Kingstone(US:KINS)2019-11-12 16:53Financial Data and Key Metrics Changes - The company reported a significant headline loss for Q3 2019, which has caused disappointment among stakeholders [6] - An adverse development of $5 million in prior year reserves was recorded, with $4.4 million attributed to commercial lines [19][20] - The company aims to return to profitability in 2020, focusing on improving metrics employed by A.M. Best [12][13] Business Line Data and Key Metrics Changes - The majority of adverse development recorded in 2019 (80%) came from commercial liability lines, which have been shut down [7][8] - Personal lines business remains stable, with fast-paying property claims that are less affected by volatility [23] Market Data and Key Metrics Changes - The company has increased homeowner's rates effective November 1st and applied for increases in other states [14] - The expected growth rate for personal lines is projected to be in the low-to-mid-teens moving forward [31] Company Strategy and Development Direction - The company is shifting its focus from growth to profitability, reducing growth mandates to improve financial health [13] - A new management team member, Meryl Golden, has joined to bring energy and expertise to the company [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the loss of trust among shareholders and is committed to restoring it over time [26] - The company is confident that reserve levels have stabilized and will allow for a focus on profitable personal lines business [23][60] Other Important Information - The company is reviewing reinsurance options for commercial liability reserves, including a full loss portfolio transfer [22] - The average claim size for commercial lines has turned out to be higher than originally anticipated, impacting reserve estimates [20][43] Q&A Session Summary Question: Differences between internal and external reserve estimates - The company is booking to the central estimate based on internal review, confirming alignment with external actuary estimates [29][30] Question: Impact of profitability focus on growth rates - The expected growth rate for personal lines is projected to be in the low-to-mid-teens due to the new profitability focus [31] Question: Likelihood of not purchasing reinsurance - The company is comfortable with current reserves but is still in the market for reinsurance options [36][37] Question: Details on open claims and policy limits - Most open claims have a $1 million policy limit, with average paid claims severity now at about $50,000 [42][43] Question: Impact of commercial lines on future profitability - The company is non-renewing all commercial lines policies, which will be completed by the end of Q3 next year [60]