Back to top

Image: Bigstock

Kinsale Capital (KNSL) Q1 Earnings Beat, Revenues Up Y/Y

Read MoreHide Full Article

Kinsale Capital Group, Inc. (KNSL - Free Report) delivered first-quarter 2021 net operating earnings of $1.11 per share, which outpaced the Zacks Consensus Estimate by 27.6%. Further, the bottom line improved 46.1% year over year.

The company’s results gained momentum on the back of growing premiums and strong underwriting results. However, the upside was partly offset due to escalating expenses in the quarter.

Operational Update

Total revenues in the first quarter surged 72.1% year over year to $138.3 million. The growth can primarily be attributed to rise in premiums and higher net investment income. Also, the top line surpassed the Zacks Consensus Estimate by 7%.

Gross written premiums of $168.9 million rose 36.2% year over year attributable to rate increases and rise in submission activity from brokers. Net written premiums climbed 33.5% year over year to $144.3 million in the quarter.

Net investment income advanced 16.5% year over year to $6.9 million in the quarter. The upside came on the back of proceeds stemming from the company’s equity offering in third-quarter 2020 coupled with operating funds being invested since Mar 31, 2020 resulting in higher investment portfolio balance.

In the first quarter, the company’s total expenses increased 31.2% year over year to $98.8 million due to rise in losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, and other expenses.

Kinsale Capital reported underwriting income of $24.6 million, which soared 70.8% year over year courtesy of higher premiums stemming from a favorable underwriting environment, persistent rate improvements and rise in net favorable development of loss reserves compared to prior accident years. Combined ratio improved 390 basis points (bps) to 80% in the quarter under review.

While expense ratio improved 110 bps to 22.9% in the first quarter, loss ratio improved 280 bps to 57.1%.

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 first quarter with cash and cash equivalents of $132.5 million, which surged 71.9% from the 2020-end level. As of Mar 31, 2021, credit facility of $42.6 million inched up 0.1% from the level at 2020 end.

As of Mar 31, 2021, stockholders’ equity grew 2% to $587.6 million from 2020-end level.

Annualized operating return on equity expanded 50 bps year over year to 17.6% in the quarter under review.

Zacks Rank

Kinsale Capital currently has a Zacks Rank #4 (Sell).

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

Performance of Other Insurers

Of the insurance industry players that have reported first-quarter results so far, the bottom line of W. R. Berkley Corporation (WRB - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and First American Financial Corporation (FAF - Free Report) beat the Zacks Consensus Estimate.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Published in