A.M. Best Affirms Ratings of Kingstone Insurance Company and Kingstone Companies, Inc.

A.M. Best Affirms Ratings of Kingstone Insurance Company and Kingstone Companies,Inc.

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and the issuer credit rating (ICR) of "bbb-" of Kingstone Insurance Company (Kingstone) (Kingston, NY).Concurrently, A.M. Best has affirmed the ICR of "bb-" of Kingstone Companies,Inc. [NASDAQ: KINS], the publicly traded holding company of Kingstone. The outlook for all ratings is stable.

The ratings and outlook reflect Kingstone's adequate capitalization, favorable operating performance and local market knowledge in New York State, its predominant operating territory. The company's favorable operating performance is reflected in its five-year average double-digit pre-tax returns on revenue and surplus, generated by positive net underwriting income and supplemented by net investment and other income. Surplus growth has been solid over the last five years, increasing at a double-digit average annual rate.

The ICR for Kingstone Companies, Inc. acknowledges the standard notching off of the ICR for the operating company. The holding company's debt leverage ratios are favorable.

Partially offsetting Kingstone's positive rating factors are its elevated net premiums written, ceded leverage ratios and its concentration of risk, primarily in downstate New York, which exposes it to weather-related events as well as to market, regulatory and judicial issues.

While Kingstone's single-state concentration exposes it to weather-related events, catastrophe exposure is partially mitigated through catastrophe reinsurance, for which the company has purchased increased limits in recent years, the use of hurricane deductibles, visual risk inspections, distance-from-shore restrictions and surcharges. In addition, the company has been expanding its operating territory to regions beyond the New York metropolitan area.

There could be pressure on Kingstone's ratings going forward if its favorable operating performance were to deteriorate or if its risk-adjusted capital weakens. The potential for rating upgrades exists if the company maintains the favorable operating performance that it has demonstrated in the most recent years while reducing its underwriting leverage ratios.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visitwww.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Company
Bob Podolski, 908-439-2200, ext. 5731
Senior Financial Analyst
Gary Davis, 908-439-2200, ext. 5665
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations

KEYWORDS:   United States  Europe  North America  New Jersey


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