Executive Summary

Kingstone delivered its most profitable quarter in company history: net income of $11.3M and diluted EPS of $0.78, driven by a net combined ratio of 71.5% and 52.5% growth in net premiums earned .
FY25 guidance was raised: combined ratio to 79–83% (from 81–85%), diluted EPS to $1.95–$2.35 (from $1.75–$2.15), ROE to 30–38% (from 27–35%), and core DPW growth refined to 15–20% (from 15–25%), on ~$187M net premiums earned .
Wall Street consensus was exceeded: EPS $0.75* vs est. $0.55* and revenue $52.3M* vs est. $44.6M*; note S&P’s EPS actual differs from company’s $0.78 due to methodology/share count, but directionally a beat*.
Strategic catalysts: reinstated $0.05 quarterly dividend payable Aug 26, 2025 ; cat reinsurance limit increased 57% including a $125M multi-year cat bond; favorable pricing reduced cost per dollar of earned premium by 5% . CFO Randy Patten joins Aug 25, 2025, adding public company finance leadership .

What Went Well and What Went Wrong

What Went Well
- Record profitability: “most profitable quarter in Kingstone’s history,” net income $11.3M; diluted EPS $0.78; annualized ROE 50.8% .
- Underwriting performance: combined ratio 71.5% (down 6.7 pts YoY); non-cat loss ratio improved 8.4 pts to 38.7% on lower water loss frequency; cat losses only 0.6 pts .
- Reinsurance optimization: cat limit up 57% with <10% price increase and issuance of first cat bond; cost per dollar of earned premium down 5% vs prior treaty .
- Strategic outlook: five-year goal ~$500M DPW by 2029 via measured E&S expansion (+2 states in 2026 and +2 in 2027) .
What Went Wrong
- Expense ratio uptick: underwriting expense ratio rose 1.5 pts YoY to 32.7% due to lower sliding-scale ceding commission; mgmt expects FY25 expense ratio in line with 2024 as ceding commission improves with loss ratio .
- Severity elevated: despite strong frequency improvement, severity was up vs Q2 2024, though down vs Q1 2025; fire-related claim frequency also improved, mitigating impact .
- AmGUARD timing: first-12-month premium estimate reduced to ~$12M due to rate level differences; total expected ~$25–$35M spread more evenly over 3 years rather than front-loaded .

Financial Results

Core P&L and Profitability (YoY and Seq)

Metric	Q2 2024	Q1 2025	Q2 2025
Net Premiums Earned ($USD 000s)	$30,304	$43,523	$46,215
Net Income ($USD 000s)	$4,515	$3,883	$11,252
Diluted EPS ($USD)	$0.37	$0.27	$0.78
Net Loss Ratio (%)	47.0%	62.4%	38.8%
Catastrophe Loss Ratio (%)	1.3%	1.7%	0.6%
Underwriting Expense Ratio (%)	31.2%	31.3%	32.7%
Net Combined Ratio (%)	78.2%	93.7%	71.5%

Revenue and EPS vs Estimates (S&P Global)

Metric	Q2 2025 Estimate	Q2 2025 Actual	Surprise
Revenue ($USD 000s)	$44,600*	$52,295*	+$7,695 (+17.3%)*
Primary EPS ($USD)	$0.55*	$0.75*	+$0.20 (+36.4%)*

Values retrieved from S&P Global.*

Note: Company-reported diluted EPS was $0.78 ; S&P’s EPS actual differs due to methodology/share count normalization.*

Segment/KPI Highlights

Metric	Q2 2024	Q2 2025
Direct Premiums Written ($USD 000s)	$53,495	$61,062
Net Investment Income ($USD 000s)	$1,765	$2,300
Underlying Loss Ratio (%)	47.1%	38.7%
Net Loss Ratio ex Cat (%)	45.7%	38.2%
Core DPW Growth YoY (%)	—	17%
Non-Core DPW Change YoY (%)	—	(42%) planned reduction

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Premiums Earned ($USD)	FY 2025	~$184M	~$187M	Raised
Core DPW Growth (%)	FY 2025	15–25%	15–20%	Refined lower range
Combined Ratio (%)	FY 2025	81–85%	79–83%	Raised (better)
EPS – Basic ($)	FY 2025	$1.90–$2.30	$2.10–$2.50	Raised
EPS – Diluted ($)	FY 2025	$1.75–$2.15	$1.95–$2.35	Raised
Return on Equity (%)	FY 2025	27–35%	30–38%	Raised
Expense Ratio (%)	FY 2025	~31% 2024 baseline	In line with 2024	Maintained
Dividend ($/share)	Q3 2025	—	$0.05 payable Aug 26, 2025	Reinstated

AmGUARD transaction: First 12-month premium estimate revised to ~$12M; total expected ~$25–$35M over 3 years given rate level differences .

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Underwriting performance	Combined ratio 78.5%; record year; strong frequency improvements	Combined ratio 93.7%; mild winter; frequency down, fire severity up	Combined ratio 71.5%; non-cat loss ratio down 8.4 pts; cat 0.6 pts	Improving
Growth drivers (Core/Non-Core)	Core growth from competitor exits; non-core shrunk	Core DPW +23%; Non-core −64% YoY	Core DPW +17%; Non-core −42% YoY	Core rising; Non-core tapering
Product mix (Select vs Legacy)	Select reduces frequency; legacy shrinking	Select frequency down; legacy fire losses random	Select frequency down 17 straight months	Positive mix shift
Reinsurance strategy	Strong cat/XOL program; cost management	Continuing optimization	Cat limit +57%, first cat bond $125M; retention $5M; second event retention $9M	Enhanced protection
Capital allocation	Debt fully repaid; paused ATM	Dividend discussed; no buybacks near-term	Dividend reinstated; no buybacks planned	Shareholder returns resuming
Strategic expansion	Studying new states; cautious	Focus on NY in 2025; expansion 2026+	E&S entry +2 states in 2026/2027; $500M DPW by 2029	Increasing clarity
Input costs/inflation	—	Monitoring tariffs/materials; rate segmentation	Severity elevated vs PY, but improving vs Q1	Managed

Management Commentary

“Yesterday afternoon, we posted the most profitable quarter in Kingstone’s history with $11.3 million in net income... combined ratio of 71.5%... diluted EPS of $0.78 and annualized ROE of 50.8%” — CEO Meryl Golden .
“Cumulative frequency for the Select Homeowners product has now decreased for seventeen straight months... homeowners frequency down 29% for the quarter” .
“We were able to increase the [cat] limit purchase by 57%, while incurring less than a 10% increase in price... multi-year protection of $125,000,000 through the issuance of our first cat bond” .
“Five-year goal of ~$500 million in written premium... measured geographic expansion... intend to operate as an E&S carrier in new geographies” .
“We are raising our profitability metrics for 2025... combined ratio 79–83%... diluted EPS $1.95–$2.35... ROE 30–38%” .

Q&A Highlights

Cat risk layering: Second-event retention of ~$9M (≈$7M after tax); reinstatement premium on first layer confirmed .
Expense ratio and expansion: Near-term expense impact from expansion expected to be immaterial; foundation already in place .
AmGUARD conversion timing: Initial 12-month premium revised to ~$12M; total still ~$25–$35M but spread evenly over three years due to rate level differences vs AmGUARD .
Capital allocation: No share buybacks planned; strong capital position supports growth after repaying debt and reinstating dividend .

Estimates Context

Q2 2025 performance exceeded S&P Global consensus: EPS $0.75* vs $0.55*; revenue $52.3M* vs $44.6M*. Company-reported diluted EPS was $0.78, reflecting different methodologies; the directional beat is clear*.
With raised FY25 profitability guidance and continued frequency improvements, estimates may need to move higher for EPS, combined ratio, and ROE*.
Values retrieved from S&P Global.*

Key Takeaways for Investors

Underwriting momentum: Rapid improvement in loss ratios and a 71.5% combined ratio underpin record EPS; non-cat water loss frequency is structurally declining due to Select mix .
Reinsurance strength: Enhanced cat protection (cat bond) and lower cost per earned premium improve downside protection while maintaining attractive net retention .
Guidance upgrade: Raised FY25 EPS and ROE with refined combined ratio; expect expense ratio to stabilize as ceding commission scales with improving loss ratio .
Growing net investment income: Portfolio additions at ~5.6% book yields and duration ~4.5 years support future NII tailwinds .
Dividend reinstatement: $0.05 quarterly dividend signals confidence; balanced with growth priorities and no buybacks .
Strategic expansion: E&S entry into four states over 2026–2027 with data-science-built Select product addresses prior expansion pitfalls; diversification reduces geographic concentration risk .
AmGUARD pacing: Near-term topline contribution lower than prior estimate but multi-year premium capture remains sizable, smoothing growth profile .

Additional relevant press releases in Q2 2025:

CFO appointment: Randy L. Patten to join as CFO Aug 25, 2025; compensation terms disclosed .
Board changes: Two directors departed; Pranav Pasricha elected to Board .
Dividend reinstatement: $0.05 per share declared, payable Aug 26, 2025 .

KINGSTONE COMPANIES, INC. (KINS)·Q2 2025 Earnings Summary