operations because the Company believes it gives management and users of the Company's financial information useful insight into the Company's results of operations and underlying business performance. Underwriting income should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define underwriting income differently.
For the three and six months ended June 30, 2024 and 2023, net income reconciles to underwriting income as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(in thousands)
Net income$92,579 $72,791 $191,520 $128,591 
Income tax expense 23,221 17,319 40,147 29,912 
Income before income taxes115,800 90,110 231,667 158,503 
Net investment income(35,847)(24,172)(68,780)(44,867)
Change in the fair value of equity securities
(3,159)(5,811)(21,212)(9,329)
Net realized investment (gains) losses (2,879)(1,291)(6,745)3,361 
Change in allowance for credit losses on investments(476)(25)(486)56 
Interest expense2,564 2,724 4,986 5,294 
Other expenses (6)
796 417 2,759 819 
Other income(740)(435)(1,059)(741)
Underwriting income$76,059 $61,517 $141,130 $113,096 
(6)    Other expenses includes primarily corporate expenses not allocated to the Company's insurance operations.

Conference Call
Kinsale Capital Group will hold a conference call to discuss this press release on Friday, July 26, 2024 at 9:00 a.m. (Eastern Time). Members of the public may access the conference call by dialing (800) 715-9871, conference ID# 7469751, or via the Internet by going to www.kinsalecapitalgroup.com and clicking on the "Investor Relations" link. A replay of the call will be available on the website until the close of business on August 23, 2024.

Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects," "believes," "seeks," "outlook," "future," "will," "would," "should," "could," "may," "can have," "prospects" or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and factors, they include, among others, the following: inadequate loss reserves to cover the Company's actual losses; inherent uncertainty of models resulting in actual losses that are materially different than the Company's estimates; adverse economic factors; a decline in the Company's financial strength rating; loss of one or more key executives; loss of a group of brokers that generate significant portions of the Company's






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business; failure of any of the loss limitations or exclusions the Company employs, or change in other claims or coverage issues; adverse performance of the Company's investment portfolio; adverse market conditions that affect its excess and surplus lines insurance operations; and other risks described in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

About Kinsale Capital Group, Inc.
Kinsale Capital Group, Inc. is a specialty insurance group headquartered in Richmond, Virginia, focusing on the excess and surplus lines market.
Contact
Kinsale Capital Group, Inc.
Bryan Petrucelli
Executive Vice President, Chief Financial Officer and Treasurer
804-289-1272
ir@kinsalecapitalgroup.com






7

KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income and Comprehensive Income

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenues(in thousands, except per share data)
Gross written premiums$529,770 $438,222 $978,414 $795,810 
Ceded written premiums(99,534)(73,181)(197,124)(131,739)
Net written premiums430,236 365,041 781,290 664,071 
Change in unearned premiums(97,775)(107,995)(139,311)(169,867)
Net earned premiums332,461 257,046 641,979 494,204 
Fee income 8,991 6,986 17,083 13,187 
Net investment income35,847 24,172 68,780 44,867 
Change in the fair value of equity securities3,159 5,811 21,212 9,329 
Net realized investment gains (losses) 2,879 1,291 6,745 (3,361)
Change in allowance for credit losses on investments476 25 486 (56)
Other income740 435 1,059 741 
Total revenues384,553 295,766 757,344 558,911 
Expenses
Losses and loss adjustment expenses193,325 147,042 380,111 286,076 
Underwriting, acquisition and insurance expenses72,068 55,473 137,821 108,219 
Interest expense2,564 2,724 4,986 5,294 
Other expenses796 417 2,759 819 
Total expenses268,753 205,656 525,677 400,408 
Income before income taxes115,800 90,110 231,667 158,503 
Total income tax expense23,221 17,319 40,147 29,912 
Net income92,579 72,791 191,520 128,591 
Other comprehensive (loss) income
Change in net unrealized losses on available-for-sale investments, net of taxes(5,658)(14,107)(15,598)3,402 
Total comprehensive income$86,921 $58,684 $175,922 $131,993 
Earnings per share:
Basic$4.00 $3.16 $8.28 $5.59 
Diluted$3.97 $3.12 $8.21 $5.52 
Weighted-average shares outstanding:
Basic23,165 23,040 23,137 23,024 
Diluted23,329 23,301 23,332 23,293 






8

KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets

June 30, 2024December 31, 2023
Assets(in thousands)
Investments:
Fixed-maturity securities at fair value
$3,072,718 $2,711,759 
Equity securities at fair value317,482 234,813 
Real estate investments, net15,045 14,791 
Short-term investments6,908 5,589 
Total investments3,412,153 2,966,952 
Cash and cash equivalents171,021 126,694 
Investment income due and accrued25,112 21,689 
Premiums receivable, net171,815 143,212 
Reinsurance recoverables, net302,092 247,836 
Ceded unearned premiums58,492 52,516 
Deferred policy acquisition costs, net of ceding commissions
109,358 88,395 
Intangible assets3,538 3,538 
Deferred income tax asset, net57,410 55,699 
Other assets84,300 66,443 
Total assets$4,395,291 $3,772,974 
Liabilities & Stockholders' Equity
Liabilities:
Reserves for unpaid losses and loss adjustment expenses$2,013,055 $1,692,875 
Unearned premiums846,638 701,351 
Payable to reinsurers48,397 47,582 
Accounts payable and accrued expenses27,188 44,922 
Debt183,984 183,846 
Other liabilities18,826 15,566 
Total liabilities3,138,088 2,686,142 
Stockholders' equity1,257,203 1,086,832 
Total liabilities and stockholders' equity$4,395,291 $3,772,974 







9
v3.24.2
DEI Document
Jul. 25, 2024
Document and Entity Information [Abstract]  
Document Type 8-K
Document Period End Date Jul. 25, 2024
Entity Registrant Name KINSALE CAPITAL GROUP, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-37848
Entity Tax Identification Number 98-0664337
Entity Address, Address Line One 2035 Maywill Street
Entity Address, Address Line Two Suite 100
Entity Address, City or Town Richmond
Entity Address, State or Province VA
Entity Address, Postal Zip Code 23230
City Area Code 804
Local Phone Number 289-1300
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol KNSL
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001669162
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