Kingstone Companies, Inc.

Second-quarter net income was a record $15.5 million versus $11.3 million a year ago, and diluted EPS was $1.05 versus $0.78. Operating net income increased 41% to $15.3 million, and annualized GAAP ROE was 50.8%. Direct premiums written grew 19% to $72.5 million, net premiums earned rose 31% to $60.5 million, and net investment income increased 49% to $3.4 million. The GAAP net combined ratio improved 1.3 points to 70.2%, with a 30.6% expense ratio, a 39.6% net loss ratio, and negative 0.8% catastrophe loss ratio; underlying loss ratio was 43.1% and underlying combined ratio was 73.7%. Book value per diluted share reached $8.69, up 35% year over year, and book value excluding AOCI was $9.27, up 32%. For the first half, direct premiums written increased 19% to $142.1 million and net premiums earned rose 30% to $116.3 million, with net income of $9.7 million and EPS of $0.66. Full-year guidance was reaffirmed: direct premiums written growth of 16% to 20%, GAAP combined ratio of 81% to 86%, underlying combined ratio of 74% to 76%, catastrophe loss ratio of 7% to 10%, diluted EPS of $2.20 to $2.90, ROE of 24% to 30%, an effective tax rate of 21%, and weighted average diluted shares of 14.8 million.

Meryl Golden described the quarter as the strongest in company history and said the earnings contribution was broad-based across premium growth, underwriting profitability, operating efficiency, and investment income. She emphasized that Kingstone will not chase volume at the expense of underwriting discipline, and said New York remains the main growth and earnings engine. Her tone was confident but cautious, noting a softening market, increased competition, and the need to build California deliberately while launching Connecticut on schedule.

Randy Patten focused on the financial drivers behind the quarter: net income of $15.5 million, EPS of $1.05, operating net income of $15.3 million, and net investment income of $3.4 million on a 4.4% average yield. He highlighted that the New York quota share session dropped to 5% for the 2026 treaty year from 16% in 2025, allowing more premium and underwriting profit to be retained. He also pointed to strong capital position with no holding company debt, $334.1 million of total investments at June 30, repurchases of about 19,500 shares at an average price of $14.98, and a 20% dividend increase to $0.06 per share after quarter end.

Analysts focused on the expense ratio, competition, and whether the quarter represented a sustainable run rate. Management said the expense ratio could come down by about 1 point to roughly 29% over time, and that the current underlying combined ratio is the run rate they expect, excluding catastrophe losses and prior-year reserve development. On competition, Golden said New York is seeing more soft-market pressure and California has seen more competition than expected because admitted carriers are reopening; she expects the impact to show up mainly in new business rather than renewal rates. Asked about catastrophe exposure, she said first-event retention remains very conservative, including $3.5 million for wildfire, $4.75 million for named storm, and $6 million for winter storm and severe convective storm, and that a Sandy-like event would be an earnings event, not a capital event.