Kingstone Companies Inc (KINS) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Kingstone Company's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kevin Lee, Vice President, the Equity Group and Kingstone's Investor Relations represented. Karen, you may begin.

您好，歡迎參加金石公司 2024 年第二季財報電話會議。此時，所有參與者都處於只聽模式。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，Kevin Lee，他是金士頓股票集團和投資者關係副總裁。凱倫，你可以開始了。

Thank you, Chamaly. Good morning, everyone. Joining us on the call today will be Chief Executive Officer, Meryl Golden; and Chief Financial Officer, Jennifer Gravelle. On behalf of the company, I would like to note that this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected results.

謝謝你，查馬利。大家早安。今天加入我們電話會議的是執行長 Meryl Golden；和財務長珍妮佛·格拉維爾。我謹代表本公司指出，本次電話會議可能包含前瞻性陳述，其中涉及已知和未知的風險、不確定性以及其他可能導致實際結果與預測結果有重大差異的因素。

Forward-looking statements speak only as of the date on which they are made and Kingstone undertakes no obligation to update the information discussed. For more information, please refer to the section entitled factors that may affect future results and financial condition in Part 1 Item 1A of the company's latest Form 10-K.

前瞻性陳述僅代表發布當日的情況，金士頓不承擔更新所討論資訊的義務。欲了解更多信息，請參閱公司最新 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。

Additionally, today's remarks may include references to non-GAAP measures. For a reconciliation of these non-GAAP measures to GAAP figures, please see the tables in the latest earnings release.

此外，今天的言論可能會提到非公認會計原則措施。有關這些非 GAAP 指標與 GAAP 數據的對照表，請參閱最新收益報告中的表格。

With that, it's my pleasure to turn the call over to Meryl Golden. Meryl, you may begin.

至此，我很高興將電話轉給梅莉爾‧戈爾登。梅莉爾，你可以開始了。

Thanks, Karen, and good morning, everyone. We are so proud of our second quarter results. This is our third consecutive quarter of profitability and the most profitable quarter for Kingstone in the last seven years. I had said repeatedly that we were doing all the right things to return the company to profitability over the years.

謝謝，凱倫，大家早安。我們對第二季的業績感到非常自豪。這是我們連續第三個季度獲利，也是金士頓過去七年來獲利最多的季度。我曾多次說過，多年來我們正在做所有正確的事情來使公司恢復盈利。

And we are finally seeing the benefits of all of those actions consistently in our financial results, there could not be a better time for Kingstone to grow faster than now as we are priced right insured to value have a product that properly matches rate to risks, have the right teams in place across the organization and have reduced our expenses marketplace. And now we are faced with an unbelievable market opportunity that I wrote about in my midyear letter to shareholders and will expand upon today.

我們終於在我們的財務表現中看到了所有這些行動的好處，對於金士頓來說，沒有比現在更好的增長速度了，因為我們的定價正確，保險價值有一個與風險正確匹配的產品，在整個組織中擁有合適的團隊，並減少了我們的市場費用。現在我們面臨著一個令人難以置信的市場機會，我在年中致股東的信中提到了這一點，並將在今天進一步闡述。

Let me remind you that more than two years ago and well ahead of many of our competitors, we recognize that loss trends around the rise and then inflation, a primary factor driving our loss trends would also result in many of our customers being underinsured.

讓我提醒您，兩年多前，我們遠遠領先許多競爭對手，認識到損失趨勢的上升和通貨膨脹是推動我們損失趨勢的主要因素，也會導致我們的許多客戶保險不足。

We acted quickly to raise our premiums and put a plan in place to update replacement cost on every policy renewal. One of the benefits of being an early mover is that we have successfully returned to profitability while some of our competitors are still restricting their business or have shut down completely, which along with an expansion of our underwriting appetite, fueled the growth in our core business this quarter.

我們迅速採取行動提高保費，並制定計畫更新每次保單續保的重置成本。成為先行者的好處之一是，我們已經成功恢復盈利，而我們的一些競爭對手仍在限制其業務或完全關閉，這加上我們承保胃口的擴大，推動了我們核心業務的增長本季度。

As quota insurance market has been volatile for some time in our core state of New York with a large competitor going insolvent and others shutting down or restricting their business over the last two years. However, market dynamics have changed profoundly in the last few weeks, competing carriers representing more than $200 million in annual premium, made the decision to exit New York State or to exit the personal property market countrywide.

由於在我們的核心紐約州，配額保險市場一段時間以來一直在波動，一個大型競爭對手破產，其他競爭對手在過去兩年關閉或限制其業務。然而，市場動態在過去幾週發生了深刻的變化，年保費超過 2 億美元的競爭承運人決定退出紐約州或退出全國個人房地產市場。

We knew that the policies issued by these carriers needed to be moved to alternative carriers and assumed that that would happen over the next year. However, about 10 days ago, we learned that the policies of two of those carriers over 16,000 policies in our downstate New York footprint, we'll need to be moved to alternative carriers by the end of this year.

我們知道這些業者發布的保單需要轉移到其他業者，並假設這將在明年發生。然而，大約 10 天前，我們了解到，其中兩家承運商的保單在我們紐約州南部的業務範圍內超過 16,000 份保單，我們需要在今年年底前更換為其他承運商。

For perspective, that number of policies is roughly the size that Kingstone is today. While the growth potential is seemingly limitless we cannot right at all. Our intent is to maximize our growth only in those segments that meet or exceed our profitability targets. We are in the fortunate position to pick which segments we want to right, because Mark capacity severely constraints.

從長遠來看，這個保單數量大致相當於金士頓今天的規模。雖然成長潛力看似無限，但我們根本無法做到這一點。我們的目的是僅在那些達到或超過我們獲利目標的細分市場中實現最大成長。我們很幸運能夠選擇我們想要糾正的部分，因為馬克的能力受到嚴重限制。

Our objective is profitable growth, not growth for growth sake. Kingstone has learned this lesson before, particularly when we expanded into the non-core states and we will not make the same mistakes again, as I stated last quarter, it's very easy to grow in the insurance business, but it's much harder to grow profitably.

我們的目標是獲利成長，而不是為了成長而成長。金士頓之前已經吸取了這個教訓，特別是當我們擴展到非核心州時，我們不會再犯同樣的錯誤，正如我上季度所說，保險業務增長很容易，但盈利增長就困難得多。

We plan to capitalize on this amazing opportunity by being very intentional and selective on which properties we write and very nimble to change our approach as we learn more and as market conditions evolve. It is such a difficult time for our select producers, and we will do everything we can to help them through this unprecedented situation.

我們計劃利用這個絕佳的機會，對我們所寫的屬性非常有意和有選擇性，並隨著我們了解更多和市場條件的變化，非常靈活地改變我們的方法。對於我們精選的製作人來說，這是一個艱難的時刻，我們將盡一切努力幫助他們度過這前所未有的局面。

While the specifics of these market dynamics are new and evolving Kingstone's entire leadership team is focused on the changes we need to make to successfully seize this incredible opportunity with as minimal disruption as possible to our underwriting and service standards. We are carefully monitoring our capital position and will utilize quota share if needed, to ensure we have the capital needed to support our growth year to date, most of our growth has been from increases in our average premiums rather than growth in policy count going forward, while we'll still benefit from increases in average premium, most of our growth will come from increasing our policies in force.

雖然這些市場動態的具體情況是新的且不斷變化的，但金士頓的整個領導團隊都專注於我們需要做出的改變，以成功抓住這一令人難以置信的機遇，同時盡可能減少對我們承保和服務標準的干擾。我們正在仔細監控我們的資本狀況，並在需要時利用配額份額，以確保我們擁有支持我們今年迄今增長所需的資本，我們的大部分增長來自平均保費的增加，而不是未來保單數量的增長雖然我們仍將受益於平均保費的增加，但我們的大部分成長將來自增加我們的有效保單。

For visibility I want to give you an update on some of the metrics that I shared in my midyear Shareholder Letter when we had just learned about this market dynamic. At that time, I shared that our new business policy count was up 3 times the prior year month.

為了提高可見性，我想向您提供我在年中股東信中分享的一些指標的最新信息，當時我們剛剛了解了這一市場動態。當時，我分享說我們的新業務保單數量比去年同期增加了 3 倍。

Well, we ended the month of July with an overall 5 times increase rather than the 3 times that we had shared. And this has increased materially so far in August. I also shared that we were at 9 times the prior year month new business premium level.

嗯，我們在 7 月結束時總體增長了 5 倍，而不是我們分享的 3 倍。八月到目前為止，這一數字已大幅增加。我還透露，我們的新業務溢價水準是去年同期的 9 倍。

We completed the month of July at 13 times higher new business premium well ahead of the 9 times that I had shared and are seeing the same trends so far in August. While it's hard to see beyond the current opportunity that is directly in front of us. We have been thinking a lot about the longer term and how to continue our profitable growth trajectory beyond 2025.

我們 7 月的新業務溢價比我分享的 9 倍高出 13 倍，並且在 8 月到目前為止也看到了相同的趨勢。儘管我們很難超越當前擺在我們面前的機會。我們一直在思考更長期的問題以及如何在 2025 年後繼續保持獲利成長軌跡。

We have what we now call our platform, our proven select product, a competitive expense structure and expert staff in all areas of the company. We have opportunities for enhanced segmentation, in our select product to better match really two risks and will make us more competitive our core business.

我們擁有現在所說的平台、經過驗證的精選產品、有競爭力的費用結構以及公司各個領域的專家員工。我們有機會在我們選擇的產品中加強細分，以更好地匹配真正的兩種風險，並使我們的核心業務更具競爭力。

We also want to grow the company in other ways. We have been discussing expansion of our platform to other geographies to increase our footprint, additional product offerings, alternative distribution channels and potential acquisitions among other strategies. There is a lot more work to do before we finalize our longer term plans, but I feel confident that we now have a scalable platform to continue to drive profitable growth for many years to come.

我們也希望透過其他方式發展公司。我們一直在討論將我們的平台擴展到其他地區，以擴大我們的足跡、提供更多產品、替代分銷管道和潛在收購等策略。在我們最終確定長期計劃之前，還有很多工作要做，但我相信我們現在擁有一個可擴展的平台，可以在未來許多年繼續推動獲利成長。

Before I touch on full year guidance, I wanted to share an update on our debt that will be maturing at year end. I am delighted to share that we have a solution and we are currently in the final stages of execution since this is in process we cannot share any information or answer any questions regarding the debt at this time. However, I can share that this solution will be announced within the next month. And I have confidence that you will be happy with the outcome. Stay tuned.

在談到全年指導之前，我想分享我們將於年底到期的債務的最新情況。我很高興地告訴大家，我們已經有了解決方案，目前正處於執行的最後階段，因為正在處理中，我們目前無法分享任何資訊或回答有關債務的任何問題。不過，我可以告訴大家，這個解決方案將在下個月內公佈。我相信您會對結果感到滿意。敬請關注。

And finally, turning to guidance, I will first cover our updated '24 guidance that we unveiled in yesterday's earnings release. And then share our initial expectations for 2025. With half of the year under our belt, full year 2024 guidance is as follows.

最後，談到指導意見，我將首先介紹我們在昨天的財報發布中公佈的更新後的 24 年指導意見。然後分享我們對2025年的初步期望。今年已經過去一半了，2024 年全年指導如下。

Direct premium written growth in our core business in the range of 25% to 35%. This increase from just two weeks ago and based on approximately $125 million of net premiums earned, we expect to achieve a GAAP combined ratio between 84% and 88% earnings per share between $1 and $1.30 and return on equity between 26% and 34%.

我們核心業務的直接保費成長在 25% 至 35% 之間。這一增幅較兩週前有所增加，基於約1.25 億美元的淨保費收入，我們預計GAAP 綜合比率將達到84% 至88%，每股收益將在1 美元至1.30 美元之間，股本回報率將在26% 至34% 之間。

We're also happy to share our initial expectations for full year 2025 as follows. Direct premium written growth in our core business in the range of 15% to 25%. And based on approximately $150 million of net premiums earned, we expect to achieve a GAAP combined ratio of between 85% and 89% earnings per share of between $1.20 and $1.60 and return on equity between 22% and 30%.

我們也很高興與大家分享我們對 2025 年全年的初步預期，如下。我們核心業務的直接保費成長在 15% 至 25% 之間。基於約 1.5 億美元的淨保費收入，我們預計 GAAP 綜合比率將達到 85% 至 89%，每股收益將在 1.20 美元至 1.60 美元之間，股本回報率將在 22% 至 30% 之間。

The recent change in our market opportunity that I have been discussing has not been factored in our earned premium, combined ratio, earnings per share or return on equity in the guidance provided for '24 or '25. It's just too early to be able to do that.

我一直在討論的最近市場機會的變化並未考慮到我們為「24」或「25」提供的指導中的賺取溢價、綜合比率、每股收益或股本回報率。現在做到這一點還為時過早。

As soon as we can forecast the impact, I will update the guidance. Otherwise, our guidance assumes no material changes in our business. And as a reminder, our results are very weather dependent and we have assumed no major catastrophe events in this guidance.

一旦我們能夠預測影響，我將更新指南。否則，我們的指導假設我們的業務沒有重大變化。提醒一下，我們的結果很大程度上取決於天氣，我們在本指南中假設沒有重大災難事件。

We have also assumed that the cost for catastrophe reinsurance for the 25 26 treaty year will increase modestly relative to this year's treaty. Last note that the second half of 24 and full year 25 does not assume any gains or losses from our investment portfolio.

我們也假設 25-26 條約年的巨災再保險費用將相對於今年的條約略有增加。最後請注意，24 年下半年和 25 年全年不承擔我們投資組合的任何收益或損失。

With that, I'll turn the call over to Jen for a more detailed review of our quarterly financial results. Take it away Jen.

接下來，我會將電話轉給 Jen，以便更詳細地審查我們的季度財務表現。把它拿走，珍。

Thanks, Meryl, and good morning, everyone. I assume as Meryl mentioned, we could not be more pleased with our second quarter and first half year results. This now marks our third consecutive quarter of profitability with net income of $4.5 million or $0.41 per basic share for the year to date, our net income is up $11.5 million over this period last year.

謝謝，梅莉爾，大家早安。我想正如梅莉爾所提到的，我們對第二季和上半年的業績感到非常滿意。這標誌著我們連續第三個季度實現盈利，今年迄今淨利潤為 450 萬美元或每股基本股 0.41 美元，我們的淨利潤比去年同期增加了 1,150 萬美元。

On a consolidated basis, direct premiums increased 12%, inclusive of 21% increase in core direct written premiums, partially offset by the continued reduction of our non-core business, which decreased by nearly 60% compared to the same period last year. The increase in our core business reflects strong pricing action with average premium up more than 18% in the quarter.

綜合來看，直保保費成長 12%，其中核心直保保費成長 21%，但部分被我們非核心業務的持續減少所抵消，非核心業務較去年同期下降近 60%。我們核心業務的成長反映了強勁的定價行動，本季平均保費上漲超過 18%。

Our combined ratio improved by 21 points to 78.2% for the quarter. Our current accident year loss ratio improved by 18 points with a 15 point improvement in non-cat losses and a three point reduction in catastrophe losses. We also had $430,000 of favorable prior year development reducing the loss ratio by 1.4 points.

本季我們的綜合成本率提高了 21 個百分點，達到 78.2%。我們目前的事故年損失率提高了 18 個百分點，其中非巨災損失提高了 15 個百分點，災難損失降低了 3 個百分點。我們還有 43 萬美元的上一年有利發展，將損失率降低了 1.4 個百分點。

Our expense ratio was 31.2%, a 1.2 point improvement from the second quarter of 2024 -- excuse me, 2023. While our expense ratio is higher than the target shared in Meryl year-end letter to shareholders, the difference is almost entirely due to increased employee bonus and contingent commission to our producers, which are triggered off of our better than expected underwriting results. This is a good problem to have.

我們的費用率為 31.2%，比 2024 年第二季（對不起，2023 年）提高了 1.2 個百分點。雖然我們的費用比率高於梅莉爾在給股東的年終信中分享的目標，但差異幾乎完全是由於員工獎金和對我們生產商的或有佣金的增加，這是由我們好於預期的承保業績引發的。這是一個很好的問題。

Our non-cat loss ratio improvement was driven by homeowners, our main line of business with decreases in both frequency and severity for our largest barrels of water and fire as compared to the prior year. We attribute this improvement to better risk selection in our Select product and the reduction in our non-core business.

我們的非貓損失率的改善是由房主推動的，房主是我們的主要業務，與前一年相比，我們最大桶水和火災的頻率和嚴重程度均有所下降。我們將這項改進歸因於我們精選產品中更好的風險選擇以及我們非核心業務的減少。

We also experienced fewer large losses this quarter compared to the prior year and the three year average for the second quarter. We are now confident that the spike in March losses we experienced in 2023 was random for the quarter. Net investment income increased 22% to $1.8 million compared to $1.5 million in the prior year quarter.

與去年同期和第二季的三年平均值相比，本季我們的重大損失也有所減少。我們現在確信，2023 年 3 月損失的激增在該季度是隨機的。淨投資收入成長 22%，達到 180 萬美元，去年同期為 150 萬美元。

Excess cash generated from operations, along with maturities from our bond portfolio and proceeds from the sale of preferred stock have been invested in treasuries to take advantage of their high risk risk-free rates. We continue to reduce our preferred stock holdings to lessen the volatility in our portfolio, resulting in a $200,000 loss for the quarter.

營運產生的多餘現金，以及我們債券投資組合的到期日和優先股銷售收益，已投資於國債，以利用其高風險無風險利率。我們繼續減少優先股持有量，以減少投資組合的波動性，導致本季損失 20 萬美元。

The average yield on non-cash invested assets was 3.81% as of June 30 compared to 3.63% as of June 30, 2023, with the effective duration of 3.5 years and the weighted average effective maturity down to 6.8 years. With the changing of the macro-economic factors and the anticipated decline in interest rates, we do expect to see a material improvement in the value of our bond portfolio going forward, which we are crafted on our balance sheet as an increase to other comprehensive income.

截至6月30日，非現金投資資產平均收益率為3.81%，而截至2023年6月30日為3.63%，有效期限為3.5年，加權平均有效期限降至6.8年。隨著宏觀經濟因素的變化和預期利率下降，我們預期未來債券投資組合的價值將出現實質改善，我們在資產負債表上將其作為其他綜合收益的增加。

For perspective, every 0.5% reduction in interest rates will increase our portfolio by about $2.7 billion.

從長遠來看，利率每降低 0.5%，我們的投資組合就會增加約 27 億美元。

Before I turn it back to the operator for questions, I would like to add that we benefited from a one-time $300,000 gain from a commutation of prior year reinsurance treaties during the quarter. Additionally, we had a $500,000 reduction in reinsurance costs from recognizing a no claims bonus on one of our catastrophe treaties.

在我將其轉回給運營商詢問之前，我想補充一點，我們從本季度前一年再保險條約的變更中一次性獲得了 300,000 美元的收益。此外，由於承認我們的一項巨災條約的無索賠獎金，我們的再保險成本減少了 50 萬美元。

Overall, we had a great quarter with earnings of $0.41 per share and an annualized return on equity of 47%. As always, we thank you for your support.

總體而言，我們度過了一個出色的季度，每股收益為 0.41 美元，年化股本回報率為 47%。一如既往，我們感謝您的支持。

And with that, we'll open it up for questions. Operator?

接下來，我們將開放提問。操作員？

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。（操作員說明）

Bob Farnham, Janney Montgomery Scott.

鮑伯法納姆，珍妮蒙哥馬利史考特。

Yeah, hi there. Good morning, everyone, that I have multiple questions about the market opportunity in front of you. And I guess I wanted to start with you mentioned kind of the expansion of your underwriting appetite into new geographies and new products. Can you give us an idea of what you're talking about in that sense?

是的，你好。大家早安，我對你們面前的市場機會有多個問題。我想我想從您提到的將您的承保興趣擴展到新地區和新產品開始。您能否從這個意義上告訴我們您正在談論的內容？

The second part of my question is going to be you have an immense growth opportunity ahead of you and I totally understand that the growth would have been profitable. Same time, it's very difficult. So you've had a lot of competitors pull out of this market because they've had issues. So how can you give us confidence there, the business that you're going to be writing and taking in is going to be good for you?

我的問題的第二部分是，你們面前有一個巨大的成長機會，我完全理解這種成長是有利可圖的。同時，也是非常困難的。因此，許多競爭對手都退出了這個市場，因為他們遇到了問題。那麼，您如何讓我們相信您將要撰寫和接受的業務會對您有利呢？

Okay. Well, thanks for your questions, Bob. So first of all in terms of our underwriting appetite. If you recall, last year, we severely restricted our writings given the a conjecture about the reinsurance market. And so we had made some significant changes to slow our growth to reduce the overall cost of reinsurance. After we finalized our reinsurance purchase for last year, we've been slowly reverting our underwriting appetite back to what it was previously.

好的。好的，謝謝你的提問，鮑伯。首先就我們的承保胃口而言。如果你還記得的話，去年我們就對再保險市場的一個猜想嚴格限制了我們的寫作。因此，我們做出了一些重大改變，以減緩我們的成長，從而降低再保險的整體成本。在我們去年完成再保險購買後，我們的承保胃口一直在慢慢恢復到以前的水平。

So we are writing more business in South of the Country as an example. And then this year, given the confidence we have that we are priced right and listening to producers in the marketplace and what their needs are, we've made some changes. As an example, we now write a higher up to $2.5 million coverage limit, which was an area where there were few companies willing to write and where we felt very confident in our pricing.

因此，我們正在以該國南部為例撰寫更多業務。今年，鑑於我們相信我們的定價是正確的，並聽取了市場上生產商的意見以及他們的需求，我們做出了一些改變。舉例來說，我們現在承保範圍較高，最高可達 250 萬美元，在這個領域，很少有公司願意承保，但我們對我們的定價非常有信心。

So the change in our underwriting appetite is nothing like really new this is all risks that Kingstone has experience with, but we reacted to the opportunity in the market and just opened up segments that the producers needed. Relative to confidence that we're doing the right thing. I mean that we are just such a different company than we were years ago when we made some mistakes and grew too quickly.

因此，我們承保偏好的變化並不是什麼新鮮事，這是金士頓經歷過的所有風險，但我們對市場機會做出了反應，剛剛開闢了生產商需要的細分市場。相對於我們正在做正確的事情的信心。我的意思是，我們與幾年前相比已經是一家完全不同的公司，當時我們犯了一些錯誤並且成長得太快。

And to give you confidence. First, we have our Select product. It's been out in the street since 2022 and is doing a great job matching rate to risk. And I've mentioned in the past the frequency we're experiencing and our select product is 10% lower what we are experiencing in our legacy product.

並給你信心。首先，我們有我們的精選產品。它自 2022 年以來就已投入使用，並且在匹配利率與風險方面表現出色。我過去曾提到過，我們所選擇的產品所經歷的頻率比我們在舊產品中所經歷的頻率低 10%。

And what's profound about that is that select is mostly new business and legacy is mostly renewal business. So usually you'd see a higher frequency and we're seeing a lower frequency, which gives us a lot of confidence that the product is working in terms of risk selection, we have done a terrific job managing our reinsurance costs.

其深刻之處在於，精選業務主要是新業務，而傳統業務主要是更新業務。因此，通常您會看到較高的頻率，而我們看到的頻率較低，這讓我們非常有信心該產品在風險選擇方面發揮作用，我們在管理再保險成本方面做得非常出色。

And we on every single quote, we measure what the loss cost and reinsurance cost is and make sure that we're adequately priced before binding those risks. We have an A-plus team across all areas of the company, and we're really closely managing and responding to the results of the business, and we're just a very nimble and efficient company now. So I could not be more confident that this is the time for Kingstone to seize this market opportunity and grow faster.

我們在每個報價中都會衡量損失成本和再保險成本，並確保在承擔這些風險之前我們的定價是適當的。我們在公司的各個領域都有一支一流的團隊，我們正在密切管理和回應業務結果，我們現在是一家非常靈活和高效的公司。因此，我非常有信心，現在是金士頓抓住這個市場機會並更快發展的時候了。

Yeah, I just I think there will be people a little nervous with the amount of growth that's potentially coming down, but it sounds like one of the expansions products or stuff you've already written before into it sounds like the business that you've expanded into thus far has been has been profitable. So my guess is with the potential book of business ahead of you.

是的，我只是我認為有人會對可能下降的增長量感到有點緊張，但這聽起來像是您之前已經寫過的擴展產品之一或內容聽起來像是您已經完成的業務擴張至今已實現盈利。所以我的猜測是你面前有一本潛在的商業書。

You're either going to be taking only a slice of it or you're going to have to be raising rates or changing terms and conditions on the policies that seems to be like what's going to have to happen if you're going to be able to absorb all these policies from your competitors?

你要嘛只拿其中的一部分，要嘛你必須提高利率或改變保單的條款和條件，這似乎就像如果你要能夠吸收競爭對手的所有這些政策嗎？

Sure by us the policies have to come on our rates in our forms, right? So it's not like we're always going to be changing our underwriting.

當然，我們的保單必須以我們的形式以我們的費率計算，對吧？所以我們並不總是會改變我們的承保。

So you're right that we have already made some restrictions. As I said, we're being very selective in terms of which properties we want to write. So we're managing our geographic concentration. We've also stopped accepting risks that have prior losses were writing risks that are more financially stable.

所以你說得對，我們已經做了一些限制。正如我所說，我們對要寫入的屬性非常有選擇性。因此，我們正在管理我們的地理集中度。我們也停止接受先前損失過的風險，這些風險是財務上更穩定的風險。

So we're using the data we have on our book for on profitability by segment to make a decision on what business we want to write with, I know you had used the comments about the capital support for this growth.

因此，我們正在使用書中關於按細分市場盈利能力的數據來決定我們想要與哪些業務合作，我知道您已經使用了有關這種增長的資本支持的評論。

Do you just remind me the ability to change the quota share percentage? Is that something you can do kind of midstream or do you have to wait to the renewal of the policy?

您只是提醒我可以更改配額份額百分比嗎？這是您可以在中途做的事情還是必須等待保單更新？

So absolutely, we can do it midstream, but we can also take on additional quota share partners. So we our broker has already reached out to our reinsurance partners, and they have expressed an interest in continuing to support our growth via quota share, if needed. So we're in a good place there.

所以絕對，我們可以在中游進行，但我們也可以接受額外的配額份額合作夥伴。因此，我們的經紀人已經聯繫了我們的再保險合作夥伴，他們表示有興趣在需要時透過配額份額繼續支持我們的成長。所以我們處於一個很好的位置。

Great. Okay. And last question for Jen, you have the new cat reinsurance treaty and then just trying to get a feel for right. So given the new treaty, if you had a hypothetical situation where Sandy hit today, kind of, what would your net our net cost to Kingstone be after reinsurance.

偉大的。好的。Jen 的最後一個問題是，您有新的巨災再保險條約，然後只是試圖找到正確的感覺。因此，考慮到新條約，如果假設今天發生了桑迪襲擊，那麼在再保險之後，我們對金士頓的淨成本是多少。

Sure. So the company has been really consistent on the attachment and different layering of the reinsurance actually since Sandy came into New York. So ultimately, Sandy, at that point was a loss to our second layer didn't go all the way through the second layer. It would be the same here.

當然。因此，自從桑迪來到紐約以來，該公司在再保險的附加和不同層面上一直非常一致。所以最終，桑迪，在那時我們第二層的損失並沒有一路通過第二層。這裡也一樣。

We actually modeled that on an annual basis as we are placing our reinsurance, just making sure that we're able to cover those kinds of storm events. And as we continue to put new policies on the books. We're continuously modeling our P&L to determine if we if we're comfortable with the amount of reinsurance that we have, it's entirely possible that we might go back out to market and say, and we need to buy a little bit more up of top just to make ourselves comfortable with the, but the amount of policies that are coming on the books.

實際上，當我們進行再保險時，我們每年都會對此進行建模，只是確保我們能夠承保此類風暴事件。隨著我們繼續制定新政策。我們不斷對損益表進行建模，以確定我們是否對我們擁有的再保險金額感到滿意，我們完全有可能回到市場並說，我們需要多購買一點頂部只是為了讓我們對即將出現的政策數量感到滿意。

Okay. And with the retention changes and stuff, so if it's gone into the reinsurance layer, can if it doesn't flow through the top, can you give us an idea of the range, how much the loss would be in the net premium on a net basis?

好的。隨著保留的變化和其他東西，如果它進入再保險層，如果它不流經頂部，你能給我們一個關於範圍的想法嗎，淨保費中的損失是多少淨基礎？

On a net basis, for us from Sandy, we actually bought down on our reinsurance tower this year. So instead of attaching at $10 million, our reinsurance will catch at $5 million and we have some quota share underneath that. So Sandy event for us would be like a $4.75 million event rates.

從淨值來看，對於來自桑迪的我們來說，我們今年實際上買下了我們的再保險塔。因此，我們的再保險將不再是 1000 萬美元，而是 500 萬美元，我們在此之下有一些配額份額。因此，桑迪賽事對我們來說相當於 475 萬美元的賽事費率。

All right, guys. Thanks. Thanks for all the additional color.

好吧，夥計們。謝謝。感謝所有額外的顏色。

Thank you.

謝謝。

Jon Old, Long Meadow Investors.

喬恩‧奧爾德（Jon Old），長草甸投資者。

Thank you very much and Meryl And Jen, just as a long-term shareholder, just cashing with appreciation, thanks for all you've done.

非常感謝你們，Meryl 和 Jen，作為長期股東，帶著感激的心情兌現，感謝你們所做的一切。

Thanks Jon.

謝謝喬恩。

Yeah, that's just been fantastic, anyway. Just a question on the expense ratio. I noted in the presentation materials, you still hope to get to 29% number for the year. And I believe if I read it correctly, so that if I've done the math right, that would imply roughly 27% for the second half.

是的，無論如何，那真是太棒了。只是關於費用比率的問題。我在簡報資料中指出，您仍然希望今年達到 29% 的數字。我相信如果我讀得正確的話，那麼如果我計算得正確的話，這意味著下半年大約有 27%。

So just curious if that is that sort of becomes a new expense ratio? Or is there a reason it's seasonally higher in the beginning and maybe lower in the end or just plant long-term torment? Thank you very much.

所以只是好奇這是否會成為一種新的費用比率？還是有什麼原因導致它在開始時季節性較高，最終可能較低，或只是造成長期折磨？非常感謝。

So Jon, let me start and you could jump in. So when we laid out the 29% goal, I had a certain profitability target in mind and what we've been experiencing since our profit is so much greater, we have a higher expense for employee bonuses and for contingent commission for our producers.

喬恩，讓我開始吧，你也可以加入。因此，當我們制定 29% 的目標時，我心中有一個確定的獲利目標，以及我們所經歷的，因為我們的利潤要高得多，我們的員工獎金和生產商的或有佣金費用更高。

So that's really what's driving our 31% versus the 29% that I had laid out. That being said, our average premium is continuing to increase, and it is true that some expenses are front of front end loaded. So I do think the expense ratio will decline a bit, but I think it's unlikely we'll hit our 29% target for the year. Jen, anything else you want to add?

所以這確實是我們的 31% 與我所設定的 29% 的推動因素。話雖這麼說，我們的平均保費正在持續增加，而且確實有些費用是前端加載的。所以我確實認為費用比率會略有下降，但我認為我們不太可能達到今年 29% 的目標。珍，你還有什麼要補充的嗎？

No, that's perfect now.

不，現在就完美了。

Okay. Well, I'll just say that whatever bonuses you're going out are well deserved. Thank you very much.

好的。好吧，我只想說，無論你獲得什麼獎金，都是你應得的。非常感謝。

Thank you Jon.

謝謝喬恩。

Gabrielle McClure, Private Investor.

加布里埃爾·麥克盧爾，私人投資者。

Good morning. Jen. Good morning Meryl. And congratulations on a great quarter again.

早安.珍。早安，梅莉爾。恭喜您再次取得了出色的季度業績。

Thanks.

謝謝。

Yes, but I wonder if you can maybe you touched on this again, but I wanted to go back to that that comment you made in your midyear letter. I'm not sure I understand it, and I've kind of gone over a few times. So, but you say that you're quoting 2 times in new business policies, 3 times new business premium and you're up 9 times or sorry, I got 3 times the business policies and about 9 times on business premium.

是的，但我想知道你是否可以再次提到這一點，但我想回到你在年中信中發表的評論。我不確定我是否理解它，我已經看了好幾遍了。所以，但你說你在新業務保單中引用了2 倍，在新業務保費中引用了3 倍，而你的報價上漲了9 倍，或者抱歉，我得到了3 倍的業務保單和大約9 倍的業務保費。

I don't understand that is I don't know what I'm not getting that in terms of the outlook that Meryl, sir, I actually updated those numbers to come. So what I'm comparing is in July, once the list near a material change of these competitors exiting the market was announced, what I'm sharing is how much our business was impacted just in the month of July.

我不明白的是，我不知道我沒有得到什麼，梅麗爾，先生，我實際上更新了這些數字。所以我比較的是7月份，一旦這些競爭對手退出市場的重大變化名單公佈後，我分享的是我們的業務在7月份受到了多大的影響。

Now since then, it's increased. But at the time when I wrote that midyear shareholder letter, what we are seeing is our quotes doubled versus July of the previous year. And our new business policies were up 3 times versus July of the previous year.

現在，從那時起，它有所增加。但當我寫那封年中股東信時，我們看到的報價比去年 7 月翻了一番。我們的新業務政策比去年7月份成長了3倍。

Now it ended up being up 5 times, not 3 times and then the premium from those new business policies, it was up 9 times versus the amount of new business premium we wrote in the month of July was higher than July of 2023 by 9 times. So that's what I was trying to explain is that this change in the marketplace was monumental in terms of what it meant for Kingstone's growth trajectory. Does that make sense, Gabe?

現在它最終上漲了 5 倍，而不是 3 倍，然後這些新業務保單的保費上漲了 9 倍，而我們在 7 月寫的新業務保費金額比 2023 年 7 月高出 9 倍。這就是我試圖解釋的，市場的這項變化對於金士頓的成長軌跡來說具有里程碑意義。這樣有道理嗎，加布？

Yeah, I think so. Are you telling me that you took in for business premiums, you took in 9 times the amount of cash from the market that you did the prior July?

是的，我想是的。您是在告訴我，您收取的商業保費是您去年 7 月從市場上收取的現金金額的 9 倍嗎？

Well, not cash necessarily because not all policies are paid in full, but in terms of the new business premiums that we booked, yeah, it was 9 times the previous July.

嗯，不一定是現金，因為並非所有保單都全額支付，但就我們預訂的新業務保費而言，是的，是去年 7 月的 9 倍。

Okay. I got it. I appreciate that. That's all from me.

好的。我得到了它。我很欣賞這一點。這就是我的全部。

Okay. Thank you, Gabe.

好的。謝謝你，加布。

Thank you. And we have reached there are no further questions at this time. I would like to turn the floor back to Meryl Golden for closing remarks.

謝謝。目前我們已經確認沒有其他問題了。我想請梅莉爾·戈爾登致閉幕詞。

Thank you. It is an incredibly exciting time for Kingstone and we could not be more optimistic about the trajectory of our business.

謝謝。對於金士頓來說，這是一個令人難以置信的激動人心的時刻，我們對我們的業務發展軌跡非常樂觀。

Before ending the call, I'd like to share that we'll be presenting and hosting meetings at the Sidoti Conference on August 15 and 16. And in September, we'll be participating in the Janney Financial Services Conference in Washington, D.C. If you'd like to join either of those events, please reach out to their respective sales team, and thank you for joining our call today.

在結束通話之前，我想告訴大家，我們將在 8 月 15 日至 16 日的 Sidoti 會議上進行演示和主持會議。九月份，我們將參加在華盛頓特區舉行的詹尼金融服務會議。

Thank you. This does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.

謝謝。今天的電話會議到此結束。我們感謝您的參與，此時您可以斷開線路。