Sign in

    KINGSTONE COMPANIES (KINS)

    KINS Q3 2024: Select product cuts claim frequency to 1.6%

    Reported on Aug 12, 2025 (After Market Close)
    Pre-Earnings Price$12.85Last close (Nov 18, 2024)
    Post-Earnings Price$12.57Open (Nov 19, 2024)
    Price Change
    $-0.28(-2.18%)
    • Strong Capital & Expense Management: Management is focused on reducing debt while targeting a lower expense ratio (around 28% for next year), which can enhance margins and profitability going forward.
    • Superior Underwriting with the Select Product: The shift to the Select product has led to significantly lower reported frequency (1.6% vs. 2.2% for legacy), reflecting better risk selection and pricing discipline that can drive improved loss ratios.
    • Proactive Pricing Adjustments: The company implemented rate increases of 5% for its Select homeowners product and 10% for its dwelling fire product, signaling confidence in its pricing strategies and the potential to boost future earnings.
    • Dilution risk: Management could not provide a specific share issuance range to reduce debt, leaving uncertainty over potential dilution from ATM offerings, which could negatively affect shareholder value.
    • Reinsurance cost risk: The company’s guidance assumes a roughly 6% catastrophe load, based on an exceptionally light 2024; if reinsurance costs increase unexpectedly, margins could be pressured.
    • Uncertain growth and pricing clarity: Executives noted that growth isn’t clearly “according to plan” and lacked insight into the pricing being offered to new customers, raising concerns about future competitiveness and revenue predictability.
    1. Capital Allocation
      Q: What are the share dilution projections?
      A: Management stated they cannot provide an exact dilution figure but plan to reduce debt swiftly using a mix of dividends, quota share adjustments, and ATM share sales to balance earnings with debt reduction.

    2. Rate Increases
      Q: What are the pricing rate changes?
      A: They raised rates by 5% on the Select homeowners product and by 10% on dwelling fire, with legacy rate changes in the low single digits, noting no impact from recent hurricanes.

    3. Expense & Cat Load
      Q: What are the expected cat load and expense ratio?
      A: Management expects a 6% catastrophe load and is targeting an expense ratio of roughly 28% next year.

    4. Guidance Basis
      Q: Why use basic rather than diluted guidance?
      A: They mentioned the change was simply due to past reporting practices, with no specific rationale, and noted that they can adjust to diluted figures if necessary.

    5. Product Mix
      Q: How do Select and legacy products differ?
      A: The Select book shows a lower claims frequency at 1.6% versus 2.2% for the legacy book, aided by by-peril rating and insurance scores in underwriting.

    6. Growth Performance
      Q: Is growth meeting expectations?
      A: While management finds it challenging to benchmark this new growth environment, they expressed confidence in underwriting and conversion rates amid unprecedented market conditions.

    7. Third Withdrawal
      Q: What are details on the third market withdrawal?
      A: They noted the third company, a Berkshire Hathaway firm, is exiting the market without providing specific premium information, leaving future opportunities open to market response.

    Research analysts covering KINGSTONE COMPANIES.