Hello, and welcome to the annual meeting of stockholders of Kinsale Capital Group. Please note that today's meeting is being recorded. During the meeting, we'll have a question-and-answer session. You can submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to Michael Kehoe, President and Chief Executive Officer of Kinsale Capital Group. Mr. Kehoe, the floor is yours.
Thank you, Operator. Good morning, everyone, and thank you for joining us. I would like to welcome everyone today to Kinsale's annual stockholders' meeting. We will begin this year's meeting with opening remarks from our Chairman of the Board, Bob Lipincott. Bob, over to you.
Thanks, Mike. Good morning, everyone. Welcome, and thank you for attending Kinsale Capital Group's annual stockholders' meeting. I'm Bob Lipincott, Chairman of the Board of Directors of Kinsale Capital. Due to the continuing public health concerns regarding the COVID-19 pandemic and to assist in protecting the health and well-being of our stockholders, employees, and other meeting attendees, we are holding this year's annual meeting in a virtual format. We hope that you and your families remain safe and healthy. We will address the impact of COVID-19 on our business later in the meeting. For now, on behalf of everyone at Kinsale Capital, I would like to express our appreciation for all the healthcare providers and other essential workers in our communities. Thank you.
In the event that we encounter any technical difficulties in the course of this virtual meeting, we ask that you please stand by and allow us time to update regarding the meeting. Joining us today by audio are my fellow directors, Steve Bensinger, Anne Cronenberg, Jim Ritchie, Fred Russell, Greg Shear, and Mike Kehoe. Together, we work closely to make certain that, one, Kinsale has all the tools, resources, and direction needed to be the finest excess and surplus lines insurance company in the U.S. marketplace; two, to represent and protect the interests of all of you, Kinsale stockholders; and three, to meet the SEC guidelines for a publicly traded company. We have had another great year, as evidenced not only by our results but by the strength of our share price.
I would like to commend Mike Kehoe, along with his entire team, who have been the orchestrators of Kinsale's growth and profitability. Again, to all of you, thank you for attending, and I will now turn the meeting back over to Mike Kehoe. Mike.
Thanks, Bob. Joining us today by audio are certain executive officers of Kinsale, who are Brian Petrucelli, Kinsale's Executive Vice President, Chief Financial Officer, and Treasurer; Brian Haney, Kinsale's Executive Vice President and Chief Operating Officer; Bob Neal, Kinsale's Senior Vice President and Chief Marketing Officer. Also with us is Amanda Vayol, Kinsale's Secretary. Representatives from KPMG, the company's independent registered public accounting firm, have also joined us today. They will be available to answer appropriate questions during the comment period following the formal business of the meeting. Also present by audio is a representative from Computershare, who will be acting as the inspector of election for today's meeting. The inspector's principal obligation is to determine and certify the results of voting. Brian Petrucelli will be presiding over the meeting today. Brian.
Thanks, Mike. The order of business for the meeting will be as follows. First, we will complete the formal portion of the annual meeting. Following the formal business of the meeting, Mike will provide a recap of events of the past year, discuss our business strategy, and take questions. The meeting will please come to order. As Mike stated, I will preside over the meeting. Amanda Vayol will act as Secretary of the meeting. I would now like to have Amanda Vayol cover the formal business of the meeting.
Thanks, Brian. I have in my possession a copy of the notice of the annual meeting and our announcement regarding the change to a virtual-only format, which together state the time, place, and purpose of the annual meeting. I also have in my possession an affidavit of distribution from Computershare, certifying the distribution of the notice of internet availability of proxy materials to all shareholders of record of the company as of March 30, 2020, the record date which determines those stockholders entitled to vote at the annual meeting. The notice, the announcement regarding the virtual-only format, and the affidavit of distribution will be incorporated into the minute book of the company as part of the minutes of the meeting.
I also have in my possession a certified true and complete copy of a list of all stockholders of the company at the close of business on March 30, 2020, the record date. This list has been opened during the usual hours of business for examination by stockholders. The number of shares of common stock outstanding at the record date and entitled to vote was 22,253,823, and each such share has one vote. The number of shares represented at this meeting in person or by proxy is at least 11,126,912 shares of common stock, and therefore a quorum is present.
On the basis of the report of the Secretary, I declare that a quorum is in attendance. The proxies are ordered to be filed with the Secretary of the meeting. Johnson Stevoll of Computershare has been appointed as Inspector of Election and has sworn to the Inspector's Oath. I direct the Secretary to file the oath with the minutes of the meeting. Before we begin with the formal business of the meeting, would the Secretary please take a moment to review the procedures that will be followed during today's meeting?
We have three items of business on the agenda to be voted on today. Detailed information concerning these items is contained in the proxy statement, which was furnished to stockholders of record in connection with this meeting. After the presentation of all agenda items, the polls will be opened, and the meeting chairman will open the floor for questions and comments. You must be logged into the meeting website using your 15-digit control number in order to submit questions and comments, as well as to vote at the meeting. Questions and comments can be submitted in the field provided on the virtual meeting website. In order to ensure that the business of the meeting proceeds in an orderly fashion, questions and comments at this time should be limited to the agenda items being considered.
Please keep in mind there will be ample opportunity for general questions and comments about our company later in the proceedings. Also, to allow us to answer questions and comments from as many stockholders as possible in the allotted time, we ask that you limit yourself to two questions or comments. Questions submitted by multiple stockholders on the same topic or that are otherwise related may be grouped and summarized together. Please include your name and affiliation, if any, and state whether you are a Kinsale stockholder or a proxy for a stockholder when submitting a question or comment. I'd like to remind you that stockholders are not authorized to record the meeting. Additional rules of conduct and procedures are posted on the virtual meeting website. Following the closing of the polls, the formal portion of the meeting will be concluded.
At that time, management will present its report to stockholders, and after the presentation, we will take general comments and questions.
We will now proceed with the formal business of the meeting. There are three items of business on today's agenda. Proposal one is the election of seven nominees to our Board of Directors to serve a one-year term until the 2021 annual meeting of stockholders. The Board, upon the recommendation of the Compensation, Nominating, and Corporate Governance Committee, has nominated Michael P. Kehoe, Stephen J. Bensinger, Anne C. Cronenberg, Robert Lipincott III, James J. Ritchie, Frederick L. Russell Jr., and Gregory M. Shear to serve as its directors. The Secretary has advised me that under Kinsale's bylaws, the only persons who have been properly nominated are those that I've just named. Accordingly, the nominations for directors are closed.
Proposal two, in accordance with Section 14A of the Securities and Exchange Act of 1934, as amended, we are asking stockholders to approve in a non-binding advisory vote the compensation of the named executive officers as disclosed in the proxy statement. This proposal, commonly known as the say-on-pay proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers. The Board of Directors has recommended a vote in favor of this proposal. The third proposal is the ratification of the appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. The Board of Directors has recommended a vote in favor of this proposal. We will now proceed to the voting on the agenda items, as well as the question and comment period relating to the agenda items.
I want to emphasize that if you have previously voted by proxy and do not wish to change your vote, you do not need to vote again on the virtual meeting website. Voting on the website revokes your prior proxy. If any stockholder has not already voted or wants to change his or her vote, please do so prior to the closing of the polls. I declare the polls open. Does any stockholder have a question or comment relating to any of the agenda items?
Brian.
I see no questions at this time.
I will be closing the polls momentarily. If any stockholder hasn't already voted or wants to change his or her vote, please do so at this time. I will pause for a brief moment to allow any last votes to be submitted. I now declare the polls closed. Would the Secretary please provide the preliminary voting results on proposals?
Based on the preliminary count of the Inspector of Elections, number one, stockholders have elected each of the seven director nominees. Number two, stockholders have approved on an advisory basis the compensation of the company's named executive officers. Number three, stockholders have ratified the appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. The final vote results will be disclosed in a Form 8-K.
That concludes the formal portion of the meeting. The meeting is now adjourned. Before we turn to our presentation, Amanda will give you some information about forward-looking statements that are part of this presentation.
I would like to remind you today that through the course of today's presentation, Kinsale management may make comments that reflect 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 factors are listed in the company's various SEC filings, including the 2019 annual report on Form 10-K, which should be reviewed carefully. Kinsale management may make reference during the presentation to non-GAAP financial measures. A reconciliation of GAAP to these measures can be found on the company's website at www.kinsalecapitalgroup.com. As previously stated, after the management presentation, we will address questions and comments. With that, I will turn the presentation over to Mike.
Thanks, Amanda. I thought it would be helpful for our stockholders to just run through the highlights of our business strategy. These are the things that we think set Kinsale apart from our numerous competitors. The same that they've been since we started the company about 10 years or 11 years ago. We focus exclusively on the non-standard or what's known as the excess and surplus lines or the E&S market. The E&S market is where businesses turn when they can't secure coverage in the standard market, typically because the hazard level associated with the business is somewhat elevated. That could be due to the fact that it's a brand new business, or maybe it operates a high-hazard operation, or maybe it's located in a very litigious venue. Maybe they've had too many losses over the years.
We take those risks, and through a combination of higher prices, higher premiums, and more restrictive coverage, we turn that into a competitive product for the business owner, but at the same time, a high-margin product for us as the risk bearer. Maybe the more interesting thing about the E&S market over the years is, even though the E&S market handles high-hazard business, historically, it has offered the best returns in the broader P&C market, and it also offers the best growth prospects. We focus on the E&S market. We focus on small accounts within that market. Historically, smaller accounts have better profit margins than medium or large accounts. One thing that is very unique about Kinsale is we maintain absolute control over the underwriting.
Most companies that write small accounts, and just to define that a little bit, our average premium runs about $10,000 per policy. Most companies we compete with, in order to handle a high volume of small accounts, do so by delegating underwriting authority to an outside party. Typically, it's what's known as a managing general agent or an MGA. These are commissioned salespeople that, for a commission, will quote, bind, and issue business on behalf of the insurance company. At Kinsale, we take a contrarian approach. We think that it's important to divide the sales aspect, which the brokers focus on, from the underwriting, which we control. We think when you co-mingle the sales and the underwriting, it creates a misalignment of interests. We see continuous examples, candidly, where there's a degradation in the quality of the underwriting when you distribute that underwriting authority outside the company.
I had a competitor say to me one time, a couple of years ago, "We can't afford to underwrite $10,000 policies in our company," meaning that company had to delegate that authority to an outside party. Our view is you can't afford not to. It is a real challenge for a lot of insurance companies to handle small accounts internally. Just to put a few numbers on the table so people kind of understand what we're talking about, Kinsale had 380,000 new business submissions in 2019. That turned into a little bit shy of a quarter million new business quotes. Between new and renewal policies, there was about 50,000 policies went out the door, and another 10,000 or so endorsements, cancellations, reinstatements, inspections, audits. It is a very high volume of transactions. I think we ended 2019 with 253 full-time employees.
A small headcount, a very high volume of work. Obviously, we're relying on a pretty comprehensive technology platform in order to accomplish that kind of work. That's really the last part of our strategy, which is we purposefully operate at a significantly lower cost structure than all of our competitors. We get there through a very comprehensive technology platform. We control our own core systems. Most of our competitors contract that out to other parties. We have one end-to-end enterprise system on which we operate our company, whereas, again, most of our competitors have a real abundance of old systems that tend to be more siloed, some of which go back 20, 30, 40 years in time.
The situation that Kinsale's in is it's an enormous advantage in a commodity business like insurance, where your customers care so much about low cost, to be the low-cost provider. Of course, we pass some of that low cost, the benefit of that low-cost platform, onto our customers in the form of better value in the insurance policy. Just as importantly, we reserve some of that benefit for our stockholders in the form of a better return. Sometimes you tend to think of technology as something that's changing so rapidly in our economy. Certainly, that's true within the P&C industry as well.
Given, I think, how advanced the Kinsale staff is in creating these systems and being able to constantly refine them and roll out new features and functions, and then given how our competitors are in such a different position with legacy systems that have to be maintained and go back many years in time, I think it really drives home the point that there's some real durability to our technology advantage. That kind of sums up our strategy. Focus on small E&S accounts, control the underwriting, and really hammer our expenses day to day to make sure that we are the low-cost provider in our segment. These are the reasons I think we have a real sense of optimism around our ability to continue to grow the business in the years ahead and generate attractive returns for all of our stockholders.
I'll make two other quick comments, and then we'll go to questions. One is there's been a lot of press, of course, around the pandemic, the COVID-19 virus. There's been a lot of commentary, especially in the insurance trade press, about this could be the largest insured loss in history. We spoke about this on our earnings call about a month or so ago, and our position's really the same. We don't think the virus is going to have a material impact on Kinsale's profitability or on our growth prospects. We talked on the conference call about the fact that we saw a pretty dramatic drop-off in new business submissions in the couple of weeks after the virus lockdown was instituted, but that we also saw a V-shaped recovery, if you will. We feel very confident about the near-term growth prospects, even with the economic contraction.
Again, because of the approach we take in our business, the use of restrictive coverage for things like viruses and communicable disease and the like, and the fact that we do not write certain lines of business that have a heightened exposure to loss like event cancellation, mortgage insurance, etc., we think Kinsale's in a really good spot. Again, do not feel like the virus is going to have a material impact on our business. The last thing I would comment on is just the growth we have experienced in the first quarter and the growth we experienced across 2019 has been dramatic. We grew 41% last year, and I think it was 47% in Q1. It is important for our stockholders to understand that that is a very unusual growth profile for an insurance company. The source of that growth really goes back to the P&C insurance cycle.
For the last 10 years or 15 years, we've been in a period of very intense price competition. In that period of time, when there's a lot of stress on pricing, insurance companies need to be very disciplined and careful in how they underwrite and price their business and manage their business. I think Kinsale did a very good job in those competitive years. As a consequence, today, we're in a position to grow rapidly. We have a lot of competitors who were not disciplined during those years of intense price competition, and they're going through a period of real upheaval where they have to cancel some business. Some underwriters are being terminated. They're withdrawing from certain states or certain coverages, cutting capacity. We've talked about this on a couple of the previous conference calls about this rising level of dislocation within our industry.
It is driven by competitors that did not do the right thing, candidly. Because Kinsale stayed on course, maintained its discipline around coverage and pricing and the like, we are really in this very unique and really advantageous position to not only grow the company at an extraordinary rate and take market share from our competitors, but also to expand our profit margins at the same time. I think we referenced on the first quarter call that we had, in the preceding three months, had raised our rates between 10%-12% on a year-over-year basis. It is an extraordinary time. We are really excited here inside the company. We have a real sense of optimism for the next year or two. It is important to remind people, though, that the market that we operate in will revert to a more normal trading environment at some point.
We don't know exactly when, but I think the next year or two is probably a good guess, after which we'll grow at a more normalized pace. It could be 10% or 12% or 15% instead of the 40%+ growth rate we've seen the last year or so. When we revert to that normal growth rate, we're just as optimistic about our ability to compound the growth and book value year after year, to generate attractive returns for our stockholders, and to create a lot of shareholder wealth year after year as we go forward. Hopefully, everybody finds that helpful, and we'll see if there are any questions from anybody on the call. We would now like to address stockholder questions and comments.
As a reminder, questions and comments can be typed into the appropriate field on the virtual meeting website by those stockholders who have logged in using their 15-digit control number. Please include your name and affiliation and whether you are a stockholder or a proxy holder. As a courtesy to other stockholders present, please limit yourself to two questions or comments. Again, similar questions or comments on related topics may be combined and answered at once. Mike, at this time, I see no questions.
Thank you, Amanda. That will conclude the 2020 annual meeting of Kinsale Capital. Thank you for attending, and thank you for your continued interest in our company.
This concludes the meeting. You may now.