increased 9.4% over the third quarter of 25, generating an annualized operating ROE of 25.6% through nine months. Gross written premium was down 4.8% and net written premium was down 1.5%. Consales combined ratio was 75.4% for the quarter. E&S market conditions in the third quarter continue to be competitive. and largely consistent with conditions in the second quarter. The level of competition and our growth rate continues to vary from one market segment to another, as you can see from the premium by underwriting division exhibit in our queue. And I'm sorry, we've got a fire alarm going off in the building adjacent to ours. We're gonna keep persevering here. The continued intense competition in our commercial property division weighed on our growth rate in the quarter, and excluding that one division, our gross written premium was down half a percent. It's also important to note that even with the drop in gross written premium for the quarter, Kinsale's number of submissions, quotes, and bind orders grew in the mid single-digit range. Essentially, with the competition in the E&S market, our books shifted slightly from larger to smaller accounts. Not only is this shift positive for maintaining best-in-class margins, but it also shows that the ConSale model works and works well even in the most competitive market we've seen in the last 10 years. Our disciplined underwriting and low-cost business model recognizes the importance of the insurance buyer in every transaction. We deliver competitively priced insurance without compromising our margins and we continue to grow the business and take market share subject only to a temporary written premium growth slowdown as we shift slightly away from larger transactions and write a slightly smaller average premium. While Kinsale always prioritizes profit over growth, we are still working very hard to grow the business. The various growth initiatives involve new and enhanced products, appointing new brokers, a robust marketing effort, and improved customer service. Stuart Winston will have some commentary on these topics here in a moment. In this era of artificial intelligence, Kinsale's longstanding strategy of making technology a core competency is allowing us to widen our lead over many competitors. Kinsale's core enterprise system is custom-built for our business. by our own engineers, analysts, and developers. We don't have any legacy software applications dating back decades ago. We also have all the company data from the first policy we wrote or the first claim we received 17 years ago recorded in the same database. ConSales TechAdvantage allows for lower costs, better customer service, and more data at the transaction level to better manage the business. Further, we have built our analytics and actuarial team over the last decade to constantly evaluate our own data and data that we acquire to improve how we segment and price risk. This team of quants combined with millions of dollars of investment and further combined with a superior tech stack is creating underwriting and pricing algorithms superior to others in the E&S industry. And Salmaan Allibhai is going to have some further comments on this topic in a moment as well. And with that, I'm going to turn the call over to Chris Tangard.

Thanks, Mike. Good morning, everyone. Before I provide commentary on our quarterly results, I want to recap our capital allocation priorities and recent actions, particularly in light of the current competitive environment that Mike mentioned. Our first capital allocation priority is to fund growth in our high margin insurance business. Our second priority is to return excess capital to stockholders, primarily through share repurchases. We also pay a dividend that, while modest, has increased at a 17.5% compound annual growth rate since our IPO in 2016. We have no interest in M&A. Over the last several years, we've generated significant capital in excess of what we need to operate the business in the current lower growth phase of the cycle. This excess capital generation continues today. As a result, in the third quarter, we repurchased 269,000 shares at an aggregate cost of $100 million or just under 80% of net operating earnings in the quarter. The $100 million is consistent with the second quarter and an increase from the $62.5 million in the first quarter of this year. At this time, we expect $100 million to be a good quarterly run rate and plan to be opportunistic otherwise. Our debt to total capitalization is low at approximately 10% and should we need additional capital in the future, we would likely look to use leverage to generate higher returns on equity. Moving on to our financial results for the quarter, diluted earnings per share declined 28.4% and diluted operating earnings per share increased 9.4% compared to the third quarter of last year. Annualized return on equity and annualized operating return on equity for the nine months ended September 30th were 26.6% and 25.6% respectively. The decline in GAAP earnings was primarily driven by our sale of certain fixed maturity holdings in a loss position, largely offsetting our selling of certain equity investments in a gain position as we repositioned the investment portfolio. With the proceeds from these sales, we reinvested approximately $100 million in higher conviction equity securities and replaced approximately $130 million of bonds yielding less than 2% with bonds yielding more than 5.5%. As the unrealized appreciation of equities is recorded through earnings each quarter, the majority of the equity gains were reflected in earnings in prior periods. Conversely, the loss on the fixed maturity holdings was reflected in earnings upon sale. The net pre-tax earnings impact of the bond sales was $37.6 million or $1.67 per diluted share in the third quarter. The sales had no impact on book value. Stripping out the investment noise diluted operating earnings per share improved to $5.70. Quarterly combined ratio was 75.4% compared to 74.9% in the third quarter of 2025. The loss ratio improved to 53.4% from 53.9%, largely driven by higher favorable prior year development. The expense ratio increased one point to 22% from 21%, primarily due to higher net commissions resulting from higher reinsurance retentions, which results in lower seating commissions. The higher retention is an intentional trade to retain more underwriting margin and float to generate investment income, which results in a slightly higher expense ratio. As a result of these changes to our reinsurance program, which renewed on June 1st, The retention ratio increased to 86.2% in the third quarter compared to 83.3% in the third quarter last year. The other underwriting portion of the expense ratio, which is the best measure of the operational efficiency of our business, was 10.2% for the third quarter of 2026, flat compared to the same period last year. Turning to investments, net investment income increased 17.5% to $58.3 million. as a result of both a higher invested asset base and higher interest rates. Kinsale's float increased to $3.5 billion at September 30th, up from $3.1 billion at year-end 2025. New money yields are averaging north of 5%, and the fixed maturity portfolio has an average duration of 4.4 years. Overall, we're pleased with our third quarter performance. We continue to produce best-in-class underwriting results, attractive investing returns, and strong returns on equity while returning meaningful capital to stockholders. And with that, I'll turn it over to Stuart.

Thanks, Chris. At the risk of sounding like a broken record, the soft E&S market continued in the third quarter across property in certain long-tail casualty lines. However, there are some favorable areas in the market that we are turning into growth opportunities. Our goal as an underwriting organization in a softer, softening market is to grow where we can, but more importantly, maintain our profitability. We will continue to be aggressive where we can, but at the same time maintain a conservative stance in areas where we feel irrational competition has taken hold. We offer our brokers one of the broadest risk appetites in the E&S market. We will continue developing new products and adding underwriting flexibility where it makes sense, further expanding that appetite. The breadth of our underwriting appetite allows us to pivot to the areas where growth is promising and take advantage. Divisions like agribusiness, communication, commercial auto, entertainment, ocean marine, and environmental all experience double-digit growth for the quarter. We continue to see favorable underwriting conditions in excess casualty, allied health, products liability, healthcare, energy, and agribusiness property as well. Before I move on, I want to briefly address the most recent CAT activity in the quarter, and we expect its impact on our results to be immaterial. Moving on, overall new business submission growth increased 6% in the third quarter, a similar rate to Q2 of this year. We continue to see a decline in new business submissions in the commercial property division that handles large shared and layered deals. Excluding the commercial property division, new business submissions were up 10% for the quarter, and over half of our divisions are seeing submission growth in the double digits. While our lines of business are experiencing varying levels of competition and pricing pressure, The combined pricing trend for KinSale is in line with the AmWins pricing index, which showed a decrease of 3.1% compared to 5.9% decrease in Q2 2026. While we continue to see strong rate pressure in commercial property, other lines like commercial auto and excess casualty and entertainment present opportunities for meaningful rate increases. Distribution and product expansion continue to drive growth. On the product side, we're looking to finish the year by rolling out an additional five or six new offerings ranging from small package policies to a digital health offering, and Hull and P&I. We continue to look for opportunities in the market to roll out new offerings to broaden our appetite. We also continue to sign up new producers to drive submission growth. During the third quarter, we appointed 12 new wholesale brokers to the KinSale platform and 124 new retail brokers to Aspera, our in-house broker through which we distribute most of our Personal Lines products. The durability of our model continued to show throughout the third quarter. Despite an influx of competition, Submissions, quotes, and binders increased across the company while renewal retention remained steady. New products, in addition to our distribution network, should continue to support growth. At the same time, large accounts remain under downward pressure. We will not chase business where the economics do not make sense. Instead, we will maintain our discipline and continue to focus on the small to medium enterprise space. So to bring it all together, the market is soft and it may stay that way for a while. We aren't going to let the market change how we operate. We will grow where the opportunity is real, we'll hold the line where competition has outrun the risk, and we will never trade profitability for volume. Soft markets don't last forever, and neither do hard ones. What we can control is how we operate in each. A broad risk appetite lets us find areas for growth, our small account focus allows for more opportunities and more favorable rates, and a tremendous sufficiency advantage will support returns as pricing softens. That's our model in a nutshell, and it's designed to perform across the whole of the market cycle. With that, I'll turn it over to Salman.

Thanks, Stuart. On the analytics and actuarial side, our guiding philosophy is that we constantly want to improve how we segment and price risk. While many competitors cut rates across the board, our goal is to be more targeted and methodical. We will adjust rates where it makes sense, consistent with our target of a 20% return on equity or better. Two major components of our analytic strategy are third-party data and generalized linear models. Each year, we acquire, analyze, and incorporate more third-party data into our underwriting and pricing process. This augments our internal data and information provided by the brokers to improve how we segment and price risk. Because all 17 years of Kinsale data resides in one database, we can perform analyses and implement improvements quickly. Generalized linear models are an increasingly important part of our pricing toolkit. They let us measure how various risk characteristics together drive loss at a granular level rather than relying on broad class level rates. We also use other machine learning algorithms to find patterns that feed back into those models and ultimately our rates. Our rating engine brings this all together and produces a technical price for every risk adjusted for the coverage provided. That tells our underwriters exactly where market pricing is relative to the actuarially sound price. The results show in our loss ratios. In today's market, the analytics advantage we have is more important and more durable than ever and will allow us to maintain those low loss ratios while competitors with less sophisticated pricing face adverse selection. On technology, our talented engineers and developers have built our own proprietary systems. We do not have legacy software, which lets us spend our effort on innovation rather than maintenance. Those proprietary systems support the fast response times our brokers expect, power our data and analytics advantage, and keep our expense ratio the lowest among our competitors by a wide margin. As we've noted in the past, AI has been adopted broadly across the company for some time now. Every associate has an enterprise license for two of the leading frontier models along with their agentic tools. Across the organization, we utilize over 100 agents and skills to process submissions, improve underwriting, perform analytics, intake claims, draft correspondence, and much more. For the technology team in particular, these agentic tools help our developers write and review code, which speeds up how quickly we deliver new capabilities to the business. We've made meaningful progress building AI functionality into our enterprise applications, and there is a lot more to be done. CanSale is well positioned for a more competitive part of the insurance cycle and for the disruption that AI will bring to our industry. Our efficiency and pricing accuracy compound over time, and we believe our lead is widening every day. And with that, I'll hand it back over to Mike.

Thanks, Salmaan. Operator, we're now ready for Q&A.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Christian Getzoff with Wells Fargo. Please go ahead. Your line is now open.

Hi, good morning. Thanks for taking my question. As we think about the makeshift towards smaller accounts and casualty, when we look at the average premium per policy x personal lines of 11.7K, if I exclude commercial property, I estimate it's around 10.4K. How long are you expecting that average premium per policy to trend to, and is there any meaningful impact on loss ratios from this mixed shift towards smaller accounts?

Yeah, Christian, this is Stuart. I think the average premium was closer to, XCP was closer to 10.7 or 10.9 year-to-date through Q2, 10,700 through Q3. It's probably going to remain pretty steady, but it will trend maybe slightly downward as competition picks up, but it's not a drop off a steep cliff.

Got it. Thank you. And then your LAE ratios, if I look at staff lines, continue to improve meaningfully. I calculate about 200% improvement in the first half, which is offsetting a lot of the pressure on the incurred loss ratio side. If you kind of think about pricing pressure and mixed shift towards casualty, can you Can you frame how you're thinking about that LEA improvement from here? Is the 200 bps a good bogey as we kind of think about 2027?

I don't know that we have that level of detail to jump into in the call. I would think it's going to be pretty consistent. I'm not sure what's driving the delta there. Our reinsurance retentions wouldn't impact that.

Yeah, I wouldn't read too much into the change. Some of that is, you know, assumption changes when we're setting IB&R. I wouldn't read too much into that. Got it.

Thank you.

Your next question comes from the line of Mike Zaremski with BMO. Your line is now open. Please go ahead.

Mike, are you there?

Your next question.

Go ahead, Aubrey.

Thank you. The next question will be from Andrew Kligerman with TD Cohen. Please go ahead.

Hey, good morning. So I'm curious, with casualty written premium up about 0.9%. I'm curious as to what rates did with respect to that 0.9, what proportion was rates, how much were rates up actually, and did pricing keep up with loss cost?

Andrew, this is Solomon. I would say pricing varies across the divisions. But in general, right, I think Stuart noted the pricing trends are kind of in line with the the Amwins index. I think lost cost trends are in some divisions running slightly ahead of where rates are. But for us, we think that's OK, just given the margins that we're generating.

Perfect. OK, thank you. And then on the prior year development of four and a half percent, could you kind of give us the geography of accident years and products that went into that four and a half?

We probably won't get too much into the detail by accident year, but I can tell you that a lot of the prior year favorable development was disproportionately the shorter tail lines of business to think the property lines of business and some of the shorter claims made lines of business.

And Andrew, we've kind of been maintaining that methodology, I think, for a couple of years now, allowing the short tail results to flow out to the bottom line where there's more predictability and being a little bit more cautious holding back the reserve development on the longer tail business.

Got it. Thank you so much.

Thank you, Beth.

Your next question is from the line of Pablo Singzon with JP Morgan. Please go ahead.

Hi. How much net investment could we expect from the fixed income assets you repositioned this quarter?

Pablo, this is Chris. The delta on the bonds we sold and the bonds we purchased was just shy of 400 basis points, and the proceeds we reinvested were about $130 million. So you can do the math on it, probably $5.5 million, $6 million annually. Yep, thank you for that.

And then a second question, as you adapted to more competitive markets, Are you still able to price at your historical expected margins in the business you choose to write? And how does investment income figure into how you price and, you know, accept or turn away business? Thanks.

Yeah, Pablo, this is Mike. We manage really all of our product lines to a 20% return or greater. And, you know, as the actuaries work through our pricing models, They effectively translate the ROE into a loss ratio target for the division managers. That's how it's more or less handled internally. But yeah, 20% ROE or greater. So all the business we're putting on the books is business that we think is producing really compelling margins.

Thanks, Mike.

Your next question comes from the line of Michael Phillips with Oppenheimer. Please go ahead.

Thanks. Good morning. With this shift towards the smaller accounts, can you talk about, you already talked about the impact on the loss ratio. Can you talk about the, I guess, the puts and takes that happen on the expense ratio from that shift?

Yeah, Michael, this is Mike. I don't see any real impact on the expense ratio. You know, I think if you look at the average premium, it's down, I don't know, a couple hundred dollars over the last year or something. I mean, it's more or less steady. The reason we've kind of highlighted the decline kind of addresses a little bit around this idea that, hey, the written premium is down, and we're trying to just emphasize the fact that, yes, the written premium's off a little bit, mostly because we've seen an attrition and some of the larger business we write, whereas the submission count is growing, the number of quotes, the number of bind orders, it's all up kind of mid-single digits for the quarter, which to us kind of communicates the fact that our business model, even in a very competitive market, is continuing to work quite well.

Okay, Mike, thanks. I mean, just the second question is still on the expense ratio. I'm trying to think about the benefits of productivity gains from tech versus slower top line growth and maybe just how to weigh those two and what that could mean in the near term for the expense ratio.

Yeah, I think, you know, I would say the rollout, the steady rollout of more and more automation in our business not just in underwriting but in claims and our policy services area, really across the company, has a positive impact. You could say, well, the decline in premium for the quarter probably had a modest negative impact. I think they largely offset. I think Chris indicated our other underwriting expense component of the expense ratio was steady at 10.2%. You know, but I would just tell you, you know, from a higher level, you know, that low expense ratio that Kinsale has is a fundamental part of our business strategy. And we expect that to drift downward over time, not up, mostly because of technology. Thanks, Mike.

Your next question comes from the line of Andrew Anderson with Jefferies.

Hey, good morning and congrats to Bryan on retirement and Chris for the new role here. As we think about the business mix, should commercial property contraction moderate in 2027 or do you find the current pricing and submission trends pointing to perhaps another year of double digit declines in premium volume there?

Hey, Andrew. It's Stuart. We're always hopeful that it will moderate. There are some signs that the reductions are easing, but it's day by day. But we are hopeful that it will moderate.

Okay. And across the whole business with property and casualty here, when you talk about competition, are you seeing this more from admitted carriers pulling more business back from E&S? Is it competition within from existing E&S carriers and MGAs, and perhaps how far along are we in that shift if it is the admitted market being more the competitive dynamic here?

I think the admitted market is more prevalent in the property space with MGAs. MGAs and admitted in the property space. And on the casualty side, long tail lines, it's the fronts and the MGAs on larger deals that are driving accounts that should be $500,000 are going for $150,000. It's just not worth competing on that business. And it's been going on for a couple of years. We'll see how long it has until it bears fruit.

Thanks. And maybe last one. I think I heard a $100 million quarterly run rate. Was that just for buybacks? Was that just for the remainder of the year, or are you contemplating that into 27 as well?

That was intended to be for the remainder of our repurchase authorization.

Thank you.

Your next question comes from the line of Mark Hughes with Truist.

Yeah, I'll just, thank you, and congratulations to Bryan and Chris. I'll follow that up, the 100 million, once you exhaust this authorization, presumably you'll have another, is 100 million beyond that a good run rate?

Well, Mark, this is Mike. We haven't, you know, we'll make that decision when we get down the road a little bit. But, you know, essentially, Our capital allocation strategies should be pretty obvious at this point. You know, growth is our biggest priority. If we can't grow the business near term as rapidly as we want, it's buybacks and then, you know, the small dividend is how we're thinking about capital allocation.

Okay. When we think about current accident year, I think you might have touched on this, but the moving parts of Decline in property, which I think has been more profitable, correct me if I'm wrong, would seem to be a headwind for accident year losses, but then the mixed shift maybe into smaller accounts and better underwriting would be helpful. How should we think about that accident year loss number? Is it more likely to go higher than lower? How should we think about it?

Mark, we probably can't give you forward guidance on the accident-year-loss ratio, but I would say looking at it simply casualty versus property, that may not be the best way to look at it. Even within casualty, there are varying lines of business with differing loss ratios. I would say across the board, our losses are coming in below expected, but the ultimate takeaway for us is that the business continues to generate really attractive underwriting margins, again, in the property space and the casualty space, and that we continue to reserve cautiously and conservatively so that investors have a lot of confidence in the strength of our balance sheet and in the integrity of our results.

If I might ask one more, the submissions up mid-single digits, it sounds like your retention is pretty good. I'm just sort of curious, is that are all reflective, perhaps, of more shopping behavior? Or are you still seeing a mixed shift out of admitted into ENS? Hey, Mark. It's Stuart.

I think there is a little more shopping, but it's also, hey, we have a lot of new products that are rolling out this year. We have a lot of new distribution partners that we're working with. So that all comes into play. So it's a little bit of everything, stuff we've done internally and stuff happening in the market.

Thank you.

Your next question comes from the line of Bob Huang with Morgan Stanley. Please go ahead.

Hi. Good morning. Understand that you don't have tech legacy infrastructure. Data is modern. And you talked about with AI, your tech edge is widening versus your peers. That said, a lot of traditional carriers, or maybe even a lot of the newer carriers, are showcasing more complex capabilities. For example, a sub-24 hours underwriting quote-unbind is much more common these days. Can you maybe help us think about how you're thinking about AI as a resetting mechanism for technology and competition, where you feel you have the widening tech lead over others. Like just curious if you can give us some examples as well, if that's possible.

Tom, why don't you start?

Yeah. Again, I alluded to some of these comments, right? We're definitely able to, our underwriters are definitely able to quote more quickly, but also handle more volume, right? Our policy operations folks are able to process transactions more quickly. The claims examiners are more efficient. They're able to draft correspondence more quickly. On the IT side, we're able to deliver new features and functionality to the business more quickly. The ability to do analytics is enhanced, turning unstructured data into structured data. So I think there are efficiencies and productivity gains across the board. And again, we feel like we're at the forefront of that.

Yeah, and Bob, this is Mike. I'm not sure we're well positioned to do the compare and contrast. I would just say, you know, our experience over 17 years is that Kinsale kind of is at the lead in terms of the customer service we deliver to our brokers. The quote ratios are, I guess, on new business run about 75% of our submissions turn into quotes. and most of those quotes go out in a day or two. And then when you combine that with the tremendous underwriting flexibility in terms of risk appetite, I think our model's a little bit unique, although highly competitive market and we got 100 competitors. And then on the tech specifically, I think that's a direct line through to the expense ratio. We finished the quarter at 22% gap expense ratio I don't know how many of our competitors are at that same level. But if they're really achieving all that we're achieving in terms of technology, I suspect they ought to be in a similar neighborhood.

Got it. Really appreciate that. Thank you. That's all I have.

Your next question comes from the line of Ryan Tunis with Kantor. Please go ahead.

Hey, thanks. Good morning and congrats to Bryan and Chris. First of all, on the mixed shift, two parts to this one. First of all, is there a broader point being made that going from large account to small could be a contributing factor to growth deceleration? And then second of all, could you just give us some idea of what percentage of your overall business is large account today versus maybe where it was five years ago?

Ryan, this is Mike. I can't do the five-year comparison. The last time I looked was about a month ago, and I think 0.7% of our policies were $100,000 premium and up, but that represented about 12% of the overall premium. And then I forget what your first question was, like how the mix shift is impacting growth.

Yeah, if it's 12% of total premium, I'm guessing it isn't, right?

Yeah, well, we're just seeing more competition on that end of our accounts. You know, we see a lower hit ratio on new business quotes. We see a lower renewal retention than we do on the smaller accounts. And so we had something last week. It was $120,000 renewal. Somebody wrote it for $30,000. You know, so it's, you know, there's some wild behavior out there. Obviously, we're not going to chase that down. You know, but you've got to write a handful. You've got to write 10 $12,000 policies to offset the 120. So we're doing that. That's why we kind of highlighted those production statistics. The submissions are growing. The quotes are growing. The bind orders are growing. It's just that we've got a temporary drop-off in the written premium. That'll correct near-term on its own.

Got it. And then a follow-up is just on the underlying loss ratio. Historically, there's been that seasonality where it tends to go lower in the back half of the year. We didn't see that this quarter. I'm just curious if there's any color around that.

Yeah, there's nothing unusual. Again, the loss ratio is comprised of a variety of lines of business and underwriting divisions. I think that seasonality, generally speaking, does still exist. But yeah, I think in general, it does still exist.

Your next question comes from Roland Mayer with RBC Capital Markets. Please go ahead.

Good morning. And congrats, Bryan, on the planned retirement and Chris on the promotion. I wanted to start on just the yield pickup. Does that change your targeted loss ratios as you seek the 20% R relief?

Not near term, no. And, you know, if it persisted You know, well into the future, at some point, it probably would impact pricing a little bit.

Okay, that's great. Thank you. And Mike, I appreciate your comment on the reserve conservatism and long tail lines. Does that feed into pricing decisions? And is that like weighing on growth a little bit here?

Big time. Big time, it's weighing on growth. Because we've got some competitors that are, you know, very aggressive. We've got some disciplined competitors too, but there are some out there that are very aggressive in how they price risk.

And the reserves in those long tail lines have been pretty stable for a couple of years now. What do you need to see to kind of unwind that conservatism on that?

Well, we've got a dozen lines of business. We're in our, I think, 17th accident year. You know, every quarter we're looking at actual claim activity, new claims coming in, old claims being negotiated and settled. And then we're comparing that activity against our, you know, actuarial assumptions and making adjustments. But, you know, I mean, ultimately, I think Solomon laid out the goals. We want to be very conservative in our loss picks, especially on the longer tail business. You know, the tort system in the U.S. can be a little bit unpredictable at times. Long-tail business is a little more exposed to inflation, changes in inflation rates. And, you know, we just have always felt that that's important is to be prepared for, you know, a little bit of that unpredictability with conservative reserves.

Thank you. And then if I could just squeeze one more. I know it's small, but the personal insurance business has been shrinking a lot. Anything going on there to call out?

Hey, Roland, it's Stuart. Yeah, we did some adjustment in our concentration in Louisiana, which was a driver of growth for the PI division. And there's increased competition in California and Florida for homeowners. There's some bright spots coming with the fair plan in California, changing rates, doing a large rate increase, I think, at the end of this month or start of November. So hopefully there's a little pickup there. but it's just there's heavy competition in the space.

But we're also really leaning into it. I think Stuart mentioned earlier we're appointing a lot of new brokers so we're kind of ramping up the distribution and the marketing in that effort and we're working on some system enhancements so more to come on the personal lines. That's obviously a tiny part of our business but longer term we think it's going to be more material to our growth prospects.

Thank you, that's great. I'm glad the fire alarm stopped.

Yeah.

Yeah.

Your next question comes from Mike Zaremski with BMO.

Hey, good morning. Sorry about that earlier. I'm not sure what happened. Maybe a couple questions on the casualty side of the business. Are you all seeing any changes in the slope of lawsuit inflation? We've heard You know, one prominent ENS carrier talked about seeing an improvement in the slope of casualty toward inflation. Thanks.

Mike, this is Solomon. I don't think we're seeing anything in particular. I don't think we have enough evidence to comment either way.

Okay, got it. And sticking to casualty, feel free to bring property in too, but their core business is casualty. So we're seeing commission rates for a lot of the E&S carriers drift higher. That's the total commission rate they're paying to brokers. I'm not sure about the split to the wholesale broker versus the retail broker, but Would you say that trend is one of the components that's kind of causing Kinzale's win ratio to be a bit lower?

Mike, this is Mike. No, our hit ratio on new business quotes is steady, consistent with last year. Our renewal retention is the same as it was last year. The number of submissions is growing, even in this competitive market. The number of quotes, the number of bind orders. Look, I'll acknowledge, you know, when rates decline, it does create a little bit of a headwind for everybody in the business. The retail broker, the wholesale broker, the insurance carrier, the reinsurers. And so, yeah, there's a natural tension where The retailers, I think, this is well known, are negotiating for a larger percentage of the gross commission when they're negotiating with the wholesalers. I think the wholesalers are looking for insurance companies to pay more, you know, a higher gross commission. The insurance buyer wants lower costs, right? The business owners that we serve, they want to pay less for insurance, not more. So look, it's an inevitable tension in the business. It's been this way forever. It's probably exacerbated in a more competitive period of the cycle, for sure, but it's not new. And yeah, we acknowledge we probably lose business routinely because of the commission, but we also get business routinely because we're the low-cost leader in an industry where you're selling a commodity-like product. I promise the customers want low-cost insurance. And so we manage our own costs aggressively. I think we pay reasonable commissions. They're slightly lower than our competitors. But we also offer our brokers the best customer service in the industry. There's nobody close to what Kinsale's doing. We offer the broadest risk appetite. If you've got a hard-to-place ENS account, I think we're a go-to market. and we can be incredibly competitive on pricing, not just because of low cost, but because of superior analytics and a better understanding of how to price risk. So I think we like our model, but we acknowledge kind of the headwind you're noting.

That's helpful. And maybe just lastly, sticking with the competitive conditions and in casualties specifically, you know, I guess we get asked a decent amount about, you know, interest rate tailwinds, especially in the last few months. Great for Kinzale, but, you know, also great for your competitors. I mean, is it fair to assume that the kind of The current levels of competition and casualty will remain. The trend in terms of less growth will persist given just how influential interest rates are on the overall ROE for the industry.

I would look beyond interest rates. I think it's really the flood of alternative capital that's come into the business over the last Five or 10 years is driving, you know, much higher level of competition. But, you know, the reason we belabor this issue around submissions, quotes, and bind orders growing is it just gives hopefully a better understanding of the premium decline. The premium decline is principally driven by a little bit of a mixed shift away from larger towards smaller accounts. I think that'll run its course relatively quickly, and I think we'll be back to a modest growth, hopefully in the near term. I can't give you a date, but I think we're just going through a little bit of an adjustment as we lose some bigger deals. Like the example I gave a few minutes ago, $120,000 renewal, somebody writes that for $30,000. That sounds kind of foolish, but... You know, that's the market we're competing in today. And so, you know, I think that's where we are.

Got it. So on that point, and sorry to take up too much time, but on the 0.7 of policies being, you know, 12%-ish of premiums, I'm sorry, I had assumed, I think many people might have assumed that was mostly a property comment. So I don't know if you have the data on just, that sounds like you're saying that there's also some large accounting in casualty. Is that correct, Mike?

Yeah, we definitely write large accounts and casualty too. I think it's been disproportionately property for sure, especially in that commercial property division where we wrote a lot of six-figure deals. Thank you. You bet.

Your next question comes from the line of Pablo Singzon with JP Morgan.

Hi. Thanks for taking my follow-up. So my question is about, I guess, the richness of the coverage you're providing, right? Has that changed versus maybe three or four years ago? And if you're holding the line there, how is competition acting? And I guess it's easier to see pricing trends from the outside, but I'm just wondering if you think about limits, exclusions, et cetera. How are you positioned versus everyone else in the market today? Thanks.

Well, we can't speak to everybody else. We just manage our own book to the 20% ROE or greater. And it absolutely takes into account limits, deductible, state, territory, coverage, etc. We've got a very quantitative approach to how we manage pricing. And, you know, again, we've got some disciplined competitors for sure, but we've got We've got some that wouldn't fit in that category.

Thanks, Mike.

There are no further questions at this time. We have reached the end of our Q&A session. I will now turn the call back to Mr. Kehoe for the closing remarks.

All right. Well, thanks, everybody, for joining us this morning, and we look forward to speaking again here in a couple months. Have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.