Toronto-based Kingsway Financial Services Inc. announced on Friday a net loss attributable to common shareholders of US$1.6 million in the third quarter of 2017 compared to net income attributable to common shareholders of US$1.4 million in Q3 2016.
“An estimated US$1.6 million of gross losses during the third quarter because of Hurricanes Harvey and Irma as well as unfavourable loss reserve development related to prior accident years adversely affected our segment operating income this quarter,” said Kingsway chief executive officer Larry G. Swets, Jr., in a press release. “However, we are encouraged by our improved underwriting result for the 2017 accident year, which reflects the progress made by our new non-standard auto management team and the many initiatives that have been implemented throughout the year.”
Kingsway recently acquired Professional Warranty Services Corporation and “we continue to look for additional opportunities in this space,” Swets said in the release. In addition, Kingsway executed an agreement to sell 900,000 shares of P&C holding company 1347 Property Insurance Holdings, Inc. “We remain optimistic about the prospects for 1347 Property Insurance Holdings and are well-positioned to participate in the company’s future success through our holding of almost two million warrants and performance share grants; however, we sought liquidity to support our warranty company purchase,” Swets said.
For the nine months ending Sept. 30, Kingsway reported net loss attributable to common shareholders of US$11.1 million compared to US$0.7 million in the prior-year period.
Operating income was US$1.9 million for the third quarter of 2017 compared to operating loss of US$0.3 million for the third quarter of 2016. Adjusted operating income was US$2.3 million for Q3 2017 compared to US$1.9 million in Q3 2016.
The Insurance Underwriting segment operating loss was US$2.4 million for Q3 2017 compared to US$0.1 million for Q3 2016, Kingsway said in the release. The Extended Warranty segment (formerly Insurance Services) operating income was US$0.8 million for Q3 2017 compared to US$0.6 million for the third quarter of last year. Kingsway’s Leased Real Estate segment operating income was US$0.5 million for the third quarter of 2017 compared to US$0.7 million for the third quarter of 2016.
Net investment income of US$2.9 million was reported for Q3 2017 compared to US$1.1 million for Q3 2016. Net realized gains of US$2 million were reported for the most recent quarter compared to US$0.0 million for Q3 2016. Other operating income and expense was a net expense of US$1.9 million for Q3 2017 compared to US$2.6 million for Q3 2016.
Kingsway is a holding company functioning as a merchant bank. The company owns or controls subsidiaries primarily in the insurance, extended warranty, asset management and real estate industries and pursues non-control investments and other opportunities acting as an advisor, an investor and a financier.