• Overall Growth: 21% growth overall and 31% growth in core business for 2024.
• Core Direct Written Premium: Increased by 49% in Q4 2024.
• Net Income: $5.4 million for Q4 2024; $18.4 million for the full year 2024.
• Earnings Per Diluted Share: $0.40 for Q4 2024; $1.48 for the full year 2024.
• Direct Written Premiums: Increased 37% in Q4 2024; 21% for the full year 2024.
• Combined Ratio: Improved to 78.5% for Q4 2024; 80% for the full year 2024.
• Expense Ratio: 29.8% in Q4 2024; 31.3% for the full year 2024.
• Net Investment Income: Increased 21% to $1.9 million in Q4 2024.
• Debt: Fully paid off by February 2025, saving approximately $800,000 in interest expense for 2025.
• Guidance for 2025: Core business direct written premium growth between 15% and 25%; GAAP combined ratio between 81 and 85; diluted earnings per share between $1.75 and $2.15; return on equity between 27% and 35%.

• Warning! GuruFocus has detected 3 Warning Sign with KINS.

Release Date: March 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kingstone Companies Inc (NASDAQ:KINS) achieved a record-breaking year in 2024 with a 21% overall growth and 31% growth in its core business.
• The company successfully capitalized on the exit of competitors Adirondack and Mountain Valley, leading to a 49% increase in core direct written premium in the fourth quarter.
• Kingstone Companies Inc (NASDAQ:KINS) has become debt-free, having paid off $20 million of debt in just five months, which will save approximately $800,000 in interest expense in 2025.
• The Select product continues to outperform expectations, with a 29% reduction in frequency compared to the legacy product, indicating improved risk selection and underwriting.
• The company has a strong financial position with substantial income, cash generation, and a healthy balance sheet, allowing it to pause share issuance via the ATM for the foreseeable future.

Negative Points

• Growth in written premium for 2025 is expected to moderate compared to the second half of 2024, as the market opportunity from the exit of competitors has been largely realized.
• The company faces potential challenges in expanding its geographic footprint beyond Downstate New York, requiring careful strategic planning and resource allocation.
• Despite the strong performance, the company experienced a $3.1 million unrealized decline in the value of its bond portfolio due to significant increases in treasury yields.
• The competitive environment remains uncertain, with rumors of new market entrants potentially impacting Kingstone Companies Inc (NASDAQ:KINS)'s growth prospects.
• The company continues to face risks associated with catastrophe-exposed geographies, which could impact future profitability and growth.

Q & A Highlights

Q: On the growth expectations for 2025, with Adirondack and Mountain Valley's opportunity going away, where is the growth coming from, and what is the competitive environment like? A: Meryl Golden, President and CEO, explained that the hard market conditions in Downstate New York persist, with few companies writing coastal properties. Most active companies are MGAs and E&S writers. Despite rumors, no new market entrants have materialized. Kingstone continues to see growth in new business counts and average premiums, feeling confident in their pricing and ability to capitalize on these conditions.

Q: Do you have a sense of where the new business is coming from, specifically the incumbent carriers? A: Meryl Golden stated that while the specific carriers are unknown, the mix of business remains consistent. Many standard and preferred carriers are not interested in coastal business in Downstate New York, leading to a similar mix of business for Kingstone.

Q: Regarding potential expansion plans, are you considering New England or other states around the country? A: Meryl Golden mentioned that Kingstone is considering both New England and other states. The company is in a strong position with a proven product, low expense ratio, and strong balance sheet. They are exploring catastrophe-exposed states to understand market potential and regulatory environments, planning a thoughtful expansion.

Q: What is the goal for the expense ratio over time? A: Meryl Golden emphasized a focus on maintaining low expenses to allow for competitive rates or higher margins. The goal for the year is to reduce the expense ratio by another point, supported by higher earned premiums from business written in the second half of the previous year and a reduction in quota share.

Q: How would you characterize the first quarter weather, and has it been a regular winter season? A: Meryl Golden noted that while this winter has been colder with more snow than the previous year, there have been no material catastrophe events, and the frequency of such events has been low. The first quarter is looking good for a winter quarter.

Q: How does the guidance for 15% to 25% growth in core for the year align with the accelerated growth seen in previous quarters? A: Meryl Golden expressed confidence in achieving the guidance, citing active writers, no new market entrants, and an expanding producer base. The company is updating its underwriting appetite and expects improved retention due to more moderate rate changes.

Q: What is the current book yield on the investment portfolio? A: Jennifer Gravelle, CFO, stated that the book yield on the portfolio is 3.86%.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.