KINGSTONE COMPANIES, INC.

Previous wording

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 three months ended June 30, 2025 and 2024 respectively, 97.9% and 95.9% of KICO’s direct written premiums came from the New York policies. For the six months ended June 30, 2025 and 2024 respectively, 98.1% and 95.2% of KICO’s direct written premiums came from the New York policies. We refer to our New York business as our “Core” business and the business outside of New York as our “non-Core” business.

Current wording

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 three months ended September 30, 2025 and 2024 respectively, 98.0% and 96.3% of KICO’s direct written premiums came from the New York policies. For the nine months ended September 30, 2025 and 2024 respectively, 98.1% and 95.6% of KICO’s direct written premiums came from the New York policies.

Previous wording

In May 2019, due to the poor performance of these lines 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 June 30, 2025 and December 31, 2024, there were no commercial liability policies in-force. As of June 30, 2025, these expired policies represented approximately 11.7% of loss and LAE reserves net of reinsurance recoverables. See discussion below under “Additional Financial Information”.

Current wording

In May 2019, due to the poor performance of these lines 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 September 30, 2025 and December 31, 2024, there were no commercial liability policies in-force. As of September 30, 2025, these expired policies represented approximately 11.3% of loss and LAE reserves net of reinsurance recoverables. See discussion below under “Additional Financial Information”.

Previous wording

See the tables below for our Core and non-Core business for policies in force as of June 30, 2025 and 2024 and direct written premiums for three months and six months ended June 30, 2025 and 2024. For the three months ended June 30, 2025, our Core direct written premiums increased by 16.6% compared to the three months ended June 30, 2024, while Core policies in force increased by 11.4% as of June 30, 2025 as compared to June 30, 2024. For the same periods, our non-Core direct written premiums decreased by 42.5% and policies in force decreased by 67.6%. For the six months ended June 30, 2025, our Core direct written premiums increased by 19.5% compared to the six months ended June 30, 2024, while Core policies in force increased by 11.4% as of June 30, 2025 as compared to June 30, 2024.For the same periods, our non-Core direct written premiums decreased by 54.1% and policies in force decreased by 67.6%.

Current wording

See the tables below for our policies in force as of September 30, 2025 and 2024 and direct written premiums for the three months and nine months ended September 30, 2025 and 2024. For the three months ended September 30, 2025, our direct written premiums increased by 13.8% compared to the three months ended September 30, 2024, while policies in force increased by 4.2% as of September 30, 2025 as compared to September 30, 2024. For the nine months ended September 30, 2025, our direct written premiums increased by 15.1% compared to the nine months ended September 30, 2024, while policies in force increased by 4.2% as of September 30, 2025 as compared to September 30, 2024.

Previous wording

1 Direct written premiums, Core written premiums, and Non-Core 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, Core written premiums, and Non-Core written premiums to the GAAP measure of net premiums earned.

Current wording

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.

Previous wording

Kingstone 2.0 (completed), Kingstone 3.0 (completed), Change in Market Dynamics (underway), and 5-Year Growth Plan (underway)

Current wording

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

Previous wording

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

Current wording

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 pivots focus away from admitted personal lines business (the "Withdrawal Plan"). The Withdrawal Plan, which includes this transaction, has been approved by the New York Department of Financial Services. This competitor wrote approximately $70 million in written premium. The Withdrawal Plan will enable KICO to work with new distribution partners to further increase our 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.

Previous wording

(2)For the six months ended June 30, 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.

Current wording

(2)For the nine months ended September 30, 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.

Previous wording

(3)The six months ended June 30, 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.

Current wording

(3)The nine months ended September 30, 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.

Previous wording

Direct written premiums from our livery physical damage business for Six Months 2025 were $7,137,000, an increase of $237,000, or 3.4%, from $6,900,000 in Six Months 2024. The increase in livery physical damage direct written premiums was due to the reversal of an underwriting restriction in place in Six Months 2024 to exclude certain electric vehicles until the approval of adequate rate for the risk was received, which happened in July 2024. The increase was also due to an increase in the values of the autos insured.

Current wording

Direct written premiums from our livery physical damage business for Nine Months 2025 were $10,722,000, an increase of $556,000, or 5.5%, from $10,166,000 in Nine Months 2024. The increase in livery physical damage direct written premiums was due to the loosening of an underwriting restriction in place in Nine Months 2024 to exclude certain electric vehicles until the approval of adequate rate for the risk was received, which happened in July 2024. The increase was also due to an increase in the values of the autos insured.

Previous wording

Net written premiums increased $33,700,000, or 42.4%, to $113,220,000 in Six Months 2025 from $79,520,000 in Six Months 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 Six Months 2025 is primarily due to the additional premiums from the Change in Market Dynamics and changes to our personal lines quota share reinsurance treaty. See quota share reinsurance treaties discussion below.

Current wording

Net written premiums increased $44,804,000, or 44.8%, to $144,869,000 in Nine Months 2025 from $100,065,000 in Nine Months 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 Nine Months 2025 is primarily due to the additional premiums from Policy Price Increases, the Change in Market Dynamics, and changes to our personal lines quota share reinsurance treaty. See quota share reinsurance treaties discussion below.

Previous wording

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 Six Months 2025, and the 2024/2025 Treaty in Six Months 2024. In Six Months 2025, our premiums ceded under quota share treaties decreased by $17,498,000 in comparison to premiums ceded under quota share treaties in Six Months 2024 (see table above). The decrease in Six Months 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.

Current wording

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 Nine Months 2025, and the 2024/2025 Treaty in Nine Months 2024. In Nine Months 2025, our premiums ceded under quota share treaties decreased by $22,004,000 in comparison to premiums ceded under quota share treaties in Nine Months 2024 (see table above). The decrease in Nine Months 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

Previous wording

In Six Months 2025, our ceded excess of loss reinsurance premiums increased $115,000 compared to the ceded excess of loss premiums for Six Months 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.

Current wording

In Nine Months 2025, our ceded excess of loss reinsurance premiums decreased $256,000 compared to the ceded excess of loss premiums for Nine Months 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 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. Retention was increased to $715,000 from $640,000 under the 2025/2026 Treaty

Previous wording

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. Under Kingstone 2.0 and 3.0 we had a decrease in policies in force, and better catastrophe management, resulting in a decrease in catastrophe exposure, and a decrease in catastrophe premiums. On July 1, 2024 and 2023, 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 2024 and 2023. The $406,000 and $506,000 negative catastrophe premiums in Six Months 2025 and Six Months 2024, respectively, was due to a no loss bonus from one of our reinsurers.

Current wording

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 Nine Months 2025, our premiums ceded under our catastrophe treaties increased by $3,056,000 in comparison to premiums ceded under catastrophe treaties in Nine Months 2024 (see table above). The increase in Nine Months 2025 was primarily attributable to the $169,000,000 increase in catastrophe coverage discussed above.

Previous wording

Net premiums earned increased $30,614,000, or 51.8%, to $89,738,000 in Six Months 2025 from $59,124,000 in Six Months 2024. The increase was due to the 11 percentage point reduction in quota share rates discussed above, the increase in premiums from the Change in Market Dynamics which began in the third quarter of 2024, and a decrease in catastrophe premium rates, reflected in ceded catastrophe premiums earned, which increased the amount of growth in net premiums earned.

Current wording

Net premiums earned increased $45,132,000, or 48.8%, to $137,663,000 in Nine Months 2025 from 92,531,000 in Nine Months 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.

Previous wording

Ceding commission revenue was $6,040,000 in Six Months 2025 compared to $9,129,000 in Six Months 2024. The decrease of $3,089,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.

Current wording

Ceding commission revenue was $10,941,000 in Nine Months 2025 compared to $13,871,000 in Nine Months 2024. The decrease of $2,930,000 is explained below in the discussion of provisional ceding commissions earned and contingent ceding commissions earned.

Previous wording

In Six Months 2025, we earned provisional ceding commissions of $6,640,000 from personal lines earned premiums ceded under the 2025/2026 Treaty, and in Six Months 2024, we earned provisional ceding commissions of $9,117,000 from personal lines earned premiums ceded under the 2024/2025 Treaty. The decrease of $2,477,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during Six Months 2025 compared to Six Months 2024, offset by an increase in ceding commission rates under the 2025/2026 Treaty.

Current wording

In Nine Months 2025, we earned provisional ceding commissions of $10,195,000 from personal lines earned premiums ceded under the 2025/2026 Treaty, and in Nine Months 2024, we earned provisional ceding commissions of $13,860,000 from personal lines earned premiums ceded under the 2024/2025 Treaty. The decrease of $3,665,000 in provisional ceding commissions earned was due to the decrease in premiums ceded under these treaties during Nine Months 2025 compared to Nine Months 2024, offset by an increase in ceding commission rates under the 2025/2026 Treaty.

Previous wording

Net investment income was $4,349,000 in Six Months 2025 compared to $3,267,000 in Six Months 2024, an increase of $1,082,000, or 33.1%. The average yield on non-cash invested assets was 4.00% as of June 30, 2025 compared to 3.80% as of June 30, 2024.

Current wording

Net investment income was $6,848,000 in Nine Months 2025 compared to $4,917,000 in Nine Months 2024, an increase of $1,931,000, or 39.3%, primarily due to an increase in invested assets and average yield on non-cash invested assets. The average yield on non-cash invested assets was 4.0% as of September 30, 2025 compared to 3.5% as of September 30, 2024.

Previous wording

Cash and invested assets were $273,550,000 as of June 30, 2025 compared to $195,789,000 as of June 30, 2024, an increase of $77,761,000.

Current wording

Cash and invested assets were $300,755,000 as of September 30, 2025 compared to $221,847,000 as of September 30, 2024, an increase of $78,908,000, primarily driven by cash flows from operations.

Previous wording

Net gains on investments were $408,000 in Six Months 2025 compared to net gains on investments of $493,000 in Six Months 2024. Unrealized gains on our equity securities and other investments in Six Months 2025 were $414,000, compared to unrealized gains of $919,000 in Six Months 2024. Net realized (losses) on sales of investments were $(6,000) in Six Months 2025 compared to net realized (losses) of $(426,000) in Six Months 2024.

Current wording

Net gains on investments were $591,000 in Nine Months 2025 compared to net gains on investments of $1,319,000 in Nine Months 2024. Unrealized gains on our equity securities and other investments in Nine Months 2025 were $603,000, compared to unrealized gains of $1,379,000 in Nine Months 2024. Net realized (losses) on sales of investments were $(12,000) in Nine Months 2025 compared to net realized (losses) of $(60,000) in Nine Months 2024.

Previous wording

Gain on sale of real estate was $1,966,000 in Six Months 2025 compared to $— in Six Months 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.

Current wording

Gain on sale of real estate was $1,966,000 in Nine Months 2025 compared to $0 in Nine Months 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.

Previous wording

The net loss ratio for Six Months 2025 improved compared to Six Months 2024. For Six Months 2025, the improvement was primarily due to the lower catastrophe impact and lower underlying loss ratio (loss ratio excluding the impact of catastrophes and prior year development) than for Six Months 2024.

Current wording

The net loss ratio for Nine Months 2025 improved compared to Nine Months 2024. For Nine Months 2025, the improvement was primarily due to a lower catastrophe impact.

Previous wording

The underlying loss ratio(1) was 50.0% for Six Months 2025, a decrease of 2.8 points from the 52.8% underlying loss ratio recorded for Six Months 2024. Overall personal lines non-catastrophe frequency for Six Months 2025 was lower than for the same period in 2024, which is believed to be the result of our new Select product as well as our active efforts to manage less profitable lines of business. The favorable frequency for Six Months 2025 was offset by higher overall personal lines non-catastrophe severity, primarily driven by a greater impact from large fire losses and fewer low value non-weather water claims.

Current wording

The underlying loss ratio(1)(loss ratio excluding the impact of catastrophes and prior year development) was 48.0% for Nine Months 2025, an increase of 0.1 points from the 47.9% underlying loss ratio recorded for Nine Months 2024. Overall personal lines non-catastrophe frequency for Nine Months 2025 was lower than for the same period in 2024, which is believed to be the result of our Select product as well as our active efforts to manage less profitable lines of business. The favorable frequency for Nine Months 2025 was offset by higher overall personal lines non-catastrophe severity, primarily driven by a greater impact from large losses.

Previous wording

There were six newly designated catastrophe events for Six Months 2025 but no major events affecting us. The estimated total net catastrophe impact for the calendar quarter was $1,039,000, which contributed 1.2 points to the loss ratio. By comparison, the catastrophe impact for Six Months 2024 was 3.2 points.

Current wording

There were eight newly designated catastrophe events for Nine Months 2025 but no major events affecting us. The estimated total net catastrophe impact for the calendar year was $1,154,000, which contributed 0.8 points to the loss ratio. By comparison, the catastrophe impact for Nine Months 2024 was 2.7 points.

Previous wording

There was favorable prior year development of $812,000 for Six Months 2025, which translates to a 0.9 point decrease to the loss ratio. By comparison, the impact of prior year development for Six Months 2024 was a decrease of 1.7 points.

Current wording

There was favorable prior year development of $822,000 for Nine Months 2025, which translates to a 0.6 point decrease to the loss ratio. By comparison, the impact of prior year development for Nine Months 2024 was a decrease of 1.8 points.

Previous wording

Commission expense was $19,943,000 in Six Months 2025 or 16.1% of direct earned premiums. Commission expense was $16,084,000 in Six Months 2024 or 15.9% of direct earned premiums The increase of $3,859,000 was primarily due to an increase in direct earned premiums of $22,669,000 and an increase of $867,000 in Six Months 2025 compared to Six Months 2024 for an accrual of estimated contingent commission based on the profitability of the business.

Current wording

Commission expense was $30,251,000 in Nine Months 2025 or 15.9% of direct earned premiums. Commission expense was $25,089,000 in Nine Months 2024 or 16.2% of direct earned premiums The increase of $5,162,000 in the Nine Months 2025 compared to the Nine Months 2024 was primarily due to an increase in direct earned premiums of $34,615,000 and an increase of $417,000 for an accrual of estimated contingent commission based on the profitability of the business.

Previous wording

Other underwriting expenses were $15,133,000, or 12.2% of direct earned premiums, in Six Months 2025 compared to $11,781,000, or 11.7% of direct earned premiums, in Six Months 2024. The increase of $3,352,000, or 28.5%, was primarily due to increases in salaries and employment costs as described below, an increase in underwriting fees due to growth and an increase in premium taxes due to the increase in direct earned premiums. In addition, we realized a $365,000 gain on the commutations of prior years’ quota share reinsurance treaties from a group of reinsurers, in Six Months 2024, with no such gain in Six Months 2025.

Current wording

Other underwriting expenses were $23,491,000, or 12.4% of direct earned premiums, in Nine Months 2025 compared to $18,676,000, or 12.0% of direct earned premiums, in Nine Months 2024. The increase of $4,815,000, or 25.8%, was primarily due to increases in salaries and employment costs as described below, an increase in underwriting fees due to growth and an increase in premium taxes due to the increase in direct earned premiums. In addition, we realized a $365,000 gain on the commutations of prior years’ quota share reinsurance treaties from a group of reinsurers, in Nine Months 2024, with no such gain in Nine Months 2025.

Previous wording

Our largest single component of other underwriting expenses is salaries and employment costs, with costs of $7,432,000 in Six Months 2025 compared to $5,738,000 in Six Months 2024. Salaries and employment costs were 8.3 points of the net underwriting expense ratio in Six Months 2025, a reduction of 1.4 points from 9.7 points in Six Months 2024. The dollar increase in salaries and employment costs was due to hiring additional staff to handle the new business from the Change in Market Dynamics, anticipated new business in accordance with our 5-Year Growth Plan, the strengthening of our professional team by investing in the hiring of higher-level and higher compensated managers and staff needed to manage the business consistent with our Kingstone 2.0 and Kingstone 3.0 strategies, and annual employee salary increases effective January 1, 2025. In addition, the increase in salaries and employment costs was due to $1,091,000 accrued under our employee and executive bonus plans, an increase of $640,000 from Six Months 2024. The increase was due to higher profitable underwriting insurance operations in Six Months 2025 compared to Six Months 2024.

Current wording

Our largest single component of other underwriting expenses is salaries and employment costs, with costs of $12,175,000 in Nine Months 2025 compared to $9,595,000 in Nine Months 2024. Salaries and employment costs were 8.8 points of the net underwriting expense ratio in Nine Months 2025, a reduction of 1.6 points from 10.4 points in Nine Months 2024. The dollar increase in salaries and employment costs was due to hiring additional staff to handle the new business from the Change in Market Dynamics, anticipated new business in accordance with our 5-Year Growth Plan, the strengthening of our professional team by investing in the hiring of higher-level and higher compensated managers, and annual employee salary increases effective January 1, 2025. In addition, the increase in salaries and employment costs was due to $2,412,000 accrued under our employee and executive bonus plans, an increase of $997,000 from Nine Months 2024. The increase was due to higher higher profitability in our insurance operations in Nine Months 2025 compared to Nine Months 2024.

Previous wording

Our net underwriting expense ratio in Six Months 2025 was 32.0%, compared with 31.3% in Six Months 2024. The following table shows the individual components of our net underwriting expense ratio for the periods indicated:

Current wording

Our net underwriting expense ratio in Nine Months 2025 was 30.8%, compared with 31.9% in Nine Months 2024. The following table shows the individual components of our net underwriting expense ratio for the periods indicated:

Previous wording

Other operating expenses, related to the expenses of our holding company and Cosi, were $2,189,000 for Six Months 2025 compared to $1,579,000 for Six Months 2024. The following table shows a breakdown of the significant components of other operating expenses for the periods indicated:

Current wording

Other operating expenses, related to the expenses of our holding company and Cosi, were $3,519,000 for Nine Months 2025 compared to $2,821,000 for Nine Months 2024. The following table shows a breakdown of the significant components of other operating expenses for the periods indicated:

Previous wording

The increase in Six Months 2025 of $610,000, or 38.6%, as compared to Six Months 2024 was primarily due to an increase in equity compensation and loss on extinguishment of debt, partially offset by a decrease in employment costs. The increase in equity compensation is due to additional restricted stock awards granted to our senior leadership team as of December 31, 2024 pursuant to our employee bonus plan. The $175,000 loss on extinguishment of debt loss is due to writing off the balance of unamortized debt issue costs upon the prepayment of the 2024 Notes in Six Months 2025 as disclosed in Note 7 to the condensed consolidated financial statements. The decrease in employment costs was due to fluctuations in deferred compensation liability in Six Months 2024 related to changes in the underlying invested portfolio. The deferred compensation plan was terminated in Six Months 2024. Beginning in March 2025, after the 2024 Notes were paid in full, the monthly cost of warrant amortization and the write-off of unamortized balances of warrants that were exercised have been included in other expenses. The increase in Six Months 2025 of $157,000 includes $178,000 of such warrant costs, compared to $0 in Six Months 2024.

Current wording

The increase in Nine Months 2025 of $698,000, or 24.7%, as compared to Nine Months 2024 was primarily due to an increase in equity compensation and professional fees, 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, 2024 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 loss on extinguishment of debt loss is due to writing off the balance of unamortized debt issue costs upon the prepayment of the 2024 Notes in Nine Months 2025 and 2024 as disclosed in Note 7 to the condensed consolidated financial statements. The decrease in employment costs was due to fluctuations in deferred compensation liability in Nine Months 2024 related to changes in the underlying invested portfolio. The deferred compensation plan was terminated in Nine Months 2024. Beginning in March 2025, after the 2024 Notes were paid in full, the monthly cost of warrant amortization and the write-off of unamortized balances of warrants that were exercised have been included in other expenses. The increase in Nine Months 2025 of $189,000 represents $189,000 of such warrant costs, compared to $0 in Nine Months 2024.

Previous wording

Depreciation and amortization was $1,237,000 in Six Months 2025 compared to $1,216,000 in Six Months 2024. The increase of $21,000, or 1.7%, in depreciation and amortization was primarily due to the difference between additional depreciation on software acquired compared to software being fully depreciated.

Current wording

Depreciation and amortization was $1,882,000 in Nine Months 2025 compared to $1,836,000 in Nine Months 2024. The increase of $46,000, or 2.5%, in depreciation and amortization was primarily due to the difference between additional depreciation on software acquired compared to software being fully depreciated.

Previous wording

Interest expense in Six Months 2025 was $305,000 compared to $1,984,000 in Six Months 2024, a decrease of $(1,679,000) or (84.6)%. In Six Months 2025 and Six Months 2024, as disclosed in Note 7 to the condensed consolidated financial statements, we incurred interest expense in connection with the 2024 Notes and 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.

Current wording

Interest expense in Nine Months 2025 was $377,000 compared to $2,884,000 in Nine Months 2024, a decrease of $2,507,000 or 86.9%. In Nine Months 2025 and Nine Months 2024, as disclosed in Note 7 to the condensed consolidated financial statements, we incurred interest expense in connection with the 2024 Notes and 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.

Previous wording

Income tax expense in Six Months 2025 was $3,750,000, which resulted in an effective tax rate of 19.9%. Income tax expense in Six Months 2024 was $1,583,000, which resulted in an effective tax rate of 21.0%. The difference in effective tax rate is due to the effect of permanent differences in Six Months 2025 compared to Six Months 2024.

Current wording

Income tax expense in Nine Months 2025 was $6,584,000, which resulted in an effective tax rate of 20.2%. Income tax expense in Nine Months 2024 was $3,689,000, which resulted in an effective tax rate of 22.2%. The difference in effective tax rate is due to the effect of permanent differences in Nine Months 2025 compared to Nine Months 2024. In Nine Months 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 Nine Months 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.

Previous wording

Net income was $15,135,000 in Six Months 2025 compared to $5,942,000 in Six Months 2024. The increase in net income of $9,193,000 was due to the items described above.

Current wording

Net income was $26,007,000 in Nine Months 2025 compared to $12,920,000 in Nine Months 2024. The increase in net income of $13,087,000 was due to the items described above.

Previous wording

Direct written premiums during the three months ended June 30, 2025 (“Three Months 2025”) were $61,062,000 compared to $53,495,000 during the three months ended June 30, 2024 (“Three Months 2024”). The increase of $7,567,000, or 14.1%, was primarily due to an increase in premiums from our personal lines business.

Current wording

Direct written premiums during the three months ended September 30, 2025 (“Three Months 2025”) were $75,810,000 compared to $66,627,000 during the three months ended September 30, 2024 (“Three Months 2024”). The increase of $9,183,000, or 13.8%, was primarily due to an increase in premiums from our personal lines business. Direct written premiums from our personal lines business for Three Months 2025 were $72,207,000, an increase of $8,871,000, or 14.0%, from $63,336,000 in Three Months 2024. The 14.0% increase in premiums from our personal lines business was primarily due to the increases in both rate and enhanced utilization of replacement cost (together "Policy Price Increases") as well as an increase in retention, and premiums associated with the Change in Market Dynamics.

Previous wording

Direct written premiums from our livery physical damage business for Three Months 2025 were $3,290,000, a decrease of $48,000, or 1.4%, from $3,338,000 in Three Months 2024. The decrease in livery physical damage direct written premiums was due to an underwriting restriction in place to exclude certain electric vehicles until the approval of adequate rate for the risk was received, which happened in July 2024. The decrease was offset by an increase in the values of the autos insured.

Current wording

Direct written premiums from our livery physical damage business for Three Months 2025 were $3,585,000, an increase of $319,000, or 9.8%, from $3,266,000 in Three Months 2024. The increase in livery physical damage direct written premiums was due to an increase in the values of the autos insured.

Previous wording

Net written premiums increased $10,786,000, or 26.0%, to $52,211,000 in Three Months 2025 from $41,425,000 in Three Months 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 Three Months 2025 is primarily due to the additional premiums from the Change in Market Dynamics and changes to our personal lines quota share reinsurance treaty. See quota share reinsurance treaties discussion below.

Current wording

Net written premiums increased $11,104,000, or 54.0%, to $31,649,000 in Three Months 2025 from $20,545,000 in Three Months 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 Three Months 2025 is primarily due to the additional premiums from Policy Price Increases, the Change in Market Dynamics, and changes to our personal lines quota share reinsurance treaty. See quota share reinsurance treaties discussion below.

Previous wording

On January 1, 2024, we entered into a new 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 Three Months 2025, and the 2024/2025 Treaty in Three Months 2024. In Three Months 2025, our premiums ceded under quota share treaties decreased by $3,475,000 in comparison to premiums ceded under quota share treaties in Three Months 2024 (see table above). The decrease in Three Months 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.

Current wording

On January 1, 2024, we entered into a new 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 Three Months 2025, and the 2024/2025 Treaty in Three Months 2024. In Three Months 2025, our premiums ceded under quota share treaties decreased by $4,506,000 in comparison to premiums ceded under quota share treaties in Three Months 2024 (see table above). The decrease in Three Months 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.

Previous wording

In Three Months 2025, our ceded excess of loss reinsurance premiums increased $155,000 compared to the ceded excess of loss premiums for Three Months 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.

Current wording

In Three Months 2025, our ceded excess of loss reinsurance premiums increased $371,000 compared to the ceded excess of loss premiums for Three Months 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 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. Retention was increased to $715,000 from $640,000 under the 2025/2026 Treaty

Previous wording

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. Under Kingstone 2.0 and 3.0 we had a decrease in policies in force, and better catastrophe management, resulting in a decrease in catastrophe exposure, and a decrease in catastrophe premiums. On July 1, 2024 and 2023, 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 2024 and 2023. The $406,000 and $506,000 negative catastrophe premiums in Three Months 2025 and Three Months 2024, respectively, was due to a no loss bonus from one of our reinsurers.

Current wording

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 $406,000 and $506,000 negative catastrophe premiums in Three Months 2025 and Three Months 2024, respectively, was due to a no loss bonus from one of our reinsurers. 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 Three Months 2025, our premiums ceded under our catastrophe treaties increased by $2,956,000 in comparison to premiums ceded under catastrophe treaties in Three Months 2024 (see table above). The increase in Three Months 2025 was primarily attributable to the $169,000,000 increase in catastrophe coverage discussed above.