Kingsway Financial posts loss

(Reuters) - North American property and casualty insurer Kingsway Financial Services (KFS.TO: Quote) posted a third-quarter loss, hurt by "disappointing" underwriting results and net realized losses.

Kingsway, which sells insurance to risky auto drivers as well as truck and taxi fleets, said it had a net loss of $17.4 million, or 32 cents a share, in the three months ended September 30. The company earned $23.6 million, or 42 cents a share, a year earlier.

Operating loss from continuing operations was 32 cents a share, which compares with pro-forma operating earnings of 29 cents a share in the year-ago period, the company said in a statement.

"The weak underwriting results and substantial impairment of investment portfolios at many leading insurers and reinsurers throughout the world will lead to a reduction of available capital at a time when premium rates need to be increased," Chief Executive Shaun Jackson said in a statement.

The company, which operates in the United States and Canada, said its underwriting loss was $50.6 million, versus a loss of $9.3 million a year earlier.

The combined ratio for continuing operations rose to 113.6 percent, from 102.1 percent in the same 2007 period. This number indicates how much was spent on claims and expenses for each dollar of premium received. A figure over 100 indicates that underwriting was unprofitable.

Net premiums earned fell 18 percent to $371.1 million.

Investment income, excluding net realized gains, fell 8 percent to $33.1 million in the third quarter.

Shares of the company closed at C$8.85 Tuesday on the Toronto Stock Exchange.

(Reporting by Anurag Kotoky in Bangalore; Editing by Amitha Rajan)