Kingstone(KINS) - 2025 Q4 - Annual Report

Financial Performance - The net balance of loss and loss adjustment expenses (LAE) at the end of 2025 was $107,306,253, an increase of 14.3% from $93,887,791 at the end of 2024[64] - Total incurred losses for the current year in 2025 were $85,349,385, compared to $64,414,543 in 2024, reflecting a year-over-year increase of 32.5%[64] - The total paid losses in 2025 amounted to $70,847,260, up from $57,276,137 in 2024, representing a 23.5% increase[64] - The gross reserves as of December 31, 2025, were $140,538,618, an increase from $126,210,428 at the end of 2024, marking an 11.7% growth[64] - The net reserve estimated as of December 31, 2025, was $107,306,000, reflecting a 14.3% increase from the previous year[68] Reinsurance and Risk Management - The company entered into a new 27% quota share reinsurance treaty effective January 1, 2024, for its personal lines business, which will last until January 1, 2025[71] - The maximum net retention for any one personal lines occurrence was reduced from $730,000 to $530,000 under the renewed excess of loss treaty effective January 1, 2024[72] - The company’s reinsurance program is structured to reduce net liability and expand underwriting capacity while maintaining obligations to policyholders[69] - In 2025, the company purchased catastrophe reinsurance providing coverage of up to $440,000,000 for losses associated with a single event[75] - The 2024/2025 Treaty covered 5.0% of catastrophe losses, resulting in a net retention of $4,750,000 for the first event of a named storm catastrophe occurrence[75] - In 2025, the company purchased winter storm specific catastrophe reinsurance providing coverage of 90% of $5,000,000 after the first $5,000,000 of gross retention[76] - The company has reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000 effective July 1, 2024[75] Catastrophe Events - The company experienced twelve catastrophe events in 2025, with none being named storms, and two classified as winter storms[78] - The net loss ratio increased by 1.2 percentage points in 2025 due to catastrophe events, compared to an increase of 1.9 percentage points in 2024[78] Regulatory Compliance - The company is subject to insurance holding company laws in New York, requiring registration and annual financial disclosures to the New York State Department of Financial Services[79] - The DFS adopted amendments to cybersecurity regulations on November 1, 2023, requiring enhanced management of cybersecurity risks[85] - The DFS commenced its examination of KICO in 2023 for the years 2019 through 2022, which was completed in 2024[101] Capital and Surplus - KICO's Total Adjusted Capital (TAC) was above its Authorized Control Level (ACL) with a ratio of 5.30 as of December 31, 2025, complying with New York's RBC requirements[103] - As of December 31, 2025, KICO's unassigned surplus was $36,152,023, with a maximum allowable dividend to the Holding Company restricted to $1,969,796 without DFS approval[104] - KICO had three ratios outside the usual range as per the Insurance Regulatory Information System (IRIS) as of December 31, 2025[105] Workforce - KICO had 113 employees as of December 31, 2025, with no employees covered by a collective bargaining agreement[110] Accounting Principles - The statutory accounting principles (SAP) used by KICO focus on measuring policyholder surplus and are essential for determining available funds for dividends[108]