This quarterly earnings news release should be read in conjunction with our First Quarter 2015 unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis (MD&A) as well as our 2014 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars.

GUELPH, ON, April 30, 2015 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended March 31, 2015. The consolidated net income was $22.2 million compared to net income of $10.6 million for the same quarter in 2014. This resulted in earnings per share of $0.98 for the quarter compared to $0.35 in the same period last year.

"The extreme winter weather experienced in Atlantic Canada led to severe damage and resulted in an increase in our claims costs in that region. However, the remainder of the country experienced less severe winter weather, reducing overall claims frequency compared to the first quarter of last year," said Kathy Bardswick, President and CEO of The Co-operators.

"The Bank of Canada's interest rate cut negatively affected our net income this quarter. But our fundamentals are strong and we continue to achieve very good client growth rates, as net earned premium increased during the first quarter in all our core product lines, across every region of the country."

CO-OPERATORS GENERAL'S FIRST QUARTER FINANCIAL HIGHLIGHTS

 

First quarter review

DWP improvements during the first quarter were attributable to vehicle and policy count growth in the auto and home lines of business paired with higher average home premiums. DWP in the first quarter has increased by 3.4% or $16.2 million to $489.1 million. NEP increased during the first quarter by 4.7% or $24.9 million compared to the same period last year. The increase in NEP is seen in all geographic regions and our core product lines.   

The combined ratio, excluding the market yield adjustment (MYA) for the quarter, was 98.2% compared to 103.7% for the same period last year. Undiscounted net claims and adjustment expenses have decreased by 2.1% from the first quarter of 2014, bringing the loss ratio to 65.1%. This improvement was driven by fewer major events combined with more favourable claims development as compared to the first quarter of 2014. Higher information technology costs in the prior year led to the improvement in the expense ratio of 0.9 percentage points, to 33.1%, as compared to 34.0% for the same period in 2014.

Net investment income and gains decreased by $10.3 million versus the first quarter of 2014 due primarily to declines in the fair value of preferred share investments. In first quarter of 2015, the change in fair value of investments was a $10.2 million loss as compared a $2.8 million gain during the same period in 2014. The decline in interest rates in the first quarter of 2015 has partially offset this by strengthening bond valuations which in turn has led to realized gains on bonds as we regularly trade our bond holdings.

Our investment portfolio composition is conservative and is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 98.7% of our portfolio considered investment grade and 89.7% rated A or higher. Our equity portfolio is 73.6% weighted in Canadian stocks.

Capital

The Company's capital position remains strong, as the Minimum Capital Test (MCT) for Co-operators General was 229% at March 31, 2015, well above the internal and regulatory minimum requirements. 

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 First Quarter 2015 MD&A or our 2014 Annual Report.

SHAREHOLDER AND INVESTOR INFORMATION

About Co-operators General Insurance Company

With assets of more than $5.2 billion, Co-operators General is a leading Canadian-owned multi-product insurance company.  Co-operators General is part of The Co-operators Group Limited, a Canadian-owned 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 well known for its community involvement and its commitment to sustainability, and is listed among the 50 Best Employers in Canada.

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