Kingstone Companies Inc (KINS) 2025 Q4 法說會逐字稿

Greetings, and welcome to the Kingstone Company's fourth quarter and full year 2025 earnings conference call. As a reminder, this conference is being recorded.

各位好，歡迎參加 Kingstone Company 2025 年第四季及全年財報電話會議。提醒各位，本次會議將被錄音。

I would now like to turn the call over to your host, Stefan Norbom, Kingstone Investor Relations representative. Thank you. You may begin.

現在我想把電話會議交給今天的主持人，Kingstone 投資人關係代表 Stefan Norbom。謝謝。您可以開始了。

Thank you, and good morning, everyone. Joining us on the call today will be President and Chief Executive Officer, Meryl Golden, Chief Financial Officer. Randy Patten.

謝謝，各位早安。今天與會的有總裁兼執行長 Meryl Golden，以及財務長 Randy Patten。

On behalf of the company, I would like to note, this conference may contain forward-looking statements, which involve known and unknown risks and uncertainties and other factors that may cause results -- actual results to be materially different from projected results.

我謹代表公司提醒，本次會議可能包含前瞻性陳述，涉及已知與未知的風險、不確定性及其他因素，可能導致實際結果與預期結果出現重大差異。

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 and Part 1 Item 1A of the company's latest Form 10-K.

前瞻性陳述僅截至其作出之日有效，Kingstone 不承擔更新所討論資訊的任何義務。更多資訊請參閱公司最新 Form 10-K 中題為「風險因素」以及第一部分第 1A 項的章節。

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 available at the company's website at www.kingstonecompanies.com.

此外，今天的發言可能會提及非 GAAP 指標。如需將這些非 GAAP 指標與 GAAP 數字進行調節，請參閱公司網站 www.kingstonecompanies.com 上最新財報新聞稿中的表格。

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

接下來，我很高興把電話會議交給 Meryl Golden。Meryl？

Thanks, Stefan. Good morning, everyone, and thanks for joining our call. I am delighted to share the results of our most profitable quarter and year in Kingstone's history. I want to thank the amazing Kingstone team and our select producers for making it possible. Let me start with the headlines.

謝謝你，Stefan。各位早安，感謝加入我們的電話會議。我很高興與各位分享 Kingstone 歷史上最獲利的一季與一年之成果。我要感謝優秀的 Kingstone 團隊以及我們精選的生產者（合作通路），讓這一切成為可能。我先從重點摘要開始。

In the fourth quarter, we delivered net income of $14.8 million, diluted earnings per share of $1.03, diluted operating earnings per share of $1.08 and a GAAP net combined ratio of 64.2%, and an annualized return on equity of 51%.

第四季我們實現淨利 1,480 萬美元，稀釋後每股盈餘 1.03 美元，稀釋後營運每股盈餘 1.08 美元，GAAP 淨綜合比率 64.2%，以及年化股東權益報酬率 51%。

For the full year, net income more than doubled to $40.8 million diluted earnings per share increased 95% to $2.88, and our return on equity was 43%. These results exceeded the guidance we provided in November. I am particularly proud that from year-end 2023 to year-end 2025, we grew direct premiums written 39%, while improving our combined ratio by 30 points, these results are structural, not simply weather-driven, and they validate the transformation we have executed.

全年淨利增加逾一倍至 4,080 萬美元，稀釋後每股盈餘成長 95% 至 2.88 美元，股東權益報酬率為 43%。這些結果超出我們在 11 月提供的指引。我尤其自豪的是，從 2023 年底到 2025 年底，我們的直接簽單保費成長 39%，同時綜合比率改善 30 個點；這些成果是結構性的，而非僅由天候因素所驅動，並驗證了我們所推動的轉型。

What sets Kingstone apart and what drove these results is clear. First, our Select product, now 57% of policies in force compared to 45% one year ago, continues to improve risk selection, properly matching rate to risk and driving lower claims frequency. Second, our producer relationships generate strong retention and consistent new business flow. Third, our operating efficiency with a net expense ratio that improved from 41% in 2021 to 30% in 2025 provides durable margin advantage and last, our conservative financial position with no debt and robust reinsurance means we can grow with confidence.

讓 Kingstone 脫穎而出並推動這些成果的原因很清楚。第一，我們的 Select 產品目前占在保保單的 57%，高於一年前的 45%，持續改善風險篩選，更精準地讓費率與風險相匹配，並帶動更低的理賠發生頻率。第二，我們與生產者（合作通路）的關係帶來強勁的續保率與穩定的新業務流量。第三，我們的營運效率提升，淨費用率從 2021 年的 41% 改善至 2025 年的 30%，帶來可持續的利潤率優勢；最後，我們保守的財務狀況—零負債與強健的再保安排—意味著我們能夠有信心地成長。

Turning to the quarter. Direct premiums written grew 14% and to $82.8 million, driven by higher average premiums and strong retention. For the full year, direct premiums written grew 15% to $277.8 million and our New York personal lines policies in force grew over 7%. The hard market conditions in our Downstate New York footprint have not changed materially. Demand from our producers remain strong, supported by policies from the Guard renewal rights agreement, which we began writing in September. New business policy count has increased sequentially from Q2 and in Q4 grew 25% over Q3.

回到本季表現。直接簽單保費成長 14% 至 8,280 萬美元，主要受平均保費提高與強勁續保所帶動。全年直接簽單保費成長 15% 至 2.778 億美元，我們在紐約的個人險在保保單數成長超過 7%。我們在紐約州下州（Downstate New York）主要市場的硬市場環境並未出現實質變化。生產者（合作通路）需求仍然強勁，並受到 Guard 續保權協議項下保單的支持；我們自 9 月開始承保該等保單。新業務保單件數自第二季以來逐季增加，且第四季較第三季成長 25%。

In this environment, what separates the winners from the rest is straightforward, highly segmented products to better assess risk, low expenses, claims execution and deep producer relationships. We have built these advantages, and we will not chase volume at the expense of underwriting discipline. Net earned premium growth remains a powerful tailwind. And Net premiums earned increased 38% in the fourth quarter and 46% for the full year, primarily due to our reduced quota share, which allows us to retain a greater share of premium and underwriting profits.

在這樣的環境下，勝出者與其他公司的差異很直接：高度分眾的產品以更好評估風險、低費用、理賠執行力，以及深厚的生產者（合作通路）關係。我們已建立這些優勢，且不會為了追求規模而犧牲核保紀律。淨已賺保費的成長仍是強勁的順風。第四季淨已賺保費成長 38%，全年成長 46%，主要因我們降低了配額分保（quota share），使我們能保留更高比例的保費與核保利潤。

The decision to reduce our quota share reflects our confidence in the quality of our book and that our underwriting results warrant retaining more premium. As such, we have reduced our quota share even further for 2026 and net earned premium growth will continue to be a tailwind.

降低配額分保的決策反映我們對保單組合品質的信心，以及我們的核保成果足以支持保留更多保費。因此，我們在 2026 年進一步降低配額分保，淨已賺保費成長將持續成為順風。

On underwriting, our fourth quarter net combined ratio of 64.2% reflects exceptional performance across the board. The underlying loss ratio was 34.7%, an improvement of over 14 points from the prior year quarter driven by meaningfully lower claim frequency. The improvement in frequency, particularly for nonweather water, our largest peril is a trend we have shared throughout the year, and we attributed to the effectiveness of risk selection in our Select product.

在核保方面，第四季 64.2% 的淨綜合比率反映各面向皆有卓越表現。基礎損失率為 34.7%，較去年同期改善超過 14 個點，主要由理賠發生頻率顯著下降所帶動。頻率的改善，特別是非天候因素的水損（我們最大的風險類別），是我們全年持續分享的趨勢；我們將其歸因於 Select 產品在風險篩選上的有效性。

During the quarter, we also recognized the benefit from continuing improvements in our claims operations were faster cycle times and providing earlier visibility into ultimate property claim costs. For the full year, our underlying loss ratio improved nearly 4 points to 44.4%, and our catastrophe loss ratio was just 1.2 points. I want to be direct, while we benefited from very low catastrophe activity in 2025, our underlying performance improved materially even with a normalized catastrophe load, our full year combined ratio would have been in the low 80s, reflecting the differentiated platform we have built.

本季我們也確認到理賠營運持續改善所帶來的效益，包括更快的處理週期，以及更早掌握最終財產險理賠成本的能見度。全年基礎損失率改善近 4 個點至 44.4%，而巨災損失率僅 1.2 個點。我想直言：雖然 2025 年我們受惠於極低的巨災活動，但即便以常態化的巨災負荷來看，我們的基礎表現仍有實質改善；在此情境下，我們全年綜合比率將落在 80% 出頭，反映我們所打造的差異化平台。

As we shared in the second quarter, we have set a five-year goal of $500 million in direct premiums written by year-end 2029, approximately doubling the size of the company through continued growth in New York measured expansion into new markets and strategic inorganic opportunities. I am pleased to share that our first new market will be California, which we will be entering in the second quarter of '26 and on an excess and surplus lines basis.

如同我們在第二季所分享的，我們設定了五年目標：到 2029 年底直接簽單保費達 5 億美元，透過在紐約持續成長、審慎擴張至新市場，以及策略性的外部併購／合作機會，使公司規模約翻倍。我很高興分享，我們第一個新市場將是加州；我們將於 2026 年第二季以超額與剩餘險（E&S）方式進入。

California is one of the largest homeowners markets with $15 billion in written premium, almost double the size of New York and the largest E&S homeowners market in the country, where the supply-demand imbalance for homeowners' coverage continues to grow. The E&S approach gives us the flexibility to price wildfire risk using forward-looking models to set prices to achieve our margin requirements and to apply strict underwriting standards including rigorous property-level risk selection and real-time accumulation management.

加州是最大的住宅險市場之一，簽單保費約 150 億美元，幾乎是紐約的兩倍；同時也是全美最大的 E&S 住宅險市場，住宅保險保障的供需失衡仍在擴大。E&S 的做法讓我們能以更具彈性的方式，使用前瞻性模型為野火風險定價，以設定符合我們利潤率要求的價格，並採用嚴格的核保標準，包括嚴謹的單一物件層級風險篩選與即時的累積風險管理。

We will start small, consistent with our disciplined approach and scale as we gain confidence in our pricing and product. The initial contribution from California will be modest less than 5% of our '26 premium, with the vast majority of our volume continuing to come from New York, but the opportunity is enormous. And California will become a large contributor to our growth over time.

我們將從小規模開始，符合我們一貫的紀律作風，並在對定價與產品更有信心後逐步擴大。加州在 2026 年的初期貢獻將相對有限，保費占比低於 5%；我們的絕大多數業務量仍將來自紐約，但機會非常龐大。隨著時間推進，加州將成為我們成長的重要貢獻來源。

Turning to our outlook for '26. I want to explain important change in how we're reframing our outlook for this year because we think it will help investors better understand our business. Starting this year, we're introducing the underlying combined ratio, which excludes catastrophe losses and prior year reserve development as our primary operating lens. We define it as the underlying loss ratio plus the net expense ratio. This metric isolates the performance we control including pricing, risk selection, claims management, and operating efficiency from the inherent volatility of catastrophe events.

接著談談我們對於 '26 年的展望。我想說明我們今年如何重新框架展望的一項重要變化，因為我們認為這將有助於投資人更好地理解我們的業務。自今年起，我們引入「基礎綜合比率」（underlying combined ratio）作為主要的營運觀察指標，該指標排除巨災損失與前期年度準備金發展（prior year reserve development）。我們將其定義為基礎損失率加上淨費用率。此指標可將我們可控的績效（包括定價、風險選擇、理賠管理與營運效率）與巨災事件固有的波動性區隔開來。

In 2025, our underlying combined ratio was 74.4%, an improvement of 5.1 points from 79.5% in 2024. That improvement is structural. It reflects Select product penetration, earned rate adequacy and operating leverage is independent of catastrophic weather events. At the same time, our record combined ratio of 75% benefited from an outlier low catastrophe loss ratio of just 1.2 points. To put that in context, the six-year average cat loss ratio from 2019 through '24 is 7.1 points.

2025 年，我們的基礎綜合比率為 74.4%，較 2024 年的 79.5% 改善 5.1 個百分點。這項改善具有結構性。它反映了 Select 產品滲透率、已賺保費費率充足性（earned rate adequacy）以及營運槓桿，且不受巨災天氣事件影響。同時，我們創紀錄的 75% 綜合比率也受惠於異常偏低的巨災損失率，僅 1.2 個百分點。作為對照，2019 年至 '24 年的六年平均巨災損失率為 7.1 個百分點。

Both '24 and '25 were well below the average, including two consecutive mild winters. So when you look at our '26 guidance, I want to be very clear about the bridge, the headline year-over-year change in earnings per share and return on equity is driven almost entirely by our assumption of a higher-than-normal catastrophe load not by any deterioration in our underlying business.

'24 與 '25 年都遠低於平均值，其中包括連續兩個溫和的冬季。因此，當你看我們的 '26 年指引時，我想非常清楚地說明這個銜接：每股盈餘與股東權益報酬率的年對年表面變動，幾乎完全是由我們對高於正常水準的巨災負荷（catastrophe load）的假設所驅動，而非我們基礎業務有任何惡化。

In fact, our underlying combined ratio guidance of 74% to 76% is comparable to 2025. The headline story is straightforward. The controllable business is healthy and growing. The year-over-year change reflects cat normalization. Here is our updated guidance for fiscal year 2026.

事實上，我們的基礎綜合比率指引 74% 至 76% 與 2025 年相當。整體重點很直接。可控的業務健康且持續成長。年對年變動反映的是巨災回歸常態（cat normalization）。以下是我們更新後的 2026 會計年度指引。

Direct premiums written growth of 16% to 20% and an underlying combined ratio, excluding catastrophes and prior year reserve development of 74% to 76%, a catastrophe loss assumption of 7 to 10 points which is at or above the six-year historical average and reflects the elevated winter storm activity we experienced in the first quarter of 2026 and a net combined ratio of 81 to 86.

直接簽單保費（direct premiums written）成長 16% 至 20%；基礎綜合比率（排除巨災與前期年度準備金發展）為 74% 至 76%；巨災損失假設為 7 至 10 個百分點，該水準等同或高於六年歷史平均，並反映我們在 2026 年第一季所經歷的冬季風暴活動升高；淨綜合比率（net combined ratio）為 81 至 86。

Diluted earnings per share of $2.20 to $2.90 with a midpoint of $2.55 reflects an increase at the midpoint relative to our initial outlook and the benefit of a lower quota share session for the 26th treaty year. Our 16% to 20% direct premium growth target help keeps us on pace toward our five-year goal of $500 million in direct premiums written by year-end 2029.

稀釋後每股盈餘（diluted earnings per share）為 2.20 至 2.90 美元，中位數 2.55 美元；該中位數相較我們最初展望有所上調，並反映 2026 合約年度（treaty year）較低的比例分保（quota share）分出比例所帶來的效益。我們 16% 至 20% 的直接保費成長目標，有助於我們朝五年目標邁進：在 2029 年底前將直接簽單保費提升至 5 億美元。

I want to give investors the tools to model different catastrophe scenarios. On an illustrative basis, and this is not guided, each 1 point of catastrophe loss ratio has approximately a $0.13 impact on diluted earnings per share. So if you want to see what our earnings power looks like at fiscal year 2025 cat levels of 1.2 points, the illustrative answer is approximately $3.53 per diluted share, which represents 23% growth year over year. That is the underlying trajectory of this business.

我希望提供投資人用來建模不同巨災情境的工具。以示意方式（此非指引），巨災損失率每增加 1 個百分點，對稀釋後每股盈餘約有 0.13 美元的影響。因此，若你想看在 2025 會計年度巨災水準（1.2 個百分點）下，我們的獲利能力會是什麼樣子，示意答案約為每股稀釋後 3.53 美元，代表年對年成長 23%。這就是本業務的基礎成長軌跡。

I want to emphasize that weather is unpredictable, and our 2026 guidance assumes a higher-than-average catastrophe year given the winter weather in the first quarter of 2026. As a reminder, our catastrophe reinsurance program limits our maximum first event loss to $5 million pretax or approximately $0.27 per share after tax, whether from a hurricane or a winter storm. We will refine our outlook as the year unfolds.

我想強調天氣難以預測，而我們的 2026 年指引在考量 2026 年第一季冬季天氣的情況下，假設將是高於平均的巨災年度。提醒一下，我們的巨災再保計畫將單一事件的最大損失限制在稅前 500 萬美元，或稅後約每股 0.27 美元，不論是颶風或冬季風暴皆然。我們將隨著年度進展持續修正展望。

Before I hand it to Randy, I want to briefly address the regulatory proposals in New York regarding homeowner insurer profitability. We share the goal of affordability for consumers, and we are monitoring these proposals closely and engaging constructively through industry bodies.

在我把電話交給 Randy 之前，我想簡要談談紐約州關於住宅保險公司獲利能力的監管提案。我們認同讓消費者負擔得起的目標，並正密切關注這些提案，且透過產業組織以建設性的方式參與溝通。

We believe any final legislation will need to account for the inherent volatility of catastrophe-exposed property insurance and the importance of maintaining carrier capacity and availability for New York homeowners.

我們認為，任何最終立法都需要考量暴露於巨災風險之財產保險的固有波動性，以及維持承保公司對紐約州屋主之承保能力與可得性的重要性。

We will continue to execute with discipline, advance our measured expansion road map and allocate capital prudently to drive sustained profitable growth. I remain highly confident in Kingstone's strategic direction and fully committed to creating long-term shareholder value.

我們將持續以紀律執行、推進審慎擴張的路線圖，並審慎配置資本，以推動可持續的獲利成長。我對 Kingstone 的策略方向仍然高度有信心，並全力致力於創造長期股東價值。

With that, I'll turn the call over to Randy Patten, our Chief Financial Officer, for a more detailed review of our results. Randy?

接下來，我把電話交給我們的財務長 Randy Patten，請他更詳細地回顧我們的業績。Randy？

Thank you, Meryl. Good morning, again, everyone. The fourth quarter was our most profitable quarter in the company's history and our ninth consecutive quarter of profitability. During the quarter, we reported net income of $14.8 million, diluted earnings per share of $1.03, a 64.2% combined ratio and an annualized return on equity of 51%. For the full year, net income was $40.8 million, more than doubling the prior year and the most profitable in company history.

謝謝你，Meryl。各位早安，再次問候。第四季是公司史上最獲利的一季，也是我們連續第九季獲利。本季我們報告淨利 1,480 萬美元、稀釋後每股盈餘 1.03 美元、綜合比率 64.2%，以及年化股東權益報酬率 51%。全年淨利為 4,080 萬美元，較前一年增加逾一倍，並創公司史上最高獲利。

Performance was driven by strong net earned premium growth as a reduced quota share in our second half of 2024 new business surge continue to earn in. This is combined with very low catastrophe losses, favorable frequency trends and lower expenses aided by adjustment to the sliding scale ceding commissions due to both an improvement in the attritional loss ratio and low catastrophe losses.

績效主要由強勁的淨已賺保費（net earned premium）成長所帶動，原因是我們在 2024 年下半年新業務激增後，因比例分保降低而使相關保費持續轉為已賺。此外，巨災損失極低、出險頻率趨勢有利，以及費用下降亦提供助力；費用下降部分受惠於滑動比例分出佣金（sliding scale ceding commissions）的調整，該調整源於一般性損失率（attritional loss ratio）的改善與巨災損失偏低。

As a reminder, the quota share reduction from 27% to 16% for the 2025 treaty year reflected the improved quality of our book and increased our projected earnings per share by approximately $0.25 for 2025. For the 2026 treaty year, we have further reduced our quota share cession from 16% to 5%, reflecting continued confidence in the quality of our underwriting portfolio and capital position to support our growth. This reduction is expected to increase projected earnings per share by approximately $0.20 for 2026 and incorporated in our updated guidance ranges.

提醒一下，2025 合約年度的比例分保由 27% 降至 16%，反映我們保單組合品質提升，並使我們對 2025 年的預估每股盈餘提高約 0.25 美元。對於 2026 合約年度，我們進一步將比例分保分出比例由 16% 降至 5%，反映我們對承保組合品質與資本狀況（足以支持成長）的持續信心。此一降低預期將使 2026 年預估每股盈餘增加約 0.20 美元，並已納入我們更新後的指引區間。

Our net investment income for the quarter in bed 65% to $3 million, up from $1.9 million last year. For the whole year, we achieved a 44% increase reaching $9.8 million. The momentum is due to robust cash generation from operations, which has enabled us to grow our investment portfolio to $309.7 million and benefit from higher fixed income yields.

本季我們的淨投資收益增加 65% 至 300 萬美元，高於去年同期的 190 萬美元。全年則成長 44%，達到 980 萬美元。這股動能來自營運帶來的強勁現金創造，使我們得以將投資組合擴大至 3.097 億美元，並受惠於較高的固定收益殖利率。

We also continue to reposition a portion of the portfolio to capitalize on attractive new money yields of 4.7% in the fourth quarter. While we remain conservative in our investment strategy, we are actively seeking opportunities to enhance our portfolio yield and duration. As of December 31, 2025, our fixed income yielded 4.3% with an effective duration of 4.4 years, up from and 3.7% in 3.9 years at December 31, 2024, an increase of 60 basis points and a half year, respectively.

我們也持續重新配置部分投資組合，以把握第四季 4.7% 的具吸引力新資金殖利率。在維持保守投資策略的同時，我們正積極尋找提升投資組合殖利率與存續期間（duration）的機會。截至 2025 年 12 月 31 日，我們的固定收益投資殖利率為 4.3%，有效存續期間為 4.4 年；相較於 2024 年 12 月 31 日的 3.7% 與 3.9 年，分別增加 60 個基點與 0.5 年。

During the quarter, we recognized an additional $1 million in sliding scale contingent ceding commissions under our quota share treaty was about half the adjustment coming from lower attritional losses and half from lower catastrophe losses which contributed a 1.9 percentage point decrease in the 27.9% expense ratio reported in the fourth quarter.

在本季度，我們在配額分保合約下確認了額外100萬美元的滑動比例或有分出佣金；其中約一半的調整來自較低的日常（attritional）損失，另一半來自較低的巨災損失，這些因素共同促成第四季所報告的27.9%費用率下降1.9個百分點。

For the full year, 2025 reported an expense ratio of 30%, an improvement of 1.3 percentage points from the prior year, reaching 30% for the expense ratio is an important milestone for the company. As a reminder, the company's expense ratio was 41% in 2021. And in four years, we have successfully lowered the expense ratio by 11 points through several expense initiatives.

就全年而言，2025年所報告的費用率為30%，較前一年改善1.3個百分點；費用率達到30%對公司而言是一個重要的里程碑。提醒一下，公司在2021年的費用率為41%。在四年內，我們透過多項費用控管措施，成功將費用率降低了11個百分點。

I'd now like to provide some detail on the guidance framework Meryl introduce. For the full year 2025, our underlying combined ratio was 74.4% comprised of a 44.4% underlying loss ratio and a 30% expense ratio. This was a 5.1 point improvement from 79.5% in the prior year.

接下來我想就Meryl所介紹的指引框架提供一些細節。2025年全年，我們的基礎綜合率為74.4%，由44.4%的基礎損失率與30%的費用率所構成。相較前一年的79.5%，改善了5.1個百分點。

For the full year of 2026, we are guiding to an underlying combined ratio of 74% to 76%, reflecting continued benefits from our Select product and operating leverage. Our full year 2025 catastrophe loss ratio of 1.2 points was well below the six-year historical average of 7.1 points for the 2019 through 2024 period.

對於2026年全年，我們指引基礎綜合率為74%至76%，反映我們的Select產品與營運槓桿帶來的持續效益。我們2025年全年巨災損失率為1.2個百分點，遠低於2019至2024年期間六年歷史平均的7.1個百分點。

Our full year 2026 guidance includes 7 to 10 points of catastrophe losses, which is above our historical average and incorporates the elevated winter storm activity experienced during the first quarter of 2026. The difference between our full year 2025 reported combined ratio of 75% and our full year 2026 guided range of 81% to 86% is mostly attributable to the inclusion of above-average catastrophe losses and minimal change to our underlying combined ratio.

我們2026年全年指引包含7至10個百分點的巨災損失，高於我們的歷史平均，並納入2026年第一季所經歷的冬季風暴活動升高的影響。2025年全年所報告的75%綜合率與2026年指引區間81%至86%之間的差異，主要歸因於納入高於平均的巨災損失，而基礎綜合率僅有極小變動。

I will conclude my portion of the call today discussing our capital position. We have no debt at the holding company. Shareholder equity ended the year at $122.7 million an increase of 84% during the year. Book value per diluted share increased 75% to $8.28 and book sale, excluding accumulated other comprehensive income increased 56% to $8.69. For 2025, return on equity is 43%, an increase of nearly 7 percentage points from the prior year.

我將以討論我們的資本狀況來結束我今天的部分。我們控股公司層級沒有負債。股東權益於年底為1.227億美元，全年增加84%。稀釋後每股帳面價值增加75%至8.28美元；剔除累積其他綜合損益後的每股帳面價值增加56%至8.69美元。2025年股東權益報酬率為43%，較前一年提高近7個百分點。

Given this foundation and our outlook, we declared our third consecutive quarterly dividend during the first quarter of 2026 and have ample capital to fund the disciplined growth initiatives that Meryl outlined.

基於這樣的基礎與我們的展望，我們在2026年第一季宣布連續第三次的季度股利，並擁有充足資本以支持Meryl所概述的審慎成長計畫。

With that, I will now turn the call back to Meryl for closing remarks.

接下來，我把電話交回給Meryl作結語。

Thanks, Randy. I just want to underscore one thing. The results we're sharing today reflect the durable competitive advantages we have built in underwriting in our producer relationships and in our operating model. We are entering '26 with a strong foundation, a clear road map for profitable growth and the financial flexibility to execute. We look forward to updating you as the year progresses.

謝謝你，Randy。我只想強調一件事。我們今天分享的成果，反映了我們在核保、在與經紀/代理人（producer）的關係，以及在營運模式上所建立的持久競爭優勢。我們以穩固的基礎進入2026年，具備清晰的獲利成長路線圖，以及可執行的財務彈性。我們期待在今年進展過程中持續向各位更新。

Operator, we're ready for questions.

接線員，我們準備開始回答問題。

(Operator Instructions) Bob Farnam, Brean Capital.

(接線員指示) Bob Farnam，Brean Capital。

I have a couple of questions. One, let's just talk about California first. Because obviously, California risks are not quite the same as Downstate, New York risks. So I kind of wanted to know. And I think this is going to be your first foray into kind of the excess and surplus lines basis or writing things.

我有幾個問題。第一個，我們先談加州。因為很明顯，加州的風險與紐約下州（Downstate）的風險不太一樣。所以我想了解一下。而且我想這會是你們首次以超額及剩餘線（E&S）的方式進入，或開始承保這類業務。

So I just want to know like how do you see the differences in the risks? How do you expect performance-wise? I'm just trying to get a little bit more color as to how California may be different from New York.

所以我想知道你們如何看待風險差異？在績效表現方面你們預期如何？我只是想更具體了解一下，加州可能會如何不同於紐約。

Sure. So we hired an actuarial consulting firm earlier this year to look at the landscape of all the catastrophe-exposed property markets for Kingstone to expand, and California came out on top because it's a very large market. It's dislocated and it's completely diversifying for Kingstone relative to New York.

當然。所以我們在今年稍早聘請了一家精算顧問公司，檢視所有對巨災曝險的財產險市場版圖，以供Kingstone擴張之用；加州之所以名列第一，是因為它是一個非常大的市場。它目前處於失衡狀態，而且相對於紐約而言，對Kingstone具有完全的分散化效果。

So our plan is to enter with the same differentiators as we have in New York. We're going to be using our Select product and that same firm that helped us build the Select product is helping us modify it to be appropriate for the California market.

因此，我們的計畫是以與在紐約相同的差異化優勢進入。我們將使用我們的Select產品，而當初協助我們打造Select產品的同一家機構，也正在協助我們進行調整，使其適用於加州市場。

We are entering as E&S, so we can have a highly segmented product and use best-in-class models for underwriting and rating of wildfire risk and for risk aggregation. And we're fortunate that we have some underwriters and some claims employees that have experience in California. So that will be really helpful to us.

我們將以E&S方式進入，因此我們可以提供高度分眾的產品，並採用同級最佳模型來進行野火風險的核保與費率訂定，以及風險聚合管理。而且我們很幸運擁有一些具備加州經驗的核保人員與理賠員工。這對我們會非常有幫助。

But mostly the point I want to make about our entry into California is that we will be disciplined. Our plan is to enter small, less than 5% of our premium for 2026, make sure we understand the market and we're doing everything right before we expand.

但我想強調我們進入加州最重要的一點是：我們會保持紀律。我們的計畫是先小規模進入，2026年加州保費占比低於5%，先確保我們了解市場並把所有事情都做對，再進一步擴張。

And if I read right in the presentation, you have a 30% quota share on the California business. Is that right?

如果我沒看錯簡報，你們對加州業務有30%的配額分保。對嗎？

That's correct. On an abundance of caution. We have a 30% quota share for California initially.

沒錯。出於高度審慎。我們一開始對加州設定30%的配額分保。

And are you looking to -- you write, all across California? Or are you looking like Northern California, Southern California, or coastal California by where the wildfires could possibly be? I'm just kind of curious, obviously, in New York, you have a specific targeted area. So I didn't know if California would be similar.

那你們是打算——在加州全境承保嗎？還是會看北加州、南加州，或沿海地區等野火可能發生的區域？我只是有點好奇；很明顯在紐約你們有特定的目標區域。所以我不確定加州是否也會類似。

Yes. So in California, we're going to write all across the state. It's really important to manage our concentration in any area of California to manage the wildfire exposure, and we'll be doing that in real time. And we're focused on low to moderate wildfire risk.

是的。在加州，我們會在全州範圍承保。為了管理野火曝險，對加州任何地區的集中度管理都非常重要，我們會即時進行管理。而我們聚焦於低至中度野火風險。

Okay. And same kind of target size value for homes as in New York.

了解。那目標房屋的規模與價值，和在紐約一樣嗎？

Same as New York.

和紐約一樣。

Just change track a little bit here. So your expense ratio, obviously, you've had a lot of progress getting it down to 30%. Do you see -- like where do you see a happy run rate as to where that expense ratio you can get to? Are you pretty much where you should be? Or do you think you could still squeak some improvement out of that?

我稍微換個話題。你們的費用率顯然已經有很大進展，降到30%。你們怎麼看——你們認為費用率理想的穩態水準（run rate）會在哪裡？你們基本上已經到達應有水準了嗎？還是你們覺得仍能再擠出一些改善空間？

Randy, do you want to take that?

Randy，你想回答這個嗎？

Bob, so reaching a 30% expense ratio is a huge milestone for the company. As you know, we -- if you look back to 2021, we were at 41%. And I think with some economies of scale, we can get that expense ratio down, possibly another half to a full point. But it's kind of where we expect it to be kind of in that 29% to 30% range is where we're ultimately, we're comfortable with that expense range.

Bob，所以費用率達到30%對公司而言是一個重大的里程碑。如你所知，我們——如果回頭看2021年，當時是41%。我認為隨著一些規模經濟，我們可以把費用率再降下來，可能再降半個到一個百分點。但大致上，我們預期會落在29%到30%的區間，最終我們對這個費用區間是感到舒適的。

I just want to add, Bob, that most of the expense to enter California has already been incurred in terms of developing the product, programming the product. And we'll likely need to add some staff, but a modest amount of staff as we continue to grow in California. So I think we're going to get scale economies like the platform we've built is scalable.

我只想補充一下，Bob，為了進入加州，在產品開發、產品程式設計方面的大部分費用其實都已經發生了。隨著我們在加州持續成長，我們可能需要增加一些人員，但增員幅度會是適度的。所以我認為我們會獲得規模經濟，因為我們建立的平台是可擴展的。

Yes. I saw that in the presentation you're talking about your ability to scale up is not going to have a whole lot of impact on the expenses at this point. So that's great.

是的。我在簡報中看到你提到，你們目前擴大規模的能力不會對費用造成太大的影響。所以這很棒。

Last question for me. I probably ask you every quarter. But obviously, with such a profitable business, it has been a change in competition at this point in New York. It's just something that baffles me that you don't have a whole bunch of other companies trying to get into the same market to try to capture the same profitability.

我最後一個問題。我大概每一季都會問你。但顯然，面對這麼高獲利的業務，目前在紐約的競爭情況有所變化。我只是覺得很困惑，為什麼沒有一大堆其他公司想進入同一個市場，去爭取同樣的獲利能力。

Yes. I mean we've been hearing lately about different companies planning to entering the state, but let's not forget that competition has come and gone in New York and Kingstone has been able to execute regardless of the competitive environment. We are in a really good place in Downstate New York. We have our Select product that properly matches rate to risk, low expenses, we're providing great service to our producers and our policyholders and we have very deep and broad producer relations. So I feel confident we can compete successfully with whoever is entering New York State.

是的。我的意思是，我們最近確實聽到有不同公司計畫進入本州，但別忘了，競爭在紐約一直是來來去去，而Kingstone無論競爭環境如何都能有效執行。我們在紐約州下州地區處於非常好的位置。我們有Select產品，能夠適切地做到費率與風險匹配、費用低，並為我們的經紀人與保戶提供優質服務，而且我們與經紀人的關係非常深且廣。因此我有信心，無論誰進入紐約州，我們都能成功競爭。

Congrats on a great year. That's it for me.

恭喜你們有個很棒的一年。我這邊就到這裡。

(Operator Instructions) Gabriel McClure, Private Investor.

(接線員指示) Gabriel McClure，私人投資人。

Congrats on an outstanding quarter.

恭喜你們有個非常出色的季度。

Thanks Gabe.

謝謝你，Gabe。

So I think Bob asked most of the questions that I had for you. Just want to circle back on the exposure limits on the policies in California. Can you remind us again what our exposure limits are on our New York policies?

所以我想Bob已經問了我大部分想問的問題。我只是想再回到加州保單的曝險限額。你能再提醒我們一次，我們在紐約保單的曝險限額是多少嗎？

Sure. We just in New York, increased the available coverage A or value of the home to $5 million. So we had been operating with a max of $3.5 million for all of last year, and we've just increased to $5 million. And that would be our plan for California as well. We're going to start off with a cap that's a bit lower and as we gain confidence in our product, we'll open up to $5 million as well.

當然。我們在紐約剛把可提供的A項保障額度（或房屋價值）提高到500萬美元。所以去年一整年我們的上限是350萬美元，而我們剛提高到500萬美元。加州也會採取同樣的規劃。我們會先以稍低的上限起步，隨著我們對產品更有信心，也會開放到500萬美元。

Okay. Got it. And then I think in your prepared remarks, you made a little bit of reference to the winter storm that you all had a couple of weeks ago. Did we have some noticeable claim activity from that storm? It looked pretty bad from out here in Arizona.

好的。了解。然後我想在你們事先準備的發言中，你稍微提到你們在幾週前遇到的冬季風暴。那場風暴有帶來一些明顯的理賠活動嗎？從我在亞利桑那這邊看起來情況相當糟。

Yes Gabe, it's obvious you're not in the Northeast because it has been a bad winter. We haven't just had one winter storm. There have actually been seven catastrophe events that have been declared since January 23. So the one thing I want to say is our claims department has been working so hard, I'm so proud of the way they've managed this catastrophe event and the service that they've been able to provide to our policyholders. And our estimate for the winter storm losses has been included in our guidance for 2026.

是的，Gabe，很明顯你不在東北部，因為這個冬天確實很糟。我們不只是遇到一場冬季風暴。自1月23日以來，實際上已宣布了七起災難事件。我想說的是，我們的理賠部門非常努力地工作，我對他們處理這次災難事件的方式，以及他們能為保戶提供的服務感到非常自豪。而我們對冬季風暴損失的估計已納入我們2026年的指引之中。

So we've mentioned that we're planning for an at or above average catastrophe last year of 7 to 10 points, and that includes the catastrophe activity from Q1. Hopefully, the winter is over, and there won't be any more catastrophes declared.

所以我們提到，我們規劃的災難損失為去年平均水準或高於平均水準的7到10個點，而其中也包含第一季的災難活動。希望冬天已經結束，不會再宣布任何新的災難事件。

Yes, I hope so. Got it Okay. And then just last thing. The California opportunity is super exciting and interesting. I know Bob answered really or asked most of my questions already, but is there anything interesting or anecdotal that you have about the California market that you might want to share.

是的，我也希望如此。了解，好。然後最後一點。加州的機會非常令人興奮也很有意思。我知道Bob已經回答或問了我大部分的問題，但你是否有任何關於加州市場有趣的或軼事性的觀察可以分享？

I think what is really important to understand is that the market is in need of capacity. And many people think that's because of wildfire. And certainly, wildfire is a major risk for California, but the primary issue in California is the regulatory environment, which precludes companies from charging adequate prices for the underlying exposure. So as an E&S writer, we're not subject to that same regulation. So it gives us a real advantage.

我認為真正重要的是要理解，市場需要承保容量。很多人認為這是因為野火。當然，野火對加州而言是重大風險，但加州的主要問題其實是監管環境，它使得公司無法就底層曝險收取足夠的價格。因此，作為E&S承保人，我們不受同樣的監管約束。這讓我們具備真正的優勢。

And that's why you're seeing in California the E&S market for homeowners is growing faster than any other place in the United States. So I think it's a terrific opportunity to highlight the differentiators that Kingstone brings to the market, particularly relative to pricing sophistication and producer relationships and I'm really excited to start writing business there in Q2.

也因此你會看到，在加州，住宅保險的E&S市場成長速度比美國其他任何地方都更快。所以我認為這是一個極佳的機會，去凸顯Kingstone帶給市場的差異化優勢，特別是在定價精細度與經紀人關係方面；我也非常期待在第二季開始在那裡承作業務。

(Operator Instructions) We're showing no additional questions in queue at this time. I'd like to turn the floor back over to Ms. Golden for closing comments.

(接線員指示) 目前佇列中顯示沒有其他問題。我想把時間交回給Golden女士做結語。

Great. Thank you, everyone, for joining us today. It's a really exciting time for Kingstone, and we appreciate your support. Have a wonderful day.

很好。感謝各位今天加入我們。對Kingstone而言，這是一個非常令人振奮的時刻，我們也感謝各位的支持。祝各位有美好的一天。

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

各位女士、先生，今天的活動到此結束。您現在可以中斷電話連線並登出網路直播，祝您今天剩下的時間愉快。