Kinsale (KNSL) Q4 2025 Earnings Call Transcript

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Date

Friday, Feb. 13, 2026 at 9:00 a.m. ET

Call participants

• Chief Executive Officer — Michael Patrick Kehoe
• Chief Financial Officer — Bryan Paul Petrucelli
• President and Chief Operating Officer — Brian Donald Haney
• Chief Underwriting Officer — Stuart Winston

Takeaways

• Diluted operating earnings per share -- Increased by 26% to $5.81, reflecting improved profitability.
• Net written premium -- Rose by 7.1% while gross written premium grew by only 1.8%, driven by increased reinsurance retention following the June 1 program renewal.
• Combined ratio -- Reported at 71.7%, with four points from net favorable prior-year loss reserve development, up from 2.6 points a year ago.
• Operating return on equity (ROE) -- Achieved 26% for the full year, supporting high capital efficiency.
• Book value per share -- Rose by 33% since the end of 2024, signaling significant balance sheet growth.
• Float -- Increased by 23% to $3.1 billion, up from $2.5 billion at the prior year-end.
• Expense ratio -- Delivered an annual ratio of 20.8%, with the operational efficiency component (other underwriting expense) at 10.5%, an improvement of 0.5 points over 2024.
• Net investment income -- Grew by 24.9% in the quarter, supported by portfolio expansion and operating cash flow.
• Gross written premium excluding commercial property division -- Increased by 10.2% for the quarter and by 13.3% for the year, highlighting underlying business growth outside the challenged segment.
• New business submissions (excluding commercial property) -- Rose by 9%, with overall new business submission growth up 6%, excluding unsolicited submissions.
• Dividend policy -- Quarterly dividend raised to $0.25 from $0.17 per share.
• Share repurchase authorization -- $250 million buyback announced in December, expected to be deployed over the coming year, while maintaining capital well above regulatory requirements.
• Technology and AI adoption -- All employees have access to an enterprise AI license, with “dozens of bots and agents” in daily use, contributing to productivity and risk segmentation improvements.
• Expense advantage versus competitors -- Management stated expense ratio “under 21%” is notably below many peers, who are “in the mid-30s or higher, some even above 40%.”
• Commercial property division performance -- Premium contraction in this division cited as the main headwind to total growth, due to “shrinking of our Commercial Property division, which writes larger catastrophe-exposed accounts.”
• Market conditions -- Management described a “competitive environment” in E&S markets, especially for large commercial property accounts, with ongoing cyclicality in growth rates and pricing.
• Underwriting discipline -- Management reaffirmed a target for each line of business to generate at least a “low 20s ROE or greater.”

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Risks

• CEO Kehoe noted the “hyper-competitive environment” in the Commercial Property division, characterizing premium shrinkage as a direct response to heightened competition and lower pricing power.
• Stuart Winston stated a “rate decrease of 2.7%” for combined pricing trend, as indicated by the Amwins index, pointing to continued pricing headwinds in some lines.
• Kehoe confirmed ongoing litigation and claims activity even in small account markets and warned of persistent “the litigation industry in the United States is large and growing and the plaintiff attorneys are entrepreneurial as hell looking for new ways to drive claims and serve their clients,” highlighting a challenging claims environment.

Summary

Kinsale Capital Group (NYSE:KNSL) reported substantial profitability gains and further balance sheet strength, with operating metrics outpacing most industry benchmarks. The company’s disciplined underwriting, significant expense advantage, and technology-led operational efficiencies provide insulation against market-wide pressures, especially as premium growth outside Commercial Property remains robust. Strategic capital returns were accelerated, while management signaled continued caution in navigating competitive cycles and segment-specific volatility.

• Stuart Winston attributed premium decline in large commercial property to “an influx from London and some MGAs in that large layered and shared space” in November and December.
• Retention ratios “in the very low 70% range” have held steady, according to Kehoe.
• Kehoe characterized recent growth deceleration ex-Commercial Property as “mostly a function of increased level of competition,” rather than a shift in submission flow.
• New product growth is principally derived from enhancements in existing lines, especially agribusiness and small business property, rather than entirely new divisions.
• Management indicated that expanded AI adoption is currently delivering productivity gains in coding, data conversion, and risk segmentation, with further operational benefits anticipated.

Industry glossary

• E&S (Excess and Surplus): Insurance market segment for non-standard or higher-risk exposures not covered by standard/admitted carriers.
• MGA (Managing General Agent): Specialized insurance agent/broker authorized to underwrite and bind coverage on behalf of insurers.
• CAT losses: Insurance losses arising from catastrophic events (e.g., hurricanes, earthquakes).
• Float: Insurer’s investable assets derived from premiums received but not yet paid out as claims.
• Combined ratio: Sum of incurred losses and expenses as a percentage of earned premiums, indicating underwriting profitability.
• IBNR (Incurred But Not Reported): Loss reserves for claims that have occurred but have not yet been reported to the insurer.

Full Conference Call Transcript

Michael Patrick Kehoe: Thank you, operator, and good morning, everyone. Bryan Paul Petrucelli, our Chief Financial Officer, Brian Donald Haney, our President and COO, and Stuart Winston, Chief Underwriter, are joining me this morning for the call. In the fourth quarter, 2025, Kinsale Capital Group, Inc.’s diluted operating earnings per share increased by 26% and gross and net written premium grew by 1.8% and 7.1% respectively over the fourth quarter 2024. For the quarter, the company posted a combined ratio of 71.7% and a full year operating ROE of 26%. Our book value per share increased by 33% since the year-end 2024, our float increased by 23%.

Overall, E&S market conditions in the fourth quarter continued to be competitive with a level of competition and our growth rate varying from one market segment to another. As we have noted for the last year or so, much of the recent headwind to Kinsale Capital Group, Inc.’s overall growth rate is due to the shrinking of our Commercial Property division, which writes larger catastrophe-exposed accounts and operates in one of the more competitive segments of the market. This decline in premium comes after several years of extraordinary growth. Excluding the Commercial Property division, Kinsale Capital Group, Inc. had growth in gross written premium of 10.2% for the quarter and 13.3% for the year.

Given the success of Kinsale Capital Group, Inc.’s disciplined underwriting and low-cost business model over the last 17 years, we have confidence in our ability to generate best-in-class returns and growth while maintaining a strong balance sheet with conservative loss reserves. It is always important to maintain underwriting discipline but especially so when the market competition is intense. Likewise, it is in a more competitive moment in the insurance cycle that Kinsale Capital Group, Inc.’s enormous expense advantage is most impactful. Kinsale Capital Group, Inc. last year had an expense ratio under 21% and many of our competitors tend to run in the mid-30s or higher, some even above 40%.

Given the customer's focus on low cost, it is hard to overstate the significance and the durability of this advantage. Another competitive advantage that we speak about frequently is technology. We consider tech to be a core competency of ours, alongside underwriting and claim handling. We own our one core operating system, which we custom built for our operation. And we do not have any legacy software going back 20, 30 years, or longer. In addition, we have spent years developing our analytics capabilities, with a growing team of actuaries and data scientists who use our data and data we acquire to discern insights and improve decision-making and profitability in our business.

Further, over a year ago, we began a company-wide push to introduce and promote the use of AI in our operation. We are making consistent use of these tools in our technology and analytical teams. We are also using AI extensively in other areas of the company, particularly underwriting. Every employee in the company has access to an enterprise AI license, we have dozens of bots and agents being used every day in our business process yielding interesting productivity gains even at this early stage. Many of these AI innovations will be quickly integrated into our custom enterprise and the continued gains we expect for both productivity and improved segmenting and pricing of risk are material.

Lastly, given our recent growth rate, we are returning more excess capital to shareholders, mostly through the $250,000,000 buyback authorization that we announced in December. Subject to a variety of considerations, we generally expect to deploy this authorization over the next year or so. Likewise, we announced an increase in our quarterly dividend to $0.25, up from $0.17. Note that even with this activity, Kinsale Capital Group, Inc. still maintains a conservative level of capital well above that required by both regulators and rating agencies. I will now turn the call over to Bryan Paul Petrucelli.

Bryan Paul Petrucelli: Thanks, Mike. As Mike just noted, we continue to generate great bottom line results with net income and net operating earnings increasing by 27% and 25%, respectively, quarter over quarter. The 71.7 combined ratio for the quarter included four points from net favorable prior-year loss reserve development compared to 2.6 points last year, with less than one point in CAT losses this year compared to 2.2 points in the fourth quarter of last year. Gross written premiums grew by 1.8% for the quarter, while net written premiums grew by 7.1%. The growth in net written premiums was higher than gross due to an increase in the retention levels when we renewed our reinsurance program at June 1.

We produced a 20.8% expense ratio for the full year compared to 20.6% last year. The other underwriting expense piece of the ratio, which is the best measure of the operational efficiency of the business, was 10.5% for the year and about 0.5 better than 2024. On the investment side, net investment income increased by 24.9% in the fourth quarter over last year as a result of continued growth in the investment portfolio generated from strong operating cash flows. Kinsale Capital Group, Inc.’s float, mostly unpaid losses and unearned premiums, grew to $3,100,000,000 at the 2024. Up from $2,500,000,000 at the 2024. The gross return 4.4% for the year and consistent with last year.

New money yields are averaging around 5%, with an average duration of four years on the company's fixed maturity investment portfolio. And lastly, diluted operating earnings per share continues to improve and was $5.81 per share for the quarter, compared to $4.62 per share for the 2024. I will now turn the call over to Stuart Winston for underwriting commentary.

Stuart Winston: Thanks, Brian. So the level of competition in the E&S market differs by underwriting group, with some areas experiencing more competitive pressure than others. We continue to see soft pricing around D&O and some other professional lines, and while large shared and layered commercial property lines experienced heightened competition during the quarter, we were able to realize growth in other property lines like small business property, high value homeowners, inland marine, personal insurance, and agribusiness property. Casualty remained a strong area of growth for the quarter. This growth was led by our commercial auto, agribusiness casualty, general casualty, entertainment, and excess casualty divisions.

We will continue to explore new products and enhance our current offerings within these growing areas to capitalize on opportunities throughout the year. Overall, new business submission growth, excluding unsolicited submissions, was up 6% for the quarter. We continue to see a decline in new business submissions in the Commercial Property division that handles large shared and layered deals, however, most divisions are still seeing submission growth with about half of those seeing double-digit growth. Excluding Commercial Property, new business submissions were up 9% for the quarter.

Our lines of business are experiencing varying levels of competition and pricing pressure, the combined pricing trend is in line with the Amwins index, which showed a rate decrease of 2.7% compared to a 0.4% decrease in Q3. Although large commercial property placements continue to experience strong rate pressure, other property lines like small business property and inland marine and casualty lines like commercial auto, excess casualty, and general casualty present opportunities for meaningful rate increases. We remain confident about our position and opportunity in the E&S market. Our low-cost model provides a durable advantage that helps us remain competitive in both hard and soft market environments.

This advantage combined with our broad risk appetite, best-in-class service standards, fast turnaround times, and the ability to quote more than 70% of all new business submissions enable us to gain market share and deliver strong returns for our investors. And with that, I will hand it back over to Mike.

Michael Patrick Kehoe: Thanks, Stuart. Operator, we are ready for any questions in the queue now.

Operator: Star then the number one on your telephone keypad. Your first question comes from Michael Wayne Phillips with Oppenheimer. Thank you. Good morning. I guess I wanted to talk on the commercial property.

Michael Wayne Phillips: Down pretty hard this quarter. Was that a change from what you were seeing last quarter? Or maybe did I misinterpret thought you were talking about an inflection there. Were there something else that happened

Brian Donald Haney: that caused that to go down harder than what you said in last quarter? Thanks.

Stuart Winston: Yeah. It seems I think what we mentioned in the last call in September, October, it seemed like it was stabilizing a little bit. And then November, December, there was an influx from London and some MGAs in that large layered and shared space that caused the deceleration in growth.

Michael Wayne Phillips: Okay. And I guess, any thoughts on how that might proceed at least for the

Brian Donald Haney: I do not know, the foreseeable future this year? Is that going to stay where you saw in November, December?

Michael Patrick Kehoe: You know, this is Mike. It ebbs and flows month by month. But I would just say, in general, at some point after the next couple of quarters, it should stabilize.

Brian Donald Haney: Okay. Thanks. Thanks, Mike. Stuart, last quarter, you said the excess casualty rates were holding strong, and you mentioned it again this quarter. I guess if we specifically I do not know how much of your commercial casualty is commercial auto. Can you say what percent is and maybe a little bit more on what you are seeing? And you said commercial auto rate were moving up. What are you seeing there in terms of the loss trends? And again, just how much of that is commercial auto when your excess casualty?

Stuart Winston: It is actually a pretty small percentage in our actual excess casualty book. And even with our commercial auto division, without getting into the details, it is actually there is no primary auto and it is a small portion of excess wheels.

Michael Wayne Phillips: Okay. Yeah. Thank you.

Brian Donald Haney: Yeah. That is all I had. Thank you very much. Okay. Thanks, Michael.

Operator: Your next question comes from Andrew E. Andersen with Jefferies. Hey. Good morning. On the submission figure that you

Brian Donald Haney: quoted of up 6%, I think you added excluding unsolicited submissions. Is that like, for the 6% in Q3, or is that a different methodology now?

Stuart Winston: That is the same. That is the same.

Brian Donald Haney: Okay. Thanks. And then could you maybe just talk about what you are seeing in business retention ratios? Not

Bryan Paul Petrucelli: so much the retention for versus reinsurers, but just year-over-year business retention and maybe just some color on how you are thinking about any flow back to the admitted market that you may be seeing in either property or casualty?

Michael Patrick Kehoe: Yeah. Andrew, it is Mike. We are I think our renewal retention is in the very low 70% range. And that has been pretty steady. We do not see a big movement there. And in terms of move to standard lines, I would just say it is a very dynamic marketplace overall. There is always business moving back and forth. We do not see any uptick in movement away from the E&S market.

Brian Donald Haney: Overall.

Operator: Your next question comes from Michael Zaremski with BMO.

Brian Donald Haney: Hey. Good morning. Thank you. Just wanted to make sure I am teasing this out correctly. Is the most of the decel and the growth rate on

Mark Douglas Hughes: on premiums is coming from property kind of larger account shared and layered. If that is correct, maybe you can kinda help us with kind of what percentage of the portfolio at this point is made up of that type of business at this point. I know it has been shrinking,

Michael Patrick Kehoe: Yeah. Mike, this is Mike. We are going to publish that next week in our K. If you look at our investor slide deck on the Internet, we break out all the divisions. I think it is through the 2024, and that will be updated at the same time with the 2025 stats. But it is essentially the Commercial Property division. It was our largest division last year. And they are larger accounts, and they are just subject to a much more intense level of competition. I think Stuart mentioned the fact that all of our other five or six property divisions are experiencing pretty robust growth. They are just off a smaller premium base at the moment.

Mark Douglas Hughes: Okay. Yeah. It. So I just want to, you know, just because I think we are probably focusing too much on this division's kind of cyclicality, but I just you know? So is it fair for us to we want to kind of get ahead this trend for 2026, I think, you know, the consensus in the market is that you know, large account property stays similarly soft to 2025. So, you know, I guess, unless you think I am off, we should just kind of assume that

Bryan Paul Petrucelli: this

Mark Douglas Hughes: this portion of your business is still material, and we should kind of make sure we are accounting for further potential shrinkage in this part of your business for next year. Is that fair?

Michael Patrick Kehoe: Yeah. I mean, it is a very competitive market. And so I think what you saw in the fourth quarter again, the specific numbers are going to ebb and flow, but the fact that we are in a hyper-competitive environment there, think will continue over into 2026.

Bryan Paul Petrucelli: Okay.

Mark Douglas Hughes: And then, pivoting to the casualty, you know, look you are seeing kind of a stabilization of the trend line there. Excellent. You know, but appears to be loss ratios. Are you specifically for casualty, you know, pricing and submission, is that kind of a are we trough there on those KPIs? You know, I am assuming pricing still competitive, or is there still kind of incremental pricing competition on the casualty side? Thanks.

Michael Patrick Kehoe: Yeah. I would say, in general, we are in a competitive moment in the insurance cycle, with the level of competition varying quite a bit from one, if you will, market segment to the next. The Commercial Property we have been talking about, the larger Southeastern wind accounts, that is an example of one of the most competitive areas. And then Stuart, a few minutes ago, listed a number of areas where we are still seeing very reasonably strong premium growth and upward movement in pricing. So we feel very positive about the business overall, given our underwriting and our cost advantages. One of the reasons we broke out that Commercial Property in our press release and in our comments

Brian Donald Haney: is just to reiterate that

Michael Patrick Kehoe: that is a little bit of a unique market segment and division for us in that it grew tremendously over the prior several years and now we are kind of giving back a little bit of that outsized growth. But if you pull that out and look at the rest of the business, it is still running not just great margins, but 10% growth in this competitive environment I think is quite positive.

Mark Douglas Hughes: That is helpful. Thank you, Michael.

Operator: Your next question is from Christian Getzhoff with Wells Fargo.

Mark Douglas Hughes: Hi. Good morning. Thank you. Any quantification you could provide on how much better in terms of percentage points the underlying combined ratio is commercial property and kind of the rest of your business? And I am trying to get a sense of how much a variation we could see just from business mix shift is. If I do, like, simple calc, I think property is down to 20% versus the 2024 at the start of 2025. So I am just trying to get a sense of what that gap is.

Michael Patrick Kehoe: Yeah. We are not going to be able to provide that on a conference call. But when our K is published next week, there are some accident year exhibits that break out occurrence casualty, claims-made casualty, and property. And then when our statutory statement is filed in a couple weeks, that gives you even more granular loss data on an accident-year basis by statutory line of business, so you can really get into the weeds there. Think that would be better. But I would just say overall, I would remind all of our investors certainly that it is a strategy of ours over the 17 years we have been in business to post loss reserves in a conservative fashion.

And if you look at our history, every year we have had favorable reserve development in our GAAP financials. And so hopefully, we are building a lot of confidence among the investment community. We have also commented that over the last couple of years, for future claims, we have been quicker to release IBNR, so reserves from the short-tail lines of business like property, and we are being a little more cautious on the long-tail lines like casualty. But again, that is a good thing. We are still posting best-in-class financial results, but we are doing it with a high level of conservatism in our reserving practices. So hopefully, investors take some comfort in that.

Mark Douglas Hughes: Got it. Thank you. And then for my follow-up, how big of an opportunity are data centers for Kinsale Capital Group, Inc.? Are you guys writing that business currently? And I guess any general market commentary on how the competition and the terms and conditions are developing in that area?

Stuart Winston: Yeah. It is not a meaningful percentage of our book of business in property or casualty. The layers. So, the limits required on those placements is just not where we are competitive.

Bryan Paul Petrucelli: Thank you.

Operator: Your next question comes from Mark Douglas Hughes with Truist.

Bryan Paul Petrucelli: Morning, Mark.

Brian Donald Haney: I think, Stuart, you had mentioned in November and December in property, you saw an influx

Bryan Paul Petrucelli: from London and MGAs. Anything in casualty on that front? Did you see a little more competitive pressure across the board?

Stuart Winston: There has always been competition from the MGAs and fronting companies on the casualty side, no real increase in the quarter.

Bryan Paul Petrucelli: Yeah. When you look across the industry as a whole, it seems like casualty has meaningfully decelerated from Q3 to Q4. Is that pricing? Is that competition? Is it business going to other carriers or nonpublic carriers?

Stuart Winston: I think it is just the normal durability in the market.

Brian Donald Haney: Mark, between quarter to quarter.

Bryan Paul Petrucelli: Very good. Very good. Brian, you have talked about the expense ratio. How much impact this quarter just from the mix shift, maybe lower ceding commission from lower property

Michael Patrick Kehoe: Yes. I think we did not break out the components by quarter.

Bryan Paul Petrucelli: Mark. But

Brian Donald Haney: portion of the expense ratio related to net commissions was relatively constant with the third quarter.

Bryan Paul Petrucelli: I think we mentioned and I have mentioned in the past, when looking at quarter by quarter, there is a fair amount of variability. So we are sort of guiding you to the

Mark Douglas Hughes: annual metric.

Bryan Paul Petrucelli: But again, I commented in my remarks that the other underwriting component

Bryan Paul Petrucelli: of the expense ratio did improve by about a half point year over year.

Brian Donald Haney: Okay.

Bryan Paul Petrucelli: So one could assume mix might account for

Bryan Paul Petrucelli: a little bit of an uptick in the expense ratio?

Bryan Paul Petrucelli: Yeah. Exactly. Yeah.

Bryan Paul Petrucelli: And then how about the kind of new business trends excess

Stuart Winston: versus

Bryan Paul Petrucelli: primary? Has there been any material shift in that if excess is more attractive? Is that you leaning into that, or is it still more balanced?

Stuart Winston: It is still pretty balanced. It has stayed, the mix has stayed pretty similar since day one.

Bryan Paul Petrucelli: Very good. Thank you.

Michael Patrick Kehoe: Thanks, Mark. Thanks, Mark.

Operator: Your next question comes from Joseph Thomas Tumillo with Bank of America.

Stuart Winston: Just

Bryan Paul Petrucelli: quick question. I know, obviously, social inflation increased litigation. This has been much more prevalent in the larger accounts, but I was not sure if that was starting to migrate at all.

Bryan Paul Petrucelli: Know, more towards the area you guys typically play in. Do you have any comments there on how that environment is kinda shaping

Michael Patrick Kehoe: Joe, this is Mike. There is plenty of claims and litigation activity in the small account market like there is in larger accounts. So small accounts definitely are not immune from that. I do not know that there is any pronounced change in recent months, but it is the litigation industry in the United States is large and growing and the plaintiff attorneys are entrepreneurial as hell looking for new ways to drive claims and serve their clients. So we are vigilant for sure.

Scott Heleniak: Okay. Great. And then just kinda just as a follow-up, a quick question. Know you guys talked about kind of leaning into a bit more AI in your prepared remarks. Just kinda wondering if you can scale up more on that where you kinda see more of the opportunities or where you are most excited for AI really to be deployed within the business, whether it is on claims, underwriting, or what have you. Kind of for the next year or so?

Michael Patrick Kehoe: Well, I think broadly speaking, AI in the business operation allows you to

Mark Douglas Hughes: automate tasks

Michael Patrick Kehoe: that are repetitive and whatnot. And so it is cost savings, opportunity. It is an opportunity to drive better customer service. It is an opportunity to reduce errors in a business. You know, we had, give or take, a million submissions last year. So hundreds and hundreds of thousands of quotes and policies, so automation is something we have been working on for ten years. AI is just a powerful new tool in that regard. But I would say, in our analytics and our IT area, it is probably being used most effectively today in terms of writing code and testing code and converting unstructured data to structured data, etcetera.

I mean, it has got a lot of use cases, but the two things we are focused on: one is driving automation in our business, and two is to get smarter about how we segment and price risk.

Bryan Paul Petrucelli: Okay. Thank you.

Brian Donald Haney: You bet. Your next question comes

Operator: from Rowan Meyer with RBC Capital Markets.

Stuart Winston: Hey. Good morning. At the Investor Day last month, you guys highlighted a bunch of new products that were launched in last year. I was wondering if we could maybe talk about how much growth is new products versus existing

Brian Donald Haney: any new plans for 2026.

Michael Patrick Kehoe: Well, we are going to publish in our K the breakout of our written premium for 2025 by underwriting division. And that will be out, I think it is next week. So if you look at the Agribusiness casualty, agribusiness property, personal insurance new, but we have expanded into the homeowner space there so you could look at that.

Stuart Winston: Yeah. A lot of the new products in 2025 were enhancements to existing products, so it is not going to be split out within divisions. But there is an element to growth with those.

Michael Patrick Kehoe: Yeah. But generally, new products, we roll them out. It is kind of a methodical rollout. And so it is really over a series of the first couple years that they start to be meaningful. If you look at the Small Business Property division, I think last year, that was $100,000,000 of premium, give or take. And

Scott Heleniak: nothing. Yeah. Yeah. Right? So, you know, it does take time, but

Michael Patrick Kehoe: it has been a big part of our growth story really for 17 years.

Stuart Winston: That is great, man. Thank you. And I wanted to just ask on the leverage and the you guys have highlighted your underlevered risk peers on a number of metrics, and I think it is on your debt to cap, you are below kind of the long-term target you have talked about.

Brian Donald Haney: It is a nice step up in the capital return in the last 18 months, but why not do more now the competitive environment the way it is?

Michael Patrick Kehoe: Well, with the capital allocation strategy, with the buyback in particular, we are, in effect, shrinking the denominator and increasing the ratio. We are pursuing it through the denominator, I guess you could say.

Brian Donald Haney: Yeah. That makes sense. And then I guess just one more. Can we talk about the

Stuart Winston: the durability, the softness in the property markets? And what did it take to actually push this competition out?

Michael Patrick Kehoe: Well, keep in mind, we are talking about intense competition in these larger Southeastern wind accounts in particular. But in our agribusiness property, inland marine, high value homeowners, personal insurance, small business property, they may have all grown in the double digits in the quarter. So it is just a reminder that the market does not move monolithically. It is a whole series of individual segments that kind of ebb and flow independently.

Mark Douglas Hughes: That is great. Thank you so much.

Operator: Your next question comes from Bob Huang with JPMorgan.

Scott Heleniak: Hello. It is Bob Lee from JPMorgan. So first question,

Mark Douglas Hughes: some other public insurers that have large or newer E&S specific have been reporting payment growth or submission growth that is running much higher than where you are now. So is there evidence in your minds that they might be taking some flow that used to go to you? And I know in the past, you have identified MGA as the main source of competition, but I was just wondering if you are seeing more competition from traditional market as well. And as you know, small commercial units and technology is a focus for many of your peers.

Stuart Winston: Yeah. Pablo, this is Mike.

Michael Patrick Kehoe: I would answer that question this way. We are bullish on our opportunity. We are working hard to grow. But we are in a much more competitive environment overall, and so you have to be careful in balancing the growth with the profitability of the business. Cannot really speak for other companies and what they are doing, but I would say our investors should have a lot of confidence that Kinsale Capital Group, Inc. is producing not only very strong margins, but that we are continuing to grow and take market share with the one caveat that we have got one large division that, if you will, is going through a little bit of a unique correction.

But overall, if you look at the disciplined underwriting model and the low-cost platform, we are confident we are going to continue to grow, take market share, and deliver very quality returns at the same time.

Mark Douglas Hughes: Alright. Thanks, Mike. And I guess just following up in on the expense advantage. Right? So I guess, philosophically, how do you think Kinsale Capital Group, Inc. demonstrates or exercises that advantage in this market? Right? So effectively, are you willing to write at ROEs below 26%, but still above your minimums, or is your approach to sort of let the market do what it does and you will just, you know, on printing 26% ROEs for the foreseeable future.

Michael Patrick Kehoe: Well, we manage our under each product line to a I would call it a low 20s ROE or greater.

Stuart Winston: And

Michael Patrick Kehoe: of course, in an insurance company, you do not know the cost of goods sold immediately. Right? So there are some assumptions there. Those assumptions, I think, lean into the conservative side. And so historically, we have outperformed our target. I do not think that would change overnight for sure. But like every business, we balance growth and profitability. It is just that we are always going to prioritize generating that low 20s ROE or better. And then where the specific return goes quarter by quarter, of course, is subject to claim activity and the weather and all sorts of things.

But I think we have got a long-term track record of producing pretty attractive margins and I would expect those to continue.

Mark Douglas Hughes: Alright. Thank you for your answers.

Andrew Scott Kligerman: Your next question comes from Andrew Scott Kligerman with TD Cowen.

Mark Douglas Hughes: Could you provide a little more clarity on the casualty lines and the rates that you are getting on the new business and the degree to which those rates are ahead of lost costs or maybe even not ahead of lost costs?

Michael Patrick Kehoe: Andrew, that is a tough question to answer.

Stuart Winston: On a conference call like this because, again, we have got 25 different underwriting divisions

Michael Patrick Kehoe: they are operating in very unique market segments in terms of the coverages they sell, the industries that we target, and, as Stuart mentioned, our commercial auto is experiencing strong price increases. Management liability, I think those rates are probably down. Non-medical professional liability, they are down. The Commercial Property division, clearly, those rates are down in the quarter. So we kind of directed in our comments to look at the Amwins pricing index. I think that is a good composite of what Amwins is a very large wholesale broker. They see a ton of business. And I think they have got a really interesting window into pricing trends across the industry.

And I think that is probably the best point of reference we can guide you to.

Mark Douglas Hughes: That is very fair. And I guess what I was trying to get at even with that question is you have got pressure in property. It sounds a little mixed in casualty on rate. And I mean, and I get that the 75% combined ratio in part is due to your expense ratio, but your loss ratio is out it is exceptional.

Michael Patrick Kehoe: So

Mark Douglas Hughes: given what the mosaic is with pricing right now, should we expect the underlying combined of 75 to drift up gradually over the course of the next year, two years, three years?

Michael Patrick Kehoe: We do not really offer guidance going out like that. I would just say we are in a competitive environment. Some of our results on an annual basis are driven by things we do not directly control,

Brian Donald Haney: like the weather or what have you. Right.

Michael Patrick Kehoe: In general, we are managing to a low 20s ROE or better. We are very conservative in setting aside loss reserves to pay claims that are reported in the future. Right? So investors should have a lot of confidence in our balance sheet. We have got competitive advantages that are, in my opinion, quite significant. If you look at if we have a 15 percentage point cost advantage, and we are in a commodity business where the customers want and focus on cost sometimes over and above everything else in the transaction. So I think that is probably the best guidance we can offer. We are bullish on our opportunity. It is a competitive environment.

We are quite conservative in the reserving. And the actual results are going to ebb and flow quarter by quarter, but I think our investors should expect us to generate very high and attractive returns

Brian Donald Haney: for the foreseeable future.

Mark Douglas Hughes: Got it. Thank you, Mike. Okay. Your next question comes from

Operator: Michael Zaremski with BMO.

Mark Douglas Hughes: Hey. Thanks. Now switching gears a bit to home insurance. I thought one of the new items that came out of your recent investor day was the opportunity there, kind of, I think you talked about maybe it being up to 10% of your revenues even, over time. If as long as it is not too competitive and you are willing to share any color, any thoughts on kind of how that is shaping up in terms of nuances on the types of policies you are offering in the states, and the trajectory of growth there? Thanks.

Stuart Winston: Yeah. This is Stuart. The homes product definitely a long-term project for us. We are starting small, the crawl, walk, run mentality that Mike mentioned earlier, and we are the to expand exists, we are going to take that opportunity to expand and do so profitably. And we are in probably four or five states. Five states for homes. And that continues to expand.

Michael Patrick Kehoe: The manufactured homes are in 15, yeah, about 15 states, and we are expanding the g

Stuart Winston: geography within the state, diversifying away from coastal there.

Brian Donald Haney: And then we write high value homes in another sluggish phase. So

Michael Patrick Kehoe: it is an ongoing process, but we are bullish. There is you are seeing across the industry a little bit more premium being pushed from the standard to the non side in the homeowner space.

Brian Donald Haney: And, you know, obviously, we are leaning into that in order to

Michael Patrick Kehoe: try to take advantage.

Mark Douglas Hughes: And just as a follow-up, it sounds like this is both high value and not high value. Are these, like, atypical, like, a standard market policies in terms of just much higher deductibles or different exclusions? Is there any broad brush you can paint? Thanks.

Stuart Winston: Yeah. It is a mix. I mean, it could be a pretty standard policy, but there is also some in tough areas that might have nonstandard exclusions in there.

Operator: Your next question comes from Mark Douglas Hughes with Truist.

Bryan Paul Petrucelli: Yeah. Thank you. What do you make of the idea that AI might take over some of the brokers’ role? Do you think that is likely? Is that the way to get efficiency? Is to go more of a direct route, or is that just a vanity at this point?

Michael Patrick Kehoe: Look. I mean, the short answer, Mark, is we do not know. I have always been impressed with Pat Ryan's commentary around the fact that the customer needs an adviser and an advocate.

Brian Donald Haney: And I do not think that changes with AI, but I do think AI is going to drive

Michael Patrick Kehoe: it is a new tool for the whole economy. And I think businesses in P&C, but really in every industry, are going to have to lean in and use this tool to get better at what they do and serve their customers. So

Bryan Paul Petrucelli: Appreciate that. Thank you.

Brian Donald Haney: Your final question comes from Bob Huang with JPMorgan.

Operator: Bob, your line is open.

Mark Douglas Hughes: Hi. Yeah. Sorry. It is Pablo again from JPMorgan. So I guess first question,

Bryan Paul Petrucelli: with growth slowing, like, it

Mark Douglas Hughes: is there an opportunity on your end to take up reinsurance retentions and therefore just retain more premium economics? Is that something you are actively considering?

Michael Patrick Kehoe: Yeah. Pablo, it is Mike. We have looked at retentions in our reinsurance program, look at it every year, and we are constantly making adjustments

Brian Donald Haney: to

Michael Patrick Kehoe: settle on what we think makes the most sense for the company and managing volatility and that type of thing. So, yeah, absolutely. Our program renews on 6/1, so we will be starting that process here in the next month or so.

Mark Douglas Hughes: Alright. Thanks, Mike. And then last question for me. So if we just focus on your book ex large account, right, growth has been slowing there too. It is still a good level, but it has been slowing. So I think it was 22% in 2024, and 2025 is 13%. So I realize this line of questioning might be too simplistic, but is that slowed down more a reflection of pricing or submission flow? And if both, how would you break down the attribution?

Michael Patrick Kehoe: I would characterize it as mostly a function of increased level of competition. And as the competition increases, if you are a disciplined underwriting company, you just have to be a little more cautious. Maybe the submission flow is down slightly, but ex Commercial Property, I think it was 9%. I think maybe two years ago, maybe a mid-teens.

Mark Douglas Hughes: Yeah.

Michael Patrick Kehoe: So, yeah, it is down a little bit, but still pretty robust. And the 13% growth overall ex Commercial Property, I think it is pretty strong if you look at how all the public brokers that have reported growth rates, I think, tend to be kind of low to mid-single digits. So I think it speaks to the competitiveness of our model even in a competitive moment in the cycle. And, hence, that is why we continue to be bullish on our opportunity.

Scott Heleniak: Alright. Thank you, Mike.

Michael Patrick Kehoe: K, Pablo.

Operator: There are no further questions at this time. I will now turn the call back over to Mr. Kehoe for any closing remarks.

Michael Patrick Kehoe: All right. I just want to thank everybody for participating, and we look forward to speaking with you again in the near future. Have a great day.

Operator: Ladies and gentlemen, that concludes today's conference call. Thank you for participating. You may now disconnect.

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