Kingstone Companies Inc (KINS) 2025 Q2 法說會逐字稿

Greetings, and welcome to the Kingstone Companies second-quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加金士頓公司 2025 年第二季財報電話會議。（操作員指示）提醒一下，本次會議正在錄音。

It is now my pleasure to introduce Karin Daly, Vice President, The Equity Group and Kingstone Investor Relations Representative. Thank you, Karin. You may now begin.

現在我很高興介紹 The Equity Group 副總裁兼 Kingstone 投資者關係代表 Karin Daly。謝謝你，卡琳。現在你可以開始了。

Thank you, Dana. Good morning, everyone. Joining us on the call today will be President and Chief Executive Officer, Meryl Golden.

謝謝你，達娜。大家早安。總裁兼執行長 Meryl Golden 將參加今天的電話會議。

On behalf of the company, I would like to note that this conference call may include 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. 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 Risk Factors in Part 1, Item 1A of the company's latest Form 10-K.

我代表公司指出，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、不確定性和其他可能導致實際結果與預測結果有重大差異的因素。前瞻性陳述僅代表其作出之日的觀點，金士頓不承擔更新所討論資訊的義務。欲了解更多信息，請參閱公司最新的10-K表格第1部分第1A項中“風險因素”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，今天的演講可能涉及非公認會計準則衡量指標。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?

說完這些，我很高興將電話轉給梅莉爾‧戈爾登 (Meryl Golden)。梅麗爾？

Thanks, Karin. Good morning, everyone, and thanks for joining our call today. Yesterday afternoon, we posted the most profitable quarter in Kingstone's history with $11.3 million in net income, an increase of 150% compared to the prior-year quarter. We delivered a stellar combined ratio of 71.5%, and with net premiums earned increasing 52% over last year, our underwriting profits were exceptional. Our quarterly net income translates to diluted earnings per share of $0.78 and an annualized return on equity for the quarter of 50.8%.

謝謝，卡琳。大家早安，感謝大家今天參加我們的電話會議。昨天下午，我們公佈了金士頓史上最賺錢的一個季度，淨收入達 1,130 萬美元，比去年同期成長 150%。我們的綜合成本率高達 71.5%，淨保費收入較去年同期成長 52%，承保利潤十分可觀。我們的季度淨收入相當於每股攤薄收益 0.78 美元，本季年化股本回報率為 50.8%。

With the exception of our incredible results in 2024, this quarter's net income was higher than any other full calendar year's profit in Kingstone's history, a remarkable achievement. Before covering our quarterly results in more detail, I want to recap some of the recent announcements we've made. First, I'm delighted that Randy Patten will be joining the company as CFO later this month. Randy comes from NEXT Insurance where he played a key role in facilitating the recent sale of the company to a subsidiary of Munich Re for $2.6 billion.

除了 2024 年令人難以置信的業績外，本季的淨收入高於金士頓歷史上任何其他全年的利潤，這是一項了不起的成就。在詳細介紹我們的季度業績之前，我想回顧一下我們最近發布的一些公告。首先，我很高興 Randy Patten 將於本月稍後加入公司擔任財務長。蘭迪來自 NEXT 保險公司，他在促成該公司最近以 26 億美元的價格出售給慕尼黑再保險公司的子公司的過程中發揮了關鍵作用。

Additionally, he has extensive prior experience as a public company finance leader, including a robust understanding of capital raising and M&A matters, and will play a critical role in providing strategic financial leadership for the company. Having a CFO of his caliber will be a tremendous asset for Kingstone, and I look forward to introducing Randy to you next quarter.

此外，他曾擔任上市公司財務主管，擁有豐富的經驗，包括對融資和併購事務的深入了解，並將在為公司提供策略財務領導方面發揮關鍵作用。擁有像他這樣有能力的財務長對於金士頓來說將是一筆巨大的財富，我期待下個季度向你們介紹蘭迪。

We've also had some changes on the Kingstone Board. Two of our long-term board members, Tim McFadden and Carla D'Andre, have completed their service after many years, and we are grateful for their numerous contributions. At the same time, Pranav Pasricha, an entrepreneurial leader with a strong track record of building insurance and technology companies joined the Board. Pranav's perspective will be invaluable as we drive forward our longer-term strategy.

金石董事會也進行了一些變動。我們的兩位長期董事會成員 Tim McFadden 和 Carla D'Andre 經過多年的任期後完成了他們的任期，我​​們感謝他們的眾多貢獻。同時，在創建保險和科技公司方面擁有豐富經驗的企業家領導者 Pranav Pasricha 加入了董事會。在我們推進長期策略的過程中，普拉納夫的觀點將非常寶貴。

I also want to reiterate how pleased I am to have reinstated our quarterly dividend. The company is in a strong position, delivering consistent top-tier underwriting results and generating significant cash flow from operations. With a robust capital position and King's inclusion in the Russell 2000, we believe it was the right time to restore the dividend. This decision reflects our commitment to rewarding our shareholders and demonstrates our confidence in the company's future growth and stability.

我還想重申，我很高興能恢復季度股息。該公司處於強勢地位，持續提供一流的承保業績，並從營運中產生大量現金流。憑藉強大的資本實力和被納入羅素 2000 指數的 King，我們認為現在是恢復股息的最佳時機。這項決定反映了我們回報股東的承諾，也顯示了我們對公司未來成長和穩定的信心。

Turning to quarterly results. Direct written premium grew 14% for the quarter with 17% growth in our core business, offset by the planned 42% reduction in noncore business. The growth in our core property premium was driven by a 21% increase in new business policy count, a 15% higher renewal average premium, and a slight uptick in retention. Core policies in force were up 11% from the prior-year quarter, led by a 20% increase in Homeowners, our largest line of business, offset by declines in our smaller product lines, particularly dwelling fire. The hard market conditions in our Downstate New York footprint have not changed materially, and while we are seeing some companies starting to write business again, or increasing their underwriting appetite, we have also seen others making further restrictions.

轉向季度業績。本季直接承保保費成長 14%，其中核心業務成長 17%，但非核心業務計畫減少 42%。我們的核心財產保險費的成長得益於新業務保單數量增加 21%、續保平均保費增加 15% 以及留存率略有上升。核心有效保單較上年同期增長 11%，其中，我們最大的業務線——房主險增長 20%，但被較小產品線（尤其是住宅火災險）的下降所抵消。我們紐約州南部地區的艱難市場條件並未發生實質變化，雖然我們看到一些公司開始重新開展業務或增加承保意願，但我們也看到其他公司採取了進一步的限制措施。

At this point, there have been no new market entrants, but certainly, there could be in the future. The growth in net earned premiums, a key driver of our increased operating income, has been and will continue to be a tailwind for our results throughout the year, exceeding 50% again for the second consecutive quarter of 2025. The increase is primarily driven by our reduced quota share, which allows us to keep a higher percentage of our premiums and underwriting profit. Additionally, the surge in new business written in the second half of last year continues to earn in, further contributing to the growth in earned premiums.

目前，還沒有新的市場進入者，但未來肯定會有。淨賺保費的成長是我們營業收入成長的主要驅動力，已經並將繼續成為我們全年業績的推動力，2025 年連續第二個季度再次超過 50%。成長的主要原因是我們減少了配額份額，這使我們能夠維持更高比例的保費和承保利潤。此外，去年下半年新業務的激增持續帶來收益，進一步促進了已賺保費的成長。

From a profitability perspective, our non-cat loss ratio improved by 8.4 percentage points to 38.7% in the second quarter of '25 from 47.1% in the prior-year quarter, driven by a material reduction in property frequency, primarily nonweather water losses, our largest peril. The frequency of this peril has been improving over time, and we are confident that this trend will continue. We believe that the mix shift we have been experiencing in our Select Homeowners program is the driver of our frequency improvement. As mentioned previously, our Select product pricing and underwriting has shifted our mix to more preferred risks with well-maintained homes, newer roofs, better insurance scores, and higher deductibles. Cumulative frequency for the Select Homeowners product has now decreased for 17 straight months.

從獲利能力角度來看，由於財產損失頻率大幅減少，主要是非天氣水損（我們最大的風險），我們的非巨災損失率從去年同期的 47.1% 改善了 8.4 個百分點至 25 年第二季的 38.7%。隨著時間的推移，這種危險的發生頻率一直在改善，我們相信這種趨勢將會持續下去。我們相信，我們在「精選房主」計畫中經歷的組合轉變是我們頻率改進的驅動力。如前所述，我們的精選產品定價和承保已將我們的組合轉向更優先的風險，包括維護良好的房屋、較新的屋頂、更好的保險評分和更高的免賠額。精選房主產品的累計頻率現已連續 17 個月下降。

Additionally, fire-related claim frequency also improved this quarter. For Homeowners, all perils combined, excluding catastrophes, our frequency was down 29% for the quarter. And while severity was elevated compared to the second quarter of last year, it was down from the first three months of 2025. The rise in severity was more than offset by lower frequency, resulting in favorable loss performance. Catastrophe losses are typically low in the second quarter, and this quarter, they contributed only 0.6 percentage points to the loss ratio.

此外，本季火災相關索賠頻率也有所改善。對於房主來說，除災難外，所有危險加在一起，本季我們的頻率下降了 29%。雖然與去年第二季相比嚴重程度有所上升，但與 2025 年前三個月相比有所下降。嚴重程度的上升被頻率的降低所抵消，從而產生了有利的損失表現。巨災損失通常在第二季較低，本季巨災損失僅佔損失率的 0.6 個百分點。

We also recognized 213,000 or 0.5 percentage points of favorable reserve development on prior-year losses. Our expense ratio was up 1.5 percentage points in the quarter to 32.7%, and up 0.7 percentage points to 32% year to date. This is driven by lower ceding commission on our primary quota share treaty, which is on a sliding scale based on the loss ratio. As the year progresses and if the loss ratio continues to improve as expected, ceding commission will continue to increase and our expense ratio will benefit as a result. We anticipate the expense ratio for full-year 2025 to be in line with 2024.

我們也確認了 213,000 或 0.5 個百分點的有利儲備發展，彌補了上一年的損失。我們的費用率在本季上升了 1.5 個百分點，達到 32.7%，年初至今上升了 0.7 個百分點，達到 32%。這是因為我們的主要配額份額條約的轉讓佣金較低，該佣金是根據損失率按比例浮動的。隨著時間的推移，如果損失率繼續如預期般改善，則分保佣金將繼續增加，我們的費用率也將因此受益。我們預計 2025 年全年費用率將與 2024 年持平。

Overall, the combined ratio of 71.5% was 6.7 percentage points better than the 78.2% combined ratio in the second quarter last year, and our operating income increased by 130%, up $6.1 million to $10.8 million. During the quarter, we finalized our catastrophe reinsurance purchase on favorable terms. We were able to increase the limit purchased by 57%, while incurring less than a 10% increase in price. This limit included multiyear protection of $125 million through the issuance of our first cat bond, and that helped manage the cost of the placement as we saw our rates overall decline by more than 10%. We also retained our first event retention of $5 million. In spite of the increase in coverage the cost per dollar of earned premium decreased by 5% from the prior treaty period.

總體而言，71.5% 的綜合比率比去年第二季的 78.2% 的綜合比率提高了 6.7 個百分點，我們的營業收入成長了 130%，增加了 610 萬美元，達到 1,080 萬美元。本季度，我們以優惠條件完成了巨災再保險的購買。我們能夠將購買限額提高 57%，而價格上漲幅度卻不到 10%。這筆限額包括透過發行我們的第一筆巨災債券提供 1.25 億美元的多年期保護，這有助於控製配售成本，因為我們看到我們的利率總體下降了 10% 以上。我們也保留了 500 萬美元的首次活動保留金。儘管保險範圍有所擴大，但每美元保費成本與先前的合約期間相比下降了 5%。

We offset this decline in rates with better balance sheet protection. To give you a sense of our protection, if a loss event similar to Superstorm Sandy were to hit with our current exposure base today, total loss cost would be approximately $95 million, of which $90 million would be paid by our reinsurers and $5 million would be paid by Kingstone. Our net investment income for the quarter increased 30% to $2.3 million, up from $1.8 million in the same period last year. Strong cash generation from operations continues to drive our investment portfolio growth.

我們透過更好的資產負債表保護來抵消利率的下降。為了讓您了解我們的保護程度，如果類似於超級風暴桑迪的損失事件以我們今天目前的風險敞口為基礎，總損失成本將約為 9500 萬美元，其中 9000 萬美元將由我們的再保險公司支付，500 萬美元將由金士頓支付。本季我們的淨投資收入從去年同期的 180 萬美元成長 30% 至 230 萬美元。強勁的營運現金流繼續推動我們的投資組合成長。

During the quarter, we invested an additional $17.7 million in highly rated mortgage-backed pass-through securities, collateralized mortgage obligations, and other asset-backed securities with a book yield of 5.6%, and an effective duration of 4.5 years. Increasing operating profits will continue to generate more cash, allowing us to grow our overall portfolio, while also investing in higher-yielding securities. This will result in higher investment income in the future. Our noncash investment assets yield an average of 4% with an effective duration of 4.3 years, and a weighted average maturity of 10.3 years. With the drop-in interest rates late in the quarter and year-to-date, our bond portfolio increased in value by $1 million and $3.2 million net of taxes for the quarter and year-to-date respectively.

本季度，我們額外投資了 1,770 萬美元於高評級的抵押貸款支持轉手證券、抵押貸款擔保債券和其他資產支持證券，帳面收益率為 5.6%，有效期限為 4.5 年。不斷增長的營業利潤將繼續產生更多的現金，使我們能夠擴大整體投資組合，同時投資於收益更高的證券。這將帶來未來更高的投資收益。我們的非現金投資資產平均收益率為 4%，有效期限為 4.3 年，加權平均期限為 10.3 年。隨著本季末和年初至今利率的下降，我們的債券投資組合價值在本季和年初至今分別增加了 100 萬美元和 320 萬美元（稅後）。

The unrealized gain is reflected in our balance sheet as an increase in other comprehensive income. Before turning to '25 guidance, I want to share more about our longer-term strategy. I am very pleased to announce our five-year goal of $0.5 billion in written premium, effectively doubling the size of the company relative to today. We have been diligently working on a strategic plan that outlines how we'll achieve this goal through a combination of organic initiatives and strategic inorganic opportunities in our Core state of New York, along with measured geographic expansion into new states. We will present this plan to you at an Investor Day in the future.

未實現收益在我們的​​資產負債表中反映為其他綜合收入的增加。在談到 25 年指導之前，我想分享更多有關我們的長期策略的資訊。我很高興地宣布，我們五年的目標是實現 5 億美元的保費收入，這實際上將使公司規模在目前基礎上翻倍。我們一直在努力製定一項戰略計劃，概述我們將如何透過結合我們的核心州紐約的有機舉措和戰略性無機機會以及向新州的有節制的地理擴張來實現這一目標。我們將在未來的投資者日向您介紹該計劃。

I want to emphasize that we intend to stick to our Core expertise of ensuring catastrophe-exposed properties. Relative to geographic expansion, we've conducted a thorough study of selected geographies and states with the help of industry-leading third-party advisers and overlaid important lessons learned from our past challenges to ensure that we do not make the same mistakes again. We plan to pursue prudent growth at a measured pace in our chosen new state, testing and validating rate adequacy commensurate with risk factors in our new geographies. Our current plan is to go live in two states in '26 and two additional states in '27. We are not sharing the specific states this time to preserve our competitive advantage but plan to do so in the coming quarters.

我想強調的是，我們打算堅持我們的核心專業知識，確保遭受災難的財產安全。關於地理擴張，我們在行業領先的第三方顧問的幫助下對選定的地區和州進行了徹底的研究，並總結了從過去的挑戰中吸取的重要教訓，以確保我們不會再犯同樣的錯誤。我們計劃在我們選擇的新州以穩健的步伐追求審慎的增長，測試和驗證與我們新地區的風險因素相稱的利率充足性。我們目前的計劃是於 2026 年在兩個州上線，並於 2027 年在另外兩個州上線。為了保持競爭優勢，我們這次不會分享具體的州，但計劃在未來幾季這樣做。

For background, in 2024, the broader Homeowners market across the US was about $173 billion in written premium, and New York represented only $8 billion or about 5% of the total. So the growth potential is enormous, both in our Core state of New York and in thoughtfully selected new states that would provide a very large addressable market for us. The Homeowners market overall is in a bit of a crisis, primarily as a result of inadequate pricing due to inflation and the rising cost of catastrophe events, the Homeowners line of business has lost money almost every year since 2017. This has resulted in a number of insurance companies restricting their writing in multiple states and creating a scarcity of options for consumers seeking Homeowners' coverage.

背景是，2024 年，美國更廣泛的房主市場已承保保費約為 1,730 億美元，而紐約僅佔 80 億美元，約佔總額的 5%。因此，無論是在我們核心的紐約州，還是在我們精心挑選的新州，成長潛力都是巨大的，這些新州將為我們提供非常大的潛在市場。整個房主市場處於危機之中，主要是由於通貨膨脹導致的定價不足以及災難事件成本上升，自 2017 年以來，房主業務線幾乎每年都在虧損。這導致許多保險公司在多個州限制其承保業務，並導致尋求房屋保險的消費者選擇稀缺。

While industry results for the Homeowners line of business improved in '24 to 99.7% combined ratio, it is expected to suffer its worst combined ratio in almost 15 years in 2025, due primarily to the California wildfires. Additionally, climate change is leading to both an increase in the frequency of catastrophe events and a rise in the severity of these events. This, coupled with substantial underwriting losses, has resulted in the top writers of Homeowners, the name brand insurers with dominant market share, to restrict new business writing and take deliberate action to reduce their exposure in higher catastrophe-prone geography. As such, there's a strong need for underwriting capacity, and we are confident that these market dynamics will allow Kingstone to expand opportunistically and achieve robust margins as we are doing today in our core state. State expansion will enable Kingstone to achieve a diversification benefit, which will mitigate our risk of geographic concentration, enhance risk management, and improve financial stability.

雖然 24 年間房主業務線的行業業績有所改善，綜合成本率達到 99.7%，但預計 2025 年該業務線的綜合成本率將達到近 15 年來的最差水平，主要原因是加州野火。此外，氣候變遷導致災難事件發生的頻率增加以及嚴重程度加劇。再加上巨額承保損失，這一問題已導致房屋保險的頂級承保人（佔據主導市場份額的知名保險公司）限制新業務承保，並採取刻意行動來減少其在高災害易發地區的風險敞口。因此，對承保能力的需求非常強烈，我們相信這些市場動態將使金士頓抓住機會擴張並實現強勁的利潤率，就像我們今天在核心州所做的那樣。州擴張將使金士頓實現多元化效益，從而降低我們的地理集中風險、加強風險管理並提高財務穩定性。

Let me share some thoughts on why I'm confident we can expand successfully. First, as just mentioned, the Homeowners market is distressed with fewer participants and demand exceeding supply. When Kingstone expanded previously, the market was saturated, and the company had to compete on price to get the business. Today, availability is the imperative, not price competitiveness. Second, we plan to offer coverage on an excess and surplus or E&S basis in the majority of these new geographies.

讓我分享一些我確信我們能夠成功擴張的想法。首先，正如剛才提到的，業主市場陷入困境，參與者減少，需求超過供應。金士頓先前擴張時，市場已經飽和，公司必須透過價格競爭來獲得業務。如今，可用性才是關鍵，而不是價格競爭力。其次，我們計劃在大多數新地區以超額和盈餘或 E&S 為基礎提供保險。

E&S product offerings are not subject to the same rate approval and forms regulations as those offered on an admitted basis. This means we'll have greater flexibility to set rates to meet our margin requirements and customized coverage to manage loss costs. We'll also be able to avoid any business that does not meet our strict underwriting and profit standards. Importantly, we have made significant advancements in our product design by more effectively leveraging data analytics and data science to build a more robust product. We'll be using our Select product for these new states, which has proven its effectiveness at properly matching rate to risk.

E&S 產品發行不受與以認可方式發行的產品相同的利率核准和形式規定的約束。這意味著我們將擁有更大的靈活性來設定利率以滿足我們的保證金要求和客製化覆蓋範圍以管理損失成本。我們還可以避免任何不符合我們嚴格的承保和利潤標準的業務。重要的是，我們透過更有效地利用數據分析和數據科學來建立更強大的產品，在產品設計方面取得了重大進展。我們將針對這些新州使用我們的 Select 產品，該產品已證明能夠有效匹配利率和風險。

When Kingstone expanded previously, the company did not have a product built using data science techniques, and this led to adverse selection. Kingstone is not the same company as in 2017. We have strengthened all aspects of our organization and assembled highly experienced team including in our claim's organization. We have never been stronger and now have a solid foundation to successfully execute this strategic expansion. We are currently finalizing the details of our plan, and I look forward to sharing it with you at an Investor Day in the future.

金士頓先前擴張時，並沒有採用數據科學技術打造的產品，導致了逆向選擇。金士頓不再是 2017 年的那家公司。我們加強了組織的各個方面，並組建了一個包括索賠組織在內的經驗豐富的團隊。我們從未像現在這樣強大，並且擁有成功實施這項策略擴張的堅實基礎。我們目前正在敲定計劃的細節，我期待在未來的投資者日與大家分享。

I am very optimistic about our future prospects, and we'll keep you apprised as we continue to make progress. And finally, with the first half of the year behind us, we've updated our guidance primarily to reflect our results this quarter, the AmGuard transaction and cost savings from our '25, '26 Catastrophe Reinsurance Placement. Relative to top line growth, we reduced the first 12-month premium estimate from the AmGuard renewal rights transaction to $12 million, now that we have a better understanding of our comparative rate levels, while regulation requires the book to be nonrenewed over a three-year period, we had assumed many policyholders would move in advance of being nonrenewed in last quarter's estimate. After gaining a better understanding of AmGuard's rate level, it became clear that there is not a compelling reason for policyholders to switch carriers until they get nonrenewed or AmGuard raises their prices further. As such, we expect a material premium benefit over a three-year period, with the benefit realized more proportionally over all three years rather than front-loaded as we had previously assumed.

我對我們的未來前景非常樂觀，我們會不斷向你們通報我們所取得的進展。最後，隨著上半年的過去，我們更新了我們的指導方針，主要是為了反映我們本季的業績、AmGuard 交易以及 25 年、26 年巨災再保險配置的成本節約。相對於營業額成長，我們將 AmGuard 續保權交易的第一個 12 個月保費估計值降低至 1,200 萬美元，現在我們對比較費率水準有了更好的了解，而法規要求三年內不得續保，我們曾假設許多保單持有人會在上個季度的估計中提前採取行動。在更好地了解了 AmGuard 的費率水平後，很明顯，在保險合約未續保或 AmGuard 進一步提高價格之前，投保人沒有令人信服的理由更換保險公司。因此，我們預計三年內將出現實質性的保費收益，並且收益將在三年內按比例更均衡地實現，而不是像我們之前假設的那樣先期實現。

We just started quoting policies with effective dates of September 1 and beyond. Given market conditions and the various product changes we have been making, we continue to plan for substantial organic growth as well. Regarding the profitability metrics, our first half underwriting results were exceptional, and we also achieved significant cost savings from our '25, '26 Catastrophe Reinsurance Placement relative to what was assumed in previous guidance. As a result, we are raising our profitability metrics for 2025. Our updated guidance is as follows: we are refining our Core business direct written premium growth to a range of 15% to 20% and based on approximately $187 million of net premiums earned, we expect to achieve a GAAP net combined ratio between 79% and 83%, basic earnings per share between $2.10 and $2.50, diluted earnings per share between $1.95 and $2.35, and return on equity between 30% and 38%. As a reminder, we have not assumed any major catastrophe events in this guidance.

我們剛開始引用生效日期為 9 月 1 日及以後的政策。鑑於市場狀況和我們一直在進行的各種產品變更，我們將繼續計劃實現大幅的有機成長。就獲利能力指標而言，我們上半年的承保業績非常出色，而且與先前的指引相比，我們在 25、26 年巨災再保險業務上也實現了顯著的成本節約。因此，我們正在提高 2025 年的獲利指標。我們的最新指引如下：我們正在將核心業務直接承保保費增長率調整至 15% 至 20% 之間，並基於約 1.87 億美元的淨保費收入，我們預計實現 GAAP 淨綜合成本率在 79% 至 83% 之間，每股基本收益在 2.10 美元至 2.50 美元之間，每股攤薄收益在 1.95 美元至 2.35 美元之間，股本回報率在 30% 至38% 之間。提醒一下，我們在本指南中沒有假設任何重大災難事件。

To conclude, we delivered another exceptional quarter with direct written premium growth in our core business -- with 17% direct written premium growth in our core business and increased profitability with our highest quarterly income in history. I have never been more optimistic about the trajectory of our business and feel confident that with our terrific team, we will continue to put up top-tier financial results, while also achieving our goal of doubling the size of the company in five years.

總而言之，我們又度過了一個出色的季度，核心業務的直接承保保費增長了 17%，盈利能力也提高了，季度收入創歷史新高。我從未對我們業務的發展軌跡如此樂觀，並且有信心，憑藉我們出色的團隊，我們將繼續取得一流的財務業績，同時實現五年內公司規模翻一番的目標。

With that, let's open it up for questions. Operator?

好了，讓我們開始提問吧。操作員？

(Operator Instructions) Bob Farnam, Janney Montgomery Scott.

（操作員指示）鮑伯法納姆、珍妮蒙哥馬利史考特。

I have a question on the reinsurance. So thank you for the details about kind of the $5 million net to you. I'm just curious, even if it's remote, what happens if it's a second event that occurs in your territory?

我對再保險有疑問。非常感謝您提供有關這筆 500 萬美元淨收入的詳細資訊。我只是好奇，即使它很遙遠，如果它是發生在你的領土上的第二個事件，會發生什麼？

Sure. Our second event retention is $9 million, so after tax, roughly $7 million.

當然。我們第二次活動的保留金額為 900 萬美元，稅後約為 700 萬美元。

Okay. And you have a reinstatement premium for that as well?

好的。您也需要支付恢復保費嗎？

Yes, we have a reinstatement premium for the first layer of our cat tower.

是的，我們的貓塔第一層有恢復原狀的保費。

Okay. And the second question was, given that you're expanding into new states, I know you're doing a lot of research into how to do that appropriately. I'm just curious, what impact is that going to have on your expense ratio in the near term before premium really starts to roll in the rightsizes?

好的。第二個問題是，鑑於您正在向新的州擴張，我知道您正在對如何適當地做到這一點進行大量研究。我只是好奇，在保費真正開始適度增長之前，這會對您的短期費用率產生什麼影響？

Yeah. I don't think it's going to have much of -- it will not have much of an impact at all. So it's -- we have to modify the product. We've hired some staff to help lead the expansion effort, but the expenses relative to expansion will be very small relative to our earned premium growth. So I don't expect our expense ratio to tick up as a result of our expansion efforts.

是的。我認為這不會產生太大的影響——根本不會產生太大的影響。所以——我們必須修改產品。我們已經僱用了一些員工來幫助領導擴張工作，但與擴張相關的費用相對於我們所賺取的保費增長而言將非常小。因此，我並不認為我們的支出率會因為我們的擴張努力而上升。

Okay. So I mean, a lot of times, companies say, well, we're spending a lot right now, but we haven't really generated the premium yet. So it's temporarily going to be a mismatch, but it sounds like it's not going to be much of an issue for Kingstone?

好的。所以我的意思是，很多時候，公司會說，我們現在花了很多錢，但我們還沒有真正產生溢價。所以暫時會出現不匹配的情況，但聽起來這對金士頓來說不是什麼大問題？

Yeah. Look, we've built the foundation already. We already have the product. We need to modify it, obviously, for these various states, but we have the actuarial team. We have the team in place today that's doing the research and leading this.

是的。看，我們已經打好了基礎。我們已經有該產品了。顯然，我們需要針對各州的情況進行修改，但我們有精算團隊。我們現在已經組建了團隊來進行研究並領導這項工作。

We have the claims team in place. So again, we might make a few hires, and there's certainly systems cost, but it's immaterial on a relative basis. I don't think we'll see an uptick.

我們已經成立了索賠團隊。所以，我們可能會招募一些員工，這肯定會產生系統成本，但相對而言這並不重要。我認為我們不會看到上漲。

Great. Okay. And the last bit is with the AmGuard transaction, if I read it right, you're only looking for maybe $12 million of premium from that $70-some-odd million book. I'm just curious if that's something that you -- it's lower than I expected. So is that something you found in that book that maybe not all that conducive to getting into Kingstone?

偉大的。好的。最後一點是關於 AmGuard 交易的，如果我沒看錯的話，你只需要從那本 7000 多萬美元的賬簿中獲得 1200 萬美元的溢價。我只是好奇這是否比我預期的要低。那麼，您是否發現那本書中的內容可能對進入金斯頓沒有多大幫助？

No. Look, last quarter, I knew after announcing the transaction that everyone would want to know what the approximate premium benefit would be. And so we came up with an estimate, but we had very little data. And to be honest with you, we still have very little data because as I mentioned, we just put out the first batch of quotes effective September 1. So we don't have certainty around what our conversion rate will be.

不。你看，上個季度，我在宣布交易後就知道，每個人都想知道大概的保費收益是多少。因此我們得出了一個估計，但我們的數據很少。老實說，我們的數據仍然很少，因為正如我所提到的，我們剛剛發布了自 9 月 1 日起生效的第一批報價。所以我們不確定我們的轉換率是多少。

But what we do have certainty around now is our rate level difference. And so we knew that AmGuard was taking a rate increase, but we didn't know where our rates would compare to AmGuard. So originally -- I still think we're going to write $25 million to $35 million, which was the estimate that I shared last quarter. But last quarter, I thought it would be more front loaded because I assumed since we're paying higher commission that producers would proactively move the book. But now that I see that our rates are higher, I think that the producers and consumers will wait until they're being nonrenewed in order to join Kingstone.

但現在我們可以確定的是我們的利率水準差異。因此，我們知道 AmGuard 的費率會提高，但我們不知道我們的費率與 AmGuard 相比如何。所以最初——我仍然認為我們將寫 2500 萬至 3500 萬美元，這是我上個季度分享的估計。但上個季度，我認為它會更加前期投入，因為我認為既然我們支付了更高的佣金，製片人就會主動推銷這本書。但現在我看到我們的費率更高了，我認為生產商和消費者會等到合約不再續約後再加入金士頓。

So it's the same amount of total premium just spread more proportionately over three years rather than front-loaded as I had assumed last quarter. Does that make sense, Bob?

因此，總保費金額相同，只是在三年內按比例分攤，而不是像我上個季度假設的那樣先付。這樣有道理嗎，鮑伯？

Yeah. No, that's good color. That was one of the questions. I mean, I just saw that it had come down from what you initially thought. So I just kind of wanted to ask about it, so good explanation.

是的。不，那是好顏色。這是其中一個疑問。我的意思是，我剛剛發現它已經低於你最初的想法了。所以我只是想問這個問題，很好的解釋。

Gabriel McClure, Private Investor.

加布里埃爾·麥克盧爾 (Gabriel McClure)，私人投資者。

Congratulations on an amazing quarter.

恭喜您取得如此出色的季度業績。

Yeah. So I guess, you just answered my AmGuard question. Thank you for that. And also the hurricane exposure, so I just have one question left for you.

是的。所以我想，你剛剛回答了我關於 AmGuard 的問題。謝謝你。還有颶風的影響，所以我只剩下一個問題要問你。

And so you announced the dividend reinstatement, and thank you for that. All the shareholders are grateful for that. But -- and as I kind of look at the company and the trajectory that you're on and basically a simplified way of saying that the money is starting to pile up, and I know we got a lot of growth ahead of us. But how does your capital allocation priorities look? How do you think about all that and share buybacks in the mix going forward?

因此，您宣布恢復派發股息，對此我表示感謝。所有股東都對此心存感激。但是——當我審視公司和你們的發展軌跡時，基本上可以簡單地說，資金開始積累，我知道我們未來會有很大的成長。但是您的資本配置優先順序是怎麼樣的呢？您如何看待這一切以及未來的股票回購？

Sure. So I've been asked the question in the past about share buybacks, and I'm going to be very consistent. We have the opportunity to use our capital, and we have no plans at this point to do a share buyback. So we -- in terms of our capital strategy, we may need more capital to execute on our plan. And if needed, we'll look caterfully at all alternatives.

當然。過去有人問我有關股票回購的問題，我將會非常一致地回答這個問題。我們有機會利用我們的資本，目前我們還沒有回購股票的計劃。因此，就我們的資本策略而言，我們可能需要更多的資本來執行我們的計劃。如果需要，我們會認真考慮所有替代方案。

But the profitability we've achieved over the last seven quarters has put us in this phenomenal place where we've paid off our debt. We've replenished our surplus. We bought more reinsurance. We've reduced our quota share, and now we've restated the dividend to shareholders. So we feel like we have sufficient capital to fund our growth in the near and midterm.

但我們在過去七個季度中實現的盈利已經讓我們處於一個驚人的境地，我們已經還清了債務。我們已經補充了剩餘物資。我們買了更多的再保險。我們已經減少了我們的配額份額，現在我們向股東重申了股息。因此，我們覺得我們有足夠的資本來資助我們近期和中期的成長。

And we just think we're in a really good place. I hope that answered your question.

我們只是認為我們處於一個非常好的位置。我希望這回答了你的問題。

It does.

確實如此。

Thank you. There's no further questions at this time. I will turn the call back over to Meryl Golden for closing remarks.

謝謝。目前沒有其他問題。我將把電話轉回給梅莉爾·戈爾登 (Meryl Golden) 做最後發言。

Terrific. Well, thank you for joining the call today. The entire team at Kingstone is both proud and energized by the strong results we've delivered, and we look forward to building Kingstone into a multistate carrier poised for meaningful growth and profitability in the years ahead. Have a great day.

了不起。好吧，感謝您今天參加電話會議。金士頓的整個團隊都為我們取得的強勁業績感到自豪和振奮，我們期待著將金士頓打造成為一家在未來幾年內實現有意義增長和盈利的跨州運營商。祝你有美好的一天。

Ladies and gentlemen, 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，今天的活動到此結束。現在您可以斷開線路或退出網路直播，享受剩餘的一天。