NASDAQ:KINS Kingstone Companies Q3 2023 Earnings Report $17.87 +0.21 (+1.19%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$17.58 -0.29 (-1.62%) As of 05/2/2025 06:20 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Kingstone Companies EPS ResultsActual EPS-$0.27Consensus EPS -$0.05Beat/MissMissed by -$0.22One Year Ago EPSN/AKingstone Companies Revenue ResultsActual Revenue$34.24 millionExpected Revenue$38.70 millionBeat/MissMissed by -$4.46 millionYoY Revenue GrowthN/AKingstone Companies Announcement DetailsQuarterQ3 2023Date11/9/2023TimeN/AConference Call DateMonday, November 13, 2023Conference Call Time8:30AM ETUpcoming EarningsKingstone Companies' Q1 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled on Friday, May 9, 2025 at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Kingstone Companies Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 13, 2023 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Greetings and welcome to the Kingstone Companies Third Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jennifer Gravel. Operator00:00:28Thank you, Ms. Gravel. You may begin. Speaker 100:00:32Thank you, and good morning, everyone. Thursday afternoon, the company issued a press release detailing Kingstone's Q3 2023 results. On this call, Kingstone may make forward looking statements regarding The forward looking events and circumstances discussed on this call may not occur and could differ materially as a result of known And unknown risk factors and uncertainties affecting Kingstone. For more information, please refer to the section entitled Factors That May Affect Future Results and Financial Conditioned in Part 1, Item 1A of the company's Form 10 ks for the year ended December 31, 2022, along with commentary On the forward looking statements at the end of the company's earnings release issued on Thursday. In addition, our remarks today include references to non GAAP measures. Speaker 100:01:18For a reconciliation of our non GAAP measures to GAAP figures, please see the tables in our earnings release. And with that, I'd like to turn the call over to Kingstone's CEO and President, Merrill Golden. Please go ahead, Merrill. Speaker 200:01:31Thanks, Jen, and thanks for joining us this morning. First, let me again thank the Board for giving me the I think it's important that we share more information with our investors and become more transparent to give you greater visibility as to the future. Our business is complicated And I thought it could be explained better, so we've made further changes to our press release and 10 Q this quarter. Your positive feedback on the changes so far is much appreciated. As you know, Kingstone is in the midst of a transformation. Speaker 200:02:11Our strategy for the near term is to return to our roots as the premier writer of Coastal Property Insurance in Downstate New York, Our core business and we have been working hard to reduce our footprint outside of New York, our non core business. As such, we've broken down our results between core and non core so that you can better understand the results of each segment. Please take your time going through the details contained in the press release and the 10 Q, as you will see that the underlying core business is profitable with a combined ratio of 96.4 for the quarter. Core premiums are growing, up just under 10 Core margins are expanding as average premiums are increasing and cost savings and efficiencies are taking hold. Non core is shrinking and by this time next year, the drag in our financials will be immaterial if not gone. Speaker 200:03:13Kingstone is poised for a profitable 2024. For 4 years, I have talked about Kingstone 2.0 and Kingstone 3.0. Our employees have worked tirelessly to implement these strategies. They are now in place and at work. Well, I'll never say we are done. Speaker 200:03:32We have accomplished an incredible amount. I believe deeply in our strategy, The team that we've built and our progress so far, I am so proud of the company that we have become. We are smaller, Highly efficient, nimble and focused on expanding the benefits that Kingstone 2.0 and Kingstone 3.0 have enabled. These benefits are now flowing through our income statement at an accelerating rate and as the non core business declines further We'll become even more apparent in our overall results. That makes me confident that 2024 will be a great year for the company and its shareholders. Speaker 200:04:15Late last year, we also laid out a plan to return the company to profitability, And I'm going to highlight our progress on those key initiatives. In Q3, we were successful in reducing our non core Policies in force by 17% from the prior quarter and non core policies in force are now down 35% from year end 2022. Our estimate is that the non core book will decline by close to 50% by the end of this year and by more than 80% by the end of next year. Combine that with the additional rate we've been able to take And I hope to be able to report this time next year that the standalone non core business is running at or near breakeven. The non core business added 6.4 points to our combined ratio for the quarter and 7.9 points on a year to date basis. Speaker 200:05:12So you can see how important it is that we're accelerating this decline. Our pricing team has done a fantastic job with rate filing to manage our overall rate level in the face of loss trends that we and the industry have been seeing. As mentioned previously, We are addressing loss trends, including inflation in 2 ways. The most significant for this year has been our effort to update replacement cost on every policy. This effort commenced in September of last year, so all policies have now been through this process once. Speaker 200:05:48We will continue to update replacement costs annually so that our customers are always insured to value. Don't forget that this update to replacement costs brings with it higher premium and those are in addition to those that come from our rate filings. Let me point out that for the trailing 12 months, We have realized a 25.5 percent increase in average premium for our legacy homeowner product in New York as a result of the combination of rate and replacement cost updates. Let me also remind you that most of the added premiums have not yet been earned and will be reflected in future quarters. It takes about 18 months for rate increases to be fully reflected in earned premium and it will be reflected on ever accelerating basis over time. Speaker 200:06:35This increase in earned premium will by definition drive down the loss ratio and lead to further declines in our expense ratio. We did an excellent job managing our catastrophe reinsurance renewal, which resulted in a much lower increase than anticipated. We were fortunate that Jen joined us earlier in the year and brought with her the reinsurance experience she's gained from her time in Florida. We had seen 2 years of dramatic pricing increases In catastrophe reinsurance costs and expected this year to be even worse, we needed to be prepared. One strategy we deployed To reduce cost was to slow core new business writings of the highest cost policies, those contributing the most to our P and L. Speaker 200:07:23This strategy was successful and this allowed us to buy to a lower limit while maintaining the same risk tolerance And as such, the increase to ceded premiums was minimized. I also want to mention our relentless focus On improving our cost structure, I am delighted that we have made such great progress in this area. We have achieved our goal for the year, A net expense ratio of 33, a 4.2 percentage point reduction from the prior year, But our focus will not wane. We will recognize the benefits of having we all recognize the benefits of having low expenses and we will have a new stretch goal for 2024 to reduce expenses below 30%. With that, I'll now pass the call over to Jen to review our Q3 results. Speaker 200:08:19Jen? Speaker 100:08:21Thank you, Nicole. For the Q3 of 2023, Kingstone recorded a net loss of $3,500,000 or $0.33 per diluted share, Improving from a net loss of $4,000,000 or $0.38 per diluted share for the same period last year. Direct Certain premiums were down 4.8 percent to $52,000,000 a decrease of $2,600,000 from $54,600,000 in the prior year period. Our core premiums were up 4.7% for the quarter, while non core premiums declined by 43.9%. The net loss and LAE ratio was up 3.5 points from the prior year to 78.5%. Speaker 100:09:00The 3rd quarter catastrophe losses added $2,200,000 or 7.7 points to the net loss ratio for the quarter, An increase of 6.6 points on the catastrophe losses over the prior year. Most of the catastrophe losses were from a rain event that hit Downstate New York, Really hard the last few days of September. Nutritional or non cat loss ratio was 70.8%, 1.6 points lower Then the loss ratio in the Q3 last year. Let me emphasize the importance of our separating the core from non core results. The core attritional loss ratio was 64.7% for the quarter, while the non core attritional loss ratio was 112.5%. Speaker 100:09:43The improvement in our attritional loss ratio was driven by lower frequency, which is believed to be the result of better risk selection in our Select product. In addition, we have been actively managing and reducing less profitable segments. These actions have been offset by a higher severity Due to inflation as well as elevated number of large losses. For the Q3, the net underwriting Expense ratio decreased 5.2 points to 31.7 percent, the lowest in the company's history. This quarter's expense ratio reduction is due to decrease in most components of the company's expenses, as Merrill said, and we have been relentless in our efforts to reduce costs, renegotiating many contracts and reevaluating the necessity for all expenditures. Speaker 100:10:31Our investment income was slightly higher in the Q3. We We benefited from higher interest rates on cash balances. From the macroeconomic perspective, the increased interest rates continue to apply pressure on our bond portfolio, resulting in unrealized losses on those investments. The effective duration of our fixed maturity securities is 4.3 years with an average yield of 3.53%. Since the cost of our 2022 Notes included a far higher interest rate. Speaker 100:11:05We initiated a sale leaseback in the Q4 of 2022. I think it's important to that we share the operating EBITDA, which removes the impacts of these two items. And we're doing this on an operating basis to also remove the impact of realized and unrealized gains on investments. Our press release shows the operating EBITDA for the past 5 quarters. For the current quarter, our operating EBITDA was a loss of 1,800,000 We have done and continue to do everything we can to bring Kingstone to a consistent and sustainable level of profitability. Speaker 100:11:39As the quarters progress And the benefits of what we've done are reflected. I'm confident that you'll continue to see the progress we've made reflected in our financial results. Thank you as always for your support. And with that, we'll open it up for questions. Operator? Operator00:11:57Thank you. We will now be conducting a question and answer session. Our first question comes from Paul Newsome from Piper Sandler. Mr. Newsome, please proceed. Speaker 300:12:37Good morning. Thanks for the call. I was hoping you could give us a little bit more thoughts on the competitive environment in New York And whether or not it's getting better or getting worse at the moment? Speaker 200:12:53Sure. So I would say that we are definitely in a hard market in Downstate New York for coastal business, And I think it's going to continue. Our 2 largest competitors historically are no longer writing business. 1 is insolvent And the other has a moratorium on new business for about 2 years. The large multi line competitors have Pulled back even further due to reinsurance costs and other factors. Speaker 200:13:28So there definitely are a few Companies writing Coastal Properties, but many fewer than in the past and the brokers will tell you that it's the hardest Market they've ever seen. So I view this as a huge opportunity for Kingstone. We're very comfortable with our pricing right now. We know our reinsurance costs. So we are and our market share in New York is less than 2%. Speaker 200:13:58So we have a huge opportunity to increase our growth in Downstate New York and we hope to do that going forward. Speaker 300:14:08Great. And then maybe a different topic. Could we talk about Kingstone's Capital position, we incurred a few losses along the way. And where do you stand from an RBC capital Ratio perspective, where do you stand from an overall capital perspective in your opinion? Speaker 200:14:30Sure. Jen, do you want to Speaker 100:14:31jump in? Sure. Paul, our statutory numbers will be coming out in the middle of this week. But again, we are in some of the amounts of debt that we have on our books on the holding company level are actually surplus And we continue to expect to see our RBC ratios that above 300 for sure. And we are maintaining to that level. Speaker 100:15:00We do have a little bit of an underwriting loss for the quarter going into the statutory numbers as well, But we do expect to start having that turnaround here in Q4 and the beginning of next year. Speaker 300:15:16Great. Thank you. Appreciate the help. Operator00:15:22Our next question comes from Gabriel McClure, who is a Private Investor. Gabriel, please proceed. Speaker 400:15:31Hi, Merrill. Hi, Jennifer. Speaker 100:15:34Hi, Brian. Speaker 400:15:36I want to congratulate you for Hitting your expense ratio, that's very good. And I have one question for you, Merrill, and then one for Jennifer. Merrill, when you referred to increasing the premiums on the New York business 25%. So you don't really break out on average how much that was And rate and how much it was in replacement cost. So I'm kind of curious if we have that. Speaker 400:16:10But I guess My thing is, I guess we've heard that before. I think we heard that last year. And if you look at your press release, At the 9 months to date, core losses, excluding catastrophe, on our underwriting, we're actually up And the loss is about 3.4 points over 2022. So how do we know, I guess, it's going to be different this time as far as making Speaker 200:16:46Sure. So let me answer your first question, which is the breakout between rates and replacement costs. So for that legacy homeowner book, about 16%, almost 17% of the increase had to do with the increase in replacement cost And the rest have to do with rate changes. So then your question about losses. So What I can tell you for the quarter is that our frequency is down, which is really The leading indicator for what losses will be? Speaker 200:17:25So Our frequency is down, we believe, because we're writing a higher, a more responsible customer in our Select program. And our Select program currently is about 20% of our book and growing. And then also we're reducing non core business, which has a much higher But our severity is up double digit just like the rest of the industry. And we are seeing claims inflation in our numbers. And in addition to that, as Jen mentioned, We have had an increase in the number of large losses this year. Speaker 200:18:08It's something we saw in every one of the quarters. And we're trying to figure out what is driving that. We have relooked at everything. We even hired an outside firm to take a look. And we really found nothing and I feel I've talked with others in the industry and I'm hearing that they're Seeing the same thing as well. Speaker 200:18:31But at the end of the day, we have now priced for this increased severity In our product and so that along with the decline in frequency will result in a better loss ratio next year. Speaker 400:18:51Okay, great. Thank you. And then, Jennifer, thanks for Given us the yield on the bond portfolio, what is the average maturity of our bond portfolio now? Okay, great. Thanks, guys. Speaker 200:19:17Thank you, Gabe. Operator00:19:23This concludes our question and answer session. I would like to turn the floor back over to Merrill Golden for closing comments. Speaker 200:19:33Great. Thanks for joining us bright and early on Monday morning and have a fantastic day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallKingstone Companies Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Kingstone Companies Earnings HeadlinesKingstone Companies: Results Confirm The Thesis, Selloff Presents OpportunitiesApril 25, 2025 | seekingalpha.comKingstone Companies, Inc: Kingstone Announces Renewal Rights Transaction to Grow Homeowners Insurance Business in Downstate New YorkApril 16, 2025 | finanznachrichten.deElon Set to Shock the World by May 1st ?Tech legend Jeff Brown recently traveled to the industrial zone of South Memphis to investigate what he believes will be Elon’s greatest invention ever… Yes, even bigger than Tesla or SpaceX.May 3, 2025 | Brownstone Research (Ad)Kingstone Companies (NASDAQ:KINS) shareholders have earned a 309% return over the last yearApril 15, 2025 | uk.finance.yahoo.comKingstone: Clean Turnaround But A Lot Of Value Already Priced InApril 14, 2025 | seekingalpha.comGrab These 4 Stocks With Solid Net Profit Margins to Boost ReturnsApril 10, 2025 | msn.comSee More Kingstone Companies Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Kingstone Companies? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Kingstone Companies and other key companies, straight to your email. Email Address About Kingstone CompaniesKingstone Companies (NASDAQ:KINS), through its subsidiary, provides property and casualty insurance products to individuals in the United States. It offers personal line of insurance products, such as homeowners and dwelling fire, cooperative/condominiums, renters, and personal umbrella policies. The company also provides for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs; and canine legal liability policies. In addition, it offers reinsurance products. The company underwrites its products through retail and wholesale agents and brokers. The company was formerly known as DCAP Group, Inc. and changed its name to Kingstone Companies, Inc. in July 2009. 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There are 5 speakers on the call. Operator00:00:00Greetings and welcome to the Kingstone Companies Third Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jennifer Gravel. Operator00:00:28Thank you, Ms. Gravel. You may begin. Speaker 100:00:32Thank you, and good morning, everyone. Thursday afternoon, the company issued a press release detailing Kingstone's Q3 2023 results. On this call, Kingstone may make forward looking statements regarding The forward looking events and circumstances discussed on this call may not occur and could differ materially as a result of known And unknown risk factors and uncertainties affecting Kingstone. For more information, please refer to the section entitled Factors That May Affect Future Results and Financial Conditioned in Part 1, Item 1A of the company's Form 10 ks for the year ended December 31, 2022, along with commentary On the forward looking statements at the end of the company's earnings release issued on Thursday. In addition, our remarks today include references to non GAAP measures. Speaker 100:01:18For a reconciliation of our non GAAP measures to GAAP figures, please see the tables in our earnings release. And with that, I'd like to turn the call over to Kingstone's CEO and President, Merrill Golden. Please go ahead, Merrill. Speaker 200:01:31Thanks, Jen, and thanks for joining us this morning. First, let me again thank the Board for giving me the I think it's important that we share more information with our investors and become more transparent to give you greater visibility as to the future. Our business is complicated And I thought it could be explained better, so we've made further changes to our press release and 10 Q this quarter. Your positive feedback on the changes so far is much appreciated. As you know, Kingstone is in the midst of a transformation. Speaker 200:02:11Our strategy for the near term is to return to our roots as the premier writer of Coastal Property Insurance in Downstate New York, Our core business and we have been working hard to reduce our footprint outside of New York, our non core business. As such, we've broken down our results between core and non core so that you can better understand the results of each segment. Please take your time going through the details contained in the press release and the 10 Q, as you will see that the underlying core business is profitable with a combined ratio of 96.4 for the quarter. Core premiums are growing, up just under 10 Core margins are expanding as average premiums are increasing and cost savings and efficiencies are taking hold. Non core is shrinking and by this time next year, the drag in our financials will be immaterial if not gone. Speaker 200:03:13Kingstone is poised for a profitable 2024. For 4 years, I have talked about Kingstone 2.0 and Kingstone 3.0. Our employees have worked tirelessly to implement these strategies. They are now in place and at work. Well, I'll never say we are done. Speaker 200:03:32We have accomplished an incredible amount. I believe deeply in our strategy, The team that we've built and our progress so far, I am so proud of the company that we have become. We are smaller, Highly efficient, nimble and focused on expanding the benefits that Kingstone 2.0 and Kingstone 3.0 have enabled. These benefits are now flowing through our income statement at an accelerating rate and as the non core business declines further We'll become even more apparent in our overall results. That makes me confident that 2024 will be a great year for the company and its shareholders. Speaker 200:04:15Late last year, we also laid out a plan to return the company to profitability, And I'm going to highlight our progress on those key initiatives. In Q3, we were successful in reducing our non core Policies in force by 17% from the prior quarter and non core policies in force are now down 35% from year end 2022. Our estimate is that the non core book will decline by close to 50% by the end of this year and by more than 80% by the end of next year. Combine that with the additional rate we've been able to take And I hope to be able to report this time next year that the standalone non core business is running at or near breakeven. The non core business added 6.4 points to our combined ratio for the quarter and 7.9 points on a year to date basis. Speaker 200:05:12So you can see how important it is that we're accelerating this decline. Our pricing team has done a fantastic job with rate filing to manage our overall rate level in the face of loss trends that we and the industry have been seeing. As mentioned previously, We are addressing loss trends, including inflation in 2 ways. The most significant for this year has been our effort to update replacement cost on every policy. This effort commenced in September of last year, so all policies have now been through this process once. Speaker 200:05:48We will continue to update replacement costs annually so that our customers are always insured to value. Don't forget that this update to replacement costs brings with it higher premium and those are in addition to those that come from our rate filings. Let me point out that for the trailing 12 months, We have realized a 25.5 percent increase in average premium for our legacy homeowner product in New York as a result of the combination of rate and replacement cost updates. Let me also remind you that most of the added premiums have not yet been earned and will be reflected in future quarters. It takes about 18 months for rate increases to be fully reflected in earned premium and it will be reflected on ever accelerating basis over time. Speaker 200:06:35This increase in earned premium will by definition drive down the loss ratio and lead to further declines in our expense ratio. We did an excellent job managing our catastrophe reinsurance renewal, which resulted in a much lower increase than anticipated. We were fortunate that Jen joined us earlier in the year and brought with her the reinsurance experience she's gained from her time in Florida. We had seen 2 years of dramatic pricing increases In catastrophe reinsurance costs and expected this year to be even worse, we needed to be prepared. One strategy we deployed To reduce cost was to slow core new business writings of the highest cost policies, those contributing the most to our P and L. Speaker 200:07:23This strategy was successful and this allowed us to buy to a lower limit while maintaining the same risk tolerance And as such, the increase to ceded premiums was minimized. I also want to mention our relentless focus On improving our cost structure, I am delighted that we have made such great progress in this area. We have achieved our goal for the year, A net expense ratio of 33, a 4.2 percentage point reduction from the prior year, But our focus will not wane. We will recognize the benefits of having we all recognize the benefits of having low expenses and we will have a new stretch goal for 2024 to reduce expenses below 30%. With that, I'll now pass the call over to Jen to review our Q3 results. Speaker 200:08:19Jen? Speaker 100:08:21Thank you, Nicole. For the Q3 of 2023, Kingstone recorded a net loss of $3,500,000 or $0.33 per diluted share, Improving from a net loss of $4,000,000 or $0.38 per diluted share for the same period last year. Direct Certain premiums were down 4.8 percent to $52,000,000 a decrease of $2,600,000 from $54,600,000 in the prior year period. Our core premiums were up 4.7% for the quarter, while non core premiums declined by 43.9%. The net loss and LAE ratio was up 3.5 points from the prior year to 78.5%. Speaker 100:09:00The 3rd quarter catastrophe losses added $2,200,000 or 7.7 points to the net loss ratio for the quarter, An increase of 6.6 points on the catastrophe losses over the prior year. Most of the catastrophe losses were from a rain event that hit Downstate New York, Really hard the last few days of September. Nutritional or non cat loss ratio was 70.8%, 1.6 points lower Then the loss ratio in the Q3 last year. Let me emphasize the importance of our separating the core from non core results. The core attritional loss ratio was 64.7% for the quarter, while the non core attritional loss ratio was 112.5%. Speaker 100:09:43The improvement in our attritional loss ratio was driven by lower frequency, which is believed to be the result of better risk selection in our Select product. In addition, we have been actively managing and reducing less profitable segments. These actions have been offset by a higher severity Due to inflation as well as elevated number of large losses. For the Q3, the net underwriting Expense ratio decreased 5.2 points to 31.7 percent, the lowest in the company's history. This quarter's expense ratio reduction is due to decrease in most components of the company's expenses, as Merrill said, and we have been relentless in our efforts to reduce costs, renegotiating many contracts and reevaluating the necessity for all expenditures. Speaker 100:10:31Our investment income was slightly higher in the Q3. We We benefited from higher interest rates on cash balances. From the macroeconomic perspective, the increased interest rates continue to apply pressure on our bond portfolio, resulting in unrealized losses on those investments. The effective duration of our fixed maturity securities is 4.3 years with an average yield of 3.53%. Since the cost of our 2022 Notes included a far higher interest rate. Speaker 100:11:05We initiated a sale leaseback in the Q4 of 2022. I think it's important to that we share the operating EBITDA, which removes the impacts of these two items. And we're doing this on an operating basis to also remove the impact of realized and unrealized gains on investments. Our press release shows the operating EBITDA for the past 5 quarters. For the current quarter, our operating EBITDA was a loss of 1,800,000 We have done and continue to do everything we can to bring Kingstone to a consistent and sustainable level of profitability. Speaker 100:11:39As the quarters progress And the benefits of what we've done are reflected. I'm confident that you'll continue to see the progress we've made reflected in our financial results. Thank you as always for your support. And with that, we'll open it up for questions. Operator? Operator00:11:57Thank you. We will now be conducting a question and answer session. Our first question comes from Paul Newsome from Piper Sandler. Mr. Newsome, please proceed. Speaker 300:12:37Good morning. Thanks for the call. I was hoping you could give us a little bit more thoughts on the competitive environment in New York And whether or not it's getting better or getting worse at the moment? Speaker 200:12:53Sure. So I would say that we are definitely in a hard market in Downstate New York for coastal business, And I think it's going to continue. Our 2 largest competitors historically are no longer writing business. 1 is insolvent And the other has a moratorium on new business for about 2 years. The large multi line competitors have Pulled back even further due to reinsurance costs and other factors. Speaker 200:13:28So there definitely are a few Companies writing Coastal Properties, but many fewer than in the past and the brokers will tell you that it's the hardest Market they've ever seen. So I view this as a huge opportunity for Kingstone. We're very comfortable with our pricing right now. We know our reinsurance costs. So we are and our market share in New York is less than 2%. Speaker 200:13:58So we have a huge opportunity to increase our growth in Downstate New York and we hope to do that going forward. Speaker 300:14:08Great. And then maybe a different topic. Could we talk about Kingstone's Capital position, we incurred a few losses along the way. And where do you stand from an RBC capital Ratio perspective, where do you stand from an overall capital perspective in your opinion? Speaker 200:14:30Sure. Jen, do you want to Speaker 100:14:31jump in? Sure. Paul, our statutory numbers will be coming out in the middle of this week. But again, we are in some of the amounts of debt that we have on our books on the holding company level are actually surplus And we continue to expect to see our RBC ratios that above 300 for sure. And we are maintaining to that level. Speaker 100:15:00We do have a little bit of an underwriting loss for the quarter going into the statutory numbers as well, But we do expect to start having that turnaround here in Q4 and the beginning of next year. Speaker 300:15:16Great. Thank you. Appreciate the help. Operator00:15:22Our next question comes from Gabriel McClure, who is a Private Investor. Gabriel, please proceed. Speaker 400:15:31Hi, Merrill. Hi, Jennifer. Speaker 100:15:34Hi, Brian. Speaker 400:15:36I want to congratulate you for Hitting your expense ratio, that's very good. And I have one question for you, Merrill, and then one for Jennifer. Merrill, when you referred to increasing the premiums on the New York business 25%. So you don't really break out on average how much that was And rate and how much it was in replacement cost. So I'm kind of curious if we have that. Speaker 400:16:10But I guess My thing is, I guess we've heard that before. I think we heard that last year. And if you look at your press release, At the 9 months to date, core losses, excluding catastrophe, on our underwriting, we're actually up And the loss is about 3.4 points over 2022. So how do we know, I guess, it's going to be different this time as far as making Speaker 200:16:46Sure. So let me answer your first question, which is the breakout between rates and replacement costs. So for that legacy homeowner book, about 16%, almost 17% of the increase had to do with the increase in replacement cost And the rest have to do with rate changes. So then your question about losses. So What I can tell you for the quarter is that our frequency is down, which is really The leading indicator for what losses will be? Speaker 200:17:25So Our frequency is down, we believe, because we're writing a higher, a more responsible customer in our Select program. And our Select program currently is about 20% of our book and growing. And then also we're reducing non core business, which has a much higher But our severity is up double digit just like the rest of the industry. And we are seeing claims inflation in our numbers. And in addition to that, as Jen mentioned, We have had an increase in the number of large losses this year. Speaker 200:18:08It's something we saw in every one of the quarters. And we're trying to figure out what is driving that. We have relooked at everything. We even hired an outside firm to take a look. And we really found nothing and I feel I've talked with others in the industry and I'm hearing that they're Seeing the same thing as well. Speaker 200:18:31But at the end of the day, we have now priced for this increased severity In our product and so that along with the decline in frequency will result in a better loss ratio next year. Speaker 400:18:51Okay, great. Thank you. And then, Jennifer, thanks for Given us the yield on the bond portfolio, what is the average maturity of our bond portfolio now? Okay, great. Thanks, guys. Speaker 200:19:17Thank you, Gabe. Operator00:19:23This concludes our question and answer session. I would like to turn the floor back over to Merrill Golden for closing comments. Speaker 200:19:33Great. Thanks for joining us bright and early on Monday morning and have a fantastic day.Read morePowered by