Kinsale Capital Group (NYSE:KNSL) reported third-quarter results marked by higher operating earnings, strong underwriting profitability and increased investment income, even as competition in the excess and surplus, or E&S, insurance market pressured written premiums—particularly in commercial property.
Diluted operating earnings per share increased 9.4% from the prior-year quarter, while diluted GAAP earnings per share declined 28.4%. Chris Tangard, Kinsale’s senior vice president and chief accounting officer, said the decline in GAAP earnings primarily reflected losses from sales of fixed-maturity investments as the company repositioned its portfolio.
Kinsale reported an annualized operating return on equity of 25.6% through the first nine months of 2026, while annualized return on equity was 26.6%. Its quarterly combined ratio was 75.4%, compared with 74.9% a year earlier. The loss ratio improved to 53.4% from 53.9%, aided largely by favorable prior-year development, while the expense ratio rose to 22% from 21%.
Premium Declines Reflect Large-Account Competition
Gross written premium declined 4.8% during the quarter and net written premium fell 1.5%. Management said intense competition in commercial property, especially in larger shared and layered accounts, weighed on growth. Excluding the commercial property division, gross written premium was down 0.5%.
Despite the premium decline, the company said submissions, quotes and bind orders increased at a mid-single-digit rate. New-business submission growth was 6%, and was 10% excluding commercial property. Stuart Winston, executive vice president and chief underwriting officer, said more than half of Kinsale’s underwriting divisions recorded double-digit submission growth.
Management characterized the results as a mix shift toward smaller accounts rather than a broader deterioration in activity. Mike Kehoe said only about 0.7% of policies had premiums of $100,000 or more, but those policies represented roughly 12% of overall premium. He said Kinsale has seen lower new-business hit rates and renewal retention among larger accounts, where competitors have offered sharply lower pricing.
“We will not chase business where the economics do not make sense,” Winston said, adding that the company remains focused on small and medium-sized accounts.
Winston said the E&S market remained soft during the quarter across commercial property and certain long-tail casualty lines. However, Kinsale identified growth opportunities in agribusiness, casualty, commercial auto, entertainment, ocean marine and environmental businesses, which each posted double-digit growth. The company also cited favorable underwriting conditions in excess casualty, allied health, products liability, healthcare, energy and agribusiness property.
Pricing, Reserves and Underwriting Discipline
Management said Kinsale continues to manage its lines of business to generate a return on equity of 20% or more. Salmaan Allibhai, chief analytics and technology officer, said pricing trends differed by division and that loss-cost trends in some business lines were running slightly ahead of rate changes. Still, he said the company believes its existing margins support its underwriting approach.
The company’s combined pricing trend was in line with the Amwins pricing index, which showed a 3.1% decline during the third quarter, compared with a 5.9% decline in the second quarter. Winston said commercial property remains under substantial rate pressure, while commercial auto, excess casualty and entertainment offer opportunities for rate increases.
Allibhai said favorable prior-year reserve development was concentrated disproportionately in shorter-tail lines, including property and some shorter claims-made business. Management said it continues to reserve cautiously in long-tail casualty lines, citing the potential for uncertainty in the U.S. tort system and the effects of inflation.
Kinsale expects the impact of catastrophe activity during the quarter to be immaterial, Winston said.
Investment Portfolio Repositioning Lifts Future Yield
Tangard said Kinsale sold certain fixed-maturity securities yielding less than 2% and reinvested approximately $130 million in bonds yielding more than 5.5%. The company also invested about $100 million in higher-conviction equity securities.
The bond sales resulted in a net pretax earnings impact of $37.6 million, or $1.67 per diluted share, during the quarter. Tangard said the transactions did not affect book value. Excluding the investment-related effects, diluted operating earnings per share were $5.70.
Net investment income rose 17.5% to $58.3 million, supported by a larger invested asset base and higher interest rates. Kinsale’s float increased to $3.5 billion as of Sept. 30, from $3.1 billion at the end of 2025. New-money yields averaged above 5%, while the fixed-maturity portfolio had an average duration of 4.4 years.
Capital Returns and Technology Initiatives
Kinsale repurchased 269,000 shares for $100 million during the third quarter, an amount Tangard said represented just under 80% of quarterly net operating earnings. The company spent the same amount on repurchases in the second quarter, up from $62.5 million in the first quarter. Tangard said management expects $100 million to be a suitable quarterly repurchase run rate for the remainder of its current authorization, while remaining opportunistic.
The company’s capital-allocation priorities are funding growth in its insurance operations, returning excess capital through repurchases and paying a modest dividend. Tangard said Kinsale has no interest in mergers and acquisitions and that debt represented approximately 10% of total capitalization.
Management also emphasized the role of its proprietary technology and analytics systems in supporting underwriting efficiency. Allibhai said Kinsale maintains all 17 years of company data in one database and uses third-party data, generalized linear models and other machine-learning tools to improve pricing segmentation.
He said the company uses more than 100 artificial intelligence agents and skills for activities including submission processing, underwriting, analytics, claims intake and correspondence. Management said technology investments have supported rapid broker response times and helped maintain a low operating expense base, with other underwriting expenses flat at 10.2% of net premiums earned during the quarter.
About Kinsale Capital Group (NYSE:KNSL)
Kinsale Capital Group, Inc is a specialty insurance company headquartered in Richmond, Virginia. Through its insurance subsidiaries, the company focuses primarily on the excess and surplus lines market, providing coverage for risks that may be difficult to insure through standard commercial insurance channels.
Kinsale offers a range of commercial property and casualty products, including coverage for commercial property, general liability, professional liability, inland marine, commercial auto, workers’ compensation and other specialty risks.
