NU Online News Service, Aug. 16, 3:30 p.m. EDT
Troubled Toronto-based non-standard automobile insurance company Kingsway Financial Services Inc. said its decision to discontinue certain lines continues to hurt profit.
Kingsway reported a second-quarter net loss of $18.5 million compared with a net loss of $38.4 million a year ago during the same period.
For the quarter, the insurer posted a 134.6 combined ratio.
Kingsway has been attempting to undergo a transformation in order to reestablish profitability. The company has discontinued commercial auto lines, disposed of certain subsidiaries and acquired other companies, such as insurance industry advisory firm Itasca Financial LLC, which was owned and controlled by Larry Swets, Kingsway's chief executive officer and president.
The company also made a $16.3 million investment in JBA Associates Inc. in June. The New Jersey-based managing general agency specializes in assigned risk auto insurance.
Gross premiums written decreased more than 32 percent for the quarter to nearly $589 million--a "reflection of the company's strategy of discontinuing certain lines of business, primarily within its commercial lines," Kingsway said in its earnings statement.
Kingsway reported an underwriting loss of $20 million in the U.S in the second quarter.
The company said its "transformation process" got rid of costs and expenses, but pressure was put on written and earned premiums by competition, regulatory limitations and financial strength ratings.
Last year Kingsway disposed of Zephyr Insurance Company, Walshire Assurance Company, subsidiary Lincoln General Insurance Company and Avalon Risk Management Inc.
In late March, Kingsway said it completed the earlier announced sale of Jevco Insurance Co. to Westaim Corp.
In June, Kingsway said it was looking to dispose of non-standard automobile insurance subsidiary Mendota Insurance Company, which it acquired in April 2007.
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