Hey, for those of you listening online, welcome and or welcome back to the 2024 MicroCap Rodeo, coming to you live from New York City, Sparks Steak House in Midtown Manhattan. Title sponsor, today, Lucosky Brookman, and today's event brought to you by The Money Channel, John Heffernan. It's been an honor to be here today with so many incredibly talented people and, none more talented than my next presenter. Ladies and gentlemen, the President and CEO of Kingstone Companies, please welcome Meryl Golden. Meryl.
How can I follow that? Oh, my God! Thank you so much for that introduction. I hope I'm as exciting as you are. So, and thank you for hearing about Kingstone today. So Kingstone is a property and casualty insurance company focused on coastal homeowners in the state of New York. And I'm gonna tell you a little bit about that business, but first, let me tell you a little bit about myself. So I joined Kingstone five years ago, and I've been the CEO for one year. And before Kingstone, I have a long career in the insurance industry. I started my career at Progressive Insurance, and I was there for nineteen years. I know, I look super young. And then I went to Liberty Mutual, and then I left the industry and worked for Bridgewater, which is a hedge fund.
And then I came back to the industry. I worked for a technology company based out of Tel Aviv before joining Kingstone. So I've had a varied experience in the insurance industry. So Kingstone was formed as a company, believe it or not, in 1886, so we've been around a super long time, but in our current form, we went public in 2009. And the company for-- I guess it's called something like a Wall Street darling. That's for about a decade, the company had more than 20% growth and 20% ROE consistently every year, until it didn't. And I joined the company when it didn't. And my job, at first, was to modernize the company because unfortunately, during that decade period of incredible results, there wasn't a lot of... Oh, I forgot to change the slide. Sorry about that.
So there wasn't a lot of investment in the company's infrastructure. So when I joined the company, one of the first things that I did was I hired some other senior leaders to help me turn around the company, and we also, you know, we changed systems, we developed a new product that properly matches rate to risk, and we did a lot to really build the infrastructure of the company. So sorry, I'm kind of behind on the slides here. So that was really the focus for the first couple of years in the company. And then the last few years has been a focus on returning the company to profitability.
So we had 2019 through 2023, we lost money, and during that time period, we lost a lot of our investor following and a lot of our institutional investors. We had a lot of issues. Here is what we did to turn the company around. First is that we had written a lot of business outside New York that was quite unprofitable, and so we spent a lot of time getting off that business. We also have taken a lot of rate, so in insurance, you need to have adequate prices, so that's something that we have focused on.
And also in this period of high inflation, we have been making sure that our customers are insured to value as the replacement cost of their homes have gone up, and so we have taken a lot of rate. We also have worked hard to manage our reinsurance costs. So you know, the last couple of years have been what's called a hard reinsurance market, where reinsurance companies or insurance companies for insurance companies, for those that don't know, it's our largest cost, and they had taken their rates up substantially. So we worked hard to manage our reinsurance costs so that the increase was not as large for Kingstone. And then last, we worked hard to reduce our expenses. So if you think about insurance as a dollar, the question is, what amount of that dollar do you spend on expenses?
And in twenty twenty-one, Kingstone was spending $0.41 of every dollar on expenses, and this year, we'll spend less than $0.31 on expenses. So we had a huge reduction in our expenses for the company. So anyway, we've done a lot to turn around the company. And so you know, this time period where we're turning around the company, there are a lot of headwinds. Like I mentioned inflation, I mentioned reinsurance, and interest rates going up is also a big deal because most insurance companies invest in bonds. So during this period where we were reinventing the company, there were a lot of headwinds blowing against us, if you will. And yet, in the fourth quarter of last year, the company completed its turnaround, and fourth quarter of last year was our first quarter of profitability in four years.
And now we've had three consecutive quarters of profitability. So again, starting in the fourth quarter of last year, we were feeling really good about the company. We're priced right and insured, our properties are insured to value, and we have the right team in place, we have the right claims organization, and we started to grow again. So we're growing, and many of our competitors did not act as quickly as we did to address the headwinds in the market. So many of them were still tightening their underwriting, accepting fewer risks. And so the company was in a very good place for the first six months of the year. And then what happened in June is two large insurance companies, exactly in our footprint, coastal homeowners in downstate New York, went insolvent.
And so now we are faced with the largest profitable growth opportunity in the company's history. It couldn't come at a better time, frankly, because we were ready for it. As I said, we're priced right, have the right team in place. It was like, you know, if I look back on my five years at Kingstone, I would say for the first four years, everything that could go wrong, went wrong. It was just a really challenging time. And now everything that could go right is going right. We're so fortunate. I mean, it's unfortunate for those companies that went insolvent and for the policyholders in the state, but for us, it could not have happened at a better time. We are profitable and growing. Just for a summary of our year-to-date results that I'll share with you.
For the first six months of the year, we wrote $103 million in premium, so that was up 8%. But it really masks the growth in the company because our New York business, we call core, and the business outside of New York, we are getting out of that business 'cause it was very unprofitable. So we call that non-core. So our core growth rate, so our New York growth rate, was 17% for the first six months of the year, and it will be much higher for the remainder of the year. I'll share with you shortly. Then, as I mentioned, you know, you think about insurance as a dollar. What do you spend that dollar on?
$0.54 of it is on losses, and you can, the improvement over the last year is really monumental, down 23 points from the prior year period. And then expense is $0.31. So overall, on the business of insurance, for the first six months of the year, we've made a 14% margin. Then in insurance, you also have investment results. So every insurance company is like two businesses. You have the business of insurance, you have the business of investing. Our first six months of investment returns, we've had, we made $3.3 million. So for the first six months of the year, our net income was $5.9 million, as compared to the prior year, six months, where we lost $5.6 million. So we've had an over $11 million swing in our earnings in a twelve-month period.
Our EPS on a basic basis was $0.54 for the first six months of the year, and our return on equity was almost 32%. So all of us who worked so hard over the past four years to turn around the company could not be more proud of what we've been able to accomplish. So the company puts out guidance, and again, the idea of putting out guidance was we wanted investors to look at Kingstone with fresh eyes. We had, you know, we had a really, a great run and then a really bad run. We're a very different company today than we were even just a year ago. So we put out guidance for calendar 2024, and we have been updating our guidance every quarter.
Where our guidance stands at the end of the second quarter, you can see that we increased our core or our New York growth rate. We believe we'll end the year up 25%-35%, and that's because of those companies going out of business that I mentioned. We are growing super fast. We're gonna end the year with an EPS between $1 and $1.30, and a ROE of 26%-34%. We also have put out guidance for twenty-five, so let the party continue. We think we'll grow in the 15%-25% range for our core New York business, and we'll earn $1.20-$1.60 per share, and also have a ROE of above twenty, somewhere in the 22%-30% range. So that's our turnaround story.
As I said, I think we're in a great place as a company, and we have this incredible opportunity in downstate New York to continue growing. I think I missed it earlier. Our market share in New York is just 1.5%, and we're the fifteenth largest homeowners carrier in the state of New York. So I tell you that, so you know, we have a lot of headroom to continue growing in New York. On that, I'd be happy to open it up for any questions that you have.
In terms of the property values that you insure, are you competing against, like, Chubb and PURE or, or some of these?
Sure. I'm gonna repeat the question so that those that are online can hear it. The question was, in terms of the property values that we insure, are we competing with the likes of Chubb and PURE? So to answer your question, it's no. We insure up to $2.5 million in value. We are not a high net worth insurer, but because of inflation, many, many homes, particularly on Long Island or in the boroughs, are multi-million, you know, they're million-dollar homes. So, but our intent is not to write the art collection or the collector's car. That's not our business. We're writing Middle America that has a home that is valued, you know, somewhere, no higher than $2.5 million.
Your competing underwriters would be names like who?
There are very few competitors in our space right now. We actually compete with no other carriers. The only companies open for business are managing general agents. But there are companies that historically, the companies that we competed with, you may have heard of a company called Heritage. They have a subsidiary in New York called Narragansett Bay. They have not written a piece of new business for two years. There was a company called United Property and Casualty, owned by United Insurance Holdings. They went insolvent last March. And then, you know, there are companies that come and go, but right now, there are probably three managing general agents that are open for business, and otherwise, it's pretty much us and the excess and surplus lines market.
And then, I'm sorry, so then I'm trying to triangulate that to your, the numbers you gave for market share then.
Mm-hmm.
That was not segment market share. That was kind of the overall property casualty market?
That was the entire state of New York-
Yeah
- for homeowners. And again, there may be like, you know, companies like State Farm, Allstate, Travelers, they have very large books of business in New York. They're just not writing new business for coastal properties.
Yeah. So then, I'm sorry, then, just the final one. So then, within the new coastal underwriting market, any estimates on what your share is like?
I realize that I have forgotten to repeat the question. So your question is: do we know our share of the coastal homeowners market in New York? I can tell you that it's definitely less than 10%. Yes, I think you had a question.
Yeah. You led off, I think you either said waterfront or coastal. So can you be more specific, where exactly are these properties? Maybe you said it, and I apologize.
Sure. So the question is, where are the properties that we insure? So the definition of coastal is really, every company has a different definition. So some companies, you know, let's say State Farm or Allstate, they might say, "I'm not gonna write a property within five miles of the coast." Others might say two miles, others might say one mile. So it's really up to them how they define coastal. And if you look at our business, we're about 60% of our business is on Long Island, and the remaining is in the boroughs or Westchester County.
Okay. So when you said coastal, you, I thought you said waterfront, you said coastal.
Coastal.
Got it.
Right.
You're not in upstate New York, you're not on the Lake Ontario or Lake Erie or anything?
We do not write in Albany, Syracuse, like, we do not write north of Westchester County.
Got it. Okay. Thank you.
My pleasure. Any other questions? Okay, well, I cannot think of a better way to end my day than here with you. And on that note, I'll turn it back over to you.
Good job.
Thank you.
Ladies and gentlemen, let's hear it one more time for Meryl Golden! Great job, Meryl. Thank you so much for that awakening presentation. Meryl, of course, the President, CEO of Kingstone Companies. Folks, it's been a great day here at Sparks Steak House in Midtown Manhattan. I wanted to give a shout-out to our sponsors before we head off the air, and for those of you listening online, we wanna thank you for joining our online audience. Today's event, sponsored by The Money Channel, Assurerack, Maxim Group, Lucosky Brookman, Eventus and Kingswood. Our participating companies today, we wanna thank Air Industries Group, Data Storage Corp, ECD Automotive, GameSquare Holdings, Giftify, GoHealth, Intellinetics, Kingstone, Kopin, Lifetime Brands, Mistras Group, Ocean Power Technologies, Orchestra BioMed Holdings, Sparta Commercial Services, Tanke Biosciences, Core, Tetra Technologies, The Glimpse Group, United States Antimony Corp, and USIO Inc.
We wanna thank the great staff here at Sparks Steak House for doing a phenomenal job today, and of course, all the fine folks at The Money Channel. Folks, that's gonna do it for the two thousand and twenty-four MicroCap Rodeo. John Heffernan signing off, Wednesday, October sixteenth. Enjoy the rest of your evening, everybody, and for those in attendance, open bar starts right now, adult beverages and soft drinks. Enjoy, and enjoy responsibly. Good night, everybody. We'll see you next time.