Kinsale Capital Group (NYSE:KNSL) is far from a household name, but it's a stock that definitely worth a closer look for long-term investors.

In this Fool Live video clip, recorded on Oct. 25, contributor Matt Frankel discusses what Kinsale does and why it's such an interesting investment opportunity. 

Matt Frankel: So, this is an insurance company, but this is not the company you would call if you want to buy, say, car insurance or homeowners insurance.

Kinsale specializes in the unusual. If you wanted to open a marijuana dispensary near your new house, Jason, Kinsale might be the company you would call. If Jon wanted to start a demolitions business down there in Florida, this might be the company you would call because it's a risk that a lot of insurers wouldn't want to even try to start to evaluate. These are really tough to evaluate risks. I mentioned marijuana dispensaries. It's just an emerging industry and there's just no data on how risky they are. Demolition businesses, like I just mentioned, there just a really high-risk business. Someone's going to get hurt doing demolitions business. These are the kind of risks Kinsale specializes in. It's really hard to be good at, but it's really profitable if you are good at it.

I want to share one thing and I want to go through this one quick because there's a lot of questions I want to get to. The yellow bar in this chart is Kinsale's profit. This is what's called the combined ratio in insurance. Picture 100% means you're breaking even on underwriting. That means you're costing what you're paying out or exactly what you're taking in. The average ensure that the specialty insurance their combined ratio was just under 96%, which means their underwriting margin was about four percent from 2016 to 2020.

Now that may sound low, but most insurance companies invest the money that they take in before they pay it out and make a lot of investment income as well. They are happy to pretty much breakeven on underwriting. Kinsale's average combined ratio was 83.5%, meaning that they have about four times the average specialty insurance margin before investment incomes even taken into account. It's a really profitable business if you're good at it. This chart that shows you just how good they are at it. 

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