"Premiums increased by 32.5% in the first quarter of 2019 over last year driven by our strategy of disciplined underwriting and low costs combined with a favorable and improving E&S market. We posted a combined ratio of 80.3% and an annualized operating return on equity of 20.0%. These results represent a strong start to the year and we look forward to building on this momentum throughout 2019," said President and Chief Executive Officer, Michael P. Kehoe.

Underwriting income⁽²⁾ was $12.1 million, resulting in a combined ratio of 80.3%, for the first quarter of 2019, compared to $6.8 million, and a combined ratio of 85.9% for the same period last year. The increase in underwriting income⁽²⁾ was due primarily to higher favorable development on loss reserves from prior accident years and growth in the business quarter over quarter. Loss and expense ratios were 54.9% and 25.4%, respectively, for the three months ended March 31, 2019 compared to 60.1% and 25.8% for the three months ended March 31, 2018. Results for the first quarters of 2019 and 2018 included favorable development on loss reserves from prior accident years of $6.4 million, or 10.4 points, and $1.3 million, or 2.7 points, respectively.

The Company's net investment income was $4.5 million in the first quarter of 2019 compared to $3.2 million in the first quarter of 2018, an increase of 39.8%. The Company's investment portfolio, excluding cash and cash equivalents, had an annualized gross investment return⁽⁵⁾ of 3.2% for the three months ended March 31, 2019 compared to 2.7% for the three months ended March 31, 2018. Funds are generally invested conservatively in high quality securities, including government agency, asset and mortgage-backed securities, municipal and corporate bonds with an average credit quality of "AA." The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 3.9 years at March 31, 2019 and December 31, 2018. Cash and invested assets totaled $708.1 million at March 31, 2019 compared to $643.1 million at December 31, 2018.

Total comprehensive income, which includes the change in after-tax unrealized gains and losses from the Company's available-for-sale investments, was $25.5 million for the first quarter of 2019 compared to $2.4 million for the first quarter of 2018. The increase in total comprehensive income was principally due to an increase in the fair value of Company's fixed-maturity investments, which was mostly attributable to a declining interest rate environment during the quarter.

Net operating earnings exclude the effect of realized investment gains and losses and unrealized gains and losses on equity securities. Management believes the exclusion of these items provides a more useful comparison of the Company's underlying business performance from period to period. Net operating earnings and percentages or calculations using net operating earnings (e.g., diluted operating earnings per share and annualized operating return on equity) are non-GAAP financial measures. Net operating earnings should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define net operating earnings differently.

Underwriting income is defined as pre-tax income excluding net investment income, realized gains and losses on investments, unrealized gains and losses on equity securities, and other income and expenses. The Company uses underwriting income as an internal performance measure in the management of its operations because the Company believes it gives management and users of the Company's financial information useful insight into the Company's results of operations and underlying business performance. Underwriting income should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define underwriting income differently.

Kinsale Capital Group will hold a conference call to discuss this press release on Friday, May 3, 2019, at 9:00 a.m. (Eastern Time). Members of the public may access the conference call by dialing (844) 239-5282, conference ID# 6448849, or via the Internet by going to www.kinsalecapitalgroup.com and clicking on the "Investor Relations" link. A replay of the call will be available on the website until the close of business on July 2, 2019.

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as "believe," "expect," "seek," "may," "will," "intend," "project," "plan," "estimate" or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and factors, they include, among others, the following: inadequate loss reserves to cover the Company's actual losses; adverse economic factors; inherent uncertainty of models resulting in actual losses that are materially different than the Company's estimates; a decline in the Company's financial strength rating; loss of one or more key executives; loss of a group of brokers that generate significant portions of the Company's business; failure of any of the loss limitations or exclusions the Company employs, or change in other claims or coverage issues; adverse performance of the Company's investment portfolio; adverse market conditions that affect its excess and surplus lines insurance operations; and other risks described in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.