July 22, 2016 by Canadian Underwriter
Toronto-based Kingsway Financial Services Inc. has reported an operating loss of US$1.1 million for the second quarter of 2016 ending June 30, compared to US$2.5 million for the second quarter of 2015.
Kingsway released its financial results on Friday, indicating that its Insurance Underwriting segment operating income was US$0.2 million for the second quarter of 2016 compared to an operating loss of US$0.5 million for the second quarter of 2015. The Insurance Services segment operating loss was $0.8 million for Q2 2016 compared to $0.1 million for Q2 2015.
The holding company reported net loss attributable to common shareholders of US$0.6 million in the second quarter of 2016, compared to net income attributable to common shareholders of US$1.8 million in the second quarter of 2015. For the six months ending June 30, Kingsway reported net loss attributable to common shareholders of US$2.1 million compared to a net income attributable to common shareholders of US$3.9 million in the prior year period.
The company also reported a net investment income of US$1.1 million for Q2 2016 compared to US$0.5 million in Q2 2014. Net realized gains of US$0.1 million were reported in the second quarter of 2016, the same as in the second quarter of 2015.
Larry G. Swets, Jr., president and chief executive officer of Kingsway, noted in a statement that the company restructured its existing Insurance Services segment with the acquisition of Argo Management Group and appointment of John T. Fitzgerald to lead the company’s warranty business. It also successfully closed the acquisition of CMC Industries, Inc. this week, which Swets views as “the beginning of building a portfolio of real estate with strong tenants that will allow the company to deploy its balance sheet and deferred tax assets at minimal risk.”
“We also were very pleased to close this week 1347 Capital Corp.’s business combination with Limbach Holdings LLC, a commercial mechanical engineering and construction contractor,” Swets said in the statement. Kingsway is a holding company functioning as a merchant bank, which owns or controls stakes in several insurance industry assets and utilizes its subsidiaries, 1347 Advisors LLC and 1347 Capital LLC, to pursue opportunities acting as an advisor, an investor and a financier.
The company also appointed Steve Harrison as executive vice president of its insurance management team. Harrison, who has over 42 years of experience in the insurance industry, “has successfully run profitable insurance businesses for over four decades and shares our view that the company can achieve considerable improvements in its underwriting results,” Swets said. Among his previous experiences, Harrison was the president and co-founder of USAuto Insurance Company, Inc. in 1995, which merged and went public in 2004 as First Acceptance Corporation. Prior to that, he was the president of Harrison Brothers Insurance Agency, Inc., writing all lines of insurance from 1974 to 1995.