Kinsale Capital Group, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Audited Consolidated Financial Statements Management's Report on Internal Control Over Financial Reporting 68 Reports of Independent Registered Public Accounting Firm 68 Consolidated Balance Sheets as of December 31, 2024 and 2023 72 Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022 73 Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2024, 2023 and 2022 74 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 75 Notes to Consolidated Financial Statements 76 Schedule I - Summary of Investments - Other than Investments in Related Parties 107 Schedule II - Condensed Financial Information of Registrant - Parent Company Only 108 Schedule V - Valuation and Qualifying Accounts 113 Schedules other than those listed are omitted for the reason that they are not required, are not applicable or that equivalent information has been included in the financial statements or notes thereto or elsewhere herein. 67 Table of Contents Management's Report on Internal Control Over Financial Reporting: Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management does not expect that its internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The design of any system of internal control over financial reporting also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management reviewed the results of its assessment with the Audit Committee of our Board of Directors. Based on our evaluation, we have concluded that we maintained effective internal control over financial reporting as of December 31, 2024. KPMG LLP, our independent registered public accounting firm, has issued an opinion on the effectiveness of the Company's internal control over financial reporting, as stated in their report which is included herein. Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Kinsale Capital Group, Inc.: Opinion on Internal Control Over Financial Reporting We have audited Kinsale Capital Group, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedules I, II, and V (collectively, the consolidated financial statements), and our report dated February 21, 2025 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the 68 Table of Contents U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Richmond, Virginia February 21, 2025 69 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Kinsale Capital Group, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Kinsale Capital Group, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedules I, II, and V (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 21, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Reserves for unpaid losses and loss adjustment expenses 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 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. As of December 31, 2024, the Company recorded $2,286 million of reserves for unpaid losses and loss adjustment expenses. We identified the evaluation of the estimation of reserves as a critical audit matter. The evaluation of the Company’s best estimate of reserves required complex auditor judgment due to the inherent uncertainty in the ultimate amount and timing of claim payments and required specialized actuarial skills and knowledge. In addition, the evaluation of 70 Table of Contents the ultimate expected loss assumptions required subjective auditor judgment due to the Company’s limited historical claims data and, therefore, also involved consideration of industry data. The following are the primary procedures we performed to address this critical audit matter. 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 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: • comparing the actuarial methodology the Company used to determine the reserves to generally accepted actuarial standards and practices • performing independent estimates of reserves for each line of business, using a combination of the Company’s underlying historical claims data and industry data • developing an independent range of reserves using both the Company’s underlying historical claims data and industry data with respect to future claim reporting amounts and payment patterns and prior year independent selected loss rates • assessing the position of the Company’s recorded reserves within this independent range in the current year and comparing to its relative position in the prior year. /s/ KPMG LLP We have served as the Company’s auditor since 2009. Richmond, Virginia February 21, 2025 71 Table of Contents KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 2024 2023 (in thousands, except share and per share data) Assets Fixed-maturity securities available-for-sale, at fair value (amortized cost: $ 3,663,031 allowance for credit loss: $ 27 – 2024; $ 2,834,463 and $ 553 – 2023) $ 3,537,563 $ 2,711,759 Equity securities, at fair value (cost: $ 313,722 – 2024; $ 193,543 – 2023) 398,359 234,813 Real estate investments, net 15,045 14,791 Short-term investments 3,714 5,589 Total investments 3,954,681 2,966,952 Cash and cash equivalents 113,213 126,694 Investment income due and accrued 27,366 21,689 Premiums and fees receivable, net of allowance for credit losses of $ 26,926 in 2024 and $ 13,383 in 2023 140,027 143,212 Reinsurance recoverables, net of allowance for credit losses of $ 932 in 2024 and $ 744 in 2023 337,891 247,836 Ceded unearned premiums 52,736 52,516 Deferred policy acquisition costs, net of ceding commissions 109,263 88,395 Indefinite-lived intangible assets 3,538 3,538 Deferred income tax asset, net 60,215 55,699 Other assets 87,774 66,443 Total assets $ 4,886,704 $ 3,772,974 Liabilities and Stockholders' Equity Reserves for unpaid losses and loss adjustment expenses $ 2,285,668 $ 1,692,875 Unearned premiums 828,449 701,351 Payable to reinsurers 43,959 47,582 Accounts payable and accrued expenses 55,159 44,922 Debt 184,122 183,846 Other liabilities 5,786 15,566 Total liabilities 3,403,143 2,686,142 Contingencies Stockholders’ equity: 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 233 232 Additional paid-in capital 361,398 352,970 Retained earnings 1,229,136 828,247 Accumulated other comprehensive loss ( 97,206 ) ( 94,617 ) Treasury stock, at cost ( 22,626 shares in 2024; — in 2023) ( 10,000 ) — Stockholders’ equity 1,483,561 1,086,832 Total liabilities and stockholders’ equity $ 4,886,704 $ 3,772,974 See accompanying notes to consolidated financial statements. 72 Table of Contents KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2024 2023 2022 (in thousands, except per share data) Revenues: Gross written premiums $ 1,870,341 $ 1,568,815 $ 1,102,092 Ceded written premiums ( 392,993 ) ( 304,185 ) ( 165,282 ) Net written premiums 1,477,348 1,264,630 936,810 Change in unearned premiums ( 126,878 ) ( 192,093 ) ( 142,691 ) 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 1,926 1,421 697 Total revenues 1,587,525 1,224,449 838,804 Expenses: Losses and loss adjustment expenses 772,899 600,219 457,913 Underwriting, acquisition and insurance expenses 285,808 228,970 180,322 Interest expense 10,134 10,301 4,284 Other expenses 3,968 942 721 Total expenses 1,072,809 840,432 643,240 Income before income taxes 514,716 384,017 195,564 Income tax expense 99,873 75,924 36,450 Net income 414,843 308,093 159,114 Other comprehensive income (loss): 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 Earnings per share: Basic $ 17.92 $ 13.37 $ 6.97 Diluted $ 17.78 $ 13.22 $ 6.88 Weighted-average shares outstanding: Basic 23,153 23,045 22,815 Diluted 23,332 23,307 23,125 See accompanying notes to consolidated financial statements. 73 Table of Contents KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Changes in Stockholders' Equity Shares of Common Stock Outstanding Common Stock Additional Paid-in Capital Retained Earnings Accumu- lated Other Compre- hensive (Loss) 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 116,140 1 1,089 — — — 1,090 Stock-based compensation expense — — 6,678 — — — 6,678 Restricted shares withheld for taxes ( 14,991 ) — ( 3,288 ) — — — ( 3,288 ) Dividends declared ($ 0.52 per share) — — — ( 11,935 ) — — ( 11,935 ) Other comprehensive loss, net of income taxes — — — — ( 153,043 ) — ( 153,043 ) Net income — — — 159,114 — — 159,114 Balance at December 31, 2022 23,090,526 231 347,015 533,121 ( 134,918 ) — 745,449 Issuance of common stock under stock-based compensation plan 104,949 1 876 — — — 877 Stock-based compensation expense — — 9,361 — — — 9,361 Restricted shares withheld for taxes ( 13,556 ) — ( 4,282 ) — — — ( 4,282 ) Dividends declared ($ 0.56 per share) — — — ( 12,967 ) — — ( 12,967 ) 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 under stock-based compensation plan 127,265 1 1,329 — — — 1,330 Stock-based compensation expense — — 14,146 — — — 14,146 Restricted shares withheld for taxes ( 14,401 ) — ( 7,047 ) — — — ( 7,047 ) Dividends declared ($ 0.60 per share) — — — ( 13,954 ) — — ( 13,954 ) 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 See accompanying notes to consolidated financial statements. 74 Table of Contents KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Year Ended December 31, 2024 2023 2022 (in thousands) Operating activities: Net income $ 414,843 $ 308,093 $ 159,114 Adjustments to reconcile net income to net cash provided by operating activities: 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 Deferred tax benefit ( 3,828 ) ( 9,429 ) ( 14,191 ) Depreciation and amortization 5,802 3,274 2,721 Stock compensation expense 14,146 9,361 6,678 Change in operating assets and liabilities: Investment income due and accrued ( 5,677 ) ( 7,238 ) ( 6,793 ) Premiums receivable, net 3,185 ( 37,458 ) ( 34,750 ) Reserves for unpaid loss and loss adjustment expenses 592,793 454,473 357,058 Unearned premiums 127,098 201,674 151,947 Reinsurance balances, net ( 93,898 ) ( 21,405 ) ( 90,828 ) Deferred policy acquisition costs ( 20,868 ) ( 26,801 ) ( 19,626 ) Income taxes payable (recoverable) ( 359 ) 742 7,518 Accounts payable and accrued expenses 8,936 12,519 8,111 Other ( 15,148 ) ( 6,840 ) 3,958 Net cash provided by operating activities 976,301 859,835 557,815 Investing activities: Purchase of property and equipment ( 23,943 ) ( 6,607 ) ( 6,901 ) Purchase of real estate investment ( 312 ) ( 2,116 ) ( 76,623 ) Sale of real estate investment — 62,036 — Change in short-term investments, net 2,056 36,706 ( 40,638 ) Purchases – fixed-maturity securities ( 1,557,541 ) ( 1,317,048 ) ( 751,402 ) Purchases – equity securities ( 156,477 ) ( 86,605 ) ( 11,506 ) Sales – fixed-maturity securities 289,360 245,618 63,092 Sales – equity securities 34,380 30,623 4,990 Maturities and calls – fixed-maturity securities 452,352 176,501 110,415 Net cash used in investing activities ( 960,125 ) ( 860,892 ) ( 708,573 ) Financing activities: Proceeds from issuance of common stock, net of issuance costs — — 47,498 Proceeds from borrowings under credit facility — — 73,000 Proceeds from notes payable — 50,000 125,000 Repayment of credit facility — ( 62,000 ) ( 43,000 ) Debt issuance costs — ( 164 ) ( 2,381 ) Payroll taxes withheld and remitted on share-based payments ( 7,047 ) ( 4,282 ) ( 3,288 ) Common stock issued, stock options exercised 1,330 877 1,090 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 Net change in cash and cash equivalents ( 13,481 ) ( 29,580 ) 35,234 Cash and cash equivalents at beginning of year 126,694 156,274 121,040 Cash and cash equivalents at end of year $ 113,213 $ 126,694 $ 156,274 See accompanying notes to consolidated financial statements. 75 Table of Contents Kinsale Capital Group, Inc. and subsidiaries Notes to consolidated financial statements Description of business Kinsale Capital Group, Inc., an insurance holding company, is a Delaware corporation that was formed in 2009 and conducts its operations through its wholly-owned subsidiaries (referred to as "Kinsale" or, with its subsidiaries, the "Company"). Kinsale Capital Group, Inc. writes excess and surplus lines insurance on a non-admitted basis principally through its insurance subsidiary, Kinsale Insurance Company ("Kinsale Insurance"), which is authorized to write business in 50 states, the District of Columbia, the Commonwealth of Puerto Rico and the U.S. Virgin Islands. Kinsale Capital Group, Inc. also markets certain products through its subsidiary, Aspera Insurance Services, Inc. ("Aspera"), an insurance broker. 1. Summary of significant accounting policies Principles of consolidation The accompanying consolidated financial statements include the accounts of Kinsale Capital Group, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year's presentation. Use of estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management periodically reviews its estimates and assumptions. These reviews include evaluating the adequacy of reserves for unpaid losses and loss adjustment expenses, allowance for credit losses and uncollectible reinsurance, fair value of investments, as well as evaluating the investment portfolio for credit impairments. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Short-term investments Short-term investments are carried at amortized cost, which approximates fair value. Short-term investments have maturities greater than three months but less than one year at the date of purchase. Fixed-maturity and equity securities Fixed-maturity securities are classified as available-for-sale and reported at fair value. Unrealized gains and losses on these securities are excluded from earnings but are recorded as a separate component of other comprehensive income and stockholders' equity, net of deferred income taxes. Equity securities are reported at fair value. Changes in unrealized gains and losses in fair value of these investments are recognized in net income. The Company regularly reviews all its available-for-sale investments with unrealized losses to assess whether the decline in the fair value is deemed to be a credit loss. See Note 2 for further discussion regarding the determination of credit losses. 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 76 Table of Contents 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. Dividends on equity securities are included in earnings on the ex-dividend date. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the trade date. Real estate investments Real estate investments include real estate and the related assets purchased for investment purposes. Real estate and the related depreciable assets are carried at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets and is included in net investment income. Rental income is recognized on a straight-line basis over the term of the respective lease and is included in net investment income. Land is not depreciated. Real estate is evaluated for impairment when events or circumstances indicate the carrying value of the real estate may not be recoverable. Reinsurance Reinsurance premiums, commissions, and ceded unearned premiums on reinsured business are accounted for on a basis consistent with that used in accounting for the original policies issued and the terms of the reinsurance contracts. The Company receives ceding commissions in accordance with certain reinsurance treaties. The ceding commissions are capitalized and amortized as a reduction of underwriting, acquisition and insurance expenses. Reinsurance recoverables represent paid losses and loss adjustment expenses and reserves for unpaid losses and loss adjustment expenses ceded to reinsurers that are subject to reimbursement under reinsurance treaties. The method for determining reinsurance recoverables for unpaid losses and loss adjustment expenses involves reviewing actuarial estimates of gross unpaid losses and loss adjustment expenses to determine the Company's ability to cede unpaid losses and loss adjustment expenses under the Company's existing reinsurance contracts. This method is continually reviewed and updated and any resulting adjustments are reflected in earnings in the period identified. See Note 8 for a further discussion of the Company's reinsurance program. Premiums receivable, net Premiums receivable balances are carried at face value, net of any allowance for credit losses. The allowance for credit losses represents an estimate of amounts considered uncollectible based on the Company’s assessment of the collectability of receivables that are past due. The estimate considers historical loss data, current and future economic conditions and specific identification of collectability concerns where applicable. The following table presents the rollforward of the allowance for credit losses for premiums receivable for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in thousands) Beginning balance $ 13,383 $ 8,067 Current period change for estimated uncollectible premiums 17,397 9,790 Write-offs of uncollectible premiums receivable ( 3,854 ) ( 4,474 ) Ending balance $ 26,926 $ 13,383 77 Table of Contents Deferred policy acquisition costs, net of ceding commissions The Company defers commissions, net of ceding commissions, and certain other costs that are directly related to the successful acquisition of insurance contracts. All eligible costs are capitalized and charged to expense in proportion to premium earned over the estimated policy life. To the extent that unearned premiums on existing policies are not adequate to cover the related costs and expenses, referred to as a premium deficiency, deferred policy acquisition costs are charged to earnings. The Company considers anticipated investment income in determining whether a premium deficiency exists. Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives range from 39 years for the building and parking deck, 15 to 20 years for land improvements, 7 to 10 years for furniture and equipment, and 3 to 7 years for electronic data processing hardware and software. Property and equipment are included in other assets in the accompanying consolidated balance sheets and consists of the following: December 31, 2024 2023 (in thousands) Building $ 37,190 $ 37,181 Parking deck 5,072 5,072 Land 3,068 3,068 Equipment 4,401 3,958 Software 20,203 15,375 Furniture and fixtures 3,200 3,065 Leasehold improvements 153 153 Land improvements 474 474 Construction in progress - building 26,530 6,623 100,291 74,969 Accumulated depreciation ( 17,367 ) ( 11,565 ) 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 Indefinite-lived intangible assets are recorded at fair value at the date of acquisition. The Company's indefinite-lived intangible assets are comprised solely of regulatory approvals granted by the various state insurance departments to write insurance business in the respective states on a non-admitted basis. In accordance with U.S. GAAP, amortization of indefinite-lived intangible assets is not permitted. Indefinite-lived intangible assets are tested for impairment during the fourth quarter on an annual basis, or earlier if there is reason to suspect that their values may have been diminished or impaired. There were no impairments recognized in December 31, 2024, 2023, or 2022. In addition, as of December 31, 2024, no triggering events occurred that suggested an updated review was necessary. Reserves for unpaid losses and loss adjustment expenses 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 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 78 Table of Contents 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. If actual liabilities exceed recorded amounts, there will be an increase to the Company’s reserves resulting in a reduction in net income and stockholders’ equity in the period in which the deficiency is identified. 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, 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. Revenue recognition Premiums are recognized as revenue ratably over the term of the insurance contracts, net of ceded reinsurance. Unearned premiums are calculated on a daily pro rata basis. Fee income is recognized as revenue when the related premium is written. Income taxes Deferred income tax assets and liabilities are determined based on the differences between the recorded amounts and the tax bases of assets and liabilities, using enacted tax rates expected to be in effect during the year in which the basis differences reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which such change was enacted. Valuation allowances on deferred tax assets are estimated based on the Company's assessment of the realizability of such amounts. Valuation allowances are recorded when it is more likely than not that some portion, or all, of the deferred tax assets will not be realizable. The Company provides for uncertain tax positions, and the related interest and penalties, based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent that the anticipated tax outcome of these uncertain tax positions changes, such changes in estimate will impact the income tax provision in the period in which such determination is made. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense. The Company uses the portfolio approach to release stranded tax effects in accumulated other comprehensive income ("AOCI") related to its available-for-sale fixed-maturity securities. Under this approach, stranded tax effects remaining in AOCI are released only when the entire portfolio of the available-for-sale fixed-maturity securities are liquidated, sold or extinguished. Contingencies Liabilities for loss contingencies, arising from noninsurance policy claims, assessments, litigation, fines, and penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Fair value of financial instruments Fair value is estimated for each class of financial instrument based on the framework established in the fair value accounting guidance. This guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). See Note 3 for further details regarding fair value disclosures. 79 Table of Contents Stock-based compensation Stock-based compensation is expensed based upon the estimated fair value of employee stock awards. Compensation cost for awards of equity instruments to employees is measured based on the grant-date fair value of those awards and compensation expense is recognized over the service period that the awards vest. Forfeitures of stock-based compensation awards are recognized as they occur. See Note 9 for further discussion and related disclosures regarding stock-based compensation. Recently adopted accounting pronouncements 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. The ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. 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 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. 2. Investments Available-for-sale investments The following tables summarize the Company’s available-for-sale investments at December 31, 2024 and 2023: December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 15,465 $ — $ ( 417 ) $ — $ 15,048 Obligations of states, municipalities and political subdivisions 168,894 46 ( 22,633 ) ( 3 ) 146,304 Corporate and other securities 2,037,372 5,779 ( 53,638 ) ( 23 ) 1,989,490 Asset-backed securities 729,658 4,606 ( 1,522 ) — 732,742 Residential mortgage-backed securities 502,121 747 ( 53,994 ) — 448,874 Commercial mortgage-backed securities 209,521 423 ( 4,838 ) ( 1 ) 205,105 Total fixed-maturity investments $ 3,663,031 $ 11,601 $ ( 137,042 ) $ ( 27 ) $ 3,537,563 80 Table of Contents December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Estimated Fair Value (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 28,003 $ 57 $ ( 806 ) $ — $ 27,254 Obligations of states, municipalities and political subdivisions 191,080 212 ( 20,248 ) — 171,044 Corporate and other securities 1,437,468 5,532 ( 54,755 ) ( 552 ) 1,387,693 Asset-backed securities 641,700 2,833 ( 2,773 ) — 641,760 Residential mortgage-backed securities 463,904 1,732 ( 48,530 ) — 417,106 Commercial mortgage-backed securities 72,308 11 ( 5,416 ) ( 1 ) 66,902 Total fixed-maturity investments $ 2,834,463 $ 10,377 $ ( 132,528 ) $ ( 553 ) $ 2,711,759 Available-for-sale investments in a loss position The Company regularly reviews all its available-for-sale investments with unrealized losses to assess whether the decline in the fair value is deemed to be a credit loss. The Company considers a number of factors in completing its review of credit losses, including the extent to which a security's fair value has been below cost and the financial condition of an issuer. In addition to specific issuer information, the Company also evaluates the current market and interest rate environment. Generally, a change in a security’s value caused by a change in the market or interest rate environment does not constitute a credit loss. For fixed-maturity securities, the Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery and the ability to recover all amounts outstanding when contractually due. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs and potential sales of investments to capitalize on favorable pricing. For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, an impairment is recognized in net income based on the fair value of the security at the time of assessment. For fixed-maturity securities that the Company does not intend to sell or for which it is more likely than not that the Company would not be required to sell before recovery of its amortized cost, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. Inputs into the present value cash flow analysis include default rates and recoverability rates based on credit rating. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income. The Company reports investment income due and accrued separately from fixed-maturity securities, available for sale, and has elected not to measure an allowance for credit losses for investment income due and accrued. 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. 81 Table of Contents 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: Years Ended December 31, 2024 2023 (in thousands) Beginning balance $ 553 $ 366 Increase to allowance from securities for which credit losses were not previously recorded 3 1 Reduction from securities sold during the period ( 479 ) ( 12 ) Net (decrease) increase from securities that had an allowance at the beginning of the period ( 50 ) 198 Ending balance $ 27 $ 553 The following tables summarize gross unrealized losses and estimated fair value for available-for-sale investments by length of time that the securities have continuously been in an unrealized loss position: December 31, 2024 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 838 $ ( 13 ) $ 14,210 $ ( 404 ) $ 15,048 $ ( 417 ) Obligations of states, municipalities and political subdivisions 27,049 ( 417 ) 114,620 ( 22,216 ) 141,669 ( 22,633 ) Corporate and other securities 667,645 ( 9,139 ) 493,598 ( 44,499 ) 1,161,243 ( 53,638 ) Asset-backed securities 121,371 ( 943 ) 24,656 ( 579 ) 146,027 ( 1,522 ) Residential mortgage-backed securities 144,955 ( 1,934 ) 237,514 ( 52,060 ) 382,469 ( 53,994 ) Commercial mortgage-backed securities 92,024 ( 960 ) 53,812 ( 3,878 ) 145,836 ( 4,838 ) Total fixed-maturity investments $ 1,053,882 $ ( 13,406 ) $ 938,410 $ ( 123,636 ) $ 1,992,292 $ ( 137,042 ) At December 31, 2024, in addition to the securities included in the allowance for credit losses, the Company held 1,031 fixed-maturity securities with a total estimated fair value of $ 2.0 billion and gross unrealized losses of $ 137.0 million. Of those securities, 616 were in a continuous unrealized loss position for greater than one year. As discussed above, the Company regularly reviews all fixed-maturity securities within its investment portfolio to determine whether a credit loss has occurred. Based on the Company's review as of December 31, 2024, except for securities previously discussed, the securities in unrealized loss positions were caused by interest rate changes or other market factors and were not credit-specific issues, nor did the Company intend to sell these securities. At December 31, 2024, 79.8 % of the Company’s fixed-maturity securities were rated "A-" or better and all of Company's fixed-maturity securities made expected coupon payments under the contractual terms of the securities. 82 Table of Contents December 31, 2023 Less than 12 Months 12 Months or Longer Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ — $ — $ 15,484 $ ( 806 ) $ 15,484 $ ( 806 ) Obligations of states, municipalities and political subdivisions 20,886 ( 221 ) 121,911 ( 20,027 ) 142,797 ( 20,248 ) Corporate and other securities 246,355 ( 1,444 ) 651,525 ( 53,311 ) 897,880 ( 54,755 ) Asset-backed securities 142,287 ( 872 ) 217,401 ( 1,901 ) 359,688 ( 2,773 ) Residential mortgage-backed securities 26,158 ( 49 ) 268,891 ( 48,481 ) 295,049 ( 48,530 ) Commercial mortgage-backed securities 8,775 ( 55 ) 56,731 ( 5,361 ) 65,506 ( 5,416 ) Total fixed-maturity investments $ 444,461 $ ( 2,641 ) $ 1,331,943 $ ( 129,887 ) $ 1,776,404 $ ( 132,528 ) Contractual maturities of available-for-sale fixed-maturity securities The amortized cost and estimated fair value of available-for-sale fixed-maturity securities at December 31, 2024 are summarized, by contractual maturity, as follows: Amortized Estimated Cost Fair Value (in thousands) Due in one year or less $ 415,494 $ 415,674 Due after one year through five years 1,070,687 1,058,729 Due after five years through ten years 513,549 496,044 Due after ten years 222,001 180,395 Asset-backed securities 729,658 732,742 Residential mortgage-backed securities 502,121 448,874 Commercial mortgage-backed securities 209,521 205,105 Total fixed maturities $ 3,663,031 $ 3,537,563 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, and the lenders may have the right to put the securities back to the borrower. 83 Table of Contents Real estate investments 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. The Company recognized a gain on the sale of $ 4.3 million, which is included in net realized investment gains on the consolidated statement of income. The Company used the net sale proceeds to pay down a portion of its Credit Facility. Concurrent with the sale of the investment property, the Company refined its plans for the remainder of the property and determined the predominant use of the remaining office building would be for future office space expansion. Upon this determination, the Company reclassified the carrying value of the building to construction in progress within property and equipment. Net investment income The following table presents the components of net investment income: Year Ended December 31, 2024 2023 2022 (in thousands) Interest: Taxable bonds $ 143,242 $ 92,227 $ 44,806 Municipal bonds (tax exempt) 1,592 2,217 3,380 Cash equivalents and short-term investments 3,012 3,004 1,251 Dividends on equity securities 6,442 5,097 4,406 Real estate investment income 153 3,716 234 Gross investment income 154,441 106,261 54,077 Investment expenses ( 4,154 ) ( 3,926 ) ( 2,795 ) 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. 84 Table of Contents Realized investment gains and losses The following table presents realized investment gains and losses: Year Ended December 31, 2024 2023 2022 (in thousands) Fixed-maturity securities: Realized gains $ 1,151 $ 1,852 $ 1,078 Realized losses ( 1,131 ) ( 2,374 ) ( 904 ) Net realized gains (losses) from fixed-maturity securities 20 ( 522 ) 174 Equity securities: Realized gains 7,271 7,678 1,363 Realized losses ( 455 ) ( 5,329 ) ( 297 ) Net realized gains from equity securities 6,816 2,349 1,066 Realized losses from the sales of short-term investments — ( 37 ) ( 49 ) 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 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. Change in net unrealized gains (losses) on fixed-maturity securities The change in net unrealized gains (losses) for fixed-maturity securities was $( 3.3 ) million, $ 51.0 million, and $( 193.7 ) million for the years ended December 31, 2024, 2023, and 2022, respectively. Insurance – statutory deposits The Company had invested assets with a carrying value of $ 3.7 million and $ 5.8 million on deposit with state regulatory authorities at December 31, 2024 and 2023, respectively. Payable for investments purchased 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. 3. Fair value measurements Fair value is estimated for each class of financial instrument based on the framework established in the fair value accounting guidance. Fair value is defined as the price in the principal market that would be received for an asset or paid to transfer a liability to facilitate an orderly transaction between market participants on the measurement date. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value. 85 Table of Contents The three levels of the fair value hierarchy are defined as follows: Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets. Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3 - Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement. Fair values of the Company's investment portfolio are estimated using unadjusted prices obtained by its investment accounting vendor from nationally recognized third-party pricing services, where available. Values for U.S. Treasuries, exchange traded funds and common stocks are generally based on Level 1 inputs which use quoted prices in active markets for identical assets. For other fixed-maturity securities and non-redeemable preferred stock, the pricing vendors use a pricing methodology involving the market approach, including pricing models which use prices and relevant market information regarding a particular security or securities with similar characteristics to establish a valuation. The estimates of fair value of these investments are included in the amounts disclosed as Level 2. 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, 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. 86 Table of Contents The following tables present the balances of assets measured at fair value on a recurring basis as of December 31, 2024 and 2023, by level within the fair value hierarchy: December 31, 2024 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 15,048 $ — $ — $ 15,048 Obligations of states, municipalities and political subdivisions — 146,304 — 146,304 Corporate and other securities — 1,989,490 — 1,989,490 Asset-backed securities — 732,742 — 732,742 Residential mortgage-backed securities — 448,874 — 448,874 Commercial mortgage-backed securities — 205,105 — 205,105 Total fixed maturities 15,048 3,522,515 — 3,537,563 Equity securities: Exchange traded funds 129,731 — — 129,731 Non-redeemable preferred stock — 26,433 — 26,433 Common stocks 242,195 — — 242,195 Total equity securities 371,926 26,433 — 398,359 Short-term investments 3,714 — — 3,714 Total $ 390,688 $ 3,548,948 $ — $ 3,939,636 December 31, 2023 Level 1 Level 2 Level 3 Total (in thousands) Assets Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 22,235 $ 5,019 $ — $ 27,254 Obligations of states, municipalities and political subdivisions — 171,044 — 171,044 Corporate and other securities — 1,387,693 — 1,387,693 Asset-backed securities — 641,760 — 641,760 Residential mortgage-backed securities — 417,106 — 417,106 Commercial mortgage-backed securities — 66,902 — 66,902 Total fixed maturities 22,235 2,689,524 — 2,711,759 Equity securities: Exchange traded funds 106,300 — — 106,300 Non-redeemable preferred stock — 33,173 — 33,173 Common stocks 95,340 — — 95,340 Total equity securities 201,640 33,173 — 234,813 Short-term investments 1,862 3,727 — 5,589 Total $ 225,737 $ 2,726,424 $ — $ 2,952,161 87 Table of Contents 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, 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. Since this methodology is based upon market yields for comparable arrangements, the measurement is categorized as Level 2. The estimated fair value of outstanding borrowings under the Company's revolving Credit Facility approximated its carrying value at December 31, 2024 and 2023. See Note 11 for further information regarding the Company's debt arrangements. The Company holds cash equivalents that are managed as part of its investment portfolio and, due to the short-term maturities of these assets, the carrying value of these investments approximates fair value. The Company held cash equivalents of $ 16.1 million and $ 11.8 million at December 31, 2024 and 2023, respectively. 4. Deferred policy acquisition costs The following table presents the amounts of policy acquisition costs deferred and amortized for the years ended: Year Ended December 31, 2024 2023 2022 (in thousands) Balance, beginning of year $ 88,395 $ 61,594 $ 41,968 Policy acquisition costs deferred: Direct commissions 274,124 227,755 160,523 Ceding commissions ( 120,459 ) ( 88,449 ) ( 48,022 ) Other underwriting and policy acquisition costs 14,215 10,982 8,155 Policy acquisition costs deferred 167,880 150,288 120,656 Amortization of net policy acquisition costs ( 147,012 ) ( 123,487 ) ( 101,030 ) Balance, end of year $ 109,263 $ 88,395 $ 61,594 Amortization of net policy acquisition costs is included in underwriting, acquisition and insurance expense in the accompanying consolidated statements of income and comprehensive income. 5. Underwriting, acquisition and insurance expenses Underwriting, acquisition and insurance expenses consist of the following: Year Ended December 31, 2024 2023 2022 (in thousands) Underwriting, acquisition and insurance expenses incurred: Direct commissions $ 254,523 $ 198,715 $ 138,451 Ceding commissions ( 120,339 ) ( 84,998 ) ( 44,695 ) Other underwriting expenses 151,624 115,253 86,566 Total $ 285,808 $ 228,970 $ 180,322 Other underwriting expenses within underwriting, acquisition and insurance expenses included salaries, employee benefits and bonus expense of $ 109.3 million, $ 85.7 million and $ 64.8 million, for the years ended December 31, 2024, 2023 and 2022, respectively. 88 Table of Contents 6. Income taxes The Company’s subsidiaries file a consolidated U.S. federal income tax return. Under a tax sharing agreement, Kinsale collects from or refunds to its subsidiaries the amount of taxes determined as if Kinsale and the subsidiaries filed separate returns. The Company is no longer subject to income tax examination by tax authorities for the years ended before January 1, 2021. Income tax expense includes the following components for the years ending December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 (in thousands) Current federal income tax expense $ 103,701 $ 85,353 $ 50,641 Deferred federal income tax benefit ( 3,828 ) ( 9,429 ) ( 14,191 ) Income tax expense $ 99,873 $ 75,924 $ 36,450 The Company paid $ 104.1 million, $ 84.6 million and $ 43.1 million in federal income taxes during the years ended December 31, 2024, 2023 and 2022, respectively. Current income taxes payable were $ 2.8 million and $ 3.2 million at December 31, 2024 and 2023, respectively, and included in other liabilities in the accompanying consolidated balance sheets. The prevailing federal income tax rate was 21 % in December 31, 2024, 2023 and 2022. The Company’s effective income tax rate on income before income taxes differs from the prevailing federal income tax rate and is summarized as follows: Year ended December 31, 2024 2023 2022 (in thousands) Income tax expense at federal income tax rate $ 108,090 $ 80,644 $ 41,068 Stock options exercised ( 7,972 ) ( 3,676 ) ( 3,240 ) Restricted stock award vesting ( 2,147 ) ( 1,256 ) ( 1,048 ) Tax-exempt investment income ( 249 ) ( 347 ) ( 527 ) Other 2,151 559 197 Total $ 99,873 $ 75,924 $ 36,450 89 Table of Contents The significant components of the net deferred tax asset are summarized as follows: December 31, 2024 2023 (in thousands) Deferred tax assets: Unrealized losses on fixed-maturity securities $ 26,343 $ 25,655 Unpaid losses and loss adjustment expenses 36,491 27,422 Unearned premiums 32,580 27,251 State operating loss carryforwards 8,859 6,012 Stock compensation 3,276 2,155 Allowance for credit losses 5,210 2,810 Other 1,939 2,394 Deferred tax assets before allowance 114,698 93,699 Less: valuation allowance ( 9,066 ) ( 6,182 ) Total deferred tax assets 105,632 87,517 Deferred tax liabilities: Unrealized gains on equity securities 17,774 8,667 Deferred policy acquisition costs, net of ceding commissions 22,945 18,563 Property and equipment 3,263 3,005 Other 1,435 1,583 Total deferred tax liabilities 45,417 31,818 Net deferred tax asset $ 60,215 $ 55,699 At December 31, 2024 and 2023, the Company had state net operating losses ("NOLs") of $ 186.9 million and $ 126.8 million, respectively. The state NOLs are available to offset future taxable income or reduce taxes payable and begin expiring in 2029. Management evaluates the need for a valuation allowance related to its deferred tax assets. 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, 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. After consideration of all available evidence, we concluded that it is more likely than not that these deferred tax assets will be realized. The Company did not have any material uncertain tax positions in 2024 or 2023. Management is not aware of any events that would give rise to any material uncertain tax positions. 90 Table of Contents 7. Reserves for unpaid losses and loss adjustment expenses The reserves for unpaid losses and loss adjustment expenses represent the Company's estimated ultimate cost of all unreported and reported but unpaid insured claims and the cost to adjust these claims. Reserves are estimated using individual case-basis valuations of reported claims and statistical analyses. Case reserves are established for individual claims that have been reported to the Company, typically by the Company's insureds or their brokers. Based on the information provided, case reserves are established by estimating the ultimate losses from the claim, including defense costs associated with the ultimate settlement of the claim. 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. 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. Policies written on a claims made basis provide coverage to the insured only for losses incurred during the coverage period, and only if the claim was reported during a specified reporting period. Policies written on an occurrence basis provide coverage to the insured for liabilities arising from events occurring during the term of the policy, regardless of when a claim is actually made. Accordingly, claims related to policies written on an occurrence basis may arise many years after a policy has lapsed. Property losses, while written on an occurrence basis, are generally reported within a short time from the date of loss, and in most instances, property claims are settled and paid within a relatively short period of time. The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses: December 31, 2024 2023 2022 (in thousands) Gross reserves for unpaid losses and loss adjustment expenses, beginning of year $ 1,692,875 $ 1,238,402 $ 881,344 Less: reinsurance recoverable on unpaid losses 241,357 177,039 117,561 Net reserves for unpaid losses and loss adjustment expenses, beginning of year 1,451,518 1,061,363 763,783 Incurred losses and loss adjustment expenses: Current year 810,554 635,993 493,800 Prior years ( 37,655 ) ( 35,774 ) ( 35,887 ) Total net losses and loss adjustment expenses incurred 772,899 600,219 457,913 Payments: Current year 49,747 38,565 49,205 Prior years 212,062 171,499 111,128 Total payments 261,809 210,064 160,333 Net reserves for unpaid losses and loss adjustment expenses, end of year 1,962,608 1,451,518 1,061,363 Reinsurance recoverable on unpaid losses, net of allowance 323,060 241,357 177,039 Gross reserves for unpaid losses and loss adjustment expenses, end of year $ 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. 91 Table of Contents 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 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. This favorable development was offset in part by adverse development largely from the 2016 and 2018 accident years due to routine variability in reported losses and modest adjustments in actuarial assumptions. 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. Incurred and Paid Claims Development The following is information about incurred and paid claims development as of December 31, 2024, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. The development and claims duration tables below exclude commuted multi-line quota-share reinsurance treaty ("MLQS") contracts, which would distort development patterns related to those transactions. Cumulative number of reported claims is reported on a per claim basis. The information about incurred and paid claims development for the years ended December 31, 2015 to December 31, 2023, is presented as unaudited supplementary information. Property Incurred Claims and Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, As of December 31, 2024 Accident Year 2020 Unaudited 2021 Unaudited 2022 Unaudited 2023 Unaudited 2024 Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims ($ in thousands) 2020 $ 40,612 $ 37,939 $ 36,807 $ 37,078 $ 42,287 $ — 2,309 2021 36,531 33,518 29,750 31,392 1,087 1,146 2022 67,127 53,676 53,527 4,131 2,346 2023 75,517 54,503 24,306 979 2024 112,051 61,791 1,376 Total $ 293,760 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2020 Unaudited 2021 Unaudited 2022 Unaudited 2023 Unaudited 2024 ($ in thousands) 2020 $ 19,897 $ 30,321 $ 31,765 $ 35,023 $ 41,696 2021 14,268 21,257 27,324 30,200 2022 33,004 46,965 48,030 2023 20,267 26,434 2024 31,303 Total 177,663 All outstanding liabilities before 2020, net of reinsurance 15 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 116,112 92 Table of Contents Historical Claims Duration The following is supplementary information about average historical claims duration as of December 31, 2024: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited) Years 1 2 3 4 5 Property 43.9 % 21.1 % 8.2 % 8.4 % 15.8 % Casualty - Claims Made Incurred Claims and Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, As of December 31, 2024 Accident Year 2015 Unaudited 2016 Unaudited 2017 Unaudited 2018 Unaudited 2019 Unaudited 2020 Unaudited 2021 Unaudited 2022 Unaudited 2023 Unaudited 2024 Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims ($ in thousands) 2015 $ 18,883 $ 16,777 $ 14,896 $ 13,583 $ 13,942 $ 13,548 $ 13,414 $ 13,066 $ 12,759 $ 12,679 $ 20 260 2016 19,170 14,693 14,675 14,322 13,583 13,602 13,228 12,707 12,703 12 312 2017 18,116 17,097 16,120 15,794 14,989 13,698 13,471 12,840 39 372 2018 22,429 20,234 18,612 17,057 14,411 14,272 14,186 840 466 2019 34,693 29,056 26,426 24,489 21,788 22,839 2,583 565 2020 55,630 44,641 38,287 33,667 28,877 5,467 787 2021 84,018 66,191 52,935 36,710 18,461 1,081 2022 101,064 81,394 60,873 32,026 1,234 2023 115,858 91,516 61,696 1,467 2024 123,511 103,838 1,461 Total $ 416,734 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2015 Unaudited 2016 Unaudited 2017 Unaudited 2018 Unaudited 2019 Unaudited 2020 Unaudited 2021 Unaudited 2022 Unaudited 2023 Unaudited 2024 ($ in thousands) 2015 $ 217 $ 4,496 $ 7,563 $ 9,238 $ 11,372 $ 11,522 $ 12,142 $ 12,463 $ 12,474 $ 12,659 2016 1,158 3,015 6,907 9,839 11,381 12,105 12,299 12,691 12,691 2017 340 4,897 8,252 10,484 11,357 12,235 12,335 12,779 2018 507 5,030 8,931 10,330 11,205 12,623 13,247 2019 2,487 6,005 10,123 14,476 15,406 16,598 2020 1,002 7,446 12,551 18,589 22,445 2021 1,146 8,437 12,895 16,294 2022 3,052 12,381 24,033 2023 4,830 16,895 2024 6,755 Total 154,396 All outstanding liabilities before 2015, net of reinsurance 132 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 262,470 93 Table of Contents Casualty - Occurrence Incurred Claims and Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, As of December 31, 2024 Accident Year 2015 Unaudited 2016 Unaudited 2017 Unaudited 2018 Unaudited 2019 Unaudited 2020 Unaudited 2021 Unaudited 2022 Unaudited 2023 Unaudited 2024 Total of IBNR Liabilities Plus Expected Development on Reported Claims Cumulative Number of Reported Claims ($ in thousands) 2015 $ 59,717 $ 51,739 $ 49,122 $ 52,100 $ 54,697 $ 54,090 $ 54,090 $ 54,637 $ 55,259 $ 56,101 $ 3,740 1,947 2016 61,440 55,680 53,549 55,534 57,401 60,861 64,612 65,323 65,025 5,511 1,694 2017 71,126 67,151 68,985 70,641 71,117 69,911 76,715 79,203 9,117 2,288 2018 86,157 78,331 78,386 83,952 93,215 97,005 101,939 13,824 2,585 2019 112,266 109,994 108,138 107,480 115,681 120,003 26,442 2,535 2020 154,619 136,212 131,082 135,045 140,203 69,005 3,072 2021 200,598 190,879 193,722 204,787 127,633 3,228 2022 272,692 271,399 287,977 199,307 3,832 2023 372,245 372,413 322,319 3,813 2024 490,719 471,397 2,513 Total $ 1,918,370 Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance For the Years Ended December 31, Accident Year 2015 Unaudited 2016 Unaudited 2017 Unaudited 2018 Unaudited 2019 Unaudited 2020 Unaudited 2021 Unaudited 2022 Unaudited 2023 Unaudited 2024 ($ in thousands) 2015 $ 941 $ 3,161 $ 12,685 $ 28,385 $ 37,690 $ 41,724 $ 44,161 $ 47,106 $ 49,147 $ 51,010 2016 1,099 6,015 17,225 28,924 34,437 43,311 51,533 55,595 57,421 2017 1,581 9,352 22,407 37,736 46,025 52,069 61,108 66,435 2018 2,638 10,995 22,860 35,138 54,441 72,174 82,927 2019 3,944 16,687 30,518 46,478 69,384 84,496 2020 2,400 8,673 17,805 32,606 55,548 2021 3,205 12,944 31,494 57,465 2022 4,658 23,084 56,201 2023 4,329 21,930 2024 6,032 Total 539,465 All outstanding liabilities before 2015, net of reinsurance 6,942 Liabilities for claims and claim adjustment expenses, net of reinsurance $ 1,385,847 Historical Claims Duration The following is supplementary information about average historical claims duration as of December 31, 2024: Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited) Years 1 2 3 4 5 6 7 8 9 10 Casualty - claims made 5.0 % 22.4 % 21.9 % 16.1 % 9.9 % 5.8 % 2.9 % 3.0 % — % 1.5 % Casualty - occurrence 1.9 % 6.7 % 12.6 % 16.3 % 15.0 % 11.7 % 9.7 % 6.1 % 3.2 % 3.3 % 94 Table of Contents Reconciliation of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses The reconciliation of the net incurred and paid claims development tables to the liability for unpaid claims and claim adjustment expenses in the consolidated statement of financial position is as follows: (in thousands) December 31, 2024 Net outstanding liabilities Property $ 116,112 Casualty - claims made 262,470 Casualty - occurrence 1,385,847 Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance 1,764,429 Reinsurance recoverable on unpaid claims Property 99,478 Casualty - claims made 21,051 Casualty - occurrence 203,463 Allowance for credit losses ( 932 ) Total reinsurance recoverable on unpaid claims 323,060 Unallocated claims adjustment expenses 197,247 Allowance for credit losses 932 Gross liability for unpaid claims and claim adjustment expense $ 2,285,668 95 Table of Contents 8. Reinsurance The Company purchases reinsurance from other insurance companies ("reinsurers") in order to limit its exposure to large losses and enable it to underwrite policies with sufficient limits to meet policyholder needs. In a reinsurance transaction, an insurance company transfers, or cedes, part or all of its exposure to the reinsurer that receives a portion of the premium. The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policy coverage, and therefore the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. The following table summarizes the effect of reinsurance on premiums written and earned: Year Ended December 31, 2024 2023 2022 (in thousands) Written: Direct $ 1,870,341 $ 1,568,815 $ 1,102,092 Ceded ( 392,993 ) ( 304,185 ) ( 165,282 ) Net written $ 1,477,348 $ 1,264,630 $ 936,810 Earned: Direct $ 1,743,243 $ 1,367,141 $ 950,145 Ceded ( 392,773 ) ( 294,604 ) ( 156,026 ) Net earned $ 1,350,470 $ 1,072,537 $ 794,119 Incurred losses and loss adjustment expenses were net of reinsurance recoverables (ceded incurred losses and loss adjustment expenses) of $ 125.4 million, $ 115.9 million and $ 117.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. Reinsurance balances The following table presents reinsurance recoverables on paid and unpaid losses as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 (in thousands) Reinsurance recoverables on paid losses $ 14,831 $ 6,479 Reinsurance recoverables on unpaid losses 323,060 241,357 Reinsurance recoverables $ 337,891 $ 247,836 Credit risk exists with reinsurance ceded to the extent that any reinsurer is unable to meet the obligations assumed under the reinsurance agreements. Allowances are established for amounts deemed uncollectible. The Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk arising from its exposure to individual reinsurers. All reinsurance recoverables are from companies with A.M. Best ratings of "A-" (Excellent) or better. To further reduce credit exposure to reinsurance recoverable balances, the Company has received letters of credit from certain reinsurers that are not authorized as reinsurers under U.S. state insurance regulations. The Company recorded an allowance for credit losses of $ 0.9 million and $ 0.7 million related to its reinsurance balances at December 31, 2024 and 2023, respectively; however, the deterioration in the credit quality of existing reinsurers or disputes over reinsurance agreements could result in future charges. At December 31, 2024, reinsurance recoverables on paid and unpaid losses from the Company’s five largest reinsurers were $ 83.8 million, $ 37.6 million, $ 34.3 million, $ 30.0 million and $ 20.5 million, representing 61.0 % of the total balance. At December 31, 2024, unearned premiums ceded to five reinsurers were $ 11.5 million, $ 6.3 million, $ 5.5 million, $ 4.8 million and $ 4.7 million representing 62.2 % of the total balance. 96 Table of Contents 9. Stockholders’ equity Capital Stock The Company’s authorized capital stock consists of 400,000,000 shares of common stock, par value $ 0.01 per share, and 100,000,000 shares of preferred stock, par value $ 0.01 per share. 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 In November 2022, the Company completed an underwritten public offering and sold and issued 155,000 shares of its common stock at a price of $ 308.30 per share, to the underwriter. The Company received net proceeds from the offering of $ 47.5 million. Equity-based Compensation On July 27, 2016, the Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (the "2016 Incentive Plan") became effective. The 2016 Incentive Plan, which is administered by the Compensation, Nominating and Corporate Governance Committee of the Company's Board of Directors, provides for grants of stock options, restricted stock, restricted stock units and other stock-based awards to officers, employees, directors, independent contractors and consultants. The number of shares of common stock available for issuance under the 2016 Incentive Plan may not exceed 2,073,832 . The Company recognized total equity-based compensation expense of $ 14.1 million, $ 9.4 million and $ 6.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. Stock Options On July 27, 2016, the Board of Directors approved, and the Company granted, 1,036,916 stock options with an exercise price equal to the initial public offering price of $ 16.00 per share. The options have a maximum contractual term of 10 years and vested in 4 equal annual installments following the date of the grant. The weighted average grant date fair value of options granted during 2016 was $ 2.71 per share. The value of the options granted was estimated at the date of grant using the Black-Scholes pricing model. A summary of option activity as of December 31, 2024 and changes during the year then ended is presented below: Number of Shares Weighted-average exercise price Weighted-average remaining years of contractual life Aggregate intrinsic value (in thousands) Outstanding at December 31, 2023 201,560 $ 16.00 Granted — — Forfeited — — Exercised ( 83,092 ) 16.00 Outstanding at December 31, 2024 118,468 $ 16.00 1.6 $ 53,208 Exercisable at December 31, 2024 118,468 $ 16.00 1.6 $ 53,208 The total intrinsic value of options exercised was $ 38.2 million during the year ended December 31, 2024 and $ 17.7 million during the year ended December 31, 2023. 97 Table of Contents Restricted Stock Awards During 2024, the Board of Directors approved, and the Company granted, restricted stock awards under the 2016 Incentive Plan. The restricted stock awards were valued on the date of grant and will vest over a period of 1 to 4 years corresponding to the anniversary date of the grants. The fair value of restricted stock awards was determined based on the closing trading price of the Company’s common stock on the grant date or, if no common stock was traded on the grant date, the last preceding date for which there was a sale of common stock. Except for restrictions placed on the transferability of restricted stock, holders of unvested restricted stock have full stockholder’s rights, including voting rights and the right to receive cash dividends. Unvested restricted stock awards and accrued dividends, if any, are forfeited upon the termination of service to or employment with the Company. A summary of restricted stock activity under the equity compensation plans for the year ended is as follows: December 31, 2024 Number of Shares Weighted Average Grant Date Fair Value per Share Nonvested outstanding at the beginning of the period 107,822 $ 250.86 Granted 47,689 $ 502.43 Vested ( 41,872 ) $ 230.81 Forfeited ( 3,516 ) $ 308.84 Nonvested outstanding at the end of the period 110,123 $ 366.73 Employees surrender restricted stock awards to pay for withholding tax obligations resulting from any vesting of those awards. During the year ended December 31, 2024, restricted stock awards withheld for taxes in connection with the vesting of those awards totaled 14,401 . The per share weighted average grant-date fair value of the Company's restricted stock awards granted during the years ended December 31, 2024, 2023 and 2022 was $ 502.43 , $ 313.35 and $ 211.86 , respectively. The fair value of restricted stock awards that vested during the year ended December 31, 2024, 2023 and 2022 was $ 20.0 million, $ 12.8 million and $ 10.0 million, respectively. As of December 31, 2024, the Company had $ 28.3 million of total unrecognized stock-based compensation expense expected to be charged to earnings over a weighted-average period of 2.2 years. Subsequent Events The Board of Directors granted 3,186 restricted stock awards on January 1, 2025 under the 2016 Incentive Plan to the Company’s non-employee directors. The restricted stock awards had a fair value on the date of grant of $ 465.13 per share and will vest on the first anniversary date of the grant. On February 10, 2025 , the Company’s Board of Directors declared a cash dividend of $ 0.17 per share of common stock. This dividend is payable on March 13, 2025 to all stockholders of record on February 27, 2025 . 98 Table of Contents 10. Earnings per share The following table represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the consolidated financial statements: Year ended December 31, 2024 2023 2022 (in thousands, except per share data) Net income $ 414,843 $ 308,093 $ 159,114 Weighted average common shares outstanding - basic 23,153 23,045 22,815 Dilutive effect of shares issued under stock compensation arrangements: Stock options 136 214 269 Restricted stock awards 43 48 41 Total dilutive effect of shares issued under stock compensation arrangements 179 262 310 Weighted average common shares outstanding - diluted 23,332 23,307 23,125 Earnings per common share: Basic $ 17.92 $ 13.37 $ 6.97 Diluted $ 17.78 $ 13.22 $ 6.88 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. Diluted earnings per share was computed by dividing earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, including potentially dilutive shares of common stock for the period determined using the treasury stock method. 11. Debt Note Purchase and Private Shelf Agreement 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. 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 . 99 Table of Contents Credit Agreement 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 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). Borrowings under the Amended and Restated Credit Agreement may be used for general corporate purposes (which may include, without limitation, to fund future growth, to finance working capital needs, to fund capital expenditures, and to refinance, redeem or repay indebtedness). In September 2023, the Company used proceeds from the sale of its real estate investment property to pay down $ 62.0 million from the Credit Facility. The loans under the Amended and Restated Credit Agreement bear interest, at the Company's option, at a rate equal to the Adjusted Term SOFR Rate (as defined therein) plus 1.625% or the Alternate Base Rate (as defined therein) plus 0.625%. 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, 2024 and 2023: Issuance Maturities December 31, 2024 December 31, 2023 (in thousands) Credit Facility Various 7/22/2027 $ 11,000 $ 11,000 5.15 % Series A Notes 7/22/2022 7/22/2034 125,000 125,000 6.21 % Series B Note 9/18/2023 7/22/2034 50,000 50,000 Less: Unamortized debt issuance costs ( 1,878 ) ( 2,154 ) Total debt $ 184,122 $ 183,846 Interest paid under both agreements totaled $ 10.3 million, $ 10.5 million and $ 2.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. 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. 12. Contingencies Contingencies arise in the normal conduct of the Company’s operations and are not expected to have a material effect on the Company’s financial condition or results of operations. However, adverse outcomes are possible and could negatively affect the Company’s financial condition and results of operations. In June 2019, Marie Hughes, as authorized administrator for the estate of George Hughes, filed a wrongful death claim against Venetian Hills Apartments, LLC ("Venetian Hills") in DeKalb County in Georgia state court. On December 20, 2023, the jury awarded a verdict to the plaintiff of $140 million. Venetian Hills was a policyholder of a $1 million general liability policy issued by Kinsale Insurance. The Company believes exclusions in the policy apply to the claim and intends to defend any action related to this proceeding vigorously. The Company 100 Table of Contents 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. The Company believes adequate provision has been made in its consolidated financial statements and its existing reserves account for liabilities to the Company relating to claims such as this legal proceeding. 13. Employee benefit plan The Company has established a defined contribution employee retirement plan ("Plan") in accordance with Section 401(k) of the Internal Revenue Code. Expenses related to the Plan were $ 5.0 million, $ 3.8 million and $ 3.1 million in 2024, 2023 and 2022, respectively. 14. Other comprehensive (loss) income The following table summarizes the components of other comprehensive (loss) income: Year Ending December 31, 2024 2023 2022 (in thousands) Unrealized (losses) gains on fixed-maturity securities arising during the period, before income taxes: $ ( 2,921 ) $ 49,384 $ ( 193,970 ) 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: Net realized investment (losses) gains on available-for-sale investments ( 170 ) ( 1,443 ) 121 Income tax benefit (expense) 36 303 ( 25 ) Reclassification adjustment included in net income ( 134 ) ( 1,140 ) 96 Change in allowance for credit losses on investments, before income taxes 526 ( 187 ) ( 366 ) Income tax (expense) benefit ( 111 ) 39 77 Reclassification adjustment included in net income 415 ( 148 ) ( 289 ) 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. The related tax effect of the reclassification adjustment is recorded in income tax expense in current period earnings. See Note 2 for additional information. 15. Segment and 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 in the United States. 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 101 Table of Contents 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) Revenues: 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 Expenses: 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. 102 Table of Contents Gross written premiums by underwriting division are presented below: Year Ended December 31, 2024 2023 2022 (in thousands) Commercial: Commercial Property $ 456,170 $ 411,956 $ 181,505 Excess Casualty 245,137 194,049 147,485 Small Business Casualty 195,593 174,080 149,366 General Casualty 169,162 118,745 69,784 Construction 148,333 137,887 122,524 Allied Health 83,058 67,808 58,839 Small Business Property 76,800 43,893 21,002 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 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 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 Railroad 225 15 — Total commercial 1,821,407 1,530,338 1,067,542 Personal: 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 Total $ 1,870,341 $ 1,568,815 $ 1,102,092 Certain prior year amounts are reclassified to conform to current year's divisions and the business underwritten within them. Commercial Property underwrites first-party coverage on manufacturing facilities, government and municipal buildings, professional buildings, offices and general commercial properties, vacant properties, as well as entertainment and retail facilities. Excess Casualty underwrites excess liability over risks that would fit within the general casualty, construction, products liability and small business casualty divisions. Coverage is written over the Company's primary liability policies as well as those of other insurers. This division also writes excess liability over primary commercial auto liability policies written by other carriers. 103 Table of Contents 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. 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. 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. 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. 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. 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. Excess Professional underwrites excess coverage over an array of insurance products in Allied Health, Management Liability, Health Care and Professional Liability. 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. 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. Aviation underwrites general liability coverage for small-to-medium sized aviation-related businesses. Ocean Marine underwrites marine cargo coverage for small-to-medium sized risks that transport goods and products in domestic inland waterways and certain U.S. 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. 104 Table of Contents Railroad underwrites excess liability for Class III short line railroads, railroad support activities and contractors and other miscellaneous railroad-related risks. 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. No other broker generated 10.0% or more of the gross written premiums for the year ended December 31, 2024. 16. Statutory financial information Kinsale Insurance maintains its accounts in conformity with accounting practices prescribed or permitted by state regulatory authorities that vary in certain respects from U.S. GAAP. In converting from statutory accounting principles to U.S. GAAP, typical adjustments include deferral of policy acquisition costs, the inclusion of statutory non-admitted assets and the inclusion of net unrealized gains or losses relating to fixed maturities in stockholders’ equity. The Company does not use any permitted practices that are different from prescribed statutory accounting practices. Statutory net income and statutory capital and surplus for Kinsale Insurance as of December 31, 2024, 2023, and 2022 and for the years then ended are summarized as follows: Year ended December 31, 2024 2023 2022 (in thousands) Statutory net income $ 357,896 $ 259,042 $ 151,105 Statutory capital and surplus $ 1,525,851 $ 1,167,382 $ 835,664 Kinsale Insurance is subject to risk-based capital ("RBC") requirements. RBC is a method developed by the National Association of Insurance Commissioners ("NAIC") to determine the minimum amount of statutory capital appropriate for an insurance company to support its overall business operations in consideration of its size and risk profile. The formula for determining the amount of RBC is calculated using various factors, weighted based on the perceived degree of risk, which are applied to certain financial balances and financial activity. The adequacy of a company’s actual capital is evaluated by a comparison to the RBC results, as determined by the formula. Companies that do not maintain statutory capital and surplus at a level in excess of the company action level RBC are required to take specified actions. At December 31, 2024 and 2023, actual statutory capital and surplus for Kinsale Insurance substantially exceeded the regulatory requirements. Dividend payments to Kinsale from Kinsale Insurance are restricted by state insurance laws as to the amount that may be paid without prior approval of the regulatory authorities of Arkansas. The maximum dividend distribution is limited by Arkansas law to the greater of 10 % of policyholder surplus as of December 31 of the previous year or statutory net income, not including realized capital gains, for the previous calendar year. Dividend payments are further limited to that part of available policyholder surplus which is derived from net profits on its business. The maximum dividend distribution that can be paid by Kinsale Insurance during 2025 without prior approval is $ 351.9 million. 105 Table of Contents 17. 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. 106 Table of Contents Schedule I KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Summary of Investments—Other than Investments in Related Parties Type of Investment Cost or Amortized Cost Fair Value (if applicable) Amount at which shown on Balance Sheet (in thousands) Fixed maturities: U.S. Treasury securities and obligations of U.S. government agencies $ 15,465 $ 15,048 $ 15,048 Obligations of states, municipalities and political subdivisions 168,894 146,304 146,304 Corporate and other securities 2,037,372 1,989,490 1,989,490 Asset-backed securities 729,658 732,742 732,742 Residential mortgage-backed securities 502,121 448,874 448,874 Commercial mortgage-backed securities 209,521 205,105 205,105 Total fixed maturities 3,663,031 3,537,563 3,537,563 Equity securities: Common stocks: ETFs (industrial, miscellaneous and all other) 72,773 129,731 129,731 Banks, trust and insurance companies 47,994 58,777 58,777 Industrial, miscellaneous and all other 165,017 183,418 183,418 Non-redeemable preferred stock 27,938 26,433 26,433 Total equity securities 313,722 398,359 398,359 Short-term investments 3,714 3,714 3,714 Real estate investments (none acquired in satisfaction of debt) 15,045 15,045 Total investments $ 3,995,512 $ 3,954,681 See accompanying Report of Independent Registered Public Accounting Firm. 107 Table of Contents Schedule II KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Condensed Financial Information of Registrant Balance Sheets (Parent Company Only) December 31, 2024 2023 (in thousands) Assets Cash and cash equivalents $ 12,336 $ 17,082 Due from subsidiaries 52,296 26,479 Investment in subsidiaries 1,604,811 1,230,371 Deferred income tax asset, net 2,527 1,673 Other assets 664 410 Total assets $ 1,672,634 $ 1,276,015 Liabilities and Stockholders' Equity Liabilities: Accounts payable and accrued expenses $ 2,001 $ 2,042 Income taxes payable 2,842 3,201 Debt 184,122 183,846 Other liabilities 108 94 Total liabilities 189,073 189,183 Stockholders’ equity: Common stock 233 232 Additional paid-in capital 361,398 352,970 Retained earnings 1,229,136 828,247 Accumulated other comprehensive loss ( 97,206 ) ( 94,617 ) Treasury stock, at cost ( 10,000 ) — Stockholders’ equity 1,483,561 1,086,832 Total liabilities and stockholders’ equity $ 1,672,634 $ 1,276,015 See accompanying notes to condensed financial information. See accompanying Report of Independent Registered Public Accounting Firm. 108 Table of Contents Schedule II KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Condensed Financial Information of Registrant Statements of Income and Comprehensive Income (Parent Company Only) Years Ended December 31, 2024 2023 2022 (in thousands) Revenues: Management fees from subsidiaries $ 16,769 $ 11,918 $ 8,686 Net investment income 641 — 121 Net realized investment gains — — 8 Total revenues 17,410 11,918 8,815 Expenses: Operating expenses 17,193 13,007 9,765 Interest expense 10,134 10,301 4,284 Other expenses 615 — — Total expenses 27,942 23,308 14,049 Loss before income taxes ( 10,532 ) ( 11,390 ) ( 5,234 ) Income tax benefit ( 12,346 ) ( 7,324 ) ( 5,387 ) 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 (losses) income of subsidiaries ( 2,589 ) 40,301 ( 153,043 ) Total comprehensive income $ 412,254 $ 348,394 $ 6,071 See accompanying notes to condensed financial information. See accompanying Report of Independent Registered Public Accounting Firm. 109 Table of Contents Schedule II KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Condensed Financial Information of Registrant Statements of Cash Flows (Parent Company Only) Years Ended December 31, 2024 2023 2022 (in thousands) Operating activities Net income $ 414,843 $ 308,093 $ 159,114 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Deferred tax benefit ( 854 ) ( 372 ) ( 367 ) Stock compensation expense 14,146 9,361 6,678 Equity in undistributed earnings of subsidiaries ( 413,029 ) ( 312,159 ) ( 158,961 ) 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 — — Net cash provided by (used in) operating activities 35,911 60,816 ( 65,175 ) Investing activities Contributions to subsidiary ( 11,000 ) ( 50,000 ) ( 100,624 ) Net cash used in investing activities ( 11,000 ) ( 50,000 ) ( 100,624 ) Financing activities Common stock issued, net of transaction costs — — 47,498 Proceeds from credit facility — — 73,000 Proceeds from notes payable — 50,000 125,000 Repayment of credit facility — ( 62,000 ) ( 43,000 ) Debt issuance costs — ( 164 ) ( 2,381 ) Payroll taxes withheld and remitted on share-based payments ( 7,047 ) ( 4,282 ) ( 3,288 ) Common stock issued, stock options exercised 1,330 877 1,090 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 Net change in cash and cash equivalents ( 4,746 ) ( 17,707 ) 20,193 Cash and cash equivalents at beginning of year 17,082 34,789 14,596 Cash and cash equivalents at end of year $ 12,336 $ 17,082 $ 34,789 See accompanying notes to condensed financial information. See accompanying Report of Independent Registered Public Accounting Firm. 110 Table of Contents KINSALE CAPITAL GROUP, INC. Condensed Financial Information of Registrant Notes to Condensed Financial Information (Parent Company Only) 1. Accounting policies Organization Kinsale Capital Group, Inc. (the "Company"), a Delaware domiciled insurance holding company, was formed on June 3, 2009 for the purpose of acquiring and managing insurance entities. Basis of presentation The accompanying condensed financial statements have been prepared using the equity method. Under the equity method, the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated subsidiaries since the date of acquisition. These condensed financial statements should be read in conjunction with the Company’s consolidated financial statements. Estimates and assumptions Preparation of the condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. Debt Note Purchase and Private Shelf Agreement 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. 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 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 111 Table of Contents thereto (collectively, the "Lenders"). 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). Borrowings under the Amended and Restated Credit Agreement may be used for general corporate purposes (which may include, without limitation, to fund future growth, to finance working capital needs, to fund capital expenditures, and to refinance, redeem or repay indebtedness). In September 2023, the Company used proceeds from the sale of its real estate investment property to pay down $ 62.0 million from the Credit Facility. The loans under the Amended and Restated Credit Agreement bear interest, at the Company's option, at a rate equal to the Adjusted Term SOFR Rate (as defined therein) plus 1.625% or the Alternate Base Rate (as defined therein) plus 0.625%. 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, 2024 and December 31, 2023: Issuance Maturities December 31, 2024 December 31, 2023 (in thousands) Credit Facility Various 7/22/2027 $ 11,000 $ 11,000 5.15 % Series A Notes 7/22/2022 7/22/2034 125,000 125,000 6.21 % Series B Note 9/18/2023 7/22/2034 50,000 50,000 Less: Unamortized debt issuance costs ( 1,878 ) ( 2,154 ) Total debt $ 184,122 $ 183,846 Interest paid under both agreements totaled $ 10.3 million, $ 10.5 million and $ 2.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. 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. Dividends from subsidiary 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 Liabilities for loss contingencies, arising from non-insurance policy claims, assessments, litigation, fines, and penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. 112 Table of Contents Schedule V KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES Valuation and Qualifying Accounts Additions Deductions (in thousands) Balance at Beginning of Period Amounts Charged to Expense Amounts Written Off or Disposals Balance at End of Period Year Ended December 31, 2024: Allowance for premiums receivable $ 13,383 $ 17,397 $ 3,854 $ 26,926 Valuation allowance for deferred tax assets 6,182 2,884 — 9,066 Allowance for reinsurance recoverables 744 188 — 932 Allowance for credit losses on fixed-maturity investments 553 ( 47 ) 479 27 Year Ended December 31, 2023: Allowance for premiums receivable 8,067 9,790 4,474 13,383 Valuation allowance for deferred tax assets 5,188 994 — 6,182 Allowance for reinsurance recoverables 459 285 — 744 Allowance for credit losses on fixed-maturity investments 366 199 12 553 Year Ended December 31, 2022: Allowance for premiums receivable 3,391 5,988 1,312 8,067 Valuation allowance for deferred tax assets 4,159 1,029 — 5,188 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. 113 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.