Kingsway Financial Services Inc., an insurer of high-risk drivers, said today its third-quarter net income soared 96% because of a record quarterly underwriting profit.

The insurer said net income was $30.6 million, or 54¢ a share, in the third quarter ended September 30, up from $15.6 million, or 28¢ a share, in the year-earlier quarter.

Net income rose despite a drop in quarterly revenue to $619.45 million from $630.9 million, partly due to lower claims.

Gross premiums written also fell in the quarter to $618.7 million from $652.8 million, but underwriting profit in the quarter totaled a record $17.9 million.

Return on equity on an annualized basis was 15.4% for the quarter, compared with 9.8% last year.

The rising Canadian dollar also stung the company’s bottom line. A significant portion of Kingsway’s operations and net assets are U.S. dollar-denominated.

The combined ratio improved to 97.0% compared to 103.7% for the third quarter of 2003.

“Our Canadian operations have produced extremely good underwriting results this year while also delivering strong growth in written premiums,” said Bill Star, president and CEO. “We continue to generate positive cash flow and are well positioned to benefit from increases in short term interest rates,” he added.