Kingstone(US:KINS)2025-11-07 14:30Financial Data and Key Metrics Changes - The company reported net income of $10.9 million and diluted earnings per share of $0.74, marking the second most profitable quarter in its history and the eighth consecutive quarter of profitability [3][10] - The GAAP combined ratio was 72.7%, with an annualized return on equity of 43% [3][10] - Direct written premium grew by 14%, and net investment income increased by 52% to $2.5 million [3][10] Business Line Data and Key Metrics Changes - Policies in force increased by 4.2% year over year and 1.4% sequentially, indicating stability in the agent and customer base [5] - The Select homeowners program now represents 54% of policies in force, with a claim frequency 31% lower than legacy products [6] - The underlying loss ratio was 44.1%, an increase of 4.9 percentage points year over year, driven by higher claim severity [5][6] Market Data and Key Metrics Changes - The company experienced a month-over-month increase in new business since June, continuing into the fourth quarter [4] - The growth of 14% for the quarter was primarily driven by an average premium increase of 13% and improved retention [4] - Catastrophe losses contributed only 0.2 percentage points to the loss ratio compared to 1.7 percentage points in the prior year quarter [6] Company Strategy and Development Direction - The company plans to present a multi-year roadmap for state expansion in the first half of next year [8] - Guidance for 2025 has been raised for net combined ratio, EPS, and ROE, while maintaining direct written premium growth expectations between 12% and 17% [8][9] - The company aims to capitalize on opportunities in the homeowners' market, particularly in catastrophe-exposed areas, to expand geographically [33] Management's Comments on Operating Environment and Future Outlook - Management noted that hard market conditions in downstate New York have not changed materially, with strong overall volume [4] - The company expects retention, which represents over 80% of its premium base, to continue trending higher as rate changes transition to high single digits [4] - Management remains optimistic about the competitive landscape, indicating a healthy growth trajectory despite increased competition [23] Other Important Information - The company has no debt at its holding company, and shareholders' equity exceeded $107 million, an increase of 80% year over year [12] - The year-to-date return on equity is 39.8%, an increase of 3 percentage points from the same period last year [12] Q&A Session Summary Question: Will all accounts eventually move to the select product? - The company will maintain its legacy book as it is profitable, with plans to convert to select only when it becomes small enough [17] Question: Is all new business put on the select platform? - Yes, all new business has been written in Select since the beginning of 2022 [18] Question: How is the new E&S product being developed? - The company is working with an outside actuarial consulting firm to develop the new product, benefiting from the experience gained with the select product [19] Question: How has the AmGuard book performed? - The AmGuard book is performing as expected, with a mix similar to the select product and geographic diversification [22] Question: How is competition in downstate New York evolving? - Competitors are expanding their target areas, but the company has maintained a healthy growth rate and high conversion rates [23]