Kingsway Financial Services Inc. today reported a 10% jump in net income for the second quarter ended June 30.

Net income increased 10% to $36.7 million, compared to $33.3 million in the second quarter of 2004.

Return on equity was 16.8% in the quarter compared to 17.2% in the same quarter of 2004,

Diluted earnings per share increased 10% to 65¢, compared to 59¢, for the second quarter of 2004.

“We are extremely pleased with the record results for the second quarter and the first half of 2005,” said Bill Star, president and CEO.

“Our determination to not sacrifice underwriting profitability has led to a decline in premiums written from our U.S. non-standard automobile business in 2005 however, it has helped protect our overall profitability.”

During the second quarter of 2005, gross premiums written were $595.1 million, compared with $702.0 million in the second quarter last year.

For the quarter gross premiums written from U.S. operations were $369.9 million compared with $476.4 million last year.

Kingsway’s said the decline in premiums written by U.S. operations compared to the previous year was attributable to competitive pricing in certain non-standard automobile markets.

Gross premiums written from Canadian operations were $225.2 million for the quarter compared to $225.6 million in Q2 last year.

Kingsway said the combined ratio was 97.0% (96.7% year-to-date) resulting in quarterly underwriting profit of $17.7 million.

Kingsway Financial Services Inc. is the largest truck insurer in North America and the sixth largest non-standard automobile insurer in North America.