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Kingsway Financial Cuts Dividend


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Big question is if they can offset their downward spiral quickly enough, & what surprizes are hiding in the run-off.

While we wish them luck, we also expect to see another few rounds of capital injection





As long as they keep buying back their debt at 50-65 cents on the dollar, I suppose that capital injections are a pretty good idea (negating some of the dilution effects that could take place). If they somehow manage to escape much in the capital injection route, then they were effectively paid 40 bucks to borrow and payback 100, all while getting the use of the money for a few years; even though former management seemed to do a bad job of managing said money.

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The new management is probably an improvement over the old management, but at this point does it matter?  Does anybody really have any idea just how crappy their book of business is?  How much more adverse development will we see from Lincoln General.


We have lived this experience with FFH and TIG.  New management (*good management*) bought TIG, but it was such a dog that even good management couldn't fix it.  The adverse development was a depressingly recurrent theme in several ARs.  Thankfully Prem salvaged what he could by creating ORH and running off the rest.


Do not underestimate the extent to which Starr and Jackson might have f*cked this company.



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