Kinsale Capital Group Inc

Previous wording

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2024, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2024, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

We have one reportable segment, our Excess and Surplus Lines Insurance segment, which offers property and casualty ("P&C") insurance products through the E&S market. For the first six months of 2024, the percentage breakdown of our gross written premiums was 65.2% casualty and 34.8% property. Our commercial underwriting divisions include commercial property, excess casualty, small business casualty, general casualty, construction, allied health, products liability, small business property, entertainment, energy, professional liability, life sciences, commercial auto, environmental, excess professional, inland marine, health care, management liability, public entity, aviation, product recall, ocean marine and railroad. We also write homeowners' coverage in the personal lines market, which in aggregate represented 2.1% of our gross written premiums in the first six months of 2024.

Current wording

We have one reportable segment, our Excess and Surplus Lines Insurance segment, which offers property and casualty ("P&C") insurance products through the E&S market. For the first nine months of 2024, the percentage breakdown of our gross written premiums was 67.0% casualty and 33.0% property. Our commercial underwriting divisions include commercial property, excess casualty, small business casualty, general casualty, construction, allied health, small business property, products liability, entertainment, energy, professional liability, life sciences, commercial auto, excess professional, environmental, inland marine, health care, management liability, public entity, aviation, ocean marine, product recall, railroad and agribusiness. We also write homeowners' coverage in the personal lines market, which in aggregate represented 2.5% of our gross written premiums in the first nine months of 2024.

Previous wording

Net income was $92.6 million for the three months ended June 30, 2024 compared to $72.8 million for the three months ended June 30, 2023, an increase of 27.2%. The increase in net income for the second quarter of 2024 from the same period last year was primarily due to continued profitable growth and an increase in investment income driven by higher investment balances and higher interest rates.

Current wording

Net income was $114.2 million for the three months ended September 30, 2024 compared to $76.1 million for the three months ended September 30, 2023, an increase of 50.1%. The increase in net income for the third quarter of 2024 from the same period last year was primarily due to higher returns on equity investments, continued profitable growth and an increase in investment income driven by higher investment balances and higher interest rates.

Previous wording

Underwriting income was $76.1 million for the three months ended June 30, 2024 compared to $61.5 million for the three months ended June 30, 2023, an increase of 23.6%. The corresponding combined ratios were 77.7% for the three months ended June 30, 2024 compared to 76.7% for the three months ended June 30, 2023. The increase in underwriting income in the second quarter of 2024 compared to the second quarter of 2023 was primarily due to a combination of premium growth and lower relative net commissions.

Current wording

Underwriting income was $86.9 million for the three months ended September 30, 2024 compared to $72.4 million for the three months ended September 30, 2023, an increase of 19.9%. The corresponding combined ratios were 75.7% for the three months ended September 30, 2024 compared to 74.8% for the three months ended September 30, 2023. The increase in underwriting income in the third quarter of 2024 compared to the third quarter of 2023 was primarily due to a combination of premium growth and lower relative net commissions offset in part by higher catastrophe losses during the period.

Previous wording

Gross written premiums were $529.8 million for the three months ended June 30, 2024 compared to $438.2 million for the three months ended June 30, 2023, an increase of $91.5 million, or 20.9%. The increase in gross written premiums for the second quarter of 2024 over the same period last year was due to higher submission activity from brokers and a favorable pricing environment. The average premium per policy written was approximately $16,300 in the second quarter of 2024 compared to approximately $16,400 in the second quarter of 2023. Excluding our personal lines insurance, which has a relatively low premium per policy written, the average premium per policy written was approximately $17,200 in the second quarter of 2024 compared to $17,800 in the second quarter of 2023.

Current wording

Gross written premiums were $448.6 million for the three months ended September 30, 2024 compared to $377.8 million for the three months ended September 30, 2023, an increase of $70.9 million, or 18.8%. The increase in gross written premiums for the third quarter of 2024 over the same period last year was due to higher submission activity from brokers and a favorable, yet increasingly competitive, pricing environment. The average premium per policy written was approximately $14,500 in the third quarter of 2024 compared to approximately $14,400 in the third quarter of 2023. Excluding our personal lines insurance, which has a relatively low premium per policy written, the average premium per policy written was approximately $15,300 in the third quarter of 2024 compared to $15,500 in the third quarter of 2023.

Previous wording

Net written premiums increased by $65.2 million, or 17.9%, to $430.2 million for the three months ended June 30, 2024 from $365.0 million for the three months ended June 30, 2023. The increase in net written premiums for the second quarter of 2024 compared to the same period last year was primarily due to higher gross written premiums. The net retention ratio was 81.2% for the three months ended June 30, 2024 compared to 83.3% for the three months ended June 30, 2023. The decrease in the net retention ratio was primarily due to a higher cession rate on the commercial property quota share treaty effective with the June 2023 renewal.

Current wording

Net written premiums increased by $55.7 million, or 18.9%, to $349.9 million for the three months ended September 30, 2024 from $294.3 million for the three months ended September 30, 2023. The increase in net written premiums for the third quarter of 2024 compared to the same period last year was primarily due to higher gross written premiums. The net retention ratio was 78.0% for the three months ended September 30, 2024 compared to 77.9% for the three months ended September 30, 2023.

Previous wording

Net earned premiums increased by $75.4 million, or 29.3%, to $332.5 million for the three months ended June 30, 2024 from $257.0 million for the three months ended June 30, 2023 and was directly related to growth in gross written premiums.

Current wording

Net earned premiums increased by $67.3 million, or 23.9%, to $348.8 million for the three months ended September 30, 2024 from $281.5 million for the three months ended September 30, 2023 and was directly related to growth in gross written premiums.

Previous wording

The loss ratio was 56.6% for the three months ended June 30, 2024 compared to 55.7% for the three months ended June 30, 2023. The increase in the loss ratio in the second quarter of 2024 compared to the second quarter of 2023 was due primarily to lower net favorable development of loss reserves from prior accident years as a percentage of the sum of earned premiums and fee income and higher catastrophe losses incurred.

Current wording

The loss ratio was 56.1% for the three months ended September 30, 2024 compared to 53.9% for the three months ended September 30, 2023. The increase in the loss ratio in the third quarter of 2024 compared to the third quarter of 2023 was due primarily to higher catastrophe losses incurred and lower relative net favorable development of loss reserves from prior accident years. Net catastrophe losses incurred during the third quarter of 2024 were primarily attributable to Hurricanes Helene, Francine and Beryl and tornadoes in the Midwest.

Previous wording

During the three months ended June 30, 2024, prior accident years developed favorably by $9.5 million, of which $14.4 million was attributable to the 2021 through 2023 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development largely from the 2017 and 2018 accident years due to construction defect claims that are more exposed to inflation.

Current wording

During the three months ended September 30, 2024, prior accident years developed favorably by $10.1 million, of which $14.9 million was attributable to the 2021 through 2023 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due to construction defect claims that are more exposed to inflation.

Previous wording

During the three months ended June 30, 2023, prior accident years developed favorably by $10.4 million, of which $14.4 million was attributable to the 2021 and 2022 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due primarily to construction defect claims that are more exposed to inflation.

Current wording

During the three months ended September 30, 2023, prior accident years developed favorably by $9.1 million, of which $12.0 million was attributable to the 2021 and 2022 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due primarily to construction defect claims that are more exposed to inflation.

Previous wording

The expense ratio was 21.1% for the three months ended June 30, 2024 compared to 21.0% for the three months ended June 30, 2023. The expense ratio continues to benefit from higher ceding commissions earned under the commercial property quota share treaty as a result of commercial property premium growth offset in part by variability in other underwriting expenses. Direct commissions paid as a percent of gross written premiums was 14.7% and 14.4% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

The expense ratio was 19.6% for the three months ended September 30, 2024 compared to 20.9% for the three months ended September 30, 2023. The expense ratio continues to benefit from higher ceding commissions earned under the commercial property quota share treaty as a result of commercial property premium growth. Direct commissions paid as a percent of gross written premiums was 14.7% and 14.6% for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

The following table summarizes net investment income, change in the fair value of equity securities and net realized investment gains for the three months ended June 30, 2024 and 2023:

Current wording

The following table summarizes net investment income, change in the fair value of equity securities and net realized investment (losses) gains for the three months ended September 30, 2024 and 2023:

Previous wording

Net investment income increased by 48.3% to $35.8 million for the three months ended June 30, 2024 from $24.2 million for the three months ended June 30, 2023. This increase was primarily due to growth in our investment portfolio generated from the investment of strong operating cash flows and higher interest rates relative to the prior year period. Our investment portfolio, excluding cash equivalents and unrealized gains and losses, had an annualized gross investment return of 4.4% and 3.9% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Net investment income increased by 46.4% to $39.6 million for the three months ended September 30, 2024 from $27.1 million for the three months ended September 30, 2023. This increase was primarily due to growth in our investment portfolio generated from the investment of strong operating cash flows and higher interest rates relative to the prior year period. Our investment portfolio, excluding cash equivalents and unrealized gains and losses, had an annualized gross investment return of 4.4% and 4.1% for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

During the second quarter of 2024, the change in fair value of equity securities included changes in unrealized gains related to common stocks of $1.7 million and exchange traded funds ("ETFs") of $0.4 million and unrealized gains related to non-redeemable preferred stock of $1.1 million. The change in the fair value of common stocks and ETFs during the second quarter of 2024 reflected changes in the broader U.S. stock market, and the change in fair value of preferred stock relates primarily to the disposition of certain preferred stock securities in a loss position.

Current wording

During the third quarter of 2024, the change in fair value of equity securities included changes in unrealized gains related to common stocks of $13.1 million and exchange traded funds ("ETFs") of $6.9 million and unrealized gains related to non-redeemable preferred stock of $0.7 million. The change in the fair value of ETFs and common stocks during the third quarter of 2024 reflected changes in the broader U.S. stock market.

Previous wording

During the second quarter of 2024, net realized investment gains of $2.9 million were primarily related to sales of ETFs due to opportunistic repositioning of our equity portfolio.

Current wording

During the third quarter of 2023, net realized investment gains of $4.3 million primarily related to the sale of a portion of our real estate investment property.

Previous wording

Our effective tax rate was 20.1% for the three months ended June 30, 2024 compared to 19.2% for the three months ended June 30, 2023. The effective tax rates were lower than the federal statutory rate of 21% due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income.

Current wording

Our effective tax rate was 20.9% for the three months ended September 30, 2024 compared to 20.3% for the three months ended September 30, 2023. The effective tax rates were lower than the federal statutory rate of 21% due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:

Previous wording

Net income was $191.5 million for the six months ended June 30, 2024 compared to $128.6 million for the six months ended June 30, 2023, an increase of 48.9%. The increase in net income for the first six months of 2024 over the same period last year was primarily due to a combination of continued profitable growth, an increase in investment income driven by both higher investment balances and higher interest rates and higher returns on equity investments.

Current wording

Net income was $305.7 million for the nine months ended September 30, 2024 compared to $204.7 million for the nine months ended September 30, 2023, an increase of 49.4%. The increase in net income for the first nine months of 2024 over the same period last year was primarily due to a combination of continued profitable growth, higher returns on equity investments, and an increase in investment income driven by both higher investment balances and higher interest rates.

Previous wording

Underwriting income was $141.1 million for the six months ended June 30, 2024 compared to $113.1 million for the six months ended June 30, 2023, an increase of 24.8%. The corresponding combined ratios were 78.6% for the six months ended June 30, 2024 compared to 77.7% for the six months ended June 30, 2023. The increase in underwriting income for the first six months of 2024 compared to the same period last year was primarily due to a combination of premium growth and lower relative net commissions.

Current wording

Underwriting income was $228.0 million for the nine months ended September 30, 2024 compared to $185.5 million for the nine months ended September 30, 2023, an increase of 22.9%. The corresponding combined ratios were 77.6% for the nine months ended September 30, 2024 compared to 76.7% for the nine months ended September 30, 2023. The increase in underwriting income for the first nine months of 2024 compared to the same period last year was primarily due to a combination of premium growth and lower relative net commissions, offset in part by higher catastrophe losses during the period.

Previous wording

Gross written premiums were $978.4 million for the six months ended June 30, 2024 compared to $795.8 million for the six months ended June 30, 2023, an increase of $182.6 million, or 22.9%. The increase in gross written premiums for the first six months of 2024 over the same period last year was due to higher submission activity from brokers and a favorable pricing environment. The average premium per policy written was $15,800 in the first six months of 2024 compared to $15,700 in the first six months of 2023. Excluding our personal insurance division, which has a relatively low premium per policy written, the average premium per policy written was $16,600 for the first six months of 2024 and $17,100 for the first six months of 2023.

Current wording

Gross written premiums were $1.4 billion for the nine months ended September 30, 2024 compared to $1.2 billion for the nine months ended September 30, 2023, an increase of $253.5 million, or 21.6%. The increase in gross written premiums for the first nine months of 2024 over the same period last year was due to higher submission activity from brokers and a favorable, yet increasingly competitive, pricing environment. The average premium per policy written was $15,400 in the first nine months of 2024 compared to $15,300 in the first nine months of 2023. Excluding our personal insurance division, which has a relatively low premium per policy written, the average premium per policy written was $16,200 for the first nine months of 2024 and $16,500 for the first nine months of 2023.

Previous wording

Net written premiums increased by $117.2 million, or 17.7%, to $781.3 million for the six months ended June 30, 2024 from $664.1 million for the six months ended June 30, 2023. The increase in net written premiums for the first six months of 2024 compared to the same period last year was primarily due to higher gross written premiums. The net retention ratio was 79.9% for the six months ended June 30, 2024 compared to 83.4% for the same period last year. The decrease in the net retention ratio was primarily due to a higher cession rate on the commercial property quota share treaty effective with the June 2023 renewal.

Current wording

Net written premiums increased by $172.9 million, or 18.0%, to $1.1 billion for the nine months ended September 30, 2024 from $958.4 million for the nine months ended September 30, 2023. The increase in net written premiums for the first nine months of 2024 compared to the same period last year was primarily due to higher gross written premiums. The net retention ratio was 79.3% for the nine months ended September 30, 2024 compared to 81.7% for the same period last year. The decrease in the net retention ratio was primarily due to a higher cession rate on the commercial property quota share treaty effective with the June 2023 renewal, offset in part by an increase in our retention on our casualty treaty effective with the June 2024 renewal.

Previous wording

Net earned premiums increased by $147.8 million, or 29.9%, to $642.0 million for the six months ended June 30, 2024 from $494.2 million for the six months ended June 30, 2023 due to growth in gross written premiums.

Current wording

Net earned premiums increased by $215.0 million, or 27.7%, to $990.7 million for the nine months ended September 30, 2024 from $775.7 million for the nine months ended September 30, 2023 due to growth in gross written premiums.

Previous wording

The following table summarizes the loss ratios for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes the loss ratios for the nine months ended September 30, 2024 and 2023:

Previous wording

The loss ratio was 57.7% for the six months ended June 30, 2024 compared to 56.4% for the six months ended June 30, 2023. The increase in the loss ratio in the first six months of 2024 compared to the first six months of 2023 was due primarily to lower net favorable development of loss reserves from prior accident years.

Current wording

The loss ratio was 57.1% for the nine months ended September 30, 2024 compared to 55.5% for the nine months ended September 30, 2023. The increase in the loss ratio in the first nine months of 2024 compared to the first nine months of 2023 was due primarily to higher catastrophe losses incurred in the period and lower relative net favorable development of loss reserves from prior accident years. Net catastrophe losses incurred during the nine months ended September 30, 2024 were primarily attributable to Hurricanes Helene, Francine and Beryl and tornadoes in the Midwest.

Previous wording

During the six months ended June 30, 2024, prior accident years developed favorably by $17.9 million, of which $30.7 million was attributable to the 2021 through 2023 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily from the 2017 through 2019 accident years due to construction defect claims that are more exposed to inflation and from the 2020 accident year due to a large property claim.

Current wording

During the nine months ended September 30, 2024, prior accident years developed favorably by $28.1 million, of which $45.6 million was attributable to the 2021 through 2023 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development primarily from the 2017 through 2019 accident years due to construction defect claims that are more exposed to inflation and from the 2020 accident year due to a large property claim.

Previous wording

During the six months ended June 30, 2023, prior accident years developed favorably by $19.5 million, of which $27.1 million was attributable to the 2021 and 2022 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due primarily to construction defect claims that are more exposed to inflation.

Current wording

During the nine months ended September 30, 2023, the reserves for unpaid losses and loss adjustment expenses held at December 31, 2022 developed favorably by $28.6 million, of which $39.0 million was attributable to the 2021 and 2022 accident years due to lower emergence of reported losses than expected across most lines of business. This favorable development was offset in part by adverse development largely from the 2017 through 2019 accident years due primarily to construction defect claims that are more exposed to inflation.

Previous wording

The following table summarizes the components of the expense ratio for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes the components of the expense ratio for the nine months ended September 30, 2024 and 2023:

Previous wording

The expense ratio was 20.9% for the six months ended June 30, 2024 compared to 21.3% for the six months ended June 30, 2023. The decrease in the expense ratio was primarily due to lower relative net commissions due to higher ceding commissions earned under the commercial property quota share treaty as a result of commercial property premium growth offset in part by variability in other underwriting expenses. Direct commissions paid as a percentage of gross written premiums was 14.7% and 14.4% for the six months ended June 30, 2024 and 2023, respectively.

Current wording

The expense ratio was 20.5% for the nine months ended September 30, 2024 compared to 21.2% for the nine months ended September 30, 2023. The decrease in the expense ratio was primarily due to lower relative net commissions due to higher ceding commissions earned under the commercial property quota share treaty as a result of commercial property premium growth. Direct commissions paid as a percentage of gross written premiums was 14.7% and 14.5% for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

The following table summarizes net investment income, change in the fair value of equity securities and net realized investment gains (losses) for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes net investment income, change in the fair value of equity securities and net realized investment gains (losses) for the nine months ended September 30, 2024 and 2023:

Previous wording

Net investment income increased by 53.3% to $68.8 million for the six months ended June 30, 2024 from $44.9 million for the six months ended June 30, 2023. The increase in the first six months of 2024 compared to the same period last year was primarily due to growth in our investment portfolio largely generated from the investment of strong operating cash flows and higher interest rates relative to the prior year period. Our investment portfolio, excluding cash equivalents and unrealized gains and losses, had an annualized gross investment return of 4.3% and 3.8% for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Net investment income increased by 50.7% to $108.4 million for the nine months ended September 30, 2024 from $72.0 million for the nine months ended September 30, 2023. The increase in the first nine months of 2024 compared to the same period last year was primarily due to growth in our investment portfolio largely generated from the investment of strong operating cash flows and higher interest rates relative to the prior year period. Our investment portfolio, excluding cash equivalents and unrealized gains and losses, had an annualized gross investment return of 4.3% and 3.9% for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

During the first six months of 2024, the change in fair value of equity securities of $21.2 million included changes in unrealized gains related to common stocks of $12.3 million and ETFs of $6.3 million and changes in unrealized gains related to non-redeemable preferred stock of $2.6 million. The change in the fair value of common stocks and ETFs during the first six months of 2024 primarily reflected higher valuations in the broader U.S. stock market and the change in fair value of preferred stock relates primarily to the disposition of certain preferred stock securities in a loss position.

Current wording

During the first nine months of 2024, the change in fair value of equity securities of $41.9 million included changes in unrealized gains related to common stocks of $25.4 million and ETFs of $13.2 million and changes in unrealized gains related to non-redeemable preferred stock of $3.3 million. The change in the fair value of common stocks and ETFs during the first nine months of 2024 primarily reflected higher valuations in the broader U.S. stock market and the change in fair value of preferred stock relates primarily to the disposition of certain preferred stock securities in a loss position.

Previous wording

During the second quarter of 2023, the change in fair value of equity securities included changes in unrealized gains related to ETFs of $3.8 million and common stocks of $1.9 million and unrealized gains related to non-redeemable preferred stock of $0.1 million. The change in unrealized gains during the second quarter of 2023 attributable to ETFs and common stocks reflected higher valuations in the broader U.S. stock market during the period.

Current wording

During the first nine months of 2023, the change in fair value of equity securities included unrealized gains related to ETFs and common stocks of $2.7 million and unrealized gains related to non-redeemable preferred stock of $1.1 million. The change in the fair value of ETFs and common stocks during the first nine months of 2023 primarily reflected changes in the broader U.S. stock market.

Previous wording

During the first six months of 2024, net realized investment gains of $6.7 million were primarily related to sales of ETFs due to opportunistic repositioning of our equity portfolio. During the first six months of 2023, net realized investment losses of $(3.4) million were related to disposing of equity securities issued by certain banking and financial institutions.

Current wording

During the first nine months of 2024, net realized investment gains of $6.7 million were primarily related to sales of ETFs due to opportunistic repositioning of our equity portfolio. During the first nine months of 2023, net realized investment gains of $0.9 million included a realized gain of $4.3 million from the sale of a portion of our real estate investment property, offset by realized investment losses primarily related to disposing of securities issued by certain banking and financial institutions.

Previous wording

Our effective tax rate was 17.3% for the six months ended June 30, 2024 compared to 18.9% for the six months ended June 30, 2023. The effective tax rate was lower than the federal statutory rate of 21% primarily due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income.

Current wording

Our effective tax rate was 18.7% for the nine months ended September 30, 2024 compared to 19.4% for the nine months ended September 30, 2023. The effective tax rate was lower than the federal statutory rate of 21% primarily due to the tax benefits from stock-based compensation, including stock options exercised, and from tax-exempt investment income.

Previous wording

Our annualized return on equity was 32.7% for the six months ended June 30, 2024 compared to 31.8% for the six months ended June 30, 2023. Our annualized operating return on equity was 28.8% for the six months ended June 30, 2024 compared to 30.6% for the six months ended June 30, 2023. The decrease in annualized operating return on equity for the six months ended June 30, 2024 compared to the prior period was due primarily to higher average stockholders' equity as a result of profitable growth offset in part by higher net operating earnings.

Current wording

Our annualized return on equity was 32.3% for the nine months ended September 30, 2024 compared to 32.7% for the nine months ended September 30, 2023. Our annualized operating return on equity was 28.2% for the nine months ended September 30, 2024 compared to 32.1% for the nine months ended September 30, 2023. The decrease in annualized operating return on equity for the nine months ended September 30, 2024 compared to the prior period was due primarily to higher average stockholders' equity as a result of profitable growth and an increase in the fair value of our fixed income portfolio offset in part by higher net operating earnings.

Previous wording

Our cash flows for thesix months ended June 30, 2024 and 2023 were:

Current wording

Our cash flows for thenine months ended September 30, 2024 and 2023 were:

Previous wording

Net cash provided by operating activities was approximately $489.3 million for the six months ended June 30, 2024 compared to $423.6 million for the same period in 2023. This increase was largely driven by higher premium volume and the timing of claim payments and reinsurance recoveries.

Current wording

Net cash provided by operating activities was approximately $763.3 million for the nine months ended September 30, 2024 compared to $648.3 million for the same period in 2023. This increase was largely driven by higher premium volume and the timing of claim payments and reinsurance recoveries.

Previous wording

Net cash used in investing activities was $432.2 million for the six months ended June 30, 2024 compared to $444.6 million for the six months ended June 30, 2023. Net cash used in investing activities during the first six months of 2024 included purchases of fixed-maturity securities of $759.8 million, which included primarily corporate bonds, asset- and mortgage-backed securities, and to a lesser extent, U.S. Treasuries and municipal securities. During the first six months of 2024, we received proceeds of $189.3 million from sales of fixed-maturity securities, largely corporate bonds, mortgage- and asset-backed securities, municipal securities, U.S. Treasuries and government agency bonds and $200.6 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the six months ended June 30, 2024, purchases of equity securities of$84.2 million consisted of common stocks and ETFs. During the first six months of 2024, we received proceeds of $30.9 million primarily from sales of ETFs and common stocks.

Current wording

Net cash used in investing activities was $762.1 million for the nine months ended September 30, 2024 compared to $616.4 million for the nine months ended September 30, 2023. Net cash used in investing activities during the first nine months of 2024 included purchases of fixed-maturity securities of $1.3 billion, which included primarily corporate bonds, asset- and mortgage-backed securities, and to a lesser extent, municipal securities and U.S. Treasuries. During the first nine months of 2024, we received proceeds of $274.2 million from sales of fixed-maturity securities, largely corporate bonds, mortgage- and asset-backed securities, municipal securities, U.S. Treasuries and government agency bonds and $317.4 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the nine months ended September 30, 2024, purchases of equity securities of$115.1 million consisted of common stocks and ETFs. During the first nine months of 2024, we received proceeds of $34.2 million primarily from sales of ETFs and common stocks and, to a lesser extent, calls of non-redeemable preferred stock.

Previous wording

Net cash used in investing activities of $444.6 million for the six months ended June 30, 2023 included purchases of fixed-maturity securities of $667.8 million, which were comprised largely of corporate bonds, asset- and mortgage-backed securities, and to a lesser extent, U.S. Treasuries and municipal securities. During the first six months of 2023, we received proceeds of $187.4 million from sales of fixed-maturity securities, largely corporate bonds, asset-backed securities and municipal securities and $62.3 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the six months ended June 30, 2023, purchases of equity securities of$40.5 million consisted of common stocks. During the first six months of 2023, we received proceeds of $6.3 million from sales of equity securities, primarily ETFs and common stocks. In addition, net sales of short-term investments of $13.1 million consisted of U.S. Treasuries and corporate bonds.

Current wording

Net cash used in investing activities of $616.4 million for the nine months ended September 30, 2023 included purchases of fixed-maturity securities of $947.9 million, which were comprised largely of corporate bonds, asset- and mortgage-backed securities, and to a lesser extent, U.S. Treasuries and municipal securities. During the first nine months of 2023, we received proceeds of $204.4 million from sales of fixed-maturity securities, largely corporate bonds, asset-backed securities and municipal securities and $113.8 million from redemptions and maturities of asset- and mortgage-backed securities and corporate bonds. For the nine months ended September 30, 2023, purchases of equity securities of$62.0 million consisted of common stocks. During the first nine months of 2023, we received proceeds of $7.5 million from sales of equity securities, primarily ETFs and common stocks. In addition, net sales of short-term investments of $13.1 million consisted of U.S. Treasuries and corporate bonds. Net cash used in investing activities also included proceeds of $62.0 million from the sale of a portion of our real estate investment property in the third quarter of 2023.

Previous wording

During the first six months of 2024, cash used in financing reflected dividends paid of $0.30 per common share, or $7.0 million in aggregate. In addition, for the six months ended June 30, 2024, payroll taxes withheld and remitted on restricted stock awards were $7.0 million, offset in part by proceeds received from our equity compensation plans of $1.2 million.

Current wording

During the first nine months of 2024, cash used in financing reflected dividends paid of $0.45 per common share, or $10.5 million in aggregate. In addition, for the nine months ended September 30, 2024, payroll taxes withheld and remitted on restricted stock awards were $7.0 million, offset in part by proceeds received from our equity compensation plans of $1.2 million.