KINS - Earnings call transcript Q1 2024 | Kingstone Companies, Inc.

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Operator

Welcome to Kingstone's Company's First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Karin Daly, Vice President of the Equity Group and Kingstone, Investor Relations representative. Karin, you may now begin.

Karin Daly

Thank you, Melissa. everyone. morning, Good

this the and Meryl on from On will Chief actual and be note be of statements, to include Joining involve results factors which and call results. that Chief projected Officer, known that to like Golden; company, risks Gravelle. different call Financial Executive may the forward-looking uncertainties us unknown I'd today conference other Officer, materially behalf cause Jennifer may

they as discussed. Forward-looking and the of are statements which to information made, undertakes on the only obligation no speak Kingstone date update

section For and more information, entitled X company's please Factors in condition XX-K. may refer Item results to future Form of the the latest affect Part XA that financial

Additionally, non-GAAP today's remarks may references include to measures.

to in my the begin. For you figures, GAAP call a turn reconciliation the Meryl, earnings it's that, please to tables of pleasure With to over may release. the measures non-GAAP Golden. latest see Meryl these

Meryl Golden

good And Karin. morning, Thanks, everyone.

we quarter worked. Our and results have first plans the place the in the show have have in turnaround made we put investments that

was an incredible in the as growth consecutive for double-digit improved net quarter core generated the to quarter. business, and achieved underwriting our we our second year income results start markedly This

accomplished and future. are proud what more of We optimistic about extremely the even we've

Bridgewater. my Kingstone I've as done foundation for experiences, the is and realize that and that the to of strategies tenure from come been that about the underlying thinking reposition everything I've about strategic the my have at most on previous What principles modernize X.X was executed to those talked we X.X upon. I learned notably Progressive based playbook Kingstone the and that we company. we've initiatives Previously,

in and taking the of X of It's our the action context will and to risk, them lastly, insurance growth, and importance trends grow The of easy having the transparency. prioritizing proactively going power turnaround and to properly specifically, rate prompt to the segmentation matching those discuss Today, low to over them. profit imperative highlight rate address I'm of identifying expenses; of in business. principles

harder profit given is always decisions. living but our that make been. to premiums the unprofitable has determination profit easier represented It's growth, XX% key at to decision grow peak, by book easier how difficult business, its much non-core is profitably, reduce example aggressively which more to than it makes Clearly, of of maybe important tenants an our an our that prioritizing

in in costs. Another material year, business the example, projected our reinsurance last significantly of our we increase slowed a new face

we because Once More new competitors, of trends we recognize trends result would some than the restrictions rates on increase being than expected net customers was higher cost, rise X actions are loss of to many expand to which and inflation, our ahead of underwriting our opportunities. the able had for less years taken that and also business the in and we underinsured. of our to understood, relaxed well driving much we ago we of was were our our which was loss account the our raise many

a put plan place cost every renewal. We on in policy raise and to update quickly premiums to acted our replacement

the shut competitors addressing benefits or take enable of producers, our of are of our still to have of their faster which One ability while profitability is needs us that conditions, some early business successfully returned gives an will the advantage have we completely. to of the restricting growth. being This mover down market

some anticipate continue our the You to continuing and quarter, for will time. that see second accelerate in growth we

challenges, early is an mover While emerge you when can the other validated side. being decision successfully the pose on

to hired recognize tenure product the Kingstone, highly develop early help that and matches We we to product. the in early I Very us talked at live outside XXXX. my We develop segmented rate enough better firm actuarial went a risk. have Select not to about product need our in more an

business mostly This Select exceeded is bodes have for lower as the Select, future book extremely Kingstone represent is well in in and product less business. expectations the portion results of frequency of which reported in The our than quarters represents than materially as is renewal will come. legacy XX% frequency a which larger today new mostly our our to

rating maintaining cannot and by are We emphasized Select rate product profitability enough. be our The growth will in enhancing segmentation, of which further our the further increase low new adding expenses variables expect we future. and significance

about expenses in have changed ways, reduce various many We in reduction talked actions and repeatedly the taken fundamentally company to reflected I've our so the expenses. substantial of it's the

average from ultimately margins allowing have as are our advantage a benefited Having us We us competitive doing. implemented. we expenses and also premium the expand faster in we grow sustainable to significant low to now that gives increase

And I want and investors. transparency. regulators, owners like act trust the to policyholders, finally, employees to believe power reinsurers and of in I our with build

ideas cultivate of environment implementing to We openness. are proactively listening an closely and

believe company supports raises We on enhances into and our and transparency our confidence are bar strategies confident operations our performance. the our in

identify the Even note Kingstone's sure that this mistakes the of problems. a quickly the and of to are more largely want that new playbook. product address performance we that, turnaround in now potential not quarter. about a make is things the repeated place to in have important With culture I built executing and is a few the blueprint to past

were router, quarter a factor and to certainly Northeast this winter typically first to mild was loss experienced We weather. a was our due an underwriting ratio loss contributing that we fortunate the winter that improvement. As in

the rate York and non-core business, Mix from other frequency. in Our Select expenses, increases reserve among and possible favorable our made book lower our changes number in this New quarter. large lower prior profitability we factors. growth year development the reduction last of was took to in of from from in large continuing Favorable a loss losses rate earn seasonably year, the

business XXXX, our half, than update XX% non-core including runoff This quick In was the the we years. profitable by quarter. last have non-core of reduction that more on most strategic a first business. X Also, our reduced in quarter in a experienced we

not our to get entirely. goal is off to impact the eliminate earnings, has the non-core Our the book business negative consolidated on

For XXXX, the share per our earnings business non-core by reduced $X.XX.

current 'XX minimis is estimate earnings year will $X.XX, the be by de XXXX. and reduce in business per share non-core the our that should Our impact full

release, yesterday's our we in outperformance to announced XXXX guidance quarter. As raised first incorporate the the in

range we to For growth achieve expect we $XXX our in sorry, XX% to of direct core now a business business the of earned, net approximately XX%. GAAP combined dependent, $X.XX between XX% written direct as business, million and assumes on share full equity year, between changes And -- we expect written catastrophe assumed XX%. are premium and our based the very achieve a in on major in to and premium return reminder, our ratio between premium core of And our XX results no events and have XX, guidance earnings per this material and weather guidance. of our $X.XX no

have for X We premium the also year's that catastrophe assumed at be our will reinsurance January rates last level renewal. cost with

for of results. with our may Bermuda, Jen? turn Jen detailed I rates. reinsurers following to achieve I'll our call we recent even in However, that optimistic the quarterly am more over visit favorable financial review With a more that,

Jennifer Gravelle

Meryl, you, everyone. morning, Thank and good

from XXXX quarter year. of net the per is Xst same with are This or $X.XX income million to million the $X.X report a quarter period a share. our consecutive last We turnaround second results, profitable $X.X

I highest was from quarter years. increased and direct happily Meryl indicated seen we strategically in quarter profitability $XX quarter. first written XX.X% XX.X% will Core while prior non-core have year earlier, reiterate, the premiums business to the As X this million, declined

relatively X.X% primarily increased written premiums losses, direct weather, basis, quarter was mild favorable our With actions. due performance losses consolidated and a large quarter-over-quarter On exceptional. continued catastrophe pricing in to fewer

losses XX first combined XX.X% to due and Our expenses. quarter ratio points both to improved lower

improved well largely lower due to mild the weather Select XX.X%, underlying points product Our our by lower to risk frequency as better as ratio XX.X from selection from winter severity. loss

quarter business. in losses that the to first quarter. we losses fortuitous it year, of we last losses, contributed and these outside conclusion. also of unusually this a at ultimately business saw We lower random. be firm and again determined not a recall, fourth take performance was may large The volatile Insurance Naturally, could the reduction close non-core the in you which of look large an high number our number hired the confirm quarter explain. to can As profitable

we favorable development of the In underlying an experienced the improved primarily losses. from losses, points to addition ratio, X-point re-estimation loss also prior from catastrophe improvement much X year, in and catastrophe of

improved loss Our points ratio by net XX.X overall.

reduction year of Our to down for our XXXX. expense X.X our result ratio and as was expense efforts ongoing towards trending XX% a goal full ratio the points expense of XX.X also

like the our quarter, to consistent For prior investment the about relatively was of make points X year $X.X million portfolio. investment key income I'd with quarter. There are net

spreads credit and increased First, the quarter rates during tightened.

decline As value such, was portfolio the our muted. in

XX% also to stocks However, reduced exposure preferred our reduce roughly volatility. we to by

further We stock intend reducing preferred on quarter. our second during holdings the

an in the finally, will number XX generating today. improved are positive results we increasing us available see next maturities lower over what to portfolio months operating coupon the flow. far carry to And which Secondly, than a of XX the company cash our of is bond

and invested we fixed that securities. first the maturity quarter, leaving note with less us You'll excess higher cash this cash in

X.X of yield effective increase down X.XX%. maturity is weighted securities, X.X average our that an fixed with income. to an in effective result increased years. will is to our average investment our This years to duration future The Relative maturity

per $X.XX value Our share. AOCI XX was March excluding book at

we'll very with on first increase an year. we equity our questions. pleased return further Operator? to of balance on XX.X% expect with the annualized that, are We of up return the produced which equity for results, quarter And it open over

Operator

comes David first Street of question the [Operator with Our Capital. Instructions] Daytona from line Eidelman

David Eidelman

presentation. a great a lot. That Thanks was wonderful. Yes. It's

gone day. if and or book my rate years value how to worth -- down. the at grow last, ability your want grow if you wonder last say, have enough does you affect net levels that is, made in decline want the value let's to? the And has X over the few grow? you reach that the years, My You to X wanted over the to is I given that question book

Meryl Golden

our as But Great. all growth. always growth Thanks we share our we have this the today. I to know, if ability as see more see at for growth. capital you we an don't, point, said, just our your our And as really question. quota We capital to our don't at it so to increase impediment constraining support need

David Eidelman

Great.

Operator

McClear, question line Gabriel Our of from next comes Private Investor. the

Gabriel McClear

Meryl blown when quarter. on I I in profitable a we've and we congratulate I'd had I've all that think since XXXX, profitable first know I been quarter. you shareholder don't were the since first first saw was quarter. I Jennifer, like to away just a

how is and from down me prior investment went yields So you, -- year I Jennifer, increasing Meryl. why actually question income that just investable happens understand thank one and net and assets of one then our for Jennifer and up. that. also the help have you for for kind are be should the went

Jennifer Gravelle

some some the Thanks question. we all so you of happened portfolio stock our as recall, for did XXXX state didn't quite Effectively, of with that XXXX gains at the Sure. in unrealized came the as investments did what through increase a bad that much quite we have in were the have we in because XXXX, have is end in economy.

XXXX, improvement was So direction. is of XXXX, going right through than which we still that it but in did the greater have

Gabriel McClear

more But like prior actual down? that versus, income. like would $X,XXX,XXX the It was income seems I we year the Why Okay. far having come like million of something. net $X.X as as or number should investment think, be being

Jennifer Gravelle

income, down A Sure. to The that It in $XX,XXX. is in net $XX,XXX. on about that change. and the very would and our like of XXXX, amount portfolio total investment the that is million driving particular $X.X interest what would investment $X.X XXXX, million year-over-year small from change appear went be dividends

Gabriel McClear

in direction Right, going right. why going supposed it's wondered to the up? I when it's just be down

Jennifer Gravelle

do response. Gabe, we further Yes, the dividends some interest in the and have and change can get thing will into on a the that look more see, only is I I is detailed this portfolio. you that

Gabriel McClear

Okay.

it's percent And the that's is could then, would a that. I'm already about you I mean, questions helpful. but question does you now. really is of business, our But anything you And guess, in work? guys public Great. it using and one in my Meryl, the call, your presentation for Are in of you answered I this program AI? about be I understand program share select like competitive a the how Okay. curious my And

Meryl Golden

Sure.

I using said, But to our we're And rates. AI So highly as I'd rates did, like point, our at to 'XX. that to you are this tell we in they we what AI, regulators, excludes to need in the be but went which opportunity regulated. use explained live

what's for like based past very each cost year on and for which peril Kingstone bi-peril so the where the we specific took of they're for XX so So the is each for priced data water, the or the built for the the liability, is homeowners, a a then, predicting we or before of plan, years, all loss that perils, peril. rating to data pricing way hurricane different most or called relevant

very we very priced, to far but a it's for coastal that in the homeowners be it's -- So our we're common a ahead feel of competitors space. way

And a what the product. upwards seeing than reduction as we're reported product, lower our Select is mentioned, seen that we've fact, so our in our frequency And of legacy in is frequency. I XX% in

higher for business. see new frequency would you typically, So

book our So is business the when that really frequency new is of majority we're seeing fact fantastic. lower the

your answers question, hope that So Gabe. I

product is and to more become segmentation can grow that rate improve so to intent and select profitable. even this our Our faster enhance we continue

So we're Select very product. about excited the

Operator

the of next question Scott. Bob Farnam Janney Our comes from line Montgomery with

Robert Farnam

I One is again. on of actually that legacy couple Are product touch have just the business. you out a trying back get of Select to questions. go the and

words, on other kind get in think you if so, soon how you're platform? the And everything Select transition? do to can that So trying you be do of to

Meryl Golden

Bob, answer, the no. So is

are those book, really our is them time. to our there policies this any that -- We see will and massive legacy renew if primary have customers dislocation very to be legacy is between need at a those policies. convert in don't move and some retain profitable we that continue for will to were frankly, book, legacy so And hoping the book would we we try we grandfathered to And the time. reason and

Robert Farnam

Okay.

just So if to to but It's going unwind book. going leave, you're basically not as when write trying That's to to will on eliminate continue renewed, the just in. indefinitely. keep policyholders just the they legacy that you're

Meryl Golden

point enough move at some at not mean it will but small them I probably get certainly time. Exactly. Exactly. over, that we this

Robert Farnam

forward non-core of Okay. hear like have a just the book, on it I you I you're negative reducing did still book And -- the it, if with will that correctly but completely. sounds not planning It's you exiting non-core going indefinitely. you're impact

Meryl Golden

New from Exactly. regulation to We're can terms off state the the get of subject did book much how in we of we of withdraw of, Jersey.

the New we will end states, rates. in XXXX, continue the to have of business at So we take no Jersey. in But other

We had. we the have that our just non-core non our to We on but can't earnings renewed from is maximum goal business. minimize the drag the

confident the very any feel the impact, rate little results. we on our in taken at we've all, so we've XXXX, it very will have And actions with other and then if taken,

Robert Farnam

And Great. last question. Okay.

what's the I'm specific are in who -- there? competition [ there that I How but kind environment face the competitive So a bunch the ] Florider space, of up of coastal writers, not know sure like York in area. you New

Meryl Golden

Sure.

market historically, moratorium is writers in coastal time business, their I largest of downstate a all business -- and in talked it that have some the one to our the pulled New the other So on large of very continue X that's away we've a going and from coast out to multiline think hard for of about of be the business. for And is a reasons. it past multitude continues York competitors has

we moratorium quarter, put had first another a And the all even new on business. in competitor large

about position, in coastal advantage beyond. you so brokers we are and and would our this the hard fewer our than have going feel past second growth companies the definitely to writing because the see take quarter are we in of there market will choices accelerate you and pricing, So they business, many that tell but confident

hope your that question, Bob. I answered So

Robert Farnam

New No, Yes. last York a market find reasonably priced have for good. if that's of something like just can't Does resort policyholders them.

Meryl Golden

some there plan, fair -- there all, compete but point, with heard is markets first this MGAs small. have a really -- space. and of what at been And E&S entering There we the it's new mostly E&S I've

extremely availability. is just It's there expensive. So

seeing don't plan. the that's I So much -- growth we're far think in

Robert Farnam

Okay. Great.

Operator

you There recent remarks. Karin any address to from the be and Group, this are contact Relations Should Kingstone's most on number back representative at Investor Her time. the earnings call turn release. I'll can e-mail the questions, no Daly Golden further follow-up telephone now can Meryl have for you questions Equity found closing

Meryl Golden

joining day. Thank I thank their for our Kingstone today. Have your for I call interest. wonderful team you great Great. for my to want a efforts. And gratitude support entire and mostly, to our express your want

Operator

Thank conference you. today's concludes call. This

You your at your may disconnect time. Thank for lines this you participation.

Kingstone Companies (KINS) 14 May 242024 Q1 Earnings call transcript