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.
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 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.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>