KNSL - Earnings call transcript Q4 2017 | Kinsale Capital Group, Inc.

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Operator

Good morning ladies and gentlemen and welcome to the Q4 2017 Kinsale Capital Group Incorporated Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded.

Before we get started, let me remind everyone that through the course of the teleconference Kinsale’s management may make comments that reflect their intentions, beliefs and expectations for the future.

statements actual to results forward-looking which risk these cause could to always are certain subject factors As differ materially. are XXXX form factors filings reviewed risk listed company’s the These various carefully. including the which annual XX-K, on report should be in SEC has with Securities The Commission furnished and its announcing form press the contains release a fourth-quarter Exchange X-K company the that results. certain the call Kinsale’s in management today. measures may non-GAAP financial also reference the which company’s can measures at A reconciliation is found the available press to at of be release website in www.kinsalecapitalgroup.com. these GAAP I turn and conference to CEO, over Mr. will the now Kinsale’s President Michael Kehoe. Please go ahead sir.

Michael Kehoe

gross thanks to Thank to today premium quarter profits an increase XX.X% participating w the e equity was $X.X prior grew claim income XX% handling like development Kinsale you, Jobs notwithstanding on income that throughout combine operator. the in of have for loss today. Tax and steady Chief Haney, trend Cut to Good cost million drop a the in competitive a morning seen growth $X.X some to adverse Kinsale use of Act. year. reported Petrucelli, activity The quarter small advanced quarter some Bryan with compared for compared robust quarter this Operating of in XXXX. side million ratio Adjusting ad XXXX, net deliver our due year everyone fourth to Financial strong with me quarter, XXXX. to technology the the markets and Kinsale growth With Chief underwriting The return charge $X.X Cat of of stockholders, of continuing of the amount exclude reserves. choppiness and on to and a million the is net low Brian have prior fourth for we an income and quarter of Kinsales’s to disciplined, related adjusted combined in call. XX% and Kinsale’s the of Officer $X.X was over written the on of charge are And a our Officer. had XX.X%, even with fourth and of fourth million strategy

details Bryan to over to for pass further Petrucelli. going I'm So

Bryan Petrucelli

Thanks, Mike.

periods for we for noted, Mike the of I XX% the and particularly consistent reduces model, effective line Tax rate and the were should activity. our low-cost quarter in among are which this results expectations. XX% the acknowledging January combined for and full from believe XX% enactment tax the the corporate The for consideration of in probably price strength the year fourth XX% As intense or in of demonstrates the start Reform XX.X% ratio combined quarter things with year's Cat goal with ratio by XXXX. and other the lower in our year competition December, X, Act to of

Although an impact tax historical we're XXXX on to not of see expect significant our exact estimate of the rate. effective reported tax able to we provide reform from effective a rate, decrease our tax

net deferred-tax and our of and fourth-quarter Additionally, result mentioned. using results and effective fourth-quarter year-to-date elevated re-measure previously in the our assets rates that year-to-date $X.X required charge related of tax and law respectively a The charge. as the enacted lower we was were the million December, the as are XX.X% Mike to rate, reflect XX.X%

quarter are year rates Excluding the and the respectively. XX.X% impact of XX.X% the fourth full and for charge, those

for from results $X.X million income of million We to for the the XXXX, down the of $X.X reported for go XXXX. I'll quarter fourth fourth Now, quarter net quarter. of

to company million quarter higher generated and for ratio compared XX.X%, of X.X XXXX. points included combined Excluding basis, Cat of reserve and percentage from from the of benefited net $X.X X.X from million $X reserve last points $XX.X reserve a loss The of Cat development, combined net from last ratio income and XX.X% ratio than reserve the development points prior-year a compared XX last. XXXX from ratio favorable losses XX%, The of net favorable of X.X X.X to year-to-date the for points tax losses included points our On losses for and net year. loss X.X income generated a the of fourth The combined $X.X development, fourth impact XX.X% income prior-year the points company the compared the cat million points $XX.X XXXX. to to losses net of quarter unfavorable X.X loss a same compared favorable underwriting loss charge, year-to-date development Cat combined and million million quarter from of underwriting XX% of was period fourth and year. adjusted and and negligible of and

year. in XX% premiums fourth XX.X% written premiums an The generated from to here gross continues $XX.X XXXX. Our bit. in discuss activity lines and a quarter written the underwriting over a increase Haney overall were little of more last detail Brian across have increased representing million, growth increase a Year-to-date will most be over of business in

gross income On fourth to XX% X.X% continued investment X.X% over returns the the last investment of result increased quarter in investment growth as a year. the by portfolio. from increased investment of side, XXXX Annualized slightly

securities our equities, year. increase this common, and We course both structured and the of continue over to allocation preferred modestly

environment share cash to and per $X.XX diluted share $X.XX our EPS The fourth-quarter we react in and was Year-to-date believe rate interest given basic respectively. changes we're $X.XX in basic diluted good $X.XX respectively. EPS and position, in per to the XXXX. and Additionally, was shape

tax the and of I'll to Haney. quarter respectively. year impact pass it over $X.XX fourth the Brian full the and for With reform per $X.XX share that, was EPS charge, diluted Excluding

Brian Haney

Bryan. Thanks,

XX earlier, noted As our Particularly spread, notable business, divisions. showing small the energy construction, in grew growth positive premium with growth The the fourth divisions quarter. was widely our XX% most of and is change. in

Life divisions. We our Science also Environmental in growth had nice and

of Commissions growth continues The is, the to gradually widespread across in The growth quarter. premiums, in the higher the for fourth last quarter XX% fourth year. XX% around submissions growth up was accelerate. in like rate submissions business Aspera divisions. in were Our the most quarter than

X% rates, to we increases rate lines all. than rates technical showing and rates the increases some our uneven. increases more market There the beyond tax a days, also increase accelerating X% of in insurance of on of X% others, our X%. seeing recently I We'd change reform business seem but roughly the say technical pushed some the the would of and effect it's to the to last and personal about note X%. equivalent be that Moving would up be to business X% passed business. In are the was at specifically rate act to above seeing don't are in we've XX on our casualty overall

net big which to effect market submissions our us. is combined the than a experience rates is for XXXX XXXX. materially in driving stronger continues are they were dislocation, So increase that commercial property The in in

New-business quarter XX% submissions for period than over up same year. in the fourth were the commercial last property more

Our in been X% running commercial have property X%. increases renewal around rate to

currently We than also smaller on just account focused will recently a property launched commercial which a new-property size target does. division risks, small our product much business

small gas give perspective, confidence Looking will effectively happening in The was well. number which their market businesses taxes, us mentioned Energy it division. do many and to that, our it for has earlier an of industry And turn where around are things helpful there The price increase benefit resurgence however, the macroeconomic we effective get a at oil that ultimately flourishing, us, to but competitors. what of particular there's high lower back have Mike. from I equivalent rate but helping terms business a and seems will businesses they be the from increase, to a over level secondary will competitors, tax to the X% owners reform, us tax reform reason another with are of which continues, to been our raise we when rate I'll us. that of tax of the offshore country they to Small of cut, in are just reform get the back for boon were, optimism. premium a of X% of to core our prices it to benefit tend was, as and many the immediate obviously Also, to tax small we benefit. of is for

Michael Kehoe

Thanks, Brian. questions. Operator, ready we're for now to up the open call

Operator

comes Mark from first from SunTrust. Hughes question [Operator Instructions] Our

Your line now open. is

Mark Hughes

a for on Thank in way to about up competitors to we that. with little into you they're account point cut you Could the talking increase And what more a here, size very much. The competitors, percentage essentially particular? detail? price are of that. your go but Lloyds little you're any a the more to Just have prices to reform, seeing going tax

Brian Haney

competitors that offshore was of thinking more Bermuda the I Lloyds.

Michael Kehoe

if the E&S XX% it's overseas-domicile. I groups, XX almost think look at like you are top

assume the new to probably there's by have under way tax some reinsurance impaired act. there you may intercompany be So that

Brian Haney

if data that competitors, And looked in tax of tax of XX% you at some cases of rates public them were some have lower. effective rates, many or those

closer down theory to rate come ours. is significantly going in go would tax while to Our theirs up,

Mark Hughes

is new admitted submission from The you you there? are you suggested, business Is Understood. businesses, think can increase, Any I accelerating. on market seeing to the that coming that? provide What E&S? more detail

Brian Haney

market coming a to that or would that. arrangement are from driven a a Well, that it's lot business amount problem a under are commercial experiencing up lot. Whether The some tough that's submissions arrangement might had We by being up a binding-authority tell. say it's of not admitted business it the property, fair insured submissions program I some it's be those has market, or is dislocations. difficulty. was in or business mentioned of Allied-Health a

just, would as characterize dislocation. market I it So in general,

Michael Kehoe

new economic one And an up, E&S about talked Mark there, are business is, and write. then formations outlook Brian when typically that's the add-on

E&S a You've of for business record without to for brand-new track years. company. got qualify into the a market They'll the a come standard number

might of it part be that as well. So,

Mark Hughes

the variability, kind some still should be deficient. redundant I would this it? reserves Is think some do turn of like model be still the inflation? happened try think understand normal conservatism you your to about on it then seems some have be to pretty enough to likely development, might been more we you I over it there on conservative and in be How but think that than can What time quarter? has And gains.

Michael Kehoe

a last it's variability That's $XXX,XXX reserves. worrisome time. normal think accident-year it of, to is, I none. consistent million slight in you tell call no fourth quarter a of went way or period of there concerns, amount are there trends, best think level XX-day to it We prior developmental the no favorable of in are that a unfavorable. from would Yes, volatility year with I $X.X the of

quarter, for ratio was XX.X%. think, loss I the Our

full which are year For solid the XX.X%, XXXX, of both numbers. was it very

how we it our accident-year reserves on the and right I in an conservative obviously Our every think company's the favorably be definitely reserve in the year, basis, started business, that goal stated. small. except Mark, at developed is if to inception-to-date was very entire are after we was single was one, conservatively and fact look you which has XXXX history,

good very of had and feel candidly, business XX.X% think, I I with we you reserves quarter, where about still a combined highly slightly in a terms elevated we even ratio. choppy amount respectable So, just the the reported think, losses, right, posted, about and, activity of

kind low-cost model. effectiveness resilience and our it speaks So of of the to the

Mark Hughes

Thank you.

Michael Kehoe

Thanks Mark.

Operator

Mark Capital comes Thank question Instructions] Dwelle next Our from Markets. RBC you. from [Operator

now line is open. Your

Mark Dwelle

if the charge can case light help of involved. could or in of of the topic it them, and kind are good what there's product If specific the that sense the actuarial-assumption questions, the reserve review give provide be you more whatever reserves with that that setting nature Yes, to stick for just I contributing whether, different morning. you can bear of was to reserve year-end to realize analyses reserving couple can changes of you a us number seemed any was kind color we a understand of Was a variability. of

Michael Kehoe

of trends, period Yes just heightened it no case just in there three-month terms reserves. best activity deficiencies Mark, no is way was book. good morning. It's the of The to slightly No in at time a a look Mike. concerns, in

normal case being claims and resolved new settled. the hey, uptick company Just, in flow coming into We of just the saw reserving. claims slight a

Mark Dwelle

relate these recent relatively years Did or to aged? more accident more primarily relatively

Michael Kehoe

are first the we're accident de tiny a Well, it's of years XXXX. the like because back keep in start-up business novo of in mind, was, book couple

accident disproportionate larger they years be happened So, I think be dollar recent would more to amounts. they the in because much

Mark Dwelle

be future, caller, were in then to whatnot. areas color there's more the can I understand on And diligent which That's if to pricing you just of said specific develop like no there's our trends high up. and taken just Really no case the line why going settle trying any claims hundreds It's shed the as on, There's course prior lines the actions in, more any a We volume, business Sometimes we to there's to be concerns. or impacted? maybe of thresholds are that's month. month of below falling of activity, anything or probability right? flow that. or reserves flow of hundreds claims in business get normal that the normal of trends a

Sometimes a conservatively And, down. And trends, that you volatility of have million are there than couple degree on in year, volatility favorably. why result annual see right? an period a might in variability think, like they're developed higher going but no time. been basis, I it's prior defined kind Every net little it XX-day concerns. in stated. the this I that of the or at would That's what we've business, of look say period dollars it normal The year been reserves bit a our in are time period have less reserves of you if was no

Mark Dwelle

hard too long. mean, not at to XX I helpful. that's combined it's with ratio, OK, for argue least

Michael Kehoe

to Mark, so we favorable cases of last fourth gross policies. I of some point It On in to million basis, individual in material that development quarter. they one forgot very that the the almost reinsured resulted reinsurance, that heavily Well, had make. actually takedowns. we And, happened settled a just $X be happened before

will, inured the takedowns of of you economic those benefit benefit, reinsurers. if the our So

Mark Dwelle

but flood some lot helping renewal-oriented, rising specifically on growth Other generally helpful. of opportunities? a the question really just signs of not Brian color wanted Haney's overall so you of commentary. strong of I exposure-unit and to to That's forth, and more economy submissions Appreciate realize seeing of is of improvement ask or business a the are in your kind the that premium kind I

Brian Haney

also seeing audit premiums we're we and as that. Yes, increases are in well. We're seeing it seeing it in exposure

Mark Dwelle

helpful. That's

that'll I my think questions, thanks. be all of

Michael Kehoe

Mark. Thanks,

Operator

I further you, Officer Executive and And the Michael have Kehoe back and just day. showing Chief turn And questions to would call Kehoe to everybody thank am us good I queue. like over remarks. further for you. thank President Thank want Michael a call to I no -- in operator. the joining the for on OK,

Operator

the in gentlemen, concludes Ladies for today's thank This you and participation conference. program.

great You day. may now disconnect. Everyone have a

Kinsale Capital (KNSL) 28 Feb 182017 Q4 Earnings call transcript