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Co-operators General Insurance Company reports 2009 third quarter results

Nov 2, 2009
7:01am

GUELPH, ON, Nov. 2 /CNW/ - Co-operators General Insurance Company ("Co-operators General") today announced its consolidated financial results for the three months ended September 30, 2009. For the third quarter, Co-operators General reported a consolidated net loss of $16.1 million, compared to net income of $22.2 million for the same quarter in 2008. Earnings (loss) per common share were ($1.01) for the third quarter compared to $1.05 for the same period last year. On a year-to-date basis, the net loss was $8.7 million (2008 - net income of $67.2 million) and earnings (loss) per common share were ($0.85) (2008 - $3.08)

"Our results were impacted by a large number of severe summer storms throughout the country, which contributed to additional claims and adjustment expenses in the third quarter compared to last year. The industry also continues to experience increasing costs related to accident benefit auto claims in Ontario," said Kathy Bardswick, President and CEO of The Co-operators. "We are pleased to be sustaining growth in net earned premium across all our core product lines in every region of the country during the economic downturn. Our capital levels remain strong, and our solid financial footing positions the company well for the future."

 

 

          Co-operators General's Third Quarter Financial Highlights
               ($ in millions, except for earnings per share)

    -------------------------------------------------------------------------
                                        3rd        3rd   Year-to-   Year-to-
                                    quarter    quarter       date       date
                                       2009       2008       2009       2008
    -------------------------------------------------------------------------

    Gross written premium         $   601.9  $   589.3  $ 1,693.4  $ 1,644.6
    Net earned premium            $   518.9  $   502.3  $ 1,513.6  $ 1,478.8
    Net investment income
     and net investment gains     $    42.4  $    42.1  $   122.6  $   159.8
    Net income (loss)             $   (16.1) $    22.2  $    (8.7) $    67.2
    Earnings (loss) per common
     share                        $   (1.01) $    1.05  $   (0.85) $    3.08
    Return on equity (annualized)     (5.5%)      7.8%      (1.0%)      7.8%

    Gross written premium growth       2.1%       3.0%       3.0%       3.2%
    Loss ratio                        82.3%      71.3%      77.1%      72.7%
    Expense ratio                     30.9%      32.2%      32.2%      32.4%
    Combined ratio                   113.2%     103.5%     109.3%     105.1%
    Minimum Capital Test               223%       218%       223%       218%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

 

 

Third Quarter Review

 

Gross written premium in the third quarter increased 2.1% to $601.9 million compared to $589.3 million in the third quarter of 2008. Retention remained strong while growth primarily resulted from rate and inflation increases. Growth was achieved in all core product lines and was driven by increases in the Ontario region.

Net earned premium growth for the quarter was 3.3% over the previous year. Growth was experienced across all product lines and regions.

Third quarter net investment income from interest, dividends and real estate rose to $36.5 million in 2009, up from $36.1 million in 2008. Net investment gains of $5.9 million were achieved in the quarter, down from $6.0 million in the same period in 2008 where we had taken advantage of market opportunities that existed at the time and recorded gains on sale of a portion of our real estate portfolio. During the quarter we recognized other than temporary impairment losses of $5.0 million (2008 - $nil) related to U.S. and Canadian equity investments. The credit quality of our portfolio remains high with 95.3% of our bonds rated A or higher. Our equity portfolio is 83.6% weighted to Canadian stocks.

The combined ratio of claims and operating expenses for the quarter was 113.2%, compared to 103.5% for the third quarter of 2008. Our loss ratio for the third quarter of 2009 increased to 82.3% from 71.3% in the third quarter of 2008; however, removing the impact of the market yield adjustment, produces an adjusted loss ratio of 79.3% in the third quarter versus 72.1% in 2008. The third quarter loss ratio has increased on all product lines. Auto results continued to deteriorate in the Ontario region, particularly on accident benefit claims, but showed improvement in western Canada. Home and commercial results have been negatively impacted in the third quarter of 2009 compared to the same period of last year due to severe summer storm activity in all regions of the country.

 

Capital

 

Co-operators General's capital position remains strong, as the Minimum Capital Test was 223% at September 30, 2009, well above the regulatory minimum requirement of 150%.

 

About Co-operators General Insurance Company:

 

With assets of over $5.1 billion, Co-operators General is a leading Canadian-owned multi-product insurance company. Co-operators General Insurance Company is part of The Co-operators Group, a national group of companies owned by 46 Canadian co-operatives, credit union centrals and like-minded organizations. Co-operators General preference shares are listed on the Toronto Stock Exchange under the trading symbols CCS.PR.C. and CCS.PR.D. Further information can be found at www.cooperators.ca.

 

For further information: P. Bruce West, Senior Vice-President and Chief Financial Officer, Telephone: (519) 767-3036, Fax: (519) 824-0599

 


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