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Kingsway/Pennsylvania Dispute


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I just think this creates more uncertainty for their agents in Ontario and a further catalyst for these agents to switch policies over to one of the other two NS insurers. One of these of course is Echelon (EGI Financial - EFH).  EFH's leveraged ratio (of annualized net written premiums to Shareholder Equity) keeps coming down -- it is now 1.1 times (compared to a year ago).  Management believes 2.5:1 would be a fully leverged ratio.  EFH is very discipline and have patiently waited things out --- they are in very fine shape to take on more business.  Not only from the Kingsway blow up ... but also from what seems to be the start of the cycle of Standard insurers exiting NS.  Meanwhile, there have been some pretty hefty premium hikes taking place and some regulations implemented in Ontario that should help on the claims side.  Echelon's MCT margin is currently 314%.  The company is also growing a niche products division and moving in to the Florida market at a time when competitors are highly leveraged.  Still trades for <0.9x Book.



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  • 4 months later...

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