What are the profitability targets when writing new business?

The company prices for an 85 combined ratio as its profitability expectation. “Well, we're pricing for an 85 combined, so that's our profitability expectation.”

Differentiate competition in California (E&S, admitted reopening) from New York (catastrophe-exposed focus).

In California, admitted carriers are selectively reopening for new business, which was unanticipated. In New York, competition primarily comes from companies focusing on catastrophe-exposed property, with few E&S writers. “But what we had not anticipated in California was that the admitted carriers, the largest writers of homeowners in California, to reopen for business. And we are starting to see that in the marketplace.”

Will increased competition in New York primarily affect new business or renewals?

Management expects a decline in new business writings rather than a significant impact on renewal rates, as consumers are more price-sensitive for new business. “So I think what we're most likely to see is... is a decline in new business writings rather than any impact on the renewal rate, but time will tell.”

KINS

Kingstone (KINS) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Aug 7, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Direct premiums written growth	16% to 20% high materiality	Full-year · FY26	High
GAAP net combined ratio	81% to 86% high materiality	Full-year · FY26	High
Underlying combined ratio	74% to 76% medium materiality	Full-year · FY26	High
Catastrophe loss ratio	7% to 10% medium materiality	Full-year · FY26	High
Diluted net income per share	$2.20 to $2.90 high materiality	Full-year · FY26	High
Return on equity	24% to 30% high materiality	Full-year · FY26	High
Effective tax rate	21% low materiality	Full-year · FY26	Medium
Weighted average diluted shares outstanding	$14.8 million low materiality	Full-year · FY26	Medium
Direct premiums written	$500 million high materiality	Long-term · FY29	High
Expense ratio	29% medium materiality	Interim	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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 million	19%	—	—

Product announcements

Product	Type	Timeline	Details
California E&S Business	expansion	last week of Q2 FY26
Connecticut Admitted Business	launch	late in the third quarter

Risks & headwinds

Softening market and increasing competition Second 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 activity Q1 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 ahead Q3 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 business Ongoing

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

New York growth moderation

next quarter

Current 19% direct premiums written growth (Q2 FY26)

Target Moderated 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.

Find out whether KINS delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.