Kingstone Companies, Inc

Greetings and welcome to the Kingstone Company's first quarter 2026 earnings conference call. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Stephan Orbaugh, Kingstone's Investor Relations Representative. You may begin.

Thank you and good morning, everyone. Joining us today on the call will be President and Chief Executive Officer, Merrill Golden, and Vice President and Chief Financial Officer, Randy Patton. 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. Forward-looking statements speak only as of the date on which they are made, and Kingston 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 content. Additionally, today's remarks may include references to non-GAAP measures. For reconciliation of these non-GAAP measures to GAAP figures, please see the tables in the latest earnings release available on the company's website at www.kingstonecompanies.com. With that, it's my pleasure to turn the call over to Merrill Golden. Merrill?

Thanks, Stephan. Good morning, everyone, and thanks for joining our call. Let me start with the headlines. Our gap net combined ratio for the first quarter was a 112, and we had a net loss of 5.8 million, or 40 cents per diluted share. The quarter's results were driven by 11 winter catastrophe events across the Northeast, contributing 26 points to the loss ratio. The winter storm season in the first quarter was exceptionally severe for downstate New York, and ranked as the coldest and snowiest in 11 years. I'm extremely proud of the way our claims organization handled these catastrophe events with many staff members working nights and weekends for months to be accessible and help our policyholders return to their pre-loss condition. This level of catastrophe activity was contemplated in our full year guidance. Now let me turn to what I believe is the more important story this quarter the health of our underlying business. Last quarter, we introduced the underlying combined ratio as our primary operating metric, specifically to give investors a clearer view of the business we control, separated from the inherent volatility of catastrophe events. That framework was designed for exactly this type of quarter. And when you look at what we control, every key metric improved. Our underlying combined ratio improved by 5.1 points year-over-year to 88.3. The underlying loss ratio improved by over 4 points to 57.9. The expense ratio improved by about a point to 30.4. Direct premiums written grew by almost 20%. Net premiums earned grew by 28%. Investment income increased by 63%. And policies enforced were up over 7% from the prior year quarter and up 2.5% from year end. Let me give you more insight into the quarter. The 20% growth in direct premium written was driven by continued momentum in our New York personal lines business with new business policies growing 19% year over year, average renewal premium up 10%, and retention increasing by about a point. Policies in force grew over 7% to more than 82,000. A renewal rights deal contribute approximately 2.5 million in direct premiums written for the quarter, so inorganic growth contributed about 4%, and our organic growth in New York was a very strong 16%. While policy volume was more moderate in January and February, likely due to the severe weather. March represented one of our strongest months of new business value, reflecting sustained demand and the competitiveness of our product offering. The downstate New York market is still hard. While we have seen a few new market entrants and a bit of softening, we continue to see strong demand for our products from our producers. Net premiums earned growth, remains a powerful tailwind, increasing 28% in the quarter, primarily due to our reduced quota share, which allows us to retain a greater share of premiums and underwriting profits. As a reminder, for the 26th treaty year, we reduced our quota share from 16% to 5% for our core New York business, reflecting our confidence in the quality of the book. Non-catastrophe claim frequency continues to be very low, but up modestly from the prior year quarter and in line with the full year 2025. Adjusted for inflation, non-cat severity was comparable to the prior year quarter. During the quarter, we also recognized 2.3 points of favorable prior year reserve development. On an inception-to-date basis, our select homeowner claim frequency continues to be phenomenal and more than 33% lower than our legacy product, which bodes well for the future as select is only 60% of our policies enforced today. Our expense ratio improved by .9 points to 30.4%, reflecting continued operating leverage as we scale. Underwriting expense dollars are growing at a slower pace than the growth in net earned premium. To put this in context, from full year 23 to full year 25, we improved the combined ratio from 105 to 75, grew direct premiums written by nearly 40%, built a balance sheet with no long-term debt, and positioned the company for its next phase of growth. One elevated winter quarter does not change that trajectory. The structural improvements we have made in risk selection, in our operating model, and in our claims organization are durable. Turning to our strategic initiatives We remain on track to enter California in the second quarter on an excess and surplus lines basis. As we outlined in our shareholder letter in April, California is one of the largest homeowner markets in the country with the fastest growing excess and surplus lines market for homeowners. Our approach is to grow in a very deliberate and controlled fashion as we learn more about our pricing and risk selection. We'll be starting with a small number of agencies all of whom are existing Kingston partners in New York. Out of an abundance of conservatism, we have a 30% quota share in place for California. While the initial contribution to our results will be modest, with most of our volume continuing to come from New York, we believe California can become a significant contributor to our growth and profit long term. We also recently incorporated Kingston America Insurance Company, a new subsidiary domiciled in Connecticut that gives us flexibility to write business on both an admitted and non-admitted basis. We expect to begin writing admitted homeowners business in Connecticut in the third quarter. These initiatives are important milestones in our five-year plan to reach $500 million in direct written premium by year end 2029. A quick comment on the insurance bills introduced by Governor Hochul earlier this year focused on insurance affordability. To date, all activity has been focused on auto insurance. And as such, I am optimistic that there will be no changes during the budget process impacting property insurance this year. What continues to set Kingstone apart is clear. First, our select product continues to drive low claim frequency through improved risk selection and a low loss ratio by matching rate to risk. Second, our producer relationships generate strong retention and consistent new business flow. Third, our operating efficiency with an expense ratio now at 30% provides durable margin advantage. And last, our conservative reinsurance program ensures that catastrophe events are an earnings event, not a capital event. We will recover under our winter storm and catastrophe reinsurance programs during the quarter and are grateful to our reinsurance partners for their support. As far as our outlook, we are reaffirming all elements of our full 26 guidance, which was issued on March 5th. Our guidance for direct premiums written growth of 15 to 20%, an underlying combined ratio of 74 to 76, A catastrophe loss ratio of 7 to 10 points, diluted earnings per share of $2.20 to $2.90, and return on equity of 24% to 30% remain unchanged. The first quarter catastrophe activity was within the scenario set embedded in our guidance. As a reminder, each one point of catastrophe loss ratio has an approximate 13 cent per share impact on diluted earnings per share, which we provided last quarter to give investors the tools to model different scenarios. I want to emphasize that the earnings power of this franchise is concentrated in the second through fourth quarters, consistent with typical seasonality for our business. Our underlying performance trends, combined with continued rate adequacy and disciplined growth, position us well to deliver on our full year outlook. With that, I'll turn the call over to Randy Patton, our Chief Financial Officer, for a more detailed review of our results. Randy?