News Details

RICHMOND, Va.--(BUSINESS WIRE)-- Kinsale Capital Group, Inc. (NYSE: KNSL) reported net income of $98.1 million, $4.36 per diluted share, for the third quarter of 2026 compared to $141.6 million, $6.09 per diluted share, for the third quarter of 2025. Net income was $386.6 million, $16.97 per diluted share, for the first nine months of 2026 compared to $365.0 million, $15.67 per diluted share, for the first nine months of 2025. Net income included after-tax catastrophe losses of $1.7 million in the third quarter of 2026 and $1.0 million in the third quarter of 2025. Net income included after-tax catastrophe losses of $7.2 million in the first nine months of 2026 and $21.7 million in the first nine months of 2025.

Net operating earnings⁽¹⁾ were $128.3 million, $5.70 per diluted share, for the third quarter of 2026 compared to $121.2 million, $5.21 per diluted share, for the third quarter of 2025. Net operating earnings⁽¹⁾ were $372.3 million, $16.34 per diluted share, for the first nine months of 2026 compared to $319.0 million, $13.70 per diluted share, for the first nine months of 2025.

Highlights for the quarter included:

• Gross written premiums decreased by 4.8% to $462.9 million, and net written premiums decreased by 1.5% to $399.1 million
• Net earned premiums increased by 3.0% to $423.5 million
• Net investment income increased by 17.5% to $58.3 million
• Underwriting income ⁽²⁾ was $107.1 million, resulting in a combined ratio ⁽⁵⁾ of 75.4%
• Annualized return on equity ⁽⁶⁾ was 26.6% for the nine months ended September 30, 2026
• Annualized operating return on equity ⁽⁷⁾ was 25.6% for the nine months ended September 30, 2026
• Net income includes a $37.6 million pre-tax realized loss on the sale of fixed-maturity securities due to a strategic repositioning of the investment portfolio expected to improve long-term returns

"Our underwriting results this quarter demonstrate discipline in a competitive market," said Chairman, President and Chief Executive Officer, Michael P. Kehoe. "We continue to produce exceptional underwriting margins and strong investment income which allows us to return capital to stockholders. Disciplined underwriting and technology-enabled low costs remain the foundation of our strategy to create long-term value for our stockholders."

Results of Operations

Underwriting Results

Gross written premiums were $462.9 million for the third quarter of 2026 compared to $486.3 million for the third quarter of 2025, a decrease of 4.8%. Gross written premiums were $1,472.5 million for the first nine months of 2026 compared to $1,526.0 million for the first nine months of 2025, a decrease of 3.5%. The decrease in gross written premiums was primarily due to heightened competition in the Company's property divisions, where premiums declined 19.3% and 18.7% in the third quarter and first nine months of 2026, respectively, including declines of 26.8% and 29.8% in the Commercial Property Division. Gross written premiums in the Company's casualty business increased 0.9% for the third quarter of 2026 and 3.0% for the first nine months of 2026 compared to the prior-year periods, primarily due to an increase in bound accounts offset in part by a change in business mix towards smaller accounts.

Underwriting income⁽²⁾ was $107.1 million, resulting in a combined ratio⁽⁵⁾ of 75.4% for the third quarter of 2026, compared to $105.7 million and a combined ratio⁽⁵⁾ of 74.9% for the third quarter of 2025. The increase in underwriting income⁽²⁾ was largely due to growth in net earned premiums and higher favorable development of loss reserves from prior accident years offset in part by lower ceding commissions as a result of increased retention on the Company's reinsurance treaties. Loss⁽³⁾ and expense⁽⁴⁾ ratios were 53.4% and 22.0%, respectively, for the third quarter of 2026 compared to 53.9% and 21.0% for the third quarter of 2025.

Underwriting income⁽²⁾ was $307.0 million, resulting in a combined ratio⁽⁵⁾ of 76.1% for the first nine months of 2026 compared to $268.6 million and a combined ratio⁽⁵⁾ of 77.5% for the first nine months of 2025. The increase in underwriting income⁽²⁾ was largely due to growth in net earned premiums, lower catastrophe losses and higher favorable development of loss reserves from prior accident years. Loss⁽³⁾ and expense⁽⁴⁾ ratios were 54.5% and 21.6%, respectively, for the first nine months of 2026 compared to 56.9% and 20.6% for the first nine months of 2025. The loss ratio for the first nine months of 2025 included 2.3 points of net catastrophe losses, primarily related to the Palisades Fire.

The increase in the expense ratio for both the third quarter and first nine months of 2026 compared to the prior-year periods was primarily due to lower ceding commissions as a result of higher retention on the Company’s reinsurance treaties. The economic effect of lower ceding commissions was more than offset by the retention of incremental underwriting margin and higher investment income.

Summary of Operating Results

The Company’s operating results for the three and nine months ended September 30, 2026 and 2025 are summarized as follows:

The following table summarizes losses incurred for the current accident year and the development of prior accident years for the three and nine months ended September 30, 2026 and 2025:

Investment Results

Net investment income was $58.3 million in the third quarter of 2026 compared to $49.6 million in the third quarter of 2025, an increase of 17.5%. Net investment income was $169.4 million in the first nine months of 2026 compared to $139.9 million in the first nine months of 2025, an increase of 21.1%. These increases were driven by growth in the Company's investment portfolio generated largely from the investment of strong operating cash flows. The Company’s investment portfolio had an annualized gross investment return⁽⁸⁾ of 4.4% and 4.3% for the first nine months of 2026 and 2025, respectively. Funds are generally invested conservatively in high-quality securities with an average credit quality of "AA-" and the weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.4 years and 4.0 years at September 30, 2026 and December 31, 2025, respectively. Cash and invested assets totaled $5.5 billion at September 30, 2026 and $5.2 billion at December 31, 2025.

During the third quarter of 2026, the Company repositioned a portion of its investment portfolio to improve expected long-term returns. The Company sold certain common stock holdings in a gain position and reinvested the proceeds in higher conviction common stock investments. The Company simultaneously sold lower-yielding fixed-maturity securities in a largely offsetting loss position and reinvested the proceeds in higher-yielding fixed-maturity investments. The repositioning reduced third quarter pre-tax earnings by $37.6 million as the equity gains were recorded through earnings in the period of appreciation and the bond losses were recorded through earnings upon sale. There was no impact to book value.

Capital Return to Stockholders

During the third quarter of 2026, the Company repurchased 269,004 shares of its common stock in the open market at an average price of $371.74 per share for a total cost of $100.0 million. At September 30, 2026, the Company had $237.5 million of capacity remaining under its share repurchase program. In the aggregate, the Company has repurchased 990,763 shares of its common stock for a total cost of $362.5 million.

During the third quarter of 2026, the Company declared and paid a cash dividend of $0.25 per share of common stock for a total distribution of $5.6 million.

Other

The effective tax rates for the nine months ended September 30, 2026 and September 30, 2025 were 20.0% and 20.6%, respectively. In the first nine months of 2026 and 2025, the effective tax rates were lower than the federal statutory rate of 21% primarily due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income.

Stockholders' equity was $1.9 billion at September 30, 2026 and $2.0 billion at December 31, 2025. Book value per share was $85.25 at September 30, 2026 compared to $84.66 at December 31, 2025. Annualized operating return on equity⁽⁷⁾ was 25.6% for the first nine months of 2026, an increase from 25.4% for the first nine months of 2025. The increase was due primarily to higher profitability compared to the prior-year period offset in part by higher average stockholders' equity.

Non-GAAP Financial Measures

Net Operating Earnings

Net operating earnings is defined as net income excluding the effects of the change in the fair value of equity securities, after taxes, net realized investment gains and losses, after taxes, and change in allowance for credit losses on investments, after taxes. Management believes the exclusion of these items provides a useful comparison of the Company's underlying business performance from period to period. Net operating earnings and percentages or calculations using net operating earnings (e.g., diluted operating earnings per share and annualized operating return on equity) are non-GAAP financial measures. Net operating earnings should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define net operating earnings differently.

For the three and nine months ended September 30, 2026 and 2025, net income and diluted earnings per share reconcile to net operating earnings and diluted operating earnings per share as follows:

Underwriting Income

Underwriting income is defined as net income excluding net investment income, the change in the fair value of equity securities, net realized investment gains and losses, change in allowance for credit losses on investments, interest expense, other expenses, other income and income tax expense. The Company uses underwriting income as an internal performance measure in the management of its operations because the Company believes it gives management and users of the Company's financial information useful insight into the Company's results of operations and underlying business performance. Underwriting income should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define underwriting income differently.

For the three and nine months ended September 30, 2026 and 2025, net income reconciles to underwriting income as follows:

Conference Call

Kinsale Capital Group will hold a conference call to discuss this press release on Friday, October 23, 2026 at 9:00 a.m. (Eastern Time). Members of the public may access the conference call by dialing (833) 461-5787, conference ID# 796 079 082, or via the Internet by going to www.kinsalecapitalgroup.com and clicking on the "Investor Relations" link. A replay of the call will be available on the website.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects," "believes," "seeks," "outlook," "future," "will," "would," "should," "could," "may," "can have," "prospects" or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and factors, they include, among others, the following: inadequate loss reserves to cover the Company's actual losses; inherent uncertainty of models resulting in actual losses that are materially different than the Company's estimates; adverse economic factors; a decline in the Company's financial strength rating; loss of one or more key executives; loss of a group of brokers that generate significant portions of the Company's business; failure of any of the loss limitations or exclusions the Company employs, or change in other claims or coverage issues; adverse performance of the Company's investment portfolio; adverse market conditions that affect its excess and surplus lines insurance operations; and other risks described in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

About Kinsale Capital Group, Inc.

Kinsale Capital Group, Inc. is a specialty insurance group headquartered in Richmond, Virginia, focusing on the excess and surplus lines market.