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Kinsale Capital (KNSL) Q3 Earnings Top on Higher Premiums
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Kinsale Capital Group (KNSL - Free Report) delivered third-quarter 2022 net operating earnings of $1.64 per share, which outpaced the Zacks Consensus Estimate by 15.5%. The bottom line improved 3.1% year over year.
The results benefited from rate increases, focus on disciplined underwriting and cost management.
Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise
Total revenues rose about 31.5% year over year to about $217 million. The growth can primarily be attributed to a rise in premiums and higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 1.4%.
Gross written premiums of $284.1 million rose 43.8% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Net written premiums climbed 38.2% year over year to $235.9 million in the quarter.
Net investment income increased 71.2% year over year to $13.9 million in the quarter. The upside came on the back of growth in the investment portfolio and higher interest rate.
Total expenses increased 48.4% year over year to $176.9 million due to a rise in losses and loss adjustment expenses and underwriting, acquisition and insurance expenses as well as interest and other expenses.
Kinsale Capital’s underwriting income of $34.3 million declined 10% year over year, attributable to higher catastrophe losses incurred, offset in part by premium growth and favorable rate increases from a strong underwriting environment and lower levels of relative operating expenses. The combined ratio deteriorated 790 basis points (bps) to 83.6 in the quarter under review, owing to catastrophe loss primarily from Hurricane Ian.
While the expense ratio improved 80 bps to 19.2 in the quarter, the loss ratio deteriorated 790 bps to 64.4.
Financial Update
Kinsale Capital exited the third quarter with cash and cash equivalents of $126.3 million, which increased 4.3% from the 2021-end level. As of Sep 30, 2022, the credit facility was $123.2 million, up nearly threefold from the level at 2021 end.
As of Sep 30, 2022, stockholders’ equity declined 11.4% to $619.5 million from the 2021-end level.
Annualized operating return on equity expanded 140 bps year over year to 24.2% in the reported quarter.
Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers’ third-quarter 2022 core income of $2.20 per share beat the Zacks Consensus Estimate by 24.3% but decreased 15.4% year over year. Total revenues increased 6.8% from the year-ago quarter to $9.4 billion and beat the Zacks Consensus Estimate by 2.5%.
Net written premiums increased 110% year over year to $9.2 billion. Underwriting gain of $115 million increased 53.3% year over year in the reported quarter. The combined ratio improved 40 bps year over year to 98.2.
RLI’s third-quarter 2022 operating earnings of 50 cents per share beat the Zacks Consensus Estimate by 51.5% but declined 23.1% from the prior-year quarter. Operating revenues were $312.7 million, up 15.3% year over year but missed the Zacks Consensus Estimate by 1.3%.
Gross premiums written increased 13.3% year over year to $403.8 million. Underwriting income of $8.8 million decreased 35.8% while the combined ratio deteriorated 240 bps year over year to 97.
Progressive’s earnings per share of 49 cents missed the Zacks Consensus Estimate of $1.24 as well as our estimate of $1.38. The bottom line, however, improved more than threefold from 14 cents earned in the year-ago quarter.
Net premiums written were $13 billion in the quarter, up 5% from $11.7 billion a year ago but missed our estimate of $14.2 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 120 bps from the prior-year quarter’s level to 99.2.
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Kinsale Capital (KNSL) Q3 Earnings Top on Higher Premiums
Kinsale Capital Group (KNSL - Free Report) delivered third-quarter 2022 net operating earnings of $1.64 per share, which outpaced the Zacks Consensus Estimate by 15.5%. The bottom line improved 3.1% year over year.
The results benefited from rate increases, focus on disciplined underwriting and cost management.
Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise
Kinsale Capital Group, Inc. price-consensus-eps-surprise-chart | Kinsale Capital Group, Inc. Quote
Operational Update
Total revenues rose about 31.5% year over year to about $217 million. The growth can primarily be attributed to a rise in premiums and higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 1.4%.
Gross written premiums of $284.1 million rose 43.8% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Net written premiums climbed 38.2% year over year to $235.9 million in the quarter.
Net investment income increased 71.2% year over year to $13.9 million in the quarter. The upside came on the back of growth in the investment portfolio and higher interest rate.
Total expenses increased 48.4% year over year to $176.9 million due to a rise in losses and loss adjustment expenses and underwriting, acquisition and insurance expenses as well as interest and other expenses.
Kinsale Capital’s underwriting income of $34.3 million declined 10% year over year, attributable to higher catastrophe losses incurred, offset in part by premium growth and favorable rate increases from a strong underwriting environment and lower levels of relative operating expenses. The combined ratio deteriorated 790 basis points (bps) to 83.6 in the quarter under review, owing to catastrophe loss primarily from Hurricane Ian.
While the expense ratio improved 80 bps to 19.2 in the quarter, the loss ratio deteriorated 790 bps to 64.4.
Financial Update
Kinsale Capital exited the third quarter with cash and cash equivalents of $126.3 million, which increased 4.3% from the 2021-end level. As of Sep 30, 2022, the credit facility was $123.2 million, up nearly threefold from the level at 2021 end.
As of Sep 30, 2022, stockholders’ equity declined 11.4% to $619.5 million from the 2021-end level.
Annualized operating return on equity expanded 140 bps year over year to 24.2% in the reported quarter.
Zacks Rank
Kinsale Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers’ third-quarter 2022 core income of $2.20 per share beat the Zacks Consensus Estimate by 24.3% but decreased 15.4% year over year. Total revenues increased 6.8% from the year-ago quarter to $9.4 billion and beat the Zacks Consensus Estimate by 2.5%.
Net written premiums increased 110% year over year to $9.2 billion. Underwriting gain of $115 million increased 53.3% year over year in the reported quarter. The combined ratio improved 40 bps year over year to 98.2.
RLI’s third-quarter 2022 operating earnings of 50 cents per share beat the Zacks Consensus Estimate by 51.5% but declined 23.1% from the prior-year quarter. Operating revenues were $312.7 million, up 15.3% year over year but missed the Zacks Consensus Estimate by 1.3%.
Gross premiums written increased 13.3% year over year to $403.8 million. Underwriting income of $8.8 million decreased 35.8% while the combined ratio deteriorated 240 bps year over year to 97.
Progressive’s earnings per share of 49 cents missed the Zacks Consensus Estimate of $1.24 as well as our estimate of $1.38. The bottom line, however, improved more than threefold from 14 cents earned in the year-ago quarter.
Net premiums written were $13 billion in the quarter, up 5% from $11.7 billion a year ago but missed our estimate of $14.2 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 120 bps from the prior-year quarter’s level to 99.2.