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Kingstone's Reinsurance Program: Why it is a Cornerstone of Growth
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Key Takeaways
KINS raised its catastrophe reinsurance limit by $160M to $440M for the 2025/2026 treaty period.
The expanded protection increased costs by only 10%, lowering cat cover to 12% of projected premiums.
Reinsurance supports premium growth, improved combined ratio and better capital efficiency at KINS.
Kingstone Companies Inc.’s (KINS - Free Report) homeowners and dwelling fire book in the storm-exposed Northeast makes risk transfer through reinsurance essential to its business strategy. Per its 2025/2026 Catastrophe Reinsurance, KINS increased the limit by 57%, from $160 million to $440 million. The limit includes multi-year protection of $125 million sourced through the issuance of the first catastrophe bond, 1886 Re Ltd., as announced in May.
The insurer increased protection with only a 10% increase in overall cost. The total cat cover cost for 2025/2026 is just 12% of projected direct premiums, down from 13% for the previous treaty period, also boosting the bottom line in the second half of 2025 by 11 cents.
Reinsurance is a core driver of Kingstone’s growth strategy, not just a risk mitigation tool. Through quota share treaties, the company yields about 25% of its personal lines’ premiums, with ceded commissions exceeding its underwriting expense ratio. This structure improves the combined ratio, safeguards surplus and supports Kingstone’s credit profile. The resulting capital efficiency enabled more than 20% premium growth in its core New York franchise last year.
A well-structured reinsurance program, combined with sound underwriting, diversification and rate adequacy, is essential for sustaining a profitable and resilient portfolio. It stabilizes earnings, lowers capital needs, and unlocks profitable growth, given the challenging pricing conditions in the Northeast. Kingstone’s ability to secure reinsurance on favorable terms reflects disciplined risk management and positions it for better return on equity performance going forward.
What About KINS’ Competitors?
KINS closely competes with Heritage Insurance Group (HRTG - Free Report) and Kinsale Capital Group (KNSL - Free Report) .
Heritage’s strong reinsurance program, combined with sound underwriting, diversification and rate adequacy, is vital to maintaining a profitable and resilient portfolio. With reduced volatility and available capital, Heritage is well-positioned to pursue higher-margin excess and surplus (E&S) and admitted niches.
With a prudent and efficient reinsurance strategy, Kinsale Capital is able to expand its underwriting capacity while effectively managing risk, particularly within its niche E&S lines. This approach enhances capital efficiency and underpins Kinsale’s ability to deliver strong, consistent returns.
KINS’ Price Performance
Shares of KINS have gained 0.4% year to date, underperforming the industry.
Image Source: Zacks Investment Research
KINS’ Expensive Valuation
KINS trades at a price-to-book value ratio of 2.59, above the industry average of 1.55. But it carries a Value Score of A.
Image Source: Zacks Investment Research
Estimates for KINS Witness no Movement
The Zacks Consensus Estimate for KINS’ 2025 and 2026 earnings has witnessed no movement in the past 30 days.
Image Source: Zacks Investment Research
Yet, the Zacks Consensus Estimate for KINS’ 2025 and 2026 revenues and EPS indicates year-over-year increases. The company has a Growth Score of A.
Image: Bigstock
Kingstone's Reinsurance Program: Why it is a Cornerstone of Growth
Key Takeaways
Kingstone Companies Inc.’s (KINS - Free Report) homeowners and dwelling fire book in the storm-exposed Northeast makes risk transfer through reinsurance essential to its business strategy. Per its 2025/2026 Catastrophe Reinsurance, KINS increased the limit by 57%, from $160 million to $440 million. The limit includes multi-year protection of $125 million sourced through the issuance of the first catastrophe bond, 1886 Re Ltd., as announced in May.
The insurer increased protection with only a 10% increase in overall cost. The total cat cover cost for 2025/2026 is just 12% of projected direct premiums, down from 13% for the previous treaty period, also boosting the bottom line in the second half of 2025 by 11 cents.
Reinsurance is a core driver of Kingstone’s growth strategy, not just a risk mitigation tool. Through quota share treaties, the company yields about 25% of its personal lines’ premiums, with ceded commissions exceeding its underwriting expense ratio. This structure improves the combined ratio, safeguards surplus and supports Kingstone’s credit profile. The resulting capital efficiency enabled more than 20% premium growth in its core New York franchise last year.
A well-structured reinsurance program, combined with sound underwriting, diversification and rate adequacy, is essential for sustaining a profitable and resilient portfolio. It stabilizes earnings, lowers capital needs, and unlocks profitable growth, given the challenging pricing conditions in the Northeast. Kingstone’s ability to secure reinsurance on favorable terms reflects disciplined risk management and positions it for better return on equity performance going forward.
What About KINS’ Competitors?
KINS closely competes with Heritage Insurance Group (HRTG - Free Report) and Kinsale Capital Group (KNSL - Free Report) .
Heritage’s strong reinsurance program, combined with sound underwriting, diversification and rate adequacy, is vital to maintaining a profitable and resilient portfolio. With reduced volatility and available capital, Heritage is well-positioned to pursue higher-margin excess and surplus (E&S) and admitted niches.
With a prudent and efficient reinsurance strategy, Kinsale Capital is able to expand its underwriting capacity while effectively managing risk, particularly within its niche E&S lines. This approach enhances capital efficiency and underpins Kinsale’s ability to deliver strong, consistent returns.
KINS’ Price Performance
Shares of KINS have gained 0.4% year to date, underperforming the industry.
Image Source: Zacks Investment Research
KINS’ Expensive Valuation
KINS trades at a price-to-book value ratio of 2.59, above the industry average of 1.55. But it carries a Value Score of A.
Image Source: Zacks Investment Research
Estimates for KINS Witness no Movement
The Zacks Consensus Estimate for KINS’ 2025 and 2026 earnings has witnessed no movement in the past 30 days.
Image Source: Zacks Investment Research
Yet, the Zacks Consensus Estimate for KINS’ 2025 and 2026 revenues and EPS indicates year-over-year increases. The company has a Growth Score of A.
KINS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.