KINS - Earnings call transcript Q4 2018 | Kingstone Companies, Inc.

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Operator

Greetings, and welcome to the Kingstone Companies' Year-End 2018 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Amanda Goldstein. ahead. go Please

Amanda Goldstein

statements much, the very XXXX good everyone. make morning, results. Thank circumstances issued factors and call on Kingstone. and Kevin, differ a as afternoon, forward-looking may uncertainties Kingstone may company this events Kingstone's itself press known Yesterday On of could this a and you effecting call, discussed and regarding release year-end result its occur and forward-looking business. materially The and not unknown risk detailing

to refer Future along please year yesterday. information company's section Conditions titled Item forward-looking Affect more For XX, the with the May That the on the the earnings XX-K statements Results in release XXXX, Factors commentary ended December for Financial at issued and the of company's the X of Form end

references remarks to measures. our addition, today non-GAAP In include

Mr. a our to For tables the to the to of I'd measures ahead, like that, Chairman, non-GAAP Thatcher. reconciliation please over turn GAAP see figures, Mr. Thatcher. our Dale earnings call Please With go release. in Kingston's

Dale Thatcher

still have Thanks, back everyone that is for at I year-end to choppier Amanda, stop Kingstone, that President and this we us at took approximately look it the to year. time accomplished was lot. was I as good the feel results the financial joining but to for year, I expected year I a here for say, you call. It our a than position conference so on of today a bit thank and a performance ago lagged

up of strongest growth with fourth up written of million our XX%. we XX%. direct $XX.X almost We quarter, year, direct had the For million, premium recorded written premium the in $XXX.X

for XXXX, growth Expanding continued very Massachusetts healthy the New in in we Island Jersey and New to in York, and York, of business, New core added year. XXXX. Our Rhode beyond show XX%

off just under add Jersey, expansion million as in the $X in possible from expect in in states million over of to of year. gotten $X our Premium our Maine well which in as in $X expansion in XXXX a quickest to and XXXX, $X.X the Pennsylvania went We million to start We've represents Connecticut restart late million XXXX. premium. New

them before to continue larger have and we're gladly wholesale into of particular quality carrier for suburban ever with dollars competitors they increasing focus minimum and Many premium our require demand agents on A-rated found an a can a are $X that a with are volumes. who We've a for commissions. high-quality looking service. who may quality We of to behind affinity premium more are premium left million who rural willing agents give our carrier. by million minimum a have That attract a with smaller carriers take of quality from beneficial often Rural to product contingent Kingstone or agents relationships sizes, agent makes not agents a and service forces year. and enough providing it business solid, believe business to size, nimble able difficult in profitable build channel. the relationships spite that. our enough agents. loyal, and By that we're comes in and to profitable as the We them their small agents players, as production with advantage of quality to low big our superior for per all with with takes $XX,XXX dedicated single

but volume, agent schedule. the servicing small to is not profitability of way attention ahead building Our only premium

with dead loss where ratio expansion well they delivered XX%, the their development, for ahead the the this we a and perform of even at states ratio company. loss overall point of thought For would XXXX, of

development immune property tightened filed just increased losses, development, increases, the adjusted industry This not and six and interior X.X cat disappointing is The trim constantly and and of keep in and exterior adverse combined balancing combined losses, as restrictions losses. unfavorable where a points to whole inspections, XX.X%. points 'XX. related tighten Our liability trend. underwriting both right. we've quarter certain rate included and some including XX.X%, has for of a from ending requirements we're ratio and seen on settlements and Overall, homes. act that of from between a We've we've steps seasonal ratio never to deterioration profitability XXXX secondary was X.X for our criteria, catastrophe to adverse Underwriting year, the we've was X.X are points taken the points production of underwriting

year we but the the For a continue profitability, been We we've adjustments success. than trend necessary bit expect balancing this ran and of growth make to fully our property expected. most part, harder at history tremendously successful to

the over call our on Now commentary I portfolio update and Barry general turn agent like our investment for on operations. COSI, some to to would an

Barry Goldstein

short-term one- A Dale. during changes elevated investment by rates. and doing some by overall was made we fixed first to portfolio grade fixed with managing our portfolio adding Thanks, conservative year-end, we fourth quarter, able years. since few credits most about of duration corporate focusing on returns. income maturities, our remarks And our the portfolio, began I it investment the XX so without income three-year level risk to been our overall By to were reduce compromising it's

is stock, reflecting significantly impacted. equity on markets. than the in that In and in pointed earnings company's than solid making equities in less X% Warren average the A-. the rated credit a fourth allocation to portfolio example, of spite preferred than to was the as the our of our brought results to now bonds As XX% very an we triple B- went of our GAAP half volatilities out, more quarter accounting Buffet by But what change have our by less corporate way

getting fixed out the addition a and than of in pounded the decline value. market our in spread reducing with equities into fourth treasury quarter, along portfolio In blew value faster translating our the income rates book decline credits far

with quarter of results I levels. to looking you to end far quarter thus do seen our that forward sharing we first Fortunately, will May. am pre-fourth the in have the and and sometime quarter in XXXX return values the

that the agency. As to I am investment Dale chief the future. responsibilities hit and of call the carrier Kingstone and very am previously, continue detail. broker for producer national the is called allows bit to agent shaping independent my our as we addition COSI very as company call premature selected producers. discussed traditional and well officer, digital much of share model a president products contribute with our away carefully with new agencies It's distribution Kingstone ground also distribution from and I COSI agencies, centers, in pleased for working I channels. a to selected we can and running COSI the the into other partners of the which

do. I back I material forward Dale. you to to color it's feel our always, to intend be May, And the we COSI let contributor to business tell me As in what with will you but not more that my in that, a done, look XXXX. best it's hope expectation what've giving call and to turn

Dale Thatcher

got developments Thanks, to seeing our for And forward really Barry. COSI. over to look I how profit time. exciting We've some profile that adds

continue to questions. to XX% losses and I with and losses for end year. quarter claims most X excluding make With on we the for like the seeing provide the a XX% our I trends and combined would and catastrophe the guidance first expect industry, we we past mind changes the results underwriting made in that call this to Keep turn Before points. that, XXXX of that we call, and practices, in to are have hit catastrophe ratio would year, to XX%, for operator of our expect XXXX. in again to an cat Based close I it of like losses the over historically and open the and this to

Operator

Our from from Paul first coming is question Instructions] today Newsome Sandler [Operator you. O'Neill. Thank

is live. now line Your

Paul Newsome

Good have are guidance? you embedded may expense what expenses talk if year trends baked ratio some had at like well? and that other you your am in morning. looking about Could as as for states It you've uptick into into your that you is wondering looks be expanded I next in the

Dale Thatcher

Paul. Yes,

so ourselves new we've invest the both states. our underwriting the growth seeing that are the investing ratio we like see, for expectation in with control can states. also in underlying continue keeping is rock expenses we to crazy the obviously at overall letting core, on look obviously, but core, included been growing but look we you we through That other our that that it, go in our the in If on the new of not will line, the combined terms on future in keep we're expenses, so and at solid we to of

We're Pennsylvania. going we up As in going and XXXX Connecticut opening also be here. Maine indicated, to be restarting we're to

of all included. So, those are

overall projections the guidance ratio, specific provided but is that included our expense on We the haven't in year. just for

Paul Newsome

the what you from any -- business new pickup perspective? us is from Can give that of sense just

Dale Thatcher

producing as states? mean, much be far how You in to as those business going new new we're

Paul Newsome

No, the ratio no, as these impact to on the what business from efforts. expense

Dale Thatcher

expense the On ratio?

Paul Newsome

roughly. Just

Dale Thatcher

I going but lot. to it, the think years. pressure not it been has upward couple may have what bit a roughly little be It last that in of on it's of a

Paul Newsome

thank Okay, you.

Operator

you. Thank

is & question Boenning next Our from coming Scattergood. from Bob Farnam

Your now line live. is

Bob Farnam

if the reserve last I you're an guidance, cats more this and it XX% like looking out development, -- combined back back think was out I'm year, know, if A I I there. the you normalize hi on I your Yes, question year. the looking ratio XX%,

the XX% next back the Just there this going to XX% how or show What to want from to that's year the year. to get XX% are levers in know an improvement?

Dale Thatcher

is embedded adverse one did contingent development, at if have thing, some that's Well, Bob, is effect there refigures there you'll that in that line, look because so you on the there, development adverse also that's too. with we see calculation, the commission, the commissions in contingent the

to play have you with around So of that kind also.

Bob Farnam

Okay.

Dale Thatcher

but cognizant view give them, way take generating lot we combined we've try up changes that credit what going of certainly improvements terms -- ratio. what we're it's that's not think in and so to of analyzed to we're to in by of a much conservative a we're too doing We end we making, trends. underwriting So, of

get position that certainly expectation call that we a that the XX% industry try be ratio. think is to we going range. same good to So, a XX% ex-cat in to combined We're property. the I to But pressure seeing seeing realistic would to what be on of in we're

Bob Farnam

seems improvement at like Okay. amount pretty Yes, because just a to good that component of contingent so relative this take look a year. I'll commission the

of development, or the think was what terms Is claims from, you development quarter? this so. the 'XX that driving reserve or liability noted I 'XX some In

Dale Thatcher

Correct.

Bob Farnam

Okay.

Dale Thatcher

-- it's so side of liability things. a just Yes, it's line commercial claims of old in the couple a

our again, just would what companies reserve be our you know, numbers. given plays So, happens larger one significant it is rounding things position -- a now of that in size, reserve the in and size and as a overall our error

Bob Farnam

right. All

thanks. Okay,

Dale Thatcher

Sure.

Operator

our of end the reached question-and-answer session. We've you. Thank

to Let's turn over or further the back closing floor comments. for management any

Dale Thatcher

all you participating today. for thank I

If can you additional would Thank discuss happy to quarter. myself, any that, and and results you have With good the you. a or our you contact either questions be I with you for Goldstein us, to contact wish like day. we'll Amanda

Operator

conclude does teleconference. today's That you. Thank

this have You day. your and at a participation you may time, thank for disconnect wonderful today. your line We

Kingstone Companies (KINS) 14 Mar 192018 Q4 Earnings call transcript