Kingstone Companies (KINS) 13 May 192019 Q1 Earnings call transcript

Greetings. Welcome to Kingstone Companies 2019 First Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. the to turn Relations Goldstein, now Director. will conference Amanda over Investor I you. Thank

You may begin.

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

more section release And May on forward-looking For along issued information, X company's Factors earnings please the in year at Conditions statements for the refer Item Results XXXX, of entitled ended Future XX-K the of the XX, company's the to yesterday. Form with Affect commentary Part end Xa That Financial the December

In addition, measures. non-GAAP our to remarks include references today

measures in that, please of Please figures, to go Dale our GAAP a Thatcher. to like ahead, Kingstone's I'd earnings For our over CEO, turn the Mr. Thatcher. non-GAAP reconciliation to the call tables release. Mr. the see With

Thanks, to call. Amanda. conference our first quarter Welcome XXXX

this challenging the on we completed in quarter fronts. an previously company In several stated did was winter on have Not restructuring but for only season rough we we those also of As spite events, reserves. several press in another resulted with reported, events, upfront extremely cat I of what review a to strengthening of our that release. claims significant want reiterate department our

as X XX% a full of the XX% ratio points well and X expect to as generate to combined We year of cats. between

expectations. results to in stellar. years XX good, still be my would our just They're not of the business, pretty XX those up For

in the of him to During a of Bill the Officer. with say, quarter, claims I'm very setting worked pleased ever worked very life identifying I announced Ben who age. new fortunate reserve to losses improvement. he's professionals a have key you like it's path with with those We're balance They the Claims with. are business, understand he's have past and issues on and already one hiring in best for honestly I my impact sheet. know of that in strong and Bill this fish. problems O'Brien can said I our the to having details as don't important me a believe us. moment, we on I've on winter better don't discuss but with will reserve get cat philosophy. our strengthening always any a In more us

away. and and to have recognize drivers the We them You are business remain them fix strong. Despite difficult our profit underlying that optimistic the fundamentals early right we of did quarter, that.

advantage was overall to business. is to and the largest in with new prior XXth XX% as Kingstone of York period, writer business lines personal grow take our contributing million the of the homeowners quarter. New now premium continues states growth XX%. in expected, $X We for written expansion over up opportunities markets continue in to our premium again Direct and increasing compared over by State

this We're profitability. positioned which of fourth reinsurance improve in agent market scale completed which will year. us to purchase now be process, quarter, order increase money our future changing continued advantage expected the of to our growth, be in less our efficient area on during than spending to to to to years. our are in our future York, renewal up in expansion During XXXX schedule outside X writing the improving and reinsurance New focus an of ahead investing in by market with speed for to growth very quarter throughout our we Connecticut, and allow started manner. better are and July catastrophe This we experience than customer XX% expect started Due happy will platforms. also We've and will One much key the our conditions. We're of be by business X. more take is we state technology

use and limit protect sheet to to the to single up our total X-in-XXX-year X% any We continue of impact than to occurrence. balance surplus reinsurance event of less

expect We profit Despite the footprint favorable pricing be carriers that our we're start again as this larger engine to for sound. year a such year, Kingstone. rough confident to northeast with remained the

our mid-XXs quarter to due overall The quarters reserve is next our down always expect to us XXXX. first quarter a for With we position, stronger to difficult X most weather. bring the back

a expect Many business. results than group of volatility such happy normal achieve companies on a to peer occasionally in Although basis. have year, be this of our insurance level consistent to we worse the would

said successful and As been to growth of and will profitability, necessary continue tremendously success. we make I of we've to continue history previously, balancing adjustments our the

Now cat events over more Actuary, that in the and strengthening was Ben? reserve it I'll turn on for details the to experienced we and quarter. EVP Ben some our the Chief recorded Walden,

you, Thank Dale.

experienced commercial immediately reserve we a strengthening. start through we Although quarter it on the another rough not side, a were first, property the quarter, challenging of drivers was claims. the and this winter quarterly on side, There X on faced were lines only some of results: second, trend. emerging quarter one main very was behind the older newly weather; trends addressed liability These

on the go details cats I'll for Now the quarter. through

York area cat During January was by PCS events. metro and February, several hit the New

single was in particularly for days low-teens severe. mid-January claims. large in freeze Temperatures pipe that the several was resulting first in numerous were a event digits and The freeze

of events the for of for impact with cat event that losses net had over $X Just total, million. claims quarter. recorded XXX over losses just the XX cat were These the -- XX claims quarter XX% combined entire point the ratio. In from a for accounted on

as dent still Although events our significant winter, a cats the last recorded results. as not impactful quite put in the

a effective results the recently rate quarter. for addressing designed are to The York book underperforming is We've and cat improve results Early most losses. losses increase territories our impact continued to increase pricing are business affected by We've rate take taken We rest have actions targeted the through first positive. able rates seeing decline claims for year, impact. we have the in New water pricing these not adjustments. any winter of other measurable been that change pull our an levers of several while the more conversion Throughout this and the planned, positive from retention. have should immediate or we new to renewal in underwriting rate many homeowners

decisive and reserves. to We quick trends. address to Turning took emerging some steps

months, case than increases. have the our These time, firm trends review same to outsized the older costs of seen number for liability settle average leading an us defense shown case engage prompted per a reserves. practices. last Over existing greater At several increasing amounts to we've claims claims consulting our

identified. As a for several were result, opportunities improvement

total led $X.XX lines, reserve decisively our adjustments our all reserves or prior the boost older of acted years IBNR. the O'Brien Chief for years the our years, dating required now total written increases discussed, Claims quarterly impact commercial was impact to several ratio; We the was point as Dale losses strengthening the XX% had all then new for reserves quarter million across hiring resulted of strengthening Officer. A to us on detailed of $X.X a claims XX.X in As adjustment Bill for ultimate premium. reserves XXXX. liability of share. which cases review large to combined on open per contributes this and reestimate back XX% result and of during These only year accident to

by lines I we profitability. as quickly issues to business and results, like would that seen As on we we adversely and the ongoing address that growing recent emerging is is this mission amount commercial business we manner. way always a emphasize the trends in sum liability up, commercial result, no reduce review act cases. acted affected and the we've our it several impacted took its it proactively profitable Kingstone's lines in to personal of are highly older in actions to quickly writing to To quarter's

move we past profitability the delivering years. our look to come we to investors that have As over ahead, expect levels continued the XX forward of

quarter Now opportunities on Barry turn on I for it to future. growth our the the and additional for Barry? some over will comments

to this boasted commercial want company story we've to were the losses, same first Ben. like address we first fix wrong in being line and action way in the by honest and and I Others, coverage. an we were $X.XX expectations, shares stock times think We way, minor the a the Thanks, automobile by trends, sense? hide. and per share X way announced like We've a the new announced I'd After put $X.XX stock it does and $X.XX catastrophe declined share those reserve end, the seeing followed How didn't XXXX that. lot analyst the trends time soon over last writer seen Because how per than to Kin starting the $X.XX, go at of believe we forget. any by the shared in our days. suit. XX of most In charge our quarter more and which we moratorium strengthening, to timely. with to it liability our couldn't active which improve price we of down. business. We make since we that before, business has $X.XX. and trades a Because a relates The on $X.XX line shut the of reserve trading makes forthright

off We a those have run claims.

not we'll deliver to and to deserves aware, that deliver to over for the are reserves it. business profit capital I committing out imposed work we protect done how to I who set deliver the added We're here think liability. those book to And the we remaining. an will I largest that it my reserves, shareholder. about single underwriting X-month shareholders. And proven shut We've our we We've remain profit returns time, in with and thing adequate. else's. everybody If down. company's commercial with moratorium, there's along and X investment the a the have not, figure fix same a

this and yes, of take tone think tell voice, could I So my I from personally. you very the

growing. We've by cumulative have time, XX% personal year over developed about more in that growth favorably, reserves our as we and is through forget It northeast. is our a of must accelerating lines business of this, actually the lines. the the core Some years. grown XX% And expand main personal that total our represents in is our than And business, redundancy. of last X each

the and agencies of that X Kingstone. ahead We've a single we forego of I don't accelerate read KOCI already our called future. the the It's the moratorium. Insurance of Offices long started, will business. intact. we're agency. months begun road went about brand conclusion pothole in with in come very of Kingstone. name build remains plenty over. turned Kaptive XX so growth we My is found have open new lose way carriers you I pull. their now And the But growth. distribution the country of our just demutualization, alternative to that premium We've now, done during us. is for write a willing agencies. KOCI faith make hard will to a to with since what far digital last to outside $X.XX. in then there's we're right direct materially working Right a I the way, producer X next commercial largest Kingstone our We're things underwriting northeast KOCI don't into years lines is with more it's appetite. anymore business of the new we've but can to along over to alluded placing KOCI XX just the getting call, business have to national the the assist this statement In new conference tell lever responsibility largest the in So channel

being the focus be for Kingstone rewards. continue proposition value Our reap ones in are And Actions remains taken those to the outstanding. the see that our profitability. on value producers who to will

Now to Dale turn back let me closing it comments. for

Thanks, Barry.

the again, rough noticed, As and people a start been buy in. If weather have rough we wouldn't didn't but that's we're for year, it's insurance. now he the business

a have to about. things excited be We of lot

to expect and make of fruit. Over in take many the areas more low-hanging next progress we quarters, X care

have turn that the growth the its With confident cease open insurance task. results. we've down It's reversal drove a the expect. to thinly stock. like But artificially expect investors can continue to reporting of And and that operator our the some and our traded I'm on I opportunities, quick call for to stock. to the that, unduly I'd do, soon normal only overreaction the the panicked the is than lot volatility we'll to assembled hope market come more be to results lead us questions. work we've over but a to a unfortunate and it in up back We recognizes actions to taken team investors we With to will underwriting that

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

sort morning. would It like looked Could higher little of a returns about was lower that about Thanks may ex Good the releases? excluding little you your the return the happen? call. accident or -- I year. guidance the of number that, assumes talk the a bit why can that And looks reserve certainly year a we expected. not to and than cat losses catastrophe level the like may for results talk to bit excluding for remainder And why that that the

that. Walden, I'll answer Ben Yes. It's

even First worst is outside our quarter of cats, seasonally, normally quarter.

frequency. have fire We claim elevated

which a impact fires points seeing activity, undertaking. bit little which higher be XX about through elevated little in some non-weather-related also quarter, is we addressing we're the that But the have of claims did water Bill initiatives we of are will claim O'Brien So usual. than from

Which to pipe other listened phenomenon industry I and of are in terms frozen at that looked it a breaks some the not have other releases, be pipe some related. the press of to new conference seems of calls in the

that to we're So and that trying arms get around out. our figure

The year. is but already may taken you else have other hit that charge is that make you $XXX,XXX listening, we and reserve realize to this, is current the did that thing, of have just care the sure sure make of to everybody -- Paul,

year. million the So was prior $X.X

current in the related current million lines. to the year picks $X.X up the year commercial had the also for We to

the of you. Thank loads remainder cat sort think the And thoughts do the your could a what bit normal is for you about Great. talk level Kind you load of in a of cat the the little for remainder about year? of year? type

the But to say, I'll catastrophe occur add add. like losses let any to then first start Kingstone, for Ben I'll XX% and in color our I'd about quarter. he'd of XX%

of So that with light history very see up the our was Hurricane a ends when the year one-off you'd The that being hit. rest year. Sandy in

if Northeast, seen year hurricane that our cat but the is So up obviously, that remainder change time have the a pretty expectation is the over load, in we've would the we light. of

third year fourth And Right. just fairly of say quarter lumpy, very consistent I the for that quarter. rest is is first the would especially cats. The and

quarter, minimal total Sandy, quarters. about may impact happened get So you Irene X event. of to most the last in traditionally the of a the years, big in in from large points events. very outside you'll fourth We've third cats last X have and but for quarters average year X seen X on

you. Thank Great.

Our Boenning Please next question with proceed. Farnam Bob from Scattergood. and is

morning. good thanks. Yeah

point Ben, a that XX -- in So like quarter be a... the cat fire would what I losses the losses, fire mean impact terms higher sorry, first typical losses? of higher from sounds

points. it Yes. about XX Normally,

elevated use of fire their heat little we see happens quarter the fireplaces, that all and a quarter, fourth first it's as that first So the frequency in candles quarter. and in see. more, normally the quarter higher fourth we But people

And the -- impact -- the with the moratorium have it on actual much I'm Thanks. commercial how new amount -- line the to Okay. what much premium. figure premium, business trying how would

months? So next there that policies, business have writing you're not in in much you be but X renewing going to lines would how commercial the new been be

Yes.

start soon. will moratorium the So

expect in as We million new will the $X next well. as year Probably some renewal go over months on expect for renewals $X that book to take X business for we $X the will another X remainder actions million or away be of the about the that of months. million the premium

a new is more channel if point coming point, business My business it up the personal sees, distribution normally with from well in offset we've the the not this is will business the new that into premium the the seen, Bob, way match than Kingstone And coming And lines better. that. of business Barry. this the that is should snitch quality

stuff, KOCI that's the homeowners? And Okay. all

all York. we New us. a these outside whatnot. exclusively It's with companies And channel now, New dwelling is national it's expand This have although right it new lines distribution almost condos, complete home, contracts for to -- York, personal

Got it.

the in claims address? you trying of us you're terms the maybe And you to issues, on of that that reserve can types give were problematic Okay. detail for some

Well, with of a difficulties small really the obviously, I of one -- a handful that's it's have claims. literally small a base. very base premium and mean we reserve

from So company. event creates It's larger for area us, review, our an for it a claim that old an XXXX have of that what of venue claims, litigation rounding say upon as a handful higher will our reserve at on be obviously. time that the frame, you're commercial age I'd older in had. estimation liability a given too further claims given level approaching a were of substantially folks and optimistic, claims a than the -- the And expect claim. claim we were the to you bit would a we But of

As those professional, soon a to than I reserved non-claims number that said even have higher claims be I, -- details wow, some a on of as some needs that. at

had claim. at through all me, and more realistic we give for and claims go professional possibility a eye older look with and those assess us, Bill his So a them to

a an the without So to apply handful has giving but impact bit of Ben's -- an on a the again, claims, as impact as helps details on outsized it's precise on that Hopefully claim. quarter it's diagonals that. that of a we it triangle. a result And only through also have little

of -- so Yes. No, this get it. I handful That's a is claims.

XXXX XXXX, ones? claims liability-type have we this mean not in commercial are claims many for you open talking many actually do stuff? just how how I total, So about

business have head. commercial a can of artisan line business, of have of the That's time. how I of lines that small pack. It's business you been is question. it's XXXX. tell that small line It's contractors. has good many my been -- And a a in off it that all since it top craft I don't

So claims contractor of about duration it's tends style X of a life years. of those business. cycle have to The a

have other in do So of data Ben, numbers? any you terms

about total, XXX have of we the now, open Right about accident in latest but claims, from year. half are those

open years years. the less a some all older bit for But of for assessment old a on these overall change So really your again, talking ratio of accident than you're can loss affect XXX little years. claims

the sounded reached it you Ben reserves that... all Is you basically And of claims? -- basically Right. like those on

Yes.

significant X were years the and XXXX, we older development that more years. boosted So we this up emerging data impact years particularly year, all old, was which -- is on the seeing one yes, to on the because recent the translates that that another because $XXX,XXX of current

Bob, recovering things, as you actuary, right? a triangle remember those

I that's Alright, triangles, me. Thanks. do yes. remember those for it

Thanks.

Instructions] Okay. [Operator

reached to question-and-answer turn of have to remarks. I'd back the the session. We conference closing for like end over management our

call I'd today. like everybody for to conference the thank attending

If you a any and us all have questions give by back you your as means, get call. perform analysis,

reiterate coming on think to to a back react right we the quarters up want of overreaction for equally And is we a that have Just more an and to reaction fully to back that the road a our and is company. opinion, kind you what will normal pothole of hopefully, insurance the gross in opposite this in the in where see driving in Barry that an terms level. indicated is much be appropriate marketplace expect track to stock

you good that, a you I you with call. Thank hope and day, give questions, So you. have any us bid will I that

you. concludes Thank today's This conference.

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