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Kinsale Capital (KNSL) Q1 Earnings Top on Higher Premiums
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Kinsale Capital Group (KNSL - Free Report) delivered first-quarter 2023 net operating earnings of $2.44 per share, which outpaced the Zacks Consensus Estimate by 8.9% and our estimate of $2.20. The bottom line improved 49.7% year over year.
Total revenues amounted to $256.9 million, surpassing the Zacks Consensus Estimate by 3.2% and our estimate of $242.1 million. The metric rose 42.8% year over year in the quarter under review. The growth can primarily be attributed to a rise in premiums and higher net investment income.
The results benefited from favorable pricing environment and a focus on disciplined underwriting and cost management.
Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise
Gross written premiums of $357.6 million rose 45.6% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Net written premiums climbed 38.1% year over year to $299 million in the quarter.
Net investment income skyrocketed 127.7% to $20.7 million in the quarter. The upside came from improved interest income due to a high-interest rate environment. The metric surpassed the Zacks Consensus Estimate by 24.5% and our estimate by a huge margin.
Total expenses increased 33.3% year over year to $188.6 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 $51.6 million improved 37.5% year over year, driven by premium growth, favorable rate increases from a strong underwriting environment and lower net commissions and scale. The combined ratio improved 80 basis points (bps) to 78.2.
While the expense ratio improved 200 bps to 19.6 in the quarter, the loss ratio deteriorated 120 bps to 58.6.
Financial Update
Kinsale Capital exited the first quarter of 2023 with cash and cash equivalents of $158.6 million, which increased from $156.3 million at 2022-end. As of Mar 31, 2023, debt was $195.8 million, up from $195.7 million at 2022-end.
As of Mar 31, 2023, stockholders’ equity increased 9.4% to $815.7 million from the 2022-end level.
Annualized operating return on equity expanded 700 bps year over year to 29.1% in 2023.
The Travelers Companies, Inc. (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41.
However, the bottom line decreased 2.6% year over year. The year-over-year decline reflects higher catastrophe losses and lower net favorable prior-year reserve developments. However, a higher underlying underwriting gain and higher net investment income partially offset the same.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 and our estimate of $1.50. The bottom line declined 20.7% year over year.
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of $14.6 billion.Net premiums earned grew 15% to $13.5 billion, beating our estimate of $12.6 billion.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2023 operating income of $1 per share missed the Zacks Consensus Estimate by about 16%. The bottom line declined 9.1% year over year and missed our estimate of $1.19.
The insurer benefited from higher premiums, driven by strong rate increases in nearly all lines of business, exposure growth fueling continued strong underwriting performance, and a surge in investment income.
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Kinsale Capital (KNSL) Q1 Earnings Top on Higher Premiums
Kinsale Capital Group (KNSL - Free Report) delivered first-quarter 2023 net operating earnings of $2.44 per share, which outpaced the Zacks Consensus Estimate by 8.9% and our estimate of $2.20. The bottom line improved 49.7% year over year.
Total revenues amounted to $256.9 million, surpassing the Zacks Consensus Estimate by 3.2% and our estimate of $242.1 million. The metric rose 42.8% year over year in the quarter under review. The growth can primarily be attributed to a rise in premiums and higher net investment income.
The results benefited from favorable pricing environment and a 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
Gross written premiums of $357.6 million rose 45.6% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Net written premiums climbed 38.1% year over year to $299 million in the quarter.
Net investment income skyrocketed 127.7% to $20.7 million in the quarter. The upside came from improved interest income due to a high-interest rate environment. The metric surpassed the Zacks Consensus Estimate by 24.5% and our estimate by a huge margin.
Total expenses increased 33.3% year over year to $188.6 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 $51.6 million improved 37.5% year over year, driven by premium growth, favorable rate increases from a strong underwriting environment and lower net commissions and scale. The combined ratio improved 80 basis points (bps) to 78.2.
While the expense ratio improved 200 bps to 19.6 in the quarter, the loss ratio deteriorated 120 bps to 58.6.
Financial Update
Kinsale Capital exited the first quarter of 2023 with cash and cash equivalents of $158.6 million, which increased from $156.3 million at 2022-end. As of Mar 31, 2023, debt was $195.8 million, up from $195.7 million at 2022-end.
As of Mar 31, 2023, stockholders’ equity increased 9.4% to $815.7 million from the 2022-end level.
Annualized operating return on equity expanded 700 bps year over year to 29.1% in 2023.
Zacks Rank
Kinsale Capital currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Property and CasualtyInsurers
The Travelers Companies, Inc. (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41.
However, the bottom line decreased 2.6% year over year. The year-over-year decline reflects higher catastrophe losses and lower net favorable prior-year reserve developments. However, a higher underlying underwriting gain and higher net investment income partially offset the same.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 and our estimate of $1.50. The bottom line declined 20.7% year over year.
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of $14.6 billion.Net premiums earned grew 15% to $13.5 billion, beating our estimate of $12.6 billion.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2023 operating income of $1 per share missed the Zacks Consensus Estimate by about 16%. The bottom line declined 9.1% year over year and missed our estimate of $1.19.
The insurer benefited from higher premiums, driven by strong rate increases in nearly all lines of business, exposure growth fueling continued strong underwriting performance, and a surge in investment income.