Kinsale Capital Group, Inc. · NYSE:KNSL
Kinsale Capital — Investor Presentation (February 2021)
19 slides from Kinsale Capital's investor presentation, February 2021
Slide 1: Kinsale Capital Group - February 2021
KINSALE CAPITAL GROUP
Slide 2: Disclaimer
Disclaimer This presentation contains or incorporates by reference forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that does not directly relate to historical or current facts. These statements m
Slide 3: Introduction to Kinsale
Introduction to Kinsale Overview 2020 gross written premiums by division Personal Founded in June 2009 and focused exclusively on the insurance Other 4% excess and surplus lines (“E&S”) market Construction commercial 1 16% Utilize our underwriting expertise to write coverages for 12% hard-to-pla
Slide 4: Highly experienced management team
Highly experienced management team Our management team is highly experienced with an average of over 25 years of experience in the E&S insurance market Strong business culture of recognizing achievement, rewarding the doers and removing underperformers As meaningful owners of Kinsale, our mana
Slide 5: Key investment highlights
Key investment highlights Exclusive focus on the E&S market Underwriting expertise across a broad spectrum of hard-to-place risks Technology is a core competency Best combination of high growth and low combined ratio among peers¹ Fully integrated claims management Entrepreneurial management team wit
Slide 6: Kinsale is the only publicly-traded pure-play E&S investment opportunity
Kinsale is the only publicly-traded pure-play E&S investment opportunity Leading public E&S players Our differentiating factors 2019 Surplus lines DWP as % of total direct and assumed written premiums¹ 100% 100% primary E&S insurance Focus on small to medium-sized 65% JRVR accounts GLBI 46% RLI
Slide 7: The E&S market has seen significant growth and generated better underwriting results than the broader P&C industry
The E&S market has seen significant growth and generated better underwriting results than the broader P&C industry U.S. surplus lines direct written premiums ($bn) $55.5 $49.9 $42.4 $44.8 $38.7 $40.2 $41.3 $36.6 $34.8 $37.7 $32.8 $33.0 $33.3 $34.4 $33.0 $31.7 $31.1 $25.6 $15.8 2001 2002 2003 2004 20
Slide 8: Dislocation in the E&S market creates additional opportunities
Dislocation in the E&S market creates additional opportunities 2019 E&S market share by DPW1 US composite insurance pricing change2 Company DPW ($mm) Market Share 20% 18% Lloyd’s 12,477 22.5% 18% 17% AIG 2,946 5.3% 15% 14% MKL 2,747 5.0% BRK 2,341 4.2% 10% 10% WRB 2,049 3.7% 6% Nationwide 2,035 3.7%
Slide 9: Our underwriting expertise across a broad spectrum of hard-to-place risks
Our underwriting expertise across a broad spectrum of hard-to-place risks Broad appetite to underwrite a diverse set of Kinsale’s underwriting divisions risks across the E&S market, including some Gross written premium by Year ended December 31, 2018-20 difficult risks where we believe pricing may
Slide 10: Technology is a core competency
Technology is a core competency We think like a technology company – digital automation is at the heart of every project Key highlights Proprietary platform design reflects the best practices our management team has learned from extensive Proprietary prior experience technology platform Single
Slide 11: Our combined ratio is the lowest amongst our specialty insurer peers while achieving leading growth
Our combined ratio is the lowest amongst our specialty insurer peers while achieving leading growth among peers 2016-2019 NPW CAGR 26.9% (3.6%) 14.4% 5.1% 2.2% 10.6% 17.1% 4.1% 6.8% 0.3% 1 Loss ratio Expense ratio 2 2015 – 2019 101.1% Average peer 99.7% 97.1% 98.0% combined ratio: 94.8% 95.5% 93.9%
Slide 12: We believe Kinsale is well-positioned for continued profitable growth
We believe Kinsale is well-positioned for continued profitable growth Growth drivers Gross premiums written ($mm) $552.8 Expand our presence in the E&S market, $389.7 particularly with smaller accounts which $188.5 $223.2 $275.5 we believe are subject to less competition 2016 2017 2018 2019 2020
Slide 13: Fourth quarter 2020 financial update
Fourth quarter 2020 financial update Kinsale’s fourth quarter performance • Net income increased by 113.9% compared to the fourth quarter of 2019 Three months ended December 31, • Net operating earnings1 increased by 83.8% compared to ($mm) 2019 2020 fourth quarter of 2019 • Underwriting income2 of
Slide 14: Conclusion
Conclusion Exclusive focus on the E&S market Underwriting expertise across a broad spectrum of hard-to-place risks Technology is a core competency Best combination of high growth and low combined ratio among peers¹ Fully integrated claims management Entrepreneurial management team with a track recor
Slide 15: Appendix
Appendix
Slide 16: Selected Financial Data
Selected Financial Data Year ended December 31, ($000) 2016 2017 2018 2019 2020 Operating Results: Gross written premiums $ 188,478 $ 223,191 $ 275,538 $ 389,694 $ 552,814 Underwriting income (1) 34,304 28,227 31,222 43,201 54,656 Net operating earnings (2) 26,053 26,718 38,743 53,245 72,313 Return
Slide 17: Non-GAAP reconciliation – Underwriting Income
Non-GAAP reconciliation – Underwriting Income Underwriting income reconciliation Year ended December 31, ($000) 2016 2017 2018 2019 2020 Net income $ 26,167 $ 24,901 $ 33,787 $ 63,316 $ 88,419 Income tax expense 13,369 13,620 6,693 12,735 11,994 Income before income taxes 39,536 38,521 40,480 76,051
Slide 18: Non-GAAP reconciliation – Net Operating Earnings
Non-GAAP reconciliation – Net Operating Earnings Net operating earnings reconciliation Year ended December 31, ($000) 2016 2017 2018 2019 2020 Net income $ 26,167 $ 24,901 $ 33,787 $ 63,316 $ 88,419 Adjustments: Change in the fair value of equity securities, after taxes - - 5,178 (9,787) (13,315) Ne
Slide 19: Non-GAAP reconciliation – Adjusted loss, expense and combined ratios
Non-GAAP reconciliation – Adjusted loss, expense and combined ratios Year Ended December 31, 2016 Including Effect of Excluding ($000) Quota Share Quota Share Quota Share Gross written premiums $188,478 $— $188,478 Ceded written premiums (21,214) 10,269 (31,483) Net written premiums $167,264 $10,269
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