Kinsale Capital Group (KNSL) risk factors, FY2025 10-K

Risks Related to Our Business, Industry, and Operations

1. 01Our loss reserves may be inadequate to cover our actual losses, which could have a material adverse effect on our financial condition, results of operations and cash flows
2. 02in frequency or severity of claims and premium defaults or both, which, in turn, could affect our growth and profitability."
3. 03The failure of any of the loss limitations or exclusions we employ, or changes in other claims or coverage issues, could have a material adverse effect on our financial condition or results of operations
4. 04We may be unable to obtain reinsurance coverage at reasonable prices or on terms that adequately protect us
5. 05Severe weather conditions, catastrophes, pandemics and similar events may adversely affect our business, results of operations and financial condition
6. 06Global climate change may have a material adverse effect on our financial results

Risks Related to Market Conditions and our Business Operations

1. 07Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in frequency or severity of claims and premium defaults or both, which, in turn, could affect our growth and profitability
2. 08A decline in our financial strength rating may adversely affect the amount of business we write
3. 09We could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified personnel
4. 10We distribute the majority of our products through a select group of brokerage firms. Of our 2025 gross written premiums, 60.6%, or $1.2 billion, were distributed through five of our approximately 227 brokers, three of which accounted for 47.6%, or $941.4 million, of our 2025 gross written premiums
5. 11Our E&S insurance operations are subject to increased risk from changing market conditions and our business is cyclical in nature, which may affect our financial performance
6. 12Our employees could take excessive risks, which could negatively affect our financial condition and business
7. 13Competition for business in our industry is intense
8. 14If we are unable to underwrite risks accurately and charge competitive yet profitable rates to our policyholders, our business, financial condition and results of operations will be adversely affected
9. 15Because our business depends on insurance brokers, we are exposed to certain risks arising out of our reliance on these distribution channels that could adversely affect our results
10. 16We are subject to reinsurance counterparty credit risk
11. 17We may act based on inaccurate or incomplete information regarding the accounts we underwrite94% rewritten
12. 18Artificial intelligence is an evolving and rapidly developing technology, and its adoption presents additional risksNew
13. 19We may change our underwriting guidelines or our strategy without stockholder approval
14. 20If actual renewals of our existing contracts do not meet expectations, our written premiums in future years and our future results of operations could be materially adversely affected
15. 21Our failure to accurately and timely pay claims could materially and adversely affect our business, financial condition, results of operations and prospects
16. 22The effects of litigation on our business are uncertain and could have an adverse effect on our business

Risks Related to Our Investment Portfolio

1. 23Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results

Risks Related to Liquidity and Access to Capital

1. 24Because we are a holding company and substantially all of our operations are conducted by our insurance subsidiary, our ability to pay dividends depends on our ability to obtain cash dividends or other permitted payments from our insurance subsidiary
2. 25We could be forced to sell investments to meet our liquidity requirements
3. 26Our credit agreements contain financial and other covenants, the breach of any of which could result in acceleration of payment of amounts due under our borrowings
4. 27We may require additional capital in the future, which may not be available or may only be available on unfavorable terms

Risks Related to Regulation

1. 28We are subject to extensive regulation, which may adversely affect our ability to achieve our business objectives. In addition, if we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, which may adversely affect our financial condition and results of operations
2. 29We may become subject to additional government or market regulation