Company: KNSL
Filing Date: 2025-10-23
Form Type: 10-Q
Source: 0001669162-25-000058
Chunk: 105

Company: Kinsale Capital Group, Inc.
Filing Date: 2025-10-23
Form: 10-Q
Item: Item 8
Chunk 105
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2025 from $108.4 million for the nine months ended September 30, 2024. The increase in the first nine months of 2025 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 4.3% for both the nine months ended September 30, 2025 and 2024.

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During the first nine months of 2025, the change in fair value of equity securities of $55.4 million primarily reflected unrealized gains arising during the period on our common stocks of $34.3 million, ETFs of $20.5 million and non-redeemable preferred stock of $0.6 million generally consistent with the broader U.S. stock market. 

During the first nine months of 2024, the change in fair value of equity securities of $41.9 million included changes in unrealized gains related to common stocks of $25.4 million and ETFs of $13.2 million and changes in unrealized gains related to non-redeemable preferred stock of $3.3 million. The change in the fair value of ETFs and common stocks during the first nine months of 2024 primarily reflected higher valuations in the broader U.S. stock market and the change in fair value of preferred stock relates primarily to the disposition of certain preferred stock securities in a loss position.

Net realized investment gains were $2.8 million and $6.7 million for the nine months ended September 30, 2025 and 2024, respectively. The prior year period reflected higher gains primarily from sales of common stocks and ETFs due to opportunistic repositioning of our equity portfolio.

Income tax expense 

Our effective tax rate was 20.6% for the nine months ended September 30, 2025 compared to 18.7% for the nine months ended September 30, 2024. 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. The effective tax rate was higher for the nine months ended September 30, 2025 compared to the same period in 2024 due primarily to a lower volume of stock option exercises.

Return on equity

Our annualized return on