TORONTO, Nov. 19, 2012 /PRNewswire/ – (TSX: KFS, NYSE: KFS) Kingsway Financial
Services Inc. (“Kingsway” or the “Company”) and its subsidiary, 1347
Capital LLC, today announced that the Company has finalized the
purchase of certain tangible and intangible assets and liabilities of
Intercontinental Warranty Services, Inc. (“IWS”). IWS, based in Boca
Raton, Florida, is a provider of after-market vehicle protection
services to credit unions throughout the country. IWS is well-known in
the credit union community for providing vehicle service agreements,
mechanical breakdown insurance, and guaranteed asset protection to
their members in conjunction with their auto loans. The tangible and
intangible assets and liabilities of IWS are being acquired in a highly
structured transaction for total consideration consisting of cash,
future contingent payments and common equity in a newly formed entity.
Kingsway expects the business to be immediately accretive to operating
income and cash flow. This purchase marks the consummation of the
previously announced execution of a definitive agreement, dated
February 21, 2012, to acquire a specialty insurance business.

“This acquisition represents the type of opportunity we expect to pursue
more frequently as we continue to focus on rebuilding shareholder value
at Kingsway. We believe IWS has a unique and compelling value
proposition that enhances credit unions’ vehicle loan programs, and we
are excited that IWS is joining the Kingsway family,” said Larry G.
Swets, Jr., Kingsway’s President and Chief Executive Officer.

Sandler O’Neill + Partners, L.P. acted as exclusive financial advisor to
Kingsway, and Updike, Kelly & Spellacy, P.C. acted as legal counsel to
Kingsway.

About the Company

Kingsway is a holding company functioning as a merchant bank with a
focus on long-term value-creation. The Company owns or controls stakes
in several insurance industry assets and utilizes its subsidiaries,
1347 Advisors LLC and 1347 Capital LLC, to pursue opportunities acting
as an advisor, an investor and a financier. The common shares of
Kingsway are listed on the Toronto Stock Exchange and the New York
Stock Exchange under the trading symbol “KFS.”

Forward Looking Statements

This press release includes “forward looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 that are not historical facts, and
involve risks and uncertainties that could cause actual results to
differ materially from those expected and projected. Words such as
“expects”, “believes”, “anticipates”, “intends”, “estimates”, “seeks”
and variations and similar words and expressions are intended to
identify such forward-looking statements. Such forward looking
statements relate to future events or future performance, but reflect
Kingsway management’s current beliefs, based on information currently
available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and
results discussed in the forward looking statements, including, without
limitation, our potential inability to complete current or future
acquisitions successfully, our inability to successfully implement our
restructuring activities, and our inability to adequately estimate and
provide for an appropriate level of reserving at our insurance company
subsidiaries. For information identifying important factors that could
cause actual results to differ materially from those anticipated in the
forward looking statements, see Kingsway’s securities filings,
including its Annual Report on Form 10-K for the year ended December
31, 2011 (“2011 Annual Report”) and its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2012. Except as expressly required
by applicable securities law, the Company disclaims any intention or
obligation to update or revise any forward looking statements whether
as a result of new information, future events or otherwise.

Additional Information

Additional information about Kingsway, including a copy of its 2011
Annual Report and its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2012, can be accessed on the Canadian Securities
Administrators’ website at www.sedar.com, on the EDGAR section of the U.S. Securities and Exchange Commission’s
website at www.sec.gov or through the Company’s website at www.kingsway-financial.com.

SOURCE Kingsway Financial Services Inc.