Kinsale Capital Group reported net income of $98.1 million, $4.36 per diluted share, for the third quarter. The company’s earnings release gives the year-earlier figure as $141.6 million, $6.09 per diluted share, for the third quarter. On premiums, the same release says that gross written premiums decreased by 4.8% to $462.9 million, and net written premiums decreased by 1.5% to $399.1 million.
Net Income, Net Operating Earnings and Per-Share Results
Kinsale Capital Group filed its third-quarter results as an exhibit to a Form 8-K. In that document, the company says it reported net income of $98.1 million, $4.36 per diluted share, for the third quarter, and it gives the prior-year comparison as $141.6 million, $6.09 per diluted share, for the third quarter.
The release also reports on the longer period. For the first nine months, it says that net income was $386.6 million, $16.97 per diluted share, for the first nine months. The prior-year nine-month figure given in the release is $365.0 million, $15.67 per diluted share, for the first nine months.
A separate line covers net operating earnings. According to the release, net operating earnings were $128.3 million, $5.70 per diluted share, for the third quarter, compared with $121.2 million, $5.21 per diluted share, for the third quarter.
The release adds a line on catastrophe losses, which it ties to net income. It says: Net income included after-tax catastrophe losses of $1.7 million in the third quarter. The prior-year figure it gives is $1.0 million in the third quarter.
The chief executive commented on the underwriting side in the release. The release attributes the following statement to Chairman, President and Chief Executive Officer, Michael P. Kehoe: “Our underwriting results this quarter demonstrate discipline in a competitive market.”
Property Competition and Gross Written Premiums
Kinsale Capital Group presents its premium figures in the release for the third quarter and for the first nine months. The release describes the premium picture in several lines. It states that gross written premiums decreased by 4.8% to $462.9 million, and net written premiums decreased by 1.5% to $399.1 million. The release gives net written premiums in that same sentence. A separate line covers earned premiums, where the release states: Net earned premiums increased by 3.0% to $423.5 million.
On the reasons for the lower gross written premiums, Kinsale gives an explicit explanation. The release says: 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. The same sentence continues, including declines of 26.8% and 29.8% in the Commercial Property Division.
Casualty is reported separately from the property divisions. The release states: Gross written premiums in the Company’s casualty business increased 0.9% for the third quarter. The release gives the longer-period casualty figure as 3.0% for the first nine months.
For readers who follow insurer results more broadly, InsuraBeat has separate coverage of another insurer’s third-quarter earnings. For readers who follow the same reporting period at another carrier, InsuraBeat has separate coverage of a Travelers filing for the same reporting period.
Underwriting Income and the Combined Ratio
The release gives the combined ratio together with underwriting income. Kinsale’s underwriting line is stated in one sentence in the release: “Underwriting income (2) was $107.1 million, resulting in a combined ratio (5) of 75.4%” for the third quarter. The same sentence of the release continues with the prior-year comparison: compared to $105.7 million and a combined ratio (5) of 74.9% for the third quarter.
The release breaks the ratio into its components. It states: Loss (3) and expense (4) ratios were 53.4% and 22.0%, respectively, for the third quarter. It gives 53.9% and 21.0% for the third quarter as the prior-year pair.
Net investment income is reported on its own line. The release states: “Net investment income increased by 17.5% to $58.3 million” for the third quarter, according to the Form 8-K exhibit.
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Portfolio Repositioning, Share Repurchases and Book Value
The release attaches a note to net income about the investment portfolio, and the note concerns securities sold by Kinsale Capital Group. It says: 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.
On capital, the release gives one sentence on repurchases. It says that during the third quarter, 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. The filing is the document in which Kinsale Capital Group reports this repurchase activity.
The release also gives two return measures. It states: Annualized return on equity (6) was 26.6% for the nine months ended September 30. It adds: Annualized operating return on equity (7) was 25.6% for the nine months ended September 30.
The release also reports book value in a single sentence. It states: Book value per share was $85.25 at September 30. The comparison date in the release is December 31, and it gives the figure for that date as $84.66 at December 31.
