This quarterly earnings news release should be read in conjunction with our Second Quarter 2016 unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis (MD&A) as well as our 2015 Annual Report which are available on SEDAR at www.sedar.com. Unless otherwise noted, all amounts are expressed in Canadian dollars. 

GUELPH, ON, July 28, 2016 /CNW/ - Co-operators General Insurance Company (Co-operators General) today released consolidated financial results for the three months ended June 30, 2016. The consolidated net loss was $39.1 million compared to a net income of $58.2 million for the same quarter in 2015. The impact of the devastating Fort McMurray wildfire was $104.0 million before tax. This resulted in an earnings (loss) per common share of ($2.00) for the quarter compared to $2.57 in the same period last year.

"The financial impact of the wildfire in Fort McMurray was very significant. Our thoughts are with all who have been so significantly affected by this devastating event and we add our voice of appreciation to the thousands of public safety responders and volunteers who worked tirelessly to keep everyone safe. Our staff and advisors continue to work long and hard to support our clients in their time of need; work that will be required for many months to come. Once again, we are clearly reminded of the need for more proactive efforts to strengthen the resilience of Canadian communities. Governments, industry and homeowners all have important roles to play in building safer, more secure communities," said Kathy Bardswick, President and CEO of The Co-operators. "Despite the increased claims costs this quarter, our fundamentals remain very strong."

Second quarter review
The second quarter results reflect before-tax losses of $104.0 million, net of reinsurance and inclusive of ceded reinstatement premium, related to the wildfire in Fort McMurray. With the aid of geo-mapping and satellite imagery a best estimate of the net impact was developed within the first few weeks of the event occurring. Based on current information, which includes visits to the impacted areas, this estimate is not expected to vary significantly in the coming quarters.

DWP improvements during the second quarter were attributable to policy and vehicle count growth in all lines of business paired with higher average home and farm premiums. In the second quarter, DWP increased by 6.1% or $41.6 million to $722.6 million. NEP increased during the second quarter by 1.6% or $9.1 million compared to the same period last year. The increase in NEP is seen in the auto line of business and all geographic regions, except the West. Ceded premium of $23.4 million was recorded against NEP in the second quarter, mainly in the home and commercial lines of business, to reinstate our catastrophe coverage after the wildfires in Fort McMurray.  

The combined ratio, excluding the market yield adjustment for the quarter, was 114.0% compared to 94.0% for the same period last year. Undiscounted net claims and adjustment expenses have increased by 34.1% from the second quarter of 2015, bringing the loss ratio to 81.0%. The increase was mainly the result of the catastrophic wildfires. Excluding the impacts of Fort McMurray, the combined ratio increased was 95.8% compared to a combined ratio of 94.0% in the second quarter of 2015. An increase in the severity of current accident year claims and unfavorable runoff within the auto line of business was partially offset by expenses which grew at a slower pace than earned premium. The expense ratio improved 1.0 percentage points, to 31.7%, as compared to the same period in 2015, driven by lower information technology costs in the current year.

Net investment income and gains increased by $5.8 million compared to the second quarter of 2015. Investment gains improved as a result of an increase in preferred and common share gains. This was partially offset by lower bond gains and declining yields in the bond portfolio. 

The Company's investment portfolio is comprised of high quality and well diversified assets. The credit quality of our portfolio remains high with 98.4% of our portfolio considered investment grade and 86.6% rated A or higher. The equity portfolio is 75.9% weighted in Canadian stocks.

Capital
The Company's capital position remains strong, as the Minimum Capital Test for Co-operators General was 214% at June 30, 2016, well above the 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 2016 MD&A or our 2015 Annual Report.

SHAREHOLDER AND INVESTOR INFORMATION
About Co-operators General Insurance Company
With assets of more than $5.8 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, wealth management as well as investment management products. The Co-operators is well known for its community involvement and its commitment to sustainability, and is listed among the Best Employers in Canada by Aon Hewitt.

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