Kingstone Companies (KINS) Soars on Amgard Deal and Premium Surge in Q1 2025

Kingstone Companies (KINS) delivered a resounding beat in its Q1 2025 earnings, transforming what was once expected to be a loss into an EPS of $0.27, a staggering $0.36 above forecasts. Revenue surged to $58.18 million, fueled by a 18% jump in direct written premiums and the strategic acquisition of Amgard’s New York homeowners business. The results, coupled with a debt-free balance sheet and disciplined underwriting, have investors betting on Kingstone’s potential to dominate niche markets—and maybe even expand beyond New York’s borders.

The Financial Turnaround: From Loss to Profit

Kingstone’s Q1 performance was a masterclass in turning expectations upside down. The company not only avoided the projected loss of -$0.09 but also reported $3.9 million in net income, driven by a 36% increase in net investment income to $2 million. Operating income nearly tripled to $2.4 million, while direct written premiums in its core New York homeowners business grew by 23%, outpacing the broader market.

The stock’s 2.8% premarket surge to $18.70 reflects investor optimism, but the real story lies in Kingstone’s long-term trajectory. Over the past year, the stock has delivered a 350% return, a stark contrast to the broader market’s muted performance.

The Amgard Deal: A Game-Changer or Risky Bet?

The crown jewel of Kingstone’s strategy is its acquisition of Amgard’s renewal rights—a $25–35 million annual premium windfall starting late in Q3 2025. The deal, which capitalizes on Berkshire Hathaway’s exit from New York’s homeowners market, positions Kingstone to expand its footprint in Downstate New York.

Yet risks loom large. Amgard’s policyholders may resist switching insurers if Kingstone’s rates exceed Amgard’s historical premiums—a potential pricing gap that could deter customers. CEO Merrill Golden acknowledged this challenge but emphasized the strategic advantage of accessing Amgard’s policyholder data to refine underwriting.

Underwriting Discipline: The Secret Sauce

Kingstone’s Select homeowners program, now 48% of policies in force, continues to outperform legacy products. Its cumulative frequency rate has dropped for 13 consecutive quarters, hitting 1.6% in Q1 compared to 2.3% for older policies. This stark disparity underscores the program’s success in targeting profitable risks—a discipline Golden has prioritized since taking the helm in 2017.

The company’s April 2025 rate segmentation reforms for dwelling products aim to counter declining smaller product lines. Meanwhile, fire loss frequency in Q1, which spiked due to random events in legacy policies, was dismissed as an anomaly by Golden, who stressed no systemic issues.

Balance Sheet Strength: Debt-Free and Ready to Grow

Kingstone’s financial fortitude is undeniable. The company fully repaid its holding company debt, saving $800,000 annually in interest, and booked a $1.5 million after-tax gain from selling its headquarters. With $16 million allocated to mortgage-backed securities (yielding 5.41% over a 5.53-year duration), Kingstone is betting on rising rates to boost investment returns as $44 million in lower-yielding bonds mature by end-2026.

This financial flexibility allows the company to prioritize organic growth over dividends or buybacks—for now. “We’re focused on executing the Amgard integration and preparing for future expansion,” Golden said, hinting at potential moves into other states by 2026.

Risks on the Horizon

Despite the optimism, challenges remain. Inflation-driven building material costs and tariffs could force further rate hikes, while the “hard market” in New York—a sellers’ market with limited capacity—may squeeze underwriting margins. The Amgard deal’s success hinges on converting policyholders and managing non-catastrophe loss ratios.

The Bottom Line: A Stock Poised for Growth—or Overvalued?

Kingstone’s Q1 results and strategic moves paint a compelling picture of a company primed to capitalize on niche opportunities. With a 36% return on equity, 21.2% gross profit margin, and a debt-free balance sheet, the company has the tools to navigate risks.

However, its stock’s current P/E ratio of 10.7 suggests it’s trading above fair value, especially if Amgard’s integration falters. Yet, with a 350% annual return and a CEO who has consistently delivered discipline, Kingstone’s trajectory remains alluring.

In the end, Kingstone’s story is one of transformation. From a struggling insurer to a strategic acquirer with a 18%-growth engine, it’s betting big on its ability to underwrite profitably and expand cautiously. For investors, the question isn’t whether Kingstone can grow—it’s whether the market will pay a premium for it.

Conclusion: Kingstone Companies (KINS) has emerged as a standout performer in the insurance sector, leveraging disciplined underwriting, strategic acquisitions, and a fortress balance sheet. While risks like inflation and market dynamics linger, the company’s execution to date—and its 18% premium growth—suggests it’s well-positioned to deliver returns. With a 36% return on equity, a $25–35 million annual boost from Amgard, and plans to explore new markets, Kingstone’s stock appears to reward investors who bet on its long game.