Kingsway builds on earnings recovery at half-year

Specialty insurer Kingsway Financial Services Inc. (TSE:KFS) reported net income of $10.4 million for the first six months of this year compared with $16.2 million achieved for the same period the year previous. Net earnings for the second quarter amounted to $7.2 million against the $3.2 million produced for the first quarter of the current financial year. This equates to earnings of 30 a share for the six month period (June 1999: 45) and 21 a share for the second quarter of 2000 against the 27 a share reported for the same quarter in 1999.

The company’s gross and net written premiums rose by 24% for the second quarter of this year compared with the same period the year prior. Gross premiums for the first six months of 2000 grew by 16% and net written premiums by 20% against the levels reported at the 1999 half-year. President Bill Star says the growth in premium levels was achieved from the company’s core “non-standard” auto markets in Canada and the southern U.S. Kingsway’s gross premiums from the Canadian market rose 28% year-on-year with the U.S. operations producing a 19% gain. “I am pleased to report a significant improvement in earnings over the previous quarter. With the substantial growth in written premiums and increased rate levels in many of our business lines, we expect continuing improvements in earnings during the second half of the year,” comments Star.

Kingsway brought the combined ratio down to 100.6% for the second quarter of this year against the 105.8% at the end of the first quarter — this equates to a ratio of 102.9% for the six month period. The combined ratio for the Canadian operations clocked in at 100.1% for the second quarter with the ratio for the six months standing at 104.3%. The U.S. business showed a 101.1% ratio for the second quarter with the ratio for the six-month period coming in slightly higher at 101.7%.

The company boosted investment income for the second quarter of this year by 15% to $11.2 million against the first quarter level, with income for the six month period amounting to $20.9 million. Realized gains accounted for $2.3 million for the second quarter, off of the $2.6 million produced at the end of the 1999 half-year. Realized gains for the first six months of this year came in at $4 million. Total assets at the end of June this year stood at $1.12 billion compared with $1.07 billion reported at the end of the 1999 financial year. The investment portfolio rose in value by 5% to $725 million compared with the level reported at the end of last year — the value of the investment portfolio equates to about $21.36 per common share.