from Kingstone Companies, Inc (NASDAQ:KINS)
Kingstone Announces Fourth Quarter and Full Year 2023 Financial Results
Returns to Profitability and Achieves Combined Ratio of 89.5% in 4Q23;
Issues Initial Guidance for FY2024
KINGSTON, NY / ACCESSWIRE / March 27, 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 fourth quarter and full year ended December 31, 2023. The Company will hold its fourth quarter and full-year 2023 financial results conference call on Thursday, March 28, 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).
| Fourth Quarter 2023 Key Financial and Operational Highlights | ||||||||||
($ in thousands, except per share data) | 2023 | 2022 | Change | |||||||
Net Income/(Loss) | $ | 2,946 | $ | (3,950 | ) | NM | ||||
Net Income/(Loss) per share - diluted | $ | 0.26 | $ | (0.37 | ) | NM | ||||
Combined ratio | 89.5 | % | 113.9 | % | -24.4 pts | |||||
Management Commentary
Meryl Golden, Chief Executive Officer of Kingstone Companies, Inc., stated, "In 2023, Kingstone experienced a significant turning point as we successfully returned to profitability in the fourth quarter. This achievement contributed to an 800 basis-point improvement on the full-year combined ratio. The effective execution of our strategic initiatives over the past few years has played a significant role in this success. Additionally, the lower-than-expected catastrophe losses in the fourth quarter further bolstered our performance.
"Looking ahead, we are confident in our ability to capitalize on this momentum and anticipate strong underwriting results. We are well-positioned to expand our Core New York business in 2024 and beyond. We remain committed to sustaining this positive trajectory and delivering value to our stakeholders."
Consolidated Financial Results | Quarter Ended | Year Ended | |||||||||||||||||||||
($ in thousands, except per share data) | December 31, | December 31, | |||||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||
Direct premiums written1 | $ | 52,938 | $ | 53,901 | -1.8% | $ | 200,175 | $ | 201,255 | -0.5% | |||||||||||||
Net premiums earned | $ | 28,683 | $ | 30,448 | -5.8% | $ | 114,384 | $ | 114,385 | 0.0% | |||||||||||||
Policies-in-force | 78,398 | 92,054 | -14.8% | 78,398 | 92,054 | -14.8 | |||||||||||||||||
Net investment income | $ | 1,571 | $ | 1,525 | 3.0% | $ | 6,009 | $ | 4,937 | 21.7% | |||||||||||||
Net gain/(loss) on investments | $ | 1,537 | $ | (78 | ) | NM | $ | 2,135 | $ | (9,392 | ) | NM | |||||||||||
Underlying loss ratio | 53.8 | % | 61.1 | % | -7.3 pts | 65.3 | % | 68.2 | % | -2.9 pts | |||||||||||||
Net adverse development of prior year losses | 0.0 | % | 6.5 | % | -6.5 pts | 0.0 | % | 2.4 | % | -2.4 pts | |||||||||||||
Net loss ratio excluding the effects of catastrophes1,2 | 53.8 | % | 67.7 | % | -13.9 pts | 65.3 | % | 70.6 | % | -5.3 pts | |||||||||||||
Catastrophe loss ratio | 3.0 | % | 13.7 | % | -10.7 pts | 7.1 | % | 6.7 | % | 0.4 pts | |||||||||||||
Total net loss ratio | 56.8 | % | 81.3 | % | -24.5 pts | 72.4 | % | 77.3 | % | -4.9 pts | |||||||||||||
Net underwriting expense ratio | 32.7 | % | 32.6 | % | 0.1 pts | 32.9 | % | 36.0 | % | -3.1 pts | |||||||||||||
Combined ratio | 89.5 | % | 113.9 | % | -24.4 pts | 105.3 | % | 113.3 | % | -8.0 pts | |||||||||||||
Adjusted EBITDA1 | $ | 4,201 | $ | (3,191 | ) | NM | $ | (1,692 | ) | $ | (11,838 | ) | 85.7% | ||||||||||
Net Income/(Loss) | $ | 2,946 | $ | (3,950 | ) | NM | $ | (6,168 | ) | $ | (22,525 | ) | 72.6% | ||||||||||
Net Income/(Loss) per share - diluted | $ | 0.26 | $ | (0.37 | ) | NM | $ | (0.57 | ) | $ | (2.12 | ) | 73.1% | ||||||||||
Return on equity | 9.7 | % | (10.5 | %) | 20.2 pts | (17.5 | %) | (40.3 | %) | 22.8 pts | |||||||||||||
Other comprehensive income/(loss) | $ | 4,845 | $ | 20 | NM | $ | 3,684 | $ | (17,755 | ) | NM | ||||||||||||
Operating net income/(loss)1 | $ | 1,732 | $ | (3,888 | ) | NM | $ | (7,855 | ) | $ | (15,105 | ) | 48.0% | ||||||||||
Operating net income/(loss) per share - diluted1 | $ | 0.15 | $ | (0.36 | ) | NM | $ | (0.73 | ) | $ | (1.42 | ) | 48.6% | ||||||||||
Operating return on equity1 | 5.7 | % | (10.4 | %) | 16.1 pts | (22.2 | %) | (27.0 | %) | 4.8 pts | |||||||||||||
Book value per share - diluted | $ | 2.81 | $ | 3.01 | -6.6% | ||||||||||||||||||
Book value per share - diluted, excluding accumulated other comprehensive income/(loss) | $ | 3.80 | $ | 4.33 | -12.2% | ||||||||||||||||||
NM = Not Meaningful
Core Business Results (New York Only)
The Company refers to its New York policies as its Core Business.
Core Business Financial Results | Quarter Ended | Year Ended | |||||||||||||||||||
($ in thousands) | December 31, | December 31, | |||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||
Direct premiums written1 | $ | 47,027 | $ | 43,923 | 7.1% | $ | 176,692 | $ | 162,255 | 8.9% | |||||||||||
Net premiums earned | $ | 25,740 | $ | 25,194 | 2.2% | $ | 99,346 | $ | 94,270 | 5.4% | |||||||||||
Policies-in-force | 67,575 | 71,359 | -5.3% | 67,575 | 71,359 | -5.3% | |||||||||||||||
Net loss ratio excluding the effect of catastrophes1,2 | 52.8 | % | 59.8 | % | -7.0 pts | 61.4 | % | 60.7 | % | 0.7 pts | |||||||||||
Catastrophe loss ratio2 | 1.6 | % | 12.6 | % | -11.0 pts | 4.4 | % | 6.2 | % | -1.8 pts | |||||||||||
Total net loss ratio2 | 54.4 | % | 72.4 | % | -18.0 pts | 65.8 | % | 66.9 | % | -1.1 pts | |||||||||||
Non-Core Business Results (Outside of New York)
The Company stopped writing all new business outside of New York and has been aggressively reducing policy count this year, subject to regulatory requirements, and expects to accelerate its policy count reduction in 2024.
Non-core Business Financial Results | Quarter Ended | Year Ended | |||||||||||||||||||
($ in thousands) | December 31, | December 31, | |||||||||||||||||||
| 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||
Direct premiums written1 | $ | 5,911 | $ | 9,978 | -40.8% | $ | 23,482 | $ | 39,000 | -39.8% | |||||||||||
Net premiums earned | $ | 2,943 | $ | 5,254 | -44.0% | $ | 15,038 | $ | 20,115 | -25.2% | |||||||||||
Policies-in-force | 10,823 | 20,695 | -47.7% | 10,823 | 20,695 | -47.7% | |||||||||||||||
Net loss ratio excluding the effect of catastrophes1,2 | 62.5 | % | 105.4 | % | -42.9 pts | 91.4 | % | 117.4 | % | -26.0 pts | |||||||||||
Catastrophe loss ratio2 | 15.7 | % | 18.7 | % | -3.0 pts | 24.9 | % | 8.7 | % | 16.2 pts | |||||||||||
Total net loss ratio2 | 78.2 | % | 124.1 | % | -45.9 pts | 116.3 | % | 126.1 | % | -9.8 pts | |||||||||||
1These measures are not based on GAAP and are defined and reconciled below to the most directly comparable GAAP measures. See "Definitions and Non-GAAP Measures".
2Core business net loss ratio excluding the effect of catastrophes, catastrophe loss ratio, net loss ratio, non-core business net loss ratio excluding the effect of catastrophes, catastrophe loss ratio, net loss ratio, non-core business net loss ratio excluding the effect of catastrophes, catastrophe loss ratio and net loss ratio are not based on GAAP. Net loss ratio is the most directly comparable GAAP measure. The aggregate of core business net loss ratio and non-core business net loss ratio is represented by net loss ratio, as set forth immediately above the non-GAAP measures.
Guidance
For 2024, the Company's full year expectations are as follows:
| Guidance | 2024 |
| Core Business direct premiums written growth | 12.0% to 16.0% |
| Combined ratio | 88.0% to 92.0% |
| Earnings per share - diluted | $0.50 to $0.90 |
| Return on equity | 15.0% to 22.0% |
Conference Call Details
Thursday, March 28, 2024, at 8:30 a.m. Eastern Time
To participate please dial:
U.S. toll free 1-877-423-9820
International 1-201-493-6749
Participants are asked to dial-in approximately 10 minutes before the conference call is scheduled to begin. The conference call can also be accessed via webcast in the "Investor Relations/Events & Presentations" tab of the Company's website or by clicking here. The webcast will be archived and accessible for approximately 30 days.
About Kingstone Companies, Inc.
Kingstone is a northeast regional property and casualty insurance holding company whose principal operating subsidiary is Kingstone Insurance Company ("KICO"). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York. Kingstone is also licensed in New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire and Maine.
Investor Relations Contact:
Karin Daly
Vice President
The Equity Group Inc.
kdaly@equityny.com
Disclaimer and Forward-Looking Statements
The guidance provided above is based on information available as of March 27, 2024 and management's review of the anticipated financial results for 2024. Such guidance remains subject to change based on management's ongoing review of the Company's 2024 results and is a forward-looking statement (see below). Kingstone assumes no obligation to update this guidance. The actual results may be materially different and are affected by the risk factors and uncertainties identified in this press release and in Kingstone's annual and quarterly filings with the Securities and Exchange Commission.
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those included in forward-looking statements due to a variety of factors. For more details on factors that could affect expectations, see Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 to be filed with the Securities and Exchange Commission and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission.
Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from our expectations of future results, performance or achievements expressed or implied by these forward-looking statements. These forward-looking statements may not be realized due to a variety of factors. The risks and uncertainties include, without limitation, the following:
- the risk of significant losses from catastrophes and severe weather events;
- risks rel