Joseph Tumillo

Joseph Tumillo asked if the trend of social inflation and increased litigation, typically seen in larger accounts, was beginning to migrate into the smaller account market where Kinsale operates. He also requested more details on Kinsale's AI deployment, specifically where the greatest opportunities lie for the next year, such as in claims or underwriting.

Answer

Chairman and CEO Michael Kehoe confirmed that small accounts are not immune to litigation activity, noting no pronounced change recently but emphasizing vigilance due to the growing and entrepreneurial litigation industry. Regarding AI, Michael Kehoe explained its broad benefits in automating repetitive tasks for cost savings, improved customer service, and error reduction. He highlighted its most effective current use in analytics and IT for coding and data conversion, with a focus on driving automation and enhancing risk segmentation and pricing.

Joseph Tumillo asked if social inflation and increased litigation, typically seen in larger accounts, were migrating to the small account market. He also requested more details on Kinsale's deployment of AI within the business, particularly in claims and underwriting, for the upcoming year.

Answer

Michael Kehoe, Chairman and CEO, confirmed small accounts are not immune to litigation but noted no pronounced recent change, while remaining vigilant. He explained AI's role in automating repetitive tasks for cost savings, customer service, and error reduction, highlighting its use in analytics and IT for coding, testing, and data conversion to improve automation and risk segmentation/pricing.

Joseph Tumillo asked if the submission rate, excluding commercial property, remained steady or decreased, and if the increased share repurchases this quarter were opportunistic or a function of lower growth and excess cash flow.

Answer

Brian Haney, President and COO, stated that the submission rate, excluding commercial property, is closer to 9%. Michael Kehoe, CEO and Chairman, indicated that the increased share repurchases were primarily a function of generating excess capital from mid-teens ROEs and high single-digit growth, with the primary goal being business growth, followed by dividends and repurchases that could grow.

Joseph Tumillo from Bank of America asked about the submission rate, specifically if it remained steady or decreased when excluding the commercial property division. He also inquired whether the stepped-up share repurchases this quarter were opportunistic due to share price movements or a function of lower growth and abundant cash flow, considering Kinsale's focus on capital efficiency.

Answer

Brian Haney, President and COO, stated that the submission rate, excluding commercial property, was closer to 9%. Michael Kehoe, CEO and Chairman, attributed the increased share repurchases to generating excess capital, with mid-teens operating return on equity and high single-digit growth. He noted that while growth is the primary goal, the company also maintains a small dividend and share repurchase program, both of which could continue to grow.

Joseph Tumillo asked about the current bind-to-submit ratio and its stability, and sought management's view on the competitive cycle for MGAs, given their high loss ratios.

Answer

President & COO Brian Haney confirmed that the bind-to-submit ratio has remained relatively stable. On the topic of MGA competition, Chairman & CEO Michael Kehoe declined to speculate on the market cycle, stating, 'We don't really have an opinion on that... we'll leave that in your capable hands.'