It’s early and hyperbolic to proclaim Kinsale Capital (KNSL) the best there is or will be in excess & surplus underwriting, but clearly management has figured out a winning formula, as Kinsale has managed to grow premiums at a compound rate of over 36% across the last four years, while growing underwriting income at close to 50% and continually posted modest positive reserve developments. Better still, the company is still a small fish in a big, growing pond, and I don’t see much that would impair Kinsale’s future growth rate.
Valuation is tricky and I won’t be surprised to see comments along the lines of “no way I’d ever pay 7x book”. Given double-digit core earnings growth potential, though, I don’t think Kinsale is necessarily overvalued, and the best-run companies have a way of making expensive-looking valuations look not-so-expensive with the benefit of hindsight (cf. W. R. Berkley (WRB)).
Click here to continue:
Kinsale Capital Reaping The Benefits Of Excellence Of Execution
No comments:
Post a Comment