Yahoo Finance Kinsale Capital (KNSL) Q1 Earnings Top, Premiums Rise Y/Y
Kinsale Capital Group KNSL delivered first-quarter 2024 net operating earnings of $3.50 per share, which outpaced the Zacks Consensus Estimate by 5.1%. The bottom line increased 43.4% year over year.
The results benefited from a favorable pricing environment, premium growth, rate increases and improved combined ratio, partially offset by higher expenses.
Operational Update
Operating revenues jumped 45.1% year over year to about $373 million. The growth can primarily be attributed to a rise in premiums, fee income, higher net investment income and other income. Revenues beat the consensus estimate by 3.8%.
Kinsale Capital Group, Inc. Price, Consensus and EPS Surprise
Kinsale Capital Group, Inc. price-consensus-eps-surprise-chart | Kinsale Capital Group, Inc. Quote
Gross written premiums of $448.6 million rose 25.5% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Our estimate was $466.3 million.
Net written premiums climbed 17.4% year over year to $351.1 million in the quarter. Our estimate was pegged at $360.2 million.
Net investment income increased 59.1% year over year to $32.9 million in the quarter and missed our estimate of $34.2 million. The increase was driven by growth in the company's investment portfolio generated primarily from the investment of strong operating cash flows and higher interest rates. The Zacks Consensus Estimate was pegged at $32.9 million.
Total expenses increased 31.9% year over year to $256.9 million due to a rise in losses and loss adjustment expenses, underwriting, acquisition and insurance expenses and other expense. Our estimate was pegged at $261.6 million.
Kinsale Capital’s underwriting income was $65.1 million, which grew 26.2% year over year. The increase was due to a combination of premium growth and lower net commissions. Our estimate was $664.5 million. The combined ratio deteriorated 70 basis points (bps) to 79.5 in the quarter under review. Our estimate, as well as the Zacks Consensus Estimate, was 80.
While the expense ratio improved 100 bps to 20.7 in the quarter, the loss ratio deteriorated 170 bps to 58.8
Financial Update
Kinsale Capital exited the first quarter of 2024 with cash and cash equivalents of $136.1 million, which increased 7.4% from the 2023-end level.
As of Mar 31, 2024, stockholders’ equity increased 9.1% to $1.1 billion from the 2023-end level. Book value per share was $50.31 as of Mar 31, 2024, up 7.3% from the 2023 end level.
Net operating cash flows were $210.2 million, up 6.5% year over year.
Annualized operating return on equity contracted 100 bps year over year to 28.9% in the reported quarter.
Zacks Rank
Kinsale Capital currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies TRV reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss. The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 15.3% from the year-ago quarter to $11.2 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.1%.
Net written premiums increased 8% year over year to about $10.2 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.9 billion. Travelers witnessed an underwriting gain of $1.4 billion, up 57.3% year over year, driven by higher business volumes.
The consolidated underlying ratio of 87.7 improved by 290 bps year over year. The combined ratio improved 150 bps year over year to 93.9 due to an improvement in the underlying combined ratio, partially offset by higher catastrophe losses and lower net favorable prior-year reserve development. The Zacks Consensus Estimate was pegged at 94.
Progressive Corporation’s PGR first-quarter 2024 earnings per share of $3.83 beat the Zacks Consensus Estimate of $3.20. The bottom line improved nearly eight times year over year. Operating revenues of $17.1 billion beat the Zacks Consensus Estimate by 2.4% and increased 20.1% year over year.
Net premiums earned grew 19% to $16 billion and beat our estimate of $14.4 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 1290 bps from the prior-year quarter’s level to 86.1.
RLI Corp. RLI reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%. The quarterly results reflected continued premium growth across all product segments. Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.
Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety (up 12.1%) segments. Our estimate was $511 million. Underwriting income of $77.7 million increased 16%. The combined ratio deteriorated by 60 bps year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.
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