A complete exist will take approximately 15 months
Kingstone Insurance, the regional property and casualty insurance holding company focused on the Northeast, has announced that its wholly owned subsidiary, Kingstone Insurance Company (“KICO”), will exit the Commercial Liability lines marketplace. As a result, the insurer will no longer underwrite Commercial Liability risks such as Busines Owners, Artisans (“CraftPak”), Special Multi-Peril, and Commercial Umbrella policies.
In commenting on the company’s decision, Barry Goldstein, the recently reappointed CEO, explained the reasoning behind the announcement:
“Following our Q1 reserve strengthening for Commercial Lines, we placed a moratorium on new business, seeking to cap our exposure to these types of risks. While they accounted for about 12% our total earned premiums, the associated reserves were 40% of the Company’s total. After a two month review, I concluded yesterday that it would be in the Company’s and shareholders’ best interest to exit these lines of business, and do so as soon as possible. We informed the NYS DFS on July 22nd of our decision, and our producers were advised today. We will continue to underwrite our Physical Damage Only product.
These commercial liability lines are the most volatile and carry the longest claim development “tail” of any of Kingstone’s offerings. They accounted for most of the adverse loss development we experienced in Q1, and our conclusion was that based on a required capital allocation, we could not deliver acceptable returns for our shareholders. We are actively exploring various alternative reinsurance arrangements to either wall off or eliminate the associated liabilities from our balance sheet. We will have a decision on any alternate handling of these liabilities by September 30. While all inforce policies for these lines will be non-renewed at the end of their current annual terms, it is estimated that a complete exit will take at least 15 months.”
Kingstone expanded into Massachusetts in 2018
Kingstone has been operating in Massachusetts since June 15, 2018, when it officially began operating in Massachusetts. Its first product launched was a new homeowners product as part of its plan to expand into a regional carrier.
In announcing its entry into the Massachusetts insurance market to Agency Checklists, David Delaney, Senior Vice President and Head of Business Development states, “Kingstone’s new homeowner product can be tailored to meet our clients’ coverage needs and lifestyle changes. Our core company values and reputation for excellence continues to pave the way as we open in new expansion states.”
Kingstone Insurance Company actually traces its roots back to 1886 when it was formed originally as the Co-Operative Fire Insurance Company in Catskill, New York. In 1976 the company’s name was changed to Commercial Mutual Insurance Company, and in 1998 the company moved to its present corporate headquarters in historic Kingston, NY.
In 2009, the company demutualized and was renamed Kingstone Insurance Company, under the holding company of Kingstone Companies, Inc. The holding company publicly trades on NASDAQ under ticker symbol KINS.In 2010, Kingstone received its first financial rating from AM Best of B, which was upgraded to B+ in 2011, B++ in 2015, and to its present rating of A- Excellent in April 2017. The upgrades were based on the insurer’s organic growth and outside investments of the holding company.
As of today, the insurer is now a multi-line property and casualty insurance company writing insurance for individuals and small businesses exclusively through independent, retail and wholesale agents and brokers. It now has licenses in New Jersey, Pennsylvania, Connecticut, Massachusetts, Rhode Island, Maine, New Hampshire, and Texas. The company’s stated goal is to become a northeast regional underwriter.
For those interested in reading our June 2018 interview with Kingstone about their entrance into the Massachusetts marketplace, please refer to our July 10, 2018 article entitled, “Kingstone Ins. Co. Enters Mass. Homeowner Market with an Appetite for Coastal Risks.“
