Western's Q3 2024: Fortifying Growth through Insurance Acquisition

Western Investment Company of Canada Limited (TSXV: WI) has reported its financial and operating results for the third quarter of 2024, with a strong performance driven by strategic acquisitions and a focus on the property and casualty insurance sector.

Western's equity income for the quarter reached CAD 1.257 million, marking a 43% increase from Q3 2023. This notable improvement reflects the robust performance of the company's associate companies, including Fortress Insurance Company, which has emerged as a key focus of Western's portfolio.

The acquisition of Fortress Insurance Company has significantly influenced Western's revenue growth. Subsequent to the end of the quarter, Western increased its ownership in Fortress to 83.57% from 28.45%, positioning the company favorably in the insurance market. Fortress demonstrated remarkable growth, with gross written premiums soaring 102% to CAD 30.9 million for the first nine months of 2024 compared to the prior year. This growth is attributable to the addition of three new programs, which have enhanced geographic diversity and expanded the class of insurance in Fortress's portfolio.

Western recognized a gain from Fortress due to its expanding services in the insurance sector, reflecting the strategic value of the acquisition. The company's transition towards a property and casualty insurance and investment holding company is proceeding as planned, with the private placement and rights offering expected to close in December 2024.

Despite the strong third quarter, Western's overall income for the nine months ended September 30, 2024, was significantly lower at CAD 150,000 compared to CAD 1.07 million from the previous year. This decline is primarily due to one-time items and transaction costs incurred during this transition phase.

Western's CEO, Scott Tannas, expressed confidence in the company's strategic execution and the positive trajectory of its affiliates. The leading cash flow generator, GlassMasters Autoglass, continued to expand operationally, positioning Western for future growth despite ongoing costs associated with its transition to a property and casualty insurance model.

The acquisition and integration of Fortress Insurance Company have significantly impacted Western's financial performance, with the potential for continued growth and success. As Western continues to execute its strategic plan, investors should monitor the company's progress and the evolving insurance landscape.