Toronto-based Kingsway Financial Services Inc. announced that it has entered into a definitive agreement to sell York Fire & Casualty Insurance Company”) to La Capitale General Insurance Inc., a member company of the mutual company, La Capitale Financial Group Inc., owned by members of Quebec’s civil service.
The transaction is expected to be completed during 2008 following the receipt of regulatory approvals.
“York writes standard personal lines automobile and property insurance in Ontario and Alberta,” said the bulletin. “For the first six months of 2008, York had gross premiums written of approximately C$48 million [US $45.5 million], or 5 percent of the premiums of the Kingsway group of companies, and produced an underwriting loss.”
Kingsway said it “anticipates receiving gross proceeds from the transaction of C$95 million [US$90 million], which is estimated to be approximately 2 times York’s shareholder’s equity at the closing of the transaction.” When the deal is completed Kingsway said it expects to record an “estimated gain before taxes on the transaction of approximately C$50 million [US$47.4 million].”
Shaun Jackson, Kingsway’s President and CEO noted: “The sale of York furthers Kingsway’s strategy of focusing its resources on its core lines of business, such as non-standard automobile and trucking. In doing so we are building a stronger platform for achieving growth and sustainable profitability in our leading products, where we have true competitive advantages.
“We will use the proceeds of this transaction to retire our remaining short-term debt and to support future growth opportunities in our core business lines. I would like to thank all of the employees and management of York for their dedication and service to the Kingsway family over the years and I look forward to working with them through the transition period.”
Source: Kingsway Financial – www.kingsway-financial.com
Was this article valuable?
Here are more articles you may enjoy.