Core Viewpoint - Kingstone Companies, Inc. reported quarterly earnings of $0.50 per share, matching the Zacks Consensus Estimate, and showing a significant improvement from a loss of $0.27 per share a year ago [1] - The company posted revenues of $40.77 million for the quarter ended September 2024, which was 2.46% below the Zacks Consensus Estimate, but up from $34.24 million year-over-year [2] Group 1: Earnings Performance - Kingstone Companies' earnings of $0.50 per share were in line with expectations, and the company has not surpassed consensus EPS estimates in the last four quarters [1] - The company had previously expected to post earnings of $0.39 per share, which it achieved, indicating no surprise in earnings performance [1] Group 2: Revenue Performance - The reported revenue of $40.77 million missed the consensus estimate, marking a failure to beat revenue estimates over the last four quarters [2] - Year-over-year revenue growth was noted, increasing from $34.24 million [2] Group 3: Stock Performance and Outlook - Kingstone Companies' shares have increased approximately 477.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 25.8% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the outlook for earnings estimates [3][4] Group 4: Earnings Estimates and Industry Outlook - The current consensus EPS estimate for the upcoming quarter is $0.40, with expected revenues of $45.1 million, and for the current fiscal year, the estimate is $1.36 on revenues of $159.2 million [7] - The Insurance - Property and Casualty industry, to which Kingstone belongs, is currently ranked in the top 19% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.While many investors like to look for moment ...

Kingstone Companies, Inc (KINS) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be releas ...

Kingstone Companies, Inc (KINS) shares rallied 6.6% in the last trading session to close at $9.58. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 6.5% gain over the past four weeks. Kingstone's growth strategy encompasses reducing non-core business, managing costs, achieving strong rate and manage exposure to a hard reinsurance pricing environment. Recently, this Northeast regional property and casualty insu ...

[PART I — FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's analysis [Item 1 — Financial Statements](index=2&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and detailed notes for Q1 2024 [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity | Metric | March 31, 2024 (Unaudited) (in millions) | December 31, 2023 (in millions) | | :--------------------------------- | :--------------------------------- | :------------------------------ | | Total assets | $318.3 | $317.6 | | Total liabilities | $282.5 | $283.1 | | Total stockholders' equity | $35.7 | $34.5 | - Total assets increased by **$659,513**, total liabilities decreased by **$586,155**, and total stockholders' equity increased by **$1.2 million** from December 31, 2023, to March 31, 2024[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) This section outlines the company's revenues, expenses, and net income or loss, reflecting operational performance | Metric | Three Months Ended March 31, 2024 (in millions) | Three Months Ended March 31, 2023 (in millions) | Change (in millions) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :----------------------------------- | | Total revenues | $35.8 | $36.6 | -$0.9 (-2.4%) | | Total expenses | $34.0 | $42.9 | -$9.0 (-20.9%) | | Income (loss) from operations before taxes | $1.8 | $(6.3) | +$8.1 (N/A) | | Net income (loss) | $1.4 | $(5.1) | +$6.5 (N/A) | | Basic EPS | $0.13 | $(0.47) | +$0.60 (N/A) | | Diluted EPS | $0.12 | $(0.47) | +$0.59 (N/A) | - The company reported a net income of **$1.4 million** for Q1 2024, a significant improvement from a net loss of **$5.1 million** in Q1 2023, driven by a substantial **20.9% reduction in total expenses**[17](index=17&type=chunk)[19](index=19&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in the company's equity accounts, including net income and other comprehensive income | Metric | January 1, 2024 (in millions) | March 31, 2024 (in millions) | | :--------------------------------- | :---------------------------- | :--------------------------- | | Total Stockholders' Equity | $34.5 | $35.7 | | Net income | N/A | $1.4 | | Change in unrealized losses on AFS securities, net of tax | N/A | $(0.4) | - Total stockholders' equity increased by **$1.2 million** from January 1, 2024, to March 31, 2024, primarily due to net income, partially offset by an increase in accumulated other comprehensive loss[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports cash generated and used by operating, investing, and financing activities | Cash Flow Activity | Three Months Ended March 31, 2024 (in millions) | Three Months Ended March 31, 2023 (in millions) | Change (in millions) | | :--------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :----------------------------------- | | Operating activities | $6.1 | $(3.4) | +$9.5 | | Investing activities | $(11.6) | $2.2 | -$13.8 | | Financing activities | $(0.3) | $(0.3) | -$0.0 | | Net decrease in cash and cash equivalents | $(5.8) | $(1.5) | -$4.3 | | Cash and cash equivalents, end of period | $3.2 | $10.5 | -$7.3 | - Net cash provided by operating activities significantly improved to **$6.1 million** in Q1 2024 from a **$3.4 million outflow** in Q1 2023, but increased cash used in investing activities led to a larger overall decrease in cash and cash equivalents[25](index=25&type=chunk)[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed explanations and additional information supporting the financial statements [Note 1 - Nature of Business and Basis of Presentation](index=6&type=section&id=Note%201%20-%20Nature%20of%20Business%20and%20Basis%20of%20Presentation) This note describes the company's primary business activities and the accounting principles used - Kingstone Companies, Inc. underwrites property and casualty insurance exclusively through its wholly-owned subsidiary, Kingstone Insurance Company (KICO), with **94.4% of direct written premiums** in Q1 2024 originating from New York policies[28](index=28&type=chunk) - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include all necessary normal recurring adjustments for fair presentation, as per management's opinion[29](index=29&type=chunk) [Note 2 – Accounting Policies](index=6&type=section&id=Note%202%20%E2%80%93%20Accounting%20Policies) This note outlines significant accounting policies and critical estimates used in financial statements - The Company's continuation as a going concern is dependent on its ability to obtain financing or other funds to satisfy its **$19.95 million Notes Payable** due December 30, 2024[32](index=32&type=chunk) - Management plans to refinance the 2022 Notes through new equity/debt issuance, distributions from KICO, or available invested assets and cash (approximately **$1.8 million** as of March 31, 2024)[36](index=36&type=chunk) - Financial statements require management to make estimates and assumptions, particularly for loss and loss adjustment expense reserves, which are subject to inherent uncertainty and reevaluation[38](index=38&type=chunk) [Note 3 - Investments](index=7&type=section&id=Note%203%20-%20Investments) This note details the composition, fair value, and income generated from the investment portfolio | Investment Category | March 31, 2024 (Fair Value) (in millions) | December 31, 2023 (Fair Value) (in millions) | | :------------------------------------ | :---------------------------------------- | :------------------------------------------- | | Fixed-maturity securities, held-to-maturity | $6.0 | $6.1 | | Fixed-maturity securities, available-for-sale | $161.2 | $148.9 | | Equity securities | $13.5 | $14.8 | | Other investments | $4.1 | $3.9 | | Total investments | $185.9 | $174.6 | | Investment Income Metric | Three Months Ended March 31, 2024 (in millions) | Three Months Ended March 31, 2023 (in millions) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Net investment income | $1.5 | $1.5 | | Net gains on investments | $0.7 | $1.2 | - As of March 31, 2024, the company held available-for-sale fixed-maturity securities with **$16.2 million** in gross unrealized losses, primarily from securities held for more than 12 months, which were deemed temporary and not credit losses[44](index=44&type=chunk)[62](index=62&type=chunk) [Note 4 - Fair Value Measurements](index=12&type=section&id=Note%204%20-%20Fair%20Value%20Measurements) This note provides information on valuation methodologies and inputs for fair value measurements | Investment Category (Fair Value) | March 31, 2024 (in millions) | December 31, 2023 (in millions) | | :--------------------------------------- | :--------------------------- | :------------------------------ | | Fixed-maturity securities available-for-sale | $161.2 | $148.9 | | Equity securities | $13.5 | $14.8 | | Total investments, at fair value | $174.8 | $163.7 | | Debt (Fair Value) | March 31, 2024 (in millions) | December 31, 2023 (in millions) | | :------------------------ | :--------------------------- | :------------------------------ | | Senior Notes due 2024 | $18.3 | $17.8 | - The hedge fund investment, measured at NAV per share, increased to **$4.1 million** at March 31, 2024, from **$3.9 million** at December 31, 2023, with income recorded in net gains on investments[67](index=67&type=chunk) [Note 5 - Fair Value of Financial Instruments and Real Estate](index=13&type=section&id=Note%205%20-%20Fair%20Value%20of%20Financial%20Instruments%20and%20Real%20Estate) This note presents the fair value of financial instruments and real estate assets by valuation level | Financial Instrument / Asset | March 31, 2024 (Fair Value) (in millions) | December 31, 2023 (Fair Value) (in millions) | Fair Value Level | | :--------------------------------------- | :---------------------------------------- | :------------------------------------------- | :--------------- | | Fixed-maturity securities held-to-maturity | $6.0 | $6.1 | Level 1 | | Fixed-maturity securities available-for-sale | $161.2 | $148.9 | Level 1/2 | | Cash and cash equivalents | $3.2 | $9.0 | Level 1 | | Premiums receivable, net | $13.9 | $13.6 | Level 1 | | Reinsurance receivables, net | $70.7 | $75.6 | Level 3 | | Real estate, net | $3.5 | $3.5 | Level 3 | | Reinsurance balances payable | $19.4 | $12.8 | Level 3 | [Note 6 – Property and Casualty Insurance Activity](index=14&type=section&id=Note%206%20%E2%80%93%20Property%20and%20Casualty%20Insurance%20Activity) This note details the company's insurance underwriting performance, including premiums, losses, and reserves | Metric | Three Months Ended March 31, 2024 (in millions) | Three Months Ended March 31, 2023 (in millions) | | :--------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Direct premiums written | $49.3 | $47.6 | | Ceded premiums written | $(11.2) | $(16.1) | | Net premiums earned | $28.8 | $28.3 | | Loss and loss adjustment expense reserves (end of period) | $122.5 | $124.1 | | Ceding commission revenue | $4.6 | $5.4 | - Net premiums earned increased by **2.0%** to **$28.8 million** in Q1 2024, while ceding commission revenue decreased by **16.1%** due to changes in reinsurance treaties[71](index=71&type=chunk)[101](index=101&type=chunk) - Prior year incurred loss and LAE development was favorable by **$566,268** for Q1 2024, compared to **$3,121 favorable** in Q1 2023, reflecting ongoing reserve reevaluation[73](index=73&type=chunk) [Note 7 – Debt](index=19&type=section&id=Note%207%20%E2%80%93%20Debt) This note provides information on outstanding debt obligations, including terms and covenant compliance | Debt Component | March 31, 2024 (in millions) | December 31, 2023 (in millions) | | :----------------------- | :--------------------------- | :------------------------------ | | 2022 Notes, net | $18.7 | $18.4 | | Equipment financing | $6.5 | $6.8 | | Total Debt | $25.3 | $25.2 | - The 2022 Notes, with a principal amount of **$19.95 million** and a **12.0% interest rate**, mature on December 30, 2024. Management intends to retire them after September 29, 2024, and before maturity, through refinancing with new equity/debt or KICO distributions[106](index=106&type=chunk)[108](index=108&type=chunk) - The company's Leverage Maintenance Test ratio was **29.2%** at March 31, 2024, below the **30% threshold**, indicating compliance after a waiver for the September 30, 2023, breach[109](index=109&type=chunk) [Note 8 – Stockholders' Equity](index=22&type=section&id=Note%208%20%E2%80%93%20Stockholders%27%20Equity) This note details changes in stockholders' equity, including stock-based compensation and dividend policies - Regular quarterly dividends were suspended on November 11, 2022, with future policy at the Board's discretion[114](index=114&type=chunk) | Stock-Based Compensation | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Stock options | ~$53,000 | $0 | | Restricted stock awards | ~$213,000 | ~$217,000 | - Warrants to purchase **969,525 shares** of Common Stock were issued with a fair value of **$993,200**, exercisable at **$1.00 per share** through December 30, 2025[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [Note 9 – Income Taxes](index=23&type=section&id=Note%209%20%E2%80%93%20Income%20Taxes) This note explains income tax expense, deferred tax assets/liabilities, and net operating loss carryovers | Income Tax Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Income tax expense (benefit) | $378 | $(1,249) | | Effective tax rate | 20.93% | 19.8% | | Deferred Tax Component | March 31, 2024 (in millions) | December 31, 2023 (in millions) | | :----------------------------- | :--------------------------- | :------------------------------ | | Total deferred tax assets | $15.4 | $15.7 | | Total deferred tax liabilities | $5.1 | $5.2 | | Net deferred income tax asset | $10.3 | $10.6 | - The company has federal net operating loss carryovers of **$4.8 million** as of March 31, 2024, with no expiration, and state NOLs of approximately **$40.7 million**, for which a full valuation allowance has been recorded[131](index=131&type=chunk) [Note 10 – Earnings (Loss) Per Common Share](index=25&type=section&id=Note%2010%20%E2%80%93%20Earnings%20%28Loss%29%20Per%20Common%20Share) This note presents basic and diluted earnings per share calculations, including dilutive securities | EPS Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Basic EPS | $0.13 | $(0.47) | | Diluted EPS | $0.12 | $(0.47) | | Weighted average common shares outstanding (basic) | 10,999,662 | 10,756,913 | | Weighted average common shares outstanding (diluted) | 11,791,520 | 10,756,913 | - Basic EPS improved to **$0.13** in Q1 2024 from **$(0.47)** in Q1 2023. Diluted EPS for Q1 2024 included **791,858 dilutive securities** (stock options, warrants, restricted stock awards), which were anti-dilutive in Q1 2023[19](index=19&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Note 11 - Commitments and Contingencies](index=25&type=section&id=Note%2011%20-%20Commitments%20and%20Contingencies) This note discloses contractual obligations, legal matters, and other potential future liabilities - The office lease for KICO's Valley Stream, New York facility expired on March 31, 2024, and was not renewed[141](index=141&type=chunk) - Meryl Golden's annual base salary will increase to **$550,000** (from **$500,000**) effective January 1, 2025, under her Third Amended and Restated Employment Agreement, which extends to December 31, 2026[159](index=159&type=chunk) - Barry Goldstein's annual salary was reduced to **$300,000** (from **$500,000**) effective October 1, 2023, and he is no longer entitled to a bonus based on net income[153](index=153&type=chunk) [Note 12 – Employee Benefit Plans](index=28&type=section&id=Note%2012%20%E2%80%93%20Employee%20Benefit%20Plans) This note outlines the company's employee benefit programs and related expenses | Employee Benefit Expense | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Employee bonus plan accrual | ~$82,000 | $0 | | 401(k) plan expense | ~$72,000 | ~$85,000 | - The Kingstone Companies, Inc. Deferred Compensation Plan was terminated effective December 22, 2022, with all Termination Payments to participants to be completed by December 22, 2024[156](index=156&type=chunk) [Note 13 – Subsequent Events](index=28&type=section&id=Note%2013%20%E2%80%93%20Subsequent%20Events) This note reports significant events occurring after the balance sheet date but before issuance - Effective April 15, 2024, CEO Meryl Golden's Third Amended and Restated Employment Agreement extends her term to December 31, 2026, and increases her annual base salary to **$550,000**, effective January 1, 2025[159](index=159&type=chunk) - On April 5, 2024, the company filed a **$50 million** shelf registration statement on Form S-3 for equity and debt securities, which became effective on April 22, 2024, allowing for future offerings[162](index=162&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Kingstone's financial performance, strategic initiatives, and operational results [Company Overview](index=29&type=section&id=Company%20Overview) This section introduces Kingstone Insurance Company's business, market position, and revenue sources - Kingstone Insurance Company (KICO) is a New York-domiciled carrier, writing personal lines and commercial auto insurance, and was the **15th largest writer of homeowners insurance** in New York in 2023[163](index=163&type=chunk) - For Q1 2024, **94.4%** of KICO's direct written premiums originated from New York policies, categorized as 'Core' business, with the remaining as 'non-Core'[163](index=163&type=chunk) - Revenue sources include earned premiums, ceding commissions from quota share reinsurance, net investment income, and net realized/unrealized investment gains/losses[165](index=165&type=chunk) [Product Lines](index=29&type=section&id=Product%20Lines) This section describes the company's insurance product offerings, focusing on personal lines - The largest line of business is personal lines, consisting of homeowners, dwelling fire, cooperative/condominium, renters, and personal umbrella policies[168](index=168&type=chunk) - The company ceased underwriting commercial lines and commercial umbrella risks in July 2019 due to poor performance, with no commercial liability policies in-force as of March 31, 2024[169](index=169&type=chunk) [Key Measures](index=30&type=section&id=Key%20Measures) This section defines core financial metrics for assessing underwriting profitability and efficiency - Net loss ratio: The ratio of net losses and LAE incurred to net premiums earned, measuring underwriting profitability[172](index=172&type=chunk) - Net underwriting expense ratio: The ratio of acquisition costs and other underwriting expenses (less ceding commission revenue and other income) to net premiums earned, measuring operational efficiency[173](index=173&type=chunk) - Net combined ratio: The sum of the net loss and net underwriting expense ratios, indicating overall underwriting profit (below **100%** is profitable without investment income)[174](index=174&type=chunk) [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting estimates, including loss reserves and deferred income taxes - Loss and Loss Adjustment Expense (LAE) Reserves are established for reported and incurred but not reported (IBNR) claims, estimated on an undiscounted basis using case-basis valuations, statistical analyses, and actuarial methodologies, subject to inherent uncertainty[178](index=178&type=chunk) - Reinsurance receivables are management's best estimate of recoverable losses and LAE from reinsurers, estimated using methodologies similar to loss and LAE reserves[181](index=181&type=chunk) - Deferred Income Taxes are recognized for temporary differences between financial and tax carrying amounts, with the effective tax rate based on GAAP income at statutory rates, adjusted for non-taxable/deductible items and credits[182](index=182&type=chunk)[183](index=183&type=chunk) [Kingstone 2.0 (completed) and Kingstone 3.0 (underway)](index=31&type=section&id=Kingstone%202.0%20%28completed%29%20and%20Kingstone%203.0%20%28underway%29) This section details strategic initiatives to improve profitability and underwriting discipline - Kingstone 2.0 initiatives included strengthening management, reducing expenses through technology (new policy management system), developing a segmented product suite (Kingstone Select), and better managing catastrophe exposure[185](index=185&type=chunk) - Kingstone 3.0 focuses on aggressively reducing non-Core business (**52.1% decrease** in policy count YoY), adjusting pricing to stay ahead of loss trends (**24.2% increase** in Core homeowners premiums YoY), tightly managing reinsurance, and reducing the net expense ratio to **33%** by year-end 2024 (achieved **31.3%** in Q1 2024)[186](index=186&type=chunk)[187](index=187&type=chunk)[190](index=190&type=chunk) | Metric | March 31, 2024 | March 31, 2023 | Change | Percent Change | | :--------------------------------- | :------------- | :------------- | :----- | :------------- | | Core Policies In Force | 66,991 | 72,081 | (5,090) | (7.1)% | | Non-Core Policies In Force | 9,080 | 18,945 | (9,865) | (52.1)% | | Total policies in force | 76,071 | 91,026 | (14,955) | (16.4)% | | Core Direct written premiums (in thousands) | $46,587 | $41,427 | $5,160 | 12.5% | | Non-Core Direct written premiums (in thousands) | $2,738 | $6,170 | $(3,432) | (55.6)% | | Total direct written premiums (in thousands) | $49,325 | $47,597 | $1,728 | 3.6% | [Consolidated Results of Operations](index=32&type=section&id=Consolidated%20Results%20of%20Operations) This section provides a comprehensive analysis of the company's financial performance | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Total revenues | $35,765 | $36,628 | $(863) | (2.4)% | | Total expenses | $33,961 | $42,931 | $(8,970) | (20.9)% | | Net income (loss) | $1,427 | $(5,055) | $6,482 | N/A | | Net loss ratio | 62.0% | 88.6% | (26.6) ppt | (30.0)% | | Net underwriting expense ratio | 31.3% | 34.7% | (3.4) ppt | (9.8)% | | Net combined ratio | 93.3% | 123.3% | (30.0) ppt | (24.3)% | - The company achieved a net income of **$1.4 million** in Q1 2024, a significant improvement from a **$5.1 million net loss** in Q1 2023, driven by a **20.9% reduction in total expenses** and a **30.0 percentage point decrease in the net combined ratio**[191](index=191&type=chunk)[193](index=193&type=chunk) [Direct Written Premiums](index=33&type=section&id=Direct%20Written%20Premiums) This section analyzes trends in premiums written across product lines, distinguishing core and non-core business | Product Line | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :----------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Personal lines | $45,740 | $44,171 | +$1,569 | 3.5% | | Livery physical damage | $3,562 | $3,406 | +$156 | 4.6% | | Total direct written premiums | $49,325 | $47,597 | +$1,728 | 3.6% | - Core business direct written premiums increased by **12.5%** to **$46.6 million**, while non-Core business premiums decreased by **55.6%** to **$2.7 million**, aligning with the Kingstone 3.0 strategy to reduce non-Core business[198](index=198&type=chunk) [Net Written Premiums and Net Premiums Earned](index=34&type=section&id=Net%20Written%20Premiums%20and%20Net%20Premiums%20Earned) This section discusses the impact of reinsurance on premiums and earned premium recognition | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :----------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Net written premiums | $38,095 | $31,492 | +$6,603 | 21.0% | | Net premiums earned | $28,820 | $28,255 | +$565 | 2.0% | - Net written premiums increased by **21.0%** due to changes in the personal lines quota share reinsurance treaty, while net premiums earned increased by **2.0%** due to reduced quota share rates and the run-off of a prior treaty[199](index=199&type=chunk)[200](index=200&type=chunk)[203](index=203&type=chunk) [Ceding Commission Revenue](index=34&type=section&id=Ceding%20Commission%20Revenue) This section explains changes in revenue received from reinsurers for ceding premiums | Ceding Commission Component | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Provisional ceding commissions earned | $4,555 | $5,447 | $(892) | (16.4)% | | Contingent ceding commissions earned | $12 | $(1) | $13 | N/A | | Total ceding commission revenue | $4,567 | $5,445 | $(878) | (16.1)% | - The decrease in provisional ceding commissions earned was due to lower premiums ceded under the new **27% quota share treaty** compared to the prior **30% treaty**, despite an increase in ceding commission rates[206](index=206&type=chunk) [Net Investment Income](index=35&type=section&id=Net%20Investment%20Income) This section details income generated from the company's investment portfolio, including yields | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :--------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Net investment income | $1,503 | $1,541 | $(38) | (2.5)% | | Average yield on non-cash invested assets | 3.77% | 3.35% | +0.42 ppt | 12.5% | | Cash and invested assets (in millions) | $189.1 | $190.7 | $(1.6) | (0.8%) | [Net Gains on Investments](index=35&type=section&id=Net%20Gains%20on%20Investments) This section reports realized and unrealized gains or losses from investment activities | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Net gains on investments | $726 | $1,225 | $(499) | (40.7)% | | Unrealized gains on equity and other investments | $819 | $1,228 | $(409) | (33.3%) | | Net realized (losses) on sales of investments | $(92) | $(3) | $(89) | 2966.7% | [Other Income](index=35&type=section&id=Other%20Income) This section covers miscellaneous income sources not categorized elsewhere | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :----------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Other income | $149 | $161 | $(12) | (7.5)% | [Net Loss and LAE](index=35&type=section&id=Net%20Loss%20and%20LAE) This section analyzes incurred losses and loss adjustment expenses, including loss ratios | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Net loss and LAE | $17,860 | $25,039 | $(7,179) | (28.7)% | | Net loss ratio | 62.0% | 88.6% | (26.6) ppt | (30.0)% | - Catastrophe losses contributed **5.2 points** to the loss ratio in Q1 2024 (**$1.486 million**), significantly lower than **13.2 points** in Q1 2023, due to minimal winter-related catastrophe claims[214](index=214&type=chunk) - The underlying loss ratio (excluding catastrophe and prior year development) improved by **16.6 points** to **58.8%** in Q1 2024, reflecting lower non-catastrophe frequency and severity[215](index=215&type=chunk) [Commission Expense](index=36&type=section&id=Commission%20Expense) This section discusses costs associated with acquiring new business, including agent commissions | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :---------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Commission expense | $7,852 | $8,540 | $(688) | (8.1)% | | % of direct earned premiums | 15.7% | 17.1% | (1.4) ppt | (8.2%) | - The decrease in commission expense was driven by reduced commission rates on legacy policies and lower rates on Select products, partially offset by a **$303,000 accrual** for estimated contingent commissions[217](index=217&type=chunk) [Other Underwriting Expenses](index=36&type=section&id=Other%20Underwriting%20Expenses) This section details administrative and operational costs directly related to underwriting | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Other underwriting expenses | $5,881 | $6,872 | $(991) | (14.4)% | | % of direct earned premiums | 11.8% | 13.8% | (2.0) ppt | (14.5%) | - Salaries and employment costs decreased by **11.3%** to **$2.601 million**, primarily due to staff reductions related to non-Core business, partially offset by hiring higher-level managers and staff for Kingstone 2.0 and 3.0 strategies[220](index=220&type=chunk) [Other Operating Expenses](index=37&type=section&id=Other%20Operating%20Expenses) This section covers general and administrative expenses not directly tied to underwriting | Component | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :---------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Employment costs | $157 | $94 | +$63 | 67.0% | | Equity compensation | $266 | $217 | +$49 | 22.6% | | Total other operating expenses | $778 | $663 | +$115 | 17.3% | - The increase in employment costs was due to fluctuations in deferred compensation liability related to changes in the underlying invested portfolio[222](index=222&type=chunk) [Depreciation and Amortization](index=38&type=section&id=Depreciation%20and%20Amortization) This section explains the non-cash expense related to asset usage and obsolescence | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Depreciation and amortization | $597 | $808 | $(211) | (26.1)% | - The decrease is attributed to the completion and deployment of customized policy management software, enabling the consolidation of multiple legacy systems and the retirement of older assets with shorter useful lives[223](index=223&type=chunk) [Interest Expense](index=38&type=section&id=Interest%20Expense) This section reports the cost of borrowing incurred on the company's debt obligations | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percent Change | | :------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------------- | | Interest expense | $994 | $1,010 | $(16) | (1.6)% | [Income Tax Expense (Benefit)](index=38&type=section&id=Income%20Tax%20Expense%20%28Benefit%29) This section details the company's tax obligations or benefits based on pre-tax income or loss | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Income tax expense (benefit) | $378 | $(1,249) | +$1,627 | | Effective tax rate | 20.93% | 19.8% | +1.13 ppt | | Income (loss) before taxes | $1,805 | $(6,304) | +$8,109 | [Net Income (Loss)](index=38&type=section&id=Net%20Income%20%28Loss%29) This section presents the company's ultimate profitability or loss after all revenues and expenses | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------ | :----------------------------------------------- | :----------------------------------------------- | | Net income (loss) | $1,427 | $(5,055) | [Additional Financial Information](index=38&type=section&id=Additional%20Financial%20Information) This section provides supplementary financial data, including premiums, losses, and loss ratios by product | Product Type | Gross Premiums Written (Q1 2024) (in thousands) | Net Premiums Written (Q1 2024) (in thousands) | Net Premiums Earned (Q1 2024) (in thousands) | Net Loss and LAE (Q1 2024) (in thousands) | Net Loss Ratio (Q1 2024) | | :----------------------- | :---------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :---------------------------------------- | :----------------------- | | Personal lines | $45,740 | $34,516 | $25,092 | $14,712 | 58.6% | | Livery physical damage | $3,562 | $3,562 | $3,708 | $1,681 | 45.3% | | Other | $22 | $17 | $19 | $(13) | 1.2% | | Commercial lines (in run-off) | N/A | N/A | N/A | $303 | N/A | - Personal lines net loss ratio significantly improved to **58.6%** in Q1 2024 from **90.2%** in Q1 2023[229](index=229&type=chunk) [Insurance Underwriting Business on a Standalone Basis](index=39&type=section&id=Insurance%20Underwriting%20Business%20on%20a%20Standalone%20Basis) This section presents the financial results of the insurance underwriting segment | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Total revenues | $35,692 | $36,585 | | Total expenses | $32,287 | $41,373 | | Net income (loss) | $2,686 | $(3,850) | | Net loss ratio | 62.0% | 88.6% | | Net underwriting expense ratio | 31.3% | 34.7% | | Net combined ratio | 93.3% | 123.3% | - The insurance underwriting business reported a net income of **$2.686 million** in Q1 2024, a substantial improvement from a **$3.850 million net loss** in Q1 2023, with the net combined ratio decreasing by **30.0 percentage points**[230](index=230&type=chunk)[234](index=234&type=chunk) [Investments](index=41&type=section&id=Investments) This section provides a detailed overview of the company's investment portfolio [Portfolio Summary](index=41&type=section&id=Portfolio%20Summary) This section summarizes the types and fair values of securities held in the investment portfolio | Fixed-Maturity Securities (AFS) | March 31, 2024 (Fair Value) (in millions) | December 31, 2023 (Fair Value) (in millions) | | :------------------------------------------ | :---------------------------------------- | :------------------------------------------- | | U.S. Treasury securities | $35.7 | $20.9 | | Political subdivisions | $13.3 | $13.4 | | Corporate and other bonds | $68.6 | $70.1 | | Residential mortgage and other asset backed securities | $43.6 | $44.5 | | Total AFS fixed-maturity securities | $161.2 | $148.9 | | Equity Securities | March 31, 2024 (Fair Value) (in millions) | December 31, 2023 (Fair Value) (in millions) | | :------------------------ | :---------------------------------------- | :------------------------------------------- | | Preferred stocks | $9.6 | $10.7 | | Fixed income ETFs | $3.0 | $3.0 | | Mutual funds | $0.9 | $0.9 | | FHLBNY common stock | $0.1 | $0.1 | | Total Equity Securities | $13.5 | $14.8 | | Held-to-Maturity Securities | March 31, 2024 (Fair Value) (in millions) | December 31, 2023 (Fair Value) (in millions) | | :------------------------------------------ | :---------------------------------------- | :------------------------------------------- | | U.S. Treasury securities | $1.2 | $1.2 | | Corporate and other bonds | $4.1 | $4.2 | | Total HTM fixed-maturity securities | $6.0 | $6.1 | [Credit Rating of Fixed-Maturity Securities](index=43&type=section&id=Credit%20Rating%20of%20Fixed-Maturity%20Securities) This section details the credit quality and maturity characteristics of fixed-maturity investments | Rating Category | March 31, 2024 (% of Fair Value) | December 31, 2023 (% of Fair Value) | | :------------------------------------------ | :------------------------------- | :---------------------------------- | | U.S. Treasury securities | 22.1% | 14.1% | | Corporate and municipal bonds (AAA-BB) | 49.8% | 54.9% | | Residential mortgage backed, asset backed, and other collateralized obligations (AAA-CC, Non rated) | 28.1% | 31.1% | | Total | 100.0% | 100.0% | | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Weighted average effective maturity | 6.9 years | 7.8 years | | Weighted average final maturity | 10.8 years | 11.9 years | | Effective duration | 3.6 years | 4.1 years | [Fair Value Consideration](index=44&type=section&id=Fair%20Value%20Consideration) This section discusses valuation methods and unrealized gains/losses within the investment portfolio - As of March 31, 2024, **67%** of the investment portfolio recorded at fair value was priced based on quoted market prices (Level 1), compared to **65%** at December 31, 2023[245](index=245&type=chunk) - The company held **140 fixed-maturity securities** with gross unrealized losses totaling **$16.2 million** at March 31, 2024, which were deemed temporary and not credit losses, with management intending to hold them until anticipated recovery of fair value[247](index=247&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet financial obligations, including cash flows and reinsurance [Cash Flows](index=46&type=section&id=Cash%20Flows) This section analyzes the sources and uses of cash from operating, investing, and financing activities | Cash Flow Activity | Three Months Ended March 31, 2024 (in millions) | Three Months Ended March 31, 2023 (in millions) | | :--------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Operating activities | $6.1 | $(3.4) | | Investing activities | $(11.6) | $2.2 | | Financing activities | $(0.3) | $(0.3) | | Net decrease in cash and cash equivalents | $(5.8) | $(1.5) | | Cash and cash equivalents, end of period | $3.2 | $10.5 | - Net cash provided by operating activities increased by **$9.645 million** in Q1 2024, primarily due to an increase in net income (adjusted for non-cash items) and favorable fluctuations in operating assets and liabilities[256](index=256&type=chunk) - KICO had a negative unassigned surplus as of March 31, 2024, restricting dividend payments without regulatory approval, though a **$2.3 million distribution** from paid-in capital is expected in Q2 2024[251](index=251&type=chunk) [Reinsurance](index=46&type=section&id=Reinsurance) This section describes the company's reinsurance arrangements and their impact on risk exposure - The company entered into a new **27% quota share reinsurance treaty** for personal lines (2024/2025 Treaty) effective January 1, 2024, replacing the **30% 2023/2024 Treaty**[260](index=260&type=chunk) - Excess of loss and catastrophe reinsurance treaties will expire on June 30, 2024, with no coverage in effect from July 1, 2024, through January 1, 2025, unless renewed[272](index=272&type=chunk) | Treaty Type | Treaty Period | Percent Ceded (Quota Share) | Risk Retained (Initial $1M losses) | Catastrophe Coverage (Excess of Quota Share) | | :-------------------- | :-------------------------- | :-------------------------- | :--------------------------------- | :------------------------------------------- | | 2024/2025 Treaty | Jan 1, 2024 - Jan 1, 2025 | 27% | $730,000 | N/A (subject to renewal) | | 2023/2024 Treaty | Jan 1, 2023 - Jan 1, 2024 | 30% | $700,000 | $315,000,000 (July 1, 2023 - June 30, 2024) | [Inflation](index=48&type=section&id=Inflation) This section discusses the effects of inflation on loss expenses and the investment portfolio - Inflation impacts loss and loss adjustment expenses, especially medical and hospital rates, and influences interest rates, affecting investment portfolio market value and new investment yields[268](index=268&type=chunk)[269](index=269&type=chunk) - Continuing effects of prior years' economic inflation in Q1 2024 led to sustained higher interest rates, widening credit spreads, lower public equity valuations, and significant financial market volatility, negatively impacting fixed income securities and loss and LAE[270](index=270&type=chunk) [Off-Balance Sheet Arrangements](index=48&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any material off-balance sheet transactions or obligations - The company has no material off-balance sheet arrangements that would significantly affect its financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources[271](index=271&type=chunk) [Outlook](index=48&type=section&id=Outlook) This section provides management's perspective on future financial performance and market conditions - Net premiums earned are influenced by competitive market conditions and economic factors. The company's underwriting changes prioritize profitability over growth, leading to a potential slowdown in premium growth compared to prior years[273](index=273&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to smaller reporting companies, as per SEC regulations - This item is not applicable to smaller reporting companies[274](index=274&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were effective as of March 31, 2024 [Evaluation of Disclosure Controls and Procedures](index=49&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures - As of March 31, 2024, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective in recording, processing, summarizing, and reporting required information on a timely basis[275](index=275&type=chunk)[276](index=276&type=chunk) [Changes in Internal Control over Financial Reporting](index=49&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to internal control over financial reporting - There have been no material changes in the company's internal control over financial reporting during the most recently completed fiscal quarter[278](index=278&type=chunk) [Inherent Limitation on Effectiveness of Controls](index=49&type=section&id=Inherent%20Limitation%20on%20Effectiveness%20of%20Controls) This section acknowledges the inherent limitations of internal controls - Internal control over financial reporting, by its inherent limitations, may not prevent or detect misstatements, and projections of effectiveness to future periods are subject to risks of inadequacy or deterioration[280](index=280&type=chunk) [PART II — OTHER INFORMATION](index=49&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, sales of equity, defaults, and exhibits [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings for the period - The company has no legal proceedings to report[282](index=282&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors disclosed in the 2023 Annual Report - No material changes to the risk factors disclosed in Part I, Item 1A of the Company's 2023 Annual Report[283](index=283&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is left blank, indicating no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities and use of proceeds to report[290](index=290&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - The company has no defaults upon senior securities to report[284](index=284&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable[285](index=285&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - No other information to report[286](index=286&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL - Exhibits include Restated Certificate of Incorporation, By-laws, CEO and CFO certifications (Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350), and XBRL Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase documents[287](index=287&type=chunk) [Signatures](index=50&type=section&id=Signatures) The report is duly signed by the CEO and CFO of Kingstone Companies, Inc - The report was signed by Meryl Golden, Chief Executive Officer, and Jennifer Gravell, Chief Financial Officer, on May 15, 2024[290](index=290&type=chunk)[291](index=291&type=chunk)

[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This section outlines the fundamental administrative and securities information for Kingstone Companies, Inc.'s Form 8-K filing [Registrant Details](index=1&type=section&id=Registrant%20Details) This section provides the core identification details for the registrant, Kingstone Companies, Inc., including its jurisdiction, file number, and principal executive offices Registrant Identification Details | Detail | Value | | :--- | :--- | | Registrant Name | KINGSTONE COMPANIES, INC. | | Jurisdiction of Incorporation | Delaware | | Commission File Number | 000-01665 | | IRS Employer Identification No. | 36-2476480 | | Principal Executive Offices | 15 Joys Lane, Kingston, New York 12401 | | Registrant's Telephone Number | (845) 802-7900 | [Securities Information](index=1&type=section&id=Securities%20Information) This section details the securities registered under Section 12(b) of the Securities Exchange Act of 1934, specifically the common stock of Kingstone Companies, Inc Registered Securities Details | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock, $0.01 par value per share | KINS | NASDAQ Capital Market | - The registrant is not an emerging growth company and has not elected to use the extended transition period for complying with new or revised financial accounting standards[2](index=2&type=chunk) [Item 2.02. Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition) This section details the announcement of Kingstone Companies, Inc.'s first-quarter 2024 financial results and related investor communications [Announcement of Q1 2024 Financial Results](index=2&type=section&id=Announcement%20of%20Q1%202024%20Financial%20Results) Kingstone Companies, Inc. announced its financial results for the first quarter ended March 31, 2024, through a press release issued on May 13, 2024 - Kingstone Companies, Inc. issued a press release on May 13, 2024, announcing its financial results for the first quarter ended March 31, 2024[3](index=3&type=chunk) [Conference Call and Investor Presentation Details](index=2&type=section&id=Conference%20Call%20and%20Investor%20Presentation%20Details) The company will host a conference call on May 14, 2024, at 8:30 A.M. ET for analysts and investors, and has made investor presentation materials available on its website - A conference call for analysts and investors is scheduled for May 14, 2024, at 8:30 A.M. ET[3](index=3&type=chunk) - Investor presentation materials are accessible via the Investor Relations/Events & Presentations section of the Company website (www.kingstonecompanies.com)[3](index=3&type=chunk) - The Presentation Materials may be used in connection with the Conference Call and other presentations to various stakeholders[4](index=4&type=chunk) [Disclaimer Regarding Information Furnished](index=2&type=section&id=Disclaimer%20Regarding%20Information%20Furnished) The information provided in the press release and presentation materials is summary in nature and should be considered in context with other SEC filings. The company disclaims any obligation to update these materials - The information in the Press Release and Presentation Materials is summary information and should be considered in the context of the Company's SEC filings[5](index=5&type=chunk) - The Company specifically disclaims any obligation to update the Presentation Materials to reflect future events or circumstances[5](index=5&type=chunk) - The furnished information (Exhibits 99.1 and 99.2) is not deemed 'filed' for Section 18 of the Exchange Act and is not incorporated by reference into other filings unless expressly stated[6](index=6&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) This section reiterates that the information from the press release and presentation materials is being furnished, not filed, under Regulation FD, clarifying its legal status and implications for incorporation by reference - The information in the Press Release and Presentation Materials is furnished, not filed, pursuant to Item 7.01[7](index=7&type=chunk) - This information will not be incorporated by reference into any registration statement under the Securities Act unless specifically identified[7](index=7&type=chunk) - Furnishing this information does not constitute a determination or admission by the Company that it is material or complete for investment decisions[7](index=7&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K filing, which include the press release announcing Q1 2024 results and the investor presentation List of Exhibits | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press release, dated May 13, 2024, issued by Kingstone Companies, Inc. | | 99.2 | Investor Presentation | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [SIGNATURES](index=4&type=section&id=SIGNATURES) This section formally concludes the Form 8-K filing, confirming that the report has been duly signed on behalf of Kingstone Companies, Inc. by an authorized officer - The report was signed on May 13, 2024, by Jennifer Gravelle, CFO, on behalf of Kingstone Companies, Inc.[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to _________ Commission File Number 0-1665 KINGSTONE COMPANIES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction o ...

PART I — FINANCIAL INFORMATION This section presents the Company's unaudited condensed consolidated financial statements and related notes [Item 1 — Financial Statements](index=2&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements) Unaudited condensed consolidated financial statements and notes for Kingstone Companies, Inc. are presented for Q3 2023 [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets provide a snapshot of the Company's assets, liabilities, and stockholders' equity at period-end Condensed Consolidated Balance Sheets | Metric | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :----------------------------------- | :----------------------- | :----------- | | **Assets** | | | | Total investments | $156,961,693 | $179,087,345 | | Cash and cash equivalents | $15,132,969 | $11,958,228 | | Total assets | $316,988,261 | $320,332,531 | | **Liabilities** | | | | Loss and loss adjustment expense reserves | $121,674,947 | $118,339,513 | | Unearned premiums | $103,161,550 | $107,492,777 | | Total liabilities | $290,459,400 | $284,163,099 | | **Stockholders' Equity** | | | | Total stockholders' equity | $26,528,861 | $36,169,432 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statements of operations and comprehensive loss detail the Company's revenues, expenses, and net loss over the periods Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net premiums earned | $27,938,318 | $29,360,976 | $85,701,467 | $83,936,424 | | Total revenues | $34,236,671 | $35,537,635 | $107,584,422 | $93,068,180 | | Total expenses | $38,633,229 | $40,096,924 | $118,848,087 | $116,075,459 | | Net loss | $(3,537,571) | $(3,997,621) | $(9,114,298) | $(18,574,772) | | Comprehensive loss | $(5,763,478) | $(7,981,933) | $(10,275,349) | $(36,350,081) | | Basic Loss per common share | $(0.33) | $(0.38) | $(0.85) | $(1.75) | | Diluted Loss per common share | $(0.33) | $(0.38) | $(0.85) | $(1.75) | [Condensed Consolidated Statements of Stockholders' Equity](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This statement outlines changes in the Company's stockholders' equity, including common stock and accumulated deficit Condensed Consolidated Statements of Stockholders' Equity | Metric | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Common stock, $.01 par value | $122,275 | $121,715 | | Capital in excess of par | $75,153,808 | $74,519,590 | | Accumulated other comprehensive loss | $(17,119,479) | $(15,958,428) | | Accumulated deficit | $(26,060,262) | $(16,945,964) | | Treasury stock | $(5,567,481) | $(5,567,481) | | Total stockholders' equity | $26,528,861 | $36,169,432 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statements summarize cash generated and used in operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | | Net cash flows used in operating activities | $(15,754,344) | $(7,921,438) | | Net cash flows provided by investing activities | $19,755,073 | $398,911 | | Net cash flows used in financing activities | $(825,988) | $(1,656,865) | | Increase (decrease) in cash and cash equivalents | $3,174,741 | $(9,179,392) | | Cash and cash equivalents, end of period | $15,132,969 | $15,111,206 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes provide additional information and context for the condensed consolidated financial statements [Note 1 - Nature of Business and Basis of Presentation](index=7&type=section&id=Note%201%20-%20Nature%20of%20Business%20and%20Basis%20of%20Presentation) Kingstone Companies, Inc. underwrites property and casualty insurance in New York through KICO, with GAAP-compliant financial statements - Kingstone Companies, Inc. operates through its wholly-owned subsidiary, Kingstone Insurance Company (KICO), underwriting property and casualty insurance[29](index=29&type=chunk) - For the three and nine months ended September 30, 2023, **88.5%** and **88.1%** of KICO's direct written premiums, respectively, originated from New York policies[29](index=29&type=chunk) - The financial statements are unaudited and prepared in accordance with U.S. GAAP, with certain reclassifications for ceded premiums having no impact on prior financial results[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 2 – Accounting Policies](index=7&type=section&id=Note%202%20%E2%80%93%20Accounting%20Policies) Accounting policies are detailed, emphasizing estimates for loss reserves, reinsurance receivables, and the non-material impact of ASU 2016-13 - Management relies on estimates and assumptions for financial statements, particularly for loss and loss adjustment expense reserves and reinsurance receivables, which are subject to inherent uncertainty[32](index=32&type=chunk)[33](index=33&type=chunk) - The condensed consolidated financial statements include Kingstone and its wholly-owned subsidiaries (KICO, CMIC Properties, 15 Joys Lane, and Cosi Agency)[33](index=33&type=chunk) - The adoption of ASU 2016-13 (Financial Instruments - Credit Losses) on January 1, 2023, did not have a material impact on the Company's consolidated financial statements[34](index=34&type=chunk) [Note 3 - Investments](index=8&type=section&id=Note%203%20-%20Investments) The investment portfolio breakdown includes fixed-maturity, equity, and other securities, detailing fair value, income, and confirming no credit losses Fixed-Maturity Securities, Available-for-Sale (Fair Value) | Category | Sep 30, 2023 | Dec 31, 2022 | | :---------------------------------------------------------------- | :----------- | :----------- | | U.S. Treasury securities and obligations of U.S. government corporations and agencies | $8,167,845 | $23,869,096 | | Political subdivisions of States, Territories and Possessions | $12,414,354 | $13,141,387 | | Corporate and other bonds Industrial and miscellaneous | $69,465,238 | $72,082,485 | | Residential mortgage and other asset backed securities | $42,739,462 | $45,622,195 | | Total fixed-maturity securities | $132,786,899 | $154,715,163 | Net Investment Income | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Income | $1,531,134 | $1,508,332 | $4,694,376 | $3,734,358 | | Investment expenses | $86,774 | $89,811 | $257,168 | $322,412 | | Net investment income | $1,444,360 | $1,418,521 | $4,437,208 | $3,411,946 | Net (Losses) Gains on Investments | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net realized (losses) gains | $(4,181) | $1,399,906 | $(17,201) | $1,189,006 | | Net unrealized (losses) gains | $(820,189) | $(1,797,564) | $614,844 | $(10,502,442) | | Net (losses) gains on investments | $(824,370) | $(397,658) | $597,643 | $(9,313,436) | - The Company determined that none of the unrealized losses on its fixed-maturity securities were deemed credit losses, citing credit quality, magnitude of losses, investment nature, interest rate environment, and management's intent/ability to hold the investments[54](index=54&type=chunk) [Note 4 - Fair Value Measurements](index=13&type=section&id=Note%204%20-%20Fair%20Value%20Measurements) Fair value hierarchy (Level 1, 2, 3) for investments, including fixed-maturity, equity, hedge funds, and long-term debt, is outlined Fair Value Hierarchy of Investments (Sep 30, 2023) | Category | Level 1 | Level 2 | Level 3 | Total | | :---------------------------------------------------------------- | :-------- | :-------- | :-------- | :---------- | | U.S. Treasury securities and obligations of U.S. government corporations and agencies | $8,167,845 | $- | $- | $8,167,845 | | Political subdivisions of States, Territories and Possessions | $- | $12,414,354 | $- | $12,414,354 | | Corporate and other bonds industrial and miscellaneous | $69,465,238 | $- | $- | $69,465,238 | | Residential mortgage and other asset backed securities | $- | $42,739,462 | $- | $42,739,462 | Hedge Fund Investment at NAV | Category | Sep 30, 2023 | Dec 31, 2022 | | :------------- | :----------- | :----------- | | Hedge fund | $3,213,318 | $2,771,652 | Fair Value of Long-Term Debt (Senior Notes due 2024) | Date | Level 1 | Level 2 | Level 3 | Total | | :----------- | :-------- | :---------- | :-------- | :---------- | | Sep 30, 2023 | $- | $17,314,915 | $- | $17,314,915 | | Dec 31, 2022 | $- | $15,829,096 | $- | $15,829,096 | [Note 5 - Fair Value of Financial Instruments and Real Estate](index=14&type=section&id=Note%205%20-%20Fair%20Value%20of%20Financial%20Instruments%20and%20Real%20Estate) Carrying and fair values of financial instruments and real estate are provided, categorized by fair value hierarchy levels Fair Value of Financial Instruments and Real Estate (Sep 30, 2023) | Instrument | Carrying Value | Fair Value | | :------------------------------------------ | :------------- | :----------- | | Fixed-maturity securities-held-to maturity | $7,053,825 | $5,699,498 | | Cash and cash equivalents | $15,132,969 | $15,132,969 | | Premiums receivable, net | $13,326,369 | $13,326,369 | | Reinsurance receivables, net | $84,257,926 | $84,257,926 | | Real estate, net of accumulated depreciation | $2,015,414 | $2,800,000 | | Reinsurance balances payable | $20,263,484 | $20,263,484 | [Note 6 – Property and Casualty Insurance Activity](index=15&type=section&id=Note%206%20%E2%80%93%20Property%20and%20Casualty%20Insurance%20Activity) Property and casualty insurance activities are detailed, including premiums, loss reserves, actuarial methods, reinsurance, and ceding commission revenue Premiums Earned (9 Months Ended Sep 30) | Metric | 2023 | 2022 | | :-------------------------- | :----------- | :----------- | | Direct premiums written | $147,236,636 | $147,353,911 | | Ceded premiums written | $(91,009,861) | $(81,313,211) | | Net premiums written | $56,226,775 | $66,040,700 | | Net premiums earned | $85,701,467 | $83,936,424 | Loss and Loss Adjustment Expense Reserves Reconciliation | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | | Balance at beginning of period | $118,339,513 | $94,948,745 | | Total incurred | $66,552,565 | $63,624,755 | | Total paid | $67,860,922 | $62,713,420 | | Balance at end of period | $121,674,947 | $106,928,898 | - The Company utilizes various actuarial reserving methodologies, including Paid Loss Development, Incurred Loss Development, Bornhuetter-Ferguson methods, Incremental Claim-Based Methods, and Frequency/Severity Based Methods, to estimate loss and LAE reserves[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) Ceding Commission Revenue (9 Months Ended Sep 30) | Metric | 2023 | 2022 | | :-------------------------- | :----------- | :----------- | | Provisional ceding commissions earned | $15,733,145 | $14,116,044 | | Contingent ceding commissions earned | $660,799 | $167,033 | | Total ceding commission revenue | $16,393,944 | $14,283,077 | [Note 7 – Debt](index=20&type=section&id=Note%207%20%E2%80%93%20Debt) Debt obligations are detailed, including FHLBNY, 2022 Senior Notes, equipment financing, and a Leverage Maintenance Test waiver - KICO is a member of FHLBNY, providing access to flexible, low-cost funding, with eligible collateral including residential and commercial mortgage-backed securities, and U.S. Treasury securities[98](index=98&type=chunk) Debt Balances | Debt Type | Sep 30, 2023 | Dec 31, 2022 | | :---------------- | :----------- | :----------- | | 2022 Notes, net | $18,129,327 | $17,252,868 | | Equipment financing | $7,095,366 | $7,905,655 | | Total Debt | $25,224,693 | $25,158,523 | - The Company issued **$19,950,000** of **12.0%** Senior Notes due December 30, 2024, as part of a Note and Warrant Exchange Agreement, with interest payable semi-annually[100](index=100&type=chunk)[101](index=101&type=chunk) - As of September 30, 2023, the Company's leverage ratio was **31.4%**, exceeding the **30%** limit, but a waiver was obtained from noteholders on November 7, 2023[105](index=105&type=chunk)[161](index=161&type=chunk) [Note 8 – Stockholders' Equity](index=22&type=section&id=Note%208%20%E2%80%93%20Stockholders%27%20Equity) Changes in stockholders' equity are outlined, covering dividend suspension, equity plans, and the issuance and valuation of warrants - Dividends on Common Stock were suspended for the nine months ended September 30, 2023, compared to **$1,277,066** paid in the prior year, following a Board decision on November 11, 2022[108](index=108&type=chunk) - The 2014 Equity Participation Plan's authorized shares were increased to **1,900,000** on August 9, 2023[109](index=109&type=chunk) Stock-Based Compensation Expense | Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Stock options | $-0- | $2,000 | $-0- | $9,000 | | Restricted stock awards | $207,000 | $186,000 | $636,000 | $1,180,000 | | Employee Stock Purchase Plan | $-0- | $5,000 | $-0- | $16,000 | - Warrants to purchase **969,525** shares of Common Stock were issued on December 15, 2022, with a fair value of **$993,200**, exercisable at **$1.00** per share through December 30, 2025[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) [Note 9 – Income Taxes](index=24&type=section&id=Note%209%20%E2%80%93%20Income%20Taxes) Income tax policies are detailed, including deferred tax assets/liabilities, NOL carryovers, and state NOL valuation allowance Net Deferred Income Tax Asset | Metric | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Total deferred tax assets | $18,106,252 | $16,296,969 | | Total deferred tax liabilities | $5,317,092 | $5,965,811 | | Net deferred income tax asset | $12,789,160 | $10,331,158 | - The Company has federal net operating loss (NOL) carryovers of **$6,411,993** (Sep 30, 2023) with no expiration, and state NOLs of approximately **$39,317,000** (Sep 30, 2023) with a valuation allowance due to uncertainty of utilization[129](index=129&type=chunk) - A deferred tax liability of **$759,543** related to the investment in KICO is maintained due to a temporary difference with an indefinite life[130](index=130&type=chunk) [Note 10 – Loss Per Common Share](index=26&type=section&id=Note%2010%20%E2%80%93%20Loss%20Per%20Common%20Share) The calculation of basic and diluted loss per common share is explained, noting anti-dilutive securities were excluded from diluted EPS Weighted Average Common Shares Outstanding | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Weighted average number of shares outstanding | 10,756,156 | 10,645,675 | 10,754,709 | 10,640,290 | | Weighted average number of shares outstanding, used for computing diluted loss per share | 10,756,156 | 10,645,675 | 10,754,709 | 10,640,290 | - No options, warrants, or restricted stock awards were included in the computation of diluted loss per common share for the three and nine months ended September 30, 2023 and 2022, as they were anti-dilutive[135](index=135&type=chunk) [Note 11 - Commitments and Contingencies](index=26&type=section&id=Note%2011%20-%20Commitments%20and%20Contingencies) Commitments and contingencies are detailed, including legal proceedings, operating leases, executive agreements, and leadership changes - The Company is involved in various legal proceedings in the ordinary course of business, with potential liabilities considered in loss and LAE estimates[137](index=137&type=chunk) - The Company has a non-cancellable operating lease for its KICO office facility expiring March 31, 2024[138](index=138&type=chunk) - Effective October 1, 2023, Barry Goldstein transitioned from President and CEO, with his salary reduced to **$300,000** per annum and bonus eligibility removed[148](index=148&type=chunk) - Effective October 1, 2023, Meryl Golden was appointed President and Chief Executive Officer of the Company[155](index=155&type=chunk)[162](index=162&type=chunk) [Note 12 – Employee Benefit Plans](index=29&type=section&id=Note%2012%20%E2%80%93%20Employee%20Benefit%20Plans) Employee benefit plans are covered, including the 401(k) Plan with matching contributions and the terminated Deferred Compensation Plan - The Company matches **100%** of participant contributions up to **4%** in its 401(k) Plan[157](index=157&type=chunk) 401(k) Plan Expense | Period | Expense | | :-------------------------- | :-------- | | 3 Months Ended Sep 30, 2023 | $90,000 | | 3 Months Ended Sep 30, 2022 | $71,000 | | 9 Months Ended Sep 30, 2023 | $249,000 | | 9 Months Ended Sep 30, 2022 | $207,000 | - The Deferred Compensation Plan was terminated effective December 22, 2022, with termination payments to participants to be made between December 22, 2023, and December 22, 2024[158](index=158&type=chunk) [Note 13 – Subsequent Events](index=29&type=section&id=Note%2013%20%E2%80%93%20Subsequent%20Events) Significant subsequent events include a Leverage Maintenance Test waiver and Meryl Golden's appointment as CEO - On November 7, 2023, a majority of 2022 Note holders agreed to waive the Leverage Maintenance Test as of September 30, 2023[161](index=161&type=chunk) - Effective October 1, 2023, Meryl Golden was appointed President and Chief Executive Officer of the Company[162](index=162&type=chunk) [Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202%20%E2%80%94%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis covers financial condition, operational results, insurance business, key metrics, strategic initiatives, and outlook [Overview of Business and Product Lines](index=30&type=section&id=Overview%20of%20Business%20and%20Product%20Lines) Kingstone operates through KICO, underwriting property and casualty insurance in New York, with revenue from premiums, ceding commissions, and investments - Kingstone's primary business is property and casualty insurance through KICO, with **88.5%** (3 months) and **88.1%** (9 months) of direct written premiums from New York policies[163](index=163&type=chunk) - The Company's main product lines are personal lines (homeowners, dwelling fire, etc) and livery physical damage[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk] [Key Measures and Critical Accounting Policies](index=30&type=section&id=Key%20Measures%20and%20Critical%20Accounting%20Policies) Key financial metrics for insurance underwriting and critical accounting policies, including loss reserves and reinsurance, are defined - Key measures for analyzing insurance underwriting include: Net loss ratio, Net underwriting expense ratio, Net combined ratio, and Underwriting income[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk] - Critical accounting policies and estimates relate to reserves for loss and LAE, amounts recoverable from reinsurers, deferred income taxes, allowance for credit losses of investment securities, and valuation of warrants[179](index=179&type=chunk) [Strategic Initiatives: Kingstone 2.0 and 3.0](index=31&type=section&id=Strategic%20Initiatives%3A%20Kingstone%202.0%20and%203.0) Kingstone 2.0 focused on modernization, while Kingstone 3.0 targets non-Core business reduction, pricing adjustments, and expense control - Kingstone 2.0 initiatives included strengthening management, reducing expenses via technology, developing segmented products (Kingstone Select), and better managing catastrophe exposure[180](index=180&type=chunk) - Kingstone 3.0 strategy focuses on: 1) Aggressively reducing non-Core business (policy count down **38.9%** YoY as of Sep 30, 2023) 2) Adjusting pricing to stay ahead of loss trends (average written premium for Legacy Core homeowners increased **25.5%** over 12 months) 3) Tightly managing reinsurance requirements and costs 4) Continuing expense reduction to achieve a **33%** net expense ratio by year-end 2024 (achieved **33.0%** for 9 months ended Sep 30, 2023)[181](index=181&type=chunk)[183](index=183&type=chunk] Policies In Force and Direct Written Premiums (YoY Change as of Sep 30, 2023) | Metric | Core Policies In Force | Core Direct Written Premiums | Non-Core Policies In Force | Non-Core Direct Written Premiums | | :---------------- | :--------------------- | :--------------------------- | :------------------------- | :----------------------------- | | % change (YoY) | -4.5% | 4.7% | -38.9% | -43.9% | [Consolidated Results of Operations (Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022)](index=32&type=section&id=Consolidated%20Results%20of%20Operations%20%28Nine%20Months%20Ended%20September%2030%2C%202023%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202022%29) The Company reported a reduced net loss of $9.1 million for the nine months ended September 30, 2023, driven by increased revenues and an improved net combined ratio Consolidated Financial Highlights (9 Months Ended Sep 30) | Metric | 2023 ($ thousands) | 2022 ($ thousands) | Change ($ thousands) | Percent Change | | :----------------------------------- | :----------------- | :----------------- | :------------------- | :------------- | | Total revenues | $107,584 | $93,068 | $14,517 | 15.6% | | Total expenses | $118,848 | $116,075 | $2,774 | 2.4% | | Net loss | $(9,114) | $(18,575) | $9,461 | 50.9% | | Net loss ratio | 77.7% | 75.8% | 1.9 ppt | 2.5% | | Net underwriting expense ratio | 33.0% | 37.2% | (4.2) ppt | (11.3)% | | Net combined ratio | 110.7% | 113.0% | (2.3) ppt | (2.0)% | - Direct written premiums remained stable at **$147.2 million**, with a **9.6%** increase in Core business premiums offset by a **39.5%** decrease in non-Core business premiums, aligning with the Kingstone 3.0 strategy[189](index=189&type=chunk)[192](index=192&type=chunk] - Net investment income increased by **30.0%** to **$4.4 million**, primarily due to a prior year adjustment and higher interest rates on cash balances[202](index=202&type=chunk) - Net loss and LAE increased by **4.6%** to **$66.6 million**, with the net loss ratio rising to **77.7%** due to a larger impact from catastrophe losses (**8.5** points in 2023 vs **4.1** points in 2022)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk] - Interest expense surged by **119.3%** to **$3.0 million**, driven by the **12%** interest rate on the 2022 Notes and equipment financing[221](index=221&type=chunk) [Consolidated Results of Operations (Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022)](index=38&type=section&id=Consolidated%20Results%20of%20Operations%20%28Three%20Months%20Ended%20September%2030%2C%202023%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202022%29) The Company's net loss decreased to $3.5 million for the three months ended September 30, 2023, due to lower expenses and improved net combined ratio Consolidated Financial Highlights (3 Months Ended Sep 30) | Metric | 2023 ($ thousands) | 2022 ($ thousands) | Change ($ thousands) | Percent Change | | :----------------------------------- | :----------------- | :----------------- | :------------------- | :------------- | | Total revenues | $34,237 | $35,538 | $(1,303) | (3.7)% | | Total expenses | $38,633 | $40,097 | $(1,465) | (3.7)% | | Net loss | $(3,538) | $(3,998) | $460 | 11.5% | | Net loss ratio | 78.5% | 75.0% | 3.5 ppt | 4.7% | | Net underwriting expense ratio | 31.7% | 36.9% | (5.2) ppt | (14.1)% | | Net combined ratio | 110.2% | 111.9% | (1.7) ppt | (1.5)% | - Direct written premiums decreased by **4.8%** to **$52.0 million**, primarily due to a **5.5%** decrease in personal lines premiums, partially offset by a **7.1%** increase in livery physical damage premiums[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk] - Net premiums earned decreased by **4.8%** to **$27.9 million**, influenced by lower direct written premiums and increased catastrophe reinsurance rates[238](index=238&type=chunk) - Ceding commission revenue increased by **13.3%** to **$5.5 million**, driven by higher provisional and contingent ceding commissions[239](index=239&type=chunk) - Net loss and LAE remained stable at **$21.9 million**, but the net loss ratio increased to **78.5%** due to a higher impact from catastrophe losses (**7.7** points in 2023 vs **1.1** points in 2022)[246](index=246&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk] - Other underwriting expenses decreased by **13.2%** to **$6.3 million**, mainly due to reductions in salaries, credit card fees, and policy management system fees[254](index=254&type=chunk) [Additional Financial Information (Segment Reporting)](index=44&type=section&id=Additional%20Financial%20Information%20%28Segment%20Reporting%29) Detailed segment reporting for the insurance underwriting business includes premiums, loss expenses by product type, and key performance measures Gross Premiums Written by Product Type (9 Months Ended Sep 30) | Product Type | 2023 | 2022 | | :----------------------- | :----------- | :----------- | | Personal lines | $136,601,070 | $138,197,960 | | Livery physical damage | $10,559,310 | $9,036,713 | | Other | $76,256 | $119,238 | | Total gross premiums written | $147,236,636 | $147,353,911 | Net Loss Ratio by Product Type (9 Months Ended Sep 30) | Product Type | 2023 | 2022 | | :----------------------- | :----- | :----- | | Personal lines | 79.0% | 74.3% | | Livery physical damage | 39.2% | 46.1% | | Other | 205.2% | -13.9% | | Total without commercial lines | 77.3% | 74.9% | | Total | 77.7% | 75.8% | Key Measures for Insurance Underwriting Business (9 Months Ended Sep 30) | Metric | 2023 | 2022 | | :----------------------------------- | :----- | :----- | | Net loss ratio | 77.7% | 75.8% | | Net underwriting expense ratio | 33.0% | 37.2% | | Net combined ratio | 110.7% | 113.0% | [Investments Portfolio Analysis](index=47&type=section&id=Investments%20Portfolio%20Analysis) A comprehensive analysis of the investment portfolio covers fixed-maturity, equity, and other securities, detailing fair value, credit ratings, yields, and maturity [Fixed-Maturity Securities](index=47&type=section&id=Fixed-Maturity%20Securities) This section details the Company's fixed-maturity securities, including available-for-sale and held-to-maturity categories Fixed-Maturity Securities, Available-for-Sale (Fair Value) | Category | Sep 30, 2023 | Dec 31, 2022 | | :---------------------------------------------------------------- | :----------- | :----------- | | U.S. Treasury securities and obligations of U.S. government corporations and agencies | $8,167,845 | $23,869,096 | | Political subdivisions of States, Territories and Possessions | $12,414,354 | $13,141,387 | | Corporate and other bonds Industrial and miscellaneous | $69,465,238 | $72,082,485 | | Residential mortgage and other asset backed securities | $42,739,462 | $45,622,195 | | Total fixed-maturity securities | $132,786,899 | $154,715,163 | [Equity Securities](index=48&type=section&id=Equity%20Securities) This section provides a breakdown of the Company's equity securities, including preferred and common stocks and exchange-traded funds Equity Securities (Fair Value) | Category | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Preferred stocks | $10,199,241 | $9,994,629 | | Common stocks and exchange traded funds | $3,708,410 | $3,839,761 | | Total | $13,907,651 | $13,834,390 | [Other Investments](index=48&type=section&id=Other%20Investments) This section details other investments, specifically the hedge fund measured at fair value Other Investments (Hedge Fund Fair Value) | Category | Sep 30, 2023 | Dec 31, 2022 | | :------------- | :----------- | :----------- | | Hedge fund | $3,213,318 | $2,771,652 | [Held-to-Maturity Securities](index=49&type=section&id=Held-to-Maturity%20Securities) This section details the Company's held-to-maturity securities, including U.S. Treasury, municipal, and corporate bonds Held-to-Maturity Securities (Fair Value) | Category | Sep 30, 2023 | Dec 31, 2022 | | :---------------------------------------------------------------- | :----------- | :----------- | | U.S. Treasury securities | $1,147,493 | $1,222,883 | | Political subdivisions of States, Territories and Possessions | $489,990 | $500,730 | | Exchange traded debt | $252,500 | $275,000 | | Corporate and other bonds Industrial and miscellaneous | $3,809,515 | $4,601,775 | | Total | $5,699,498 | $6,600,388 | [Credit Rating of Fixed-Maturity Securities](index=50&type=section&id=Credit%20Rating%20of%20Fixed-Maturity%20Securities) This section analyzes the credit quality and average yield of the Company's fixed-maturity securities portfolio Credit Quality of Available-for-Sale Fixed-Maturity Securities (Fair Value) | Rating Category | Sep 30, 2023 (Estimated Fair Value) | Sep 30, 2023 (% of Total) | Dec 31, 2022 (Estimated Fair Value) | Dec 31, 2022 (% of Total) | | :---------------------------------------------------------------- | :---------------------------------- | :------------------------ | :---------------------------------- | :------------------------ | | U.S. Treasury securities | $8,167,845 | 6.2% | $23,869,096 | 15.4% | | Total corporate and municipal bonds | $80,238,403 | 60.4% | $83,572,384 | 54.1% | | Total residential mortgage backed, asset backed, and other collateralized obligations | $44,380,651 | 33.4% | $47,273,683 | 30.5% | | Total | $132,786,899 | 100.0% | $154,715,163 | 100.0% | Average Yield by Fixed-Maturity Security Type | Category | Sep 30, 2023 | Dec 31, 2022 | | :---------------------------------------------------------------- | :----------- | :----------- | | U.S. Treasury securities and obligations of U.S. government corporations and agencies | 4.53% | 2.58% | | Political subdivisions of States, Territories and Possessions | 3.61% | 3.58% | | Corporate and other bonds Industrial and miscellaneous | 3.72% | 3.68% | | Residential mortgage backed securities | 2.97% | 2.70% | | Total | 3.53% | 3.20% | [Fair Value Consideration](index=51&type=section&id=Fair%20Value%20Consideration) This section discusses the fair value considerations for the investment portfolio, including pricing levels and credit loss assessments - As of September 30, 2023, and December 31, 2022, **62%** and **65%**, respectively, of the investment portfolio recorded at fair value was priced based on quoted market prices (Level 1)[286](index=286&type=chunk) - The Company determined that none of the gross unrealized losses on its 150 fixed-maturity securities (available-for-sale) at September 30, 2023, were credit losses, based on credit quality, loss magnitude, investment nature, interest rate environment, and management's intent to hold[289](index=289&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity and capital resources are discussed, covering cash flows, reinsurance, inflation impact, and the absence of material off-balance sheet arrangements [Cash Flows](index=52&type=section&id=Cash%20Flows) This section analyzes cash flows from operating, investing, and financing activities, highlighting key changes and sources - Primary cash flow sources for KICO include direct premiums, ceding commissions, loss recovery payments, investment income, and proceeds from investment sales/maturities[290](index=290&type=chunk) - KICO paid a **$1,250,000** dividend and a **$2,700,000** distribution from paid-in capital to the holding company during the nine months ended September 30, 2023[291](index=291&type=chunk) Cash Flow Summary (9 Months Ended Sep 30) | Cash Flow Activity | 2023 | 2022 | | :----------------------------------- | :------------- | :------------- | | Operating activities | $(15,754,344) | $(7,921,438) | | Investing activities | $19,755,073 | $398,911 | | Financing activities | $(825,988) | $(1,656,865) | | Net increase (decrease) in cash and cash equivalents | $3,174,741 | $(9,179,392) | | Cash and cash equivalents, end of period | $15,132,969 | $15,111,206 | - Net cash used in operating activities increased by **$7,833,000** to **$15,754,000** in Nine Months 2023, primarily due to fluctuations in operating assets and liabilities[294](index=294&type=chunk) - Net cash provided by investing activities increased by **$19,356,000** to **$19,755,000** in Nine Months 2023, driven by net cash from the investment portfolio and decreased fixed asset acquisitions[296](index=296&type=chunk) [Reinsurance](index=53&type=section&id=Reinsurance) This section details the Company's reinsurance program, including quota share, excess of loss, and catastrophe treaties - The Company utilizes quota share, excess of loss, and catastrophe reinsurance treaties to manage capital and financial ratios, and to provide income through ceding commissions[298](index=298&type=chunk)[299](index=299&type=chunk] - New quota share (**30%** personal lines), excess of loss, and catastrophe reinsurance treaties became effective January 1, 2023, and July 1, 2023, respectively[298](index=298&type=chunk)[299](index=299&type=chunk] [Inflation](index=54&type=section&id=Inflation) This section discusses the impact of inflation on loss and loss adjustment expenses and the investment portfolio - Inflation impacts loss and loss adjustment expenses, especially medical and hospital rates, and influences interest rates, affecting the investment portfolio and yields[303](index=303&type=chunk)[304](index=304&type=chunk] - Continuing economic inflation in Nine Months 2023 impacted loss and LAE, and if trends persist, could negatively affect results of operations[305](index=305&type=chunk) [Off-Balance Sheet Arrangements](index=54&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements that would significantly affect the Company's financials - The Company has no material off-balance sheet arrangements that would significantly affect its financial condition, revenues, or liquidity[306](index=306&type=chunk) [Outlook](index=55&type=section&id=Outlook) The outlook indicates net premiums earned will be influenced by written premium volume, competitive markets, and underwriting changes prioritizing profitability - Net premiums earned are expected to be impacted by net written premium volume, which is influenced by competitive market conditions and general economic conditions[308](index=308&type=chunk) - Underwriting changes emphasizing profitability over growth are anticipated to lead to a slowdown in premium growth, especially in new business[308](index=308&type=chunk) [Item 3 — Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company, as a smaller reporting company, is not required to provide market risk disclosures - The Company is exempt from providing quantitative and qualitative disclosures about market risk as it is a smaller reporting company[309](index=309&type=chunk) [Item 4 — Controls and Procedures](index=55&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control - As of September 30, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective[310](index=310&type=chunk)[311](index=311&type=chunk] - There have been no material changes in internal control over financial reporting during the most recently completed fiscal quarter[312](index=312&type=chunk) - Internal control over financial reporting has inherent limitations and may not prevent or detect all misstatements[313](index=313&type=chunk)[314](index=314&type=chunk] PART II — OTHER INFORMATION This section provides other required information, including legal proceedings, risk factors, and exhibits [Item 1 — Legal Proceedings](index=55&type=section&id=Item%201%20%E2%80%94%20Legal%20Proceedings) No material legal proceedings are reported - The Company has no material legal proceedings to disclose[316](index=316&type=chunk) [Item 1A — Risk Factors](index=55&type=section&id=Item%201A%20%E2%80%94%20Risk%20Factors) No material changes to previously disclosed risk factors have occurred since the 2022 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in Part I, Item 1A of the Company's 2022 Annual Report[317](index=317&type=chunk) [Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds are reported - There are no unregistered sales of equity securities or use of proceeds to report[318](index=318&type=chunk)[325](index=325&type=chunk] [Item 3 — Defaults Upon Senior Securities](index=56&type=section&id=Item%203%20%E2%80%94%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities are reported - The Company has no defaults upon senior securities to report[319](index=319&type=chunk) [Item 4 — Mine Safety Disclosures](index=56&type=section&id=Item%204%20%E2%80%94%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[320](index=320&type=chunk) [Item 5 — Other Information](index=56&type=section&id=Item%205%20%E2%80%94%20Other%20Information) No other information is reported - There is no other information to report[321](index=321&type=chunk) [Item 6 — Exhibits](index=56&type=section&id=Item%206%20%E2%80%94%20Exhibits) Exhibits filed with the Quarterly Report include corporate documents, CEO/CFO certifications, and XBRL taxonomy documents - Exhibits include the Restated Certificate of Incorporation, By-laws, Rule 13a-14(a)/15d-14(a) Certifications of CEO and CFO, and XBRL Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase documents[322](index=322&type=chunk) [Signatures](index=56&type=section&id=Signatures) The report includes signatures from the Chief Executive Officer and Chief Financial Officer, certifying its filing - The report is signed by Meryl Golden, Chief Executive Officer, and Jennifer Gravelle, Chief Financial Officer, on November 20, 2023[324](index=324&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to _________ Commission File Number 0-1665 KINGSTONE COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 36-2476480 (State ...

Financial Data and Key Metrics Changes - For Q2 2023, the company reported a net loss of $0.5 million, or $0.05 per diluted share, compared to a net loss of $5.4 million, or $0.51 per diluted share for the same period last year [12] - Direct written premiums decreased by 4.3% to $47.6 million, down $2.1 million from $49.8 million in the prior year [12] - The attritional loss ratio improved to 61.7%, 3.8 points lower than the same quarter last year, driven by lower frequency and better risk selection [13] - Operating EBITDA for the current quarter was $1.02 million, or $0.10 per share [15] Business Line Data and Key Metrics Changes - In New York, direct written premiums increased by 5% while premiums outside New York declined by 46% [10] - Policies in force outside New York were reduced by 27% through Q2, with an anticipated 50% reduction by year-end [9] - The net loss ratio for personal lines outside New York was 108.9%, while it was 64.7% for New York [28] Market Data and Key Metrics Changes - Kingstone's market share in New York homeowners is less than 2%, indicating significant growth potential [8] - The company has received approval for a 6.3% increase in New York homeowners and an 18.2% increase in Massachusetts [29] Company Strategy and Development Direction - The company is focusing on returning to its roots as a premier writer of coastal property insurance in Downstate New York and reducing its footprint outside of New York [8] - The strategy includes replacing unprofitable policies outside New York with profitable ones in New York [28] Management's Comments on Operating Environment and Future Outlook - Management believes the worst is behind the company and is optimistic about future growth opportunities in New York [6][24] - The company is confident that continued execution of its strategic plan will lead to consistent profitability [30] Other Important Information - The company has tightened expenses, leading to a reduction in headcount, now at the lowest level since 2017 [14] - The company is experiencing elevated large losses primarily driven by inflation, but is actively managing these risks [11] Q&A Session Summary Question: How does the company view rate versus underlying claims inflation on the core New York book? - Management noted a decline in frequency for both water and fire claims, indicating positive signs, but acknowledged a double-digit increase in severity [17] Question: What is the competitive environment in New York? - The market is described as very tight, with many competitors tightening guidelines and reducing business, presenting a significant opportunity for Kingstone [62] Question: What combined ratio is needed to break even in the future? - Management indicated that a combined ratio below 100% is typically expected to be profitable, but additional adjustments may be needed to cover other operational costs [46][47] Question: What is the current book yield of the investment portfolio? - The book yield is currently at 3.63% [49] Question: When will the non-New York business no longer impact the company? - Management anticipates that the non-New York business will continue to be a drag on results through the end of next year, but it will decrease significantly as policies are non-renewed [51][52]