Kinsale Capital Group Inc

We have purchased American Kinsale Capital Corp (KNSL) to this bucket... It specializes in issuing insurance policies in unique areas that other insurance companies refuse to insure (Excess and Surplus), mainly for small businesses. This company excels in an extraordinary low loss ratio, and its shares have not lagged behind as since its IPO in 2016, their shares have risen almost twenty-fold.

We continue to own Kinsale Capital Group, Inc. because we believe it is well managed and has a long runway for growth in an attractive segment of the insurance market. In the most recent quarter, Kinsale reported quarterly earnings that exceeded Street expectations, driven by higher earned premiums, very low catastrophe losses, and favorable reserve development. Despite concerns about moderating growth amid a cyclical slowdown in the property and casualty insurance industry, we remain confident in Kinsale's potential for continued growth.

Kinsale is currently facing slowing growth, which is a concern for its future performance. The manager notes that this issue could prove transient over a longer time horizon, indicating a cautious outlook on the company's ability to regain momentum. The mention of Kinsale alongside other companies facing specific challenges suggests that the manager is wary of its current trajectory, reflecting a bearish sentiment.

Kinsale Capital Group is a specialty insurance company operating in the U.S. excess and surplus market. While they are not the largest in the industry, Kinsale has about a 2% market share but is growing very quickly. The company was founded 15 years ago and is still run by the founder and his long tenured team. They have an underwriting approach and discipline that provides them with significant advantages. As well, they are as much a technology company as they are an insurance company and, as a result, have a profound cost advantage relative to the competition, that we believe is sustainable. We added Kinsale to the portfolio last year and expect to remain shareholders for a long time, subject, of course, to valuation.

Kinsale Capital grew written premiums more than 25% year-over-year and sustained industry-leading underwriting margins. It remains among the portfolio’s most durable compounders and has added meaningfully to returns since inception. The company demonstrates attributes we look for — self-funded growth, prudent capital allocation, and consistent cash generation. Despite valuation multiples compressing, Kinsale Capital's strong growth and cash flow position it well for future performance.

We purchased more shares of our insurer Kinsale Corp. during the quarter. Mr. Market is a volatile fellow and periodically he does weird things, such as sell great companies because they miss short-term growth targets. He did this in April when Kinsale reported slightly disappointing revenue growth and losses related to Southern California wildfires. We added to our position in late April at $419. Kinsale continues to have the lowest expense structure of its peer group, and among the highest growth rates and profit margins. Insurance is a commodity business, so players like Kinsale in commercial property and casualty are going to win over time by being efficient.

Kinsale Capital Group is a fast-growing excess and surplus (E&S) insurance company managed by its founder, operating with a true owner-operator mentality. The company's proprietary technology systems create significant efficiencies, providing a low-cost advantage. Kinsale's strong entrepreneurial culture and commitment to in-house operations lead to superior underwriting performance. With only ~1-2% market share in the E&S industry, the growth potential is substantial. Recent stock underperformance is attributed to slowing premium growth and concerns over the insurance pricing cycle, resulting in a reasonable valuation that reflects the business's quality and long-term compounding potential.

Kinsale Capital Group is a fast-growing excess and surplus (E&S) insurance company managed by its founder, operating with a true owner-operator mentality. The company's proprietary technology systems create significant efficiencies, providing a low-cost advantage. Kinsale's strong entrepreneurial culture and unique in-house operations lead to superior underwriting performance. With only ~1-2% market share in the E&S industry, the growth potential is substantial. Recent stock underperformance is attributed to slowing premium growth and concerns over the insurance pricing cycle, resulting in a reasonable valuation that reflects the business's quality and long-term compounding potential.

Kinsale Capital Group is a fast-growing excess and surplus (E&S) insurance company managed by its founder, operating with a true owner-operator mentality. The company's proprietary technology systems create significant efficiencies, providing a low-cost advantage. Kinsale's strong entrepreneurial culture and unique in-house operations lead to superior underwriting performance. With only ~1-2% market share in the E&S industry, the growth potential is substantial. Recent stock underperformance is attributed to slowing premium growth and concerns over the insurance pricing cycle, resulting in a reasonable valuation that reflects the business's quality and long-term compounding potential.

Kinsale Capital Group, Inc. continues to gain market share in a large and growing market and is successfully converting attractive premium growth to industry-leading margins and robust returns on equity. The company recently announced its first share repurchase, which adds an additional dimension of capital return to its compelling growth algorithm. We believe Kinsale’s agile underwriting process, best-in-class loss ratios, and disciplined risk-taking will enable it to generate 10% to 20% annual premium growth while generating outstanding returns on capital.