Third quarter 2026
Filed Nov 5, 2026Kingstone Reports Third Quarter 2026 Results Most Profitable Quarter in Company History Diluted Net Income Per Share of $1.19 | Annualized Return on Equity of 53% Net Premiums Earned Growth of 30% | Direct Premiums Written Growth 1 of 14.5% GAAP Net Combined Ratio of 65.6% Company Updates 2026 Outlook; Raises and Narrows Diluted EPS Guidance to $2.70 to $2.90
Third-quarter net income rose 61.7% to $17,584, diluted EPS rose 60.8% to $1.19, net premiums earned increased 30.2%, and the GAAP net combined ratio improved 7.1 points to 65.6%. Management raised and narrowed diluted EPS guidance to $2.70 to $2.90 and improved its net combined ratio outlook to 79% to 83%.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| Direct premiums written growth | 16% to 20% | 17.4% | in line |
| Net combined ratio | 81% to 86% | 81.7% | in line |
| Underlying combined ratio | 74% to 76% | 75.1% | in line |
| Catastrophe loss ratio | 7% to 10% | 10.4% | below |
| Net income per share – diluted | $2.20 to $2.90 | $1.86 | n/a |
| Return on equity | 24% to 30% | 28.0% | in line |
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net premiums earned, three months ended September 30GAAP | $62.41M | – | 30.2% |
| Net premiums earned, nine months ended September 30GAAP | $178.7M | – | 29.8% |
| Direct premiums written, three months ended September 30non-GAAP | $86.80M | – | 14.5% |
| Direct premiums written, nine months ended September 30non-GAAP | $228.9M | – | 17.4% |
| Policies in force, at the end of the periodother | 86,579 | – | 11.0% |
| Total revenues, three months ended September 30GAAP | $67.54B | – | – |
| Total revenues, nine months ended September 30GAAP | $193.2B | – | – |
| Ceding commission revenue, three months ended September 30GAAP | $1.74B | – | – |
| Ceding commission revenue, nine months ended September 30GAAP | $4.68B | – | – |
| Net investment income, three months ended September 30GAAP | $3.76M | – | 50.3% |
| Net investment income, nine months ended September 30GAAP | $10.52M | – | 53.7% |
| Net losses on investments, three months ended September 30GAAP | $ (550) | – | NM |
| Net losses on investments, nine months ended September 30GAAP | −$1.32M | – | (324.2)% |
| Gain on sale of real estate, nine months ended September 30GAAP | $ — | – | (100.0)% |
| Income from operations before taxes, three months ended September 30GAAP | $22.30B | – | – |
| Income from operations before taxes, nine months ended September 30GAAP | $34.42B | – | – |
| Income tax expense, three months ended September 30GAAP | $4.72B | – | – |
| Income tax expense, nine months ended September 30GAAP | $7.17B | – | – |
| Net income, three months ended September 30GAAP | $17.58M | – | 61.7% |
| Net income, nine months ended September 30GAAP | $27.25M | – | 4.8% |
| Net income per share - basic, three months ended September 30GAAP | $ 1.21 | – | 57.1% |
| Net income per share - basic, nine months ended September 30GAAP | $ 1.88 | – | —% |
| Net income per share - diluted, three months ended September 30GAAP | $ 1.19 | – | 60.8% |
| Net income per share - diluted, nine months ended September 30GAAP | $ 1.86 | – | 2.2% |
| Adjusted EBITDA, three months ended September 30non-GAAP | $24.38M | – | 66.2% |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $40.17M | – | 19.2% |
| Operating net income, three months ended September 30non-GAAP | $18.02M | – | 67.9% |
| Operating net income, nine months ended September 30non-GAAP | $28.29M | – | 17.9% |
| Operating net income per share - diluted, three months ended September 30non-GAAP | $ 1.22 | – | 67.1% |
| Operating net income per share - diluted, nine months ended September 30non-GAAP | $ 1.93 | – | 14.9% |
| Net loss ratio, three months ended September 30GAAP | 34.9% | – | (9.4)pts |
| Net loss ratio, nine months ended September 30GAAP | 51.1% | – | 2.9pts |
| Net underwriting expense ratio, three months ended September 30GAAP | 30.7% | – | 2.3pts |
| Net underwriting expense ratio, nine months ended September 30GAAP | 30.6% | – | (0.2)pts |
| Net combined ratio, three months ended September 30GAAP | 65.6% | – | (7.1)pts |
| Net combined ratio, nine months ended September 30GAAP | 81.7% | – | 2.7pts |
| Catastrophe loss ratio, three months ended September 30other | 7.5% | – | 7.3pts |
| Catastrophe loss ratio, nine months ended September 30other | 10.4% | – | 9.6pts |
| Underlying loss ratio, three months ended September 30non-GAAP | 33.5% | – | (10.6)pts |
| Underlying loss ratio, nine months ended September 30non-GAAP | 44.5% | – | (3.5)pts |
| Underlying combined ratio, three months ended September 30non-GAAP | 64.2% | – | (8.3)pts |
| Underlying combined ratio, nine months ended September 30non-GAAP | 75.1% | – | (3.7)pts |
| Return on equity - annualized, three months ended September 30GAAP | 52.9% | – | 10.0pts |
| Return on equity - annualized, nine months ended September 30GAAP | 28.0% | – | (11.8)pts |
| Other comprehensive loss, net of tax, three months ended September 30GAAP | −$9.69M | – | NM |
| Other comprehensive loss, net of tax, nine months ended September 30GAAP | −$12.13M | – | (323.3)% |
| Book value per share, at the end of the period - dilutedGAAP | $ 9.21 | – | 26.5% |
| Book value per share, at the end of the period - diluted excluding AOCInon-GAAP | $ 10.43 | – | 34.9% |
| Cash and cash equivalents, as of September 30, 2026GAAP | $20.79B | – | – |
| Total investments, as of September 30, 2026GAAP | $337.1B | – | – |
| Debt, net, as of September 30, 2026GAAP | $3.47B | – | – |
| Total stockholders' equity, as of September 30, 2026GAAP | $136.7B | – | – |
Fiscal Year 2026 outlook
- Tax rate21%
- NoteDirect premiums written growth: ~16%
- NoteNet combined ratio: 79% to 83%
- NoteUnderlying combined ratio: 74% to 76%
- NotePrior-year reserve development: (3)% to (2)%
- NoteCatastrophe loss ratio: 8% to 9%
- NoteNet income per share – diluted: $2.70 to $2.90
- NoteReturn on equity: 29% to 30%
- NoteWeighted average diluted shares outstanding: 14.8 million
Capital returns
- Dividends declared and paid per common share, three months ended September 30: $ 0.06
- Dividends declared and paid per common share, nine months ended September 30: $ 0.16
- Treasury stock, at cost, 1,543,571 shares at September 30, 2026: $ (5,859,840)
What drove it
- Net premiums earned rose 30% on premium growth and the reduced quota share.
- Direct premiums written growth was driven by higher average renewal premiums, improved retention and new business growth.
- Policies in force were up 11% year-over-year.
- Underlying loss ratio improved 10.6 points to 33.5% on lower claim frequency and severity.
- Management cited the growing mix of business on the Select platform and faster claims cycle times that give earlier visibility into ultimate claim costs.
- Net investment income increased 50.3% to $ 3,756 in the third quarter.
Concerns
- The third-quarter catastrophe loss ratio was 7.5%, compared with 0.2% a year ago.
- The nine-month catastrophe loss ratio was 10.4%, above the prior guidance range of 7% to 10%.
- Nine-month GAAP net combined ratio was 81.7%, 2.7 points higher than 79.0% in the prior-year period.
- Other comprehensive loss, net of tax, was $ (9,690) in the third quarter and $ (12,130) in the nine-month period.
- Management cited $9.7 million of after-tax unrealized bond losses in the quarter.
- Net losses on investments were $ (550) in the third quarter and $ (1,325) for the nine months.
What to watch
- Whether fiscal 2026 direct premiums written growth reaches the updated estimate of ~16%.
- The fiscal 2026 net combined ratio relative to the updated 79% to 83% range.
- Catastrophe losses relative to the updated 8% to 9% catastrophe loss ratio outlook.
- Additional prior-year reserve development, as management assumes no additional development for the fourth quarter.
- Retention, renewal premium trends, new business growth and the Select platform mix.
- The effect of unrealized losses on available-for-sale securities and book value per share.
Balance sheet and cash flow
- Cash and cash equivalents at September 30, 2026: $ 20,789,875
- Total investments at September 30, 2026: $ 337,055,391
- Total assets at September 30, 2026: $ 488,731,370
- Loss and loss adjustment expense reserves at September 30, 2026: $ 158,457,641
- Unearned premiums at September 30, 2026: $ 162,401,533
- Debt, net at September 30, 2026: $ 3,474,589
- Total liabilities at September 30, 2026: $ 351,989,018
- Total stockholders' equity at September 30, 2026: $ 136,742,352
- Operating cash flow: not reported
- Free cash flow: not reported
Analysis
Kingstone reported its most profitable quarter in company history, with third-quarter GAAP net income of $ 17,584, up 61.7%, and diluted EPS of $ 1.19, up 60.8%. Net premiums earned rose 30.2% to $ 62,412, while direct premiums written increased 14.5% to $ 86,795. Policies in force increased 11.0% to 86,579. The quarter also benefited from a 50.3% increase in net investment income to $ 3,756.
Management, verbatim
I am very pleased to again report the most profitable quarter in Kingstone history.
Meryl Golden, President and Chief Executive Officer
Net premiums earned rose 30% on premium growth and our reduced quota share and direct premiums written 1 grew 14.5%, driven by higher average renewal premiums, improved retention and new business growth.
Meryl Golden, President and Chief Executive Officer
We are updating our 2026 direct premiums written growth outlook to approximately 16%, improving our net combined ratio outlook to 79% to 83%, and raising the midpoint of our diluted earnings per share guidance to $2.80.
Meryl Golden, President and Chief Executive Officer
Not in the filing
stated, not guessed- Gross margin
- Operating cash flow
- Free cash flow
- Share repurchases during the reported quarter or nine-month period
- Segment revenue disclosure
- Prior-quarter comparisons for reported income-statement and ratio metrics
- Fiscal 2026 guidance for net premiums earned
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.