U.S. property and casualty insurance company Kinsale's profits increased significantly, with net profit up 34% year-on-year
Kinsale Capital Group, which focuses on the excess and surplus (E&S) insurance market, announced its second-quarter results. Net profit increased by 34% year-on-year, although commercial property insurance premium income declined significantly due to intensified competition. The company's financial report showed that net profit in the second quarter was US$175.9 million, or diluted earnings per share of US$7.72, higher than US$134.1 million in the same period last year. Core operating income was $126.2 million, or $5.54 per share, a year-over-year increase of 15.9%, exceeding analysts' expectations of $5.10. In terms of premium income, total written premiums in the quarter were US$527.6 million, a year-on-year decrease of 5.0%. The decline was mainly concentrated in the commercial property and casualty insurance segment, where premiums fell 32.7% year-on-year. The company attributed it to "increased competition" in the market. After excluding the commercial property insurance segment, other business premiums achieved positive growth. Despite pressure on premium income, underwriting profits remained healthy. Premiums earned in the quarter increased by 8.9% to US$417.6 million, and underwriting profit reached US$105.4 million. The combined ratio was 75.5%, which was better than the 75.8% in the same period last year. The company benefited from positive reserve releases of approximately $19.4 million in prior accident years, and net investment income increased 19.9% year over year to $55.7 million. The company repurchased US$100 million in shares during the quarter at a price of approximately US$311.47 per share. The board of directors subsequently approved an additional US$250 million repurchase authorization, leaving the remaining repurchase amount at the end of the quarter at US$337.5 million. Book value per share rose to $89.34 from $84.66 at the end of last year. Chairman and CEO Michael P. Kehoe said that the company's business continues to generate healthy and growing underwriting profits and investment income, with sufficient operating cash flow, and the company will continue to focus on achieving sustainable value creation through strict underwriting discipline and a technology-driven low-cost model.