Kingstone(KINS)2025-03-14 13:59Financial Data and Key Metrics Changes - Kingstone Companies reported a record-breaking fourth quarter and full year 2024, achieving a net income of 0.40 per diluted share for the quarter, and 6.2 million last year [23][24] - Direct written premiums for Q4 increased by 37%, with a 49% increase in core direct written premiums, while the overall direct written premiums for the year were up 21% [24][8] - The combined ratio improved by 11 percentage points to 78.5% for the quarter and by 25.3 percentage points to 80% for the year [25][26] Business Line Data and Key Metrics Changes - Core business growth was driven by the exit of two competitors, leading to a 49% growth in core direct written premiums and a 44% increase in overall policy count [9][24] - The average premium for personal lines increased by almost 20% in Q4 compared to the same quarter in 2023 [24] - The company strategically reduced its non-core business, which saw a 60% decrease in direct written premiums and a 65% decrease in policies-in-force [24] Market Data and Key Metrics Changes - The hard market conditions in Downstate New York persist, with limited competition from other companies, primarily MGAs and E&S writers [37][38] - The company is experiencing growth in new business counts and average premiums, indicating a favorable market environment [38][56] Company Strategy and Development Direction - Kingstone plans to focus on its core state of New York while exploring expansion into other catastrophe-exposed geographies [11] - The company aims to maintain a low expense ratio to enhance competitiveness and margins, with a goal to reduce the expense ratio by another point this year [46][12] - Significant resources are being allocated to understand potential new markets and prioritize expansion thoughtfully [44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving core business direct written premium growth between 15% and 25% for 2025, despite the exit of competitors [20][55] - The company anticipates a favorable first quarter with more snow and colder temperatures compared to the previous year, but without any material catastrophe events [49][55] - Management remains optimistic about the trajectory of the business and its ability to generate long-term value for shareholders [61] Other Important Information - Kingstone has eliminated its debt, saving approximately $800,000 in interest expense for 2025 [14] - The company achieved a book yield of 3.86% on its investment portfolio [59] Q&A Session Summary Question: Growth expectations for 2025 and competitive environment - Management noted that hard market conditions persist in Downstate New York, with limited competition from new entrants, allowing for continued growth in new business counts and average premiums [37][38] Question: Potential expansion plans - Management confirmed plans to explore both New England and other states, emphasizing a thoughtful approach to expansion based on market needs and regulatory environments [41][44] Question: Improvement in expense ratio - Management aims to reduce the expense ratio by another point this year, focusing on maintaining low expenses to enhance competitiveness [46] Question: First quarter weather characterization - Management indicated that this winter has been colder with more snow than last year, but without significant catastrophe events, leading to a positive outlook for Q1 [49][55]