This quarterly earnings news release should be read in conjunction with our Second 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, July 30, 2015 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended June 30, 2015. The consolidated net income was $58.2 million compared to net income of $58.1 million for the same quarter in 2014. This resulted in earnings per share of $2.57 for the quarter compared to $2.48 in the same period last year.

"We continue to achieve good premium and client growth, and our balance sheet remains strong. Our loss ratios improved overall, resulting in strong net income," said Kathy Bardswick, President and CEO of The Co-operators.

"In May, we were proud to become the first Canadian insurance company to offer overland flood insurance for homeowners when we launched our new Comprehensive Water product in Alberta. It is critical that we build the resilience of our communities against flooding, the most common type of natural disaster in Canada. We are committed to continuing our work in this area, both by working toward making our product available across the country and through our ongoing advocacy efforts."

Second quarter review

DWP improvements during the second quarter were attributable to continued growth in vehicles in force paired with higher average home premiums. In the second quarter, DWP has increased by 4.0% or $26.5 million to $681.0 million. NEP increased during the second quarter by 4.1% or $22.6 million compared to the same period last year. The increase in NEP is seen in all geographic regions except the West and all product lines except commercial. DWP and NEP growth remains tempered by the cancellation of two unprofitable lines of business, specifically, CGIC's withdrawal from the condominium market and Sovereign's withdrawal from the standard personal lines market.   

The combined ratio, excluding the market yield adjustment (MYA) for the quarter, was 94.0% compared to 93.9% for the same period last year. Undiscounted net claims and adjustment expenses have increased by 3.3% from the second quarter of 2014, bringing the loss ratio to 61.3%. The increase in undiscounted net claims and adjustment expenses was driven by a number of large fire losses during the quarter, partially offset by favourable claims development on prior years. Increased investment in information technology in the current year led to the decline in the expense ratio of 0.6 percentage points, to 32.7%, as compared to 32.1% for the same period in 2014.

Net investment income and gains decreased by $18.9 million versus the second quarter of 2014 due to lower net investment gains. During the second quarter of 2015 realized gains decreased by $7.2 million and the change in fair value of investments resulted in a $6.5 million loss as compared a $1.9 million gain during the same period in 2014.

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 98.2% of our portfolio considered investment grade and 88.0% rated A or higher. Our equity portfolio is 73.3% weighted in Canadian stocks.

Capital

The Company's capital position remains strong, as the Minimum Capital Test (MCT) for Co-operators General was 237% at June 30, 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 $5.3 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