TORONTO - Kingsway Financial Services Inc. (TSX:KFS) is quitting some lines of business, cutting 750 jobs and selling assets, including its common-share equity portfolio, while warning of a "material" fourth-quarter loss.
The jobs will be eliminated during the next 18 to 24 months, the vehicle-insurance-focused company stated Monday.
Kingsway, headquartered in Toronto but keeping its accounts in U.S. dollars, said it expects to report a fourth-quarter loss of $324 million to $344 million, or $5.88 to $6.24 per share.
The loss is blamed on underwriting problems at Lincoln General Insurance Co., a U.S. subsidiary specializing in truckers and high-risk motorists, as well as impairments to goodwill, investment losses, and writedowns of future tax assets.
Kingsway said it will reduce its capital requirements by eliminating US$350 million in premiums through quitting non-core and unprofitable lines of business at Pennsylvania-based Lincoln and at Alabama-headquartered Southern United Fire Insurance Co.
Kingsway said other assets and business will also be run off "with the objective to free up approximately $200 million in capital."
Meanwhile, a corporate restructuring will aim to cut costs by $80 million annually.
