thanks for the reply - appreciate your insight on KNSL - I haven't understood insurance cos too well, although invested in KNSL for a while - but never know on which drop to add. I guess there isn't enough analyst coverage either, which is a good thing for now, it let's the stock fall enough every so often (like SWAV, WCC, and a few other's I like(d)).
Thank you! Yeah the slide right above "My Explanation" gives a breakdown of all Kinsale's peer comparison that the company gives. That should fully cover what you're looking for but it did appear smaller than I would've like because I agree that's an important aspect!
Thank you! Lemonade has grown fast as an admitted carrier. However, their combined ratios are above 150% and are highly unprofitable. Kinsale has grown fast from Day 1 but has always been profitable.
Personally, I won't be getting involved with Lemonade (and wouldn't recommend others do either).
William, this is a really great writeup about Kinsale. I have been eyeing on this company and waiting for the right time to add it to my portfolio. So glad that now it presents on opportunity.
One question here:
I am trying to find the explanation from management on why the latest 2024Q1 earnings is lower than the previous quarter. But I just couldn't find any comment on that. Did you find it somewhere? Or did the management mention anything about this?
Thank you for the kind words! Definitely appreciating the opportunity myself to finally add more aggressively.
With some context I think you won't be worried about that. The EPS each quarter is relatively uneven with the Q4 being typically seasonally by far the strongest. If you look up the EPS each quarter, you'll see what I mean.
It's also worth mentioning that EPS was still up 76% Y/Y, which is a pretty impressive metric. Even if it's not Q/Q!
Another great and useful writeup as usual! Thank you! For me, no question it is a great business, but the valuation is still demanding that the company to continue great execution and achieve great growth without any hiccups... Hopefully it'll get a little cheaper so I can invest a lot more and still able to sleep well
Understandable sentiment! I expect growth to continue, although at a much slower rate much closer to the 15-20% guided for by management. For that growth and quality, I’m personally happy to add here. To be fair, I’m also in my younger years and *hope* to be able to hold for the long term.
I would've said yes but I wanted to comment. I now am educated on the E&S insurance business but it would've been helpful to know their direct competitors where I could gauge appropriate metrics for this sector. Also no mention on why the stock has dropped 30% or previously jumped 60%. I like your analysis but I really don't know whether it's cheap or expensive - the mkt is saying there's a problem.
Great feedback! I will make sure to include in the future discussion on price action and return expectations. I think with a valuation of ~7.5 Price/Book, the expectations are still high for the company and it's still valued for future success. However, the valuation has definitely cooled off significantly.
As to direct competitors that are leading the E&S market, that would be Lloyds of London (15.7%), Berkshire 7%, AIG 4.6%, Markel 3.9%, Fairfax 3.8%, WRB 3.3%, Nationwide 2.8%, Chubb 2.8%, Liberty Mutual 2.3%, XL America Cos 2.1%
Hopefully this helps! However, none of these companies are "pure E&S" players so it's hard to compare. The slide that I put on from the IR presentation with the combined ratio gives some comparison to other E&S carriers. Hopefully this is helpful!
thanks for the reply - appreciate your insight on KNSL - I haven't understood insurance cos too well, although invested in KNSL for a while - but never know on which drop to add. I guess there isn't enough analyst coverage either, which is a good thing for now, it let's the stock fall enough every so often (like SWAV, WCC, and a few other's I like(d)).
Loved KNSL writeup - felt that there could be more peer comparison and competition mentions.
Thank you! Yeah the slide right above "My Explanation" gives a breakdown of all Kinsale's peer comparison that the company gives. That should fully cover what you're looking for but it did appear smaller than I would've like because I agree that's an important aspect!
Great analysis and fantastic informative article on the insurance industry (E&S in particular).
I wonder how Lemonade compares to Kinsale. Thanks!
Thank you! Lemonade has grown fast as an admitted carrier. However, their combined ratios are above 150% and are highly unprofitable. Kinsale has grown fast from Day 1 but has always been profitable.
Personally, I won't be getting involved with Lemonade (and wouldn't recommend others do either).
Great write-up! I’m definitely hooked to learn more about the company now :)
Really well done writeup, Will!
William, this is a really great writeup about Kinsale. I have been eyeing on this company and waiting for the right time to add it to my portfolio. So glad that now it presents on opportunity.
One question here:
I am trying to find the explanation from management on why the latest 2024Q1 earnings is lower than the previous quarter. But I just couldn't find any comment on that. Did you find it somewhere? Or did the management mention anything about this?
Thanks a again for your kind sharing.
Thank you for the kind words! Definitely appreciating the opportunity myself to finally add more aggressively.
With some context I think you won't be worried about that. The EPS each quarter is relatively uneven with the Q4 being typically seasonally by far the strongest. If you look up the EPS each quarter, you'll see what I mean.
It's also worth mentioning that EPS was still up 76% Y/Y, which is a pretty impressive metric. Even if it's not Q/Q!
Well written about E&S as well as about Kinsale.
Appreciate it karthick! Definitely was nice to get my thesis down on paper with the industry.
Another great and useful writeup as usual! Thank you! For me, no question it is a great business, but the valuation is still demanding that the company to continue great execution and achieve great growth without any hiccups... Hopefully it'll get a little cheaper so I can invest a lot more and still able to sleep well
Understandable sentiment! I expect growth to continue, although at a much slower rate much closer to the 15-20% guided for by management. For that growth and quality, I’m personally happy to add here. To be fair, I’m also in my younger years and *hope* to be able to hold for the long term.
That was helpful and many thx! Good luck in your endeavours & success.
Chris
I would've said yes but I wanted to comment. I now am educated on the E&S insurance business but it would've been helpful to know their direct competitors where I could gauge appropriate metrics for this sector. Also no mention on why the stock has dropped 30% or previously jumped 60%. I like your analysis but I really don't know whether it's cheap or expensive - the mkt is saying there's a problem.
Thx again for your work!
Great feedback! I will make sure to include in the future discussion on price action and return expectations. I think with a valuation of ~7.5 Price/Book, the expectations are still high for the company and it's still valued for future success. However, the valuation has definitely cooled off significantly.
As to direct competitors that are leading the E&S market, that would be Lloyds of London (15.7%), Berkshire 7%, AIG 4.6%, Markel 3.9%, Fairfax 3.8%, WRB 3.3%, Nationwide 2.8%, Chubb 2.8%, Liberty Mutual 2.3%, XL America Cos 2.1%
Hopefully this helps! However, none of these companies are "pure E&S" players so it's hard to compare. The slide that I put on from the IR presentation with the combined ratio gives some comparison to other E&S carriers. Hopefully this is helpful!