par Kingstone Companies, Inc (NASDAQ:KINS)
Kingstone Reports Double-Digit Premium Growth in Core Business and Third Consecutive Quarter of Net Income
Raises 2024 Guidance and Unveils Initial 2025 Guidance
KINGSTON, NY / ACCESSWIRE / August 12, 2024 / Kingstone Companies, Inc. (Nasdaq:KINS) (the "Company" or "Kingstone"), a Northeast regional property and casualty insurance holding company, today announced its financial results for the second quarter ended June 30, 2024. The Company will hold its second quarter 2024 financial results conference call on Tuesday, August 13, 2024, at 8:30 a.m. Eastern Time. With this release, the Company has provided an investor presentation that can be accessed through the Investor Relations/Events & Presentations section of the Company website (www.kingstonecompanies.com).
Key Financial and Operational Highlights | ||||||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||||||
($ in thousands, except per share data) | June 30, | June 30, | ||||||||||||||||||||||
2024 | 2023 | Change | 2024 | 2023 | % Change | |||||||||||||||||||
Direct premiums written1 - Core Business2 | $ | 51,306 | $ | 42,212 | 21.5 | % | $ | 97,893 | $ | 83,639 | 17.0 | % | ||||||||||||
Net combined ratio | 78.2 | % | 98.9 | % | (20.7) pts | 85.6 | % | 110.8 | % | (25.2) pts | ||||||||||||||
Net Income/(Loss) | $ | 4,515 | $ | (522 | ) | NM | $ | 5,942 | $ | (5,577 | ) | NM | ||||||||||||
Net Income/(Loss) per share - basic | $ | 0.41 | $ | (0.05 | ) | NM | $ | 0.54 | $ | (0.52 | ) | NM | ||||||||||||
Return on equity - annualized | 47.2 | % | (6.4 | %) | 53.6 pts | 31.6 | % | (32.7 | %) | 64.2 pts | ||||||||||||||
Management Commentary
Meryl Golden, Chief Executive Officer of Kingstone Companies, Inc., stated, "We take pride in our ongoing profitability, marking our third consecutive quarter of excellent results. This performance was enhanced by favorable weather conditions and the accelerating reduction of our non-core business.
"Core business direct premiums written increased by nearly 22% during the quarter as compared to the second quarter of 2023, driven primarily by continued increases in average premium and strengthened through a modest expansion of our underwriting appetite. Since then, we are capitalizing on new business opportunities resulting from recent changes in the New York competitive landscape and anticipate even more robust policy and premium growth moving forward.
"Our underlying loss ratio improved by 14.6 points in the second quarter as compared to the comparable 2023 quarter due to both lower frequency and severity. The absence of severe weather conditions throughout the quarter benefited our catastrophe loss ratio by 3.4 points compared to the previous year, and we experienced modest favorable prior year reserve development. Furthermore, our expense management efforts reduced our expense ratio by 1.3 points from the comparable period last year. These factors led to a net combined ratio of 78.2% for the second quarter, marking a 20.7 point improvement from the prior year period."
Ms. Golden concluded, "Following unprecedented performance in the first six months and the increasing growth prospects for our business, we are raising our full-year 2024 guidance and providing initial full-year 2025 guidance. We are committed to delivering sustainable long-term shareholder value."
Guidance (see "Disclaimer and Forward-Looking Statements" below)
For 2024, the Company's current full year expectations are calculated based on anticipated net premiums earned of approximately $125 million, and are as follows:
Guidance Metrics | 2024 - Current | 2024 - Previous | ||||
Core Business2 direct premiums written growth | 25% to 35% | 16% to 20% | ||||
Combined ratio | 84% to 88% | 86% to 90% | ||||
Net income per share - basic* | $ 1.00 to $1.30 | $ 0.75 to $1.10 | ||||
Return on equity | 26% to 34% | 22% to 30% |
For 2025, the Company's full year expectations are calculated based on anticipated net premiums earned of approximately $150 million, and are as follows:
Guidance Metrics | 2025 | ||
Core Business2 direct premiums written growth | 15% to 25% | ||
Combined ratio | 85% to 89% | ||
Net income per share - basic* | $ 1.20 to $1.60 | ||
Return on equity | 22% to 30% |
*The variance between net income per share - diluted and basic is immaterial. Previous guidance was presented on a diluted shares basis, while current guidance is presented on a basic share basis.
Consolidated Financial Results
Consolidated Financial Results | Quarter Ended | Six Months Ended | ||||||||||||||||||||||
($ in thousands, except per share data) | June 30, | June 30, | ||||||||||||||||||||||
2024 | 2023 | Change | 2024 | 2023 | % Change | |||||||||||||||||||
Direct premiums written1 | $ | 53,495 | $ | 47,647 | 12.3 | % | $ | 102,820 | $ | 95,244 | 8.0 | % | ||||||||||||
Net premiums earned | $ | 30,304 | $ | 29,508 | 2.7 | % | $ | 59,124 | $ | 57,763 | 2.4 | % | ||||||||||||
Net investment income | $ | 1,765 | $ | 1,451 | 21.6 | % | $ | 3,267 | $ | 2,993 | 9.2 | % | ||||||||||||
Net (loss)/gain on investments | $ | (234 | ) | $ | 197 | NM | $ | 493 | $ | 1,422 | (65.3 | %) | ||||||||||||
Underlying loss ratio 1 | 47.1 | % | 61.7 | % | (14.6) pts | 52.8 | % | 68.4 | % | (15.6) pts | ||||||||||||||
Net development of prior year losses | (1.4 | %) | (0.1 | %) | (1.3) pts | (1.7 | %) | 0.0 | % | (1.7) pts | ||||||||||||||
Net loss ratio excluding the effects of catastrophes1 | 45.7 | % | 61.7 | % | (16.0) pts | 51.1 | % | 68.4 | % | (17.3) pts | ||||||||||||||
Catastrophe loss ratio | 1.3 | % | 4.7 | % | (3.4) pts | 3.2 | % | 8.9 | % | (5.7) pts | ||||||||||||||
Net loss ratio | 47.0 | % | 66.4 | % | (19.4) pts | 54.3 | % | 77.2 | % | (22.9) pts | ||||||||||||||
Net underwriting expense ratio | 31.2 | % | 32.5 | % | (1.3) pts | 31.3 | % | 33.6 | % | (2.3) pts | ||||||||||||||
Net combined ratio | 78.2 | % | 98.9 | % | (20.7) pts | 85.6 | % | 110.8 | % | (25.2) pts | ||||||||||||||
Adjusted EBITDA1 | $ | 7,845 | $ | 1,236 | 534.7 | % | $ | 10,779 | $ | (4,258 | ) | NM | ||||||||||||
Net Income/(Loss) | $ | 4,515 | $ | (522 | ) | NM | $ | 5,942 | $ | (5,577 | ) | NM | ||||||||||||
Net Income/(Loss) per share - basic | $ | 0.41 | $ | (0.05 | ) | NM | $ | 0.54 | $ | (0.52 | ) | NM | ||||||||||||
Net Income/(Loss) per share - diluted | $ | 0.37 | $ | (0.05 | ) | NM | $ | 0.50 | $ | (0.52 | ) | NM | ||||||||||||
Return on equity - annualized | 47.2 | % | (6.4 | %) | NM | 31.6 | % | (32.7 | %) | NM | ||||||||||||||
Other comprehensive income/(loss) | $ | 90 | $ | (886 | ) | NM | $ | (350 | ) | $ | 1,065 | NM | ||||||||||||
Operating net income/(loss) 1 | $ | 4,699 | $ | (678 | ) | NM | $ | 5,552 | $ | (6,700 | ) | NM | ||||||||||||
Operating net income/(loss) per share - basic 1 | $ | 0.43 | $ | (0.06 | ) | NM | $ | 0.50 | $ | (0.62 | ) | NM | ||||||||||||
Operating net income/(loss) per share - diluted 1 | $ | 0.39 | $ | (0.06 | ) | NM | $ | 0.46 | $ | (0.62 | ) | NM | ||||||||||||
Operating return on equity 1 | 12.3 | % | (2.1 | %) | NM | 14.7 | % | < | ||||||||||||||||