KINGSTON, NY - Kingstone Companies, Inc. (NASDAQ:KINS), a regional property and casualty insurer, disclosed preliminary first-quarter financials, revealing a modest increase in net premiums earned and a significant reduction in non-core policies. The company, which focuses on the Northeast market, reported net premiums earned of $28.8 million for the quarter ending March 31, 2024, up 2.0% year-over-year.
This growth was primarily attributed to robust renewal rates in its New York core business. Conversely, Kingstone's non-core business saw net premiums earned plummet by 49%, falling from $4.5 million to $2.3 million as the company strategically phased out these policies. The number of non-core policies-in-force also dropped by 52%.
In terms of performance metrics, the company's GAAP combined ratio improved substantially to 93.6%, a 30.0 percentage point enhancement from the previous year. The catastrophe loss ratio saw an 8.0 percentage point improvement, standing at 5.2%.
Kingstone's focus on its core New York business, where it is a significant player in the homeowners insurance market, is part of its ongoing strategy. The company is also licensed in several other states in the region, including New Jersey and Pennsylvania.
The insurer plans to discuss these preliminary results in greater detail during its first-quarter 2024 financial results conference call, scheduled for 8:30 a.m. Eastern Time on May 14, 2024. The official financial results will be released after market close on May 13, 2024.
The company's forward-looking statements indicated that the preliminary results are subject to change and carry risks and uncertainties that could cause actual outcomes to differ materially. These risks include significant losses from catastrophic events, regulatory changes, and reliance on key personnel, among others.
The information presented here is based on a press release statement from Kingstone Companies, Inc. and reflects the company's performance and strategic decisions without speculation on future impacts or trends.
InvestingPro Insights
As Kingstone Companies, Inc. (NASDAQ:KINS) continues to refine its strategy, focusing on its core business in New York, the latest financial data from InvestingPro provides insight into the company's current market position. With a market capitalization of $48.43 million, Kingstone shows a dedication to its regional market. Despite the positive renewal rates highlighted in the recent press release, the company faces challenges, as underscored by an adjusted P/E ratio for the last twelve months as of Q4 2023 standing at -7.85, indicating that investors are concerned about future earnings.
Kingstone's revenue growth for the last twelve months as of Q4 2023 was 10.78%, which could be seen as a sign of underlying business strength. However, analysts are anticipating a sales decline in the current year, which aligns with the company's strategy to reduce non-core policy sales. This strategic shift is reflected in the gross profit margin of 1.55% for the same period, which points to the company's weak gross profit margins, an area that may require further attention.
Investors should note the significant price movement over the last six months, with a 126.8% total return. This large price uptick could be indicative of market sentiment and the company's operational changes taking effect. Yet, InvestingPro Tips suggest that Kingstone is quickly burning through cash and short-term obligations exceed liquid assets, which could potentially impact its liquidity position.
For those looking to delve deeper into Kingstone's financial health and future prospects, additional InvestingPro Tips are available, providing a more comprehensive analysis. Currently, there are 9 more tips listed on InvestingPro, which could offer valuable guidance for investors. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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