Kingsway Announces Acquisition of Renewal And Certain Processing Operations of The Robert Plan Corporation

Toronto, Ontario (January 18, 2007) – Kingsway Financial Services Inc. (TSX:KFS, NYSE:KFS) announced today that it had entered into an agreement with The Robert Plan Corporation (‘RPC’) whereby Kingsway has acquired the renewal rights of RPC’s assigned risk business. As part of these arrangements, RPC has been given the authority to market the assigned risk programs on behalf of Kingsway, and Kingsway has assumed certain operating functions related to this business. RPC has also been granted an option for a limited period of time to repurchase these rights and acquire these operating functions from Kingsway.

“We are pleased to have solidified our arrangements with RPC”, said Bill Star, President and CEO of Kingsway Financial. “This transaction strengthens our relationship with RPC and further illustrates our commitment to the assigned risk business in the United States.”

About the Company

Kingsway Financial Services Inc. is one of the largest truck insurers and non-standard automobile insurers in North America based on A.M. Best data that we have compiled. Kingsway’s primary business is trucking insurance and the insuring of automobile risks for drivers who do not meet the criteria for coverage by standard automobile insurers. The Company currently operates through eleven wholly-owned insurance subsidiaries in Canada and the U.S.. Canadian subsidiaries include Kingsway General Insurance Company, York Fire & Casualty Insurance Company and Jevco Insurance Company. U.S. subsidiaries include Universal Casualty Company, American Service Insurance Company, Southern United Fire Insurance Company, Lincoln General Insurance Company, U.S. Security Insurance Company, American Country Insurance Company, Zephyr Insurance Company and Avalon Risk Management, Inc. The Company also operates reinsurance subsidiaries in Barbados and Bermuda.