Canadian-based Kingsway Financial Services Inc. announced financial results – in U.S. dollars – for the third quarter ended September 30, 2006. Net income increased 19 percent to $37.4 million compared to $31.3 million in Q3 2005.
Other earnings highlights, cited by the Company were as follows:
— Operating earnings1 increased 37 percent to $31.9 million
— Diluted earnings per share increased 20 percent to $0.66 compared with $0.55
— Combined ratio improved to 97.2 percent compared to 97.8 percent in Q3 2005
— Underwriting profit improved to $12.7 million compared to $10.0 million last year
— Gross premiums written increased 7 percent to $483.9 million
— Investment income increased 40 percent to $31.5 million
— Annualized return on equity of 16.8 percent
— Book value per share increased 18 percent to $16.14 from $13.65 at Q3 2005
Net income for the nine months ended September 30, 2006 increased 7 percent to $106.5 million (C$120.2 million) compared to $99.1 million (C$121.0 million) reported last year. Q3 operating earnings, which exclude capital transactions, increased 37 percent to a third quarter record of $31.9 million (C$35.8 million) compared to $23.3 million (C$28.0 million) in the same quarter last year. Operating earnings for the first nine months of 2006 increased 24 percent to $95.1 million (C$107.5 million) compared to $76.8 million (C$94.0 million) for the same period last year.
“Revenues and earnings continue to grow in line with our expectations,” noted President & CEO Bill Star. “Strong operating results, in particular, from our Canadian operations and increased investment income have resulted in a solid third quarter and first nine months of 2006. Our growth in earnings and excellent return on equity have also increased our capital strength, while reducing Kingsway’s operating leverage. Market conditions continue to be competitive, but we are starting to see indications of improvements, particularly in the U.S. Consistent with our operating strategy, we expect to continue to seize opportunities for profitable growth as they arise.”
Kingsway’s gross premiums written increased 7 percent to $483.9 million (C$542.6 million) in the third quarter, compared with $452.3 million (C$543.9 million) in the third quarter last year. Gross premiums written increased 5 percent to $1.52 billion (C$1.73 billion) for the first nine months of 2006, compared to $1.46 billion (C$1.78 billion) for the same period last year.
The bulletin noted: “In the quarter, U.S. operations comprised 68 percent (69 percent year to date) of gross premiums written, compared with 65 percent (67 percent year to date) in the third quarter last year. Trucking, non-standard automobile and commercial automobile premiums comprised 32 percent, 26 percent and 13 percent, respectively, of gross premiums written compared with 30 percent, 29 percent and 13 percent last year.”
The full report and additional information may be obtained on the Group’s Website at: www.kingsway-financial.com. The Company’s conference call may also be accessed through the Website.
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