Kingsway sets quarterly record

Specialty risk auto insurer Kingsway Financial Services Inc. (TSE: KFS) delivered a sterling 13.1% return on equity for the first quarter of this year. Net income for the latest reporting period rose 138% year-on-year to $10.6 million (1st quarter 2000: $4.4 million). The significant jump in earnings – which clocked in at 27 a share against the 9 a share made at the end of the 2000 first quarter – is largely attributed to vigorous growth experienced by the company’s U.S. operations.

Gross written premiums for the reporting period came in 61% higher at $216 million compared with the $134 million posted for the 2000 first quarter, with most of the gain achieved on the U.S. book of business. Gross written premiums south of the border rose by 91% to $148 million while Canadian operations notched up a 20% gain in gross written premiums of $67.3 million. The regions producing the strongest levels of growth for the first quarter of this year were the southern parts of the U.S., Illinois in the northern U.S., and Ontario in Canada, according to a press statement released by the directors.

Kingsway’s combined ratio for the first quarter of 2001 was 99.7%, producing an underwriting profit for the period of $504,000 against the $6.3 million underwriting loss made for the same period a year prior. The combined ratio of the company’s Canadian operations showed noticeable improvement for the quarter at 103.8% compared with 110.1% for last year, while the U.S. business produced an even healthier ratio of 96.9% from the previous year’s 102.5%. The insurer’s investment book also notched up significant gains, with investment income rising 39% year-on-year to $13.5 million (1st quarter 2000: $9.6 million) and realized gains amounting to $1.8 million compared with the $1.6 million made for the same period the year prior. Kingsway’s total assets at the end of the latest reporting period grew by 17% to $1.27 billion, equal to a book value per share of 847. “This is a very good start to the year with a return to underwriting profit, and record premium levels. It is particularly pleasing to see such strong growth and profitability from our U.S. operations,” says president Bill Star.