Losses increase for auto carrier Kingsway Financial

Kingsway Financial Services Inc. of Toronto, which last year announced the restructuring of its American underwriting subsidiaries, announced last week it lost $53 million in 2012.

In a press release Friday, Kingsway said it recorded net premiums earned in 2012 of $114.9 million, down from $156.4 million in 2011.

Total revenue dropped, from $228.5 million in 2011 to $150.4 million last year. In 2011, the firm’s net loss was $27.4 million.

Last September, the company announced the restructuring of its underwriting and services subsidiaries under two separate management teams.

The underwriting group offers auto insurance, mainly in the U.S. for drivers who do not meet the criteria for coverage by standard insurers, through KAI Advantage Auto Inc. of Chicago and Mendota Insurance Co. and Mendakota Insurance Co., both based in Irvine, Calif.

Other subsidiaries include Kingsway Amigo, Universal Casualty Company, Advantage Auto, Kingsway Reinsurance Corp. and Kingsway Reinsurance (Bermuda) Ltd.

“As part of the restructuring, the company intends to streamline its non-standard automobile property and casualty insurance business operations,” the firm stated in its March 22 statement.

“Specific to Insurance Underwriting, during the fourth quarter of 2012, the company began taking steps to place all of Kingsway Amigo Insurance Company, one of the company’s property and casualty insurance subsidiaries, into voluntary run-off.”

Last November, Kingsway said, the Florida Office of Insurance Regulation (OIR) approved Amigo’s plan to withdraw from the business of offering commercial lines insurance in the state. 

“On January 30, 2013, the OIR approved Amigo’s plan to withdraw from the business of offering personal lines insurance in Florida,” the company stated.  “Kingsway has commenced discussions with the OIR to outline plans for Amigo’s run-off. Any comprehensive run-off plan would be subject to OIR approval.

Kingway’s net operating loss for insurance underwriting was $5.7 million in the fourth quarter of 2012, while it recorded net operating income of $600,000 for insurance services during the same period.