Kingsway Financial Services (NYSE:KWY) versus Ategrity Specialty (NYSE:ASIC) Financial Review

Ategrity Specialty (NYSE:ASIC) and Kingsway Financial Services (NYSE:KWY) are both small-cap financial services companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Valuation & Earnings

This table compares Ategrity Specialty and Kingsway Financial Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ategrity Specialty	$424.34 million	2.15	$74.00 million	$1.86	10.24
Kingsway Financial Services	$134.97 million	2.10	-$10.73 million	($0.40)	-24.53

Ategrity Specialty has higher revenue and earnings than Kingsway Financial Services. Kingsway Financial Services is trading at a lower price-to-earnings ratio than Ategrity Specialty, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

72.4% of Kingsway Financial Services shares are owned by institutional investors. 41.4% of Kingsway Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ategrity Specialty and Kingsway Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ategrity Specialty	0	2	3	1	2.83
Kingsway Financial Services	1	0	0	0	1.00

Ategrity Specialty currently has a consensus target price of $26.50, indicating a potential upside of 39.20%. Given Ategrity Specialty’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ategrity Specialty is more favorable than Kingsway Financial Services.

Profitability

This table compares Ategrity Specialty and Kingsway Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ategrity Specialty	19.75%	15.29%	6.32%
Kingsway Financial Services	-8.83%	-72.50%	-5.67%

Summary

Ategrity Specialty beats Kingsway Financial Services on 12 of the 14 factors compared between the two stocks.

About Ategrity Specialty

We are a profitable and growing specialty insurance company dedicated to providing excess and surplus (“E&S”) products to small to medium-sized businesses (“SMBs”) across the United States. We have built a proprietary underwriting platform that combines sophisticated data analytics with automated and streamlined processes to efficiently serve our clients and deliver long-term value to our stockholders. The SMB market is characterized by large volumes of small-sized policies, and we believe our competitive edge lies in our ability to offer consistent, high-speed, and low-touch interactions that our distribution partners value. This advantage stems from our technology-driven method of standardizing, simplifying, and automating our transaction process, which we call productionized underwriting. We target industry verticals where we have deep expertise and develop data-driven insights to gain a competitive advantage. We leverage our expertise and our efficient underwriting platform to deliver tailored insurance products and customized services that meet the needs of our distribution partners. We believe the universe of distributors in the SMB segment of the E&S market is rapidly shifting toward agents and brokers who were raised in the digital age. These digital-native and tech-savvy distribution partners expect real-time, frictionless insurance transactions that mirror the seamless experiences they encounter in their daily lives. In an industry where insurance applications are often submitted via email with slow response times, we have designed a technology-driven underwriting process that addresses our distribution partners’ demands for rapid, high-quality interactions. Our strong value proposition has contributed to a growing network of 512 distribution partners as of March 31, 2025, which provides us with increased transaction opportunities and diversified sources of business. Our fully integrated claims management function is designed to enable us to resolve claims efficiently and effectively. We take an active approach to risk management through real-time performance analytics, rigorous risk aggregation monitoring, and robust reinsurance protection aimed at minimizing volatility and generating consistent underwriting results. We have grown our business substantially while generating attractive underwriting results. For the three months ended March 31, 2025, we wrote $116.1 million in gross written premiums, an increase of $34.5 million, or 42.3% compared to the three months ended March 31, 2024. Our combined ratio for the three months ended March 31, 2025, was 90.9%, a decrease of 3.3% from the three months ended March 31, 2024. Our members’ equity at March 31, 2025, was $426.8 million, an increase of $28.5 million (7.2%) from December 31, 2024. For the twelve months ended March 31, 2025, our return on members’ equity was 12.6%. For the year ended December 31, 2024, we wrote $437.0 million in gross written premiums, representing a compound annual growth rate of 28.4% over the last two years. Our combined ratio for the year ended December 31, 2024, was 93.9%, a decrease of 3.6% from the year ended December 31, 2023. Our members’ equity at December 31, 2024, was $398.3 million, an increase of $76.6 million (23.8%) from December 31, 2023. We believe that our productionized underwriting capabilities will continue to drive enhanced profitability as we continue to scale our business. Our company’s mission is to transform the E&S marketplace for SMBs through the power of productionized underwriting with precision, simplicity, and efficiency. When we entered the E&S industry, we found what we believe to be an under-served and inefficient marketplace that was hindered by inconsistent and antiquated processes of legacy insurance carriers. We also believe that many distribution partners and their end-clients were struggling with slow response times, unpredictable underwriting capacity, and subpar pricing, which we believe make the market ripe for technology and efficiency-driven disruption. To address these challenges, we developed a technology-enabled underwriting process that we believe sets us apart in the E&S market. Our productionized underwriting approach combines rigorous technical underwriting with a highly efficient and centralized operating platform powered by advanced technology. This process begins with a deep understanding of our end-clients, the insurance policyholders. We intensely study the industry and geographical micro-segments in which our end-clients operate using sophisticated data analytics. We leverage these analytics to build quantitative risk models that shape our risk appetite and client targeting. Furthermore, we aim to eliminate unnecessary complexity by standardizing our processes and automating key underwriting tasks, such as submission intake, risk classification, pricing, and documentation. This allows our underwriters to focus on high-value underwriting tasks and make timely and accurate decisions in a uniform manner. For each individual transaction opportunity, our underwriting models efficiently determine which components of the process can be automated. For simpler products with clearly identified risk characteristics, we can execute the entire underwriting process without human intervention. We believe our productionized underwriting approach generates consistent, efficient, and scalable processes that allow us to deliver differentiated value to our distribution partners without compromising accuracy and profitability. Our location is in New York NY.

About Kingsway Financial Services

Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty business services, asset management, and real estate businesses. The company operates through three segments: Extended Warranty, Leased Real Estate, and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also sells new home warranty products, as well as offers uninsured warrant administration services to homebuilders and homeowners; markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies. The Leased Real Estate segment owns a parcel of real property consisting of approximately 192 acres located in the State of Texas. The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, SEC reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services. The company offers its products and services through credit unions, dealers, homebuilders, and consumers. Kingsway Financial Services Inc. was incorporated in 1989 and is based in Itasca, Illinois.