Kingstone Companies Inc (NASDAQ:KINS) Q3 2019 Earnings Conference Call - Final Transcript
Nov 12, 2019 • 08:30 am ET
Greetings and welcome to Kingstone Companies 2019 Third Quarter Earnings Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Rich Swartz. Thank you, Mr. Swartz. You may begin.
Thank you very much, Jenny, and good morning, everyone.
Yesterday afternoon, the company issued a press release, detailing Kingstone's 2019 third quarter results. On this call, Kingstone may make forward-looking statements regarding itself and its business. The forward-looking events and circumstances discussed on this call may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Kingstone.
For more information, please refer to the section entitled Factors That May Affect Future Results and Financial Condition in Part I, Item 1A of the Company's Form 10-K for the year ended December 31, 2018, along with the commentary on forward-looking statements at the end of the company's earnings release issued yesterday. In addition, our remarks today include references to non-GAAP measures. For a reconciliation of our non-GAAP measures to the GAAP figures, please see the tables in our earnings release.
With that, I'd like to turn the call over to Kingstone's CEO, Mr. Barry Goldstein. Please go ahead, Mr. Goldstein.
Thanks, Rich, and good morning. Thank you all for joining us in our third quarter 2019 conference call. I continue to share your disappointment and frustration with our recent results. No doubt, the headline loss is upsetting to all, and believe me I know, misery needs no company. But before we can truly ride the ship and focus on our return to profitability in 2020, I wanted to be as sure as I could that the past would not impair our future.
As mentioned on the August call, only a couple of weeks after my return to day-to-day management, the first action I took was to shutdown commercial liability lines. It was those highly volatile lines that were the source of the vast majority of adverse development we recorded this year, including the amount we just booked. In fact, of the amount of adverse development recorded thus far in 2019, 80% of it comes from those same commercial liability lines. But it's important for you to note that the balance of about $2.3 million does relate to personal lines liability claims, but be aware that even after those amounts were added to the reserves, our results over the past five years reflect a redundancy in our personal lines reserves.
I'll defer to Ben to discuss the claims reserves, but know that Ben and I agreed we should get an updated viewpoint from an external independent actuary, which was conducted during the third quarter. Liability case reserving is a judgmental process that depends on many, many assumptions. Individual opinions can vary and often change as new information becomes available. With all these assumptions, there is a wide range of