Kingstone Companies (KINS) Q2 2024 earnings summary

Executive summary

• Achieved third consecutive quarter of profitability, with Q2 2024 net income of $4.5M and strong double-digit core premium growth, marking the most profitable quarter in seven years.

• Core business direct written premium grew 21.5% year-over-year in Q2 2024, while non-core business continued to decline as part of a strategic focus on profitable growth in New York.

• Benefited from early actions to address inflation, loss trends, and expense management, with improved underwriting and favorable weather.

• Experiencing unprecedented growth opportunity as major competitors exit the New York market, with over 60,000 policies needing new carriers by year-end.

• Raised full-year 2024 guidance and introduced initial 2025 guidance, reflecting confidence in continued growth and performance.

Financial highlights

• Q2 2024 net income was $4.5M, or $0.41 per basic share, with annualized return on equity reaching 47.2%.

• Q2 2024 direct premiums written increased 12.3% to $53.5M; core direct written premiums up 21.5%; non-core business down nearly 60% year-over-year.

• Combined ratio improved to 78.2% for Q2 2024, down over 20 points year-over-year; underlying loss ratio improved to 47.1%.

• Adjusted EBITDA for Q2 2024 was $7.8M, up 534.7% year-over-year.

• Book value per share (diluted) increased 22.1% year-over-year to $3.19 at June 30, 2024.

Outlook and guidance

• 2024 guidance: core business direct premium written growth of 25–35%, combined ratio of 84–88%, EPS of $1.00–$1.30, and ROE of 22–34%.

• 2025 initial guidance: core business direct premium written growth of 15–25%, combined ratio of 85–89%, EPS of $1.20–$1.60, and ROE of 22–30%.

• Guidance does not yet factor in the recent market opportunity from competitor exits and assumes no major catastrophe events.

• Targeting net underwriting expense ratio of 29% by year-end 2024.