KINGSTONE COMPANIES, INC. Q3 FY2024 earnings call

• This quarter had the highest income since Kingstone Insurance Company was acquired in 2009 and record-setting premiums written. - Growth driven by two competitors exiting downstate New York and a third company exiting the homeowners market nationally. - Select product outperforms with lower frequency than legacy product. - Sold almost 1.1 million shares via at-the-market offering, used proceeds for debt payment and expenses. - Investment portfolio shifted to corporate bonds for better yields. - EBITDA close to $11 million for the quarter.

Core personal lines direct written premium was up 43% this quarter versus the prior year quarter, driven by an increase in average premium of 23% and a surge in new business policy count up almost 4x the prior year quarter. New business premium was 27% of total core personal lines direct written premium this quarter. For the quarter, the combined ratio improved by 38.2 points to 72%. The expense ratio was 33%, 1.2 points higher than the prior year quarter. Investment income for the quarter increased 14% to $1.7 million.

• For 2024, reaffirms core business direct premiums written growth 25%-35%, raises GAAP combined ratio guidance to 79%-83%, EPS to $1.40-$1.70, ROE to 32%-36%. - For 2025, reaffirms core business direct written premium growth 15%-25%, raises GAAP combined ratio guidance to 82%-86%, EPS to $1.60-$2, ROE to 24%-32%. Guidance reflects market changes, catastrophe reinsurance cost increases, etc.

• Dependence on dividends from insurance company for liquidity is a risk as dividend payment is regulated. - Holding company has debt, need to manage strategically to pay off debt expeditiously. - Catastrophe reinsurance costs may increase due to exposure growth and hardening market.

Q: On guidance, are you assuming a 6% cat load and expense ratio target?

A: Yes, assuming ~6% cat load for 2025 as 2024 was light on catastrophes, expecting expense ratio decrease to ~28% next year.

Q: How has business gone vs plan, core combines, pricing for new customers?

A: Growth not strictly according to plan, proud of handling growth while maintaining standards; pricing competitive with high conversion rate on business from exiting companies.

Q: Size of third company pulling out of market?

A: AmGUARD, a Berkshire Hathaway company, withdrawing from homeowners market nationally with significant policies in NY.

Q: Pricing, impact of storms, rate changes?

A: No impact from Helene/Milton on current decisions, raised rates for Select homeowners and dwelling fire, update replacement cost annually.

Q: Capital allocation, share dilution projection?

A: Trying to balance quota share, stock issuance, and dividends to pay debt expeditiously, but no exact share count projection given.

Q: Reason for guidance from basic to diluted share count?

A: No particular reason, could change to diluted if makes more sense.