May 6, 2004 by Canadian Underwriter
Kingsway Financial Services Inc. (TSX, NYSE: KFS) CEO Bill Star says the company has started 2004 off well, posting net income up 26% for the first quarter ending March 31.
While net income rose to $30.8 million for the quarter, from $24.4 million the year prior, earnings per share were up 12% to $0.55 from $0.49. Annualized return on equity is 16.9%, up from 16.0% as of the first quarter 2003.
Net written premiums were up 3% to $684.1 million in first quarter 2004, versus $666.7 million the year prior. Net earned premiums rose 6% to $584.8 million from $551.3 million over the same comparative period. U.S. net earned premiums decreased over the period, while Canadian premiums grew by 38% to $155.1 million from $112.2 million.
The combined ratio climbed slightly over the same comparative period to 98.2% from 96.8%, but the company still managed a strong underwriting profit of $10.4 million. Both Canadian and U.S. operations produced solid combined ratios at 98.4% and 98.2% respectively.
At the same time, investment income was up 42%, to $22.3 million from $15.8 million the year prior. Net realized gains grew significantly in first quarter 2004 to $6.8 million compared to a loss of $0.7 million in first quarter 2003.
Star says he is particularly encouraged by growth in the company’s Canadian operations. “We are particularly encouraged by the strong improvement in results from our Canadian operations as a result of rate increases and claims fraud initiative we have implemented.” He adds, “We are well positioned to take advantage of the prevailing insurance market conditions, and see no softening of rates in any of our business lines.”