Company: KNSL
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001669162-25-000010
Chunk: 99

Company: Kinsale Capital Group, Inc.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 7
Chunk 99
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 not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define underwriting income differently.

Net income for the years ended December 31, 2024 and 2023 reconciles to underwriting income as follows:

Year Ended December 31,($ in thousands)20242023Net income$414,843 $308,093 Income tax expense99,873 75,924 Income before taxes514,716 384,017 Net investment income(150,287)(102,335)Change in the fair value of equity securities(43,367)(15,277)Net realized investment gains(6,831)(6,040)Change in allowance for credit losses on investments(526)187 Interest expense10,134 10,301 Other expenses (1)3,968 942 Other income(1,926)(1,421)Underwriting income$325,881 $270,374 

(1) Other expenses are corporate expenses not allocated to our insurance operations.

57

Reconciliation of net operating earnings

Net operating earnings is defined as net income excluding the effects of the net change in the fair value of equity securities, after taxes, net realized investment gains and losses, after taxes, and the change in allowance for credit losses on investments, after taxes. Management believes the exclusion of these items provides a useful comparison of the Company's underlying business performance from period to period. Net operating earnings and percentages or calculations using net operating earnings (e.g., operating return on equity) are non-GAAP financial measures. Net operating earnings should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define net operating earnings differently.

Net income for the years ended December 31, 2024 and 2023 reconciles to net operating earnings as follows:

Year Ended December 31,($ in thousands)20242023Net income$414,843 $308,093 Adjustments:Change in the fair value of equity securities, before taxes(43,367)(15,277)Income tax expense (1)9,107 3,208 Change in the fair value of equity securities, after taxes(34,260)(12,069)Net realized investment gains, before taxes(6,831)(6,040)Income tax expense (1)1,435 1,268 Net realized investment gains, after taxes(5,396)(4,772)Change in allowance for