Kingstone completes 24/25 reinsurance placement with savings of $6mn

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Kingstone Companies, Inc., a US property and casualty insurance holding company, has finalised its 2024/2025 catastrophe reinsurance placement, purchasing a total cat limit of $275 million with savings of $6 million.

Jennifer Gravelle, Chief Financial Officer at Kingstone, said: “I am delighted to share that Kingstone has finalised its 2024/2025 catastrophe reinsurance placement. The company purchased $275 million of total catastrophe limit and reduced its first event retention to $5 million. The total cost is approximately 14% of projected direct premiums earned, a significant reduction from 19% for the previous treaty period.”

A number of measures taken by Kingstone last year allowed the company to lower its 24/25 reinsurance treaty cost by around $6 million.

Gravelle continued: “Last year, we tightened our underwriting and curtailed new business writings to better manage our catastrophe exposure and reduce our probable maximum loss (PML). Although reinsurance pricing increased, it was not as significant as projected.

“As a result of these efforts, and other factors, we were able to lower our 24/25 reinsurance treaty cost by approximately $6 million, improving our projected full-year earnings by approximately $0.21 per share and better protecting the Company with a lower first event retention.”

According to Gravelle, the savings will be reflected in the company’s 2024 third and fourth quarter results.

Meryl Golden, Chief Executive Officer of Kingstone, commented: “We appreciate the broad support we received from our valued reinsurance partners, with over 25 reinsurers participating in the program.

“In 2024, with the expectation of the reinsurance market softening and with confidence in our rates, we re-adjusted our underwriting guidelines to accept more new business. This has resulted in greater than 20% premium growth in our Core New York State business, which continues to accelerate, while we were also able to greatly reduce the cost of this year’s reinsurance placement.”

Earlier in the year, Kingstone announced the placement of its quota share reinsurance program for 2024. Under this agreement, the company is to cede 27% of its personal lines’ insurance written (down from 30% in 2023).

Additionally, a small 3% treaty was also placed into runoff, which will give additional coverage for the winter months..

For its 2023/2024 reinsurance program Kingstone purchased $325 million of total catastrophe limit and was able to maintain its retention at $10 million despite a hard market.

On a risk adjusted basis, the total cost accounted for 19% of March 31, 2023 premiums-in-force, 1 point higher than the prior year cost.

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