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    KNSL
    Earnings call· Mar 2026(Q1 FY26)

    Kinsale Capital Group Q1 FY26 earnings call KNSL

    Apr 24, 2026 Source

    Executive summary

    Kinsale Capital Group Q1 FY26 — Strong Profitability Amidst Competitive E&S Market

    Kinsale Capital Group delivered robust profitability in Q1 FY26, marked by strong operating EPS and ROE, despite a highly competitive E&S market. The company's disciplined underwriting, low-cost model, and technology focus allowed it to navigate headwinds in large commercial property, strategically shifting focus to smaller, more profitable transactions. Management expressed confidence in its adaptable model to perform across market cycles, maintaining a long-term low-20s ROE target.

    Highlights

    5

    • Diluted operating earnings per share increased by 37.7% over Q1 FY25.

    • Annualized operating return on equity reached 24%.

    • Combined ratio was strong at 77.4%, including 4.5 points from net favorable prior year loss reserve development.

    • Net written premium grew by 5.6%, driven by less reinsured lines.

    • New business submissions were up 6% overall, with quotes up 8% and bind orders up 9%.

    Concerns

    4

    • Gross written premium decreased by 0.5% due to intense competition and falling rates in the large commercial property division.

    • Overall expense ratio increased to 21.1% from 20% last year, primarily due to a higher net commission ratio.

    • E&S homeowners division declined 22% in the quarter due to increased competition and lower limits offered.

    • The Amwins Pricing Index showed a rate decrease of 3 1/3% compared to a 2.7% decrease in Q4 FY25, indicating continued pricing pressure.

    Guidance & targets

    1
    CategoryTargetConfidence
    Annualized Operating Return on Equity
    low 20s or greater
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Commercial Property division
    Much of the headwind to our growth emanates from our large commercial property division, where we write larger layered property accounts and where there is an abundance of competition and falling rates. New business submissions declined in this division. This division is a stand-alone division for large shared and layered deals.
    Average policy premium: $30,000-$40,000 (estimated, down from >$50,000 a year or two ago)
    		$65 milliondeclined——
    All other divisions (excluding Commercial Property)
    These divisions are experiencing favorable underwriting conditions and strong growth, including small business property, Inland Marine, Agribusiness property, Personal Insurance, Agribusiness Casualty, Allied Health, General Casualty, Healthcare, Entertainment and Product Liability.
    New business submissions growth: 9%
    		—6%——
    E&S Homeowners
    Driven by increased competition in the high-value market and offering lower limits, resulting in a dropping average premium.
    		—declined 22%——
    Personal Insurance
    Also a homeowner split, showing good growth despite E&S homeowners decline.
    		—good growth——

    Operational metrics

    12
    Expense Ratio
    21.1%vs 20% last year
    Q1 FY26

    The overall expense ratio increase is attributable to a higher net commission ratio resulting from higher reinsurance retentions.

    Other Underwriting Expense Ratio
    10.3%vs 10.5% in Q1 2025
    Q1 FY26

    This portion of the ratio is considered the best measure of operational efficiency.

    Float
    $3.3 billionfrom $3.1 billion at end of 2025
    as of March 31

    Float grew to $3.3 billion at March 31 from $3.1 billion at the end of 2025.

    Annual Gross Return (Investment Portfolio)
    4.5%vs 4.3% last year
    Q1 FY26

    Annual gross return was 4.5% for the quarter compared to 4.3% last year.

    New Money Yields
    around 5%
    Q1 FY26

    New money yields are averaging around 5%.

    Average Duration (Fixed Maturity Investment Portfolio)
    slightly above 4 years
    Q1 FY26

    Average duration slightly above 4 years on the company's fixed maturity investment portfolio.

    New Business Submissions Growth
    6%similar rate to Q4 FY25
    Q1 FY26

    Overall new business submission growth increased 6% in the first quarter.

    New Business Submissions Growth
    9%
    Q1 FY26

    Excluding the Commercial Property division, new business submissions were up 9% for the quarter.

    New Business Quotes Growth
    8%
    Q1 FY26

    New business quotes were up 8%.

    New Business Bind Orders Growth
    9%
    Q1 FY26

    New business bind orders were up 9%.

    Average Policy Premium
    $12,200down from $14,200 in Q1 2025
    Q1 FY26

    The average policy premium for the quarter was $12,200, down from $14,200 in the first quarter of 2025, reflecting a shift to smaller accounts.

    Diluted EPS (GAAP)
    $5.11vs $3.71 per share for Q1 2025
    Q1 FY26

    Diluted earnings per share for the quarter.

    Industry KPIs

    8
    MetricValueDetails
    Combined ratio77.4%%
    ROE operating ROE24%%
    Catastrophe lossesless than 1 pointpoints
    Net investment income—
    Retention persistencyconsistent
    Net premiums written earned5.6%%
    Renewal rate change pricingrate decrease of 3 1/3%%
    Prior year reserve development4.5 pointspoints

    Risks & headwinds

    3
    Competitive E&S market conditionsQ1 FY26, ongoing

    Gross written premium was down 0.5%; Amwins Pricing Index showed a rate decrease of 3 1/3%; E&S homeowners declined 22%

    Mitigation: Focus on smaller transactions, disciplined underwriting, low-cost business model, technology and analytics, broad risk appetite.

    Falling rates and intense competition in large commercial propertyQ1 FY26, expected to continue into H1 FY26

    Gross written premium was down 0.5%; average policy premium for the quarter was $12,200, down from $14,200; Amwins Pricing Index showed a rate decrease of 3 1/3%

    Mitigation: Shifting focus to smaller accounts where margins are robust, maintaining underwriting discipline.

    Increased competition in long-tail casualty linesLast quarter (Q4 FY25/Q1 FY26), ongoing

    More aggressive competition in some long tail lines like construction over the last quarter

    Mitigation: Leveraging underwriting discipline, market responsiveness, low cost, and adaptability; premises liability and auto-related lines still present opportunities.

    What to watch in Q2 FY26

    4

    Reinsurance renewal strategy

    Next quarter (Q2 FY26)
    CurrentIncreased retentions last year, 6/1 renewal date approaching.
    TargetDecision on reinsurance retentions and limits for the upcoming year.

    Why it matters

    Reinsurance strategy impacts net written premium, expense ratio, and capital efficiency.

    I know your reinsurance renewal is coming up and you guys increased retentions last year. But how are you guys thinking about it for this year given the below-average forecasted hurricane season. But also counterbalancing that, which is the lower cost of reinsurance? Yes. This is Mike. We look at reinsurance retentions, limits, et cetera, every year. We've obviously increased our retention many times over the 17 years in business. And so obviously, we'll look at it again this year, but I can't really commit at this moment to how the treaties will be placed. I'll just note, it's a 6/1 renewal date.

    Q&A highlights

    6

    How have new business quotes and bind orders trended year-over-year and quarter-over-quarter, and how should this KPI be viewed relative to submission growth?

    Management stated that the new granular disclosure was provided due to requests but cautioned against overthinking short-term volatility. They emphasized that the numbers reflect a competitive market with varying opportunities across divisions.

    “I would say we've had requests from people over the years for a little bit more granular disclosure. So we're providing it. The more granular, the more volatile those numbers are. So I wouldn't overthink how important it is that in a 90-day period, some things up or down. But across the 25 divisions, I think you can see what we're talking about, which is overall, we're in a competitive market, but there's plenty of opportunities in some places. In other places, there's a lot more competition, and we're going to grow a little bit more slowly.”

    asked by Daniel Cohen · answered by Michael Kehoe

    2 min read6 chapters

    Detailed Narrative

    01

    Market Conditions and Growth Strategy

    The E&S market remains competitive, particularly in large commercial property, certain professional lines, management liability, and public entity, where rates are falling. Kinsale is strategically focusing on smaller transactions, where margins are more robust, and is seeing strong growth in areas like small business property, Inland Marine, Agribusiness property, Personal Insurance, Agribusiness Casualty, Allied Health, General Casualty, Healthcare, Entertainment, and Product Liability.

    02

    Underwriting Discipline and Cost Advantage

    Kinsale attributes its continued success in a competitive market to its disciplined underwriting, which is kept in-house, and its low-cost business model driven by 17 years of commitment to technology and analytics. This approach allows for more accurate underwriting, superior customer service, and a broader risk appetite, providing a significant competitive lead.

    03

    Technology and AI Innovation

    The company is actively incorporating AI models into its business processes, including underwriting, claims handling, software development, and analytics. This innovation is expected to enhance efficiency, accuracy, and data collection, leveraging Kinsale's bespoke enterprise system and lack of legacy software to expand its technological lead and benefit both profitability and growth.

    04

    New Business Momentum

    Despite overall gross written premium being down slightly, new business submissions were up 6% (9% excluding the Commercial Property division), new business quotes up 8%, and bind orders up 9%. This indicates strong momentum for small- to medium-sized risks, where Kinsale's value proposition continues to resonate well with brokers and insurers.

    05

    Investment Portfolio Performance

    Kinsale's investment portfolio continues to grow, with net investment income increasing by 26.5% year-over-year. The float, primarily unpaid losses and unearned premium, reached $3.3 billion at March 31, up from $3.1 billion at the end of 2025. New money yields are averaging around 5%, contributing to strong overall profitability.

    06

    Reinsurance Strategy

    The company continuously evaluates its reinsurance retentions and limits, having increased them multiple times over its history. While specific changes for the upcoming 6/1 renewal were not committed, management noted that higher reinsurance retentions in Q1 led to a higher net commission ratio, which was more than offset by greater underwriting and investment income.

    AI-generated summary of the company’s earnings call. Not investment advice.