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Kinsale Capital's (KNSL) Q2 Earnings Beat, Revenues Up Y/Y

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Kinsale Capital Group, Inc. (KNSL - Free Report) reported second-quarter 2020 net operating earnings of 84 cents per share, which surpassed the Zacks Consensus Estimate by 20%. Moreover, the bottom line improved 47.4% year over year.

The company’s results benefited from improved revenues and strong underwriting results, which were partially offset by increased costs.

Operational Update

Total revenues in the second quarter were $118 million, which surged 61.6% year over year. The upside can primarily be attributed to higher premiums and improved net investment income. The top line also beat the consensus mark by 15.1%

Gross written premiums increased 41.2% year over year to $134.1 million, primarily driven by increased submission activity and higher rates on bound accounts.

Net investment income surged 38.3% year over year to nearly $6.6 million, courtesy of persistent growth in the company’s investment portfolio.

Total expenses in the quarter under review climbed 45% year over year to $81.3 million owing to higher losses and loss adjustment expenses, and underwriting, acquisition and insurance expenses.

Kinsale Capital incurred underwriting income of $15.7 million, up 55.8% year over year, driven by premium growth and higher favorable development on loss reserves from prior accident years. Combined ratio improved 100 basis points (bps) to 83.8%.

Expense ratio improved 120 bps to 23.7% in the second quarter. However, loss ratio deteriorated 20 bps to 60.1% in the quarter under review.

Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise

Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise

Kinsale Capital Group, Inc. price-consensus-eps-surprise-chart | Kinsale Capital Group, Inc. Quote

Financial Update

Kinsale Capital exited the second quarter with cash and cash equivalents of $63 million, down 37.3% over the level at 2019 end. As of Jun 30, 2020, credit facility of $33.1 million surged 97.7% from 2019-end level.

In the first half of 2020, net cash from operating activities was $132.6 million, which soared 86% from the first half of 2019.

Annualized operating return on equity expanded 110 bps year over year to 17.8% in the quarter.

Zacks Rank & Performance of Other Insurers

Kinsale Capital carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom lines of Selective Insurance Group, Inc. (SIGI - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the Zacks Consensus Estimate.

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