⚔️ Head to Head: Kinsale vs Hamilton - Similar ROE, 20 Points Apart on Combined Ratio

Both write specialty insurance. Both reported strong quarters. Both produced returns on average equity above 20%.

They are not the same investment, and the difference is more fundamental than valuation.

🛡️ Kinsale Capital at a glance:

• 📈 Q2 revenue $548.5M, up 16.8%, beat consensus by over 12%

• 🎯 Combined ratio 75.5%, against an industry that generally runs near 100%

• 🏆 Annualised operating ROE 24.4%

• 📉 Gross premiums written down 5%, deliberately

• 💰 Roughly 3.8 times book, against a historical level closer to 7 times

🏝️ Hamilton Insurance at a glance:

• 📈 Q2 gross premiums written $831.0M, up 16.7%

• 🎯 Combined ratio 95.0%, up from 86.8%

• 🏆 Annualised operating ROE 22.7%

• 📊 Underwriting income $29.1M, down from $67.5M

• 💰 Roughly 1.3 times book, near its 52-week high

One of these companies is shrinking on purpose and trades at a large premium to book. The other is growing 17% and trades barely above it.

The full comparison, including why both returns on equity look similar and are produced by completely different machinery, the reserve question that connects two facts in one quarter, and which one the analysis would own, is below for paid subscribers. 🔒

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Kinsale Capital Group (NYSE: KNSL): the pure-play E&S underwriter.

Kinsale writes excess and surplus lines exclusively, in the United States, and is the only publicly traded pure play in that market. E&S covers risks standard carriers decline: difficult construction, chemical storage, nightclubs, trucking fleets with poor loss history. Because E&S carriers are not bound by state-approved rate filings, Kinsale prices each risk on its own merits and writes custom policy language.