What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-23 · 169 added, 158 removed, 1249 unchanged (21% of the section changed)

78 unchanged sentences

As described in Notes 1 and 7 to the consolidated financial statements, the Company records reserves for unpaid losses and loss adjustment expenses (reserves), which represent the Company’s best estimate of ultimate unpaid cost of all reported and unreported losses and loss adjustment expenses incurred prior to the financial statement date.

This estimate is based on an actuarial method that uses the Company’s initial expected loss ratios, expected reporting patterns for losses based on historical Company and industry data, and the Company’s actual reported losses and loss adjustment expenses.

This estimate is based on various actuarial methods.

These methods utilize numerous inputs including initial expected loss ratios, expected development patterns for losses based on historical Company and industry data, actual reported losses and loss adjustment expenses, claim counts and price indices.

All estimates are regularly reviewed and, as experience develops and new information becomes known, the reserves are adjusted as necessary.

6 unchanged sentences

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s reserving process.

These included internal controls over the actuarial method and certain assumptions used to derive the Company’s best estimate of reserves and the comparison of the Company’s best estimate to the annual independent actuarial reserve estimate performed by an external consulting actuary.

These included internal controls over the actuarial methods and certain assumptions used to derive the Company’s best estimate of reserves and the comparison of the Company’s best estimate to the annual independent actuarial reserve estimate performed by an external consulting actuary.

We also involved actuarial professionals with specialized skills and knowledge, who assisted in:

12 unchanged sentences

$ 3,663,031 allowance for credit loss:

$ 553 – 2023;

$ 2,834,463 and $ 553 – 2023)

29 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.01 par value, 400,000,000 shares authorized, 23,181,919 shares issued and outstanding at December 31, 2023;

Common stock, $ 0.01 par value, 400,000,000 shares authorized, 23,294,783 shares issued and 23,272,157 shares outstanding at December 31, 2024;

23,181,919 shares issued and outstanding at December 31, 2023

2 unchanged sentences

Accumulated other comprehensive loss ( 97,206 ) ( 94,617 )

Treasury stock, at cost ( 22,626 shares in 2024;

Stockholders’ equity 1,483,561 1,086,832

30 unchanged sentences

Other comprehensive income (loss):

Change in unrealized gains (losses) on available-for-sale investments, net of taxes 40,301 ( 153,043 ) ( 23,255 )

Change in unrealized (losses) gains on available-for-sale investments, net of taxes ( 2,589 ) 40,301 ( 153,043 )

Total comprehensive income $ 412,254 $ 348,394 $ 6,071

9 unchanged sentences

Consolidated Statements of Changes in Stockholders' Equity

Shares of Common Stock Common Stock Additional Paid-in Capital Retained Earnings Accumu-

Shares of Common Stock Outstanding Common Stock Additional Paid-in Capital Retained Earnings Accumu-

hensive (Loss)

Income Total Stockholders' Equity

Income Treasury

Stock, at Cost Total Stockholders' Equity

(in thousands, except for share and per share data)

Balance at December 31, 2021 22,834,377 $ 228 $ 295,040 $ 385,942 $ 18,125 $ — $ 699,335

Issuance of common stock, net of issuance costs

155,000 2 47,496 — — — 47,498

Issuance of common stock under stock-based compensation plan

7 unchanged sentences

Balance at December 31, 2022 23,090,526 231 347,015 533,121 ( 134,918 ) — 745,449

Issuance of common stock, net of issuance costs

155,000 2 47,496 — — 47,498

Issuance of common stock under stock-based compensation plan

4 unchanged sentences

— — — ( 12,967 ) — — ( 12,967 )

Other comprehensive loss, net of income taxes — — — — ( 153,043 ) ( 153,043 )

Other comprehensive income, net of income taxes — — — — 40,301 — 40,301

Net income — — — 308,093 — — 308,093

Balance at December 31, 2023 23,181,919 232 352,970 828,247 ( 94,617 ) — 1,086,832

Issuance of common stock, net of issuance costs

Issuance of common stock under stock-based compensation plan

4 unchanged sentences

— — — ( 13,954 ) — — ( 13,954 )

Other comprehensive income, net of income taxes — — — — 40,301 40,301

Other comprehensive loss, net of income taxes — — — — ( 2,589 ) — ( 2,589 )

Net income — — — 414,843 — — 414,843

Treasury stock acquired — share repurchases ( 22,626 ) — — — — ( 10,000 ) ( 10,000 )

Balance at December 31, 2024 23,272,157 $ 233 $ 361,398 $ 1,229,136 $ ( 97,206 ) $ ( 10,000 ) $ 1,483,561

46 unchanged sentences

Dividends paid ( 13,940 ) ( 12,954 ) ( 11,927 )

Treasury stock acquired — share repurchases ( 10,000 ) — —

Net cash (used in) provided by financing activities ( 29,657 ) ( 28,523 ) 185,992

40 unchanged sentences

Interest on fixed-maturity securities is credited to earnings as it accrues.

Premiums and discounts are amortized or accreted using the effective interest method over the lives of the related fixed maturities, or to the earliest call date for securities purchased at a premium.

This method includes an adjustment for estimated principal prepayments, if any, on

asset- and mortgage-backed securities.

Premiums and discounts are amortized or accreted using the effective interest method over the lives of the related fixed maturities, or to the earliest call date for

securities purchased at a premium.

This method includes an adjustment for estimated principal prepayments, if any, on asset- and mortgage-backed securities.

To the extent that the estimated lives of such securities change as a result of changes in estimated prepayment rates, the adjustments are included in net investment income using the retrospective method.

49 unchanged sentences

Total property and equipment, net $ 82,924 $ 63,404

Construction in progress includes capitalized expenses related to the development of the new corporate headquarters' building.

Construction is expected to be completed in the fourth quarter of 2025.

Indefinite-lived intangible assets

8 unchanged sentences

Reserves for unpaid losses and loss adjustment expenses represent management's best estimate of ultimate unpaid cost of all reported and unreported losses and loss adjustment expenses incurred prior to the financial statement date.

The estimates are based on an actuarial method that uses management’s initial expected loss ratios, expected reporting patterns for losses based on industry data and the Company’s actual reported losses and loss adjustment expenses.

The estimates are based on several actuarial methods that use a variety of inputs including initial expected loss ratios, loss development patterns, paid losses, reported losses, claim counts and price indices.

All estimates are regularly reviewed and, as experience develops and new information becomes known, the reserves for unpaid losses and loss adjustment expenses are adjusted as necessary.

Such adjustments are reflected in the results of operations in the period in which they are determined.

Such adjustments are reflected in the results of operations in the period in which they

are determined.

Although management believes that the reserves for losses and loss adjustment expenses are reasonable, due to the inherent uncertainty in estimating reserves for unpaid losses and loss adjustment expenses, it is possible that the Company’s actual incurred losses and loss adjustment expenses will not develop in a manner consistent with the assumptions inherent in the determination of these reserves.

1 unchanged sentence

Furthermore, management may determine that recorded reserves are more than adequate to cover expected losses which will result in a reduction to the reserves.

The Company believes that the reserves for unpaid losses and loss adjustment expenses at December 31, 2023 and 2022 are

adequate and represent a reasonable estimate of the Company's future obligations.

The Company believes that the reserves for unpaid losses and loss adjustment expenses at December 31, 2024 and 2023 are adequate and represent a reasonable estimate of the Company's future obligations.

See Note 7 for a further discussion of reserves for unpaid losses and loss adjustment expenses.

27 unchanged sentences

Recently adopted accounting pronouncements

There were no recently adopted accounting standards that had a material impact on the Company’s consolidated financial statements.

Prospective accounting pronouncements

ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Accounting Standards Update ("ASU") 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures," which expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss.

1 unchanged sentence

Additionally, ASU 2023-07 requires all segment profit or loss and assets disclosures to be provided on an annual and interim basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning one year later.

Early adoption is permitted and the amendments must be applied retrospectively to all prior periods presented.

The Company does not expect the adoption of this guidance to materially affect the consolidated financial statements, and the Company is currently evaluating the effect the guidance will have on its disclosures.

ASU 2023-07 became effective for the Company for the year ended December 31, 2024 and will be effective for interim periods beginning in 2025.

Refer to Note 15 for the Company's segment reporting disclosures.

Prospective accounting pronouncements

ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses," requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effect the guidance will have on its disclosures.

Available-for-sale investments

43 unchanged sentences

Investment income due and accrued is written off through earnings at the time the issuer of the bond defaults or is expected to default on payments.

As of December 31, 2023, the Company's credit loss review resulted in an allowance for credit losses on 6 securities.

As of December 31, 2024, the Company's credit loss review resulted in an allowance for credit losses on four securities.

The following table presents changes in the allowance for expected credit losses on available-for-sale securities:

4 unchanged sentences

Reduction from securities sold during the period ( 479 ) ( 12 )

Net increase from securities that had an allowance at the beginning of the period 198 —

Net (decrease) increase from securities that had an allowance at the beginning of the period ( 50 ) 198

Ending balance $ 27 $ 553

52 unchanged sentences

Real estate investments

During the year ended December 31, 2022, the Company purchased a real estate investment property.

Real estate investments consisted of the following at December 31, 2023 and 2022:

(in thousands)

Building $ — $ 44,931

Land 14,791 17,946

Intangible in-place lease — 9,749

Site improvements — 2,686

Parking deck — 1,311

14,791 76,623

Accumulated depreciation — ( 236 )

Total real estate investments, net $ 14,791 $ 76,387

Real estate investments represents directly owned property held for investment purposes and consisted of land with a carrying value of $ 15.0 million and $ 14.8 million at December 31, 2024 and 2023, respectively.

There was no accumulated depreciation on real estate investments at December 31, 2024 and 2023.

During the third quarter of 2023, the Company sold the parking deck, one of the office buildings and the related in-place leases of its real estate investment property for approximately $ 62.0 million in cash, net of seller’s costs.

17 unchanged sentences

Net investment income $ 150,287 $ 102,335 $ 51,282

There was no depreciation expense related to real estate investments for the year ended December 31, 2024 as the Company sold the related assets during 2023.

Investment expenses included depreciation expense related to real estate investments of $ 0.5 million and $ 0.2 million for the years ended December 31, 2023 and 2022, respectively.

There were no real estate investments at December 31, 2021.

Realized investment gains and losses

6 unchanged sentences

Realized losses ( 1,131 ) ( 2,374 ) ( 904 )

Net realized (losses) gains from fixed-maturity securities ( 522 ) 174 2,941

Net realized gains (losses) from fixed-maturity securities 20 ( 522 ) 174

Equity securities:

1 unchanged sentence

Realized losses ( 455 ) ( 5,329 ) ( 297 )

Net realized gains (losses) from equity securities 2,349 1,066 ( 113 )

Net realized gains from equity securities 6,816 2,349 1,066

Realized losses from the sales of short-term investments — ( 37 ) ( 49 )

Realized gain on sale of real estate investments 4,250 — —

Realized (losses) gains on sale of real estate investments ( 5 ) 4,250 —

Net realized investment gains $ 6,831 $ 6,040 $ 1,191

The net realized gains or losses on sales of equity securities represent the total gains or losses from the purchase dates of the equity securities.

The change in unrealized gains (losses) in the consolidated statement of income consists of two

The change in unrealized gains (losses) in the consolidated statement of income consists of two components:

(1) the reversal of the gain or loss recognized in previous periods on equity securities sold and (2) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held.

4 unchanged sentences

Payable for investments purchased

The Company recorded a payable for investments purchased, not yet settled, of $ 12.3 million and $ 1.8 million at December 31, 2023 and 2022, respectively.

The Company did not have a payable for investments purchased at December 31, 2024.

The Company recorded a payable for investments purchased, not yet settled, of $ 12.3 million at December 31, 2023.

The payable balance was included in the other liabilities line item of the consolidated balance sheet.

16 unchanged sentences

For those investments where significant inputs are unobservable, the Company's investment accounting vendor obtains valuations from pricing vendors or brokers using the market approach and income approach valuation techniques and are disclosed as Level 3.

Management performs several procedures to ascertain the reasonableness of investment values included in the consolidated financial statements at December 31, 2023 and 2022, including 1) obtaining and reviewing internal control reports from the Company's investment accounting vendor that assess fair values from third party pricing services, 2) discussing with the Company's investment accounting vendor its process for reviewing and validating pricing obtained

from third party pricing services and 3) reviewing the security pricing received from the Company's investment accounting vendor and monitoring changes in unrealized gains and losses at the individual security level.

Management performs several procedures to ascertain the reasonableness of investment values included in the consolidated financial statements at December 31, 2024 and 2023, including 1) obtaining and reviewing internal control reports from the Company's investment accounting vendor that assess fair values from third party pricing services, 2) discussing with the Company's investment accounting vendor its process for reviewing and validating pricing obtained from third party pricing services and 3) reviewing the security pricing received from the Company's investment accounting vendor and monitoring changes in unrealized gains and losses at the individual security level.

The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs.

43 unchanged sentences

There were no assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2024 or 2023.

The carrying amount of the Company's fixed-rate senior notes was $ 175.0 million and $ 125.0 million, less debt issuance cost, and the corresponding estimated fair value was $ 171.6 million and $ 117.2 million at December 31, 2023 and 2022, respectively.

The carrying amount of the Company's fixed-rate senior notes was $ 175.0 million, less debt issuance cost, and the corresponding estimated fair value was $ 168.6 million and $ 171.6 million at December 31, 2024 and 2023, respectively.

The fair value measurement was determined using a discounted cash flow analysis that factors in current market yields for comparable borrowing arrangements under the Company's credit profile.

39 unchanged sentences

Current federal income tax expense $ 103,701 $ 85,353 $ 50,641

Deferred federal income tax (benefit) expense ( 9,429 ) ( 14,191 ) ( 576 )

Deferred federal income tax benefit ( 3,828 ) ( 9,429 ) ( 14,191 )

Income tax expense $ 99,873 $ 75,924 $ 36,450

37 unchanged sentences

At December 31, 2024 and 2023, the Company recorded a tax valuation allowance equal to the state NOLs and the deferred tax assets, net of existing deferred tax liabilities that were expected to reverse in future periods, related to certain state jurisdictions.

No other valuation allowances were established against the Company’s deferred tax assets at December 31, 2023 and 2022, as the

Company believes that it is more likely than not that the remaining deferred tax assets will be realized given the carry back availability, reversal of existing temporary differences and future taxable income.

No other valuation allowances were established against the Company’s deferred tax assets at December 31, 2024 and 2023, as the Company believes that it is more likely than not that the remaining deferred tax assets will be realized given the carry back availability, reversal of existing temporary differences and future taxable income.

With respect to deferred tax assets associated with unrealized losses on fixed-maturity securities, management has the ability and intent to execute a tax planning strategy to hold those securities to recovery or maturity to the extent not matched with realized capital gains or available carry back to ensure recognition of the deferred tax asset.

8 unchanged sentences

Incurred-but-not-reported ("IBNR") reserves are determined using actuarial methods to estimate losses that have occurred but have not yet been reported to the Company.

The incurred Bornhuetter-Ferguson actuarial method ("BF method") is used to arrive at the Company's loss reserve estimates for each line of business.

This method estimates the reserves based on the initial expected loss ratio and expected reporting patterns for losses.

Because the Company has a limited number of years of loss experience compared to the period over which losses are expected to be reported, the Company uses industry and peer-group data, in addition to its own data, as a basis for selecting its expected reporting patterns.

Various actuarial methods are used to arrive at the Company's loss reserve estimates for each line of business.

These methods utilize numerous inputs including initial expected loss ratios, loss development patterns, paid losses, reported losses, claim counts and price indices.

The Company also uses industry and peer-group data, in addition to its own data, to assist in analyzing loss development patterns by line of business.

As part of the reserving process, the Company reviews historical data and considers the effect of various factors on claims development patterns including polices written on a "claims made" versus "occurrence" basis.

24 unchanged sentences

$ 2,285,668 $ 1,692,875 $ 1,238,402

During the year ended December 31, 2024, prior accident years developed favorably by $ 37.7 million, of which $ 57.6 million was attributable to the 2021 through 2023 accident years due to lower emergence of reported losses than expected across most lines of business.

This favorable development was offset in part by adverse development primarily from the 2017 through 2019 accident years due to construction defect claims that are more exposed to inflation, from the 2020 accident year due to a large property claim and more conservative actuarial assumptions in the 2021 through 2023 accident years for lines of business exposed to construction liability.

Current accident year incurred losses and loss adjustment expenses for the year ended December 31, 2024 included $ 25.5 million of net catastrophe losses primarily related to Hurricanes Milton, Helene and Francine and tornadoes in the Midwest.

During the year ended December 31, 2023, prior accident years developed favorably by $ 35.8 million, of which $ 49.0 million was attributable to the 2021 and 2022 accident years due to lower emergence of reported losses than expected across most lines of business.

This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due to long-tailed property damage claims within the construction-related primary casualty business that are more exposed to the increase in inflation.

This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due to construction defect claims that are more exposed to inflation.

During the year ended December 31, 2022, prior accident years developed favorably by $ 35.9 million, of which $ 41.8 million was attributable to the 2020 and 2021 accident years due to lower emergence of reported losses than expected across most lines of business.

1 unchanged sentence

Current accident year incurred losses and loss adjustment expenses for the year ended December 31, 2022 included $ 26.6 million of catastrophe losses primarily related to Hurricane Ian.

During the year ended December 31, 2021, prior accident years developed favorably by $ 32.0 million, of which $ 33.7 million was attributable to the 2020 accident year and was related to a lower-than-expected levels of reported losses.

Although the Company did not have any significant direct COVID-19 loss exposure, the related disruption in the court system and the general economy created additional uncertainty in estimating loss reserves in 2020.

As a result, accident year 2020 actuarial assumptions were adjusted in 2020 to increase IBNR to account for this additional uncertainty.

In 2021, the Company's outlook was more favorable than in the prior year and, based on observed trends, the Company reevaluated and adjusted certain assumptions for accident year 2020 to reflect the favorable experience.

In addition, $ 3.8 million of favorable development was attributable to accident year 2019 due to reported losses emerging at lower levels than expected.

This favorable development was offset in part by adverse development, mostly attributable to the 2016 and 2018 accident years due to modest adjustments in actuarial assumptions.

Current accident year incurred losses and loss adjustment expenses for the year ended December 31, 2021 included $ 8.6 million of catastrophe losses primarily related to Hurricane Ida and winter storms Uri and Viola in Texas.

Incurred and Paid Claims Development

41 unchanged sentences

Accident Year 2015

Unaudited 2015

Unaudited 2016

Unaudited 2017

Unaudited 2018

Unaudited 2019

Unaudited 2020

Unaudited 2021

Unaudited 2022

Unaudited 2023 Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims

2024 Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims

($ in thousands)

13 unchanged sentences

Accident Year 2015

Unaudited 2015

Unaudited 2016

Unaudited 2017

Unaudited 2018

Unaudited 2019

Unaudited 2020

Unaudited 2021

Unaudited 2022

Unaudited 2023

($ in thousands)

120 unchanged sentences

There were no shares of preferred stock issued or outstanding at December 31, 2024 or 2023.

Treasury Stock

In October 2024, the Company's Board of Directors authorized a share repurchase program authorizing the repurchase of up to $ 100.0 million of the Company's common stock.

The shares may be repurchased from time to time in open market purchases, privately-negotiated transactions, block purchases, accelerated share repurchase agreements or a combination of methods and pursuant to safe harbors provided by Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934.

The timing, manner, price and amount of any repurchases under the share repurchase program will be determined by the Company in its discretion.

The stock repurchase program does not require the Company to repurchase any specific number of shares, and may be modified, suspended or terminated at any time.

Public Offerings

59 unchanged sentences

Diluted $ 17.78 $ 13.22 $ 6.88

There were 1 thousand, zero and 30 thousand anti-dilutive stock awards for the years ended December 31, 2023, 2022 and 2021, respectively.

There were 43,000 , 1,000 and zero anti-dilutive stock awards for the years ended December 31, 2024, 2023 and 2022.

Basic earnings per share was computed by dividing the earnings attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period.

1 unchanged sentence

Note Purchase and Private Shelf Agreement

On July 22, 2022, the Company entered into a Note Purchase and Private Shelf Agreement (the "Note Purchase Agreement") with PGIM, Inc.

("Prudential") and the purchasers of the Series A Notes (as defined below), named in the Purchaser Schedule attached thereto (collectively, the "Note Purchasers").

The Note Purchase Agreement also provides for the issuance of additional shelf notes issued thereunder (the "Shelf Notes" and, together with the Series A Notes, the "Notes") not to exceed $ 150.0 million of Notes outstanding thereunder.

On September 18, 2023, the Company entered into a First Amendment to the Note Purchase Agreement and increased the additional Shelf Notes limit to $ 200.0 million.

Pursuant to the First Amendment to the Note Purchase Agreement, on September 18, 2023 , the Company issued a $ 50.0 million aggregate principal amount 6.21 % Series B Senior Note due July 22, 2034 to the note purchaser.

On July 22, 2022, the Company entered into a Note Purchase and Private Shelf Agreement (as subsequently amended, the "Note Purchase Agreement") with PGIM, Inc.

("Prudential") and the purchasers of the Series A and Series B Senior Notes (as defined below).

The Note Purchase Agreement provides for issuance of senior promissory notes with an aggregate principal amount of up to $ 200.0 million through September 18, 2026.

Pursuant to the Note Purchase Agreement, on July 22, 2022 , the Company issued $ 125.0 million aggregate principal amount of 5.15 % Series A Senior Notes Due July 22, 2034 (collectively, the "Series A Notes”), and on September 18, 2023 , the Company issued a $ 50.0 million aggregate principal amount 6.21 % Series B Senior Note ("Series B Note") due July 22, 2034 .

The Series A and B Notes are senior unsecured obligations of the Company and rank pari passu with the Company’s Amended and Restated Credit Agreement.

The Series A Notes bear interest at 5.15 % per annum and mature on July 22, 2034 , unless paid earlier by the Company.

Should the Company elect to prepay the Series A Notes, such aggregate prepayment will include the applicable make-whole amount(s),

as defined within the applicable Note Purchase Agreement.

Principal payments are required annually beginning on July 22, 2030 in equal installments of $ 25.0 million through July 22, 2034 .

The Series B Note bears interest at 6.21 % per annum and matures on July 22, 2034 , unless paid earlier by the Company.

Should the Company elect to prepay the Series B Note, such aggregate prepayment will include the applicable make-whole amount(s), as defined within the applicable Note Purchase Agreement.

Principal payments are required annually beginning on July 22, 2030 in equal installments of $ 10.0 million through July 22, 2034 .

Principal payments on the Series A Notes are required annually beginning on July 22, 2030 in equal installments of $ 25.0 million through July 22, 2034 .

Principal payments on the Series B Note are required annually beginning on July 22, 2030 in equal installments of $ 10.0 million through July 22, 2034 .

Credit Agreement

On May 28, 2019, the Company entered into a Credit Agreement (the "Credit Agreement") that provided the Company with a $ 50.0 million senior unsecured revolving credit facility (the "Credit Facility") and an uncommitted accordion feature that permits the Company to increase the commitments by an additional $ 30.0 million.

On July 22, 2022, the Company entered into an Amended and Restated Credit Agreement, with JPMorgan Chase Bank, N.A., as administrative agent and as issuing bank, Truist Bank, as syndication agent, and the lenders party thereto (collectively, the "Lenders").

The Amended and Restated Credit Agreement extended the maturity date to July 22, 2027 , and increased the aggregate commitment to $ 100.0 million, with the option to increase the aggregate commitment by $ 30.0 million, subject to the Company obtaining commitments from existing or new lenders and satisfying other conditions specified in the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement provides the Company with a $ 100.0 million senior unsecured revolving credit facility (the "Credit Facility"), with the option to increase the aggregate commitment by $ 30.0 million.

The Company is required to pay a Commitment Fee Rate (as defined therein) of 0.25 % on the average daily amount of the Available Revolving Commitment (as defined therein).

3 unchanged sentences

For the year ended December 31, 2024, the annual weighted-average interest rate of borrowings under the Credit Facility was 6.91 %.

The following table presents the Company's outstanding debt as of December 31, 2023 and December 31, 2022:

The following table presents the Company's outstanding debt as of December 31, 2024 and 2023:

Issuance Maturities December 31, 2024 December 31, 2023

9 unchanged sentences

Both the Note Purchase Agreement and the Amended and Restated Credit Agreement contain representations and affirmative and negative covenants, including financial covenants customary for agreements of this type, as well as customary events of default provisions.

In October 2024, the covenants limiting restricted payments under the Note Purchase Agreement and Amended and Restated Credit Agreement were amended.

The amendments allow the Company to make restricted payments so long as the aggregate amount of all such restricted payments does not exceed the greater of $300.0 million and 6.5% of the total assets of the Company and its subsidiaries at the end of the most recently completed fiscal quarter.

As of December 31, 2024, the Company was in compliance with all of its financial covenants under both the Note Purchase Agreement and the Credit Facility.

6 unchanged sentences

The Company believes exclusions in the policy apply to the claim and intends to defend any action related to this proceeding vigorously.

The Company expects to appeal the verdict at the conclusion of post trial motions and does not expect a resolution as to the Company’s liability, if any, with respect to this matter in the foreseeable future, and potentially for multiple years.

has begun the appeal process and does not expect a resolution as to the Company’s liability, if any, with respect to this matter in the foreseeable future, and potentially for multiple years.

The Company does not believe this legal proceeding will have a material adverse effect on its results of operations or business.

3 unchanged sentences

Expenses related to the Plan were $ 5.0 million, $ 3.8 million and $ 3.1 million in 2024, 2023 and 2022, respectively.

Other comprehensive income (loss)

The following table summarizes the components of other comprehensive income (loss):

Other comprehensive (loss) income

The following table summarizes the components of other comprehensive (loss) income:

Year Ending December 31,

1 unchanged sentence

(in thousands)

Unrealized gains (losses) on fixed-maturity securities arising during the period, before income taxes:

Unrealized (losses) gains on fixed-maturity securities arising during the period, before income taxes:

$ ( 2,921 ) $ 49,384 $ ( 193,970 )

Income tax (expense) benefit ( 10,371 ) 40,734 5,626

Unrealized gains (losses) arising during the period, net of income taxes 39,013 ( 153,236 ) ( 21,166 )

Income tax benefit (expense) 613 ( 10,371 ) 40,734

Unrealized (losses) gains arising during the period, net of income taxes ( 2,308 ) 39,013 ( 153,236 )

Less reclassification adjustment:

3 unchanged sentences

Change in allowance for credit losses on investments, before income taxes 526 ( 187 ) ( 366 )

Income tax benefit 39 77 —

Income tax (expense) benefit ( 111 ) 39 77

Reclassification adjustment included in net income 415 ( 148 ) ( 289 )

Other comprehensive income (loss) $ 40,301 $ ( 153,043 ) $ ( 23,255 )

Other comprehensive (loss) income $ ( 2,589 ) $ 40,301 $ ( 153,043 )

The sale of or credit loss on an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to realized gains or losses in current period earnings.

1 unchanged sentence

See Note 2 for additional information.

Underwriting information

The Company has one reportable segment, the Excess and Surplus Lines Insurance segment, which primarily offers commercial excess and surplus lines liability and property insurance products through its underwriting divisions.

Segment and underwriting information

The Company reports operating and financial results in a single segment based on the Company's exclusive focus on property and casualty insurance in the excess and surplus lines market and the consolidated information used by the chief operating decision maker ("CODM") in evaluating the financial performance of its business and allocating resources.

Additionally, while the

Company's individual underwriting divisions are evaluated on premium volume, the CODM does not use discrete financial information for measures of profit or loss in making resource allocation decisions.

The Company's CODM is the Chief Executive Officer.

The CODM uses consolidated net income to allocate resources primarily during the annual budgeting process and uses that measure to assess performance by considering budget-to-actual variances and evaluating financial results.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

The accounting policies used to prepare the segment reporting data are the same as those described in Note 1.

Year Ended December 31,

2024 2023 2022

(in thousands)

Net earned premiums $ 1,350,470 $ 1,072,537 $ 794,119

Fee income 34,118 27,026 19,604

Net investment income 150,287 102,335 51,282

Change in fair value of equity securities 43,367 15,277 ( 27,723 )

Net realized investment gains 6,831 6,040 1,191

Change in allowance for credit losses on investments 526 ( 187 ) ( 366 )

Other income (1)

1,926 1,421 697

Total revenues 1,587,525 1,224,449 838,804

Losses and loss adjustment expenses - current year 785,036 631,407 467,182

Losses and loss adjustment expenses - catastrophes 25,518 4,586 26,618

Losses and loss adjustment expenses - prior year development ( 37,655 ) ( 35,774 ) ( 35,887 )

Net commissions incurred 134,184 113,717 93,756

Salaries, employee benefits and bonus expense 109,319 85,689 64,765

Credit loss expense - premiums receivable 17,397 9,790 5,988

Depreciation (2)

4,686 2,655 2,267

Interest expense 10,134 10,301 4,284

Other segment items (3)

24,190 18,061 14,267

Income tax expense 99,873 75,924 36,450

Segment net income 414,843 308,093 159,114

Reconciliation of profit or loss:

Adjustments and reconciling items — — —

Consolidated net income $ 414,843 $ 308,093 $ 159,114

(1) Other income primarily includes income generated from the Company's real estate operations.

(2) Excludes depreciation expense allocated to loss adjustment expenses and investment expenses

(3) Other segment items primarily includes other general and administrative expenses such as technology costs, facility expenses and audit and inspection costs.

Gross written premiums by underwriting division are presented below:

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Small Business Casualty 195,593 174,080 149,366

Construction 137,887 122,524 101,441

General Casualty 169,162 118,745 69,784

Construction 148,333 137,887 122,524

Allied Health 83,058 67,808 58,839

Products Liability 61,786 60,374 55,070

Small Business Property 76,800 43,893 21,002

Life Sciences 41,379 41,346 40,487

Products Liability 67,035 61,786 60,374

Entertainment 58,506 39,218 22,268

Energy 42,710 38,637 32,217

Life Sciences 36,252 41,379 41,346

Commercial Auto 35,047 19,050 5,950

Professional Liability 34,841 35,743 30,313

Management Liability 26,617 28,856 28,031

Environmental 25,938 19,455 13,584

Excess Professional 32,633 24,033 22,826

Environmental 30,372 25,938 19,455

Inland Marine 27,184 18,669 14,396

Health Care 23,179 20,378 16,916

Management Liability 21,705 26,617 28,856

Public Entity 20,047 20,028 15,512

Commercial Auto 19,050 5,950 977

Inland Marine 18,669 14,396 9,752

Aviation 8,591 6,453 4,424

Ocean Marine 3,655 2,339 765

Agribusiness 2,775 — —

Product Recall 2,397 1,637 1,419

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Total commercial 1,821,407 1,530,338 1,067,542

Personal Insurance 24,182 31,289 27,002

High Value Homeowners 26,844 14,295 3,261

Personal Insurance 22,090 24,182 31,289

Total personal 48,934 38,477 34,550

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Small Business Casualty underwrites commercial general liability on smaller risks, generally businesses with revenues not exceeding $2.5 million, with an emphasis on artisan contractors and premises related exposures.

Construction underwrites commercial general liability coverage on contractors focusing on new residential construction, residential remodeling and renovation and commercial construction.

General Casualty underwrites general liability and liquor liability on hospitality, habitational and retail risks, among others, with similar premises liability loss exposures.

Construction underwrites commercial general liability coverage on contractors focusing on new residential construction, residential remodeling and renovation and commercial construction.

Allied Health underwrites commercial general liability, professional liability and excess liability on allied health and social service risks including assisted living facilities, home health care agencies and outpatient medical facilities.

Products Liability underwrites commercial general liability on manufacturers, distributors and importers of a wide array of consumer, commercial and industrial products.

Small Business Property underwrites Commercial Property coverage for smaller properties, generally with total insured values not exceeding $3.5 million, including banks, daycare centers, strip malls, and greenhouses, among others.

Life Sciences underwrites general liability, products liability and professional liability coverage for manufacturers, distributors and developers of dietary supplements, medical devices, pharmaceuticals, biologics, health and beauty products, durable medical equipment and clinical trials.

Products Liability underwrites commercial general liability on manufacturers, distributors and importers of a wide array of consumer, commercial and industrial products.

Entertainment underwrites commercial general liability for small-to-medium sized entertainment classes, including such classes as bowling alleys, campgrounds, escape rooms, fitness centers, museums and paintball facilities, among others.

Energy underwrites commercial general liability, pollution liability, professional liability and excess liability on enterprises engaged in the business of energy production or distribution or mining including drillers, lease operators, contractors, product manufacturers and alternative energy.

Commercial Auto underwrites garage liability and excess auto coverages.

Professional Liability underwrites small-to-medium sized non-medical professional liability risks.

The classes of risks include accountants, architects and engineers, financial planners, insurance agents, lawyers, realtors and certain other professions.

Management Liability underwrites directors and officers liability, employment practices liability and fiduciary liability coverage on a variety of commercial and government risks.

Environmental underwrites commercial general liability, pollution liability and professional liability on a wide range of commercial risks where environmental exposures exist that are operational in nature or related to the premises.

Excess Professional underwrites excess coverage over an array of insurance products in Allied Health, Management Liability, Health Care and Professional Liability.

Inland Marine underwrites a variety of inland marine coverages including builders risk, contractors' equipment, transportation risks and mobile equipment.

Health Care underwrites medical professional liability for physicians, surgeons, dentists, chiropractors and podiatrists.

Policies cover both individuals and small practice groups.

Management Liability underwrites directors and officers liability, employment practices liability and fiduciary liability coverage on a variety of commercial and government risks.

Public Entity underwrites law enforcement professional liability and school board liability.

Commercial Auto underwrites garage liability and excess auto coverages.

Inland Marine underwrites a variety of inland marine coverages including builders risk, contractors' equipment, transportation risks and mobile equipment.

Aviation underwrites general liability coverage for small-to-medium sized aviation-related businesses.

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coastal waters.

Agribusiness underwrites general liability coverage for operations, manufacturers and land related to the agriculture industry.

Product Recall underwrites recall expense and liability coverage for life sciences and general products sector consumable, commercial and consumer goods.

Railroad underwrites excess liability for Class III short line railroads, railroad support activities and contractors and other miscellaneous railroad-related risks.

Personal Insurance writes homeowners' coverage on manufactured homes with catastrophe exposure due to coastal location.

High Value Homeowners underwrites first party homeowners' coverage on homes valued above $1.0 million on a primary and excess basis.

Personal Insurance writes homeowners' coverage on manufactured homes with catastrophe exposure due to coastal location.

The Company does business with three unaffiliated insurance brokers that generated $ 366.4 million, $ 325.5 million and $ 213.9 million of gross written premiums for the year ended December 31, 2024, representing 19.6 %, 17.4 % and 11.4 % of gross written premiums, respectively.

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The maximum dividend distribution that can be paid by Kinsale Insurance during 2025 without prior approval is $ 351.9 million.

Immaterial Correction to Prior Period Financial Statements for Accounting Policy Change

The Company charges insureds certain policy fees and recognizes such fees into earnings when the related premium is written.

Previously, the Company presented these fees as a reduction of underwriting, acquisition and insurance expenses.

Effective April 1, 2023, the Company corrected its accounting policy to present these fees as fee income in the consolidated statements of income and comprehensive income in accordance with ASC 944, Financial Services–Insurance.

The Company presented $ 27.0 million as fee income for the year ended December 31, 2023 in the consolidated statements of income and comprehensive income.

The Company reclassified $ 19.6 million and $ 13.7 million to fee income from

underwriting, acquisition and insurance expenses in the previously issued financial statements on Form 10-K for the years ended December 31, 2022 and 2021, respectively, to correct prior periods’ presentation.

The Company considered the qualitative and quantitative impacts and determined that the correction was not material to the Company's previously issued consolidated financial statements.

Subsequent event

In January 2025, a series of wildfires began in Southern California.

The Company is evaluating the impact of such wildfires and currently estimates pre-tax catastrophe losses of approximately $ 25.0 million, net of reinsurance, to be reflected in the first quarter of 2025.

These estimates are subject to change due to the ongoing nature of these events and the complexity of the claims.

KINSALE CAPITAL GROUP, INC.

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Retained earnings 1,229,136 828,247

Accumulated other comprehensive income ( 94,617 ) ( 134,918 )

Accumulated other comprehensive loss ( 97,206 ) ( 94,617 )

Treasury stock, at cost ( 10,000 ) —

Stockholders’ equity 1,483,561 1,086,832

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Interest expense 10,134 10,301 4,284

Other expenses 615 — —

Total expenses 27,942 23,308 14,049

1 unchanged sentence

Income tax benefit ( 12,346 ) ( 7,324 ) ( 5,387 )

(Loss) income before equity in net income of subsidiaries ( 4,066 ) 153 1,460

Equity in net income of subsidiaries 312,159 158,961 151,199

Income (loss) before equity in net income of subsidiaries 1,814 ( 4,066 ) 153

Equity in undistributed earnings of subsidiaries 413,029 312,159 158,961

Net income 414,843 308,093 159,114

Other comprehensive income (loss):

Equity in other comprehensive earnings (losses) of subsidiaries 40,301 ( 153,043 ) ( 23,255 )

Equity in other comprehensive (losses) income of subsidiaries ( 2,589 ) 40,301 ( 153,043 )

Total comprehensive income $ 412,254 $ 348,394 $ 6,071

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Net income $ 414,843 $ 308,093 $ 159,114

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Deferred tax benefit ( 854 ) ( 372 ) ( 367 )

2 unchanged sentences

Changes in operating assets and liabilities ( 25,795 ) 55,893 ( 71,639 )

Current taxes payable ( 359 ) — —

Change in accounts payable and accrued expenses ( 41 ) — —

Dividends received from subsidiary 47,000 — —

3 unchanged sentences

Net cash used in investing activities ( 11,000 ) ( 50,000 ) ( 100,624 )

( 50,000 ) ( 100,624 ) ( 571 )

Financing activities

4 unchanged sentences

Debt issuance costs — ( 164 ) ( 2,381 )

( 164 ) ( 2,381 ) —

Payroll taxes withheld and remitted on share-based payments ( 7,047 ) ( 4,282 ) ( 3,288 )

1 unchanged sentence

Dividends paid ( 13,940 ) ( 12,954 ) ( 11,927 )

Treasury stock acquired — share repurchases ( 10,000 ) — —

Net cash (used in) provided by financing activities ( 29,657 ) ( 28,523 ) 185,992

1 unchanged sentence

Cash and cash equivalents at beginning of year 17,082 34,789 14,596

34,789 14,596 8,395

Cash and cash equivalents at end of year $ 12,336 $ 17,082 $ 34,789

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Note Purchase and Private Shelf Agreement

On July 22, 2022, the Company entered into a Note Purchase and Private Shelf Agreement (the "Note Purchase Agreement") with PGIM, Inc.

("Prudential") and the purchasers of the Series A Notes (as defined below), named in the Purchaser Schedule attached thereto (collectively, the "Note Purchasers").

On September 18, 2023, the Company entered into a First Amendment to the Note Purchase Agreement and increased the additional Shelf Notes limit to $ 200.0 million.

On July 22, 2022, the Company entered into a Note Purchase and Private Shelf Agreement (as subsequently amended, the "Note Purchase Agreement") with PGIM, Inc.

("Prudential") and the purchasers of the Series A and Series B Senior Notes (as defined below).

The Note Purchase Agreement provides for issuance of senior promissory notes with an aggregate principal amount of up to $ 200.0 million through September 18, 2026.

Pursuant to the Note Purchase Agreement, on July 22, 2022 , the Company issued $ 125.0 million aggregate principal amount of 5.15 % Series A Senior Notes Due July 22, 2034 (collectively, the "Series A Notes”), and on September 18, 2023, the Company issued a $ 50.0 million aggregate principal amount 6.21 % Series B Senior Note ("Series B Note") due July 22, 2034 .

The Series A and B Notes are senior unsecured obligations of the Company and rank pari passu with the Company’s Amended and Restated Credit Agreement.

The Series A Notes bear interest at 5.15 % per annum and mature on July 22, 2034 , unless paid earlier by the Company.

Should the Company elect to prepay the Series A Notes, such aggregate prepayment will include the applicable make-whole amount(s), as defined within the applicable Note Purchase Agreement.

Principal payments are required annually beginning on July 22, 2030 in equal installments of $ 25.0 million through July 22, 2034 .

The Series B Note bears interest at 6.21 % per annum and matures on July 22, 2034 , unless paid earlier by the Company.

Should the Company elect to prepay the Series B Note, such aggregate prepayment will include the applicable make-whole amount(s), as defined within the applicable Note Purchase Agreement.

Principal payments are required annually beginning on July 22, 2030 in equal installments of $ 10.0 million through July 22, 2034 .

Principal payments on the Series A Notes are required annually beginning on July 22, 2030 in equal installments of $ 25.0 million through July 22, 2034 .

Principal payments on the Series B Note are required annually beginning on July 22, 2030 in equal installments of $ 10.0 million through July 22, 2034 .

Credit Agreement

thereto (collectively, the "Lenders").

The Company is required to pay a Commitment Fee Rate (as defined therein) of 0.25 % on the average daily amount of the Available Revolving Commitment (as defined therein).

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The following table presents the Company's outstanding debt as of December 31, 2024 and December 31, 2023:

Issuance Maturities September 30, 2023 December 31, 2022

Issuance Maturities December 31, 2024 December 31, 2023

(in thousands)

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In October 2024, the covenants limiting restricted payments under the Note Purchase Agreement and Amended and Restated Credit Agreement were amended.

As of December 31, 2024, the Company was in compliance with all of its financial covenants under both the Note Purchase Agreement and the Credit Facility.

Dividends from subsidiary

There were no cash dividends paid to Kinsale Capital Group, Inc.

by its wholly-owned subsidiary, Kinsale Insurance Company for the years ended December 31, 2023 or 2022.

Cash dividends paid by the insurance subsidiary were $ 8.0 million for the year ended December 31, 2021.

Cash dividends paid to Kinsale Capital Group, Inc.

by its wholly-owned subsidiary, Kinsale Insurance Company, were $ 47.0 million for year ended December 31, 2024.

There were no cash dividends paid by the insurance subsidiary for the years ended December 31, 2023 and 2022.

Contingencies

23 unchanged sentences

Allowance for reinsurance recoverables 400 59 — 459

Allowance for credit losses on fixed-maturity investments — 366 — 366

See accompanying Report of Independent Registered Public Accounting Firm.

2 unchanged sentences

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 8. Financial Statements and Supplementary Data