Kingstone's Q2 2025 Earnings Call: Navigating Contradictions in Capital Allocation and Expansion Strategy

Capital allocation priorities - share buybacks, expansion into new states and impact on expense ratio, expense ratio impact from expansion, growth projections and competitive environment, and capital allocation priorities and share buybacks are the key contradictions discussed in Kingstone Companies, Inc.'s latest 2025Q2 earnings call.



Record Quarterly Net Income and Profitability:
- Kingstone Companies reported $11.3 million in net income for Q2 2025, marking a 150% increase compared to the prior year quarter.
- The strong performance was driven by a stellar combined ratio of 71.5%, with net premiums earned increasing by 52% year-over-year.

Dividend Reinstatement and Capital Management:
- Kingstone reinstated its quarterly dividend, reflecting confidence in the company's future growth and stability.
- The decision was supported by a robust capital position, as the company has paid off its debt, replenished surplus, bought more reinsurance, and reduced its quota share.

Core Business Growth and Strategic Expansion:
- Direct written premium in the core business grew by 17% in Q2 2025, with a 21% increase in new business policy count.
- Kingstone plans to expand into new states, aiming to double its written premium to $0.5 billion in the next five years.
- This strategic move is driven by the need for underwriting capacity in the distressed Homeowners market and the opportunity to achieve robust margins.

Improved Loss Ratio and Product Strategy:
- The non-cat loss ratio improved by 8.4 percentage points to 38.7%, driven by a reduction in property frequency, particularly nonweather water losses.
- The shift in underwriting and product design, incorporating data analytics and data science, has led to a decrease in cumulative frequency for the Select Homeowners product for 17 consecutive months.