Kinsale Capital Group, Inc.

Before we get started, let me remind everyone that through the course of the teleconference, KIN Sales Management may make comments that reflect their intentions, beliefs, and expectations for the future. As always, these forward-looking statements are subject to certain risk factors which could cause actual results to differ materially. These risk factors are listed in the company's various SEC filings. including the third quarter 2020 quarterly report on Form 10Q and the 2019 annual report on Form 10K, which should be reviewed carefully. The company has furnished a Form 8K with the Securities and Exchange Commission that contains the press release announcing its third quarter results. Ken Sales Management may also reference certain non-GAAP financial measures in the call today. A reconciliation of gap to these measures can be found in the press release, which is available at the company's website at www.KinselCapitalGroup.com. I would now like to turn the conference over to Kinsel's President and CEO, Mr. Michael Kehoe. Please go ahead, sir.

Thank you, Operator, and good morning, everyone. Thank you for joining us on the call today. As usual, Brian Petrucelli, Kinsale's Chief Financial Officer, is here, as is Brian Haney, Chief Operating Officer. I'm going to begin our presentation, and then Brian Petrucelli will step in to cover the financial performance for the quarter. And following that, Brian Haney will provide some color on the market and our underwriting operation. Last night, Kinsale reported operating earnings of 42 cents per diluted share for the third quarter of 2020, down 26.3% compared to the third quarter of 2019. Gross written premium was up 48% for the quarter. The company posted a 97.3% combined ratio and a 13% annualized operating return on equity for the nine months ending on September 30, 2020. The quarterly profitability was negatively impacted by multiple catastrophes, principally hurricanes Laura and Sally on the Gulf Coast, the Glass Wildfire in Napa Valley, California, and even one loss from the derecho windstorm in Iowa. As a reminder, we do write catastrophe-exposed property through both our commercial property and personal insurance divisions, Although the margins on property CAT can be compelling, we are also mindful of the volatility associated with that business, and we limit that volatility in a conservative fashion, but obviously can't eliminate it completely. Each of these events individually resulted in a manageable loss well within expectations. The combination of multiple events in the same quarter is what drove the outsized CAT loss. Beyond the CAT activity, Kinsale's business continues to perform at a high level. The combination of disciplined and highly controlled underwriting combined with technology-driven low costs and a focus on the E&S market is propelling our profitability and growth, and we believe we'll continue to do so over the long term. Kinsale's growth rate at the moment is being enhanced by continued dislocation within the P&C market. Some competitors are reacting to substandard results by restructuring books of business, canceling programs, and withdrawing capacity. This behavior is causing Kinsale's new business submissions and premium to grow at strong double-digit rates, and we continue to expect this extraordinary growth to continue through 2021. At some point thereafter, we expect the level of dislocation in the broader market to abate, and our growth rates are normalized, perhaps in the low double-digit range. Beyond the accelerated growth, industry dislocation is also allowing Kinsale to raise rates and, in some cases, restrict coverage to further expand our profit margins. Brian Haney will provide some additional commentary on this topic here in a moment. Our position on the COVID-19 virus hasn't changed from earlier in the year, Because of the mix of business and the coverage limitations in our book, we don't expect the virus to materially impact Kinsale's profitability or growth. And now I'll turn the call over to Brian Petrucelli.

Thanks, Mike. As Mike just noted, the Q3 CAT activity had a significant impact on our results for the quarter. Net income and operating income included $13.2 million in after-tax CAT losses. Keeping in mind, these losses were offset somewhat by lower variable compensation, increases in investment income, and by the continued growth in the business. We reported net income of $14.9 million for the third quarter of 2020, representing an increase of almost 15% when compared to $13 million last year, resulting from approximately an $8 million increase in investment returns, offset by the CAT losses during the quarter. Net operating earnings, which excludes the volatility from equity investment gains and losses, were $9.6 million, down from $12.6 million in the third quarter of last year, and lower primarily due to the cap losses. The company generated underwriting income of $2.9 million and a combined ratio of 97.3%, compared to $9.5 million and 87% last year. The combined ratio for the third quarter of 2020 included 2.8 points from net favorable prior year loss reserve development compared to less than a point last year. Our effective income tax for the first nine months of 2020 was 12.8% compared to 16.6% last year and lower primarily to larger discrete tax benefits related to stock options exercised during the period. Annualized operating return on equity was 7.8 percent for the quarter and 13 percent for the year so far, both impacted by the CAT losses, combined with a higher average equity balance resulting from the $57 million in net proceeds we received from our August equity offering. Gross written premiums were $145 million, representing a 48 percent increase over last year, for all the reasons Mike previously mentioned. On the investment side, net investment income increased by 33% over the third quarter last year, up to $7 million from $5 million last year, as a result of continued growth in the investment portfolio. Annualized gross investment returns, excluding cash and cash equivalents, was 3% for both the first nine months of this year and last. Diluted operating earnings per share was 42 cents per share for the quarter, compared to 57 cents per share last year. Important to note and to give some perspective on the performance of the company's underlying business and adjusting for the impact of the CAT activity, including the losses themselves, reinstatement premiums paid to reinsurers, and adjustments related to variable compensation, the company's quarterly combined ratio would have been approximately 84%. Quarterly net operating earnings would have been approximately $21.3 million. An annualized operating return on equity would have been approximately 17%. And diluted earnings per share would have been approximately 93 cents per share for the quarter. And with that, I'll pass it over to Brian Ames.