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FG Financial reports $23.9mn loss for 2020

19th March 2021 - Author: Charlie Wood

Reinsurance and investment management holding company FG Financial Group has reported a $23.9 million net loss for 2020.

FGMajor items contributing to the net loss included non-cash losses associated with the change in fair value of the company’s investment in FedNat of $16.2 million.

Furthermore, during the third quarter FGF realised losses of $2.1 million associated with the transfer of 330,231 FedNat shares as part of a repurchase and cooperation agreement with Hale Partnership Capital. This increased FGF’s treasury shares by or $5.2 million.

The major components of general and administrative expense incurred include $1.4 million for legal, regulatory and formation costs for FGF’s new strategy including reinsurance and asset management.

This also includes the shared services fee of $1.4 million with our related party Fundamental Global Management.

General and administrative expenses for the year were $6 million

“FGF took significant steps to further our business strategy in terms of launching our reinsurance business allowing for our first contract to be written effective January 1, 2021,” said FGF Chief Executive Officer Larry Swets.

“We advanced our approach to Asset Management with the funding of FG Special Situations Fund, LP which led to a further enhancement in our strategy to develop a SPAC Platform.

“We were excited to successfully launch the first SPAC on our platform earlier this year and are well positioned to build on this platform with incremental transactions.”

Swets added, “The D&O market for small IPOs and SPACs in particular has been dislocated for some time and presents an area where our expertise in two areas, both SPACs and insurance, intersect. We will look to develop a product to serve SPACs and their directors and officers with a product that makes sense for the sponsors.”

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