Kingsway earnings up for third quarter (December 01, 2002)

Kingsway Financial Services Inc. (TSX: KFS) increased net income for the third quarter by 51% to $21.7 million from the $14.3 million made for the same period last year. This saw a 22% jump in earnings to 44 a share compared with the 35 a share shown for the third quarter of 2001. The company’s ROE for the latest reporting period clocked in at 15.2%.

Gross written premiums rose to $605.6 million from last year’s $297.5 million. “The growth in written premiums for the first nine months of the year is attributable to increases in our core business lines of non-standard automobile of 51%, and trucking of 214%,” states a company release. Net earned premiums were up year-on-year by 102% to $479.4. million. Much of the growth comes from the company’s U.S. operations, with Canada showing a 29% rise in gross written premiums to $125.2 million, and a 25% rise in earned premiums to $117.1 million.

The company’s combined ratio climbed to 101.2% for the latest quarter, up from 96.4% a year ago. The deterioration mostly came from the Canadian operations which produced a combined ratio of 108.2% for the quarter. Although the combined ratio for U.S. operations was up slightly to 97.5%, this business achieved an underwriting profit of $21.1 million for the quarter. The company’s investment income rose by 39% to $19.6 million from $14.1 million a year earlier. Realized gains were $6.3 million in the third quarter versus $1.2 million for the 2001 third quarter. “…Our growth in written premiums has led to a significant increase in unearned premium balances, representing revenue to be earned in future periods at progressively higher premium levels,” says Kingsway president Bill Star.