Kingstone Companies (KINS) Sidoti Micro-Cap Virtual Conference summary

Company background and recent history

• Focuses on coastal property insurance, primarily in downstate New York, with 91% personal lines policies in force.

• Experienced double-digit growth and ROE for 14 years post-IPO, but lacked investment in people, product, technology, and processes.

• Underwent a five-year modernization and turnaround, now reporting three consecutive profitable quarters.

Modernization and turnaround initiatives

• Hired experienced senior leaders and invested in new systems, saving $1.5 million annually.

• Launched the Select product in January 2022, using advanced data science for better risk segmentation.

• Select product achieved 10% lower claim frequency than legacy products, driving profitability.

• Improved catastrophe exposure management and introduced hurricane deductibles.

Strategic business focus and risk management

• Exited unprofitable non-core business outside New York, reducing non-core premium from 20% to 5%.

• Focused on profitable Long Island business, previously masked by non-core losses.

• Raised rates to address inflation and increased replacement costs, re-underwrote policies for adequate coverage.

• Enhanced reinsurance cost management by evaluating risk at the point of quote and non-renewing high-cost policies.

• Reduced expense ratio from $0.41 to $0.31 per $1 of premium by staff reductions, tech upgrades, and renegotiated contracts.