Kinsale Capital Group, Inc. · NYSE:KNSL
Kinsale Capital — Investor Day (December 2022)
55 slides from Kinsale Capital's investor day presentation, Dec 7, 2022
Slide 1: Investor Day 12.7.22
INVESTOR DAY 12.7.22
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain 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 may discuss
Slide 3: Agenda
AGENDA 8:30 – 8:40 Opening Remarks Mike Kehoe 8:40 – 8:50 Company Overview Bryan Petrucelli 8:50 – 9:50 Underwriting Brian Haney 9:50 – 10:20 Human Resources Amber Sheridan 10:20 – 10:30 Break 10:30 – 11:00 Information Technology Diane Schnupp 11:00 – 11:30 Claims Mark Beachy 11:30 – 12:00 Analytics
Slide 4: Underwriting
UNDERWRITING Brian Haney
Slide 5: Underwriting Overview
UNDERWRITING OVERVIEW OF UNDERWRITING AT KINSALE STATE OF THE MARKET KEEPING EXPENSES LOW RISK APPETITE PRODUCT DEVELOPMENT TRAINING AND DEVELOPMENT CUSTOMER SERVICE PRODUCTIVITY & INNOVATION
Slide 6: Underwriting Divisions
Life Sciences Environmental UNDERWRITING Casualty Specialty Casualty Professional Lines UW Operations Digital Marketing Transportation Property
Slide 7: Premium Mix by Underwriting Division
Casualty 45% Property 20% Specialty Cas. 17% Professional Lines 16% Transportation 2%
Slide 8: Our Approach
OUR APPROACH 100% Excess & Surplus Lines Small-to-Medium Sized Risks Individual Risk Underwriting Superior Systems & Data Keep expenses low Hard-to-place risks
Slide 9: How We Are Different
HOW WE ARE DIFFERENT Rewarding the Doers No Delegated Underwriting One Location, in Person, 5 Days a Week Contrarian Underwriting Tailored Coverage
Slide 10: State of the Market
STATE OF THE MARKET Rate Flow of Business in E&S Property Casualty Proliferation of MGAs Professional Lines
Slide 11: Factors Influencing Market
FACTORS INFLUENCING MARKET Poor historical experience among many carriers Adverse reserve development in weaker companies Natural catastrophes Significant inflation Jump in bond yields End of easy money policy Economy ESG considerations
Slide 12: Drivers of the Expense Ratio
DRIVERS OF THE EXPENSE ACQUISITION COSTS EMPLOYEE COSTS EVERYTHING ELSE
Slide 13: Casualty
CASUALTY Divisions Small Business General Casualty Excess Casualty Construction
Slide 14: Specialty Casualty
SPECIALTY CASUALTY Divisions Environmental Entertainment Energy Life Sciences Products Product Recall
Slide 15: Professional Lines
PROFESSIONAL LINES Divisions Public Entity Professional Liability Management Liability Healthcare Allied Healthcare
Slide 16: Property
PROPERTY Divisions Small Property Commercial Property Personal Insurance
Slide 17: Transportation
TRANSPORTATION Divisions Ocean Marine Inland Marine Commercial Auto Aviation
Slide 18: Underwriting E&S Accounts
UNDERWRITING E&S ACCOUNTS Individual Risk Underwriting “Just Quote It” Utilize 3rd Party Data Underwriters are Subject Matter Experts Flexibility of Forms and Limits
Slide 19: Product Development Process
Which Products to Bring To Market Determine the Lift Needed to Create Product IT, Forms, Actuarial, and Underwriting Work Marketing of Product Product Roll Out PRODUCT DEVELOPMENT PROCESS
Slide 20: New Products
NEW PRODUCTS Extended Completed Operations and Discontinued Operations Athletic Facilities Excess Product Recall Ocean Marine Garage Liability- Non-Dealers
Slide 21: Underwriter Training
UNDERWRITER TRAINING Hit the Ground Running Movement Territory & Letters of Authority File Audits
Slide 22: Customer Service
CUSTOMER SERVICE Use the Phone Two Hour Turn Around Time on All Emails First in First Out 24 Hour Turn Around Time
Slide 23: Productivity
PRODUCTIVITY Rewarding the Doers Quote More Bind More IT/Transit
Slide 24: Innovation
INNOVATION Submission Clearance Automatic Excess
Slide 25: Human Resources
HUMAN RESOURCES Amber Sheridan, SVP HR
Slide 26: Kinsale Culture
Kinsale Culture Reward the Doers Recognize Achievement Remove Under- performers ENTREPRENEURIAL SPIRIT • Owner/Operator Model and Mentality • Compensation • Over 30% of Compensation is Lump Sum • Ability to Differentiate • Long Term Wealth Building • All Leaders Participate in Stock Plan
Slide 27: Employees Are Our Foundation of Success
EMPLOYEES ARE OUR FOUNDATION OF SUCCESS High Performance High Pay High Productivity
Slide 28: How We Hire
Outreach and Participation Evaluating Business Asks and Needs Gathering the Right Candidates Screening and Testing for Attitude and Aptitude In Person Interview with Trained Panel Thoughtful Conversation and Offer Onboarding HOW WE HIRE
Slide 29: Talent Development
TALENT DEVELOPMENT EXPERTS Current Level of Understanding Learning Required for Current Role Opportunities to Grow and Create Long Term Career
Slide 30: The Kinsale Environment
ALL EMPLOYEES IN OFFICE INCREASED UNDERSTANDING AND CONFIDENCE SENSE OF TRUST AND BELONGING GIVING AND RECEIVING FEEDBACK THE KINSALE ENVIRONMENT
Slide 31: Information Technology
INFORMATION TECHNOLOGY Diane Schnupp
Slide 32: Kinsale Core Competency
Technology is a core competency for efficiency, accuracy, service, and data Efficiency Accuracy Service Data KINSALE CORE COMPETENCY Technology is a core competency for:
Slide 33: IT Strategic Pillars
IT STRATEGIC PILLARS Be a great place to work Accelerate our technology-empowered competitive advantage Enable smart company growth
Slide 34: Product, Delivery Maturity & Experience
PRODUCT, DELIVERY MATURITY, & EXPERIENCE APPLICATION DEVELOPMENT ARCHITECTURE DATA IT INFRASTRUCTURE & SECURITY IT ORGANIZATION
Slide 35: Branding
BRANDING
Slide 36: Target State
36 Data Driven ApproachStrategic Accelerator Custom Designed for Our Business Processes TARGET STATE
Slide 37: Target State Examples
37 TARGET STATE EXAMPLES Submission Intake Underwriting Claims
Slide 38: Target State Benefits
TARGET STATE BENEFITS 38 Target State Revenue Impact • quotes / UW • new product speed-to- market Cost Efficiency • manual effort • accuracy and reporting capabilities Risk Mitigation • enable scale, reliability, performance & security
Slide 39: Claims
KINSALE INSURANCE Mark Beachy CLAIMS
Slide 40: Excess & Surplus Claim Business
EXCESS & SURPLUS CLAIM BUSINESS 40 Severity driven Complex multi-party litigation Litigious environment Tailored coverage forms Aggressive plaintiff bar
Slide 41: Strategic Objectives
STRATEGIC OBJECTIVES 41 Leverage a high-performance culture to continuously improve and deliver results. Pay Only What We Owe Enhance Organization and Talent Streamline and Improve Processes Technology and Innovation Leverage Partnerships Drive High Performance Culture
Slide 42: Claim Organization
42 ORGANIZATION CLAIM Casualty Specialty Property Claim Legal Compliance Product Development Fully integrated Claims Department organized both vertically and by claim type.
Slide 43: Talent
TALENT Reward & Retain Top Performers Continued Growth Improve Skills with Specialized Training Strategic Staffing Recruit Claim- Legal Experience • 59 high-performing team members • 48% of employees are attorneys • 55% of liability examiners are attorneys • Experienced staff averaging 13 years of i
Slide 44: High Performance Model
HIGH PERFORMANCE MODEL Risk Appetite Risk Appetite In-House Claim HandlingSpan of Control Pay What We Owe Rigorous Application of Coverage Forms Legal Partnerships Limited Reserve & Settlement Authority • Superior execution • Resolution focused • Data and process driven • Teamwork • Responsiveness •
Slide 45: Results: More Claims With Less Staffing
We handle 45% more claims with only a 21% more staffing. RESULTS 45 Claims Received Claims Closed Average Months to Close Average Paid 45% Increased Claims 21% Increased Staffing 2020 2022 Increased Productivity Continuous improvements drive increased productivity, reduced cycle times, and declining
Slide 46: Processes: Claims Triage
• High volume, lower severity property damage claims • Speed & efficiency reduces claim cycle • Continuous & ongoing damage over multiple policy periods • Organized by states PROCESSES: CLAIMS TRIAGE Right Touch Right Touch • In-house experts on coverage & forms • Advice & counsel on jurisdictional
Slide 47: Technology & Innovation
TECHNOLOGY & INNOVATION 47 Proprietary Claim Platform Third Party Data Kinsale Analytics Automation & Artificial Intelligence Create technology vision Prioritize improvements Mobilize staff Collaborate closely with IT Track progress Measure business value Leveraging technology and drivin
Slide 48: Partnerships
PARTNERSHIPS 48 Actuary Underwriting Legal Information Technology Unique Competitive Advantage Leveraging internal and external partnerships to deliver strategic objectives and outcomes.
Slide 49: Analytics & Actuarial
Analytics & Actuarial Salmaan Allibhai
Slide 50: Kinsale Is a Quantitative Company
KINSALE IS A QUANTITATIVE COMPANY The use of data in decision-making is a key competitive advantage for us Embracing data is a fundamental part of the Kinsale culture Pricing/ Underwriting Reserving Claims Handling Capital Management Risk Management Staffing/ Budgeting
Slide 51: Data Is an Integral Part of Our Strategy
DATA IS AN INTEGRAL PART OF OUR STRATEGY We collect a lot of data • We have data on the full life cycle of a policy from when it arrives as a submission until the last dollar of a claim is paid • Data sources include Underwriting Worksheets, Policy System, Claims, and Finance We help users throughou
Slide 52: Using Data to Drive Efficiency and Profitability
WE CONTINUOUSLY USE DATA TO DRIVE EFFICIENCY AND PROFITABILITY Recurring Analyses: Product Line Reviews (Pricing Analyses) Reserve Reviews Capital Adequacy Projections (BCAR) Catastrophe Modeling Reinsurance and Risk Management Reviews
Slide 53: Examples of Recent Ad Hoc Analyses
EXAMPLES OF RECENT AD HOC ANALYSES Commercial Credit Submission Scoring Utilizing text mining on Claims and UW notes to refine pricing and expand our coverage offering Flat-fee agreements for California Construction Defect claims
Slide 54: Focusing on Third-Party Data
FOCUSING ON THIRD-PARTY DATA Combined effort by Analytics & Actuarial, Underwriting, and IT to take advantage of third-party data There is a lot of data out there, and thanks to our focus on technology, we are well-positioned to utilize that data to drive efficiency and profitability Improve how we
Slide 55: Investor Day 12.7.22
INVESTOR DAY 12.7.22