Kinsale Reports Highest Net Income Ever

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Here’s our initial take on Kinsale Capital Group‘s (KNSL) financial report.

Key Metrics

Metric Q2 2024 Q2 2025 Change vs. Expectations
Revenue $384.6 million $469.8 million 22.2% Beat
EPS (adjusted) $3.75 $4.78 27.5% Beat
Combined ratio 77.7% 75.8% -190 bps n/a
Net investment income $35.8 million $46.5 million 29.6% n/a

Few Disaster Losses Leads to Record Profits

Before this recent quarter, Kinsale Capital Group had experienced slightly underwhelming performance for two consecutive periods, sparking curiosity among investors as to whether the company could manage a turnaround.

It turns out that during the second quarter, Kinsale surpassed both revenue and earnings forecasts significantly. The adjusted earnings for this period increased by 27.5% from last year to reach $4.78 per share. Additionally, total revenue jumped up by 22% to an impressive $469.8 million. Interestingly, the catastrophe losses in the second quarter were on par with those of the previous year, contributing positively to Kinsale’s overall performance. In fact, this quarter marked the highest net income the company has ever recorded.

Behind the sensational news, Kinsale saw a 5% increase in annual gross written premiums, yet what truly made headlines were their profitability and investment strategies.

In terms of profitability, Kinsale posted a significantly improved combined ratio of 75.8%, up from 82.1% in the initial quarter. This implies an underwriting profit margin of over 24%. To be frank, many other insurance companies would be thrilled with just half of this success. On the investment front, Kinsale saw a 29.6% rise in net investment income during the second quarter, largely due to the sustained high-interest climate.

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Immediate Market Reaction

At 4:25 p.m. EDT on Thursday, the initial response in the market towards Kinsale’s report showed a slight negativity. By this time, the value of Kinsale shares had decreased by approximately 0.9% compared to their previous state.

It’s crucial to note that these events occurred prior to Kinsale’s earnings call. Typically, Kinsale’s shares don’t show much reaction during after-hours trading. Following the release of their first-quarter report, Kinsale’s stock remained almost unchanged, but it experienced a significant drop on the subsequent trading day. Therefore, there is a strong likelihood that we might witness a more substantial movement in its price tomorrow, either way.

What to Watch

In general, the second quarter tends to be a robust period for the insurance sector due to its lower likelihood of natural catastrophes. This trend is evident in our latest financial report, but since the third quarter coincides with the height of hurricane season, it’s crucial to closely examine the combined ratio as we move forward into 2025.

It’s noteworthy that Kinsale repurchased $10 million worth of stocks during Q2, which is relatively low for a company of its scale. Intriguingly, Kinsale has consistently spent $10 million on buybacks over the past three consecutive quarters. Moving forward, it will be intriguing to observe if the company will become more bullish in case the share price weakens or will curtail buyback actions should the stock price increase.

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2025-07-25 00:20