noodls browser compatibility check

The security settings of your browser are blocking the execution of scripts.

To use noodls, javascript support must be enabled. Please change your browser's security settings to enable javascript.

If you have changed your browser's security settings, you can click here.

related announcements

Company News

Economy, Business and Finance

Kingstone Companies Inc.

03/16/2026 | Press release | Distributed by Public on 03/16/2026 12:17

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company ("KICO"). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2024 was the 12th largest writer of homeowners insurance in New York. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. For the years ended December 31, 2025 and 2024, respectively, 98.0% and 96.0% of KICO's direct written premiums came from the New York policies.

In addition, our subsidiary, Cosi Agency, Inc. ("Cosi"), a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies. Cosi retains the profit between the commission revenue received and the commission expense paid ("Net Cosi Revenue"). Commission expense is reduced by Net Cosi Revenue. Cosi-related operating expenses are minimal and are included in other operating expenses.

We derive substantially all of our revenue from KICO, which includes revenues from earned premiums, ceding commissions from quota share reinsurance, net investment income generated from its portfolio, and net realized gains and losses on investment securities. All of KICO's insurance policies are written for a one year term. Earned premiums represent premiums received from insureds, which are recognized as revenue over the period of time that insurance coverage is provided (i.e., ratably over the one year life of the policy). A significant period of time can elapse from the receipt of insurance premiums to the payment of insurance claims. During this time, KICO invests the premiums, earns investment income and generates net realized and unrealized investment gains and losses on investments. The Holding Company earns investment income from its cash holdings.

Our expenses include the insurance underwriting expenses of KICO and other operating expenses. Insurance companies incur a significant amount of their total expenses from losses incurred by policyholders, which are referred to as claims. In settling these claims, various loss adjustment expenses ("LAE") are incurred such as insurance adjusters' fees and legal expenses. In addition, insurance companies incur policy acquisition costs. Policy acquisition costs include commissions paid to producers, premium taxes, and other expenses related to the underwriting process, including employees' compensation and benefits.

Other operating expenses include our corporate expenses as a holding company. These corporate expenses include legal and auditing fees, executive employment costs and equity compensation, directors' fees, and other costs directly associated with being a public company.

Principal Revenue and Expense Items

Net premiums earned:Net premiums earned is the earned portion of our written premiums, less that portion of premium that is ceded to third party reinsurers under reinsurance agreements. The amount ceded under these reinsurance agreements is based on a contractual formula contained in the individual reinsurance agreement. Insurance premiums are earned on a pro rata basis over the term of the policy. At the end of each reporting period, premiums written that are not earned are classified as unearned premiums and are earned in subsequent periods over the remaining term of the policy. Our insurance policies have a term of one year. Accordingly, for a one-year policy written on July 1, 2025, we would earn half of the premiums in 2025 and the other half in 2026.

Ceding commission revenue:Commissions on reinsurance premiums ceded to quota share treaties are earned in a manner consistent with the recognition of the direct acquisition costs of the underlying insurance policies, generally on a pro-rata basis over the terms of the policies reinsured.

Net investment income and net gains (losses) on investments:We invest in cash and cash equivalents, short-term investments, fixed-maturity and equity securities, and other investments. Our net investment income includes interest and dividends earned on our invested assets, less investment expenses. Net realized gains and losses on our investments are reported separately from our net investment income. Net realized gains occur when our investment securities are sold for more than their costs or amortized costs, as applicable. Net realized losses occur when our investment securities are sold for less than their costs or amortized costs, as applicable, or are written down as a result of other-than-temporary impairment. We classify our fixed-maturity securities as either available-for-sale or held-to-maturity. Net unrealized gains

(losses) on those securities classified as available-for-sale are reported separately within accumulated other comprehensive (loss) income on our balance sheet while our equity securities and other investments report changes in fair value through earnings. See Note 2 in the accompanying consolidated financial statements for a further discussion of our accounting policies following Item 16 of this Annual Report.

Other income:We recognize installment fee income and fees charged to reinstate a policy after it has been cancelled for non-payment.

Loss and loss adjustment expenses incurred:Loss and LAE incurred represent our largest expense item, and for any given reporting period include estimates of future claim payments, changes in those estimates from prior reporting periods and costs associated with investigating, defending and servicing claims. These expenses fluctuate based on the amount and types of risks we insure. We record loss and LAE related to estimates of future claim payments based on case-by-case valuations, statistical analyses and actuarial procedures. We seek to establish all reserves at the most likely ultimate liability based on our historical claims experience. It is typical for certain claims to take several years to settle and we revise our estimates as we receive additional information on such claims. Our ability to estimate loss and LAE accurately at the time of pricing our insurance policies is a critical factor affecting our profitability.

Commission expenses and other underwriting expenses:Other underwriting expenses include policy acquisition costs and other expenses related to the underwriting of policies. Policy acquisition costs represent the costs of originating new insurance policies that vary with, and are primarily related to, the production of insurance policies (principally commissions, premium taxes and certain underwriting salaries). Policy acquisition costs are deferred and recognized as expense as the related premiums are earned. Other underwriting expenses represent general and administrative expenses of our insurance business and are comprised of other costs associated with our insurance activities such as regulatory fees, telecommunication and technology costs, occupancy costs, employment costs, and legal and auditing fees.

Other operating expenses:Other operating expenses include the corporate expenses of our holding company, Kingstone Companies, Inc. These expenses include executive employment costs, legal and auditing fees, and other costs directly associated with being a public company.

Stock-based compensation:Non-cash equity compensation includes the fair value of stock grants issued to our directors, officers and employees, and amortization of stock options issued to the same.

Depreciation and amortization:Depreciation and amortization includes the amortization of intangibles related to the acquisition of KICO, depreciation of the real estate used in KICO's operations, as well as depreciation of capital expenditures for information technology projects, office equipment and furniture.

Interest expense:Interest expense represents amounts we incur on our outstanding indebtedness at the applicable interest rates. Interest expense also includes amortization of debt discount and issuance costs.

Income tax expense:We incur federal income tax expense on our consolidated statement of operations as well as state income tax expense for our non-insurance underwriting subsidiaries.

Product Lines

Our product lines include the following:

Personal lines:Our largest line of business is personal lines, consisting of homeowners, dwelling fire, cooperative/condominium, renters, and personal umbrella policies.

Commercial liability: Through July 2019, we offered businessowners policies, which consist primarily of small business retail, service, and office risks, with limited property exposures. We also wrote artisan's liability policies for small independent contractors with smaller sized workforces. In addition, we wrote special multi-peril policies for larger and more specialized businessowners risks, including those with limited residential exposures. Further, we offered commercial umbrella policies written above our supporting commercial lines policies.

In May 2019, due to the poor performance of this line we placed a moratorium on new commercial lines and new commercial umbrella submissions while we further reviewed this business. In July 2019, due to the continuing poor performance of these lines, we made the decision to no longer underwrite commercial lines or commercial umbrella risks. In-force policies as of July 31, 2019 for these lines were non-renewed at the end of their annual terms. As of December 31, 2025 and 2024, there were no commercial liability policies in-force. As of December 31, 2025, these expired policies

represent approximately 12.5% of loss and LAE reserves net of reinsurance recoverables. See discussion below under "Additional Financial Information".

Livery physical damage: We write for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs. These policies insure only the physical damage portion of insurance for such vehicles, with no liability coverage included.

Other: We write canine legal liability policies and have a small participation in mandatory state joint underwriting associations.

Key GAAP and Non-GAAP Measures

We utilize the following key GAAP and non-GAAP measures in analyzing the results of our insurance underwriting business. See "Non-GAAP Financial Measures" for a reconciliation of the below non-GAAP measures to the most directly comparable GAAP measure:

Direct written premiums; net written premiums:Direct written premiums is a non-GAAP measure, which represent the total premiums charged on policies issued by an insurance company during the respective fiscal period. Net written premiums is a non-GAAP measure, which are direct written premiums less premiums ceded to reinsurers. Net premiums earned, the GAAP measure most comparable to direct written premiums and net written premiums, are net written premiums that are pro-rata earned during the fiscal period presented. All of our policies are written for a twelve-month period. Management uses direct written premiums and net written premiums, along with other measures, to gauge our performance and evaluate results. Direct written premiums and net written premiums are provided as supplemental information, not as a substitute for net premiums earned, and do not reflect the Company's net premiums earned.

Net loss ratio: The net loss ratio is a measure of the underwriting profitability of an insurance company's business. Expressed as a percentage, this is the ratio of net losses and LAE incurred to net premiums earned.

Underlying loss ratio: The underlying loss ratio is a non-GAAP ratio, which is computed as the GAAP net loss ratio excluding the effect of prior year loss reserve development and catastrophes losses. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by prior year loss reserve development and catastrophe losses. Catastrophe losses cause our loss ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The underlying loss ratio should not be considered a substitute for the net loss ratio and does not reflect our net loss ratio.

Net loss ratio excluding the effect of catastrophes: The net loss ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of catastrophes on the net loss ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by catastrophe losses. Catastrophe losses cause our net loss ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The net loss ratio excluding the effect of catastrophes should not be considered a substitute for the net loss ratio and does not reflect our net loss ratio.

Net loss ratio excluding commercial lines business: The net loss ratio excluding commercial lines business is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of commercial lines on the net loss ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by losses from commercial lines business. Our commercial lines business has been in run-off effective July 2019. Commercial lines losses cause our net loss ratios to vary between periods as a result of changes to their loss reserves during the run-off period and have an impact on the net loss ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net loss ratio. The net loss ratio excluding commercial lines business should not be considered a substitute for the net loss ratio and does not reflect our net loss ratio.

Net underwriting expense ratio:The net underwriting expense ratio is a measure of an insurance company's operational efficiency in administering its business. Expressed as a percentage, this is the ratio of the sum of acquisition costs (the most significant being commissions paid to our producers) and other underwriting expenses less ceding commission revenue less other income to net premiums earned.

Net underwriting expense ratio excluding the effect of catastrophes: The net underwriting expense ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net underwriting expense ratio and the effect of catastrophes on the net underwriting expense ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by catastrophe losses. Catastrophe losses cause our net underwriting expense ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the underwriting expense ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net underwriting expense ratio. The net underwriting expense ratio excluding the effect of catastrophes should not be considered a substitute for the net underwriting expense ratio and does not reflect our net underwriting expense ratio.

Net combined ratio:The net combined ratio is a measure of an insurance company's overall underwriting profit. This is the sum of the net loss and net underwriting expense ratios. If the net combined ratio is at or above 100 percent, an insurance company cannot be profitable without investment income, and may not be profitable if investment income is insufficient.

Net combined ratio excluding the effect of catastrophes: The net combined ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP combined ratio and the effect of catastrophes on the net combined ratio. Management believes that this ratio is useful to investors, and it is used by management to reveal the trends in our business that may be obscured by catastrophe losses. Catastrophe losses cause our net combined ratios to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the net combined ratio. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is the net combined ratio. The net combined ratio excluding the effect of catastrophes should not be considered a substitute for the net combined ratio and does not reflect our net combined ratio.

Underwriting income:Underwriting income is net pre-tax income attributable to our insurance underwriting business before investment activity. It excludes net investment income, net realized gains from investments, and depreciation and amortization (net premiums earned less expenses included in combined ratio). Underwriting income is a measure of an insurance company's overall operating profitability before items such as investment income, depreciation and amortization, interest expense and income taxes.

Net income from insurance underwriting business on a standalone basis: Net income from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net income without the effect of holding company operations on GAAP net income. Management believes that this measure is useful to investors, and it is used by management to reveal the trends in our insurance underwriting business that may be obscured by holding company operations. Holding company operations cause our GAAP net income to vary significantly between periods as a result of their magnitude and can have a significant impact on GAAP net income. Management believes that this measure is useful for investors to evaluate this component separately when reviewing our underwriting performance. The most directly comparable GAAP measure is GAAP net income. Net income from insurance underwriting business on a standalone basis should not be considered a substitute for GAAP net income and does not reflect our GAAP net income.

Critical Accounting Estimates

Our consolidated financial statements include the accounts of Kingstone Companies, Inc. and all majority-owned and controlled subsidiaries. The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements and related notes. In preparing these consolidated financial statements, our management has utilized information including our past history, industry standards, and the current economic environment, and other factors, in forming its estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by our management in formulating its estimates in these financial statements may not materialize.

Application of the critical accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In addition, other companies may utilize different estimates, which may impact comparability of our results of operations to those of similar companies.

See below a description of these critical accounting estimates. Also, see Note 2 to the consolidated financial statements following Item 16 of this Annual Report.

Loss and Loss Adjustment Expense Reserves

Property and casualty loss and loss adjustment expense ("LAE") reserves are established to provide for the estimated cost of settling both reported ("case") and incurred but not reported ("IBNR") claims and claims adjusting expenses. The liability for these reserves is estimated on an undiscounted basis, using individual case-basis valuations and paid claims, pending claims, statistical analyses and various actuarial reserving methodologies. Due to the inherent uncertainty of the reserve process, actual loss costs could vary significantly compared to estimated loss costs. The below table provides detail of our reserves as of December 31, 2025 and 2024:


	As of December 31, 2025						As of December 31, 2024

($ in thousands)	Gross		Ceded		Net		Gross		Ceded		Net
Case loss	$	75,385	$	20,749	$	54,636	$	64,087	$	17,721	$	46,366
Case LAE	7,459		1,812		5,646		6,563		1,426		5,137
IBNR loss	38,794		8,277		30,517		38,681		10,661		28,020
IBNR LAE	18,901		2,394		16,507		16,879		2,514		14,365
Total	$	140,539	$	33,232	$	107,306	$	126,210	$	32,322	$	93,888

(Components may not sum due to rounding)

Case Reserves - Reserves for reported losses are based on an estimate of ultimate loss costs of an individual claim derived from individual case-basis valuations, actual claims paid, pending claims, statistical analyses and various actuarial reserving methodologies.

IBNR Reserves - IBNR reserves are estimates of claims that have occurred but as to which we have not yet been notified to establish the case reserve. IBNR is determined using historical information aggregated by line of insurance and adjusted to current conditions.

Reinsurance

We purchase reinsurance to manage our underwriting risk on certain policies. Reinsurance receivables represent management's best estimate of loss and LAE recoverable from reinsurers. Reinsurance receivables are estimated using the same methodologies as loss and LAE reserves. Changes in the methods and assumptions used could result in significant variances between actual and estimated losses.

Deferred Income Taxes

Our effective tax rate is based on GAAP income at statutory tax rates, adjusted for non-taxable and non-deductible items, and tax credits. Changes in estimates used in preparing the consolidated statements of operations and comprehensive income (loss) could result in significant changes to our deferred tax asset or liability.

Deferred tax assets or liabilities are recognized for estimated future tax consequences which result in differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. These assets and liabilities are carried at the enacted tax rates expected to apply when the asset or liability is expected to be recovered or settled. Changes in estimates and assumptions in the consolidated statements of operations and comprehensive income (loss), or changes in the enacted tax rate, could result in significant variances between our carried deferred tax and tax recognized on the recovery or settlement of the asset or liability.

Investments

Bonds are classified as held-to-maturity ("HTM") or available-for-sale ("AFS"), and stocks are generally classified as AFS. Investments classified as HTM are carried at amortized cost, which requires very little judgement. Investments classified as AFS are generally carried at fair value with an unrealized gain/loss recorded in income. Actual results could vary significantly from the fair values recognized in the Consolidated Statements of Income and Comprehensive Income.

Policies in Force and Direct Written Premiums

See the tables below for our policies in force as of December 31, 2025 and 2024 and direct written premiums for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, our direct written premiums1increased by 14.8% compared to the same period in 2024, while policies in force increased by 3.6% as of December 31, 2025 as compared to December 31, 2024.


	As of December 31,
	2025	2024	Change	Percent

Policies In Force	80,432	77,656	2,776	3.6	%


	Years Ended December 31,
(000's except percentages)	2025		2024		Change		Percent

Direct written premiums1	$	277,801	$	241,980	$	35,821	14.8	%

1 Direct written premiums is a non-GAAP measure defined above under "Key GAAP and Non-GAAP Measures". See "Non-GAAP Financial Measures" below for the reconciliation of direct written premiums to the GAAP measure of net premiums earned.

Change in Market Dynamics (underway), and 5-Year Growth Plan (underway)

•Change in Market Dynamics

On August 2, 2024, two large competitors announced a plan to wind down their personal lines operations in New York State and to non-renew or mid-term cancel their entire book of business before year end 2024. The policyholders of such competitors needed to find alternative coverage. Beginning in the quarter ended September 30, 2024, we began seeing a sizable increase in our policies in force and direct written premiums from these non-renewed and cancelled policies. We refer to this new business as a Change in Market Dynamics.

On April 14, 2025, KICO entered into an agreement to offer a quote for a replacement policy to selected homeowners policyholders in Downstate New York as one of our competitors pivoted focus away from admitted personal lines business (the "Withdrawal Plan"). The Withdrawal Plan, which includes this transaction, has been approved by the DFS. This competitor wrote approximately $70 million in written premium. The Withdrawal Plan has enabled KICO to work with new distribution partners to further increase its footprint in Downstate New York by offering an alternative policy to selected homeowners policyholders with effective dates that started in late third quarter of 2025. This transaction is being handled in a similar manner to the Change in Market Dynamics, except that we are streamlining the process by providing a quote for eligible policyholders to our producers.

•5-Year Growth Plan

We recently announced our 5-year goal of $500 million in direct written premium (the "5-Year Growth Plan"), effectively doubling the size of our company relative to today. We are diligently working on a strategic plan that outlines how we will achieve this goal through a combination of organic initiatives and strategic inorganic opportunities in our core state of New York along with measured geographic expansion into new states. We intend to maintain our focus on our core expertise of insuring catastrophe-exposed properties.

Relative to geographic expansion, we have conducted a thorough study of selected geographies and states with the help of industry-leading third-party advisors and overlaid important lessons learned from our past challenges to ensure that we do not face such challenges again. We plan to pursue prudent growth at a measured pace in our chosen new states, testing and validating rate adequacy commensurate with risk factors in the new geographies. Our current plan is to go live in California and Connecticut in 2026, and two additional states in 2027.

Consolidated Results of Operations

The following table summarizes the changes in the results of our operations for the periods indicated:


	Years ended December 31,
($ in thousands)	2025		2024		Change		Percent
Revenues
Direct written premiums (1)	$	277,801	$	241,980	$	35,821	14.8	%
Ceded written premiums
Ceded to quota share treaties (2)	23,828		50,539		(26,711)		(52.9	%)
Ceded to excess of loss treaties	6,391		6,417		(26)		(0.4	%)
Ceded to catastrophe treaties	33,863		30,794		3,069		10.0	%
Total ceded written premiums	64,082		87,750		(23,668)		(27.0	%)

Net written premiums (1)	213,719		154,230		59,489		38.6	%

Change in unearned premiums
Direct and assumed	(19,326)		(29,080)		9,754		33.5	%
Ceded to quota share treaties (2)	(7,266)		3,348		(10,614)		NM
Change in net unearned premiums	(26,592)		(25,732)		(860)		(3.3	%)

Premiums earned
Direct and assumed	258,474		212,900		45,574		21.4	%
Ceded to reinsurance treaties	(71,348)		(84,402)		13,054		15.5	%
Net premiums earned	187,127		128,498		58,629		45.6	%

Ceding commission revenue (2)	15,675		18,838		(3,163)		(16.8	%)
Net investment income	9,799		6,824		2,975		43.6	%
Net (losses) gains on investments	(310)		415		(725)		174.7	%
Gain on sale of real estate	1,966		-		1,966		NM
Other income	611		568		43		7.6	%
Total revenues	214,867		155,142		59,725		38.5	%
Expenses
Loss and loss adjustment expenses
Direct and assumed:
Loss and loss adjustment expenses excluding the effect of catastrophes	100,708		79,472		21,236		26.7	%
Losses from catastrophes (3)	2,578		3,389		(811)		(23.9)	%
Total direct and assumed loss and loss adjustment expenses	103,286		82,861		20,425		24.6	%

Ceded loss and loss adjustment expenses:
Loss and loss adjustment expenses excluding the effect of catastrophes	18,615		19,292		(677)		(3.5	%)
Losses from catastrophes (3)	405		935		(530)		(56.7)	%
Total ceded loss and loss adjustment expenses	19,020		20,226		(1,206)		(6.0	%)

Net loss and loss adjustment expenses:
Loss and loss adjustment expenses excluding the effect of catastrophes	82,093		60,181		21,912		36.4	%
Losses from catastrophes (3)	2,173		2,454		(281)		(11.5	%)
Net loss and loss adjustment expenses	84,266		62,635		21,631		34.5	%

Commission expense	40,727		33,929		6,798		20.0	%
Other underwriting expenses	31,719		25,693		6,026		23.5	%
Other operating expenses	4,105		3,635		470		12.9	%
Depreciation and amortization	2,560		2,449		111		4.5	%
Interest expense	445		3,514		(3,069)		(87.3	%)
Total expenses	163,822		131,854		31,968		24.2	%

Income before taxes	51,046		23,288		27,758		119.2	%
Income tax expense	10,279		4,930		5,349		108.5	%
Net income	$	40,767	$	18,358	$	22,409	122.1	%

(Columns in the table above may not sum to totals due to rounding)

(1)Direct written premiums and net premiums written are non-GAAP measures, defined above under "Key GAAP and Non-GAAP Measures", and reconciled in the table herein to the GAAP measure of net premiums earned.

(2)For the year ended December 31, 2024, our personal lines business was subject to a 27% quota share treaty, expiring on January 1, 2025, which included a runoff of a 3.0% portion of the prior quota share reinsurance treaty through the remainder of 2024. Effective January 1, 2025, we entered into a 16% personal lines quota share treaty, under a cutoff basis.

(3)For the year ended December 31, 2025 and 2024 include catastrophe losses, which are defined as losses from an event for which a catastrophe bulletin and related serial number has been issued by the Property Claims Services (PCS) unit of the Insurance Services Office (ISO). PCS catastrophe bulletins are issued for events that cause more than $25 million in total insured losses and affect a significant number of policyholders and insurers.


	Years Ended December 31,
	2025		2024		Percentage Point Difference	Percent Change

Key ratios:
Net loss ratio	45.0	%	48.7	%	(3.7)	(7.6)	%
Net underwriting expense ratio	30.0	%	31.3	%	(1.3)	(4.2)	%
Net combined ratio	75.0	%	80.0	%	(5.0)	(6.3)	%

Direct Written Premiums(1)

Direct written premiums during the year ended December 31, 2025 ("Year Ended 2025") were $277,801,000 compared to $241,980,000 during the year ended December 31, 2024 ("Year Ended 2024"). The increase of $35,821,000, or 14.8%, was primarily due to an increase in premiums from our personal lines business. Direct written premiums from our personal lines business for Year Ended 2025 were $263,188,000, an increase of $35,545,000, or 15.6%, from $227,643,000 in Year Ended 2024. The 15.6% increase in premiums from our personal lines business was primarily due to the organic growth from the Change in Market Dynamics in the New York market and to a lesser extent an increase in rates primarily from an increase in replacement costs.

Direct written premiums from our livery physical damage business for Year Ended 2025 were $14,550,000, an increase of $302,000, or 2.1%, from $14,248,000 in Year Ended 2024. The growth in direct written premiums for livery physical damage reflects increased vehicle valuations and an increase from the removal of underwriting restrictions on electric vehicles until after receiving adequate rate approval in July 2024.
___________________

(1) Direct written premiums is a non-GAAP measure defined above under "Key GAAP and Non-GAAP Measures", and reconciled in the table above to the GAAP measure of net premiums earned.

Net Written Premiums and Net Premiums Earned

Net Written Premiums(1) and Net Premiums Earned

Net written premiums increased $59,489,000, or 38.6%, to $213,719,000 in Year Ended 2025 from $154,230,000 in Year Ended 2024. Net written premiums include direct premiums, less the amount of written premiums ceded under our reinsurance treaties (quota share, excess of loss, and catastrophe). The increase in Year Ended 2025 was primarily due to the additional premiums due to the organic growth from the Change in Market Dynamics in the New York market and to a lesser extent an increase in rates primarily from an increase in replacement costs, and changes to our personal lines quota share reinsurance treaty. See "Quota share reinsurance treaties" discussion below.
___________________

(1) Net written premiums is a non-GAAP measure, defined above under "Key GAAP and Non-GAAP Measures", and reconciled in the table above to the GAAP measure of net premiums earned.

Quota share reinsurance treaties

Effective January 1, 2024, we entered into a 27% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2024 through January 1, 2025 ("2024/2025 Treaty"). Upon expiration of the 2024/2025 Treaty on January 1, 2025, we entered into a new 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 ("2025/2026 Treaty"). Our personal lines business was subject to the 2025/2026 Treaty in Year Ended 2025, and the 2024/2025 Treaty in Year Ended 2024. In Year Ended 2025, our premiums ceded under quota share treaties decreased by $26,711,000 in comparison to premiums ceded under quota share treaties in Year Ended 2024 (see table above). The decrease in Year Ended 2025 was attributable to the decrease in the quota share ceding percentage rate, offset by an increase in direct written premiums subject to the 2025/2026 Treaty compared to direct written premiums subject to the 2024/2025 Treaty. The inception of the 2025/2026 Treaty was recorded as a cutoff, resulting in the return of $11,471,000 from reinsurers to us of previously ceded written premiums that were unearned as of January 1, 2025.

Excess of loss reinsurance treaties

In Year Ended 2025, our ceded excess of loss reinsurance premiums decreased $26,000 compared to the ceded excess of loss premiums for Year Ended 2024. Effective January 1, 2024, we entered into an underlying excess of loss reinsurance treaty (the "Underlying XOL Treaty") covering the period from January 1, 2024 through January 1, 2025. The Underlying XOL Treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the Underlying XOL Treaty. Effective January 1, 2025, the Underlying XOL Treaty was renewed covering the period from January 1, 2025 through June 30, 2026. The Underlying XOL Treaty, combined with the excess of loss treaty, provided 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000, together with facultative coverage. Retention was increased to $715,000 from $640,000 under the 2025/2026 Treaty. Under the 2026/2027 Treaty, retention was increased to $825,000 from $715,000.

Catastrophe reinsurance treaties

Most of the premiums written under our personal lines policies are also subject to our catastrophe reinsurance treaties. An increase in our personal lines business historically gave rise to more property exposure, which increased our exposure to catastrophe risk; therefore, our premiums ceded under catastrophe treaties would increase. An increase in our personal lines business historically resulted in an increase in premiums ceded under our catastrophe treaties if reinsurance rates were stable or were increasing. With regard to treaties entered into on July 1, 2025 ("2025/2026 Catastrophe Treaty") and 2024 ("2024/2025 Catastrophe Treaty"), we recorded our catastrophe premiums written for the entire treaty period covering July 1 through June 30, resulting in the entire annual premium written being recorded in the third quarter of 2025 and 2024. The 2025/2026 Catastrophe Treaty covers 80% of losses on the first layer of $5,000,000 in excess of $5,000,000 (Catastrophe coverage of $4,000,000), and losses of $435,000,000 in excess of $5,000,000 (Catastrophe coverage of $430,000,000), for a total catastrophe coverage of $434,000,000. The 2024/2025 Catastrophe Treaty covered 80% of losses on the first layer of $5,000,000 in excess of $5,000,000 (Catastrophe coverage of $4,000,000), and losses of $275,000,000 in excess of $10,000,000 (Catastrophe coverage of $265,000,000), for a total catastrophe coverage of $269,000,000. Catastrophe coverage under the 2025/2026 Catastrophe Treaty increased by $165,000,000 compared to the 2024/2025 Catastrophe Treaty. In Year Ended 2025, our premiums ceded under our catastrophe treaties increased by $3,069,000 in comparison to premiums ceded under catastrophe treaties in Year Ended 2024 (see table above). The increase in Year Ended 2025 was primarily attributable to the $169,000,000 increase in catastrophe coverage discussed above.

Net premiums earned

Net premiums earned increased $58,629,000 or 45.6% to $187,127,000 in Year Ended 2025 compared to $128,498,000 in Year Ended 2024. The increase was due to the 11 percentage point reduction in quota share rates discussed above, and the increase in premiums from the Change in Market Dynamics which began in the third quarter of 2024, partially offset by an increase in catastrophe premiums due to the increase in catastrophe coverage reflected in ceded catastrophe premiums earned, which increased the amount of growth in net premiums earned.

Ceding Commission Revenue

The following table summarizes the changes in the components of ceding commission revenue (in thousands) for the periods indicated:


	Years ended December 31,
($ in thousands)	2025		2024		Change		Percent

Provisional ceding commissions earned	$	13,927	$	18,829	$	(4,902)	(26.0	%)
Contingent ceding commissions earned	1,748		9		1,739		NM

Total ceding commission revenue	$	15,675	$	18,838	$	(3,163)	(16.8	%)

NM = Not Meaningful

(Columns in the table above may not sum to totals due to rounding)

Ceding commission revenue was $15,675,000 in Year Ended 2025 compared to $18,838,000 in Year Ended 2024. The decrease of $3,163,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.

Provisional Ceding Commissions Earned

In the Year Ended 2025, we earned provisional ceding commissions of $13,927,000 from personal lines earned premiums ceded under the 2025/2026 Treaty, and in the Year Ended 2024, we earned provisional ceding commissions of $18,829,000 from personal lines earned premiums ceded under the 2024/2025 Treaty. The decrease of $4,902,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during the Year Ended 2025 compared to the Year Ended 2024, offset by an increase in ceding commission rates under the 2025/2026 Treaty. The decrease in the premiums ceded was due to a decrease in the quota share percentage from 27% in the Year Ended 2024 to 16% in the Year Ended 2025.

Contingent Ceding Commissions Earned

Under our 2025/2026 Treaty and prior years' quota share treaties before July 1, 2017, we received a contingent ceding commission based on a sliding scale of commission rates and ultimate treaty year loss ratio on the policies reinsured under this agreement based upon which contingent ceding commissions are earned. The sliding scale includes minimum and maximum commission rates in relation to specified ultimate loss ratio. The commission rate and contingent ceding commissions earned increase when the estimated ultimate loss ratio decreases and, conversely, the commission rate and contingent ceding commissions earned decrease when the estimated ultimate loss ratio increases. The lower the ceded loss ratio, the more contingent commission we received. The structure of the 2024/2025 Treaty called for a fixed provisional ceding commission with no opportunity to earn additional contingent ceding commissions. We earned $1,748,000 of contingent ceding commissions due to both a decrease in the attritional and catastrophe loss ratios in the Year Ended 2025 as compared to $9,000 earned in the Year Ended 2024.

Net Investment Income

Net investment income was $9,799,000 in the Year Ended 2025 compared to $6,824,000 in the Year Ended 2024, an increase of $2,975,000, or 43.6%. The average yield on non-cash invested assets was 4.3% as of December 31, 2025 compared to 3.8% as of December 31, 2024

Cash and invested assets were $321,867,000 as of December 31, 2025 compared to $237,287,000 as of December 31, 2024, an increase of $84,580,000.

Net Gains on Investments

Net (losses) on investments were $(310,000) in the Year Ended 2025 compared to net gains of $415,000 in the Year Ended 2024. Unrealized (losses) on our equity securities and other investments in the Year Ended 2025 were

$(87,000), compared to unrealized gains of $477,000 in the Year Ended 2024. Net realized (losses) on sales of investments were $(223,000) in the Year Ended 2025 compared to net realized (losses) of $(62,000) in the Year Ended 2024.

Gain on Sale of Real Estate

Gain on sale of real estate was $1,966,000 in the Year Ended 2025 compared to $0 in the Year Ended 2024. On March 19, 2025 one of our subsidiaries closed on the sale of our headquarters building in Kingston, New York, along with an adjacent mixed-use property (collectively, the "Property"). The purchase price for the Property was $3,600,000. We are now renting a smaller facility in Kingston, New York.

Other Income

Other income was $611,000 in the Year Ended 2025 compared to $568,000 in the Year Ended 2024, an increase of $43,000, or 7.6%.

Net Loss and LAE

Net loss and LAE was $84,266,000 for the Year Ended 2025 compared to $62,635,000 for the Year Ended 2024. The net loss ratio was 45.0% in the Year Ended 2025 compared to 48.7% in the Year Ended 2024, a decrease of 3.7 percentage points. The improvement in the net loss ratio was primarily driven by a decrease in the frequency of non-catastrophe losses and a decrease in catastrophe losses, both partially offset by less favorable prior accident year reserve development and an increase in severity from large losses. The total net catastrophe impact for the Year Ended 2025 was $2,173,000, which contributed 1.2 points to the loss ratio. By comparison, the catastrophe impact for the Year Ended 2024 was 1.9 points. Favorable prior accident year development decreased the net loss ratio by 0.6 points during the Year Ended 2025 as compared to decreasing the net loss ratio by 1.4 points during the Year Ended 2024. In 2025, property claims overall developed better than expected, driven primarily by reserve takedowns on several large fire and water damage claims from accident years 2023 and 2024, resulting in favorable development. This favorable development was partially offset by increased reserves associated with liability claims, which reflect the inherent variability associated with liability claim settlement patterns. In 2024, the favorable development was primarily attributable to reserve takedowns on several large property losses from accident years 2022 and 2023, reflecting recoverable depreciation. This favorable impact was partially offset by strengthening of reserves for liability claims, particularly related to loss adjustment expenses.

The underlying loss ratio(1)(loss ratio excluding the impact of catastrophes and prior year development) was 44.4% for the Year Ended 2025, a decrease of 3.8 points from the 48.2% underlying loss ratio recorded for the Year Ended 2024. The improvement in the underlying loss ratio for the Year Ended 2025 as compared to the Year Ended 2024 was primarily due to an improvement in the frequency of losses which is the result of better performance of our Select product as well as our active efforts to manage less profitable lines of business. The favorable frequency for the Year Ended 2025 was partially offset by higher overall personal lines non-catastrophe severity, primarily driven by a greater impact from large losses.

________________

(1) Underlying loss ratio is a non-GAAP ratio, which is computed as the GAAP net loss ratio excluding the effect of prior year loss reserve development and catastrophe losses. See "Non-GAAP Financial Measures" for the reconciliation of underlying loss ratio to the GAAP measure of net loss ratio.

See table below under "Additional Financial Information" summarizing net loss ratios by line of business.

Commission Expense

Commission expense was $40,727,000 in the Year Ended 2025 or 15.8% of direct earned premiums. Commission expense was $33,929,000 in the Year Ended 2024 or 15.9% of direct earned premiums. The increase of $6,798,000 in the Year Ended 2025 compared to the Year Ended 2024 was primarily due to an increase in direct earned premiums of $45,574,000 and an increase of $313,000 contingent commission based on the profitability of the business.

Other Underwriting Expenses

Other underwriting expenses were $31,719,000 in the Year Ended 2025 compared to $25,693,000 in the Year Ended 2024. The increase of $6,026,000, or 23.5%, was primarily due to increases in salaries and employment costs as described below; an increase in underwriting fees and premium taxes due to the growth in direct earned premiums; an increase in DFS regulatory fees; and an increase in professional fees. In addition, we realized a $365,000 gain on the

commutations of prior years' quota share reinsurance treaties from a group of reinsurers, in the Year Ended 2024, with no such gain in the Year Ended 2025.

Our largest single component of other underwriting expenses is salaries and employment costs, with costs of $15,681,000 in the Year Ended 2025 compared to $13,143,000 in the Year Ended 2024. Salaries and employment costs were 8.4 points of the net underwriting expense ratio in the Year Ended 2025, a reduction of 1.8 points from 10.2 points in the Year Ended 2024 primarily due to the economies of scale with the increase in net premiums earned. The dollar increase in salaries and employment costs was due to annual salary increases, increase in profit sharing due to improvement in Company performance and strengthening of our professional team by investing in hiring talent with insurance industry experience due to the growth in premiums written and anticipated new business in accordance with our 5-Year Growth Plan.

Our net underwriting expense ratio in the Year Ended 2025 was 30.0% compared to 31.3% in the Year Ended 2024. The following table shows the individual components of our net underwriting expense ratio for the periods indicated:


	Years ended December 31,				Percentage Point Change
	2025		2024
Other underwriting expenses
Employment costs	8.4	%	10.2	%	(1.8)
Underwriting fees (inspections/surveys)	1.3		1.4		(0.1)
IT expenses	1.5		2.2		(0.7)
Professional fees	0.7		0.8		(0.1)
Other expenses	5.0		5.4		(0.4)
Total other underwriting expenses	16.9		20.0		(3.1)

Commission expense	21.8		26.4		(4.6)

Ceding commission revenue
Provisional	(7.4)		(14.7)		7.3
Contingent	(0.9)		-		(0.9)
Total ceding commission revenue	(8.3)		(14.7)		6.4

Other income	(0.3)		(0.4)		0.1

Net underwriting expense ratio	30.0	%	31.3	%	(1.3)

(Components may not sum to totals due to rounding)

Other operating expenses were $4,105,000 for the Year Ended 2025 compared to $3,635,000 for the Year Ended 2024. The following table shows a breakdown of the significant components of other operating expenses for the periods indicated:


	Years ended December 31,
($ in thousands)	2025		2024		Change		Percent

Other operating expenses
Employment costs	$	232	$	325	$	(93)	(28.6)	%
Executive bonus	69		50		19		38.0
Equity compensation	1,482		1,383		99		7.2
Professional	673		381		292		76.6
Directors fees	486		376		110		29.3
Insurance	153		196		(43)		(21.9)
Loss on extinguishment of debt	175		297		(122)		(41.1)
Other expenses	835		627		208		33.2
Total other operating expenses	$	4,105	$	3,635	$	470	12.9	%

(Components may not sum to totals due to rounding)

The increase in the Year Ended 2025 of $470,000, or 12.9%, as compared to the Year Ended 2024 was primarily due to an increase in professional fees, other expenses and equity compensation, partially offset by a decrease in employment costs and loss on extinguishment of debt. The increase in equity compensation is due to additional restricted stock awards granted to our senior leadership team as of December 31, 2025 pursuant to our employee bonus plan. The increase in professional fees is due to incurring additional expenses related to our upcoming requirement for the audit of our internal controls over financial reporting. The increase in other expenses in the Year Ended 2025 of $208,000 represents $219,000 of warrant costs following the exercise of the warrants in December 2025, compared to $0 in the Year Ended 2024. The loss on extinguishment of debt is due to the balance of unamortized debt issue costs upon the prepayment of the 2024 Notes in the Year Ended 2025 and Year Ended 2024 as disclosed in Note 9 to the consolidated financial statements. The decrease in employment costs was due to fluctuations in deferred compensation liability in the Year Ended 2024 related to changes in the underlying invested portfolio. The deferred compensation plan was terminated in the Year Ended 2024.

Depreciation and Amortization

Depreciation and amortization was $2,560,000 in the Year Ended 2025 compared to $2,449,000 in the Year Ended 2024. The increase of $111,000, or 4.5%, in depreciation and amortization was primarily due to the difference between additional depreciation on software acquired compared to software being fully depreciated.

Interest Expense

Interest expense in the Year Ended 2025 was $445,000 compared to $3,514,000 in the Year Ended 2024, a decrease of $3,069,000 or 87.3%. In the Year Ended 2025 and the Year Ended 2024, as disclosed in Note 9 to the consolidated financial statements, we incurred interest expense in connection with the 2024 Notes and the 12.00% Senior Notes due 2024 (the "2022 Notes"), respectively. The 2022 Notes provided for interest at the rate of 12% per annum. In September 2024, in accordance with the 2024 Exchange Agreement, we paid $5,000,000 of principal on the 2022 Notes, reducing the principal balance to $14,950,000 from $19,950,000. Under the 2024 Exchange Agreement, the balance of the 2022 Notes were exchanged for the 2024 Notes, which provided for interest at the rate of 13.75% per annum. Beginning in the third quarter of 2024 through February 2025, we paid optional principal amounts, reducing the balance of the 2024 Notes, and completely satisfying the obligation on February 24, 2025. In addition, we also incurred interest expense on the 2022 equipment financing.

Income Tax Expense

Income tax expense in the Year Ended 2025 was $10,279,000, which resulted in an effective tax rate of 20.1%. Income tax expense in the Year Ended 2024 was $4,930,000, which resulted in an effective tax rate of 21.2%. The difference in effective tax rate is due to the effect of permanent differences in the Year Ended 2025 compared to the Year Ended 2024. In the Year Ended 2025, the vesting of restricted stock awards resulted in an income tax benefit, due to the increase in the stock price on the vesting date as compared to the grant date, which had the effect of reducing the effective tax rate. In the Year Ended 2024, the vesting of restricted stock awards resulted in additional income tax, due to the decrease in the stock price on the vesting date as compared to the grant date, which had the effect of increasing the effective tax rate.

Net income was $40,767,000 in the Year Ended 2025 compared to net income of $18,358,000 in the Year Ended 2024. The increase in net income of $22,409,000 was due to the items described above.

Additional Financial Information

We operate our business as one segment, property and casualty insurance. Within this segment, we offer an array of property and casualty policies to our producers. The following table summarizes gross and net premiums written, net premiums earned, and loss and loss adjustment expenses by major product type, which were determined based primarily on similar economic characteristics and risks of loss.


	Years Ended December 31,
	2025			2024
Direct written premiums(1):
Personal lines	$	263,187,529		$	227,642,802
Livery physical damage	14,549,889			14,248,462
Other(1)	63,212			88,673
Total direct written premiums(1)	$	277,800,630		$	241,979,937

Net premiums written(1):
Personal lines	$	199,111,560		$	139,914,970
Livery physical damage	14,549,889			14,248,462
Other(2)	57,617			66,433
Total net premiums written	$	213,719,066		$	154,229,865

Net premiums earned:
Personal lines	$	172,418,801		$	113,876,043
Livery physical damage	14,643,437			14,550,160
Other(2)	64,484			71,717
Total net premiums earned	$	187,126,722		$	128,497,920

Net loss and loss adjustment expenses(4):
Personal lines	$	70,481,180		$	49,268,714
Livery physical damage	5,617,684			6,158,197
Other(2)	(128)			(34,237)
Unallocated loss adjustment expenses	5,986,975			4,926,243
Total without commercial lines	82,085,711			60,318,917
Commercial lines (in run-off effective July 2019)(2)	2,180,011			2,315,799
Total net loss and loss adjustment expenses	$	84,265,722		$	62,634,716

Net loss ratio(4):
Personal lines	40.9		%	43.3		%
Livery physical damage	38.4		%	42.3		%
Other(1)	(0.2		%)	(47.7		%)
Total without commercial lines	43.9		%	46.9		%
Commercial lines (in run-off effective July 2019)(2)	na			na
Total	45.0		%	48.7		%

(1)Direct written premiums and net written premiums are non-GAAP measures, defined above under "Key GAAP and Non-GAAP Measures". See "Non-GAAP Financial Measures" below for the reconciliation of direct written premiums, and net written premiums to the GAAP measure of net premiums earned.

(2)"Other" includes, among other things, premiums and loss and loss adjustment expenses from our participation in a mandatory state joint underwriting association and loss and loss adjustment expenses from commercial auto.

(3)In July 2019, we stopped underwriting Commercial Liability risks. See discussions above regarding the discontinuation of this line of business.

(4)See discussions above with regard to "Net Loss and LAE", as to catastrophe losses in the years ended December 31, 2025 and 2024.

Insurance Underwriting Business on a Standalone Basis(1)

Our insurance underwriting business reported on a standalone basis(1) for the years ended December 31, 2025 and 2024 follows:


	Years ended December 31,
	2025			2024

Revenues
Net premiums earned	$	187,126,722		$	128,497,920
Ceding commission revenue	15,674,971			18,837,946
Net investment income	9,798,764			6,823,590
Net (losses) gains on investments	(309,994)			359,490
Gain on sale of real estate	1,965,989			-
Other income	610,212			549,967
Total revenues	214,866,664			155,068,913

Expenses
Loss and loss adjustment expenses	84,265,722			62,634,716
Commission expense	40,726,801			33,929,333
Other underwriting expenses	31,718,770			25,692,727
Depreciation and amortization	2,559,835			2,448,932
Interest expense	299,235			368,664
Total expenses	159,570,363			125,074,372

Income from operations	55,296,301			29,994,541
Income tax expense	11,460,903			6,412,686
Net income from insurance underwriting business on a standalone basis(1)	$	43,835,398		$	23,581,855

Key Measures:
Net loss ratio	45.0		%	48.7		%
Net underwriting expense ratio	30.0		%	31.3		%
Net combined ratio	75.0		%	80.0		%

Reconciliation of net underwriting expense ratio:
Acquisition costs and other
underwriting expenses	$	72,445,571		$	59,622,060
Less: Ceding commission revenue	(15,674,971)			(18,837,946)
Less: Other income	(610,212)			(549,967)
Net underwriting expenses	$	56,160,388		$	40,234,147

Net premiums earned	$	187,126,722		$	128,497,920

Net Underwriting Expense Ratio	30.0		%	31.3		%

(1) Net income from insurance underwriting business on a standalone basis is a non-GAAP measure, which is computed as GAAP net income without the effect of holding company operations on GAAP net income. See "Non-GAAP Financial Measures" for the reconciliation of net income from insurance underwriting business on a standalone basis to the GAAP measure of net income.

An analysis of our direct, assumed and ceded earned premiums, loss and loss adjustment expenses, and loss ratios is shown below:


	Direct			Assumed			Ceded			Net
Year ended December 31, 2025
Written premiums	$	277,800,630		$	-		$	(64,081,564)		$	213,719,066
Change in unearned premiums	(19,326,339)			-			(7,266,005)			(26,592,344)
Earned premiums	$	258,474,291		$	-		$	(71,347,569)		$	187,126,722

Loss and loss adjustment expenses excluding
the effect of catastrophes	$	100,707,653		$	-		$	(18,614,871)		$	82,092,782
Catastrophe loss	2,577,920			-			(404,980)			2,172,940
Loss and loss adjustment expenses	$	103,285,573		$	-		$	(19,019,851)		$	84,265,722

Loss ratio excluding the effect of catastrophes(2)	39.0		%	0.0		%	26.1		%	43.9		%
Catastrophe loss	1.0		%	0.0		%	0.6		%	1.2		%
Loss ratio	40.0		%	0.0		%	26.7		%	45.0		%

Year ended December 31, 2024
Written premiums	$	241,979,937		$	-		$	(87,750,072)		$	154,229,865
Change in unearned premiums	(29,080,195)			-			3,348,250			(25,731,945)
Earned premiums	$	212,899,742		$	-		$	(84,401,822)		$	128,497,920

Loss and loss adjustment expenses excluding
the effect of catastrophes	$	79,477,309		$	-		$	(19,296,752)		$	60,180,557
Catastrophe loss	3,388,937			-			(934,778)			2,454,159
Loss and loss adjustment expenses	$	82,866,246		$	-		$	(20,231,530)		$	62,634,716

Loss ratio excluding the effect of catastrophes(2)	37.3		%	0.0		%	22.9		%	46.8		%
Catastrophe loss	1.6		%	0.0		%	1.1		%	1.9		%
Loss ratio	38.9		%	0.0		%	24.0		%	48.7		%

(Percentage components may not sum to totals due to rounding)

The key measures for our insurance underwriting business for the years ended December 31, 2025 and 2024 are as follows:


	Years ended December 31,
	2025			2024

Net premiums earned	$	187,126,722		$	128,497,920
Ceding commission revenue	15,674,971			18,837,946
Other income	610,212			549,967

Loss and loss adjustment expenses (1)	84,265,722			62,634,716

Acquisition costs and other underwriting expenses:
Commission expense	40,726,801			33,929,333
Other underwriting expenses	31,718,770			25,692,727
Total acquisition costs and other underwriting expenses	72,445,571			59,622,060

Underwriting income	$	46,700,612		$	25,629,057

Key Measures:
Net loss ratio excluding the effect of catastrophes(2)	43.8		%	46.8		%
Effect of catastrophe loss on net loss ratio (1)(2)	1.2		%	1.9		%
Net loss ratio	45.0		%	48.7		%

Net underwriting expense ratio excluding the effect of catastrophes(2)	30.0		%	31.3		%
Effect of catastrophe loss on net underwriting expense ratio(2)	0.0		%	0.0		%
Net underwriting expense ratio	30.0		%	31.3		%

Net combined ratio excluding the effect of catastrophes(2)	73.8		%	78.1		%
Effect of catastrophe loss on net combined ratio (1)(2)	1.2		%	1.9		%
Net combined ratio	75.0		%	80.0		%

Reconciliation of net underwriting expense ratio:
Acquisition costs and other underwriting expenses	$	72,445,571		$	59,622,060
Less: Ceding commission revenue	(15,674,971)			(18,837,946)
Less: Other income	(610,212)			(549,967)
	$	56,160,388		$	40,234,147

Net earned premium	$	187,126,722		$	128,497,920

Net Underwriting Expense Ratio	30.0		%	31.3		%

(1)For the years ended December 31, 2025 and 2024, includes the sum of net catastrophe losses and loss adjustment expenses of $2,172,940 and $2,454,159, respectively.

(2)Net loss ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between the GAAP net loss ratio and the effect of catastrophes on the net loss ratio. See "Non-GAAP Financial Measures" for the reconciliation of net loss ratio excluding the effect of catastrophes to the GAAP measure of net loss ratio. Net underwriting expense ratio excluding the effect of catastrophes is also a non-GAAP ratio, which is computed as the difference between the GAAP net underwriting expense ratio and the effect of catastrophes on the net underwriting expense ratio. See "Non-GAAP Financial Measures" for the reconciliation of net underwriting expense ratio excluding the effect of catastrophes to the GAAP measure of net underwriting expense ratio. Net combined ratio excluding the effect of catastrophes is also a non-GAAP

ratio, which is computed as the difference between the GAAP net combined ratio and the effect of catastrophes on the net combined ratio. See "Non-GAAP Financial Measures" for the reconciliation of net combined ratio excluding the effect of catastrophes to the GAAP measure of net combined ratio.

Investments

Portfolio Summary

The following table presents a breakdown of the amortized cost, estimated fair value, and unrealized gains and losses of our investments in fixed-maturity securities classified as available-for-sale as of December 31, 2025 and 2024:

Available-for-Sale Securities


	December 31, 2025

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Estimated Fair Value		% of Estimated Fair Value
Category					Less than 12 Months		More than 12 Months

U.S. Treasury securities and obligations of U.S. government corporations and agencies (1)	$	997,124	$	10,066	$	-	$	-	$	1,007,190	0.3	%
Political subdivisions of States, Territories and Possessions	24,125,578		182,580		-		(2,534,725)		21,773,433		7.5	%
Corporate and other bonds Industrial and miscellaneous	131,958,643		567,410		(118,901)		(2,540,470)		129,866,682		44.9	%
Residential mortgage and other asset backed securities (1) (2)	139,656,710		1,273,816		(62,968)		(4,477,673)		136,389,885		47.2	%
Total fixed-maturity securities	$	296,738,055	$	2,033,872	$	(181,869)	$	(9,552,868)	$	289,037,190	100.0	%


	December 31, 2024

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Estimated Fair Value		% of Estimated Fair Value
Category					Less than 12 Months		More than 12 Months

Political subdivisions of States, Territories and Possessions	$	24,271,177	$	-	$	(73,589)	$	(3,324,491)	$	20,873,097	11.2	%
Corporate and other bonds Industrial and miscellaneous	112,507,436		-		(1,024,461)		(4,690,597)		106,792,378		57.1	%
Residential mortgage and other asset backed securities (1) (2)	65,529,545		119,647		(209,890)		(6,211,339)		59,227,963		31.7	%
Total fixed-maturity securities	$	202,308,158	$	119,647	$	(1,307,940)	$	(14,226,427)	$	186,893,438	100.0	%

(1)In October 2022, KICO placed certain U.S. Treasury securities to fulfill the required collateral for a sale leaseback transaction in a designated custodian account (see Note 7 - Debt - "Equipment Financing"). As of December 31, 2024. KICO had sold its U.S. Treasury securities and replaced a portion of its other fixed-maturity securities in the designated custodian account. As of December 31, 2025 and December 31, 2024, the amount of required collateral was approximately $3,616,000 and $5,308,000, respectively. As of December 31, 2025 and December 31, 2024, the estimated fair value of the eligible collateral was approximately $3,616,000 and $5,308,000 respectively.

(2)KICO has placed certain residential mortgage backed securities as eligible collateral in a designated custodian account related to its membership in the Federal Home Loan Bank of New York ("FHLBNY") (see Note 9 - Debt - "Federal Home Loan Bank"). The eligible collateral would be pledged to FHLBNY if KICO draws an advance from the FHLBNY credit line. As of December 31, 2025, the estimated fair value of the eligible investments was approximately $9,598,000. KICO will retain all rights regarding all securities if pledged as collateral. As of December 31, 2025 and December 31, 2024 there was no outstanding balance on the FHLBNY credit line.

Equity Securities

The following table presents a breakdown of the cost and estimated fair value of, and gross gains and losses on, investments in equity securities as of December 31, 2025 and 2024:


	December 31, 2025
Category	Cost		Gross Gains		Gross Losses		Estimated Fair Value		% of Estimated Fair Value

Equity Securities:
Preferred stocks	$	9,750,322	$	-	$	(2,765,627)	$	6,984,695	69.5	%
Fixed income exchange traded funds	3,711,232		-		(724,432)		2,986,800		29.7	%
FHLBNY common stock	85,100		-		-		85,100		0.8	%
Total	$	13,546,654	$	-	$	(3,490,059)	$	10,056,595	100.0	%


	December 31, 2024
Category	Cost		Gross Gains		Gross Losses		Estimated Fair Value		% of Estimated Fair Value

Equity Securities:
Preferred stocks	$	9,750,322	$	-	$	(2,422,617)	$	7,327,705	71.2	%
Fixed income exchange traded funds	3,711,232		-		(808,432)		2,902,800		28.2	%
FHLBNY common stock	66,000		-		-		66,000		0.6	%
Total	$	13,527,554	$	-	$	(3,231,049)	$	10,296,505	100.0	%

Other Investments

The following table presents a breakdown of the cost and estimated fair value of, and gross gains on, our other investments as of December 31, 2025 and 2024:


	December 31, 2025						December 31, 2024
Category	Cost		Gross Gains		Estimated Fair Value		Cost		Gross Gains		Estimated Fair Value

Other Investments:
Hedge fund	$	1,987,040	$	2,565,338	$	4,552,378	$	1,987,040	$	2,393,616	$	4,380,656

Held-to-Maturity Securities

The following table presents a breakdown of the amortized cost and estimated fair value of, and gross unrealized gains and losses on, investments in held-to-maturity securities as of December 31, 2025 and 2024:


	December 31, 2025

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Estimated Fair Value		% of Estimated Fair Value
Category					Less than 12 Months		More than 12 Months

Held-to-Maturity Securities:
U.S. Treasury securities	$	1,229,490	$	-	$	(3,070)	$	(22,083)	$	1,204,337	23.4	%
Exchange traded debt	304,111		-		-		(62,111)		242,000		4.7	%
Corporate and other bonds
Industrial and miscellaneous	4,508,747		-		-		(817,817)		3,690,930		71.8	%
Total	$	6,042,348	$	-	$	(3,070)	$	(902,011)	$	5,137,267	100.0	%


	December 31, 2024

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Estimated Fair Value		% of Estimated Fair Value
Category					Less than 12 Months		More than 12 Months

Held-to-Maturity Securities:
U.S. Treasury securities	$	1,229,170	$	-	$	(39,630)	$	(15,990)	$	1,173,550	19.7	%
Political subdivisions of States,
Territories and Possessions	499,719		-		(654)		-		499,065		8.4	%
Exchange traded debt	304,111		-		-		(55,611)		248,500		4.2	%
Corporate and other bonds
Industrial and miscellaneous	5,014,342		-		-		(976,192)		4,038,150		67.8	%
Total	$	7,047,342	$	-	$	(40,284)	$	(1,047,793)	$	5,959,265	100.0	%

Held-to-maturity U.S. Treasury securities are held in trust pursuant to various states' minimum fund requirements.

A summary of the amortized cost and estimated fair value of our investments in held-to-maturity securities by contractual maturity as of December 31, 2025 and 2024 is shown below:


	December 31, 2025				December 31, 2024
Remaining Time to Maturity	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value

Less than one year	$	-	$	-	$	499,719	$	499,065
One to five years	2,063,366		2,029,462		622,375		600,288
Five to ten years	-		-		1,427,579		1,323,600
More than 10 years	3,978,982		3,107,805		4,497,669		3,536,312
Total	$	6,042,348	$	5,137,267	$	7,047,342	$	5,959,265

Credit Rating of Fixed-Maturity Securities

The table below summarizes the credit quality of our available-for-sale fixed-maturity securities as of December 31, 2025 and 2024 as rated by Standard and Poor's (or, if unavailable from Standard and Poor's, then Moody's, Fitch, or Kroll):


	December 31, 2025				December 31, 2024
	Estimated Fair Value		Percentage of Estimated Fair Value		Estimated Fair Value		Percentage of Estimated Fair Value

Rating
U.S. Treasury securities	$	1,007,198	0.3	%	$	-	0.0	%

Corporate and municipal bonds
AAA	3,388,595		1.2	%	3,232,352		1.7	%
AA	18,728,005		6.5	%	22,844,557		12.2	%
A	72,631,685		25.1	%	61,528,377		32.9	%
BBB+	29,128,976		10.1	%	20,827,660		11.1	%
BBB	24,203,080		8.4	%	13,933,733		7.5	%
BBB-	1,958,225		0.7	%	1,953,596		1.0	%
BB	-		-	%	991,550		0.5	%
Total corporate and municipal bonds	150,038,566		52.0	%	125,311,825		66.9	%

Residential mortgage backed, asset backed, and other collateralized obligations
AAA	50,779,398		17.6	%	15,961,257		8.5	%
AA	64,073,127		22.2	%	34,893,057		18.7	%
A	22,403,831		7.8	%	9,927,371		5.3	%
CCC	422,903		0.1	%	372,787		0.2	%
CC	-		0.0	%	82,696		0.0	%
Non rated	312,167		0.1	%	344,445		0.2	%
Total residential mortgage backed, asset backed,
and other collateralized obligations	137,991,426		47.8	%	61,581,613		32.9	%

Total	$	289,037,190	100.0	%	$	186,893,438	100.0	%

The table below details the average yield by type of fixed-maturity security as of December 31, 2025 and 2024:


Category	December 31, 2025		December 31, 2024
U.S. Treasury securities and obligations of U.S. government corporations and agencies	3.84	%	3.62	%

Political subdivisions of States, Territories and Possessions	3.69	%	3.85	%

Corporate and other bonds Industrial and miscellaneous	4.19	%	3.86	%

Residential mortgage backed securities	4.44	%	3.31	%

Total	4.27	%	3.68	%

The table below lists the weighted average maturity and effective duration in years on our fixed-maturity securities as of December 31, 2025 and 2024:


	December 31, 2025	December 31, 2024
Weighted average effective maturity	11.2	7.6

Weighted average final maturity	15.0	11.0

Effective duration	4.4	3.9

Fair Value Consideration

As disclosed in Note 4 to the consolidated financial statements, with respect to "Fair Value Measurements," we define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction involving identical or comparable assets or liabilities between market participants (an "exit price"). The fair value hierarchy distinguishes between inputs based on market data from independent sources ("observable inputs") and a reporting entity's internal assumptions based upon the best information available when external market data is limited or unavailable ("unobservable inputs"). The fair value hierarchy prioritizes fair value measurements into three levels based on the nature of the inputs. Quoted prices in active markets for identical assets have the highest priority ("Level 1"), followed by observable inputs other than quoted prices including prices for similar but not identical assets or liabilities ("Level 2"), and unobservable inputs, including the reporting entity's estimates of the assumption that market participants would use, having the lowest priority ("Level 3"). As of December 31, 2025 and 2024, 47% and 59%, respectively, of the investment portfolio recorded at fair value was priced based upon quoted market prices.

Liquidity and Capital Resources

Cash Flows

The primary sources of cash flow are from our insurance underwriting subsidiary, KICO, and include direct premiums written, ceding commissions from our quota share reinsurers, loss recovery payments from our reinsurers, investment income and proceeds from the sale or maturity of investments. Funds are used by KICO for ceded premium payments to reinsurers, which are paid on a net basis after subtracting losses paid on reinsured claims and reinsurance commissions. KICO also uses funds for loss payments and loss adjustment expenses on our net business, commissions to producers, salaries and other underwriting expenses as well as to purchase investments and fixed assets.

The primary source of cash flow for the Holding Company are dividends and distributions received from KICO, which are subject to statutory restrictions. For the Year Ended 2025, KICO paid dividends of $7,950,000 to the Holding Company. As of December 31, 2025, the maximum dividends that KICO can pay to us is restricted to the lesser of 10% of statutory surplus as shown by its last statement on file with DFS, or 100% of net investment income of the preceding 36

months reduced by dividends paid during such period. As of December 31, 2025, the maximum allowable dividend that KICO may pay to KINS was $1,969,796 without DFS approval.

KICO is a member of the FHLBNY, which provides additional access to liquidity. Members have access to a variety of flexible, low-cost funding through FHLBNY's credit products, enabling members to customize advances. Advances are to be fully collateralized; eligible collateral to pledge to FHLBNY includes residential and commercial mortgage-backed securities, along with U.S. Treasury and agency securities. See Note 3 - Investments to our consolidated financial statements for eligible collateral held in a designated custodian account available for future advances. Advances are limited to 5% of KICO's net admitted assets as of the end of the previous quarter, which is September 30, 2025. On July 6, 2023, A.M. Best withdrew KICO's ratings as KICO requested to no longer participate in A.M. Best's interactive rating process. As a result of the withdrawal of A.M. Best ratings, prior to April 15, 2025, KICO was only able to borrow on an overnight basis. Effective April 15, 2025, based on KICO's credit rating from FHLBNY, KICO can now borrow for a term of up to five years. The maximum allowable advance as of December 31, 2025, based on the net admitted assets as of September 30, 2025, was approximately $16,873,000. Available collateral as of December 31, 2025 was approximately $9,598,000. Effective April 15, 2025, advances are limited to 91% of the amount of available collateral. Prior to April 15, 2025, advances were limited to 85% of the amount of available collateral. There were no borrowings under this facility during the years ended December 31, 2025 and 2024.

On April 5, 2024, we filed a shelf registration (the "Shelf Registration") statement on Form S-3 with the SEC under the Securities Act of 1933, as amended, with regard to the registration of $50,000,000 of our equity and debt securities (the "Shelf Registration Statement"). The Shelf Registration Statement was declared effective by the SEC on April 22, 2024. Any offering made pursuant to the Shelf Registration Statement may only be made by means of a prospectus, including a prospectus supplement, forming a part of the effective Shelf Registration Statement, relating to the offering.

In May 2024, we entered into a Sales Agreement with Janney Montgomery Scott LLC (the "Sales Agent") under which we initially had the ability to issue and sell shares of our Common Stock, from time to time, through the Sales Agent, pursuant to the Shelf Registration Statement, up to an aggregate offering price of approximately $16,400,000 in what is commonly referred to as an "at-the-market" ("ATM") program. On January 7, 2025, we filed a prospectus supplement providing for a going forward aggregate offering price for the ATM program of $25,000,000. During the year ended December 31, 2025, we sold 612,999 shares of our Common Stock at a weighted average price of $16.00 per share and raised $9,464,323 in net proceeds under the ATM program. As of December 31, 2025, we had remaining capacity to sell up to an additional $15,945,937 of our Common Stock under the ATM program.

On September 12, 2024, we issued the 2024 Notes in the aggregate principal amount of $14,950,000 pursuant to the 2024 Exchange Agreement. Beginning in the third quarter of 2024 through the first quarter of 2025, we paid optional principal amounts, reducing the balance of the 2024 Notes, and completely satisfying the obligation on February 24, 2025.

If the aforementioned sources of cash flow currently available are insufficient to cover our Holding Company cash requirements, we will seek to obtain additional financing.

Cash flow and liquidity are categorized into three sources: (1) operating activities; (2) investing activities; and (3) financing activities, which are shown in the following table:


Years ended December 31,	2025		2024

Cash flows provided by (used in):
Operating activities	$	75,859,517	$	57,947,771
Investing activities	(92,856,302)		(35,261,441)
Financing activities	506,074		(2,993,887)
Net (decrease) increase in cash and cash equivalents	(16,490,711)		19,692,443
Cash and cash equivalents, beginning of period	28,669,441		28,669,441
Cash and cash equivalents, end of period	$	12,178,730	$	28,669,441

Net cash provided by operating activities was $75,860,000 in the Year Ended 2025 as compared to $57,948,000 provided by operating activities in the Year Ended 2024. The $17,912,000 increase in cash flows provided by operating

activities in the Year Ended 2025 as compared to the Year Ended 2024 was primarily the result of an increase in net income (adjusted for non-cash items) of $16,190,000 and cash provided from net fluctuations in operating assets and liabilities. The net fluctuations in assets and liabilities are related to operating activities of KICO as affected by growth or declines in its operations, payments on claims and other changes, which are described above.

Net cash used in investing activities was $92,856,000 in the Year Ended 2025 compared to $35,261,000 used in investing activities in the Year Ended 2024 resulting in a $57,595,000 increase in net cash used in investing activities. In the Year Ended 2025 we had net cash used by our investment portfolio of $93,649,000, compared to $32,924,000 used in the Year Ended 2024. In the Year Ended 2025 one of our subsidiaries received gross proceeds of $3,600,000 from the sale of real estate that was used as our headquarters building.

Net cash provided by financing activities was $506,000 in the Year Ended 2025 compared to $2,994,000 used in the Year Ended 2024. In the Year Ended 2025, we received net proceeds of $9,470,000 from our ATM offering. This amount was offset primarily by principal payments of $5,950,000 on our 2024 Notes, $1,223,000 on our equipment financing debt in connection with KICO's sale-leaseback transaction, $562,000 for withholding taxes paid on vested restricted stock awards and the exercise of stock options, and shareholder dividend payments of $1,414,000. The principal payments on the 2024 Notes were made by using a portion of the net proceeds from our ATM offering. Net cash used in financing activities in the Year Ended 2024 were primarily principal payments of $5,000,000 on our 2022 Notes, $9,000,000 on our 2024 Notes, and $1,154,000 principal payments on our equipment financing debt. The principal payments in the Year Ended 2024 on the 2024 Notes were made by using a portion of the $13,611,000 net proceeds from our ATM offering.

Reinsurance

The following table provides summary information with respect to each reinsurer that accounted for more than 10% of our reinsurance recoverables on paid and unpaid losses and loss adjustment expenses as of December 31, 2025:


($ in thousands)	A.M. Best Rating	Amount Recoverable as of December 31, 2025
Swiss Reinsurance America Corporation	A+	$	9,658,000	26.8	%
Hanover Rueck SE	A+	12,373,000		34.3	%
Lancashire Insurance Company Limited	A	7,040,000		19.5	%
		29,071,000		80.6	%
Others (1)		6,989,000		19.4	%
Total		$	36,060,000	100.0	%

(1)Of $6,989,000 reinsurance recoverables included in Others at December 31, 2025, $384,000 was guaranteed by irrevocable letters of credit.

Effective January 1, 2024, we entered into a 27% quota share reinsurance treaty for our personal lines business, which primarily consisted of homeowners' and dwelling fire policies, covering the period from January 1, 2024 through January 1, 2025 ("2024/2025 Treaty"). Upon the expiration of the 2024/2025 Treaty on January 1, 2025, we entered into a new 16% quota share reinsurance treaty for our personal lines business, covering the period from January 1, 2025 through January 1, 2026 ("2025/2026 Treaty"). Upon the expiration of the 2025/2026 Treaty on January 1, 2026, we entered into a new 5% quota share reinsurance treaty for our personal lines business (written in all states except California for which we entered into a new 30% quota share reinsurance treaty) covering the period from January 1, 2026 through January 1, 2027 ("2026/2027 Treaty").

Our excess of loss and catastrophe reinsurance treaties expired on June 30, 2025 and we entered into new excess of loss and catastrophe reinsurance treaties effective July 1, 2025 (as discussed below).The new catastrophe reinsurance treaties includes the issuance of a $125,000,000 catastrophe bond ("Series 2025-1 Notes"). The Series 2025-1 Notes were priced at 4.5% and issued through a Bermuda-registered special purpose insurer, 1886 Re Ltd., providing us with $125,000,000 of collateralized reinsurance protection. The Series 2025-1 Notes offer multi-year protection against named storm events across New York, New Jersey, Connecticut, Massachusetts and Rhode Island on an indemnity trigger and per-

occurrence basis. The Series 2025-1 Notes, which were structured and placed by Aon Securities LLC, will cover four annual risk periods from July 1, 2025, through June 30, 2029.

Effective January 1, 2024, we renewed an underlying excess of loss treaty ("Underlying XOL Treaty") covering the period from January 1, 2024 through January 1, 2025. The treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms were excluded from the treaty. Effective January 1, 2025, the Underlying XOL Treaty was renewed covering the period from January 1, 2025 through June 30, 2025. Effective July 1, 2025, the Underlying XOL Treaty was renewed along with our excess of loss reinsurance treaty covering the period from July 1, 2025 through June 30, 2026. Combined, the renewed treaties provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. For the period October 1, 2024 through April 30, 2025, we purchased catastrophe reinsurance which provides coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. For the period October 15, 2025 through April 30, 2026, we purchased catastrophe reinsurance which provides coverage for winter storm losses to the extent of 90% of $5,000,000 in excess of $5,000,000. Effective July 1, 2025, we purchased $435,000,000 of catastrophe reinsurance in excess of $5,000,000, compared to $275,000,000 of catastrophe reinsurance in excess of $5,000,000 in the expiring treaty. Material terms for our reinsurance treaties in effect for the treaty years shown below are as follows:


	Treaty Period
	2026/2027 Treaty						2025/2026 Treaty						2024/2025 Treaty
Line of Business	July 1, 2026 to January 1, 2027			January 2, 2026 to June 30, 2026			July 1, 2025 to January 1, 2026			January 2, 2025 to June 30, 2025			July 1, 2024 to January 1, 2025			January 1, 2024 to June 30, 2024

Personal Lines:
Homeowners, dwelling fire and canine legal liability
Quota share treaty:
Percent ceded (6)	5		%	5		%	16		%	16		%	27		%	27		%
Risk retained on initial
$1,000,000 of losses (4) (5) (6)	$	950,000		$	950,000		$	840,000		$	840,000		$	730,000		$	730,000
Losses per occurrence
subject to quota share
reinsurance coverage	$	1,000,000		$	1,000,000		$	1,000,000		$	1,000,000		$	1,000,000		$	1,000,000
Expiration date	January 1, 2027			January 1, 2027			January 1, 2026			January 1, 2026			January 1, 2025			January 1, 2025
Excess of loss coverage and
facultative facility
coverage (1) (4) (5)	$	(5)		$	8,250,000		$	8,250,000		$	8,400,000		$	8,400,000		$	8,400,000
				in excess of			in excess of			in excess of			in excess of			in excess of
				$	750,000		$	750,000		$	600,000		$	600,000		$	600,000
Total reinsurance coverage
per occurrence (4) (5)	$	50,000		$	8,175,000		$	8,285,000		$	8,360,000		$	8,470,000		$	8,470,000
Losses per occurrence
subject to reinsurance
coverage (5)	$	1,000,000		$	9,000,000		$	9,000,000		$	9,000,000		$	9,000,000		$	9,000,000
Expiration date	(5)			June 30, 2026			June 30, 2026			June 30, 2025			June 30, 2025			June 30, 2024

Catastrophe Reinsurance:
Initial loss subject to personal
lines quota share treaty (5)	$	10,000,000		$	10,000,000		$	10,000,000		$	10,000,000		$	10,000,000		$	10,000,000
Risk retained per catastrophe
occurrence (5) (6) (7) (8)	(5)			$	5,500,000		$	5,000,000		$	4,250,000		$	4,750,000		$	9,500,000
Catastrophe loss coverage
in excess of quota share
coverage (2) (5) (8)	(5)			$	434,500,000		$	435,000,000		$	275,000,000		$	275,000,000		$	315,000,000

Reinstatement premium
protection (3)	(5)			Yes			Yes			Yes			Yes			Yes

(1)For personal lines, includes the addition of an automatic facultative facility allowing KICO to obtain homeowners single risk coverage up to $9,000,000 in total insured value, which covers direct losses from $3,500,000 to $9,000,000 through June 30, 2026.

(2)Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts, except for one occurrence on 80% of the first layer of $5,000,000 in excess of $5,000,000, and one occurrence on 52% of the top layer of $240,000,000 in excess of $200,000,000, which is covered under the catastrophe bond. Duration of 168 consecutive hours for a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone, except for winter storm coverage, which is covered under a specific declared catastrophe event.

(3)For the period July 1, 2024 through June 30, 2025 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000. For the period July 1, 2025 through June 30, 2026 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000.

(4)For the period January 1, 2024 through June 30, 2025, the Underlying XOL Treaty provides 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Excludes losses from named storms. Reduces retention to $530,000 from $730,000 under the 2024/2025 Treaty. Retention increases to $640,000 from $530,000 under the 2025/2026 Treaty. For the period July 1, 2025 through June 30, 2026, the Underlying XOL Treaty combined with the excess of loss treaty provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. Increased retention to $715,000 from $640,000 under the 2025/2026 Treaty, and increased retention to $825,000 under the 2026/2027 Treaty. (see note 5 below).

(5)Excess of loss coverage and facultative facility and catastrophe reinsurance treaties will expire on June 30,2026, with none of these coverages to be in effect during the period from July 1 2026 through January 1, 2027. If and when these treaties are renewed on July 1, 2026 the excess of loss and facultative facility, underlying excess of loss treaty, and the catastrophe reinsurance treaty, will be as provided for therein. Reinsurance coverage in effect from July 1, 2026 through January 1, 2027 is currently only covered under the 2026/2027 Treaty. The 2026/2027 Treaty will expire on January 1, 2027.

(6)For the 2024/2025 Treaty, 22% of the 27% total of losses ceded under this treaty are excluded from a named catastrophe event. For the 2025/2026 Treaty, 6% of the 16% total of losses ceded under this treaty are excluded from a named catastrophe event. For the 2026/2027 Treaty, there is no exclusion for catastrophe events.

(7)Plus losses in excess of catastrophe coverage.

(8)Effective July 1, 2025 through June 30, 2026, catastrophe coverage is 80% of the first layer of $5,000,000 in excess of $5,000,000. The remaining coverage is at 100% of $430,000,000 in excess of $10,000,000. For the period October 1, 2024 through April 30, 2025, additional catastrophe reinsurance treaty provided coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. For the period October 15, 2025 through April 30, 2026, additional catastrophe reinsurance treaty will provide coverage for winter storm losses to the extent of 90% of $5,000,000 in excess of $5,000,000. Retention for winter storms is $4,800,000 under the 2024/2025 Treaty, $5,200,000 under the 2025/2026 Treaty from January 1, 2025 through April 30, 2025, $3,900,000 from October 15, 2025 through January 1, 2026, the expiration date of the 2025/2026 Treaty, and $5,000,000 under the 2026/2027 Treaty through April 30, 2026,


	Treaty Year
Line of Business	July 1, 2025 to June 30, 2026			July 1, 2024 to June 30, 2025			July 1, 2023 to June 30, 2024

Personal Lines:
Personal Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage	90		%	90		%	90		%
Percent ceded - excess of $1,000,000 dollars of coverage	95		%	95		%	95		%
Risk retained	$	300,000		$	300,000		$	300,000
Total reinsurance coverage per occurrence	$	4,700,000		$	4,700,000		$	4,700,000
Losses per occurrence subject to quota share reinsurance coverage	$	5,000,000		$	5,000,000		$	5,000,000
Expiration date	June 30, 2026			June 30, 2025			June 30, 2024

Commercial Lines (1)

(1)Coverage on all commercial lines policies expired in September 2020; reinsurance coverage is based on treaties in effect on the date of loss.

Inflation

Premiums are established before we know the amount of losses and loss adjustment expenses or the extent to which inflation may affect such amounts. We attempt to anticipate the potential impact of inflation in establishing our reserves, especially as it relates to medical and hospital rates where historical inflation rates have exceeded the general level of inflation. Inflation in excess of the levels we have assumed could cause loss and loss adjustment expenses to be higher than we anticipated, which would require us to increase reserves and reduce earnings.

Fluctuations in rates of inflation also influence interest rates, which in turn impact the market value of our investment portfolio and yields on new investments. Operating expenses, including salaries and benefits, generally are impacted by inflation.

The Year Ended 2025 economic inflation tempered compared to 2024 and 2023, which resulted in a sustained increase in interest rates, a widening of credit spreads, lower public equity valuations, and significant financial market volatility. The higher interest rates and widening of credit spreads reduced the value of our fixed income securities.

Non-GAAP Financial Measures

Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP.

The following table reconciles GAAP net premiums earned to net written premiums and direct written premiums for the periods presented:


	Years Ended December 31,
	2025		2024

GAAP net premiums earned	$	187,126,722	$	128,497,920
Change in unearned premiums	26,592,344		25,731,945
Net written premiums	213,719,066		154,229,865
Ceded written premiums	64,081,564		87,750,072
Direct written premiums	$	277,800,630	$	241,979,937

The following table reconciles the GAAP net loss ratio to the net loss ratio excluding the effect of catastrophes and to the underlying loss ratio for the periods presented:


	Years ended December 31,
	2025		2024

GAAP net loss ratio	45.0	%	48.7	%
Effect of catastrophes	1.2	%	1.9	%
Net loss ratio excluding the effect of catastrophes	43.8	%	46.8	%
Effect of prior year reserve development	(0.6	%)	(1.4	%)
Underlying loss ratio	44.4	%	48.2	%

The following table reconciles the GAAP net loss ratio to the net loss ratio excluding commercial lines business for the periods presented:


	Years ended December 31,
	2025		2024

GAAP net loss ratio	45.0	%	48.7	%
Effect of commercial lines business	1.1	%	1.8	%
Net loss ratio excluding the effect of commercial lines business	43.9	%	46.9	%

The following table reconciles GAAP net income to net income from insurance underwriting business on a standalone basis for the periods presented:


	Years ended December 31,
	2025		2024

GAAP net income	$	40,767,128	$	18,358,436
Holding company operations	(3,068,270)		(5,223,419)
Net income from insurance underwriting business on a standalone basis	$	43,835,398	$	23,581,855

The following table reconciles the GAAP net loss ratio, GAAP net underwriting expense ratio, and GAAP net combined ratio to the net loss ratio excluding the effect of catastrophes, net underwriting expense ratio excluding the effect of catastrophes, and net combined ratio excluding the effect of catastrophes for the periods presented:


	Years ended December 31,
	2025		2024

GAAP net loss ratio	45.0	%	48.7	%
Effect of catastrophes	1.2	%	1.9	%
Net loss ratio excluding the effect of catastrophes	43.8	%	46.8	%

GAAP net underwriting expense ratio	30.0	%	31.3	%
Effect of catastrophes	0.0	%	0.0	%
Net underwriting expense ratio excluding the effect of catastrophes	30.0	%	31.3	%

GAAP net combined ratio	75.0	%	80.0	%
Effect of catastrophes	1.2	%	1.9	%
Net combined ratio excluding the effect of catastrophes	73.8	%	78.1	%

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Outlook

Our net premiums earned may be impacted by a number of factors. Net premiums earned are a function of net written premium volume. Net written premiums comprise both renewal business and new business and are recognized as earned premium over the term of the underlying policies. Net written premiums from both renewal and new business are impacted by competitive market conditions as well as general economic conditions. We have made underwriting changes to emphasize profitability over growth and have culled out the type of risks that do not generate an acceptable level of return.

On April 14, 2025, KICO entered into an agreement to offer a quote for a replacement policy to selected Homeowners policyholders in Downstate New York as one of our competitors pivoted focus away from admitted personal lines business (the "Withdrawal Plan"). The Withdrawal Plan, which includes this transaction, was approved by the New York Department of Financial Services. The Withdrawal Plan enabled KICO to work with new distribution partners to further increase its footprint in Downstate New York by offering an alternative policy to selected Homeowners policyholders with effective dates that started in the third quarter of 2025. In March 2026, we announced that we intend to expand into new markets, starting with California in the second quarter of 2026. See "Forward-Looking Statements" before Part I, Item 1.

During the first quarter of 2026, winter weather in the Northeast United States has been more severe than recent winters with losses incurred from seven catastrophe events during the months of January and February 2026. The 2026 guidance disclosed in our Form 8-K filing on March 5, 2026, assumes higher-than-average catastrophe losses in the first quarter and full year of 2026.

Kingstone Companies Inc. published this content on March 16, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 16, 2026 at 18:18 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]

Back

View original format