Kinsale Capital Group, Inc. (KNSL) Q3 2025 Earnings Summary

Executive Summary

• Kinsale delivered a strong Q3 2025: diluted GAAP EPS $6.09 (+24.3% YoY), diluted operating EPS $5.21 (+24.0% YoY), combined ratio 74.9%, underwriting income $105.7M, and total revenues $497.5M .
• Material beats versus S&P Global consensus: operating EPS $5.21 vs $4.82 estimate (+8.0%)* and revenue $497.5M vs $446.6M estimate (+11.4%)*; with net investment income up 25.1% YoY to $49.6M .
• Growth mixed: gross written premiums (GWP) +8.4% YoY to $486.3M, but Commercial Property Division GWP down 7.9% YoY; ex-Commercial Property GWP +12.3% YoY, driven by strong submissions across most divisions .
• Outlook/tone: management highlighted competitive E&S conditions, expense leadership, and tech/AI-enabled underwriting; property rate declines appear to be moderating; CFO flagged higher retention (June 1 renewal) lifting expense ratio to ~21% baseline near term .
• Corporate developments: Brian D. Haney elected to the Board; plans to retire March 2, 2026 (becoming Senior Advisor); Stuart P. Winston promoted to EVP & Chief Underwriting Officer; later, a $0.17 per share dividend was declared for payment on Dec 11, 2025 .

What Went Well and What Went Wrong

What Went Well

• Combined ratio improved to 74.9% (loss 53.9%, expense 21.0%) with $15.8M (3.7 pts) favorable prior-year reserve development; underwriting income rose to $105.7M .
• Net investment income climbed 25.1% YoY to $49.6M on strong operating cash flows; cash and invested assets reached $4.9B, with AA- average credit quality and 3.6-year duration .
• CEO on strategy and execution: “disciplined underwriting and technology-enabled expense management…deliver long-term value” .

What Went Wrong

• Expense ratio increased to 21.0% from 19.6% YoY due to lower ceding commissions as retention rose; CFO expects ~21% to be a reasonable near-term baseline .
• Commercial Property Division GWP declined 7.9% YoY (Q3) amid lower rates and increased competition (including standard carriers) .
• Current accident year loss ratio rose modestly (57.3% vs 55.1% YoY), partly offset by favorable prior-year development; CAT losses were minimal (0.3 pts) versus 3.8 pts YoY .

Financial Results

Quarterly Trends (Q1 → Q2 → Q3 2025)

Q3 2025 vs Q3 2024

Actual vs S&P Global Consensus (Q3 2025)

Segment/Division Indicators

KPIs (Quarterly)

Guidance Changes

Note: Kinsale typically does not provide quantitative revenue/margin guidance; management offers operational commentary instead .

Earnings Call Themes & Trends

Management Commentary

• CEO Kehoe: “Our business continues to produce strong results across the market cycle…disciplined underwriting and technology-enabled expense management” .
• CFO Petrucelli on retention/expense dynamics: net earned premium outpaced GWP due to increased retention; expense ratio up to 21% from lower ceding commissions; float grew to ~$3B; investment duration ~3.6 years .
• CEO on technology: enterprise system rewrite (target state architecture) and active use of new AI tools across IT, underwriting, and claims to sustain cost advantage .
• President/COO Haney: property rate declines appear to be moderating; growth strongest in commercial auto, entertainment, energy, allied health; submission growth +6% overall, ~9% ex-property .

Q&A Highlights

• Property market: Rate declines moderating; deterioration slowing; other property lines grew double-digit; caution about potential alternative capital entering if CAT activity remains low .
• Casualty lines: Opportunities in excess casualty (lead/first $10M layers), social services, allied health; competition rational after recent adverse development in industry .
• Expense/ceding: Higher retention and lower ceding commissions elevate expense ratio; ~21% and ~17% ceded premium seen as reasonable near-term baselines, subject to mix .
• Technology/AI: Ongoing enterprise system rebuild; active AI deployment across functions to automate and reduce costs .
• Capital allocation: Increased buybacks ($20M in Q3); management sees continued capacity for small dividend and repurchases given mid-teens ROE and high-single-digit growth .

Estimates Context

• Consensus comparison (S&P Global): Q3 2025 operating EPS $4.82* vs actual $5.21, beat +8.0%; Q3 2025 revenue $446.6M vs actual $497.5M, beat +11.4%* .
• Forward consensus (S&P Global): EPS estimates Q4 2025 $5.22*, Q1 2026 $4.75*; revenue estimates Q4 2025 $471.0M*, Q1 2026 $479.9M*; target price consensus $470.89* (9 estimates*)*.
• Implication: Models likely to revise up near term for operating EPS and revenue given beats; watch for mix-driven expense ratio dynamics and property rate trajectory.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Strong quarter with broad-based profitability: combined ratio 74.9%, underwriting income $105.7M, and investment income momentum; operating EPS and revenue materially beat consensus, a positive catalyst .
• Growth quality over quantity: GWP +8.4% YoY with disciplined underwriting; ex-Commercial Property growth +12.3% signals resilience despite competitive property market .
• Near-term margin mechanics: expect elevated expense ratio (~21%) tied to higher retention/lower ceding commissions; still supported by favorable prior-year development and minimal CAT .
• Technology/AI advantage: enterprise system overhaul and AI-enabled workflows underpin structural cost edge; supports sustained underwriting outperformance through cycles .
• Watch property cycle: management sees moderating rate declines; monitor competitive entry and rate normalization into 2026 .
• Capital returns increasing: $20M buybacks in Q3 and $0.17 dividend declared; indicates robust capital generation and shareholder-friendly posture .
• Estimate trajectory: Expect upward revisions for near-term operating EPS/revenue; attention to retention/ceding dynamics in expense forecasts* .