Company: KNSL
Filing Date: 2025-04-24
Form Type: 10-Q
Source: 0001669162-25-000027
Chunk: 47

Company: Kinsale Capital Group, Inc.
Filing Date: 2025-04-24
Form: 10-Q
Item: Item 1
Chunk 47
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 some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Restricted investments

In order to conduct business in certain states, we are required to maintain letters of credit or assets on deposit to support state-mandated insurance regulatory requirements and to comply with certain third-party agreements. Assets held on deposit or in trust accounts are primarily in the form of high-grade securities. The fair value of our restricted assets was $3.9 million and $3.7 million at March 31, 2025 and December 31, 2024, respectively.

Reconciliation of Non-GAAP Financial Measures

Reconciliation of underwriting income

Underwriting income is a non-GAAP financial measure that we believe is useful in evaluating our underwriting performance without regard to investment income. Underwriting income is defined as net income excluding net investment income, the net change in the fair value of equity securities, net realized investment gains and losses, change in allowance for credit losses on investments, interest expense, other expenses, other income and income tax expense. We use underwriting income as an internal performance measure in the management of our operations 

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because we believe it gives us and users of our financial information useful insight into our results of operations and our underlying business performance. Underwriting income should 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 three months ended March 31, 2025 and 2024, reconciles to underwriting income as follows:

Three Months Ended March 31,($ in thousands)20252024Net income$89,227 $98,941 Income tax expense23,084 16,926 Income before income taxes112,311 115,867 Net investment income(43,819)(32,933)Change in the fair value of equity securities(3,038)(18,053)Net realized investment gains(537)(3,866)Change in allowance for credit losses on investments20 (10)Interest expense2,538 2,422 Other expenses (1)660 1,963 Other income(674)(319)Underwriting income$67,461 $65,071 

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

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Reconciliation of net operating earnings

Net operating earnings is defined as net income excluding the effects of the net change in the fair