Greetings, and welcome to the Kingstone Companies, Incorporated Third Quarter 2015 Financial Results. At this time, all participants are in a 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 Mr. Adam Prior of The Equity Group. Thank you, sir. You may begin.

Thank you Dana, thank you and good morning everyone. Yesterday afternoon, the company issued the announcement of Kingstone's 2015 third quarter results. We will be utilizing a slide show presentation as an accompaniment to this call. This presentation is available on Kingstone Companies’ website at www.kingstonecompanies.com. While we will not be referring to the entire presentation slide by slide, the structure of the discussion will mirror that of the slide show. We welcome you to review this presentation and follow along. On this call, Kingstone may make forward-looking statements regarding the company, its subsidiaries, and businesses. Such statements are based on the current expectations of the management of each entity. These words anticipate, expect, believe, may, should, estimate, project, outlook, forecast, or similar words are used to identify such forward-looking information. 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 the companies, including risk regarding the insurance industry, economic factors, and the equity markets generally, and the risk factors discussed in the Risk Factors section of its Form 10-K for the year ended December 31, 2014. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made, and the company and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. When discussing business operations, we may use certain terms of our, which are not defined under U.S. GAAP. In the event of any unintentional difference between the presentation materials and our GAAP results, investor should rely on the financial information in our public filings. With that, I’d now like to turn the call over to Mr. Barry Goldstein, the Chairman and CEO of Kingstone. Please go ahead, Barry.

Yes, good morning everyone. I’m joined today by Victor Brodsky, Kingstone's Chief Financial Officer, as well as Ben Walden, our Senior Vice President and Chief Actuary. I’ll begin today’s call with a discussion of our financial results, our growth, and the competitive elements within our target markets. Ben will then discuss our underwriting performance and Victor will review some specifics of our financial results. Then finally I’ll return for a few closing remarks. To begin Kingstone continued to generate excellent financial results in the third quarter; as we’ve discussed with you in the past each quarter we target for three things, 20% growth, 20% operating margin and 20% return on equity. This is what we refer to is our 20-20-20 and we exceeded all three of these goals during the quarter just as we did in the second quarter. We achieved the 26.3% growth in our continuing lines of business and we see continuing growth opportunities within our markets and downstate New York. In the third quarter we reported an excellent combined ratio of 72.8% translating to a margin of 27.2%. This along with our increased writings is what led to Kingstone's 24.5% increase in net income for the quarter. We are in $2.3 million this quarter equals to diluted earnings per share of $0.32 and this is an increase 23.1% over last year’s third quarter. Our historical performance strong evidenced that the Company can achieve return on equity of 20% while still remaining true to our principles of disciplined underwriting and returning income to our shareholder through a policy of consistent dividend payouts. Our quarterly results translate to an annualized return on equity of 22.1%. And we announced yesterday the Kingstone's Board of Directors voted to raise our quarterly dividend by 25% to $0.0625 per quarter or $0.25 per…

Thank you, Barry. I will now take a few moments to discuss the loss rate field for the quarter. The 2015 third quarter net loss ratio improved 7.4 points to exceptional 38.5% from 45.9% in the prior year period. Our net loss ratio for the quarter decreased primarily due to a reduce impacts from prior-year developments. In the third quarter of 2015 prior year development was favorable reducing the overall loss ratio by 4.2 points in the third quarter of last year we had adverse prior year development which increased the loss ratio by 4.4 points. Therefore the year-over-year impact of prior year development was a decrease of 8.6 points. Favorable prior year development was recorded this quarter for both personal lines and for our legacy lead paint claims. 2015 is emerging as the first year since 2011 without significant adverse prior year development. It appears that the initiatives we undertook last year, adding claims staff expertise performing a completely review of open claims and strengthening our case reserves are now proving to have a positive impact on our results. The core net loss ratio excluding severe winter weather and prior year development was 42.1% for the third quarter 2015 just slightly higher than the prior year period. We observed higher average claims severity for personal lines this quarter, which was offset by a significant reduction in claims frequency. The metric we reply upon most in evaluating our underwriting performance is claims frequency, which declined across all lines when compared to the third quarter of 2014. The consistency we observe in our net core loss ratio reflects both our strong underwriting discipline and careful selection of agency partners. For the nine months ended September 30, 2015 the company’s net loss ratio was 49.1% compared to 53.4% in the prior year period. The improvement in our loss ratio was driven by a reduction in the impact of prior year development, a shift in mix of business toward personal lines and a rapidly declining impact of commercial auto on our overall loss ratio. At this point, I’ll turn it over to Victor Brodsky, our CFO.

Thanks. Following up on Ben’s detail and loss ratio I want to also breakout the components of our net underwriting expense ratio. Our net underwriting expense ratio was 34.3% this quarter, compared to 25% in the third quarter of 2014. The comparison of net underwriting expense ratio between quarters is impacted by the reduction of our quota share ceding rates to 40% from 55% on July 1, 2015 the increase in our net underwriting expense ratio was an unexpected result in the change in terms of our quota share as we now receive less ceding commissions in relation to net earn premiums, we are trading our [ph] ceding commissions for underwriting profits by retaining more of the business that we write. The other components of a net underwriting expense ratio are commissions paid to us like producers another underwriting expenses, which is the overhead required to run our business. Other underwriting expenses as a percentage of direct earned premiums decrease to 16.0% this quarter from 16.1% in 2014, we were able to achieve a slight improvement in this percentage while also continuing to hire staff particularly in our claims department to support our continuing growth. I see the new faces in all our departments yet noted that cost are will and paid for by the growth of our business. We are realizing the scalability of our in place infrastructure as our business grows. To improve on this we implemented image write software during the third quarter and expect to benefit from additional efficiencies [indiscernible] both in our underwriting and claims departments, the efficiency is go forward beyond we expected savings on paper and toner. We were now able to electronically monitor time our staff spends on tasks, number of tasks that they are handling and backlog if any. This will allow us to manage our company by growing to the next level, by realizing rate of staff efficiency. In total when factoring the new -- the net underwriting expense ratio, our net combined ratio for the quarter was an excellent 72.8%. Moving to our balance sheet in investments, our portfolio remained very consistent quarter-over-quarter to predominant the math our investments consisting of invest grade fixed income securities. Kingstone’s cash invested holdings of September 30, 2015 increased to $83.5 million an effective duration of 5.2 years. One trend worth noting is that over the past several quarters we have successfully shortened the effective duration of the portfolio. Finally, to reiterate Barry’s early comments, we were pleased to report that our Board declared a dividend of $0.0625 in a quarter per share, which will be paid on December 14, 2015 to shareholders of record on November 30, 2015. The dividend represents the 18th consecutive quarterly dividend declared by the company and a 25% increase over the prior quarter’s dividend of $0.05 per share. With that I’ll turn the things back over to Barry for closing remarks.

Thanks Victor. To conclude our growth rates continue to be strong, we’re retaining more the business we write and from what we do see we’ve negotiated favorable terms with our long time reinsurance partners. We’re doing so without strain from our core underwriting principles or philosophies that we’ve been practicing for decades. Ultimately our goal is to eliminate quota share reinsurance entirely and retain a 100% of the profit produced by all of our businesses. One of our goals is to have a simply to understand business model, which will be aided by the elimination of quota share reinsurance, we aim to achieve an A rating from A.M. Best and by diversifying in products in adding new and non-correlated geographies we are pointing ourselves towards achieving another of our long-term goals. With that, operator let's open it for question.

Thank you. This floor is now open for questions. [Operator Instructions] Our first question is come from Paul Newsome of Sandler O'Neill. Please proceed with your question.

I wanted to focus in on the expense ratio this quarter which was obviously little bit elevated from the history. Could you go through the components that were perhaps related to the change in the quarter share versus what's related to the increase in expenses, I want to -- get a sense of where the maybe where run rates for the expense ratio is at, given all these changes?

Great, thanks Paul. Before I let Victor go into this specific, this is one of the concerns and exactly how I ended my address this morning. The competition of accounting for quarter share leads to some what might seem to be unfavorable results and one of the things you're point to is what looks like an increase in our expense ratio. I will leave it to Victor to go over the details with your but when you factor out and look at our expenses as a percentage of the actual business we're writing we're not seeing any increase at all in our expense ratio, it's actually gone down a tick. So Victor you want to go through this specific with Paul please.

Yes, just so talking on the phone is one thing but it is detailed and our 10-Q in the MD&A section, so it's something for you to refer back to after the call. So we have ceding commissions which is benefit for us, it's a negative. What happens is that negative becomes less of a benefit because of the net earned premiums increasing, so it's really kind of like crazy point which makes very difficult to compare because of the change in quota share. But probably the best thing to look at when -- if you take a look at that table later on, we have a line item nickled underwriting expense and there you could see the ratio is 25.8% for the quarter compared to 28.8% last year. So in the pure underwriting expenses, you’ll be able to see it, even though it's a non-GAAP measures maybe another way to look at it is to compare it to direct on premiums because that doesn't change on a quota share. So that’s something -- that's comparing something that's constant rather than what we have to deal with for these changes.

Yes, as we cut back on the quota share we are receiving less commission which by itself generating an increase to that ratio, you can't look at one without the other Paul and the increase to the -- what looks an increase to the expense ratio translates into an increase to our underlying profits.

Do you have a sense of where it's going to go prospectively on a referred basis?

Ultimately, I mean when we eliminate the quota share, Victor’s -- the percentage you've just gave on a direct basis that's where we're going to wind up. Ultimately, that's exactly where we're going to wind up.

[Operator Instructions] Our next question is coming from Ken Billingsley of Compass Point. Please proceed with your question.

I wanted to ask about a comment you said about increased competition in downstate New York, could you just expand a little bit on that, is there -- are the players that you saw, that lasted a few years ago, are they the ones coming back or is this competition from new bodies?

More of the latter, Ken, I mean, the large national carriers will periodically put the their toe in water I think just to keep some of that captive agents busy and drive a little business into their stores. But for the most part what we're seeing -- I mean this has not been an exceptional increase, it's something we note. There is a couple of newly formed carriers that have gotten a foothold in New York. But this is nothing exceptional at all. So the answer to your question would be more of the new carriers rather than the major nationals coming back.

And when you say new carriers, new carriers that were formed or ones that are just new to the state, but they're operating -- they were a small player or may be someone else?

I think first we saw a couple of new carriers that were formed that's started to really pop up towards the end of last year. But look we've seen other carriers announced their intentions to enter New York, particularly some of the Florida based carriers. We haven't seen it per se yet. One of those Florida based carriers is in the midst trying to acquire one of our local competitors. I just -- it’s important for me to give you a sense of where the overall is for our business, at this point I wouldn’t consider the impact of the competition any differently than I did at the end of last quarter, there has been no incremental gain that I can sense.

Okay. And I might have missed the comment specifically and just want to clarify, you are talking about -- as you’re looking to hire a new VP and what you are looking for and essentially the business plan of Kingstone. So you want to appoint an agents, maybe I missed this, but you want to appoint an agent to does business with an underwriter that has a direct operation or did I miss-hear that?

What we won’t appoint is an agency owned by a carrier that with where the carrier sells its products direct to consumer, without mentioned -- it’s not really a good idea to mention your competitors name, but that little lizard guy -- that company has an agency that resells other carriers products. If the direct marketers intention and its in 15 minutes that can eliminate 15% of the cost, the direct message there is go away from your broker, you don't need him we’ll take care everything for you and I won’t aligning myself or try to make money along with the corporation that seeking to hurt one of my business partners. That's really where I’m going to, I have a belief that insurance is not such a plain vanilla product, maybe automobile insurance say has been able to do a lot with, but when it comes to business insurance and home owners insurance where these is an array of choices, I would never put the choice in the hands of the company that selling me the policy and so I won’t align myself with them.

With the expansion plans from a staffing perspective, what kind of staffing increase will you need to facilitate your growth into these new states?

It's a little premature to talk about business account, but as we’ve achieved deficiencies already through the use of the digital software and the rollout of some other products that we recently purchased, you will see that we’ve booked quite a lot of fixed assets over the last year and so. And as we gain the efficiencies from that and get efficiencies out of our incumbent staff, the hope is that the incremental staffing gain won’t have to be as though we’re starting from ground zero. But it's a little premature for me to give you specifics.

Okay. Other question I have on insured -- and the insured value the homes, what is in general, for your target markets, what is the -- I don't know if this is the appropriate way to ask the question, but you can understand where I’m trying to go with this is, what is the type of house that you are showing and what has maybe change in the last few years? What’s the average insured value?

Yes, this is Ben Walden. Our average value in New York is a little higher than 400,000 coverage A that's the building coverage, we trying to do something on the product to shift our mix to a little bit more preferred type markets, so a higher end market. We’ve opened up our underwriting eligibility to those risks and we would expect to move in that direction going forward.

I mean, at this point, we do have the ability to write homes with up to a $2 million replacement cost. We are writing the lodge or homes, we are competitively priced versus the high end names like Chubb and ACE and Fireman’s and what not, when I say competitively we’re probably a smidge below what they are, we don't offer the bells and whistles, at least at this point that those carriers do, but we find that there is a very significant place that we can stake out in the market albeit it’s not that big of an opportunity for us going forward.

Okay. And two more questions, if you have time. With the agents that you are doing business with from a software or technology standpoint, what do you have in place that allows your product maybe to go to the front of line, when they are marketing other carriers, what do you do to make the ease of business transition better with your agents?

I think the fairest answer to be to say, we really don't have anything. We have similar conduits between the agents and the company that most other companies do, maybe a little more in certain areas, little less in other areas. It’s the consistency with which we act, it's the consistency how we treat our business partners, that we don't try to nibble around the edges and change rates every few months, like some of our competitors do, so I don't think it’s so much an ease of doing business as the consistency in approach. They know what they are going to get with Kingstone, every one of our producers is assigned a specific underwriter who they have a direct dial to and have a relationship with on a first name basis. They pick up the phone they get their calls, its very old school Ken. So yes we’ve got the ability to rate and write and submit online seamlessly, that's not much different than anybody else, where we separate ourselves is on service and relationships.

And I wanted to ask about the Livery’s business, I know you've been expanding, there is a small piece but a growing piece of your business. Any change given some pushback from states and regulatory changes, obviously you're growing the business but do you see some headwinds coming in there or do you still see kind of wide open spaces?

Well in terms of regulatory there has been a lot of conversation in New York. We've got Uber trying to turn the regulations from being New York City based to a state wide approach. The governors chimed in on that I guess in the last few weeks and certainly the legislature has the opportunity in its next session to consider this. There are bills that have been proposed. The changes in those bills would exempt New York City from most of the impact, but this is a very fluid situation. Uber is, I mean, it's like great company to watch. These are the most aggressive guys I've ever seen in any business and it's just a pleasure to watch it. But at the end, at this point, I don't really have a sense as to how things are going to change or what's going to change about it.

[Operator Instructions] Our next question is coming from Ken Billingsley of Compass Point. Please proceed with your question.

From a capital standpoint, really strong growth I know you increased your dividend here, but you’re increasing your dividend at a time that you're growing your business as well, and you're talking about improving your rating with A.M. Best. With that all laid out there where do you see capital needs or what ratios are you targeting to work towards the A.M. Best rating that you’re targeting as well as where you feel comfortable, what rate are you looking at and how high can you take?

Yes, historically Ken, we kept at 1.5 to 1 on a net leverage basis. We are at or about that right now maybe a smidge, really close enough that it doesn’t make much of a difference to talk about. Victor and I have been reviewing this and we feel it will in or about that same range at the end of the year. So I think if there is any kind of changes, it will take -- if there are any it won't be in 2015. And unless there are opportunities which I've been -- it's interesting I have met every banker I haven’t met before, I have met in the last two months. So something kind of triggered the interest in Kingstone. I think it maybe reflect in the stock price or maybe its chicken and the egg, but at this point we're starting to see opportunities. Things are being presented to us and if we get to the point where capital is required to make an acquisition then we will be back in the market. But other than that I don't see us having any real capital needs until the earliest of the 2016.

Okay and when you saying leverage basis, I’m assuming that's a net to statutory surplus?

Yes.

And do you have your statutory surplus number for the quarter?

36 and change, we can get that to you offline. We have these GAAP calls and the lawyers scare us into talking about only GAAP.

Thank you. At this time I would like to turn the floor back over to management for any additional or closing comment.

Well, I mean, I would like to thank everybody for being on the call with us today. I think as a group, you're listening to some very proud people here. We've done I think an exceptional job. I’ve got a phenomenal team to work with. We’re going to build that team and we're going to keep building this company and we don't do things on the quarter-by-quarter basis, we don't take shortcuts, we don't try to squeeze the lemon where it's not necessary, that's not been a change. But what you see going forward is a bigger, stronger and in fact better managed company, so thank you all for your time and I look forward to talking to you at our next call.

Ladies and gentlemen, thank you for your participation on today's teleconference. You may disconnect your lines at this time and have a wonderful day.