Kingstone Companies, Inc · NASDAQ:KINS
Kingstone Companies — Q3 2024 Earnings Presentation
28 slides from Kingstone Companies's earnings presentation, Nov 13, 2024
Slide 1: Kingstone Investor Presentation November 2024
NASDAQ: KINS KINGSTONE P&C Insurance Company Capitalizing on Unique Niche Market Opportunity to Achieve Profitable Growth Investor Presentation November 2024
Slide 2: Disclaimer & Forward-Looking Statements
This presentation 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 —_ D ] Ss Cc LAI M E R management's curre
Slide 3: Kingstone Overview
KINGSTONE OVERVIEW Market Cap Core Direct Written Kingstone is a northeast regional property and Premium casualty insurance holding company whose principal operating subsidiary is Kingstone Insurance Policies- Company (“KICO”). In-Force KICO, a New York domiciled carrier writing business through 700
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Strong Position in Niche Markets * Focusing on core business growth in Downstate NY * Core represents 93% of total policies as of September 30, 2024. + Ranked by S&P as the 15" largest homeowner insurer in NY in 2023 with a market share of 1.6%. Unprecedented Market Opportunity
Slide 5: Business Operations
BUSINESS OPERATIONS 2023 DIRECT PREMIUMS WRITTEN OF $200 MILLION 1574 LARGEST WRITER OF HOMEOWNERS INSURANCE IN THE STATE OF NEW YORK FOUNDED IN 1886 a“ = 92.6% 7.3% [ Personal Lines ] [eae Physical } [ Other ] Damage As of December 31, 2023 Personal lines: Largest line of business; consists of home
Slide 6: Core Business Growth
CORE BUSINESS GROWTH —_ © Westchester Long Island Sound Percentage of In-force Premium by County ¢ er <i County 9/30/2024 Suffolk 44.5% Nassau 16.0% Atlantic Ocean Kings 13.9% Queens 11.2% . . . i 9 Kingstone refers to its New York business Richmond 6.5% as its “Core Business”. Bronx 4.7% New York 0
Slide 7: Strategic & Profitable Growth
STRATEGIC & PROFITABLE GROWTH — Underwriting Measures to Grow Profitability; We are... ‘operly matching rate to r / believe the current market changes present us with the Insuring all properties at their current replacement cost; greatest Profitable . growth opportunity that Kingstone has ever exper
Slide 8: Core vs Non-Core Personal Lines Loss Experience
CORE VS NON-CORE persownat LINES LOSS EXPERIENCE = Core Business refers to the Company’s New York policies. Personal Lines Net Loss+ALAE Ratio 160% 140% 120% 100% 80% 60% 40% : A a al 1% 2022Q1 202202 202203 202204 2023Q1 202302 202303 202304 2024Q1 202402 g 202403 mPLCore mPLNon-Core Net loss ratio
Slide 9: Mix of Business by Policies-in-Force
MIX OF BUSINESS By POLICIES-IN-FORCE Core Business refers to the Company's New York policies. December 31, 2023 Core HO 54% Other September 30, (7 pts) in Non-Core Business 2024 +7 pts in Core Business % Core HO 61% Core HO = Core Homeowners Core DF = Core Dwelling Fire Non-Core = Non-core Homeowner
Slide 10: Direct Premiums Written
DIRECT PREMIUMS WRITTEN* Strategically shrinking Non-Core Business due to profitability concerns. +10% 21% A $201M ! i || (3%) 1 ! J 1 1 |__| r é NY New Other 2023 DPW 2022 DPW NY Renewal Non-Core NY New NY Renewal Other Further strategic non- renewal of Non- Core policies in 2024 Non-Core i 2024E D
Slide 11: Pricing Trends
Average Core Business Renewal Premium Increase of +22% in Q3'24 vs. Q3'23 Replacement cost was adjusted on every policy starting Q3 2022 so that the entire portfolio is insured to value PRICING TRENDS Achieving significant price increases, ahead of inflation. $4,000 $3,500 $3,000 $2,500 $2,000 $1,50
Slide 12: Managing Reinsurance Requirements
MANAGING REINSURANCE REQUIREMENTS 100YR Verisk Hurricane Probable Maximum Cost $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 so February 2016 Cumulative Risk Adjusted Rate Change - Catastrophe XOL 2020 2021 2022 Guy Carpenter Index 1.00 1.06 a
Slide 13: Expense Reduction Initiative
EXPENSE REDUCTION INITIATIVE * Achieved a 3.1 percentage point reduction in our net underwriting expense ratio in 2023, driven primarily by decreases in commissions, staffing and other efficiency improvements to business operations along with an increase in our average premium. * Continuing expense
Slide 14: Third Quarter 2024 Summary
THIRD QUARTER 2024 SUMMARY The operational changes implemented are demonstrating their positive impact. Results Summary (all metrics are compared to Third Quarter 2023, unless noted otherwise) * Core Business direct written premium up 39.4%; * Non-Core Business direct written premium down 58.8%; * N
Slide 15: Key Financial Metrics - Three Months
KEY FINANCIAL METRICS = THREE MONTHS ENDED SEPTEMBER 30 Consolidated Financial Results +28% ($ in thousands, except per share data) 2024 2023 Direct premiums written’ $66,627 $51,992 DIRECT PREMIUMS Net premiums earned $33,407 $27,938 WRITTEN Net investment income $1,650 $1,444 Net gain/(loss) on in
Slide 16: Key Financial Metrics - Nine Months
+15% DIRECT PREMIUMS WRITTEN GROWTH? COMBINED RATIO IMPROVED BY 30.0 POINTS TO 80.7% KEY FINANCIAL METRICS NINE MONTHS ENDED SEPTEMBER 30 Consolidated Financial Results ($ in thousands, except per share data) 2024 2023 Change} Direct premiums written? $169,447 $147,237 15.1%] Net premiums earned $92
Slide 17: Balance Sheet Overview
BALANCE SHEET OVERVIEW i September 30, December 31, 2024 2023) Assets Total investments $ 188,086,413 $ 174,632,828 Cash and cash equivalents 33,760,798 8,976,998 Premiums receivable, net 17,601,417 13,604,808 Reinsurance receivables, net 65,746,827 75,593,912 Deferred policy acquisition costs 21,85
Slide 18: Investment Portfolio
INVESTMENT PORTFOLIO as of 9/30/2024) - Net Investment Income $in millions Highlights $49 $4.4 2023 2024 Estimated Fair Value Fixed Portfolio . Average Yield 3.58% 320%, 3.39% Corporate 2.92% < BBB- or Non Rated 3% Preferred Stocks — am 4% Gov't 8% RBS & Other us. Treasuries 4% Treasuries 2021 2022
Slide 19: Raised 2024 Guidance
RAISED 2024 GUIDANCE For 2024, the Company’s full year expectations are as follows: Previous (8/12/2024): 25% - 35% Core Business direct written premium growth 79% to 83% Combined ratio $1.40 to $1.70 Earnings per share - basic* 32% to 36% Return on equity “Previous guidance was presented on a dilut
Slide 20: Raised 2025 Guidance
RAISED 2025 GUIDANCE For 2025, the Company’s full year expectations are as follows: Previous (8/12/2024): 15% - 25% Core Business direct written premium growth 82% to 86% Combined ratio $1.60 to $2.00 Earnings per share - basic* 24% to 32% Return on equity “Previous guidance was presented on a dilut
Slide 21: Executive Management Team
EXECUTIVE MANAGEMENT TEAM Meryl S. Golden - Chief Executive Officer Jennifer Gravelle - Chief Financial Officer Sarah Chen - Chief Actuary Investor Relations Contact: Karin Daly Vice President The Equity Group Inc. kdaly@equityny.com
Slide 22: Definitions and Non-GAAP Measures
DEFINITIONS AND NON-GAAP MEASURES \ —- the total harged ies issued by the Company during the respective fiscal period. Net premiums written ae rect premkims written ess prewiuns code to rdnsrers, Net premiums ‘eared, the GAAP measure mast comparable t rect premiums written and net premlims wetter, a
Slide 23: Reconciliation of Direct Premiums Written to Net Premiums Earned
RECONCILIATION OF DIRECT PREMIUMS WRITTEN TO NET 23 PREMIUMS EARNED ‘or the Three Months Ended, For the Nine Months Ended September 30, September 30, % % 2024 2023 Change 2024 2023 Change (000’s except percentages) Direct Premiums Written Reconciliation: Direct premiums written $66,627 $51,992 28.1
Slide 24: Reconciliation of Net Income (Loss) to Adjusted EBITDA
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA 24 ‘or the Nine Months Ended e Three Months Ended September 30, September 30, % % 2024 2023 Change 2024 2023 Change (000's except percentages) Adjusted EBITDA Reconciliation: Net income (loss) $6,978 ($3,538) NM $12,920 ($9,114) NM Interest expe
Slide 25: Net Income to Operating Net Income and Basic Per Share
NET INCOME (LOSS) TO OPERATING NET INCOME (LOSS) AND BASIC NET INCOME (LOSS) PER SHARE TO BASIC OPERATING NET INCOME (LOSS) PER SHARE For the Three Months Ended For the Nine Months Ended 30, 2024 30, 2023 30, 2024. 30, 2023 Basic Bacielose Basic Basic loss income per income per per Amount. commen Am
Slide 26: Net Income to Operating Net Income and Diluted Per Share
NET INCOME (LOSS) TO OPERATING NET INCOME (LOSS) AND 26 For the Three Months Ended For the Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Diluted Diluted Diluted Diluted Amount income per Revemit loss per AmOUnE income per AMOUne loss per common common
Slide 27: Reconciliation of Net Income to Operating Net Income and Return on Equity
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING NET 27 INCOME (LOSS) AND RETURN ON EQUITY TO OPERATING RETURN ON EQUITY For the Three Months Ended For the Nine Months Ended September 30, September 30, % % 2024 2023 Change 2024 2023 Change (000's except percentages) Operating Net Income (Loss) Recon
Slide 28: Reconciliation of Underlying Loss Ratio to Net Loss Ratio
RECONCILIATION OF THE UNDERLYING LOSS RATIO, THE NET 28 LOSS RATIO EXCLUDING THE EFFECT OF CATASTROPHES AND THE CATASTROPHE LOSS RATIO TO THE NET LOSS RATIO For the Three Months Ended For the Nine Months Ended September 30, September 30, 2024 2023 Percentage Point 2024 2023 Percentage Point Change C