Kingstone Companies, Inc

Greetings. Welcome to Kingstone Company's second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Jen Gravel, CFO and Head of Investor Relations. Thank you. You may begin.

Thank you, and good morning, everyone. Yesterday afternoon, the company issued a press release detailing Kingston's second quarter results. On this call today, Kingston will make forward-looking statements regarding itself and its business. The forward-looking events and circumstances discussed on this call may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Kingston. For more information, please refer to the section titled Factors that May Affect Future Results and Financial Conditions in Part 1, Item 1A of the company's Form 10-K for the year ended December 31, 2022, along with a commentary on forward-looking statements at the end of the company's earnings release issued yesterday. In addition, our remarks today include references to non-GAAP measures. For reconciliation of our non-GAAP measures to GAAP figures, please see the tables in our earnings release. With that, I'd like to turn the call over to Kingstone's chairman and CEO, Mr. Barry Goldstein. Go ahead, Barry.

Thank you, and good morning, everyone. Thanks for joining Kingstone's second quarter earnings call. On Wednesday, the company announced that I would be stepping back and Merrill will become the company's next CEO effective October 1st. I will continue to serve as chairman of the company through the next annual shareholders' meeting which will be in August of 2024. I've been thinking about stepping back for some time, and I believe now is the right time to do it. And let me tell you why. It's been almost four years since Merrill laid out her plans to the Kingstone Board for modernizing the company. She told them how we needed to build new products, increase rates, and cut costs. She told them how we needed to gain efficiencies by retiring multiple old systems, and most importantly, what we needed to do was build a more diverse, better skilled, and experienced leadership team. She also saw the need to contain our exposure to spiking reinsurance rates. She has accomplished each of these items. We've been plagued with severe headwinds since. forces that absent her planning and execution would have overwhelmed us. It's my feeling that the worst is now behind us. Inflation has receded, moving back towards the Fed's 2% target. The economy is likely heading for a soft landing, allowing for interest rates to decline. We saw increases in reinsurance rates for the sixth consecutive year, with the two most recent years being double-digit increases, amounting to a cumulative total increase of over 65%, that together with spiking inflation rendered our rates inadequate to address our heightened loss costs. While the impact on us is also being felt industry-wide, we started early and adjusted by taking rate and cutting costs. We made the difficult decision to stop writing new business outside of New York, to recognize that the geographic expansion efforts that began in 2017 were resulting in big underwriting losses for the company that could not be fixed by taking rate or taking underwriting actions as we had attempted to do. Merrill's led the company's efforts to quickly reduce our book outside New York, and she will discuss this in a few minutes. But we are now turning the corner, knowing there is a great opportunity for Kingstone to again grow and expand by further writing more business in New York where we are already the number 15 writer of homeowners insurance, but only enjoy a 1.6% market share as of the end of last year. As a key part of Merrill's team, Jen joined us in January of this year and has had an immediate impact. as her experience gained in dealing with catastrophe exposed property underwriting in Florida is being put to work at Kingston. Together, they are a great team. So again, I believe the worst is behind us, and while there is much left to be done, we're on the right path, and this is the perfect time for me to step back, to leave it to Merrill and Jen and their capable teams, and allow them to move the company forward. Let me now turn the call over to Merrill. Merrill, go ahead. Thanks, Barry.