Mississauga, Ont.-based Kingsway Financial Services Inc. has appointed Colin Simpson as president and CEO, replacing Shaun Jackson.

The announcement came just hours after nine new board members were appointed at the company’s annual general meeting of shareholders, which was held in Toronto on Thursday.

Bill Andrus, Robert Cassels, Peter Copestake, Walter Farnam, Terry Kavanagh, Brian Reeve, Spencer Schneider, Jack Sullivan and Larry Swets were elected as directors.

Immediately following the annual meeting, Swets, who originally had been appointed to the board as a nominee of the Stilwell Group, tendered his resignation as a director. Joseph Stilwell, principal of the New York-based Stilwell Group, was appointed as a director of Kingsway to replace Swets.

In addition, the board elected Spencer Schneider as the company’s new chairman, replacing David Atkins. Atkins was appointed non-executive chairman of the board in January to assist with the corporate restructuring. He had replaced Michael Walsh, who resigned due to personal reasons.

Earlier in the day, Jackson spoke confidently at the Design Exchange in Toronto, reassuring shareholders that the firm is taking all measures to regain profitability through its corporate transformation program.

“We are focused on rebuilding shareholder value by regaining performance and financial strength as well as earning back investor confidence,” says Shaun Jackson, now former president and CEO for Kingsway Financial Services.

Kingsway, which offers trucking insurance and non-standard automobile insurance to drivers who don’t meet the criteria for coverage set by standard auto insurers, reported a net loss of US$405 million for the year ended Dec. 31, 2008. Most of these losses occurred in the fourth quarter and were mainly the result of underwriting losses at York, Pa.-based subsidiary, Lincoln General Insurance Co.

“We recognize that Kingsway has made mistakes in the past and we have made every effort to learn from those mistakes to shape our future,” Jackson told a roomful of shareholders at the opening of the AGM.

In late 2008, the firm began to redefine its strategic focus and decided to exit all non-core lines of business and underperforming legacy programs, notably at Lincoln and announced a three-phase transformation program that would help achieve its performance objectives.

The first two phases of the program are already close to completion; measures include the selling off of Mississauga-based subsidiary York Fire and Casualty Insurance, a non-core business that offers mainly standard insurance products, and consolidating subsidiaries American Country Insurance Co. into American Service Insurance Co. and Southern United Fire Insurance Co. into Hamilton Risk Management.

Kingsway also completed the consolidation of nine operating companies in the U.S. and Canada into three operating units: one in Canada and two in the U.S. Serge Lavoie was appointed president and CEO of Kingsway’s business in Canada earlier this month.

Simpson, who was promoted to senior vice president and chief operating officer in February to lead the transformation program, says the goal is to continue to focus on core lines of business and reduce expenses in excess of $80 million during the next 18 to 24 months.

Earlier this year, N.J-based rating agency A.M Best Co. Inc. downgraded the financial strength of Kingsway and its subsidiaries; at the same time, Kingsway announced it would be eliminating 750 employee positions as part of its restructuring strategy. As of May 1, the company will have eliminated 400 of those positions.

Shareholders’ demands for more outside executives to be added to the board have been heard by the firm. David Atkins, former chairman of Kingsway, told the crowd that there will be significant turnover of board directors at the company this year.

“The board has listened to investors over the past 12 months and we will enhance the board composition with additional expertise to assist in achieving the goal of the transformation program,” he added.

Kingsway Financial will release its first-quarter financial results on May 8.