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Kinsale Capital (KNSL) Q2 Earnings Top on Solid Underwriting
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Kinsale Capital Group (KNSL - Free Report) delivered second-quarter 2022 net operating earnings of $1.92 per share, which outpaced the Zacks Consensus Estimate by 14.9%. The bottom line improved 54.7% year over year.
The results benefited from the rate increases, focus on disciplined underwriting and cost management.
Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise
Total revenues rose about 17% year over year to about $179 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 8.5%.
Gross written premiums of $277 million rose 42.7% year over year, driven by higher submission activity from brokers and a continued favorable pricing environment. Net written premiums climbed 44.5% year over year to $242.3 million in the quarter.
Net investment income increased 42.6% year over year to $10.6 million in the quarter. The upside came on the back of growth in the investment portfolio.
Total expenses increased 33.9% year over year to $146.5 million due to a rise in losses and loss adjustment expenses and underwriting, acquisition and insurance expenses as well as other expenses.
Kinsale Capital’s underwriting income of $44.1 million soared 53.7% year over year, largely on strong premium growth, rate increase and lower levels of relative reported losses and operating expenses. The combined ratio improved 240 basis points (bps) to 76.8 in the quarter under review, reflecting the combination of a superior business model and favorable E&S market conditions.
While the expense ratio improved 120 bps to 21.4 in the quarter, the loss ratio improved 120 bps to 56.3.
Financial Update
Kinsale Capital exited the second quarter with cash and cash equivalents of $120.9 million, which decreased 0.1% from the 2021-end level. As of Jun 30, 2022, the credit facility was $42.8 million, up 0.1% from the level at 2021 end.
As of Jun 30, 2022, stockholders’ equity declined 9.3% to $634.1 million from the 2021-end level.
Annualized operating return on equity expanded 800 bps year over year to 27.3% in the reported quarter.
Of the insurance industry players that have reported second-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) met the mark.
Travelers’ core income of $2.57 per share beat the Zacks Consensus Estimate by 28.5% but decreased 26% year over year. Total revenues increased 7% year over year, primarily due to higher premiums and beat the consensus estimate by 1.8%. Net written premiums increased 11%, driven by strong retention rates and positive renewal premium changes across all the segments. Underwriting gain of $113 million decreased 65% year over year in the reported quarter.
Travelers’ combined ratio deteriorated 300 bps year over year to 98.3 due to higher catastrophe losses and a higher underlying combined ratio.
RLI’s operating earnings of $1.49 per share beat the Zacks Consensus Estimate by 6.1% and improved 36.7% from the prior-year quarter. Operating revenues were $301.3 million, up 16.9% year over year, driven by 17.3% higher net premiums earned and 10.5% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.9%.
RLI’s underwriting income of $56 million increased 53%, primarily due to the strong performance of the Property and Surety segments. The combined ratio improved 460 bps year over year to 80.2.
Progressive’s earnings per share of 95 cents came in line with the Zacks Consensus Estimate. The bottom line declined 37.1% year over year. Net premiums written were $12.4 billion in the quarter, up 8% from $11.7 billion a year ago.
Progressive’s net premiums earned grew 13% to $12.1 billion. The combined ratio improved 90 bps from the prior-year quarter’s level to 95.6.
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Kinsale Capital (KNSL) Q2 Earnings Top on Solid Underwriting
Kinsale Capital Group (KNSL - Free Report) delivered second-quarter 2022 net operating earnings of $1.92 per share, which outpaced the Zacks Consensus Estimate by 14.9%. The bottom line improved 54.7% year over year.
The results benefited from the 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 17% year over year to about $179 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 8.5%.
Gross written premiums of $277 million rose 42.7% year over year, driven by higher submission activity from brokers and a continued favorable pricing environment. Net written premiums climbed 44.5% year over year to $242.3 million in the quarter.
Net investment income increased 42.6% year over year to $10.6 million in the quarter. The upside came on the back of growth in the investment portfolio.
Total expenses increased 33.9% year over year to $146.5 million due to a rise in losses and loss adjustment expenses and underwriting, acquisition and insurance expenses as well as other expenses.
Kinsale Capital’s underwriting income of $44.1 million soared 53.7% year over year, largely on strong premium growth, rate increase and lower levels of relative reported losses and operating expenses. The combined ratio improved 240 basis points (bps) to 76.8 in the quarter under review, reflecting the combination of a superior business model and favorable E&S market conditions.
While the expense ratio improved 120 bps to 21.4 in the quarter, the loss ratio improved 120 bps to 56.3.
Financial Update
Kinsale Capital exited the second quarter with cash and cash equivalents of $120.9 million, which decreased 0.1% from the 2021-end level. As of Jun 30, 2022, the credit facility was $42.8 million, up 0.1% from the level at 2021 end.
As of Jun 30, 2022, stockholders’ equity declined 9.3% to $634.1 million from the 2021-end level.
Annualized operating return on equity expanded 800 bps year over year to 27.3% 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 second-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) met the mark.
Travelers’ core income of $2.57 per share beat the Zacks Consensus Estimate by 28.5% but decreased 26% year over year. Total revenues increased 7% year over year, primarily due to higher premiums and beat the consensus estimate by 1.8%. Net written premiums increased 11%, driven by strong retention rates and positive renewal premium changes across all the segments. Underwriting gain of $113 million decreased 65% year over year in the reported quarter.
Travelers’ combined ratio deteriorated 300 bps year over year to 98.3 due to higher catastrophe losses and a higher underlying combined ratio.
RLI’s operating earnings of $1.49 per share beat the Zacks Consensus Estimate by 6.1% and improved 36.7% from the prior-year quarter. Operating revenues were $301.3 million, up 16.9% year over year, driven by 17.3% higher net premiums earned and 10.5% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.9%.
RLI’s underwriting income of $56 million increased 53%, primarily due to the strong performance of the Property and Surety segments. The combined ratio improved 460 bps year over year to 80.2.
Progressive’s earnings per share of 95 cents came in line with the Zacks Consensus Estimate. The bottom line declined 37.1% year over year. Net premiums written were $12.4 billion in the quarter, up 8% from $11.7 billion a year ago.
Progressive’s net premiums earned grew 13% to $12.1 billion. The combined ratio improved 90 bps from the prior-year quarter’s level to 95.6.