Kingstone Companies (NASDAQ:KINS) used its fourth-quarter earnings call to highlight what management described as the most profitable quarter and full year in the insurer’s history, driven by strong premium growth, lower claims frequency, and improved operating efficiency. President and CEO Meryl Golden and CFO Randy Patten also outlined a 2026 framework that puts greater emphasis on “underlying” underwriting performance while assuming a return to more typical catastrophe losses, and they introduced plans to begin writing business in California in 2026.
Record profitability in the quarter and full year
Golden said the company generated fourth-quarter net income of $14.8 million and diluted earnings per share (EPS) of $1.03. Kingstone reported a GAAP net combined ratio of 64.2 and an annualized return on equity (ROE) of 51% for the quarter. For the full year, management reported net income of $40.8 million, diluted EPS of $2.88, and ROE of 43%, noting that results exceeded guidance provided in November.
Premium growth, product mix, and underwriting performance
Management emphasized that growth has been paired with improved underwriting metrics. Golden said that from year-end 2023 to year-end 2025, Kingstone grew direct premiums written (DPW) 39% while improving its combined ratio by 30 points, calling the improvements “structural” rather than simply weather-driven.
In the fourth quarter, direct premiums written increased 14% to $82.8 million, driven by higher average premiums and strong retention, according to Golden. For the full year, DPW rose 15% to $277.8 million, and New York personal lines policies in force grew more than 7%. Golden said hard market conditions in Kingstone’s downstate New York footprint “have not changed materially,” and demand from producers remained strong. She noted support from policies under the Guard renewal rights agreement, which Kingstone began writing in September, and said new business policy count increased sequentially from the second quarter, with fourth-quarter new business policy count up 25% versus the third quarter.
Golden also highlighted continued penetration of the company’s Select product, which she said improves risk selection and matches rate to risk. Select policies represented 57% of policies in force, up from 45% one year ago.
On underwriting, Golden said the fourth-quarter combined ratio of 64.2 reflected “exceptional performance,” with an underlying loss ratio of 34.7—an improvement of more than 14 points year over year—driven by meaningfully lower claims frequency. She cited non-weather water as the largest peril and said frequency improvements were tied to Select risk selection. Golden also said claims operations improvements led to faster cycle times and earlier visibility into ultimate property claims costs.
For the full year, Golden said the underlying loss ratio improved nearly 4 points to 44.4%, while the catastrophe loss ratio was 1.2 points. She acknowledged that 2025 benefited from very low catastrophe activity, but maintained that underlying performance improved materially, adding that with a “normalized” catastrophe load the full-year combined ratio would have been in the low 80s.
Lower quota share and investment income tailwinds
Net earned premium growth was another key theme. Golden said net premiums earned rose 38% in the fourth quarter and 46% for the full year, primarily due to reduced quota share, allowing Kingstone to retain more premiums and underwriting profits. She said the company reduced quota share further for 2026.
Patten provided more detail, saying the quota share reduction from 27% to 16% for the 2025 treaty year increased projected EPS by approximately $0.25 for 2025. For the 2026 treaty year, Kingstone further reduced quota share cession from 16% to 5%, which Patten said is expected to increase projected EPS by approximately $0.20 for 2026 and is included in updated guidance ranges.
Patten also highlighted investment income gains. Net investment income increased 55% to $3.0 million in the fourth quarter, up from $1.9 million a year earlier, and rose 44% to $9.8 million for the full year. He attributed the increase to strong operating cash generation, portfolio growth to $309.7 million, and higher fixed income yields. Patten said the company continued to reposition part of the portfolio to capture “attractive new money yields of 4.7%” in the fourth quarter. As of December 31, 2025, he reported fixed income yield of 4.3% and effective duration of 4.4 years, compared with 3.7% and 3.9 years at December 31, 2024.
2026 guidance reframed around “underlying” combined ratio
Golden said Kingstone is introducing “underlying combined ratio” as its primary operating lens beginning in 2026, defined as the underlying loss ratio plus the net expense ratio, excluding catastrophe losses and prior-year reserve development. She said the metric is intended to isolate controllable performance such as pricing, risk selection, claims management, and operating efficiency.
Management reported an underlying combined ratio of 74.4% for 2025, down from 79.5% in 2024. Golden said the improvement reflected Select penetration, earned rate adequacy, and operating leverage, while also noting the company’s 2025 reported combined ratio benefited from an “outlier” low catastrophe loss ratio of 1.2 points versus a six-year average catastrophe loss ratio of 7.1 points from 2019 through 2024.
For 2026, Golden outlined guidance that assumes a higher catastrophe load, which she said is the primary driver behind the year-over-year change implied in EPS and ROE comparisons, rather than a deterioration in underlying performance. The company’s updated 2026 guidance included:
- Direct premiums written growth: 16% to 20%
- Underlying combined ratio (excluding catastrophes and prior-year reserve development): 74% to 76%
- Catastrophe loss assumption: 7 to 10 points, reflecting elevated winter storm activity experienced in first-quarter 2026
- Net combined ratio: 81% to 86%
- Diluted EPS: $2.20 to $2.90 (midpoint $2.55)
Golden also offered an illustrative sensitivity for modeling catastrophe outcomes, stating that each one point of catastrophe loss ratio has approximately a $0.13 impact on diluted EPS. Using fiscal 2025 catastrophe levels of 1.2 points, she said the illustrative earnings power would be approximately $3.53 per diluted share, while emphasizing that this was “not guided” and that weather is unpredictable.
On reinsurance, Golden said the catastrophe reinsurance program limits maximum first event loss to $5 million pre-tax, or approximately $0.27 per share after tax, whether from a hurricane or winter storm.
California expansion and New York market context
Golden reiterated a five-year goal first shared earlier in the year: $500 million in direct premiums written by year-end 2029, driven by continued growth in New York, measured expansion into new markets, and strategic inorganic opportunities. She said Kingstone’s first new market will be California, with entry planned in the second quarter of 2026 on an excess and surplus (E&S) lines basis.
In response to analyst questions, Golden said Kingstone hired an actuarial consulting firm to evaluate catastrophe-exposed property markets and selected California because it is a large market, “dislocated,” and diversifying relative to New York. She said the company will use its Select product approach, with support from the same firm that helped build Select, to modify it for California. Golden said the E&S structure allows highly segmented pricing, the use of models for underwriting and rating wildfire risk, and real-time aggregation management.
Golden said the company plans to write across the state while managing concentration in real time and focusing on low to moderate wildfire risk. She also said the initial contribution from California would be modest—less than 5% of 2026 premium—while the majority of volume remains in New York. When asked about quota share for California, Golden confirmed an initial 30% quota share “out of abundance of caution.” She also discussed coverage limits, noting that in New York Kingstone recently increased maximum Coverage A to $5 million (from $3.5 million previously) and that California would start with a lower cap before opening up to $5 million as confidence grows.
Golden also addressed why E&S is attractive in California, saying the primary issue in the state is a regulatory environment that she said precludes adequate pricing for underlying exposure. She said E&S writers are not subject to the same regulation, and she characterized the E&S homeowners market in California as growing faster than elsewhere in the U.S.
In New York, Golden said competition has “come and gone,” and she expressed confidence in Kingstone’s ability to compete, citing Select pricing, low expenses, and producer relationships. She also said the company is monitoring and engaging on New York regulatory proposals regarding homeowner insurer profitability through industry bodies, adding that final legislation would need to account for catastrophe volatility and the importance of maintaining carrier capacity and availability.
Patten said Kingstone ended 2025 with no holding company debt. Shareholder equity was $122.7 million, up 84% during the year. Book value per diluted share increased 75% to $8.28, and book value excluding accumulated other comprehensive income increased 56% to $8.69. He also noted the company declared its third consecutive quarterly dividend during the first quarter of 2026.
About Kingstone Companies (NASDAQ:KINS)
Kingstone Companies, Inc is a publicly traded property and casualty insurance holding company whose primary focus lies in personal and commercial insurance products. Through its wholly owned subsidiary, Kingstone Insurance Company, the firm underwrites a broad portfolio of property and casualty lines, including private passenger auto, homeowners, inland marine, umbrella, and various small‐commercial coverage options. Distribution is handled predominantly through a network of independent agents, allowing Kingstone to maintain strong broker relationships and responsive service for policyholders.
The company was incorporated in Delaware in 2010 and commenced operations following the acquisition of Kingstone Insurance Company in early 2011.
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