Kingsway Reports Q1 Net Income Up 33 Percent at $24.4M

Toronto-based, Kingsway Financial Services Inc., a provider of commercial and non-standard auto coverage in Canada and the U.S., announced record financial results for the quarter ended March 31, 2003, posting gains in net income and earnings per share.

Net income increased by 33 percent to $24.4 million, compared to $16.3 million in the first quarter of last year. The company said its return on equity (annualized) was 16 percent in the quarter compared to 11.9 percent in Q1 2002, while its combined ratio improved to 96.8 percent compared to 99.3 percent in the same quarter last year.

The result was a “record quarterly underwriting profit of $17.9 million in the quarter compared to $2.2 million in Q1 last year. Diluted earnings per share increased 48 percent to 49 cents for the quarter, compared to 33 cents for the first quarter of 2002 with Net income increasing by 50 percent to $2404 million,” said the announcement.

“We are very pleased with the results for the first quarter of 2003 which produced record levels of underwriting profit, net income and earnings per share”, stated president & CEO Bill Star. “It is particularly pleasing to see the substantial improvement in the results from our Ontario private passenger automobile product as a result of remedial actions that were started in late 2002. We continue to benefit from the positive pricing environment that is prevalent in all of our core lines of business and all our markets. This is a very good start to the year which we expect will be another record year for Kingsway.”

Premiums grew by a quarterly record to $702.6 million, compared with $416.4 million in the first quarter last year. Written premiums from U.S. operations increased 78 percent to $575.6 compared with $324.1 million last year. “In the quarter, U.S. operations represented 82 percent of gross premiums written compared with 78 percent in the first quarter last year, said the announcement. “Written premiums from Canadian operations grew 38 percent to $127.0 million during the quarter, compared to $92.3 million in Q1 last year.”

Kingsway also noted a 25 percent increase in premiums from non-standard automobile policies to $248.9 million and by 107 percent to $319.8 million for trucking and commercial automobile over last year’s first quarter. “Increased premium rates and firming market conditions are prevalent in all of the Company’s geographic locations,” it indicated.