Kingsway sets own Q1 record for underwriting profit

Kingsway Financial Services Inc. (TSE:KFS, NYSE:KFS) reported its net operating income in 2006 1Q increased 11% to US$30 million, compared to US$27 million in 2005 Q1.Underwriting profit during this year’s first quarter set a Q1 record of US$16.4 million, Kingsway noted in a press release.At the same time, the company’s overall net income decreased to US$28.9 million from US$38.1 million, the company reported, “due to the impact of net losses realized on investments.”Kingsway reported its combined ratio improved to 96.2% (from 96.3 in 2005 1Q), and its annualized return on equity (ROE) was 14.2%.”We are pleased with the positive start that we have made to 2006,” Kingsway president and CEO Bill Star said. “Each of our operating subsidiaries reported an underwriting profit, which led to a record underwriting profit and an improved combined ratio for the quarter. Our investment managers repositioned their portfolios and disposed of underperforming equity investments. As a result, the unrealized gain position in our equity portfolio increased by US$15.5 million to US$55.6 million from year-end.”We continue to maintain our underwriting discipline in all of our markets, and anticipate that capacity constraints in reinsurance markets in the United States will provide opportunities for our growth as 2006 progresses.”