Kingsway sees return to profitability in 2008 Q2 results

Kingsway Financial Services Inc. (TSE:KFS, NYSE:KFS) has reported net income of US$6.3 million in 2008 Q2, marking what the company called “a significant improvement” over the net loss of US$34.4 million reported in the first quarter of 2008.
Still, the result was below the net income of $41.7 million reported in the second quarter of 2007.
“The return to overall profitability in the second quarter resulted from consistent income from our investment portfolio, despite challenging market conditions, and improving performance in our insurance operations, where we have established more conservative reserving practices,” Kingsway president and CEO Shaun Jackson said in a press release. “We have moved decisively to identify and remedy underperforming businesses in order to stabilize and then improve the future performance of our insurance operations.”
Investment income, excluding net realized gains, was US$33.6 million, virtually unchanged from a year ago.
Overall, gross premiums written were US$443.2 million, 16% lower than a year ago.
The company had an overall combined ratio (COR) of 107% in 2008 Q2, as compared to a COR of 100.8% during the same period last year.
In Canada, the COR was 107.7% in 2008 Q2, as opposed to 95.9% in 2007 Q2.
Net premiums written in Canada amounted to US$174.1 million in 2008 Q2, which was up from the US$162.7 million net premium written in 2007 Q2.
“In Canada, premiums were 2% lower when adjusted for the stronger Canadian dollar, reflecting slowness in the trucking line of business, as fleet operators have been reducing their cross border operations due to the slowing of the U.S. economy,” Kingsway noted in its release.