Kingway’s 2005 Q4 net income increases

Kingsway Financial Services Inc. (TSE:KFS, NYSE:KFS) reported its 2005 Q4 net income increased 16% over its 2004 Q4 results from Cdn$36.3 million in 2004 to Cdn$42.1 million in 2005 despite lower premium volumes in 2005.
Overall Kingsway’s net income in 2005 increased 24%, to a record Cdn$163.1 million, over the Cdn$131.0 million reported last year.
The company reported its 2005 Q4 combined ratio improved to 97.7% compared to 98.2% in Q4 2004
Despite the numbers above, Kingsway’s 2005 Q4 net premiums written decreased 7% to Cdn$473.3 million, compared with the 2004 Q4 net written premiums of Cdn$506.4 million.
Overall, net written premiums for 2005 amounted to Cdn$2.21 billion, compared to Cdn$2.27 billion in 2004.
Premiums ceded to reinsurers represented 8% of gross premiums written 4% for the year compared to 13% in the same quarter last year (13% for the year). Premiums ceded to reinsurers included Cdn$10.8 million related to Hawaii’s Zephyr Insurance, which was acquired in the fourth quarter of 2005.
“I am very pleased to again report record earnings,” Bill Star, Kingsway’s president and CEO, said. “2005 was an outstanding year in which we delivered record earnings for each quarter and for the year.
“Our disciplined underwriting approach has led to an improved combined ratio and record underwriting profits in 2005 on lower premium volume than 2004. During the year, we continued to build our book value per share and strengthen our capital position. As a result, I am pleased to announce the board has approved a 25% increase in our quarterly dividend.
“Pricing is generally stable and we continue to see growth opportunities in the extremely fragmented U.S. markets. Our diversification in the U.S. and Canada, together with our dominant niche market positions, provide us with a strong foundation as we enter 2006.”