April 26, 2017 by Canadian Underwriter
Toronto-based Kingsway Financial Services Inc. released its financial results for the first quarter of the year on Wednesday, reporting a net loss attributable to common shareholders of US$1.7 million compared to such a net loss of US$1.5 million in Q1 2016.
Operating loss was $0.6 million for the first quarter of 2017 ending March 31 compared to $2.8 million for the first quarter of 2016, Kingsway said in a press release.
Specifically, the Insurance Underwriting segment operating loss was US$0.7 million in Q1 2017 compared to US$0.2 million in Q1 2016. Insurance Services segment operating income was US$0.6 million for the first quarter of 2017 compared to segment operating loss of US$0.2 million for the first quarter of 2016. Operating income attributable to the Leased Real Estate segment was US$0.9 million for the first quarter of 2017 compared to zero for the first quarter of 2016, Kingsway noted in the release.
Total revenues were US$46.7 million in the most recent quarter, up from US$36.9 million in Q1 2016. Net premiums earned were US$32.9 million, up from US$29.4 million in the first quarter of 2016.
Kingsway also reported a net investment income of US$0.7 million for the first quarter of 2017 compared to a net investment loss of US$0.1 million in Q1 2016. Net realized gains of US$0.4 million were reported for the first quarter of 2017 compared to net realized losses of US$0.2 million for the first quarter of 2016. Other operating income and expense was a net expense of US$2.5 million for Q1 2017 compared to US$2.1 million for Q1 2016.
Adjusted operating income was US$4.1 million for the first quarter of 2017 compared to adjusted operating loss of US$0.8 million for the first quarter of 2016, the release said.
“Adjusted operating income of US$4.1 million during the first quarter reflected progress in a number of our segments and investments,” said Larry G. Swets, Jr., CEO of Kingsway, in the release. “We recorded US$2.4 million from our equity pickup in the results of Itasca Capital Ltd. (ICL), reflecting the increase in value of ICL’s indirect investment in Limbach Holdings, Inc. The improved results in our Leased Real Estate segment are based in part on a US$25 million lease amendment… under which we will record increases in rental income each period for the remainder of the lease, beginning with the first quarter of 2017.”
The company’s Insurance Services segment recorded positive operating earnings for the third consecutive quarter, Swets said, adding that its Insurance Underwriting segment has “made progress on the implementation of several initiatives under its new management team. Its first quarter results reflect US$0.4 million of non-recurring severance expense related to its restructuring.”
Kingsway is a holding company functioning as a merchant bank and owns or controls stakes in several insurance industry assets.