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Kinsale (KNSL) Q3 Earnings Top, Revenues Miss Estimates
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Kinsale Capital Group (KNSL - Free Report) delivered third-quarter 2023 net operating earnings of $3.31 per share, which outpaced the Zacks Consensus Estimate by 13%. The bottom line more than doubled year over year. The results benefited from an improved pricing environment, premium growth, favorable loss experience and higher net investment income.
Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise
Operating revenues rose 44.7% year over year to about $314 million. The growth can primarily be attributed to a rise in premiums, fee income and higher net investment income. Revenues missed the consensus estimate by 1.9%.
Gross written premiums of $377.8 million rose 33% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Our estimate was $348.5 million.
Net written premiums climbed 24.7% year over year to $294.3 million in the quarter. Our estimate is pegged at $287.9 million.
Net investment income increased 95.5% year over year to $27.1 million in the quarter and beat our estimate of $14.9 million. The increase was driven by growth in the investment portfolio, driven largely by the investment of strong operating cash flows and higher interest rates. The Zacks Consensus Estimate was pegged at $21.5 million.
Total expenses increased 20.3% year over year to $218.9 million due to a rise in losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, interest expense and other expenses. Our estimate was pegged at $235.7 million.
Kinsale Capital’s underwriting income of $72.4 million more than doubled year over year. The increase in underwriting income was due to a combination of premium growth, favorable loss experience and lower net commissions. Our estimate was $61.3 million.
The combined ratio deteriorated 900 basis points (bps) to 78.4 in the quarter under review.
While the expense ratio deteriorated 20 bps to 20.9 in the quarter, the loss ratio deteriorated 900 bps to 53.9.
Financial Update
Kinsale Capital exited the third quarter with cash and cash equivalents of $162.9 million, which increased 4.3% from the 2022-end level. As of Sep 30, 2023, stockholders’ equity increased 23.9% to $923.8 million from the 2022-end level.
Annualized operating return on equity expanded 1020 bps year over year to 34.4% in the reported quarter.
The Travelers Companies (TRV - Free Report) reported third-quarter 2023 core income of $1.95 per share, which missed the Zacks Consensus Estimate by 33.4%. The bottom line decreased 11.4% year over year, primarily attributable to higher catastrophe losses and net unfavorable prior-year reserve development. Travelers’ total revenues increased 14% from the year-ago quarter to $10.6 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 1.3%.
Net written premiums increased 14% year over year to a record $10.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.4 billion. Travelers witnessed an underwriting gain of $868 million, up 43% year over year, driven by record net earned premiums of $9.7 billion and a 90.6% improvement in the consolidated underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2023 earnings per share of $2.09 beat the Zacks Consensus Estimate of $1.71. The bottom line improved more than fourfold year over year. Net premiums written were $15.6 billion in the quarter, which grew 20% from $13 billion a year ago and beat our estimate of $14.2 billion.
Net premiums earned grew 20% to $14.9 billion, beating our estimate of $13.6 billion and the Zacks Consensus Estimate of $14.8 billion. Net realized losses on securities were $149 million, narrower than a loss of $216.4 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 680 bps from the prior-year quarter’s level to 92.4.
RLI Corp. (RLI - Free Report) reported third-quarter 2023 operating earnings of 61 cents per share, beating the Zacks Consensus Estimate by 510%. The bottom line improved 22% from the prior-year quarter. Operating revenues for the reported quarter were $350.4 million, up 12.1% year over year, driven by 9.2% higher net premiums earned and 50.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 7.2%.
Gross premiums written increased 11.3% year over year to $449.3 million. Underwriting income of $4.2 million decreased 52.3%, primarily due to Hawaiian wildfire losses. The combined ratio deteriorated 170 basis points (bps) year over year to 98.7. Our estimate was 90.8.
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Kinsale (KNSL) Q3 Earnings Top, Revenues Miss Estimates
Kinsale Capital Group (KNSL - Free Report) delivered third-quarter 2023 net operating earnings of $3.31 per share, which outpaced the Zacks Consensus Estimate by 13%. The bottom line more than doubled year over year. The results benefited from an improved pricing environment, premium growth, favorable loss experience and higher net investment income.
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
Operating revenues rose 44.7% year over year to about $314 million. The growth can primarily be attributed to a rise in premiums, fee income and higher net investment income. Revenues missed the consensus estimate by 1.9%.
Gross written premiums of $377.8 million rose 33% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Our estimate was $348.5 million.
Net written premiums climbed 24.7% year over year to $294.3 million in the quarter. Our estimate is pegged at $287.9 million.
Net investment income increased 95.5% year over year to $27.1 million in the quarter and beat our estimate of $14.9 million. The increase was driven by growth in the investment portfolio, driven largely by the investment of strong operating cash flows and higher interest rates. The Zacks Consensus Estimate was pegged at $21.5 million.
Total expenses increased 20.3% year over year to $218.9 million due to a rise in losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, interest expense and other expenses. Our estimate was pegged at $235.7 million.
Kinsale Capital’s underwriting income of $72.4 million more than doubled year over year. The increase in underwriting income was due to a combination of premium growth, favorable loss experience and lower net commissions. Our estimate was $61.3 million.
The combined ratio deteriorated 900 basis points (bps) to 78.4 in the quarter under review.
While the expense ratio deteriorated 20 bps to 20.9 in the quarter, the loss ratio deteriorated 900 bps to 53.9.
Financial Update
Kinsale Capital exited the third quarter with cash and cash equivalents of $162.9 million, which increased 4.3% from the 2022-end level. As of Sep 30, 2023, stockholders’ equity increased 23.9% to $923.8 million from the 2022-end level.
Annualized operating return on equity expanded 1020 bps year over year to 34.4% in the reported quarter.
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 Some Other P&C Insurers
The Travelers Companies (TRV - Free Report) reported third-quarter 2023 core income of $1.95 per share, which missed the Zacks Consensus Estimate by 33.4%. The bottom line decreased 11.4% year over year, primarily attributable to higher catastrophe losses and net unfavorable prior-year reserve development. Travelers’ total revenues increased 14% from the year-ago quarter to $10.6 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 1.3%.
Net written premiums increased 14% year over year to a record $10.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.4 billion. Travelers witnessed an underwriting gain of $868 million, up 43% year over year, driven by record net earned premiums of $9.7 billion and a 90.6% improvement in the consolidated underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2023 earnings per share of $2.09 beat the Zacks Consensus Estimate of $1.71. The bottom line improved more than fourfold year over year. Net premiums written were $15.6 billion in the quarter, which grew 20% from $13 billion a year ago and beat our estimate of $14.2 billion.
Net premiums earned grew 20% to $14.9 billion, beating our estimate of $13.6 billion and the Zacks Consensus Estimate of $14.8 billion. Net realized losses on securities were $149 million, narrower than a loss of $216.4 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 680 bps from the prior-year quarter’s level to 92.4.
RLI Corp. (RLI - Free Report) reported third-quarter 2023 operating earnings of 61 cents per share, beating the Zacks Consensus Estimate by 510%. The bottom line improved 22% from the prior-year quarter. Operating revenues for the reported quarter were $350.4 million, up 12.1% year over year, driven by 9.2% higher net premiums earned and 50.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 7.2%.
Gross premiums written increased 11.3% year over year to $449.3 million. Underwriting income of $4.2 million decreased 52.3%, primarily due to Hawaiian wildfire losses. The combined ratio deteriorated 170 basis points (bps) year over year to 98.7. Our estimate was 90.8.