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Kingsway Financial restructures insurance services and insurance underwriting business segments


September 17, 2012   by Canadian Underwriter


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Toronto’s Kingsway Financial Services Inc. announced a restructuring of its insurance services and insurance underwriting segments on Sept. 17.

Bradley Diericx will join Kingsway as executive vice president in its insurance services business. Diericx most recently worked as a partner and leader of the Midwest practice at Johnson Lambert LLP, an insurance-focused CPA firm. He has also held executive roles at GE Reinsurance Corp. and the Insurance Corporation of Hannover.

In his new role, Diericx will oversee Kingsway’s insurance services segment, which will include the specialty insurance business it announced its intention to acquire in February. It recently received approval from the Florida Office of Insurance Regulation to acquire that business and is now pursuing the remaining state approvals to close the acquisition during the fourth quarter of 2012, Kingsway said in a statement.

“Brad brings a wealth of insurance industry leadership and knowledge to our team,” Larry G. Swets, Jr., Kingsway’s president and CEO said in a statement, “and his connections within the insurance space will help us to enhance and grow our insurance services businesses, including the new opportunities to be presented when we complete the acquisition of the specialty insurance business.  Following completion of that transaction, we expect to pursue a variety of acquisition opportunities as we implement our plans for growth.”

Kingsway has also restructured its insurance underwriting segment. It intends to streamline its non-standard property and casualty insurance business operations under one management team led by William A. Hickey, Jr., Kingsway’s executive vice president, CFO, and COO. 

The segment will now include several of the company’s subsidiaries, including Mendota Insurance Co., Mendakota Insurance Co., Universal Casualty Company, Amigo Insurance Co., KAI Advantage Auto, Inc., all under one management team. It will also include Kingsway Reinsurance Corporation and Kingsway Reinsurance (Bermuda) Ltd.

“While we have seen improvement in our loss ratios at our Mendota and Advantage Auto franchises, we continue to see stress at our Amigo subsidiary,” Hickey said in a statement. 

As part of the restructuring, Kingsway will post $11.4 million in additional unpaid loss and loss adjustment expenses. That includes $9.4 million related to its Amigo business, primarily to increase prior accident year unpaid loss and loss adjustment expenses on Amigo’s commercial automobile and personal injury protection coverages. 

It also includes $2 million related to its Mendota and Mendakota, primarily to increase prior accident year unpaid loss and loss adjustment expenses on their personal automobile physical damage, uninsured motorist and bodily injury coverages.

According to its statement, Kingsway has begun taking actions to reduce the amount of commercial lines business written at Amigo and to restructure and update Amigo’s personal lines product offering. It has also made Amigo a 100%-owned indirect subsidiary and will reduce staff at its Amigo business.

“All of these actions are intended to simplify our non-standard auto business operating strategy and move us toward the eventual turnaround of our insurance underwriting operations,” Swets noted.


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