Kinsale Capital (KNSL) 30 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Michael Kehoe	President and Chief Executive Officer
Bryan Petrucelli	Chief Financial Officer
Brian Haney	Chief Operating Officer
Matt Carletti	JMP Securities
Mark Hughes	Truist
Jeff Smith	William Blair
Mark Dwelle	RBC Capital Markets
Colin Ducharme	Sterling Capital
Casey Alexander	Compass Point

Call transcript

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Operator

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

As always, these forward-looking statements are subject to certain risk factors, which could cause actual results to differ materially. These risk factors are listed in the company's various SEC filings, including the third quarter 2020 quarterly report on Form 10-Q and the 2019 Annual Report on Form 10-K, which should be reviewed carefully. The company has furnished a Form 8-K with the Securities and Exchange Commission that contains the press release announcing its third quarter results. Kinsale's management may also reference certain non-GAAP financial measures in the call today. to which can company's is www.kinsalecapitalgroup.com. GAAP the found website of release, press available reconciliation these be measures in at A at the would over the CEO, I to President Mr. Kinsale's and conference like now to turn Kehoe. Michael Please go sir. ahead,

Michael Kehoe

Thank Thank us for on you, joining today. you morning call operator good and everyone. the

the quarter, written XXXX. annualized Haney catastrophes, on to The from quarter. and financial Sally and Iowa. posted night, for Financial third principally impacted Coast, provide to the Petrucelli, Bryan California, for begin XX.X%, of hurricanes by as for will our performance and market XXXX. operating is the return then derecho is Napa September quarter operating down cover and I’m was on loss months a up Last in XXXX, Brian The usual, Bryan the share Officer $X.XX multiple compared Officer. to XX% As reported that Haney, will operation. going even in step Petrucelli the combined Kinsale's the premium Chief for the XX, the Valley, following here; windstorm Brian Chief of a nine and the ratio XX% ending XX.X% on company Gross Gulf some one third per on diluted negatively and color our Laura profitability Operating quarterly the wildfire Glass Kinsale in was quarter earnings presentation equity underwriting

catastrophe commercial and divisions. property, we As our write personal do exposed property a both through reminder, insurance

same of limit with resulted but expectations. is manageable these loss. mindful property quarter Each well the what that multiple be a conservative of can't in completely. of within associated fashion, volatility are that on a events the we drove cat individually in in can it outsized also eliminate cat The margins combination the loss events volatility Although business, and we obviously the compelling,

our high on a Kinsale’s underwriting level. at business long-term. technology dislocation propelling at and and Kinsale’s market believe we continues The the and being continued by combination E&S P&C to continue over with cat rate disciplined the so the a focus highly market. is growth to moment controlled enhanced the profitability perform of within costs, combined do is and the growth activity, Beyond low we'll driven

by competitors substandard Some causing behavior are extraordinary to level and point is this capacity. and the of XXXX. strong canceling low rates, digit new to submissions of our in the reacting range. broader the digit at expect withdrawing have business to growth programs, books results and normalized we business, restructuring in growth to thereafter, continue Kinsale’s grow some double continue to premium perhaps we At double dislocation expect market through abate and This rates

raise cases Kinsale also will some the to dislocation growth, allowing restrict Beyond profit industry additional is to and this accelerated on some further here moment. coverage in Brian expand provide topic commentary a Haney our in rates, margins.

we the Petrucelli. profitability over in don't position virus on mix And materially from the virus book, in COVID-XX and the now, to year. turn or Bryan of the in Because limitations expect hasn't impact earlier Our the changed call business growth. I'll sales, our coverage of the to

Bryan Petrucelli

Mike. Thanks

resulting third increase a year. million ratio offset million $X.X income $X income, last point XX% The quarter. year. third of by company of to were the of We excludes losses. $XX.X returns, approximately on cat volatility by XXXX somewhat income included our As losses. operating last million to significant XXXX, reserve net when million business. losses from than Mike $X.X the included and $X.X Net generated in in losses an for underwriting operating $XX.X offset reported down million, compared of compared an year ratio primarily prior from XX.X%, $XX compared and by net of continued from cat million, activity combined were last the the due the and lower a XX% the increases and variable The X.X investment the gains compensation, quarter the of after-tax representing million these growth almost noted, cat favorable and from to which losses mind million during net just increase Net Keeping combined had equity year, income quarter. cat and the in development, quarter the QX investment quarter third in impact for of income $XX.X the less in points year, investment for earnings, results lower and last a to loss

for first months with offering. written operating nine exercised year increase the XX.X% cat from to effective in to compared for combined balance, and X.X% the higher by Annualized year, primarily and XXXX a all the mentioned. $XXX our impacted tax XX% tax representing Gross million, million we Mike the equity on was benefits for discreet both losses so resulting August were over last proceeds return was to previously for equity $XX related reason from far, the last options larger received premiums during the period. net quarter, year XX.X%, average of Our XX% income the equity stock lower a

combined was from share investment on was a the quarter investment year. both last per and the to share give equivalents note and Annualized the third $X.XX last quarter, for operating cash the net the gross that, business adjusting approximately returns, per $X up adjustments been the increased cash continued last annualized would premiums variable some investment income over XX%. perspective of portfolio. losses quarterly million per share And of including and per per this the activity, been approximately quarter. nine to months side, would the and result pass and in underlying company's have investment million to the return company's reinstatement, it XX% and compared for the Important I'll year Diluted ratio been for growth of the to last. first earnings to would to been to year, themselves, net have have performance on the approximately X% impact equity reinsurers, paid million, Haney. with operating over Quarterly excluding share related $X $XX.X for XX%, On Brian cat have and approximately year, by share earnings diluted $X.XX would of earnings operating $X.XX as compensation,

Brian Haney

Thanks, Bryan.

the in earlier, premium XX% mentioned As grew quarter.

growth are across seeing the We board.

particular our part fullness we restrictions of an on because market additional as will COVID-related mentioned, number of recently The be by pent-up some a to those still and in in sciences life environmental see harden overall should we business being however, I on, the expect and businesses shut]. time loosened, have caused example opportunities. should canceled the see Mike economy, activity, accounts affected which continues up Our is to [be expect that are going in [E&L] to illustrate The a the recent and of One impact pandemic. we significantly to admitted economic of XXXX. what a continue positive release lawyers through which insurer restrictions. program,

things help market, go will end which to Some many Two other as when really in lines it carriers, us market for but us. of the surplus the creates up accounts now admitted doing. turns opportunity more those will is

adjust sell to but are our tougher are market], rates correct problems on rates In we become the in focus sell. more competitors books this with sell higher market. their in a of [harming to business, competitors which easier tend we doesn't than would tailored which rates, [indiscernible], be market, Similarly, soft when our to restrictive coverage. become to seeing their south in First, narrow a well as our competitors

So, One put finding exclusions, Many of have example well our is COVID not did. the exclusions casualty to insurers easier usual but of We those tougher business. a to competitors virus We of a or long us. exclusions. our implemented and to such on we forms in this when property sell. it bit would are fact prior many coming use was pathogen had coverage and virus-related market sell be our

commercial interest or these is new segment, have business. We quarter. our Submission lines few a products to a line, Now lot recently Among started more a about are following a that but These we in approach, are have expansions XX% still find incremental new hard-to-place adopting aviation our was we either we model segment. product products. recall our product mind to the and launched surplus there launch. are from in business growth competitors keep quarter last auto do the unchanged segment, in essential Kinsale basically

we are still conditions. market up for rates, pushing to in response As them

to have being to said, which [heterogonous] a very rate number, we XX% As back getting that, but conditions, pure the a beyond to should rates terms Even single we And bottom the the which movement further all with line. Mike. XX% in over even to reducing aggregate contribute complicates we during up reminder, quarter. it that being turn tightening the more all rate and are one see book-of-business, I'll

Michael Kehoe

we're Operator, now Q&A. ready for Brian. Thanks,

Operator

JMP you. Instructions] of comes Thank with from Your Securities. [Operator Carletti the first Matt line question

Matt Carletti

morning. good Thanks,

Bryan Petrucelli

Good morning, Matt.

Matt Carletti

trend, your environment, questions. rate how you wanted [indiscernible] with specifically – of loss I of just Couple if versus little stable. comment know kind you seeing to has quite start you're and been ratio pricing the of a bit

it kind of plays about you you're Are lot How building that maybe a of there think like the mixed seeing that a cloud are pricing. little? changes forward? of indications getting out? Or going to And kind there see other you place and be waiting taking we that You're just things how should that might picture are margin?

Bryan Petrucelli

would probably are X% range. the like imply a trends, I say, We've to Obviously so in XX%, you said margin. I higher rates, would XX%. that Yeah, seen know, up X%

is up. implied very But, show that one]. in increase [that's immediately margin Our process reserving so doesn't conservative

Matt Carletti

Got you.

Michael Kehoe

I add]. reminder, is say, wanted was Mike. just as going a this [I just to to just

build than to goal favorably You develop are reserves unfavorably. much know, to develop more is our always to that likely

that's dynamic think, just spoke you you what's that And I driving so, conservatism. to, know, know, that the Bryan

Matt Carletti

across on a during then historic with it activity cats broadly great. touch the the And mean, Okay, wanted quick. understanding frequency that was to sector, quarter. real of I pretty the the I

we long you you're go very thing of willing before with think is we Does, loss think result, you that where you the back did understood that how fine I to the risk? that it ways sort the about and there? to the that any and given different to infrequently volatility, of frequency. take happens in have a well kind way cause or such that potential, than something before that And find quarter aggregations a was

Michael Kehoe

overlaying one would any individual we underwriting volatility. that of that know, past to percentage outcomes if I years, limits know, in given, cat we, just than in manageable are not on compelling. that fairly think you several reinsurance our in combined on lot think the against the of we do actually that area. points in they And We're terms today the well. were buy concentration Yeah, is then mindful we also as you know, volatility that risk see quality say, of even I approach the look pretty and more know, a we like the very very And strict actually know, the business, reward margins events, I you the a at that XX conservative kind but fact really of kind you all And the disaggregate of have a business. you a of the approach, protect business you

risk unprecedented, it's and of activity quarter, with. a that we're amount So, it's you that that you not a it's unusual but would in certainly know, certainly have comfortable

Matt Carletti

one probably for great. last question, And Bryan. Okay, numbers

You good it, well. the growing in travel there's that's quickly, and you're little savings big imagine quite and sorts as the expense of going quarter. mean, Can otherwise, scale, ratio imagine getting of I'd on a but some obviously there's unpack you some maybe is those I also everything with that you're piece the know bit? pandemic

feel for of, somewhat that So, much a how of more kind is how temporary? know And that a of just sustainable trying much to you is get level?

Bryan Petrucelli

things. the it the really Yeah, what's own impact. areas variable One, hiring, of then to the continuing And is. really hire of rate that because sure. two you not have driving, for in Certainly but aren’t accrual know, depressed Really, IT there's cat beyond an was we're dollars doesn't, that, much quarter at but – the anyway. it small folks know, losses. our and It's travel, reduction doesn't in those been you a comp our premium primarily, we're claims increasing costs underwriting it's

I there. those about scale of economies some two between gaining are we it's So, half half say buckets. would and

Matt Carletti

best Okay, all color very Thanks great, forward. helpful. going for the of and luck

Michael Kehoe

Thanks, Matt.

Operator

question Hughes the next of Your from comes Mark with line Truist.

Mark Hughes

morning. Good you. Thank

Michael Kehoe

Mark. morning, Good

Mark Hughes

did agreement that premiums. much what then reinstatement And of substantial the that? enough You hit mentioned events reinsurers? impact? to Was that these the reinsurance one was How there was

Bryan Petrucelli

not wildfires [seeding] fell agreement subject the insurance related XX% under the reinsurance reinstatement Yeah, on share $X.X risk quarter our the book reinsurance is policy. premium personal to into our for really entered itself, we're per Mark, of million, The the that whereby and off. in that we is quota to June, that

if have, on policy. you look losses, the you seeded know, was the to was the seeded-off that We did per wildfires. of so, And off that hurricane risk XX% at on some

Mark Hughes

much How out wildfire were roughly? the just curiosity, losses, of

Bryan Petrucelli

the individual $X cats were to in All $X range. million that million

Mark Hughes

you. Got

about auto. the auto quite past not commercial was mentioned heard volatile in You Mike, that commercial pricing you adequate. talk I've and it

you update – time comment us on I is at the point? last attractive the it, an think heard what I give on you could this

Michael Kehoe

into XX writing know, ever it in cautiously very that ago. commercial we've because years since of done went business market. we've that we you mean, the Yeah, I challenges auto just It's been

I now, incremental creates number for markets think what underwriting and been think I more a little see bit Haney where approach, expansion. just some of obviously opportunity in Brian that's speaking for focused which to, a that we understands shambles that, everybody opportunities, years was

Mark Hughes

XX% that think last you When continues that Haney, harden. the to to had look to I rates, to I you Brian similar your quarter. XX%, mentioned probably market think

to you would curious market. I've our to more quarter hardening saw that that through you the on be way the at sort heard rate of helpful? how your a that of sense think hard maybe traditional I point, I’m progress get we’re this suggest just of of

Brian Haney

that that anymore. mean, to in accounts. I space to programs used We now mind, opportunity, business shows say that think be getting overall accounts and programs of and now be its admitted see don't in not mean, we’ve expect would ours hardening used the at in the I with keep I are accelerate, some wouldn't expect peaked. with up just I of rate. along space don't same do that is or I I Yes. to hardening it. are the to I accounts in our are with so rates just more – to industry done. we're go think some

Mark Hughes

it's of so still of terms rate in Peaked the increase, accelerating?

Brian Haney

the I – either rate has industry don't think I of the yet. Kinsale or increases don't peak market think hard reached

I think probably that's or going XXXX to in later. happen

Mark Hughes

just a I'm if that looking a higher at influenced bit premium, a this that? properly, or seeded what the it was was property excess little then, of And more mix quarter, little

Michael Kehoe

Yes.

think of, and I a reinstatement it's the one, combination Mark, premium, then…

Mark Hughes

Okay.

Michael Kehoe

in mix [indiscernible]. property yes, our casualty then, commercial And the of business, you know, growth business excess and

Mark Hughes

as premium? So, does premium up that reinstatement show seeded

Michael Kehoe

Yes. Under earn], our [unseeded yes.

Mark Hughes

Yes.

Anything of on frequency actually developments, good. topics? the in Very loss Okay. any claimed social thoughts inflation about the those quarter, kind

Michael Kehoe

of in about that. and see social We're don't to year really that know, talked You inflation ahead we've every our mindful trend, our obviously of past. we the book. impacting cost rates adjust loss stay We

with claim frequency, as been, the this frequency balance clearly there of say in parts statements well. you across think has associated you the or drop-off shutdown and, of slow a not frequency of Kinsale In sheets. economy, terms COVID I has that the our the down is industry, I noted in – know, would impacted that, our up income in know, shown that’s our virus,

in are we're haven't these early come. is going know, reserving it's down whether – claims no because tell You come I – don't too to there it's that slow think to as

take up is there's just period permanent, this in You accidents a a know, advantage the for number to know, of company you quick a certain that going and or place. be the catch didn't future

see of taking wait So, of kind terms the and and in conservative reserving future terms path the what we're frequency. holds of we're more reserving – in

Mark Hughes

much. very Thank you

Michael Kehoe

bet. You

Operator

the William comes Jeff question Blair. of with line Smith next from Your

Jeff Smith

morning. good Hi,

Michael Kehoe

morning, Good Jeff.

Jeff Smith

development maybe X%, thought new ex-cat your to a sort a the and historical maybe X%. that obviously thought sort basis for back but on the to positioned now your follow-up trends, about that seems on loss year-to-date. go ratio a – a the above couple Just and like favorable And from XXX more that? of [indiscernible] this that Is hundred loss up move like rates here thinking a X%, of it X%, is of bit quite points, maybe cost are just

Michael Kehoe

Well, in experience. favorably when know, post you going are just to you would to business goal you again, over volatility time. Mike. can this I is And reserves some going – think I XXX% those very confident year-over-year our never reserves I quarter-over-quarter, know, you there's say in variability property – you sure, that or but there is also the cat. that is compare say, be develop were know, natural beyond some we're our to mean,

know, is don't of know, you be think time. you on was ratio of And XXXX. quick it the so, pretty quarter, want that develop second that the think just good with the to over news. – We would to downward I the to year we yes, And, where I expect accident for spot kind quarter too recognize,

Jeff Smith

shakes Okay. But of it's plan I of what sort it it – to is out? no is specific whatever sort mean,

Michael Kehoe

Yes.

Jeff Smith

And first you then, that XX% expense XX%, the of a run and on think comp. That you half better the going decline is more just kind the forward? like to said, the assumption sort is rate half, safe variable that maybe a due in run lower was about I ratio, of implies instead of rate know, that

Bryan Petrucelli

expect. ongoing an range basis, XX% Yes, I XX.X%, what that, on you know we've would that in I would past in say, this think commented is on somewhere the we

stand. again, moving to quicker the our you we know, the certainly more know, business technology, but than are growth You in much invest continuing in is

Jeff Smith

Okay. in And you personalized Aspera rate in of growth book? what getting the then, are type just in

Michael Kehoe

yes, and that's higher, probably cat XX to XX anything overall, it's exposed.

Bryan Petrucelli

would like XX XX to don't exact have [something would – I figures. have I something I around]. or the have said Yes.

Jeff Smith

for Okay, the answers. great. Thanks

Michael Kehoe

Jeff. Thanks,

Operator

Capital of from comes line question RBC Markets. Mark with next Dwelle the Your

Mark Dwelle

morning. good Hey,

Jeff… think I

Michael Kehoe

Good morning, Mark.

Mark Dwelle

Jeff just think your to know, got like One reserves the I and of within contribute you most casualty, questions, I but any of a way develop, business? likewise? long been anything mean, shift any the couple the but [the my mix different cetera? et in that overall more will that has – still actually just, to would – tale] any left. there thinking of snagged of about mostly it's question take How I classes, will notable obviously,

Michael Kehoe

going mean, rates. into, divisions You they're always know, some our have to variability always growth team be there's I in we different the divide – mean, going I that to underwriting

two, think at excess brisk has our year pretty unit the You know, commercial in the I last book. casualty pace, or grown a property

I fact think experienced, the the life of science you know, outsized that Bryan during the the touched bit pandemic, a environmental divisions little on growth. and have

I this general, little growth strong portfolio. but, across seeing in think rate to abate that's up a late, the we're starting bit know, you double-digit

So you know, know, I – think of than, can't say, other you highlighted. what you I'd I just there's know, anything

Mark Dwelle

change in know that real business, in relatively And been I whatever the then, any lifts any increase notable average average larger crust kind premium coming know, size but you’ve you always, in premium play, your there has similarly, any way? account that mean, opportunistically I taken that's of way?

Brian Haney

[indiscernible]. I larger would are sort also no. but of account areas business some personal in more some small there's say the accounts, overall, smaller business probably like that There's or growth seeing

Michael Kehoe

Yes.

sized is is So, strike one some tightening still of market things we opportunities and a some do zone our policy. larger small-to-medium get day-to-day But transactions. the that nice about

count, you on is kind but at and and little range, smaller everything premium things we're policy more going $XX,XXX and up. XX, look butter exclude to is almost significant, But $XX,XXX personal a still transaction know, it's write of the know, and under, count, insurance. be that you a you to we bread the If bit our if you by in $XX,XXX

in personal mix, the include obviously policies. you smaller are insurance those If the

$XX,XXX policy, think on us I under that gets per average.

Mark Dwelle

anything Alright. remained Okay. environment other changes, any or yield dismal from at investment standpoint, just changes you're was about, there? thinking differently further has question Only anything best? Recently, any an in doing the you're mix

Bryan Petrucelli

say is I’d Mark, materially this Bryan. And changing there. nothing

Michael Kehoe

on quite You conservative as investment And know, yes, continue. we're know – said, you Bryan that'll Mark, the side.

Mark Dwelle

much very answers. the for Thanks Okay.

Michael Kehoe

Thanks Mark.

Operator

line from comes with question Ducharme Your next Sterling Colin of the Capital.

Colin Ducharme

give taking seeing questions if trying for my of can been quick previous by release, a for the just answered, I Quick Not some division, question. good any there? Hi, but additional morning. where reserve one, because color strength to you're for you Thanks most have looking roll with us may, get Bryan Petrucelli, color. again, releases call one the here,

Bryan Petrucelli

Hey, the Thanks for question. Colin.

that, are down know, reserves at speaking, I You – of favorably you generally level, things say disclose across we at line business that don't most but our the would business. of lines developing know, just our

Colin Ducharme

our would be a so I guess, strength Okay, reserve there, from fair broad from a characterization, standpoint standpoint? just based

Bryan Petrucelli

Yes.

Colin Ducharme

the understandably or just Again, to in you Okay, the that going acceleration. off quarters? outs, for talked Haney, think as level disclosure that's strength you out looking some environment sciences thanks. rate maybe forward in the of the from And half now, months. then, here in terms color set terms to during just know, division-by-division any divisions perhaps trying next and but about we called cooling of kind the the just in We're forward as call divisions are next pandemic, XX portfolio, roll You here, which life seeing few at peers. we for looking or some Brian again, not Mike but about certainly you hearing standouts of for of

Michael Kehoe

I'll start then and to I'll hand it Brian.

the know look the fact the average fact where pronounced the to probably at you pretty that hey, growing whole portfolio, of favorable now property than even is it's there. a the hey, we're faster pronounced, don’t you rate I know, if market, that, Brian… but, growth across which kind getting speaks is If commercial most is outsized indicates, this

Brian Haney

insurance I or are And the what you would outliers, commercial property to the continue in I to quarter, certainly you would just Yes. industry, that going of happened just not personal given if say, [indiscernible] outliers. expect think be about accelerate. definitely know, and

most been rate rest up but a point, of in terms competitors of long the – of had the industry the our they I and most been were for probably to of profitable in time, our lagging insurance too. – professional certain increases, sort they're lines Some a but starting catch think they've for of of for stable

are we board pretty So, across saying the intense of question a we’re like – just them. we're I just increases. great a how is much seeing It's mean,

Colin Ducharme

it. Got

helpful. know, E&S of going forward, kind has markets in largest through then, you strategy multi-year that's here the restructuring And final process. Okay, player of attacking terms been thoughts just a and

As others, terms we if all scenarios know, if ownership really some now know, the just a a Kinsale, We've see there's pretty it happening there. also for history you of could a creating among shared announcement been anticipated has that's Number the restructuring those will, you player I'm there. Perhaps, trying is benefited. some you X pie, the in significant large seems chunk opportunities that, with gotten and you're from – Mike, potentially viewing compare opportunities? conditions jump like which to us to you know, way lesson like just give for there's notes also if balls of

Michael Kehoe

of unique ways. look think I two One, model. at a Kinsale it bit a I Colin. business Yes, has little

you to If there. behalf consider typically the managers to issue, the underwrite of companies do by authority underwriting that that most accounts program that write [indiscernible] outside small parties, business or on delegating risk [NGAs], so fact

drive think hey, and drive job is, our a managing can better underwriters result. we also a broader model We do can risk appetite. much a by we Our that we can we think with better own

brokers, guidelines. your your have rigidity to to If introduce definition, by you you're underwriting underwriting almost authority to some delegate to going

we're right, offer loss we we do things think cost the and a offer to driven us, or by this we allows can ratio But propensity at an quality a And that again, can absolute of provide you and there's brokers then, of also advantage, to – underwriting, service of it we your our technology we're your the call do. to underwrite flexibility to to combining business. And of drive haven't better that with that more our brokers. drive given competitors costs. controlling bind with, us some up that so, our able down a yes, And able lot technology kind levels. between maybe to allows service the the moment piece to correlation aren't And

our So, what's, we you've some advantages restructuring they that, apart and have durability competitors I that's think other we to them. it, quarter. up The continue, you we got low-double Separate know, expect XX% extraordinary got to think, I'll real call experienced growth certainly from our you think know, driven and and rate models through some the from, growth, for the we XXXX. the, digits into

we but, interesting really know, capital But point, like. we're know, industry at and think You into don't some market this hard you beyond obviously, definitively, abate even comes that model know little new cost as we've the an experiencing, that, we the know, got will cetera the longer term controlling underwriting business around from makes a the and play. this competitors that's a bit you differentiated et it

Colin Ducharme

the of peers new know, from auto frankly, to then, several Absolutely, called in other drilling quite and Those aviation. previous questions who down attempted potholes, analysts, question, put the for one you delicately definitely in opportunities final out differentiated. you on share. commercial have grow And have,

drill given little with peers? auto, Thanks. some Kinsale from just trying preserve those differentiation to the attack highlighted, but spaces about You other and talked the of kind how again, to a some differently you we've just history those into intending you're commercial seen already the of as has you avoid potholes that underwriting bit profitability perhaps

Michael Kehoe

to been trucking all business. Alright. I'm done example is business. we've we've for we auto any down ridiculously very levels, writing years going XX We've Bryan, hey, didn't going is, rates low but Colin, got been say I'm carefully. to Mike. get One obviously this it commercial that I just would in the to trucking start when write

talking we're underwriting teams bit of all to Okay, focus a this more hey, so, kind a is our organization about on here have of area. little a

Bryan Petrucelli

business is just accounts. of Yes. know, say, model we would you lot think] I write smaller generally a yes, [I

you aviation, smaller a is of doing. towards opposite if aviation We are great related and things Airlines]. there's so, what that in the like, in a auto, aviation And your [insurance exact there. things airports That it to if you manufacturers of or mind business know, lot near commercial Delta think space the and accounts you contractors think think we're hey, working space. naturally There's gravitates like, around could be the opportunity

we’re I fill trying think trying to [incremental, offering. what again, less focused mind, really and our market. our just not trying of product expansion] doing, keep works approach We're We're the in the so share in market we're just of its on and share. sort it's And volatile. probably market we're – not it's grab to cornering gaps well not in

general, an if something it. it, to we'd doing E&S we we written do basis is can like know, and You money in on make think

Colin Ducharme

Thanks.

Operator

question comes of Point. next Alexander from the Compass with line Your Casey

Casey Alexander

Hi, and taking that that thank bit, business part down what particular of admitted you my about the you're have morning, of a that carrier you talking and discussion so that is broaden questions. creating their I a you shutting could opportunity, little discussion better good understanding little for about? gave just The a

Bryan Petrucelli

to retail they admitted you to company way, go want a company and and so Yes, preferred preferred admitted commercial think insurance about wants to buyer a goes a the typical this the risk. agent,

don't to brokers but will times, go of to companies those find well. lot pen a then so, give out And the preferred things risks, these

coverage. next deals anymore, they to contract. They But can't that those to year. going through MGA So then, get the can't have preferred the go buy – still preferred price, get can't they they're insurance an

is to going company somewhere a business find be us. of that agent know to they’re like going brokers you and – to have to wholesale of place to to a the cancel have lot times go to come them. their going do They’re, scrambling renewal, which we broker, a to the they when majority to program, at So, with is

basically, never see, through admitted So longer available is it think rather we going much because the program market you them it way, this they coverage. price that – that buyer a in if business the about would get rather program, the and broad is until cheap much the – for would no

start our market in you these submissions – up see. never we now all why hard we that's had So, which a because shoot seen, submissions, to see in

at. us business more all take Now it's them, don't not swing to we bind it but of a becomes for

Casey Alexander

Okay.

Michael Kehoe

you're happening going this lawyer’s And that the because it and on [indiscernible] discontinued. a for think it over wasn't But case, program Casey, re-underwriting books somebody, was working I it's the carriers business. in industry, obviously, so all of seeing, was across And place. are

million for company put used you $X a reduced need Sometimes up that know, to that find, of and just million cut capacity. $XX a $X million. policies new they Well, excess carrier. limits from out go and There's additional they've carriers to to buyer, standard the

it. Standard all it's know, are Even companies of kind a over triage non-standard You in industry. are doing books of happening the business. companies

the of know, we lot Kinsale about over you the not so, the we're thing is underwriting course of discipline anything. a soft nice maintained and And discontinuing cycle

we're on margins. has a consequence, know, at growing business to, this off as lines. underperforming fixing attractive you Our thrown focused as And very point, opposed

Casey Alexander

you talking my thank that. broader thought misunderstanding that for a I trend, you're and about get about Okay, was talking And carrier because you more a that. were I specific so industry

storm quarter, idiosyncratic know, from probably you're have quarter. and for to the continuing the understand there you been what but, the activity in it's in coming of I claims further Have know continued Secondly, seeing? seen it expectations, you more the standpoint guys the would market helpful any cat in? some early be wildfires have fourth

Michael Kehoe

In write terms would west. lines I the personal California say we of don't business out wildfires,

really So, exposure considerable have we don't a out there.

have expect in pronounced – a best characterize couldn't Napa quarter. have know, in but ready impacted hey, it. quarter we some wildfire quite did I don't is general, But fourth was said, business to being commercial a to I we frequently. Kinsale Valley. we're the would maybe that's that Not than favorable that to get expectations announce really We hit, you a to but that say, the the more way I happen would bit exposure. our Now, anything, say don't think be third that? How to And that we for wouldn't about just

Casey Alexander

much. thanks. That's appreciate Great. I my Thank very questions. fine. you taking right, All you

Michael Kehoe

Okay. Thanks, Casey.

Operator

Thank you.

a have of Hughes Mark with You the Truist. follow-up question line from

Mark Hughes

was anything quarter in you question Thank you fourth answered that. would you. the actually just that and highlight That – my was

So, I'm you. good. Thank

Michael Kehoe

calls? there Alright. Operator, are more Thanks Mark. any

Operator

your is line [Heather] open.

Unidentified Analyst

I Hi, a questions. few have guys.

Michael Kehoe

Heather. morning Good

Unidentified Analyst

have a Do would for more was Do normalized Good CATs. would mean, I quarter? frequency what quarter’s for ratio severity a morning. of you view ratio unusually cat a quarter? what have been you high have on been of that this view more this have in a typical

Michael Kehoe

you the of I those that I the right? lot give volatility, one you with number. quarters, It's – prices, de know, zero as limit minimis said, do volatility, approach, concentration quality adequate either challenge a would that is a a And us CAT this if consistent area. lot buying say a All big or to is charging the its Heather, business in more we you being Mike. most any earlier, not business things know, certainty. But reinsurance, said of a of lot it's amount. limiting underwriting things

company guess, of of You ratio. our was history higher one combined terms know, in the our on I impact quarters, in this

Irma in quarter. same think in a couple and hit Harvey, Florida storms years of ago Texas, I those and the

from I think slightly had impact those a we storms. larger

low no zero lot with XX%, So, would be activity. being cat really that we've somewhere XX%, neighborhood and of the a in the really quarters end, high got

a se. hopefully have you of really you, bit don't gives know, we target So, little a per But guidance. that

Unidentified Analyst

Got it.

Another your been]? business I'm what but about year-over-year business the talking [terms you talk ratio? question, retention the versus So, and about have retention reinsures, could retention not

Bryan Petrucelli

handy to XX% around think is a way Yes, would – going I say, dollars. speaking, in Generally dollars of the be it of to renewal. it's the

pretty the from be next. that's would business it’d So, That year have right [indiscernible]. and of consistent renewal business $XXX the next new renewal $XX

Michael Kehoe

And consistent industry E&S that's across the also broadly.

Unidentified Analyst

up? been going haven't any that there so and changes Okay, isn't ratio,

Brian Haney

material. Nothing

Unidentified Analyst

the got been there that? could And have to is then, it. what last changes ratio any has you about Okay, in you're question, and buying quote talk

Brian Haney

is it to somewhere XX% XX% hasn't bond quote between changed and really and much. The

Unidentified Analyst

Those Thank all it. it. are That's my [Indiscernible] you. questions. got

Bryan Petrucelli

Thanks Heather.

Operator

questions. Mr. there At Kehoe. turn would no call like the are back this to to over time, further I

Michael Kehoe

Thank you, again of in operator. with look And And months. speaking thanks, couple here the everybody forward to call today. us for joining a you on we

Operator

and We disconnect. your that does you conference. now that Ladies participating ask for we and conclude gentlemen, thank today's you

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