Robert Farnham

Robert Edward Farnham of Brean Capital inquired about Kingstone Companies' expansion into California, specifically the differences in risk compared to New York, the use of an excess and surplus (E&S) lines basis, expected performance, initial quota share, geographic focus within California, and target home values. He also asked about the future run rate and potential for further improvement in the company's expense ratio, and the current competitive landscape in New York given Kingstone's profitability.

Answer

President and CEO Meryl Golden explained that California offers market dislocation and diversification, allowing Kingstone to apply its Select product with modifications for wildfire risk using best-in-class models and E&S flexibility. She noted a disciplined, small entry (<5% of 2026 premium) with a 30% initial quota share, targeting low to moderate wildfire risk across the state with similar home values as New York. CFO Randy Patten added that the 30% expense ratio is a significant milestone, with potential for a further 0.5-1 point improvement, aiming for a 29%-30% range. Meryl Golden also stated that most California entry expenses are already incurred, and the platform is scalable. Regarding competition, Meryl Golden acknowledged new entrants in New York but expressed confidence in Kingstone's ability to compete due to its Select product, low expenses, strong service, and deep producer relationships.

Robert Farnham asked about the potential impact of undocumented workers on AMERISAFE's business, specifically inquiring if the proportion of undocumented employees being insured had changed, and if any shift towards more documented workers might alter claims patterns. He also sought to understand how AMERISAFE handles claims involving undocumented workers and if premium collection for their payrolls was affected.

Answer

Janelle Frost, President and CEO of AMERISAFE, stated that the company has not observed any shift in employee count attributable to undocumented workers, noting that their agriculture book actually grew in 2025. She clarified that claims involving undocumented workers are handled no differently than any other claim, though a desire to return to their home country can sometimes accelerate claim closure. Ms. Frost believes AMERISAFE is collecting premiums for their payrolls and concluded that, as of the end of 2025, undocumented workers are not significantly impactful to the book.