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    KINS
    Earnings call· Jun 2026(Q2 FY26)

    KINGSTONE COMPANIES Q2 FY26 earnings call KINS

    Aug 7, 2026 Source

    Executive summary

    Kingstone Q2 FY26 — Record Profitability and Strategic Expansion

    Kingstone delivered a record-breaking quarter, driven by strong premium growth, underwriting profitability, and operational efficiency, leading to significant increases in net income and book value. The company is strategically expanding into California and Connecticut while navigating a softening market and increased competition, particularly in New York. Management remains confident in its full-year outlook, emphasizing disciplined growth and capital management.

    Highlights

    9

    • Net income reached a record $15.5 million.

    • Net income per diluted share increased 35% to $1.05.

    • GAAP net combined ratio improved 1.3 points to 70.2%.

    • Annualized return on equity was 50.8%.

    • Diluted book value per share reached $8.69, up 35% year over year.

    • Direct premiums written increased 19% to $72.5 million.

    • Net premiums earned grew 31% to $60.5 million.

    • Expense ratio improved by 2.1 points to 30.6%.

    • Quarterly dividend increased by 20% to $0.06 per share.

    Concerns

    3

    • Signs of a softening market and increasingly competitive environment, particularly in the dwelling fire line.

    • Underlying loss ratio was 4.4 points higher compared to an exceptionally strong prior year quarter.

    • Growth in New York is expected to moderate from first half levels due to increased competition.

    Guidance & targets

    10
    CategoryTargetConfidence
    Direct premiums written growth
    16% to 20%
    high materiality
    High
    GAAP net combined ratio
    81% to 86%
    high materiality
    High
    Underlying combined ratio
    74% to 76%
    medium materiality
    High
    Catastrophe loss ratio
    7% to 10%
    medium materiality
    High
    Diluted net income per share
    $2.20 to $2.90
    high materiality
    High
    Return on equity
    24% to 30%
    high materiality
    High
    Effective tax rate
    21%
    low materiality
    Medium
    Weighted average diluted shares outstanding
    $14.8 million
    low materiality
    Medium
    Direct premiums written
    $500 million
    high materiality
    High
    Expense ratio
    29%
    medium materiality
    Medium

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    New York Personal Lines
    Led direct premiums written growth. Select product continues to perform well with lower claim frequencies. Growth is expected to moderate in the second half due to increased competition.
    New business policy count growth: 35%Retention improvement: 2 percentage pointsAverage renewal premium increase: 8%Select homeowners policies in force: 62%Select dwelling fire policies in force: 40%
    		$72.5 million19%——

    Operational metrics

    27
    Operating net income
    $15.3 millionup 41%
    Q2 FY26

    Compared with $11.3 million in Q2 FY25.

    Operating net income
    $10.3 million
    H1 FY26

    For the first six months of 2026.

    Diluted operating net income per share
    $1.04
    Q2 FY26

    Compared with $0.75 in Q2 FY25.

    Diluted operating net income per share
    $0.70
    H1 FY26

    For the first six months of 2026.

    Net premiums earned
    $60.5 millionup 31% YoY
    Q2 FY26

    Primarily reflecting continued growth and direct premiums written, along with reduced quota share cession.

    Net premiums earned
    $116.3 millionup 30% YoY
    H1 FY26

    For the first six months of 2026.

    New York quota share cession
    5%down 11 percentage points
    2026 treaty year

    Decreased from 16% in the 2025 treaty year, allowing retention of more premium and underwriting profits.

    Policies in force
    84,570up 9.9% QoQ
    Q2 FY26

    Total policies in force at quarter end.

    Net investment income
    $3.4 millionup 49% YoY
    Q2 FY26

    Driven by an increase in invested assets and higher average yields.

    Invested assets
    $334.1 millionup $24.4 million from year end
    June 30th

    Total invested assets at quarter end.

    Average yield on invested assets
    4.4%
    Q2 FY26

    Increased average yield on the investment portfolio.

    Underlying loss ratio
    43.1%up 4.4 points
    Q2 FY26

    Compared with 38.7% in Q2 FY25. Excludes CAT losses and favorable prior year reserves development.

    Underlying loss ratio
    up 0.2 points
    YTD FY26

    Year-to-date increase, showing strong underlying performance.

    Underlying combined ratio
    73.7%
    Q2 FY26

    Compared with 71.4% in Q2 FY25. Reflects strong underlying performance.

    Underlying combined ratio
    80.7%improved 1.3 points
    H1 FY26

    Compared with H1 FY25, reflecting strength in the underlying book of business.

    Underlying expense ratio
    30.5%improved 1.5 points
    H1 FY26

    Compared with H1 FY25, reflecting the strength in the performance of the underlying book of business.

    Net combined ratio
    90.2%
    H1 FY26

    Compared with 82.3% in the prior year period, including 12 points of catastrophe losses.

    Estimated book value per share excluding AOCI
    $9.27up 32% YoY
    June 30th

    Compared with $7.04 a year ago.

    Shares repurchased
    19,500
    Q2 FY26

    Purchased under the board-authorized program.

    Quarterly dividend
    $0.06up 20%
    Q3 FY26

    Increased by the board, one year after reinstatement.

    Total catastrophe protection
    $500 millionup 14%
    July 1st placement

    Increased total catastrophe protection, including wildfire protection.

    Risk-adjusted cost of core catastrophe excess of loss coverage
    lowered by more than 15%
    July 1st placement

    Achieved during the successful reinsurance placement.

    First event retention (wildfire)
    $3.5 million
    Current

    Maintained low first event retention across all perils.

    First event retention (named storm)
    $4.75 million
    Current

    Maintained low first event retention across all perils.

    First event retention (winter storm and severe convective storm)
    $6 million
    Current

    Maintained low first event retention across all perils.

    Select homeowners claim frequency
    34% lower
    Exemption to date

    Compared to Legacy product, demonstrating effectiveness at risk selection.

    Select dwelling fire claim frequency
    19% lower
    Exemption to date

    Compared to Legacy product, demonstrating effectiveness at risk selection.

    Industry KPIs

    11
    MetricValueDetails
    Combined ratio70.2%%
    Capital returns19,500 sharesshares
    ROE operating ROE50.8%%
    Catastrophe losses-0.8%%
    Book value per share$8.69USD
    Net investment income$3.4 millionUSD
    Retention persistency2 percentage pointspoints
    Net premiums written earned$72.5 millionUSD
    Renewal rate change pricing8%%
    Statutory regulatory capital—
    Prior year reserve development$1.6 millionUSD

    Product announcements

    2
    ProductTypeDetails
    California E&S Businessexpansion
    Connecticut Admitted Businesslaunch

    Risks & headwinds

    4
    Softening market and increasing competitionSecond half of FY26

    New York growth will moderate from first half levels; July new business for Dwelling Fire saw a tick down.

    Mitigation: Underwriting discipline, risk selection, strong producer relationships, low expenses, and effective Select product.

    Elevated winter storm activityQ1 FY26

    Costing about $14 million in losses in Q1 FY26; 12 points of catastrophe losses in H1 FY26 compared to 1.2 points in H1 FY25.

    Mitigation: Successful July 1st catastrophe reinsurance placement.

    Hurricane season aheadQ3 FY26

    Q3 is typically a quarter where we see sizable catastrophe losses.

    Mitigation: Reinsurance protection, conservative first event retention ($4.75 million for named storm).

    Admitted carriers in California reopening for new businessOngoing

    Competition building faster than anticipated.

    Mitigation: Started small in California, using early feedback to refine approach, nimble E&S structure and platform to adjust pricing and appetite.

    What to watch in Q3 FY26

    5

    New York growth moderation

    next quarter
    Current19% direct premiums written growth (Q2 FY26)
    TargetModerated growth from H1 levels

    Why it matters

    To assess the impact of increased competition and softening market conditions on the primary growth engine.

    As competition increases, New York growth will moderate📎 from first half levels.

    Q&A highlights

    6

    What is the target expense ratio as the company scales?

    Management aims to reduce the expense ratio by about 1 point, targeting approximately 29%.

    “So, we're thinking we could take about a point out of the expense ratio. So, our interim goal is something like the 29.”

    asked by Bob Farnham · answered by Unknown Speaker

    2 min read5 chapters

    Detailed Narrative

    01

    Record Profitability and Strong Returns

    Kingstone achieved its most profitable quarter ever, with net income of $15.5 million and diluted EPS of $1.05, representing a 35% increase year-over-year. This performance translated into an annualized ROE of 50.8% and a 35% year-over-year increase in diluted book value per share to $8.69, reflecting broad-based earnings contributions from premium growth, underwriting profitability, operating efficiency, and higher investment income.

    02

    Premium Growth and Market Dynamics

    Direct premiums written surged 19% to $72.5 million, primarily from New York personal lines, with new business policy count up 35% and retention improving by 2 points. Net premiums earned increased 31% to $60.5 million due to prior period growth and a reduced quota share cession from 16% in 2025 to 5% for the 2026 treaty year. However, management noted signs of a softening market and increased competition, particularly in the dwelling fire line, which is expected to moderate📎 New York growth from first half levels.

    03

    Underwriting Performance and Efficiency

    The GAAP net combined ratio improved 1.3 points to 70.2%. While the underlying loss ratio was 4.4 points higher quarter-over-quarter compared to an exceptionally strong prior year, it was up only 0.2 points year-to-date. Favorable prior year development of $1.6 million (2.7 points) and a negative catastrophe loss ratio contributed to the strong result. The expense ratio improved 2.1 points to 30.6%, demonstrating operating leverage as underwriting expense dollars grew slower than net earned premium.

    04

    Strategic Geographic Expansion

    The company is taking measured steps towards geographic diversification, entering California in the last week of the quarter through a small number of agencies on an E&S basis. It also plans to launch in Connecticut on an admitted basis late in Q3, with Department of Insurance filings moving quickly. These initiatives support the long-term goal of reaching $500 million in direct premiums written by year-end 2029, balancing growth with return requirements and capital capacity.

    05

    Reinsurance and Capital Management

    Kingstone successfully placed its July 1st catastrophe reinsurance, increasing total protection by 14% to $500 million, adding wildfire coverage, and lowering risk-adjusted costs by over 15%. The program maintains low first event retention ($4.75 million for named storm, $3.5 million for wildfire). Capital allocation priorities focus on funding profitable growth, growing the quarterly dividend (increased 20% to $0.06/share), and opportunistic share repurchases, with 19,500 shares bought at an average price of $14.98.

    AI-generated summary of the company’s earnings call. Not investment advice.