November 2, 2009 (FinancialWire) — Kingsway Financial Services Inc. (TSX: KFS) (NYSE: KFS) has closed the sale of Zephyr Insurance Co., Inc. for initial gross proceeds of $31.5 million U.S., plus a contingent, deferred earn-out amount.

The buyers were Zephyr acquisition Co., an acquisition vehicle of Ocean Harbor Holding and MP Holdings, a Hawaiian-based investor group.

Zephyr is a specialty property insurance company founded specifically to protect Hawaii homeowners and residents from catastrophic loss due to hurricanes. For the first six months of 2009, Zephyr had gross premiums written of around $36 million, or 7% of the premiums of the Kingsway group of companies, and produced an underwriting profit.

Toronto-based Kingsway Financial focuses on non-standard automobile insurance in North America. Kingsway’s primary businesses are the insuring of automobile risks for drivers who do not meet the criteria for coverage by standard automobile insurers, and commercial automobile insurance.

The company operates through wholly-owned insurance subsidiaries in Canada and the U.S. which it is currently consolidating to reduce overhead.

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