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Kinsale Capital (KNSL) Up 58.4% in a Year: More Room to Run?

Shares of Kinsale Capital Group, Inc. KNSL have gained 58.4% in a year against the industry's decline of 1.6%. The Zacks S&P 500 composite decreased 16.4% in the said time frame. With a market capitalization of $5.9 billion, the average volume of shares traded in the last three months was 0.1 million.


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The rally was largely driven by the company’s focus on the Excess and Surplus Lines Insurance market, lower underwriting expenses and growth in the investment portfolio.

This Zacks Rank #3 (Hold) insurer has a solid track record of beating earnings estimates in each of the last seven quarters.

KNSL has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, the best growth and the most promising momentum.

Can KNSL Stock Retain the Momentum?

The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $7.23 and $8.42, indicating year-over-year increases of 25.9% and 16.5%, respectively.

Kinsale remains well poised to gain from the growing E&S market that enables the insurer to continue rate increases and grow premiums at a high level.

The combination of highly controlled underwriting with advanced technology-driven low costs and a focus on the Excess and Surplus Lines Insurance market is driving profitability and growth of Kinsale Capital.

The Excess and Surplus Lines insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
Growth in the investment portfolio, generated from the investment of positive cash flow, is likely to result in a robust investment income.

The expense ratio is expected to gain from lower reinstatement premiums on certain property reinsurance treaties that do not have ceding commissions as well as lower other underwriting expenses due to higher net earned premiums.
Kinsale, with a low expense ratio and higher margins, remains well poised to lead in the current economic situation.

Banking on operational excellence, the property and casualty insurer has increased its dividend since 2017 at a five-year CAGR (2016-2022) of 14.6%.

KNSL’s ROE for the trailing 12 months is 24%, which expanded 840 basis points year over year and was better than the industry average of 6.4%, reflecting efficiency in utilizing shareholders’ fund.

Stocks to Consider

Some better-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. ACGL, American Financial Group, Inc. AFG and ProAssurance Corporation PRA, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. In the past year, the insurer has rallied 16.4%.

The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 9.2% and 7.2% north, respectively, in the past 60 days.

American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has lost 1.9%.

The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 4% and 4.3% north, respectively, in the past 60 days.

The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 19.2%.

The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 60 days.


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ProAssurance Corporation (PRA): Free Stock Analysis Report
 
American Financial Group, Inc. (AFG): Free Stock Analysis Report
 
Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report
 
Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis Report
 
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