KINGSTONE COMPANIES, INC.KINS

KINGSTONE COMPANIES, INC. Segments Disclosure

10-KFiled Mar 18, 20253 min read
Segment Information
The Company reports results of operations for its reportable segments consistent with the manner in which its chief operating decision maker ("CODM") reviews the business to assess performance and allocate resources. The Company identifies its CODM to be its President and Chief Executive Officer.

The Company evaluates the results of its single reportable segment as follows:

Insurance operations are evaluated on (i) underwriting results (net premiums earned, ceding commission earned, other income, loss and loss adjustment expenses, commission expense, and other underwriting expenses), equating to the components of the net combined ratio.

Investments from the insurance operation are primarily evaluated on net investment income and its return on equity contribution.

Net gains (losses) on investments, other operating expenses are corporate expenses, depreciation and amortization, interest expense, and income tax (benefit), which are broken out below the insurance operations components of the net combined ratio to return to the consolidated net income (loss).

The Company's CODM uses these measures of profit or loss predominantly in the annual budget and forecasting process, considering budget-to-actual variances throughout the year. The CODM also uses these profit measures for evaluating (i) financial performance, (ii) pricing in the Company's insurance operations, and (iii) employee compensation.

The Company does not allocate items not included in the net combined ratio. Such items include net gains on investments, depreciation and amortization, interest expense, corporate expenses included in other operating expenses, and assets to these segments. The Company does not allocate income taxes to its segments. The Company does not manage those segments on after-tax results.
The following tables reconciles the revenue and expense components of the net combined ratio to consolidated net (income) loss for the periods presented.

Other Cost and Expense, Operating, Excluded from Net Combined RatioYears ended
December 31,
 20242023
 Revenue components of net combined ratio
 Net premiums earned $128,497,920 $114,384,263 
 Ceding commission revenue 18,837,946 21,053,494 
 Other income 549,967 600,993 
 Total revenue components of net combined ratio 147,885,833 136,038,750 
 Expense components of net combined ratio
 Loss and loss adjustment expenses 62,634,716 82,849,210 
 Commission expense 33,929,333 33,364,629 
 Other underwriting expenses 25,692,727 25,909,962 
 Total expense components of net combined ratio 122,256,776 142,123,801 
 Operating segment net income (loss) 25,629,057 (6,085,051)
 Reconciliation of net income (loss) components
 excluded from net combined ratio:
 Revenue components excluded from net combined ratio
 Net investment income 6,823,590 6,008,682 
 Net gains on investments 414,551 2,134,554 
 Other income 18,129 8,728 
 Total revenue components excluded
 from net combined ratio 7,256,270 8,151,964 
 Expense components excluded from net combined ratio
 Other operating expenses 3,634,583 2,456,473 
 Depreciation and amortization 2,448,932 2,973,440 
 Interest expense 3,513,655 4,002,531 
 Income tax (benefit) 4,929,721 (1,197,185)
 Total expense components excluded
 from net combined ratio 14,526,891 8,235,259 
 Total net loss components
 excluded from net combined ratio: (7,270,621)(83,295)
 Consolidated net income (loss) $18,358,436 $(6,168,346)
The following table shows the calculation of the net combined ratio and return on equity from net investment income for the periods presented.
 Years ended
December 31,
 20242023
Net combined ratio
Net loss ratio48.7 %72.4 %
Net underwriting expense ratio31.3 %32.9 %
Net combined ratio80.0 %105.3 %
Reconciliation of net underwriting expense ratio:
Commission expense and other
underwriting expenses59,622,060 59,274,591 
Less: Ceding commission revenue(18,837,946)(21,053,494)
Less: Other income(549,967)(600,993)
Total commission expense and other
underwriting expenses$40,234,147 $37,620,104 
Net earned premium$128,497,920 $114,384,263 
Net Underwriting Expense Ratio31.3 %32.9 %
Return on equity on net investment income
Stockholders' equity beginning of period$34,504,139 $36,169,432 
Stockholders' equity end of period$66,708,451 $34,504,139 
Average stockholders' equity$50,606,295 $35,336,786 
Net investment income$6,823,590 $6,008,682 
Return on equity on net investment income13.5 %17.0 %
Return on equity on net investment income - annualized13.5 %17.0 %
Total assets$372,661,348 $317,633,210 
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About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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