Kinsale Capital Group (NYSE:KNSL) executives emphasized underwriting discipline, expense efficiency, and selective growth amid what management described as a competitive excess and surplus (E&S) market during the company’s fourth-quarter 2025 earnings call.
Quarterly results and profitability metrics
Chairman and CEO Michael Kehoe said diluted operating earnings per share rose 26% year over year, while gross and net written premium increased 1.8% and 7.1%, respectively, compared with the fourth quarter of 2024. Kinsale reported a combined ratio of 71.7% for the quarter and a full-year operating return on equity (ROE) of 26%.
CFO Bryan Petrucelli said net income and net operating earnings increased 27% and 25%, respectively, versus the prior-year quarter. Petrucelli attributed elements of the combined ratio to reserve development and catastrophe losses, noting that the 71.7% combined ratio included four points of net favorable prior-year loss reserve development, compared with 2.6 points in the prior year’s quarter. He also said catastrophe losses were less than a point in the quarter, compared with 2.2 points in the fourth quarter of last year.
Premium growth shaped by commercial property pressures
Management repeatedly pointed to the company’s commercial property division—focused on larger, catastrophe-exposed accounts—as the primary drag on overall growth. Kehoe said much of the “headwind” to Kinsale’s growth rate has been driven by the shrinking of that division, which operates in “one of the more competitive segments of the market” following several years of strong expansion.
Kehoe said that excluding the commercial property division, Kinsale generated gross written premium growth of 10.2% for the quarter and 13.3% for the year.
In the Q&A, Kehoe explained that commercial property appeared to be stabilizing earlier, but said an “influx from London, and some MGAs” into the large layered and shared property space in November and December contributed to further deceleration. Looking ahead, he said results can “ebb and flow” month to month, but suggested the division should stabilize “after the next couple of quarters.” He also said the hyper-competitive environment in that segment is expected to continue into 2026.
Market conditions: mixed pricing and pockets of growth
Chief Underwriter Stuart Winston said competitive intensity varied by underwriting group. He cited soft pricing in D&O and some professional lines, and heightened competition in large shared and layered commercial property. However, Winston said Kinsale achieved growth in other property lines, including small business property, high-value homeowners, inland marine, personal insurance, and agribusiness property.
Winston said casualty was a strong growth area in the quarter, led by divisions including commercial auto, agribusiness casualty, general casualty, entertainment, and excess casualty. He said the company plans to continue exploring new products and enhancing existing offerings in these growing areas.
On submissions, Winston said new business submissions growth (excluding unsolicited submissions) was up 6% for the quarter, with commercial property submissions declining in the division handling large shared and layered deals. Excluding commercial property, submissions were up 9%, and he noted roughly half of divisions were seeing double-digit submission growth.
Winston also referenced broader pricing trends, saying the combined pricing trend was in line with the Amwins Index, which showed a rate decrease of 2.7% (compared with a 0.4% decrease in the third quarter). He added that while large commercial property placements continued to face strong rate pressure, Kinsale saw opportunities for meaningful rate increases in other property lines and in casualty lines such as commercial auto, excess casualty, and general casualty.
Expense ratio, investments, and capital return
Kehoe highlighted Kinsale’s cost structure as a competitive advantage, saying the company’s expense ratio was under 21% last year and contrasting that with competitors in the mid-30s or higher. Petrucelli said Kinsale posted a 20.8% expense ratio for the full year, compared with 20.6% in 2024. He added that the “other underwriting expense” component—described as a measure of operational efficiency—was 10.5% for the year, about a half point better than 2024.
On investments, Petrucelli said net investment income increased 24.9% in the fourth quarter from the prior year, driven by growth in the investment portfolio from strong operating cash flows. He said float grew to $3.1 billion, from $2.5 billion. Petrucelli said the gross return was 4.4% for the year, consistent with last year, and that new money yields were averaging around 5% with an average duration of four years on the fixed maturity portfolio.
Kehoe said the company was returning more excess capital to shareholders, primarily through a $250 million share repurchase authorization announced in December, which management generally expects to deploy “over the next year or so,” subject to various considerations. He also noted Kinsale increased its quarterly dividend to $0.25 from $0.17 and said the company still maintains capital levels well above regulatory and rating agency requirements.
Technology, AI adoption, and product expansion
Kehoe said technology is a core competency for Kinsale alongside underwriting and claims, emphasizing the company’s custom-built core operating system and lack of legacy software. He also described expanding analytics capabilities through actuaries and data scientists.
Kehoe said the company began a company-wide push more than a year ago to introduce and promote AI use, with every employee having access to an enterprise AI license and “dozens of bots and agents” used daily. In response to an analyst question, he said current AI use has been particularly effective in analytics and IT for tasks such as writing and testing code and converting unstructured data into structured data, while also supporting automation and improved risk segmentation and pricing.
On new products, management said rollouts are methodical and can take a couple of years to become meaningful. Kehoe pointed to the small business property division as an example, noting it was around $100 million of premium last year after being effectively nonexistent about five years ago.
Regarding homeowners insurance, Winston described it as a long-term “crawl, walk, run” project. Management said the homes product was in “four or five states,” manufactured homes in about 15 states with geographic expansion and diversification away from coastal exposure, and high-value homes in additional states. Winston said the offering ranges from relatively standard policies to more non-standard structures with exclusions in tougher areas.
Management also said data centers were not a meaningful percentage of the book, with Winston noting the required limits and layering are “not where we’re competitive.”
About Kinsale Capital Group (NYSE:KNSL)
Kinsale Capital Group, Inc (NYSE:KNSL) is a specialty property and casualty insurance company headquartered in Richmond, Virginia. Established in 2009, the company focuses on underwriting complex and underserved risks across the United States. Kinsale operates through a network of wholesale brokers and independent agencies, offering tailored coverage solutions for a range of niche industries.
The company’s product portfolio includes general liability, business auto, professional liability, environmental liability, inland marine, cyber liability, and other specialty lines.
