Auto and truck insurer Kingsway Financial Services said Wednesday that it will cut jobs and freeze salaries as part of its plan to save about $20 million in 2009.
The company, which hired consultants early this year to find ways to maximize shareholder value, said it will also increase rates and terminate unprofitable businesses under its return-to-profit strategy.
By merging four U.S. subsidiaries and two offices in Montreal, Kingsway will cut 162 jobs and save about $8 million. To reduce compensation by about $7.8 million it will freeze hiring and salaries, while restricting its incentive plan.
The Toronto-based Company will also cut spending by about $4.2 million in marketing, promotion and information technology.
Management expects to finalize another round of cost cutting in early January.
Kingsway has called a special shareholders meeting for Feb. 10 to deal with an attempt by New York-based Stilwell Group to replace the company’s chairman and CEO. Stilwell has said that Kingsway needs to do more to cut costs, sell non-core businesses and that the removal of CEO Shaun Jackson was “non-negotiable”.
($1=$1.20 Canadian) (Reporting by Susan Taylor; editing by Rob Wilson)
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