Kingstone exits "volatile" commercial liability lines after new CEO evaluates performance
Property/casualty insurer Kingstone Companies has decided to no longer underwrite commercial liability risks following a review by its new chief executive Barry Goldstein.
The announcement comes shortly after Goldstein reassumed his position as CEO of Kingstone last week. Goldstein returned at the request of company's board of directors following the sudden departure of Dale Thatcher, just seven months after he took the reins.
Kingstone said the complete exit from commercial liability will take at least 15 months but it will stop renewing all inforce policies for these lines at the end of their current annual terms.
The discontinued lines include business owners, artisans (CraftPak), special multi-peril, and commercial umbrella policies.
The company said it would be "actively exploring alternative reinsurance arrangements" to either wall off or eliminate the associated liabilities from its balance sheet. The decision on any alternate handling of these liabilities is expected by September 30.
"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," said Goldstein.
He added: “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."
Get all the latest re/insurance industry news with our daily newsletter - sign up here.
More of today's news
GWP up 12% for Beazely in half year results but combined ratio increases
CEO says rise in combined ratio driven by claims mainly in marine and reinsurance divisions.
Willis' new data and analytics tool to help improve underwriting outcomes
The broker says aviation insurance rates have fallen continually making this an incredibly challenging market.
Fractal raises $78.6m Series A funding for expansion
The technology firm with a focus on insurance, cybersecurity and quantitative finance has rebranded itself as Qomplx.
Save £600 with the Intelligent InsurTECH Europe Super Early-Bird rate: Book now
