Introduction
Kinsale Capital Group, Inc & its subsidiaries (“Kinsale Capital”) is a P&C Insurance carrier in US that focuses exclusively on the excess and surplus (E&S) lines market. Another special part is that for a 5 year time period – 2019 to 2023, Kinsale delivered a total shareholder return (TSR) of 44%, the highest in the insurance sector.
Kinsale’s business strategy is focused on maximising underwriting profit – a strategy we will look closely at below. In our view, this is in contrast with Berkshire’s strategy of maximising investment income of insurance business.
Corporate Structure & Market Presence
Kinsale holds 1.6% market share in the total E&S market (recorded approx at $115.6 billion in Direct Written Premiums in 2023). Kinsale has presence across all 50 states in USA, District of Columbia, US Virgin Islands and Puerto Rico. The distribution is through group company Aspera, and a network of independent insurance brokers.
Financial Performance (2024)
- GWP: $1.9 billion (+19.2% YoY)
- Net Written Premium: $1.5 billion
- Net Earned Premium: $1.35 billion
- Underwriting Income: $325.9 million
- Net Investment Income: $150.3 million
- Combined Ratio: 76.4%
- Loss Ratio: 55.8%
- Return on Equity (ROE): 32.3%
- TSR: 44% (2019-2023)
- Average Premium per Policy (2024): $15,100
- Excluding Personal Insurance: $15,900
A lower loss ratio, a healthy combined ratio suggest that the the company has been operating the business in good health with a focus on profitability.
Kinsale’s TSR outperforms other insurance carriers
Kinsale Capital has emerged as the top-performing insurer in terms of Total Shareholder Return (TSR) over the past five years (2019-2023), delivering an impressive 44% TSR. This significantly outpaces its closest competitor, Qualitas Controlad. (38% TSR), and is nearly double that of Progressive (25% TSR), which holds the third spot.
Kinsale Capital’s 23% RoE places it among the stronger performers in the insurance sector, though it is not the highest. Qualitas Controlad. leads with a 28% RoE, demonstrating superior profitability relative to its equity base. However, Kinsale’s ability to convert solid RoE into the highest Total Shareholder Return (TSR) of 44% sets it apart.
Kinsale vs S&P 500
Kinsale Capital has significantly outpaced the S&P 500, delivering a 49.7% CAGR and a 2,893.5% overall gain since its 2016 IPO, compared to the S&P 500’s 14.6% CAGR and 214.3% total return
Strategic Approach
Exclusive Focus on E&S
E&S provides coverage for unique, high-risk or hard-to-place risks outside the scope of standard risk appetites. Within E&S, Kinsale focuses on small to medium-sized accounts, which face less competition and allow for better pricing.
Specialised Underwriting
Kinsale’s exclusive focus on E&S insurance is supported by the underlying expertise brought by its underwriters. Underwriters specialise in individual lines of business, which helps Kinsale to insure hard-to-place risks that traditional insurers will avoid. Kinsale also optimizes by retaining underwriting authority in-house rather than delegating to agents.
Different from Berkshire’s approach
Unlike Berkshire Hathaway insurance, which focuses on pooling premiums and generating investment income, Kinsale prioritizes underwriting profitability. This strategy is key to its sustained growth and competitive positioning.
Conclusion
Kinsale’s exclusive E&S market focus, disciplined underwriting, and technology-driven efficiency have resulted in exceptional financial performance. With a strong growth trajectory and a proven leadership team, Kinsale Capital continues to outperform its peers and establish itself as a dominant force in the specialty insurance market.
References
Kinsale Capital’s annual report
Investor presentation
BCG Value Creators Report
