par Kingstone Companies, Inc (NASDAQ:KINS)
Kingstone Reports Record Profitability and Growth
Raises 2024 and 2025 Guidance
Raises 2024 and 2025 Guidance
Kingston, NY - November 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 third quarter ended September 30, 2024. The Company will hold its third quarter 2024 financial results conference call on Wednesday, November 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 | Nine Months Ended | ||||||||||||||||||||||||
($ in thousands, except per share data) | September 30, | September 30, | |||||||||||||||||||||||
2024 | 2023 | Change | 2024 | 2023 | % Change | ||||||||||||||||||||
Direct premiums written1 - Core Business2 | $ | 64,170 | $ | 46,026 | 39.4 | % | $ | 162,063 | $ | 129,665 | 25.0 | % | |||||||||||||
Net combined ratio | 72.0 | % | 110.2 | % | (38.2) pts | 80.7 | % | 110.7 | % | (30.0) pts | |||||||||||||||
Net Income/(Loss) | $ | 6,978 | $ | (3,538 | ) | NM | $ | 12,920 | $ | (9,114 | ) | NM | |||||||||||||
Net Income/(Loss) per share - basic | $ | 0.61 | $ | (0.33 | ) | NM | $ | 1.16 | $ | (0.85 | ) | NM | |||||||||||||
Return on equity - annualized | 55.6 | % | (48.3 | %) | 103.8 pts | 36.6 | % | (38.8 | %) | 75.3 pts | |||||||||||||||
Management Commentary
Meryl Golden, Chief Executive Officer of Kingstone Companies, Inc., stated, "In the third quarter of 2024, we delivered the highest level of income since Kingstone Insurance Company was acquired by Kingstone Companies in 2009, coupled with record-breaking premiums written. The simultaneous achievement of these milestones is remarkable, driven in large part by the strength of our team, as well as the favorable market conditions that emerged just months ago. The timing could not have been more advantageous for Kingstone.
Core business direct premiums written increased by 39% and 25% during the quarter and year-to-date, respectively. Our objective has always been, and will continue to be, profitable growth. We are managing our new business growth in a deliberate and strategic manner to ensure that we maintain our strong profitability.
Our net combined ratio improved by 38.2 percentage points to 72.0% compared to the third quarter of the prior year, primarily driven by lower frequency and severity of claims due to risk selection in our Select product, the reduction in our non-core business and our disciplined underwriting approach. Contributing further to our profitability, severe weather conditions within our footprint were limited, adding only 1.7% to our loss ratio, which was more than offset by favorable prior year reserve development of 1.9%. Our expense ratio was 33%, representing an increase of 1.3 percentage points from the prior year's third quarter, primarily driven by higher bonus and contingent commission for our talented employees and producers, based on the strong underwriting performance we achieved.
Ms. Golden concluded, "With most of the year behind us and strong visibility into the fourth quarter, we are raising both our full-year 2024 and 2025 guidance. We have successfully executed our strategy and delivered meaningful, sustainable value for our shareholders. Moving forward, our priority remains maximizing value for our shareholders and ensuring the long-term success of the company.
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 $128million, and are as follows:
Guidance Metrics | 2024 - Current | 2024 - Previous | ||||
Core Business2 direct premiums written growth | 25% to 35% | 25% to 35% | ||||
Combined ratio | 79% to 83% | 84% to 88% | ||||
Net income per share - basic* | $1.40 to $1.70 | $1.00 to $1.30 | ||||
Return on equity | 32% to 36% | 26% to 34% |
For 2025, the Company's full year expectations are calculated based on anticipated net premiums earned of approximately $165 million, and are as follows:
Guidance Metrics | 2025 - Current | 2025 - Previous | ||||||
Core Business2 direct premiums written growth | 15% to 25% | 15% to 25% | ||||||
Combined ratio | 82% to 86% | 85% to 89% | ||||||
Net income per share - basic* | $ | 1.60 to $2.00 | $ | 1.20 to $1.60 | ||||
Return on equity | 24% to 32% | 22% to 30% | ||||||
*Previous guidance was presented on a diluted shares basis, while current guidance is presented on a basic share basis.
Consolidated Financial Results
Consolidated Financial Results | Quarter Ended | Nine Months Ended | ||||||||||||||||||||||
($ in thousands, except per share data) | September 30, | September 30, | ||||||||||||||||||||||
2024 | 2023 | Change | 2024 | 2023 | % Change | |||||||||||||||||||
Direct premiums written1 | $ | 66,627 | $ | 51,992 | 28.1 | % | $ | 169,447 | $ | 147,237 | 15.1 | % | ||||||||||||
Net premiums earned | $ | 33,407 | $ | 27,938 | 19.6 | % | $ | 92,531 | $ | 85,701 | 8.0 | % | ||||||||||||
Net investment income | $ | 1,650 | $ | 1,444 | 14.3 | % | $ | 4,917 | $ | 4,437 | 10.8 | % | ||||||||||||
Net gain/(loss) on investments | $ | 827 | $ | (824 | ) | NM | $ | 1,319 | $ | 598 | 120.6 | % | ||||||||||||
Underlying loss ratio1 | 39.2 | % | 70.8 | % | (31.6) pts | 47.9 | % | 69.2 | % | (21.3) pts | ||||||||||||||
Net development of prior year losses | (1.9 | %) | 0.0 | % | (1.9) pts | (1.8 | %) | 0.0 | % | (1.8) pts | ||||||||||||||
Net loss ratio excluding the effect of catastrophes1 | 37.3 | % | 70.8 | % | (33.5) pts | 46.1 | % | 69.2 | % | (23.1) pts | ||||||||||||||
Catastrophe loss ratio1 | 1.7 | % | 7.7 | % | (6.0) pts | 2.7 | % | 8.5 | % | (5.8) pts | ||||||||||||||
Net loss ratio | 39.0 | % | 78.5 | % | (39.5) pts | 48.8 | % | 77.7 | % | (28.9) pts | ||||||||||||||
Net underwriting expense ratio | 33.0 | % | 31.7 | % | 1.3 pts | 31.9 | % | 33.0 | % | (1.1) pts | ||||||||||||||
Net combined ratio | 72.0 | % | 110.2 | % | (38.2) pts | 80.7 | % | 110.7 | % | (30.0) pts | ||||||||||||||
Adjusted EBITDA1 | $ | 10,433 | $ | (1,635 | ) | NM | $ | 21,212 | $ | (5,893 | ) | NM | ||||||||||||
Net Income/(Loss) | $ | 6,978 | $ | (3,538 | ) | NM | $ | 12,920 | $ | (9,114 | ) | NM | ||||||||||||
Net Income/(Loss) per share - basic | $ | 0.61 | $ | (0.33 | ) | NM | $ | 1.16 | $ | (0.85 | ) | NM | ||||||||||||
Net Income/(Loss) per share - diluted | $ | 0.55 | $ | (0.33 | ) | NM | $ | 1.05 | $ | (0.85 | ) | NM | ||||||||||||
Return on equity - annualized | 55.6 | % | (48.3 | %) | NM | 36.6 | % | (38.8 | %) | NM | ||||||||||||||