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Here's Why You Should Stay Invested in Kinsale (KNSL) Stock
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Kinsale Capital (KNSL - Free Report) is poised to gain from its focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment. These, along with solid growth projections, make the stock worth retaining.
An Outperformer
Shares of this Zacks Rank #3 (Hold) insurer have gained 14.9% year to date, compared with the industry’s growth of 14.5%.
Image Source: Zacks Investment Research
Return on Capital
Kinsale’s return on equity (ROE) for the trailing 12 months is 31.2%, comparing favorably with the industry’s 7.8% and reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income. ROIC for the trailing 12 months was 25.9%, comparing favorably with the industry’s 5.9%.
Growth Projection
The Zacks Consensus Estimate for Kinsale’s 2024 earnings is pegged at $14.96 per share, indicating a 19.7% year-over-year increase on 27.4% higher revenues of $1.6 billion. The consensus estimate for 2025 earnings is pegged at $17.95, indicating a 20% year-over-year increase on 18.3% higher revenues of $1.8 billion. We expect the 2026 bottom line to witness a three-year CAGR of 20.1%.
The company has a Growth Score of B. This style score analyzes the growth prospects of a company.
Earnings History
KNSL has a solid surprise history, beating earnings estimates in the last 14 reported quarters. Earnings increased 45.7% in the past five years, outperforming the industry average of 10.5%.
Growth Drivers
Premiums should continue to improve, given the company’s strong presence across the E&S market in the United States and high retention rates stemming from contract renewals. We expect 2026 net written premiums to witness a three-year CAGR of 18.3%. Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. It remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Management estimates low double-digit rate increases across the book of business.
Kinsale enjoys the best combination of high growth and low combined ratio among its peers. It targets a combined ratio in the mid-80s range over the long term.
Also, KNSL is well poised to generate an improved expense ratio given its proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business.
Investment of excess operating funds at higher rates in an improved rate environment should drive investment results.
Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
Impressive Dividend History
The insurer has increased dividends since 2017 at a seven-year CAGR (2017-2024) of 12%, riding on the strength of operational excellence that supports a solid capital position.
HCI Group earnings surpassed estimates in each of the last four quarters, the average beat being 139.15%. In the past year, HCI has rallied 10.5%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies 57.6% and 4.3% year-over-year growth, respectively.
Palomar’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 15.10%. In the past year, PLMR’s stock has surged 54.8%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings indicates 25.8% and 16.1% year-over-year growth, respectively.
ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. In the past year, PRA’s stock has lost 2.5%.
The Zacks Consensus Estimate for PRA’s 2024 and 2025 earnings suggests 371.4% and 71.6% year-over-year growth, respectively.
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Here's Why You Should Stay Invested in Kinsale (KNSL) Stock
Kinsale Capital (KNSL - Free Report) is poised to gain from its focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment. These, along with solid growth projections, make the stock worth retaining.
An Outperformer
Shares of this Zacks Rank #3 (Hold) insurer have gained 14.9% year to date, compared with the industry’s growth of 14.5%.
Image Source: Zacks Investment Research
Return on Capital
Kinsale’s return on equity (ROE) for the trailing 12 months is 31.2%, comparing favorably with the industry’s 7.8% and reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income. ROIC for the trailing 12 months was 25.9%, comparing favorably with the industry’s 5.9%.
Growth Projection
The Zacks Consensus Estimate for Kinsale’s 2024 earnings is pegged at $14.96 per share, indicating a 19.7% year-over-year increase on 27.4% higher revenues of $1.6 billion. The consensus estimate for 2025 earnings is pegged at $17.95, indicating a 20% year-over-year increase on 18.3% higher revenues of $1.8 billion. We expect the 2026 bottom line to witness a three-year CAGR of 20.1%.
The company has a Growth Score of B. This style score analyzes the growth prospects of a company.
Earnings History
KNSL has a solid surprise history, beating earnings estimates in the last 14 reported quarters. Earnings increased 45.7% in the past five years, outperforming the industry average of 10.5%.
Growth Drivers
Premiums should continue to improve, given the company’s strong presence across the E&S market in the United States and high retention rates stemming from contract renewals. We expect 2026 net written premiums to witness a three-year CAGR of 18.3%. Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. It remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Management estimates low double-digit rate increases across the book of business.
Kinsale enjoys the best combination of high growth and low combined ratio among its peers. It targets a combined ratio in the mid-80s range over the long term.
Also, KNSL is well poised to generate an improved expense ratio given its proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business.
Investment of excess operating funds at higher rates in an improved rate environment should drive investment results.
Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
Impressive Dividend History
The insurer has increased dividends since 2017 at a seven-year CAGR (2017-2024) of 12%, riding on the strength of operational excellence that supports a solid capital position.
Stocks to Consider
Some top-ranked stocks from the insurance industry are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings (PLMR - Free Report) and ProAssurance (PRA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group earnings surpassed estimates in each of the last four quarters, the average beat being 139.15%. In the past year, HCI has rallied 10.5%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies 57.6% and 4.3% year-over-year growth, respectively.
Palomar’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 15.10%. In the past year, PLMR’s stock has surged 54.8%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings indicates 25.8% and 16.1% year-over-year growth, respectively.
ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. In the past year, PRA’s stock has lost 2.5%.
The Zacks Consensus Estimate for PRA’s 2024 and 2025 earnings suggests 371.4% and 71.6% year-over-year growth, respectively.