Kingstone Announces 2019 First Quarter Catastrophe Losses and Reorganization of Claims Department

KINGSTON, N.Y.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/hashtag/dividend?src=hash” target=”_blank”gt;#dividendlt;/agt;–Kingstone Companies, Inc. (Nasdaq:KINS) (the “Company” or “Kingstone”),
a multi-line regional property and casualty insurance holding company,
and parent of Kingstone Insurance Company (“KICO”) today makes two
announcements:

Catastrophe Losses in Q1-KICO
estimates ultimate net losses from multiple winter catastrophe events of
approximately $5 million pre-tax, resulting in a 17 point impact on the
quarterly combined ratio. No catastrophe reinsurance recovery is
expected as no single event reached the KICO retention of $5 million.
The catastrophe events are estimated to have a $0.37 after-tax impact on
net income per share for the quarter. Relative to the prior year, net
losses from winter cat events are higher than those recorded in 2018 due
to the reduction in the quota share rate from 20% to 10% in July 2018.

Claims Department Reorganization-“Following
multiple quarters of disappointing results from our Claims Department,
KICO engaged a consultant to do a comprehensive review of our claims
operations,” said Dale Thatcher, Kingstone CEO. “The final report
concluded that there was much room for improvement in claims handling
through adopting and implementing a number of industry best practices
including the need to acquire more skilled and experienced staff. The
process began with our hiring of a former colleague of mine, Bill
O’Brien, as our new Chief Claims Officer as announced earlier this
month. The result of the review gives rise for the need to strengthen
our claims case reserves by approximately $2.5 million and our IBNR
reserves by an additional $2.5 million for a total reserve charge of
$5.0 million. The overall impact of this reserve strengthening is 17
points on the quarterly combined ratio. Although this will reduce our
quarterly earnings and book value per share by approximately $0.37, it
will substantially strengthen our balance sheet and position us well for
the future.”

Updated Guidance

As a result of the two charges noted above, Kingstone now expects to end
the full year with a combined ratio excluding catastrophe losses of 88%
to 91% and catastrophe losses of 4 to 5 points.

About Kingstone Companies, Inc.

Kingstone is a northeast regional property and casualty insurance
holding company whose principal operating subsidiary is Kingstone
Insurance Company (“KICO”). KICO is a multi-line carrier writing
business through retail and wholesale agents and brokers. KICO offers
primarily personal lines insurance products to individuals as well as
various small business coverages. Actively writing in New York, New
Jersey, Rhode Island, Massachusetts, Connecticut and Pennsylvania,
Kingstone is also licensed (but not yet active) in New Hampshire and
Maine.

Forward-Looking Statement

Statements in this press release may contain “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of historical
facts, may be forward-looking statements. These statements are based on
management’s current expectations and are subject to uncertainty and
changes in circumstances. These statements involve risks and
uncertainties that could cause actual results to differ materially from
those included in forward-looking statements due to a variety of
factors. For more details on factors that could affect expectations, see
Part II, Item 7 of our Annual Report on Form 10-K for the year ended
December 31, 2018 under “Factors That May Affect Future Results and
Financial Condition.” Kingstone undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.

Contacts

Investor Relations:
Amanda M. Goldstein
Investor Relations
Director
(516) 960-1319