Kingstone Companies, Inc. Q4 FY2025 earnings call

• Delivered most profitable quarter and year in history. Fourth quarter net income $14.8M, diluted EPS $1.03, full year net income $40.8M, diluted EPS $2.88. - Grew direct premiums written 39% from 2023 to 2025 while improving combined ratio by 30 points. - Select product improved risk selection, producer relationships strong, operating efficiency improved. - Fourth quarter direct premiums written grew 14%, full year 15%. Net earned premium growth due to reduced quota share. - Fourth quarter net combined ratio 64.2, underlying loss ratio 34.7. Full year underlying loss ratio 44.4, catastrophe loss ratio 1.2. - Set five-year goal of $500M in direct premiums written by 2029, entering California in Q2 2026 on excess and surplus lines basis. - Introducing underlying combined ratio as primary operating lens, 2025 underlying combined ratio 74.4, 2026 guidance 74 - 76. - Net investment income increased in fourth quarter and full year. Expense ratio 30% in 2025, improvement from 2021. - Shareholder equity increased 84% in 2025, book value per diluted share increased 75%.

In the fourth quarter, net income was $14.8 million, diluted earnings per share was $1.03, diluted operating earnings per share was $1.08, GAAP net combined ratio was 64.2, and annualized return on equity was 51%. For the full year, net income was $40.8 million, diluted earnings per share increased to $2.88, and return on equity was 43%. Direct premiums written grew 39% from year end 2023 to year end 2025. Fourth quarter direct premiums written grew 14% to $82.8 million, full year direct premiums written grew 15% to $277.8 million. Net earned premium increased 38% in the fourth quarter and 46% for the full year. Fourth quarter net combined ratio was 64.2, underlying loss ratio was 34.7. Full year underlying loss ratio was 44.4, catastrophe loss ratio was 1.2. Select product was 57% of policies enforced compared to 45% one year ago. Expense ratio improved from 41% in 2021 to 30% in 2025.

• 2026 direct premiums written growth 16 - 20%. - Underlying combined ratio excluding catastrophes and prior year reserve development 74 - 76. - Catastrophe loss assumption 7 - 10 points. - Net combined ratio 81 - 86. - Diluted earnings per share 220 - 290, midpoint 255. - Illustrative: each 1 point catastrophe loss ratio impact ~13 cents on diluted EPS. - 2026 guidance assumes higher than average catastrophe year due to first quarter winter weather. - Catastrophe reinsurance program limits max first event loss to 5M pre-tax or ~27 cents per share after tax.

• Weather is unpredictable, can cause actual results to differ from projections. - Regulatory proposals in New York regarding homeowner insurer profitability may impact business. - California market has different risks and regulatory environment compared to New York.

Q: Talk about differences in risks and performance in California compared to New York.

A: California is large, dislocated market. Entering with same differentiators as New York, using select product, ENS basis, disciplined entry, 30% quota share initially, writing all across California focusing on low to moderate wildfire risk, same target size value for homes as New York.

Q: Expense ratio, where can it go?

A: Reached 30% in 2025, from 41% in 2021, can get another half to full point lower, likely 29 - 30% range. Most expense to enter California already incurred, scale economies exist.

Q: Competition in New York?

A: Competition has come and gone, Kingston has select product, low expenses, good producer relations, confident in competing.

Q: Exposure limits in California?

A: Start lower than New York's five million, will increase as confidence grows.

Q: Winter storm claim activity?

A: Seven catastrophe events since Jan 23rd, claims department managed well, losses included in 2026 guidance.

Q: California market opportunity?

A: Market in need of capacity, regulatory environment allows ENS writers to charge adequate prices, ENS market for homeowners growing fast in California, excited to start writing business in Q2.