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, driven by improved underwriting, favorable weather, and expense management.

• Core business direct written premium grew 21.5% year-over-year in Q2 2024, while non-core business shrank by nearly 60% as part of a strategic focus on profitable growth in New York.

• Annualized return on equity reached 47.2% in Q2 2024, reflecting significant profitability improvement.

• Benefited from major competitors exiting the New York market, creating unprecedented growth opportunities and rapid increases in new business activity.

• 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 direct premiums written up 12.3% to $53.5M and core direct written premiums up 21.5%.

• Net combined ratio improved to 78.2% in Q2 2024, a 21-point year-over-year improvement; underlying loss ratio was 47.1%.

• Adjusted EBITDA for Q2 2024 was $7.8M, up from $1.2M in Q2 2023.

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

• Net investment income rose 22% to $1.8M in Q2 2024.

Outlook and guidance

• 2024 guidance: core business direct premiums written growth of 25–35%, combined ratio of 84–88%, EPS of $1.00–$1.30, and ROE of 26–34%.

• 2025 initial guidance: core business direct premiums 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 due to uncertainty in forecasting its impact.

• Assumes no major catastrophe events and only modest increases in reinsurance costs.

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