Kingstone Announces Preliminary Results for the Three and Six Month Periods Ended June 30, 2020 And Reinsurance Placement
The preliminary, unaudited financial results included in this press release are based on information available as of
Financial Highlights
2020 Second Quarter
(All results are approximations and are compared to prior year quarterly period actual amounts unless otherwise noted)
- Net operating income1 of
$2.3 million , or$0.22 per diluted share, compared to$1.1 million , or$0.10 per diluted share. - Net income of
$6.1 million , or$0.56 per diluted share, compared to net income of$1.6 million , or$0.15 per diluted share. - Net combined ratio of 87.7% compared to 94.1%, an improvement of 6.4 percentage points.
- Net premiums earned from personal lines decreased by 5.3% reflecting the 25% quota share in effect in Q2 2020 vs. 10% quota share in effect in Q2 2019. Net premiums earned, including commercial liability lines in run off, decreased 15.0% to
$26.5 million . - Net loss ratio, excluding commercial liability lines in run off1, of 47.8% compared to 50.5%; Net loss ratio, including commercial liability lines in run off1, of 48.1% compared to 56.6%.
- Book Value per Share of
$9.01 up$1.88 , or 26.4% from Q1.
Six Months Ended
(All results are approximations and are compared to prior year period actual amounts unless otherwise noted)
- Net operating income1 of
$2.0 million , or$0.18 per diluted share, compared to (loss) of$(7.8) million , or$(0.73) per diluted share. - Net income of
$0.6 million , or$0.06 per diluted share, compared to net (loss) of$(5.7) million , or$(0.53) per diluted share. - Net combined ratio of 94.0% compared to 115.0%, an improvement of 21.0 points.
- Net premiums earned from personal lines decreased by 4.4% reflecting the 25% quota share in effect for six months ended
June 30, 2020 vs. 10% quota share in effect for six months endedJune 30, 2019 . Net premiums earned, including commercial liability lines in run off, decreased 12.0% to$53.5 million . - Net loss ratio, excluding commercial liability lines in run off1, of 51.8% compared to 68.0%; Net loss ratio, including commercial liability lines in run off1, of 54.5% compared to 77.0%.
- Book Value per Share of
$9.01 up$0.84 , or 10.3% fromDecember 31, 2019 .
____________________
1 These measures are not based on accounting principles generally accepted in
Catastrophe Excess of Loss Reinsurance and Rating Agency Implications
We began the marketing of our reinsurance program far earlier this year than in the past, expecting to encounter a difficult market influenced further by Covid-19. Our intention was to once again secure the purchase of sufficient limit in order to maintain our
Property reinsurance rates spiked this year, with the well-publicized difficulty in finding affordable capacity first felt by the
We will maintain our long held goal of an “A- Excellent” or greater rating, and will pursue opportunities for achieving such rating in the future. Management’s obligation is to provide a highly reliable product for policyholders while preserving and enhancing the long-term stability of our Company. While the result of the catastrophe reinsurance purchase was not what was initially intended, we feel even more confident in our ability to meet these obligations and to continue to achieve profitable growth.”
FOR ADDITIONAL INFORMATION PLEASE VISIT OUR WEBSITE AT WWW.KINGSTONECOMPANIES.COM.
Definitions and Non-GAAP Measures
Direct written premiums represent the total premiums charged on policies issued by the Company during the respective fiscal period. Net written premiums are direct written premiums less premiums ceded to reinsurers. Net premiums earned, the GAAP measure most comparable to direct written premiums and net written premiums written, are net written premiums that are pro-rata earned during the fiscal period presented. All of the Company’s policies are written for a twelve-month period. Management uses direct written premiums and net written premiums, along with other measures, to gauge the Company’s performance and evaluate results.
Core direct written premiums - represents the total premiums charged on policies issued by the Company during the respective fiscal period from its business located in
Expansion direct written premiums - represents the total premiums charged on policies issued by the Company during the respective fiscal period from its business located in other states (i.e., outside
Net operating income (loss) - is net income (loss) exclusive of realized investment gains (losses), net of tax. Net income (loss) is the GAAP measure most closely comparable to net operating income (loss).
Management uses net operating income (loss) along with other measures to gauge the Company’s performance and evaluate results, which can be skewed when including realized investment gains (losses), and may vary significantly between periods. Net operating income (loss) is provided as supplemental information, not as a substitute for net income (loss) and does not reflect the Company’s overall profitability.
Net loss ratio excluding commercial lines - is a non-GAAP ratio, which is computed as the difference between GAAP net loss ratio and the loss ratio that relates to commercial lines.
We believe that this ratio is useful to investors and it is used by management to reveal the trends in our business that may be obscured by the loss ratio that relates to commercial lines which is in run off. Due to our decision in
About
Kingstone is a Northeast regional property and casualty insurance holding company whose principal operating subsidiary is
Forward-Looking Statements
Statements in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those included in forward-looking statements due to a variety of factors. For more details on factors that could affect expectations, see Part I, Item 1A of our Annual Report on Form 10-K for the year ended
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