April 25, 2016 by Canadian Underwriter
Kingsway Financial Services Inc. of Toronto, whose products include non-standard auto in the United States, reported Friday it lost US$1.495 million during the three months ending March 31.
Net premiums earned in the most recent quarter were $29.427 million, essentially unchanged from $29.03 million in Q1 2015. All figures are in U.S dollars.
Net income in Q1 15 was $3.434 million. Kingsway had reported $8.357 million in “other income” in Q1 2015. When it released its Q1 2015 financials on April 30 2015, Kingsway noted it had “terminated the Management Services Agreement that had been in place with its former subsidiary, 1347 Property Insurance Holdings, Inc.” As a result, Kingsway recorded a gain of $6 million in Q1 2015.
Kingsway writes insurance through Mendota Insurance Company, Mendakota Insurance Company, Mendakota Casualty Company (formerly Universal Casualty Company), Kingsway Amigo Insurance Company and Kingsway Reinsurance Corporation.
In 2015, 24% of Kingsway’s gross premiums written were from non-standard auto in Florida, 16.3% were from Texas, 16.3% were from Illinois and 10.3% were from California, Kingsway reported this past March in its annual report for 2015.
In its annual report, Kingsway said its insurance underwriting operations have policyholders in 12 U.S. states but it is only accepting new business in nine states.
Both Amigo and Mendakota Casualty Company (MCC) entered into a comprehensive run-off plan, Kingsway said earlier in its annual report. During the first quarter of 2015, Mendakota Casualty “sent a letter of intent to the Illinois Department of Insurance to resume writing private passenger automobile policies in the state of Illinois,” Kingsway said at the time. “MCC began writing these policies on April 1, 2015.”
Kingsway was the parent company of Jevco Insurance Company until 2010, when it sold Jevco to The Westaim Corp. Intact Financial Corp. bought Jevco from Westaim in 2012. In 2008, Kingsway had sold York Fire & Casualty Insurance Company to La Capitale General Insurance Inc.
Other Kingsway subsidiaries include IWS Acquisition Corp. and Trinity Warranty Solutions LLC. IWS administers vehicle service agreements, under which IWS agrees to replace or repair designated vehicle parts in the event of a mechanical breakdown. Trinity Warranty provides warranty support for refrigeration and heating, ventilation, air conditioning (HVAC) equipment.
On April 21, 2016, Kingsway announced the acquisition of Argo Management Group LLC and the formation of 1347 Warranty Holdings, a new unit formed to manage IWS and Trinity. Argo managing member John Fitzgerald has been hired as executive vice president of Kingsway and is appointed to Kingsway’s board of directors, Kingsway announced last week.
Fitzgerald was managing director of Adirondack Capital, LLC, a financial futures and derivatives trading firm. He will sit on Kingsway’s board until its annual general meeting, at which time he will stand for re-election.
Kingsway is currently led by president and chief executive officer Larry Swets, who joined the firm in 2010. It is publicly-traded and as of April 27, 2015, 44.33% of outstanding common shares and restricted shares were owned by the firm’s directors and officers. Director Joseph Stilwell owned 17.71% of common and restricted shares, as of April 27, 2015, the firm reported in its management information circular at the time.