Kinsale Capital Group Inc (KNSL) 2025 Q1 法說會逐字稿

Thank you for standing by, and welcome to the Kinsale Capital Group First Quarter 2025 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. Before we get started, let me remind everyone that through the course of the teleconference, Kinsale's management may make comments that reflect their intentions, beliefs and expectations for the future. As always, these forward-looking statements are subject to certain risk factors, which could cause actual results to differ materially. These risk factors are listed in the company's various SEC filings, including the 2024 annual report on Form 10-K, which should be reviewed carefully.

感謝您的支持，歡迎參加 Kinsale Capital Group 2025 年第一季財報電話會議。（操作員指示）提醒一下，本次電話會議正在錄音。在我們開始之前，請允許我提醒大家，在電話會議過程中，金塞爾的管理層可能會發表反映他們的意圖、信念和對未來的期望的評論。與往常一樣，這些前瞻性陳述受某些風險因素的影響，可能導致實際結果大不相同。這些風險因素列在公司提交給美國證券交易委員會的各種文件中，包括 2024 年 10-K 表格年度報告，應仔細審查。

The company has furnished a Form 8-K with the Securities and Exchange Commission that contains the press release announcing its first quarter results. Kinsale's management may also reference certain non-GAAP financial measures in the call today. A reconciliation of GAAP to these measures can be found in the press release, which is available at the company's website at www.kinsalecapitalgroup.com.

該公司已向美國證券交易委員會提交了 8-K 表格，其中包含宣布其第一季業績的新聞稿。金塞爾的管理階層可能也會在今天的電話會議中提到某些非公認會計準則財務指標。您可以在新聞稿中找到 GAAP 與這些措施的對帳情況，該新聞稿可在公司網站 www.kinsalecapitalgroup.com 上找到。

I will now turn the conference over to Kinsale's Chairman and CEO, Mr. Michael Kehoe. Please go ahead, sir.

現在我將會議交給金塞爾董事長兼執行長麥可·基霍先生。先生，請繼續。

Thank you, operator, and good morning everyone. Bryan Petrucelli, our CFO; and Brian Haney, our President and COO, are both joining me this morning for the call. We will each make a few comments and then take any questions you may have.

謝謝接線員，大家早安。我們的財務長 Bryan Petrucelli；我們的總裁兼營運長 Brian Haney 今天早上都將參加我的電話會議。我們每個人都會發表一些評論，然後回答你們可能提出的任何問題。

In the first quarter of 2025, Kinsale's operating earnings per share increased by 6% and gross written premium grew by 8% over the first quarter of 2024. For the quarter, the company posted a combined ratio of 82% and an annualized operating return on equity of 22.5%. These results reflect strong profitability in our business generated from our disciplined underwriting and low-cost model even with the significant catastrophe event occurring in the quarter. The Palisades wildfire loss that we estimated in February at $45 million is now estimated to be about $41 million gross and $22 million net of reinsurance. All these numbers are pretax.

2025 年第一季度，金塞爾每股營業收益較 2024 年第一季成長 6%，總承保保費成長 8%。本季度，該公司的綜合比率為 82%，年化營業股本回報率為 22.5%。這些結果反映出，即使本季發生重大災難事件，我們嚴格的承保和低成本模式仍為我們的業務帶來了強勁的獲利能力。我們在二月估計帕利塞茲山林火災損失為 4,500 萬美元，現在估計總損失約 4,100 萬美元，扣除再保險後淨損失為 2,200 萬美元。所有這些數字都是稅前數字。

As a reminder, Kinsale has a considerable presence in the natural catastrophe market, but we operate with a conservative risk management approach to balance the margin in the business with its inherent volatility. We use a disciplined underwriting model, a robust reinsurance program, regular cat modeling and strict limits on concentration of business to limit the volatility of our financial results. We view the outcome of the Palisades wildfire as consistent with this strategy.

提醒一下，金塞爾在自然災害市場佔有相當大的份額，但我們採用保守的風險管理方式來平衡業務利潤與其固有的波動性。我們採用嚴謹的核保模式、穩健的再保險計畫、常規的巨災模型以及嚴格的業務集中度限制來限制財務績效的波動性。我們認為帕利塞茲野火的結果與此策略一致。

Growth in premium in the quarter was 8%, slightly below our expectations of 10% to 20% across the cycle. This growth rate was mostly driven by the 18% decrease in our Commercial Property division, which was our largest underwriting unit last year. Note this underwriting division grew twentyfold over the prior five years, and has produced compelling profits, but now we are seeing more intense competition, including from some standard companies and rate declines from the peak of about 20%. The margins in this business are still strong, but we do expect to write less premium compared to the prior year for the near term. If you exclude the Commercial Property division from the calculation, Kinsale's direct written premium for the quarter grew by 16.7%.

本季保費成長率為 8%，略低於我們預期的整個週期 10% 至 20%。這一成長率主要是由於商業房地產部門 18% 的降幅所致，該部門是去年我們最大的核保部門。請注意，該承保部門在過去五年中增長了二十倍，並產生了可觀的利潤，但現在我們看到了更激烈的競爭，包括來自一些標準公司的競爭，並且費率從峰值下降了約 20%。該業務的利潤率仍然很高，但我們預計短期內保費收入將比前一年減少。如果將商業房地產部門排除在計算之外，金塞爾本季的直接承保保費增加了 16.7%。

Also, since the Commercial Property division premium in 2024 is disproportionately concentrated in the first half of the calendar year, we expect this to be a headwind to overall growth in the second quarter as well, but less so in the second half of 2025. It's also worth mentioning that our personal lines and small commercial property teams continue to grow at double-digit rates.

此外，由於 2024 年商業房地產部門的溢價不成比例地集中在日曆年的上半年，我們預計這也會對第二季的整體成長產生阻力，但對 2025 年下半年的影響會較小。另外值得一提的是，我們的個人險和小型商業房地產團隊繼續以兩位數的速度成長。

Overall, the E&S market in the first quarter remained steady, but with a continued increase in competition. And with that, I'm going to turn the call over to Bryan Petrucelli.

整體來看，一季度電氣與電氣市場保持穩定，但競爭持續加劇。現在，我將把電話轉給 Bryan Petrucelli。

Thanks, Mike. Another nice quarter with net operating earnings increasing by 6%, even with the impact of the California wildfires. The 82.1% combined ratio for the quarter included 3.9 points from net favorable prior year loss reserve development compared to 2.7 points last year with 6 points in cat losses this year, primarily again from the California wildfires compared to less than 0.5 point in first quarter last year. We produced a 20% expense ratio in the first quarter and comparable to the 20.7% last year. As we've noted in previous quarters, the expense ratio will fluctuate from quarter-to-quarter, and we'll just continue to point you to the full year expense ratio as a good measure.

謝謝，麥克。儘管受到加州野火的影響，但這仍是一個良好的季度，淨營業收入增加了 6%。本季綜合成本率為 82.1%，其中上年淨虧損準備金成長 3.9 個百分點，而去年為 2.7 個百分點；今年的巨災損失為 6 個百分點，主要還是由於加州野火造成的，而去年第一季的巨災損失不到 0.5 個百分點。我們第一季的費用率為 20%，與去年的 20.7% 相當。正如我們在前幾個季度所指出的，費用率會逐季度波動，我們將繼續向您指出全年費用率是一個很好的衡量標準。

On the investment side, net investment income increased by 33.1% this quarter over last year as a result of continued growth in the investment portfolio generated from strong operating cash flows. The annualized gross return was 4.3% and consistent with last year. New money yields continue to average in the low 5% range with book yields around 4.5%, so we should see some continued investment income benefit from these higher rates as we move forward. Diluted operating earnings per share continues to improve and was $3.71 per share for the quarter compared to $3.50 per share for the first quarter of 2024.

投資方面，由於強勁的經營現金流帶來投資組合的持續成長，本季淨投資收入較去年同期成長33.1%。年化總報酬率為4.3%，與去年持平。新資金收益率繼續平均在 5% 以下，帳面收益率在 4.5% 左右，因此，隨著我們向前發展，我們應該會看到一些持續的投資收益受益於這些更高的利率。每股攤薄營業收益持續改善，本季為每股 3.71 美元，而 2024 年第一季為每股 3.50 美元。

As respect to capital management, we repurchased $10 million in shares during the first quarter. I would expect similar modest levels of repurchases each quarter on a routine basis with larger purchases made opportunistically from time to time. With that, I'll pass it over to Brian Haney.

在資本管理方面，我們在第一季回購了價值 1000 萬美元的股票。我預計每季都會有類似適度的回購，並且偶爾會伺機進行更大規模的購買。說完這些，我將把它交給 Brian Haney。

Thanks, Bryan. First quarter saw growth in our gross written premium of 8%. Our property-related divisions as a whole shrank by 8% while the rest of the company grew 15%. The decrease in the property premiums was driven entirely by our Commercial Property division, all the other property divisions were up for the quarter, as Mike mentioned. The rates in commercial property in this space had reached all-time highs and the margins have become very significant, which is bringing in competition, including from [MGAs] and admitted companies.

謝謝，布萊恩。第一季我們的毛承保保費增加了 8%。我們的房地產相關部門整體萎縮了 8%，而公司其他部門則成長了 15%。正如麥克所提到的，房地產保費的下降完全是由我們的商業房地產部門推動的，其他所有房地產部門的保費在本季度都有所上漲。該領域的商業房地產價格已達到歷史最高水平，利潤率也變得非常可觀，這帶來了競爭，包括來自 [MGAs] 和認可公司的競爭。

That market is now normalizing after a period of crisis pricing conditions in past years. Casualty is still seeing growth overall, particularly commercial auto and general casualty. Professional lines remain competitive with management liability and our non-medical professional under pressure but our Professional Lines group as a whole, still grew for the quarter, and we are seeing positive signs in the allied health and excess professional areas. We are also seeing growth opportunities in our personal line space, whether it be through our high-value homeowners division or in manufactured homes or in traditional site built homes, which are all products we are looking to expand and should provide a nice growth opportunity going forward. New business submission growth was 11% for the quarter, down from 17% in the fourth quarter. This number is subject to some variability, but in general, we view submissions as a leading indicator of growth. And so we see the submission growth rate as a positive signal.

在經歷了過去幾年的危機定價狀況之後，該市場目前正在恢復正常。整體而言，意外險仍在成長，尤其是商業汽車險和一般意外險。專業險種在管理責任險和非醫療專業險種方面仍保持競爭力，但整體而言，我們的專業險種集團本季度仍然實現增長，而且我們在輔助醫療和過剩專業險種領域看到了積極的跡象。我們也看到了個人產品線領域的成長機會，無論是透過我們的高價值房主部門，還是透過預製房屋或傳統的現場建造房屋，這些都是我們希望擴展的產品，並且應該為未來提供良好的成長機會。本季新業務提交成長率為 11%，低於第四季的 17%。這個數字可能會有一些變化，但總的來說，我們將提交數量視為成長的領先指標。因此，我們將提交率的成長率視為一個正面的訊號。

Overall rates were for the quarter were down 1%. As mentioned earlier, our Commercial Property division is seeing rates down about 20%, but our other commercial -- our other property lines are still seeing modest rate increases. Casualty rates overall were up modestly driven by construction and general casualty, and there modest rate declines in professional and some specialty casualty lines where profitability has been exceptional. We are believers in the model of disciplined underwriting and technology-driven low cost. And over the long term, our business model has and will continue to have continue to drive business.

本季總體利率下降了 1%。如前所述，我們的商業房地產部門的利率下降了約 20%，但我們的其他商業房地產業務的利率仍在小幅上漲。整體傷亡率在建築和一般傷亡的推動下略有上升，而在盈利能力出色的專業和一些特殊傷亡險種中，傷亡率略有下降。我們相信嚴格的承保模式和技術驅動的低成本模式。從長遠來看，我們的商業模式已經並將繼續推動業務發展。

Our advantage is particularly in lower cost and greater efficiency are tough to replicate and we feel these give us a durable [moat]. Beyond that, though, there are some recent data points that give us additional cause for optimism. A lot of the more aggressive competition we are facing and that is producing some headwind at the moment comes from fronting companies. If you look at the gross incurred loss ratios for some of these fronting companies, you see a lot of older accident years where the loss ratios are 90% or 100% or higher and continuing to develop adversely. No risk bearer is making money at 100% loss ratio, period.

我們的優勢尤其在於較低的成本和較高的效率，這是難以複製的，我們認為這些為我們提供了持久的[護城河]。除此之外，最近的一些數據也讓我們更加樂觀。我們面臨的許多更激烈的競爭以及目前產生的一些阻力都來自於前端公司。如果你查看一些代理商的總損失率，你會發現許多較早的事故年份的損失率高達 90% 或 100% 或更高，並且還在繼續不利地發展。沒有任何風險承擔者能夠在 100% 的損失率下賺錢，就是這樣。

And while the front-end companies themselves don't bear those loss ratios because they're seeing a way to premium, someone is bearing those loss ratios. And that someone can't keep doing that for long. Kinsale couldn't make money at 100% loss ratio, even with our expense ratio advantage. So you know a risk there that has an expense ratio of 35 or 40 or higher, can't. it's just not sustainable.

儘管前端公司本身並不承擔這些損失率，因為他們正在尋找溢價的方法，但有人正在承擔這些損失率。而且某人不可能長期保持這種狀態。即使我們擁有費用率優勢，金塞爾也無法在 100% 的損失率下賺錢。因此，您知道費用率為 35 或 40 或更高的風險是不能存在的。這是不可持續的。

And beyond that, some of the same fronting companies showed current accident year gross loss ratios in the low 60s, that is a remarkable, you might say, incredible improvement. It seems difficult to believe a business that was producing 90% or 100% loss ratios with persistent and significant adverse development as recently as 2022, could be in the low 60s in 2024. All this data is public, by the way, so I invite the listeners to look it up for themselves. It's eye opening.

除此之外，一些相同的代理公司顯示本年度事故總損失率在 60% 以下，這是一個顯著的，可以說是令人難以置信的改善。似乎很難相信，一家在 2022 年虧損率高達 90% 或 100% 且持續嚴重不利發展的企業，到 2024 年虧損率可能會降至 60% 出頭。順便說一句，所有這些數據都是公開的，所以我邀請聽眾自己去找。真是讓人大開眼界。

And so for all these reasons, we remain optimistic. Our results are good. Our growth prospects are good. And as the low-cost provider in our space, we have a durable competitive advantage that should allow us to continually gradually take market share from our higher-expense competitors while delivering strong results and build wealth for our investors. And with that, I'll hand it back over.

因此，由於所有這些原因，我們仍然保持樂觀。我們的成果是好的。我們的成長前景良好。作為我們領域的低成本供應商，我們擁有持久的競爭優勢，這使我們能夠不斷從高費用競爭對手手中逐步奪取市場份額，同時提供強勁的業績並為我們的投資者創造財富。說完這些，我就把它交還給你。

Thanks, Brian. Operator, we're ready for any questions in the queue.

謝謝，布萊恩。接線員，我們已經準備好回答隊列中的任何問題。

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Your first question comes from the line of Michael Zaremski from BMO Capital Markets. Your line is open.

謝謝。我們現在開始問答環節。（操作員指示）您的第一個問題來自 BMO 資本市場的 Michael Zaremski。您的線路已開通。

It's Dan on for Mike. First, I can just start with the 11% submission rate that you gave us. Could you maybe parse out how that's trending between property and casualty lines for us?

丹代替麥克上場。首先，我可以從您提供給我們的 11% 的提交率開始。您能否為我們分析一下財產險和意外險之間的趨勢？

The commercial property is experiencing the biggest decline in growth rate. And Dan, I would say the rest of properties submission growth continues to be strong.

商業不動產增速下滑最為明顯。丹，我想說其餘房產的提交增長持續強勁。

Consistent with cash.

與現金一致。

Yes.

是的。

Okay. So small property is in line with casualty and the large account is materially declining, correct?

好的。那麼小額財產與意外事故相符，而大額帳戶則大幅下降，對嗎？

Yeah.

是的。

Okay, thanks. And then on -- more back to the property slowdown this quarter, you're mentioning the increasingly competitive environment. Does that comment mean E&S business is flowing back to the standard market? Or are those standard line carriers writing more business on an E&S basis?

好的，謝謝。然後——回到本季房地產市場的放緩，您提到了日益激烈的競爭環境。該評論是否意味著 E&S 業務正在回流到標準市場？或者那些標準線路營運商是否在 E&S 基礎上開展更多業務？

I think it's, in general, a lot more competition in the large property account space, including standard companies, MGAs, E&S companies, et cetera. The returns there have been dramatically good, and it makes sense, right? It's attracting a lot more capital. And as a consequence, the opportunity is slightly more limited.

我認為，總體而言，大型房地產帳戶領域的競爭更加激烈，包括標準公司、MGAs、E&S 公司等等。那裡的回報非常好，這是有道理的，對吧？它正在吸引更多的資本。因此，機會就稍微有限了。

Thank you.

謝謝。

Your next question comes from the line of Bill Carcache from Wolfe Research. Your line is open.

您的下一個問題來自 Wolfe Research 的 Bill Carcache。您的線路已開通。

Thank you. Good morning. Your stock is down over 10% premarket. It seems largely on a continuation of the decelerating top line growth theme, which feels like it's been under scrutiny for a long time. But it looks like the top line growth comparisons are going to get easier as we progress through the year, as you pointed out, and that should help mitigate the growth headwinds. But what I think is notable is that many investors have called attention to is your ability to more than offset top line weakness with a lower combined ratio.

謝謝。早安.您的股票盤前下跌超過 10%。這在很大程度上似乎是營收成長放緩主題的延續，感覺它已經受到長期的審查。但正如您所指出的，隨著時間的推移，營收成長的比較似乎會變得更容易，這應該有助於緩解成長阻力。但我認為值得注意的是，許多投資者都注意到，你有能力透過較低的綜合成本率來抵消營業收入的疲軟。

Can you give a little bit more color on your confidence level in being able to sustain that kind of underwriting performance. There's been some concern that potential degradation in underwriting quality would exacerbate the sort of top line deceleration concerns. And it would be just helpful to get your thoughts.

您能否進一步說明一下您對維持這種承保績效的信心程度。有人擔心核保品質的潛在下降會加劇營業收入減速的擔憂。了解您的想法將會很有幫助。

Yes, Bill, this is Mike. We're very confident in our business model, as Brian was just commenting on his prepared remarks. Kinsale focuses on a high-margin segment, small E&S accounts. We control our own underwriting. We don't outsource that to other parties.

是的，比爾，我是麥克。我們對我們的商業模式非常有信心，正如布萊恩剛才對他準備好的發言所做的評論一樣。Kinsale 專注於高利潤領域，即小型 E&S 帳戶。我們控制自己的承保。我們不會將其外包給其他方。

We think that drives meaningfully better accuracy. We are the low-cost leader in our space. Insurance is a good or a service where our customers care intensely about the price. I think we have built a very conservative balance sheet. I think our reserves, we are very confident are conservatively stated, so they're much more likely to develop favorably than unfavorably.

我們認為這會顯著提高準確性。我們是該領域的低成本領導者。保險是一種商品或服務，我們的客戶非常關心價格。我認為我們已經建立了非常保守的資產負債表。我認為，我們非常有信心，我們的儲備是保守估計的，因此它們向好發展的可能性遠大於向壞發展的可能性。

So we're bullish on the future. I think we've got advantages that are compelling and dramatic. That being said, we always prioritize profitability over growth. And so when you have a period of time where there's intense price competition, Bryan just detailed where there's a number of companies writing business below the burn cost, okay? We're not going to do that.

因此我們對未來充滿信心。我認為我們擁有引人注目且顯著的優勢。話雖如此，我們始終將獲利置於成長之上。因此，當價格競爭非常激烈時，布萊恩剛才詳細說明了許多公司以低於成本的價格開展業務，好嗎？我們不會這麼做。

But the market ebbs and flows, and I think we're very confident, we're going to continue to grow, take market share and deliver best-in-class returns.

但市場有起有落，我認為我們非常有信心，我們將繼續成長，佔領市場份額，並實現一流的回報。

Thanks, Mike. That's helpful. Separately, Kinsale established a strong track record since the time of our founding, but you haven't faced a severe macro downturn outside of COVID. Could you speak to what Kinsale's playbook is if, say, tariff policy were to push the U.S. economy into recession. Any color on maybe where you'd expect to adjust what you'd expect to stay the same, where you'd expect to see the greatest opportunities?

謝謝，麥克。這很有幫助。另外，金塞爾自成立以來就建立了良好的業績記錄，但除了 COVID 之外，你們還沒有面臨嚴重的宏觀經濟衰退。您能否談談，如果關稅政策導緻美國經濟陷入衰退，金塞爾的因應策略是什麼？您認為哪些方面需要調整，哪些方面保持不變，哪些方面您認為會出現最大的機會？

Insurance is a compulsory product in a modern economy. So we -- if the economy were to contract, the P&C industry might contract along with it, that tends to be a couple of percentage points, I think we would continue to grow right through that. We're operating with a 20% expense ratio. Most of our competitors that like us, focus on the small account space tend to be well into the 30s or even above 40. I think we're well positioned to continue to grow and take market share in all markets. I just think in a competitive market, hey, it's going to be a little bit more slowly than in a less competitive market.

保險是現代經濟的必需產品。因此，如果經濟萎縮，財產和意外保險業可能會隨之萎縮，萎縮幅度往往為幾個百分點，但我認為，我們仍將繼續成長。我們的營運費用率為 20%。與我們一樣，大多數競爭對手都專注於小額帳戶領域，他們的帳戶餘額往往已經達到 30 多甚至 40 多。我認為我們有能力繼續成長並在所有市場佔據市場份額。我只是認為，在競爭激烈的市場中，它會比競爭不那麼激烈的市場慢一點。

Thanks, Mike. If I may squeeze in one last one. Sort of against the backdrop that you've laid out where you expect to write less premium. It seems like -- and to the extent that your -- we do see volatility in your stock under pressure, maybe if you could just speak to like what it takes for you to consider more aggressively increasing repurchases perhaps even above that modest amount that you've mentioned, particularly if the growth environment remained weak and volatility intensified. Thanks.

謝謝，麥克。如果我可以再擠進最後一個的話。在某種程度上，在您所列出的背景下，您預計保費會降低。看起來——並且就您的情況而言——我們確實看到您的股票在壓力下波動，也許您可以談論您需要什麼才能考慮更積極地增加回購，甚至可能超過您提到的適度金額，特別是如果增長環境仍然疲軟且波動加劇。謝謝。

Yes. We expect to have incremental purchases. We always leave the door open to do things opportunistically. But in general, we kind of view the incremental repurchase as the best strategy for us. And it's consistent, if you will, in the fact that we pay a small dividend as well. And we've incrementally increased that a little bit each year. That's the way we kind of view it at least at this time.

是的。我們期望有增量購買。我們總是敞開大門，伺機而動。但總的來說，我們認為增量回購對我們來說是最好的策略。如果你願意的話，事實上我們也支付少量股息，這是一致的。而我們每年都會逐步增加一點。至少目前我們是這麼看待這個問題的。

Thanks, Mike. I appreciate it. I appreciate you taking my questions.

謝謝，麥克。我很感激。感謝您回答我的問題。

Thanks Bill.

謝謝比爾。

Your next question comes from the line of Andrew Andersen from Jefferies. Your line is open.

您的下一個問題來自 Jefferies 的 Andrew Andersen。您的線路已開通。

Hey, good morning. The 60.0 underlying loss ratio was pretty strong in the quarter. I think you called out some better results on property. But was there any change in loss trend on either the property or the casualty lines?

嘿，早安。本季 60.0 的潛在損失率相當高。我認為您在房地產方面取得了一些更好的成果。但是財產險或意外險的損失趨勢有改變嗎？

Andrew, I think it was basically a decrease in reported losses and then a little bit of it is driven by the mix of business. The property, obviously, is short-tail business. So those losses are resolved much more quickly than our long-tail casualty book. So it's basically those two things.

安德魯，我認為這基本上是報告損失的減少，其中一部分是由業務組合推動的。顯然，房地產是短尾業務。因此，這些損失的解決速度比我們的長尾傷亡帳簿要快得多。所以基本上就是這兩件事。

Okay. And then maybe just kind of back on macro. I guess, I typically think of Kinsale is writing a lot in the small commercial end of the market. If we are to get into a tougher macro backdrop, is there an intention to move more into middle market? Or do you still find the small commercial runway pretty plentiful?

好的。然後或許就回到宏觀層面。我想，我通常認為金塞爾在小型商業市場中寫了很多東西。如果我們要進入更嚴峻的宏觀背景，是否有意進一步進軍中端市場？或者您仍然發現小型商業跑道相當充足？

We like the small space. Our average premium since we launched the company back in 2010, has been in that mid-teens space. We're always willing to consider larger deals. There's nothing inherently wrong with them. It's just that they tend to be priced much more aggressively from the perspective of the risk bearer.

我們喜歡小空間。自 2010 年成立公司以來，我們的平均保費一直處於十幾歲左右的水平。我們始終願意考慮更大的交易。它們本質上並沒有什麼問題。只是從風險承擔者的角度來看，它們的定價往往更為積極。

I think the margins are not quite as good. But no, I think we're very comfortable with where we have been, and that's where we expect to be. In fact, as Brian Haney mentioned, we're expanding our personal lines book in effect, going lower, not higher.

我認為利潤率不太好。但不，我認為我們對目前的狀況感到非常滿意，這也是我們期望達到的水平。事實上，正如 Brian Haney 所提到的那樣，我們實際上正在擴大我們的個人險種範圍，使其降低，而不是升高。

Thank you.

謝謝。

Your next question comes from the line of Michael Phillips from Oppenheimer. Your line is open.

您的下一個問題來自奧本海默公司的邁克爾·菲利普斯。您的線路已開通。

Thank you. Good morning. I wanted to touch on your comments on the more conservative actual assumptions for construction liability. The question is, what are you seeing for severity there? Has that changed from, say, last quarter? And then maybe -- was that what you did there? Was that a result of what you're actually seeing in the data? Or is that more of a proactive stance given the impact tariffs may have on construction wins?

謝謝。早安.我想談談您對更保守的建築責任實際假設的評論。問題是，您認為那裡的嚴重程度如何？與上一季相比，情況有變化嗎？然後也許——這就是你在那裡所做的嗎？這是您在數據中實際看到的結果嗎？或者，考慮到關稅可能對建築業帶來的影響，這是否是一種更積極的立場？

Yes, this is Mike again. We have seen a -- we've seen development on the long-tail casualty business, in particular, the construction. In certain accident years where it's developed a little bit higher and a little bit later than we originally anticipated. And so we've pushed the book loss ratios for construction specifically, that probably picks up some other long tail lines as well up over the last several years. And we've done a lot of things to drive better margins going forward, higher prices. We've adjusted the mix of coverage that we offer, et cetera.

是的，我又是麥克。我們已經看到—我們已經看到長尾傷亡業務的發展，特別是建築業的發展。在某些事故年份，事故發生率會比我們原先預期的要高一些，而且晚一些。因此，我們特別提高了建築業的帳面損失率，這可能在過去幾年中也影響了其他一些長尾業務的損失率。我們已採取多項措施來提高未來利潤率和價格。我們調整了所提供的保險範圍等等。

But we've also just as a precaution, booked the 2020, 2021, 2022, 2023, 2024 construction lines in the mid-80s as well. So we're very conservatively positioned there, but it has nothing to do with tariffs. It really just has to do with the fact that, that's a long tail business. And it can be a very litigious line. And I think there was a significant impact from the spike in inflation a few years ago, but really has nothing to do with tariffs.

但為了以防萬一，我們也將 2020、2021、2022、2023、2024 年的建設線預定在 80 年代中期。因此，我們在這方面的立場非常保守，但這與關稅無關。這實際上與一個事實有關，那就是這是一個長尾業務。這可能是一條非常容易引起訴訟的路線。我認為幾年前通貨膨脹的飆升產生了重大影響，但實際上與關稅無關。

Okay, thanks. So it's more of what you're seeing than proactive on tariffs. Okay, thank you. I guess a second question on your casualty treaties, I think, comes up in June. I think it's a big piece of your ceded premium. Anything we -- that you can share that we would expect on changes in retention levels or anything else that might affect that the growth that maybe also help top line?

好的，謝謝。因此，這更多的是你所看到的而不是主動的關稅措施。好的，謝謝。我想，有關傷亡條約的第二個問題將在六月提出。我認為這是你的保費的很大一部分。您能否分享我們對保留水準變化的預期，或其他可能影響成長並可能有助於營收的因素？

Look, we've adjusted the retentions many, many times over the years. So that would not be unprecedented that we would take a little bit more net. You're always balancing profitability with the business with volatility. And as we've gotten larger, we've continued to take a larger net. So that might be a safe assumption.

你看，這些年來我們已經多次調整了保留率。因此，我們多徵收一點稅並不是史無前例的。您總是需要在獲利能力和業務波動性之間取得平衡。隨著我們規模不斷擴大，我們的網路也變得越來越大。所以這可能是個安全的假設。

Okay, and then if I could see, any chance you'd share the commercial property combined ratio this quarter versus the last quarter?

好的，那麼如果我能看到的話，您能否分享一下本季與上一季相比的商業房地產綜合比率？

No. But I mean -- no, we're kind of not going to get into that. It gets very complex when you start to disaggregate losses between reported case reserves, paid and then by accident year, I'm not sure that will be productive. But I would just tell you that, as you can tell from the 82% combined, the business is very profitable. And that profitability is even in the face of a very conservative approach to reserving for future claims.

不。但我的意思是——不，我們不會討論這個。當你開始按報告的案件準備金、已支付的損失以及事故年份來分解損失時，事情會變得非常複雜，我不確定這是否有成效。但我只想告訴你，從 82% 的總和比例就可以看出，這項業務的利潤非常豐厚。即使採取非常保守的未來索賠準備金方式，也能獲利。

And it's one of the benefits, I think, of our underwriting model is driving a very positive result and combining that with a low-cost approach to the business. Again, we think it gives us a very interesting advantage long term.

我認為，我們的核保模式的優勢之一是能夠帶來非常積極的結果，並且與低成本的業務方式相結合。再次，我們認為從長遠來看這會為我們帶來非常有趣的優勢。

Okay. Thank you Mike, appreciate it.

好的。謝謝邁克，非常感謝。

Your next question comes from the line of Pablo Singzon from JPMorgan. Your line is open.

您的下一個問題來自摩根大通的 Pablo Singzon。您的線路已開通。

Hi, good morning. First question is about the large commercial property. I'm curious to find out if the price of clients there have reached a point where your appetite is reduced? Or are the lower premiums you referenced purely a function of lower prices, right? So it sounds like you're getting less submissions, but was curious if for those submissions that you come in, if you're still actively engaging in writing those cases?

嗨，早安。第一個問題是關於大型商業房地產。我很好奇，那裡的顧客價格是否已經到了讓你胃口大開的地步？或者您提到的較低保費僅僅是由於價格較低造成的，對嗎？所以聽起來你收到的投稿少了，但我很好奇，對於你收到的那些投稿，你是否仍然積極地參與撰寫這些案例？

Yes. I think part of it is we are. We haven't changed our appetite. Our idea is that there's a price for everything, and it's our job to know like the right pricing terms that are going to give us our best chance of making money. But it's mostly a function of rates are down and submissions are down.

是的。我認為部分原因是我們確實如此。我們的胃口沒有改變。我們的想法是，任何事物都有其價格，而我們的工作就是了解正確的定價條件，以便讓我們有最大的機會賺錢。但這主要是由於費率下降和提交量下降造成的。

Okay. And then you provided qualitative commentary about competition in large commercial. I was wondering -- well, I suppose in the context that price declines there are not -- you're right, that didn't happen in just this quarter. So therefore, I was curious if the price declines there are stable, continue to accelerate, slowing from sort of peak pricing? I just want to get a sense of the shape of pricing and how that's developing.

好的。然後您對大型商業競爭提供了定性評論。我在想——嗯，我想在價格下跌的背景下——你是對的，這並不是本季發生的。因此，我很好奇那裡的價格下跌是否穩定，是否繼續加速，是否從高峰價格放緩？我只是想了解定價的形態以及它是如何發展的。

Well, we said they're down 20% on average, right? We're looking at thousands of transactions. So there's a range of what's going on with those individual transactions. But for the 3-month period, that's what we saw. The results have been very positive.

嗯，我們說它們平均下降了 20%，對嗎？我們正在查看數千筆交易。因此，這些單獨的交易中發生的事情有很多種。但就這三個月而言，我們看到的就是這種情況。結果非常積極。

We saw property cat pricing in particular, go up year after year after year. I think we're kind of -- we're at about a 20-year high. And so that kind of high pricing, combined with positive results, it's attracted a lot more capital. And so I think the business is still very high margin. It's just incrementally lower than it was this time a year ago.

我們看到，尤其是財產險的價格，逐年上漲。我認為我們正處於 20 年來的最高水平。因此，這種高定價加上正面的成果吸引了更多的資本。因此我認為該業務的利潤率仍然很高。與去年同期相比，這只是略有下降。

Yes. Yes. Understood. And then lastly, just shifting to the Casualty side. Curious if you're seeing, I guess, more positive signals there, right? Like if you go by what other companies you're saying, especially in (inaudible) I know you had called out a decline in the nominal rate, but I suspect a lot of them to do with large property commercial. So so if you could provide more context of what's happening on the casualty side of thing. Thank you.

是的。是的。明白了。最後，轉到 Casualty 方面。我很好奇您是否看到了更多積極的信號，對嗎？就像如果你按照其他公司的說法那樣，特別是在（聽不清楚）我知道你已經提到了名目利率的下降，但我懷疑其中很多與大型商業地產有關。所以，如果您可以提供更多有關傷亡情況的背景資訊的話。謝謝。

I think casualty is still favorable for us. I think excess casualty looks good. And I think the MGAs we were talking about earlier, seemed to write a lot of that business. And so I don't expect that business to get like -- it would not shock me if and when there is a correction in the fronting world that you would see further positive movement in the casualty market.

我認為傷亡對我們仍然有利。我認為過多的傷亡看起來不錯。我認為我們之前談到的 MGAs 似乎承擔了很多這樣的業務。因此，我並不認為該業務會出現這樣的情況——如果前端世界出現調整，你會看到傷亡市場進一步出現積極趨勢，這並不會讓我感到震驚。

Thank you.

謝謝。

(Operator Instructions) Your next question comes from the line of Bob Huang from Morgan Stanley. Your line is open.

（操作員指示）您的下一個問題來自摩根士丹利的 Bob Huang。您的線路已開通。

Hi, good morning. Maybe just like a follow-up on some clarification side. In terms of competition, you've talked about several times on this call that there are funding companies that have high loss ratios and what they're doing is unsustainable. But if we can just think from their perspective, how long do you think they can sustain an elevated loss environment, kind of erode the competitive environment, so to speak. Do you think this is more of a next 12-month thing? Or do you think they can last a lot longer than that? Just curious to your thoughts.

嗨，早安。也許只是某些澄清的後續跟進。關於競爭，您在這次電話會議上多次談到，有些融資公司的虧損率很高，而且他們的做法是不可持續的。但如果我們從他們的角度思考，你認為他們能夠維持高虧損環境多久，或是說能夠削弱競爭環境多久。您認為這更像是未來 12 個月的事情嗎？或者您認為它們可以持續更長時間？只是好奇你的想法。

Yes. We don't know. I mean it's just -- it's tough. It would be tough for us to know. All we do know is that it will change. Yes, the math doesn't work out.

是的。我們不知道。我的意思是，這很艱難。我們很難知道這一點。我們唯一知道的是，它將會改變。是的，數學計算不出來。

Know. I mean, it's just, it's tough. It would be tough for us to know. All we do know is that, it will change. Yeah, the math doesn't work out.

知道。我的意思是，這很艱難。我們很難知道這一點。我們唯一知道的是，它會改變。是的，數學計算不出來。

Okay. No, that's fair. The second question, if we think about your core loss ratio, which would be incredibly strong, it actually improved year-on-year, right? If I remember correctly, in the past, you've mentioned that you're willing to sacrifice some of this margin for growth. Just given the strong core loss ratio today, how much and how willing are you to sacrifice that margin for additional growth given that it sounds like the broader market is a lot riskier than the previous time that you mentioned this.

好的。不，這很公平。第二個問題，如果我們考慮一下您的核心損失率，它會非常強勁，實際上它同比有所改善，對嗎？如果我沒記錯的話，過去您曾經提過，您願意犧牲部分利潤來換取成長。鑑於目前的核心損失率很高，考慮到聽起來大盤比您上次提到這一點時風險更大，您願意在多大程度上犧牲利潤率來換取額外的增長？

Bob, maybe a better way to describe it is we're always managing profitability at a granular level. Kinsale collects a tremendous amount of statistical information at the transaction level. It's another consequence of having very modern up-to-date systems. And we pour through that data on a regular basis to analyze profitability, not just by product line, but by class of business within the product line, by state, by territory, by account size, all sorts of different ways, and we're adjusting the pricing in order to make sure we're generating low 20s ROEs or better, okay? So that's just a normal part of managing an insurance company.

鮑勃，也許更好的描述方式是，我們始終在精細的層面上管理獲利能力。Kinsale 在交易層面收集了大量的統計資料。這是擁有非常現代化的最新系統的另一個結果。我們定期分析這些數據，不僅按產品線分析盈利能力，還按產品線內的業務類別、按州、按地區、按帳戶規模等各種不同方式分析盈利能力，並且我們正在調整定價，以確保我們產生低於 20% 或更高的 ROE，好嗎？這只是管理保險公司的正常部分。

I wouldn't really look into that as anything extraordinary. We're always managing profitability. Profit comes first, growth second. But given our model, we think even in a competitive market, we can deliver the best-in-class returns, but at the same time, we can take share away from less efficient competitors.

我不會真的認為這有什麼特別的。我們始終在管理獲利能力。利潤第一，成長第二。但根據我們的模型，我們認為即使在競爭激烈的市場中，我們也可以提供一流的回報，但同時，我們可以從效率較低的競爭對手那裡奪取市場份額。

Got it. No, that's incredibly helpful. Thank you very much for that.

知道了。不，這非常有幫助。非常感謝。

Your next question comes from the line of Mark Hughes from Truist Securities. Your line is open.

您的下一個問題來自 Truist Securities 的 Mark Hughes。您的線路已開通。

Yeah, thanks. Good morning.

是的，謝謝。早安.

Good Morning, Mark.

早上好，馬克。

How do we think about the competition in the property -- the commercial property kind of is this progressed through the quarter. You talked about 2Q, which has a lot seasonally strong in terms of property renewals. And so we ought to consider that in thinking about the growth rates. Is that property market more competitive now than it was at the start of the first quarter? And so maybe you see a little bit of incremental pressure? Or would you describe it as relatively steady compared to what you experienced in -- throughout the first quarter?

我們如何看待房地產領域的競爭—商業房地產領域的競爭在本季是如何發展的？您談到了第二季度，該季度的房地產續約情況具有很大的季節性強勁。因此，我們在考慮成長率時應該考慮到這一點。現在房地產市場的競爭是否比第一季初更加激烈？那麼，也許您看到了一點增量壓力？或者，與整個第一季相比，您會將其描述為相對穩定？

I think it's steady. It's hard to put too fine a point on it, Mark, right? I mean, again, we're looking at -- I think we wrote about $450 million of premium in that division last year. So it's a big division. There are thousands and thousands of transactions.

我認為它很穩定。很難對此做出太明確的評論，馬克，對吧？我的意思是，我們再次考慮——我認為去年我們在該部門創造了約 4.5 億美元的保費收入。所以這是一個很大的分歧。有成千上萬筆交易。

Some of it's fire-exposed business. Some of it's wind. We write a little bit of quake -- there's a lot going on there. But in general, the results certainly for Kinsale have been incredible. I think they've been quite positive for the industry. And it's attracted a lot more capital.

其中一些是暴露在火災中的企業。有些是風。我們寫了一些關於地震的內容——那裡發生了很多事情。但總體而言，金塞爾的成績確實令人難以置信。我認為他們對這個行業非常積極。並且它吸引了更多的資本。

Yes, I would agree with that. I think it's tough as Mike said, put too fine a point on it, but I would say it's pretty stable.

是的，我同意。我認為它很堅固，就像麥克說的那樣，說得太過分了，但我想說它相當穩定。

So when you think about hit rates, that sort of thing that it's -- you're at some sort of equilibrium. Is that fair?

因此，當您考慮命中率時，您就處於某種平衡狀態。這樣公平嗎？

Yes. Actually, that's a good way of looking at it. The hit rates haven't changed much.

是的。事實上，這是一個很好的觀察方式。命中率沒有太大變化。

Okay. And then the -- when you look at your mix of property versus casualty, you're a lot heavier in property now than you were 2 years ago, 4 years ago. Is there some reason to think there's a normal equilibrium. If you think about the long-term E&S market, how much should be property, how much should be casualty? Are there any rules of thumb? Do you have any sense of -- or is there any reason to think it normally would return to a certain mix between the two? That's a big question, but I wonder if you have any thoughts on it.

好的。然後 — — 當您查看財產險和意外險的組合時，您會發現現在財產險的比重比 2 年前或 4 年前要大得多。是否有理由認為存在正常平衡？如果您考慮長期的 E&S 市場，那麼財產保險應該佔多少，意外保險應該佔多少？有什麼經驗法則嗎？您是否有任何感覺——或者是否有任何理由認為它通常會回到兩者之間的某種混合？這是一個很大的問題，但我想知道您對此有什麼想法。

I think the E&S market is one-third, two-thirds Mark. So that's probably a good benchmark. Brian indicated, we're doing a lot of work to expand into the homeowners business. That's been a sore point for the industry, with some of the volatility in that line over the last 5 years. So we see an opportunity as an E&S company to build a more meaningfully sized homeowner's book.

我認為 E&S 市場佔 Mark 的三分之一到三分之二。所以這可能是一個很好的基準。布萊恩表示，我們正在做大量工作來擴展房主業務。這一直是該行業的一個痛點，過去五年來該行業出現了一些波動。因此，作為一家 E&S 公司，我們看到了一個建立更有意義的房主帳簿的機會。

And of course, that's predominantly a multi-peril line, but it's predominantly property. So that could drive it up a little bit. But in general, I think one-third, two-third.

當然，這主要是一條多危險線路，但主要是財產。因此這可能會使其上漲一點。但總的來說，我認為是三分之一、三分之二。

Thank you. Your next question comes from the line of Pablo Singzon from JPMorgan. Your line is open.

謝謝。您的下一個問題來自摩根大通的 Pablo Singzon。您的線路已開通。

Hi, thanks for the follow up, Mike, you had mentioned that large commercial property tends to be concentrated in the first half. I was wondering if you could provide some sense of the split there, right, between the first half and second half? Is it like 60:40, 70:30? Yeah.

你好，謝謝你的跟進，麥克，你提到大型商業房地產往往集中在上半年。我想知道您是否可以提供一些關於前半部分和後半部分的劃分概念？是像 60:40 還是 70:30？是的。

I think it was 60:40. And I think it was 35% in the second quarter.

我認為是 60:40。我認為第二季這一比例是 35%。

All right, thank you.

好的，謝謝。

All right, Pablo.

好的，巴布羅。

Your next question comes from the line of Casey Alexander from Compass Point. Your line is open.

您的下一個問題來自 Compass Point 的 Casey Alexander。您的線路已開通。

Hi, good morning, and forgive me if these seem a little naive. But first of all, it seems like California, despite the fact that you had the loss in California this quarter, it started to exhibit a lot of the characteristics of what Florida had when you made a concerted move to grow in that market with a lack of capacity and carriers leaving the market. Is there a similar opportunity building in California? Is it too early to look at it? Or how do you see that market as an opportunity to shift the property book and continue to grow it?

嗨，早上好，如果這些看起來有點天真，請原諒我。但首先，看起來加州雖然本季在加州遭受了損失，但當你採取一致行動在該市場發展時，它開始表現出佛羅裡達州的許多特徵，但該市場缺乏運力，承運商也退出了市場。加州有類似的機會建築嗎？現在看這個還太早嗎？或者您如何將該市場視為轉變房地產業務並繼續成長的機會？

I think you're absolutely right. I think the biggest opportunity there is going to be in personal -- probably some on the smaller commercial, but we are taking advantage of that. I mean high-value homes division, we're growing nicely in that and a lot of it is in California, and there is a huge opportunity.

我認為你完全正確。我認為最大的機會在於個人——可能在於一些較小的商業領域，但我們正在利用這一點。我的意思是，高價值住宅部門，我們在這個領域發展得很好，其中很大一部分在加州，這是一個巨大的機會。

Okay. Great, thank you. Secondly, if the tariffs do create -- one of the areas that we kind of see vulnerability building and tariffs is that it could significantly increase the building materials cost. Would that have -- if that were to take place, would that have some impact on your ability to release reserves, particularly against construction, things like that?

好的。太好了，謝謝。其次，如果關稅確實造成了——我們認為脆弱性加劇和關稅的一個方面是，它可能會大幅增加建築材料的成本。如果發生這種情況，這會對您釋放儲備的能力產生影響嗎，特別是針對建築等事項？

Casey, it's Mike. I would say this. I agree tariffs -- I mean, look, that's a work in progress, right? Nobody really knows where that policy ends up. But assuming the worst, it could drive up the cost of building supplies.

凱西，我是麥克。我會這麼說。我同意關稅——我的意思是，看，這是一項正在進行的工作，對吧？沒有人真正知道這項政策最終會如何發展。但假設最壞的情況，它可能會推高建築材料的成本。

And certainly, that would flow through to an insurance company. What I would say is, Kinsale's margins are really, really strong. We're in a great spot, very conservative reserves, very low-cost operating model, very strict controls over our underwriting. And so I think we're very well positioned to absorb any kind of incremental movement in prices, whether it's building supplies or whether it's medical inflation or anything else. I think we're in a great spot to handle that. I wouldn't really see that as being a material exposure for us.

當然，這會流向保險公司。我想說的是，金塞爾的利潤率確實非常高。我們處於一個很好的位置，非常保守的儲備，非常低成本的營運模式，對承保的控制非常嚴格。因此，我認為我們完全有能力吸收價格的任何增量變動，無論是建築材料價格、醫療通膨或其他任何價格上漲。我認為我們能夠很好地處理這個問題。我真的不認為這對我們來說是一個實質的風險。

Okay. Great. And then lastly, I was impressed by the fact that you were able to squeeze out a profit from the equity portfolio during a quarter where there was a pretty decent negative return for the overall market. Is there some unique characteristic to the equity portfolio that permitted it to outperform the general market by such an extent?

好的。偉大的。最後，令我印象深刻的是，在整個市場出現相當可觀的負回報的一個季度中，您仍然能夠從股票投資組合中榨取利潤。股票投資組合是否有一些獨特的特性，使其表現如此優於整體市場？

Well, our equity portfolio is one-third passively managed through indexes that are very close to the S&P and two-third active. The active portfolio is very much a value orientation, larger cap, dividend paying kind of buy and hold. So you could either -- I think that's essentially, yes. I mean we're underweight.

我們的股票投資組合有三分之一是透過非常接近標準普爾指數的指數進行被動管理的，另外三分之二是主動管理的。主動投資組合非常注重價值導向、較大市值、支付股利的買入並持有方式。所以你可以——我認為基本上是的。我的意思是我們的體重不足。

Yeah, great. All right, thank you for taking my questions. I appreciate it.

是的，很棒。好的，感謝您回答我的問題。我很感激。

And we have reached the end of our question-and-answer session. I will now turn the call back over to Mike for closing remarks.

我們的問答環節已經結束。現在我將把電話轉回給麥克，請他作最後發言。

Okay. Well, thank you, everybody, for joining us, and we look forward to speaking with you again here in 3 short months. Have a great day.

好的。好吧，謝謝大家加入我們，我們期待在短短三個月後再次與你們交談。祝你有美好的一天。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。