Kingsway on fast-track

Specialty insurer Kingsway Financial Services Inc. (TSE: KFS) reported a 48% increase in net income to $20.1 million for the nine month period ended September of this year compared with $13.6 million disclosed for the entire 1999 financial year. This produced a return on equity for the reporting period of 15%.

The gain in earnings for the first nine months of this year translates to 58 a share compared with 52 a share reported at the 1999 yearend. Earnings for the first nine months of last year did, however, clock in higher at 73 a share – the insurer ran into an underwriting loss in the last quarter of 1999 which had a negative impact on the year’s overall results. Kingsway president Bill Star says, “I am extremely pleased to report significantly improved earnings and an underwriting profit for the quarter. We continue to experience tremendous growth and improved pricing in our major markets, the benefits of which have yet to be fully realized in our results. We are therefore extremely optimistic about the future.”

Gross written premiums for the three-quarters of this year amounted to $469.3 million, up 20% on the $390.3 million reported for the same period in 1999. This resulted in a 22% rise in net written premiums for this year of $442.5 million against the $361.4 million made at the end of September 1999. Based on gross written premiums, the company’s business in Canada grew by 12% over the past nine months while U.S. operations notched up a 47% gain.

The rise in premiums was accompanied with a positive underwriting development in the third quarter, resulting in a profit of $4.2 million. However, the company’s performance over the past nine months of this year produced an underwriting loss of $3 million against a $14.7 million underwriting profit made at the end of the 1999 third quarter. Investment income for this year also rose by 10% to $32.5 million (September 1999: $29.6 million) with realized gains made for the first three-quarters of this year of $5.9 million compared with $2.8 million reported at the end of September 1999. Kingsway’s investment portfolio now stands at $752 million based at market value, with total assets clocking in at $1.15 billion.