Kinsale Capital Group (NYSE:KNSL) Q2 2022 Earnings Conference Call July 29, 2022 9:00 AM ET

Company Participants

Michael Kehoe - Chief Executive Officer

Bryan Petrucelli - Chief Financial Officer

Brian Haney - Chief Operating Officer

Conference Call Participants

Mark Hughes - Truist

Scott Heleniak - RBC Capital Markets

Casey Alexander - Compass Point

Pablo Singzon - JPMorgan

Operator

Ladies and gentlemen, thank you for standing by and welcome to Kinsale's Second Quarter 2022 Earnings Call.

Before we get started, let me remind everyone that through the course of the teleconference, Kin sales management may make comments that reflect their intentions, beliefs and expectations for the future. As always, these forward-looking statements are subject to certain risk factors which could cause actual results to differ materially. These risk factors are listed in the company's various SEC filings, including their 2021 annual report on Form 10-K which should be reviewed carefully. The company has furnished a Form 8-K with the Securities and Exchange Commission that contains the press release announcing its second quarter results. Kinsale's management may also reference certain non-GAAP financial measures in the call today. A reconciliation of GAAP to these measures can be found in the press release which is available at the company's website at www.kinsalecapitalgroup.com.

I will now turn the conference over to Kinsale's President and CEO, Mr. Michael Kehoe. Please go ahead, sir.

Michael Kehoe

Thank you, operator and good morning, everyone. Welcome to our second quarter conference call. Bryan Petrucelli, Kinsale's Chief Financial Officer; and Brian Haney, Kinsale's Chief Operating Officer, are with me on the call this morning. As usual, we will each make a few comments and then move on to any questions you may have.

Kinsale's operating earnings for the second quarter 2022 increased by 51% over the second quarter 2021 and gross written premium was up 43% for the quarter. The company posted a 77% combined ratio for the quarter and an annualized operating return on equity of 24.6% for the first 6 months of the year. This quarter's performance is similar to our experience over the last couple of years, where we have been able to raise rates to our customers above loss cost trend and at the same time, grow our premium volume at a remarkable level. This multiyear combination of profit margin expansion with outsized premium growth is extraordinary. It's allowing us to deliver better returns while continuing to build a strong balance sheet, especially with regard to loss reserves. Although there is much uncertainty in the economy today, especially with inflation, Kinsale stockholders should be confident that our reserves are conservatively positioned and we're likely to develop favorably and unfavorably in the years ahead.