Kinsale Capital Group (NYSE:KNSL) Q4 2021 Earnings Conference Call April 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

Pablo Singzon - JPMorgan

Casey Alexander - Compass Point

Operator

Before we get started, let me remind everyone that through the course of the teleconference, Kinsale's 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 the 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 it's first 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 first quarter conference call. As you know, both Bryan Petrucelli, Kinsale's CFO; and Brian Haney, Kinsale's COO are joining me. They will each make a few comments on the quarter and then proceed to any questions that you may have.

Kinsale's operating earnings for the first quarter 2022 increased by 47% over the same quarter in 2021, and gross written premium was up 45%. The company posted a 79% combined ratio for the quarter and an annualized operating return-on-equity of 22.1%. The performance of the business in the first quarter of 2022 is really a continuation of what we have been seeing for the last couple of years. A favorable and growing E&S market is creating a tailwind for Kinsale, in particular, by allowing us to raise rates and grow our premium at an unusually high level. Adding to this tailwind is our own unique business strategy, expert underwriting and claim handling, together with a technology-driven low-cost operation, the combination of which creates a powerful opportunity to deliver best-in-class profit and growth in the years ahead.

We remain confident that the E&S market environment will remain favorable and allow for further rate increases and strong premium growth over the course of the next year. Beyond that, we have a little less visibility on the broader market, but we do have visibility on our competitive advantages which we believe have real durability to them, specifically controlling our own underwriting and not contracting that out to third-parties; and secondly, building a core competency around technology, just like we do underwriting and claim handling, owning our own core systems and not relying on external parties for that function contributes to our highly automated business process and all the various benefits that flow from it, productivity gains, superior customer service, more robust and accurate data, and of course, it's driving our low expense ratio and boosting our returns.