Company: KNSL
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001669162-25-000010
Chunk: 85

Company: Kinsale Capital Group, Inc.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 7
Chunk 85
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 through 2023 accident years for lines of business exposed to construction liability.

During the year ended December 31, 2023, prior accident years developed favorably by $35.8 million, of which $49.0 million was attributable to the 2021 and 2022 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due to construction defect claims that are more exposed to inflation.

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Expense ratio

The following table summarizes the components of the expense ratio for the years ended December 31, 2024 and 2023:

Year Ended December 31,20242023($ in thousands)Underwriting Expenses% of Sum of Earned Premiums and Fee IncomeUnderwriting Expenses% of Sum of Earned Premiums and Fee IncomeNet commissions incurred$134,184 9.7 %$113,717 10.3 %Other underwriting expenses151,624 10.9 %115,253 10.5 %Underwriting, acquisition, and insurance expenses$285,808 20.6 %$228,970 20.8 %

The expense ratio was 20.6% for the year ended December 31, 2024 compared to 20.8% for the year ended December 31, 2023. The decrease in the expense ratio was primarily due to lower relative net commissions as a result of higher ceding commissions earned under the commercial property quota share treaty as a result of commercial property premium growth. Direct commissions paid as a percent of gross written premiums was 14.7% and 14.5% for the years ended December 31, 2024 and 2023, respectively. 

Investing results

The following table summarizes the components of net investment income, change in the fair value of equity securities, net realized investment gains and change in allowance for credit losses on investments for the years ended December 31, 2024 and 2023:

Year Ended December 31,($ in thousands)20242023ChangeInterest from fixed-maturity securities$144,834 $94,444 $50,390 Dividends on equity securities6,442 5,097 1,345 Cash equivalents and short-term investments3,012 3,004 8 Real estate investment income153 3,716 (3,563)