Kingstone Companies (KINS) 15 Mar 182017 Q4 Earnings call transcript

Greetings, and welcome to Kingstone Companies' 2017 Fourth Quarter and Year-End Financial Results and Dale Thatcher introduction. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to conference like host, to now Goldstein. Amanda would turn over your your I you. Thank

begin. may You

Thank good and affecting The unknown a this result known XXXX Sherrie may a year-end discussed and call you and On Kingstone. make press differ company may afternoon, results. and its itself circumstances release issued could forward-looking the statements detailing call, Kingstone's this fourth as business. regarding not and morning quarter factors materially uncertainties Kingstone everyone. and risk forward-looking events on occur and Yesterday of

the more entitled Financial Affect For on information, X XX-K to that please Kingstone's our go and XX/XX/XX, Goldstein. the in release year would ahead, section forward-looking earnings Mr. refer I of and commentary that, Barry of issued Chairman Factors over to along Results the Company's With statements a Form turn call to for Future Item the Goldstein. Please like May at company's CEO, Mr. the yesterday. Condition ended with end

morning. and Amanda Thanks, good

Joining as always our know Chief Brodsky, I don’t Victor the you introduce today And to to Mr. of Walden you Thatcher. Ben like for those and first CFO. Actuary very him, our who Dale time is for me

Kingstone grow maybe would of over of time the the August expanding role of to insurance on the yourself. our been has good continue as in take the company. for Kingstone Dale As today the affairs. to our Kingstone. and now board, introduce and forward he Officer board of joins he an company’s Since Dale, as Chief companies President Operating active a you knowledgeable Dale our to team CEO and joined I XXXX, as be time influence will look we

by and of team impressed to Kingstone’s board, is begin the and help Kingstone. success. Kingstone I of an people exciting the on they for support Ever me I of the performance to me. by the build I’ve executive have Thanks, Barry. been the shown opportunity Board for Directors must since thanking And joined foundation This join

look know For related in those I continue primarily a both helping the the growth Barry. always my to Cincinnati Selective tradition in improve With but and me an XX industry, years I’m the Insurance years who XX background as University to experience have Kingstone. as finance of call back and forward we after spent with roles, and CFO of you the eye last the I that, me, of have primary let firm my the few Group. I of operations own CPA [Indiscernible] don’t at of toward the in of turn of spending companies. consulting over my contributing School. years here profitable Business and finance proud to experience Harvard P&C the

thanks, Okay Dale.

Let me at start with a XXXX. short look back

the great to shape, in like just ended we a few First, year mention items. but I’d

am sheet Kingstone XXXX, reminded the Chairman [ph] company ended Following XXXX just in offering over as $XXX in subsequent I I had statutory insurance in XXXX the began over the million to million with company, that we rating, journey this of board $XX million contribution surplus we note January December insurance and (Fair), XXXX, A.M. we started $XX surplus. and and insurance our when worked joined any rating company the late in initial its B since balance of years quota reinsurance. share Excellent”. upon Earlier surplus. our “A- grow improve Best its ago, rating XX writing, in hard million reduce reliance we’ve to $X saw without our strengthen that company Best A.M.

on began to become in plan all that a carrier with agree last I year think Northeast. we’ve regional all a me succeeded with the We counts. you’ll

our to Jersey, New in in addition business New writing York. actively now of are and Island home We state Pennsylvania Rhode

so for going can I’m over into to fourth Ben plans turn think the our in sneaky Our now, more give and call call you year-end. Ben? to results Massachusetts soon by hopefully he as what I that the good expansion Connecticut color quarter. little to further a

most Barry. ever We XXXX you, from perspective. Thank ended with underwriting profitable our year an

results. During we quarter, rate and solidly saw accelerating growth the an profitable

early However, the fires the fourth of be year-to-year to impact quarter volatile from larger does tend due to and weather. winter

in QX, loss than quarter. XXXX higher the was for we ratio because normally was result better XXXX QX, last see primarily year, the than much Our fourth

started result in week risk years an higher Fire by per retentions. claim frequency and was quarter. with also two personal in last one impacted averages, our increase large consecutive lines, was was had results. due XX.X to fourth line to in claims, year increased spell last also December than activity seasonal claims compared of prior York of affected one There in XX reached of quarter weather the continuing the lines, early but days and in which quarter’s maximum to six starting New December net the the onset We in fourth This region. temperatures XXXX of The into commercial cold our freezing in which the extreme significantly in cold weather period. early December. below past ratio with that X XX.X points January longest week very a in was The last the loss

the year. the upgrade, to line. expansion personal personal premium themselves. to is quarter, existing optimistic new producers driven will volume regional continues growth time A.M. in In XXXX, the and for XX% that and homeowner’s of and rate recent for increase three seen lines policies volume, our growth Best written a our New lines will XX% quarter the was forward. last by XX% personal from quarters affect we opportunities take contrast, continuing Growth related rates York direct have A.M. Best The XX%, in since fully increased The and the line. premiums to premiums first the compared the to increases to lines growth bottom entirely results personal written growth lines increased since almost from grew remain move into trend XX% In to XX% accelerated upgrade. earn written the the fourth Turning further present some

Jersey homeowners grow launched product the filing. months New business Rhode homeowners will initial month we and follow a just as await last we Our after to Island the quickly as state. filed four homeowner’s Massachusetts diversify December, In approval. products throughout our we now continues

second a targeting there. are We quarter rollout

small confirmed ended favorable developments year Our of loss external quarter, prior year-end although XXXX of reviews reserve third our year strength internal actuarial a in of straight recorded the we development. we and fourth a position, with amount the

not for in reserves. changes quarter results financial materially year the of our by adequacy the Our and affected are the

some Before the provide concluding, like results on to for I’d expected XXXX. guidance first quarter

winter this cats, a you region significant York know, the powerful three events. by As year freeze affected and been a already including New has Nor'easter major

The March. events in January the first cat occurred two in early and early last

of see early precise between will to do net the share believe quarter. we is trends impact and in earnings for three after-tax. effect these to make not unusual trends any from While we be claim $X.XX Non-weather $X and the million $X.XX quarters first of line with per combined past in the projections, too it’s although core combined storms higher $X million ratio higher profitability we’d This distribution are XXXX trends. XX.X% slightly the record in following of a the was combined it solid. growth XX.X% full-year than XX.X like, not than the XXXX fourth underrating and remains The claims. was conclusion, profits accelerating for of fourth quarter related In our ratio resulted although for the unusual storm quarter, while for related an

our results, stability program to reinsurance lends reserving volatility. term short even philosophy and strong Our of times in

on to our “A” other for results. of are very We our details agency I rated expanding now Northeast optimistic Victor and components financial a to Victor? the about premier will for as relationships XXXX outlook turn carrier. the regional

morning. Good

see XXXX. As and premiums to Ben direct increased in compared by to our fourth strong XX% noted, written we QX, continued the quarter almost growth

expense. New are that periods. pronounced premiums and in incurred on we lag Accelerating more building expense the business as York lag now earned. our business. our The underwriting York, so, expansion at commissions of the in As earned expense we share business expansion both the comparisons quarter, more net between core expenses premiums premium our in in Due ratio lag our businesses, New rate looking expansion and net written creates impacting business. this ceding decrease expansion net expense growth adversely The in business earned most which net commission in even XXXX quota we lag core distorts a is net and underwriting premiums fourth and outside July for as thus net premiums ratio earned our to our excludes ratio expansion X, our in business are

The at core consistent And refer our to in core commissions. expenses, Due it retain, comparison would change I the immediate ratio. utilizing New ratio. no expansion largest fees. in increase share of I is that like changes underwriting of core more premiums in will between in looking expense driver lag in core in to a While expenses a quota the decrease what underwriting direct written periods. earned to expenses, was commissions as ceding decrease York the your premiums in over quota our impact net expense and increase in premiums of of expense regulatory underwriting quarter, fourth the the which decrease State recall have and in during effects also share significant is to that we to the the believe ratio net rate, significant a the we control attention this the result ceding net

budget carrier, expenses for of year York We with year share first for In the services bills the prior financial we New pro we the estimate estimated are the an based a written the department quarters. which in funding receive the State for actual revised quarter, current to were of our year. New fourth the on true-up for basis during domiciled York. share rata As and three the received premiums recorded insurance subject

is has corresponding this the liabilities XX% year which was same from was federal us more expense As enabled the rates in to quarter. XXXX, QX, the prior ratio by our reported the period. $XXX,XXX tax at as Without deferred core of is at of and XX.X% impact the which this in of tax than essentially tax a expense actual starting reduce expense result, expense Also XXXX. note, reduction fourth our expense, corporate XX.X% quarter $XXX,XXX onetime the income

quarter. fourth was Our the in diluted $X.XX share per earnings

claims additional me the large and per the the with reiterate the two quarter, share weather to amounted that Ben impact that together expansion December cold the discussed expenses fourth a share York Let to New Regulatory $X.XX for share. per in of share tax effect and items the these $X.XX $X.XX rates per earnings reduction us gave was in quarter. in The benefit. per $X.XX fees amounted total The of

to back for it some remarks. concluding turn I’ll Now, Barry

Thanks, Victor.

reputation a years, With management team becoming build strengthened a forward back, the over regional look the agent-only winds and many rock at northeast to solid a “A” sheet, we’ve our rated and underwriter. balance we

of We to we XXXnd our anniversary the in input finesse open everything our with continued for support that success our [ph] producers We loyalty charge set quarter-by-quarter honoring by as of Kingstone let our line that do reach we not you. operator, will select values the approach and next have only goals. me of the pointing questions. achieved With and their we Thank long-term, Insurance. and

you. is O'Neill. Newsome first your from Sandler Thank Instructions] with [Operator proceed Our Please question question. with Paul

would that and Good of harm from timing in bit. about the can of is, little sort knew but disappointing first perspective of pronouncements result about quarter a the sort when you guess, morning. I bunch talk thoughts financial I’ve down the future? the fourth the a let’s and just -- got of you question be questions, [ph]

Sure.

freeze fully We type start pipe Ben. winter the to I'll even Let it getting from take known. develop and the that claim, turn of the while today isn’t related claims, early started a over January the quite me of a to frozen lot but gravity in they then still

already range to intention them once wide a to bit Our we we of color pre-announce give it’s have it around for. have. as things as discomfort enough a little as is, having And is and

we’ll during a the as maybe So saw quarter. and that, what how detail Ben of handle can rest quarter this things more to for the give with little we

Sure.

noted So we two the in large there quarter. were claims

We was because that claims. as One did later we known low not result lines freeze feel it was quarter fire large the personal a first of similar in of the last outside fire week about quarters, but an to quarter. the said quarter The unusual But activity December, activity. last December. of until late had fourth had last two to the so fact were in very prior till was unusually know them worse occurred as in was than Barry occurred actually the which fire fourth claims noted seen fourth in in quarter amount they what we a not due the that really quarter of didn’t

yours I’m we sorry, the the sure of your are detail answering Paul, quarter? I’m directed first announcement not quarter regarding the the question. towards free or Was fourth

quarter basically reinsurance do catastrophe of hoped. based that has by a how losses Historically, of I’d -- end changed fourth well never time minimal quarter. over quarter with as Can you’ve This from like in the us you a the both for squeak related sort terms upon those first question has size is it by anyhow a fairly events. you’ve given quarter, that will coverage about the of given allowed you perspective? how quarter I the Really, the you sounds management's to those as as of it loss of what in addressed up the being financial kind Historically events. reinsurances first think talk

reinsurance, prior when in coverage an like have terms So, to of today that event treatment had we recall, did we sustain the have Sandy, you of this. we not

reinsurance effect of In protection to limits $X million. a reinstatement our single a the cat several is which premium to One important last in number. it's of the the known case additions this years

of So volatility. some the limits that

have However, the one events. cat of believe will storm do likely for two not. the that other this them separate quarter, three retention, particular we will hit We

your share. will question. line to that That bottom fall after So Paul? the answers reported

the phone Sorry. I here. on been [ph] have

that’s very helpful. think I

Yes.

bit. little a in chime just me Let

from treaties company going reinsurance single in carrier. essentially regional transition last state we our set and negotiated moving a rider, towards of a when We’re

being we’ll the being us exposure July Northeast, the the restructure regional program more program we’ll date, us So that likelihood increases into the way as take X, our construct weather we winter will and about our by with of a of reflect renewal which company to throughout is impacted and more consideration.

helpful. it. It’s Great. Thank you. Appreciate

Thank you.

this time. like are to the There turn closing Instructions] at for call no remarks. to [Operator back over questions I would management

an very much. we had Thanks excellent Great. fourth And think I quarter.

an of around. long-term. my can’t calling get XXXX imagination built Insurance is a think a I for is a stretch that arms business a the I miss

quarter-by-quarter entire business XXX-year a game that’s company claim But system is want we’re activity, fool’s to in I try a very try say only run consistent paid what the If to of it results in same over forward beyond. the every and these to much. the it and to a you we that’s is. we now delivered team strong on you very end, Thank Thatcher, proud you it’s been for company. control pleased taking Thank the which that Dale time say game. and are to bet that how listen. in and to And look proud and more to And I’d this over hold period. and from XXXX my have includes

Thank you. today’s concludes This conference.

your may participation. You thank your at time. And lines for this you disconnect