Back to Bio

Kinsale Capital Group, Inc.: Initiation of Research Coverage

Friday, August 26, 2016

William Blair & Company initiated research coverage of Kinsale Capital Group, Inc. (KNSL $20.00), the only publicly traded specialty commercial insurer exclusively focused on the excess and surplus (E&S) market.

Analyst Adam Klauber estimated that the company would earn $0.99 per share in 2016 and $1.27 per share in 2017.

“Kinsale’s modern proprietary technology platform provides it with durable and scalable productivity and cost advantages,” Klauber said. “Its systems drive a high level of efficiency, accuracy, and speed in an industry plagued by inefficient legacy systems. Submissions can be responded to within hours, versus days for most competitors, leading to increased production and lower commissions. Technology is one of the key drivers of a 10- to 15-point expense ratio advantage over many E&S peers.”

He added, “Kinsale is still a fairly new company and has a long runway. Terminating the quota share and the recent IPO effectively provide locked-in growth of premiums, investment income, and earnings through 2017. Double-digit organic growth is likely sustainable over the long term. Most of the growth should come from expanding product offerings, entering new markets, broadening the distribution network, and leveraging technology. Its exclusive E&S focus should also be a tailwind as the non-admitted market has historically achieved higher growth than the admitted market.”

William Blair is a global investment banking and asset management firm. We are committed to building enduring relationships with our clients and providing expertise and solutions to meet their evolving needs. An independent and employee-owned firm, William Blair is based in Chicago, with offices in 18 cities across four continents.

View our research coverage list


William Blair or an affiliate does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as a single factor in making an investment decision.

William Blair or an affiliate was a manager or co-manager of a public offering of equity securities of Kinsale Capital Group, Inc. within the prior 12 months.

William Blair or an affiliate is a market maker in the security of Kinsale Capital Group, Inc.

William Blair or an affiliate expects to receive or intends to seek compensation for investment banking services from Kinsale Capital Group, Inc. within the next three months.

William Blair or an affiliate received compensation for investment banking services from Kinsale Capital Group, Inc. within the last 12 months. Kinsale Capital Group, Inc. is or was, within the last 12 months, an investment banking client of William Blair and/or one or more of its affiliates.

Additional information is available upon request.

Please contact us at +1 800 621 0687 or view disclosures on our coverage list.

Current Ratings Distribution (as of 7/31/16)

Coverage Universe
Outperform (Buy): 63%
Market Perform (Hold): 36%
Underperform (Sell): 1% 

Inv. Banking Relationships*
Outperform (Buy): 8%
Market Perform (Hold): 3%
Underperform (Sell): 0%

* Percentage of companies in each rating category that are investment banking clients, defined as companies for which William Blair has received compensation for investment banking services within the past 12 months.

The compensation of the research analyst is based on a variety of factors, including performance of his or her stock recommendations; contributions to all of the firm’s departments, including asset management, corporate finance, institutional sales, and retail brokerage; firm profitability; and competitive factors.

Stock ratings, price targets, and valuation methodologies: William Blair & Company, L.L.C. uses a three-point system to rate stocks. Individual ratings and price targets (where used) reflect the expected performance of the stock relative to the broader market (generally the S&P 500, unless otherwise indicated) over the next 12 months. The assessment of expected performance is a function of near-, intermediate-, and long-term company fundamentals, industry outlook, confidence in earnings estimates, valuation (and our valuation methodology), and other factors. Outperform (O) – stock expected to outperform the broader market over the next 12 months; Market Perform (M) – stock expected to perform approximately in line with the broader market over the next 12 months; Underperform (U) – stock expected to underperform the broader market over the next 12 months; not rated (NR) – the stock is not currently rated. The valuation methodologies used to determine price targets (where used) include (but are not limited to) price-to-earnings multiple (P/E), relative P/E (compared with the relevant market), P/E-to-growth-rate (PEG) ratio, market capitalization/revenue multiple, enterprise value/EBITDA ratio, discounted cash flow, and others.

Company Profile: The William Blair research philosophy is focused on quality growth companies. Growth companies by their nature tend to be more volatile than the overall stock market. Company profile is a fundamental assessment, over a longer-term horizon, of the business risk of the company relative to the broader William Blair universe. Factors assessed include: 1) durability and strength of franchise (management strength and track record, market leadership, distinctive capabilities); 2) financial profile (earnings growth rate/consistency, cash flow generation, return on investment, balance sheet, accounting); 3) other factors such as sector or industry conditions, economic environment, confidence in long-term growth prospects, etc. Established Growth (E) – Fundamental risk is lower relative to the broader William Blair universe; Core Growth (C) – Fundamental risk is approximately in line with the broader William Blair universe; Aggressive Growth (A) – Fundamental risk is higher relative to the broader William Blair universe.

The ratings, price targets (where used), valuation methodologies, and company profile assessments reflect the opinion of the individual analyst and are subject to change at any time.

Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies—to our clients and our trading desks—that are contrary to opinions expressed in this research. Certain outstanding reports may contain discussions or investment opinions relating to securities, financial instruments and/or issuers that are no longer current. Always refer to the most recent report on a company or issuer before making an investment decision. Our asset management and trading desks may make investment decisions that are inconsistent with recommendations or views expressed in this report. We will from time to time have long or short positions in, act as principal in, and buy or sell the securities referred to in this report. Our research is disseminated primarily electronically, and in some instances in printed form. Electronic research is simultaneously available to all clients. This research is for our clients only. No part of this material may be copied or duplicated in any form by any means or redistributed without the prior written consent of William Blair & Company, L.L.C.

This is not in any sense a solicitation or offer of the purchase or sale of securities. The factual statements herein have been take from sources we believe to be reliable, but such statements are made without any representation as to accuracy or completeness or otherwise. Opinions expressed are our own unless otherwise stated. Prices shown are approximate.

This material is distributed in the United Kingdom and the European Economic Area (EEA) by William Blair International, Ltd., authorized and regulated by the Financial Conduct Authority (FCA), and is only directed at and is only made available to persons falling within articles 19, 38, 47, and 49 of the Financial Services and Markets Act of 2000 (Financial Promotion) Order 2005 (all such persons being referred to as “relevant persons”). This document is intended for persons regarded as professional investors (or equivalent) and is not to be distributed to or passed onto any “retail clients.” No persons other than persons to whom this document is directed should rely on it or its contents or use it as the basis to make an investment decision.

“William Blair” and “R*Docs” are registered trademarks of William Blair & Company, L.L.C. Copyright 2016, William Blair & Company, L.L.C. All rights reserved.