Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - KINGSTONE COMPANIES, INC. | kins_ex991.htm |
| 8-K - CURRENT REPORT - KINGSTONE COMPANIES, INC. | kins-20201231.htm |
Exhibit 99.2
Additional Financial Information for Q3 2020
Definitions and Non-GAAP Measures
Direct written premiums represent the total premiums charged on policies
issued by the Company during the respective fiscal period.
Net
premiums written are direct
written premiums less premiums ceded to reinsurers. Net premiums
earned, the GAAP measure most comparable to direct written premiums
and net premiums written, are net premiums written that are
pro-rata earned during the fiscal period presented. All of the
Company’s policies are written for a twelve-month period.
Management uses direct written premiums and net premiums written,
along with other measures, to gauge the Company’s performance
and evaluate results.
Core direct written premiums - represents the total premiums charged on
policies issued by the Company during the respective fiscal period
from its business located in New York.
Expansion direct written premiums - represents the total premiums charged on
policies issued by the Company during the respective fiscal period
from its business located in other states (i.e., outside New
York).
Net operating income (loss) - is net income (loss)
exclusive of realized investment gains (losses), net of tax. Net
income (loss) is the GAAP measure most closely comparable to net
operating income (loss).
Management
uses net operating income (loss) along with other measures to gauge
the Company’s performance and evaluate results, which can be
skewed when including realized investment gains (losses), and may
vary significantly between periods. Net operating income (loss) is
provided as supplemental information, not as a substitute for net
income (loss) and does not reflect the Company’s overall
profitability.
Operating return on average common equity - is net operating
income (loss) divided by average common equity. Return on average
common equity is the GAAP measure most closely comparable to
operating return on average common equity.
Management
uses net operating income (loss) and operating return on average
common equity, along with other measures, to gauge the
Company’s performance and evaluate results, which can be
skewed when including realized investment gains (losses), which may
vary significantly between periods. Net operating income (loss) and
operating return on average common equity are provided as
supplemental information, are not a substitute for net income
(loss) or return on average common equity and do not reflect the
Company’s overall profitability or return on average common
equity.
Underlying net loss ratio - is a non-GAAP ratio, which is computed
as the difference between GAAP net loss ratio and the effect of
catastrophes and prior year loss development on the net loss
ratio.
Underlying net loss ratio excluding Commercial Lines
- is a non-GAAP ratio, which
is computed as the difference between GAAP net loss ratio and the
loss ratio that relates to commercial lines, catastrophes, and
prior year loss development.
Net loss ratio excluding commercial lines - is a non-GAAP ratio, which is computed
as the difference between GAAP net loss ratio and the loss ratio
that relates to commercial lines.
Net loss ratio excluding commercial lines in run-off and
catastrophes - is a
non-GAAP ratio, which is computed as the difference between GAAP
net loss ratio and the loss ratio that relates to commercial lines
in run-off and catastrophes.
Net combined ratio excluding effect of catastrophes and prior year
loss development - is a non-GAAP ratio, which is computed as
the difference between GAAP net combined ratio and the effect of
catastrophes and prior year loss development on the net combined
ratio.
Net combined ratio excluding effect of catastrophes - is a
non-GAAP ratio, which is computed as the difference between GAAP
net combined ratio and the effect of catastrophes on the net
combined ratio.
We
believe that these ratios are useful to investors and they are used
by management to reveal the trends in our business that may be
obscured by catastrophe losses and prior year loss development, as
well as the loss ratio that relates to commercial lines which is in
run off. Catastrophe losses cause our loss ratios to vary
significantly between periods as a result of their incidence of
occurrence and magnitude, and can have a significant impact on the
net loss ratio and net combined ratio. Prior year loss development
can cause our loss ratio to vary significantly between periods and
separating this information allows us to better compare the results
for the current accident period over time. Due to our decision in
July 2019 to no longer underwrite commercial lines, excluding the
loss ratio related to such line of business allows us to compare
our loss ratio with regard to our ongoing lines of business. We
believe these measures are useful for investors to evaluate these
components separately and in the aggregate when reviewing our
underwriting performance. We also provide them to facilitate a
comparison to our outlook on the underlying net loss ratio
excluding commercial lines and net combined ratio excluding the
effect of catastrophes and prior year loss development. The most
directly comparable GAAP measures are the net loss ratio and net
combined ratio. The underlying net loss ratio excluding commercial
lines, net loss ratio excluding commercial lines and net combined
ratio excluding the effect of catastrophes and prior year loss
development should not be considered a substitute for the net loss
ratio and net combined ratio and do not reflect the Company’s
net loss ratio and net combined ratio.
Book value per share exclusive of catastrophes – is a
non-GAAP ratio which is computed as the difference between GAAP
book value per share and the effect of catastrophes on book value
per share.
______________________________________________________________________________________________________
Book Value Per Share
The Company’s book value per share at September 30, 2020 was
$8.40, an increase of 4.1% compared to $8.04 at September 30,
2019.
|
|
30-Sep-20
|
30-Jun-20
|
31-Mar-20
|
31-Dec-19
|
c30-Sep-19
|
|
Book Value Per Share
|
$8.37
|
$8.40
|
$7.13
|
$8.17
|
$8.04
|
|
|
|
|
|
|
|
|
% Increase from specified period to 9/30/20
|
|
-0.4%
|
17.4%
|
2.4%
|
4.1%
|
The table below reconciles direct written premiums and net written
premiums to net premiums earned for the periods
presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
2020
|
2019
|
$ Change
|
% Change
|
2020
|
2019
|
$ Change
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
(000’s
except percentages)
|
|
|
|
|
|
|
|
|
|
Direct and Net Written Premiums Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct written premiums
|
$45,742
|
$46,023
|
$(281)
|
(0.6)%
|
$125,090
|
$128,333
|
$(3,243)
|
(2.5)%
|
|
Assumed
written premiums
|
-
|
1
|
(1)
|
-%
|
-
|
1
|
(1)
|
-%
|
|
Ceded written
premiums
|
(15,748)
|
(5,586)
|
(10,162)
|
(181.9)%
|
(43,814)
|
(20,914)
|
(22,900)
|
(109.5)%
|
|
|
|
|
|
|
|
|
|
|
|
Net written premiums
|
29,994
|
40,438
|
(10,444)
|
(25.8)%
|
81,276
|
107,420
|
(26,144)
|
(24.3)%
|
|
Change in
unearned premiums
|
(2,473)
|
(6,218)
|
3,745
|
60.2%
|
(176)
|
(12,403)
|
12,227
|
98.6%
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned
|
$27,521
|
$34,220
|
$(6,699)
|
(19.6)%
|
$81,100
|
$95,017
|
$(13,917)
|
(14.6)%
|
The table below details the breakdown of direct written premiums
between Core direct written premiums and Expansion direct written
premiums for the periods presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
2020
|
2019
|
$ Change
|
% Change
|
2020
|
2019
|
$ Change
|
% Change
|
|
(000’s
except percentages)
|
|
|
|
|
|
|
|
|
|
Core and Expansion Direct Written Premiums
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core direct written premiums
|
$36,545
|
$38,652
|
$(2,107)
|
(5.5)%
|
$100,797
|
$111,433
|
$(10,636)
|
(9.5)%
|
|
Expansion direct written premiums
|
9,197
|
7,371
|
1,826
|
24.8%
|
24,293
|
16,900
|
7,393
|
43.7%
|
|
Direct written premiums
|
$45,742
|
$46,023
|
$(281)
|
(0.6)%
|
$125,090
|
$128,333
|
$(3,243)
|
(2.5)%
|
The following table reconciles net operating income (loss) to net
income (loss) and operating return on average common equity to
return on average common equity for the periods
indicated:
|
|
Three Months Ended
|
Three Months Ended
|
Nine Months Ended
|
Nine Months Ended
|
||||
|
|
September 30, 2020
|
September 30, 2019
|
September 30, 2020
|
September 30, 2019
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
Diluted loss
per common share
|
Amount
|
Diluted loss
per common share
|
Amount
|
Diluted loss
per common share
|
Amount
|
Diluted loss
per common share
|
|
(000’s
except per common share amounts and
percentages)
|
|
|
|
|
|
|
|
|
|
Net
Operating Loss and Diluted Loss per Common Share
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$(1,228)
|
$(0.12)
|
$(1,725)
|
$(0.16)
|
$(2,064)
|
$(0.19)
|
$(7,421)
|
$(0.69)
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
(gain) loss on investments
|
(2,108)
|
|
(998)
|
|
1,639
|
|
(3,712)
|
|
|
Less tax
(expense) benefit on net realized (gain) loss
|
(443)
|
|
(210)
|
|
344
|
|
(780)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
(gain) loss on investments, net of taxes
|
(1,665)
|
$(0.16)
|
(788)
|
$(0.07)
|
1,295
|
$0.12
|
(2,932)
|
$(0.27)
|
|
|
|
|
|
|
|
|
|
|
|
Net operating loss
|
$(2,893)
|
$(0.27)
|
$(2,513)
|
$(0.23)
|
$(769)
|
$(0.07)
|
$(10,353)
|
$(0.96)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding
|
10,673,077
|
|
10,779,641
|
|
10,737,853
|
|
10,769,817
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Return on Average Common Equity (Annualized)
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$(1,228)
|
|
$(1,725)
|
|
$(2,064)
|
|
$(7,421)
|
|
|
Average common
equity
|
$89,467
|
|
$87,203
|
|
$88,768
|
|
$87,701
|
|
|
Return on average common equity (annualized)
|
-5.5%
|
|
-7.9%
|
|
-3.1%
|
|
-11.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
(gain) loss on investments, net of taxes
|
$(1,665)
|
|
$(788)
|
|
$1,295
|
|
$(2,932)
|
|
|
Average common
equity
|
$89,467
|
|
$87,203
|
|
$88,768
|
|
$87,701
|
|
|
Effect of net
realized (gain) loss on investments, net of taxes, on return on
average common equity (annualized)
|
-7.4%
|
|
-3.6%
|
|
1.9%
|
|
-4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating loss
|
$(2,893)
|
|
$(2,513)
|
|
$(769)
|
|
$(10,353)
|
|
|
Average common
equity
|
$89,467
|
|
$87,203
|
|
$88,768
|
|
$87,701
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating return on average common equity
(annualized)
|
-12.9%
|
|
-11.5%
|
|
-1.2%
|
|
-15.7%
|
|
The following table reconciles the underlying net loss ratio
excluding commercial lines to the net loss ratio for the periods
presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
||
|
Underlying
Net Loss Ratio Excluding Commercial lines
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
loss adjustment expenses ("Net loss")
|
|
|
|
|
|
|
|
|
|
Underlying Net Loss Excluding Commercial lines
|
$11,597
|
$15,653
|
$(4,056)
|
-25.9%
|
$36,928
|
$44,069
|
$(7,141)
|
-16.2%
|
|
Commercial
lines net loss
|
(44)
|
8,023
|
(8,067)
|
-100.5%
|
2,863
|
18,459
|
(15,596)
|
-84.5%
|
|
Catastrophe
losses excluding commercial lines
|
8,665
|
492
|
8,173
|
1661.2%
|
10,375
|
6,783
|
3,592
|
53.0%
|
|
Prior year
loss development excluding commercial lines
|
(100)
|
613
|
(713)
|
-116.3%
|
(849)
|
2,277
|
(3,126)
|
-137.3%
|
|
Net loss
|
$20,118
|
$24,781
|
$(4,663)
|
-18.8%
|
$49,317
|
$71,588
|
$(22,271)
|
-31.1%
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
|
|
|
|
|
|
|
|
Net premiums earned excluding commercial lines
|
27,285
|
30,475
|
(3,190)
|
-10.5%
|
78,387
|
83,981
|
(5,594)
|
-6.7%
|
|
Commercial
lines net premiums earned
|
236
|
3,745
|
(3,509)
|
-93.7%
|
2,712
|
11,036
|
(8,324)
|
-75.4%
|
|
Net premiums earned
|
$27,521
|
$34,220
|
$(6,699)
|
-19.6%
|
$81,099
|
$95,017
|
$(13,918)
|
-14.6%
|
|
|
|
|
|
|
|
|
|
|
|
Underlying net loss ratio excluding commercial
lines
|
42.5%
|
51.4%
|
(8.9)
|
pts
|
47.1%
|
52.5%
|
(5.4)
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio
|
73.1%
|
72.4%
|
0.7
|
pts
|
60.8%
|
75.3%
|
(14.5)
|
pts
|
The following table reconciles the net loss ratio excluding
commercial lines in run-off and catastrophe losses to the net loss
ratio for the periods presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
||
|
Net Loss Ratio Excluding Commercial Lines in Run-off and
Catastrophe Losses Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
loss adjustment expenses ("Net loss")
|
|
|
|
|
|
|
|
|
|
Net Loss Ratio Excluding Commercial Lines in Run-off and
Catastrophe Losses
|
$11,497
|
$16,312
|
$(4,815)
|
-29.5%
|
$36,079
|
$46,182
|
$(10,103)
|
-21.9%
|
|
Commercial
lines net loss
|
(44)
|
8,023
|
(8,067)
|
-100.5%
|
2,863
|
18,459
|
(15,596)
|
-84.5%
|
|
Catastrophe
losses
|
8,665
|
446
|
8,219
|
1842.8%
|
10,375
|
6,947
|
3,428
|
49.3%
|
|
Net loss
|
$20,118
|
$24,781
|
$(4,663)
|
-18.8%
|
$49,317
|
$71,588
|
$(22,271)
|
-31.1%
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
|
|
|
|
|
|
|
|
Net premiums earned excluding commercial lines in
run-off
|
27,285
|
30,475
|
(3,190)
|
-10.5%
|
78,387
|
83,981
|
(5,594)
|
-6.7%
|
|
Commercial
lines net premiums earned
|
236
|
3,745
|
(3,509)
|
-93.7%
|
2,712
|
11,036
|
(8,324)
|
-75.4%
|
|
Net premiums earned
|
$27,521
|
$34,220
|
$(6,699)
|
-19.6%
|
$81,099
|
$95,017
|
$(13,918)
|
-14.6%
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Ratio Excluding Commercial Lines in Run-off and
Catastrophe Losses
|
42.1%
|
53.5%
|
(11.4)
|
pts
|
46.0%
|
55.0%
|
(9.0)
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio
|
73.1%
|
72.4%
|
0.7
|
pts
|
60.8%
|
75.3%
|
(14.5)
|
pts
|
The following table reconciles the net loss ratio excluding
commercial lines to the net loss ratio for the periods
presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
||
|
Net Loss Ratio Excluding Commercial Lines
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
loss adjustment expenses ("Net loss")
|
|
|
|
|
|
|
|
|
|
Net Loss Excluding Commercial Lines
|
$20,162
|
$16,758
|
$3,404
|
20.3%
|
$46,454
|
$53,129
|
$(6,675)
|
-12.6%
|
|
Commercial
lines net loss
|
(44)
|
8,023
|
(8,067)
|
-100.5%
|
2,863
|
18,459
|
(15,596)
|
-84.5%
|
|
Net loss
|
$20,118
|
$24,781
|
$(4,663)
|
-18.8%
|
$49,317
|
$71,588
|
$(22,271)
|
-31.1%
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
|
|
|
|
|
|
|
|
Net premiums earned excluding commercial lines
|
27,285
|
30,475
|
(3,190)
|
-10.5%
|
78,387
|
83,981
|
(5,594)
|
-6.7%
|
|
Commercial
lines net premiums earned
|
236
|
3,745
|
(3,509)
|
-93.7%
|
2,712
|
11,036
|
(8,324)
|
-75.4%
|
|
Net premiums earned
|
$27,521
|
$34,220
|
$(6,699)
|
-19.6%
|
$81,099
|
$95,017
|
$(13,918)
|
-14.6%
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio excluding commercial lines
|
73.9%
|
55.0%
|
18.9
|
pts
|
59.3%
|
63.3%
|
(4.0)
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio
|
73.1%
|
72.4%
|
0.7
|
pts
|
60.8%
|
75.3%
|
(14.5)
|
pts
|
The following table reconciles the net combined ratio excluding
catastrophes and prior year loss development to the net combined
ratio for the periods presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
2020
|
2019
|
Percentage Point Change
|
2020
|
2019
|
Percentage Point Change
|
||
|
Net Combined Ratio Excluding Catastrophes and Prior Year
Development Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Combined Ratio Excluding Catastrophes and Prior Year
Development
|
80.8%
|
93.7%
|
(12.9)
|
pts
|
87.2%
|
94.0%
|
(6.8)
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of catastrophe losses and prior year developmen t
|
|
|
|
|
|
|
|
|
|
Catastrophe
losses
|
31.5%
|
1.3%
|
30.2
|
pts
|
12.8%
|
7.3%
|
5.5
|
pts
|
|
Prior year
development
|
-0.4%
|
14.8%
|
(15.2)
|
pts
|
-0.3%
|
11.8%
|
(12.1)
|
pts
|
|
Effect of
catastrophe losses and prior year development on net loss and loss
adjustment expenses
|
31.1%
|
16.1%
|
15.0
|
pts
|
12.5%
|
19.1%
|
(6.6)
|
pts
|
|
Net
underwriting expense ratio
|
0.0%
|
0.0%
|
-
|
pts
|
0.0%
|
0.0%
|
-
|
pts
|
|
Total effect
of catastrophe losses and prior year
development
|
31.1%
|
16.1%
|
15.0
|
pts
|
12.5%
|
19.1%
|
(6.6)
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
Net combined ratio
|
111.9%
|
109.8%
|
2.1
|
pts
|
99.7%
|
113.1%
|
(13.4)
|
pts
|
The following table reconciles the net combined ratio excluding
catastrophes to the net combined ratio for the periods
presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
2020
|
2019
|
Percentage Point Change
|
2020
|
2019
|
Percentage Point Change
|
||
|
Net Combined Ratio Excluding Catastrophes
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Combined Ratio Excluding Catastrophes
|
80.4%
|
108.5%
|
(28.1)
|
pts
|
86.9%
|
105.8%
|
(18.9)
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe
losses
|
31.5%
|
1.3%
|
30.2
|
pts
|
12.8%
|
7.3%
|
5.5
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
Net combined ratio
|
111.9%
|
109.8%
|
2.1
|
pts
|
99.7%
|
113.1%
|
(13.4)
|
pts
|
The following table reconciles net operating income and diluted
operating earnings per share exclusive of catastrophe and prior
year loss development financial impact to net operating loss and
diluted operating loss per share for the periods
presented:
|
|
For
the Three Months Ended
|
For
the Nine Months Ended
|
||||||
|
|
September
30,
|
September
30,
|
||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
Diluted (loss) earnings
per common share
|
Amount
|
Diluted (loss) earnings
per common share
|
Amount
|
Diluted (loss) earnings
per common share
|
Amount
|
Diluted (loss) earnings
per common share
|
|
(000’s except per
common share amounts)
|
|
|
|
|
|
|
|
|
|
Net
Operating and Diluted Operating Earnings per Share Exclusive of
Catastrophes and Prior Year Loss Development Financial
Impact:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating loss
|
$(2,893)
|
$(0.27)
|
$(2,513)
|
$(0.23)
|
$(769)
|
$(0.07)
|
$(10,353)
|
$(0.96)
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe and prior year loss development financial
impact
|
|
|
|
|
|
|
|
|
|
Ceding commission
revenue
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Total
expenses
|
8,559
|
|
5,515
|
|
10,095
|
|
18,133
|
|
|
Income from operations
before taxes
|
8,559
|
|
5,515
|
|
10,095
|
|
18,133
|
|
|
Income tax
expense
|
1,797
|
|
1,158
|
|
2,120
|
|
3,808
|
|
|
Total catastrophe and
prior year loss development financial impact
|
6,762
|
$0.63
|
4,357
|
$0.40
|
7,975
|
$0.74
|
14,325
|
$1.33
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating income exclusive of catastrophes and prior year loss
development financial impact
|
$3,869
|
$0.36
|
$1,844
|
$0.17
|
$7,206
|
$0.67
|
$3,972
|
$0.37
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
10,673,077
|
|
10,779,641
|
|
10,737,853
|
|
10,769,817
|
|
The following table reconciles net operating income (loss) and
diluted operating earnings (loss) per share exclusive of
catastrophe losses to net operating income (loss) and diluted
operating earnings (loss) per share for the periods
presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
Diluted (loss)
earnings per common share
|
Amount
|
Diluted loss
per common share
|
Amount
|
Diluted (loss)
earnings per common share
|
Amount
|
Diluted loss
per common share
|
|
(000’s
except per common share amounts)
|
|
|
|
|
|
|
|
|
|
Net
Operating and Diluted Operating Earnings per Share Exclusive of
Catastrophe Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating loss
|
$(2,893)
|
$(0.27)
|
$(2,513)
|
$(0.23)
|
$(769)
|
$(0.07)
|
$(10,353)
|
$(0.96)
|
|
Catastrophe
losses
|
8,665
|
$0.81
|
446
|
$0.04
|
10,375
|
$0.97
|
6,947
|
$0.65
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income (loss) exclusive of catastrophe
losses
|
$5,772
|
$0.54
|
$(2,067)
|
$(0.19)
|
$9,606
|
$0.90
|
$(3,406)
|
$(0.31)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding
|
10,673,077
|
|
10,779,641
|
|
10,737,853
|
|
10,769,817
|
|
The following table reconciles book value per exclusive of
catastrophes to book value per share for the periods
presented:
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||
|
|
September 30,
|
September 30,
|
||||||
|
|
2020
|
2019
|
2020
|
2019
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
Book value per
common share out-standing
|
Amount
|
Book value per
common share out-standing
|
Amount
|
Book value per
common share out-standing
|
Amount
|
Book value per
common share out-standing
|
|
(000’s except per common share amounts)
|
|
|
|
|
|
|
|
|
|
Book Value per Share Exclusive of Catastrophes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
$89,313
|
$8.37
|
$86,736
|
$8.04
|
$89,313
|
$8.37
|
$86,736
|
$8.04
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe
losses
|
8,665
|
|
446
|
|
10,375
|
|
6,947
|
|
|
Income tax
expense
|
1,820
|
|
94
|
|
2,179
|
|
1,459
|
|
|
Catastrophe
losses, net of income tax
|
6,845
|
$0.64
|
352
|
$0.03
|
8,196
|
$0.77
|
5,488
|
$0.51
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity exclusive of catastrophes
|
$96,158
|
$9.01
|
$87,088
|
$8.07
|
$97,509
|
$9.14
|
$92,224
|
$8.55
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
10,675,198
|
|
10,783,572
|
|
10,675,198
|
|
10,783,572
|
|
The following table summarizes gross and net written premiums, net
premiums earned, net loss and loss adjustment expenses and net loss
ratio by major product type, which were determined based primarily
on similar economic characteristics and risks of loss.
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||
|
|
September 30,
|
September 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
Gross premiums written:
|
|
|
|
|
|
Personal
lines(3)
|
$43,640,603
|
$40,996,459
|
$119,598,207
|
$109,143,415
|
|
Livery
physical damage
|
2,045,746
|
2,590,434
|
5,466,552
|
8,199,269
|
|
Other(1)
|
62,664
|
401,073
|
192,395
|
535,950
|
|
Total
without commercial lines
|
45,749,013
|
43,987,966
|
125,257,154
|
117,878,634
|
|
Commercial
lines (in run-off effective July 2019)(2)
|
(6,848)
|
2,036,185
|
(167,583)
|
10,455,421
|
|
Total
gross premiums written
|
$45,742,165
|
$46,024,151
|
$125,089,571
|
$128,334,055
|
|
|
|
|
|
|
|
Net premiums written:
|
|
|
|
|
|
Personal
lines(3)
|
$27,916,850
|
$35,442,970
|
$76,231,996
|
$89,287,063
|
|
Livery
physical damage
|
2,045,746
|
2,590,434
|
5,466,552
|
8,199,269
|
|
Other(1)
|
50,626
|
410,317
|
151,784
|
522,596
|
|
Total
without commercial lines
|
30,013,222
|
38,443,721
|
81,850,332
|
98,008,928
|
|
Commercial
lines (in run-off effective July 2019)(2)
|
(18,271)
|
2,004,152
|
(574,228)
|
9,411,053
|
|
Total
net premiums written
|
$29,994,951
|
$40,447,873
|
$81,276,104
|
$107,419,981
|
|
|
|
|
|
|
|
Net premiums earned:
|
|
|
|
|
|
Personal
lines(3)
|
$25,220,883
|
$27,487,526
|
$71,434,757
|
$75,737,374
|
|
Livery
physical damage
|
2,014,458
|
2,712,283
|
6,803,475
|
7,850,822
|
|
Other(1)
|
49,939
|
275,324
|
149,087
|
392,745
|
|
Total
without commercial lines
|
27,285,280
|
30,475,133
|
78,387,319
|
83,980,941
|
|
Commercial
lines (in run-off effective July 2019)(2)
|
235,801
|
3,744,877
|
2,712,068
|
11,036,237
|
|
Total
net premiums earned
|
$27,521,081
|
$34,220,010
|
$81,099,387
|
$95,017,178
|
|
|
|
|
|
|
|
Net loss and loss adjustment expenses(4):
|
|
|
|
|
|
Personal
lines
|
$18,657,325
|
$14,389,168
|
$41,810,950
|
$46,666,275
|
|
Livery
physical damage
|
648,520
|
1,395,630
|
1,798,210
|
3,816,390
|
|
Other(1)
|
29,104
|
246,811
|
5,465
|
573,376
|
|
Unallocated
loss adjustment expenses
|
827,031
|
726,778
|
2,839,359
|
2,072,570
|
|
Total
without commercial lines
|
20,161,980
|
16,758,387
|
46,453,984
|
53,128,611
|
|
Commercial
lines (in run-off effective July 2019)(2)
|
(44,005)
|
8,022,931
|
2,863,443
|
18,459,239
|
|
Total
net loss and loss adjustment expenses
|
$20,117,975
|
$24,781,318
|
$49,317,427
|
$71,587,850
|
|
|
|
|
|
|
|
Net loss ratio(4):
|
|
|
|
|
|
Personal
lines
|
74.0%
|
52.3%
|
58.5%
|
61.6%
|
|
Livery
physical damage
|
32.2%
|
51.5%
|
26.4%
|
48.6%
|
|
Other(1)
|
58.3%
|
89.6%
|
3.7%
|
146.0%
|
|
Total without
commercial lines
|
73.9%
|
55.0%
|
59.3%
|
63.3%
|
|
|
|
|
|
|
|
Commercial
lines (in run-off effective July 2019)(2)
|
-18.7%
|
214.2%
|
105.6%
|
167.3%
|
|
Total
|
73.1%
|
72.4%
|
60.8%
|
75.3%
|
1.
“Other”
includes, among other things, premiums and loss and loss adjustment
expenses from our participation in a mandatory state joint
underwriting association and loss and loss adjustment expenses from
commercial auto.
2.
In July 2019, the
Company decided that it will no longer underwrite Commercial
Liability risks. See discussions above regarding the
discontinuation of this line of business.
3.
See discussion with
regard to “Direct Written Premiums, Net Written Premiums and
Net Premiums Earned” in the Company’s Form 8-K Exhibit
99.1 – Press Release dated November 6, 2020 (also available
at www.kingstonecompanies.com).
4.
See discussions
above with regard to “Net Loss Ratio and Underlying Net Loss
Ratio Excluding Commercial Lines”.
|
KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
|
||||
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations and Comprehensive
Income (Loss) (Unaudited)
|
||||
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||
|
|
September 30,
|
September 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
Net
premiums earned
|
$27,521,081
|
$34,220,010
|
$81,099,387
|
$95,017,178
|
|
Ceding
commission revenue
|
3,448,774
|
1,029,582
|
10,760,087
|
2,982,960
|
|
Net
investment income
|
1,494,086
|
1,856,553
|
4,771,936
|
5,200,034
|
|
Net
gains (losses) on investments
|
2,107,876
|
998,162
|
(1,638,674)
|
3,712,180
|
|
Other
income
|
250,654
|
343,391
|
772,672
|
998,927
|
|
Total
revenues
|
34,822,471
|
38,447,698
|
95,765,408
|
107,911,279
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
Loss and
loss adjustment expenses
|
20,117,975
|
24,781,318
|
49,317,427
|
71,587,850
|
|
Commission
expense
|
8,036,298
|
7,722,825
|
23,652,765
|
21,866,420
|
|
Other
underwriting expenses
|
6,346,846
|
6,430,734
|
19,434,110
|
17,983,174
|
|
Other
operating expenses
|
1,038,453
|
609,924
|
3,364,483
|
2,647,221
|
|
Depreciation
and amortization
|
710,181
|
646,201
|
2,070,435
|
1,876,202
|
|
Interest
expense
|
456,545
|
456,545
|
1,369,635
|
1,369,635
|
|
Total
expenses
|
36,706,298
|
40,647,547
|
99,208,855
|
117,330,502
|
|
|
|
|
|
|
|
Loss
from operations before income taxes
|
(1,883,827)
|
(2,199,849)
|
(3,443,447)
|
(9,419,223)
|
|
Income
tax benefit
|
(655,971)
|
(474,687)
|
(1,379,578)
|
(1,998,251)
|
|
Net loss
|
(1,227,856)
|
(1,725,162)
|
(2,063,869)
|
(7,420,972)
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
Gross
change in unrealized gains
|
|
|
|
|
|
on
available-for-sale-securities
|
1,778,478
|
1,323,626
|
5,938,600
|
9,191,817
|
|
|
|
|
|
|
|
Reclassification
adjustment for (gains) losses
|
|
|
|
|
|
included
in net loss
|
(606,969)
|
46,841
|
(560,696)
|
81,636
|
|
Net
change in unrealized gains
|
1,171,509
|
1,370,467
|
5,377,904
|
9,273,453
|
|
Income
tax benefit related to items
|
|
|
|
|
|
of other
comprehensive income
|
(246,017)
|
(287,798)
|
(1,129,359)
|
(1,947,424)
|
|
Other comprehensive income, net of tax
|
925,492
|
1,082,669
|
4,248,545
|
7,326,029
|
|
|
|
|
|
|
|
Comprehensive (loss) income
|
$(302,364)
|
$(642,493)
|
$2,184,676
|
$(94,943)
|
|
|
|
|
|
|
|
Loss per common share:
|
|
|
|
|
|
Basic
|
$(0.12)
|
$(0.16)
|
$(0.19)
|
$(0.69)
|
|
Diluted
|
$(0.12)
|
$(0.16)
|
$(0.19)
|
$(0.69)
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
Basic
|
10,673,077
|
10,779,641
|
10,737,853
|
10,769,817
|
|
Diluted
|
10,673,077
|
10,779,641
|
10,737,853
|
10,769,817
|
|
|
|
|
|
|
|
Dividends declared and paid per common share
|
$0.0400
|
$0.0625
|
$0.1425
|
$0.2625
|
|
KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
|
||
|
Condensed Consolidated Balance Sheets
|
||
|
|
September 30,
|
December 31,
|
|
|
2020
|
2019
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Fixed-maturity
securities, held-to-maturity, at amortized cost (fair value
of
|
|
|
|
$7,899,304
at September 30, 2020 and $4,124,767 at December 31,
2019)
|
$7,369,608
|
$3,825,952
|
|
Fixed-maturity
securities, available-for-sale, at fair value (amortized cost
of
|
|
|
|
$145,126,859
at September 30, 2020 and $162,202,355 at December 31,
2019)
|
156,538,589
|
168,236,181
|
|
Equity
securities, at fair value (cost of $30,300,839 at September 30,
2020 and
|
|
|
|
$22,624,668
at December 31, 2019)
|
29,623,267
|
24,661,382
|
|
Other
investments
|
2,829,078
|
2,584,913
|
|
Total
investments
|
196,360,542
|
199,308,428
|
|
Cash and
cash equivalents
|
24,388,103
|
32,391,485
|
|
Premiums
receivable, net
|
13,883,708
|
12,706,411
|
|
Reinsurance
receivables, net
|
55,529,408
|
40,750,538
|
|
Deferred
policy acquisition costs
|
19,916,325
|
20,634,378
|
|
Intangible
assets, net
|
500,000
|
500,000
|
|
Property
and equipment, net
|
7,788,633
|
7,620,636
|
|
Deferred
income taxes, net
|
-
|
311,052
|
|
Other
assets
|
8,992,936
|
6,979,884
|
|
Total assets
|
$327,359,655
|
$321,202,812
|
|
|
|
|
|
Liabilities
|
|
|
|
Loss and
loss adjustment expense reserves
|
$84,979,024
|
$80,498,611
|
|
Unearned
premiums
|
88,167,636
|
90,383,238
|
|
Advance
premiums
|
4,919,256
|
3,191,512
|
|
Reinsurance
balances payable
|
10,062,649
|
11,714,724
|
|
Deferred
ceding commission revenue
|
7,207,142
|
7,735,398
|
|
Accounts
payable, accrued expenses and other liabilities
|
11,134,175
|
9,986,317
|
|
Deferred
income taxes, net
|
1,972,782
|
-
|
|
Long-term
debt, net
|
29,603,566
|
29,471,431
|
|
Total
liabilities
|
238,046,230
|
232,981,231
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
Preferred
stock, $.01 par value; authorized 2,500,000
shares
|
-
|
-
|
|
Common
stock, $.01 par value; authorized 20,000,000 shares; issued
11,871,307 shares
|
|
|
|
at
September 30, 2020 and 11,824,889 at December 31, 2019;
outstanding
|
|
|
|
10,675,198
shares at September 30, 2020 and 10,797,450 shares at December 31,
2019
|
118,713
|
118,248
|
|
Capital
in excess of par
|
70,372,799
|
69,133,918
|
|
Accumulated
other comprehensive income
|
9,017,415
|
4,768,870
|
|
Retained
earnings
|
13,318,838
|
16,913,097
|
|
|
92,827,765
|
90,934,133
|
|
Treasury
stock, at cost, 1,196,109 shares at September 30,
2020
|
|
|
|
and
1,027,439 shares at December 31, 2019
|
(3,514,340)
|
(2,712,552)
|
|
Total stockholders' equity
|
89,313,425
|
88,221,581
|
|
|
|
|
|
Total liabilities and stockholders'
equity
|
$327,359,655
|
$321,202,812
|