Kingsway maintains profit surge

Non-standard auto insurer Kingsway Financial Services Inc. (TSE: KFS) more than doubled net income for the 2000 financial year to $27.5 million (1999: $13.6 million). This translated to earnings of 81 a share (1999: 38), with the company posting a 10.7% return on equity for year.

Strong business growth was mostly responsible for the earnings gain, which saw gross written premiums for the year reach a record level of $643 million – a 26% increase on the previous year. In particular, the insurer made substantial gains in the final quarter of 2000, with net income clocking in at $7.4 million against the $12.6 million loss reported for the same period the year prior.

Kingsway’s combined ratio for 2000 came in at 101% compared with the previous year’s 102.6%. Its Canadian operations experienced a slightly higher ratio of 101.8% while U.S. operations closed the year at 100.9%. The expense ratio fell to 32.1% against the 34.2% reported at the end of 1999. Investment income for 2000 rose by 18% to $44.6 million with realized gains a key area of performance at $10.4 million against the previous year’s $900,000. Overall, the investment portfolio grew by 14% during 2000 to $787.5 million (1999: $668.5 million), equal to about $23.12 per common share. Kingsway’s total assets at the end of 2000 stood at $1.17 billion. “We continue to outperform the Canadian and U.S. industry results by a wide margin. Currently, we are experiencing very strong growth in our core business, and are poised to see the full benefit of our 2000 growth in the coming quarters,” comments president Bill Star.