Kinsale Capital Group, Inc. · NYSE:KNSL
Kinsale Capital — Investor Presentation (May 2022)
23 slides from Kinsale Capital's investor presentation, May 2022
Slide 1: Kinsale Capital Group May 2022
—me CAPITAL GROUP ” Avy KINSALE YQ Jf May 2022
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
Slide 3: Introduction to Kinsale
INTRODUCTION TO KINSALE | | i, Wn E a a > L| ‘
Slide 4: Overview
Overview Kinsale Capital Group, Inc., founded in 2009, is a specialty insurance company focused exclusively on the excess and surplus lines market in the United States. Utilize our Focus on smaller Maintain Leveraging our Well-positioned underwriting accounts, which absolute control proprietary to g
Slide 5: Highly Experienced Management Team
Highly Experienced Management Team Name Exp. Prior experience Michael Kehoe Founder, President and President and CEO at James River from 2002 to 25+ years CEO 2008 Brian Haney EVP, Chief Operating 25+ years Chief Actuary of James River from 2002 to 2009 Officer Bryan Petrucelli EVP, Chief Financial
Slide 6: Select Market Information
Select Market Information As of March 31, 2022 Ticker KNSL Exchange New York Stock Exchange Stock Price $228.02 per share Market Capitalization $5.22 Billion Book Value $29.05 per share Debt to Total Capitalization Ratio 6.1% Employees 387 6
Slide 7: Our Approach
Our Approach • Exclusive focus on the small-account E&S market • Disciplined underwriting expertise across a broad spectrum of hard-to-place risks; no delegated underwriting authority • Technology is a core competency, driving best-in-class expense ratio • Entrepreneurial business culture with a clo
Slide 8: Kinsale is the only publicly-traded, pure-play E&S investment opportunity
Kinsale is the only publicly-traded, pure-play E&S investment opportunity Leading public E&S players Our differentiating factors 2021 Surplus lines DWP as % of total direct and assumed written premiums¹ 100% No delegated underwriting JRVR 59% GLBI 55% Low-cost business model RLI 35% ARGO 33% Contrar
Slide 9: E&S Market
E&S Market The E&S market has seen significant growth and generated better underwriting results than the broader P&C industry U.S. surplus lines direct written premiums ($bn) $66.1 $56.3 $49.9 $41.3 $42.4 $44.9 $38.7 $36.6 $37.7 $40.2 $32.8 $33.0 $33.3 $34.4 $33.0 $31.7 $31.1 $34.8 $25.6 $15.8 2001
Slide 10: Dislocation in the E&S market creates additional opportunities
Dislocation in the E&S market creates additional opportunities 2020 E&S market share by DPW1 US composite insurance pricing change2 20% Company DPW ($mm) Market Share 18% 18% Lloyd’s 12,821 19.4% 17% BRK 3,559 5.4% 15% AIG 3,550 5.4% 14% 14% 14% 14% MKL 2,791 4.2% 12% WRB 2,261 3.4% 12% 10% Nationwi
Slide 11: Our underwriting expertise across a broad spectrum of hard-to-place risks
Our underwriting expertise across a broad spectrum of hard-to-place risks Personal Insurance Broad appetite to underwrite a diverse set of risks 3.5% Small Business across the E&S market, including some difficult risks Other Commercial 1 14.7% where we believe pricing may be attractive 14.2% Hig
Slide 12: Product Portfolio
Product Portfolio We target classes of business where our underwriters have extensive experience allowing us to compete effectively and earn attractive returns Gross written premium by Year ended December 31, 2019-2021 division ($000’s) 2019 2020 2021 CAGR Commercial: Small Business $63,181 $83,289
Slide 13: Technology is a core competency
Technology is a core competency Key highlights Proprietary technology Proprietary platform design reflects the best practices our management platform team has learned from extensive prior experience Integrated digital platform enables scale, reliability and performance throughout the organizatio
Slide 14: Our combined ratio is one of the lowest amongst our specialty insurer peers
Our combined ratio is one of the lowest amongst our specialty insurer peers while achieving leading growth among peers 2019-2021 NPW CAGR 38.9% (9.1%) 22.2% 10.9% 13.6% 14.7% (8.9%) 11.5% (16.8)% 6.2% 1 Loss ratio Expense ratio 2 114.6% 2019 – 2021 Average peer 106.8% 106.7% combined ratio: 23.1% 99
Slide 15: We believe Kinsale is well-positioned for continued profitable growth
We believe Kinsale is well-positioned for continued profitable growth Gross written premiums ($mm) Growth drivers $764.4 Expand our presence in the E&S market, particularly $552.8 with smaller accounts which we believe are subject to $275.5 $389.7 $245.5 $223.2 less competition $168.9 Maintain a
Slide 16: Investment Portfolio
Investment Portfolio $1.6 Billion Investment Portfolio as of March 31, 2022 Credit Quality – Fixed-Maturity Portfolio Asset Allocation – Total Investment Portfolio Below BBB U.S. Treasuries/Short-term 4.8% Equities 1.0% Municipals 10.1% 13.4% BBB AAA 14.4% 26.2% CMBS 4.2% Corporates 32.5% A RMBS 18.
Slide 17: Financial Results
FINANCIAL RESULTS | | i, Wn E a a > L| ‘
Slide 18: Operating Return on Equity
Operating Return on Equity 22.1% 20.8% 17.6% 15.4% 15.9% 14.7% 11.9% 2017 2018 2019 2020 2021 Q1 2021 Q1 2022 Operating return on equity is net operating earnings expressed as a percentage of average beginning and ending stockholders’ equity during the period. Net operating earnings is a non-GAAP fi
Slide 19: Q1 2022 Financial Update
Q1 2022 Financial Update Three months ended March 31, 2022 Net income decreased by 0.9% resulting from a decline in the fair ($mm) 2021 2022 value of equity investments during the quarter compared to an increase in the fair value of these investments during the same period last year Gross written
Slide 20: Selected Financial Data
Selected Financial Data Three months ended Year ended December 31, March 31, ($000’s) 2017 2018 2019 2020 2021 2021 2022 Operating Results: Gross written premiums $223,191 $275,538 $389,694 $552,814 $764,373 $168,876 $245,513 Underwriting income (1) 28,227 31,222 43,201 54,656 133,564 24,645 37,512
Slide 21: Appendix
APPENDIX 21
Slide 22: Non-GAAP reconciliation – Underwriting Income
Non-GAAP reconciliation – Underwriting Income Three months ended Year ended December 31, March 31, ($000’s) 2017 2018 2019 2020 2021 2021 2022 Net income $24,901 $33,787 $63,316 $88,419 $152,659 $32,079 $31,791 Income tax expense 13,620 6,693 12,735 11,994 36,142 7,360 7,081 Income before income tax
Slide 23: Non-GAAP reconciliation – Net Operating Earnings
Non-GAAP reconciliation – Net Operating Earnings Three months ended Year ended December 31, March 31, ($000’s) 2017 2018 2019 2020 2021 2021 2022 Net income $24,901 $33,787 $63,316 $88,419 $152,659 $32,079 $31,791 Adjustments: Change in the fair value of equity securities, before taxes (1) - 6,555 (
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