Kingsway acquires AXA fleet book

Insurer AXA Canada has sold its book of commercial trucking business, consisting of ten vehicles and more, to specialty insurer Kingsway Financial Services Inc. The book is valued at about $23 million in annual premium. As part of the arrangement, Kingsway will pay AXA an “overriding commission” of an undisclosed amount depending on the amount of business retained from the book.

Losses occurring in the “ten-plus vehicle fleet business”, which tends to be dominated by large transport companies with little day-to-day control over the conditions their vehicles are subject to, is believed to be the reason for AXA’s decision to dispose of its interests in this segment of the market. AXA will continue to expand its commercial trucking business in the smaller “owner/operator” fleet market. The changeover of control over the book will take place at the beginning of July of this year.

Bill Star, president of Kingsway, says, “this is an important step for Kingsway in this under-served specialty class of business. We will work closely with AXA Canada and leverage our expertise to ensure a smooth transition for brokers and insureds.” The trucking business acquired from AXA will boost Kingsway’s total exposure in the Canadian and U.S. commercial vehicle fleet markets to about $80 million in annual premiums. The new business will also boost Kingsway’s stake of long-haul and other commercial auto classes to about $110 million in annual premiums.

Kingsway indicated in a press statement released with its first quarter year 2000 results that commercial fleet business had run at a loss for the reporting period. Star is, however, confident that the fleet portfolio, including the AXA book, will produce attractive earnings for the remainder of the current financial year. “We believe that, with one less competitor, and prices [turn in rates] going up, this business will become attractive again. We’re now one of the largest fleet insurance companies in Canada.