Canadian Underwriter

Kingsway enters into letter of intent to sell non-standard auto business

May 11, 2018   by Staff

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Copyright: / kmlmtz66Kingsway Financial Services Inc. has announced it has entered into a letter of intent to sell its non-standard automobile insurance companies.

“After significant debate, we pursued and executed a letter of intent to sell our non-standard auto business,” Kingsway CEO Larry G. Swets, Jr., said in a news release. “It was a tough decision, but we will now be able to focus our time and resources on growing our Extended Warranty segment.”

The sale, expected to close in the third quarter, remains subject to the negotiation and execution of definitive agreements as well as the receipt of regulatory approvals. Kingsway would record a loss on disposal of discontinued operations that it currently estimates to be approximately $8.5 million.

“The sale at statutory book value will allow us the liquidity to purchase a portfolio of investments from the insurance company so they can be utilized to fund future warranty acquisitions or merchant banking activity,” Swets said. “We remain pleased with the trajectory of our Extended Warranty companies. We like warranty businesses and will continue to look for opportunities to grow this segment.”

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This story was originally published by Canadian Insurance Top Broker.