Kingsway Corporation · NYSE:KWY

Kingsway — Kingsway Financial Services — Investor Presentation (November 2015)

17 slides from Kingsway's investor presentation, November 2015

  1. Slide 1: Kingsway Financial Services Inc. Investor Presentation

    KINGSWAY FINANCIAL SERVICES INC. INVESTOR PRESENTATION NOVEMBER 2015

  2. Slide 2: Forward-Looking Statements

    FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements related to our future growth, trends in our operating companies' businesses and industries and our financial and operational results and performance that are based on management’s current expectations, forecasts and ass

  3. Slide 3: Value Building Philosophy

    VALUE BUILDING PHILOSOPHY Compounding capital in the long‐term with investments/acquisitions/financings that offer asymmetric risk/reward potential with a margin of safety supported by private market values 3

  4. Slide 4: Kingsway Is A Merchant Bank

    KINGSWAY IS A MERCHANT BANK  Kingsway is a merchant bank with a focus on long- Kingsway At-A-Glance Ticker KFS (NYSE), KFS.TO (TSX) term value-creation Stock Price $4.40 (as of 11/20/2015) Shares Outstanding 19.7 million  Insurance industry assets provide financial Market Cap $86.7 million foundat

  5. Slide 5: Understanding Kingsway's History

    UNDERSTANDING KINGSWAY’S HISTORY  Previous management and board replaced 2009  Multi-year plan to shed assets and streamline ops  Embarked on plan to reduce Kingsway’s debt; total principal at 12/31/2008: $341.0 million  Disposed of Zephyr Insurance Company, Inc.  Larry Swets joined Kingsway in

  6. Slide 6: 2015 – Continued Progress

    2015 – CONTINUED PROGRESS 2015  Announces sale of Assigned Risk Solutions Ltd. to National General Holdings Corp.  Announces Buy-out of Management Services Agreement with 1347 Property Insurance Holdings, Inc.  Pays $22.1 million to its Trust Preferred Trustees to satisfy entirety of deferred int

  7. Slide 7: How We Think About Building Value

    HOW WE THINK ABOUT BUILDING VALUE Concentration on insurance companies, which provide unique Compounding Capital investment vehicles to compound and leverage investment results Focus on a 15-30 year perspective when creating/building value, while A Long-term Perspective recognizing short- and near-t

  8. Slide 8: Kingsway's Businesses

    KINGSWAY’S BUSINESSES Type of Business Traditional Insurance Warranty Insurance Services Risk-Taking Fee for Service * PIH (Nasdaq: PIH) IPO in April 2014; KFS currently owns approximately 16% 8

  9. Slide 9: Case Study: Sale Of ARS

    CASE STUDY: SALE OF ARS Assigned Risk Solutions (“ARS”) Combination of Northeast Alliance Insurance Agency and JBA & Associates Partners with Berkshire Hathaway’s National Liability & Fire Insurance Company  ARS is an insurance services business that underwent a strategic review process in 2014. On

  10. Slide 10: Case Study: Atlas Financial Holdings

    CASE STUDY: ATLAS FINANCIAL HOLDINGS  Atlas Financial Holdings, Inc. (“Atlas” or “AFH”) is a combination of former Kingsway units American Country Insurance Company and American Service Insurance Company, Inc.  Commercial auto insurance in the U.S.  Niche markets of taxi/limo/para-transit  Atlas

  11. Slide 11: Insurance Underwriting – NSA Business

    INSURANCE UNDERWRITING – NSA BUSINESS Mendota is a non-standard automobile (“NSA”) insurance carrier; current management has substantially repositioned the business relative to prior strategic direction Previous NSA View on Premium  Kingsway wrote total NSA premium of $350 million in 33 states at i

  12. Slide 12: Insurance Services

    INSURANCE SERVICES  IWS Acquisition Corporation (“IWS”)  Kingsway acquired in November 2012 in a highly structured transaction for total consideration consisting of cash, future contingent payments and common equity in a newly formed entity  Providing after-market vehicle protection services sinc

  13. Slide 13: 1347 Capital LLC

    1347 CAPITAL LLC  Identifies and targets specialty insurance businesses and special situation investments for acquisition or financing with a goal of managing, improving, and growing to create value for Kingsway’s shareholders  Principals of 1347 Capital LLC have been active in public and private

  14. Slide 14: Management / Alignment Of Interests

    MANAGEMENT / ALIGNMENT OF INTERESTS Dedicated and experienced management team and Board of Directors has transformed the Company  Meaningful stake (approximately 37% including restricted shares)  Invested approximately $6.6 million over the past 24 months in private placement and rights offering (

  15. Slide 15: Positioned For Growth In Book Value

    POSITIONED FOR GROWTH IN BOOK VALUE  Operations stabilized as exhibited by: NSA improved operating performance and reduced overhead  Passive portfolio results  Opportunity to make leveraged investments (e.g. leveraged NNN real estate credit tenant portfolio) to effectively turn our NOLs into accr

  16. Slide 16: Key Takeaways

    KEY TAKEAWAYS  Kingsway provides an opportunity to invest in a diverse pool of insurance assets and insurance-related businesses led by experienced leadership team with a history of success  Through our merchant bank platform, we have the opportunity to capitalize on changing markets through a var

  17. Slide 17: Contact Us

    CONTACT US Investor Relations Hassan Baqar Kingsway Financial Services Inc. 1.847.700.8064 hbaqar@kingswayfinancial.com KINGSWAY FINANCIAL SERVICES INC. INVESTOR PRESENTATION 17 NOVEMBER 2015

Kingsway Financial Services — Investor Presentation (November 2015) on 6ix