KINGSTONE COMPANIES, INC.KINS決算レポート
Nasdaq · 金融 · 火災、海上及び損害保険
Kingstone Companies, Inc., headquartered in Kingston, New York, provides property and casualty insurance products through its subsidiary, Kingstone Insurance Company. It places contracts with the third-party licensed premium finance company through its subsidiary Payments, Inc., a NYS licensed Insurance Premium Finance Company. Kingstone Insurance Company was ranked #1 of the 81 insurers rated by the Professional Insurance Agents Association in its 2010 Company Performance Survey. The company...
What changed in KINGSTONE COMPANIES, INC.'s 10-K — 2024 vs 2025
Top changes in KINGSTONE COMPANIES, INC.'s 2025 10-K
384 paragraphs added · 378 removed · 268 edited across 2 sections
- Item 5. Market for Registrant's Common Equity+205 / −200 · 140 edited
- Item 1. Business+179 / −178 · 128 edited
Item 1. Business
Business — how the company describes what it does
128 edited+51 added−50 removed141 unchanged
Item 1. Business
Business — how the company describes what it does
128 edited+51 added−50 removed141 unchanged
2024 filing
2025 filing
While this circular letter does not have the force of law, it articulated DFS’ expectations about the use of AIS and ECDIS. In the past, the release of a circular letter has preceded the issuance of draft and eventually final regulations in the area addressed.
While this circular letter does not have the force of law, it articulated the DFS’ expectations about the use of AIS and ECDIS. In the past, the release of a circular letter has preceded the issuance of draft and eventually final regulations in the area addressed.
Our underwriting process evaluates and screens out certain risks based on their prior loss experience, cost of reinsurance, property condition, insurance scoring and driving record, and then is augmented by information collected from physical property inspections. We maintain certain policy exclusions that reduce our exposure to risks that can create severe losses.
Our underwriting process evaluates and screens out certain risks based on their prior loss experience, cost of reinsurance, property condition, insurance scoring and driving record, and then is augmented by information collected from virtual and physical property inspections. We maintain certain policy exclusions that reduce our exposure to risks that can create severe losses.
(b) Business Property and Casualty Insurance Overview Property and casualty insurance companies provide policies in exchange for premiums paid by their customers (the “insureds”). An insurance policy is a contract between the insurance company and its insureds where the insurance company agrees to pay for losses that are covered under the contract.
Business Property and Casualty Insurance Overview Property and casualty insurance companies provide policies in exchange for premiums paid by their customers (the “insureds”). An insurance policy is a contract between the insurance company and its insureds where the insurance company agrees to pay for losses that are covered under the contract.
If the amount of our capital falls below certain thresholds, we may face restrictions with respect to soliciting new business and/or keeping existing business. Similar regulations apply in other states in which we operate. 20 Table of Contents Changing climate conditions may adversely affect our financial condition, profitability or cash flows.
If the amount of our 21 Table of Contents capital falls below certain thresholds, we may face restrictions with respect to soliciting new business and/or keeping existing business. Similar regulations apply in other states in which we operate. Changing climate conditions may adversely affect our financial condition, profitability or cash flows.
Departure from the usual values on four or more of the ratios can lead to inquiries from individual state insurance commissioners as to certain aspects of an insurer’s business. As of December 31, 2024, KICO had three ratios outside the usual range. Accounting Principles Statutory accounting principles (“SAP”) are a basis of accounting developed by the NAIC.
Departure from the usual values on four or more of the ratios can lead to inquiries from individual state insurance commissioners as to certain aspects of an insurer’s business. As of December 31, 2025, KICO had three ratios outside the usual range. Accounting Principles Statutory accounting principles (“SAP”) are a basis of accounting developed by the NAIC.
Such attacks or actions may include attempts to: • steal, corrupt, or destroy data, including our intellectual property, financial data or the personal information of our customers or employees • misappropriate funds • disrupt or shut down our systems • deny customers, agents, brokers, or others access to our systems, or 22 Table of Contents • infect our systems with viruses or malware.
Such attacks or actions may include attempts to: • steal, corrupt, or destroy data, including our intellectual property, financial data or the personal information of our customers or employees • misappropriate funds • disrupt or shut down our systems 23 Table of Contents • deny customers, agents, brokers, or others access to our systems, or • infect our systems with viruses or malware.
The sliding scale provided minimum and maximum ceding commission rates in relation to specified ultimate loss ratios. Under the 2023/24 Treaty, KICO received a fixed provisional rate with no adjustment for sliding scale contingent commissions. Under the 2024/2025 Treaty, KICO received a fixed provisional rate with no adjustment for sliding scale contingent commissions.
The sliding scale provided minimum and maximum ceding commission rates in relation to specified ultimate loss ratios. Under the 2024/2025 Treaty, KICO received a fixed provisional rate with no adjustment for sliding scale contingent commissions.
Since we are primarily liable to an insured for the full amount of insurance coverage, our inability to collect a material recovery from a reinsurer could have a material adverse effect on our operating results and financial condition. Applicable insurance laws regarding the change of control of our company may impede potential acquisitions that our stockholders might consider desirable.
Since we are primarily liable to an insured for the full amount of insurance coverage, our inability to collect a material recovery from a reinsurer could have a material adverse effect on our operating results and financial condition. 20 Table of Contents Applicable insurance laws regarding the change of control of our company may impede potential acquisitions that our stockholders might consider desirable.
State insurance authorities have broad regulatory, supervisory and administrative powers, including, among other things, the power to grant and revoke licenses to transact business, set the standards of solvency to be met and maintained, determine the nature of, and limitations on, investments and dividends, approve policy forms and rates, and in some instances to regulate unfair trade and claims practices.
State insurance authorities have broad regulatory, supervisory and administrative powers, including, among other things, the power to grant and revoke licenses to transact business, set the 14 Table of Contents standards of solvency to be met and maintained, determine the nature of, and limitations on, investments and dividends, approve policy forms and rates, and in some instances to regulate unfair trade and claims practices.
ITEM 1C . CYBERSECURITY. Risk Management and Strategy We regularly assess risks from cybersecurity threats; monitor our information systems for potential vulnerabilities; and test those systems pursuant to our cybersecurity policies, processes, and practices, which are integrated into our overall risk management program.
Risk Management and Strategy We regularly assess risks from cybersecurity threats; monitor our information systems for potential vulnerabilities; and test those systems pursuant to our cybersecurity policies, processes, and practices, which are integrated into our overall risk management program.
Governance Our Corporate Sustainability and Risk Management Committee of the Board of Directors has been delegated the power and authority to oversee and make recommendations to the Board with regard to our overall approach to risks relating to business operations, including with regard to information technology and cybersecurity.
Governance The Risk Management Committee of our Board of Directors has been delegated the power and authority to oversee and make recommendations to the Board with regard to our overall approach to risks relating to business operations, including with regard to information technology and cybersecurity.
Accordingly, statutory accounting focuses on valuing assets and liabilities of insurers at financial reporting dates in accordance with appropriate insurance law and regulatory provisions applicable in each insurer’s domiciliary state. Generally accepted accounting principles (“GAAP”) are concerned with a company’s solvency, but are also concerned with other financial measurements, principally results of operations and cash flows.
Accordingly, statutory accounting focuses on valuing assets and liabilities of insurers at financial reporting dates in accordance with appropriate insurance law and regulatory provisions applicable in each insurer’s domiciliary state. 17 Table of Contents Generally accepted accounting principles (“GAAP”) are concerned with a company’s solvency, but are also concerned with other financial measurements, principally results of operations and cash flows.
Risks presented by the effects of pandemics like COVID-19 include, among others, the following: Investments. Our corporate fixed income portfolio may be adversely impacted by ratings downgrades, increased bankruptcies and credit spread widening in distressed industries. In addition, in recent years, many state and local governments have been operating under deficits or projected deficits.
Risks presented by the effects of pandemics include, among others, the following: Investments. Our corporate fixed income portfolio may be adversely impacted by ratings downgrades, increased bankruptcies and credit spread widening in distressed industries. In addition, in recent years, many state and local governments have been operating under deficits or projected deficits.
In addition, the reinsurance losses that are incurred in connection with a catastrophe could have an adverse impact on the terms and conditions of future reinsurance treaties. In addition, we are subject to claims arising from non-catastrophic weather events such as hurricanes, tropical storms, severe winter weather, rain, hail and high winds.
In addition, the reinsurance losses that are incurred in connection with a catastrophe could have an adverse impact on the terms and conditions of future reinsurance treaties. 18 Table of Contents In addition, we are subject to claims arising from non-catastrophic weather events such as hurricanes, tropical storms, severe winter weather, rain, hail and high winds.
ITEM 1. BUSINESS . (a) Business Development General As used in this Annual Report, references to the “Company,” “we,” “us,” or “our” refer to Kingstone Companies, Inc. (“Kingstone”) and its subsidiaries. We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”).
ITEM 1. BUSINESS . (a) Business Development General As used in this Annual Report, references to the “Company,” “we,” “us,” or “our” refer to Kingstone Companies, Inc. (the “Holding Company”) and its subsidiaries. We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”).
The Terrorism Risk Insurance Program serves as a federal “backstop” for insurance claims related to acts of terrorism. 14 Table of Contents On November 15, 2021, the DFS issued its final Guidance for New York Domestic Insurers On Managing the Financial Risks from Climate Change. On June 15, 2022, the DFS released its 2021 annual report.
The Terrorism Risk Insurance Program serves as a federal “backstop” for insurance claims related to acts of terrorism. On November 15, 2021, the DFS issued its final Guidance for New York Domestic Insurers On Managing the Financial Risks from Climate Change. On June 15, 2022, the DFS released its 2021 annual report.
The extensive heritage of our insurance company subsidiary and our commitment to the markets in which we operate is a competitive advantage with producers and insureds. 6 Table of Contents Strong Producer Relationships Within our producers’ offices, we compete with other property and casualty insurance carriers available to those producers.
The extensive heritage of our insurance company subsidiary and our commitment to the markets in which we operate is a competitive advantage with producers and insureds. Strong Producer Relationships Within our producers’ offices, we compete with other property and casualty insurance carriers available to those producers.
We believe that the excellent service provided to our Select producers, our broad product offerings, and our competitive prices provide a strong foundation for profitable growth. Sophisticated Pricing, Underwriting and Risk Management Practices We believe that a significant underwriting advantage exists due to our local market presence and expertise.
We believe that the excellent service provided to our Select producers, our broad underwriting appetite, and our competitive prices provide a strong foundation for profitable growth. Sophisticated Pricing, Underwriting and Risk Management Practices We believe that a significant underwriting advantage exists due to our local market presence and expertise.
KICO’s TAC is above its ACL. As of December 31, 2024, the ratio of TAC to ACL was 5.62 and is in compliance with New York’s RBC requirements. Dividend Limitations Our ability to receive dividends from KICO is restricted by the state laws and insurance regulations of New York. These restrictions are related to surplus and net investment income.
KICO’s TAC is above its ACL. As of December 31, 2025, the ratio of TAC to ACL was 5.30 and is in compliance with New York’s RBC requirements. Dividend Limitations Our ability to receive dividends from KICO is restricted by the state laws and insurance regulations of New York. These restrictions are related to surplus and net investment income.
We are subject to statutes and regulations of the state of New York which generally require that any person or entity desiring to acquire direct or indirect control of KICO, our insurance company subsidiary, obtain prior regulatory approval. In addition, a change of control of Kingstone Companies, Inc. would require such approval.
We are subject to statutes and regulations of the state of New York which generally require that any person or entity desiring to acquire direct or indirect control of KICO, our insurance company subsidiary, obtain prior regulatory approval. In addition, a change of control of the Holding Company would require such approval.
We rely on our information technology and telecommunication systems, and the failure of these systems could materially and adversely affect our business. Our business is highly dependent upon the successful and uninterrupted functioning of our information technology and telecommunications systems. We rely on these systems to support our operations.
We rely on our information technology, including artificial intelligence, and telecommunication systems, and the failure of these systems could materially and adversely affect our business. Our business is highly dependent upon the successful and uninterrupted functioning of our information technology, including artificial intelligence, and telecommunications systems. We rely on these systems to support our operations.
An insurance company’s combined ratio is calculated by taking the ratio of incurred loss and LAE to earned premiums (the 5 Table of Contents “loss and LAE ratio”) and adding it to the ratio of policy acquisition and other underwriting expenses to earned premiums (the “expense ratio”).
An insurance company’s combined ratio is calculated by taking the ratio of incurred loss and LAE to earned premiums (the “loss and LAE ratio”) and adding it to the ratio of policy acquisition and other underwriting expenses to earned premiums (the “expense ratio”).
Livery physical damage - We write for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs. These policies insure only the physical damage portion of insurance for such vehicles, with no liability coverage included. These policies accounted for 5.9% of our gross written premiums for the year ended December 31, 2024.
Livery physical damage - We write for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs. These policies insure only the physical damage portion of insurance for such vehicles, with no liability coverage included. These policies accounted for 5.2% of our gross written premiums for the year ended December 31, 2025.
Our common stock has substantially less liquidity than the average trading market for many other publicly traded insurance and other companies. An active trading market for our common stock may not develop or, if developed, may not be sustained. Such stocks can be more volatile than stocks trading in an active public market.
Our common stock has substantially less liquidity than the average trading market for many other publicly traded insurance and other companies. An active trading market for our common stock may not develop or, if developed, may not be sustained. Such stocks can 24 Table of Contents be more volatile than stocks trading in an active public market.
Approximately 96% of our revenue during the year ended December 31, 2024 was derived from sources located in the State of New York and, accordingly, is affected by the prevailing regulatory, economic, demographic, competitive and other conditions in the state. Changes in any of these conditions could make it costlier or difficult for us to conduct our business.
Approximately 98% of our revenue during the year ended December 31, 2025 was derived from sources located in the State of New York and, accordingly, is affected by the prevailing regulatory, economic, legislative, demographic, competitive and other conditions in the state. Changes in any of these conditions could make it costlier or difficult for us to conduct our business.
Additionally in 2024, we purchased winter storm specific catastrophe reinsurance that provides coverage to the extent of 71% of $4,500,000 of coverage after the first $5,500,000 of gross retention.
Additionally in 2024, we purchased winter storm specific catastrophe reinsurance that provides coverage to the extent of 71% of $4,500,000 of coverage after 13 Table of Contents the first $5,500,000 of gross retention.
Securities and Exchange Commission (the “SEC”). Such reports and other information filed by us with the SEC are available free of charge at the investor relations section of our website at www.kingstonecompanies.com as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.
Such reports and other information filed by us with the SEC are available free of charge at the investor relations section of our website at www.kingstonecompanies.com as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.
In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits. Other operating expenses include our corporate expenses as a holding company.
In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include 5 Table of Contents commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits. Other operating expenses include our corporate expenses as a holding company.
The ratings of Kingstone Insurance Company (“KICO”), our insurance subsidiary, reflect the rating agencies’ opinion as to its financial strength and are not evaluations directed to investors in our securities, nor are they recommendations to buy, sell or hold our securities. In July 2023, A.M.
The ratings of Kingstone Insurance Company (“KICO”), our insurance subsidiary, reflect the rating agencies’ opinion as to its financial strength and are not evaluations directed to investors in our securities, nor are they recommendations to buy, sell or hold our securities.
Product Lines Our product lines include the following: Personal lines - Our largest line of business is personal lines, consisting of homeowners, dwelling fire, cooperative/condominium, renters, and personal umbrella policies. Personal lines policies accounted for 94.1% of our gross written premiums for the year ended December 31, 2024.
Product Lines Our product lines include the following: Personal lines - Our largest line of business is personal lines, consisting of homeowners, dwelling fire, cooperative/condominium, renters, and personal umbrella policies. Personal lines policies accounted for 94.7% of our gross written premiums for the year ended December 31, 2025.
Increases in claim severity can arise from unexpected events that are inherently difficult to predict, such as a change in the law or an inability to enforce exclusions and limitations contained in 17 Table of Contents our policies.
Increases in claim severity can arise from unexpected events that are inherently difficult to predict, such as a change in the law or an inability to enforce exclusions and limitations contained in our policies.
IBNR reserves are calculated in bulk as an estimate of ultimate losses and LAE less reported losses and LAE. There are two types of IBNR; the first is a provision for claims that have occurred but are not yet reported or known.
IBNR reserves are calculated in bulk as an estimate of ultimate losses and LAE less reported losses and LAE. There are two types of IBNR; the first is a provision for claims that have occurred but are not yet reported or known. We refer to this as ‘Pure’ IBNR.
Statutory accounting practices established by the NAIC and adopted in part by New York insurance regulators determine, among other things, the amount of statutory surplus and statutory net income of KICO and thus determine, in part, the amount of funds that are available for KICO to pay dividends to Kingstone Companies, Inc.
Statutory accounting practices established by the NAIC and adopted in part by New York insurance regulators determine, among other things, the amount of statutory surplus and statutory net income of KICO and thus determine, in part, the amount of funds that are available for KICO to pay dividends to the Holding Company.
It was again passed in identical form in 2023 and again vetoed in December 2023. The bill was reintroduced in identical form in February 2024 and following two-house passage, vetoed again in December 2024.
It was again passed in identical form in 2023 and again vetoed in December 2023. The bill was reintroduced in identical form in February 2024 and following two-house passage, vetoed again in December 2024. This identical legislation was passed and vetoed again in 2025.
Other - We write canine legal liability policies and have a small participation in mandatory state joint underwriting associations. These policies accounted for 0.03% of our gross written premiums for the year ended December 31, 2024. Our Competitive Strengths Long History of Operations KICO has been in operation in the State of New York since 1886.
Other - We write canine legal liability policies and have a small participation in mandatory state joint underwriting associations. These policies accounted for 0.02% of our gross written premiums for the year ended December 31, 2025. 6 Table of Contents Our Competitive Strengths Long History of Operations KICO has been in operation in the State of New York since 1886.
Our ability to recruit and retain such personnel will depend upon a number of factors, such as our results of operations and prospects and the level of competition prevailing in the market for qualified personnel. Ms. Golden and we are parties to an employment agreement which expires on December 31, 2026.
Our ability to recruit and retain such personnel will depend upon a number of factors, such as our results of operations and prospects and the level of competition prevailing in the market for qualified personnel. Ms. Golden and we are parties to an employment agreement which expires on January 10, 2027.
Dividends may be paid, without the need for DFS approval, from unassigned surplus and are restricted to the lesser of 10% of surplus or 100% of investment income (on a statutory accounting basis) for the trailing 36 months, less dividends by KICO paid during such period. At December 31, 2024, unassigned surplus was $13,658,183.
Dividends may be paid, without the need for DFS approval, from unassigned surplus and are restricted to the lesser of 10% of surplus or 100% of investment income (on a statutory accounting basis) for the trailing 36 months, less dividends by KICO paid during such period. At December 31, 2025, unassigned surplus was $36,152,023.
From January 1, 2024 through January 1, 2025, under the Underlying XOL Treaty, our maximum net retention for any one personal lines occurrence was reduced from the retention of $730,000 under 2024/2025 Treaty to $530,000.
From January 1, 2024 through January 1, 2025, under the Underlying XOL Treaty, our maximum net retention for any one personal lines occurrence was reduced from the retention of $730,000 under 2024/2025 Treaty to $530,000. From January 1, 2025 through June 30, 2025, our maximum net retention increased to $640,000 under the 2025/2026 Treaty.
The FIO releases reports summarizing and analyzing the Office’s oversight efforts, and general activities.
The FIO releases reports summarizing and analyzing its oversight efforts, and general activities.
Copies are also available, without charge, by writing to Kingstone Companies, Inc., Investor Relations, 15 Joys Lane, Kingstone, New York 12401. The SEC also maintains a website, www.sec.gov, which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Copies are also available, without charge, by writing to Kingstone Companies, Inc., Investor Relations, 120 Wood Road, Kingston, New York 12401. The SEC also maintains a website, www.sec.gov, which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers. Our predominant market, downstate New York, was affected by several events during 2024, one of which was a named storm, and one was a winter storm, and the remaining events were wind and thunderstorm.
PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers. Our predominant market, downstate New York, was affected by twelve events during 2025, of which none was a named storm, two were winter storms, and the remaining ten events were wind and thunderstorm.
KICO is actively writing its property and casualty insurance products in New York. Additionally, our subsidiary, Cosi, a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies.
KICO is actively writing its property and casualty insurance products in New York. Additionally, our subsidiary, Cosi, a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies. See "Competition; Market - 5-Year Growth Plan" below.
Upon the expiration of the 2023/2024 Treaty on January 1, 2024, we entered into a new 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 (“2024/2025 Treaty”).
Upon the expiration of the 2024/2025 Treaty on January 1, 2025, we entered into a new 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”).
We have a cyber insurance policy to protect against the monetary impact of some of these risks. However, the occurrence of a security breach, data loss or corruption, or cyber-attack, if sufficiently severe, could have a material adverse effect on our business results.
We have a cyber insurance policy to protect against the monetary impact of some of these risks. However, the occurrence of a security breach, data loss or corruption, or cyber-attack, if sufficiently severe, could have a material adverse effect on our business results. See Item IC ("Cybersecurity") in this Annual Report.
We believe that our relationship with our employees is good. Availability of Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the U.S.
Availability of Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the U.S. Securities and Exchange Commission (the “SEC”).
RBC provides for targeted surplus levels based on formulas, which specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk, and are set forth in the RBC requirements.
The RBC Model serves as a benchmark for the regulation of insurance companies. RBC provides for targeted surplus levels based on formulas, which specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk, and are set forth in the RBC requirements.
The re-estimated ultimate reserves two years later for those claims as of December 31, 2014 had decreased to $21,501,000. The “cumulative redundancy (deficiency)” represents, as of December 31, 2024, the difference between the latest re-estimated liability and the amounts as originally estimated. A redundancy means that the original estimate was higher than the current estimate.
The re-estimated ultimate reserves two years later for those claims as of December 31, 2015 had increased to $24,413,000. The “cumulative redundancy (deficiency)” represents, as of December 31, 2025, the difference between the latest re-estimated liability and the amounts as originally estimated. A redundancy means that the original estimate was higher than the current estimate.
Effective January 1, 2024 through January 1, 2025, losses on personal lines policies were subject to the 2024/2025 Treaty, which will cover 5.0% of catastrophe losses and will result in a net retention by us of $4,750,000 of exposure for the first event of a named storm catastrophe occurrence.
Effective January 1, 2024 through January 1, 2025, losses on personal lines policies were subject to the 2024/2025 Treaty, which covered 5.0% of catastrophe losses and resulted in a net retention by us of $4,750,000 of exposure for the first event of a named storm catastrophe occurrence. Our net retention for a second event of a named storm is $9,500,000.
Effective July 1, 2024 and through June 30, 2025, we had reinstatement premium protection for $10,500,000 of catastrophe coverage in excess of $10,000,000. This protects us from having to pay an additional premium to reinstate 12 Table of Contents catastrophe coverage for an event up to this level.
Effective July 1, 2024 and through June 30, 2026, we have reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000. This protects us from having to pay an additional premium to reinstate catastrophe coverage for an event up to this level.
We are pursuing profitable growth through existing producers in existing markets, by developing new geographic markets and producer relationships, and by introducing niche products that are relevant to our producers and insureds.
We are pursuing profitable growth through existing producers in existing markets, by developing new geographic markets and producer relationships, and by introducing niche products that are relevant to our producers and insureds. See "Competition; Market - 5-Year Growth Plan" below.
We currently have catastrophe reinsurance coverage with regard to losses of up to $285,000,000 ($275,000,000 in excess of $10,000,000). Effective January 1, 2025, $5,000,000 of losses in a catastrophe are subject to a quota share reinsurance treaty, which covers 10.0% of catastrophe losses such that we retain $4,250,000 of risk per catastrophe occurrence.
We currently have catastrophe reinsurance coverage with regard to losses of up to $440,000,000 ($435,000,000 in excess of $5,000,000). Effective January 1, 2026, $10,000,000 of losses in a catastrophe are subject to a quota share reinsurance treaty, which covers 5% of catastrophe losses such that we retain $5,500,000 of risk per catastrophe occurrence.
Effective January 1, 2023, we entered into a 30% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2023 through January 1, 2024 (“2023/2024 Treaty”).
Effective January 1, 2024, we entered into a new 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 (“2024/2025 Treaty”).
Cosi-related operating expenses are not included in our stand-alone insurance underwriting business and, accordingly, its expenses are not included in the calculation of our combined ratio as described below.
Net Cosi revenue is deducted against commission expense and Cosi-related expenses are included in other operating expenses. Cosi-related operating expenses are not included in our stand-alone insurance underwriting business and, accordingly, its expenses are not included in the calculation of our combined ratio as described below.
On November 1, 2023, the DFS adopted substantive amendments updating the 2017 cybersecurity regulations. The adopted regulations require that a covered entity’s chief information security officer (“CISO”) have sufficient authority to ensure that cybersecurity risks are appropriately managed and require the CISO to report material cybersecurity issues.
The adopted regulations require that a covered entity’s chief information security officer (“CISO”) have sufficient authority to ensure that cybersecurity risks are appropriately managed and require the CISO to report material cybersecurity issues.
Maximum allowable dividends by KICO to us are restricted to the lesser of 10% of surplus or 100% of net investment income (on a statutory accounting basis) for the trailing 36 months, less dividends paid by KICO during such period. As of December 31, 2024, KICO had unassigned surplus of approximately $13.7 million.
Maximum allowable dividends by KICO to us are restricted to the lesser of 10% of surplus or 100% of net investment income (on a statutory accounting basis) for the trailing 36 months, less dividends paid by KICO during such period. At December 31, 2025, unassigned surplus was $36,152,023.
Legal Structure We were incorporated in 1961 and assumed the name DCAP Group, Inc. in 1999. On July 1, 2009, we changed our name to Kingstone Companies, Inc. 16 Table of Contents Employees As of December 31, 2024, we had 99 employees. None of our employees are covered by a collective bargaining agreement.
Legal Structure We were incorporated in 1961 and assumed the name DCAP Group, Inc. in 1999. On July 1, 2009, we changed our name to Kingstone Companies, Inc. Employees As of December 31, 2025, we had 113 employees. None of our employees are covered by a collective bargaining agreement. We believe that our relationship with our employees is good.
These include cybersecurity assessors, consultants, and other external cybersecurity experts to assist in the identification, verification, and validation of cybersecurity risks, as well as to support associated mitigation plans when necessary. 24 Table of Contents Additionally, we require security training for all employees on a quarterly basis.
These include cybersecurity assessors, consultants, and other external cybersecurity experts to assist in the identification, verification, and validation of cybersecurity risks, as well as to support associated mitigation plans when necessary. Additionally, we require security training for all employees on a quarterly basis. The training covers a wide range of topics, including phishing, social engineering and data protection.
KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. For the years ended December 31, 2024 and 2023, respectively, 96.0% and 88.3% of KICO’s direct written premiums came from the New York policies.
KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. For the years ended December 31, 2025 and 2024, respectively, 98.0% and 96.0% of KICO’s direct written premiums came from the New York policies. In addition, through our subsidiary, Cosi Agency, Inc.
All of these systems are subject to “cyber attacks” by sophisticated third parties with substantial computing resources and capabilities, and to unauthorized or illegitimate actions by employees, consultants, agents and other persons with legitimate access to our systems.
We also store our intellectual property, trade secrets, and other sensitive business and financial information. All of these systems are subject to “cyber attacks” by sophisticated third parties with substantial computing resources and capabilities, and to unauthorized or illegitimate actions by employees, consultants, agents and other persons with legitimate access to our systems.
Under a “net” arrangement, all catastrophe reinsurance coverage above our catastrophe retention is purchased directly by us. In 2024, we purchased catastrophe reinsurance to provide coverage of up to $280,000,000 for losses associated with a single event.
The 2024/2025 Treaty, 2025/2026 Treaty and 2026/2027 Treaty are on a “net” of catastrophe reinsurance basis. Under a “net” arrangement, all catastrophe reinsurance coverage above our catastrophe retention is purchased directly by us. In 2025, we purchased catastrophe reinsurance to provide coverage of up to $440,000,000 for losses associated with a single event.
The bill was vetoed by the Governor in a message suggesting it needs further consideration. In 2024, legislation was passed, and signed into law which requires the Superintendent of Insurance to issue regulations providing standards for hurricane windstorm deductibles which create, to the greatest extent possible, uniformity in the operation of such deductibles with respect to the triggering event.
In 2024, legislation was passed, and signed into law which requires the Superintendent of the DFS to issue regulations providing standards for hurricane windstorm deductibles which create, to the greatest extent possible, uniformity in the operation of such deductibles with respect to the triggering event.
Developments During 2025 • Sale of Building In February 2025, 15 Joys Lane LLC, our subsidiary, entered into a contract of sale with Ulster County, New York (the "County") for the sale to the County of our headquarters building in Kingston, New York, along with an adjacent mixed use property (collectively, the "Property").
Recent Developments Developments During 2025 • Sale of Building On February 5, 2025, one of our subsidiaries entered into a contract of sale with Ulster County, New York (the “County”) for the sale to the County of our headquarters building in Kingston, New York, along with an adjacent mixed-use property (collectively, the “Property”).
Catastrophe Losses In 2024 we had catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO).
Demotech is the rating agency most commonly used by carriers focused on coastal property risks. Catastrophe Losses In 2025 we had catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO).
A deficiency means that the current estimate is higher than the original estimate. 10 Table of Contents (in thousands of $) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Reserve for loss and loss adjustment expenses, net of reinsurance recoverables 21,663 23,170 25,960 32,051 40,526 64,770 62,647 84,311 90,680 88,529 93,888 Net reserve estimated as of One year later 21,200 23,107 25,899 33,203 51,664 64,811 62,632 87,011 90,673 86,749 Two years later 21,501 24,413 26,970 42,723 55,145 65,113 65,339 88,418 94,245 Three years later 22,576 25,509 33,298 43,780 56,346 67,291 67,135 92,642 Four years later 23,243 28,638 33,342 43,973 58,048 68,612 70,643 Five years later 25,442 28,506 33,120 43,774 57,957 71,022 Six years later 25,353 28,849 32,936 43,777 59,187 Seven years later 25,445 28,734 32,617 44,395 Eight years later 25,324 28,499 32,739 Nine years later 25,200 28,646 Ten years later 25,233 Net cumulative redundancy (deficiency) (3,570) (5,476) (6,779) (12,344) (18,661) (6,252) (7,996) (8,331) (3,565) 1,780 (in thousands of $) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Cumulative amount of reserve paid, net of reinsurance recoverable through One year later 8,500 8,503 9,900 15,795 23,075 27,454 20,137 32,419 35,854 24,319 Two years later 12,853 14,456 17,187 26,168 35,924 35,142 30,262 47,547 48,199 Three years later 16,564 19,533 23,484 32,704 40,264 42,365 40,702 57,171 Four years later 19,838 22,816 27,203 35,510 45,085 49,581 47,113 Five years later 21,976 25,210 28,833 37,846 48,650 52,938 Six years later 23,280 26,298 30,141 39,596 49,682 Seven years later 24,146 26,945 30,693 39,570 Eight years later 24,633 27,013 30,243 Nine years later 24,654 26,609 Ten years later 24,218 Net reserve - December 31, 21,663 23,170 25,960 32,051 40,526 64,770 62,647 84,311 90,680 88,529 93,888 * Reinsurance Recoverable 18,250 16,707 15,777 16,749 15,671 15,728 20,154 10,638 27,660 33,289 32,323 * Gross reserves - December 31, 39,913 39,877 41,737 48,800 56,197 80,499 82,801 94,949 118,340 121,818 126,210 Net re-estimated reserve 25,233 28,646 32,739 44,395 59,187 71,022 70,643 92,642 94,245 86,749 Re-estimated reinsurance recoverable 23,280 21,090 20,336 20,612 18,650 15,052 20,266 11,726 26,669 29,410 Gross re-estimated reserve 48,513 49,736 53,075 65,007 77,837 86,074 90,909 104,368 120,914 116,159 Gross cumulative redundancy (deficiency) (8,600) (9,859) (11,338) (16,207) (21,640) (5,575) (8,108) (9,419) (2,574) 5,659 (Components may not sum to totals due to rounding) 11 Table of Contents Reinsurance We purchase reinsurance to reduce our net liability on individual risks, to protect against possible catastrophes, to remain within a target ratio of net premiums written to policyholders’ surplus, and to expand our underwriting capacity.
A deficiency means that the current estimate is higher than the original estimate. 11 Table of Contents (in thousands of $) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Reserve for loss and loss adjustment expenses, net of reinsurance recoverables 23,170 25,960 32,051 40,526 64,770 62,647 84,311 90,680 88,529 93,888 107,306 Net reserve estimated as of One year later 23,107 25,899 33,203 51,664 64,811 62,632 87,011 90,673 86,749 92,804 Two years later 24,413 26,970 42,723 55,145 65,113 65,339 88,418 94,245 89,447 Three years later 25,509 33,298 43,780 56,346 67,291 67,135 92,642 99,136 Four years later 28,638 33,342 43,973 58,048 68,612 70,643 98,262 Five years later 28,506 33,120 43,774 57,957 71,022 74,430 Six years later 28,849 32,936 43,777 59,187 73,157 Seven years later 28,734 32,617 44,395 59,167 Eight years later 28,499 32,739 44,149 Nine years later 28,646 32,379 Ten years later 28,364 Net cumulative redundancy (deficiency) (5,194) (6,419) (12,098) (18,641) (8,386) (11,783) (13,951) (8,456) (918) 1,084 (in thousands of $) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Cumulative amount of reserve paid, net of reinsurance recoverable through One year later 8,503 9,900 15,795 23,075 27,454 20,137 32,419 35,854 24,319 29,907 Two years later 14,456 17,187 26,168 35,924 35,142 30,262 47,547 48,199 41,831 Three years later 19,533 23,484 32,704 40,264 42,365 40,702 57,171 62,777 Four years later 22,816 27,203 35,510 45,085 49,581 47,113 68,928 Five years later 25,210 28,833 37,846 48,650 52,938 52,913 Six years later 26,298 30,141 39,596 49,682 56,933 Seven years later 26,945 30,693 39,570 50,975 Eight years later 27,013 30,243 40,207 Nine years later 26,609 30,568 Ten years later 26,862 Net reserve - December 31, 23,170 25,960 32,051 40,526 64,770 62,647 84,311 90,680 88,529 93,888 107,306 * Reinsurance Recoverable 16,707 15,777 16,749 15,671 15,728 20,154 10,638 27,660 33,289 32,323 33,232 * Gross reserves - December 31, 39,877 41,737 48,800 56,197 80,499 82,801 94,949 118,340 121,818 126,210 140,539 Net re-estimated reserve 28,364 32,379 44,149 59,167 73,157 74,430 98,262 99,136 89,447 92,804 Re-estimated reinsurance recoverable 21,104 20,348 20,813 18,928 15,780 21,686 13,149 28,760 29,568 32,762 Gross re-estimated reserve 49,467 52,728 64,963 78,095 88,936 96,116 111,410 127,897 119,015 125,566 Gross cumulative redundancy (deficiency) (9,590) (10,991) (16,163) (21,898) (8,438) (13,315) (16,461) (9,557) 2,803 644 (Components may not sum to totals due to rounding) 12 Table of Contents Reinsurance We purchase reinsurance to reduce our net liability on individual risks, to protect against possible catastrophes, to remain within a target ratio of net premiums written to policyholders’ surplus, and to expand our underwriting capacity.
Adverse regulatory developments in New York, which could include fundamental changes to the design or implementation of the insurance regulatory framework, could have a material adverse effect on our results of operations and financial condition. We are highly dependent on a relatively small number of insurance brokers for a large portion of our revenues.
Adverse regulatory developments in New York, could include fundamental changes to the design or implementation of the insurance regulatory framework, could have a material adverse effect on our results of operations and financial condition.
For the year ended December 31, 2024, our gross written premiums totaled $242.0 million, an increase of 20.9% from the $200.2 million in gross written premiums for the year ended December 31, 2023.
For the year ended December 31, 2025, our gross written premiums totaled $277.8 million, an increase of 14.8% from the $242.0 million in gross written premiums for the year ended December 31, 2024.
The failure of these systems could interrupt our operations and result in a material adverse effect on our business. Risks Related to Our Common Stock Our stock price may fluctuate significantly and be highly volatile and this may make it difficult for stockholders to resell shares of our common stock at the volume, prices and times they find attractive.
Risks Related to Our Common Stock Our stock price may fluctuate significantly and be highly volatile and this may make it difficult for stockholders to resell shares of our common stock at the volume, prices and times they find attractive.
In 2021, the Governor of the State of New York signed into law, effective January 28, 2022 and subsequently clarified by law taking effect March 15, 2023, legislation that seeks to prevent homeowner insurers from discriminating solely on the basis of breed of dog. In 2021, the Comprehensive Insurance Disclosure Act was enacted in New York State.
The report references the creation of a standalone Climate Division, which was the source of the aforementioned guidance. 15 Table of Contents In 2021, the Governor of the State of New York signed into law, effective January 28, 2022 and subsequently clarified by law taking effect March 15, 2023, legislation that seeks to prevent homeowner insurers from discriminating solely on the basis of breed of dog.
An example with respect to the net loss and LAE reserves of $21,663,000 as of December 31, 2014 is as follows. By December 31, 2016 (two years later), $12,853,000 had actually been paid in settlement of the claims that relate to liabilities as of December 31, 2014.
An example with respect to the net loss and LAE reserves of $23,170,000 as of December 31, 2015 is as follows. By December 31, 2017 (two years later), $14,456,000 had actually been paid in settlement of the claims that relate to liabilities 10 Table of Contents as of December 31, 2015.
We carefully select our producers by evaluating numerous factors such as their need for our products, premium production potential, loss history with other insurance companies that they represent, product and market knowledge, and agency size. We only distribute through agents and have never sought to distribute our products direct to the consumer.
Distribution We generate business through our relationships with over 700 producers. We carefully select our producers by evaluating numerous factors such as their need for our products, premium production potential, loss history with other insurance companies that they represent, product and market knowledge, and agency size.
While the majority of our policies are written for risks in downstate New York, our remote workforce model provides a low-cost operating environment. We continue to invest in improving our online application and quoting systems for our personal lines products. We have leveraged a paperless workflow management and document storage tool that has improved efficiency and reduced costs.
While the majority of our policies are written for risks in downstate New York, our remote workforce model provides a low-cost operating environment. 7 Table of Contents We continue to invest in improving our online application and quoting systems for our personal lines products.
The regulations must be adopted by August 19, 2025. The DFS adopted a circular letter in 2024 regarding the use of external consumer data and information sources (“ECDIS”) and artificial intelligence systems (“AIS”) by insurers.
The regulations implementing such were adopted on August 6, 2025, and took effect on February 2, 2026. The DFS adopted a circular letter in 2024 regarding the use of external consumer data and information sources (“ECDIS”) and artificial intelligence systems (“AIS”) by insurers.
Some of these systems rely on third-party vendors, through either a connection to, or an integration with, those third-parties’ systems. In the course of our operations, we acquire the personal confidential information of our customers and employees. We also store our intellectual property, trade secrets, and other sensitive business and financial information.
Our business requires that we develop and maintain computer systems to run our operations and to store a significant volume of confidential data. Some of these systems rely on third-party vendors, through either a connection to, or an integration with, those third-parties’ systems. In the course of our operations, we acquire the personal confidential information of our customers and employees.
If we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient and at prices that we consider acceptable, we will have to either accept an increase in our exposure risk, reduce our insurance writings or seek other alternatives. 19 Table of Contents Reinsurance subjects us to the credit risk of our reinsurers, which may have a material adverse effect on our operating results and financial condition.
If we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient and at prices that we consider acceptable, we will have to either accept an increase in our exposure risk, reduce our insurance writings or seek other alternatives.
In late 2023, the property was rezoned to allow for residential development. 25 Table of Contents In February 2025, 15 Joys Lane LLC, our subsidiary, entered into a contract of sale with Ulster County, New York (the “County”) for the sale to the County of our headquarters building in Kingston, New York, along with an adjacent mixed-use property (collectively, the “Property”) .
In February 2025, 15 Joys Lane LLC, our subsidiary, entered into a contract of sale with Ulster County, New York (the 26 Table of Contents “County”) for the sale to the County of such headquarters, along with an adjacent mixed-use property (collectively, the “Property”). The purchase price for the Property was $3,600,000. The sale closed in March 2025.
Reconciliation of Loss and Loss Adjustment Expenses The table below shows the reconciliation of loss and LAE on a gross and net basis, reflecting changes in losses incurred and paid losses: Years ended December 31, 2024 2023 Balance at beginning of period $ 121,817,862 $ 118,339,513 Less reinsurance recoverables (33,288,650) (27,659,500) Net balance, beginning of period 88,529,212 90,680,013 Incurred related to: Current year 64,414,543 82,856,483 Prior years (1,779,827) (7,273) Total incurred 62,634,716 82,849,210 Paid related to: Current year 32,956,899 49,146,173 Prior years 24,319,238 35,853,838 Total paid 57,276,137 85,000,011 Net balance at end of period 93,887,791 88,529,212 Add reinsurance recoverables 32,322,637 33,288,650 Balance at end of period $ 126,210,428 $ 121,817,862 Our claims reserving practices are designed to set reserves that, in the aggregate, are adequate to pay all claims at their ultimate settlement value.
Reconciliation of Loss and Loss Adjustment Expenses The table below shows the reconciliation of loss and LAE on a gross and net basis, reflecting changes in losses incurred and paid losses: Years ended December 31, 2025 2024 Balance at beginning of period $ 126,210,428 $ 121,817,862 Less reinsurance recoverables (32,322,637) (33,288,650) Net balance, beginning of period 93,887,791 88,529,212 Incurred related to: Current year 85,349,385 64,414,543 Prior years (1,083,663) (1,779,827) Total incurred 84,265,722 62,634,716 Paid related to: Current year 40,940,473 32,956,899 Prior years 29,906,787 24,319,238 Total paid 70,847,260 57,276,137 Net balance at end of period 107,306,253 93,887,791 Add reinsurance recoverables 33,232,365 32,322,637 Balance at end of period $ 140,538,618 $ 126,210,428 Our claims reserving practices are designed to set reserves that, in the aggregate, are adequate to pay all claims at their ultimate settlement value.
As adjustments to these estimates become necessary, they are reflected in the period in which the estimates are changed. Because of the nature of the business historically written, we believe that we have limited exposure to asbestos and environmental claim liabilities. We engage an independent external actuarial specialist (the “Appointed Actuary”) to opine on our recorded statutory reserves.
As adjustments to these estimates become necessary, they are reflected in the period in which the estimates are changed. Because of the 9 Table of Contents nature of the business historically written, we believe that we have limited exposure to asbestos and environmental claim liabilities.
Our future results are dependent in part on our ability to successfully operate in an insurance industry that is highly competitive. The insurance industry is highly competitive. Many of our competitors have well-established national reputations, substantially more capital and significantly greater marketing and management resources.
The insurance industry is highly competitive. Many of our competitors have well-established national reputations, substantially more capital and significantly greater marketing and management resources.
State insurance laws limit the ability of KICO to pay dividends from unassigned surplus and require KICO to maintain specified minimum levels of statutory capital and surplus.
Consequently, we must rely on KICO for our ability to repay debts, pay expenses and pay cash dividends to our stockholders. State insurance laws limit the ability of KICO to pay dividends from unassigned surplus and require KICO to maintain specified minimum levels of statutory capital and surplus.
Some of these proposals have been enacted to conform portions of their insurance laws and regulations to various model acts adopted by the National Association of Insurance Commissioners (the “NAIC”). In 2017, the DFS implemented new comprehensive cybersecurity regulations, which became effective on March 1, 2017, with transitional implementation periods.
Some of these proposals have been enacted to conform portions of their insurance laws and regulations to various model acts adopted by the National Association of Insurance Commissioners (the “NAIC”). On November 1, 2023, the DFS adopted substantive amendments updating the 2017 cybersecurity regulations.
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
140 edited+65 added−60 removed58 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
140 edited+65 added−60 removed58 unchanged
2024 filing
2025 filing
Management believes 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 catastrophe losses.
Management believes 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 catastrophe losses.
Management believes 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 catastrophe losses.
Management believes 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 catastrophe losses.
In September 2024, in accordance with the 2024 Exchange Agreement, we paid $5,000,000 of principal on the 2022 Notes, reducing the principal balance to $14,950,000 from $19,950,000. Under the 2024 Exchange Agreement, the principal balances of the 2022 Notes were exchanged for the 2024 Notes, which provided for interest at the rate of 13.75% per annum.
In September 2024, in accordance with the 2024 Exchange Agreement, we paid $5,000,000 of principal on the 2022 Notes, reducing the principal balance to $14,950,000 from $19,950,000. Under the 2024 Exchange Agreement, the balance of the 2022 Notes were exchanged for the 2024 Notes, which provided for interest at the rate of 13.75% per annum.
In May 2024, we entered into a Sales Agreement with Janney Montgomery Scott LLC (the “Sales Agent”) under which we initially had the ability to issue and sell shares of our Common Stock, from time to time, through the Sales Agent, pursuant to the Shelf Registration Statement, up to an aggregate offering price of approximately $16,400,000 in what is commonly referred to as an “at-the-market” (“ATM”) program.
I n May 2024, we entered into a Sales Agreement with Janney Montgomery Scott LLC (the “Sales Agent”) under which we initially had the ability to issue and sell shares of our Common Stock, from time to time, through the Sales Agent, pursuant to the Shelf Registration Statement, up to an aggregate offering price of approximately $16,400,000 in what is commonly referred to as an “at-the-market” (“ATM”) program.
Net income (loss) from insurance underwriting business on a standalone basis : Net income (loss) from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net income (loss) without the effect of holding company operations on GAAP net income (loss).
Net income from insurance underwriting business on a standalone basis : Net income from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net income without the effect of holding company operations on GAAP net income.
Also, see Note 2 to the consolidated financial statements following Item 16 of this Annual Report. 31 Table of Contents Loss and Loss Adjustment Expense Reserves Property and casualty loss and loss adjustment expense (“LAE”) reserves are established to provide for the estimated cost of settling both reported (“case”) and incurred but not reported (“IBNR”) claims and claims adjusting expenses.
Also, see Note 2 to the consolidated financial statements following Item 16 of this Annual Report. 32 Table of Contents Loss and Loss Adjustment Expense Reserves Property and casualty loss and loss adjustment expense (“LAE”) reserves are established to provide for the estimated cost of settling both reported (“case”) and incurred but not reported (“IBNR”) claims and claims adjusting expenses.
See "Non-GAAP Financial Measures" for the reconciliation of net income (loss) from insurance underwriting business on a standalone basis to the GAAP measure of net income (loss).
See "Non-GAAP Financial Measures" for the reconciliation of net income from insurance underwriting business on a standalone basis to the GAAP measure of net income.
Investments Portfolio Summary The following table presents a breakdown of the amortized cost, estimated fair value, and unrealized gains and losses of our investments in fixed-maturity securities classified as available-for-sale as of December 31, 2024 and 2023: Available-for-Sale Securities December 31, 2024 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value % of Estimated Fair Value Category Less than 12 Months More than 12 Months U.S.
Investments Portfolio Summary The following table presents a breakdown of the amortized cost, estimated fair value, and unrealized gains and losses of our investments in fixed-maturity securities classified as available-for-sale as of December 31, 2025 and 2024: Available-for-Sale Securities December 31, 2025 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value % of Estimated Fair Value Category Less than 12 Months More than 12 Months U.S.
KICO is actively writing personal lines and commercial auto insurance in New York, and in 2024 was the 12th 27 Table of Contents largest writer of homeowners insurance in New York. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine.
KICO is actively writing personal lines and commercial auto insurance in New York, and in 2024 was the 12th largest writer of homeowners insurance in New York. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine.
This is the sum of the net loss and net underwriting expense ratios. If the net combined ratio is at or above 100 percent, an 30 Table of Contents insurance company cannot be profitable without investment income, and may not be profitable if investment income is insufficient.
This is the sum of the net loss and net underwriting expense ratios. If the net combined ratio is at or above 100 percent, an insurance company cannot be profitable without investment income, and may not be profitable if investment income is insufficient.
An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase if reinsurance rates are stable or are increasing.
An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase. An increase in our personal lines business historically resulted in an increase in premiums ceded under our catastrophe treaties if reinsurance rates were stable or were increasing.
Operating expenses, including salaries and benefits, generally are impacted by inflation. The Year Ended 2024 included continuing economic inflation, albeit tempered compared to 2023, which resulted in a sustained increase in interest rates, a widening of credit spreads, lower public equity valuations, and significant financial market volatility.
Operating expenses, including salaries and benefits, generally are impacted by inflation. The Year Ended 2025 economic inflation tempered compared to 2024 and 2023, which resulted in a sustained increase in interest rates, a widening of credit spreads, lower public equity valuations, and significant financial market volatility.
If and when these treaties are renewed on July 1, 2025, the excess of loss and facultative facility, and the catastrophe reinsurance treaty, will be as provided for therein. Reinsurance coverage in effect from July 1, 2025 through January 1, 2026 is currently only covered under the 2025/2026 Treaty and (underlying excess of loss reinsurance treaty through June 30, 2025).
If and when these treaties are renewed on July 1, 2026 the excess of loss and facultative facility, underlying excess of loss treaty, and the catastrophe reinsurance treaty, will be as provided for therein. Reinsurance coverage in effect from July 1, 2026 through January 1, 2027 is currently only covered under the 2026/2027 Treaty.
Net unrealized gains (losses) on those securities classified as available-for-sale are reported separately within accumulated other comprehensive (loss) income on our balance sheet while our equity securities and other investments report changes in fair value through earnings.
Net unrealized gains 29 Table of Contents (losses) on those securities classified as available-for-sale are reported separately within accumulated other comprehensive (loss) income on our balance sheet while our equity securities and other investments report changes in fair value through earnings.
Holding company operations cause our GAAP net income (loss) to vary significantly between periods as a result of their magnitude and can have a significant impact on GAAP net income (loss). Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance.
Holding company operations cause our GAAP net income to vary significantly between periods as a result of their magnitude and can have a significant impact on GAAP net income. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is GAAP net income.
See "Non-GAAP Financial Measures" for the reconciliation of net loss ratio excluding the effect of catastrophes to the GAAP measure of net loss ratio.
See "Non-GAAP Financial Measures" for the reconciliation of net combined ratio excluding the effect of catastrophes to the GAAP measure of net combined ratio.
At the end of each reporting period, premiums written that are not earned are classified as unearned premiums and are earned in subsequent periods over the remaining term of the policy. Our insurance policies have a term of one year.
Insurance premiums are earned on a pro rata basis over the term of the policy. At the end of each reporting period, premiums written that are not earned are classified as unearned premiums and are earned in subsequent periods over the remaining term of the policy. Our insurance policies have a term of one year.
Treasury securities and obligations of U.S. government corporations and agencies 3.62 % 4.95 % Political subdivisions of States, Territories and Possessions 3.85 % 3.35 % Corporate and other bonds Industrial and miscellaneous 3.86 % 3.62 % Residential mortgage backed securities 3.31 % 2.90 % Total 3.68 % 3.58 % The table below lists the weighted average maturity and effective duration in years on our fixed-maturity securities as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Weighted average effective maturity 7.6 7.8 Weighted average final maturity 11.0 11.9 Effective duration 3.9 4.1 Fair Value Consideration As disclosed in Note 4 to the consolidated financial statements, with respect to “Fair Value Measurements,” we define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction involving identical or comparable assets or liabilities between market participants (an “exit price”).
Treasury securities and obligations of U.S. government corporations and agencies 3.84 % 3.62 % Political subdivisions of States, Territories and Possessions 3.69 % 3.85 % Corporate and other bonds Industrial and miscellaneous 4.19 % 3.86 % Residential mortgage backed securities 4.44 % 3.31 % Total 4.27 % 3.68 % The table below lists the weighted average maturity and effective duration in years on our fixed-maturity securities as of December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Weighted average effective maturity 11.2 7.6 Weighted average final maturity 15.0 11.0 Effective duration 4.4 3.9 Fair Value Consideration As disclosed in Note 4 to the consolidated financial statements, with respect to “Fair Value Measurements,” we define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction involving identical or comparable assets or liabilities between market participants (an “exit price”).
Net combined ratio excluding the effect of catastrophes is also a non-GAAP ratio, which is computed as the difference between the GAAP net combined ratio and the effect of catastrophes on the net combined ratio. See "Non-GAAP Financial Measures" for the reconciliation of net combined ratio excluding the effect of catastrophes to the GAAP measure of net combined ratio.
(2) Net loss ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of catastrophes on the net loss ratio. See "Non-GAAP Financial Measures" for the reconciliation of net loss ratio excluding the effect of catastrophes to the GAAP measure of net loss ratio.
(2) For the years ended December 31, 2024 and 2023 include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO).
(3) For the year ended December 31, 2025 and 2024 include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO).
ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . Market Information Our common stock is quoted on The Nasdaq Capital Market under the symbol “KINS.” Holders As of March 12, 2025, there were 210 record holders of our common stock.
ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . Market Information Our common stock is quoted on The Nasdaq Capital Market under the symbol “KINS.” Holders As of March 10, 2026, there were 181 record holders of our common stock.
Accordingly, for a one-year policy written on July 1, 2023, we would earn half of the premiums in 2023 and the other half in 2024.
Accordingly, for a one-year policy written on July 1, 2025, we would earn half of the premiums in 2025 and the other half in 2026.
These expenses fluctuate based on the amount and types of risks we insure. We record loss and LAE related to estimates of future claim payments based on case-by-case valuations, statistical analyses and actuarial procedures. We seek to establish all reserves at the most likely ultimate liability based on our historical claims experience.
We record loss and LAE related to estimates of future claim payments based on case-by-case valuations, statistical analyses and actuarial procedures. We seek to establish all reserves at the most likely ultimate liability based on our historical claims experience.
The decrease of $1,568,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during Year Ended 2024 compared to Year Ended 2023, offset by an increase in ceding commission rates under the 2024/2025 Treaty.
The decrease of $4,902,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during the Year Ended 2025 compared to the Year Ended 2024, offset by an increase in ceding commission rates under the 2025/2026 Treaty.
In Year Ended 2024 and Year Ended 2023, as disclosed in Note 9 to the consolidated financial statements, we incurred interest expense in connection with the 2022 Notes and 2024 Notes. The 2022 Notes provided for interest at the rate of 12% per annum.
In the Year Ended 2025 and the Year Ended 2024, as disclosed in Note 9 to the consolidated financial statements, we incurred interest expense in connection with the 2024 Notes and the 12.00% Senior Notes due 2024 (the "2022 Notes"), respectively. The 2022 Notes provided for interest at the rate of 12% per annum.
Material terms for our reinsurance treaties in effect for the treaty years shown below are as follows: 57 Table of Contents Treaty Period 2025/2026 Treaty 2024/2025 Treaty 2023/2024 Treaty Line of Business July 1, 2025 to January 1, 2026 January 2, 2025 to June 30, 2025 July 1, 2024 to January 1, 2025 January 1, 2024 to June 30, 2024 July 1, 2023 to January 1, 2024 January 1, 2023 to June 30, 2023 Personal Lines: Homeowners, dwelling fire and canine legal liability Quota share treaty: Percent ceded (7) 16 % 16 % 27 % 27 % 30 % 30 % Risk retained on initial $1,000,000 of losses (5) (6) (7) $ 840,000 $ 840,000 $ 730,000 $ 730,000 $ 700,000 $ 700,000 Losses per occurrence subject to quota share reinsurance coverage $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 Expiration date January 1, 2026 January 1, 2026 January 1, 2025 January 1, 2025 January 1, 2024 January 1, 2024 Excess of loss coverage and facultative facility coverage (1) (5) (6) $ 400,000 $ 8,400,000 $ 8,400,000 $ 8,400,000 $ 8,400,000 $ 8,400,000 in excess of in excess of in excess of in excess of in excess of in excess of $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 Total reinsurance coverage per occurrence (5) (6) $ 360,000 $ 8,360,000 $ 8,470,000 $ 8,470,000 $ 8,500,000 $ 8,500,000 Losses per occurrence subject to reinsurance coverage (6) $ 1,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 Expiration date (6) June 30, 2025 June 30, 2025 June 30, 2024 June 30, 2024 June 30, 2023 Catastrophe Reinsurance: Initial loss subject to personal lines quota share treaty (6) $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 Risk retained per catastrophe occurrence (6) (7) (8) (9) (6) $ 4,250,000 $ 4,750,000 $ 9,500,000 $ 8,750,000 $ 8,750,000 Catastrophe loss coverage in excess of quota share coverage (2) (6) (6) $ 275,000,000 $ 275,000,000 $ 315,000,000 $ 315,000,000 $ 335,000,000 Reinstatement premium protection (3) (4) (6) Yes Yes Yes Yes Yes (1) For personal lines, includes the addition of an automatic facultative facility allowing KICO to obtain homeowners single risk coverage up to $9,000,000 in total insured value, which covers direct losses from $3,500,000 to $9,000,000 through June 30, 2025. 58 Table of Contents (2) Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts.
Material terms for our reinsurance treaties in effect for the treaty years shown below are as follows: 56 Table of Contents Treaty Period 2026/2027 Treaty 2025/2026 Treaty 2024/2025 Treaty Line of Business July 1, 2026 to January 1, 2027 January 2, 2026 to June 30, 2026 July 1, 2025 to January 1, 2026 January 2, 2025 to June 30, 2025 July 1, 2024 to January 1, 2025 January 1, 2024 to June 30, 2024 Personal Lines: Homeowners, dwelling fire and canine legal liability Quota share treaty: Percent ceded (6) 5 % 5 % 16 % 16 % 27 % 27 % Risk retained on initial $1,000,000 of losses (4) (5) (6) $ 950,000 $ 950,000 $ 840,000 $ 840,000 $ 730,000 $ 730,000 Losses per occurrence subject to quota share reinsurance coverage $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 Expiration date January 1, 2027 January 1, 2027 January 1, 2026 January 1, 2026 January 1, 2025 January 1, 2025 Excess of loss coverage and facultative facility coverage (1) (4) (5) $ (5) $ 8,250,000 $ 8,250,000 $ 8,400,000 $ 8,400,000 $ 8,400,000 in excess of in excess of in excess of in excess of in excess of $ 750,000 $ 750,000 $ 600,000 $ 600,000 $ 600,000 Total reinsurance coverage per occurrence (4) (5) $ 50,000 $ 8,175,000 $ 8,285,000 $ 8,360,000 $ 8,470,000 $ 8,470,000 Losses per occurrence subject to reinsurance coverage (5) $ 1,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 $ 9,000,000 Expiration date (5) June 30, 2026 June 30, 2026 June 30, 2025 June 30, 2025 June 30, 2024 Catastrophe Reinsurance: Initial loss subject to personal lines quota share treaty (5) $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 Risk retained per catastrophe occurrence (5) (6) (7) (8) (5) $ 5,500,000 $ 5,000,000 $ 4,250,000 $ 4,750,000 $ 9,500,000 Catastrophe loss coverage in excess of quota share coverage (2) (5) (8) (5) $ 434,500,000 $ 435,000,000 $ 275,000,000 $ 275,000,000 $ 315,000,000 Reinstatement premium protection (3) (5) Yes Yes Yes Yes Yes (1) For personal lines, includes the addition of an automatic facultative facility allowing KICO to obtain homeowners single risk coverage up to $9,000,000 in total insured value, which covers direct losses from $3,500,000 to $9,000,000 through June 30, 2026. 57 Table of Contents (2) Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts, except for one occurrence on 80% of the first layer of $5,000,000 in excess of $5,000,000, and one occurrence on 52% of the top layer of $240,000,000 in excess of $200,000,000, which is covered under the catastrophe bond.
Beginning in the quarter ended September 30, 2024, we began seeing a sizable increase in our policies in force and direct written premiums from these non-renewed and cancelled policies. We refer to this new business as a Change in Market Dynamics.
The policyholders of such competitors needed to find alternative coverage. Beginning in the quarter ended September 30, 2024, we began seeing a sizable increase in our policies in force and direct written premiums from these non-renewed and cancelled policies. We refer to this new business as a Change in Market Dynamics.
Treasury securities to fulfill the required collateral for a sale leaseback transaction in a designated custodian account (see Note 9 – Debt - “Equipment Financing”). As of December 31, 2024 KICO had sold its U.S.
Treasury securities to fulfill the required collateral for a sale leaseback transaction in a designated custodian account (see Note 7 – Debt - “Equipment Financing”). As of December 31, 2024. KICO had sold its U.S. Treasury securities and replaced a portion of its other fixed-maturity securities in the designated custodian account.
The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms are excluded from the Underlying XOL Treaty. Effective January 1, 2023, the Underlying XOL Treaty was renewed covering the period from January 1, 2023 through January 1, 2024.
The treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the treaty. Effective January 1, 2025, the Underlying XOL Treaty was renewed covering the period from January 1, 2025 through June 30, 2025.
Provisional Ceding Commissions Earned In Year Ended 2024, we earned provisional ceding commissions of $18,829,000 from personal lines earned premiums ceded under the 2024/2025 Treaty, and in Year Ended 2023, we earned provisional ceding commissions of $20,397,000 from personal lines earned premiums ceded under the 2023/2024 Treaty.
Provisional Ceding Commissions Earned In the Year Ended 2025, we earned provisional ceding commissions of $13,927,000 from personal lines earned premiums ceded under the 2025/2026 Treaty, and in the Year Ended 2024, we earned provisional ceding commissions of $18,829,000 from personal lines earned premiums ceded under the 2024/2025 Treaty.
The decrease of $2,215,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.
The decrease of $3,163,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.
Overview We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . Overview We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company (“KICO”). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers.
The following table shows the individual components of our net underwriting expense ratio for the periods indicated: Years ended December 31, Percentage Point Change 2024 2023 Other underwriting expenses Employment costs 10.2 % 9.9 % 0.3 Underwriting fees (inspections/surveys) 1.4 1.6 (0.2) IT expenses 2.2 2.9 (0.7) Professional fees 0.8 1.1 (0.3) Other expenses 5.4 7.1 (1.7) Total other underwriting expenses 20.0 22.6 (2.6) Commission expense 26.4 29.2 (2.8) Ceding commission revenue Provisional (14.7) (17.8) 3.1 Contingent — (0.6) 0.6 Total ceding commission revenue (14.7) (18.4) 3.7 Other income (0.4) (0.5) 0.1 Net underwriting expense ratio 31.3 % 32.9 % (1.6) (Components may not sum to totals due to rounding) Other Operating Expenses Other operating expenses, related to the expenses of our holding company and Cosi, were $3,635,000 for Year Ended 2024 compared to $2,456,000 for Year Ended 2023.
The following table shows the individual components of our net underwriting expense ratio for the periods indicated: Years ended December 31, Percentage Point Change 2025 2024 Other underwriting expenses Employment costs 8.4 % 10.2 % (1.8) Underwriting fees (inspections/surveys) 1.3 1.4 (0.1) IT expenses 1.5 2.2 (0.7) Professional fees 0.7 0.8 (0.1) Other expenses 5.0 5.4 (0.4) Total other underwriting expenses 16.9 20.0 (3.1) Commission expense 21.8 26.4 (4.6) Ceding commission revenue Provisional (7.4) (14.7) 7.3 Contingent (0.9) — (0.9) Total ceding commission revenue (8.3) (14.7) 6.4 Other income (0.3) (0.4) 0.1 Net underwriting expense ratio 30.0 % 31.3 % (1.3) (Components may not sum to totals due to rounding) 40 Table of Contents Other operating expenses were $4,105,000 for the Year Ended 2025 compared to $3,635,000 for the Year Ended 2024.
Retention increases to $640,000 from $530,000 under the 2025/2026 Treaty. (6) Excess of loss coverage and facultative facility and catastrophe reinsurance treaties will expire on June 30,2025, with none of these coverages to be in effect during the period from July 1 2025 through January 1, 2026.
Increased retention to $715,000 from $640,000 under the 2025/2026 Treaty, and increased retention to $825,000 under the 2026/2027 Treaty. (see note 5 below). (5) Excess of loss coverage and facultative facility and catastrophe reinsurance treaties will expire on June 30,2026, with none of these coverages to be in effect during the period from July 1 2026 through January 1, 2027.
Effective December 31, 2021, we entered into a quota share reinsurance treaty for our personal lines business, which primarily consisted of homeowners’ and dwelling fire policies, covering the period from December 31, 2021 through January 1, 2023 (“2021/2023 Treaty”).
Effective January 1, 2024, we entered into a 27% quota share reinsurance treaty for our personal lines business, which primarily consisted of homeowners’ and dwelling fire policies, covering the period from January 1, 2024 through January 1, 2025 (“2024/2025 Treaty”).
Treasury securities $ 1,229,170 $ — $ (39,630) $ (15,990) $ 1,173,550 19.7 % Political subdivisions of States, Territories and Possessions 499,719 — (654) - 499,065 8.4 % Exchange traded debt 304,111 - - (55,611) 248,500 4.2 % Corporate and other bonds Industrial and miscellaneous 5,014,342 - - (976,192) 4,038,150 67.8 % Total $ 7,047,342 $ — $ (40,284) $ (1,047,793) $ 5,959,265 100.0 % December 31, 2023 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value % of Estimated Fair Value Category Less than 12 Months More than 12 Months Held-to-Maturity Securities: U.S.
Treasury securities $ 1,229,170 $ — $ (39,630) $ (15,990) $ 1,173,550 19.7 % Political subdivisions of States, Territories and Possessions 499,719 — (654) — 499,065 8.4 % Exchange traded debt 304,111 — — (55,611) 248,500 4.2 % Corporate and other bonds Industrial and miscellaneous 5,014,342 — — (976,192) 4,038,150 67.8 % Total $ 7,047,342 $ — $ (40,284) $ (1,047,793) $ 5,959,265 100.0 % Held-to-maturity U.S.
Our expenses include the insurance underwriting expenses of KICO and other operating expenses. Insurance companies incur a significant amount of their total expenses from losses incurred by policyholders, which are referred to as claims. In settling these claims, various loss adjustment expenses (“LAE”) are incurred such as insurance adjusters’ fees and legal expenses.
Insurance companies incur a significant amount of their total expenses from losses incurred by policyholders, which are referred to as claims. In settling these claims, various loss adjustment expenses (“LAE”) are incurred such as insurance adjusters’ fees and legal expenses. In addition, insurance companies incur policy acquisition costs.
For the period July 1, 2023 through June 30, 2024, reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000. (4) For the period July 1, 2024 through June 30, 2025 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of 10,000,000.
For the period July 1, 2025 through June 30, 2026 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000. (4) For the period January 1, 2024 through June 30, 2025, the Underlying XOL Treaty provides 50% reinsurance coverage for losses of $400,000 in excess of $600,000.
On August 2, 2024, two large competitors announced a plan to wind down their personal lines operations in New York State and to non-renew or mid-term cancel their entire book of business before year end 2024. The policyholders of such competitors will need to find alternative coverage.
Change in Market Dynamics (underway), and 5-Year Growth Plan (underway) • Change in Market Dynamics On August 2, 2024, two large competitors announced a plan to wind down their personal lines operations in New York State and to non-renew or mid-term cancel their entire book of business before year end 2024.
The 2025/2026 Treaty will expire on January 1, 2026. (7) For the 2023/2024 Treaty, 17.5% of the 30% total of losses ceded under this treaty are excluded from a named catastrophe event.
The 2026/2027 Treaty will expire on January 1, 2027. (6) For the 2024/2025 Treaty, 22% of the 27% total of losses ceded under this treaty are excluded from a named catastrophe event. For the 2025/2026 Treaty, 6% of the 16% total of losses ceded under this treaty are excluded from a named catastrophe event.
See "Non-GAAP Financial Measures" for a reconciliation of the below non-GAAP measures to the most directly comparable GAAP measure: Net loss ratio: The net loss ratio is a measure of the underwriting profitability of an insurance company’s business. Expressed as a percentage, this is the ratio of net losses and LAE incurred to net premiums earned.
Net loss ratio: The net loss ratio is a measure of the underwriting profitability of an insurance company’s business. Expressed as a percentage, this is the ratio of net losses and LAE incurred to net premiums earned.
In-force policies as of July 31, 2019 for these lines were non-renewed at the end of their annual terms. As of December 31, 2024 and 2023, there were no commercial liability policies in-force. As of December 31, 2024, these expired policies represent approximately 14.4% of loss and LAE reserves net of reinsurance recoverables. See discussion below under “Additional Financial Information”.
In-force policies as of July 31, 2019 for these lines were non-renewed at the end of their annual terms. As of December 31, 2025 and 2024, there were no commercial liability policies in-force. As of December 31, 2025, these expired policies 30 Table of Contents represent approximately 12.5% of loss and LAE reserves net of reinsurance recoverables.
All of KICO’s insurance policies are written for a one year term. Earned premiums represent premiums received from insureds, which are recognized as revenue over the period of time that insurance coverage is provided (i.e., ratably over the one year life of the policy).
Earned premiums represent premiums received from insureds, which are recognized as revenue over the period of time that insurance coverage is provided (i.e., ratably over the one year life of the policy). A significant period of time can elapse from the receipt of insurance premiums to the payment of insurance claims.
Treasury securities are held in trust pursuant to various states’ minimum fund requirements. 50 Table of Contents A summary of the amortized cost and estimated fair value of our investments in held-to-maturity securities by contractual maturity as of December 31, 2024 and 2023 is shown below: December 31, 2024 December 31, 2023 Remaining Time to Maturity Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Less than one year $ 499,719 $ 499,065 $ — $ — One to five years 622,375 600,288 1,121,288 1,097,101 Five to ten years 1,427,579 1,323,600 1,414,911 1,270,770 More than 10 years 4,497,669 3,536,312 4,516,342 3,738,277 Total $ 7,047,342 $ 5,959,265 $ 7,052,541 $ 6,106,148 51 Table of Contents Credit Rating of Fixed-Maturity Securities The table below summarizes the credit quality of our available-for-sale fixed-maturity securities as of December 31, 2024 and 2023 as rated by Standard and Poor’s (or, if unavailable from Standard and Poor’s, then Moody’s, Fitch, or Kroll): December 31, 2024 December 31, 2023 Estimated Fair Value Percentage of Estimated Fair Value Estimated Fair Value Percentage of Estimated Fair Value Rating U.S.
A summary of the amortized cost and estimated fair value of our investments in held-to-maturity securities by contractual maturity as of December 31, 2025 and 2024 is shown below: December 31, 2025 December 31, 2024 Remaining Time to Maturity Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Less than one year $ — $ — $ 499,719 $ 499,065 One to five years 2,063,366 2,029,462 622,375 600,288 Five to ten years — — 1,427,579 1,323,600 More than 10 years 3,978,982 3,107,805 4,497,669 3,536,312 Total $ 6,042,348 $ 5,137,267 $ 7,047,342 $ 5,959,265 51 Table of Contents Credit Rating of Fixed-Maturity Securities The table below summarizes the credit quality of our available-for-sale fixed-maturity securities as of December 31, 2025 and 2024 as rated by Standard and Poor’s (or, if unavailable from Standard and Poor’s, then Moody’s, Fitch, or Kroll): December 31, 2025 December 31, 2024 Estimated Fair Value Percentage of Estimated Fair Value Estimated Fair Value Percentage of Estimated Fair Value Rating U.S.
For the period October 1, 2024 through April 30, 2025, we purchased catastrophe reinsurance which will provide coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. Effective January 1, 2025, the Underlying XOL Treaty was renewed covering the period from January 1, 2025 through June 30, 2025.
For the period October 1, 2024 through April 30, 2025, we purchased catastrophe reinsurance which provides coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000.
Critical Accounting Estimates Our consolidated financial statements include the accounts of Kingstone Companies, Inc. and all majority-owned and controlled subsidiaries. The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements and related notes.
The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements and related notes.
Upon the expiration of the 2023/2024 Treaty on January 1, 2024, we entered into a new 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 (“2024/2025 Treaty”).
Upon expiration of the 2024/2025 Treaty on January 1, 2025, we entered into a new 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”). Our personal lines business was subject to the 2025/2026 Treaty in Year Ended 2025, and the 2024/2025 Treaty in Year Ended 2024.
(9) For the period October 1, 2024 through April 30, 2025, additional catastrophe reinsurance treaty will provide coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. Retention for winter storms under this treaty is $4,800,000 under the 2024/2025 Treaty and $5,200,000 under the 2025/2026 Treaty.
For the period October 1, 2024 through April 30, 2025, additional catastrophe reinsurance treaty provided coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000.
Net Income (Loss) Net income was $18,358,000 in Year Ended 2024 compared to net loss of $(6,168,000) in Year Ended 2023. The change from net loss to net income of $24,526,000 was due to the circumstances described above. 42 Table of Contents Additional Financial Information We operate our business as one segment, property and casualty insurance.
Net income was $40,767,000 in the Year Ended 2025 compared to net income of $18,358,000 in the Year Ended 2024. The increase in net income of $22,409,000 was due to the items described above. 42 Table of Contents Additional Financial Information We operate our business as one segment, property and casualty insurance.
In addition, pursuant to the 2022 Exchange Agreement and the 2024 Exchange Agreement, we were not permitted to pay any cash dividends without the approval of the holders of a majority of the outstanding principal amount of the 2022 Notes and the 2024 Notes.
In addition, pursuant to a certain debt exchange agreement (the "2024 Exchange Agreement"), we were not permitted to pay any cash dividends without the approval of the holders of a majority of the outstanding principal amount of the debt. The debt was repaid in full on February 25, 2025.
The $69,275,000 increase in cash flows provided by operating activities in Year Ended 2024 as compared to Year Ended 2023 was primarily the result of the change to net income from net loss (adjusted for non-cash items) of $69,275,000 and cash provided arising from net fluctuations in operating assets and liabilities.
The $17,912,000 increase in cash flows provided by operating 54 Table of Contents activities in the Year Ended 2025 as compared to the Year Ended 2024 was primarily the result of an increase in net income (adjusted for non-cash items) of $16,190,000 and cash provided from net fluctuations in operating assets and liabilities.
A significant period of time can elapse from the receipt of insurance premiums to the payment of insurance claims. During this time, KICO invests the premiums, earns investment income and generates net realized and unrealized investment gains and losses on investments. Our holding company earns investment income from its cash holdings.
During this time, KICO invests the premiums, earns investment income and generates net realized and unrealized investment gains and losses on investments. The Holding Company earns investment income from its cash holdings. Our expenses include the insurance underwriting expenses of KICO and other operating expenses.
Expressed as a percentage, this is the ratio of the sum of acquisition costs (the most significant being commissions paid to our producers) and other underwriting expenses less ceding commission revenue less other income to net premiums earned.
Expressed as a percentage, this is the ratio of the sum of acquisition costs (the most significant being commissions paid to our producers) and other underwriting expenses less ceding commission revenue less other income to net premiums earned. 31 Table of Contents Net underwriting expense ratio excluding the effect of catastrophes: The n et underwriting expense ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net underwriting expense ratio and the effect of catastrophes on the net underwriting expense ratio.
Net underwriting expense ratio excluding the effect of catastrophes: The n et underwriting expense ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net underwriting expense ratio and the effect of catastrophes on the net underwriting expense ratio.
Net combined ratio excluding the effect of catastrophes is also a non-GAAP 47 Table of Contents ratio, which is computed as the difference between the GAAP net combined ratio and the effect of catastrophes on the net combined ratio.
For the year ended December 31, 2024, our Core direct written premiums increased by 31.4% compared to the year ended December 31, 2023, while Core policies in force increased by 9.3% as of December 31, 2024 as compared to December 31, 2023.
For the year ended December 31, 2025, our direct written premiums 1 increased by 14.8% compared to the same period in 2024, while policies in force increased by 3.6% as of December 31, 2025 as compared to December 31, 2024.
On February 24, 2025, we paid the balance of the 2024 Notes in full reducing the outstanding balance to $0. If the aforementioned sources of cash flow currently available are insufficient to cover our holding company debt service and other cash requirements, we will seek to obtain additional financing.
Beginning in the third quarter of 2024 through the first quarter of 2025, we paid optional principal amounts, reducing the balance of the 2024 Notes, and completely satisfying the obligation on February 24, 2025. If the aforementioned sources of cash flow currently available are insufficient to cover our Holding Company cash requirements, we will seek to obtain additional financing.
Cosi-related operating expenses are minimal and are included in other operating expenses. We derive substantially all of our revenue from KICO, which includes revenues from earned premiums, ceding commissions from quota share reinsurance, net investment income generated from its portfolio, and net realized gains and losses on investment securities.
We derive substantially all of our revenue from KICO, which includes revenues from earned premiums, ceding commissions from quota share reinsurance, net investment income generated from its portfolio, and net realized gains and losses on investment securities. All of KICO’s insurance policies are written for a one year term.
Effective January 1, 2023, we entered into an underlying excess of loss reinsurance treaty (the “Underlying XOL Treaty”) covering the period from January 1, 2023 through January 1, 2024. The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the Underlying XOL Treaty.
The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the Underlying XOL Treaty. Effective January 1, 2025, the Underlying XOL Treaty was renewed covering the period from January 1, 2025 through June 30, 2026.
The principal payments on the 2024 Notes were made by using a portion of the $13,611,000 net proceeds from our ATM offering. 56 Table of Contents Reinsurance The following table provides summary information with respect to each reinsurer that accounted for more than 10% of our reinsurance recoverables on paid and unpaid losses and loss adjustment expenses as of December 31, 2024: ($ in thousands) A.M.
Reinsurance The following table provides summary information with respect to each reinsurer that accounted for more than 10% of our reinsurance recoverables on paid and unpaid losses and loss adjustment expenses as of December 31, 2025: ($ in thousands) A.M.
Cash flow and liquidity are categorized into three sources: (1) operating activities; (2) investing activities; and (3) financing activities, which are shown in the following table: Years ended December 31, 2024 2023 Cash flows provided by (used in): Operating activities $ 57,947,771 $ (11,326,850) Investing activities (35,261,441) 9,461,700 Financing activities (2,993,887) (1,116,080) Net increase (decrease) in cash and cash equivalents 19,692,443 (2,981,230) Cash and cash equivalents, beginning of period 8,976,998 11,958,228 Cash and cash equivalents, end of period $ 28,669,441 $ 8,976,998 Net cash provided by operating activities was $57,948,000 in the Year Ended 2024 as compared to $11,327,000 used in operating activities in Year Ended 2023.
Cash flow and liquidity are categorized into three sources: (1) operating activities; (2) investing activities; and (3) financing activities, which are shown in the following table: Years ended December 31, 2025 2024 Cash flows provided by (used in): Operating activities $ 75,859,517 $ 57,947,771 Investing activities (92,856,302) (35,261,441) Financing activities 506,074 (2,993,887) Net (decrease) increase in cash and cash equivalents (16,490,711) 19,692,443 Cash and cash equivalents, beginning of period 28,669,441 28,669,441 Cash and cash equivalents, end of period $ 12,178,730 $ 28,669,441 Net cash provided by operating activities was $75,860,000 in the Year Ended 2025 as compared to $57,948,000 provided by operating activities in the Year Ended 2024.
Direct written premiums from our livery physical damage business for Year Ended 2024 were $14,248,000, a decrease of $400,000, or 2.7%, from $14,648,000 in Year Ended 2023.
Direct written premiums from our livery physical damage business for Year Ended 2025 were $14,550,000, an increase of $302,000, or 2.1%, from $14,248,000 in Year Ended 2024.
Net Gains on Investments Net gains on investments were $415,000 in Year Ended 2024 compared to net gains of $2,135,000 in Year Ended 2023. Unrealized gains on our equity securities and other investments in Year Ended 2024 were $477,000, compared to unrealized gains of $2,153,000 in Year Ended 2023.
Net Gains on Investments Net (losses) on investments were $(310,000) in the Year Ended 2025 compared to net gains of $415,000 in the Year Ended 2024. Unrealized (losses) on our equity securities and other investments in the Year Ended 2025 were 38 Table of Contents $(87,000), compared to unrealized gains of $477,000 in the Year Ended 2024.
The below table provides detail of our reserves as of December 31, 2024 and 2023: As of December 31, 2024 As of December 31, 2023 ($ in thousands) Gross Ceded Net Gross Ceded Net Case loss $ 64,087 $ 17,721 $ 46,366 $ 67,108 $ 19,538 $ 47,570 Case LAE 6,563 1,426 5,137 5,726 1,121 4,605 IBNR loss 38,681 10,661 28,020 37,262 10,665 26,597 IBNR LAE 16,879 2,514 14,365 11,722 1,965 9,757 Total $ 126,210 $ 32,322 $ 93,888 $ 121,818 $ 33,289 $ 88,529 (Components may not sum due to rounding) Case Reserves – Reserves for reported losses are based on an estimate of ultimate loss costs of an individual claim derived from individual case-basis valuations, actual claims paid, pending claims, statistical analyses and various actuarial reserving methodologies.
The below table provides detail of our reserves as of December 31, 2025 and 2024: As of December 31, 2025 As of December 31, 2024 ($ in thousands) Gross Ceded Net Gross Ceded Net Case loss $ 75,385 $ 20,749 $ 54,636 $ 64,087 $ 17,721 $ 46,366 Case LAE 7,459 1,812 5,646 6,563 1,426 5,137 IBNR loss 38,794 8,277 30,517 38,681 10,661 28,020 IBNR LAE 18,901 2,394 16,507 16,879 2,514 14,365 Total $ 140,539 $ 33,232 $ 107,306 $ 126,210 $ 32,322 $ 93,888 (Components may not sum due to rounding) Case Reserves – Reserves for reported losses are based on an estimate of ultimate loss costs of an individual claim derived from individual case-basis valuations, actual claims paid, pending claims, statistical analyses and various actuarial reserving methodologies.
As of December 31, 2024, the estimated fair value of the eligible investments was approximately $10,130,000. KICO will retain all rights regarding all securities if pledged as collateral.
As of December 31, 2025, the estimated fair value of the eligible investments was approximately $9,598,000. KICO will retain all rights regarding all securities if pledged as collateral. As of December 31, 2025 and December 31, 2024 there was no outstanding balance on the FHLBNY credit line.
In addition to interest on 2022 Notes and 2024 Notes, we also incur interest expense on the 2022 equipment financing. Income Tax Expense (Benefit) Income tax expense in Year Ended 2024 was $4,930,000, which resulted in an effective tax rate of 21.2%. Income tax (benefit) in Year Ended 2023 was $(1,197,000), which resulted in an effective tax rate of (16.3)%.
In addition, we also incurred interest expense on the 2022 equipment financing. 41 Table of Contents Income Tax Expense Income tax expense in the Year Ended 2025 was $10,279,000, which resulted in an effective tax rate of 20.1%. Income tax expense in the Year Ended 2024 was $4,930,000, which resulted in an effective tax rate of 21.2%.
As of December 31, 2024 and 2023 there was no outstanding balance on the FHLBNY credit line. 48 Table of Contents Equity Securities The following table presents a breakdown of the cost and estimated fair value of, and gross gains and losses on, investments in equity securities as of December 31, 2024 and 2023: December 31, 2024 Category Cost Gross Gains Gross Losses Estimated Fair Value % of Estimated Fair Value Equity Securities: Preferred stocks $ 9,750,322 $ - $ (2,422,617) $ 7,327,705 71.2 % Fixed income exchange traded funds 3,711,232 (808,432) 2,902,800 28.2 % FHLBNY common stock 66,000 - - 66,000 0.6 % Total $ 13,527,554 $ — $ (3,231,049) $ 10,296,505 100.0 % December 31, 2023 Category Cost Gross Gains Gross Losses Estimated Fair Value % of Estimated Fair Value Equity Securities: Preferred stocks $ 13,583,942 $ - $ (2,870,027) $ 10,713,915 72.6 % Fixed income exchange traded funds 3,711,232 (669,232) 3,042,000 20.6 % Mutual funds 622,209 314,816 - 937,025 6.3 % FHLBNY common stock 69,400 - - 69,400 0.5 % Total $ 17,986,783 $ 314,816 $ (3,539,259) $ 14,762,340 100.0 % Other Investments The following table presents a breakdown of the cost and estimated fair value of, and gross gains on, our other investments as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Category Cost Gross Gains Estimated Fair Value Cost Gross Gains Estimated Fair Value Other Investments: Hedge fund $ 1,987,040 $ 2,393,616 $ 4,380,656 $ 1,987,040 $ 1,910,110 $ 3,897,150 49 Table of Contents Held-to-Maturity Securities The following table presents a breakdown of the amortized cost and estimated fair value of, and gross unrealized gains and losses on, investments in held-to-maturity securities as of December 31, 2024 and 2023: December 31, 2024 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value % of Estimated Fair Value Category Less than 12 Months More than 12 Months Held-to-Maturity Securities: U.S.
Equity Securities The following table presents a breakdown of the cost and estimated fair value of, and gross gains and losses on, investments in equity securities as of December 31, 2025 and 2024: December 31, 2025 Category Cost Gross Gains Gross Losses Estimated Fair Value % of Estimated Fair Value Equity Securities: Preferred stocks $ 9,750,322 $ — $ (2,765,627) $ 6,984,695 69.5 % Fixed income exchange traded funds 3,711,232 — (724,432) 2,986,800 29.7 % FHLBNY common stock 85,100 — — 85,100 0.8 % Total $ 13,546,654 $ — $ (3,490,059) $ 10,056,595 100.0 % 49 Table of Contents December 31, 2024 Category Cost Gross Gains Gross Losses Estimated Fair Value % of Estimated Fair Value Equity Securities: Preferred stocks $ 9,750,322 $ — $ (2,422,617) $ 7,327,705 71.2 % Fixed income exchange traded funds 3,711,232 — (808,432) 2,902,800 28.2 % FHLBNY common stock 66,000 — — 66,000 0.6 % Total $ 13,527,554 $ — $ (3,231,049) $ 10,296,505 100.0 % Other Investments The following table presents a breakdown of the cost and estimated fair value of, and gross gains on, our other investments as of December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Category Cost Gross Gains Estimated Fair Value Cost Gross Gains Estimated Fair Value Other Investments: Hedge fund $ 1,987,040 $ 2,565,338 $ 4,552,378 $ 1,987,040 $ 2,393,616 $ 4,380,656 Held-to-Maturity Securities The following table presents a breakdown of the amortized cost and estimated fair value of, and gross unrealized gains and losses on, investments in held-to-maturity securities as of December 31, 2025 and 2024: December 31, 2025 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value % of Estimated Fair Value Category Less than 12 Months More than 12 Months Held-to-Maturity Securities: U.S.
Upon the expiration of the 2021/2023 Treaty on January 1, 2023, we entered into a new 30% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2023 through January 1, 2024 (“2023/2024 Treaty”).
Upon the expiration of the 2025/2026 Treaty on January 1, 2026, we entered into a new 5% quota share reinsurance treaty for our personal lines business (written in all states except California for which we entered into a new 30% quota share reinsurance treaty) covering the period from January 1, 2026 through January 1, 2027 (“2026/2027 Treaty”).
Treasury securities and obligations of U.S. government corporations and agencies (1) $ — $ — $ — $ - $ — — % Political subdivisions of States, Territories and Possessions 24,271,177 - (73,589) (3,324,491) 20,873,097 11.2 % Corporate and other bonds Industrial and miscellaneous 112,507,436 - (1,024,461) (4,690,597) 106,792,378 57.1 % Residential mortgage and other asset backed securities (2) 65,529,545 119,647 (209,890) (6,211,339) 59,227,963 31.7 % Total fixed-maturity securities $ 202,308,158 $ 119,647 $ (1,307,940) $ (14,226,427) $ 186,893,438 100.0 % 47 Table of Contents December 31, 2023 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value % of Estimated Fair Value Category Less than 12 Months More than 12 Months U.S.
Treasury securities and obligations of U.S. government corporations and agencies (1) $ 997,124 $ 10,066 $ — $ — $ 1,007,190 0.3 % Political subdivisions of States, Territories and Possessions 24,125,578 182,580 — (2,534,725) 21,773,433 7.5 % Corporate and other bonds Industrial and miscellaneous 131,958,643 567,410 (118,901) (2,540,470) 129,866,682 44.9 % Residential mortgage and other asset backed securities (1) (2) 139,656,710 1,273,816 (62,968) (4,477,673) 136,389,885 47.2 % Total fixed-maturity securities $ 296,738,055 $ 2,033,872 $ (181,869) $ (9,552,868) $ 289,037,190 100.0 % 48 Table of Contents December 31, 2024 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value % of Estimated Fair Value Category Less than 12 Months More than 12 Months Political subdivisions of States, Territories and Possessions $ 24,271,177 $ — $ (73,589) $ (3,324,491) $ 20,873,097 11.2 % Corporate and other bonds Industrial and miscellaneous 112,507,436 — (1,024,461) (4,690,597) 106,792,378 57.1 % Residential mortgage and other asset backed securities (1) (2) 65,529,545 119,647 (209,890) (6,211,339) 59,227,963 31.7 % Total fixed-maturity securities $ 202,308,158 $ 119,647 $ (1,307,940) $ (14,226,427) $ 186,893,438 100.0 % (1) In October 2022, KICO placed certain U.S.
We attempt to anticipate the potential impact of inflation in establishing our reserves, especially as it relates to medical and hospital rates where historical inflation rates have exceeded the general level of inflation.
Inflation Premiums are established before we know the amount of losses and loss adjustment expenses or the extent to which inflation may affect such amounts. We attempt to anticipate the potential impact of inflation in establishing our reserves, especially as it relates to medical and hospital rates where historical inflation rates have exceeded the general level of inflation.
Treaty Year Line of Business July 1, 2024 to June 30, 2025 July 1, 2023 to June 30, 2024 July 1, 2022 to June 30, 2023 Personal Lines: Personal Umbrella Quota share treaty: Percent ceded - first $1,000,000 of coverage 90 % 90 % 90 % Percent ceded - excess of $1,000,000 dollars of coverage 95 % 95 % 95 % Risk retained $ 300,000 $ 300,000 $ 300,000 Total reinsurance coverage per occurrence $ 4,700,000 $ 4,700,000 $ 4,700,000 Losses per occurrence subject to quota share reinsurance coverage $ 5,000,000 $ 5,000,000 $ 5,000,000 Expiration date June 30, 2025 June 30, 2024 June 30, 2023 Commercial Lines (1) (1) Coverage on all commercial lines policies expired in September 2020; reinsurance coverage is based on treaties in effect on the date of loss. 59 Table of Contents Inflation Premiums are established before we know the amount of losses and loss adjustment expenses or the extent to which inflation may affect such amounts.
Retention for winter storms is $4,800,000 under the 2024/2025 Treaty, $5,200,000 under the 2025/2026 Treaty from January 1, 2025 through April 30, 2025, $3,900,000 from October 15, 2025 through January 1, 2026, the expiration date of the 2025/2026 Treaty, and $5,000,000 under the 2026/2027 Treaty through April 30, 2026, 58 Table of Contents Treaty Year Line of Business July 1, 2025 to June 30, 2026 July 1, 2024 to June 30, 2025 July 1, 2023 to June 30, 2024 Personal Lines: Personal Umbrella Quota share treaty: Percent ceded - first $1,000,000 of coverage 90 % 90 % 90 % Percent ceded - excess of $1,000,000 dollars of coverage 95 % 95 % 95 % Risk retained $ 300,000 $ 300,000 $ 300,000 Total reinsurance coverage per occurrence $ 4,700,000 $ 4,700,000 $ 4,700,000 Losses per occurrence subject to quota share reinsurance coverage $ 5,000,000 $ 5,000,000 $ 5,000,000 Expiration date June 30, 2026 June 30, 2025 June 30, 2024 Commercial Lines (1) (1) Coverage on all commercial lines policies expired in September 2020; reinsurance coverage is based on treaties in effect on the date of loss.
The following table shows a breakdown of the significant components of other operating expenses for the periods indicated: Years ended December 31, ($ in thousands) 2024 2023 Change Percent Other operating expenses Employment costs $ 325 $ 376 $ (51) (13.6) % Executive bonus 50 — 50 na Equity compensation 1,383 833 550 66.0 Professional 381 276 105 38.0 Directors fees 376 275 101 36.7 Insurance 196 194 2 1.0 Loss on extinguishment of debt 297 — 297 na Other expenses 627 502 125 24.9 Total other operating expenses $ 3,635 $ 2,456 $ 1,179 48.0 % (Components may not sum to totals due to rounding) 41 Table of Contents The increase in Year Ended 2024 of $1,179,000, or 48.0%, as compared to Year Ended 2023 was primarily due to an increase in equity compensation and loss on extinguishment of debt.
The following table shows a breakdown of the significant components of other operating expenses for the periods indicated: Years ended December 31, ($ in thousands) 2025 2024 Change Percent Other operating expenses Employment costs $ 232 $ 325 $ (93) (28.6) % Executive bonus 69 50 19 38.0 Equity compensation 1,482 1,383 99 7.2 Professional 673 381 292 76.6 Directors fees 486 376 110 29.3 Insurance 153 196 (43) (21.9) Loss on extinguishment of debt 175 297 (122) (41.1) Other expenses 835 627 208 33.2 Total other operating expenses $ 4,105 $ 3,635 $ 470 12.9 % (Components may not sum to totals due to rounding) The increase in the Year Ended 2025 of $470,000, or 12.9%, as compared to the Year Ended 2024 was primarily due to an increase in professional fees, other expenses and equity compensation, partially offset by a decrease in employment costs and loss on extinguishment of debt.
In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits. Other operating expenses include our corporate expenses as a holding company.
Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees’ compensation and benefits. Other operating expenses include our corporate expenses as a holding company. These corporate expenses include legal and auditing fees, executive employment costs and equity compensation, directors' fees, and other costs directly associated with being a public company.
Dividends Holders of our common stock are entitled to dividends when, as and if declared by our Board of Directors out of funds legally available. We paid a cash dividend in each quarter from September 2011 through September 2022.
Dividends Holders of our common stock are entitled to dividends when, as and if declared by our Board of Directors out of funds legally available. In each of July and October 2025, our Board of Directors approved a quarterly cash dividend of $0.05 per share.
Non-GAAP Financial Measures Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP.
The higher interest rates and widening of credit spreads reduced the value of our fixed income securities. Non-GAAP Financial Measures Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP.
The following table reconciles the underlying loss ratio and the net loss ratio excluding the effect of catastrophes to the net loss ratio for the periods presented: Years ended December 31, 2024 2023 Underlying Loss Ratio 48.2 % 65.3 % Effect of prior year reserve development (1.4 %) 0.0 % Net loss ratio excluding the effect of catastrophes 46.8 % 65.3 % Effect of catastrophes 1.9 % 7.1 % GAAP net loss ratio 48.7 % 72.4 % The following table reconciles the net loss ratio excluding commercial lines business to the net loss ratio for the periods presented: Years ended December 31, 2024 2023 Net loss ratio excluding the effect of commercial lines business 46.9 % 70.9 % Effect of commercial lines business 1.8 % 1.5 % GAAP net loss ratio 48.7 % 72.4 % The following table reconciles net income (loss) from insurance underwriting business on a standalone basis to GAAP net income (loss) for the periods presented: 60 Table of Contents Years ended December 31, 2024 2023 Net income (loss) from insurance underwriting business on a standalone basis $ 23,581,855 $ (1,487,910) Holding company operations (5,223,419) (4,680,436) GAAP net income (loss) $ 18,358,436 $ (6,168,346) The following table reconciles the net loss ratio excluding the effect of catastrophes, net underwriting expense ratio excluding the effect of catastrophes, and net combined ratio excluding the effect of catastrophes to GAAP net loss ratio, GAAP net underwriting expense ratio, and GAAP net combined ratio, respectively, for the periods presented: Years ended December 31, 2024 2023 Net loss ratio excluding the effect of catastrophes 46.8 % 65.3 % Effect of catastrophes 1.9 % 7.1 % GAAP net loss ratio 48.7 % 72.4 % Net underwriting expense ratio excluding the effect of catastrophes 31.3 % 32.9 % Effect of catastrophes 0.0 % 0.0 % GAAP net underwriting expense ratio 31.3 % 32.9 % Net combined ratio excluding the effect of catastrophes 78.1 % 98.2 % Effect of catastrophes 1.9 % 7.1 % GAAP net combined ratio 80.0 % 105.3 % Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
The following table reconciles GAAP net premiums earned to net written premiums and direct written premiums for the periods presented: Years Ended December 31, 2025 2024 GAAP net premiums earned $ 187,126,722 $ 128,497,920 Change in unearned premiums 26,592,344 25,731,945 Net written premiums 213,719,066 154,229,865 Ceded written premiums 64,081,564 87,750,072 Direct written premiums $ 277,800,630 $ 241,979,937 59 Table of Contents The following table reconciles the GAAP net loss ratio to the net loss ratio excluding the effect of catastrophes and to the underlying loss ratio for the periods presented: Years ended December 31, 2025 2024 GAAP net loss ratio 45.0 % 48.7 % Effect of catastrophes 1.2 % 1.9 % Net loss ratio excluding the effect of catastrophes 43.8 % 46.8 % Effect of prior year reserve development (0.6 %) (1.4 %) Underlying loss ratio 44.4 % 48.2 % The following table reconciles the GAAP net loss ratio to the net loss ratio excluding commercial lines business for the periods presented: Years ended December 31, 2025 2024 GAAP net loss ratio 45.0 % 48.7 % Effect of commercial lines business 1.1 % 1.8 % Net loss ratio excluding the effect of commercial lines business 43.9 % 46.9 % The following table reconciles GAAP net income to net income from insurance underwriting business on a standalone basis for the periods presented: Years ended December 31, 2025 2024 GAAP net income $ 40,767,128 $ 18,358,436 Holding company operations (3,068,270) (5,223,419) Net income from insurance underwriting business on a standalone basis $ 43,835,398 $ 23,581,855 The following table reconciles the GAAP net loss ratio, GAAP net underwriting expense ratio, and GAAP net combined ratio to the net loss ratio excluding the effect of catastrophes, net underwriting expense ratio excluding the effect of catastrophes, and net combined ratio excluding the effect of catastrophes for the periods presented: 60 Table of Contents Years ended December 31, 2025 2024 GAAP net loss ratio 45.0 % 48.7 % Effect of catastrophes 1.2 % 1.9 % Net loss ratio excluding the effect of catastrophes 43.8 % 46.8 % GAAP net underwriting expense ratio 30.0 % 31.3 % Effect of catastrophes 0.0 % 0.0 % Net underwriting expense ratio excluding the effect of catastrophes 30.0 % 31.3 % GAAP net combined ratio 75.0 % 80.0 % Effect of catastrophes 1.2 % 1.9 % Net combined ratio excluding the effect of catastrophes 73.8 % 78.1 % Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
The underlying loss ratio(1) was 48.2% for Year Ended 2024, a decrease of 17.1 points from the 65.3% underlying loss ratio recorded for Year Ended 2023.
The underlying loss ratio (1) (loss ratio excluding the impact of catastrophes and prior year development) was 44.4% for the Year Ended 2025, a decrease of 3.8 points from the 48.2% underlying loss ratio recorded for the Year Ended 2024.
Duration of 168 consecutive hours for a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone. (3) For the period July 1, 2022 through June 30, 2023, reinstatement premium protection for $12,500,000 of catastrophe coverage in excess of $10,0000,000.
Duration of 168 consecutive hours for a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone, except for winter storm coverage, which is covered under a specific declared catastrophe event. (3) For the period July 1, 2024 through June 30, 2025 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000.
The $297,000 loss on extinguishment of debt loss is due to writing off the balance of unamortized debt issue costs from the 2022 Notes at the time of the 2024 Exchange Agreement as disclosed in Note 9 to the consolidated financial statements.
The loss on extinguishment of debt is due to the balance of unamortized debt issue costs upon the prepayment of the 2024 Notes in the Year Ended 2025 and Year Ended 2024 as disclosed in Note 9 to the consolidated financial statements.
The increase of $41,805,000, or 20.9%, was primarily due to an increase in premiums from our personal lines business. Direct written premiums from our personal lines business for Year Ended 2024 were $227,643,000, an increase of $42,217,000 or 22.8%, from $185,426,000 in Year Ended 2023.
The increase of $35,821,000, or 14.8%, was primarily due to an increase in premiums from our personal lines business. Direct written premiums from our personal lines business for Year Ended 2025 were $263,188,000, an increase of $35,545,000, or 15.6%, from $227,643,000 in Year Ended 2024.
Our largest single component of other underwriting expenses is salaries and employment costs, with costs of $13,143,000 in Year Ended 2024 compared to $11,335,000 in Year Ended 2023. The increase of $1,808,000, or 34.2%, is compared unfavorably to the 20.9% increase in direct written premiums.
Our largest single component of other underwriting expenses is salaries and employment costs, with costs of $15,681,000 in the Year Ended 2025 compared to $13,143,000 in the Year Ended 2024.
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