Kingstone Successfully Sponsors Inaugural $125 Million Catastrophe Bond

Rhea-AI Summary

Kingstone Companies (NASDAQ:KINS) has successfully issued its first catastrophe bond worth $125 million through its subsidiary, Kingstone Insurance Company. The Series 2025-1 notes were issued via Bermuda-registered 1886 Re Ltd., priced at 4.5%, providing collateralized reinsurance protection. The notes offer multi-year protection against named storm events across five Northeast states (NY, NJ, CT, MA, RI) from July 1, 2025, through June 30, 2029. This strategic move enhances Kingstone's access to diversified capital while securing additional multi-year reinsurance capacity and managing protection costs. The catastrophe bond was structured and placed by Aon Securities LLC.

Positive

• Secured $125 million in collateralized reinsurance protection
• Multi-year protection spanning four annual risk periods (2025-2029)
• Diversification of risk transfer and capital sources
• Coverage across five Northeast states against named storm events

Negative

• 4.5% pricing on the notes represents additional cost of capital
• Limited to named storm events only, leaving other catastrophic risks potentially uncovered

Insights

Insurance Financial Analyst

Kingstone's first $125M catastrophe bond provides multi-year storm protection while diversifying capital sources and potentially reducing reinsurance costs.

Kingstone's inaugural $125 million catastrophe bond represents a strategic enhancement to their reinsurance program with significant implications for their risk management capabilities. The transaction, structured through Bermuda-based 1886 Re Ltd., provides collateralized protection specifically against named storms across five Northeastern states where Kingstone operates.

The 4.5% pricing on these notes is particularly noteworthy in the current reinsurance market environment. This structure offers Kingstone guaranteed storm protection for four years (July 2025-June 2029), creating predictability in an otherwise volatile reinsurance market where pricing and availability can fluctuate significantly year-to-year.

The indemnity trigger mechanism means the protection is based directly on Kingstone's actual losses, making this highly aligned with their specific exposure profile. This transaction represents financial innovation for a regional insurer of Kingstone's size - catastrophe bonds have typically been utilized by much larger carriers, suggesting increased sophistication in their risk management approach.

Most importantly, this structure likely helps Kingstone optimize its overall reinsurance costs while providing certainty on a significant portion of capacity. For a regional property insurer operating in coastal Northeastern states, catastrophe protection is a fundamental business requirement. This transaction effectively transfers peak storm risk to capital markets, complementing traditional reinsurance and potentially reducing concentration risk with any single source of protection.

KINGSTON, NY / ACCESS Newswire / May 22, 2025 / Kingstone Companies, Inc. (Nasdaq:KINS) (the "Company" or "Kingstone"), a Northeast regional property and casualty insurance holding company, today announced the successful issuance of a $125 million catastrophe bond, marking a significant milestone in the company's strategic risk transfer and capital management initiatives. The catastrophe bond issuance is the first sponsored by the Company's subsidiary, Kingstone Insurance Company.

The Series 2025-1 notes were priced at 4.5% and issued through a Bermuda-registered special purpose insurer, 1886 Re Ltd., providing Kingstone Insurance Company with $125 million of collateralized reinsurance protection. The notes offer multi-year protection against named storm events across New York, New Jersey, Connecticut, Massachusetts and Rhode Island on an indemnity trigger and per-occurrence basis. The notes, which were structured and placed by Aon Securities LLC, will cover four annual risk periods from July 1, 2025, through June 30, 2029.

Meryl Golden, President and Chief Executive Officer of Kingstone, stated, "We are pleased to have sponsored this catastrophe bond issuance, which enhances our access to efficient, diversified capital. This transaction has enabled the Company to secure additional multi-year reinsurance capacity while also helping to manage the overall cost of protection. We are thankful to Aon Securities for their effective execution of the process and to our catastrophe bond investors for their support."

Richard Pennay, CEO of Aon Securities LLC, said, "Aon Securities is honored to have partnered with Kingstone on their inaugural catastrophe bond, issued by 1886 Re Ltd. The support Kingstone received from the global catastrophe bond investor base is a tribute to the company and management team. With this offering, Kingstone has demonstrated its ability to access a diversifying source of risk-transfer protection."

About Kingstone Companies, Inc.

Kingstone is a northeast regional property and casualty insurance holding company whose principal operating subsidiary is Kingstone Insurance Company ("KICO"). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2024 was the 12^th largest writer of homeowners insurance in New York. KICO is also licensed in New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine.

About Aon Securities

Aon Securities and its associated personnel are subject to a number of regulatory bodies. Aon Securities LLC is a broker-dealer registered with the Securities and Exchange Commission (SEC), all fifty State securities commissions and the Commonwealth of Puerto Rico, the Municipal Securities Rulemaking Board (MSRB), and the Commodity Futures Trading Commission (CFTC). Aon Securities is a member of the Financial Industry Regulatory Authority (FINRA) and National Futures Association (NFA).

Investor Relations Contact:

Karin Daly
Vice President
The Equity Group Inc.
kdaly@equityny.com

SOURCE: Kingstone Companies, Inc.

View the original press release on ACCESS Newswire

FAQ

What is the size and purpose of Kingstone's (KINS) first catastrophe bond?

Kingstone's first catastrophe bond is $125 million and provides collateralized reinsurance protection against named storm events across five Northeast states.

What is the duration and coverage area of KINS's 2025 catastrophe bond?

The catastrophe bond covers four annual risk periods from July 1, 2025, through June 30, 2029, protecting against named storms in New York, New Jersey, Connecticut, Massachusetts and Rhode Island.

What is the pricing of Kingstone's Series 2025-1 catastrophe bond notes?

The Series 2025-1 notes were priced at 4.5% and issued through 1886 Re Ltd., a Bermuda-registered special purpose insurer.

Who structured and placed Kingstone's catastrophe bond issuance?

Aon Securities LLC structured and placed the catastrophe bond issuance for Kingstone.

How does the catastrophe bond benefit KINS shareholders?

The bond provides Kingstone with diversified capital access, multi-year reinsurance capacity, and helps manage overall protection costs, strengthening the company's risk management strategy.