What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-25 compared with 2021-02-25 · 131 added, 111 removed, 506 unchanged (32% of the section changed)

15 unchanged sentences

See "Management’s Discussion and Analysis of Financial Condition and Results of Operations — Reconciliation of Non-GAAP Financial Measures" for a reconciliation of net income to net operating earnings and calculations using net operating earnings (e.g., operating return on equity).

Kinsale Capital Group, Inc., a Delaware domiciled insurance holding company, was formed on June 3, 2009 for the purpose of acquiring and managing insurance entities.

Prior to September 5, 2014, the Company was a Bermuda registered holding company, formerly known as Kinsale Capital Group, Ltd.

Effective September 5, 2014, KCGL was re-domesticated from Bermuda to Delaware.

A wholly-owned subsidiary of KCGL, Kinsale Capital Group, Inc., which was formed on June 4, 2009 as a U.S.

holding company, was immediately merged into the re-domesticated entity and Kinsale Capital Group, Ltd.

changed its name to Kinsale Capital Group, Inc.

On June 4, 2009, we incorporated Kinsale Management, Inc.

("Kinsale Management") as a wholly-owned subsidiary domiciled in Delaware, in order to provide management services to all of our U.S.-based subsidiaries.

On February 5, 2010, we acquired American Healthcare Specialty Insurance Company and changed its name to Kinsale Insurance Company ("Kinsale Insurance").

Kinsale Insurance is an Arkansas-domiciled insurance company and is eligible to operate on an excess and surplus lines basis in 50 states, the District of Columbia, the Commonwealth of Puerto Rico and the U.S.

Virgin Islands.

On August 21, 2013, we established Aspera Insurance Services, Inc.

("Aspera"), an insurance broker.

Aspera is domiciled in Virginia and is authorized to conduct business in Virginia, Alabama, California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont and Washington.

On December 3, 2018, we incorporated Kinsale Real Estate, Inc.

("Kinsale Real Estate"), as a wholly-owned subsidiary domiciled in Delaware, in order to acquire and hold real estate.

On December 3, 2018, we incorporated 2001 Maywill, LLC, as a wholly-owned subsidiary of Kinsale Real Estate, domiciled in Delaware, in order to acquire and hold our corporate headquarters.

We write a broad array of insurance coverages for risks that are unique or hard to place in the standard insurance market.

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Our core client focus is small to medium-sized accounts, which we believe tend to be subject to less competition and have better pricing.

The average premium per policy written by us in 2020 was approximately $9,100.

Excluding our personal lines insurance, which has a relatively low premium per policy written, the average premium per policy written was approximately $11,800 in 2020.

The average premium per policy written by us in 2021 was $10,400.

Excluding our personal lines insurance, which has a relatively low premium per policy written, the average premium per policy written was $12,900 in 2021.

We believe that our strategy, experience and expertise allow us to compete effectively in the E&S market and will enable us to generate attractive long-term stockholder value.

In 2021, the percentage breakdown of our gross written premiums was 85.1% casualty and 14.9% property.

Our commercial lines offerings include construction, small business, excess casualty, commercial property, product liability, allied health, life sciences, general casualty, professional liability, management liability, energy, environmental, health care, inland marine, public entity and commercial insurance.

Our commercial lines offerings include small business, excess casualty, construction, commercial property, allied health, products liability, life sciences, general casualty, professional liability, management liability, energy, environmental, entertainment, health care, inland marine, public entity, and commercial insurance.

We also write a small amount of homeowners insurance in the personal lines market, which in aggregate represented 3.5% of our gross written premiums in 2021 and is included within our personal insurance division.

The following table provides a summary of gross premiums written by division for the years ended December 31, 2021, 2020 and 2019.

Year Ended December 31,

2021 2020 2019

($ in thousands)

Small Business $ 112,142 14.7 % $ 83,289 15.1 % $ 63,181 16.2 %

Excess Casualty 109,464 14.3 % 76,715 13.9 % 51,225 13.1 %

Construction 103,540 13.6 % 87,206 15.8 % 71,035 18.2 %

Commercial Property 78,722 10.3 % 51,789 9.4 % 29,115 7.5 %

Allied Health 59,208 7.8 % 37,562 6.8 % 23,962 6.1 %

Products Liability 55,070 7.2 % 38,306 6.9 % 26,333 6.8 %

Life Sciences 41,297 5.4 % 31,027 5.6 % 17,821 4.6 %

General Casualty 36,042 4.7 % 24,591 4.4 % 20,931 5.4 %

Professional Liability 33,226 4.3 % 27,051 4.9 % 20,029 5.1 %

Management Liability 32,163 4.2 % 24,061 4.3 % 14,820 3.8 %

All other commercial lines 76,497 10.0 % 49,507 9.0 % 34,582 8.9 %

Total commercial 737,371 96.5 % 531,104 96.1 % 373,034 95.7 %

Personal insurance 27,002 3.5 % 21,710 3.9 % 16,660 4.3 %

Total gross written premiums $ 764,373 100.0 % $ 552,814 100.0 % $ 389,694 100.0 %

Our Competitive Strengths

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Expense management is ingrained in our business culture.

We believe that our proprietary technology platform coupled with our low-cost operation allow us to process policy quotes, underwrite policies and operate at a lower cost than our direct competitors.

In particular, our efficient platform allows us

to provide a higher level of service to our brokers and to target smaller accounts which we believe are generally subject to less competition.

We believe that our proprietary technology platform coupled with our low-cost operation allow us to process quotes, underwrite policies and operate at a lower cost than our direct competitors.

In particular, our efficient platform allows us to provide a higher level of service to our brokers and to target smaller accounts which we believe are generally subject to less competition.

For the year ended December 31, 2021, our expense ratio was 21.4%.

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We believe we distinguish ourselves in the market with our contrarian risk appetite and our willingness to offer terms on risks requiring more extensive underwriting that some of our competitors may decline to consider.

Such accounts frequently offer us a better risk-adjusted return than those preferred by our competitors due to reduced competition.

Such accounts frequently offer us a better return than those preferred by our competitors due to reduced competition.

Leverage investment in technology to drive efficiencies.

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We have organized our workflows, designed our systems and aligned our staff to provide superior service levels to brokers while achieving a level of efficiency that we believe provides us with a competitive advantage and helps contribute to our low expense ratio.

We believe that automation also reduces human error in our underwriting, policy processing, accounting, collections, and claims adjusting processes.

Additionally, we are able to track quotes, monitor historical loss experience and reserve development, and

measure other relevant metrics at a granular level of detail.

We believe that

automation also reduces human error in our underwriting, policy processing, accounting, collections, and claims adjusting processes.

Additionally, we are able to track quotes, monitor historical loss experience and reserve development, and measure other relevant metrics at a granular level of detail.

We believe that our technology is scalable and will allow us to maintain a low expense ratio as we continue to organically grow our business.

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real estate entity)

Kinsale Capital Group, Inc., a Delaware domiciled insurance holding company, was formed on June 3, 2009 for the purpose of acquiring and managing insurance entities.

Prior to September 5, 2014, the Company was a Bermuda registered holding company, formerly known as Kinsale Capital Group, Ltd.

Effective September 5, 2014, KCGL was re-domesticated from Bermuda to Delaware.

A wholly-owned subsidiary of KCGL, Kinsale Capital Group, Inc., which was formed on June 4, 2009 as a U.S.

holding company, was immediately merged into the re-domesticated entity and Kinsale Capital Group, Ltd.

changed its name to Kinsale Capital Group, Inc.

On June 4, 2009, we incorporated Kinsale Management, Inc.

("Kinsale Management") as a wholly-owned subsidiary domiciled in Delaware, in order to provide management services to all of our U.S.-based subsidiaries.

On February 5, 2010, we acquired American Healthcare Specialty Insurance Company and changed its name to Kinsale Insurance Company ("Kinsale Insurance").

Virgin Islands.

On August 21, 2013, we established Aspera Insurance Services, Inc.

("Aspera"), an insurance broker.

Aspera is domiciled in Virginia and is authorized to conduct business in Virginia, Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont and Washington.

On December 3, 2018, we incorporated Kinsale Real Estate, Inc.

("Kinsale Real Estate"), as a wholly-owned subsidiary domiciled in Delaware, in order to acquire and hold real estate.

On December 3, 2018, we incorporated 2001 Maywill, LLC, as a wholly-owned subsidiary of Kinsale Real Estate, domiciled in Delaware, in order to hold our corporate headquarters.

Marketing and Distribution

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Our underwriters regularly visit with brokers in their offices in order to market to these brokers and discuss the products we offer.

For the year ended December 31, 2020, our largest brokers were R-T Specialty, LLC, which produced $72.1 million, or 13.0%, of our gross written premiums, AmWINS Group, LLC, which produced $63.8 million, or 11.5% of our gross written premiums, and CRC Commercial Solutions, which produced $56.5 million, or 10.2% of our gross written premiums.

For the year ended December 31, 2021, our largest brokers were RSG Specialty, LLC, which produced $137.0 million, or 17.9%, of our gross written premiums and AmWINS Brokerage, which produced $118.8 million, or 15.5% of our gross written premiums.

No other broker accounted for more than 10% of our gross written premiums in the year ended December 31, 2021.

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In 2021, we paid an average commission to our brokers of 14.6% of gross written premiums.

We believe this is slightly lower than the

average commission paid by our competitors.

We believe this is slightly lower than the average commission paid by our competitors.

We believe that our specialization in hard-to-place risks, combined with our high degree of service, including our rapid speed-to-quote, permits us to manage our commission expense as part of our overall management of the underwriting process.

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New Jersey 22,125 2.9 % 16,823 3.0 % 11,887 3.1 %

Arizona 12,722 2.3 % 8,116 2.1 % 5,469 2.0 %

Pennsylvania 16,518 2.2 % 11,184 2.0 % 6,867 1.8 %

Arizona 15,894 2.1 % 12,722 2.3 % 8,116 2.1 %

Georgia 14,920 1.9 % 11,014 2.0 % 6,431 1.7 %

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Information Technology

Our information technology department consisted of approximately 70 full-time employees and contractors as of December 31, 2020.

Our information technology department consisted of approximately 90 employees and contractors as of December 31, 2021.

Our Chief Information Officer has over 30 years of experience in the technology field.

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We believe the proprietary technology platform, which includes the data warehouse, is a competitive advantage for us.

Reserve Development

We maintain reserves for specific claims incurred and reported and for claims incurred but not reported.

We continually monitor and adjust our reserves as necessary using new information on reported claims and a variety of statistical techniques.

Anticipated inflation is reflected implicitly in the reserving process through analysis of cost trends and the review of historical development.

We do not discount our reserves for unpaid losses and loss adjustment expenses to reflect estimated present value.

However, our ultimate liability may be greater or less than current reserves and there is always the risk that reserves may prove inadequate.

See "Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates — Reserves for Unpaid Losses and Loss Adjustment Expenses" and Note 7 of the consolidated financial statements for a discussion of estimates and assumptions related to the reserves for unpaid losses and loss adjustment expenses.

Catastrophe Risk Management

We use sophisticated computer models to analyze the risk of severe losses from natural catastrophes.

We measure exposure to these losses in terms of probable maximum loss ("PML"), which is an estimate of the amount of loss we would expect to meet or exceed once in a given number of years (referred to as the return period).

When managing our catastrophe exposure, we focus on the 100-year and the 250-year return periods.

Our main catastrophe risk arises from hurricanes and we manage this exposure through:

• careful and disciplined underwriting,

• purchasing extensive reinsurance protection from financially strong counterparties,

• analyzing results of catastrophe modeling for our business portfolio on monthly basis, and

• limiting the concentration of property business by geographic area to reduce loss exposure from extreme events.

We mitigate catastrophe exposure by implementing certain aggregate risk management guidelines for our overall property business.

For instance, these guidelines limit the exposed property values within a specified geographic radius, which in turn limits the gross and net PML.

In addition to our aggregate risk management guidelines, we write policies using limits tactically in order to minimize exposure to large losses.

While specific limits change over time as our risk appetite changes due to growth, the majority of our business is concentrated to property coverages with policy limits between $1.0 million and $5.0 million.

O ur insurance policies are also generally written for one year and repriced annually to reflect changing exposures, including changes in frequency and severity of weather-related claims.

The increased frequency and severity of natural catastrophes drive increased volatility for insurers.

It also causes standard insurers to push more catastrophe exposed business into the E&S market thereby increasing our business opportunity.

E&S companies are better able to manage the volatility associated with catastrophe risk given their regulatory freedom of rate and form allowing for maximum flexibility in restricting coverage and charging higher rates.

We enter into reinsurance contracts primarily to limit our exposure to potential large losses.

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The reinsurer assumes the exposure in return for a portion of the premium.

Our reinsurance is primarily contracted under quota-share reinsurance contracts and excess of loss contracts.

In quota-share reinsurance, the reinsurer agrees to assume a

specified percentage of the ceding company's losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission.

Our reinsurance is primarily contracted under quota-share reinsurance contracts and excess of loss treaties.

In quota-share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company's losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission.

In excess of loss reinsurance, the reinsurer agrees to assume all or a portion of the ceding company's losses, in excess of a specified amount.

Under excess of loss reinsurance, the premium payable to the reinsurer is negotiated by the parties based on their assessment of the amount of risk being ceded to the reinsurer because the reinsurer does not share proportionately in the ceding company's losses.

We also use facultative reinsurance coverage on a limited basis.

Facultative coverage refers to a reinsurance contract on individual risks as opposed to a group or class of business.

It is used for a variety of reasons, including supplementing the limits provided by the treaty coverage or covering risks or perils excluded from treaty reinsurance.

We renew our reinsurance treaties annually.

During each renewal cycle, there are a number of factors we consider when determining our reinsurance coverage, including (1) plans to change the underlying insurance coverage we offer, (2) trends in loss activity, (3) the level of our capital and surplus, (4) changes in our risk appetite and (5) the cost and availability of reinsurance coverage .

To manage our natural catastrophe exposure, we use computer models to analyze the risk of severe losses.

When managing our catastrophe exposure, we focus on the 100 year and the 250 year return periods.

Effective with the June 1, 2020 renewal, we entered into a new personal insurance quota-share treaty.

We used model results previously noted to stress test the completeness of our program and determined that over 70% of the modelled losses from catastrophes costing over $10 million came from our personal insurance business.

We determined that utilizing a personal lines quota-share treaty combined with a catastrophe treaty was a more efficient and cost-effective way to manage the total loss exposure on our property coverages.

As previously discussed, when managing our catastrophe exposure, we focus on the 100-year and the 250-year return periods.

We mitigate our risk associated with natural catastrophes with respect to our property insurance business primarily by purchasing reinsurance from only highly-rated reinsurers.

We utilize a personal lines quota-share treaty combined with a catastrophe treaty as an efficient and cost-effective way to manage the total loss exposure on our property coverages.

The following is a summary of our significant reinsurance programs as of December 31, 2021:

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Property - per risk (1) Up to $10.0 million per risk $5.75 million excess of $3.0 million $3.0 million per occurrence

Property - personal insurance (2) N/A 50% up to $47.5 million per catastrophe

50% of all personal property losses

Property - personal insurance (2) N/A 50% up to $30.4 million per catastrophe 50% of all personal property losses

Property - catastrophe (3) N/A $60.0 million excess of $15.0 million $15.0 million per catastrophe

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(1) Our property per-risk reinsurance reduces the financial impact of a large loss on a single commercial property or inland marine policy.

This treaty includes a reinstatement provision which requires us to pay reinstatement premiums after a loss has occurred in order to preserve coverage.

In addition to the Company's retention, this treaty includes a deductible of the first $4.0 million of losses covered under this reinsurance treaty.

This treaty also includes a reinstatement provision which requires us to pay reinstatement premiums after a loss in excess of $5 million has occurred in order to preserve coverage.

(2) Our personal insurance quota share reinsurance reduces the financial impact of property losses on our personal insurance policies.

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Our property catastrophe reinsurance includes a reinstatement provision which requires us to pay reinstatement premiums after a loss has occurred in order to preserve coverage.

Including the reinstatement provision, the maximum aggregate loss recovery limit is $90 million and is in addition to the per-occurrence coverage provided by our facultative and treaty coverages.

Including the reinstatement provision, the maximum aggregate loss recovery limit is $120 million and is in addition to the per-occurrence coverage provided by our treaty coverages.

(4) Reinsurance is not applicable to any individual policy with a per-occurrence limit of $2.0 million or less.

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Arch Reinsurance Co.

Hannover Ruck SE A+ 3,997

BF Re A+ 2,489

Hannover Ruckversicherungs AG A+ 8,115

Berkley Insurance Co.

General Reinsurance Corp.

Partner Reinsurance Co.

of the US A+ 1,417

Total for Top Ten 89,078

AXIS Reinsurance Company A 1,204

Total for top ten reinsurers 118,599

All others 4,371

Total $ 93,215

Total reinsurance recoverable $ 122,970

We did not have reinsurance recoverables greater than $1.2 million at December 31, 2021 from any individual reinsurer other than the ten listed above.

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In addition, under the terms of our reinsurance contracts discussed above, we may retain funds due from reinsurers as security for those recoverable balances.

Catastrophe Risk Management

In addition to the reinsurance protection noted above, we use other techniques to carefully manage our exposure to catastrophe losses.

We use computer models to analyze the risk of severe losses from natural catastrophes.

We measure exposure to these losses in terms of PML.

When managing our catastrophe exposure, we focus on the 100 year and the 250 year return periods.

Our main catastrophe risk arises from hurricanes.

We manage this exposure through careful and disciplined underwriting, extensive reinsurance protection purchased from financially strong counterparties and monthly catastrophe modeling of the portfolio.

Additionally, we limit the concentration of property business by geographic area to reduce loss exposure from extreme events.

Reserve Development

We maintain reserves for specific claims incurred and reported, reserves for claims incurred but not reported and reserves for uncollectible reinsurance when appropriate.

Our ultimate liability may be greater or less than current reserves.

In the insurance industry, there is always the risk that reserves may prove inadequate.

We continually monitor reserves using new information on reported claims and a variety of statistical techniques.

Anticipated inflation is reflected implicitly in the reserving process through analysis of cost trends and the review of historical development.

We do not discount our reserves for unpaid losses and loss adjustment expenses to reflect estimated present value.

See Note 7 of the notes to the consolidated financial statements and "Critical Accounting Estimates" for a discussion of estimates and assumptions related to the reserves for unpaid losses and loss adjustment expenses.

Investment income is an important component of our earnings.

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We seek to maximize investment returns using investment guidelines that stress prudent allocation among cash and cash equivalents, fixed-maturity securities and, to a lesser extent, equity securities.

Our cash and invested assets generally consist of fixed-maturity securities, short-term investments, cash and cash equivalents, exchange traded funds and preferred stock (classified as equity securities on the consolidated balance sheet).

Our cash and invested assets generally consist of fixed-maturity securities, short-term investments, cash equivalents, exchange traded funds and preferred stock (classified as equity securities on the consolidated balance sheet).

Our fixed-maturity securities are classified as "available-for-sale" and are carried at fair value with unrealized gains and losses on those securities reported, net of tax, as a separate component of accumulated other comprehensive income (loss).

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Short-term investments, if any, are reported at cost and include investments that are both readily convertible to known amounts of cash and have maturities of 12 months or less upon acquisition by us.

Our cash and invested assets totaled $1.3 billion at December 31, 2020 and $908.2 million at December 31, 2019, and is summarized as follows:

Our cash and invested assets totaled $1.7 billion at December 31, 2021 and $1.3 billion at December 31, 2020, and is summarized as follows:

December 31, 2021 December 31, 2020

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Asset-backed securities 301,775 17.9 % 240,661 18.7 %

Commercial mortgage-backed securities 70,969 5.5 % 56,046 6.2 %

Residential mortgage-backed securities 337,685 20.0 % 222,656 17.3 %

Commercial mortgage-backed securities 59,227 3.6 % 70,969 5.5 %

Total fixed maturities 1,392,066 82.6 % 1,081,800 84.0 %

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Exchange traded funds 123,389 7.3 % 98,050 7.6 %

Nonredeemable preferred stock 31,612 2.4 % 23,831 2.6 %

Non-redeemable preferred stock 49,222 2.9 % 31,612 2.4 %

Total equity securities 172,611 10.2 % 129,662 10.0 %

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($ in thousands)

Treasury securities and obligations of U.S.

government agencies

$ — $ 6,847 $ — $ — $ — $ 6,847

Obligations of states, municipalities and political subdivisions

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Asset-backed securities 269,987 14,722 13,188 3,878 — 301,775

Commercial mortgage-backed securities 65,080 5,889 — — — 70,969

Residential mortgage-backed securities 36,436 300,752 — — 497 337,685

Commercial mortgage-backed securities 53,644 5,583 — — — 59,227

Total fixed maturities $ 375,579 $ 523,739 $ 234,547 $ 196,740 $ 61,461 $ 1,392,066

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Asset-backed securities 301,775 21.7 %

Commercial mortgage-backed securities 70,969 6.6 %

Residential mortgage-backed securities 337,685 24.3 %

Commercial mortgage-backed securities 59,227 4.2 %

Total fixed maturities $ 1,392,066 100.0 %

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($ in thousands)

Industrials and other $ 172,500 54.5 %

Financial $ 250,826 54.7 %

Industrials and other 193,117 42.1 %

Utilities 14,544 3.2 %

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Ratings for an insurance company are based on its ability to pay policyholder obligations and are not directed toward the protection of investors.

Today, our primary competitors in the E&S sector include Alleghany Corporation, Argo Group International Holdings, Ltd., James River Group Holdings, Ltd., the Lloyds of London syndicates, Markel Corporation, ProSight Global, Inc., RLI Corp.

Today, our primary competitors in the E&S sector include Alleghany Corporation, Arch Capital Group, Ltd., Argo Group International Holdings, Ltd., James River Group Holdings, Ltd., Lloyds of London, Markel Corporation, RLI Corp.

Berkley Corporation.

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State insurance laws and regulations generally are designed to protect the interests of policyholders, consumers and claimants rather than stockholders or other investors.

The nature and extent of state regulation varies by jurisdiction, and state insurance regulators generally have broad administrative power relating to, among other matters, setting capital and surplus requirements, licensing of insurers and agents, establishing standards for reserve adequacy, prescribing statutory accounting methods, determining the form and content of statutory financial reports, regulating certain transactions with affiliates and prescribing types and amounts of investments.

Regulation of insurance companies constantly changes as governmental agencies and legislatures react to real or perceived issues.

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We operate as an insurance holding company system and are subject to the insurance holding company laws of the State of Arkansas, the state in which Kinsale Insurance is organized and domiciled.

These statutes require that each insurance company in the system register with the insurance department of its state of domicile and furnish information concerning the operations of companies within the holding company system that may materially affect the operations, management or financial condition of the insurers within the system and domiciled in that state.

These statutes also provide that all transactions among members of a holding company system must be fair and reasonable.

These laws require that each insurance company in the system register with the insurance department of its state of domicile and furnish information concerning the operations of companies within the holding company system that may materially affect the operations, management or financial condition of the insurers within the system and domiciled in that state.

These laws also provide that all transactions among members of a holding company system must be fair and reasonable.

Transactions between insurance subsidiaries and their parents and affiliates generally must be disclosed to the state regulators, and notice to or prior approval of the applicable state insurance regulator generally is required for any material or extraordinary transaction.

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The ORSA Model Act, when adopted by state regulators requires domestic insurers to maintain a risk management framework and establishes a legal requirement for domestic insurers to conduct an ORSA.

The ORSA is a confidential internal assessment, appropriate to the nature, scale and complexity of an insurer, regarding the material and relevant risks identified by the insurer associated with an insurer’s current business plan and the sufficiency of capital resources to support those risks.

The ORSA Summary Report is a confidential internal assessment, appropriate to the nature, scale and complexity of an insurer, regarding the material and relevant risks identified by the insurer associated with an insurer’s current business plan and the sufficiency of capital resources to support those risks.

Effective July 2015, Arkansas adopted its version of the ORSA Model Act.

Our subsidiary, Kinsale Insurance, is subject to the requirements of the ORSA Model Act adopted in its domicile of Arkansas.

Our subsidiary, Kinsale Insurance, is subject to the requirements of the ORSA Model Act as adopted in its domicile of Arkansas.

Additionally, in response to the growing threat of cyber-attacks in the insurance industry, certain jurisdictions have begun to consider new cybersecurity measures, including the adoption of cybersecurity regulations which, among other things, would require insurance companies to establish and maintain a cybersecurity program and implement and maintain cybersecurity policies and procedures.

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Additionally, the FIO must publish a notice regarding the basis for the preemption in the Federal Register, allowing a reasonable opportunity for comments.

The FIO cannot preempt state antitrust laws governing rate making, underwriting, sales practices or coverage

requirements.

The FIO cannot preempt state antitrust laws governing rate making, underwriting, sales practices or coverage requirements.

No later than September 30th of each year, the FIO must submit an annual report to Congress explaining any use of the preemption authority during the prior year.

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After a number of private negotiating sessions, on January 13, 2017, the U.S.

Department of Treasury and the Office of the U.S.

Department of the Treasury and the Office of the U.S.

Trade Representative notified Congress that they had completed negotiations with the European Union for the Covered Agreement, which addressed reinsurance, insurance group supervision and the exchange of information between insurance supervisors.

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On June 25, 2019, the NAIC adopted revisions to the Credit for Reinsurance Model Law and Regulation in order to satisfy the substantive and timing requirements of the Covered Agreement.

These amendments pave the way for state legislatures to bring their credit for reinsurance laws into compliance with the Covered Agreement's zero reinsurance collateral provisions by September 2022, thereby avoiding a potential federal preemption of these laws (Arkansas has not yet adopted the Credit for Reinsurance Model Law and Regulation).

Associated revisions were adopted by Arkansas effective July 1, 2021.

Trade practices

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Human Capital

As of February 18, 2021, we had 323 full-time and 12 part-time employees, all of whom are employed by us through arrangements with Kinsale Management, Inc., and are located at our headquarters in Richmond, Virginia.

Our employees are not subject to any collective bargaining agreements, and we are not aware of any current efforts to implement such an agreement.

We consider our relationship with our employees to be good.

We believe our employees are key to achieving our business objectives.

During fiscal year 2020, the Company launched remote-working protocols due to the escalating COVID-19 outbreak and, as a result, over 90% of our employees worked from home for a portion of time during the eight months spanning from March through October.

Before our employees returned during the September to October time frame, we implemented COVID-19 protocols to minimize the spread of the virus in our workplace.

These protocols, which currently remain in place, meet or exceed the Centers for Disease Control, Virginia Department of Health, and Virginia Department of Labor and Industry guidelines and, where applicable, our state mandate.

Additionally, during the fourth quarter of 2020, we moved into a new headquarters building.

Our new building utilizes technological amenities which facilitates the health and wellness of our employees.

For example, our building’s heating, ventilation and air conditioning (“HVAC”) system monitors air quality and pulls air from the outside rather than simply recirculating it, which helps reduce indoor airborne contaminants.

Many of our building’s fixtures are touchless, such as restroom doors, lighting fixtures, wash basins and elevators.

We have also taken advantage of newer technologies to help sanitize the air, such as ultraviolet (“UV”) filters in our HVAC system.

We continue to evaluate health and wellness initiatives which are in the best interests of our employees and the stakeholders of our Company.

As of December 31, 2021, we had 375 employees, of which 364 were full-time employees, and all of whom were located at our headquarters in Richmond, Virginia.

Compensation and Benefits

We believe that our employees are one of our most valuable assets and paying our employees well is the foundation of our performance-based culture.

In order to attract and retain talent, we offer and maintain market competitive compensation and benefit programs to all our employees.

Our compensation program includes base salary, performance-based cash awards and equity grants for some management level employees.

In 2020, the median pay of all our full-time employees was more than $97,000.

We believe that our employees are our most valuable asset and paying our employees well is the foundation of our performance-based culture.

In order to attract and retain high-performing talent, we offer and maintain market-competitive compensation and benefit programs to all our employees.

Our compensation program includes base salary, performance-based bonuses and equity grants for certain management-level employees.

The mix of these rewards varies depending on the employee’s role at the Company and our longstanding pay-for-performance philosophy.

While all of our employees are eligible to participate in the variable compensation element of our program (annual cash bonus and equity awards), variable compensation becomes a larger portion of the total mix for employees at higher levels in the organization.

While all of our employees are eligible to participate in the variable compensation elements of our program (annual cash bonus and equity awards), variable compensation becomes a larger portion of the total mix for employees at higher levels in the organization.

Our executives, who are responsible for the development and execution of our strategic and financial plans, have the largest portion of their compensation tied to equity-based incentives to ensure financial alignment with our stakeholders.

In addition to competitive compensation, we offer our employees comprehensive and flexible benefit options including:

In addition to competitive compensation, we offer comprehensive and flexible benefit options to support the health and wellness needs of our employees including:

• Company-matched 401(k) plan

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• Paid time off, family leave, and employee assistance programs.

Learning and Development

Employee training and development programs that enhance employee skills and capabilities directly lead to Kinsale’s success.

We encourage and support employee development through our Educational Assistance Program.

All employees have the opportunity to enroll in courses or classes that will enhance their contribution to the organization and/or prepare them for more advanced positions at Kinsale.

Our employees have access to courses tailored to specific career paths, such as underwriting, claims, information technology, reinsurance, and other disciplines to build professional expertise.

We sponsor on-site education courses, such as the Chartered Property Casualty Underwriter (CPCU), that make professional development programs more accessible to our employees.

In addition, we offer tuition reimbursement programs to encourage employees to enhance their education, skills and knowledge for their continued growth.

Performance & Success

We believe that performance management ensures our continued success through cultivating the right talent and skill sets and equipping our employees with the necessary tools and feedback.

On an annual basis, every employee at Kinsale actively participates in a performance evaluation.

The annual performance management process requires setting goals, planning development, assessing progress against those goals as well as discussing opportunities for improvement.

Our performance management process provides a forum for meaningful conversations to discuss what went well and what can be improved.

Diversity and Inclusion

We are committed to fostering a diverse and inclusive work environment free from discrimination of any kind and that supports the communities we serve.

We seek to recruit the best qualified employees regardless of gender, ethnicity or other protected traits and it is our policy to fully comply with all laws applicable to discrimination in the workplace.

Our diversity and inclusion principles are reflected in our employee training and policies.

We believe in hiring the best talent and making our employment-related decisions without regard to race, color, religion, gender, sexual orientation, national origin, age, veteran status, disability, or other characteristics or activity that is protected by state or U.S.

We have an anti-nepotism policy in place to ensure fairness and business decisions are based on individual qualifications, skills, ability, and performance.

We value the diverse perspectives, talent, and experience that our employees bring to our organization.

We believe the best business decisions are reached by listening to diverse views and opinions.

We are committed to fostering a diverse and inclusive work environment free from discrimination of any kind and one that supports the communities we serve.

Available Information

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The SEC maintains an internet web site that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC.

The address of that site is http://www.sec.gov.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and other information filed by us with the SEC are available, without charge, on our internet web site, http://www.kinsalecapitalgroup.com, as soon as reasonably practicable after they are filed electronically with the SEC.

The address of that site is https://www.sec.gov.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and other information filed by us with the SEC are available, without charge, on our internet web site, https://www.kinsalecapitalgroup.com, as soon as reasonably practicable after they are filed electronically with the SEC.

The information on our website is not a part of this Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business