Kingstone's Q1 2025 Earnings Call: Conflicting Signals on Capital Management and Geographic Expansion

Capital management and dividend policies, expansion plans beyond New York, focus on geographical expansion, capital management priorities, focus on new geographies are the key contradictions discussed in Kingstone Companies' latest 2025Q1 earnings call.



Profitability and Premium Growth:
- Kingstone reported a net income of $3.9 million or $0.27 per diluted share for Q1 2025, with a 93.7% combined ratio, close to the previous year's 93.3%.
- The growth was driven by an 18% direct written premium increase, including 23% growth in the core business, offset by a 64% reduction in non-core premiums.

Renewal Rights Transaction with AmGUARD:
- Kingstone and AmGUARD (a Berkshire Hathaway subsidiary) completed a renewal rights transaction, with Kingstone expected to start quoting business in late Q3.
- The transaction is anticipated to add $25 million to $35 million in premiums over a 12-month period, contributing to Kingstone's profitability.

Underwriting Performance and Frequency Improvement:
- The Select homeowners' program's frequency has decreased for 13 straight quarters, with a Q1 frequency of 1.6% compared to 2.3% for the legacy product.
- This improvement is attributed to shifts in underwriting and pricing, leading to a mix of more preferred risks.

Investment Income and Surplus:
- Kingstone's net investment income increased by 36% to $2 million in Q1 2025, with a bond portfolio net increase in value of $2.2 million due to lower interest rates.
- The company's strong cash generation supports investment portfolio growth and enhances financial strength.