Kingstone(US:KINS)2025-05-09 13:32Financial Data and Key Metrics Changes - The company reported a net income of $3,900,000 or $0.27 per diluted share, marking a 172% increase in net income compared to the prior year [3][16] - Direct written premium growth was 18% overall, with a 23% increase in the core business, while non-core business saw a 64% reduction as planned [3][8] - The combined ratio was 93.7%, close to the 93.3% from the same quarter last year, while operating income nearly tripled to $2,400,000 [12][16] Business Line Data and Key Metrics Changes - The select homeowners program's cumulative frequency decreased for thirteen consecutive quarters, with a frequency of 1.6% compared to 2.3% for the legacy product [7] - Core policies in force increased by 10% year-over-year, led by a 19% increase in homeowners policies [9] - New business policy count increased by 68%, contributing to the growth in core business premiums [8] Market Data and Key Metrics Changes - The company expects to generate $25,000,000 to $35,000,000 in premiums from the Amgard transaction over a twelve-month period [8][16] - The hard market conditions in Downstate New York remain stable, with companies beginning to increase their underwriting appetite [8] Company Strategy and Development Direction - The company plans to focus on its core state of New York and capitalize on hard market conditions to maximize profitable growth [7][16] - There is a cautious approach to potential expansion into other states, with a strategy for 2026 and beyond, ensuring that products match rate to risk [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business, reaffirming guidance for the calendar year 2025 [16] - The company is confident in its ability to generate long-term value for shareholders through disciplined execution and strategic planning [16] Other Important Information - The company finalized the sale of its headquarters, resulting in a one-time after-tax gain of $1,500,000, and fully paid off remaining holding company debt, saving over $800,000 in annual interest [12] - Net investment income increased by 36% to $2,000,000, driven by strong cash generation from operations [13] Q&A Session Summary Question: Fire losses details - Fire losses were 3.3 points higher than anticipated, offset by lower catastrophe losses [20] - Management is not concerned about these fire losses as they are considered random events [21] Question: Combined ratio guidance - The combined ratio guidance was not updated due to the offsetting nature of fire and catastrophe losses [22][23] Question: Capital management priorities - The Board is discussing restoring dividends, but share buybacks are not envisioned in the near future [24][25] Question: Amgard transaction pricing - Amgard's pricing is expected to be higher, and the company is uncertain about the impact of the transaction [26][27] Question: CFO search update - A retained search firm has been hired, and interviews are ongoing for the CFO position [28] Question: Net investment income growth - The increase in investment income is due to cash generation from profitability and strategic investment portfolio management [38] Question: Intrinsic value of Kingstone - Management did not provide specific insights on intrinsic value but acknowledged the importance of increasing company value [40] Question: Expansion into other jurisdictions - The focus remains on Downstate New York for 2025, with potential expansion considered for 2026 and beyond [46]