Kingsway Financial Services Inc. was incorporated under the Business Corporations
Act (Ontario) on September 19, 1989.
Kingsway are listed on the Toronto Stock Exchange and the New York Stock Exchange
under the trading symbol "KFS."
Kingsway is a Canadian holding company with operating subsidiaries located in
the United States. The Company operates as a merchant bank primarily engaged,
through its subsidiaries, in the property and casualty insurance business. Kingsway
conducts its business through the following two reportable segments: Insurance
Underwriting and Insurance Services. Insurance Underwriting and Insurance Services
conduct their business and distribute their products in the United States.
The Companys property and casualty insurance business operations are conducted
primarily through the following subsidiaries: Mendota Insurance Company ("Mendota"),
Mendakota Insurance Company ("Mendakota"), Mendakota Casualty Company
(formerly Universal Casualty Company) ("MCC"), Kingsway Amigo Insurance
Company ("Amigo") and Kingsway Reinsurance Corporation (collectively,
"Insurance Underwriting").
The insurance subsidiaries in Insurance Underwriting issue insurance policies
and retain the risk of operating profit or loss related to the ultimate loss
and loss adjustment expenses incurred on the underlying policies. Insurance
Underwriting provides non-standard automobile insurance to individuals who do
not meet the criteria for coverage by standard automobile insurers. Insurance
Underwriting has policyholders in 12 states; however, new business is accepted
in only nine states. In 2015, the following states accounted for 84.8% of Insurance
Underwritings gross premiums written: Florida (24.0%), Texas (16.3%), Illinois
(15.7%), California (10.3%), Nevada (9.9%) and Colorado (8.6%).
Trinity is a provider of warranty products and maintenance support to consumers
and businesses in the heating, ventilation, air conditioning ("HVAC"),
standby generator, commercial LED lighting and refrigeration industries. Trinity
distributes its warranty products through original equipment manufacturers,
HVAC distributors and commercial and residential contractors. Trinity distributes
its maintenance support direct through corporate owners of retail spaces throughout
the United States.
Responsibility for pricing and product management rests with the Companys
individual operating subsidiaries in each of Insurance Underwriting and Insurance
Services. Typically, teams comprised of pricing actuaries, product managers
and business development managers work together by territory to develop policy
forms and language, rating structures, regulatory filings and new product ideas.
Data solutions and claims groups track loss performance on a monthly basis so
as to alert the operating subsidiaries to the potential need to adjust forms
or rates.
Claims management is the process by which Insurance Services determines the
validity and amount of a claim. We believe that claims management is fundamental
to our operating results. The individual operating subsidiaries in Insurance
Services primarily employ their own claims adjusters who are responsible for
investigating and settling claims. Our goal is to settle claims fairly for the
benefit of our insureds and the insureds of our insurance company partners in
a manner that is consistent with the insurance policy language and our regulatory
and legal obligations.
IWS effectively and efficiently manages claims by utilizing in-house expertise
and information systems. IWS employs an experienced claims staff comprised of
Automotive Service Excellence certified mechanics, knowledgeable in all aspects
of vehicle repairs and potential claims. Additionally, IWS owns its own proprietary
database of historical claims data dating back over twenty years. Management
analyzes this database to drive real-time pricing adjustments and strategic
decision-making.
The Companys insurance policies are generally written on an occurrence basis.
Non-standard automobile includes both short and long-tail coverages. The payments
that are made quickly typically pertain to auto physical damage and property
damage claims. The payments that take longer to finalize and are more difficult
to estimate relate to bodily injury claims. Reporting lags are relatively short,
and the claim settlement process for personal automobile liability generally
is the least complex of the liability products. Given that our core non-standard
automobile offerings are policies at the minimum prescribed limits in each state,
our non-standard automobile business is generally viewed as a high frequency,
low severity business.