Kingstone’s Earnings Call Highlights Record Growth and Debt Elimination

Kingstone ((KINS)) has held its Q4 earnings call. Read on for the main highlights of the call.

Kingstone’s Latest Earnings Call Reflects Positive Momentum

The recent earnings call from Kingstone Company was marked by an overwhelmingly positive sentiment, highlighting significant achievements in growth and financial stability. The company reported record-breaking results and successfully eliminated its debt, despite facing some challenges in its non-core business and bond portfolio. Overall, the highlights of the call significantly outweighed the lowlights, painting a bright picture for Kingstone’s future.

Record-Breaking Year and Growth

Kingstone celebrated a record-breaking year in 2024, achieving an impressive 21% overall growth and a remarkable 31% growth in its core business. The fourth quarter was particularly strong, with a 49% increase in core direct written premium. This surge was largely driven by market opportunities arising from the exit of competitors Adirondack and Mountain Valley, positioning Kingstone as a leader in its sector.

Debt Elimination

In a significant financial maneuver, Kingstone successfully paid off $20 million of debt within just five months. This strategic move is expected to save the company approximately $800,000 in interest expenses for 2025, contributing an additional $0.05 to earnings per diluted share. This debt elimination underscores Kingstone’s commitment to financial prudence and shareholder value.

Improved Profitability

Kingstone reported a notable improvement in profitability, with the combined ratio improving by 25.3 percentage points to 80% for the year. This improvement was driven by reductions in both non-catastrophe and catastrophe losses, as well as a decrease in the expense ratio, reflecting the company’s efficient operational management.

Strong Financial Position

The earnings call highlighted Kingstone’s robust financial position, characterized by a healthy balance sheet, substantial income and cash generation, and sufficient statutory surplus to support future growth. This strong financial foundation positions Kingstone well for continued success and expansion.

Decline in Non-core Business

Kingstone continued its strategic reduction of non-core business, with direct written premiums decreasing by 60% and policies-in-force down by 65% compared to the previous year. This decline is part of Kingstone’s focused strategy to streamline operations and concentrate on its core business areas.

Bond Portfolio Pressure

The company faced some pressure in its bond portfolio due to significant increases in treasury yields, resulting in a $3.1 million unrealized decline in value during the quarter. However, Kingstone managed to achieve a $100,000 unrealized gain for the full year, demonstrating resilience in managing its investment portfolio.

Forward-Looking Guidance

Looking ahead, Kingstone provided raised guidance for 2025, reflecting optimism and strategic planning. The company anticipates core business direct written premium growth between 15% and 25%, with net premiums earned projected at approximately $184 million. The guidance also includes a GAAP combined ratio between 81 and 85, basic earnings per share ranging from $1.90 to $2.30, and a return on equity of 27% to 35%. These projections consider various factors, including increased premiums, reduced quota share, and interest savings from debt elimination.

In conclusion, Kingstone’s earnings call showcased a company on a positive trajectory, with strong growth, improved profitability, and a solid financial position. Despite some challenges, the overall sentiment was optimistic, with forward-looking guidance suggesting continued success in the upcoming year. Investors and stakeholders can take confidence in Kingstone’s strategic direction and financial health.