Car Insurance Rates Skyrocketing: 10 Best Stocks to Buy

7. Kinsale Capital Group, Inc. (NYSE:KNSL)

Number of Hedge Fund Investors  in Q1 2024: 30

Kinsale Capital Group, Inc. (NYSE:KNSL) is a specialty insurance line provider that covers policies that are typically too risky for most other insurers. This provides it with a niche market that is served by fewer companies and allows Kinsale Capital Group, Inc. (NYSE:KNSL) to charge high premiums and operate in a market with fewer competitors. For its auto insurance products, the firm focuses primarily on offering insurance for commercial customers. These include costly coverage options such as tractor trailer fleets, insurance offered to car dealers and repair shops from their operations, and general liability insurance for truckers. While these programs allow Kinsale Capital Group, Inc. (NYSE:KNSL) to compete with few firms that offer similar products, it also leaves it vulnerable to severe claims even if they are limited. A key advantage for the firm is its technology model, which enables customers to get coverage quotes within a day which allows it to score deals with customers that are looking for quick coverage.

Giverny Capital mentioned Kinsale Capital Group, Inc. (NYSE:KNSL) in its Q4 2023 investor letter. Here is what the firm said:

“Kinsale was founded in 2009 by Mike Kehoe, an industry veteran who remains at the helm. Mike built Kinsale on a state-of-the-art technology platform that allows the company to provide quotes to most callers within a couple of hours. Many competitors need several days to scour their databases and assemble the information required to offer a quote. Kinsale’s expense ratio is about 21%, far below larger competitors like Markel. Insurance is a commodity product; nearly every business policy is put out to brokers for bid. In the end, the insurer with the lowest cost of operation is going to win. We paid a high price for Kinsale relative to its current earnings, but I believe the company can grow at a mid-to-high teens rate for a long time. Currently, it has a 1.5% market share in E&S.”