| Ticker | Status | Jurisdiction | Filing Date | CP Start | CP End | CP Loss | Deadline |
|---|
| Ticker | Case Name | Status | CP Start | CP End | Deadline | Settlement Amt |
|---|
| Ticker | Name | Date | Analyst Firm | Up/Down | Target ($) | Rating Change | Rating Current |
|---|
Kingstone Companies, Inc. (NASDAQ:KINS) (the "Company" or "Kingstone"), a Northeast regional property and casualty insurance holding company, today issued the following open letter to stockholders regarding the actions taken to enhance value:
Dear Shareholders,
As we enter the new year and I complete my first quarter as CEO, I want to thank all KINS shareholders, old and new, for your support. Feedback I've received from you about our increased transparency and enhanced disclosures and your ideas for improving our business are much appreciated. Today I want to review some of our accomplishments in 2023 and expectations for 2024.
I joined Kingstone about 4 years ago and can proudly say that we are entering 2024 as a transformed and much stronger company. The Kingstone 2.0 and 3.0 strategies were the foundation for the improvements that you see in our business today, and we expect that the results will manifest themselves even more clearly in 2024. The initiatives underlying these strategies produced a smart, nimble and efficient company and resulted in a portfolio of risks that are both priced right and insured to value. Our products use advanced rate segmentation to better match rate to risk. We now have effective risk management, modern efficient systems, and low expenses. Most importantly, we have a clear strategy to focus on our Core state of New York, where we have deep producer relationships and have operated profitably over decades.
2023 was a year for the record books. The confluence of various macro-economic factors made for an unusually trying time. Kingstone acted early to address these factors and made numerous changes to help return the company to profitability. One advantage of being an early mover is that Kingstone has turned the corner, and we are now in the position to grow again while others are still making these changes and are still restricting their business. This makes us extremely optimistic as we return to growth in 2024!
In addition to being a first mover, let me share some additional reasons for our optimism:
First, the macro-economic factors that were headwinds now appear to be turning into tailwinds as inflation has abated, reinsurance rates are thought to have peaked and interest rates look to be on the decline. All of these factors had a material negative impact on operating and investment results in 2023 and should instead materially benefit the company in 2024.
Second, the drag on our operating performance of the Non-Core business (i.e., outside New York) will be minimal in 2024. As shared previously, we have successfully taken a series of actions that will result in the continuous and rapid reduction in our Non-Core policies-in-force, forecast to be down 80% by year-end 2024 from year-end 2022 when the decision was made to reduce the book as quickly as possible. The loss ratio on the remaining book should also improve materially because of rate increases and other actions taken.
| Impact of Non-Core Business on Loss Ratio | ||
| 2022 Actual | 2023 Estimated* | 2024 Forecast |
| 11.1% | 7.2% | 2.8% |
| * Based on 11 months of actual results and estimated December 2023 results | ||
I am especially proud of the significant reduction in our expense ratio that we have been able to achieve. This will enable us to have more competitive pricing in the long term. Multiple factors contributed to this decline, most notably our increase in average premium, the new terms of our quota share treaties (for 2024) and the numerous changes we made to improve the efficiency of our business.
| 2022 Actual | 2023 Estimated* | 2024 Forecast | |
| Net Expense Ratio | 36% | 33% | 29% |
| * Based on 11 months of actual results and estimated December 2023 results | |||
Last, we have addressed increasing loss trends, including inflation, with our effort to update replacement cost on every policy as well as by adopting an annual rate change cadence for every product in our portfolio. As such, our personal lines average written premium per policy increased materially in 2023 and will increase again in 2024. These higher premiums should lead to wider margins and higher underwriting profits.
| Personal Lines Average Premium | |||
| 2022 Actual | 2023 Estimated* | 2024 Forecast | |
| Core | 2037 | 2324 | 2648 |
| % Change | 14% | 14% | |
| Non-Core | 1704 | 1835 | 2173 |
| % Change | 8% | 18% | |
| * Based on 9 months of actual results and estimated Q4 2023 results | |||
I am so proud of the company that we have become and could not be more excited as I look forward to the anticipated positive financial results for 2024 from the tireless efforts of the entire Kingstone team. Thanks again for your support.
Best regards,
Meryl
Meryl Golden
President & CEO
mgolden@kingstoneic.com
203-246-5602
Posted In: KINS
