UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
For the quarterly period ended March 31, 2026
| Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
For the transition period from _______ to _______
Commission File Number: 001-37848
(Exact name of registrant as specified in its charter) | ||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of principal executive offices, including zip code)
(804 ) 289-1300
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer ☐ | Non-accelerated filer ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of the registrant's common stock outstanding at April 17, 2026: 23,062,819
KINSALE CAPITAL GROUP, INC.
TABLE OF CONTENTS
| Page | |||||||||||
| PART I. FINANCIAL INFORMATION | |||||||||||
| Item 1. | |||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| PART II. OTHER INFORMATION | |||||||||||
| Item 1. | |||||||||||
| Item 1A. | |||||||||||
| Item 2. | |||||||||||
| Item 5. | |||||||||||
| Item 6. | |||||||||||
1
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that does not directly relate to historical or current fact. These statements may discuss, among others, our future financial performance, our business prospects and strategy, our anticipated financial position, liquidity and capital, dividends and general market and industry conditions. You can identify forward-looking statements by words such as "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects," "believes," "seeks," "outlook," "future," "will," "would," "should," "could," "may," "can have," "prospects" or similar terms. Forward-looking statements are based on management’s current expectations and assumptions about future events, which are subject to uncertainties, risks and changes in circumstances that are difficult to predict. These statements are only predictions and are not guarantees of future performance. Actual results may differ materially from those contemplated by a forward-looking statement. Factors that may cause such differences include, without limitation:
•the possibility that our loss reserves may be inadequate to cover our actual losses, which could have a material adverse effect on our financial condition, results of operations and cash flows;
•the inherent uncertainty of models resulting in actual losses that are materially different than our estimates;
•the failure of any of the loss limitations or exclusions we employ, or change in other claims or coverage issues, having a material adverse effect on our financial condition or results of operations;
•the inability to obtain reinsurance coverage at reasonable prices and on terms that adequately protect us;
•the possibility that severe weather conditions and catastrophes, including due to climate change, pandemics and similar events adversely affecting our business, results of operations and financial condition;
•adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity resulting in the sale of fewer policies than expected or an increase in frequency or severity of claims and premium defaults or both, affecting our growth and profitability;
•a decline in our financial strength rating adversely affecting the amount of business we write;
•the potential loss of one or more key executives or an inability to attract and retain qualified personnel adversely affecting our results of operations;
•our reliance on a select group of brokers;
•the changing market conditions of our excess and surplus lines ("E&S") insurance operations, as well as the cyclical nature of our business, affecting our financial performance;
•our employees taking excessive risks;
•the intense competition for business in our industry;
•the effects of litigation having an adverse effect on our business;
•the performance of our investment portfolio adversely affecting our financial results;
•the ability to pay dividends being dependent on our ability to obtain cash dividends or other permitted payments from our insurance subsidiary;
•being forced to sell investments to meet our liquidity requirements;
2
•our credit agreements contain a number of financial and other covenants, the breach of which could result in acceleration of payment of amounts due under our borrowings;
•extensive regulation adversely affecting our ability to achieve our business objectives or the failure to comply with these regulations adversely affecting our financial condition and results of operations; and
•the other risks and uncertainties discussed in Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2025.
Forward-looking statements speak only as of the date on which they are made. Except as expressly required under federal securities laws or the rules and regulations of the Securities and Exchange Commission ("SEC"), we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
| March 31, | December 31, | |||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||
| Assets | ||||||||||||||
| Investments: | ||||||||||||||
Fixed-maturity securities, available for sale, at fair value (amortized cost: $ | $ | $ | ||||||||||||
Equity securities, at fair value (cost: $ | ||||||||||||||
| Real estate investments, net | ||||||||||||||
| Short-term investments | ||||||||||||||
| Total investments | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Investment income due and accrued | ||||||||||||||
Premiums and fees receivable, net of allowance for credit losses of $ | ||||||||||||||
Reinsurance recoverables, net of allowance for credit losses of $ | ||||||||||||||
| Ceded unearned premiums | ||||||||||||||
| Deferred policy acquisition costs, net of ceding commissions | ||||||||||||||
| Intangible assets | ||||||||||||||
| Deferred income tax asset, net | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||
| Liabilities: | ||||||||||||||
| Reserves for unpaid losses and loss adjustment expenses | $ | $ | ||||||||||||
| Unearned premiums | ||||||||||||||
| Payable to reinsurers | ||||||||||||||
| Accounts payable and accrued expenses | ||||||||||||||
| Debt | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
Treasury stock, at cost ( | ( | ( | ||||||||||||
| Total stockholders’ equity | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income and Comprehensive Income (Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||
| Revenues: | ||||||||||||||
| Gross written premiums | $ | $ | ||||||||||||
| Ceded written premiums | ( | ( | ||||||||||||
| Net written premiums | ||||||||||||||
| Change in unearned premiums | ( | |||||||||||||
| Net earned premiums | ||||||||||||||
| Fee income | ||||||||||||||
| Net investment income | ||||||||||||||
Change in the fair value of equity securities | ( | |||||||||||||
| Net realized investment gains | ||||||||||||||
| Change in allowance for credit losses on investments | ( | ( | ||||||||||||
| Other income | ||||||||||||||
| Total revenues | ||||||||||||||
| Expenses: | ||||||||||||||
| Losses and loss adjustment expenses | ||||||||||||||
| Underwriting, acquisition and insurance expenses | ||||||||||||||
| Interest expense | ||||||||||||||
| Other expenses | ||||||||||||||
| Total expenses | ||||||||||||||
| Income before income taxes | ||||||||||||||
| Total income tax expense | ||||||||||||||
| Net income | ||||||||||||||
| Other comprehensive (loss) income: | ||||||||||||||
| Change in net unrealized losses on available-for-sale investments, net of taxes | ( | |||||||||||||
| Total comprehensive income | $ | $ | ||||||||||||
| Earnings per share: | ||||||||||||||
| Basic | $ | $ | ||||||||||||
| Diluted | $ | $ | ||||||||||||
Weighted-average shares outstanding: | ||||||||||||||
| Basic | ||||||||||||||
| Diluted | ||||||||||||||
See accompanying notes to condensed consolidated financial statements.
5
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
| Shares of Common Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumu- lated Other Compre- hensive Loss | Treasury Stock, at Cost | Total Stock- holders' Equity | ||||||||||||||||||||||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Issuance of common stock under stock-based compensation plan | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Restricted shares withheld for taxes | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Treasury stock acquired – share repurchases | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Issuance of common stock under stock-based compensation plan | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Restricted shares withheld for taxes | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Treasury stock acquired – share repurchases | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
6
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Operating activities: | ||||||||||||||
| Net cash provided by operating activities | $ | $ | ||||||||||||
| Investing activities: | ||||||||||||||
| Purchase of property and equipment | ( | ( | ||||||||||||
| Change in short-term investments, net | ( | |||||||||||||
| Purchases – fixed-maturity securities | ( | ( | ||||||||||||
| Purchases – equity securities | ( | ( | ||||||||||||
| Sales – fixed-maturity securities | ||||||||||||||
| Sales – equity securities | ||||||||||||||
| Maturities and calls – fixed-maturity securities | ||||||||||||||
| Other | ||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Financing activities: | ||||||||||||||
| Payroll taxes withheld and remitted on share-based payments | ( | ( | ||||||||||||
| Proceeds from stock options exercised | ||||||||||||||
| Dividends paid | ( | ( | ||||||||||||
Treasury stock acquired – share repurchases | ( | ( | ||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Net change in cash and cash equivalents | ||||||||||||||
| Cash and cash equivalents at beginning of year | ||||||||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
7
KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Summary of Significant Accounting Policies
Basis of presentation
The unaudited condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. As such, these unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of Kinsale Capital Group, Inc. and its subsidiaries ("the Company") included in the Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All significant intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year.
Use of estimates
Prospective accounting pronouncements
Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect the guidance will have on its disclosures.
ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, "Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software," to modernize the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect the guidance will have on its financial statements.
8
2. Investments
Available-for-sale investments
The following tables summarize the available-for-sale investments at March 31, 2026 and December 31, 2025:
| March 31, 2026 | ||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Estimated Fair Value | ||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||
| Corporate and other securities | ( | ( | ||||||||||||||||||||||||||||||
| Asset-backed securities | ( | |||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Total fixed-maturity securities | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Estimated Fair Value | ||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||
| Corporate and other securities | ( | ( | ||||||||||||||||||||||||||||||
| Asset-backed securities | ( | |||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | |||||||||||||||||||||||||||||||
| Total fixed-maturity securities | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||
Available-for-sale securities in a loss position
The Company regularly reviews all its available-for-sale investments with unrealized losses to assess whether the decline in the fair value is deemed to be a credit loss. The Company considers a number of factors in completing its review of credit losses, including the extent to which a security's fair value has been below cost and the financial condition of an issuer. In addition to specific issuer information, the Company also evaluates the current market and interest rate environment. Generally, a decline in a security’s value caused by a change in the market or interest rate environment does not constitute a credit loss.
For fixed-maturity securities, the Company also considers whether it intends to sell the security or, if it is more likely than not that it will be required to sell the security before recovery, and its ability to recover all amounts outstanding when contractually due. When assessing whether it intends to sell a fixed-maturity security or, if it is
9
likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs and potential sales of investments to capitalize on favorable pricing.
For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, an impairment is recognized in net income based on the fair value of the security at the time of assessment. For fixed-maturity securities that the Company does not intend to sell or for which it is more likely than not that the Company would not be required to sell before recovery of its amortized cost, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. Inputs into the cash flow analysis include default rates and recoverability rates based on credit rating. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income.
The Company reports investment income due and accrued separately from available-for-sale investments and has elected not to measure an allowance for credit losses for investment income due and accrued. Investment income due and accrued is written off through earnings at the time the issuer of the bond defaults or is expected to default on payments.
At March 31, 2026, the Company's credit loss review resulted in an allowance for credit losses on four securities. The following table presents changes in the allowance for expected credit losses on available-for-sale securities for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Increase to allowance from securities for which credit losses were not previously recorded | ||||||||||||||
| Reduction from securities sold during the period | ( | ( | ||||||||||||
| Net increase from securities that had an allowance at the beginning of the period | ||||||||||||||
| Ending balance | $ | $ | ||||||||||||
10
The following tables summarize gross unrealized losses and estimated fair value for available-for-sale investments by length of time that the securities have continuously been in an unrealized loss position:
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
| Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of U.S. government agencies | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Corporate and other securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Asset-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total fixed-maturity securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
At March 31, 2026, the Company held 764 fixed-maturity securities in an unrealized loss position with a total estimated fair value of $2.5 billion and gross unrealized losses of $106.3 million. Of these securities, 446 were in a continuous unrealized loss position for greater than one year. As discussed above, the Company regularly reviews all fixed-maturity securities within its investment portfolio to determine whether a credit loss has occurred. Based on the Company's review as of March 31, 2026, except for securities previously discussed, unrealized losses were caused by interest rate changes or other market factors and were not credit-specific issues. At March 31, 2026, 83.0 % of the Company’s fixed-maturity securities were rated "A-" or better and all of the Company’s fixed-maturity securities made expected coupon payments under the contractual terms of the securities.
11
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Corporate and other securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Asset-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total fixed-maturity securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Contractual maturities of available-for-sale fixed-maturity securities
The amortized cost and estimated fair value of available-for-sale fixed-maturity securities at March 31, 2026 are summarized, by contractual maturity, as follows:
| March 31, 2026 | ||||||||||||||
| Amortized | Estimated | |||||||||||||
| Cost | Fair Value | |||||||||||||
| (in thousands) | ||||||||||||||
| Due in one year or less | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
| Asset-backed securities | ||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||
| Total fixed-maturity securities | $ | $ | ||||||||||||
Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, and the lenders may have the right to put the securities back to the borrower.
12
Real estate investments
Real estate investments represents directly owned property held for investment purposes. In December 2025, the Company reclassified its former headquarters and related assets to real estate investments. Real estate investments consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Building | $ | $ | ||||||||||||
| Parking deck | ||||||||||||||
| Land | ||||||||||||||
| Land improvements | ||||||||||||||
| Furniture and fixtures | ||||||||||||||
| Real estate investments | ||||||||||||||
| Accumulated depreciation | ( | ( | ||||||||||||
| Real estate investments, net | $ | $ | ||||||||||||
Net investment income
The following table presents the components of net investment income for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Interest: | ||||||||||||||
| Taxable bonds | $ | $ | ||||||||||||
| Tax exempt municipal bonds | ||||||||||||||
| Cash equivalents and short-term investments | ||||||||||||||
| Dividends on equity securities | ||||||||||||||
| Real estate investment income | ||||||||||||||
| Gross investment income | ||||||||||||||
| Investment expenses | ( | ( | ||||||||||||
| Net investment income | $ | $ | ||||||||||||
13
Realized investment gains and losses
The following table presents realized investment gains and losses for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Fixed-maturity securities: | ||||||||||||||
| Realized gains | $ | $ | ||||||||||||
| Realized losses | ( | ( | ||||||||||||
| Net realized losses from fixed-maturity securities | ( | ( | ||||||||||||
| Equity securities: | ||||||||||||||
| Realized gains | ||||||||||||||
| Realized losses | ( | ( | ||||||||||||
| Net realized gains from equity securities | ||||||||||||||
| Realized gains from the sales of short-term investments and cash equivalents | ||||||||||||||
| Net realized investment gains | $ | $ | ||||||||||||
The net realized gains or losses on sales of equity securities represent the total gains or losses from the purchase dates of the equity securities. The change in unrealized gains (losses) in the consolidated statement of income consists of two components: (1) the reversal of the gain or loss recognized in previous periods on equity securities sold and (2) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held.
Change in net unrealized gains (losses) on fixed-maturity securities
For the three months ended March 31, 2026 and 2025, the change in net unrealized gains (losses) for fixed-maturity securities was $(44.2 ) million and $33.4 million, respectively.
Insurance – statutory deposits
The Company had invested assets with a fair value of $3.9
Payable for investments purchased
The Company recorded a payable for investments purchased, not yet settled, of $16.6 million at March 31, 2026. The Company did not have a payable for investments purchased at December 31, 2025. The payable balance was included in the "other liabilities" line item of the consolidated balance sheet.
3. Fair Value Measurements
Fair value is estimated for each class of financial instrument based on the framework established in the fair value accounting guidance. Fair value is defined as the price in the principal market that would be received for an asset or paid to transfer a liability to facilitate an orderly transaction between market participants on the measurement date. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
14
liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value.
The three levels of the fair value hierarchy are defined as follows:
Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets.
Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs.
Level 3 - Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement.
Fair values of the Company's investment portfolio are estimated using unadjusted prices obtained by its investment accounting vendor from nationally recognized third-party pricing services, where available. Values for U.S. Treasuries, exchange-traded funds and common stocks are generally based on Level 1 inputs, which use quoted prices in active markets for identical assets. For other fixed-maturity securities and non-redeemable preferred stock, the pricing vendors use a pricing methodology involving the market approach, including pricing models which use prices and relevant market information regarding a particular security or securities with similar characteristics to establish a valuation. The estimates of fair value of these investments are included in the amounts disclosed as Level 2. For those investments where significant inputs are unobservable, the Company's investment accounting vendor obtains valuations from pricing vendors or brokers using the market approach and income approach valuation techniques and are disclosed as Level 3.
Management performs several procedures to ascertain the reasonableness of investment values included in the condensed consolidated financial statements, including 1) obtaining and reviewing internal control reports from the Company's investment accounting vendor that assess fair values from third party pricing services, 2) discussing with the Company's investment accounting vendor its process for reviewing and validating pricing obtained from third party pricing services and 3) reviewing the security pricing received from the Company's investment accounting vendor and monitoring changes in unrealized gains and losses at the individual security level. The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs.
15
The following tables present the balances of assets measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025, by level within the fair value hierarchy:
| March 31, 2026 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | $ | $ | $ | ||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||
| Corporate and other securities | ||||||||||||||||||||||||||
| Asset-backed securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Total fixed-maturity securities | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
| Exchange-traded funds | ||||||||||||||||||||||||||
| Non-redeemable preferred stock | ||||||||||||||||||||||||||
| Common stocks | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
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| December 31, 2025 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | $ | $ | $ | ||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||
| Corporate and other securities | ||||||||||||||||||||||||||
| Asset-backed securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Total fixed-maturity securities | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
| Exchange-traded funds | ||||||||||||||||||||||||||
| Non-redeemable preferred stock | ||||||||||||||||||||||||||
| Common stocks | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
There were no assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2026 or December 31, 2025.
The carrying amount of the Company's fixed-rate senior notes was $175.0 171.3 million and $173.8 million at March 31, 2026 and December 31, 2025, respectively. The fair value measurement was determined using a discounted cash flow analysis that factors in current market yields for comparable borrowing arrangements under the Company's credit profile. Since this methodology is based upon market yields for comparable arrangements, the measurement is categorized as Level 2. The estimated fair value of outstanding borrowings under the Company's revolving Credit Facility approximated its carrying value at March 31, 2026 and December 31, 2025. See Note 13 for further information regarding the Company's debt arrangements.
4. Allowance for Credit Losses
Premiums receivable
Premiums receivable balances are carried at face value, net of any allowance for credit losses. The allowance for credit losses represents an estimate of amounts considered uncollectible based on the Company’s assessment of the collectability of receivables that are past due. The estimate considers historical loss data, current and future economic conditions and specific identification of collectability concerns, where applicable. The following table presents the change in the allowance for credit losses for premiums receivable for the three months ended March 31, 2026 and 2025:
17
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Current period change for estimated uncollectible premiums | ||||||||||||||
| Write-offs of uncollectible premiums receivable | ( | ( | ||||||||||||
| Ending balance | $ | $ | ||||||||||||
5. Deferred Policy Acquisition Costs
The following table presents the amounts of policy acquisition costs deferred and amortized for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Balance, beginning of period | $ | $ | ||||||||||||
Policy acquisition costs deferred: | ||||||||||||||
| Direct commissions | ||||||||||||||
| Ceding commissions | ( | ( | ||||||||||||
| Other underwriting and policy acquisition costs | ||||||||||||||
| Policy acquisition costs deferred | ||||||||||||||
Amortization of net policy acquisition costs | ( | ( | ||||||||||||
| Balance, end of period | $ | $ | ||||||||||||
Amortization of net policy acquisition costs is included in the line item "underwriting, acquisition and insurance expenses" in the accompanying consolidated statements of income and comprehensive income.
6. Property and Equipment, Net
Property and equipment are included in "other assets" in the accompanying consolidated balance sheets and consist of the following:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Building | $ | $ | ||||||||||||
| Equipment | ||||||||||||||
| Software | ||||||||||||||
| Furniture and fixtures | ||||||||||||||
| Land improvements | ||||||||||||||
| Construction in progress | ||||||||||||||
| Property and equipment | ||||||||||||||
| Accumulated depreciation | ( | ( | ||||||||||||
| Total property and equipment, net | $ | $ | ||||||||||||
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7. Underwriting, Acquisition and Insurance Expenses
Underwriting, acquisition and insurance expenses for the three months ended March 31, 2026 and 2025 consist of the following:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Underwriting, acquisition and insurance expenses incurred: | ||||||||||||||
| Direct commissions | $ | $ | ||||||||||||
| Ceding commissions | ( | ( | ||||||||||||
| Other underwriting expenses | ||||||||||||||
| Total | $ | $ | ||||||||||||
Other underwriting expenses within underwriting, acquisition and insurance expenses include salaries, bonus and employee benefits expenses of $32.6 million and $29.2 million for the three months ended March 31, 2026 and 2025, respectively.
8. Stock-based Compensation
The Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (the "2016 Incentive Plan") was effective from 2016 to 2025. On May 22, 2025, the Company's stockholders approved the Kinsale Capital Group, Inc. 2025 Omnibus Incentive Plan (the "2025 Incentive Plan"), which replaced the 2016 Incentive Plan prior to its scheduled expiration in 2026. The 2025 Incentive Plan is administered by the Compensation, Nominating and Corporate Governance Committee of the Company's Board of Directors and authorizes the grant of stock options, restricted stock, restricted stock units, and other stock-based awards to officers, employees, directors, independent contractors, and consultants.
No additional awards will be issued under the 2016 Incentive Plan, and shares remaining available under that plan will not roll forward to the 2025 Incentive Plan. The maximum number of shares of the Company's common stock reserved and available for issuance under the 2025 Incentive Plan is 860,500 plus any shares subject to awards outstanding under the 2016 Incentive Plan as of May 22, 2025 that are subsequently forfeited or settled in cash. All shares granted during the three months ended March 31, 2026 were granted under the 2025 Incentive Plan.
The total compensation cost that has been charged against income for share-based compensation arrangements was $5.0 million and $3.8 million for the three months ended March 31, 2026 and 2025, respectively.
Restricted Stock Awards
During the three months ended March 31, 2026, the Company granted restricted stock awards under the 2025 Incentive Plan. The restricted stock awards were valued on the date of grant and will vest over a period of 1 to 4 years corresponding to the anniversary date of the grants. The fair value of restricted stock awards was determined based on the closing trading price of the Company's shares on the grant date or, if no shares were traded on the grant date, the last preceding date for which there was a sale of shares. Except for restrictions placed on the transferability of restricted stock, holders of unvested restricted stock have full stockholder’s rights, including voting rights and the right to receive dividends. Unvested shares of restricted stock awards and accrued dividends, if any, are forfeited upon the termination of service to or employment with the Company.
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A summary of restricted stock activity for the three months ended March 31, 2026 is as follows:
| Three Months Ended March 31, 2026 | ||||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value per Share | |||||||||||||
| Non-vested outstanding at the beginning of the period | $ | |||||||||||||
| Granted | $ | |||||||||||||
| Vested | ( | $ | ||||||||||||
| Forfeited | ( | $ | ||||||||||||
| Non-vested outstanding at the end of the period | $ | |||||||||||||
Employees surrender shares to pay for withholding tax obligations resulting from any vesting of restricted stock awards. During the three months ended March 31, 2026, shares withheld for taxes in connection with the vesting of restricted stock awards totaled 17,283 .
The weighted average grant-date fair value per share of the Company's restricted stock awards granted during the three months ended March 31, 2026 and 2025 was $390.04 and $433.62 , respectively. The fair value of restricted stock awards that vested during the three months ended March 31, 2026 and 2025 was $19.2 million and $18.7 million, respectively. As of March 31, 2026, the Company had $56.5 million of total unrecognized stock-based compensation expense expected to be charged to earnings over a weighted-average period of 3.0 years.
Stock Options
On July 27, 2016, the Board of Directors approved, and the Company granted, 1,036,916 stock options under the 2016 Incentive Plan with an exercise price equal to the initial public offering price of $16.00 per share and a weighted-average grant-date fair value of $2.71 per share. The options have a maximum contractual term of 10 years and vested in 4 equal annual installments following the date of the grant. The value of the options granted was estimated at the date of grant using the Black-Scholes pricing model.
A summary of option activity as of March 31, 2026, and changes during the period then ended are presented below:
| Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Years of Contractual Term | Aggregate Intrinsic Value (in thousands) | |||||||||||||||||||||||
| Outstanding at January 1, 2026 | $ | |||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Forfeited | ||||||||||||||||||||||||||
| Exercised | ( | |||||||||||||||||||||||||
Outstanding at March 31, 2026 | $ | $ | ||||||||||||||||||||||||
Exercisable at March 31, 2026 | $ | $ | ||||||||||||||||||||||||
20
9. Earnings Per Share
The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the condensed consolidated financial statements:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||
| Effect of potential dilutive securities: | ||||||||||||||
| Conversion of stock options | ||||||||||||||
| Conversion of restricted stock | ||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | $ | ||||||||||||
| Diluted | $ | $ | ||||||||||||
There were 126,000 and 89,000 anti-dilutive stock awards for the three months ended March 31, 2026 and 2025, respectively.
10. Income Taxes
The Company uses the estimated annual effective tax rate method for calculating its tax provision in interim periods, which represents the Company's best estimate of the effective tax rate expected for the full year. The estimated annual effective tax rate typically differs from the U.S. statutory tax rate, primarily as a result of tax-exempt investment income and any discrete items recognized during the period. The Company's effective tax rates were 19.4 % and 20.6 % for the three months ended March 31, 2026 and 2025, respectively, and were lower than the federal statutory rate of 21
21
11. Reserves For Unpaid Losses and Loss Adjustment Expenses
The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses:
| March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
Gross reserves for unpaid losses and loss adjustment expenses, beginning of year | $ | $ | ||||||||||||
Less: reinsurance recoverable on unpaid losses | ||||||||||||||
Net reserves for unpaid losses and loss adjustment expenses, beginning of year | ||||||||||||||
| Incurred losses and loss adjustment expenses: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ( | ( | ||||||||||||
| Total net losses and loss adjustment expenses incurred | ||||||||||||||
| Payments: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ||||||||||||||
| Total payments | ||||||||||||||
Net reserves for unpaid losses and loss adjustment expenses, end of period | ||||||||||||||
| Reinsurance recoverable on unpaid losses | ||||||||||||||
Gross reserves for unpaid losses and loss adjustment expenses, end of period | $ | $ | ||||||||||||
During the three months ended March 31, 2026, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2025 developed favorably by $18.7 million, of which $20.6 million was attributable to the 2020 through 2025 accident years due to lower emergence of reported losses than expected across most lines of business, particularly in the property lines of business. This favorable development was offset in part by adverse development primarily in the construction liability business in the 2018 and 2019 accident years.
22
12. Reinsurance
The following table summarizes the effect of reinsurance on premiums written and earned for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Premiums written: | ||||||||||||||
| Direct | $ | $ | ||||||||||||
| Ceded | ( | ( | ||||||||||||
| Net written | $ | $ | ||||||||||||
| Premiums earned: | ||||||||||||||
| Direct | $ | $ | ||||||||||||
| Ceded | ( | ( | ||||||||||||
| Net earned | $ | $ | ||||||||||||
The following table summarizes ceded losses and loss adjustment expenses for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Ceded incurred losses and loss adjustment expenses | $ | $ | ||||||||||||
The following table presents reinsurance recoverables on paid and unpaid losses as of March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Reinsurance recoverables on paid losses | $ | $ | ||||||||||||
| Reinsurance recoverables on unpaid losses, net | ||||||||||||||
| Reinsurance recoverables, net | $ | $ | ||||||||||||
13. Debt
Note Purchase and Private Shelf Agreement
On July 22, 2022, the Company entered into a Note Purchase and Private Shelf Agreement (as subsequently amended, the "Note Purchase Agreement") with PGIM, Inc. ("Prudential") and the purchasers of the Series A and Series B Senior Notes (as defined below). The Note Purchase Agreement provides for issuance of senior promissory notes with an aggregate principal amount of up to $200.0 million through September 18, 2026.
Pursuant to the Note Purchase Agreement, on July 22, 2022 , the Company issued $125.0 million aggregate principal amount of 5.15 % Series A Senior Notes Due July 22, 2034 (collectively, the "Series A Notes"), and on September 18, 2023, the Company issued a $50.0 million aggregate principal amount 6.21 % Series B Senior Note (the "Series B Note") due July 22, 2034 .
23
The Series A and B Notes are senior unsecured obligations of the Company and rank pari passu with the Company’s Amended and Restated Credit Agreement.
Principal payments on the Series A Notes are required annually beginning on July 22, 2030 in equal installments of $25.0 million through July 22, 2034 .
Principal payments on the Series B Note are required annually beginning on July 22, 2030 in equal installments of $10.0 million through July 22, 2034 .
Credit Agreement
On July 22, 2022, the Company entered into an Amended and Restated Credit Agreement, with JPMorgan Chase Bank, N.A., as administrative agent and as issuing bank, Truist Bank, as syndication agent, and the lenders party thereto (collectively, the "Lenders"). The Amended and Restated Credit Agreement provides the Company with a $100.0 million senior unsecured revolving credit facility (the "Credit Facility"), with the option to increase the aggregate commitment by $30.0 million. The Company is required to pay a Commitment Fee Rate (as defined therein) of 0.25 % on the average daily amount of the Available Revolving Commitment (as defined therein). Borrowings under the Amended and Restated Credit Agreement may be used for general corporate purposes (which may include, without limitation, to fund future growth, to finance working capital needs, to fund capital expenditures, and to refinance, redeem or repay indebtedness).
The following table presents the Company's outstanding debt as of March 31, 2026 and December 31, 2025:
| Issuance | Maturity | March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Credit Facility | Various | $ | $ | |||||||||||||||||||||||
| Less: Unamortized debt issuance costs | ( | ( | ||||||||||||||||||||||||
| Total debt | $ | $ | ||||||||||||||||||||||||
Both the Note Purchase Agreement and the Amended and Restated Credit Agreement contain representations and affirmative and negative covenants, including financial covenants customary for agreements of this type, as well as customary events of default provisions. As of March 31, 2026, the Company was in compliance with all of its financial covenants under both the Note Purchase Agreement and the Credit Facility.
24
14. Other Comprehensive (Loss) Income
The following table summarizes the components of other comprehensive (loss) income for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Unrealized (losses) gains on fixed-maturity securities arising during the period, before income taxes | $ | ( | $ | |||||||||||
| Income tax benefit (expense) | ( | |||||||||||||
| Unrealized (losses) gains arising during the period, net of income taxes | ( | |||||||||||||
| Less reclassification adjustment: | ||||||||||||||
| Net realized losses on fixed-maturity securities, before income taxes | ( | ( | ||||||||||||
| Income tax benefit | ||||||||||||||
| Reclassification adjustment included in net income | ( | ( | ||||||||||||
| Change in allowance for credit losses on investments, before income taxes | ( | ( | ||||||||||||
| Income tax benefit | ||||||||||||||
| Reclassification adjustment included in net income | ( | ( | ||||||||||||
| Other comprehensive (loss) income | $ | ( | $ | |||||||||||
The sale or credit loss of an available-for-sale fixed-maturity security results in amounts being reclassified from accumulated other comprehensive income (loss) to realized gains or losses in current period earnings. The related tax effect of the reclassification adjustment is recorded in income tax expense in current period earnings. See Note 2 for additional information.
15. Segment Information
The Company has one reportable segment, the Excess and Surplus Lines Insurance segment, which primarily offers commercial excess and surplus lines liability and property insurance products through its underwriting divisions in the United States. The Company reports operating and financial results in a single segment based on the Company's exclusive focus on property and casualty insurance in the excess and surplus lines market and the consolidated information used by the chief operating decision maker ("CODM") in evaluating the financial performance of its business and allocating resources.
The Company's CODM is the Chief Executive Officer. The CODM uses consolidated net income to allocate resources primarily during the annual budgeting process and uses that measure to assess performance by considering budget-to-actual variances and evaluating financial results. The measure of segment assets is reported on the consolidated balance sheets as total assets.
25
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Revenues: | ||||||||||||||
| Net earned premiums | $ | $ | ||||||||||||
| Fee income | ||||||||||||||
| Net investment income | ||||||||||||||
| Change in fair value of equity securities | ( | |||||||||||||
| Net realized investment gains | ||||||||||||||
| Change in allowance for credit losses on investments | ( | ( | ||||||||||||
Other income (1) | ||||||||||||||
| Total revenues | ||||||||||||||
| Expenses: | ||||||||||||||
Losses and loss adjustment expenses – current year | ||||||||||||||
Losses and loss adjustment expenses – catastrophes | ||||||||||||||
Losses and loss adjustment expenses – prior year development | ( | ( | ||||||||||||
| Net commissions incurred | ||||||||||||||
| Salaries, employee benefits and bonus expense | ||||||||||||||
Credit loss expense – premiums receivable | ||||||||||||||
Depreciation (2) | ||||||||||||||
| Interest expense | ||||||||||||||
Other segment items (3) | ||||||||||||||
| Income tax expense | ||||||||||||||
| Segment net income | ||||||||||||||
| Reconciliation of profit or loss: | ||||||||||||||
| Adjustments and reconciling items | — | — | ||||||||||||
| Consolidated net income | $ | $ | ||||||||||||
(1) Other income primarily includes income generated from the Company's real estate operations.
(2) Excludes depreciation expense allocated to loss adjustment expenses and investment expenses.
(3) Other segment items primarily includes other general and administrative expenses such as technology costs, facility expenses and audit and inspection costs.
16. Contingencies
Contingencies arise in the normal conduct of the Company’s operations and are not expected to have a material effect on the Company’s financial condition or results of operations. However, adverse outcomes are possible and could negatively affect the Company’s financial condition and results of operations.
In June 2019, Marie Hughes, as authorized administrator for the estate of George Hughes, filed a wrongful death claim against Venetian Hills Apartments, LLC ("Venetian Hills") in DeKalb County in Georgia state court. On December 20, 2023, the jury awarded a verdict to the plaintiff of $140.0 million.
26
On October 31, 2025, the Georgia Court of Appeals vacated the $140.0 million judgment and ordered a full retrial after it found that the trial court incorrectly charged the jury on the applicable law. On December 29, 2025, the plaintiff filed a petition requesting that the Georgia Supreme Court review the Georgia Court of Appeal’s decision. The Georgia Supreme Court has the discretion to either accept or deny the plaintiff’s request to hear the case.
Venetian Hills was a policyholder of a $1.0 million general liability policy issued by Kinsale Insurance. The Company believes exclusions in the policy apply to the claim and intends to defend any action related to this proceeding vigorously. The Company has begun the appeal process and does not expect a resolution as to the Company’s liability, if any, with respect to this matter in the foreseeable future, and potentially for multiple years.
27
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The discussion and analysis below include certain forward-looking statements that are subject to risks, uncertainties and other factors described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors.
The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2026, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025.
References to the "Company," "Kinsale," "we," "us," and "our" are to Kinsale Capital Group, Inc. and its subsidiaries, unless the context otherwise requires.
Overview
Founded in 2009, Kinsale is a specialty insurance company. Kinsale focuses exclusively on the excess and surplus lines ("E&S") market in the U.S., where we use our underwriting expertise to write coverages for hard-to-place small business risks and personal lines risks. We market these insurance products in all 50 states, the District of Columbia, the Commonwealth of Puerto Rico and the U.S. Virgin Islands, primarily through a network of independent insurance brokers.
We have one reportable segment, our Excess and Surplus Lines Insurance segment, which offers property and casualty ("P&C") insurance products through the E&S market. For the first three months of 2026, the percentage breakdown of our gross written premiums was 76.0% casualty and 24.0% property. Our commercial underwriting divisions include Excess Casualty, Commercial Property, General Casualty, Small Business Casualty, Construction, Allied Health, Small Business Property, Products Liability, Entertainment, Commercial Auto, Energy, Excess Professional, Inland Marine, Life Sciences, Environmental, Professional Liability, Health Care, Public Entity, Agribusiness Property, Management Liability, Agribusiness Casualty, Aviation, Ocean Marine, and Product Recall. We also write homeowners' coverage in the personal lines market, which in aggregate represented 2.5% of our gross written premiums in the first three months of 2026.
Components of Our Results of Operations
Gross written premiums
Gross written premiums are the amounts received or to be received for insurance policies written or assumed by us during a specific period of time without reduction for policy acquisition costs, reinsurance costs or other deductions. The volume of our gross written premiums in any given period is generally influenced by:
•New business submissions;
•Conversion of new business submissions into policies;
•Renewals of existing policies; and
•Average size and premium rate of bound policies.
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We earn insurance premiums on a pro rata basis over the term of the policy. Our insurance policies generally have a term of one year. Net earned premiums represent the earned portion of our gross written premiums, less that portion of our gross written premiums that is ceded to third-party reinsurers under our reinsurance agreements.
Ceded written premiums
Ceded written premiums are the amount of gross written premiums ceded to reinsurers. We enter into reinsurance contracts to limit our exposure to potential large losses. Ceded written premiums are earned over the reinsurance contract period in proportion to the period of risk covered. The volume of our ceded written premiums is impacted by the level of our gross written premiums, any decision we make to increase or decrease retention levels and reinstatement premiums, if any.
Fee income
Fee income includes policy fees charged to insureds and is recognized in earnings when the related premium is written. Policy fees are a flat charge to insureds and fee income is impacted primarily by the volume of business we write.
Losses and loss adjustment expenses
Losses and loss adjustment expenses are a function of the amount and type of insurance contracts we write and the loss experience associated with the underlying coverage. In general, our losses and loss adjustment expenses are affected by:
•Frequency of claims associated with the particular types of insurance contracts that we write;
•Trends in the average size of losses incurred on a particular type of business;
•Mix of business written by us;
•Changes in the legal or regulatory environment related to the business we write;
•Trends in legal defense costs;
•Wage inflation;
•Social inflation;
•Inflation in material costs, and
•Inflation in medical costs.
Losses and loss adjustment expenses are based on an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods. Losses and loss adjustment expenses may be paid out over a period of years.
Underwriting, acquisition and insurance expenses
Underwriting, acquisition and insurance expenses include policy acquisition costs and other underwriting expenses. Policy acquisition costs are principally composed of the commissions we pay our brokers, net of ceding commissions we receive on business ceded under certain reinsurance contracts. Policy acquisition costs also include underwriting expenses that are directly related to the successful acquisition of those policies which are deferred. The amortization of policy acquisition costs is charged to expense in proportion to premium earned over the policy life.
Other underwriting expenses represent the general and administrative expenses of our insurance business such as employment costs, telecommunication and technology costs, and legal and auditing fees.
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Net investment income
Net investment income is an important component of our results of operations. We earn investment income on our portfolio of cash and invested assets. Our cash and invested assets are primarily composed of fixed-maturity securities, and may also include cash equivalents, equity securities and short-term investments. The principal factors that influence net investment income are the size of our investment portfolio and the yield on that portfolio. As measured by amortized cost (which excludes changes in fair value), the size of our investment portfolio is mainly a function of our invested equity capital combined with premiums we receive from our insureds less payments on policyholder claims. Net investment income also includes rental income and depreciation expense from our real estate investment property, if any.
Change in fair value of equity securities
Change in fair value of equity securities represents the increase or decrease in the fair value of equity securities held during the period.
Net realized investment gains (losses)
Net realized investment gains (losses) are a function of the difference between the amount received by us on the sale of a security and the security's amortized cost.
Income tax expense
Currently, substantially all of our income tax expense relates to federal income taxes. Our insurance subsidiary, Kinsale Insurance Company, is not subject to income taxes in the states in which it operates; however, our non-insurance subsidiaries are subject to state income taxes, but have not generated any material taxable income to date. The amount of income tax expense or benefit recorded in future periods will depend on the jurisdictions in which we operate and the tax laws and regulations in effect.
Key metrics
We discuss certain key metrics, described below, which we believe provide useful information about our business and the operational factors underlying our financial performance.
Underwriting income is a non-GAAP financial measure. We define underwriting income as net income, excluding net investment income, net change in the fair value of equity securities, net realized investment gains and losses, change in allowance for credit losses on investments, interest expense, other income, other expenses and income tax expense. See "—Reconciliation of Non-GAAP Financial Measures" for a reconciliation of net income in accordance with GAAP to underwriting income.
Net operating earnings is a non-GAAP financial measure. We define net operating earnings as net income excluding the net change in the fair value of equity securities, after taxes, net realized investment gains and losses, after taxes and change in allowance for credit losses on investments, after taxes. See "—Reconciliation of Non-GAAP Financial Measures" for a reconciliation of net income in accordance with GAAP to net operating earnings.
Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses to the sum of net earned premiums and fee income.
Expense ratio, expressed as a percentage, is the ratio of underwriting, acquisition and insurance expenses to the sum of net earned premiums and fee income.
Combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.
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Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending total stockholders’ equity during the period.
Operating return on equity is a non-GAAP financial measure. We define operating return on equity as net operating earnings expressed on an annualized basis as a percentage of average beginning and ending total stockholders’ equity during the period. See "—Reconciliation of Non-GAAP Financial Measures" for a reconciliation of net income in accordance with GAAP to net operating earnings.
Net retention ratio is the ratio of net written premiums to gross written premiums.
Gross investment return is investment income from fixed-maturity and equity securities (and short-term investments, if any), before any deductions for fees and expenses, expressed as a percentage of the average beginning and ending book values of those investments during the period.
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Results of Operations
Three months ended March 31, 2026 compared to three months ended March 31, 2025
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Gross written premiums | $ | 482,018 | $ | 484,275 | $ | (2,257) | (0.5) | % | ||||||||||||||||||
| Ceded written premiums | (78,756) | (102,570) | 23,814 | (23.2) | % | |||||||||||||||||||||
| Net written premiums | $ | 403,262 | $ | 381,705 | $ | 21,557 | 5.6 | % | ||||||||||||||||||
| Net earned premiums | $ | 406,859 | $ | 365,790 | $ | 41,069 | 11.2 | % | ||||||||||||||||||
| Fee income | 10,995 | 9,559 | 1,436 | 15.0 | % | |||||||||||||||||||||
| Losses and loss adjustment expenses | 235,119 | 232,976 | 2,143 | 0.9 | % | |||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 88,234 | 74,912 | 13,322 | 17.8 | % | |||||||||||||||||||||
Underwriting income (1) | 94,501 | 67,461 | 27,040 | 40.1 | % | |||||||||||||||||||||
| Net investment income | 55,423 | 43,819 | 11,604 | 26.5 | % | |||||||||||||||||||||
| Change in fair value of equity securities | (8,356) | 3,038 | (11,394) | NM | ||||||||||||||||||||||
| Net realized investment gains | 1,719 | 537 | 1,182 | NM | ||||||||||||||||||||||
| Change in allowance for credit losses on investments | (27) | (20) | (7) | NM | ||||||||||||||||||||||
| Interest expense | (3,167) | (2,538) | (629) | 24.8 | % | |||||||||||||||||||||
| Other (expense) income, net | (433) | 14 | (447) | NM | ||||||||||||||||||||||
| Income before taxes | 139,660 | 112,311 | 27,349 | 24.4 | % | |||||||||||||||||||||
| Income tax expense | 27,106 | 23,084 | 4,022 | 17.4 | % | |||||||||||||||||||||
| Net income | $ | 112,554 | $ | 89,227 | $ | 23,327 | 26.1 | % | ||||||||||||||||||
Net operating earnings (2) | $ | 117,818 | $ | 86,419 | $ | 31,399 | 36.3 | % | ||||||||||||||||||
| Loss ratio | 56.3 | % | 62.1 | % | ||||||||||||||||||||||
| Expense ratio | 21.1 | % | 20.0 | % | ||||||||||||||||||||||
Combined ratio (3) | 77.4 | % | 82.1 | % | ||||||||||||||||||||||
| Annualized return on equity | 22.9 | % | 23.3 | % | ||||||||||||||||||||||
Annualized operating return on equity (2) | 24.0 | % | 22.5 | % | ||||||||||||||||||||||
NM - Percentage change not meaningful.
(1) Underwriting income is a non-GAAP financial measure. See "—Reconciliation of Non-GAAP Financial Measures" for a reconciliation of net income in accordance with GAAP to underwriting income.
(2) Net operating earnings and annualized operating return on equity are non-GAAP financial measures. Net operating earnings is defined as net income excluding the net change in the fair value of equity securities, after taxes, net realized investment gains and losses, after taxes, and change in allowance for credit losses on investments, after taxes. Annualized operating return on equity is defined as net operating earnings expressed on an annualized basis as a percentage of average beginning and ending total stockholders’ equity during the period. See "—Reconciliation of Non-GAAP Financial Measures" for a reconciliation of net income in accordance with GAAP to net operating earnings.
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(3) The combined ratio is the sum of the loss ratio and expense ratio as presented. Calculations of each component may not add due to rounding.
Overview
Net income was $112.6 million for the three months ended March 31, 2026 compared to $89.2 million for the three months ended March 31, 2025, an increase of 26.1%. The increase in net income for the first three months of 2026 over the same period last year was primarily due to lower catastrophe losses and higher investment income offset in part by a decrease in the fair value of our equity portfolio.
Underwriting income was $94.5 million for the three months ended March 31, 2026 compared to $67.5 million for the three months ended March 31, 2025, an increase of 40.1%. The corresponding combined ratios were 77.4% for the three months ended March 31, 2026 compared to 82.1% for the three months ended March 31, 2025. The increase in underwriting income for the first three months of 2026 compared to the same period last year was primarily due to growth in net earned premiums, lower catastrophe losses and higher favorable development of loss reserves from prior accident years.
Premiums
Gross written premiums were $482.0 million for the three months ended March 31, 2026 compared to $484.3 million for the three months ended March 31, 2025, a decrease of $2.3 million, or 0.5%. The decrease in gross written premiums was primarily due to a 28.3% decline in the Commercial Property Division, one of the Company's largest divisions, driven by continued rate decreases from heightened competition, including from standard carriers. Excluding our Commercial Property Division, gross written premiums grew 6.0% due primarily to continued strong submission flow from brokers across most divisions.
The average premium per policy written was $12,200 in the first three months of 2026 compared to $14,200 in the first three months of 2025. Excluding our Personal Insurance Division, which has a relatively low premium per policy written, the average premium per policy written was $12,600 for the first three months of 2026 and $14,700 for the first three months of 2025. The decrease in average premium per policy for the first three months of 2026 over the same period last year was due to an increase in competition on larger accounts, primarily in our Commercial Property Division.
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The following table provides a summary of gross premiums written by division for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | Change | % Change | ||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||
| Excess Casualty | $ | 72,361 | $ | 67,473 | $ | 4,888 | 7.2 | % | ||||||||||||||||||
| Commercial Property | 65,558 | 91,487 | (25,929) | (28.3) | % | |||||||||||||||||||||
| General Casualty | 56,390 | 50,429 | 5,961 | 11.8 | % | |||||||||||||||||||||
| Small Business Casualty | 49,500 | 52,407 | (2,907) | (5.5) | % | |||||||||||||||||||||
| Construction | 34,009 | 40,794 | (6,785) | (16.6) | % | |||||||||||||||||||||
| Allied Health | 26,529 | 23,011 | 3,518 | 15.3 | % | |||||||||||||||||||||
| Small Business Property | 23,817 | 20,581 | 3,236 | 15.7 | % | |||||||||||||||||||||
| Products Liability | 20,247 | 18,405 | 1,842 | 10.0 | % | |||||||||||||||||||||
| Entertainment | 18,825 | 14,584 | 4,241 | 29.1 | % | |||||||||||||||||||||
| Commercial Auto | 14,422 | 12,533 | 1,889 | 15.1 | % | |||||||||||||||||||||
| Energy | 13,079 | 11,448 | 1,631 | 14.2 | % | |||||||||||||||||||||
| Excess Professional | 10,270 | 9,916 | 354 | 3.6 | % | |||||||||||||||||||||
| Inland Marine | 9,682 | 7,678 | 2,004 | 26.1 | % | |||||||||||||||||||||
| Life Sciences | 8,826 | 9,785 | (959) | (9.8) | % | |||||||||||||||||||||
| Environmental | 8,255 | 7,769 | 486 | 6.3 | % | |||||||||||||||||||||
| Professional Liability | 8,240 | 9,379 | (1,139) | (12.1) | % | |||||||||||||||||||||
| Health Care | 7,801 | 6,976 | 825 | 11.8 | % | |||||||||||||||||||||
| Public Entity | 4,488 | 4,309 | 179 | 4.2 | % | |||||||||||||||||||||
| Agribusiness Casualty | 4,412 | 2,935 | 1,477 | 50.3 | % | |||||||||||||||||||||
| Management Liability | 4,284 | 4,941 | (657) | (13.3) | % | |||||||||||||||||||||
| Agribusiness Property | 4,143 | — | 4,143 | NM | ||||||||||||||||||||||
| Aviation | 2,923 | 2,463 | 460 | 18.7 | % | |||||||||||||||||||||
| Ocean Marine | 1,169 | 781 | 388 | 49.7 | % | |||||||||||||||||||||
| Product Recall | 799 | 793 | 6 | 0.8 | % | |||||||||||||||||||||
| Total commercial | 470,029 | 470,877 | (848) | (0.2) | % | |||||||||||||||||||||
| Personal: | ||||||||||||||||||||||||||
| High Value Homeowners | 6,576 | 8,411 | (1,835) | (21.8) | % | |||||||||||||||||||||
| Personal Insurance | 5,413 | 4,987 | 426 | 8.5 | % | |||||||||||||||||||||
| Total personal | 11,989 | 13,398 | (1,409) | (10.5) | % | |||||||||||||||||||||
| Total | $ | 482,018 | $ | 484,275 | $ | (2,257) | (0.5) | % | ||||||||||||||||||
NM - Percentage change not meaningful.
Net written premiums increased by $21.6 million, or 5.6%, to $403.3 million for the three months ended March 31, 2026 from $381.7 million for the three months ended March 31, 2025. The net retention ratio was 83.7% for the three months ended March 31, 2026 compared to 78.8% for the same period last year. The increases in net written premiums and the net retention ratio were primarily due to an increase in the retention on our reinsurance treaties and change in the mix of business.
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Net earned premiums increased by $41.1 million, or 11.2%, to $406.9 million for the three months ended March 31, 2026 from $365.8 million for the three months ended March 31, 2025 due primarily to continued earning of premium from prior-period growth in gross written premiums and higher net retention levels.
Loss ratio
The following table summarizes the loss ratios for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| ($ in thousands) | Losses and Loss Adjustment Expenses | % of Sum of Earned Premiums and Fee Income | Losses and Loss Adjustment Expenses | % of Sum of Earned Premiums and Fee Income | ||||||||||||||||||||||
| Loss ratio: | ||||||||||||||||||||||||||
Current accident year before catastrophe losses | $ | 252,188 | 60.4 | % | $ | 225,047 | 60.0 | % | ||||||||||||||||||
| Current year catastrophe losses | 1,636 | 0.4 | % | 22,578 | 6.0 | % | ||||||||||||||||||||
| Effect of prior year development | (18,705) | (4.5) | % | (14,649) | (3.9) | % | ||||||||||||||||||||
| Total | $ | 235,119 | 56.3 | % | $ | 232,976 | 62.1 | % | ||||||||||||||||||
The loss ratio was 56.3% for the three months ended March 31, 2026 compared to 62.1% for the three months ended March 31, 2025. The decrease in the loss ratio for the first three months of 2026 compared to the first three months of 2025 was due primarily to lower catastrophe losses incurred in the period and higher relative net favorable development of prior-year loss reserves, particularly in our property lines of business.
During the three months ended March 31, 2026, prior accident years developed favorably by $18.7 million, of which $20.6 million was attributable to the 2020 through 2025 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily in our construction liability business in the 2018 and 2019 accident years.
During the three months ended March 31, 2025, prior accident years developed favorably by $14.6 million, of which $16.7 million was attributable to the 2021 through 2024 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily from the 2017 through 2019 accident years and more conservative actuarial assumptions in the 2021 through 2023 accident years for lines of business exposed to construction liability. Incurred losses and loss adjustment expenses for the three months ended March 31, 2025 included $22.6 million of net catastrophe losses primarily related to the Palisades Fire.
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Expense ratio
The following table summarizes the components of the expense ratio for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| ($ in thousands) | Underwriting Expenses | % of Sum of Earned Premiums and Fee Income | Underwriting Expenses | % of Sum of Earned Premiums and Fee Income | ||||||||||||||||||||||
| Net commissions incurred | $ | 45,254 | 10.8 | % | $ | 35,680 | 9.5 | % | ||||||||||||||||||
Other underwriting expenses | 42,980 | 10.3 | % | 39,232 | 10.5 | % | ||||||||||||||||||||
| Total | $ | 88,234 | 21.1 | % | $ | 74,912 | 20.0 | % | ||||||||||||||||||
The expense ratio was 21.1% for the three months ended March 31, 2026 compared to 20.0% for the three months ended March 31, 2025. The increase in the expense ratio was primarily due to lower ceding commissions as a result of increased retention on our reinsurance treaties. Direct commissions paid as a percentage of gross written premiums was 14.9% and 14.8% for the three months ended March 31, 2026 and 2025, respectively.
Investing results
The following table summarizes net investment income, change in the fair value of equity securities and net realized investment gains (losses) for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | Change | |||||||||||||||||
| Interest from fixed-maturity securities | $ | 52,161 | $ | 41,838 | $ | 10,323 | ||||||||||||||
| Dividends from equity securities | 3,171 | 1,953 | 1,218 | |||||||||||||||||
| Cash equivalents and short-term investments | 1,404 | 1,130 | 274 | |||||||||||||||||
| Real estate investment income | 245 | — | 245 | |||||||||||||||||
| Gross investment income | 56,981 | 44,921 | 12,060 | |||||||||||||||||
| Investment expenses | (1,558) | (1,102) | (456) | |||||||||||||||||
| Net investment income | 55,423 | 43,819 | 11,604 | |||||||||||||||||
| Change in fair value of equity securities | (8,356) | 3,038 | (11,394) | |||||||||||||||||
| Net realized investment gains | 1,719 | 537 | 1,182 | |||||||||||||||||
| Change in allowance for credit losses on investments | (27) | (20) | (7) | |||||||||||||||||
| Net realized and unrealized investment gains | (6,664) | 3,555 | (10,219) | |||||||||||||||||
| Total | $ | 48,759 | $ | 47,374 | $ | 1,385 | ||||||||||||||
Net investment income increased by 26.5% to $55.4 million for the three months ended March 31, 2026 from $43.8 million for the three months ended March 31, 2025. The increase in the first three months of 2026 compared to the same period last year was primarily due to growth in our investment portfolio largely generated from the investment of strong operating cash flows. Our investment portfolio, excluding cash equivalents and unrealized gains and losses, had an annualized gross investment return of 4.5% and 4.3% for the three months ended March 31, 2026 and 2025, respectively.
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The change in the fair value of equity securities consisted of the following:
| Three Months Ended March 31, | ||||||||||||||
| ($ in thousands) | 2026 | 2025 | ||||||||||||
| Common stocks | $ | 186 | $ | 9,414 | ||||||||||
| Exchange-traded funds ("ETFs") | (8,637) | (6,508) | ||||||||||||
| Preferred stocks | 95 | 132 | ||||||||||||
| Change in fair value of equity securities | $ | (8,356) | $ | 3,038 | ||||||||||
The change in the fair value of equity securities for both the three months ended March 31, 2026 and 2025 were generally consistent with the changes in the broader U.S. stock market.
Net realized investment gains were $1.7 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively, primarily as a result of opportunistic sales of equity securities.
Income tax expense
Our effective tax rate was 19.4% for the three months ended March 31, 2026 compared to 20.6% for the three months ended March 31, 2025. The effective tax rate was lower than the federal statutory rate of 21% primarily due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income.
Return on equity
Our annualized return on equity was 22.9% for the three months ended March 31, 2026 compared to 23.3% for the three months ended March 31, 2025. Our annualized operating return on equity was 24.0% for the three months ended March 31, 2026 compared to 22.5% for the three months ended March 31, 2025. The increase in annualized operating return on equity for the three months ended March 31, 2026 compared to the prior period was due primarily to higher profitability compared to the prior-year period offset in part by higher average stockholders' equity.
Liquidity and Capital Resources
Sources and uses of funds
We are organized as a Delaware holding company with our operations primarily conducted by our wholly-owned insurance subsidiary, Kinsale Insurance Company, which is domiciled in Arkansas. Accordingly, we primarily receive cash through (1) loans from banks and other third parties, (2) issuance of equity and debt securities, (3) corporate service fees from our insurance subsidiary, (4) payments from our subsidiaries pursuant to our consolidated tax allocation agreement and other transactions, and (5) dividends from our insurance subsidiary. We may use the proceeds from these sources to contribute funds to Kinsale Insurance in order to support premium growth, reduce our reliance on reinsurance, pay dividends and taxes, repurchase shares and for other business purposes.
We receive corporate service fees from Kinsale Insurance Company to reimburse us for most of the operating expenses that we incur. Reimbursement of expenses through corporate service fees is based on the actual costs that we expect to incur with no mark-up above our expected costs.
Shelf registration
In August 2025, we filed a universal shelf registration statement with the SEC that expires in 2028. We can use this shelf registration to issue an unspecified amount of common stock, preferred stock, depositary shares and warrants.
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The specific terms of any securities we issue under this registration statement will be provided in the applicable prospectus supplements.
Share repurchase program
In December 2025, our Board of Directors authorized a new share repurchase program authorizing the repurchase of up to $250.0 million of our common stock. The shares may be repurchased from time to time in open market purchases, privately-negotiated transactions, block purchases, accelerated share repurchase agreements or a combination of methods and pursuant to safe harbors provided by Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934. The timing, manner, price and amount of any repurchases under the share repurchase program will be determined by us in our discretion. The share repurchase program does not require us to repurchase any specific number of shares, and may be modified, suspended or terminated at any time.
The cost of treasury stock acquired pursuant to common share repurchases includes the 1% excise tax imposed on common share repurchase activity, net of common share issuances, as part of the Inflation Reduction Act of 2022. At March 31, 2026, the Company had $187.5 million of capacity remaining under its share repurchase program.
Debt
In July 2022, we entered into a Note Purchase and Private Shelf Agreement (the "Note Purchase Agreement"), which provides for the issuance of senior promissory notes with an aggregate principal amount of up to $150.0 million. In September 2023, we amended the Note Purchase Agreement, which increased the authorized aggregate principal amount of senior promissory notes that may be issued thereunder to $200.0 million.
Pursuant to the Note Purchase Agreement, on July 22, 2022 we issued $125.0 million aggregate principal amount of 5.15% senior promissory notes (the "Series A Notes") and on September 18, 2023 we issued a $50.0 million aggregate principal amount 6.21% senior promissory note (the "Series B Note"), the proceeds of which were used to fund surplus at Kinsale Insurance Company, refinance indebtedness and for general corporate purposes. See Note 13 for further information regarding the Note Purchase Agreement.
In July 2022, we entered into an Amended and Restated Credit Agreement, which extended the maturity date to July 22, 2027, and increased the aggregate commitment to $100.0 million, with the option to increase the aggregate commitment by $30.0 million, subject to certain conditions. Borrowings under the Amended and Restated Credit Agreement may be used for general corporate purposes (which may include, without limitation, to fund future growth, to finance working capital needs, to fund capital expenditures, and to refinance, redeem or repay indebtedness). See Note 13 for further information regarding the Amended and Restated Credit Agreement.
In December 2025, the covenants limiting restricted payments under the Note Purchase Agreement and Amended and Restated Credit Agreement were amended to allow the Company to make restricted payments so long as at the time of the declaration of such restricted payment, no event of default under the Note Purchase Agreement has occurred and is continuing or would arise after giving effect, on a pro forma basis, to such restricted payment if such restricted payment were to be made at such time of declaration.
Management believes that the Company has sufficient liquidity available both in Kinsale and in its insurance subsidiary, Kinsale Insurance Company, as well as in its other operating subsidiaries, to meet its operating cash needs and obligations and committed capital expenditures for the next 12 months.
Cash flows
Our most significant source of cash is from premiums received from our insureds, which we generally receive at the beginning of the coverage period. Our most significant cash outflow is for claims that arise when a policyholder incurs an insured loss. Because the payment of claims occurs after the receipt of the premium, often years later, we
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invest the cash in investment securities that earn interest and dividends. We also use cash to pay commissions to insurance brokers, as well as to pay operating expenses such as salaries, consulting services and taxes. As described under "—Reinsurance" below, we use reinsurance to help manage the risk that we take related to the issuance of our policies. We cede, or pay out, part of the premiums we receive to our reinsurers and collect cash back when losses subject to our reinsurance coverage are paid.
The timing of our cash flows from operating activities can vary among periods due to the timing by which payments are made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can be significant, so their timing can influence cash flows from operating activities in any given period. Management believes that cash receipts from premiums, proceeds from investment sales and redemptions and investment income are sufficient to cover cash outflows in the foreseeable future.
Our cash flows for the three months ended March 31, 2026 and 2025 were:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Cash and cash equivalents provided by (used in): | ||||||||||||||
Operating activities | $ | 248,869 | $ | 229,779 | ||||||||||
| Investing activities | (114,432) | (180,961) | ||||||||||||
Financing activities | (74,535) | (20,005) | ||||||||||||
| Change in cash and cash equivalents | $ | 59,902 | $ | 28,813 | ||||||||||
Net cash provided by operating activities was approximately $248.9 million for the three months ended March 31, 2026 compared to $229.8 million for the same period in 2025. This increase was largely driven by higher investment income received and the timing of reinsurance recoveries offset in part by timing of claim payments and a decline in premium volume.
Net cash used in investing activities was $114.4 million for the three months ended March 31, 2026 compared to $181.0 million for the three months ended March 31, 2025. Net cash used in investing activities during the first three months of 2026 included purchases of fixed-maturity securities of $361.8 million, which included primarily mortgage- and asset-backed securities and corporate bonds. During the first three months of 2026, we received proceeds of $182.7 million from sales of fixed-maturity securities, largely corporate bonds, and, to a lesser extent, asset- and mortgage-backed securities and municipal securities and $92.8 million primarily from redemptions and maturities of asset- and mortgage-backed securities. For the three months ended March 31, 2026, purchases of equity securities of $33.1 million consisted of common stocks and ETFs. During the first three months of 2026, we received proceeds of $8.6 million primarily from sales of common stocks and preferred stocks. In addition, net sales of short-term investments of $3.9 million consisted of U.S. Treasuries.
Net cash used in investing activities of $181.0 million during the first three months of 2025 included purchases of fixed-maturity securities of $369.5 million, which included primarily corporate bonds and asset- and mortgage-backed securities. During the first three months of 2025, we received proceeds of $107.0 million from sales of fixed-maturity securities, largely corporate bonds, mortgage- and asset-backed securities, and, to a lesser extent, municipal securities and $144.7 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the three months ended March 31, 2025, purchases of equity securities of $42.7 million consisted primarily of common stocks. During the first three months of 2025, we received proceeds of $11.6 million primarily from sales of common stocks. Cash used in investing activities was partially offset by unsettled purchases of cash equivalents totaling $15.0 million as of March 31, 2025.
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During the first three months of 2026, cash used in financing activities reflected dividends paid of $0.25 per common share, or $5.8 million in aggregate, share repurchases of $62.5 million and payroll taxes withheld and remitted on restricted stock awards of $6.7 million, offset in part by proceeds received from our equity compensation plans of $0.5 million.
During the first three months of 2025, cash used in financing reflected dividends paid of $0.17 per common share, or $4.0 million in aggregate, share repurchases of $10.0 million and payroll taxes withheld and remitted on restricted stock awards of $6.2 million, offset in part by proceeds received from our equity compensation plans of $0.2 million.
Reinsurance
We enter into reinsurance contracts primarily to limit our exposure to potential large losses. Reinsurance involves an insurance company transferring ("ceding") a portion of its exposure on a risk to another insurer, the reinsurer. The reinsurer assumes the exposure in return for a portion of the premium. Our reinsurance is primarily contracted under quota share reinsurance treaties and excess of loss treaties. In quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company's losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission. In excess of loss reinsurance, the reinsurer agrees to assume all or a portion of the ceding company's losses, in excess of a specified amount. Under excess of loss reinsurance, the premium payable to the reinsurer is negotiated by the parties based on their assessment of the amount of risk being ceded to the reinsurer because the reinsurer does not share proportionately in the ceding company's losses.
We renew our reinsurance treaties annually. During each renewal cycle, there are a number of factors we consider when determining our reinsurance coverage, including (1) plans to change the underlying insurance coverage we offer, (2) trends in loss activity, (3) the level of our capital and surplus, (4) changes in our risk appetite and (5) the cost and availability of reinsurance coverage.
To manage our natural catastrophe exposure, we use stochastic models to analyze the risk of severe losses. We measure exposure to these losses in terms of probable maximum loss ("PML"), which is an estimate of the amount of loss we would expect to meet or exceed once in a given number of years (referred to as the return period). When managing our catastrophe exposure, we generally focus on the 100-year and the 250-year return periods.
The following is a summary of our significant reinsurance programs as of March 31, 2026:
| Line of Business Covered | Company Policy Limit | Reinsurance Coverage | Company Retention | |||||||||||||||||
| Property (1) | Up to $10.0 million per occurrence | 40% up to $443.0 million per catastrophe | 60% of property losses | |||||||||||||||||
Property – catastrophe (2) | N/A | $250.0 million excess of $75.0 million | $75.0 million per catastrophe | |||||||||||||||||
| Primary casualty (3) | Up to $10.0 million per occurrence | $8.0 million excess of $2.0 million | $2.0 million per occurrence | |||||||||||||||||
| Excess casualty (4) | Up to $10.0 million per occurrence | Variable quota share | $3.0 million per occurrence as described in note (4) below | |||||||||||||||||
(1) Our property quota share reinsurance reduces the financial impact of property losses up to a loss recovery of $177.2 million for an event. This reinsurance is not applicable to any individual policy with a limit of $2.0 million or less.
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(2) Our property catastrophe reinsurance reduces the financial impact of a catastrophe event involving multiple claims and policyholders. Our property catastrophe reinsurance includes a reinstatement provision which requires us to pay reinstatement premiums after a loss has occurred in order to preserve coverage. Including the reinstatement of coverage, the maximum aggregate loss recovery limit is $500.0 million. This coverage applies after the coverage provided by the commercial property quota share treaty.
(3) This reinsurance is not applicable to any individual policy with a per-occurrence limit of $2.0 million or less.
(4) For excess casualty policies with a per-occurrence limit higher than $3.0 million, the ceding percentage varies such that the retention is always $3.0 million or less. For example, for a $5.0 million limit excess policy, our retention would be 60%, whereas for a $10.0 million limit excess policy, our retention would be 30%. For policies for which we also write an underlying primary limit, the combined retention on the primary and excess policies would not exceed $3.0 million. This reinsurance is not applicable to any individual policy with a per-occurrence limit of $3.0 million or less.
Reinsurance contracts do not relieve us from our obligations to policyholders. Failure of the reinsurer to honor its obligation could result in losses to us, and therefore, we established an allowance for credit risk based on historical analysis of credit losses for highly rated companies in the insurance industry. In formulating our reinsurance programs, we are selective in our choice of reinsurers and we consider numerous factors, the most important of which are the financial stability of the reinsurer, its history of responding to claims and its overall reputation. In an effort to minimize our exposure to the insolvency of our reinsurers, we review the financial condition of each reinsurer regularly. In addition, we continually monitor for rating downgrades involving any of our reinsurers. At March 31, 2026, all reinsurance contracts that our insurance subsidiary was a party to were with companies with A.M. Best ratings of "A-" (Excellent) or better. As of March 31, 2026, we recorded an allowance for credit losses of $1.0 million related to our reinsurance balances.
Ratings
Kinsale Insurance Company has a financial strength rating of "A" (Excellent) with a stable outlook from A.M. Best. A.M. Best assigns ratings to insurance companies, which currently range from "A++" (Superior) to "F" (In Liquidation). "A" (Excellent) is the third highest rating issued by A.M. Best. The "A" (Excellent) rating is assigned to insurers that have, in A.M. Best's opinion, an excellent ability to meet their ongoing obligations to policyholders. This rating is intended to provide an independent opinion of an insurer's ability to meet its obligation to policyholders and is not an evaluation directed at investors.
The financial strength ratings assigned by A.M. Best have an impact on the ability of the insurance companies to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that the insurance companies receive. The "A" (Excellent) rating obtained by Kinsale Insurance Company is consistent with our business plan and allows us to actively pursue relationships with the agents and brokers identified in our marketing plan.
Financial Condition
Stockholders' equity
Total stockholders' equity and tangible stockholders' equity were $2.0 billion at both March 31, 2026 and December 31, 2025. Tangible stockholders’ equity is a non-GAAP financial measure. See "—Reconciliation of non-GAAP financial measures" for a reconciliation of stockholders' equity in accordance with GAAP to tangible stockholders' equity.
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Investment portfolio
At March 31, 2026, our cash and invested assets of $5.3 billion consisted of fixed-maturity securities, equity securities, cash and cash equivalents and real estate investments. At March 31, 2026, the majority of the investment portfolio was composed of fixed-maturity securities of $4.4 billion that were classified as available-for-sale. Available-for-sale investments are carried at fair value with unrealized gains and losses on these securities, net of applicable taxes, reported as a separate component of accumulated other comprehensive income. At March 31, 2026, we also held $644.5 million of equity securities, which included common stocks, ETFs and non-redeemable preferred stock, $223.3 million of cash and cash equivalents and $55.0 million of real estate investments.
Our fixed-maturity securities, including cash equivalents, had a weighted average duration of 4.1 years and 4.0 years at March 31, 2026 and December 31, 2025, respectively, and an average rating of "AA-" at both March 31, 2026 and December 31, 2025.
At March 31, 2026 and December 31, 2025, the amortized cost and estimated fair value on fixed-maturity securities were as follows:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Amortized Cost | Estimated Fair Value | % of Total Fair Value | Amortized Cost | Estimated Fair Value | % of Total Fair Value | |||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||
| Fixed-maturity securities: | ||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 864 | $ | 868 | — | % | $ | 861 | $ | 874 | — | % | ||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions | 142,303 | 124,022 | 2.8 | % | 146,222 | 127,860 | 2.9 | % | ||||||||||||||||||||||||||||||
| Corporate and other securities | 1,748,210 | 1,727,309 | 39.3 | % | 1,711,348 | 1,713,888 | 39.5 | % | ||||||||||||||||||||||||||||||
| Asset-backed securities | 569,696 | 572,432 | 13.0 | % | 582,780 | 588,519 | 13.6 | % | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 1,557,832 | 1,510,246 | 34.3 | % | 1,491,642 | 1,459,270 | 33.6 | % | ||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | 469,241 | 467,773 | 10.6 | % | 449,872 | 451,039 | 10.4 | % | ||||||||||||||||||||||||||||||
| Total fixed-maturity securities | $ | 4,488,146 | $ | 4,402,650 | 100.0 | % | $ | 4,382,725 | $ | 4,341,450 | 100.0 | % | ||||||||||||||||||||||||||
The table below summarizes the credit quality of our fixed-maturity securities at March 31, 2026 and December 31, 2025, as rated by Standard & Poor’s Financial Services, LLC ("Standard & Poor's"):
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| Standard & Poor’s or Equivalent Designation | Estimated Fair Value | % of Total | Estimated Fair Value | % of Total | ||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||
| AAA | $ | 1,220,275 | 27.7 | % | $ | 1,194,902 | 27.5 | % | ||||||||||||||||||
| AA | 1,545,956 | 35.1 | % | 1,503,373 | 34.6 | % | ||||||||||||||||||||
| A | 888,201 | 20.2 | % | 861,657 | 19.8 | % | ||||||||||||||||||||
| BBB | 697,364 | 15.8 | % | 722,141 | 16.7 | % | ||||||||||||||||||||
| Below BBB and unrated | 50,854 | 1.2 | % | 59,377 | 1.4 | % | ||||||||||||||||||||
| Total | $ | 4,402,650 | 100.0 | % | $ | 4,341,450 | 100.0 | % | ||||||||||||||||||
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The amortized cost and estimated fair value of our fixed-maturity securities summarized by contractual maturity as of March 31, 2026 and December 31, 2025, were as follows:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Amortized Cost | Estimated Fair Value | % of Total Fair Value | Amortized Cost | Estimated Fair Value | % of Total Fair Value | |||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||
| Due in one year or less | $ | 19,235 | $ | 18,937 | 0.4 | % | $ | 14,324 | $ | 14,392 | 0.3 | % | ||||||||||||||||||||||||||
| Due after one year through five years | 834,143 | 836,800 | 19.0 | % | 868,804 | 879,532 | 20.3 | % | ||||||||||||||||||||||||||||||
| Due after five years through ten years | 776,675 | 769,362 | 17.5 | % | 695,323 | 700,466 | 16.1 | % | ||||||||||||||||||||||||||||||
| Due after ten years | 261,324 | 227,100 | 5.2 | % | 279,980 | 248,232 | 5.7 | % | ||||||||||||||||||||||||||||||
| Asset-backed securities | 569,696 | 572,432 | 13.0 | % | 582,780 | 588,519 | 13.6 | % | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 1,557,832 | 1,510,246 | 34.3 | % | 1,491,642 | 1,459,270 | 33.6 | % | ||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | 469,241 | 467,773 | 10.6 | % | 449,872 | 451,039 | 10.4 | % | ||||||||||||||||||||||||||||||
| Total fixed-maturity securities | $ | 4,488,146 | $ | 4,402,650 | 100.0 | % | $ | 4,382,725 | $ | 4,341,450 | 100.0 | % | ||||||||||||||||||||||||||
Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Restricted investments
In order to conduct business in certain states, we are required to maintain letters of credit or assets on deposit to support state-mandated insurance regulatory requirements and to comply with certain third-party agreements. Assets held on deposit or in trust accounts are primarily in the form of high-grade securities. The fair value of our restricted assets was $3.9 million at both March 31, 2026 and December 31, 2025.
Reconciliation of Non-GAAP Financial Measures
Reconciliation of underwriting income
Underwriting income is a non-GAAP financial measure that we believe is useful in evaluating our underwriting performance without regard to investment income. Underwriting income is defined as net income excluding net investment income, the net change in the fair value of equity securities, net realized investment gains and losses, change in allowance for credit losses on investments, interest expense, other expenses, other income and income tax expense. We use underwriting income as an internal performance measure in the management of our operations because we believe it gives us and users of our financial information useful insight into our results of operations and our underlying business performance. Underwriting income should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define underwriting income differently.
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Net income for the three months ended March 31, 2026 and 2025, reconciles to underwriting income as follows:
| Three Months Ended March 31, | ||||||||||||||
| ($ in thousands) | 2026 | 2025 | ||||||||||||
| Net income | $ | 112,554 | $ | 89,227 | ||||||||||
| Income tax expense | 27,106 | 23,084 | ||||||||||||
| Income before income taxes | 139,660 | 112,311 | ||||||||||||
| Net investment income | (55,423) | (43,819) | ||||||||||||
| Change in the fair value of equity securities | 8,356 | (3,038) | ||||||||||||
| Net realized investment gains | (1,719) | (537) | ||||||||||||
| Change in allowance for credit losses on investments | 27 | 20 | ||||||||||||
| Interest expense | 3,167 | 2,538 | ||||||||||||
Other expenses (1) | 529 | 660 | ||||||||||||
| Other income | (96) | (674) | ||||||||||||
| Underwriting income | $ | 94,501 | $ | 67,461 | ||||||||||
(1) Other expenses includes primarily corporate expenses not allocated to our insurance operations.
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Reconciliation of net operating earnings
Net operating earnings is defined as net income excluding the effects of the net change in the fair value of equity securities, after taxes, net realized investment gains and losses, after taxes, and the change in allowance for credit losses on investments, after taxes. We believe the exclusion of these items provides a useful comparison of our underlying business performance from period to period. Net operating earnings and percentages or calculations using net operating earnings (e.g., diluted operating earnings per share and annualized operating return on equity) are non-GAAP financial measures. Net operating earnings should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define net operating earnings differently.
Net income for the three months ended March 31, 2026 and 2025, reconciles to net operating earnings as follows:
| Three Months Ended March 31, | ||||||||||||||
| ($ in thousands) | 2026 | 2025 | ||||||||||||
| Net income | $ | 112,554 | $ | 89,227 | ||||||||||
| Adjustments: | ||||||||||||||
| Change in the fair value of equity securities, before taxes | 8,356 | (3,038) | ||||||||||||
Income tax (benefit) expense (1) | (1,755) | 638 | ||||||||||||
| Change in the fair value of equity securities, after taxes | 6,601 | (2,400) | ||||||||||||
| Net realized investment gains, before taxes | (1,719) | (537) | ||||||||||||
Income tax expense (1) | 361 | 113 | ||||||||||||
| Net realized investment gains, after taxes | (1,358) | (424) | ||||||||||||
| Change in allowance for credit losses on investments, before taxes | 27 | 20 | ||||||||||||
Income tax benefit (1) | (6) | (4) | ||||||||||||
| Change in allowance for credit losses on investments, after taxes | 21 | 16 | ||||||||||||
| Net operating earnings | $ | 117,818 | $ | 86,419 | ||||||||||
| Operating return on equity: | ||||||||||||||
Average stockholders' equity (2) | $ | 1,963,465 | $ | 1,533,268 | ||||||||||
Annualized return on equity (3) | 22.9 | % | 23.3 | % | ||||||||||
Annualized operating return on equity (4) | 24.0 | % | 22.5 | % | ||||||||||
(1) Income taxes on adjustments to reconcile net income to net operating earnings use an effective tax rate of 21%.
(2) Average stockholders' equity is computed by adding the total stockholders' equity as of the date indicated to the prior quarter-end or year-end total, as applicable, and dividing by two.
(3) Annualized return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period.
(4) Annualized operating return on equity is net operating earnings expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period.
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Reconciliation of tangible stockholders' equity
Tangible stockholders’ equity is defined as total stockholders’ equity less intangible assets, net of deferred taxes. Our definition of tangible stockholders’ equity may not be comparable to that of other companies, and it should not be viewed as a substitute for stockholders’ equity calculated in accordance with GAAP. We use tangible stockholders' equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure.
Stockholders' equity at March 31, 2026 and December 31, 2025, reconciles to tangible stockholders' equity as follows:
| ($ in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Stockholders' equity | $ | 1,967,346 | $ | 1,959,583 | ||||||||||
| Less: intangible assets, net of deferred taxes | 2,795 | 2,795 | ||||||||||||
| Tangible stockholders' equity | $ | 1,964,551 | $ | 1,956,788 | ||||||||||
Critical Accounting Estimates
We identified the accounting estimates which are critical to the understanding of our financial position and results of operations. Critical accounting estimates are defined as those estimates that are both important to the portrayal of our financial condition and results of operations and require us to exercise significant judgment. We use significant judgment concerning future results and developments in applying these critical accounting estimates and in preparing our condensed consolidated financial statements. These judgments and estimates affect our reported amounts of assets, liabilities, revenues and expenses and the disclosure of our material contingent assets and liabilities, if any. Actual results may differ materially from the estimates and assumptions used in preparing the condensed consolidated financial statements. We evaluate our estimates regularly using information that we believe to be relevant. Our critical accounting policies and estimates are described in our annual consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial instrument as the result of changes in interest rates, equity prices, foreign currency exchange rates and commodity prices. Our primary market risks have been equity price risk associated with investments in equity securities and interest rate risk associated with investments in fixed maturities. We do not have any material exposure to foreign currency exchange rate risk or commodity risk.
There have been no material changes in market risk from the information provided in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required financial disclosure.
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As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of that date.
Changes in Internal Control over Financial Reporting
During the first quarter of 2026, we implemented a new general ledger system. The implementation was completed in the ordinary course of business to modernize technology used in our financial processes. In connection with the implementation activities, we evaluated the impact of the new general ledger system on our internal controls over financial reporting and revised certain controls to align with the new system.
Except for the implementation discussed above, there were no other changes to our internal control over financial reporting that occurred during the first quarter of 2026 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
The effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance that our controls and procedures will detect all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be attained.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are party to legal proceedings which arise in the ordinary course of business. We believe that the outcome of such matters, individually and in the aggregate, will not have a material adverse effect on our condensed consolidated financial position. Refer to Note 16 of the notes to the condensed consolidated financial statements for further information regarding legal proceedings.
Item 1A. Risk Factors
There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K
for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The table below sets forth information regarding repurchases by the Company of its common stock during the periods indicated.
| Period Beginning | Period Ending | Total number of shares purchased | Average price paid per share(1) | Total number of shares purchased as part of publicly announced plans or programs(2) | Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) | |||||||||||||||||||||||||||
| January 1, 2026 | January 31, 2026 | — | $ | — | — | $ | 250.0 | |||||||||||||||||||||||||
| February 1, 2026 | February 28, 2026 | 166,042 | $ | 378.64 | 166,042 | $ | 187.5 | |||||||||||||||||||||||||
| March 1, 2026 | March 31, 2026 | — | $ | — | — | $ | 187.5 | |||||||||||||||||||||||||
| Total | 166,042 | $ | 378.64 | 166,042 | $ | 187.5 | ||||||||||||||||||||||||||
(1) The cost of treasury stock acquired pursuant to common share repurchases includes the 1% excise tax imposed on common share repurchase activity, net of common share issuances, as part of the Inflation Reduction Act of 2022.
(2) In December 2025, the Company's Board of Directors authorized a share repurchase program authorizing the repurchase of up to $250 million of the Company's common stock. The shares may be repurchased from time to time in open market purchases, privately-negotiated transactions, block purchases, accelerated share repurchase agreements or a combination of methods and pursuant to safe harbors provided by Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934. The timing, manner, price and amount of any repurchases under the share repurchase program will be determined by the Company in its discretion. The stock repurchase program does not require the Company to repurchase any specific number of shares and may be modified, suspended or terminated at any time.
Item 5. Other Information
Securities Trading Plans of Directors and Executive Officers
Transactions in our securities by our non-employee directors and executive officers are required to be made in accordance with our Policy on the Prevention of Insider Trading and Selective Disclosure (the "Insider Trading
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Policy"), which, among other things, requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information. Our Insider Trading Policy permits our non-employee directors and executive officers to enter into trading plans designed to comply with Rule 10b5-1.
During the first quarter of 2026, none of our non-employee directors or executive officers adopted , modified or terminated a Rule 10b5-1 trading plan or adopted , modified or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
Item 6. Exhibits
| Exhibit Number | Description | |||||||
| 101.INS ** | XBRL Instance Document | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* This certification is deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
** The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| KINSALE CAPITAL GROUP, INC. | ||||||||
Date: April 23, 2026 | By: | /s/ Michael P. Kehoe | ||||||
| Michael P. Kehoe Chairman, President and Chief Executive Officer | ||||||||
Date: April 23, 2026 | By: | /s/ Bryan P. Petrucelli | ||||||
| Bryan P. Petrucelli Executive Vice President, Chief Financial Officer and Treasurer | ||||||||
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