Toronto-based Kingsway Financial Services Inc. has responded to the various rating actions taken by A.M. Best (see related article). The Company acknowledged that Best has affirmed the financial strength ratings of eight of its subsidiaries as well as downgraded the financial strength ratings of four other subsidiaries.
Kingsway also announced that its Board and Management “will focus their efforts to cut costs and exit non-core lines of business.” As an “important part of these initiatives,” Kingsway announced that Colin Simpson has been appointed Senior Vice President and Chief Operating Officer. He is currently Senior Vice President and Chief Strategy Officer.
Kingsway said Simpson’s new role is to “lead a company-wide effort to simplify the organization, eliminate operational inefficiencies, and identify and implement cost cuts.”
The bulletin acknowledged the following ratings action by Best, indicating that it had “affirmed the financial strength ratings of eight insurance and reinsurance subsidiaries, including Universal Casualty Company, American Service Insurance Company, U.S. Security Insurance Company, Mendota Insurance Company, Mendakota Insurance Company, Southern United Fire Insurance Company, Jevco Insurance Company and Kingsway Reinsurance (Bermuda) Ltd.
“Best has downgraded the financial strength ratings of Lincoln General Insurance Company to “B-” (Fair), Kingsway General Insurance Company to “B” (Fair), American Country Insurance Company to “B-” (Fair), and Kingsway Reinsurance Corporation to “C++” (Marginal). Best has also downgraded the issuer credit rating of Kingsway Financial Services Inc. and Kingsway America Inc. to “b”.
“We are disappointed with this A.M. Best decision,” said Shaun Jackson, Kingsway’s President & CEO. “However, we anticipate that there will be little impact to the majority of our operating companies, particularly for those companies in the non-standard automobile business.
“The Board and Management are working to reduce costs over and above any expected impact due to the A.M. Best downgrade. In addition, the Company has been and will continue to exit non-core lines and focus its resources on its profitable lines of business.”
Jackson added: “The appointment of Colin Simpson as Chief Operating Officer is an important step in ensuring that expense reduction measures are implemented and supported with a sense of urgency throughout the Company. I look forward to working closely with Colin to restore Kingsway Financial to profitability and thereby building long-term shareholder value.”
Source: Kingsway Financial Services – www.kingsway-financial.com
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