Kingstone Companies Inc (KINS) 2022 Q4 法說會逐字稿

Greetings, and welcome to Kingstone Companies, Inc. 2022 Fourth Quarter and Full Year Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎來到 Kingstone Companies, Inc. 2022 年第四季度和全年收益電話會議。 （操作員說明）提醒一下，正在錄製此會議。

It is now my pleasure to introduce your host, Jennifer Gravelle, Chief Financial Officer and Head of Investor Relations. Thank you. Please go ahead.

現在，我很高興向您介紹主持人 Jennifer Gravelle，她是首席財務官兼投資者關係主管。謝謝。請繼續。

Thank you, and good morning, everyone. Yesterday afternoon, the company issued a press release detailing Kingstone's 2022 4th quarter results.

謝謝大家，早上好。昨天下午，該公司發布了一份新聞稿，詳細介紹了金石通 2022 年第四季度的業績。

On this call, Kingstone may make forward-looking statements regarding itself and its business. The forward-looking events and circumstances discussed on this call may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Kingstone. For more information, please refer to the section entitled Factors that May Affect Future Results and Financial Conditions in Part 1 Item 1A of the company's Form 10-K for the year ended December 31, 2021, along with commentary on forward-looking statements at the end of the company's earnings release issued yesterday.

在這次電話會議上，金石可能會就自身及其業務做出前瞻性陳述。本次電話會議上討論的前瞻性事件和情況可能不會發生，並且可能會因影響金士頓的已知和未知風險因素和不確定性而出現重大差異。有關更多信息，請參閱公司截至 2021 年 12 月 31 日止年度的 10-K 表格第 1 部分第 1A 項中標題為可能影響未來業績和財務狀況的因素的部分，以及對前瞻性陳述的評論公司昨日發布財報結束。

In addition, our remarks today include references to non-GAAP measures. For a reconciliation of our non-GAAP measures to GAAP figures, please see the tables in our earnings release.

此外，我們今天的評論包括對非 GAAP 措施的提及。如需將我們的非 GAAP 措施與 GAAP 數據進行核對，請參閱我們的收益發布中的表格。

With that, I'd like to turn the call over to Kingstone's Chairman of the Board and CEO, Mr. Barry Goldstein. Please go ahead, Barry.

有了這個，我想把電話轉給金士頓的董事會主席兼首席執行官巴里戈德斯坦先生。請繼續，巴里。

Great. And thank you, and good morning, everyone. In addition to Jen Gravel, our new CFO and Head of Investor Relations, also with me today is Meryl Golden, our Chief Operating Officer and President of the insurance company. So welcome to the fourth quarter earnings call and goodbye to a highly challenging 2022.

偉大的。謝謝大家，早上好。除了我們的新首席財務官兼投資者關係主管 Jen Gravel 之外，今天和我在一起的還有我們的首席運營官兼保險公司總裁 Meryl Golden。歡迎來到第四季度財報電話會議，告別充滿挑戰的 2022 年。

Despite the many hurdles, we got through it and this was in no small part due to the multiyear transformation that we methodically and deliberately undertook. Most importantly, this transformational journey has laid the foundation needed to support our success and profitability in the years ahead.

儘管有許多障礙，我們還是挺過去了，這在很大程度上歸功於我們有條不紊、有意識地進行了多年的轉型。最重要的是，這一轉型之旅為支持我們未來幾年的成功和盈利能力奠定了基礎。

Indeed, we believe that 2023 will be a year that will prove out our hard work, return us to profitability and set the stage for double-digit returns on equity in the future. We're moving forward as a company more focused than ever before, more efficient in its processes with a lower cost structure and most importantly, with a product that will get us back to what we had been known for in the past.

事實上，我們相信 2023 年將是證明我們辛勤工作的一年，我們將恢復盈利，並為未來兩位數的股本回報率奠定基礎。作為一家比以往任何時候都更加專注、流程效率更高、成本結構更高效的公司，我們正在向前邁進，最重要的是，我們的產品將使我們回到過去的知名度。

We will review with you the regular financial and operational metrics, business updates and market trends, but our comments are primarily focused on our strategic priorities. The actions that have already been implemented and how they will result in profitability.

我們將與您一起審查定期的財務和運營指標、業務更新和市場趨勢，但我們的評論主要集中在我們的戰略重點上。已經實施的行動以及它們將如何帶來盈利。

Today, we will share with you some early indications that those actions have taken hold and are already delivering clear results, even as we and our industry continued to navigate a challenging environment. The environment includes a number of macro factors we have no influence or control over though which we have already taken significant steps to fortify our business against.

今天，我們將與您分享一些早期跡象，表明即使我們和我們的行業繼續在充滿挑戰的環境中前行，這些行動已經站穩腳跟，並且已經取得了明顯的成果。環境包括許多我們無法影響或控制的宏觀因素，儘管我們已經採取重要措施來加強我們的業務。

As we have shared, results in 2022 were impacted by a surge in inflation. We were advised by the Fed that this spike would be what they called transitory, but it didn't work out that way, did it? This surge resulted in rapidly increasing market interest rates and a near shutdown of the credit markets. Our reinsurance partners felt the same thing. Higher rates meant that their bond portfolio valuation would be declining just as ours did.

正如我們所分享的，2022 年的業績受到通貨膨脹激增的影響。美聯儲告訴我們，這種飆升將是他們所謂的暫時性的，但事實並非如此，對嗎？這種激增導致市場利率迅速上升，信貸市場幾近關閉。我們的再保險合作夥伴也有同樣的感受。更高的利率意味著他們的債券投資組合估值將像我們一樣下降。

Questions about property cat insurance were more dramatic as bad weather resulted in more catastrophe claims and the failure of many Florida companies. Our reinsurance placement last July was a bit more than just difficult. Our rates forced higher as long-time reinsurers cut back or were far less interested in taking on catastrophe risk. These macro factors are continuing to impact the entire industry, including Kingstone in 2023.

由於惡劣的天氣導致更多的災難索賠和許多佛羅里達州的公司倒閉，有關財產巨災保險的問題更加引人注目。我們去年 7 月的再保險安排不僅僅是困難。由於長期再保險公司削減或對承擔巨災風險的興趣大大降低，我們的利率被迫上漲。這些宏觀因素正在持續影響整個行業，包括2023年的金士頓。

How are we responding to these challenges that's what I'm going to talk about today specifically inflation, interest rates and reinsurance. Relative to inflation, we've taken a two-pronged approach. First, we include an estimate for future inflation in all of our premium rates. We, like others, were unprepared for the sudden spike in inflation during late '21 and early 2022, while our rates anticipated a fall lower rate than we actually experienced. And while I hope that we have seen peak inflation and are on a declining path, know this, that our rate levels are reflective of this difficult environment, and we will continue to appropriately adjust them to address ongoing inflation.

我們如何應對這些挑戰，這就是我今天要談論的，特別是通貨膨脹、利率和再保險。相對於通貨膨脹，我們採取了雙管齊下的方法。首先，我們在所有保費率中都包含了對未來通貨膨脹的估計。與其他人一樣，我們對 21 年底和 2022 年初的通脹突然飆升沒有做好準備，而我們的利率預期下降幅度低於我們實際經歷的水平。雖然我希望我們已經看到通貨膨脹達到頂峰並且正在走下坡路，但要知道這一點，我們的利率水平反映了這種困難的環境，我們將繼續適當調整它們以應對持續的通貨膨脹。

Second, as we've discussed previously, we are updating the replacement cost of every property we insure, so that each of our policyholders are properly covered and their homes are insured to its then current replacement cost, including inflation that had already been experienced. We permanently adopted this process. We followed this practice on every renewal. Meryl will discuss this in more detail, but at a high level, we're confident in our approach to keeping up with and managing the ongoing impact of inflation.

其次，正如我們之前所討論的，我們正在更新我們承保的每處房產的重置成本，以便我們的每位保單持有人都得到適當的保障，並且他們的房屋按照當時的重置成本進行投保，包括已經經歷過的通貨膨脹。我們永久地採用了這個過程。我們在每次更新時都遵循這種做法。梅麗爾將更詳細地討論這個問題，但在高層次上，我們對我們應對和管理通貨膨脹持續影響的方法充滿信心。

As we've all seen with the rapid onset of inflation came higher interest rates since Kingstone's investment portfolio comprises fixed income securities, the rising rate environment has had a material impact on their valuation. Our bond portfolio, which is externally managed by [Corning] has an average credit rating from the 3 major rating agencies of AA- in a relatively short 4.4-year duration. As such, our portfolio was hard hit as short-term rates spiked higher along with inflation.

正如我們都看到的那樣，隨著通貨膨脹的迅速發生，利率上升，因為金士頓的投資組合包括固定收益證券，利率上升的環境對其估值產生了重大影響。我們由[康寧]外部管理的債券組合在相對較短的4.4年期限內獲得了三大評級機構AA-的平均信用評級。因此，我們的投資組合受到重創，因為短期利率隨著通貨膨脹而飆升。

It's important to state that we do not trade our portfolio. It's designed to provide us with additional income, avoiding credit risk by investing in obligations from the strongest of borrowers. We hold most securities until the scheduled maturity and -- at which time we expect to receive par value. We expect that the current level of unrealized losses will shrink as time passes and hopefully more quickly as interest rates retreat.

重要的是要聲明我們不交易我們的投資組合。它旨在為我們提供額外收入，通過投資於最強借款人的債務來避免信用風險。我們持有大部分證券直到預定的到期日——屆時我們預計會收到票面價值。我們預計當前的未實現損失水平將隨著時間的推移而縮小，並希望隨著利率回落而更快。

Our portfolio is closely aligned with the 5-year treasury rate. So following that, you can see how values are changing. We have seen a significant decline in the 5-year rate recently. And keep in mind that at year-end 2022, the 5-year rate was at 4%. It moved up to 4.17% at the end of February, and I think it closed yesterday, 50 basis points lower at 3.67%.

我們的投資組合與 5 年期國債利率密切相關。因此，在此之後，您可以看到價值觀是如何變化的。我們最近看到 5 年期利率顯著下降。請記住，到 2022 年底，5 年期利率為 4%。它在 2 月底升至 4.17%，我認為它昨天收盤時下跌 50 個基點至 3.67%。

I believe we will report in Q1 an improvement in AOCI and a quarterly increase in unrealized gains on our equity securities, which are primarily preferred shares and fixed income ETFs.

我相信我們將在第一季度報告 AOCI 的改善以及我們股票證券（主要是優先股和固定收益 ETF）的未實現收益的季度增加。

Relative to reinsurance costs, many say, it is as hard of a reinsurance market as they have ever seen. As those who follow the industry know the growing frequency and severity of natural disasters and a host of other factors are driving up the cost of reinsurance, and it's become more difficult for primary carriers like Kingstone to obtain reinsurance coverage at reasonable rates.

許多人表示，相對於再保險成本，這是他們所見過的最艱難的再保險市場。關注該行業的人都知道，自然災害的頻率和嚴重程度越來越高，以及許多其他因素正在推高再保險成本，像金斯通這樣的主要承保人越來越難以以合理的費率獲得再保險。

Reinsurance companies are becoming more selective in the risks they are willing to cover leading to ever higher premiums for insurers and that poses challenges for all of us who need reinsurance, but know this, over the last 10 years, Kingstone's loss ratio on its catastrophe coverage has been just over 7%. We have been a cash cow for the reinsurers, with us receiving back just $0.07 of every dollar of premium that we paid in. Yet, we're continuing to expect a tough market this July.

再保險公司在他們願意承保的風險方面變得越來越有選擇性，這導致保險公司的保費越來越高，這給我們所有需要再保險的人帶來了挑戰，但要知道，在過去的 10 年裡，金斯通巨災保險的損失率剛剛超過7%。我們一直是再保險公司的搖錢樹，我們支付的每一美元保費中僅收回 0.07 美元。然而，我們繼續預計今年 7 月市場會很艱難。

We've anticipated and adapted to these changes by proactively taking actions to better manage our risk and to slow the growth in the amount of reinsurance we need to buy, which we refer to as our probable maximum loss or PML. We managed this by utilizing a real-time upfront underwriting tool, which we call CAT score. At the time of [quote], it helped us to determine if the policy to be underwritten will pass our self-imposed thresholds. We have materially tightened criteria to better manage PML growth and while the current competitive environment has far fewer active competitors, we remain active but are highly selective as the only writings we are undertaking now are those that are far less catastrophe exposed.

我們通過積極採取行動更好地管理我們的風險並減緩我們需要購買的再保險數量的增長來預測並適應這些變化，我們將其稱為我們可能的最大損失或 PML。我們通過使用我們稱之為 CAT 分數的實時前期承保工具來管理這一點。在 [quote] 時，它幫助我們確定要承保的保單是否會超過我們自行設定的門檻。我們已經實質性地收緊標準以更好地管理 PML 增長，雖然當前的競爭環境中活躍的競爭對手要少得多，但我們仍然活躍但具有高度的選擇性，因為我們現在正在進行的唯一作品是那些災難暴露較少的作品。

In the same rain, we've tightened our underwriting and reduced the maximum coverage, a, that we're willing to insure and have nonrenewed policies that are outside of our new tighter guidelines. Working closely with the New Jersey and Rhode Island regulators, we were granted approval for block nonrenewals of many policies that are contributing the most to Kingstone's PML. We are now modeling our entire portfolio every month and measuring the impact of these and other underwriting strategies.

在同一場雨中，我們收緊了承保並減少了最大承保範圍，a，我們願意承保並且擁有不在我們新的更嚴格指導方針之外的非續保政策。我們與新澤西州和羅德島州的監管機構密切合作，獲得了對許多對金石 PML 貢獻最大的保單的集體不續籤的批准。我們現在每個月都對整個投資組合進行建模，並衡量這些和其他承保策略的影響。

Looking ahead, we'll continue to use all the tools available to us to keep our reinsurance needs as low as possible in such a challenging marketplace. I'm delighted to share with you that these efforts are already bearing fruit and we will be able to further reduce our 2023 reinsurance requirements by 7% as compared to last year.

展望未來，我們將繼續使用我們可用的所有工具，以在這樣一個充滿挑戰的市場中盡可能降低我們的再保險需求。我很高興與您分享，這些努力已經取得成果，與去年相比，我們將能夠將 2023 年的再保險要求進一步降低 7%。

With Kingstone 2.0 behind us, the foundation is in place. Kingstone 3.0 is underway with changes having been made to address these macro factors as best we can. We're laser-focused on the strategic plan that will lead us back to the high-performing company we were for so many years. Meryl will speak in greater detail about our strategic plan to do just that.

隨著我們身後的金石 2.0，基礎已經到位。 Kingstone 3.0 正在進行中，我們已盡最大努力解決這些宏觀因素。我們非常專注於戰略計劃，這將使我們回到多年來的高績效公司。 Meryl 將更詳細地介紹我們為此制定的戰略計劃。

Before this, however, I'm going to turn the call over to Jen Gravelle. As I mentioned, Jen joined us early this year as our CFO and Head of Investor Relations and is already a valuable part of our team. She brings to Kingstone a 20-plus year successful track record in executive financial management, including most recently as CFO of Slide Insurance and previously CFO of both Allied Trust Insurance Company, and the Olympus Insurance Company.

然而，在此之前，我要把電話轉給 Jen Gravelle。正如我提到的，Jen 今年年初加入我們，擔任我們的首席財務官和投資者關係主管，並且已經是我們團隊中很重要的一員。她為 Kingstone 帶來了 20 多年執行財務管理方面的成功業績，包括最近擔任 Slide Insurance 的首席財務官，之前擔任 Allied Trust Insurance Company 和 Olympus Insurance Company 的首席財務官。

Jen is an expert when it comes to reinsurance and particularly matters involving homeowners insurance companies who are exposed to wind-related risks as well as coastal-focused property insurance. Her deep knowledge in these areas are instrumental to Kingstone as we move forward in this next phase.

Jen 是再保險方面的專家，尤其是涉及面臨與風相關風險的房主保險公司以及沿海財產保險的專家。她在這些領域的深厚知識對金士頓在下一階段的發展起到了重要作用。

With that, I'll pass the call over to Jen to review our fourth quarter and full year financial results. Please go ahead, Jen.

有了這個，我會把電話轉給 Jen 來審查我們的第四季度和全年財務業績。請繼續，珍。

Thank you, Barry. It's great to be here today, and thank you for that wonderful introduction. In the fourth quarter of 2022, Kingstone reported a net loss of $3.95 million and $0.37 per diluted share compared to net income of $2.2 million and $0.21 per diluted share for the same period last year.

謝謝你，巴里。很高興今天來到這裡，感謝您的精彩介紹。 2022 年第四季度，金士頓報告淨虧損 395 萬美元和攤薄後每股收益 0.37 美元，而去年同期的淨收入為 220 萬美元和攤薄後每股收益 0.21 美元。

Direct written premiums were up 7.7% to $53.9 million, an increase of $3.8 million from $50.1 million in the prior year period. However, our policies in force have declined 1.8% from the previous quarter. We remain laser-focused on increasing our average premium and expect to continue to grow premiums materially faster than exposures for the foreseeable future.

直接承保保費增長 7.7% 至 5390 萬美元，比去年同期的 5010 萬美元增加了 380 萬美元。然而，我們有效的政策比上一季度下降了 1.8%。我們仍然專注於提高我們的平均保費，並期望在可預見的未來繼續以比風險敞口更快的速度增長保費。

The net loss in LAE ratio was 81.3%, up 19.5 points from the prior year. The largest driver of this increase was catastrophe losses. Fourth quarter catastrophe losses, principally Winter Storm Elliott, added $4.2 million or 13.7 points to the net loss ratio for the quarter.

LAE淨虧損率為81.3%，較上年上升19.5個百分點。這一增長的最大驅動力是巨災損失。第四季度的巨災損失，主要是冬季風暴埃利奧特，使本季度的淨損失率增加了 420 萬美元或 13.7 個百分點。

During the quarter, we also recorded a $2 million reserve development or 6.5 points from our commercial liability line of business. The company exited that line in 2019. We feel good about our overall reserve position and our reserves at year-end have been strengthened relative to our independent actuary central point estimates. The attrition of our non-CAT loss ratio was 61.1%, the lowest of any quarter in 2022. If not for the cat losses and prior year development, we would have made an underwriting profit in the fourth quarter of 2022.

在本季度，我們還記錄了 200 萬美元的儲備開發或我們商業責任業務線的 6.5 個百分點。公司於 2019 年退出該行。我們對我們的整體準備金頭寸感覺良好，我們的年末準備金相對於我們的獨立精算中心點估計有所加強。我們的非巨災損失率為 61.1%，是 2022 年任何季度中最低的。如果不是因為巨災損失和上一年的發展，我們本可以在 2022 年第四季度實現承保利潤。

For the fourth quarter, the net underwriting expense ratio decreased 6.9 points to 32.6%. Our expense reduction is driven by multiple expense reduction initiatives, most notably of our IT expense from return of legacy systems, changes to commission and profit sharing structure that will continue to be recognized over time. We've made great progress on expenses, but are engaged in other efforts, which will reduce the expenses even further.

第四季度，淨承保費用率下降 6.9 個百分點至 32.6%。我們的費用減少是由多項費用減少計劃推動的，最顯著的是我們因遺留系統的回歸、佣金和利潤分享結構的變化而產生的 IT 費用，這些費用將隨著時間的推移繼續得到認可。我們在費用方面取得了很大進展，但正在進行其他努力，這將進一步減少費用。

Before turning it over to Meryl, I'd like to add a few -- in a few short months that I've been with Kingstone, I have come to appreciate the talent of our team, the compelling value of our product, services and platforms for our producers and customers. And although there's still much to be done, I've been really impressed with how much has already been completed.

在交給梅麗爾之前，我想補充幾點——在我加入金士頓的短短幾個月裡，我開始欣賞我們團隊的才華，以及我們產品、服務和服務的令人信服的價值為我們的生產商和客戶提供平台。儘管還有很多工作要做，但我對已經完成的工作量印象深刻。

I can confidently say that the hard decisions have been made and the most important initiatives to turn around that business are already in process. I look forward to meeting more members of the financial community in the months to come and continue to work to show a new path of value creation.

我可以自信地說，艱難的決定已經做出，扭轉業務的最重要舉措已經在進行中。我期待在未來幾個月與更多金融界人士會面，並繼續努力展示價值創造的新路徑。

Now I'll turn it over to Meryl. Meryl?

現在我將把它交給梅麗爾。梅麗爾？

Thanks. While our financial results for the fourth quarter were nowhere near what we want them to be, the quarter is the first sign that the business has begun to turn and we are seeing green shoots. This progress overall is a direct reflection of the transformation initiatives that we have diligently executed on since 2019, including throughout 2022, a year that was a challenge for the entire insurance industry.

謝謝。雖然我們第四季度的財務業績遠未達到我們的預期，但該季度是業務開始好轉的第一個跡象，我們看到了復甦的跡象。這一總體進展直接反映了我們自 2019 年以來努力執行的轉型舉措，包括整個 2022 年，這一年對整個保險業來說是一個挑戰。

As a result of these efforts, we are now a more efficient company with strength and fundamentals. I want to spend a few minutes walking through some of the actions we've already taken and that are already in place to proactively address market challenges and operational inefficiencies before turning to our strategic plan for 2023 and beyond.

由於這些努力，我們現在是一家更有實力和基礎的更有效率的公司。在轉向我們 2023 年及以後的戰略計劃之前，我想花幾分鐘時間介紹一下我們已經採取的一些行動，這些行動已經到位，以主動應對市場挑戰和運營效率低下的問題。

Barry spoke to inflation, but I'd like to go into more detail given its major impact on our book of business. Apart from annual rate changes, we initiated a new practice in the third quarter to update the replacement cost of our entire book to keep up with inflation and make sure that our policyholders are insured to value.

巴里談到了通貨膨脹，但考慮到它對我們業務的重大影響，我想更詳細地介紹一下。除了年度利率變化外，我們在第三季度啟動了一項新做法，以更新我們整個帳簿的重置成本，以跟上通貨膨脹的步伐，並確保我們的保單持有人獲得保險價值。

Our previous practices didn't keep up with rising building costs, especially with the inflation that we've all been experiencing of late. As Barry mentioned, we adopted a process to update replacement cost of each policy with every renewal using the most recent data available. And we're pleased to share that this is producing positive results. For New York homeowners, as an example, we've seen a 25% increase in average premium since this new practice was implemented. Let me repeat that the average renewal premium is up 25% over the expiring term. This increase reflects both the rate change that's flowing through the book as well as this update and replacement cost.

我們以前的做法跟不上不斷上漲的建築成本，尤其是我們最近都經歷過的通貨膨脹。正如 Barry 提到的，我們採用了一種流程，使用最新的可用數據在每次續保時更新每份保單的更換成本。我們很高興地分享這正在產生積極的結果。以紐約房主為例，自從實施這項新措施以來，我們發現平均保費增加了 25%。讓我重複一遍，平均續約保費在到期期限內上漲了 25%。這種增加既反映了流經本書的比率變化，也反映了更新和更換成本。

Remember, though, we're rolling on to the book these 2 items, and that takes a full year to work through the book, and we earn the new hire premium over the 12 months of the renewal term. Thus, while much of the benefit will be seen in 2023 and increasing an amount as the year goes on, the real effect will be in 2024.

不過請記住，我們正在著手處理這 2 個項目，這需要一整年的時間來完成這本書，並且我們在續訂期限的 12 個月內賺取了新員工的溢價。因此，雖然大部分收益將在 2023 年顯現，並且數量會隨著時間的推移而增加，但真正的效果將在 2024 年出現。

Looking forward ahead to 2024, we anticipate a continued rise in replacement cost as we believe inflation, unfortunately, will continue for the foreseeable future and expect premiums to increase accordingly. It's one thing for us to raise our premium, but it's also worth noting that our retention has declined only slightly despite the significant increase in rate. For instance, the New York -- in New York homeowners, we've experienced less than a 1% drop in retention despite rates increasing so materially.

展望 2024 年，我們預計重置成本將繼續上升，因為不幸的是，我們認為通貨膨脹將在可預見的未來繼續存在，並預計保費將相應增加。提高保費是一回事，但同樣值得注意的是，儘管費率顯著提高，但我們的保留率僅略有下降。例如，紐約——在紐約房主中，儘管利率大幅上漲，但我們的保留率下降不到 1%。

We're in the midst of a hard market with fewer competitors than in recent years and we expect these conditions will continue. That said, our continued strong retention is a positive indicator of the loyalty of our customer base and the talent of our producers and team members who are working directly with customers every day.

我們正處於競爭激烈的市場之中，與近年來相比，我們預計這些情況將持續下去。也就是說，我們持續強勁的保留率是我們客戶群忠誠度以及每天直接與客戶打交道的製作人和團隊成員的才能的積極指標。

Beyond the macro factors discussed, the primary driver of our fourth quarter and calendar year 2022 underwriting loss has been the results of our businesses in state other than New York, namely New Jersey, Connecticut, Rhode Island and Massachusetts. We entered these states to diversify Kingstone's footprint starting in 2017 and they have had a disproportionate negative impact on our underwriting results, especially in 2022.

除了所討論的宏觀因素之外，我們第四季度和 2022 日曆年承保虧損的主要驅動因素是我們在紐約以外州（即新澤西州、康涅狄格州、羅德島州和馬薩諸塞州）的業務結果。從 2017 年開始，我們進入這些州是為了使金士頓的足跡多樣化，它們對我們的承保業績產生了不成比例的負面影響，尤其是在 2022 年。

We've attempted to address these challenges to achieve profitability in the past we made a series of rate changes and tightened underwriting, but they were not enough and did not deliver the expected results. The impact we've worked towards was not there and what benefit we did see was nullified by inflation.

過去，我們曾嘗試應對這些挑戰以實現盈利，我們進行了一系列費率調整併收緊了承保，但這些還不夠，也沒有達到預期的結果。我們努力實現的影響並不存在，我們確實看到的好處被通貨膨脹抵消了。

So in late 2022, after considering this continued unprofitable trend, we made the difficult decision to focus on our profitable state of New York, where we have more than 80% of our business and to aggressively reduce our non-New York book of business subject to regulatory constraints.

因此，在 2022 年底，考慮到這種持續無利可圖的趨勢後，我們做出了艱難的決定，將重點放在我們盈利的紐約州，我們 80% 以上的業務都在那裡，並積極減少我們的非紐約業務主題監管約束。

We are confident that the decision to limit our operations outside of New York is the fastest way to improve profitability for Kingstone. The actions we have put in place will reduce our policies in force outside of New York by more than 50% by year-end 2023, and another 40% will be reduced in 2024. By eliminating these unprofitable policies, we anticipate this to significantly improve the bottom line for Kingstone.

我們相信，限制我們在紐約以外地區開展業務的決定是提高金士頓盈利能力的最快方式。到 2023 年底，我們已採取的行動將使我們在紐約以外地區實施的保單減少 50% 以上，到 2024 年將再減少 40%。通過取消這些無利可圖的保單，我們預計這將顯著改善金石的底線。

Last, our net expense ratio for calendar year 2022 was 36%, down over 4 points from 2021 and is continuing to decline. We're pleased with the progress so far, and by 2024, we expect our net expense ratio to reach 33%, a significant improvement in a short period and one we're committed to furthering. Month to the ratio decline is attendant to our restructuring and reduction of producer comp commission rates. Select policies are at a 15% commission rate and our legacy policies are being renewed at lower rates as well.

最後，我們 2022 日曆年的淨費用率為 36%，比 2021 年下降了 4 個百分點，並且還在繼續下降。我們對迄今為止取得的進展感到滿意，到 2024 年，我們預計我們的淨費用率將達到 33%，這是短期內的顯著改善，我們致力於進一步提高。本月比率下降是由於我們的重組和生產者補償佣金率的降低。部分保單的佣金率為 15%，我們的舊保單也以較低的費率續簽。

Due to GAAP accounting, we paid the lower commission at the policy renewal but recognize the benefit over the life of the policy. Just like the increased premiums being felt more profoundly in 2024, the same is true for commission reductions from lower commission rates.

由於採用 GAAP 會計準則，我們在保單續籤時支付了較低的佣金，但在保單有效期內確認了收益。就像 2024 年保費增加的影響更深一樣，較低的佣金率帶來的佣金減少也是如此。

Needless to say, 2023 is a pivotal year for Kingstone as we look to build on the key actions we've undertaken and are currently undertaken. Our 4-pillar strategy for '23 and '24, which we've creatively coined Kingstone 3.0 is focused on 4 things: One, aggressively reducing the non-New York book of business; two, adjusting pricing to stay ahead of loss trends, including inflation; three, tightly managing reinsurance requirements and costs and last, continuing our focus on expense reduction.

毋庸置疑，2023 年對金士頓來說是關鍵的一年，因為我們希望在我們已經採取和目前正在採取的關鍵行動的基礎上再接再厲。我們創造性地創造了 Kingstone 3.0 的 23 年和 24 年四大支柱戰略專注於四件事：第一，積極減少非紐約業務；第二，調整定價以領先於損失趨勢，包括通貨膨脹；第三，嚴格管理再保險要求和成本，最後，繼續關注減少費用。

By executing on these initiatives, Kingstone will be positioned to achieve our goal of returning to profitability in 2023 and beyond. Barry, Jen, myself and the entire leadership team are optimistic for the future.

通過執行這些舉措，金士頓將能夠實現我們在 2023 年及以後恢復盈利的目標。 Barry、Jen、我自己和整個領導團隊都對未來持樂觀態度。

We have a solid foundation from which to build with a clear plan in place to capitalize on our strengths and deliver long-term value creation for shareholders. Thank you, as always, for your support. And with that, we'll open it up to questions. Operator?

我們擁有堅實的基礎，可以製定明確的計劃來利用我們的優勢並為股東創造長期價值。一如既往地感謝您的支持。有了這個，我們將打開它來提問。操作員？

(Operator Instructions) First question is coming from Jon Paul Newsome of Piper Sandler.

（操作員說明）第一個問題來自 Piper Sandler 的 Jon Paul Newsome。

Maybe we can start with expense management. As you're triaging the book, I would imagine that there's some negative expense leverage just with fixed costs. Is the reduction in the expense ratio in your view purely a function of the lower commissions? Or is there some leverage other pooling to reduce expenses from a pure operating perspective?

也許我們可以從費用管理開始。當你對這本書進行分類時，我想只有固定成本才會有一些負費用槓桿。在您看來，費用率的下降是否純粹是佣金減少的結果？或者從純粹的運營角度來看，是否有一些槓桿作用來減少開支？

Sure. I'll answer the question, Paul. So thank you for pointing out our lower expenses. We have worked really hard to reduce our expenses and so happy that we've been able to see a 4-point reduction in 2022. So yes, commissions play a very significant role because we reduced the commission in Select, we reduced the commission on our legacy book. We reduced the commission for the non-New York states to encourage agents to move the book, and we've also restructured our profit-sharing plans, but beyond that, we have made major efforts in all areas of the company to review and reduce our expenses. I've talked repeatedly about the retirement of our legacy systems that saved us $1.5 million. We have reviewed every contract. I mean we're really relentless in managing our expenses, and that's what will be driving our expense reduction going forward.

當然。我來回答這個問題，保羅。因此，感謝您指出我們較低的開支。我們非常努力地減少開支，很高興我們能夠在 2022 年減少 4 個百分點。所以，是的，佣金發揮了非常重要的作用，因為我們減少了 Select 的佣金，我們減少了我們的遺書。我們降低了非紐約州的佣金，以鼓勵代理人搬家，我們還重組了利潤分享計劃，但除此之外，我們在公司的所有領域都做出了重大努力，以審查和減少我們的開支。我多次談到我們的遺留系統的淘汰為我們節省了 150 萬美元。我們審查了每一份合同。我的意思是我們在管理我們的開支方面真的很不懈，這將推動我們未來削減開支。

Could you give us a little bit more color on the reserve development in the quarter, the sources and that reserve development, frequency very -- where it's coming from in your view?

您能否為我們提供更多有關本季度儲備開發的信息，資源和儲備開發，頻率非常 - 在您看來它來自哪裡？

Yes, I think that's -- thanks for the question, Paul. There was a $2 million additional reserve put up, all of it relating to commercial multi-peril policies, a line of business that we exited in 2019. And the statute of limitations is just about run on all of those old policies, but an abundance of caution, this is the first additional strengthening we've taken on that. You may recall that we put up a lot of strengthening in 2019, but it's directly related to a line of business that we exited and the total amount on a pretax basis was $2 million.

是的，我認為那是——保羅，謝謝你提出這個問題。有 200 萬美元的額外準備金，所有這些都與商業多重風險政策有關，這是我們在 2019 年退出的業務範圍。訴訟時效幾乎適用於所有這些舊政策，但大量需要注意的是，這是我們對此進行的第一次額外強化。您可能還記得我們在 2019 年進行了很多加強，但這與我們退出的業務線直接相關，稅前總額為 200 萬美元。

Great. Could you guys talk -- maybe walk us through the debt refinancing impact that we should think about on the model prospectively?

偉大的。你們能不能談談——也許可以讓我們了解一下我們應該前瞻性地考慮模型的債務再融資影響？

Sure. I'll start that. And if Jen or Meryl want to chime in, please do. So we had, as you recall, a $30 million loan coming due in December of last year. And it was -- we were paying an interest rate that was said 5 years earlier at 5.5%. When we finally got through the debt exchange, we -- thanks in large part to the great team at, I guess, across the wall from you, Paul, at Piper Sandler. The total amount of debt is now reduced to just under $20 million, but the interest rate that we're paying on that reduced amount is now 12%.

當然。我會開始的。如果 Jen 或 Meryl 想插話，請插話。所以，正如你記得的那樣，我們有一筆 3000 萬美元的貸款將於去年 12 月到期。它是——我們支付的利率是 5 年前所說的 5.5%。當我們最終完成債務交換時，我們——在很大程度上要感謝偉大的團隊，我想，就在你隔壁的派珀桑德勒。債務總額現在減少到略低於 2000 萬美元，但我們為減少的金額支付的利率現在是 12%。

So what you're seeing is about a $0.75 million a year increase in our interest expense. And you'll also see that the costs of the financing will be amortized over the life of that loan. And further, we issued warrants to the note-holders, and those costs will also be reflected as time goes forward. We'll be -- I think a lot of this will be clear to you, Paul, we should file our 10-K by end of business today, and there's quite a detailed discussion included in the 10-K. I hope that answers your question.

所以你看到的是我們的利息支出每年增加約 75 萬美元。你還會看到融資成本將在貸款期限內攤銷。此外，我們向票據持有人發行了認股權證，這些成本也將隨著時間的推移而反映出來。我們會——我想你會很清楚，保羅，我們應該在今天營業結束前提交我們的 10-K，10-K 中包含了相當詳細的討論。我希望這能回答你的問題。

Yes. I guess the more challenging piece is to figure out the impact of the warrants on the shares outstanding.

是的。我想更具挑戰性的部分是弄清楚認股權證對已發行股票的影響。

Yes. I think what you all see is they're accounted for as equity warrants and they go through the entire Black-Scholes discussion. And I think it will be clear to you exactly what it will be when you can read the 10-K.

是的。我認為你們都看到了它們被視為股權認股權證並且它們經歷了整個 Black-Scholes 討論。我認為當您閱讀 10-K 時，您會清楚地知道它會是什麼。

Great. And then I guess one last question, and I'll let anybody else want to ask questions. Any early read on the July renewals for this year?

偉大的。然後我猜最後一個問題，我會讓其他人想問問題。是否提前閱讀了今年 7 月的續訂？

Well, I'm going to let Meryl and Jen talk. They just got back from London. So ladies, why don't you go ahead?

好吧，我要讓 Meryl 和 Jen 談談。他們剛從倫敦回來。那麼女士們，你們為什麼不繼續呢？

Yes. So we're just coming back from London earlier this month. Somewhat interesting conversations over there with the reinsurance partners and new markets that we were talking to. So what we're hearing is that they actually have -- we're going to have some additional capacity in the Northeast in this upcoming renewal for us, but the question is what cost, right?

是的。所以我們本月初剛從倫敦回來。在那裡與我們正在與之交談的再保險合作夥伴和新市場進行了一些有趣的對話。所以我們聽到的是他們實際上擁有 - 我們將在即將到來的續約中在東北部擁有一些額外的能力，但問題是成本是多少，對吧？

So that is the biggest challenge is how much it is going to be to place the reinsurance. And the forecast that Meryl has created, there is absolutely expectations of increased reinsurance costs going through, and it's just whether or not we can come in underneath those reinsurance costs that are expected, one of the things that I love telling these reinsurers is that, hey, look, you need to go to a flight to a higher quality book and the fact that Kingstone has only produced a 7.27% catastrophe loss ratio for these reinsurers on this program, they really need to start paying attention to this company versus others who are providing a higher rate on -- sorry, loss ratio on the cat business.

因此，最大的挑戰是放置再保險的金額。梅麗爾做出的預測，絕對期望再保險成本會增加，這只是我們是否可以低於預期的再保險成本，我喜歡告訴這些再保險公司的一件事是，嘿，你看，你需要坐飛機去買一本質量更高的書，事實上金斯通在這個項目中只為這些再保險公司產生了 7.27% 的巨災損失率，他們真的需要開始關注這家公司，而不是其他公司正在提供更高的利率——對不起，貓業務的損失率。

Yes, I don't know if Meryl wants to add anything to that?

是的，我不知道 Meryl 是否想對此添加任何內容？

Yes. I think the important point, Paul, is while we're not prepared to guess at what's going to happen, and we will have our own personal hope for us. What drove last year's increased pricing, which was almost 20% was a lack of interest by the reinsurers. They were confronted by the same issues that we were and they were stung repeatedly in Florida. To the point our renewal is in July, the Florida renewals are primarily in June. And to say that we got the after effect of the pounding that the Florida carriers took, I think, would be fair.

是的。保羅，我認為重要的一點是，當我們不准備猜測將要發生的事情時，我們將對我們有自己的個人希望。推動去年價格上漲近 20% 的原因是再保險公司缺乏興趣。他們面臨著與我們相同的問題，他們在佛羅里達州一再被刺痛。到目前為止，我們的續約是在 7 月，而佛羅里達州的續約主要是在 6 月。並且說我們得到了佛羅里達航空公司遭受的衝擊的後遺症，我認為，這是公平的。

We've all gone through this. The times are challenging, but the combination of an expectation that capacity is freeing up that new capital is entering the reinsurance market. And at least as early as, I guess, yesterday, there's an expectation that the projected number of storms to effect the Atlantic Seaboard is going to be less than it was in prior years. So a lot of positive signs to hope for, but the proof will be in the pudding. Hope that gets you to where you need to be.

我們都經歷過這個。時代充滿挑戰，但容量正在釋放的預期相結合，新資本正在進入再保險市場。我想至少早在昨天，預計影響大西洋沿岸的風暴數量將少於往年。所以希望有很多積極的跡象，但證據將在布丁中。希望這能讓你到達你需要去的地方。

Always appreciate the help. Thank you very much.

始終感謝您的幫助。非常感謝。

Thank you, Paul.

謝謝你，保羅。

(Operator Instructions). The next question is coming from Gabriel McClear, a private investor.

（操作員說明）。下一個問題來自私人投資者 Gabriel McClear。

So my first question is kind of -- just more follow-up with Paul's question on the reserve development on the commercial lines. That was kind of a surprise being is how we discontinued that in 2019. For me, that was a surprise. So my question is, when is this -- when are these reserve development is going to be done? Or are we going to see any more? What's your best guess on all that?

所以我的第一個問題是 - 只是跟進保羅關於商業線路儲備開發的問題。令人驚訝的是我們在 2019 年停止了它。對我來說，這是一個驚喜。所以我的問題是，這些儲備開發什麼時候完成？或者我們還會再看嗎？你對這一切的最佳猜測是什麼？

Yes. I mean let me start by saying -- and first, thank you for the question, Gabe. This was the first additional reserve development we've taken since the third quarter of 2019. It was a painful exit from a problem that the -- I'll just say the prior administration refused to acknowledge. And I think we did a pretty damn good job in sizing it up, but inflation got in the way and COVID got in the way. Inflation, obviously, everything costs more and COVID slows the ability to resolve these claims, the courts were closed, attorneys weren't working. So I think $2 million, while it might be a surprise, is not something that I would consider unusual in size at all. And hopefully, that just shuts the door on everything going forward.

是的。我的意思是讓我首先說——首先，謝謝你提出這個問題，Gabe。這是自 2019 年第三季度以來我們採取的第一個額外的儲備開發。這是一個痛苦的退出問題——我只想說前任政府拒絕承認。而且我認為我們在評估方面做得非常好，但通貨膨脹和 COVID 都成了阻礙。通貨膨脹，顯然，一切成本都更高，而 COVID 減緩了解決這些索賠的能力，法院關閉，律師不工作。所以我認為 200 萬美元，雖然這可能是一個驚喜，但我認為這根本不是什麼不尋常的事情。希望這只是為未來的一切關上了大門。

Additionally, Barry, if I may add that we are -- we, as a company, have a little bit more conservative reserving policy than what was in place back in 2019. We are now -- we have our Chief Actuary, in house, Sarah, and we have an independent actuarial firm who reviews our reserves on an annual basis and tell us where we are within their range. And we are $2 million above their central point estimates. So we are also being more conservative to ensure that our reserves are adequate and reasonable going forward.

此外，巴里，如果我可以補充一點，我們是——作為一家公司，我們的準備金政策比 2019 年的準備金政策稍微保守一些。我們現在——我們有內部首席精算師，莎拉，我們有一家獨立的精算公司，他們每年審查我們的準備金並告訴我們我們在他們範圍內的位置。我們比他們的中心點估計高出 200 萬美元。因此，我們也更加保守，以確保我們的儲備充足且合理。

That being said, you never know, commercial multiperil is a commercial liability is a very volatile line. So there is some exposure there still, but we don't expect additional claims to be coming in as statute limitations runs out. So it's just a matter of handling what's currently open.

話雖這麼說，你永遠不知道，商業多重風險是一種商業責任，是一條非常不穩定的線。因此，仍然存在一些風險，但我們預計隨著法定時效到期，不會出現額外的索賠。所以這只是處理當前打開的內容的問題。

Okay. Got it. I have a question about the bond portfolio. Your duration is stated at 4.5 or 4.4 And I guess my question is, where do you all see the duration going? It's really nice that we all think that the Federal Reserve is going to lower rates later this year or next year. But once they don't, when rates go up and what if they do lower rates for a year or 2 and then rates go up again. So just how are we thinking about that?

好的。知道了。我有一個關於債券投資組合的問題。你的持續時間是 4.5 或 4.4 我想我的問題是，你們都認為持續時間會怎樣？很高興我們都認為美聯儲將在今年晚些時候或明年降低利率。但是一旦他們不這樣做，當利率上升時，如果他們降低利率一兩年然後利率再次上升怎麼辦。那麼我們是如何考慮的呢？

Yes. I mean it's a good question. And I think maybe I should have added before that I think it's just about the entire last year. Whatever proceeds we've received from principal paydowns in the mortgage bonds we own or the maturity of bonds proceeds that we get, even the interest that we earn on the portfolio, the only new securities we've purchased have been short-term treasuries. So the duration is going down not just as the existing portfolio marches towards their scheduled maturities, but the incremental amount of new securities we add is at a much lower duration, bringing it down.

是的。我的意思是這是個好問題。而且我認為也許我應該在此之前添加，我認為這幾乎是整個去年。無論我們從我們擁有的抵押債券的本金償還中獲得什麼收益，或者我們獲得的債券收益到期，甚至我們從投資組合中賺取的利息，我們購買的唯一新證券都是短期國債。因此，不僅隨著現有投資組合向預定到期日邁進，持續時間正在下降，而且我們添加的新證券的增量數量也處於更短的持續時間，從而降低了持續時間。

So I think in general, if bonds are basically mirroring a treasury rate plus a credit spread, right? So if there were no changes, and there have been quite a lot of changes recently in credit spreads with everything going on in the world, but in general, 100 basis point reduction or increase by that matter, in the 5-year treasury rate will result in a $6 million change to our carrying value of our portfolio, a very rough measurement. But in answer to your question, we see the duration going down over time while the quality of the portfolio by adding just treasuries is going up.

所以我認為一般來說，如果債券基本上反映了國債利率加上信用利差，對嗎？因此，如果沒有變化，並且最近隨著世界上發生的一切，信用利差發生了相當多的變化，但總的來說，5 年期國債利率將因此減少或增加 100 個基點導致我們投資組合的賬面價值發生 600 萬美元的變化，這是一個非常粗略的測量。但在回答你的問題時，我們看到久期隨著時間的推移而下降，而僅通過添加國債來提高投資組合的質量。

So we feel real good about the portfolio. Yes, we'd be very happy to see rates come down. I'd love to see rates come down, not because of a recession, but I'd like to just see rates come down. But you're right, I mean rates could go up. And I think we've taken a conservative approach to this and have limited further exposure to the valuation of the portfolio by relying on AAA rated or short-term treasuries. I hope that answers your question.

所以我們對投資組合感覺非常好。是的，我們很高興看到利率下降。我很樂意看到利率下降，不是因為經濟衰退，而是我只想看到利率下降。但你是對的，我的意思是利率可能會上漲。而且我認為我們對此採取了保守的方法，並通過依賴 AAA 評級或短期國債來限制對投資組合估值的進一步敞口。我希望這能回答你的問題。

No, that's great. That does, thank you very much. And I just have 1 last question for you all. Maybe something to think about on the reporting, we're -- and I know it's customary for a lot of these other property and calculated companies to provide reports excluding catastrophe losses and this and that.

不，那太好了。原來如此，非常感謝。我只有最後一個問題要問大家。也許在報告中需要考慮一些事情，我們 - 我知道很多其他財產和計算公司通常會提供不包括災難損失和這個和那個的報告。

But I'd like us to think about maybe taking those -- taking that out and just reporting the numbers straight up, you guys were in New York. So we're going to have winter storms and hurricanes, -- it's just kind of -- in my opinion, it's part of doing business. I'm from South Alabama. And if I reported a catastrophe every time it got hot out in the middle of the summer, people would laugh so -- just what you think about that.

但我想讓我們考慮一下，也許把這些拿掉——把它拿走，然後直接報告這些數字，你們在紐約。所以我們將有冬季風暴和颶風，——在我看來，這只是一種——這是做生意的一部分。我來自南阿拉巴馬州。如果我每次在盛夏天氣變熱時都報告一場災難，人們會大笑——這就是你的想法。

No. And I think you know -- and look, you've been a participant in these calls for many years, and you know that's never been my go-to find an excuse by blaming it on catastrophes. But Kingstone always has been compared and has a peer group to compare itself against, and that's how they report. It's also important to note that we got to the -- almost the end of December was sitting on what looked to be a really good quarter from an underwriting perspective and then got up-ended by this Winter Storm Elliott. We've never had a freeze event in December like that. I mean, I've lived in New York. It's now -- look, I'm living here 70 years. We've never had something like that before.

不，我想你知道——看，你多年來一直是這些電話的參與者，你知道這從來不是我找藉口的藉口，將其歸咎於災難。但 Kingstone 總是被比較，並且有一個同行群體可以與自己進行比較，這就是他們的報告方式。同樣重要的是要注意，從承銷的角度來看，我們幾乎在 12 月底坐在一個看起來非常好的季度，然後被這場冬季風暴 Elliott 打倒了。我們在 12 月從未有過這樣的凍結事件。我的意思是，我住在紐約。現在——看，我在這裡生活了 70 年。我們以前從未有過這樣的事情。

And you're right. It is what it is, whether you want to call it a cat loss or attritional loss or like some of the Florida carriers, call it bad weather that doesn't reach the level of a catastrophe, at the end of the day, money is money, losses are losses. And I appreciate your sentiment and -- but I hope that you can parse out the extra information if you don't want to look at it. But like I said, since we're being compared to others and others do that, I thought it appropriate to leave that in.

你是對的。它就是這樣，無論你想稱它為巨災損失或自然減員損失，還是像佛羅里達州的一些承運人一樣，稱其為未達到災難級別的惡劣天氣，歸根結底，金錢就是錢，損失就是損失。我很欣賞你的觀點，但我希望你可以解析出額外的信息，如果你不想看的話。但就像我說的，既然我們被拿來和其他人比較，而其他人也這樣做，我認為把它留在裡面是合適的。

We're showing no additional questions in queue at this time. I'd like to turn the floor back over to management for any additional or closing comments.

我們目前沒有顯示隊列中的其他問題。我想將發言權轉回管理層以徵求任何其他意見或結束意見。

Great. Thank you, operator, and thanks, everybody, for listening. We've all put up with a horrible 2022. Our company has been materially impacted by things that were outside of our control. And our plan for '23 and going forward is to turn the tables, take control over the things that we can and if it results in having to raise consumer premiums by these material amounts of 20%, 25%, like Meryl was talking about, we have to do that. And if we're going to be confronted with a higher cost of doing business through increased reinsurance costs, our obligation is to pay claims as they come due. And if there's less -- and we must purchase reinsurance in order to stay in business.

偉大的。謝謝接線員，也謝謝大家的收聽。我們都忍受了可怕的 2022 年。我們的公司受到了我們無法控制的事情的重大影響。我們 23 年和未來的計劃是扭轉局面，控制我們能做的事情，如果這導致不得不將消費者保費提高 20%、25%，就像梅麗爾所說的那樣，我們必須這樣做。如果再保險成本增加，我們將面臨更高的經營成本，我們的義務是在索賠到期時支付索賠。如果減少了——我們必須購買再保險才能繼續經營。

So if there's less money left over after paying those reinsurance premiums and higher claims cost due to inflation, then we had to share the burden of this and not just dump it all on the policyholders. So we had to cut commissions. We changed the overall dynamic of the company in response to these changing macro factors. This will prove through in '23 and like Meryl said, because of GAAP accounting and the need to earn through the heightened premiums and get the benefit of the lower commissions more of it will be seen in '24 and '23.

因此，如果在支付這些再保險保費後剩下的錢更少，並且由於通貨膨脹導致索賠成本更高，那麼我們必須分擔這個負擔，而不是僅僅將其全部轉嫁給保單持有人。所以我們不得不削減佣金。我們改變了公司的整體動態以應對這些不斷變化的宏觀因素。這將在 23 年得到證明，正如梅麗爾所說，由於 GAAP 會計以及通過提高保費賺取收入並從較低佣金中獲益的需要，將在 24 年和 23 年看到更多。

But I think you'll see as we report going forward, these actions are purely math. They will be represented in each of the quarterly statements as we discuss and I think our next call is going to be in mid-May, and I look forward to sharing more data with you then. So thank you all for listening in. Thanks for hanging in with Kingstone. And I hope that you remain as good and loyal shareholders. So thank you again. Have a great day.

但我認為您會在我們的報告中看到，這些行動純粹是數學。他們將在我們討論的每個季度報表中都有代表，我認為我們的下一次電話會議將在 5 月中旬舉行，我期待屆時與您分享更多數據。因此，感謝大家的收聽。感謝您與 Kingstone 保持聯繫。我希望你們仍然是優秀和忠誠的股東。所以再次感謝你。祝你有美好的一天。

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.

女士們，先生們，感謝你們的參與。今天的活動到此結束。此時您可以斷開線路或退出網絡廣播，然後享受接下來的一天。