Kingsway Financial to take $55 million loss for Q4
Kingsway Financial Services said that it expects to report a fourth quarter decline in shareholders’ equity of approximately $55 million, or $1.06 per share, primarily due to loss reserve strengthening, non-cash impairments and adjustments and the operations and disposition of both American Country Insurance Company and American Service Insurance Company.
Kingsway projects:
- approximately $21 million of loss reserve strengthening in its insurance companies, primarily in Universal Casualty Company, related to periods prior to fourth quarter 2010;
- approximately $10 million of non-cash impairments and adjustments to certain operating assets and liabilities;
- approximately $9 million relating to the disposition and fourth quarter operating results of American Country Insurance Company and American Service Insurance Company, Inc.; and
- the remainder of the expected decline will result from fourth quarter results of operations and expenses of the holding company including interest expense.
“These results are disappointing but reflect the continued restructuring that is required to move forward,” said Larry G. Swets, Jr., Kingsway’s President and Chief Executive Officer. “Immediate action was taken in the fourth quarter to address the operating results, and we feel confident our business units are now focused solely on profitability. We still remain challenged by operational profitability, corporate overhead expense and interest expense. We will continue to address these challenges with further strategic actions.”
Kingsway will release its audited 2010 results on March 30.
