This quarterly earnings news release should be read in conjunction with our second quarter 2019 unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis (MD&A) as well as our 2018 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars. 

GUELPH, ON, July 31, 2019 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended June 30, 2019. The consolidated net income was $79.1 million compared to a net loss of $4.0 million for the same quarter in 2018. This resulted in an earnings per common share of $2.84 for the quarter compared to ($0.35) in the same period last year.

"Improved underwriting profitability combined with favourable investment returns has led to a significant increase in our net income compared to the second quarter of 2018," said Rob Wesseling, president and CEO of The Co-operators. "We continue to focus on achieving sustainable premium and client growth, and remain proactive in managing our overall claims costs."

SECOND QUARTER REVIEW

In the second quarter, DWP increased by 11.5% or $108.1 million to $1,049.8 million compared to the same quarter of 2018. The increase in DWP was primarily attributable to policy growth and rate adjustments across the auto and home lines of business, particularly in Ontario. NEP increased during the second quarter by 12.2% or $87.2 million compared to the same quarter last year.

Undiscounted net claims and adjustment expenses have decreased by $41.9 million or 7.7% from the second quarter of 2018. The primary driver of the decrease was lower frequency and severity of accident year claims, particularly in our home line of business as the comparative 2018 results included a significant windstorm in Ontario. A secondary driver of the decrease was a reduction in current year accident claims in the Western region across all lines of business, except farm.

Strong premium growth coupled with decreased claims and adjustment costs drove down the loss ratio from 75.7% in the second quarter of 2018 to 62.3% in the current quarter. The expense ratio increased by 1.0 percentage points to 33.1% driven by an increase in general expenses from staffing costs in the current quarter coupled with the timing of project spend. Consequently, our combined ratio excluding MYA decreased to 95.4% in the current quarter, compared to 107.8% in the same quarter of 2018.

Net investment income and gains increased by $34.9 million compared to the same quarter last year as higher turnover in our common share and bond portfolios as well as declining interest rates in the current period led to an increase in realized gains. The MYA had an $13.6 million unfavourable impact on net income before tax as a result of a decrease in the discount rate.

Co-operators General's investment portfolio is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 96.1% of our portfolio considered investment grade and 85.0% rated A or higher. Our equity portfolio is 87.5% weighted to Canadian stocks.

CAPITAL

Co-operators General's capital position remains strong, as the Minimum Capital Test for Co-operators General was 224% at June 30, 2019, well above internal and regulatory minimum requirements. 

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This document may contain forward-looking statements and forward-looking information, including statements regarding the operations, objectives, strategies, financial situation and performance of Co-operators General. These statements generally can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "would", "should", "could", "trend", "predict", "likely", "potential" or "continue" or the negative thereof and similar variations. These statements are not guarantees of future performance and involve known and unknown risk, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements or information. Although we believe that the expectations reflected in the forward-looking statements and information are reasonable, there can be no assurance that such expectations will prove to be correct.  Consequently, we make no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements and information. For further information, refer to our second quarter 2019 MD&A or our 2018 Annual Report.

ABOUT CO-OPERATORS GENERAL INSURANCE COMPANY

With assets of more than $7.0 billion, Co-operators General is a leading Canadian multi-product insurance company. Co-operators General is part of The Co-operators Group Limited, a Canadian co-operative. Through its group of companies, it offers home, auto, life, group, travel, commercial and farm insurance, as well as investment products. The Co-operators is ranked as #1 among Corporate Knights' Best 50 Corporate Citizens in Canada and lists among the Best Employers in Canada by Aon Hewitt. For more information, visit www.cooperators.ca

Co-operators General Class E, Series C Preference Shares trade under ticker symbol CCS.PR.C on the Toronto Stock Exchange (TSX). Further information can be found at www.cooperators.ca.

SOURCE The Co-operators