Kingstone Cos. Inc. plans to enter the California excess and surplus lines homeowners’ market in the second quarter of 2026, the company announced April 1, positioning the expansion as both a growth driver and a hedge against its concentrated exposure in New York.
President and chief executive officer Meryl Golden outlined the move in a shareholder letter following what the company described as the strongest financial performance in its history, with net income more than doubling to $40.8 million, diluted earnings per share rising 95% to $2.88, and a combined ratio of 75%, producing a 43% return on equity in 2025.
California ranked first among a large group of catastrophe-exposed states that Kingstone evaluated with an advisory firm, based on criteria including market size and profitability, competitive dynamics, regulatory and legislative environments, diversification benefit, and peril characteristics. The state’s homeowners’ market carries more than $15 billion in premium, nearly double New York’s market size.
“The flexibility E&S affords us is a key reason we believe the California opportunity is so attractive,” Golden said in the shareholder letter.
“Admitted market capacity is expected to remain constrained for years, as it will take considerable time for regulatory change to take hold and for admitted carriers to get the rate they need,” she said.
Golden said the dislocation in California’s admitted market has created pockets where risk can be appropriately priced. She said many low-risk homeowners in the state have few coverage options, allowing Kingstone to build a high-quality book with limited aggregation risk. Many E&S competitors in California, she added, are the same managing general agents and carriers the company already competes with, and outperforms, in downstate New York.
“We will also achieve diversification benefits by adding California to our portfolio. No state is more diversifying to our New York footprint than California,” Golden said.
“To reduce the volatility in our earnings and risk overall, it is imperative that we diversify from our current geographic concentration in a single state and a single regulatory environment,” she added.
Golden said Kingstone developed a California-specific Select product with the same actuarial advisory firm that helped build the product for New York. The product matches rate to risk at the peril level and uses wildfire models for both risk acceptability and rating. She said the company will target low-to-moderate wildfire exposure and use a real-time model to manage risk accumulation.
Non-weather water is the largest peril in California, Golden said – the same peril Kingstone manages routinely in New York. The company will use independent adjusters for field estimates initially but will manage all claims internally.
“Our platform is scalable, and the costs of entering California are not material,” Golden said.
Kingstone plans to keep California below 5% of 2026 premium and will cede a 30% quota share on that business. Golden said the company’s 30% expense ratio gives it a structural advantage over many competitors.
The California entry is part of a five-year growth plan announced in 2025 to reach $500 million in written premium by year-end 2029, approximately doubling the size of the company through continued growth in New York, geographic expansion, and strategic acquisitions.
The expansion marks a strategic reversal from a retrenchment the company undertook in 2022, when it exited the vast majority of business outside New York, BestWire reported. At the time, operations in Massachusetts, Rhode Island, Connecticut, and New Jersey – entered in 2017 to diversify risk – had disproportionately weighed on the overall book despite rate changes and tightened underwriting. Those states accounted for roughly 80% of business outside New York, according to BestWire.
